Rumors of an upward correction on textile export rebates were widespread in 2008. It was heard that the textile export rebate would be revised from 11% to 13% and the garment rebate from 11% to 15%. It was even speculated that this policy would be released in July.
Media XKB sources released news that Mr. Li Rongchan, director of the Finance Department, Ministry of Commerce, was reported saying at the Chinese Medicine and Health Care Products Import and Export Fair that the Ministry of Finance and State Tax Bureau will continue to implement export VAT rebate policy stably, without any fresh export rebate nominations. The rebate of labor-intensive producers is likely being lifted.
However, the domestic media group CCF released news on 3 July, disclosing that the upward adjustment policy of the textile export rebate has been approved and will be announced in due time. The upward correction of 2% means that enterprises will see an increase of 2% in profits. This is a most direct way to alleviate the strain for Chinese textile producers whose profits are just over 3%. However, at press time, related departments did not confirm the details and timeframe of the new policy. Market players said export rebate adjustments are be inevitable when the macroeconomic situation is changing greatly.
Textile export rebates were lowered to 11% on 1 July, 2007. The Chinese textile industry, a representative labor-intensive industry, was greatly affected. In early June 2008, Chinese Customs released the total value for May garment exports which were at $8,588,028,000, a marginal increase of 1.18% Year on year, the lowest rise in recent years. If the decision to increase the export rebate reached, the textile industry will recover.