2006-10-27
Beijing --The Chinese government has announced widespread changes to import and export taxes affecting steel, base and minor metals, ferroalloys and scrap in an effort to reduce its massive trade surplus.

In an unexpected move, the Ministry of Finance said Friday that it is introducing a new tax regime effective Nov. 1.

The import tax on alumina will be cut to 3 percent from 5.5 percent, while a 2-percent import tax on iron and steel scrap will be abolished, the government said.

The key changes affect export taxes. A 10-percent tax will be imposed on outbound shipments of steel billet and slab, for which China is a sizable exporter.
Export taxes also will be imposed on steelmaking raw materials, with a 10-percent tax imposed on pig iron and sponge iron exports and a 5-percent tax on coking coal and coke exports.

A 10-percent tax will be added to exports of many ferroalloys, including ferromanganese, ferrosilicon, silicomanganese, ferrochrome, silicochrome, ferronickel, ferromolybdenum, ferrotungsten, silicotungsten, ferrotitanium, silicotitanium, ferrovanadium, and ferroniobium.

Export taxes on ferromanganese, ferrosilicon, silicomanganese and ferrochrome had been 5 percent. The other products were not subject to export taxes.
Exports of iron ore and the ores and concentrates of copper, manganese, alumina, chromium, molybdenum, titanium, zirconium, antimony, nickel, cobalt, silver and precious metals also will face a 10-percent tax.

A 15-percent tax will be added to exports of copper, copper cathode and copper scrap, nickel, nickel cathode and nickel alloys, aluminum and aluminum scrap, manganese and manganese scrap, and tungsten scrap, the ministry said.

China recorded a trade surplus of $15.3 billion last month, its second-largest ever. The ballooning surplus helped drive economic growth of 10.7 percent in the first three quarters, according to Chinese media reports.