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Tax rebates cut to slow steel sector

By Fu Chenghao (Shanghai Daily)
Updated: 2007-04-11 16:59

China will cut or cancel export tax rebates on more than 150 steel products from Sunday, in its latest effort to optimize trade structure, an industry association said yesterday.

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The rebates from value-added taxes on 76 steel products including some stainless steel plates will be reduced to five percent while those on 83 products such as some hot-rolled coils will be canceled, the China Iron and Steel Industry Association said on its Website yesterday, citing a joint statement from the Ministry of Finance and the State Administration of Taxation.

The new policy has been approved by the State Council, or Cabinet, and will take effect from Sunday, it said. It's not immediately clear what are the current rebates on the affected products.

China, the world's largest steel maker and also the No. 1 exporter, cut rebates on 142 steel products to eight percent from 11 percent in September to discourage exports of the low-end products, whose production consume a large amount of energy and cause pollution.

The latest adjustment has confirmed long-time industry speculation after China's steel exports more than doubled last year. The rising overseas steel sales have led to trade frictions with countries like the United States while a cut or removal in rebates could affect earnings of Chinese mills.

In the first quarter this year, the country's steel product exports jumped 118 percent to 14.1 million tons, according to data by China's General Administration of Customs.