Econ0602-Lecture-4

Econ0602-Lecture-4 - ECON 0602: Lecture 4 Outline The open...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
1 China’s Foreign Trade: A General Picture ECON 0602: Lecture 4 © HKU ECON 0602 Larry Qiu 2/58 Outline ± The open door policy ± Trade performance © HKU ECON 0602 Larry Qiu 3/58 The Open-Door Policy ± Before 1979 ± Self-sufficiency strategy ± No FDI ± Different approaches to trade and FDI reform. ± FDI -- No FDI before 1979, new policy, new law. ± Trade : ± The first area is the reform of the foreign trade system. ± The second area is the policy reform. © HKU ECON 0602 Larry Qiu 4/58 Planned system/ economy Market system/ economy How?
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
© HKU ECON 0602 Larry Qiu 5/58 Figure 1: Structure of the Pre-Reform Foreign Trade System State Planning Commission Ministry of Foreign Trade Bureau in Foreign Trade (in provinces) Specialized Import/Export Corporation Headquarters (in Beijing) Foreign Trade Corporations (in provinces and municipalities) © HKU ECON 0602 Larry Qiu 6/58 © HKU ECON 0602 Larry Qiu 7/58 How to reform it? ± The whole idea of the export reform is to encourage export activities through ± decentralization of export decisions, ± reform of the foreign trade system, ± combination of mandatory and guidance export plans, and ± introduction of a series of export incentives. © HKU ECON 0602 Larry Qiu 8/58 Two important steps ± PT (Processing trade) ± HK businesses to sign PT contracts with Chinese firms in PRD (Pearl River Delta) ± No import competition, but export promotion ± SEZs (special economic zones) ± Guangdong and Fujian ± Duty free import for export within the zone ± Grew twice as fast as the rest
Background image of page 2
Larry Qiu 9/58 Other liberalization ± Import/Export rights ± In 1991, 600 large enterprises had the import/export right. ± 1360 in 1993 and 42,000 (including FTCs) in 2001, and ± now everyone ± FIEs firms trade ± FIEs had the right to trade their own products only. ± Very large FIEs can trade other products. By Dec 20, 2001, 180,000 FIEs can do so, and ± Now everyone. © HKU ECON 0602 Larry Qiu 10 / 58 ± Non-tariff barriers: In Jan 2003, categories of import commodities subject to licensing were reduced to 8, down from 12 in 2002. Export: 52. ± Import quotas as well as trading rights were discontinued at the end of 2004. ± China maintains import prohibitions, largely for health and safety reasons and under international conventions. ± Beginning from July 2001, the qualification approval system for export rights has been changed to a registration system , for all firms with the same prescribed conditions. © HKU ECON 0602 Larry Qiu 11 / 58 Average Tariff Rates (heavy protection?) 5.7 (8.9) 4.0 (15.2) 5.5 9.8 Post-WTO 2005 13.0 17.7 13.7 16.6 2001 13.3 19.5 14.1 17.0 2000 13.4 21.8 14.2 17.2 1999 18.5 20.0 18.7 17.5 1998 23.2 20.0 22.6 26.6 1996 46.5 22.3 40.6 42.9 1992 Manufactures Primary Weighted Simple © HKU ECON 0602 Larry Qiu 12 / 58 Foreign Trade Financial Management System and Policies ± Tax Rebate for Exports ± When goods are exported, the exporters will be rebated the paid taxes including the
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/06/2010 for the course ECON ECON0602 taught by Professor Qiu during the Fall '09 term at HKU.

Page1 / 15

Econ0602-Lecture-4 - ECON 0602: Lecture 4 Outline The open...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online