James Cheng
On May 5, 2016, the State Council promulgated Several Opinions on Promoting Stabilized and Positive Development in Foreign Trade (hereinafter, the “Opinions”). The State CouncilÕs Opinions acknowledges that foreign trade is a vital component and driving force of national economy, but the current foreign trade environment is quite complex and challenging with increasing uncertainties, destabilizing factors and downward pressure. Promoting the stabilization and positive development of foreign trade is particularly significant in the smooth running, improvement and development of economics. To this end, the Opinions put forward multiple concurrent measures to promote the innovation and development of foreign trade for striving to the stabilization and positive development of foreign trade.
The Opinions put forward 14 policy measures in five aspects.
Firstly, fiscal and financial support is enhanced. Financial institutions are encouraged to extend credit to foreign trade enterprises that are attracting orders and demonstrate efficiency. Financing secured by export credit insurance policies are expanded with further reduction of short-term export insurance premiums. Export financing for large-scale equipment packages should strive to be insured to the greatest extent possible. Certain electrical products now enjoy refunds based on the amount of taxes levied, and administrative measures for the classification of export tax refund are improved.
Secondly, the original competitive advantage in foreign trade should be further built on. There shall be further improvements to trade policies, and better combined application of fiscal, land and financial policies to encourage the migration of processing trade to the mid-western regions of China. The lands in the eastern region that are being gradually opened up from the relocation of processing trade may, subject to approval, be changed for commercial, tourism and elderly care purposes. The examination and approval of processing trade is abolished nationwide. Development of border trade is supported with greater ability of movement for payments from the central government to border regions.
Third is to cultivate new foreign trade competitive advantages. Enterprises are now encouraged to establish an international marketing network with overseas showrooms, distribution centers, wholesale markets and retail outlets. Enterprises are also encouraged to set up an overseas customer service guarantee system. Cultivation of independent foreign trade brand should be accelerated, particularly through developing professional brand exhibitions overseas in certain main businesses, and greater support for acquisition of foreign brands and marketing systems.
Fourthly, efforts will be made to optimize the foreign trade structure. Expansions are planned for transnational e-commerce, market procurement trade and comprehensive foreign trade service pilot projects. Enterprises are encouraged to establish “overseas warehouses” “overseas warehouses” for exported goods. There shall be focused support to bring in advanced equipment and technology and lowering the tariffs on some daily consumables. The scale and speed of foreign investment should be stabilized so that the quality of foreign investment can increase. There shall be a strong push to promote a “single track” construction and cooperation with global productivity so as to boost the export of domestic products, technologies, standards and services.
Fifthly, the foreign trade environment should be improved, with less overall export inspection rate while providing greater classification guidance. The “single contact” development of international trade will be expanded from coastal regions to certain mid-western regions by the end of 2016. The system for cataloging service charges and the Port Charges Collection and Calculation Measures should be thoroughly followed and executed, with more investigative efforts to fee collections on e-government platforms. Special operations to crack down on infringement and counterfeiting in foreign trade should continue, and thorough support should be provided to import and export enterprises in dealing with foreign intellectual property rights disputes.
The Opinions require all regions and departments to further increase their awareness and enhance coordination for synergy. Each region shall increase the precision in its policies and formulate targeted measures. All departments are required to work with a clear division of labor and formulate implementation rules where possible.