State Council introduces new policies to boost foreign trade

China’s State Council again issued 14 opinions to stabilize the foreign trade after two years. On May 9, the State Council released Certain Opinions on Stabilizing and Boosting the Foreign Trade (“opinions”), which contains 14 policy measures in five aspects, aiming to boost innovative development of and stabilize foreign trade.

“As the economy still faces huge downside pressure currently, the stabilizing and recovery momentum of the foreign trade is unstable. In this context, the policy mix introduced by the State Council that requires various departments to make joint efforts is the highlight in the opinions,” said Sang Baichuan, dean of the international economic research institute of the University of International Business and Economics. “The policy mix not only involves finance, insurance, fiscal and taxation aspects, but also includes various trade policies concerning processing trade as well as concrete supporting policies designed to improve the business environment for foreign trade companies.”

Make joint efforts to stabilize foreign trade

Fiscal, taxation and financial support. The opinions encourage financial institutions to lend to foreign trade enterprise with vast order sources and economic returns. Expand financing for export credit insurance policies, further reduce short-term export credit insurance rates, and provide insurance for the export of large complete equipment to the maximum extent. Fully refund the duty levied on some mechanical and electrical products, and improve the administration measures on export tax rebate classification.

Solidify traditional competitive edge of foreign trade. The opinions proposes to further improve policies on processing trade, and comprehensively use fiscal, land and financial policies, to support processing trade to transfer to the central and western China. Land emptied out from the regional gradient transference of processing trade in the eastern region can be used for commercial, tourism and old-age service purposes. Cancel examination and approval on the business of processing trade nationwide. Support the development of frontier trade, and increase the central government’s transfer payment to border regions.

Foster new competitive strength for foreign trade. The opinions put forward to support enterprises to build international marketing network system, construct a number of overseas exhibition center, distribution center, wholesale market and retail networks. Encourage enterprises to build overseas service assurance system. Speed up the cultivation of self-owned foreign trade brands, and foster specialized overseas brand shows for a number of key industries, enhance credit support for foreign trade enterprises to purchase foreign brands and marketing system.

Strive to optimize the structure of foreign trade. The opinions suggest launching and expanding pilots of cross-border e-commerce, market purchase trade methods and foreign trade enterprises providing integrated services. Support enterprises to build overseas warehouses for export products. Prioritize the support to advanced equipment and technology import, and reduce the tariff of some consumer goods. Stabilize the scale and speed of foreign investment, and improve the quality of foreign investment brought in. Vigorously promote the “Belt and Road” construction and international cooperation on production capacity, to boost
China’s product, technology, criterion and service export.

Further improve the environment of foreign trade. The opinions suggest reducing average inspection rate of export and enhancing the guidance on classification. Expand the single window system of international trade from coastal areas to qualified central and western regions by the end of 2016. Implement directory listing system on charges and Methods of Port Charging and Billing; increase investigation on the charging of e-government platform. Continuously conduct special actions on cracking down infringement and counterfeit in foreign trade area, and practically support import and export enterprises to deal with overseas intellectual property rights disputes.

Sang said that the current downturn of foreign trade is not simply due to trade itself, but also close related to industrial and technological progress. If separate the foreign trade from the industrial foundation, foreign trade can be hardly stabilized. Therefore, what we should do now is to solve the problem of working separate ways and ineffective cooperation in the past. The 14 measures in the opinions, which take into consideration of coordinated efforts, can practically help to stabilize the foreign trade.

Seeking for stabilization first before transformation and upgrading

“The foreign trade is in urgent need of recovery now and can bear no further deterioration. Low base plays a positive role till the year end and the exchange rate will boost foreign trade till August. But what to do with future growth?”, worried by Bai Ming, deputy director of the Ministry of Commerce of the International Market Research Institute. The import and export data in April released on May 8 show that the US dollar-denominated exports actually declined rather than climbed in April. Besides, the China Import and Export Fair, also known as the Canton Fair, concluded its 119th session with export turnover edging up 0.1 percent, showing that the foundation for recovery of foreign trade is weak and it cannot be treated lightly.

The General Office of the State Council released the Certain Opinions on Supporting Steady Growth of Foreign Trade in May 2014 with 16 pro-growth measures proposed. The State Council again issued 14 opinions to stabilize the foreign trade after two years.

“The policy tools proposed in the opinions issued in 2014 are still in service, but considering the grim situation of recovery, more efforts must be made”, said Bai Ming.

“The policies released this time bring true benefits, such as credit insurance, financing, refund of duty, reduction of charges for enterprises and etc. In short, more support and less charges.” In Bai’s view, besides aforesaid measures, the opinions also propose specific measures in providing service to enterprises, such as providing service on single platform. Specific measures are also proposed in advancing the transformation and upgrading of foreign trade, propelling development of new business forms like e-commerce and market purchase, releasing more benefit through reform and etc.

Moreover, the opinions also show the intention of stabilizing foreign trade first and then seeking for transformation and upgrading. Sang Baichuan indicated that transformation and upgrading can be achieved only after stabilization. For instance, creating self-owned brand and protecting intellectual property can facilitate the transformation and upgrading of foreign trade. But the upgrading of products and the structure or mode of trade is premised on the stabilization of foreign trade.