Aerial photo taken on March 7, 2022 shows containers at Lianyungang Port in east China's Jiangsu Province. (Photo by Wang Jianmin/Xinhua)
While complex domestic and international economic situations weigh on businesses amid a lingering COVID-19 pandemic, China's foreign trade enterprises will see their cash flow problems eased by a raft of relief policies.
Despite the solid growth in foreign trade in the first quarter of 2022, Chinese regulators are taking note of increasing challenges and difficulties faced by enterprises, Yuan Xiaoming, an official with the Ministry of Commerce (MOC), told a press conference on Thursday.
Globally, slower economic recovery, rising inflation pressure and bottleneck in the supply chain are affecting business activities, he added.
"In the current situation, China needs to roll out more supportive policies and ensure their solid implementation to effectively help foreign trade businesses stabilize orders and production," said Zhuang Rui, a professor at the University of International Business and Economics.
According to a circular jointly released by the State Taxation Administration and nine other government departments, authorities have decided to further leverage export tax rebates, which has proved to be effective in lowering operating costs and easing cash shortages for foreign trade enterprises.
Starting from March 20, 2020, the country raised the export tax rebate rates for 1,464 items from 10 percent to 13 percent, or from 6 percent to 9 percent, which had increased export rebates by 37.7 billion yuan (about 5.74 billion U.S. dollars) for 94,000 enterprises by the end of 2021.
The circular outlined measures to improve export tax rebate policies and streamline procedures for applications.
Export tax rebates will be better aligned with export credit insurance, said the circular, adding that export credit insurance indemnities received by foreign trade enterprises will be regarded as foreign exchange receipts and rebates will be provided accordingly.
The circular also noted that rebate policies for processing trade firms will be improved and the coverage of the departure tax refund policy will be expanded.
The process for export tax rebates will be expedited, said Yuan, adding that the average time needed for export rebates will be further shortened from seven to no more than six working days this year.
Besides export tax rebates, joint efforts will be made to step up financial support for foreign trade enterprises to tide over difficulties, especially for smaller ones, he said.
Export credit insurance agencies will be revitalized to further expand insurance coverage and scale for small and medium-sized trade firms, helping them hedge against foreign exchange risks, Yuan said.
He also pointed out that the linkage between banks and export credit insurance agencies will also be strengthened, as part of efforts to expand financing channels for foreign trade enterprises.
The MOC will work with other departments to ensure the implementation of existing policies and introduce new ones in order to maintain a reasonable range of foreign trade throughout the year.