February 1, 2009 will tax rebate rate for textiles from 14% to 15%

 February 7, the Ministry of Finance, the State Administration of Taxation announced that from February 1, 2009 will textiles and clothing export tax rebate rate from 14% to 15%. According to foreign trade and economic cooperation in Nantong City, Jiangsu Statistics Bureau, last year, the above-mentioned goods exports Nantong 4.384 billion U.S. dollars, this year’s average exchange rate of the yuan by 6.5 is estimated that textile and garment export tax rebate rate increase of 1 percentage point, about nantong textile and garment enterprises of 180 million yuan rebate amount. The photo shows one corner of the textile export enterprises workshop. FISHER-Shan Qiu

Following the iron and steel, motor vehicles took the lead in planning the revitalization of the two industries through the State Council, after consideration, China’s another important industry planning to revitalize the textile industry also adjust February 4 in principle by the State Council executive meeting’s deliberations. This is undoubtedly the bursts in the cold of China’s textile industry will bring a ray of warmth.

As overseas dependence up to 30% of the labor-intensive industries, by the international financial crisis, China’s textile products Qi price or volume, the first time in 10 years the whole industry appears negative growth. Therefore, adjust the revitalization of planning the introduction of the industry and more positive attitude, think is a big “feel good” message, which will greatly enhance the confidence of the textile industry to develop and accelerate the pace of adjustment and upgrade the textile industry and help the textile industry at an early date out of the woods.

According to the adjustment of the revitalization plan, China will be mainly from 5 to adjust aspects of the revitalization of the textile industry: co-ordinate international and domestic markets, strengthening the technical transformation and self-brand building and speed up eliminating backward production capacity, and optimize the regional distribution and increase the taxation of financial support.

1% of the benefits brought about by the export tax rebate

5 industrial policy as the most practical parts of country will be China’s textile and garment export tax rebate rate from 14% to 15%, although many institutions with the previous prediction of 17% has the gap, but even if the only increase by 1% of new export tax rebate rate for domestic textile enterprises is still an increase of several billion dollars of profits.

Ministry of Commerce statistics show that since 2008 China’s textile export growth declined. The annual cumulative exports 185.17 billion U.S. dollars, up 8.2 percent, higher than in 2007 decreased 10.7 percentage points, is expected in 2009 China’s textile export growth overall will continue to slow down. While in previous years, China’s textile products have remained at around 30 percent growth rate.

China Textile Industry Association vice-president Xu Kunyuan think the next 3 years, China’s textile and garment exports are expected to realize an average annual increase of 8%, international market share to enhance the potential is great. “2008 China’s textile export tax rebate rate service products improve 3 points, on the effective suppression of the export decline in momentum. Exporting companies operating profit, loss-making enterprises have been re-export of a point of export tax rebates, may not be a loss.” Xu Kunyuan express, Pratt & Whitney has the policies conducive to export promotion, will report directly to “save” a large number of small and medium-sized.

It is estimated that in 2009 average exchange rate of RMB against the U.S. dollar in accordance with the 6.5 estimate, textile and garment export tax rebate rate increase of 1 percentage point, the textile and garment export enterprises will be 7.6 billion yuan in tax rebates. Changes do not take into account other factors, 25% in the enterprises income tax case, because the export tax rebate adjustment, the textile industry will increase by about 57 billion yuan in net profit.

“Improve the export tax rebate of 1%, for enterprises to cope with the international economic crisis and improve the international competitiveness has provided a very favorable condition.” Jiangsu Sunshine shares (4.76,0.07,1.49%) Co., Ltd. said. It is learned that from the second half of 2005 to the present appreciation of the RMB rate has reached more than 18 percent, the export tax rebate rate down from 17 percent to 11 percent, the competitiveness of textile and garment industry declining, industry margins are thin, the best corporate profit margins are also in 15%. A sharp contraction in global demand, the second half of last year two consecutive enhance textile and apparel export tax rebate rate to 14%, to a certain extent improve the confidence of the textile enterprises, but the overall situation of the textile industry does not change very significantly .

Crack the market bottlenecks

Although 1% of the export tax rebate can directly improve the textile industry as a whole bring real benefits, but experts believe that the current status of the entire textile industry is still difficult to immediate short term.

Jiangsu Provincial Economic and Trade Commission Deputy Director of Institute of Economic Research think-ching Ni, textile industry adjust to revitalize the planning brewing for a very long time before the formal introduction of the current industry-wide problems and made a lot of specific ideas and approaches, but these measures should would like a short-term effects there are many difficulties, one of the most important reason is that China’s market demand for the textile industry has undergone major changes, especially in external demand there has been a fundamental change.

According to the Ministry of Information Industry and the latest information on the textile industry in 2008 by the international financial crisis, lack of external demand led to the textile exports blocked, benefits decline, last year’s trip added value growth of 10.3 percent over the previous year, year-on-year growth rate down 6.2 percentage points, export delivery value of 4.7 percent growth, down 9.5 percentage points. The first 11 months of last year, the textile industry realized profits of 102.6 billion yuan, rising by 2007 to 36.9 percent increase over the same period fell by 0.7%; loss-making enterprises amounted to a loss of 22.13 billion yuan, up 97.7 percent, 20.4 percent achieved a loss of face.

People in the trade, to open up the market has become the textile industry must have been the first clearance. In the textile industry also adjust the focus of the revitalization plan proposed to co-ordinate domestic and international markets. Actively expand domestic consumption, the development of new products, developing the rural market and promote the application of industrial textiles. In fact, China’s domestic consumption of textile products accounted for 77 percent, while the figure in 2000, less than 60 percent, the per capita fiber consumption in 2000 was only 7.5 kilograms, and in 2007 had reached 14.6 kilograms. The domestic market remains the development of the textile industry’s first driving force. “1.3 billion people have to wear clothes, this is the long-term development of the textile industry a strong guarantee for the domestic market there is still tremendous potential.” Xu Kunyuan said.

   revealed that this year the sun Group strategy is to adjust a major focus on domestic market, the domestic market to compensate for the decline in export markets and inadequate. Xu Kunyuan said that the global economic crisis will make the demand for textiles and garments to reduce the total amount, which is very detrimental to China’s exports. However, by increasing value-added products, adjust product structure, the international share of Chinese textile products can also continue to enhance.

Quality first completion of the self-salvation

The industry believes that the textile industry to break the bottleneck of the market, apart from the export tax rebate measures such visible and, more importantly, textile enterprises to strengthen technology to enhance the quality and brand awareness.

To improve sales of the first thing is to improve product quality and brand awareness. The face of fierce market competition, the textile enterprises have begun to take on high-end line to fight for the textile market place, high-end products not only high-margin, high-yielding, and the market competitiveness of products will also be greatly enhanced.

Adjust the revitalization planning is also proposed to strengthen the technological transformation and building their own brands. Central investment in the new set up special, focusing on support for spinning weaving, printing and dyeing, chemical fiber industry advances in technology, to promote the industrialization of high-tech fiber, textile equipment, improve the level of autonomy, cultivate their own international influence well-known brands.

“Through our practice, our own brand products in the 2008 competition in the market decline is not significant. Therefore, we in the original preparation of this year on the basis of the development of an own brand, and strive to use 3 years to realize their own branded products ratio from 40% to 70%. ” said.

Have eliminated, there is progress, product quality has become the darling of today’s textile market. An industry source pointed out that the current domestic and foreign market sales are not optimistic, because of the shrinking buyer’s market, a direct result of a competitive textile market, in such circumstances, competition among enterprises become competitive products, the more is the best quality products more competitive. Brand will become the main textile market.