The Chinese Government is poised to restructure the country's foreign trade by setting up pilot high-tech export zones.

The Ministry of Commerce and the Ministry of Science and Technology yesterday named 18 national high-tech export and innovation zones and said they will offer full support to the enterprises based in them.

The move is regarded as a key step to help China's exports move up the value chain from labour-intensive industries to technology-intensive sectors with high-added value.

The 18 zones selected by the ministries from 69 applicants include high-tech industrial parks, cities and an individual enterprise.

Companies based in the zones attach great importance to research and development (R&D) and innovation, ploughing around 3 per cent of their profits back into R&D, much higher than Chinese exporters' average R&D spending.

Firms in the zones include those engaged in the agricultural, chemical industries, energy, pharmaceuticals, aeronautics and astronautics sectors.

Zhang Ji, director of the commerce ministry's department of mechanical, electronic and high-tech industry, said the government will create a favourable environment for the firms, including helping them attract skilled staff, attract foreign investment and conduct research.

Meanwhile, an agreement was signed yesterday between the commerce ministry and the Export-Import Bank of China.

According to the agreement, the bank will provide credit to enterprises in the export zones, in particular for their research and development projects.

According to statistics from the Ministry of Commerce, firms in the 18 zones had a total sales volume of 1.26 trillion yuan (US$159.5 billion) last year, while their exports reached US$21.2 billion in 2005, accounting for nearly 10 per cent of the country's high-tech exports. Officials from the ministries expect the firms' exports to reach US$30 billion this year.

The government expects to build these bases into export-oriented zones with complete industrial chains and a high capacity for innovation.

The government plans to establish a further 100 such zones over the next three years in a bid to promote the technological and innovative capacities of a host of industries.

Although China became the world's third-largest trader in 2004 with its exports and imports exceeding US$1 trillion, the country is still far from a trading power. Most of China's exports are light industrial products with low added value.

The Chinese Government is working hard to restructure the nation's foreign trade. Besides encouraging its high-tech exports, China is also restricting exports from low added-value industries by scrapping tax rebates or even imposing duties on them.

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