Beyond dollar exchange-rate targeting: China's crisis-era export management regime
- 1 June 2012
- journal article
- Published by Oxford University Press (OUP) in Oxford Review of Economic Policy
- Vol. 28 (2), 284-300
- https://doi.org/10.1093/oxrep/grs016
Abstract
During the crisis era, while considerable attention was given to Chinese management of its currency’s exchange rate with the US dollar, the frequent alteration of rebates on value-added taxes (VAT) paid by exporters on the inputs they have imported has been overlooked. In this paper the relevant Chinese policy changes are documented and evidence presented to gauge the relative importance of what turns out to be a systematic form of export management. Given the relatively high shares of imported content used in Chinese exports and the low profit margins of Chinese exporters, an increase in the VAT rebate of a single per cent is estimated to increase the profitability of beneficiary exporters by 12 per cent for the typical Chinese exporter, and by 18 per cent for those Chinese exporters operating in export processing zones.Keywords
This publication has 4 references indexed in Scilit:
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