China rules seen hiking prices

SANDY PARKER REPORT, VOL. 31, ISSUE 29, SEPT. 24, 2007
The following extract is reproduced with permission from Sandy Parker Reports, Weekly International Fur News. Sandy Parker has been covering the fur industry for more than four decades. For most of that time he has published a weekly newsletter, detailing results of international pelt auctions, wholesale price trends, business developments and movements in the trade, as well as economic and political activities that may impact on it.
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International Fur News
with Sandy Parker
China rules seen hiking prices
CHINA HAS YET TO SPELL OUT HOW ITS RECENT DECISION to deal with its pollution problems by a new tax system will affect furs. As previously reported (SPR, Aug. 20), imports of a wide range of goods considered to be in the high-energy or high-polluting class, such as raw furs, would be subjected to duty and value-added tax (VAT). The duty on raw mink reportedly will be 15% and for foxes and other furs 20%. The VAT would add another 17%. While furs have not yet officially appeared on the list of restricted categories, the full list is expected to be issued soon. In addition, the Ministry of Commerce has developed a list of more than 1,800 product categories that will be subject to export taxes in an effort to curb exports of labor-intensive products. When the regulations go into effect, foreign importers will have to deposit a refundable 50% of the trade taxes on those products. Although those funds are to be returned after an unspecified period, the new policy could create cash-flow problems for some.
At this point, it appears that furs will be affected both as they are imported into China for processing and manufacture and then exported in garment form. So far, there has been no mention of any refund of the import levies on goods that are subsequently exported, as was the case under the old system which provided that goods imported for processing could be brought in under bond and for the duty and VAT to be refunded when the products were re-exported. With no refund procedure in place, the added costs to Chinese processors and manufacturers undoubtedly would be passed along in the form of higher prices. Considering the size of the skin levies – at least 32% – the price increases could be substantial.
IN THIS ISSUE:
Cooler Weather Stirs Traffic
Fall Season Starting to Open
China Rules Seen Hiking Prices
Dollar Eases on Interest Cut
Canadian, US Dollars at Parity
For extracts from back issues of Sandy Parker Reports see News Index. Subscribers can access an archive of complete issues at www.sandyparker.com.
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