Guangdong kicks off effort to spur foreign trade
2014-June-9 Source: China Daily Website
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Province unveils new measures to streamline refunds, assist SMEs

The Guangdong provincial government has pledged to improve its export duty refund policy and step up enhancements for foreign trade service providers and commodity import trading centers as part of 25 measures it recently enacted.

Guangdong houses the country's largest number of small and medium-sized enterprises and was the first to provide comprehensive foreign trade service in China, said Xiao Feng, deputy general manager of Shenzhen OneTouch Enterprise Service Co.

The new measures should guide more SMEs into outsourcing foreign trade services and encourage such service providers to help shift away from their long-time reliance on manufacturing, he said.

The provincial government accounted for 23.2 percent of China's foreign trade in April. Its plan for facilitating growth in foreign trade is the first such plan since the State Council, China's cabinet, announced a guideline on the topic in May.

Guangdong's total foreign trade declined by 23.5 percent year-on-year in the first four months of the year, which was 1.7 percentage points narrower than the drop in the first quarter, according to the Guangdong Sub-Administration of China Customs. The country's foreign trade fell by 3.1 percent in the first four months.

Guangdong's foreign trade fell by 18.7 percent in April, with a smaller decline estimated for May.

In its latest plan, Guangdong's government set its foreign trade growth target this year at 2.4 percent, which was higher than the 1 percent goal noted in the government's work report delivered in January at the annual session of the provincial people's congress.

The government pledged to cut the time for approving export duty refunds to within 20 working days.

It also said it will work with national agencies to improve the refund policy, with an aim of optimizing the local government's share in providing such refunds and adjusting the basis for calculating refunds.

The move is expected to assist exporters by speeding up their capital turnover, said Chen Wanling, director of the Research Center for International Trade and Economy of the Guangdong University of Foreign Studies.

The government will offer subsidies on interest for loans to companies providing comprehensive foreign trade services and will guide other cities in nurturing such companies.

It also will offer a 5 million yuan ($799,288) award to a foreign trade service provider in the Pearl River Delta that facilitates exports of more than $1 billion in a year as well as 5 million yuan to each such provider in the less developed cities.

The measure should help exporters reduce their costs and raise efficiency, Chen said.

The provincial government plans to identify 10 key trading centers for imported commodities, which will receive prioritized treatment in setting up bonded warehouses, to promote the link between imports and domestic distribution systems.

Chen sees little improvement in the demand from overseas markets and noted that the most fundamental way to support trade is to improve the business environment so that companies can increase efficiency.

He suggested that oversight be strengthened on cross-border e-commerce trade, which is a relatively new form of trade that has huge volume but is hard to regulate.

It will facilitate the exploration of European and North American markets, expand into emerging markets and boost its support to companies attending trade fairs overseas.

A general manager of Silky Steel (Foshan) Industrial Co, who identified himself as Wu, said the measure should be helpful as most of his clients have been gained through overseas trade fairs.

Wu said he also hoped the measures would help transform trade processing.

"Foshan city is a base for the stainless-steel industry but is known for offering cheap, low-end products. We make tailor-made products with relatively high technology, but some of our clients wonder how a Chinese company can set such high prices," Wu said.

Xiao Jiaxiang, chairman of Foshan Shunde Cold Magic Air-Conditioning Equipment Co, applauded the measures to boost efforts to explore key markets and encourage technological innovation, as the industry has suffered from the global economic downturn and rising costs.

RISING CROSS-BORDER YUAN SETTLEMENT

Guangdong province in South China is expecting to further increase cross-border renminbi settlement, a senior provincial finance official said.

Liu Wentong, director of Guangdong provincial office of finance, said Guangdong's cross-border renminbi transactions account for one-third of the country's total and have surpassed 1 trillion yuan ($162.6 billion).

"Taiwan and Singapore also have more than 200 billion yuan worth of offshore renminbi each," Liu added.

"Most of the offshore renminbi actually left the mainland via Guangdong province," Liu told a news conference in Guangzhou, the provincial capital, on June 4.

Guangdong, which borders Hong Kong and Macao special administrative regions, has enjoyed rapid development of cross-border renminbi business since the China Import and Export Fair, held twice yearly in Guangzhou, announced the debut of renminbi settlement in 2013.

Liu said when the province gets the green light to build a free trade zone, Guangdong's finance industry will open even wider to the outside world.

In the meantime, it plans to expand its cooperation with Hong Kong and Macao to establish a regional financial center.

Cooperation with members of the Association of Southeast Asian Nations and Europe will also be expanded, Liu said.

Guangdong is currently weighing the introduction of policies to ensure offshore renminbi's return to the mainland.

The province has attracted the most foreign banks on the mainland, with more than 260 setting up branches and representative offices.

Editor: Olivia
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