China will reinforce existing policies and streamline administrative procedures to steady foreign trade growth, the government announced Tuesday. Tuesday's State Council meeting, chaired by Premier Li Keqiang, focused on key problems concerning trade policy implementation and measures needed to address them.
During the meeting, while acknowledging the economy's outstanding performance in the first half of this year, Li pointed out that the sluggish global outlook and weak overseas demand have undermined increased efforts to shore up China's trade volume. Rising domestic manufacturing costs also have consequences for China's imports and exports.
A series of policies has been released by the Chinese government since 2013 to encourage the steady growth of foreign trade, and China has remained the world's largest nation in terms of trading goods in recent years.
Yet due to the impacts of the world financial crisis as well as faltering global growth, China's foreign trade growth has started to lose momentum. "We should enhance steady growth both in exports and imports to advance the country's industrial upgrading to attract new foreign investment on top of the foreign investment already in the Chinese market," Li said. "An increase in this year's imports could bring higher exports next year," he added.
An evaluation was done recently on the implementation of these policies to see how well they have boosted China's foreign trade. The evaluation was mainly overseen by the Ministry of Commerce, China's National Development and Reform Commission and the Ministry of Finance.
The evaluation revealed that while existing measures have contributed substantially to promoting China's trade growth via financial support measures such as tax reduction and encouraging new types of trade such as e-commerce, there are still certain problems.
High financing costs for companies remain a major obstacle in maintaining trade growth. Other problems include sluggish trade policy implementation as well as outdated management methods.
A third-party evaluation was conducted by the Development Research Center (DRC) of the State Council in July, through field research in enterprises in nine cities.
The evaluation report shows China's trade faces combined headwinds caused by the in-depth adjustment of the global economy plus China's economic transition.
Besides problems such as high financing costs for enterprises, the DRC evaluation reveals some other problem affecting trade growth. For example, officials are not sufficiently aware of the problems encountered during these policy implementations. Also, while domestic labor costs continue to increase, the country has not managed to firmly establish its competence in technology, branding and marketing in the global market.
In some areas, existing policies need to be updated to accommodate a larger variety of foreign trade businesses. Statistics from China customs show that in the first half of 2016, China's foreign trade stood at 11.13 trillion yuan (1.7 trillion U.S. dollars), a drop of 3.3 percent year-on-year while exports amounted to 6.4 trillion yuan (0.98 trillion dollars), down by 2.1 percent. Imports decreased by 4.7 percent to 4.73 trillion yuan (0.72 trillion dollars) but the country's trade surplus increased by 5.9 percent to 1.67 trillion yuan (0.25 trillion dollars).
Li highlighted the importance of further opening up various sectors to market competition. He also required related government departments to enhance efforts to provide greater efficiency in facilitating customs clearance and financing channels.
More measures will be introduced to ensure a steady growth of China's foreign trade after the meeting. First, detailed adjustments will be made to existing polices to better facilitate foreign trade development and better streamline procedures in trade gateways.
Second, financial institutions are encouraged to provide more financial and credit support to enterprises with substantial business profit, and export credit insurance will cover a wider range.
Third, procedures for tax reimbursement for exports will be made more efficient, and unnecessary costs in harbors and shipping will be reduced, creating a fair market for competition.
Fourth, policies will be further adjusted to facilitate new types of trade, such as cross-border e-commerce.
Fifth, bilateral investment will be further encouraged to boost foreign trade by promoting the country's Belt and Road Initiative as well as international cooperation on production capacity.
"China is now deeply integrated with the world economy, and our international competitiveness will be better enhanced through opening up," Li said. "China has opened its door to the world. The door will be never closed again, and will be opened even wider."
Latest comments