Q: China has intensified efforts to crack down on smuggling in recent years, yet smuggling remains a problem at Chinese borders. What is the government's perspective on this situation, and what measures are being adopted to stop smuggling?

A: China has constantly carried out actions against smuggling while implementing the reform and open-up policy to develop the economy. In 1998, the Chinese Government took a series of decisions, including demanding the military units, the armed police and judicial organ to divest themselves of their operating business entities, and organizing customs anti-smuggling police. Since then, China has launched a campaign against smuggling, investigated a number of major smuggling cases and punished a group of smugglers as well as people bribed to facilitate smuggling activities. As a result, large-scale smuggling has been put under control, cross-border order has improved and tariff revenue at customs has increased by considerable margins on an annual basis. And, normal economic order has been maintained, helping ensure healthy development of the economy and smooth implementation of the reform and opening-up policy.

Currently, while the overall situation of smuggling in China has been alleviated, it remains a problem. Smuggling activities by corporate entities or special organizations have been checked and large-scale smuggling put under control due to the long-term crackdown and comprehensive efforts to get the situation straightened up. However, smugglers adapt themselves to new situations and more cunning smuggling tactics, which is especially true with the secret networks of smugglers that haven't yet been uprooted.

As for the implementation of the campaign and coordinated action to crack down on smuggling, China gives full play to the pioneering role of customs in establishing a long-term, anti-smuggling mechanism and promotes all efforts to combat smuggling in a comprehensive way. These efforts include improving the legal system and regulations at customs, establishing a guard line against people cheating on prices at customs as well as the system of credit administration of importers and exporters, and strengthening the monitoring system of goods crossing the border.

At the same time, China has checked rampant smuggling by breaking up smuggling chains, with a focus on cracking down on illegal operations, bogus invoices, and punishing businesses selling goods from illegal sources. With the help of the People's Bank of China and the State Administration of Foreign Exchange, relevant authorities have seized a number of underground private banks and criminals involved in substantial money laundering and hence a major channel of money transactions for smuggling has been blocked.

At present, the damage smuggling causes to the country is diminishing while tariff revenue at customs is increasing by nearly 100 billion yuan (US$12.1 billion) a year. We believe the tax revenue drain will diminish as the government strengthens its monitoring, administration and crackdown on smuggling activities.