Beijing vows helping hand for exporters hit by strong yuan

Vice-Minister of Commerce Gao Hucheng confirmed yesterday that Beijing is considering moves to help struggling exporters, but stopped short of promising a widely expected rise in tax rebates.

Mr Gao said the ministry was aware of the pain felt by low-end exporters, which have been particularly hard hit by tighter credit and the appreciation of the yuan, and would study how to target policy support.

But he also said that fears over slowing export growth, which fell by 5.7 percentage points in the first half of the year, were overplayed. 'We have quite optimistic and positive forecasts for exports in the second half of this year,' he told reporters.

Export growth slowed to 17.6 per cent in the year to June, roughly 7 per cent in real terms and well below the sizzling pace of recent years.

This prompted calls for a looser monetary policy to give exporters access to cheaper credit and even demands for a halt in yuan appreciation, which has made Chinese exports more expensive.

However, a more widely expected policy is restoration of value-added tax rebates on targeted sectors such as textile and garment exporters.

'VAT rebate increases are almost certain now,' said Standard Chartered economist Stephen Green.