China is considering introducing additional taxation policies to curb exports and encourage imports, Finance Minister Jin Renqing said on Wednesday.
Jin was quoted by the official Xinhua news agency as saying that the finance ministry and other government agencies were researching new policies on export tax rebates, processing trade and export tariffs, with an eye to reining in exports.
Jin said China might also cut import tariffs and introduce import subsidies to encourage imports. He did not elaborate. Earlier on Wednesday, Wang Xiaohua, a vice director with the taxation department of the finance ministry, said in a Web cast on www.gov.cn that China's existing plan to slash or cut export tax rebates on a broad range of products would only go some way to reducing the country's large trade surplus.
"In my view other supporting policies are needed to address the problem of the excessive trade surplus," Wang said. The rebate move, which comes into effect on July 1, would translate into an average cut of 2 percentage points in export rebate rates, something that exporters could withstand, she said.
Globally competitive firms would easily be able to raise prices to shift the burden to importers, she said. Less competitive Chinese exporters could slash costs as a way of coping with the changes, she said. The government said last week that it would cut the refund of value added tax on about 37 percent of its export categories.
It said that rebates would be scrapped on 553 products and cut by 5-13 percentage points on another 2,268 lines. Wang said further adjustments to export tax rebates would be determined by the impact of existing policies.