To boost exports, the city is considering granting all industrial companies in Pudong export rights. However, eager companies must await further instructions from the authorities.

Last week, Zhu Xiaoming, director of the Shanghai Foreign Economic Relations and Trade Commission (SFERTC), was quoted by local media as saying that "deregulation (concerning the granting of export licences) seems necessary".

The measure was believed to be considered because the growth rate of the city's exports continued to drop this year, from 33 per cent in March to 2.9 per cent in June.

However, the Ministry of Foreign Trade and Economic Co-operation (MOFTEC), which was claimed in some local media to have orally approved the measure, denied the possibility of deregulation.

"Rules on granting industrial companies export rights can only be eased, not cancelled," said one official from MOFTEC identifying himself as Zhu.

The current rule on granting industrial companies export rights is that the applying company should have registered capital of at least 5 million yuan (US$603,800) and foreign trade volume running into the millions of US dollars.

Lower requirement

"In order to meet increasing demands from industry, the requirements might be lowered, such as that the required registered capital be cut to about 3 million yuan (US$362,300)," Zhu said.

He said that so far, his division, which is responsible for the regulation of foreign trade, had not yet received any notice from the ministry relating to the Pudong case.

However, feedback from Pudong showed that companies in the area responded actively to the potential lifting of regulations on granting export rights.

"We have received many inquiries on that one," said Zhang Hao, an official of the Pudong Economic and Trade Bureau.

He believed that lifting the rules could create fair competition for all companies, foreign or domestic, big or small.

Most foreign industrial companies in Pudong have export licences, but many Chinese ones, because of their small size, do not.

So far, companies having no export licence employ State-owned export-import agents, to which they have to pay hefty commissions.

"This measure, if implemented, will definitely sharpen the competitive edge of Chinese companies in Pudong, especially small ones," Zhang said.

The measure is expected to help stabilize the downside trend of exports.

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