Following the August 1 textile export tax rebate rate increase after the approval the State Council, Ministry of Finance and State Administration of Taxation has declared a November 1, 2008 from a large area of increased export tax rebate rate, the beneficiaries include textiles, clothing, toys and other labor intensive goods and anti-AIDS drugs and other high-tech, high value-added goods, total 3486 products, accounting for the Customs Tariff 25.8% of the total number of goods. The adjusted export tax rebate rate is divided into 5%, 9%, 11%, 13%, 14% and 17% of the six files.

Export dependence on the Chinese economy are the highest in the world power in the global economic downturn, China’s exports face a severe test case, the adjustment of export tax rebate policy to maintain moderate growth in exports, has its own necessity. Te Bie is labor-intensive exports to absorb tens of millions of labor, but vendors were generally smaller and less ability to resist risks, if the closure of a large area, the local economy and social stability may have resulted in major economic impact.

Nevertheless, we expected effects of the export policy change should not be too high. Many labor-intensive products for export in China, the general economic recession in the importing country, demand shrinking, even though efforts to increase export incentives, we probably can not be expected to maintain high export growth can be maintained without reduce the already considered successful. In particular, China in the international market, many products have occupied a high share, we have 774 kinds of manufactured exports in the world, toys and the like products “Made in China” share has been as high as 80% to 90%.

In any case to increase the intensity of export incentives, expect these industries to continue to maintain double-digit export volume growth will be futile, in the current of “stagflation + financial crisis” characterized by the world economic environment, in particular. At the same time, we can not ignore the negative impact of export policy adjustments. First, efforts to increase export incentives, which means spending tax rebate, a time when a sharp slowdown in revenue growth anticipated substantial increase in spending occasion, the pressure may not be ignored.

Second, China’s international balance of payments situation has not changed double surplus, this situation to our base money, inflation, asset markets, foreign asset management, causing a heavy burden and huge risks, in the sub-prime crisis, which kind of exposure was particularly prominent. We are the world’s largest and fastest-growing foreign exchange reserves, although it played a role to avoid balance of payments crisis, but also to blackmail people into our tools, our Reserve Management Bumen suspense and rising domestic social criticism.

Moreover, because the other major economic powers of economic turmoil is far higher than China, although part of the access to China’s arbitrage capital has returned home country emergency of the situation, but there are a lot of capital, as China safe harbor and eager to flow into China’s stable domestic economic performance of the more significant , this potential impact of the greater flow of capital, the greater the pressure on the issue. In this case, if no other measures to support efforts to increase export incentives would help increase the trade surplus, and thus to fuel the problem, this, we should not be underestimated.

China’s high dependence on external demand to promote economic growth model, while a great success, but also bears and China’s economic development objectives run counter to the contradiction: our economic development goal was to improve people’s material and cultural living standard, but highly dependent on external demand in the economy pattern of growth required internally to maximize the income of their nationals down in order to increase their export prices in the international market competitiveness, it is precisely with the original aim.

Only by relying on domestic demand-led model of economic growth within only ask for a higher national income in order to create more effective demand production only in line with our original objective of economic development. China must rely more on domestic demand and stimulate economic growth, has become a domestic and international consensus. And if no other set of policies, excessive strengthening export incentives, of course, be cured short time, but the pattern of economic growth on China’s transition is negative.

In view of this, in the midst of the subprime mortgage crisis, we have to treat, but also to transform, this transformation has included two levels: first level is the trade itself to upgrade and improve trade efficiency; second level Economic growth is more dependent on domestic demand rather than relying on external demand driven.

On the first level, in addition to aid, the greater need is to help businesses in emerging markets, etc. in the circulation and brand links open up new possibilities to improve the effectiveness of exports, export incentive measures to prevent escalation of an international balance of payments surplus growing out of control. On the second level, specific ways of “molecular responses” and “denominator measures” of the former is to reduce exports, which is to promote faster growth in foreign demand, domestic demand growth, we prefer the no doubt denominator of the measures.

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