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China to trim foreign capital policies

(Chinanews.cn)
Updated: 2006-07-14 14:25

China's foreign trade has kept growing at the rate of over 30% for five years in a row, and the trade surplus is going up every year. However, China is going to change her "encouraging export" policy to help the sustainable development of her domestic economy.

Deputy minister of the Ministry of Commerce, Fu Ziying said in a news briefing that trims would be made to foreign capital and trade policies, but there would be no need to worry about over adjustment that might tamper with foreign capital and foreign trade.

Fu also emphasized that the making of foreign trade and capital policies must be based on the situation of domestic economic development. "Take the rate of export rebates as an example, we should stop reimbursing tax for exporting high-energy-consuming products, contaminative products and raw materials, but we should offer more to the export of farm products, as it is difficult to export them," said he.

China has started reimbursing tax for export since 1985. That is to return part (or all) of the domestic taxes on the exported products, thus to make them more competitive in the international market. This policy has greatly helped the growth in export.

"China will have to attract foreign investment on a selective basis. We welcome good industries and good enterprises. Of course we won't forget equality," concluded Fu.