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The export tax rebate in China

China increased the export tax rebate for labor-intensive, mechanical and electrical products in the second half of last year.

The increased tax rebate has in a sense eased capital pressure for some businesses.
China unveiled a slew of tax and foreign exchange policy changes to boost its exports, which saw its worst monthly decline in more than a decade in February.

The government will raise export rebates for textiles, steel, petrochemicals and electronics etc. China raised the export rebate on 3,800 items to maintain growth .It was the sixth increase since last August when the government decided to raise refunds in an attempt to tackle slumping exports amid the global financial crisis.
Rebates will also be increased for non-ferrous metals, light industrial products and information-technology products, the notice said.

In a separate move, the country's foreign exchange regulator decided to raise the amount of short-term foreign debt that banks may incur by 12 percent to boost trade financing.
The move is aimed to facilitate growth in the real economy and boost trade financing," the foreign exchange regulator said. China cut the banks' short-term foreign debt quota by 10 percent in 2008, after lowering it even more sharply in 2007.
Experts are of the opinion that while these measures would certainly help exporters, it does not address the fundamental problems.

The latest tax rebate hikes will partly alleviate the woes caused by the declining demand in international market," said Ma Li, analyst, China Galaxy Securities.
"But it cannot fundamentally solve their problems as the main cause of their woes is the slumping overseas demand," the analyst said.
Export tax rebate for non- ferrous metals and furniture will be raised to 13 percent, according to the notice.