Changes In Tax Rebate Policy Impact Studies, Hunan's Export Trade

In 2004, China carries out reforms on its Export Tax Rebate(ETR) policies. The rate of ETR has been reduced and a new system that the central government and the local governments share the burden of ETR has been established. The implementation of the new system is thought to influence the export in all areas. This paper' purpose is to test this with sample from Hunan province.To examine the exact effect of the implementation of ETR policies on Hunan's export, the paper first establishes a tendency model with the sample of Hunan's annual export volume from 1980 to 1990, in which the quotient sign of the policy dummy variable is used to inflect the ETR' contribution to Hunan' export growth. After making a seasonal adjustment of the sample of Hunan's monthly export from 1993 to 2003, the paper works out an index tendency model and makes a forecast of the effects of ETR's reduce on Hunan's export in 2004. And we also make a comparison between the forecast and the actual result. The result indicates that the change of ETR usually brings the change in Hunan's export in the same direction. The comparison, however, shows that our forecast is on the contrary to the actual result in 2004 due to the enhanced process of ETR's implementation. Based on the analysis of the effect of RTR' adjustment on the configuration of export commodity of Hunan province, we provide an explanation for the difference and come to our conclusion: Hunan's configuration of export commodity has evolved to a higher level and the change of RTR rate has little effect on Hunan's export. The new ETR system has a greater effect on export in coastal areas than in midland areas. Finally, we make proposals on how Hunan province should respond to the change of ETR rate and the new system.