China Raises Garment, Textile Export Tax Rebate Rate to 16%

China increases the tax rebate rate for textile and garment exports from 14 percent to 16 percent. . The effective date of the new rate is April 1,2009.

The move would reduce exporters' costs and support the textile industry, the Council said
In a national plan to invigorate China's textile industry adopted by the State Council, the government would allocate funds for companies that produce textiles or fibers, or operate in the textile printing and dyeing sector, to upgrade technology and develop domestic brands.

Government departments were told to provide financial support and insurance services to small and medium-sized textile plants.

The government would also announce steps intended to phase out obsolete capacity, eliminate energy-intensive, polluting equipment and technology, and encourage textile and garment makers to relocate from southeastern parts of China to central and western areas.

According to the plan, the government will take a proactive attitude to enlarge domestic consumption, innovate new production, expand rural markets and promote the use of textile products in relevant industries, while expanding export destinations to stabilize the share in the international market.

The textile sector is the country's traditional pillar industry and enjoys an advantage in international competition.

China has raised the export tax rebate rate for textiles three times since last August. The previous increase in November took the rate from 13 percent to 14 percent.