The Impact of Export Tax Rebate Policies on China’s Travel Luggage Industry

                             The Impact of Export Tax Rebate Policies on China's Travel Luggage Industry

As the world's largest producer and exporter of luggage and bags, China's luggage industry has faced multiple challenges in recent years, including fluctuations in global demand, rising production costs, and intensifying trade barriers. Against this backdrop, continuously optimized export tax rebate policies have become a crucial force in stabilizing growth and accelerating structural upgrading across the luggage, suitcase, and traveling bags sectors.

From higher rebate rates to the implementation of the "tax rebate upon departure" mechanism for cross-border e-commerce exports, policy dividends are being steadily released. These measures not only ease cash flow pressure for manufacturers of luggage bags and suitcases, but also drive the industry's transition from low-cost competition toward high-quality, value-added development.

According to the latest data from China Customs, exports of luggage and similar containers reached RMB 127.75 billion in the first half of 2025. Although year-on-year fluctuations persisted, the effects of a series of foreign trade stabilization policies became evident, with June exports rising 5.2% month-on-month-signaling a gradual recovery of the traveling bags market. Behind this rebound, export tax rebate policies have played a decisive enabling role.

In recent years, China has repeatedly optimized export rebate rates for luggage, suitcase, and related products. Currently, the rebate rate for leather goods remains stable at 13%, while higher value-added luggage bags have benefited from further increases. On average, rebate rates have risen by 2.3 percentage points compared with previous levels, directly reducing export costs and enhancing the global competitiveness of Chinese luggage and bags brands.

For small and medium-sized manufacturers, faster rebate disbursement has significantly improved cash flow. At Caihua Industrial Co., Ltd. in Guizhou Province, production lines are operating at full capacity as shipments of suitcases and traveling bags are sent to markets such as the United States and Germany. Over the past three years, the company has received RMB 5.43 million in export tax rebates, which has been reinvested into product R&D and overseas market expansion. Leveraging its A-level taxpayer credit rating, the firm also accessed RMB 5 million in unsecured financing through tax–bank cooperation, further scaling up its luggage manufacturing capacity.

Policy innovation has also created new momentum for cross-border e-commerce exporters of luggage bags. In 2025, China introduced a "tax rebate upon departure" policy for goods exported via overseas warehouses under customs supervision code "9810." This allows companies to apply for rebates immediately after customs clearance, rather than waiting for final overseas sales. As a result, rebate cycles have been shortened by two to three months, greatly improving capital turnover efficiency for exporters of traveling bags and suitcases.

Yanteng Luggage reported that following the policy's implementation, it accelerated the deployment of overseas warehouses, achieving a 15% year-on-year increase in export orders in the second half of 2025. Meanwhile, the expansion of cross-border e-commerce pilot zones is expected to further enhance rebate facilitation, with B2C export rebate rates potentially reaching 13% by 2028.

Beyond short-term relief, export tax rebate policies are also guiding the luggage and bags industry toward premium and sustainable development. As global regulations on plastic products tighten, the EU has introduced tariff incentives of 5%–7% for bio-based material suitcases. Coordinated with export rebate policies, this has encouraged Chinese manufacturers to increase investment in green R&D. Industry forecasts indicate that by 2026, bio-based luggage R&D will account for 25% of total industry investment.

Additionally, China's "Foreign Trade Transformation and Upgrading Base" initiative prioritizes support for 20 leisure luggage bag enterprises to enhance innovation capabilities, with a target of raising the share of high-tech product exports to 40% by 2029. In this process, export tax rebates have become a vital source of confidence for enterprises upgrading their traveling bags product lines.

Despite these policy dividends, challenges remain. Starting in 2026, Indonesia will impose a 15% value-added tax on imported luggage, while global markets continue to face price pressure and volume declines. Industry experts suggest that manufacturers should fully leverage export tax rebate funds to strengthen R&D and brand building, achieve product differentiation, and overcome trade barriers. By combining tax rebates with logistics subsidies from platforms such as international land ports, companies can further expand into emerging markets including RCEP member countries.

Tax authorities have stated that they will continue to streamline export tax rebate services by simplifying documentation, shortening approval timelines, and providing targeted policy guidance. With the combined momentum of supportive policies and industrial upgrading, China's luggage and bags industry is steadily moving beyond low-cost competition and advancing toward the mid-to-high end of the global value chain.