China extends trade goods forex reform

BEIJING -- China will extend a nationwide trial of simplified procedures for passing foreign currencies between banks and companies in goods trades, the country's foreign exchange regulator announced on Friday.

The move is aimed at "making foreign trade more convenient, increasing trading firms' global competitiveness and promoting stable growth of foreign trade," according to a statement issued by the State Administration of Foreign Exchange (SAFE).

The trial program, started in eight provinces and cities on December 1, 2011, canceled the previous procedure of verifying each foreign exchange payment and receival for goods trading firms.

The program also allowed easier export declaration and export tax rebate procedures, while enabling the SAFE to share information with tax and customs authorities to crack down on illegal cross-border capital flows, tax fraud and smuggling.

The trials, carried out in the provinces of Jiangsu, Shandong, Hubei, Zhejiang (excluding Ningbo), and Fujian (excluding Xiamen), as well as in the cities of Dalian and Qingdao, produced good results, the SAFE said.

The nationwide extension of the program from August 1 comes as China tries to maintain foreign trade growth amid weakening external demand due to economic difficulties in key Western markets as well as rising costs of labor and raw materials.

In the first five months of 2012, China's foreign trade rose 7.7 percent year on year to $1.51 trillion, much slower than the 27.4-percent increase registered during the same period last year.