Analysis on the effects of China's fiscal and taxation policy on exporting products of photovoltaic and high-end equipment manufacturing industries

Abstract

China's fiscal and taxation subsidy policy plays a positive role in promoting the international market development of emerging industries, which also brought about many problems. In this paper, countries with large overseas investment from China and those along the “One Belt One Road” project were specially selected and divided into different types of international markets according to parameters of political risk, relations with China, geographical locations, etc. The computable general equilibrium model was then used to analyze the change in the export volume to different types of countries influenced by the change in export tax rebate ratios and research and development (R&D) subsidies. Simulation results showed that the change in export tax rebate policy has a greater impact on the photovoltaic industry and a relatively low impact on the high-end equipment manufacturing industry. The change in the export tax rebate rate has different effects on the export volume of countries in different regions and has the greatest effect on the high risk region and the partnership region. Additionally, R&D subsidy has different effects on the export volume of countries in different regions and has the greatest effect on the low risk region and the poorer relation region. Therefore, suitable subsidy policy should be decided, based on the characteristics of foreign markets in different regions. Contributions of this study are expected to be used in governmental policy designing and company development strategy optimization.