China's reform programme to cut tax rebates for exports seems to have temporarily hit an impasse, partially due to a stronger-than-expected performance of the export sector - which entails higher payouts from the government.
Since reforms are contingent on the government paying off outstanding rebates before they are introduced, officials and economic researchers admitted that the reform plan has been affected by the surprisingly fast growth of exports.
The central government's 2003 budget for export-tax rebates was based on a seven per cent growth for exports forecast by the former Ministry of Foreign Trade and Economic Co-operation.
Even according to more aggressive estimates by some government thinktanks, China's exports were projected to grow by 15 per cent at most.
