Measures to stimulate exports 'due out soon'
Updated: 2012-09-08 02:53
By DING QINGFEN in Xiamen, Fujian (China Daily)
The Chinese government is expected to launch a package of measures to support the nation's struggling exports in mid-September, the first such move since the global financial crisis, two sources from the Ministry of Commerce told China Daily.
The measures cover a wide range of issues including tax rebates, insurance, credit, taxes, customs clearance and other tools to facilitate foreign trade, said the two sources.
The move comes as China’s export growth continues to slow.
General Administration of Customs statistics showed that growth in China's overseas shipments has been declining since the latter half of last year, due to eurozone debt woes.
In July, the nation’s export growth slumped to 1 percent, the lowest since 2009. Officials and experts are pessimistic about the outlook for the nation’s exports in the rest of the year.
After a tour of Guangdong province last month, Premier Wen Jiabao said China should take measures to stimulate exports in the third quarter, a normally crucial period for the nation’s overseas shipment, as Chinese exports continue to face many difficulties and uncertainties in the rest of the year.
"The government has been highly alert regarding the nation's exports since Premier Wen's tour of Guangdong", the largest province in terms of foreign trade, and the nation is therefore "strongly motivated and determined to roll out the measures as soon as possible to boost China's exports", said the sources.
They refused to elaborate on when exactly the measures would be launched, but said it would be "around mid-September" when the government is due to publish a series of economic figures for August including exports, industrial output and inflation.
Foreign trade figures for August are expected to be released next Monday.
During the first seven months, China's overseas shipments rose by 7.8 percent from a year earlier and imports surged by 6.4 percent year-on-year, putting China at risk of missing the target of 10 percent for this year’s foreign trade growth.
"Trade figures for August are not positive and not encouraging," said the sources.
And "from the figures that we have got ending in August, we have to say it would be a very difficult task for China to achieve the target of 10 percent this year", they said.
Wang Tao, an economist from UBS Securities, agreed on the dim outlook for the nation's exports.
"As the European sovereign debt crisis drags on, and the US growth recovery falters, leading indicators do not give us confidence that export growth will recover," Wang said.
Wen said during his Guangdong tour that, to help stabilize export growth, China will launch export-related policies, including expanding the scale of export credit insurance, reducing taxes, promoting trade facilitation in customs, and foreign exchange management, and accelerating tax rebate procedures.
Early this week, sources were quoted by Bloomberg as saying that China may expand exporter tax rebates as soon as this month, giving a full rebate of the 17 percent value-added tax on products including furniture, shoes and toys, up from the current range of 13 percent to 15 percent.
The nation used the tool in 2008 and 2009 when exports plunged during the global financial crisis, at one point raising tax rebates on 553 products including motorcycles and sewing machines.
Can it work?
Measures to help expand exports are required, as the slackening trade is increasing the risk that China will miss the target of 7.5 percent for this year’s economic growth set by Premier Wen, some experts said.
China’s gross domestic product expanded 7.6 percent in the second quarter from a year earlier, the slowest pace in three years.
During his visit to Guangdong, Wen warned that the economy could still face turbulence and called for measures to meet economic goals.
However, Zhang Yansheng, secretary-general of an experts’ committee under the National Development and Reform Commission, said: "The impact of exports on the economy is not as big as expected.
"To boost the economy, the top priority is to transform its economic growth model through stimulating domestic consumption, creating jobs, reducing taxes and providing vocational training to migrant workers," Zhang said.
Lu Zhengwei, chief economist at Industrial Bank, said the package of measures which is in the pipeline can only help up to a point.
"They can, to some extent, help exporters, but that would be limited. What is worse, they will increase the nation’s fiscal burdens and hurt the economy," he said.