Constant Optimization of Customs Control and Services for the Rapid Growth of China's Foreign Trade
0 Comment(s)
Print
E-mail
China.org.cn, October 13, 2011
I. Latest Customs Statistics
Since the beginning of this year, China's foreign trade has generally maintained rapid growth. According to customs statistics, in the first three quarters of this year, the total import and export value of China's foreign trade reached 2.67744 trillion U.S. dollars, a year-on-year (the same below) increase of 24.6%. China's foreign trade volume in the first three quarters of this year has already exceeded that for the whole year of 2008 (US$2.56 trillion). In the first three quarters of 2011, China's exports reached 1.39227 trillion U.S. dollars, up 22.7%, while its imports amounted to 1.28517 trillion U.S. dollars, an increase of 26.7%. Its trade surplus for the first three quarters stood at 107.1 billion U.S. dollars, which shrank by 10.6%.
In September alone, China' total import and export value reached 324.83 billion U.S. dollars, up 18.9%, among which, exports stood at 169.67 billion U.S. dollars, an increase of 17.1%, and imports amounted to 155.16 billion U.S. dollars, jumping 20.9%, registering a trade surplus of 14.51 billion U.S. dollars, a decrease of 12.4 %.
According to customs statistics, with the introduction of the policy of restructuring foreign trade and transforming its growth pattern, in the first three quarters of this year, China's foreign trade had shown the following 7 characteristics:
1. The pattern and the structure of China's foreign trade have continued being improved. General trade registered rapid growth, while the percentage of processing trade continued declining. In the first three quarters, China's imports and exports under general trade reached 1.41575 trillion U.S. dollars, jumping 31.7%, 7.1 percentage points higher than the overall growth rate of the total foreign trade volume of China for the same period, accounting for 52.9% of China's total imports and exports for the same period, a year-on-year increase of 2.9 percentage points. Also in the first three quarters, imports and exports under processing trade registered 961.6 billion U.S. dollars, up 14.8%, accounting for 35.9% of China's total imports and exports for the same period, a year-on-year decline of 3.1 percentage points. Compared with processing trade, general trade has a longer domestic industrial chain and higher added value. Therefore, the continued increase of the share of general trade, to a certain extent, has reflected the optimization of China's foreign trade pattern.
2. Achievements have been made in the diversification of trading partners. Dependence on such traditional markets as the EU, the U.S. and Japan was reduced, while the trade with emerging markets has shown strong growth momentum. In the first three quarters, growth rates of bilateral trade with the EU, the U.S. and Japan stood at 20.9%, 17% and 18.2% respectively, which were lower than the overall growth rate of China's total imports and exports by 3.7, 7.6 and 6.4 percentage points respectively. Such traditional export destinations as the EU, the U.S. and Japan accounted for 43.7% as a whole in China's total exports, 2 percentage points lower on a year-on-year basis. During the same period, ASEAN overtook Japan to become the 3rd largest trading partner of China, with its bilateral trade volume with China reaching 267.09 billion U.S. dollars, a year-on-year increase of 26.4%. On the export side, the growth rates of China's exports to such countries and regions as India, Russia, Brazil and South Africa were all higher than the overall growth rate of China's total exports during the same period, with the share of emerging markets in China's exports further increasing.
3. The regional distribution of China's foreign trade is now more reasonable. Guangdong, Jiangsu and 5 other provinces (or provincial-level municipalities) account for over 80% of China's total foreign trade volume, while the mid-western region is also showing strong driving force in its foreign trade. In the first three quarters, the imports and exports of 7 eastern coastal provinces and municipalities, namely Guangdong, Jiangsu, Shanghai, Beijing, Zhejiang, Shandong and Fujian, reached 2.1922 trillion U.S. dollars, accounting for 81.9% as a whole in China's total imports and exports for the same period. With the mid-western region having increased capacity to receive industries transferred from eastern coastal areas and attract foreign direct investment (FDI), its export growth rate was much higher than the overall growth rate of China's total exports for the same period. In the first three quarters, exports of Chongqing, Jiangxi, Henan, and Qinghai grew by 150%, 61.4%, 61.1% and 60.1% respectively.
4. The proportion of different types of market players has gradually changed. Foreign-invested enterprises (FIEs) continued their dominant position, while private enterprises witnessed rapid growth of their imports and exports. In the first three quarters, FIEs' imports and exports reached 1.36891 trillion U.S. dollars, a year-on-year increase of 18.4%, accounting for 51.1% of China's total imports and exports for the same period, 2.7 percentage points lower compared with the same period of last year. State-owned enterprises (SOEs) saw that their imports and exports reached 569.14 billion U.S. dollars, a year-on-year increase of 23.8%, accounting for 21.3% of China's total imports and exports, 0.1 percentage point lower compared with the same period of the previous year. Also in the first three quarters, private enterprises registered 739.39 billion U.S. dollars of imports and exports, jumping 38.7% year-on-year, 14.1 percentage points higher than the overall growth rate of the total imports and exports of China for that period.
5. Quantity and prices of exported traditional competitive products have both increased. The export prices of traditional labor-intensive products were remarkably higher than before, while the export growth rate of electro-mechanical products was lower than the overall growth rate. In the first three quarters, China's average export price level increased by 9.9%, 8.2 percentage points higher on a year-on-year basis. With the price factor eliminated, the real export quantity grew by 11.7%, 20.1 percentage points lower compared with the same period of last year. The bargaining power for such labor-intensive products as textiles and garment, footwear, and toys was generally increased, with their export prices up by 20.9%, 15.8% and 8.2% respectively. After deducting the price factor, the real quantity of such exports grew by 2.8%, 3.2% and 0.6% respectively. At the same time, since the European and U.S. markets are sluggish, in the first three quarters, the exports of China's electro-mechanical products stood at 789.33 billion U.S. dollars, a year-on-year increase of 18.2%, and 4.5 percentage points lower than the overall growth rate of China's total exports for the same period.
6. The structure of import commodities has been further optimized. Imports of energy and resource products and consumer goods witnessed rapid growth. In the first three quarters, China imported 190 million tons of crude oil, a year-on-year increase of 4%; 510 million tons of iron ore, up 11.1 %; 120 million tons of coal, a growth of 1.9% on a year-on-year basis. The steady growth of imported energy and resource products has met the demand for sound and rapid development of the domestic economy. On July 1st this year, China lowered the import duty rates of 33 tariff lines of commodities, such as refined oil and some raw materials of non-ferrous metals. In the third quarter of this year, the imports of such commodities totaled 5.98 billion U.S. dollars, an upsurge of 76.9%, with the growth rate being 23.8 percentage points higher than that of the first half of this year, showing that the policies adopted by China to boost imports have yielded remarkable results.
7. China's foreign trade is developing in a more and more balanced fashion. Import growth is showing strong momentum, resulting in the shrinking trade surplus, and providing a great impetus to the growth of the world economy. In the first three quarters of this year, the import growth rate was 4 percentage points higher than the export growth rate. As a result, China's foreign trade surplus shrank by 12.7 billion U.S. dollars, a decline of 10.6% on a year-on-year basis. The ratio of trade surplus to total foreign trade volume was 4%, a year-on-year decrease of 1.6 percentage points. (The ratio was 11.6%, 8.9% and 6.2% in 2008, 2009 and 2010 respectively.) This shows China's foreign trade is developing towards a more and more balanced direction.
The above-mentioned data and characteristics show that despite the good momentum of development of China's foreign trade taken as a whole, due to the constraints by sluggish international demand and rising domestic costs, growth of imports and exports was slowing down from the previously much higher level. Monthly growth rate dropped from 31.5% in March to 18.5% in June, rebounding to 27.1% in August, and falling again to 18.9% in September. At the same time, import prices rose much more remarkably than export prices, resulting in great pressures of imported inflation and deteriorating terms of trade. In the first three quarters, export prices went up by 9.9% on a year-on-year basis, while import prices rose by 14.8% year on year, with a 95.7% index of terms of trade. That is to say, to import the same quantity of commodities, an additional 4.3% of commodities need to be exported. In addition, pace has been slow in terms of the restructuring and upgradation of export commodities, with the export growth rates of electro-mechanical products and high-tech and new-tech ones lower than the overall growth rate of China's total exports and a lowered percentage of such products in the export mix of China.
In the fourth quarter, there remain quite a number of uncertainties that will constrain the growth of China's foreign trade, mainly in the following aspects:
First, international market environment is more complicated. Currently, there are clear signs showing a slowing down world economy. The three major developed economies, namely the EU, the U.S. and Japan, are facing serious debt problems, high unemployment rate, and sliding consumer confidence. The negative economic impact of the earthquake in Japan will continue lingering around, while such emerging economies as India and Brazil will also see their economic growth slowing down due to high inflation pressures. All these factors present severe challenges to the realization of the steady and rapid growth of foreign trade of China.
Second, the volatility of the RMB exchange rate is higher. Since the exchange rate reform was introduced in June 2010, the pace of appreciation of RMB against the USD has been quickened. RMB appreciation has not only weakened the competitiveness of China's export products, but also resulted in a situation where foreign trade enterprises dare not accept big or long-term orders. It has increased enterprises' cost of avoiding exchange rate risks and suppressed the space for further growth of China's exports.
Third, trade protectionism is rising again. At present, trade protectionism is prevailing in the EU and the U.S., with trade barriers introduced one after another and in one form or another. This has also quickly spread to emerging markets, which has further complicated the trade environment and has become a big impediment to exports of Chinese products.
Fourth, small and medium-sized enterprises are confronted with more difficulties in their operations. Currently, due to the surging costs for small and medium-sized enterprises (SMEs) in terms of financing and factors of production, such as labor cost, many foreign orders have shifted to countries like Vietnam, where the manufacturing costs are lower. Moreover, inadequate input by SMEs in R&D and technological innovations has also resulted in the slow pace of export restructuring and upgradation.
Despite the more complicated and severe situations confronting China's foreign trade, the core competitive edge of the manufacturing sector of China will not undergo any major changes in the short term. This year, China's foreign trade will continue maintaining its high growth margin, and the position of China as the largest exporting country and the second largest importing country will continue being consolidated.
In facilitating the development of foreign trade of China, China Customs has earnestly discharged its responsibilities by constantly optimizing customs control and services, forging ahead with trade facilitation, and upgrading its capacity in monitoring imports and exports and providing early warnings. It has conducted a series of special operations to fight against smuggling. It has also been actively promoting the restructuring and upgradation of processing trade and supporting the economic growth of export-oriented regions. Such efforts have all scored remarkable achievements. From January to September 2011, China Customs collected and handed over to the State coffer 1.2789 trillion RMB yuan of customs duties and import taxes, a year-on-year increase of 32.59%; exercised Customs control over 2.4066 billion tons of incoming and outgoing cargo, a year-on-year increase of 10.5%; and filed and investigated 9,181 smuggling crime cases, which involved a value of 14.25 billion RMB yuan with 2.25 billion RMB yuan of alleged evasion of duties and taxes, down by 8.9%, 32.3% and 24.0% respectively
II. Measures Taken by China Customs to Serve the Transformation of the Growth Pattern of China's Foreign Trade and Promote Trade Facilitation
Despite the sluggish recovery of the world economy and rising instabilities and uncertainties, China's foreign trade has maintained good momentum of steady growth, which would not have become a reality without the concerted efforts of its business community, governments at all levels and all the government departments involved. In the process of national socio-economic development, particularly the development of the export-oriented economy, China Customs, as a window connecting the world economy and the Chinese economy, has always deemed it incumbent on itself to promote the sound and rapid socio-economic development of the country. It has earnestly followed the scientific outlook on development, given full play to its role as the bridge for imports and exports, and made courageous explorations and innovations to blaze a new trail while working in a down-to-earth manner. Such efforts have played an essential and catalytic role and yielded positive results in serving the transformation of the growth pattern of China's foreign trade and promoting trade facilitation.
1. Forging Ahead with Trade Facilitation by Accelerating Reforms and Innovations
(1) Adoption of the categorized management of enterprises further regulate and encourage the compliance by enterprises. In light of the level of compliance and credibility of enterprises and under the principle of "compliance for facilitation", China Customs has adopted differentiated management measures for different categories of enterprises. Based on this, it has rolled out a comprehensive reform in customs houses nationwide to have categorized clearance. The Rules on Categorized Management of Enterprises newly amended this year has not only ensured that the categorization criteria will be more scientific and accurate, but also enabled more compliant enterprises to enjoy various clearance facilitation measures.
(2) Optimization of customs clearance control to provide more clearance facilitation for compliant importers and exporters. First, research has been actively conducted on paperless clearance, and a number of reforms and pilots have been carried out to that end. Second, China Customs has adopted the system of advance declaration and release of goods upon arrival. With the adoption of this system, importers and exporters may go through the declaration and duty/tax payment formalities with the Customs in advance so that their goods can be released immediately upon arrival if inspection of the goods is not required. Third, clearance appointment service is offered. In this way, China Customs can provide clearance services for importers and exporters outside the business hours. Fourth, service is provided to realize consolidated declaration. China Customs allows enterprises which engage in the trade of such special commodities as fresh and live goods to go through the clearance formalities with the Customs in a consolidated fashion, summarizing many entries/exits of such commodities into one-off declaration. Fifth, control over goods making a domestic transit has been standardized and simplified, which has facilitated the import/export cargo flow from port customs houses to the hinterland of the mid-western region and even to the border areas. Sixth, service is provided to realize "declaration at the place of location and examination and release at ports", which allows businesses to go through the declaration and duty/tax payment formalities with the customs house having jurisdiction over them at the place of location and let the customs house at the port of entry/exit handle the examination and release formalities for the imports/exports.
(3) Active involvement in international customs cooperation to create a more enabling clearance environment for importers and exporters. Currently, China Customs has conducted friendly exchanges with the customs administrations of 117 countries and regions, signed 81 bilateral agreements on mutual assistance and cooperation, and acceded to 8 international conventions related to customs matters. In 9 multilateral and regional cooperation organizations, such as the World Customs Organization (WCO) and the World Trade Organization (WTO), China Customs has been actively involved in international customs affairs and in the coordination and resolution of major hotspot issues. It has also been pushing forward cooperation with the customs administration of major trading partners as well as neighboring countries and regions for trade facilitation.
Moreover, since March 17, 2011, customs houses nationwide have opened the "12360 hotline" service one after another, and have answered a total of 369,775 enquiry calls, providing policy information, answering enquiries and offering clearance guide for 290,000 businesses and individuals in a timely fashion. This has been a great convenience for the businesses to go through customs clearance formalities.
2. Targeted Support for Regional Economic Growth in Light of the Development Characteristics of Different Regions
(1) Implementing the regional development strategies of China to promote the innovative development of the export-oriented economy in different regions. Up to now, the Customs authority has signed MOUs with 25 provinces (autonomous regions and provincial-level municipalities) to offer targeted support for the opening up and key projects in those places. Cooperation has been carried out with such regions as Guangdong and Zhejiang for pilots in the restructuring and upgradation of processing trade, development of Zhejiang Ocean Economic Development Demonstration Zone, and the comprehensive reform and pilot in international trade in Yiwu, Zhejiang. China Customs has also conducted research and explorations in a new development and opening up model in Fujian Pingtan Comprehensive Experiment Zone and Zhuhai Hengqin New Area. It has formulated targeted support measures for Suzhou and Dongguan, which are two pilot cities in the restructuring and upgradation of processing trade, in consultation with the Ministry of Commerce (MOFCOM) and the Ministry of Human Resources and Social Security in light of the different characteristics of processing trade in the two cities.
(2) Constantly optimizing the distribution of ports and the development of special customs control areas. First, China Customs is accelerating the formulation of the "National Development Plan for Ports for the 12th Five-Year Plan Period", which will lay down the standards for infrastructure construction of land border crossings, further strengthen cooperation at border crossings connecting China with Russia and Kazakhstan, and raise clearance efficiency. Second, in terms of the development of special customs control areas, preferences are now being given to the mid-western region so that the development of such areas will boost the economic growth of the region and promote the formation of industrial clusters in the region. In the future, mechanisms for the establishment of special customs control areas and the exit strategies will be further improved to support and guide local places to apply for the establishment of such areas more reasonably and utilize them more wisely.
(3) Earnestly implementing the tax refund and duty/tax break policies in Hainan International Tourism Island. With the adoption of the duty/tax break policies, Hainan's position as a tourism destination has become remarkably prominent. According to statistics, in the second quarter of this year, Hainan received 6,656,200 arrivals of domestic and overseas overnight tourists, a year-on-year increase of 13.9%, and 9 percentage points higher than the first quarter. From May to July this year, the number of arrivals of overnight tourists and the tourism revenue in Hainan have both maintained a double-digit growth. Sanya, a city of Hainan, has now become one of the most popular domestic destinations for tourists.
3. Optimization and Integration of Special Customs Control Areas to Promote the Restructuring, Upgradation and Gradient Transfer of Processing Trade
(1) Optimization and integration of special customs control areas to guide and support processing trade businesses to concentrate in those areas. There are now a total of 102 special customs control areas in China. Such areas, located in 26 provinces (or autonomous regions/provincial-level municipalities), have attracted 57,000 businesses to operate within the areas with around 1.5 million people employed. According to the instructions of Premier WEN Jiabao at the Central Economic Work Conference to "encourage processing trade to extend to the higher end of the industrial chain and concentrate in special customs control areas", China Customs is now integrating the existing special customs control areas to optimize the industrial structure within the areas, expand the bonded service sector within the areas, adopt differentiated management within and outside the areas, and attract processing trade businesses to concentrate in those areas. Since last year, a number of strong bellwether enterprises have entered the special customs control areas in such mid-western cities as Chongqing, Zhengzhou and Chengdu, thus establishing the momentum of clustered and concentrated industrial development there.
(2) Optimization of customs control over bonded operations to promote the restructuring, upgradation and gradient transfer of process trade. In recent years, China Customs has adopted a series of policies and measures to boost the development of processing trade: (a) adjusted the catalog of industries prohibited and restricted from processing trade in consultation with other relevant government departments in light of the requirements to save energy and reduce emissions; (b) rolled out the pilot of bonded operations for imported goods of the international service outsourcing sector in 21 service outsourcing demonstration cities in two batches; (c) conducted research and pilots in the bonded operations of such special sectors as aircrafts and vessels; (d) actively participated in the selection of places to receive the gradient transfer of processing trade; (e) adopted differentiated treatment for mid-western enterprises in terms of the requirement of bank account security deposit system, which has helped reduce their operational costs; (f) standardized and simplified the formalities for the outsourcing and deep processing of the processing trade sector to support enterprises to extend the industrial chain of the processing trade. In 2010, the import and export value of processing trade of China reached 1.15776 trillion U.S. dollars, accounting for 39% of the total foreign trade of China, a 693-fold increase compared with the 1.67 billion U.S. dollars in 1980. The industrial structure and product mix of processing trade is more and more optimized, its industrial chain is being extended, its added value is increasing, the processing trade businesses are now more and more able to digest, absorb and re-innovate, and development of the processing trade in the mid-western region is now accelerating, presenting a sanguine picture of the processing trade in China.
4. Giving Active Play to Its Own Functional Advantages to Serve the Transformation of the Growth Pattern of China's Foreign Trade.
(1) Carrying out the national strategy of balanced foreign trade by further optimizing the import and export product mix. First, a good job has been done in customs control over the 33 tariff lines of commodities whose import duty rates had been lowered, such as gasoline, diesel, aviation kerosene and fuel oil. Second, efforts have been made to control the exports of highly energy-consuming and heavily pollutant products and promote the imports of low-carbon environment-friendly products. Third, China Customs is supporting and encouraging businesses to utilize the policy advantages of special customs control areas and bonded operations premises to expand the import and storage of important materials.
(2) Actively pushing forward the establishment of free trade areas to further deepen China's relationship with its trading partners. The General Administration of Customs has either taken the lead or participated in the negotiations on rules of origin of more than 10 free trade agreements, and is now earnestly carrying out cooperation under China-ASEAN Free Trade Agreement, ECFA and CEPAs. The value of ASEAN goods enjoying preferential treatment had risen from 687 million U.S. dollars in 2004 to 18.337 billion U.S. dollars in 2010, a 26.7-fold increase in seven years. As a result, ASEAN has overtaken Japan to become the third largest trading partner of China. Meanwhile, the value of goods of Hong Kong and Macao enjoying preferential treatment under CEPAs had risen from 232,200 and 127 million U.S. dollars in 2004 to 8.396 million and 884 million U.S. dollars in 2010, a 36-fold and 7-fold increase in seven years respectively. The value of agricultural goods of Taiwan enjoying preferential treatment had grown from 1.56 million U.S. dollars in 2005 to 18.72 million U.S. dollars in 2010, a 12-fold increase in six years.
(3) Making use of the advantage of customs statistics to provide information services for the government and the business community. Giving full play to its role in monitoring imports and exports and issuing early warnings, China Customs has strengthened its analysis of trends in the quantity and value of major import and export commodities, followed closely and conducted research on the role and contributions of imports and exports in macro-economic balancing and restructuring, and actively provided information services for the government and the businesses regarding import and export commodities. In 2010, China Customs submitted over 800 statistics analysis reports in various forms to the CPC Central Committee and the State Council, and processed more than 8,300 enquiries from the businesses.
(4) Earnestly performing its function of protecting intellectual property rights (IPRs) to safeguard the legitimate rights and interests of right holders. Since 1994 when China Customs began its efforts of IPR protection, it has been improving the institutional framework, increasing inputs and strengthening law enforcement, which has protected the legitimate rights and interests of right holders and won high praise from all walks of life. In 2006, China Customs received the "Public Sector Organization Award of Global Anti-Counterfeiting Awards 2006"from Global Anti-Counterfeiting Group (GACG). In January 2007, the WCO granted 15 China Customs officers dedicated to IPR protection the title of "Customs Officers of Merit in Law Enforcement". In June 2007, China Customs received the "2007 WCO Counterfeiting Trophy" from the WCO. The Quality Brands Protection Committee (QBPC) of the China Association of Enterprises with Foreign Investment has rated China Customs as "the most efficient IPR enforcement agency" for the recent 6 years in a row. In 2011, the General Administration of Customs was granted the title of "Chinese Government Organization with Outstanding Contributions to IPR Protection". In June 2011, China Customs received the "Public Sector Organization Award of Global Anti-Counterfeiting Awards 2011" from the GACG, and China Customs was the only government organization in the world receiving the award for this year.
This year marks the beginning of the 12th Five-Year Plan. "Keeping the national gateway, providing good services, guarding against risks and building an excellent team" is now a mission set by the General Administration of Customs for itself in the new era. China Customs will follow earnestly the scientific outlook on development and be innovative in performing its functions to create a harmonious internal and external environment. It will do its best to serve the macro-economic decision-making by the State and provide services for the importers and exporters so as to maximize its user satisfaction.
Explanations regarding customs terminologies:
1. Categorized Clearance: The reform to have categorized clearance is designed to make use of the philosophies and methodologies of risk management in customs matters scientifically. It is based on the management of compliance of enterprises. In light of the categories of enterprises, commodity classification, value, place of origin, general trade/processing trade, country, route, logistics information and other risk elements, the imported and exported goods of different enterprises are classified into different categories based on the level of risks. During the clearance process, there will be different operational procedures in light of the levels of risks of the goods, hence differentiated clearance management models. Low-risk goods will be released quickly, while high-risk ones will be subject to targeted inspections and tightened control.
2. Declaration at the Place of Location and Examination and Release at Ports: Businesses which meet the requirements set by the Customs may, when importing or exporting goods, opt to file the declaration form with the customs house at the place where they are located, and go through the rest of the formalities with the customs house located at the place of entry/exit for the goods to be released. This is designed to provide more convenience to the businesses.
Go to Forum >>0 Comment(s)