May 30,2009

China Strives to Keep Its Export Share in World Market

By CSC staff, Shanghai

In spite of the signs of rebound in China's economy, the reduced exporting resulting from shrinking external demand remains the greatest challenge China is facing now. During the first four months of this year, exports had a year-on-year fall of 17.5%, 21.2%, 19.7% and 20.5% respectively. However, due to the faster decline in imports, China is still accumulating lots of current account surplus.

To stop the drastic fall of exports has been one of the most important goals set by the Chinese government earlier this year. Taking the continuous decline in exports in the past four months into consideration, exporting may show a negative growth this year. The State Council has changed the goal from stopping the fall of volume to stopping the fall of market share of " made in China" in the world market. The State Council says it will "focus on promoting the exports of important products with an edge, labor-intensive products and high-tech products, and strive to maintain the share of exported products in the international market."
Since the export tax rebate policy has been in effect, the State Council has launched a series of more policies to promote export:

-To improve the export credit insurance policy and its coverage. In 2009 the short-term export credit insurance will amount to $84 billion; To lower premium rates and improve risk compensation mechanisms;To provid special coverage of financing the export of large complete sets equipment.

-To improve the export tax policy; Also to continue to support superior products, labor-intensive products, high-tech exports, and stringently control over the export of energy-intensive products, seriously-polluting products and resources products.

-To make efforts to address the issue of financing in foreign trade enterprises. The central government will arrange funds to support agencies to expand financing guarantees for small and medium-sized enterprises. To encourage financial institutions to support financing of export-oriented enterprises through various ways. To speed up the implementation of RMB settlement pilot project. To maintain the stability of RMB exchange rate at a reasonable and balanced level.

-To further reduce the burden of foreign trade enterprises; To have a comprehensive check of fees and charges in the export sector and severely crack down arbitrary fee collection from exporting companies.

-To improve the processing trade policy; To improve taxation and customs policies to facilitate domestic sales of processing trade products; For those corporate businesses with capital from non-priced equipment and meeting certain conditions, import tariffs and import value-added tax of non-priced equipment can be exempted to an extent.

-To support various types of ownership enterprises "going out" in order to stimulate export; $10 billion Preferential credit for buyers of China's exports will be arranged in 2009;To simplify funding approval process of preferential projects.


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