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SCIO briefing on China's import/export performance in 2019

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Phoenix Television:

According to recent statistics, private enterprises have become the biggest actor in China's foreign trade. What are the specific characteristics of private enterprises in terms of imports and exports in 2019? What are the new measures adopted by the General Administration of Customs of the PRC (GACC) to support the trading activities of private enterprises? Thank you.

Zou Zhiwu:

Thank you for your question. As you've mentioned, private enterprises have become the biggest actor in China's foreign trade in 2019. As far as we are concerned, their characteristics lie in the following three aspects:

First, they display growing vitality. The number of private enterprises engaged in foreign trade transactions reached 406,000 in 2019, up 8.7% year-over-year. The total number of private enterprises experiencing significant increase reflected the continuous improvement of the domestic business environment, and also showed China's internal driving force and the vitality of its foreign trade. The aggregate imports and exports generated by China's private enterprises went up 11.4% year-over-year in 2019, contributing to a 4.5% increase on our overall foreign trade.

Second, private enterprises in central and western China achieved rapid growth. Due to the Belt and Road Initiative, as well as their comparative cost advantage, the imports and exports of private enterprises in central and western regions achieved the strongest growth. In 2019, the foreign trade generated by private enterprises in the central and western areas surged 28.3% and 22.4% respectively, 19.5 and 13.6 percentage points higher than that of the eastern region. The top four provinces with the highest growth rate in this regard were Tibet, Hunan, Guangxi and Anhui.

Third, private enterprises also show a growing ability to tap emerging markets. In 2019, their exports to all the major markets registered a growth trend. While maintaining the advantages to the traditional markets, private enterprises' exports to ASEAN countries, Latin America and Africa rose 25.6%, 11.4%, and 15.6% respectively, outpacing the national average growth in this regard.

Customs implement the decisions and arrangements made by the central government and strive to create a more favorable development environment for private enterprises. For example, we have introduced a lot of favorable measures, because micro and small enterprises account for a relatively high proportion of private enterprises engaged in foreign trade, but there are certain pressures facing them, such as capital turnover, taxation, and financing. To improve the situation, we have introduced a reform of tariff guarantee insurance and introduced commercial insurance mechanisms to the tax system. Private enterprises are major players and benefit most from such reform. This action clarified that, as long as the enterprises have a credit rating of BBB and above, they can claim customs guarantee insurance to guarantee their customs clearance and taxation. This reduces the financing cost of the enterprise. Moreover, it can greatly improve the efficiency of customs clearance because it provides important guarantees. For another example, the Customs implemented the central government decision of reducing taxes and fees. At present, administrative fees have been completely cancelled. A column on the portal website is set up to show publicly the fees charged according to regulations. "No notice, no fees." The Customs will make sure that the tax burden of private enterprises is effectively reduced.

In the next step, we will continue to follow the instructions of the Central Economic Work Conference and implement the work arrangements made by the CPC Central Committee and the State Council to support the development of private enterprises. We also plan to introduce more specific, targeted and favorable measures to resolve the concerns of private foreign trade companies. We will do our best to improve supervision, provide better services, and further optimize the business environment of private enterprises. Thank you.