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Beyond dollar exchange-rate targeting: China’s crisis-era export management regime

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  • Simon J. Evenett
  • Johannes Fritz
  • Yang Chun Jing

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. Copyright 2012, Oxford University Press.

Suggested Citation

  • Simon J. Evenett & Johannes Fritz & Yang Chun Jing, 2012. "Beyond dollar exchange-rate targeting: China’s crisis-era export management regime," Oxford Review of Economic Policy, Oxford University Press, vol. 28(2), pages 284-300, SUMMER.
  • Handle: RePEc:oup:oxford:v:28:y:2012:i:2:p:284-300
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    File URL: http://hdl.handle.net/10.1093/oxrep/grs016
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    Cited by:

    1. Gourdon, Julien & Monjon, Stéphanie & Poncet, Sandra, 2016. "Trade policy and industrial policy in China: What motivates public authorities to apply restrictions on exports?," China Economic Review, Elsevier, vol. 40(C), pages 105-120.
    2. Eisenbarth, Sabrina, 2017. "Is Chinese trade policy motivated by environmental concerns?," Journal of Environmental Economics and Management, Elsevier, vol. 82(C), pages 74-103.
    3. Simon J. Evenett, 2014. "Mapping crisis-era protectionism in the Asia and Pacific region," Chapters,in: A World Trade Organization for the 21st Century, chapter 6, pages 130-156 Edward Elgar Publishing.
    4. Sandra PONCET & Laura HERING & José DE SOUSA, 2015. "Has trade openness reduced pollution in China?," Working Papers P132, FERDI.
    5. Simon J. Evenett & Johannes Fritz, 2011. "Die negativen Auswirkungen des krisenbezogenen Handelsprotektionismus auf die Schweizer Aussenwirtschaft:," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 66(04), pages 359-383, December.
    6. Evenett, Simon J, 2013. "Mapping Crisis-Era Protectionism in the Asia-Pacific Region," CEPR Discussion Papers 9783, C.E.P.R. Discussion Papers.
    7. Sandra PONCET & Julien GOURDON & Laura HERING & Stéphanie MONJON, 2014. "Export management and incomplete VAT rebates to exporters: the case of China," Working Papers P117, FERDI.
    8. Julien Gourdon & Stéphanie Monjon & Sandra Poncet, 2014. "Incomplete VAT rebates to exporters : how do they affect China's export performance?," Working Papers 2014-05, CEPII research center.
    9. Daniel Poon, 2014. "China’s Development Trajectory: A Strategic Opening for Industrial Policy in the South," UNCTAD Discussion Papers 218, United Nations Conference on Trade and Development.

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