China’s Gypsum Board and Gypsum Export Tax Rebate Cancellation: Where Does Gypsum Board Export Go from Here?

The Ministry of Finance has just announced that, effective from April 1, 2026, the export tax rebate for gypsum board and other gypsum products will be canceled. In recent years, China, as the world’s largest producer and exporter of gypsum board, has held a significant position in the international market. However, with the adjustment of domestic policies, the export tax rebate for gypsum board and related products has undergone a major shift—from a reduction from 13% to 9% in 2024 to complete cancellation now. This policy change has brought considerable challenges to the industry. The cancellation of the export tax rebate means increased costs for businesses and squeezed profit margins, posing unprecedented difficulties for gypsum board export enterprises. So, under these circumstances, where does China’s gypsum board export industry go from here? This article explores the policy background, current industry status, challenges, and response strategies.

1. Policy Background of Export Tax Rebate Cancellation

The export tax rebate policy has long been a key measure in China to encourage exports, providing strong support for industries including building materials like gypsum board. By refunding a portion of the value-added tax (VAT), companies could compete in international markets with more competitive pricing. However, as China’s economic structure transforms and upgrades, alongside tightened regulations on resource-intensive and high-pollution industries, export tax rebates for certain sectors have been gradually adjusted or even canceled.

The export tax rebate for gypsum board and related products (such as gypsum) was first reduced from 13% to 9% in 2024 and has now been completely canceled. This shift is driven by the following considerations:

1. Environmental Policy Pressure: Gypsum board production involves gypsum mining and processing, which can have environmental impacts in certain stages. Canceling the rebate is partly aimed at reducing the over-export of resource-based products and encouraging companies to shift toward greener production.
2. International Trade Frictions: In recent years, anti-dumping investigations against Chinese building materials have become frequent in international markets. Canceling the rebate is seen as a proactive adjustment to avoid further trade disputes.

2. Current Status of the Gypsum Board Export Industry

China’s gypsum board export volume has grown rapidly over the past decade, with key markets including Southeast Asia, the Middle East, Africa, and parts of Europe and North America. Statistics show that China accounts for nearly 40% of the global gypsum board export market, earning its reputation as a “gypsum board powerhouse.” However, after the rebate was reduced to 9% in 2024, companies already faced rising costs, and the complete cancellation now exacerbates the situation. The industry is currently dealing with the following realities:

• Rising Costs: The cancellation of the rebate directly increases export costs. For instance, with the original 13% VAT rebate gone, the cost per ton of gypsum board may rise by tens of yuan, significantly reducing profit margins.
• Declining Market Competitiveness: In the international market, China’s gypsum board price advantage has been further eroded, allowing low-cost products from emerging producers like India and Thailand to capture market share.
• Increasing Disparities Among Enterprises: Large enterprises with brand and technological advantages can still maintain exports, while small and medium-sized enterprises, lacking bargaining power, face order losses and even the risk of market exit.

3. Challenges Faced

The cancellation of the export tax rebate presents multifaceted challenges to the gypsum board industry:

1. Intensified Price Competition: In international markets, price is often a critical factor in customers’ choice of suppliers. Rising costs have diminished China’s competitive edge against countries like India and Vietnam.
2. Fluctuating Market Demand: Some traditional export markets are affected by geopolitical and economic volatility, leading to unstable demand for gypsum board. The rebate cancellation further heightens market uncertainty.
3. Pressure for Industrial Upgrading: The cancellation forces companies to transform and upgrade, but technological research, development, and equipment upgrades require substantial capital investment, which is difficult to achieve in the short term.
4. Increasing Trade Barriers: Some countries may seize this opportunity to raise import tariffs on Chinese gypsum board or impose non-tariff barriers, further constricting export opportunities.

4. Response Strategies for Gypsum Board Exports

Despite the impact of the export tax rebate cancellation, Chinese gypsum board companies are not without options. Here are several viable response strategies:

1. Diversifying Markets: While consolidating traditional markets, companies should actively explore emerging markets, such as Africa and Latin America, where infrastructure construction demand is strong and can serve as new growth points for exports.
2. Enhancing Product Value: Through technological innovation, companies can develop high-performance, eco-friendly gypsum board products (e.g., fire-resistant, moisture-resistant, or soundproof boards) to offset price disadvantages with quality and brand advantages.
3. Strengthening Supply Chain Integration: Companies can optimize production processes and reduce raw material and logistics costs by integrating upstream and downstream operations, thereby improving overall competitiveness.
4. Seeking Policy Support: Industry associations and companies should actively communicate with the government to seek alternative forms of policy support, such as tax incentives or subsidies for green production, to alleviate cost pressures.
5. Deepening International Cooperation: By establishing joint ventures or technical partnerships with overseas companies, firms can circumvent trade barriers and produce and sell directly in target markets.

5. Future Outlook

While the cancellation of the export tax rebate has caused short-term pain for the industry, it also serves as an opportunity to push for industrial upgrading and resource optimization in the long run. Chinese gypsum board companies must seek breakthroughs amid challenges, gradually moving away from reliance on policy benefits and toward winning markets through technological innovation and brand building.

At the same time, the government and industry associations should play a guiding role by formulating reasonable industrial policies and support measures to help companies navigate difficulties. For instance, special funds could be established to support technological R&D, or international industry standards could be promoted to enhance the global recognition of Chinese gypsum board.

6. Conclusion

The reduction of the export tax rebate to 9% in 2024 and its subsequent complete cancellation have undoubtedly sounded an alarm for China’s gypsum board export industry, but challenges and opportunities coexist. In the context of increasingly fierce global competition, companies must proactively adapt to policy changes and accelerate transformation and upgrading to maintain their foothold in international markets. The future path for China’s gypsum board exports may be more arduous, but through market diversification and enhanced core competitiveness, the industry still holds the potential to achieve a transformative leap from “high volume” to “high quality.”

Where does China’s gypsum board export industry go from here? The answer lies in the strategic adjustments and innovation capabilities of the companies themselves, as well as in the collaborative efforts between the industry and policymakers. Only through such synergy can new opportunities be forged amid change, securing a stronger voice for China’s building materials industry in the global market.