China cuts exporters' tax incentives
Afp, Beijing
China cut tax incentives for many of its exporters Friday, on the eve of an economic gathering in Singapore where it is likely to see renewed pressure over its allegedly undervalued currency. The exports tax rebate, in effect a government subsidy to select industries, was lowered to eight percent from 11 percent for steel products, and to 11 percent from 13 percent for textiles, the finance ministry said. "This will help promote the balanced development of imports and exports," the ministry said in a statement posted on its website. China made the announcement shortly after releasing data showing a record 18.8-billion-dollar trade surplus for August. The announcement also came as finance ministers from Britain, Canada, France, Germany, Italy, Japan and the United States were to meet in Singapore ahead of gatherings of the International Monetary Fund and the World Bank. The seven finance chiefs are seen likely to renew calls on China to free up its currency so as to help ease global economic imbalances. Introduced in 1985, tax rebates for exporters have made Chinese products more competitive on the international market. Following the late-1990s Asian financial crisis, China raised its average export rebate from six to 15 percent. reached 1.19 trillion yuan (148.7 billion dollars).
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