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Official of Ministry of Commerce Interprets Opinions of the General Office of the State Council on Strengthening Import

China’s State Council issued the Opinions of the General Office of the State Council on Strengthening Import (No. [2014] 49, hereinafter referred to as Opinions) on October 23. An official of the Department of Foreign Trade of the Ministry of Commerce made an interpretation on that a few days ago.

1. What are the backgrounds and policy goals of the Opinions?

A: Since the beginning of this year, China’s foreign trade has been facing a severe and complicated situation, and the recovery of global economy has been weak with the growth rate slowing down. Attaching high attention to and considering the situation, the Party Central Committee and the State Council introduced policies and measures to support the steady growth of foreign trade, playing important role in bolstering the confidence of the business, stimulating market vitality and promoting the balanced development of import and export.

Recently, the State Council issued the Opinions on Strengthening Import, to implement active import promoting strategies, and guided by the market demand, to make full use of the import to optimize resource allocation, further optimize import management, promote trade facilitation, improve trade environment, encourage expanding import of advanced technical equipment and key components, reduce enterprises’ cost and improve their competitiveness. The Opinions is also aimed at stabilizing import of resources needed by the domestic market, promoting energy conservation and emission reduction, increasing import of consumer goods reasonably to meet the demands of domestic production and life, and promoting the transformation, upgrading and restructuring of domestic economy. This is an important measure to implement the spirit of the Third Plenary Session of the 18th CPC Central Committee and construct the new system of open economy.

Since entering into the WTO, the Chinese government has been continuously opening the market, and paying equal attention to both import and export. The import of the country has been expanding, with a value of US$ 1.95 trillion in 2013, seven times more than that of 2001, ranking the second in the world for five consecutive years. While promoting domestic economic growth, China has made great contributions to the global economy. At present, implementing related policies and measures to strengthening import will not only be conducive to stabilizing growth, pattern transformation, structure adjustment, benefiting the people and promoting trade facilitation, but can also bolster the recovery and prosperity of the global economy.

II. What are the main contents of the Opinions?

A: China’s import commodities are mainly capital goods, intermediate goods and consumer goods, which are driven by domestic investment, production supporting and consumption, as well as the demands of processing trade, and the import demands are decided by the market. The policies and measures in the Opinions, following the principal of leading by the market demands, pay attention to playing the promoting role of import in optimizing structure and innovative upgrading, and emphasize the role of satisfying consumer demands and bolstering domestic market. The policies and measures in the Opinions are mainly in eight aspects:

1. Import of advanced technical equipment and key components is encouraged. The Catalog of Technologies and Products that are Encouraged to Import is adjusted. The banking financial institutions are encouraged to strengthen support to import credit. Enterprises of financial leasing are encouraged to carry out financing leasing of import equipment. Import tax policies on products of science and education and scientific and technological development are optimized.

2. Import of resource products is stabilized. The national reserve system will be optimized, enterprises are encouraged to build commercial reserves, investment overseas will be supported, backhaul of strategic resources is encouraged, and import of renewable resources will be moderately increased.

3. Import of general consumer goods could be increased reasonably. The signing of inspection and quarantine agreements with related countries on aquatic products, fruits, beef and mutton should be accelerated, and the registration of qualified processing enterprises and products should be actively promoted. Qualified domestic circulation enterprises will be supported to integrate domestic and foreign trade, and domestic enterprises are encouraged to operate and be agents of foreign brands.

4. Import of trade in service should be vigorously promoted. Import of productive service including consulting, research and development and design, energy conservation and environment protection and environmental service, and import of tourism service will be increased. International cooperation in personnel flow, mutual recognition of qualification and formulation of industrial standards will be strengthened. The customs management system that accommodates with trade in service will be improved.

5. Management of import should be optimized. Pilot work of parallel import of automobiles in the China (Shanghai) Free Trade Pilot Zone should be accelerated, the categories of goods with automatic import licensing will be adjusted, pilot work of the clearance of customs without paper of automatic import licensing will be carried out, and the procedures of tax collection and management of the customs will be continuously optimized.

6. Facilitation of import and trade will be further promoted. 24-hour customs clearance reservation even in holidays for import goods will be implemented, reform of integration of customs clearance round the country will be accelerated, the inspection and quarantine system will be further improved, the collecting and admitting of the authentication results of a third party inspection will be expanded, and international mutual recognition of the results and standards will be promoted, in order to shorten the time for inspection and quarantine.

7. Import promotion platforms should be vigorously developed. Policy support to national innovation demonstration zones for import promotion should be strengthened, building of trade platforms for staple commodities should be supported, and import trade platforms will be improved. The formulation of the guidance to support the development of cross-border e-commerce should be accelerated, work should be done to make full use of the special supervision areas of the customs, import expos and fairs should be organized and supported, and great efforts should be made to introduce import policies.

8. Active participation in multilateral and bilateral cooperation is encouraged. The implementation of the Belt and Road Initiatives should be accelerated, and enterprises are encouraged to take part in investment, processing and manufacturing in the countries linked by the initiatives and increase import. Businesses are encouraged to actively sign cooperation agreements in trade in service, non-governmental exchanges among domestic and foreign trade promotion organizations and chambers of commerce should be increased, and measures are to be taken to promote and organize enterprises to carry out trade promotion activities.

III. What concrete measures does the Opinions have to encourage import of advanced technological equipment and consumer goods?

A: The Opinions stresses opening up wider and reform and innovation, and adopting effective measures to promote an even development between import and export at present while looking ahead to the future by transforming government functions, exploring long-time and systematic policies, enhancing economic structure adjustment and advancing economic and social harmonious development.

(I) The Opinions emphasizes encouraging import of latest technological equipment and key parts, and makes it clear that the Catalog of Technology and Products Encouraged to be Imported (hereinafter referred to as “the Catalog”) would be adjusted. To expand the import of advanced technology, important equipment, key parts and resource products in short supply in China, the National Development and Reform Commission has formulated and revised three times the Catalog, together with the Ministry of Finance and the Ministry of Commerce since 2007. The Catalog 2014 was issued in March 2014. Moving forward, the ministries will continue to study on the adjustment of the Catalog in accordance with domestic needs and industrial development to actively lead the enterprises to expand imports of latest technology, important equipment, key parts and resource products in short supply in China.

(II) The Opinions calls for increasing support of credit and encourages the Export-Import Bank of China to give the role of import credit with preferential interest rates into full play. The Opinions stresses the supportive role of financing in import, meeting import credit demands of latest equipment, key parts, and important resource products, and encouraging the Export-Import Bank of China to expand policy finance’s support for import.

(III) The Opinions urges for accelerating the signing of inspection and quarantine agreements with relevant countries on products like aquatic products, fruits, and beef and mutton, and positively promoting qualified processing enterprises and products to register. With the improvement of people’s daily life, China’s demands for beef and mutton, aquatic products and fruits have constantly increased, and imports have made up for domestic short supply, enriched domestic markets and provided consumers with more choices. To further expand sources of imports, inspection and quarantine departments will accelerate the signing of agreements in this regard with relevant countries. As we know, the General Administration of Quality Supervision, Inspection and Quarantine has increased the number of registered enterprises for imports of beef and mutton from some countries in 2014.

(IV) The Opinions urges the China (Shanghai) Pilot Free Trade Zone to take the lead in parallel import of automobiles. The present Implementation Measures of Automobile Brand Sales Management has played a positive role in regulating sales behaviors and protecting consumers’ rights since it was carried out nine years ago. The parallel import is conducive to enhancing competition, maintaining a fair market order and providing consumers with diversified choices. To better play an early and pilot role, the Ministry of Commerce will work with relevant departments to support the China (Shanghai) Pilot Free Trade Zone to carry out parallel imports in the automobile industry as soon as possible. Meanwhile, active efforts will also be made to perfect relevant regulations on automobile sales management, advance fair and just market competition and build a safe consumption environment.

IV. What characteristics does the Opinions have on promoting trade facilitation?

A: The policy measures mentioned in the Opinions on trade facilitation are as follows. Firstly, efforts will be made to genuinely relieve enterprises’ burden, combined with transforming government functions, streamlining administration and delegating more power to lower government levels, and optimizing import management methods. Secondly, active efforts are to be made to solve major difficulties and problems enterprises face in import with characteristics of import combined. Thirdly, work will be done to positively promote various ongoing Customs clearance facilitation pilot work, combining reform and pilot experience.

(I) Adjust the categories of automatic import license goods and accelerate non-paper clearance pilots. The Ministry of Commerce will adjust the Catalog of Automatic Import License Management Goods dynamically in accordance with the principles of streamlining administration and delegating power to lower government departments as well as the needs of macro-control. The General Administration of Customs and the Ministry of Commerce jointly released an announcement in August 2014, making a breakthrough for the first time in non-paper clearance along with the China (Shanghai) Pilot Free Trade Zone’s automatic import license non-paper clearance work. Moving forward, the two ministries will conclude experience, improve Internet technology, expand the range of pilots as soon as possible and strive to spread the experience around the whole country in 2015

(II) Accelerate the national Customs integration reform. Concretely speaking, three steps will be taken. Firstly, the national strategy focusing on coordinate development of Beijing, Tianjin and Hebei province was launched on July 1, 2014. Secondly, the important strategic deployment of Yangtze River Economic Zones based on the golden waterway has started the clearance integration in the Yangtze River Delta in late September of 2014, which will be extended to the Yangtze River Economic Zones. The clearance integration reforms in Guangdong province have also been implemented simultaneously. Thirdly, along with national strategic deployments like the Belt and Road initiatives and the inland’s international channels construction, active efforts will be made to innovate multimodal transport regulation, extend regional clearance integration to the inland and border areas, and realize national clearance integration finally. Compared with traditional transfer of customs procedures, the regional integration of customs clearance will save the clearance process and reduce the procedure time for enterprises. In addition, enterprises could choose clearance places and methods on their own, realizing 24 hours clearance. Enterprises could also choose ways of transportation on their own for cross-border cleared imported goods, greatly saving the logistics time and cost.

(III) Continue to perfect the inspection and quarantine system, expand the admission of results from a third party inspection and quarantine organization and shorten the inspection and quarantine time. Major measures include: promoting regional integration of inspection and quarantine, accelerating non-paper progress of inspection and quarantine, gradually admitting the results of specific imported goods by a recognized third party on the basis of risk analysis, and speeding up the clearance of imported cargo or goods.