List of Tax-Exempt Re-Export Products Requiring Deposit to Have Limited Impact

SHANGHAI, Jul. 27 (CBI China)--On July 23rd, the Ministry of Commerce and China Customs issued a new list of tax-exempt re-export products. Many copper, aluminum, zinc and lead products are included.

    CBI's consensus is the policy will have a negligible effect upon aluminum, zinc, and lead, but will have a slight dampening effect on exports of copper.

    For aluminum sheet and coil, zinc sheet, coil and section, lead sheet, coil, powder and section, there were few existing re-exporters as:
1. Domestic metal prices are lower than overseas markets.
2. China currently has minimum import taxes for these metals.

    Copper rod and bar manufacturers are required to deposit between USD 773/mt - 1,547/mt to the customs when raw material is imported.  This deposit, plus interest, is paid back when the copper rod and bar is exported. Most manufacturers interviewed believe the policy will have a transitory effect as cash flow could be immediately restricted, but in the mid-to-long term will  have no negative impact on the value-added re-export business.