China may expand tax rebates to boost exports
2012-09-05 17:53:42
China could expand tax rebates for exporters in labour-intensive industries as soon as this month to help them cope with a slump in trade growth, three informed sources said, deploying a stimulus tool used during the global financial crisis.
The government may give a full rebate of the 17 per cent value-added tax on products including shoes and toys, up from the current 13 to 15 per cent, the sources said. The policy may be rolled out as soon as this month, depending on whether trade remains weak.
Premier Wen Jiabao has pledged policy "fine-tuning" to cope with a deepening slowdown in the world's second-largest economy that saw export gains slump to an annual 1 per cent pace in July from 11 per cent in June. The deterioration in trade escalated the risk that Mr Wen will miss his full-year economic expansion target for the first time since he took office in 2003.
The government provided 531.6 billion yuan (S$104.3 billion) in export-tax rebates in the first half of this year, up 16.4 per cent on-year, according to the Finance Ministry.