A couple of weeks back, I worked closely with MFG.com to help put on a webinar covering the China VAT rebate changes and their impact on global and China sourcing. It now looks like Ariba is putting on a similar event as well later in the month. I can't reiterate enough how important it is for global sourcing professionals to listen in on these webcasts, especially because the mainstream media has been so slow to pick up on the news (I supposed tax / tariff issues are not quite as sexy as product recalls and hot crossed Beijing buns).
The VAT changes are real, and, according to Ariba, this "most recent policy shift, which took effect on July 1, reduces or eliminates the existing VAT export rebates on 2,281 Chinese products." What will the outcome be of these changes? "Lowering the export VAT rebate will financially deter the export of China’s finite raw materials and the consumption of its limited energy supply for use in exported goods. The changes in the export policies are directly targeting an extensive number of metal commodities, as well as other low-value chemicals and raw materials such as cement, fertilizers, and caustic soda."
I would strongly encourage you to listen in to what Ariba has to say on the subject on August 21st. But in the meantime, if you need to learn about the issues more closely, check out MFG.com's China Sourcing center. In it, you'll find close to a dozen pieces of thought leadership examining the situation in China from on-the-ground, sourcing and trading perspectives (and you'll also find the archived webinar on the same subject that I hosted). And in the next couple of days, MFG.com has told me they'll be putting up a full list of English-translated product classifications that were impacted on the site as well (with no registration required -- how's that for "free"!)
Look for more coverage and analysis on the issue on Spend Matters in the coming weeks, including a discussion with an Ariba expert on the subject as well prior to the webinar. But if you can't wait and you're curious to learn more about the China VAT rebate changes and issues surrounding China quality and supplier performance, you can also click on this post to see a full listing of all related Spend Matters blogs on the subject in the past few weeks (scroll down to the end of the blog entry after clicking).