China cancels export tax rebates for aluminum products, and the global market may usher in a new pattern

[Yangzhou, November 29, 2024]

On the evening of November 15, China's tax department issued a major policy announcement, announcing that the 13% VAT rebate on aluminum product exports will be canceled from now on. This move immediately attracted widespread attention at home and abroad. As an important force in the global export of aluminum products, China's policy adjustment is expected to have a profound impact on the global market supply and demand pattern and the operation of export companies.

Policy background and core content

Aluminum products have long been an important part of China's exports, especially in the fields of construction, automobiles, packaging and consumer electronics, occupying a core position in the global supply chain. Previously, China's 13% export tax rebate policy effectively reduced the export costs of enterprises and helped them maintain price competitiveness in the international market. The cancellation of the tax rebate is regarded by the industry as a key step for the Chinese government to balance domestic resource pressures and promote the development of high value-added industries.

Impact on the global market

Expected price increases for aluminum products:

The cancellation of the tax rebate policy will directly increase the cost of China's export of aluminum products, which may lead to an increase in its international market price. This provides other aluminum product exporting countries (such as India, Vietnam, Turkey, etc.) with an opportunity to seize market share.

Global supply chain tension:

Many countries, especially the European and American markets, have long relied on China's high-cost-effective aluminum products. The cancellation of tax rebates may cause these regions to face supply tensions, forcing downstream companies to find alternative suppliers or increase production costs. Reshaping of international trade relations: Some Chinese export companies may circumvent the policy impact by setting up factories in Southeast Asia or turning to Hong Kong re-export trade, which will change the existing international trade model and may also drive the re-layout of the aluminum industry chain in the region. Impact on Chinese export companies

Export cost pressure surges:

Aluminum product export companies will directly face a 13% cost increase, especially companies with low profit margins, which may be unable to withstand this impact and be forced to reduce export scale or withdraw from some markets. Enterprise transformation is imminent: This policy has a particularly significant impact on companies exporting low-end aluminum products, and is expected to accelerate the industry's transformation towards high value-added products and deep processing. For example, products with high technical content such as medical packaging and aviation aluminum may become new competition focuses. Accelerated industry integration: Small and medium-sized aluminum product export companies may be eliminated due to their inability to adapt to cost pressures, while leading companies with scale advantages and technical strength are expected to further expand their market share through market integration.

Countermeasures and prospects

Increasing product added value:

Chinese export enterprises need to speed up R&D innovation, improve product technology content and brand value to alleviate price disadvantages. For example, in the field of pharmaceutical packaging, the introduction of environmentally friendly and functional aluminum foil products may become a breakthrough direction.

Optimizing market layout:

Emerging markets represented by Southeast Asia, the Middle East and Africa may become new expansion focuses for enterprises due to their low price sensitivity and large demand potential.

Using re-export trade and overseas bases:

The re-export trade policies and factory advantages in Hong Kong, Vietnam and other places provide enterprises with effective means to maintain competitiveness in the global market.

Release of domestic demand potential:

Against the background of export restrictions, aluminum product enterprises may turn more attention to the domestic market, especially in the fields of green buildings, rail transit and new energy, to meet the strategic needs of the country's internal circulation economy.

Expert views

Industry experts pointed out that the cancellation of the export tax rebate for aluminum products reflects the Chinese government's determination to adjust the structure of high-energy-consuming and high-pollution industries. It is not only a driving force for industrial upgrading, but also a proactive response strategy to changes in the international trade environment. Although it will have a certain impact on export companies in the short term, in the long run, it will promote the Chinese aluminum products industry to move towards high-quality development.

Conclusion

The adjustment of China's aluminum products export tax rebate policy is not only a strategic choice for optimizing the domestic industrial structure, but will also have a profound impact on the global aluminum industry competition pattern. For Chinese export companies, challenges and opportunities coexist. How to quickly adjust strategies and enhance core competitiveness will become the key to future market competition.