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Proposed amendments to the nation's decade-old Foreign Trade Law will bring more liberalization and vigour to the industry by giving import-export rights to individuals.

Under the existing Foreign Trade Law, individual Chinese citizens cannot operate a foreign trade business. That right is preserved for the powerful State-run import-export companies.

But along with the country's reform in foreign trade, trading rights have gradually been extended to a much wider range of companies, including some private companies.

The draft amendment to the law on foreign trade will, for the first time, define individuals as parties able to engage in foreign trade.

The draft amendment also proposes changing the approval system into a registration system for import-export enterprises, a move that will open the field even further.

In the protocol on its accession to the World Trade Organization, China promised to progressively liberalize the availability and scope of the right to trade. Within three years after accession, all enterprises in China shall have the right to trade in all goods throughout the customs territory of China, except for those goods which continue to be subject to State trading in accordance with the protocol.

China will complete all necessary legislative procedures to implement these provisions during the transition period.

It is only natural for the legislators to grant Chinese individuals the right to trade, since foreign individuals can operate foreign trade businesses here.

The right to trade has close links to almost every aspect of the industry, including industrial management, customs, foreign exchange and taxation.

Therefore, the stipulation on the right to trade usually serves as a prelude for liberalization of a nation's entire foreign trade system.

Most developed economies, including the United States, Canada, the European Union and Japan, have granted the right to trade to individuals, corporations and partnerships.

As a matter of fact, China has broken the monopoly of State-run import-export companies in foreign trade business over the past decade. Qualified enterprises of all forms of ownership are encouraged to engage in foreign trade.

The Ministry of Commerce lowered the capital demand for domestic trading companies and offered an easier approval process last December.

The bottom line for registered capital for professional foreign trading companies was lowered from 5 million yuan (US$604,000) to 1 million yuan (US$120,800).

The number of enterprises qualified to do import-export business in China has hit over 100,000 - a huge increase from 8,300 just 10 years ago, according to sources from the Ministry of Commerce.

And more and more individuals have become involved in foreign trade businesses - particularly involving technology and services and border trade.

The proposed amendment will not only fulfill China's pledges to the global trade club, but consolidate the fruits of reform in the industry and better facilitate private foreign trade business at home.

After the nation lifted its limitation on foreign trade business, the private sector has shown its vitality in this industry.

Among the 1,582 private enterprises which have an annual operating revenue of over 120 million yuan (US$14.5 million) each, 1,024 have acquired the right to conduct import and export business directly.

Taking individually owned businesses and privately run enterprises as an example, the average annual growth of exports has surpassed 150 per cent since 2000. In 2002, they exported US13.9 billion worth of goods, up by 154.8 per cent over the previous year, compared with the 22.3 per cent increase for the nation's whole exports, according to figures of the All-China Federation of Industry and Commerce, China's general chamber of commerce.

Members of the Standing Committee of the 10th National People's Congress (NPC) made a preliminary review of the draft amendment in December.

The Law on Legislative Procedures said a draft law or draft amendment is likely to be put to a vote after three rounds of discussion by national legislators.

(China Daily 02/05/2004 page6)


		Amended law will bring vigour to trade Liu Yan 2004-02-05 07:34:59 Proposed amendments to the nation's decade-old Foreign Trade Law will bring more liberalization and vigour to the industry by giving import-export rights to individuals. Under the existing Foreign Trade Law, individual Chinese citizens cannot operate a foreign trade business. That right is preserved for the powerful State-run import-export companies. But along with the country's reform in foreign trade, trading rights have gradually been extended to a much wider range of companies, including some private companies. The draft amendment to the law on foreign trade will, for the first time, define individuals as parties able to engage in foreign trade. The draft amendment also proposes changing the approval system into a registration system for import-export enterprises, a move that will open the field even further. In the protocol on its accession to the World Trade Organization, China promised to progressively liberalize the availability and scope of the right to trade. Within three years after accession, all enterprises in China shall have the right to trade in all goods throughout the customs territory of China, except for those goods which continue to be subject to State trading in accordance with the protocol. China will complete all necessary legislative procedures to implement these provisions during the transition period. It is only natural for the legislators to grant Chinese individuals the right to trade, since foreign individuals can operate foreign trade businesses here. The right to trade has close links to almost every aspect of the industry, including industrial management, customs, foreign exchange and taxation. Therefore, the stipulation on the right to trade usually serves as a prelude for liberalization of a nation's entire foreign trade system. Most developed economies, including the United States, Canada, the European Union and Japan, have granted the right to trade to individuals, corporations and partnerships. As a matter of fact, China has broken the monopoly of State-run import-export companies in foreign trade business over the past decade. Qualified enterprises of all forms of ownership are encouraged to engage in foreign trade. The Ministry of Commerce lowered the capital demand for domestic trading companies and offered an easier approval process last December. The bottom line for registered capital for professional foreign trading companies was lowered from 5 million yuan (US$604,000) to 1 million yuan (US$120,800). The number of enterprises qualified to do import-export business in China has hit over 100,000 - a huge increase from 8,300 just 10 years ago, according to sources from the Ministry of Commerce. And more and more individuals have become involved in foreign trade businesses - particularly involving technology and services and border trade. The proposed amendment will not only fulfill China's pledges to the global trade club, but consolidate the fruits of reform in the industry and better facilitate private foreign trade business at home. After the nation lifted its limitation on foreign trade business, the private sector has shown its vitality in this industry. Among the 1,582 private enterprises which have an annual operating revenue of over 120 million yuan (US$14.5 million) each, 1,024 have acquired the right to conduct import and export business directly. Taking individually owned businesses and privately run enterprises as an example, the average annual growth of exports has surpassed 150 per cent since 2000. In 2002, they exported US13.9 billion worth of goods, up by 154.8 per cent over the previous year, compared with the 22.3 per cent increase for the nation's whole exports, according to figures of the All-China Federation of Industry and Commerce, China's general chamber of commerce. Members of the Standing Committee of the 10th National People's Congress (NPC) made a preliminary review of the draft amendment in December. The Law on Legislative Procedures said a draft law or draft amendment is likely to be put to a vote after three rounds of discussion by national legislators. (China Daily 02/05/2004 page6)



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