Export tax rebate was lowered by textile fabric enterprises

In order to achieve industrial transformation and upgrading, the country has formulated the goal of eliminating backward production capacity and controlling carbon emissions, and promoting and encouraging technological innovation in enterprises. At the same time, a large number of domestic small and medium-sized textile Fabric companies have produced little-changing products over the years, lacking innovation power; and some new products that are already on the market are also facing challenges in market acceptance.

Reducing the export tax rebate is a lever to promote the transformation and upgrading of the textile industry, but it will also be a heavy burden on SMEs.

The author visited some of the exhibitors and asked them their response to the reduction of export tax rebates. The answer was the same: it was difficult to accept.

After 2011 **, the state will further spread the news of “high pollution, high energy consumption, and resource-based” “two high and one resource” industries to lower export tax rebates. This involves textile exports. In 2010, China's total textile exports reached 77.051 billion U.S. dollars, and the export tax rebate amounted to approximately 78.5 billion U.S. dollars. It fluctuates by one percentage point, which is related to the approximately 5.2 billion yuan in profits of the textile industry. At the 17th China International Textile Fabrics and Accessories (Spring-Summer) Expo and the 8th China International Textile and Yarn (Spring-Summer) Exhibition held recently, the author visited some exhibitors and asked them to lower export tax rebates. The response was consistent with the answer: hard to accept.

Reduced orders

Mr. Gu Jiaxiong of Shaoxing Fleiss Industrial Co., Ltd. has heard of news that export tax rebates may be lowered. He told this reporter: “If the state wants to lower the export tax rebate rate, our company can only increase prices.”

The export tax rebate is mainly to balance the tax burden on domestic products by returning domestic tax paid for export goods, so that domestic products enter the international market at a cost that does not include tax, and compete with foreign products under the same conditions, thereby enhancing the competitiveness and expanding Export earnings. Since the implementation of the export tax rebate policy in 1985, by the end of February 2006, China's ** reserves have surpassed Japan, ranking first in the world, and in 2009 it surpassed Germany as the world’s largest exporter. In 2010, China's export tax rebate amounted to 730 billion yuan, while China's trade surplus in 2010 was 183.1 billion US dollars, which means that the gap between the export tax rebate and the trade surplus is narrowing. Such a situation is closely related to the current inflation situation in the country. For this reason, some scholars have previously proposed to gradually cancel or lower export tax rebates.

However, the current domestic textile industry's export tax rebate rate is 13% -16%, while most textile companies' profit rate does not exceed 5%. If the export tax rebate is lowered, corporate profits will be significantly reduced.

Gu Jianan said: “The company is now facing serious difficulties in rising prices of raw materials. We mainly produce hemp fabrics, and 80% of domestic raw materials are imported from abroad. Now, although the consumption of linen is low season, the prices are still rising. Foreign merchants to the domestic The rising prices of products have become increasingly unacceptable, so that our products can increase their prices in the country and they cannot do so in foreign trade.

Huang Guofang, marketing manager of Guangzhou Kangjian Textile and Garment Co., Ltd., stated to the reporter that the current domestic textile consumption capacity is relatively low, and compared with 2010, the clothing brand dealers have lost 1/3-1/2 orders. The important reason is that the price of fabrics has risen. “Middle-level denim like us, 15 yuan per meter in 2010, the same product in 2011, the price is 22 yuan per meter. Even if it rises so much, the profit is only 3%-5%."

Exports of textiles have experienced price ceilings, while domestic sales have decreased year-on-year, and textile fabric companies have been in awkward conditions. Before and after the Spring Festival, due to the high prices of Chinese textiles, some European and American orders have turned to Southeast Asian countries such as Vietnam. At the Beijing Spring 2011 yarn show, an agent from Vietnam told the author that the Chinese yarn price is still the lowest in the world, and the labor cost in Vietnam will be lower than China, but the actual price of the product is very different. small.

According to Meng Yunyan, general manager of Shaoxing Beihong Textile Co., Ltd., “The price of domestic fabrics is still very affordable internationally, and foreigners can actually accept price increases. Only domestic fabrics sold abroad go through layers of middlemen, and each Businesses must ensure that their bottom line is profitable.For example, I earn 10 cents for a meter of fabric and 50 cents for a middleman, so the actual situation is that our company wants to increase prices, but middlemen do not buy it. ”

Advantages and Disadvantages

The implementation of the export tax rebate policy for more than 20 years has had a significant effect in stimulating the rise of China’s foreign trade volume and enhancing the export price competitiveness of enterprises. The long-term implementation of this policy has, in the eyes of some scholars, caused some negative effects on China's economic structure.

On the one hand, China’s economy’s dependence on foreign trade exceeds 60%, and the fluctuation of the world’s economic environment has a significant impact on domestic economic development and employment. After the international financial crisis occurred, the coastal foreign trade processing companies had no choice but to shut down the factory. Obviously it will be felt, and this will make our company into a passive situation. On the other hand, many of the major profits of export companies come from export tax rebates, indicating that these enterprises are not competitive enough. For this, Huang Guofang told the author: "It is true that many fabric companies rely on export tax rebates for survival in foreign trade, and use loopholes in the policy to defraud more tax rebates." The state propped up the umbrella for foreign trade exports, leaving companies with no incentive to go Improve their profitability and product competitiveness.

Fiscal subsidies affect market competition and allow companies with backward production capacity to survive in the market, leading to unreasonable resource allocation. On March 7, 2011, at the author's meeting on "Financial Policy and Related Issues" held during the National Conference, the Minister of Finance Xie Xuren once said: "In 2011, we will continue to use policies and measures related to export tax rebate, and further We will support adjustments to the structure of export products, continue to promote the export of electromechanical products and products with superior characteristics, and at the same time, strictly control the export of products such as high energy consumption and high pollution through the use of tax policies."

"The gradual elimination of export tax rebate policy will help curb the export of low-end products, speed up the elimination of backward production capacity, accelerate the adjustment of industrial structure, and promote energy-saving and emission reduction. Moreover, the savings will be used in the construction of infrastructure for domestic logistics channels. The transformation of external demand guidance into domestic demand is conducive to structural adjustment and to scientific development, according to analysts.

Looking up the data in recent years, it can be seen that the country has been using foreign exchange tax rebate adjustments to adjust foreign trade in accordance with changes in economic patterns. In January 2011, the export tax rebate for chemical fiber products increased by two percentage points. On August 1, 2010, the export tax rebate rate for some textiles and apparel increased from 11% to 13%. In September 2006 and July 2007, the government had twice lowered the tax rebate rate for textile and apparel exports, and the export tax rebate has been changing. Representatives of the National People's Government and Youngor Group, Li Rucheng, stated during the ** period that in 2010 Mainland companies had just passed the difficulties of the international financial crisis, coupled with high inflation and rising prices of raw materials, the companies hoped that export tax rebates would continue to be stable.

In the words of the first-line companies, if the export tax rebate is lowered, the survival of textile companies will be even more difficult.

Insufficient innovation

At the textile innovation conference held in 2010, Wang Wei, deputy director of the Consumer Products Division of the Ministry of Industry and Information Technology, stated: "High-performance fibers and composite materials in the textile industry are an important part of the new strategic industries, including new energy, environmental protection, bio-medicine, and others. The accelerated development of emerging industries also creates a demand space for the development of textile fiber new materials and textiles. During the 12th Five-Year Plan period, we must strive to achieve new breakthroughs in key technologies in the field of high-performance fibers and textiles, improve product functionality, and expand The application has made it a new growth point for the textile industry.” In fact, the reduction or elimination of tax rebates on textile exports also shows that the state hopes that textile companies can improve their competitiveness by improving their creativity. How high is the enthusiasm of corporate innovation?

Huang Ronghua, executive director of Xurong Group, told this reporter that Xurong will newly develop 3,000 kinds of fabrics for customers to choose. Innovation is the driving force behind the sustainable development of enterprises, and it is also a manifestation of Xu Rong's R&D capabilities. However, Huang Guanhua also admitted that the acceptance of new product markets is not high, and product promotion still needs time to develop.

At the Beijing Spring 2011 yarn show, a company from Qingdao also brought new products, but the person in charge said that the new products are not the flagship products for their participation in this exhibition, and the sales volume will not be too high. "The research and development of new products is mainly following the current situation of hot functional fabrics," said the person in charge.

Huang Guofang said: “We did not bring in new products. The reason is very simple. Mature fabrics can guarantee sales and insurance. Our company has 400 workers and we must guarantee a certain amount of work to support these workers. New fabrics may be possible. The profits are larger, but the sales volume is also limited, so there is little incentive to make new fabrics."

Innovation is now a banner for large textile companies to demonstrate R&D capabilities. For textile industries that are labor-intensive industries, a large number of companies are unable to innovate and are unintentionally innovating. A very important influencing factor is profit. Innovation is indeed an inexhaustible motive force for the development of the industry. However, how to make innovations quickly bring benefits to enterprises, it is clear that in the short term, the export tax rebates are more effective.

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