China on Monday rolled out new measures that will curb the development of processing trade for labor-intensive industries, yet another attempt to bring the rising trade surplus under control.
The new policy, to come into being on August 23, will target 1,853 products in plastics, furniture and textiles and other labor-intensive industries.
All enterprises manufacturing the products concerned must now have guarantee deposits in the Bank of China, the designated bank of China Customs, while also registering their process trade contracts with the authorities, according to the statement jointly released by the Ministry of Commerce (MOC) and China Customs.
Should enterprises be found in breach of such regulations, they would lose their deposits and interest and forfeit them to the customs house.
"We are striving to improve the development of China's processing trade in a bid to promote trade balance and reduce the trade surplus," said Wei Jianguo, vice minister of the MOC.
According to the statement published on the ministry's website, the move will especially seek to bring high polluting and high-energy-consuming industries in eastern regions of China under control, namely Beijing, Tianjin, Shanghai, Liaoning, Hebei, Shandong, Jiangsu, Zhejiang, Fujian and Guangdong.
Enterprises in these regions without export rights as of July 23, 2007 will not be allowed to process the blacklisted product, although western regions remain, for now, untouched by the move.
Customs data put the domestic processing trade volume in the first six months at US$440.9 billion, translating as a 17.6 percent rise, accounting for nearly half of China's imports and exports. From the US$2.5 billion annual level in 1981, China has seen its processing trade volume soar to US$831.9 billion in 2006.
Since 2003, the Chinese government has sought to make transnational companies relocate their high-tech and high-value-added processing businesses and relevant research institutions to China to advance its industrial capabilities.
"We will continue to improve the categorization of processing industries and set stricter entry standards for enterprises engaged in the processing trade," said Wei.
(Xinhua News Agency July 24, 2007)
