Economists Urge Export Tax Rebate Cuts as Trade Surplus Hits Record¶
By Cheng Siwei — Caixin
China's trade surplus reached a record $1.2 trillion in 2025, while export tax rebates totaled 2.1 trillion yuan ($309bn) — the highest share of tax revenue on record at 12.1%.
The Argument¶
Researchers and policy advisers are calling for targeted cuts to export tax rebates, arguing that the fiscal savings should be redirected to boost household incomes and rural consumption.
Recent Actions¶
China has already moved to cut rebates on certain products: - Aluminum - Copper - Photovoltaic products - Battery products
These cuts come amid concerns about overcapacity and ongoing trade tensions with major trading partners.
Expert Voices¶
Zhang Yu, chief economist at Huachuang Securities, argues for a comprehensive reassessment of the export tax rebate system during the 15th Five-Year Plan period.
PwC China notes that actual refund rates range from 0% to 13%, and many exporters are unable to recover all input VAT under the current system.
Historical Context¶
| Year | Event |
|---|---|
| 1985 | Export tax rebate system introduced |
| 2025 | Trade surplus hits record $1.2T; rebates at 12.1% of tax revenue |
| April 2026 | Full elimination of PV product rebates |