Friday, February 3, 2012

China's agricultural trade promotion strategy

China's new plan for agricultural trade promotion advocates more support for overseas marketing, more systematic use of safeguards to protect domestic industries, better information and other services, financial support for exporters and a more active role in international trade negotiations.

The plan for agricultural trade promotion (2011-2020) was released by the Ministry of Agriculture December 29, 2011. The plan emphasizes the importance of international trade for creating jobs, raising farmers' income and guaranteeing the supply of important commodities to the domestic market. It also worries that large volumes of imports are putting downward pressure on prices for some Chinese commodities. The plan voices concerns that rising costs in China are eroding international competitiveness and it worries that exports have low value-added, are sold in small batches and often face quality barriers overseas. The plan calls for promoting exports more actively, exports with higher value-added and higher profit margins, and controlling imports to preserve "industry security."

The plan calls for central and local governments to pay more attention to promoting agricultural trade. According to the plan, Chinese support comes in many forms:

  • Trade fairs held in China (there were 260 such fairs held in 2010)
  • Financial support for Chinese companies to participate in exhibitions overseas, take overseas trips for market research or scouting missions
  • Favorable tax policies, including value added tax rebates and giving preference to exporters for other tax reductions
  • Subsidized or earmarked loans for exporters
  • Helping Chinese companies build brands, advertise and sell directly overseas
  • Helping companies obtain certifications and registrations
  • Reducing or waiving fees for quarantine and inspection, expediting and simplifying procedures for exported agricultural products
  • Collecting and reporting foreign market information
  • Special credit and insurance for exporters from the Export-Import Bank and China Export Credit Insurance Co.
The plan says there have been many achievements, but funding is unstable, central and western regions have fewer resources for exporting, and more coordination and organization is needed. 

A set of "model exporters" and model export bases will be set up to show others how to export. China hopes to create well-known brands overseas produced by leading Chinese companies. 

Another strategy is to diversify agricultural export markets. Chinese exporters are to keep traditional markets in the United States, Europe, and neighboring countries as a base, and develop new markets in Latin America, Eastern Europe and Africa. 

The plan suggests learning from the experience and practice of developed countries and calls for using WTO-approved measures to protect domestic industries. The measures include antidumping, countervailing duties and other safeguards. The plan calls for setting up a system for monitoring losses and negative trade impacts on domestic agricultural industries. It calls for industry associations and companies to work together to file antidumping complaints. The Chinese government will strengthen its monitoring of overseas markets, collect trade laws and regulations, and conduct trade barrier investigations.

China wants to strengthen its negotiations in bilateral and multilateral forums. This includes active participation in a new round of WTO agricultural negotiations, genetic resource, intellectual property, and trade liberalization negotiations. They will pay for more training to develop personnel who are knowledgeable on agricultural trade issues. 

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