Ha Jiming difficult to slow the appreciation of the export tax rebate adjustment of the pressure

 Ha Jiming
2006   9 14, the Ministry of Finance, National Development and Reform Commission, Ministry of Commerce, General Administration of Customs, State Administration of Taxation 5 departments have jointly issued a circular to adjust some of the export tax rebate rate of export commodities, while addition of the processing trade ban catalog.
type minerals, coal, natural gas, paraffin,UGGs, asphalt, silicon, arsenic, stone materials, nonferrous metals and scrap and other metal ceramic; 25 kinds of pesticides and intermediates, some finished leather, lead-acid batteries, mercury oxide batteries; fine goat hair , charcoal, crosstie, cork products, some primary wood products, such as the elimination of export tax rebate policy.
Second, the 142 tariff lines of steel export tax rebate rate from 11% to 8%; the ceramics, some finished leather and cement , glass export tax rebate rate from 13% to 8% and 11%; the part of non-ferrous materials export tax rebate rate from 13% to 5%, 8% and 11%; the textiles, furniture,UGG bailey button, plastics, lighters, individual Wood products export tax rebate rate from 13% to 11%; the non-mechanically propelled vehicles (trolleys) and parts of the export tax rebate rate from 17% down to 13%.
Third, there will be major technical equipment, some IT products and bio-pharmaceutical products as well as some national industrial policy to encourage export of high-tech products, the export tax rebate rate from 13% to 17%; some processed agricultural products as raw materials, export tax rebate rate of 5% or 11% to 13 %.
the export tax rebate and processing trade policy adjustments to structural adjustment is conducive to further optimize the industrial structure,UGG boots clearance, promoting change the growth mode of foreign trade, and promote China's export structure upgrade. But whether in the short or medium term are difficult to reduce the yuan appreciation pressure.
the short term, exports will not only not decreased but increased. First, the new policy since September 15 this year from the Executive. on September 14 (including 14) has been signed prior to export contract, where in December 14 (including 14 days) prior to the export declaration to adjust export tax rebate rate of the goods, the export enterprises can choose to continue to adjust export tax rebate rate before the tax refund. Therefore, the export enterprises will be as much as possible in three months to complete the export declaration.
Second, short-term trade surplus will increase. recent macroeconomic data showed the domestic and the decline in production growth, which will import growth dropped significantly (see Figure 1). the recent oil prices and other raw material prices will fall to some extent, to reduce China's imports. Although export growth is expected to slowdown in U.S. economic growth but with somewhat lower, but export growth is still faster than import growth. After all, the external environment change more slowly, while domestic investment fell due to administrative measures in the short term may be very severe.
Third,Discount UGG boots, China has always concerned about the decision-making impact of RMB appreciation on agriculture, which is the smaller rate of appreciation of RMB has reason one. The part of the agricultural product processing industry to improve the export tax rebate helps reduce the impact of currency appreciation on agriculture for further appreciation of the yuan to create the conditions.
medium to long term, China's huge trade surplus will be maintained long-term. First, The adjustment is to maintain pressure of structural adjustment, while reducing some of the raw materials and consumer goods, the export tax rebate, while the other improved equipment industry, high-tech products and agricultural products processing industry tax credit. In recent years, China's export structure has undergone significant changes: the proportion of equipment and machinery exports rising (from 33.1% in 2000 increased to 46.3% in 2005); raw materials and the declining proportion of consumer goods exports (the former from 5% in 2000 to 2005 3.3%, the latter from 39.9% in 2000 to 28.6% in 2005) (see Figure 2).
Second, China's export competitiveness has been increasing. China's current export structure and high-income countries and regions close (see Figure 3), regardless of the cost of labor or capital are lower than China in the global export market share will continue to improve.
Third, the aging population and inadequate social security system, China The savings rate in the next 5 years will continue to increase, while investment in peak current cycle is over, so China is still a great medium-term current account surplus pressure of RMB appreciation will be long.
(International Finance Corporation of China Chief Economist, the article only the personal views of the author)