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New Chinese policy to rein in trade surplus
China is rolling out a new policy aimed at restraining the expansion of process trade in labor-intensive industries in an effort to suppress its burgeoning trade surplus.
With effect from Aug. 23, labor-intensive processing industries of 1,853 products, such as plastics, furniture and textiles, will be subjected to customs restrictions.
According to a statement jointly released by the Ministry of Commerce (MOC) and China Customs, the Mainland is making it compulsory for enterprises involved in the manufacturing of affected products to have guaranteed deposits in the Bank of China during the course of registering their process trade contracts.
Failing which, they would be liable to losing their deposits and interest to the bank as a penalty.
High polluting and high-energy consuming industries in China's eastern regions, including Beijing, Tianjin, Shanghai, Liaoning, and Jiangsu, will be placed under the tightest scrutiny. However, the western regions would not fall under the new policy.
Furthermore, enterprises in the Eastern regions which fail to acquire export rights by this Monday will be barred from participating in process trade involving the blacklisted products.
Wei Jianguo, vice minister of the MOC said that the objectives of this move is to enhance the progress of China's processing trade in leveling trade imbalances and slash trade surplus.
With a surge of 17.6% to US$440.9 billion in the first half, China's processing trade volume is equivalent to half of the Mainland's total imports and exports. This may be attributed to long term efforts by the Chinese government to promote China as an idea hub for transnational companies to locate advanced and high-value-added processing businesses as well as research institutions there.
Editor:admin Date:2007-07-26
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