Wednesday, July 11, 2018

China Ideas on Expanding Imports in "New Era"

China's State Council has issued a document guiding Government ministries to push ahead on strategies to promote imports and free trade in the country's "new era" proclaimed by Xi Jinping.

The July 2 "Ideas on expanding imports to promote balanced development of foreign trade" (unofficial translation) directed various government departments to carry out practical implementation of the strategic "mutually beneficial opening of the economy" that has been proclaimed by China's leadership.

The strategy has multiple objectives:
  • promote imports to better satisfy the rising demands of consumers,
  • speed up institutional innovation,
  • push ahead on upgrades of the economic structure,
  • raise international competitiveness,
  • further expand imports while keeping exports stable
  • promote balanced development of foreign trade,
  • preserve free trade
The document is a practical implementation of directives issued at last year's 19th communist party congress to keep consumers happy by giving them access to imported products, reform outdated economic institutions, produce higher-quality internationally-competitive products, and to burnish China's credentials as a leader of global "free" trade (as defined by China). The document does not make reference to trade tensions with the United States. It does emphasize "One Belt One Road" countries and establishment of a web of free trade agreements as targets for efforts in opening the economy.

The document calls for measures to facilitate imports of products and services that improve peoples' lives and raise living standards. This represents a break from the Soviet-era dogma of suppressing consumption and focusing on imports of raw materials and equipment to promote industrial development that has shaped China's trade strategy since the 1950s. The new strategy encourages imports of items for daily life, medicine and health-related products, and support of the elderly. It calls for reduced taxes on some imported commodities, reducing layers of intermediaries in distribution, cleaning up irrational charges, and improving the duty-free shop system.

The document also focuses on imports of "transformational" technology and equipment that can support China's ambitions to become a high-tech superpower. It calls for complementary foreign investment and imports in key strategic industries. ...and it calls for protection of intellectual property rights (again).

Agricultural and resource-type products are also targeted for "appropriate increases in imports," including agricultural products that are in tight supply domestically, inputs that can upgrade agricultural competitiveness, and ag machinery. The document advocates fast-tracking inspection and quarantine protocols with related countries and pushing inspection and quarantine entry arrangements for important food and agricultural products. It calls for increased international cooperation in agriculture and forestry.

"Belt and Road" countries are targeted for "optimizing" the international trade layout. Several commitments to give concessionary trade access, including zero tariffs for most commodities, to least-developed countries and "south-south" foreign aid receive emphasis.

Strategies for promoting trade include China's international import expo, free trade agreements, free trade demonstration zones and industrial parks, e-commerce development and oversight, trade facilitation, elimination of "irrational" fees, simplifying the import process, and improvement of the technical barrier system.

Finally, the State Council document orders each government department and locality to give a high level of attention to work based on these ideas in the new situation of expanding imports.

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