Major changes are coming from China that could impact global trade. Starting in 2026, China is eliminating export VAT rebates for a wide range of products, which will increase export costs and change procurement conditions for many companies.
This is not a minor adjustment but a significant policy shift that will affect a broad spectrum of industries—from photovoltaic and battery products to chemicals, plastics, glass, and other cargo categories.
Below, we explain what is changing, which products are affected, and why importers should pay attention starting now.
Table of Contents
What Is an Export Rebate?
An export rebate is a mechanism through which the government returns a portion of VAT to the manufacturer after goods are exported. This reduces production costs and allows Chinese exporters to compete on international markets with more competitive pricing.
Under the new policy, this rebate will no longer apply to a large number of products. This means higher costs for exporters and potentially higher prices for buyers worldwide.
Which Products Are Affected?
Although the official announcement specifically mentions photovoltaic products and battery materials, the list is much broader. It covers various industrial and consumer categories, including chemical products, plastics, glass, ceramics, electrical equipment, and many other goods listed in the official annexes.
According to official documentation, numerous product categories across multiple HS chapters are affected, with the following groups standing out:
Annex 1: Products losing rebate starting April 1, 2026
- Article 24 – Tobacco and manufactured tobacco substitutes
- Article 25 – Salt; sulfur; earths and stone; plasters, lime and cement
- Article 28 – Inorganic chemicals; compounds of precious metals and rare earth elements
- Article 29 – Organic chemicals
- Article 38 – Miscellaneous chemical products
- Article 39 – Plastics and plastic articles
- Article 68 – Stone, plaster, cement, asbestos, and mica products
- Article 69 – Ceramic products
- Article 70 – Glass and glassware
- Article 85 – Electrical machinery and equipment
Annex 2: Battery products with phased rebate elimination
For battery products, the rebate is first reduced and then completely eliminated:
- Primary cells and batteries – button, cylindrical, lithium, zinc-air, silver-oxide, fuel cells
- Products containing mercury – mercury-free and mercury-containing
- Battery packs and assemblies
- Battery parts and components
- Rechargeable batteries – NiMH, Li-ion, vanadium flow batteries
Note: The numbers above refer to main HS chapters. For complete details, descriptions, and all specific codes, refer to the official annexes.
Official resources and documents:
Products Affected from April 1, 2026 (Official PDF)
Battery Products Affected from January 1, 2027 (Official PDF)
Original Source (Ministry of Finance, PRC):
Official Announcement
Timeline of Changes
- April 1, 2026: Export VAT rebates are eliminated for photovoltaic and other related products. For certain battery products, the rebate is reduced from 9% to 6%.
- January 1, 2027: Remaining rebates for battery products are completely eliminated.
This schedule means companies have very limited room to adapt, especially if their cargo falls into one of the affected categories.
Why Importers Should Pay Attention
This change has real consequences for anyone sourcing products from China. When exporters lose a financial incentive, it is common for part of that cost to be passed on to buyers through higher selling prices.
- Costs may increase: Exporters may raise prices to compensate for the loss of the rebate.
- Supply chains may shift: Buyers may seek alternative suppliers or new sourcing models.
- Planning becomes critical: Companies should review contracts, margins, and long-term sourcing strategies.
In short, a key financial incentive for Chinese exports is disappearing, which could impact prices and supply chains globally.
Frequently Asked Questions (FAQ)
What is being eliminated?
The export VAT rebate is being eliminated for a large number of products, listed by HS codes in the official annexes.
When does this happen?
The main changes take effect on April 1, 2026, while the final phase for battery products begins on January 1, 2027.
Will import prices increase?
In most cases, yes, because exporters lose part of their financial incentive and may pass some of the cost on to buyers.
Why is China making this change?
China is using this measure to change the structure of export incentives and increase cost pressure on affected industries, which could impact prices and competitiveness in international markets.
What should businesses do now?
Review your supply contracts, assess the impact on costs, and explore alternative sources. Early preparation is critical.
Conclusion: Starting in 2026, a large number of Chinese products will lose an important financial incentive. Importers should review costs, lead times, and sourcing strategies before the changes take full effect.
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