China Cancels Export Tax Rebates, Ceramic Tile Export Industry Faces Profound Adjustment

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According to the “Announcement on Canceling Export Tax Rebate Rates for Selected Products” issued by the Ministry of Finance and the State Taxation Administration in March 2026, China will eliminate the export tax rebate policy for multiple product categories, including certain ceramic products, effective April 1, 2026. This policy adjustment represents a further measure to promote the optimization of the foreign trade structure and industrial transformation and upgrading, following the gradual reduction of export rebate rates in recent years.

The announcement explicitly states that the list of products affected by the cancellation involves multiple industries, with building ceramics, sanitary ceramics, and related products included in the adjustment scope. Following the policy change, relevant ceramic products will no longer benefit from the previous export rebate rates, leading to a corresponding increase in export costs for enterprises.

Impact Analysis on the Ceramic Tile Foreign Trade Industry

1. Significant Short-Term Cost Pressure
The cancellation of the export tax rebate policy will directly increase the export costs for ceramic tile manufacturers. Based on the current industry average, export rebate rates for tile products typically range between 5% and 9%. Post-adjustment, enterprises will face a cost increase of a similar magnitude. For traditional tile export businesses that already operate on thin profit margins, this undoubtedly creates immediate financial pressure.

Industry estimates suggest that after the rebate cancellation, export costs for some enterprises will rise by 6% to 8%, significantly affecting competitiveness in price-sensitive markets. Taking major export markets like the Middle East and Southeast Asia as examples, the price advantage of Chinese tiles may weaken by 5% to 10%, increasing the short-term risk of order diversion.

2. Accelerated Industry Consolidation and Shakeout
This policy adjustment will further accelerate the integration and restructuring of the tile industry. Leading enterprises with technological advantages, brand value, and strong cost-control capabilities will absorb the cost pressure through product upgrades and efficiency improvements. Conversely, small and medium-sized enterprises reliant on low-price competition and with lower technological levels may face greater survival pressure.

This process will drive the industry towards high-quality development transformation. Enterprises will increasingly focus on enhancing product added value, reducing reliance on price competition. Those companies that have already positioned themselves in premium market segments, possess proprietary brands, and have innovation capabilities will gain a relative advantage in the new policy environment.

3. Promotion of Export Structure Optimization
The policy adjustment will compel a shift in the tile export structure from a “quantity-focused” model to a “quality-focused” one. Exports of traditional low value-added products will be discouraged, while exports of higher value-added products such as premium tiles, functional tiles, and customized products will find relatively more room for development.

This structural optimization aligns with the national industrial policy direction. In recent years, the government has introduced multiple policies to encourage the export of products with high technological content and high added value. This rebate policy adjustment can be viewed as a supporting measure to promote industrial upgrading.

4. Encouragement of Overseas Production Capacity Layout
In the long term, the rebate cancellation may accelerate the globalization strategies of Chinese tile enterprises. To mitigate rising costs and market access barriers, more companies might consider establishing production bases overseas, particularly in major export markets or regions with raw material advantages.

While such capacity relocation might reduce some domestic employment and output, from a global resource allocation perspective, it helps Chinese tile enterprises build more stable international supply chains and enhance global competitiveness.

5. Catalyst for Technological Innovation and Brand Building
Increased cost pressure will force enterprises to reduce production costs through technological innovation and to enhance product premium through brand building. Companies are likely to increase investment in areas such as intelligent production, green manufacturing, and new material applications to improve production efficiency and reduce energy and material consumption.

Concurrently, the importance of brand building will become more pronounced. Brands with international recognition will be better positioned to pass on cost pressures and maintain their market position. A new wave of brand-building initiatives within the industry is anticipated.

Industry Response Recommendations

In response to the policy change, ceramic tile export enterprises can adopt the following strategies:

1. Accelerate product structure upgrades, increasing the proportion of high value-added products.

2. Optimize production processes to reduce manufacturing costs.

3. Strengthen proprietary brand building to enhance product premium capability.

4. Explore emerging markets to reduce dependence on single markets.

5. Consider reasonable adjustments to pricing strategies to balance costs and market share.

Although this export tax rebate policy adjustment poses short-term challenges for the industry, in the long run, it will propel the Chinese tile industry from cost-based competition to value-based competition, fostering high-quality industry development. Enterprises capable of promptly adjusting their strategies and accelerating transformation and upgrading will seize new development opportunities amid this industry change.