Measures taken to upgrade processing trade 2007-07-27 09:07   From:Department of Information Technology    Original:News Vice-Minister Wei Jianguo talked about the new policies concerning processing trade during a recent interview. Question: What is the general picture of China’s processing trade? 　 Answer: Processing trade had made tremendous progress in China since our opening up and reform, due to our active participation in international industrial cooperation and division of labor. The past few decades have seen China’s processing trade volume jumping from $2.5 billion in 1981 to $831.9 billion in 2006, a stunning 333 fold increase. For the first six months of 2007, national processing trade volume reached $440.9 billion, accounting for 45% of China’s total import and export. Question: What is the role of processing trade in Chinese economy? Answer: Processing trade contributed to the continuous growth of national economy. It provided an important avenue for Chinese enterprises to participate in international division of labor. Also, the development of processing trade played a vital role in optimizing export structure, upgrading industrial structure, and creating employment opportunities. Processing trade also claimed a critical position in the trade between Chinese mainland, and Hong Kong and Taiwan, thus helping build a closer relationship between them. Question: What do you mean by the transformation and upgrade of processing trade? Answer: It includes the following levels of meaning: first, it means we need to upgrade the structure of processing trade industries and the products they make, to raise the technical content of products and the ability to produce key parts; second, it requires an optimal regional plan of processing trade, creating a balanced and layered pattern between the East, and the Center/West; third, it demands a processing trade structure oriented towards the higher ends of industrial chain, changing from simple processing to design, R&D, brand building, and service. Question: What is the guiding principle of the recent policy change? Answer: The guiding principle for promoting processing trade upgrade by means of executive measures is the concept of scientific development and the idea of building a harmonious society. The changes would be phased in gradually, taking into account the differences of circumstances and time. Question: Is it possible that the Central Government will cancel processing trade step by step by means of such policy changes? Answer: No. The aim of policy change is not canceling process trade, but its better development. Reining in or prohibiting the export of “high-energy-consuming and high-polluting” products and low-value-added products can help relieve the present energy supply tension, curb the worsening of environment and the relative shortage of natural resources. Moreover, it puts us in a better position to take advantage of the global industrial and capital reconfiguration, and to expedite our own structural reform and upgrade. The change is also instrumental in speeding up the opening up of the Western and the Central region, and promoting the balanced development of export and import. On the whole, transformation and upgrade of processing trade constitute both opportunities and pressures for the industries involved, which are encouraged to take full advantage of the opportunity and develop high-tech, high-value-added, brand name products.

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