China VAT Rebates Raised - But Not By Much

aj — Thu, 28 Aug 2008 20:02:10 GMT

The Chinese government has raised the value added tax (VAT) rebates given to manufacturers of some textiles and garments. It's been reported (see here and here) that the rise is meant to ease cost pressures on China's textile producers slapped with rising costs. The move is minimal (from 11% to 13%) and isn't seen as a trend to reverse the drastic rebate cuts of the past year.

The rebates for some products, including zinc, silver and batteries (seen as highly polluting), were scrapped entirely.

The 2% increase for textiles is half of the 4% requested by China's textile and garment manufacturers.

My sources on the ground in Shanghai confirm that the recent rebates have been met with little attention, compared with the sweeping cuts of last year that that sent shock waves throughout all global manufacturing supply chains.

MFGx Blog

China VAT Rebates Raised - But Not By Much