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China to tweak export tax rates soon

By Ding Qingfen (China Daily)
Updated: 2009-06-23 08:01

China will remove or reduce export taxes on a range of products - from grain and rice to metals and other materials - effective from July 1, the country's finance ministry said. This is aimed at preventing the trade situation from deteriorating further, analysts said.

Related readings:  China cuts tariffs to spur exports  China's foreign trade down for 7th month  China announces further support policies for exports  China hikes export tax rebates

Export taxes for indium and molybdenum would be cut from 15 percent to 5 percent; tax on some steel and tungsten products will also be reduced to 5 percent from 10 percent, and export tax on wheat, rice, soybean and sulfuric acid will be scrapped, according to the Ministry of Finance website.

"This shows the government's intention to stabilize exports amid the continuous drop in growth of foreign trade since late last year," Li Jianfeng, analyst from Shanghai Securities, told China Daily.

Due to the economic slowdown in the US, Europe and Japan, China's key trade partners, the nation's exports witnessed a drop for seven consecutive months since November last year. Analysts said exports might not show positive growth until later this year.

Premier Wen Jiabao said last month that China's exports situation was severe and that the nation would give more incentives to exporters.

Since late last year, the government has reduced export taxes on a range of commodities, especially in labor-intensive sectors. It has also hiked tax rebates for exports seven times since August 2008.