The National Development and Reform Commission (NDRC) reported its policy opinion that high energy consumption processing trade faces death penalty

The high energy-consuming processing trade, which accounts for a growing proportion of China’s total exports, may be formally “sentenced to death” by the National Development and Reform Commission within this year.

On July 7, two officials of the relevant department of the National Development and Reform Commission confirmed to the reporter that the National Development and Reform Commission intends to stop domestic enterprises from engaging in high-energy-consuming processing trade as soon as possible. A policy opinion drafted by the Economic and Trade Department of the National Development and Reform Commission on this issue has been submitted for approval.

According to the "Spring 2005 Report on China's External Trade Situation" issued by the Ministry of Commerce, in the first quarter of this year, the export of high energy consumption, high pollution, and resource products grew rapidly, and the export volume of some commodities changed from a year earlier to a substantial increase.

"Overheating in the past two years has caused a sudden tension between resources and energy. In the long run, China's resources and energy situation is not optimistic," officials from the National Development and Reform Commission told reporters. "So, this policy of stopping high-energy-consuming processing trade, It is not only a means for the state to regulate and control the current economic overheating, but also a long-term measure to transform China’s economic growth pattern and adjust its economic structure.”

The official also revealed that although some "different opinions from companies" have been encountered at present, it is optimistic that this policy is expected to be introduced within this year.

Development and Reform Commission brewing to stop high energy consumption processing trade

The NDRC officials refused to disclose more specific policy content, because "in the process of constantly researching, adjusting, negotiating, investigating and soliciting opinions, no one knows how it will ultimately be decided before it is formally introduced."

However, it said that the specific restrictions may include canceling or reducing some export tax rebates, raising tariffs, cutting quotas, and completely stopping some processing trade.

Officials of the National Development and Reform Commission explained that yellow phosphorus, calcium carbide, electrolytic aluminum, ferroalloy, tungsten, tin, zinc, antimony, etc. would consider canceling the export tax rebate, and the export tax rebate rate for coal also fell from 11% to 8%; the export of electrolytic aluminum was Consider increasing tariffs such as 5%; at the same time, commodities subject to quota control will consider reducing the total amount of quotas; while products such as steel, rare earth, and yellow phosphorus will completely stop their processing trade.

"Although restricting and stopping high-energy-consuming processing trade will be a long-term policy, we will consider step-by-step implementation and formulate some clear timetables when it is implemented," officials from the National Development and Reform Commission said.

In fact, since April this year, the National Development and Reform Commission has already begun this gradual progress. The website of the National Development and Reform Commission released on April 30th that the relevant agencies have begun to gradually reduce or cancel some product export tax rebates, stop processing trade, increase export tentative tariffs, and other measures to curb high energy consumption, high pollution, and export of resource products. Fast growth.

Later, the Ministry of Commerce and the General Administration of Customs jointly announced that on May 19th, iron ore, pig iron, steel scrap, steel billets, steel ingots, rare earth ore, and phosphate ores were listed in the Catalogue of Prohibited Products in Processing Trade.

It is understood that this policy opinion led by the Economic and Trade Department of the National Development and Reform Commission to gradually stop high-energy-consuming processing trade has also been coordinated by ministries and commissions such as the Ministry of Commerce, the Ministry of Finance, and the State Administration of Taxation.

According to Dr. Mei Xinyu, the Research Institute of the Ministry of Commerce, this trade pattern dominated by high energy-consuming processing trade is itself a very low-end trade.

“Thousands of domestic processing companies in the country face the orders of foreign companies and they can only let foreign companies press prices very low. A large amount of profits make foreign companies earn away. There are not many in the world. Countries like China have such a high percentage of processing trade,” said Dr. Mei.

At the same time, Dr. Mei reminded reporters that China's processing trade surplus was close to US$50 billion from January to May this year. “This high processing trade surplus is not a healthy and reasonable trade situation. From the perspective of the Ministry of Commerce, we also hope to change the current situation as soon as possible. This kind of growth of foreign trade."

Dr. Mei also believes that only from the situation that China’s trade surplus has reached 30 billion U.S. dollars in the first half of this year, there is also an urgent need to limit high-energy-consuming processing trade. "No other country in the world has such a high proportion of processing trade as China."

Long-term policy is gradually implemented

However, the voice from the business community does not support the NDRC's policy as the Ministry of Commerce.

Development and Reform Commission officials disclosed to reporters on the 7th: The policy on the reduction, exemption and quota reduction of export scarce, high energy-consuming and high-pollution products in the export tax rebate has been carried out smoothly and smoothly, but it has encountered some resistance in stopping processing trade. To different voices. "Because companies have their own interests."

“Some companies will undoubtedly be greatly affected by this, especially in some western provinces, such as those in some resource counties and cities in Shanxi that are engaged in the export of such low-end processed products. The doctor said, "In fact, they have made big profits in the past two years, but also caused the local environment is very poor, and I personally think that it should have stopped their business."

Officials of the National Development and Reform Commission also frankly stated: “Before 2002, our resource situation was not as tight as it is now, and it even appeared to be slightly surplus. Especially in the western provinces, there are a lot of resource reserves, and there are some small thermal power stations and hydropower that cannot be accessed. Therefore, at that time, many local officials actually encouraged this kind of processing trade."

Encouraging the vicious competition of low-end products caused by small thermal power, small hydropower, and high energy consumption has been a big disdain for large state-owned companies with higher technology and higher profits. Therefore, Long Chunman, chief engineer of the Anshan Iron and Steel Group, believed that this new policy is actually good for large companies. “It has long been time to eliminate these high-energy-consuming, high-pollution, and low-efficiency enterprises and replace them with low-consumption, low-pollution, and high-efficiency companies,” said Master Dragon.

Officials of the National Development and Reform Commission clearly estimate the impact this policy will have on businesses. They stress that the goal of restricting and halting high-energy-consuming processing trade is very firm, but at the same time it will pay attention to the gradual progress of policy implementation.

“Like the current auto industry, many industries in China are destined to experience an industrial pain. Rather than a major earthquake, it is better to artificially regulate and release problems slowly. I think this is in line with this industry and local provinces and cities. For the long-term interest, officials from the National Development and Reform Commission said, “Of course, the adjustment of each national policy is a process of redistribution of interests and balanced reconciliation. Our ultimate goal is ten steps, and the actual introduction may only take two steps. ”

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