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Tariffs Aim to Reduce Energy Consumption

Temporary tariffs on 110 export categories of products, which are energy guzzling, or experts have hailed resource-intensive as a major step towards optimizing the national energy structure.

The regulation, which was issued over the weekend and takes effect tomorrow, will also help curb the country's soaring trade surplus, the Ministry of Finance said.

Among the goods, which will attract the temporary export, tax is: 5 percent on oil, coal, coke and crude oil.

10 percent on non-ferrous metals, various types of minerals such as apatite and rare earth minerals as well as iron alloy, raw iron, steel billets and 27 other iron and steel products.

Wooden flooring, disposable chopsticks and 19 other goods will be taxed at the same rate.

15 percent on copper, nickel and other metallurgical products.

"It is a very positive move, which is designed to enhance energy efficiency, optimize the national energy structure and rationalize energy- and resource-intense sectors," Zhou Dadi, director of the Energy Research Institute affiliated to the National Development and Reform Commission, told China Daily.

Meanwhile, import taxes on 58 categories of commodities will be reduced.

Rates on 26 energy and resource products, such as oil, coal and alumina, will be cut from 3-6 percent to 0-3 percent.

The policy is expected to rein in exports, which rely heavily on energy and resources, while encouraging their imports, Zhou said.

He expects to see results within this year.

"Rather than administrative and regulatory mandates, the authorities used a market mechanism to restrain exports of certain commodities of strategic importance and put a brake on the development of energy-intensive industries," Zhou said.

Although some enterprises may suffer from higher export costs, the policy will boost energy efficiency and keep manufacturers away from energy-intensive sectors, Gong Jinshuang, a senior researcher with China National Petroleum Corp, noted.

Some enterprises are already prepared.

"We will certainly witness our exports affected by the new policy. We will adjust our business structure to cushion the negative effect," a manager with Sinochem Guangzhou Import and Export Corp said on condition of anonymity.

China's trade surplus hit a new high of 109.85 billion U.S. dollars in the first three quarters of the year amid concern over disputes with its major trade partners and over-exploitation of resources.

Last month, the government cancelled or lowered export tax rebates on hundreds of products.

(China Daily October 31, 2006)

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