Textile Industry Accepted Tax Rebate Rate Did Not Meet Expectations.

Core tip: according to the revitalization plan fifth, textile and garment export tax rebate rate increased from 14% to 15%, although the tax rebate rate has not reached 17% of the previous estimate, but the industry was not surprised.

According to the revitalization plan fifth, the export rebate rate of textile and garment increased from 14% to 15%. Although the tax rebate rate did not meet expectations, the industry was not surprised.

China's textile export growth has declined since 2008, according to the Ministry of commerce data.

The cumulative export volume of US $185 billion 170 million for the whole year increased by 8.2% compared with the same period last year, an increase of 10.7 percentage points lower than that in 2007. It is estimated that the overall growth rate of China's textile exports will continue to slow down in 2009.

However, even with a mere increase of 1%, the new export tax rebate rate still adds billions of profits to domestic textile enterprises.

According to estimates, in 2009, the average exchange rate of RMB against the US dollar was estimated at 6.5, and the textile and garment export tax rebate rate increased by 1 percentage points, and the textile and garment export enterprises received 7 billion 600 million yuan of tax rebate.

Without considering other factors, when the enterprise implements the 25% income tax, the export tax rebate will increase the net profit of the textile industry by about 5 billion 700 million yuan.

It is learnt that from the second half of 2005 to the present, the appreciation rate of RMB has reached over 18%, and the export rebate rate has also been reduced from 17% to 11%. The competitiveness of textile and garment industry has been declining, the industry profit is slim, and the best enterprise profit margin is about 15%.

With the sharp shrinkage of global demand, the export tax rebate rate of textile and garment has increased two to 14% in the second half of last year. To a certain extent, it has boosted the confidence of textile enterprises, but the change in the overall situation of the textile industry will not be very obvious.

As a labor-intensive traditional industry with a dependency ratio of 30%, China's textile industry has become the "worst hit area" in the financial tsunami.

Data from the National Bureau of statistics showed that in 2008 1 - November, textile enterprises above Designated Size realized profits of 104 billion 200 million yuan, down 1.77% from the same period last year, and the growth rate dropped 38.76 percentage points over the same period in 2007.

Among them, the deficit of loss making enterprises reached 22 billion 750 million yuan, an increase of 99.85% over the same period last year, and 2/3 enterprises were losing money or losing money.

This is the first time that China's textile industry has seen negative growth in the first 10 years. In 2008, the textile industry profits will be flat or even negative growth in 2007, while the overall industry profit growth in 2007 will be as high as 37.79%.

However, the industry experts believe that although the textile industry revitalization plan has shown the support of the state, the textile industry will remain depressed in the short term.

Experts said that the textile industry revitalization plan is no doubt a very good policy, but the implementation of the policy will take 3-6 months. Good results will not happen immediately. In addition, under the background of shrinking global demand, it is difficult for the above policies to stimulate exports and stimulate the rapid recovery of the textile economy in a direct and timely manner.

Experts said that the main competitors of China's textile export enterprises are not in foreign countries, but in the mainland. Therefore, improving the export tax rebate and other negative burdens policy is only giving export enterprises more room for price reduction, and can not create external demand.

Experts believe that the key to the revitalization of the textile industry is to stimulate consumption, and suggest that some of the expected expenditure be directly used to stimulate domestic consumption.

"There are two advantages to stimulate consumption. On the one hand, it can solve the excess capacity in China. On the other hand, it can also pry the domestic market. Most of the export tax rebates in the last ten billion are subsidized by foreign consumers. If used in China, this 10 billion capital may pry up a huge market effect, even in the short term, the role of stimulating consumption may be greater."

Experts say.