June 8, 2009

More tax rebates to boost Chinese exports

China, needing to shore up exports in the current global economic downturn, has again raised its export tax rebates, the seventh such boost since last August.

The finance ministry announced Monday the tax rebates would go up on more than 2,600 items, including processed farm products, machines, shoes, hats and toys, the state-run Xinhua news agency reported.

Ministry official Liu Shangxi told Xinhua the new policy reflects efforts to boost the export sector and increase domestic consumption.

China's exports still face difficulties in the short term. The tax rebate increase would help exporters reduce costs and shore up exports, he said.

In short term, exports may play a less important role in driving up the economy, one trade expert told Xinhua. However, its position as a core for economic growth will not change.

Besides tax rebates, the government also has provided more than $878 billion in loans to help small- and medium-sized companies expand into the export markets and set up distribution channels in emerging markets, the report said.

Government figures say exports declined 24.3 percent in the first four months of this year. But there are signs of improvement since then.