China will maintain the basic stability of the RMB exchange rate and continue the export tax rebate policy in order to accelerate the transformation of the foreign trade development pattern, according to an article written by Chinese Vice Commerce Minister Zhong Shan published in Qiushi Magazine on Aug. 17.
Zhong wrote in the article that China's foreign trade is currently faced with many problems, such as increasing trade frictions, insufficient comparative advantages and serious trade imbalances.
"The long-term trade imbalance, which is detrimental to the sustainable development of foreign trade, is not a result of China's policy, and China must take the initiative in transforming its foreign trade development pattern," he wrote.
Liu Zhiyi, a macro-economic analyst at China Securities Research Company, said that according to the recently-released foreign trade data for July 2010, China's exports hit a new high in July, but both the year-on-year and month-on-month growth rates dropped.
In the future, China's exports will still be subject to pressure from reduced inventories worldwide, the euro zone debt crisis and industrial restructuring in China. Therefore, China needs to maintain the stability of its foreign trade policy in the second half, he said.
Liu also said that China seeks to reduce energy consumption per unit of GDP by 20 percent during the 11th Five-year Plan period (2006-2010). Since 2010 is the last year and only 72 percent of the task has been accomplished, it is inevitable for China to eliminate outdated production capacity by closing down some poorly-operated factories that have heavily polluted the environment, suspending the operations of similar factories, encouraging mergers and acquisitions or by other means.
Li Jian, a researcher at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, said that the central government should make tweaks based on the progress of the energy-conservation and emissions-reduction mission and the number of high-pollution, high-energy consumption and resource-dependent export products.
According to the "Notice on Eliminating Tax Rebates on Some Export Goods" jointly issued by the Ministry of Finance and the State Administration of Taxation, China started eliminating tax rebates on exports of 406 items, including several steel products, nonferrous materials and chemical products on July 15. In addition, the 406 export goods are mostly high-pollution, high-energy consumption and resource-dependent products.
