Fortune Article Claims United Nations Subsidizes Chinese Shipping...


The bigger subsidy seems to be VAT export refunds.

Though that's only for EC countries, right?

Well, I'm wrong about it just being EU. :(

Its obviously quite complex, but at the risk of being wrong again and/or oversimplifying, it sounds like China charges Sales (VAT) tax on every transaction, unlike the U.S. where sales tax is only paid by the final user.

The way they deal with the double taxation issues that occur is by deducting the tax paid on raw materials from the finished goods tax owed.

Since exports are usually not taxed, the net effect is you get a refund for any tax paid when you bought the raw materials.

Which could be a lot, up to 17%.

On the other hand, the U.S. doesn't charge any export tax nor sales tax on export, so I'm not sure how this is a Chinese advantage.