China will raise export tax rebates for textiles and clothing from 11 percent to 13 percent starting Aug. 1, the State Administration of Taxation (SAT) and the Ministry of Finance (MOF) said in a joint statement released on the SAT's Web site.

The Chinese government cut the textile export tax rebate on September 15, 2006 from 13 percent to 11 percent to reduce the surging trade surplus at the time.

However, Chinese export enterprises have faced unexpected challenges since early this year, including increasing raw material prices, accelerated yuan appreciation and a global economic downturn. Thus, export enterprises have been calling for a loosening of trade control policies.

The government is also looking into this matter. The country's top leaders have made several trips to Zhejiang and Jiangsu, the nation's major textile exporting provinces.

In early July, Minister of Commerce Chen Deming visited Wenzhou in Zhejiang to check the business and trade situation of the city's textile industry. Two days later, Vice Premier Li Keqiang paid another visit to Wenzhou, also to assess the performance of local textile and clothing companies.

After these visits, the Ministry of Commerce (MOC) reportedly made official suggestions to the State Council to increase export tax rebates for certain products. Since then, industry rumors have circulated saying that the government will soon raise the export tax rebate for textiles and clothes.

In the joint statement, the SAT and MOF said that the export tax rebate increase won the approval of the State Council.

The export tax rebate for garment was also increased to 13%, according to the joint statment.

(China.org.cn by Yan Pei, July 31, 2008)