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Easing policies will alleviate the liquidity problems of Chinese foreign trade companies.
At a press conference, Yuan Xiaoming, a Ministry of Commerce (MOC) official, said that amid a difficult domestic and international economic situation, coupled with the persistent pandemic of COVID-19, Chinese regulators are studying the growing challenges facing businesses.
According to the official, business activities worldwide are currently struggling with slowing economic recovery, rising inflationary pressure, and supply chain bottlenecks.
In this connection, Zhuang Rui, a professor at the University of International Business and Economics, said that "in the current situation, China needs to roll out more supportive policies and ensure their solid implementation to effectively help foreign trade businesses stabilize orders and production".
Authorities resolved to enhance export tax rebates, proven to be effective in reducing operational costs and alleviating the lack of liquidity of foreign trade enterprises, according to a circular issued jointly by the State Administration of Taxation and nine other government departments.
The Ministry of Commerce of China said on Thursday that it has spared no effort to boost the supply of daily necessities for regions experiencing COVID-19 resurgences. pic.twitter.com/QQDdJzLV1l
As for measures to improve export tax relief policies and speed up implementation procedures, the circular said that export tax relief will be better matched to export credit insurance and that export credit insurance indemnities received by foreign trade enterprises will be considered foreign exchange earnings and the corresponding rebate will be provided.
The improvement of rebate policies for processing trade enterprises and the expansion of the outbound tax rebate policy coverage are set forth in the circular as well. In this regard, Yuan said the export tax refund process will be accelerated, and the average time needed for export refunds will be cut further from seven to no more than six working days this year.
The official said that efforts will be made to increase financial support to foreign trade enterprises to overcome difficulties, especially for smaller ones. In addition, the revitalization of export credit insurance agencies will be addressed, as well as the strengthening of links between such agencies and banks.