How to change the pattern of China's foreign trade growth?

In his government work report at the ongoing Fifth Session of the 10th National People Congress (NPC), Premier Wen Jiabao said the emphasis in the work with China's foreign trade in 2007 was "to optimize the mix of imports and exports, change the pattern of the foreign trade growth and strive to ease contradictions deriving from excessive trade surplus." Then, how can China optimize the mix of imports and exports and change the pattern of its foreign trade growth?

First of all, backing or support should be granted to the export of China's own brand names and products of high added value. The nurturing of those products with core competitiveness and the country's own brands should be hastened, and the effective useful policy support regime be instituted, so as to increase the added value of export products. Four mechanisms should be formed respectively for the promotion, appraisal, spread and protection of Chinese brand names, and platforms or passageways for China's own brand names to enter global markets should be put up so that a batch of export brands with increasing global competitiveness and impact will emerge and be brought about.

Secondly, the export of the products with an excessive consumption of energy and resources and worsening environmental pollution should be put under control. As part of an effort to alleviate the pressure on domestic resources, the export tax refund will be rescinded and resource tax should be increased appropriately, and an environment tax will be levied on those export products involving environmental pollutions.

Thirdly, more energy and raw materials as well as advanced technologies, equipment and crucial parts and accessories should be imported. An import mechanism for vital resources should keep improving, an import strategy for petroleum, iron ore, concentrated copper ore, and cereals should be formulated as quickly as possible, a reserve setup for petroleum and other strategic resources should be set up, and varied stable, uninterrupted and safe import channels should be opened up. Furthermore, the current opportune time with a drop of global oil price should be seized to appropriately import more oil to fill up the nation's strategic oil reserve.

Fourthly, an all-out effort should be taken to expand the export of service. As a sign for the growth of service industry, service trade has increasingly become an integral part of global trade and investment. Service trade will eventually become a leading industry, which will bring changes to the industry structure of all countries around the world. Service items are intangible commodities entering into circulation, which have less consumption of resources in the concerned nations, less damages wrought to the environment and less market risks, but with much more high-added values. The ratio of service trade to the general trade should increase more still so as to help alter the existing situation with China's foreign trade featured by a huge trade volume but with less actual value and limited profits.

Last but not least, it is essential to spur the upgrading of processing trade, which poses an efficacious way for developing nations to partake in the international division of labor and global trade under the condition of economic globalization. Such a trade pattern in conformity with China's specific national conditions has played a vital role in enlarging employment and expanding exports. From a perspective of the current trend in the international division of labor and China's present development level, processing trade still has a room of expansion for a fairly long period of time. And there are also some accompanying problems within a short chain of processing, less profits and aggravated trade fictions involved. Hence, there is an urgent need for the processing trade to be "shifted" and "upgraded" while extending its upstream and downstream businesses and uplifting as rapidly as possible China's status in the value chain of the global division of labor.

(By the People's Daily Online and its author Chen Wenling, director general of the Department of General Affairs under the Research Office of the State Council, or the Chinese central government)

By People's Daily Online