Nov. 13 – China’s Cabinet announced on its website that it would increase the value-added tax (VAT) refund rate on some products including steel, grain, chemical goods and thousands of other goods as part of its efforts to quicken growth after the release of a multibillion-dollar economic stimulus package.

The VAT refund rate increase, effective Dec. 1, will cover some 3,770 types of exports, or about 28 percent of the country’s total exports. The move will “expand domestic consumption and promote economic stability,” the statement said.

The new law also applies to labor-intensive goods, electrical products and other goods. Beijing has been aggressive in coping with the downturn caused by the global credit crisis. The export industry has been hit hard leading to mass layoffs and factory closures in China’s Guangdong province.

China has since then cut interest rates three times in recent weeks and issued new law to help struggling textile exporters cope. The country’s US$586 billion economic stimulus package plans to invest heavily on government construction projects, alleviate poverty and issue tax cuts for exporters.

In addition, the government has recently approved two multibillion-dollar energy projects and a water conservancy project. The energy projects will include a RMB93 billion pipeline that should transfer natural gas from China’s northwest to Hong Kong, a RMB95.5 billion expansion of a nuclear power plant in Yangjiang in the southeastern province of Guangdong.

There is also a RMB17.4 billion water conservancy project located in the northwestern region of Xinjiang.