Rebate increase in response to weakening European demand

NANCHANG / SHANGHAI - Export tax rebates will be increased this year in response to an export decline triggered by the European debt crisis.

The move, which Commerce Ministry officials said will be implemented when the time is appropriate, will be the first increase since 2009.

"We are studying the launch of relevant measures" to stabilize export growth, said Zhong Shan, deputy minister of commerce, at the 2012 China Imports and Exports Work Conference held in Nanchang in East China's Jiangxi province on Monday.

"Uncertainty and instability in the global economic scene are growing - there are also some domestic factors," Zhong said.

According to the General Administration of Customs, exports declined 0.5 percent over the year to January, the first fall in more than two years. Officials from the ministry have stated that exports face challenging times.

China will, "at the appropriate time, increase tax rebates on specific categories of goods, including labor-intensive products", Zhong said.

From 2008 to 2009 when the financial crisis hit, China raised export tax rebates seven times on a wide range of goods.

Tax rebate rates in general were increased to 13.5 percent in 2009 from 9.8 percent before the crisis.

"The situation is getting more severe with a double-digit decline in export growth expected in the first quarter," said Da Jiaxiang, deputy director of the department of commerce in East China's Jiangsu province, one of the nation's top textile exporters.

"We are expecting preferential policies on tax rebates."

In South China's Guangdong province, a key export region, companies said they were experiencing a difficult time.