Expanding Imports and Promoting Opening Up: China’s Ten Biggest Moves to Boost Trade Since 2001
After it joined the World Trade Organization (WTO) in 2001, China adopted a series of measures to address the issue of global trade imbalance and promote its imports. These measures have helped China maintain its high-speed growth in foreign trade and boost its imports. Since China’s entry into the WTO, the value of the country’s newly added imports has either totaled or exceeded US$100 billion annually. Such a large sum is rare globally and has made tremendous contributions to global economic growth.
Accession to the WTO
In 2001, China joined the WTO with a pledge to gradually streamline administrative examination and approval procedures, relax market access, substantively reduce import tariffs and remove non-tariff barriers such as import quotas and import licenses which do not align with WTO rules. China’s WTO accession serves as an important milestone for the country’s fusion with the global economy, lifting its reform and opening up to a higher level.
Enactment of Regulations on the Import and Export of Goods of the People’s Republic of China and Regulations on the Import and Export of Technology of the People’s Republic of China
In 2002, these two documents were both implemented. They have promoted the free import and export of goods, regulated the management of technology import and export and maintained the order of technology importing and exporting. They have also promoted the healthy development of China’s foreign trade, evidencing that China has begun to adopt international standards on import and export management.
Revision of Foreign Trade Law of the People’s Republic of China
In 2004, the revised Foreign Trade Law of the People’s Republic of China went into effect. This revision covered three major aspects, including enlarging the scope of foreign trade business operators, replacing the approval system with a registration system for foreign trade authorization, and adding clauses to guarantee foreign trade fairness and transparency. Implementation of the revised law served as an important symbol of China’s fulfillment of WTO commitments on laws and regulations. It also highlighted the direction and institutional guarantees of China’s further reform on foreign trade against the backdrop of the country’s continuing reform and opening up.
The right to engage in foreign trade more widely granted
In July 2004, China fulfilled its WTO accession commitment by replacing the 50-year-old approval system with a registration system for foreign trade authorization, six months before the deadline to which it had committed. This move was conducive to creating a fair market environment and has played an important role in the rapid development of China’s imports and exports.
Implementation of Enterprise Income Tax Law of the People’s Republic of China
The Enterprise Income Tax Law of the People’s Republic of China, adopted
in 2007, came into force on January 1, 2008, ending the two-decade-long practice of differing tax rates for domestic and foreign enterprises in China. This law drew on experience from international practice and cast a profound influence on China’s economic restructuring and the structural optimization of China’s foreign capital utilization.
China-ASEAN Free Trade Area (CAFTA)
The CAFTA was formed in 2010. According to the framework agreement, China would adopt a zero tariff rate for 90 percent of traded goods produced by ASEAN members. A bold move on regional economic integration, the launch of the free trade zone was another measure expanding China’s opening up and driving its reform to a deeper level.
Tariff reduction commitments accomplished
In 2010, China further reduced its import and export tariff rates and fulfilled all of its tariff reduction commitments to the WTO later that year. This move typified China’s active participation in economic globalization during its reform and opening up.
China (Shanghai) Pilot Free Trade Zone
In 2013, China (Shanghai) Pilot Free Trade Zone was officially launched. The free trade zone serves as a testing ground for a number of economic and social reforms including streamlining administration and delegating power, introducing the negative list, facilitating free exchange of RMB and promoting domestic capital for overseas investment and financing. Later, China set up several other free trade zones in places such as Tianjin, Guangdong, and Fujian. These free trade zones are the epitomes of China’s current reform and opening up in the deep-water zone. Establishment of free trade zones helps drive China’s domestic reform, especially its reform of the economic system, to a deeper level and is conducive to expanding its opening up. Through these free trade zones, China is able to better allocate resources through the international market.
The Belt and Road Initiative
In 2013, Chinese President Xi Jinping proposed the initiative to jointly build the Silk Road Economic Belt and the 21st-Century Maritime Silk Road (known as the “Belt and Road Initiative”), which has attracted enthusiastic attention from around the world. Aiming to promote economic prosperity in countries along the Belt and Road, the initiative upholds the principles of extensive consultation, joint contributions and shared benefits, marking China’s entry into a new era of all-round opening up.
RMB’s inclusion in the SDR
In 2016, China’s currency, Renminbi (RMB), was included in the International Monetary Fund’s Special Drawing Rights (SDR) basket as an international reserve currency. It further accelerated RMB’s pace to become an international currency and facilitated more extensive foreign investment in China.