China will ban processing trade in more categories of chemical
and resource products in the latest move to restrict the export of
resource-intensive products and to balance trade.
The 2007 Prohibited List for Processing Trade, which will take
effect on April 26, bans processing trade firms from dealing in 990
products.
There are 186 new categories listed, including heavy diesel oil,
apatite and lanthanon ore. They are mostly non-renewable resources,
energy-consuming and high-polluting products.
Most of the newly added products fall within the categories for
which export tax rebates were scrapped or lowered, according to an
official with the Ministry of Commerce who did not wish to be
named.
"It reflects the fact that China does not encourage exports of
these products," he said.
The prohibition was jointly released by the commerce ministry,
the General Administration of Customs and the State Environmental
Protection Administration. The government has updated the list
every year since 2004.
Processing trade, in which Chinese manufacturers add value and
re-export, is a major source of China's widening trade surplus.
Although the surplus is included in China's figures, the profit
goes to foreign investors.
The government's moves to control processing trade have had a
preliminary impact this year, according to Customs. The processing
sector's imports and exports accounted for 45.4 percent of the
country's total trade in the first two months this year, down 2.8
percentage points from a year ago.
But the processing trade surplus still amounted to $34.57
billion in this period, while the total trade surplus was $39.64
billion.
Apart from controlling processing trade, the Chinese government
is also reportedly preparing to cut or scrap export tax rebates on
extra categories such as high-purity refined zinc, garments and
more iron and steel products.
Vice Minister of Commerce Gao Hucheng said last month that the
introduction of measures to slow down export growth?was likely
to spur exports in the short term as exporters rushed to fulfill
contracts, so the impact on the trade surplus would be delayed.
?
(China Daily April 7, 2007)