Several government bodies are studying possible cuts, which one Commerce Ministry official said could come as early as June.

    "If this happens in time then the steps could be taken at the end of this month. We will have to wait for the details to be clarified," said the official, who declined to be named.

    "It's possible that a fairly large part of this will relate to light manufacturing," he said.

    Other agencies involved in the discussions include the Finance Ministry, the tax administration and the National Development and Reform Commission, China's top planning body. The rebates could be reduced by about 2 percent, although no final decisions have been made, a researcher from a think-tank under the Commerce Ministry said.

    Lower tax rebates would spur domestic exporters to move up the value chain and upgrade technology to remain competitive, said the researcher, who declined to be identified.

    Vice Finance Minster Li Yong said last month that China would trim export tax rebates at some point, with the adjustments varying by sector and product.

    Metal industry sources have said rebates on products that use base metals as their main raw material could be cut by as much as 5 percent to 8 percent from July 1.

    They have said that rebates for products that use copper, aluminium, lead, zinc, tin and nickel were being reviewed.

    Some sources have said that China has been considering introducing export tariffs of 5 to 10 percent on semi-finished steel products and trimming related tax rebates by two percentage points.

    China has long granted rebates on value-added tax for some exports. For primary copper, zinc and tin, exporters can claim 5 percent of the export price as a rebate, down from 13 percent two years ago. But most metals products carry a rebate of 13 percent.

    The rebates were designed to encourage exports. But now China is trying to rein in its resource-intensive metals sector and trim exports as well as its swollen foreign exchange reserves.

    China is facing pressure from trading partners, including the United States, to cut its exports to help redress global imbalances in trade and capital flows.

    (Souce: Shenzhen Daily/Agencies)