China To Cut Export Tax to Zero as Part of Stimulus

China has set a plan to cut its export taxes to zero in an effort to encourage producers to sell their products abroad, the nation’s commerce minister said today. He added that the Asian country will “use all possible measures to ensure the stable growth of our exports and prevent a large drop in external demand.” The plan comes less than one week after it was reported that Premier Wen Jinbao would announce additions to the 4 trillion Yuan ($585 billion) stimulus package that was set in October.

Timing couldn’t be any more perfect. Indeed, collapsing global trade has forced the world’s third-largest economy to see its export volume plummet by 17.5% in January alone. Early reports, albeit unofficial, predict February’s figure to plummet by even more than that.