China issues trade facilitation measures

China rolled out measures on Wednesday to stabilize weak trade as its economy undergoes restructuring.

"China faces a complex and challenging environment, with exports and imports easing their pace of growth. We need to advance innovative mechanisms to enhance trade facilitation and enterprises' competitiveness," Premier Li Keqiang said at a meeting of the State Council.

Measures for simplifying clearance through customs will be carried out gradually in ports with the theme of "one-time declaration, one-time inspection and one-time clearance".

Operation and management charges will be adjusted, and administrative fees will be reduced. Inspection fees will be temporarily scrapped and the number of export items needing inspection will be cut down with manufactured exports, in principle, free from inspection. A plan for reforming the country's inspection system is also being studied, according to a State Council news release.

Financial institutions are encouraged to strengthen support for enterprises with orders and good performance, including providing short-term export credit insurance. Trade service enterprises are called on to aid small and medium-sized private exporters with financing, custom's clearance and tax rebating.

Zero tariffs will be implemented on exported services while imported services will be gradually enlarged, said the release.

The country will also increase commodity imports with a rise in the import discount interest fund while diversifying trade.

Meanwhile, the government will try to achieve a basic equilibrium in the balance of international payments while "keeping the renminbi exchange rate basically stable at a reasonable and balanced level", the news release said.

In June, China's exports surprisingly declined by 3.1 percent year-on-year, the first monthly decrease since January 2012 and the biggest decline since the 2009 recession. Imports dropped 0.7 percent year-on-year in June, compared with a 0.3 percent fall in May, according to the General Administration of Customs.

Exports and imports have gradually been slowing down in the first half of the year, though foreign trade expanded 8.6 percent year-on-year with exports rising 10.4 percent and imports increasing 6.7 percent, in line with the government's outline of 8 percent trade growth for the year.

"It's necessary for China to put forward trade support measures so that foreign trade will maintain moderate growth. Otherwise, declining trade will bring a negative momentum to the country's economic growth," said Huo Jianguo, president of the Chinese Academy of International Trade and Economic Cooperation, a think tank of the Ministry of Commerce.

Commerce ministry spokesman Shen Danyang said at a news briefing on July 17 that China's outlook for exports in the second half is "not optimistic, and we have to overcome many difficulties to reach this year's trade growth target, though that does not mean we will miss it".

Wang Jun, a senior researcher at the China Center for International Economic Exchanges, said that the renminbi should be moderately depreciated in the second half of this year, which will enhance export competitiveness as well as ease pressure on monetary policy.

Huo added that the government should step away from pressing small and medium-sized enterprises, the major force of China's trade enterprises, while helping them explore the international market.

The State Council also decided to temporarily exempt companies with monthly sales of less than 20,000 yuan from value-added and business taxes, starting Aug 1. The move will benefit more than 6 million small businesses and affect jobs and income for tens of millions of people.