China Cuts Rebates For Steel Exports

Changes come after criticism of China's large trade surplus.

China will remove value-added tax rebates for some steel product exports while reducing the rebates on some others from April 15, an industry group said April 10.

China will scrap export rebates for 83 types of steel products, according to a notice issued by the finance ministry and tax administration and posted on the website of China Iron and Steel Association.

It will also reduce tax rebates on 76 types of specialty steel, stainless steel products, and cold rolled steel, according to the notice, jointly issued by Ministry of Finance and State Administration of taxation.

The move, which has been approved by the State Council, comes after continued overseas criticism of China's apparent inability to rein in its large trade surplus. China's March trade surplus plunged sharply to $6.9 billion, or 38.6 % down from a year earlier and was less than a third of near-record February figure. But economists have said the slump was a result of exporters en masse bringing forward March orders in order to avoid a further reduction of value-added tax rebates threatened by officials.

China exported 14.13 million tons of steel products for the first quarter, up 118.4% from a year earlier while billet exports rose 98.1% to 1.78 million tons during the period, according to data from the customs.

Copyright Agence France-Presse, 2007

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