Analysis On New Political Economy Of China's Tax Rebate For Exports

As a public product and a preferential trade policy for promoting export, tax rebate for exports is not only an economic policy, but also a result of equilibrium among the various interest groups. It is a comprehensive problem concerning politics, economy, domestic and foreign factors. This dissertation tries to analyze the endogenous process of tax rebate for exports from the aspect of new political economy.First, this dissertation gives a general theoretical frame of trade policy decision on the basis of the resent study. As a product of political market, trade policy is decided by the supplier and demander. The decision of trade policy is not simply an economic concept. With the premise of national interests, trade policy is a public product considering economic, political, social factors and the restraint of interest groups at home and abroad.Second, according to the general theoretical frame of trade policy decision, this dissertation studies the endogenous political and economic process of tax rebate for exports from the point of policy supplier and demander. Due to the financial pressure, the central government prefers to afford the tax rebate together with local governments. However, the local governments are not active to the policy because of the same financial pressure and local economic interests. The unbalance of local economic interests accelerates the unbalance of regional economy. Therefore, the local governments hold different attitudes to the tax rebate policy. Because of the export cost increase, many export enterprises are opposite to the tax rebate decrease. However, consumers are not taken into consideration. In addition, proper decrease of export rebate is an effective method to balance China's foreign trade and resist the foreign export interest groups.Third, within the theoretical frame above, a new political economic model is proposed, and then comes to the conclusion: the export groups are playing a very important role in the decision process of tax rebate.Finally, this dissertation draws to the conclusion and puts forward policy suggestions. That is, to adopt strategic tax rebate policy, to adjust the rates of tax rebate differently, in order to improve the industry competitive power. Meanwhile, to decrease the rates of tax rebate is not an effective method to resist the foreign pressure.