Having been working on finance and people’s livelihood content for many years, I rarely use the word “big news” to describe news, but this new export tax rebate policy is definitely affordable.
Starting from April 1, the new export tax rebate policy jointly issued by the Ministry of Finance and the State Administration of Taxation has officially been implemented.
Among them, the entire photovoltaic industry chain has directly canceled export tax rebates, involving 249 products; the tax rebate rate for battery products has been reduced from 9% to 6%, and it is clear that it will be completely zeroed from 2027; including other fields, a total of 271 products have bid farewell to financial subsidies.
Many foreign trade bosses and factory workers were very panicked after seeing the news. They were worried that without tax refunds, profits would be lost and it would be difficult to receive orders. They even questioned whether the country was going to “wean itself off” and no longer pay attention to foreign trade.
But in fact, this is not only not a suppression, but a coming of age gift from the state to the foreign trade industry and Made in China.
Saying goodbye to “fiscal rebates for exports” can force companies to move from “low-price involution” to “high-quality profits”, and ultimately keep profits in the country and feed back to ordinary people.
The following is an explanation of the core policies in vernacular: First, the photovoltaic industry is the most thorough. The entire industrial chain of silicon materials, silicon wafers, cells, modules, inverters, photovoltaic glass, etc. will no longer receive a penny tax rebate for exports after April 1. The previous model of relying on tax rebates to lower prices to grab orders has completely failed.
Second, there is a buffer period for the battery industry. This year, the tax rebate rate will be reduced from 9% to 6%. The tax rebate will be completely canceled from January 1, 2027, achieving complete marketization.
Third, the customs declaration date shall prevail. Any customs declaration for export on or after April 1 will be subject to the new policy, regardless of the order signing and production time.
Many people do not understand why the country suddenly adjusted its policies when it was leading the world in photovoltaics and batteries.
In fact, the logic behind it is realistic and long-term, and directly addresses the pain points of foreign trade in the past ten years.
First, the industry is strong enough and there is no need to subsidize “blood transfusion”.
China’s photovoltaic industry accounts for more than 70% of the world’s total, and it controls the entire chain. In the battery industry, in the fields of energy storage and power, the global market is also inseparable from Chinese companies.
In the past, when the industry was weak, export tax rebates helped companies open up international markets. Now that they are leading the way, it is no longer necessary to rely on tax rebates for subsidies.
Second, state subsidies can no longer be used to provide “price discounts” to foreigners.
The original intention of export tax rebates is to avoid double taxation and allow Chinese products to compete fairly. However, in reality, companies cede tax rebate profits to overseas buyers in order to grab orders, resulting in an absurd situation of state subsidies, low-price enterprises, overseas buyers profiting, and domestic workers earning hard-earned money. The state’s cancellation of tax rebates is intended to cut off the vicious cycle.
Third, world-class production capacity must be transformed into a good life for Chinese people.
In the past, the photovoltaic and battery industries had large production capacity but thin profits. Companies relied on tax rebates to survive and did not dare to increase prices, conduct research and development, or raise wages for workers. The national adjustment policy aimed to keep profits in the country, allowing companies to make money based on technology, quality, and brand, and feed back domestic demand.
After the policy is implemented, companies will become polarized.
Small factories that rely on tax rebates to survive will be cleared out at an accelerated pace. They have no technology, brands and customers. They will be in a dilemma after the tax rebates are cancelled. This will help purify the market and eliminate backward production capacity.
Companies with technology, customers and bargaining power will usher in the spring, such as the leading foreign trade companies in Jiangsu, Zhejiang and Shanghai. Policies encourage everyone to uniformly “raise prices”, return to reasonable prices, and compete on quality rather than low prices.
It also has a great impact on ordinary people.
First of all, workers’ wages are more likely to rise, and companies will have the confidence to raise wages and improve benefits for employees after their profits increase.
Secondly, domestic consumption will be activated, and the increase in workers’ income can drive domestic demand.
Finally, the industry will truly upgrade. Companies will devote their energy to research and development, improve efficiency and build brands. In the future, high-value products will be exported, and China’s manufacturing industry will truly rise.
I would like to say to foreign trade bosses, don’t panic, don’t be preoccupied, and don’t grab orders at low prices.
After April 1, if there is a price increase, we will raise the price, and if there is a transformation, we will transform.
The national signal is clear and supports high-quality development.
If you have technology, quality and brand, you will not be afraid of market changes.
The implementation of the new export tax rebate policy on April 1 is not the end, but the starting point for China’s manufacturing to mature.
From “policy transfusion” to “independent hematopoiesis”, from “low-price involution” to “high-quality premium”, from “subsidizing overseas” to “hiding wealth among the people”, China’s foreign trade will bid farewell to the cheap label and rely on technology, brand and quality to establish a global foothold, and ordinary people will also enjoy the dividends of industrial upgrading.
The coming-of-age ceremony made in China has arrived, we will wait and see.
