China to roll out policies to help exporters amid economic headwinds

China will roll out more policies to help exporters and importers as foreign trade faces growing uncertainties, the official Xinhua news agency said on Thursday, citing a meeting of the state council, or cabinet, chaired by Premier Li Keqiang.

China’s surprisingly resilient trade performance this year has provided a crucial buffer to the slowing economy, but analysts expect exports to come under great pressure in coming months as the COVID-19 pandemic eases. Demand for Chinese goods is expected to fall as global lockdowns ease and people spend more on services.

Authorities will step up the support to the trade sector, including implementing previously flagged tax and fee cuts and speeding up the export tax rebates, said the State Council. Premier Li Keqiang said in November that China is studying a new combination of tax and fee cuts to help small businesses.

The yuan exchange rate will be kept basically stable and banks are encouraged to conduct deals in the forward market to help exporters better cope with currency fluctuations risks, it added.

Behind rosy headline figures, Chinese exporters have been grappling with thinning profit margins as the Chinese currency appreciates, raw material prices rise and logistics costs surge.

The government will also take measures to ease the stress in the international logistics market as it cracks down on illegal fee charges and unreasonable price hikes, it added.

Authors: Stella Qiu, Cheng Leng, Ryan Woo, Reuters

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