China, the world's biggest metals consumer, is close to deciding whether to allow tax-free imports of copper concentrate and primary aluminum for processing into export-bound products to boost industrial production.

The government should make a decision soon on whether to allow the practice, known as tolling, Wen Xianjun, vice president of China Nonferrous Metals Industry Association, said yesterday.

China has been restoring tax benefits for overseas metals sales to encourage exports, which fell for the first time in seven years last month, and to boost industrial production that grew at the weakest pace in almost a decade.

"This is to help Chinese metal processors maximize capacity at a time when the global slowdown has reduced demand," Wen told Bloomberg News. China ended tolling for some metal raw materials last year in an effort to curb expansion in the energy-intensive and polluting sector.

Raw material imports under tolling trade would be exempt from export duties and value-added tax, Wang Qinhua, head of the markets and trade department of the association, said. Exports of finished goods, which for the pending decision means refined copper and aluminum products, would still be subject to both taxes, Wang said. "Metal processors want the practice back, feeling such production isn't energy-consuming and is often labor-intensive, which helps employment at this difficult time," she said.

(Shanghai Daily December 30, 2008)