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ReturnChina promises more help to textile industry
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PublishDate：
2008-11-19 16:10:00
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China will roll out more tax breaks for textile firms and help channel loans to the industry, which has been hard hit by slowing external demand, a government minister said on Tuesday.
Since July, Beijing has twice increased refunds of value-added taxes to exporters of textiles, a big employer of semi-skilled labour.
"Next we will continue to come up with various fiscal and credit measures to help resolve the difficulties the textile industry is currently facing," Ou Xinqian, vice minister of the Ministry of Industry and Information Technology, told a forum.
But she said the government could do only so much. The prime responsibility lay with companies themselves, which had to innovate and build up their brands, Ou said.
Textile exporters have been seriously affected by shrinking demand in the United States and Europe in the wake of the global financial crisis, as well as the yuan's rise in value over the past year.
Annual growth in apparel exports dropped to 2.8 percent in the first 10 months of the year, compared with a 22.9 percent pace in January to October of 2007.
Yang Jianguang, general manager of Haining Chaoda Warp Knitting in eastern Zhejiang province, said that while the increases in export tax rebates had helped somewhat, he hoped the government would further lower interest rates and firms' taxes.
For now, he said his company was running at just 70 to 80 percent capacity, well below normal, and was cutting prices to hold on to customers as demand waned.
"Hopefully that way, once the winter (of the economic slowdown) is over, things will slowly get better," Yang told Reuters on the sidelines of the industry forum.
In addition to the export tax rebates, Beijing has rolled out revised value-added tax (VAT) rules aimed at cutting firms' tax bill and set up a mechanism for encouraging loans to small- and medium-sized enterprises (SMEs) through government guarantees.
Du Yuzhou, president of the China National Textile and Apparel Council (CNTAC), said that stepping up support for loans to SMEs was among the most important things the government could do next, together with further easing their tax burden.
"The scale of the loans under that programme is already about right, but if possible we should give SMEs more ways of obtaining such loans," Du told Reuters.
Sun Ruizhe, CNTAC's vice president, pointed to other steps firms could take to weather the storm, which he said had left around two-thirds of them with little to no profits.
Companies needed to shift their production to keep up with the changing landscape, Sun told Reuters.
The government's recently announced 4-trillion-yuan ($586 billion) fiscal stimulus package would create opportunities for textile makers by increasing demand for industrial clothing as investment pours into new infrastructure projects, Sun said.
Government efforts to increase farmers' incomes also promised to create more demand in China's vast countryside, he added.
"Basically, the consumption is still there. The only thing that has changed is the composition of the consumption," he said.
Source:www.guardian.co.uk
Since July, Beijing has twice increased refunds of value-added taxes to exporters of textiles, a big employer of semi-skilled labour.
"Next we will continue to come up with various fiscal and credit measures to help resolve the difficulties the textile industry is currently facing," Ou Xinqian, vice minister of the Ministry of Industry and Information Technology, told a forum.
But she said the government could do only so much. The prime responsibility lay with companies themselves, which had to innovate and build up their brands, Ou said.
Textile exporters have been seriously affected by shrinking demand in the United States and Europe in the wake of the global financial crisis, as well as the yuan's rise in value over the past year.
Annual growth in apparel exports dropped to 2.8 percent in the first 10 months of the year, compared with a 22.9 percent pace in January to October of 2007.
Yang Jianguang, general manager of Haining Chaoda Warp Knitting in eastern Zhejiang province, said that while the increases in export tax rebates had helped somewhat, he hoped the government would further lower interest rates and firms' taxes.
For now, he said his company was running at just 70 to 80 percent capacity, well below normal, and was cutting prices to hold on to customers as demand waned.
"Hopefully that way, once the winter (of the economic slowdown) is over, things will slowly get better," Yang told Reuters on the sidelines of the industry forum.
In addition to the export tax rebates, Beijing has rolled out revised value-added tax (VAT) rules aimed at cutting firms' tax bill and set up a mechanism for encouraging loans to small- and medium-sized enterprises (SMEs) through government guarantees.
Du Yuzhou, president of the China National Textile and Apparel Council (CNTAC), said that stepping up support for loans to SMEs was among the most important things the government could do next, together with further easing their tax burden.
"The scale of the loans under that programme is already about right, but if possible we should give SMEs more ways of obtaining such loans," Du told Reuters.
Sun Ruizhe, CNTAC's vice president, pointed to other steps firms could take to weather the storm, which he said had left around two-thirds of them with little to no profits.
Companies needed to shift their production to keep up with the changing landscape, Sun told Reuters.
The government's recently announced 4-trillion-yuan ($586 billion) fiscal stimulus package would create opportunities for textile makers by increasing demand for industrial clothing as investment pours into new infrastructure projects, Sun said.
Government efforts to increase farmers' incomes also promised to create more demand in China's vast countryside, he added.
"Basically, the consumption is still there. The only thing that has changed is the composition of the consumption," he said.
Source:www.guardian.co.uk
