What Are Export Incentives?

Export incentive measures mainly include export credits, export credit state guarantees, export subsidies, commodity dumping, and foreign exchange dumping.

Measures to encourage exports

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Export incentives include: export credit, export credit country guarantee,
Export incentives include: export credit, export credit country guarantee,
Export credit
Export credit: In order to encourage exports and enhance the competitiveness of goods, a country provides loans at preferential interest rates provided by domestic exporters (sellers) or foreign importers or importer banks (buyers) through domestic banks. Export credit can be divided into seller's credit and buyer's credit according to the loan object. A seller's credit is a loan provided by a bank of an exporting country to a domestic exporter to support preferential interest rates for exports. Buyer's credit is a loan provided by an exporting country's bank to a foreign importer or importer's bank to support preferential interest rates for domestic goods exports. In order to reduce possible risks, the maximum loan amount generally does not exceed 85% of the value of the trade contract, and is guaranteed by the country's export credit guarantee agency. The details of export credit will be introduced in the international finance section.
Export Credit National Guarantee System
That is, in order to expand exports, the state provides guarantees for credit provided by domestic export manufacturers or commercial banks. When foreign debtors refuse to pay, the agency will compensate them according to the amount insured. Export items not normally covered by insurance companies can be insured with guarantee agencies. Guarantee risk is generally divided into political risk and economic risk. The former is generally 85% -95% of the contract amount, and the latter is generally 70% -80% of the contract amount.
Export subsidies
Export subsidies, also known as export subsidies, are cash subsidies or preferential financial treatment given by exporters to exporters in order to reduce the price of exported goods and strengthen their competitiveness in foreign markets. It should be pointed out that some subsidies will cause market distortions and are unfair trade practices. They should be banned in accordance with relevant commitments. Export tax rebates can reduce the cost and price of exported goods. It is a commonly used measure to encourage exports in international trade. It is not an unfair trade practice. Export tax rebates are measures taken by the state to return to the exporter all the taxes levied on the domestic production and circulation process when the goods are exported, so that the goods can be exported at zero tax rates. At present, China has gradually raised the export tax rebate rate.
Merchandise dumping
It refers to the behavior of exporting companies selling a large amount of goods in foreign markets at prices lower than the domestic market price or even lower than the cost.
Foreign exchange dumping
Foreign exchange dumping is the use of the opportunity of the devaluation of the national currency to expand exports. If the national currency depreciates, the price of domestic exports in foreign currencies will decrease, and the competitiveness of domestic exports will increase, which will help expand exports. At the same time, the price of imported goods in local currency has increased and the competitiveness of imported goods has declined, which is conducive to restricting imports. However, foreign exchange dumping is conditional: (1) the degree of currency depreciation is greater than the increase in domestic prices, and (2) other countries do not simultaneously implement the same degree of currency devaluation or take other retaliation measures.
Organizational measures to promote exports
The specifics are: setting up a specialized agency to study and formulate export strategies; establishing a business information network; establishing a trade center; organizing trade delegations to visit or receive visits; and organizing awards for exporters.
Other measures
In order to expand exports, both developed and developing countries have tried every means to encourage the enthusiasm of exporters. For example, the specific forms of establishing special economic zones are: free ports, bonded zones, export processing zones, free border zones, transit zones, and so on.

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