China to cut export tax rebates to ease global trade tensions
Starting Apr 1, value-added tax rebates will be removed for 249 products
[BEIJING] China will cancel or reduce tax rebates on hundreds of products as Beijing seeks to reassure trade partners concerned about surging Chinese exports.
Starting Apr 1, the Chinese government will remove value-added tax rebates for 249 products, including solar cells, ceramic roof tiles and lithium hexafluorophosphate, the Ministry of Finance said in a statement on Friday (Jan 9).
The rebate rates on 22 battery-related goods, such as lithium-ion batteries, will be lowered to 6 per cent from 9 per cent, with complete removal planned from Jan 1 2027, it added.
China is taking voluntary moves to rein in the exports of some goods as trade tensions with partners such as the EU remain intense despite a tariff truce with the US. Before the Friday announcement, it already applied some controls on the shipments of steel and electric cars through measures such as licensing, Citigroup economists wrote in an earlier note.
“Beijing is taking more steps to address its trade imbalances,” said Michelle Lam, Greater China economist at Societe Generale. “It will help to some extent, though China’s trade surplus rise in recent years is still too large to ease trade partners’ concerns.”
Chinese industries including solar have been struggling with overcapacity and intense price competition. Removing export tax rebates could hasten the failure of the weakest companies reliant on overseas sales, which would help ease glut in the sector, according to consultancy Trivium China.
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Trimming tax rebates on exports can help beef up China’s falling government income. The benefits for exporters rose 5.6 per cent year on year to almost two trillion yuan (S$368.4 billion) in the first 11 months of 2025, latest official data showed, or about 8 per cent of broad government revenue in the period. BLOOMBERG
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