A view of Shekou Port in Shenzhen, South China's Guangdong Province Photo: Chen Tao/GT

China will encourage the processing trade of high value-added products, while supporting the development of advanced manufacturing and strategic emerging industries in processing trade, a spokesperson of the Chinese Ministry of Commerce (MOFCOM) said on Tuesday.

As a crucial component of China's foreign trade, intensified efforts to promote the processing trade will play a vital role in facilitating external openness, driving industrial upgrading, stabilizing supply chains and ensuring employment, observers said.

Ten ministries, including the MOFCOM, jointly issued Opinions on Enhancing the Development Level of Processing Trade on December 27, 2023, a significant guiding policy document on the development of the nation's processing trade. 

With the aim of explaining the policy, the MOFCOM spokesperson said in a statement that the new opinions put forward 12 measures to bolster the industry. 

For instance, the opinions propose supporting the development of advanced manufacturing and strategic emerging industries in the processing trade. 

Processing trade enterprises are encouraged to make full and effective use of the pre-tax deductions for research and development expenses, among others. 

In strengthening financial and tax support, the new guiding policy suggests making effective use of existing funds and offering preferential tax policies. It also emphasizes increasing credit support for processing trade enterprises and enhancing export credit insurance support to meet the needs of enterprises for exchange rate hedging and cross-border yuan settlements.

To optimize the management and services of the processing trade, it supports expanding the domestic market, promoting the integration of domestic and foreign trade, adjusting the catalog of prohibited goods for the processing trade in a timely manner, further optimizing related measures and innovating customs supervision mechanisms.

"As the next step, the MOFCOM, in collaboration with relevant localities and departments, will actively promote key tasks, improve support policies, closely cooperate and create a favorable policy environment for the sustained and healthy development of the processing trade," said the spokesperson.

China's processing trade totaled 5.57 trillion yuan ($761.22 billion) between January and September 2023, accounting for 18.1 percent of the country's total foreign trade, customs data showed.

Global Times