Tax Rebate China
...to Close Record Trade Gap (Update3)
By Zhang Dingmin
June 19 (Bloomberg) -- China said it will reduce export rebates on 2,831 products to curb the country's record trade surplus, ease friction with other countries and spur industries to use less energy.
From July 1, rebates will be removed on 553 types of goods that require a lot of energy to produce and are polluting, including fertilizers, cement, salt and leather, the Ministry of Finance said today on its Web site. Rebates will be pared for 2,268 other exports while 10 products will be made tax-free.
The world's fourth-largest economy may export more than any other nation next year, boosting its 2008 trade surplus by 45 percent to a record $257 billion, according to an April estimate by the Asian Development Bank. The U.S. Congress, labor unions and some manufacturers have accused China of spurring exports by keeping its currency weak against the dollar and giving rebates.
``The trade surplus is not merely an economic issue, it's also a political problem,'' said Wang Yuanhong, an economist at the State Information Center in Beijing, a unit of the government's top planning agency. ``China must adjust its cost of production, including the cost of labor, resources and the environmental impact, to rein in the trade gap.''
U.S. Pressure
U.S. senators Charles Schumer, Max Baucus, Lindsey Graham and Charles Grassley last week introduced legislation that would allow American companies to petition for steeper anti-dumping duties to counter the benefit of under-valued currencies in China or other countries.
The U.S. Commerce Department in March levied new duties of between 10.9 percent and 20.3 percent on China-made coated paper to compensate for Chinese subsidies. The tariff on the glossy paper, used in magazines and art books, will average 18.16 percent for China.
China has cut export rebates three times...
View Full Essay
