A Theoretical And Empirical Research On The Effects Of China's Export Tax Rebate Over Its Export And Economic Growth

The export tax rebate policy is a financial means used by a country to enhance the competitiveness of its export products. It remains increasingly controversial in theory field as long as it is implemented. One of the views is that the the export tax rebate policy is a neutral tax policy that eliminates discriminations in export to achieve a tax equity and by creating a fair market of competition, it brings the profits of global resource allocation to its maximum. While according to the other point of view, the export tax rebate policy, as a incentive policy, could be formulated into different modes by the government within reasonable limits to back up the adjustment of its economic structure and the change of its economy growth patten. It stresses the positive promoting effect of the export tax rebate policy.How to evaluate the economic effect of the export tax rebate from the quantative aspect and use it efficiently is a meaningful subject concerned by the government and theory field.After a historical review over the 20 year's export tax rebate policy in China, a prelimilary examination on the effect following the export tax rebate adjustment has been made in this article. Furthermore, an analysis of its impact over the exports and economy growth is performed from the point of its system and channels characteristics, including its influence over the cost-benefit, the revenue and its improvement of the structure of export products. Considering the"export first, tax rebate next"policy in China and the deferment effect of the policy, the histeretic nature of the variable in the export tax rebate is accounted while making the empirical analysis. So an empirical pattern on the export tax rebate's impact over the export and economy growth is established. Next, in reference to the national total data of 1989-2005, an empirical research is implemented, and the result shows the strong incentive improving effect of export tax rebate over China's export and economy growth, the histeretic nature of its incentive effect in China and its stronger impact on the next export tax rather than on the present one. And essentially there is a relevance effect among the export tax rebate , the export and the economy growth. In order to avoid the variable endophytism problem of adapting the monoequation analysis by those existing researches, a simultaneous equation set among them is made in the empirical analysis and the result shows the same as the former. With a view to the regional inbalance of trade development and economy growth, a further empirical research is made about the effect of the export tax rebate over the export and economy growth by using the inter-provincial panel data. And the result shows that on the provincial level, the export tax rebate accelerates the export and economy growth with a regional difference. The improving power if export tax rebate is more remarkable in coastal provinces but its impact over the interior provonces'economy growth is more important. At the end, on the basis of the results of the theoretical analysis and empirical examination above, considering the present situation in China, it is concluded that our industry structure needs optimization for as the export surplus to America continues, the foreign-exchange reserves zooms up, the pressure of RMB's appreciation grows. Both the central government and the local government should pay enough attention to the flexible operation of the export tax rebate in China, avoiding to adapt blindly a"complete rebate"or"rebate no more"export tax rebate policy and continuing to make a full use of it in China's macroeconomy construction.