Under high pressure of tax rebate adjustment policy this year, about 60 percent of export enterprises in Shaoxing, totaling 2,142 units, will be affected.
It is feared that this will lead to reduction of around 685 million yuan in the half-yearly revenue of Shaoxing, the prefecture level city located in Zhejiang Province.
Tax rebate deduction is concentrated in chemical industry in Shaoxing, including main products like disperse dyes. Many enterprises are forced to develop high value-added products and deep processing trade.
An garment company official said that income from tax rebate will be reduced by 0.15 yuan on every one dollar of apparel export. Since Chinese products were basically low priced, they can compete in the international market.
However, with the cut in export tax rebate, water, electricity and other production resources costs have increased. With continuous RMB appreciation, enterprises have to focus on domestic market instead of foreign trade. If the companies intend to remain stable in the global arena, product quality and design standards must be improved.
An official from the city authority said that Chinese enterprises are passing through a tough time. Only those who are able to take this pressure and change into driving forces will be able to find firm foothold and sustain the competition.
Fibre2fashion News Desk - China
marketing@alchempro.com
