INDUSTRY BRIEF: China to scrap or lower export tax rebates for solar products, batteries

China will cancel or lower its export tax rebates for solar products and batteries from April 1, as it seeks to ease price wars that have wreaked havoc on both sectors that are dominated by Chinese companies. The move also addresses frequent foreign complaints that China unfairly subsidizes some of its industries to the detriment of overseas competitors.

Under the changes, jointly announced by the Ministry of Finance and the State Taxation Administration, rebates of value added taxes for photovoltaic products that are exported will be canceled from April, according to a Monday posting on the State Council’s website. Meanwhile, the rebate rate for the value added tax on exported battery products will be reduced from the current 9% to 6%, also starting on April 1.

“The move is welcomed by China’s domestic industry, with the China Photovoltaic Industry Association saying that the measure will help restore rational pricing in foreign markets and reduce the risk of trade frictions for China,” the association said, according to the State Council’s announcement. “Over the long term, the measure will help prevent export prices from falling too rapidly and lower the risk of trade disputes further.”

Among solar panel makers, U.S.-listed shares of JinkoSolar (JKS.US) rose 7.6% on Monday in New York, while Shanghai-listed shares of Longi Green Energy rose 4.6% that day, before giving back some of the gains on Tuesday. Among battery makers, Hong Kong-listed shares of industry leader CATL (3750.HK; 300750.SZ) fell 2.5% on Monday, while Eve Energy (300014.SZ) fell 1.5% that day.

By Doug Young

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