China raises export tax on steel, metals

China will raise export taxes on 142 products and cut import tariffs on 209 types of goods to rein in overseas shipments and pare a record trade surplus that's threatening to hurt relations with the US and other nations.

Starting June 1, China would charge higher export taxes on steel products, pig iron, nickel, lead and zinc, the Chinese finance ministry said today on its website. Import tariffs would be slashed for home appliances, kitchenware, softwood, coal and fuel oil to encourage domestic consumption, the ministry said.

The new taxes, the third set since the last year, are "aimed at reducing exports of energy-consuming, polluting and resource-intensive products,'' the finance ministry said.

Chinese Vice-Premier Wu Yi is due to meet US Treasury Secretary Henry Paulson this week to discuss ways for paring the last year's $232.5 billion of US trade deficit with the world's most populous nation.

The record trade gap is feeding complaints in the Congress that China is artificially keeping its currency cheap to give exporters a leg-up over American competitors.

China, the world's largest producer of steel, will impose as much as 10 per cent export tariff on steel wires and rods, plates and some other products. The company will increase the tariff on steel slabs, ingots and pig iron to 15 per cent from 10 per cent, according to the statement.

China has reduced tax rebates on steel shipments as it seeks to curb a trade surplus that may swell by 45 per cent this year and to restrict expansion in production capacity.

The government wants tougher measures to control steel exports as it has acknowledged that measures taken so far may not be sufficient.

China's steel exports more than doubled in the first three months to 14.1 mt from a year earlier, according to data from the Beijing-based customs office.

Export taxes on nickel, chrome, tungsten and rare earth would be raised to 15 per cent from 10 per cent now, while that on steel alloys and zinc would be raised to between 10 per cent and 15 per cent, from the current range of 5 per cent to 10 per cent, it said.