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Lowering VAT is likely to be the next announcement from China's government to support domestic coal producers. Adjustments to VAT have a marginal impact on China's coal sector as this step does not address fundamental problem of weak demand and oversupply.
This report contains
What's next for China's coal sector: will lowering VAT help domestic miners?
Table of contents
VAT: the next step for China's government supports
VAT will provide minimal support to domestic suppliers
Lower VAT will not impact imports
Tables and charts
This report includes 3 images and tables including:
Delivered cost comparison of domestic and imports in south China (RMB/t)
Operating margin with 17% VAT– domestic thermal supply to coastal China at RMB430/t FOB Qinhuangdao (5500 kcal NAR energy adjusted)
Operating margin with 13% VAT– domestic thermal supply to coastal China at RMB430/t FOB Qinhuangdao (5500 kcal NAR energy adjusted)