On April 20, the State Council executive meeting presided over by Premier Li Keqiang pushed forward measures to promote and stabilize foreign trade.
This is the third time this year that foreign trade was discussed at a State Council executive meeting, and related policies are getting tougher.
Substantial financial and fiscal taxation policies
Despite positive changes in economic indicators in March, foreign trade still faces a tough situation.
In previous measures, the State Council didn’t make policies regarding refund rates. But this time, it made explicit policies to increase refund rates for exports of some mechanical and electrical products.
The government’s support for export enterprises in finance and fiscal taxation can help the transformation and upgrading of export industries over a mid-to-long period of time, according to Zhang Jun, chief economist at Morgan Stanley Huaxin Securities.
Experiences in free trade zones extended to all sectors
Processing trade was another topic at the meeting as the State Council decided to encourage central and western China to take over the processing trade, while in recent years, eastern China was encouraged to develop high and new technologies. The State Council also announced that lands no longer used for processing trade can be used for business, tourism and nursing homes.
The move indicates a new trend where modern service industries will be developed alongside high and new technologies, said Bai Ming, a researcher at the Ministry of Commerce.
One thing that should be noted is that some measures put forward by the State Council are derived from applicable experiences from the four free trade pilot zones in China.
Forging new advantages in foreign trade competition needs new trade modes. E-commerce is one such mode as the State Council tried to expand tests in the trade mode of marketing purchase, brand strategy, and overseas channel strategy.
“The Belt and Road Initiative also requires us not to relax on foreign trade. China will be replaced by other countries in foreign trade if we are relaxed, and it will be more difficult to take such a position back. This requires us to make more efforts to stabilize foreign trade,” said Bai Ming.