China’s new plans and policies in promoting domestic and foreign trade

Recently, the State Council of China officially released the 12th Five-year Development Plan for the Domestic Trade (hereinafter referred to as the Plan), which is prepared by the Ministry of Commerce together with other relevant departments. This is the first national special plan for the domestic trade in China since the reform and opening up. Launched under a strategic background of boosting domestic demands, especially the consumption demands, the Plan is of great importance in guiding the behavior of the market entity, realizing the healthy and rapid development of the domestic trade and playing the role of domestic trade in expanding consumption, improving people’s livelihood and guiding production.

The Plan comprehensively summarizes the outstanding achievements obtained in the development of the domestic trade during the 11th Five-year Plan period, profoundly analyzes the development environment of the domestic trade, explicitly points out the key opportunities and challenges encountered in the development of the domestic trade, clarifies the development strategies for the domestic trade in China during the 12th Five-year Plan period, and presents the policy guidance and priority in development.

The Plan proposes that during the 12th Five-year Plan period, the development of the domestic trade in China will focus on improving the circulation efficiency, facilitating the life of the people, guaranteeing commodity quality, guiding production development and promoting the consumption of the residents and accelerating the conversion of the development methods of the domestic trade to establish a healthy modern domestic trade system and bring into full play the role of domestic trade as the fundamental and guiding industry of national economy.

The Plan puts forward five principles to promote the development of the domestic trade: 1. insisting on exerting the fundamental functions of market; 2. Focusing on the strategic position of expanding consumption; 3. Enhancing the important functions of guiding production; 4 clarifying the essential tenet of improving people’s livelihood; and 5. giving great impetus to reform and innovation.

The Plan provides the goals of the domestic trade development during the 12th Five-year Plan period, i.e. twice more than the present indicators of the overall size, tendency of the urban and rural development to a consistency, remarkable improvement in the modern level of circulation, ability enhancement of the market in emergency regulation and control, and obvious improvement in the domestic market environment. The objects mainly include: the total volume of retail sales of social consumer goods reaches RMB 32 trillion by 2015 with an annual average growth rate of about 15%; the added value of wholesale, retail sale, accommodation, and catering industries exceeds RMB 7 trillion by 2015 with an annual average growth rate of about 11%; the number of employees in the domestic trade reaches 130 million including about 100 million employees in towns by 2015 with an annual average increase of more than 5 million person-time; the total sales volume of commodities in chain retail enterprises above designated sizes accounts for about 20% of the total retail sales volume of the social consumer goods by 2015; and the annual average growth rate for the trade volume in electronic commerce exceeds 30%.

The Plan has made overall arrangements for the development of the domestic trade during the 12th Five-year Plan period, and explicitly presented 8 major tasks. The first task is to plan the domestic trade as a whole for harmonious development, place key emphasis on forming a development pattern with regional features, exert the radiation and the driving effects of the main commercial functional areas, enhance the construction of rural modern market system and promote the integration of urban and rural commercial service network. The second task is to establish and perfect the modern commodity circulation system, and comprehensively enhance the construction of the circulation systems of agricultural products, means of production and industrial consumer goods. The third task is to promote the development of the service industry in the field of domestic trade, focus on promoting the development of service industries that concern the people’s livelihood such as household services, popular catering, economical accommodation and other service industries. The fourth task is to improve the competitive force of the circulation enterprises, cultivate large enterprises, support small and medium-sized enterprises, and implement brand strategies. The fifth task is to greatly promote the circulation modernization, actively propel technology advancement, vigorously develop modern circulation methods and actively develop green and low carbon circulation. The sixth task is to guarantee the stable operation of domestic market, enhance public information service, improve the ability of market regulation and control and perfect the market emergency system. The seventh task is to create a normalized and orderly market environment, greatly rectify the market order, severely fight against infringement and counterfeits, actively promote the construction of credit system and enhance the management of commodity quality and safety industry. The eighth task is to deepen the reform and opening of the domestic trade, promote the management system reform, improve the level of opening up and promote the harmonious development of the foreign and domestic trade.

Centering on the main object and tasks of the domestic trade in China during the 12th Five-year Plan period, the Plan presents guarantee measures in six aspects, including improving regulation and standard system, enhancing the support of fiscal taxation and price policies, policies of Financing support to innovation, perfecting the planning and land policies, strengthening theoretical research and talent cultivation and establishing statistical evaluation system, etc.

On September 12, Premier Wen Jiabao presided over a State Council executive meeting to deliberate and decided on policies to promote steady growth in foreign trade.

In order to support the development of foreign trade, the meeting adopted Several Opinions on Promoting Steady Growth in Foreign Trade: 1.Speed up the export tax rebate process and ensure it be done accurately and promptly. 2. Expand financing and lower financing cost, and give support to commercial banks to expand trade financing for small and micro-sized firms and increase loans to qualified exporters. 3. Increase export credit and its coverage, especially credit provided to small and micro-sized firms. Offer more short-term credit to small and medium-sized businesses to help them explore overseas markets, and implement in earnest the special arrangement of insurance financing for the export of large-scale complete equipment. 4. Enhance trade facilitation. Streamline approval procedures, improve efficiency in customs clearance, and lower clearance cost. On the premise of effective supervision, the mode of local declaration and port clearance will be applicable for category B enterprises. The statutory inspection and quarantine catalogue will be further reduced. The entry-exit inspection and quarantine fee of all statutory inspection and quarantine objects in the fourth quarter of 2012 will be exempted, and the lowered inspection and quarantine rate will come into force in 2013. 5. Properly address trade frictions, as well as using trade remedy measures to protect home industries. Encourage enterprises to make use of the cooperation mechanism of advantageous region and sub-region and effective FTA agreement. 6. Expand imports of high-tech equipment, key components and daily necessities in order to support the technological reform of enterprises and balance trade. 7. Explore emerging markets in Africa, Latin America and Southeast Asia, as well as Central and Eastern Europe, and optimize international market layout for foreign trade. 8. Optimize the domestic layout for foreign trade, expand opening up of central and western region, and promote economic and trade cooperation of border regions with neighboring countries. The meeting requires all regions and departments to seriously implement the policies, reinforce monitoring, research and judgment of foreign trade situation, and provide good services for enterprises.

In order to intensify crackdown on infringement and counterfeits and effectively punish crimes, the meeting passed the Opinions on Connection of Administrative Enforcement and Criminal Enforcement in Cracking down on IPR Infringements and the Production and Sales of Counterfeit and Forged Commodities. The Opinions stipulates: 1. Where the administrative law enforcement department finds that the infringement and counterfeits case is suspected of constituting crimes and should be investigated for criminal responsibility during its law enforcement inspection, the administrative enforcement department shall transfer the suspected criminal case as required to the public security organ at the same level. 2. Where the administrative law enforcement department finds that the infringements and counterfeits case is obvious to constitute crimes during its law enforcement inspection or dealing with reports and complaints, the administrative enforcement department shall notify the public security organ in a timely manner in written form, and make a copy for the People’s Procuratorate. When the public security organ receive the notification, the public security organ should make investigation immediately, and decide within 10 days of the notification whether to file the case, and should notify the administrative law enforcement organ and make a copy for the People’s Procuratorate. 3. When public security organ finds a case is not needed to be investigated for criminal responsibility but for administrative responsibility, it should transfer the case to administrative law enforcement department at the same level for dealing with. 4. For those suspected criminal cases that are of major importance and complicated, administrative law enforcement department and the public security organ can join efforts to deal with, so as to find out the key criminal and crackdown the illegal production, supply and sales chain. 5. The administrative law enforcement department should report the cases it has investigated to the people’s government at the same level and the administrative law enforcement department at the upper level on a regular basis. If the administrative law enforcement organ does not transfer or does not transfer the cases that should be transferred to the public security organ within the deadline, the people’s government at the same level and the administrative law enforcement department at the upper level should urge it to transfer within a time limit; if the case is serious, the supervision organ should punish the person who are responsible for this; if it is a criminal case, the person in charge will be investigated for criminal responsibility at the judicial authorities. 6. If the public security organ does not deal with the case transferred by the administrative law enforcement department, or does not decide whether to file the case within the statutory deadline, the administrative law enforcement organ can suggest the People’s Procuratorate to place it as a case and supervise the enforcement. The Opinions also made specific provisions on perfecting work mechanism, strengthening supervision and assessment and ensuring the implementation of the connection work, and required the administrative law enforcement department to incorporate the infringement and counterfeits cases into government information publication scope to receive public supervision.

For effective control over futures trading, the meeting revised the Regulations for the Administration on Futures Trading. The revised Regulations further defined trade in futures, made it clear that local governments are responsible for dealing with and banning illegal futures trading, and perfected related policies.

Source: Ministry of Commerce Website; http://english.mofcom.gov.cn/aarticle/newsrelease/significantnews/201209/20120908339832.html; http://english.mofcom.gov.cn/aarticle/newsrelease/significantnews/201209/20120908346277.html

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