China to adopt cross-cyclical adjustment measures, promote stable growth of foreign trade

BEIJING - China will continue to expand opening-up, roll out measures to respond to difficulties and challenges, ensure cross-cyclical adjustments and help ease problems facing enterprises with a special focus on supporting smaller ones, as part of effort to secure business orders, anchor market expectations and underpin steady growth of foreign trade, the State Council's Executive Meeting chaired by Premier Li Keqiang decided earlier this week.

The meeting also decided on arrangements for the implementation of the Regional Comprehensive Economic Partnership (RCEP) following its entry into force.

The meeting noted the fast growth in China's imports and exports this year, as well as their important contributions to economic stability and recovery. That said, foreign trade is faced with rising uncertainty, instability and imbalance.

"Foreign trade is a major highlight in the Chinese economy this year, yet we still need to be fully prepared for the challenges in keeping foreign trade stable next year. With China's economy so deeply integrated into the global economy, stable foreign trade is crucial to steady economic growth. Early measures must be taken wherever possible," Li said.

The meeting decided on greater policy support for imports and exports. Tax and fee cut measures will be implemented. Export tax rebates will be processed faster, to cut the average time needed for export tax rebates to no more than six working days.

Banks will be guided toward developing new products around the needs of foreign trade enterprises, including insurance policy-based financing. The RMB exchange rate will be kept basically stable, and banks will be encouraged to conduct forward foreign exchange settlement and sales services in a targeted manner, to make foreign trade enterprises more resilient to exchange rate risks.

Terms for the underwriting and claim-settlement of export credit insurance will be improved, to scale up support for micro, small and medium-sized enterprises (MSMEs) in foreign trade and against the risks of cancellation of orders before shipment. Cooperation and pair-up programs between the eastern region and the central, western and northeastern regions will be deepened, and cross-regional relocation and transfer of processing trade will be supported. Efforts will be made to ensure commodity import.

Development of new forms of foreign trade such as cross-border e-commerce will be encouraged. More integrated pilot zones for cross-border e-commerce will be established, and off-shore trade center cities and regions nurtured. Support for the development and use of overseas warehouses will be intensified in a market-oriented approach. The catalogue of retail imports via cross-border e-commerce will be updated and optimized, and the categories of imports will be expanded.

"Market expectation on foreign trade is trending downward. Anchoring expectation of MSMEs in foreign trade calls for clear and targeted measures, to help them reduce costs and overcome difficulties," Li said, "Private firms are the leading force in export, a large number of which are MSMEs, including those in cross-border e-commerce."

Supporting services for enterprises will be enhanced, and efforts will be made to resolve their problems in ensuring products for domestic sales are produced on the same production lines, meet the same standards, and be of the same quality as products for export, expanding trade channels and improving supply chains. In 2022, interests on the deferred tax payments will be temporarily exempted for the domestic sales of processing trade enterprises.

Efforts will be made to ease the pressure in international logistics. Long-term contracts between foreign trade firms and shipping companies will be encouraged. Irregularities such as arbitrary charges and freight gouging will be tackled in accordance with laws and regulations.

Financial institutions will be supported in providing logistics-related inclusive finance to eligible micro and small foreign trade enterprises. Localities will be supported in developing and improving systems based on actual conditions and proactively undertaking trade adjustment assistance, to help keep stability in industrial and supply chains.

The meeting also noted that the RCEP will take effect and get implemented on Jan. 1. Enterprises will be supported in seizing the opportunity of RCEP implementation, to boost competitiveness on international markets, elevate the level of trade and investment and push for upgrading by domestic industries.

Enterprises will be encouraged to leverage the tax cuts in participating countries and the regional cumulation provisions on the rules of origin, to expand export of advantageous products and import of competitive products. Opening-up commitments and rules will be well harnessed, to strengthen intra-regional cooperation on high-end, green industrial chains and manufacturing projects, and raise the level of openness in the services sector and investment.

A more enabling business environment will be fostered in line with advanced international standards. Greater efforts will be made to attract funds and talent from within the region and to participate in the making of and align with international standards.

Public service platforms and expert teams for implementing the free trade agreement will be put in place, and training for MSMEs intensified through government procurement of services, to help MSMEs better understand and apply the rules in the agreement.

Specialized services such as custom clearance and foreign trade documents will be developed, to provide convenience for MSMEs. Efforts will be continued to promote the entry into force and implementation of the RCEP in more participating countries, and institutionalization of the agreement actively advanced, to jointly build a major platform for regional economic and trade cooperation.

Efforts will be made in support of WTO to play its due role and uphold fair trade. Negotiations on other multilateral and bilateral free trade agreements will be advanced to pursue opening-up at a higher level.

"Active participation in regional economic cooperation of RCEP will serve as a key fulcrum for stabilizing foreign trade. Most the 15 participating countries are export-oriented economies, and 90 percent of goods will be tariff free. The rules of origin in the RCEP will also play a positive role in keeping industrial chains stable," Li said, "We must seize the opportunity, and provide a package of services, to bring in foreign companies and investment and encourage more MSMEs and cross-border e-commerce firms to go global. This will enable them to improve the level of development in the competition," Li said.