At an executive meeting chaired by Premier?Wen
Jiabao, the State Council decided Wednesday that halting
irrational expansion of steel production is a matter of urgent
importance.
To that end, domestic steel companies will no longer be handed
tax rebates on exports of low-end steel billet and ingot products,
the government ruled yesterday.
The sector consumes vast amounts of funds and energy resources,
and analysts said the measure is a continuation of the drive to
protect the environment. In the fourth quarter of 2004, the
government cut off the tax rebate on copper, aluminum and nickel
exports.
Currently, the rebate rate on steel billet and ingot is 13
percent.
Earlier reports indicated the gap between China's steel imports
and exports narrowed in 2004. It imported 29.3 million tons of
steel products, down 7.9 million tons or 21.2 percent
year-on-year.
However, steel product exports leapt 104.6 percent, or 6.1
million tons, to 14.2 million tons last year. Nearly 60 percent of
exports were low-value-added products such as ingot.
Also at the executive meeting, the State Council told local
governments to clamp down on growth in fixed asset investment,
especially in projects connected with urban expansion and real
estate.
The measures are the latest in China's effort, launched in
mid-2003, to use macroeconomic controls to slow economic
growth.
The State Council said that although China's social and economic
development?is satisfactory overall, it also called attention
to a number of problems.
Unstable and unhealthy factors should be eliminated from the
national economy to build a harmonious country with each element of
society well developed.
(China Daily, Xinhua News Agency March 31, 2005)