What do you think of China's new export tax rebates?

Introduced in 1985, the tax rebates for exporters have made Chinese products more competitive on the international market.

It is now expected that China will cut tax rebates by an average of two percent for sectors such as textiles, metallurgy, iron and steel. Only high-tech industries avoid the knife -- their rebate is being increased.

"Export rebates for high energy-consuming, high-polluting and resource-intensive products should be stopped," says Fu Ziying, assistant to the Minister of Commerce.

As a buyer how do you cope with China's export tax rebates?

As China supplier how do you cope with it?

I think we should focus on following points;

1. Increase of pollution due to increase in manufacturing causing health hazards.

2. Limited Energy. They want to utilize enery for most profitable way.

3. China economy is self sustainable now.

4. Reduce produciton and risk. This is very important. We should remember the case of USA economical slump which came due to over production as the money got struck in form of raw material.

In currest case USA's economy in going down which is biggest consumer and if they stop buying we can face the same situation over again.

5. Also in some products there is high fluctuation in price which could pose a problem is overstocked.

6. Chinese government want that material espacially for construciton should also get available to local consumer as high end development is going on there.