MOFCOM denies plans to cut steel export rebates
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China has no plans to reduce export tax rebates on steel products, Shanghai Securities News reported on May 26, contradicting recent reports.
A source from Hebei Iron and Steel Group had claimed the Ministry of Commerce (MOFCOM) was considering canceling the 9 percent export tax rebate on hot rolled steel coil, and cutting rebates on cold rolled steel coil and coated steel sheets from 13 percent to 9 percent. The report caused dismay in the steel industry.
But MOFCOM dismissed the story as groundless. An official said, "Even if an export rebate adjustment was under consideration, it would be the Ministry of Finance (MOF) not the MOFCOM that would have the main responsibility."
Qi Xiangdong, deputy secretary-general of the China Iron and Steel Association, said he had heard nothing about cutting rebates. Qi, who is also an advisor to MOF, emphasized that adjusting export tax rebates is the responsibility of MOF, not MOFCOM, and said no such move is on the agenda.
Han Weidong, marketing director of Hebei Iron and Steel Group, said, "The source could not have been from our company. Our people are not authorized to disclose information like that." Han added that in current market conditions, he could not see the sense of an adjustment that would badly affect China's exports.
Another expert said that the Chinese economy had still not achieved stability following the financial crisis and the country needs to maintain continuity in its export policy.
But China is considering changing its tax policy for the exports in the processing trade, Qi said. In order to restrict exports of energy-intensive and high-pollution products, China plans to adjust its catalogue of prohibited commodities. Some steel products are likely to be included. "But the steel industry as a whole will be hardly affected," Qi said.
From January to April this year, China exported 13.02 million tons of steel, accounting for just 2.9 percent of its total steel output.
