A rising RMB may cause a recommencement in tax breaks for textile exporters after it reduced profits and cut back production.
It is said that the Chinese government has last reduced refunds on
exports such as textiles in an effort to lower energy consumption and
to remedy trade disagreement with its largest trade partners U.S and
Europe. However, the appreciating yuan and depreciating demand from its
trade partners have put a strain on the export and growth of textiles
among other produce.
Market Avenue quotes Zhang Xiaoqiang, Vice chairman of the National
Development and Reform Commission, as saying that “many textile
exporters and similar companies are on the verge of shutting down and
that the government should consider resuming some tax incentives to
help them survive."
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