Rumors of adjustments to textile export tax rebates have caused foreign trade textile companies to panic again
Affected by rumors of export tax rebate adjustments and other factors, the market situation at the 109th Canton Fair is uncertain.
“If the adjustment is reduced by 5%, we will really have no profit.” On May 3, Gao Bingxue, chairman of the Zhejiang Provincial Native Produce and Livestock Products Import and Export Group, told this newspaper that since April, there have been rumors in the market that the country will target “high-pollution, The export tax rebates for the “high energy consumption and resource-intensive” industries of “two highs and one capital” will be reduced, among which the export tax rebate rate for textiles and clothing will be reduced from 16% to 11%.
Gao Bingxue believes that textile and clothing exports are inherently profitable, and the amount of export tax rebates is related to the survival of the industry. If the tax rebate rate drops sharply by 5 percentage points, most small and medium-sized enterprises will face bankruptcy under the pressure of soaring raw materials and rising exchange rates.
Concerns over the reduction in export tax rebate quota
The loss of clothing orders will intensify, and the space for price increases will be more limited.
In the early morning of May 3, at Xingangdong Station of Guangzhou Metro Line 8, people of different skin colors poured out of the ground and rushed to the Pazhou Hall of the Canton Fair.
Looking at the endless stream of buyers, Gao Bingxue’s mood did not become relaxed. At present, the exchange rate of RMB against the US dollar has fallen below 6.5 from 6.58 last month, resulting in an overall decrease of 0.8 points in corporate profits.
Data show that throughout 2010, the appreciation rate of RMB against the US dollar was 3.1%; in 2011, the exchange rate of RMB against the US dollar began to “accelerate”, with a cumulative increase of 1.9% in the first four months alone, accelerating the appreciation trend. obvious.
Gao Bingxue told reporters that for every 1% appreciation of the RMB, companies will face exchange losses of US$16,000, or more than 100,000 yuan, and profits will be reduced by about 5%. Therefore, the product quotation cycle has been fixed to half a month every year in the past, and now it has to be re-quoted every 10 days, which is completely floating.
“From an exchange rate perspective, taking a long order is likely to result in a loss.” Ying Xiuzhen, deputy general manager of Ningbo Zhongji Import and Export Company, said that although the RMB exchange rate accounts for no more than 30% of the quotation, the appreciation is highly uncertain. Because of this, many companies only dare to accept some short-term orders.
Currently, under the combined influence of rising prices of bulk commodities and raw materials and the appreciation of the RMB, small and medium-sized foreign trade companies have been approaching the “life and death critical point.”
On April 26, Liu Jingsong, deputy director of the Finance Department of the Ministry of Commerce, said that in 2010, the average profit rate of my country’s export enterprises was 1.47%, which was lower than the average profit level of industrial enterprises; from January to February 2011, the export profit rate of enterprises further improved. dropped to 1.44%.
The first quarter economic data released showed that despite the first deficit in six years, China’s total exports of textiles and clothing were US$48.627 billion, a year-on-year increase of 23.96%.
“If you exclude the factors of general price increases by enterprises, it is likely to be negative growth based on volume alone.” Jin Fangping, general manager of China Commodity City (600415), believes that this year the global demand for centralized replenishment has come to an end, and costs have forced it down. Textile enterprises will be forced to increase the price of export products by 10% to 15%, and the price game process will be extremely difficult.
The bigger concern comes from rumors that the export tax rebate amount will be reduced. In 2010, my country’s total textile exports reached US$77.051 billion, and the export tax rebate was about 78.5 billion yuan, plus or minus one percentage point, which was related to the profits of the textile industry of about 5.2 billion yuan.
Ouyang Meiqin, foreign trade manager of Zhejiang Xinshi Garment Co., Ltd., pointed out that once the export tax rebate rate is reduced by 5 percentage points, the loss of orders from China Garment (000902) will inevitably increase, and the space for price increases will be more limited.
Gao Bingxue asserted: If the rumors turn out to be true, a large number of domestic textile and garment export companies will close down.
The foreign trade situation of the six major exporting provinces is not optimistic
About half of the companies in these areas have seen their profits decline and their losses widen.
Export tax rebates play an important role in China’s import and export trade.
Taking the textile and garment industry as an example, Dr. Mei Xinyu from the Institute of International Trade and Economic Cooperation of the Ministry of Commerce said that between August 2008 and April 2009, due to the sharp drop in international market demand, companies were affected by the “new labor law” Due to the introduction and rising raw material prices and rising costs, the country has raised the export tax rebate rate four times, gradually increasing it from 11% to 16%. In January 2011, due to the increase in international oil prices, the export tax rebate rate for the chemical fiber industry in the upstream textile industry was raised again by 2 percentage points.
To a certain extent, export tax rebates have also become a “protective umbrella” for domestic enterprises. Under its protection, domestic companies have never stopped using low prices as an advantage. Even foreign buyers now understand that as long as the export tax rebate rate is raised, prices can be lowered.
Not only that, the ratio between the current situation of low-price growth and the energy consumption caused by this industry is expanding.
Relevant data shows that the energy consumption in the entire process of my country’s textile industry is roughly 4.84 tons of standard coal/ton of fiber. Among them, the energy consumption of the clothing industry is 1.05 tons of standard coal/ton of clothing, the energy consumption of the weaving industry is 0.95 tons of standard coal/ton of fiber, and the energy consumption of the printing and dyeing industry is about 2.5 to 3.2 tons of standard coal/ton of fiber, with an average of 2.84 tons of standard coal. Coal/ton of fiber. It can be seen that the textile industry is the focus of energy-saving reform.
In 2010, my country’s export tax rebates amounted to 730 billion yuan, while the trade surplus was US$183.1 billion, which means that the gap between export tax rebates and trade surplus is narrowing. Therefore, some scholars have put forward suggestions to gradually cancel or reduce export tax rebates.
��But the market has mixed opinions on this. Recently, a foreign trade survey from the six major exporting provinces of Guangdong, Zhejiang, Jiangsu, Liaoning, Sichuan and Hubei showed that about half of the companies in these regions have experienced declining profits and increasing losses. Industry insiders pointed out that the reduction in the tax rebate rate for export commodities should not be too large and should be controlled at 1 to 2 percentage points during the year to maintain a relatively stable operating environment for exports.
Pan Yinglai, head of Zhejiang Jinfang Trading Co., Ltd., believes that from the strategic perspective of industrial transformation, China should reduce the tax rebate for textile exports. All that needs to be considered now is the extent of the tax rate adjustment and the timing of the policy rollout.
Pan Yinglai called for other ways to reduce the burden on enterprises, such as reducing the value-added tax of up to 17% and the income tax of 30% for industrial enterprises.
“As individuals in the real economy, factories are different from shopping malls and need to continuously invest funds in production. It is unreasonable for both to bear the same amount of tax burden.” Pan Yinglai said bluntly.
Faced with the concerns of enterprises, Gao Hucheng, the international trade negotiator and deputy minister of the Ministry of Commerce, recently publicly responded that “the country’s foreign trade policy will remain relatively stable.”
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