Up To The Tax Rebate Rate, Textile And Garment Enterprises Have Been Saved?

The Ministry of Finance and the State Administration of Taxation recently announced that the export rebate rate of some textiles and clothing increased from 11% to 13% since August 1st this year.

Sun Huaibin, a spokesman for the China Textile Industry Association, said the move showed the government's concern and support for the difficult textile and garment export enterprises and played a positive role in relieving the pressure caused by rising costs.

The latest statistics from the China Textile Industry Association show that the total export volume of textiles and clothing in the previous June was 83 billion 851 million US dollars, an increase of 11.11% over the same period last year, an increase of 6.44% over the same period last year.

If converted into RMB, the export growth rate of the former June was only 1.6%, an increase of 11.6% over the same period last year.

The increase of the export tax rebate rate is equal to 2% of the profits directly sent to the relevant enterprises.

For many textile and clothing SMEs, it is undoubtedly a timely relief, providing a breathing space for a large number of export oriented textile and garment enterprises on the verge of collapse.

But at the same time, it is easy to be diluted when international consumption demand is reduced, domestic production costs are rising, and RMB appreciation continues to rise.

"Just the appreciation of the renminbi is enough to offset the profits that the government has given us."

A garment export enterprise official said.

China's textile and garment enterprises have always been highly dependent on exports.

According to the statistics of China Textile Industry Association, although textile and garment exports declined this year, the total value of textile and clothing exports in June accounted for 12.58% of the total share of the country, compared with 29.32% in the same period last year.

Figures show that the national textile and apparel exports to the United States in June were only 0.65% in dollar terms.

With the weakening of international demand and the rise of domestic prices, many enterprises worry that the new profit after the adjustment of export tax rebate rate will be shared by all relevant links.

For example, the raw material dealer may ask for a raise in price, while foreign importers may lower the quoted price.

"Although the new policy is conducive to reducing the pressure of enterprises and improving the profitability of the industry, the multiple factors that are troubling the development of the textile and garment industry are difficult to change in a certain period and will not be eliminated because of the increase in the export tax rebate rate.

Raising the tax rebate rate will not change the downward trend of the industry's profit growth rate, but it only slows down the rate of decline.

Someone in the industry said.

Textile and garment enterprises must rely on their own upgrading if they want to really get out of difficulties.

Sun Huaibin said.