About 150 kinds of plastic raw materials and products are listed in the new batch of processing trade restricted product catalogues. The new catalog came into effect on August 23, and the export of enterprises will face huge financial pressure.
On July 1st, the country’s adjustment of export tax rebate policy was unreliable and a major policy for export trade was released. On July 23, the state announced a new batch of restricted-product catalogs for processing trade, and the processing trade of about 150 plastic raw materials and products was limited.
After the implementation of the new policy, plastics companies are facing huge financial pressure and the export market is expected to be squeezed.
Export Policy: A Two-pronged Approach to Curbing High Contradictions
In China's chemical import and export trade, processing trade has always occupied an important position. The data from the China National Chemical Information Center shows that from January to June 2007, China’s chemical exports amounted to US$40.45 billion, including 1.966 billion U.S. dollars for processing and assembly and 1.22.08 billion U.S. dollars for processing materials, and processing trade exports. The amount accounts for more than 35% of the total chemical exports.
The export tax rebate adjustment policy that was introduced not long ago raises the threshold for the export of chemical products, and widens the gap between the export of general trade and the export of processing trade. The export trade tax rebate adjustment of more than 500 kinds of chemical products, its general trade export costs will generally increase 8% to 13%, so that the difference between the cost of export goods and processing trade to expand the cost to 12% to 17%. Therefore, after the adjustment of the export tax rebate policy on July 1st, some companies have already considered turning chemical products originally produced and exported in general trade into processing trade. According to news learned from Shanghai Customs, some companies in the Shanghai Chemical Industry Park have expressed their intention to increase the processing trade business or expand the scale of existing processing trade business to Shanghai Customs in early July.
However, the company has just used its brains for export transformation. On July 23, the state's processing trade policy was readjusted, and the road to export transformation of companies seeking to shift to processing trade was blocked. Export tax rebate adjustment and processing trade restrictions are both at the same level, which indicates that the government has a major determination to “contain high trade surpluses and promote the development of higher product content and greater value-added linksâ€.
Exports of restricted products must be "actually transferred"
The most intuitive restriction of this adjustment is to increase the amount of funds that the company has occupied. From August 23 onwards, export goods that are listed in the restricted category of processing trade must be subject to the “Real Transfer†management of bank guarantee account books.
The previous processing trade policy requires companies to apply for imported raw materials through processing trade manuals. When importing, they need not pay import duties and value-added tax. Theoretically speaking, companies need to deposit deposits with import customs duties and value-added taxes to the designated customs bank account, which will be returned to the company by customs after verification. However, in practice, most companies do not have to pay actual deposits. This is the so-called bank guarantee account “idle†and does not need to actually occupy corporate funds.
However, all products that have been listed in the restricted category must be "actually transferred" - full margin payment. For example, the import tariff for a certain product is 5%, the export tax rebate rate is 11%, a chemical company imports 1 million US dollars of raw materials, and the processed product is sold at a price of 1.5 million U.S. dollars and profits of 500,000 U.S. dollars. The original company was in the process. It only needs to bear the export tax rebate balance of 30,000 U.S. dollars. However, from August 23 onwards, when companies import raw materials, they must additionally prepare a security deposit of 220,000 U.S. dollars to be deposited into the designated account of the customs, and they can not apply for the return until the export of products is verified.
The processing trade of plastic raw materials and products is limited and it is urgent to develop high value-added products
In this adjustment, more than 150 kinds of plastic raw materials and products were newly added in the “Restriction Catalog for Processing Tradeâ€, among which polyethylene, polyvinyl chloride, polyvinyl alcohol, polyacrylamide, polystyrene, epoxy resin, poly Plastic raw materials such as carbonates, polyamides, phenolic resins, cellulose acetate, etc., and ethylene propylene rubber, ethylene polymer hard pipe, plastic pipe, plastic film, plastic sheet, polyester film, foam plastic, plastic doors and windows, plastic artificial leather Most plastic products, such as synthetic leather, are included in the list of restricted trade processing.
As a world base for the processing of plastic products, China has stepped into the ranks of the world's largest producer of plastic products, and its output ranks second in the world. At present, there are 90,000 plastics processing companies. Due to the cost advantages such as labor, China's plastics exports have been booming. In 2006, China exported more than 12 million tons of plastic products and exported more than US$16 billion. In January-June 2007, exports of plastic products reached US$ 10.136 billion, a year-on-year increase of 15.67%. However, there are only 9,000 plastic product enterprises above designated size (with output value over 5 million yuan). Some small enterprises have poor technology and equipment, and their product grades are very low. For many years, domestic enterprises are accustomed to taking the “low-end route†and exports are mostly plastic life. Supplies and crafts mainly rely on price measures to maintain market share. All these have become a barrier to the healthy development of the plastics processing trade.
Li Guojun, vice president of the China Plastics Processing Industry Association, said that the current burden on plastics processing companies is getting heavier due to the rise in raw material prices, the appreciation of the renminbi, the reduction of export rebates, and the impact of international trade barriers. Due to the fierce competition in the domestic market and the huge demand in the international market, the export of plastic products will not be greatly reduced. However, the export tax rebate adjustment and processing trade are limited, will enable companies to withstand unprecedented financial pressure, many companies will reduce the export of related products, some poor management, low-end products, business difficulties may even shut down or face Transformation.
Li Guojun stated that at present, the state is restraining the export of low-value-added and low-tech products. If companies are to face the reality, they can take measures to increase export prices and reduce costs in the short term, but in the long run, they will try their best to improve the technological content of products. Added value is the best way to respond to policy changes.
On July 1st, the country’s adjustment of export tax rebate policy was unreliable and a major policy for export trade was released. On July 23, the state announced a new batch of restricted-product catalogs for processing trade, and the processing trade of about 150 plastic raw materials and products was limited.
After the implementation of the new policy, plastics companies are facing huge financial pressure and the export market is expected to be squeezed.
Export Policy: A Two-pronged Approach to Curbing High Contradictions
In China's chemical import and export trade, processing trade has always occupied an important position. The data from the China National Chemical Information Center shows that from January to June 2007, China’s chemical exports amounted to US$40.45 billion, including 1.966 billion U.S. dollars for processing and assembly and 1.22.08 billion U.S. dollars for processing materials, and processing trade exports. The amount accounts for more than 35% of the total chemical exports.
The export tax rebate adjustment policy that was introduced not long ago raises the threshold for the export of chemical products, and widens the gap between the export of general trade and the export of processing trade. The export trade tax rebate adjustment of more than 500 kinds of chemical products, its general trade export costs will generally increase 8% to 13%, so that the difference between the cost of export goods and processing trade to expand the cost to 12% to 17%. Therefore, after the adjustment of the export tax rebate policy on July 1st, some companies have already considered turning chemical products originally produced and exported in general trade into processing trade. According to news learned from Shanghai Customs, some companies in the Shanghai Chemical Industry Park have expressed their intention to increase the processing trade business or expand the scale of existing processing trade business to Shanghai Customs in early July.
However, the company has just used its brains for export transformation. On July 23, the state's processing trade policy was readjusted, and the road to export transformation of companies seeking to shift to processing trade was blocked. Export tax rebate adjustment and processing trade restrictions are both at the same level, which indicates that the government has a major determination to “contain high trade surpluses and promote the development of higher product content and greater value-added linksâ€.
Exports of restricted products must be "actually transferred"
The most intuitive restriction of this adjustment is to increase the amount of funds that the company has occupied. From August 23 onwards, export goods that are listed in the restricted category of processing trade must be subject to the “Real Transfer†management of bank guarantee account books.
The previous processing trade policy requires companies to apply for imported raw materials through processing trade manuals. When importing, they need not pay import duties and value-added tax. Theoretically speaking, companies need to deposit deposits with import customs duties and value-added taxes to the designated customs bank account, which will be returned to the company by customs after verification. However, in practice, most companies do not have to pay actual deposits. This is the so-called bank guarantee account “idle†and does not need to actually occupy corporate funds.
However, all products that have been listed in the restricted category must be "actually transferred" - full margin payment. For example, the import tariff for a certain product is 5%, the export tax rebate rate is 11%, a chemical company imports 1 million US dollars of raw materials, and the processed product is sold at a price of 1.5 million U.S. dollars and profits of 500,000 U.S. dollars. The original company was in the process. It only needs to bear the export tax rebate balance of 30,000 U.S. dollars. However, from August 23 onwards, when companies import raw materials, they must additionally prepare a security deposit of 220,000 U.S. dollars to be deposited into the designated account of the customs, and they can not apply for the return until the export of products is verified.
The processing trade of plastic raw materials and products is limited and it is urgent to develop high value-added products
In this adjustment, more than 150 kinds of plastic raw materials and products were newly added in the “Restriction Catalog for Processing Tradeâ€, among which polyethylene, polyvinyl chloride, polyvinyl alcohol, polyacrylamide, polystyrene, epoxy resin, poly Plastic raw materials such as carbonates, polyamides, phenolic resins, cellulose acetate, etc., and ethylene propylene rubber, ethylene polymer hard pipe, plastic pipe, plastic film, plastic sheet, polyester film, foam plastic, plastic doors and windows, plastic artificial leather Most plastic products, such as synthetic leather, are included in the list of restricted trade processing.
As a world base for the processing of plastic products, China has stepped into the ranks of the world's largest producer of plastic products, and its output ranks second in the world. At present, there are 90,000 plastics processing companies. Due to the cost advantages such as labor, China's plastics exports have been booming. In 2006, China exported more than 12 million tons of plastic products and exported more than US$16 billion. In January-June 2007, exports of plastic products reached US$ 10.136 billion, a year-on-year increase of 15.67%. However, there are only 9,000 plastic product enterprises above designated size (with output value over 5 million yuan). Some small enterprises have poor technology and equipment, and their product grades are very low. For many years, domestic enterprises are accustomed to taking the “low-end route†and exports are mostly plastic life. Supplies and crafts mainly rely on price measures to maintain market share. All these have become a barrier to the healthy development of the plastics processing trade.
Li Guojun, vice president of the China Plastics Processing Industry Association, said that the current burden on plastics processing companies is getting heavier due to the rise in raw material prices, the appreciation of the renminbi, the reduction of export rebates, and the impact of international trade barriers. Due to the fierce competition in the domestic market and the huge demand in the international market, the export of plastic products will not be greatly reduced. However, the export tax rebate adjustment and processing trade are limited, will enable companies to withstand unprecedented financial pressure, many companies will reduce the export of related products, some poor management, low-end products, business difficulties may even shut down or face Transformation.
Li Guojun stated that at present, the state is restraining the export of low-value-added and low-tech products. If companies are to face the reality, they can take measures to increase export prices and reduce costs in the short term, but in the long run, they will try their best to improve the technological content of products. Added value is the best way to respond to policy changes.
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