Beijing slashes tax rebates, exporters pass costs to buyers

Industry insiders revealed that Chinese exporters in diverse sectors, including aluminium products, used cooking oil (UCO), and solar power equipment, are preparing to hike prices and renegotiate contracts following Beijing's decision to cut tax incentives.

The policy change, announced on November 15, 2024, will take effect on December 1, 2024, and significantly impact exporters. The export tax rebate rate for certain products, such as refined oil, photovoltaic components, batteries, and specific non-metallic mineral products, will drop from 13 per cent to 9 per cent. Moreover, the rebate will be entirely eliminated for aluminium and copper products as well as chemically modified oils and fats, including UCO.

The move is expected to send ripples across global markets. Analysts predict metal exporters will expedite shipments ahead of the December deadline to avoid the higher costs. However, UCO exporters may adopt a different strategy, delaying deliveries to renegotiate terms with buyers.