China will increase tax rebates for certain textile and garment exports to help producers cope with narrowing profit margins squeezed by the yuan’s appreciation and higher costs, chinadaily.com reported.


Export tax rebates for some textile and garment items would be increased by two percentage points to 13 percent from Aug. 1, the State Administration of Taxation said in a statement on Thursday.


These items included silk, wool yarn, chemical fibre and cotton products. However, export rebates for certain products, including pesticides, medicine, silver, paint, zinc and battery would be scrapped, it said.


China’s government has lowered VAT tax rebates on some exports to expedite the move out of lower value industries, but observers have speculated the government might reverse itself in the wake of massive job losses in some sectors.


The country’s textile and clothing exports rose 11.1% to $81.7 billion in the first half, but the growth rate was 6.4 percentage points less than the same period last year.