An end will be declared to the 40-year-old global textiles quota system in late 2004. On January 1 the Chinese government will take the initiative for the first time since the founding of New China in 1949 to adopt measures including the levy of export duty-why beginning the collection of export duty on textiles is a matter of concern today. Official from customs department answers reporters' questions

I. Highlight:

The development of Chinese textiles is aimed not at occupying other countries' markets through simple quantitative growth, but rather it is hoped to promote a fundamental change in the growth method for the export of textiles through propelling the upgrading of product mix and even industrial upgrading and enhancing core competitiveness. Initiating the collection of export tariffs makes it possible to avoid as far as possible the phenomenon of growth of export volume but a fall in price. Meanwhile, it is conducive to dispelling some countries' doubts and misgivings and to creating a free, relaxed favorable trading environment.

Reporter: Quota management over global textiles trade will be abolished next year, what consideration has prompted the Chinese government to decide to adopt measures including an additional charge of export tariff on some textiles?

Official: Textile industry is a traditional Chinese dominating sector. Since China's entry into the WTO, the export of textiles has witnessed sustained, fast growth, which accounts for 20 percent of the world's total, thus making China the world's giant producer, consumer and exporter of textiles. However, the problems caused by the fast growth of the export of textiles have become increasingly prominent: Domestically, the exportation of Chinese textiles has witnessed an increase in volume but a fall in price, these products are manufactured in the brand-name or trademark designated by the clients, lacking Chinese own brands. Internationally, to counter the emergence of China's textiles trade protectionism, some countries exaggerated China's textiles exporting capability, bringing many uncertain factors in the export of textiles, for instance, they set up new trade barriers such as the harsh and unreasonable rules on the product origin and special restrictive measures, setting serious obstacles to the textile exportation of developing countries.

The Chinese government has attached great importance to the development of textile industry, advocating trade liberalization and facilitation and opposing trade protectionism. The development of China's textiles is not aimed at seizing other countries' markets through simple quantitative growth, nor is fighting a price war a road to enhancing our competitiveness. We hope to gradually upgrade products and increase their added value through promoting the upgrading of product mix and even the textile industry. In order to maintain and coordinate the export order and to establish a long-term, stable guarantee supporting system for the export of products, that is in keeping with WTO rules, the Chinese government has decided to adopt eight-point measures in 2005 including the collection of tariffs on the export of some textile products.

Reporter: What are the main advantages of the levying of export tariff in relevance to other measures?

Official: Through improving tariff structure and optimizing tax rates, active collection of export duty makes it possible to promote effective competition, realize the rational allocation and effective utilization of resources, expedite change in the growth method for the export of textiles, accelerate technical renovation and industrial restructure, enhance and strengthen the competitiveness of Chinese textiles in the international market and maintain the sustainable development of textile industry. This is helpful to raising export price and avoiding as far as possible an increase in export volume but a fall in price.

Meanwhile, it is also conducive to dispelling some countries' doubts and apprehensions, and creating a free, relaxed favorable trading environment.

II. Highlight:

China will levy a surcharge of export tariffs on 148 clothing duty paragraphs in 33 sensitive categories of seven types of products such as coats, skirts, shirts, trousers, pajamas and underwear to be exported worldwide, which will achieve the result of a relatively low tax burden for the export of high value-added products and relatively high tax burden for the export of low value-added products.

Reporter: What are the main textile products on which export duty is levied this time?

Official: Starting from Jan.1, 2004 to Dec. 31, 2007, China will adopt transitional, temporary measures to levy a surcharge of special export tariffs on 148 clothing duty paragraphs in 33 sensitive categories of seven types to be exported worldwide, such as coats, skirts, shirts, trousers, pajamas and underwear.

In terms of tax rates, full consideration is given to the bearing capability of enterprises. On the premise of simple tax calculation, a tax rate structure is established rationally and different tax burdens are set for export products of different prices. For commodities measured on the basis of piece (set, item), those priced relatively high, the tax rate is set as 0.3 yuan/piece (set, item), those with a relatively low price, the tax rate is set at 0.2 yuan/piece (set, item); for commodities calculated with weight as a measuring unit, the tax rate is fixed at 0.5 yuan/kg.

An estimate shows that the average tax burden level is 1.3 percent, which will put big pressure upon poor-quality and low-price products and light pressure upon fine-quality and high-price products, making it possible to achieve the result of relatively low tax burden for the export of high value-added products, and relatively high tax burden for the export of low value-added products, thereby encouraging the export of high value-added products and thus achieving the aim of optimizing the export structure of Chinese textiles. Meanwhile, to guarantee fair competition between domestic and foreign enterprises and simplify the tax system, we will adopt the same taxation policy toward general trade and processing trade, and levy export duty by nine methods of supervision over general trade, petty border trade and barter trade.

III. Highlight:

China's collection of export duty on some textiles is in keeping with WTO rules. Currently, the Chinese customs department has basically completed all preparations for the collection of duty, the textile industry and textile export enterprises should also make active preparations for tackling related work.

Reporter: Is China's collection of export duty on some textiles identical with WTO rules?

Official: As of January 1, 2005, realization of the integration of textile trade is a major achievement of WTO's Uruguay round of multilateral trade negotiation and an irreversible trend under the background of economic globalization, which is in the long-term interests of WTO member countries. China's collection of export tariffs on some textiles not only accords fully with WTO/GATT rules on the handling of current trade, but also lays a solid foundation for strengthening China's friendly cooperation and exchanges with other countries, making responsible contributions to the stable development of global textile trade.

Reporter: The levy of tariffs on the export of textiles will produce huge influence in the world, what preparation has Chinese customs department made for this brand-new work?

Official: The Chinese customs department started to study the implementing plan from the beginning of November. Currently, all items of preparatory work have been more or less completed: Firstly, the scope and ways and means for the levy of export duty on textiles have been fixed; secondly, nine kinds of customs supervision and management methods for the collection of export duty on general trade and barter trade are finally determined after sifting one by one the current 91 customs supervision and administration methods; thirdly, fixing the customs' special supervision areas for the entry of export textiles, (namely, export processing area, bonded area, bonded material circulation park area, bonded material circulation center, etc.), export duty is levied in the area of entry; and fourthly, the customs supervision job program should be adjusted to ensure that materials are kept under control and can move smoothly and speedily.

Reporter: In the face of tax collection, what preparations should export enterprise make?

Official: As far as textile industry and textiles export enterprises are concerned, they should actively handle things and cope with the situation. First of all, they should understand and master the concrete contents and operation procedures of the policy, step up readjustment of the product mix, accelerate enterprise technological renovation and promote the sound, sustainable development of the textile industry.

By People's Daily Online