A Study On The Adjustment Of Export Tax Rebate Policy Influence On Textile Export Trade

As an export incentive, export tax rebates enhance exports'competitiveness in the international market mainly through indirectly reducing product costs. China's export of textile and garment growing rapidly since 1994, when the export tax rebates system formal established. China has become the world's largest textile and garment producing and trading countries. However, the current export tax rebates policy has also brought a series of negative effects: a lot of textile and apparel export enterprises seen export rebates as a major source of profit; the frequently adjustment of export tax rebate rate also increased the occurrence of trade friction. How to effectively make good use of export tax rebates to promote the development of China's textile and apparel export trade has became an unavoidable reality.This paper research on the impact of export tax rebate policy adjustment on textile and garment export trade, mainly use the knowledge and theory of International Trade, welfare economics, industry economics and game theory. This article first make theoretical analysis of the concept and economic effects of export tax rebate, and then compared the competitiveness of China's textile and apparel products in the international market, and analysis the impact of export tax rebate on different value-added textile and apparel by knowledge of game theory. Finally, the paper research on the adjustment of export tax rebate policy influence on different types of textile products export by means of ADL model, considering structural change and by using 7/2005-12/2009 monthly data. The empirical results show that: (1) The adjustment of export tax rate influence on textile and apparel export trade has a lag; (2) The same export tax rebate rate has different effect on different types of textile and apparel production; (3) Most of China's exports of textile and apparel are low value-added products, so enterprises weak in bargaining power.The main conclusions of this paper are: (1) The impact of changes in export tax rebate rate on textile and apparel is not obvious. So, it's inappropriate to reduce China's textile and apparel exports, and reduce trade surplus by adjusting the textile and apparel export tax rebate rate; (2) The export tax rebate did not really promote China's textile and apparel products in international competitiveness. The added value of China's textile and apparel is generally low, and our textile and apparel has a full replacement in the international market. Enterprises can earn steady profits(export tax rebate) even they selling textile and apparel at cost price, due to China's high export tax rebate on textile and apparel. Textile and apparel export enterprises rely on the export tax rebate, losing the driving force of technical innovation and develop new products; (3) The adjustment of export tax rebate policy is too frequent. For the three questions, this paper put forward corresponding countermeasures from the view of state and enterprises.The main feature of this paper is: using monthly data to make empirical analysis, and add the anti-dumping, technical barriers as variables; take into account the impact of financial crisis, using the model of ADL considering structural change; analysis of export tax rebates on textile and apparel products in the international competitiveness, and get in line with the conclusions of the actual situation, providing a reference to the export tax rebate policy reform.