China's economic planner has forecast slower export growth for paper products in the second half of 2007 after export tax rebates for energy-consuming products were cut from 13 to five percent.

 

The reduction, which took effect on July 1, would reduce the sector's profit margin by five to seven percent as exporters were expected to lose US$73 million in tax rebate revenues, said the National Development and Reform Commission in a report.

 

The export rush triggered by anticipation of the tax rebate reduction in the first half had also contributed to the slowdown, it said.

 

Customs figures revealed that the export growth for paper products had been hovering at a high level, with the rise in February surging to the highest 54.18 percent.

 

The reduction would also have a serious impact on the profitability of the paper-making industry as paper products, such as napkins, packaging paper and cartons, accounted for 37 percent of last year's total exports of US$4.58 billion.

 

Export rebates for the remaining exports -- categorized as paper pulp and paper -- were scrapped from Jan. 1, 2006.

 

Enterprises manufacturing coated paper noticed problems after the United States slapped duties of 10.9 to 20.4 percent on imports of Chinese coated paper in April.

 

"Some paper-making companies might go bankrupt or will have to turn to other business," said the report.

 

(Xinhua News Agency July 18, 2007)