What challenges will China's accession to the WTO pose to the cost of construction machinery products in China?

In the Chinese construction machinery market, the price of imported products is always much higher than that of domestic products. Therefore, most people also think that the manufacturing cost of domestic products is low (this may be the case for labor-intensive products). Is this really the case? Let’s take a look at the cost comparison table of domestic 18t single drum full hydraulic vibratory roller and the same type of roller roller in the United States:
COMPARISON OF COST COMPENSATION OF HOME-Made 18-ton Single-drum Full-hydraulic Vibratory Roller and American-made Roller of the Same Type
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Project Domestic U.S. Amount (million yuan) Rate Amount (ten thousand yuan) Rate
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Selling Price 72 120
VAT 12.24 17% 20.4 17%
Sales revenue 59.76 99.6
Selling costs 1.79 3% 9.96 10%
Technology development costs 1.20 2% 3.98 4%
Profit 4.78 8% 10.96 11%
Shipping incidentals 0 0 6.97 7%
Tariff 0 0 14.94 15%
Total 7.77 46.81
Manufacturing costs 51.99 52.79
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As can be seen from the table, when the selling price of U.S. products is 1.75 times that of domestic roller, the manufacturing cost of the mainframe is almost the same. It is assumed here that the extraction of other expenses is the same. If the extraction is inconsistent, our manufacturing costs may also be slightly higher than imported products.
In the past, it has always been considered that the manufacturing costs of imported products are high. Can we change our understanding through comparison? The more accurate answer should be: Not necessarily. We admit that the advantages of low manufacturing cost have once been, but are slowly disappearing, and our country's tax system will allow special super national treatment for imported products. The current value-added tax in China is a production-type value-added tax that is rarely used internationally. VAT is still levied on the depreciation of fixed assets included in the cost of an enterprise's products. Therefore, there is a phenomenon of double taxation. This is no longer levied on the consumption of all external shopping products consumed by consumer-oriented VAT, ie, production taxable products, which are implemented in most countries in the world. The actual overall tax burden is much higher than the value-added portion of products. The prescribed tax rate. In the statistical yearbook of 1997, 43 items of value-added tax payable by the central and local state-owned industrial enterprises in Jiangsu Province in 1996 were 9.135 billion yuan, and the industrial added value was 56.1 billion yuan. The actual tax calculated based on the value added of the production value-added tax was calculated. Negative is 16.3%, close to the prescribed 17% tax rate. However, if the calculation is based on the internationally-adopted value-added tax tax base, that is, the value of the industrial added value minus the total fixed asset value of RMB 23.6 billion in the current year, the actual tax burden is as high as 23%, which is higher than the The nominal tax rate is 6 percentage points. The European Union and many other developed and developing countries have implemented consumer-based value-added tax (VAT) and have completely reimbursed export products. The products imported from these countries in China are not fully taxed in the current value-added tax (VAT) in the transaction of goods and services, and the taxes on most of the goods and services levied on the purchase tax are not deductible, and the tax burden on imported products is lower than that of domestic products. The actual tax burden is even lower. At the same time, urban maintenance and construction tax and education surtaxes are only levied on domestic products, but they are not levied on imported products. In today's and future highly open years, such a policy has become a self-discriminatory taxation system. According to regulations, the average tax burden on urban maintenance and construction tax in the country is 5% of value-added tax, business tax and consumption tax, and the education surcharge is 3% of the three tax amounts. The two items add up to the same amount as the import value-added tax on imported products. The 8% additional tax on consumption tax and consumption tax is equivalent to 1.84% of the consumption-type VAT tax base.
The above-mentioned two taxes plus an additional total of imported products, the tax burden of imported products is at least 7 to 8 percentage points lower than the actual tax of domestic products, and this 7 to 8 percentage points is the cost that our domestic products bear more than imported products. If we reduce the tax rate of the tariff to the average level of 5% of the world, under the conditions of the current domestic tax system, it will lead to the occurrence of "negative tariffs" in our country. This should cause us to attach great importance to it.
To join the WTO, our country must bear the obligation to further reduce tariffs. We forecast that the average construction machinery tariff is currently 16.08%, and that in 2005 is about 10%, while the tariff level of domestic construction machinery mainframe products will reach the current 13%, and 10% in 2005. That is to say, around 2005, the tariff rate of the main products of domestic construction machinery will actually become zero. This is a big crisis for us. How to do? First of all, it is recommended to the relevant state departments that China implement consumer-type VAT as soon as possible and increase the tax rate (from 17% to about 25%). For domestic products, the implementation of consumer-based value-added tax will not increase the tax burden even if it is a high tax rate. For import products, regardless of the value-added tax implemented, the tax basis is the total value of imports. The implementation of consumer-type value-added tax will leave the basis for tax calculation unchanged, increase the tax rate, and increase the tax burden. This is also of great significance in promoting the transformation of China’s economic growth pattern.
The second is to prepare as soon as possible, accept this super national treatment, and vigorously reduce manufacturing costs, because the market itself is a cruel competition.
In short, we should recognize that we do not have the advantage of low manufacturing cost, but we must also stand up courageously to participate in the brutal competition in the market, to find and create the high quality of our products, and to stand in the market competition. Defeated.
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