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China cuts tax rebate rates to ease pressure on currency
Beijing, Oct 15: China has slashed its tax rebate rates by an average of three percentage points on some export items like petrol, Coke and zinc in an attempt to alleviate the heavy burden on state finances and ease the upward pressure on the Chinese currency, Renminbi.
Beijing, Oct 15: China has slashed its tax rebate rates by an average of three percentage points on some export items like petrol, Coke and zinc in an attempt to alleviate
the heavy burden on state finances and ease the upward pressure on the Chinese currency, Renminbi.
This is a wise move, Yuan Gangming, an expert with the
Chinese Academy of Social Sciences, said while noting that
the adjustment was the right direction to take to rationalise
China's tax rebate system.
"This will help ease the increasing pressure for Renminbi appreciation, which is a result of the strong trade surplus," he was quoted as saying by 'China Daily' today.
The cuts, which take effect on January one, will also push up the costs of exports and weaken their competitiveness on international markets, Yuan said.
Countries like the United States, Japan and South Korea want China to let the currency appreciate and thus reduce a large trade imbalance. The undervalued currency makes Chinese imports cheaper for American consumers and makes US products more expensive in China, foreign experts say.
However, China says its policy is prudent and cautious - and protected the country from the worst effects of the 1997 Asian economic turmoil.
The Renminbi has been pegged at about 8.28 to the US dollar since 1994. China has said it would probably eventually float the currency but has rebuffed pressure by Washington and others to do so immediately. Bureau Report
"This will help ease the increasing pressure for Renminbi appreciation, which is a result of the strong trade surplus," he was quoted as saying by 'China Daily' today.
The cuts, which take effect on January one, will also push up the costs of exports and weaken their competitiveness on international markets, Yuan said.
Countries like the United States, Japan and South Korea want China to let the currency appreciate and thus reduce a large trade imbalance. The undervalued currency makes Chinese imports cheaper for American consumers and makes US products more expensive in China, foreign experts say.
However, China says its policy is prudent and cautious - and protected the country from the worst effects of the 1997 Asian economic turmoil.
The Renminbi has been pegged at about 8.28 to the US dollar since 1994. China has said it would probably eventually float the currency but has rebuffed pressure by Washington and others to do so immediately. Bureau Report