Laws of the People's Republic of China

Guo Ban Fa [2006] No. 42

The people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government, all ministries, commissions and directly subordinate institutions of the State Council:

The Opinions of the Transition of Export Growth Mode of Electromechanical Products during the Eleventh Five-year Plan Period, which are submitted by the Ministry of Commerce, the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Finance, the Ministry of Information Industry, the People's Bank of China, the General Administration of Customs, the State Administration of Taxation, and the General Administration of Quality Supervision, Inspection and Quarantine, have been approved by the State Council, and are hereby transmitted to you. Please abide hereby.

The General Office of the State Council

May 27, 2006

Opinions of the Transition of Export Growth Mode of Electromechanical Products during the Eleventh Five-year Plan Period

During the Tenth Five-year Plan period, remarkable headway was made in China's export of electromechanical products through joint efforts of relevant parties. By 2005, the electromechanical products, a vital role in China's foreign trade, have been the No. 1 category of export commodities for 11 years in a row. For the purpose of helping lift the quality and benefit of foreign export, effective measures must be taken during the Eleventh Five-year Plan period to transmit the export growth mode of electromechanical products. The Opinions are hereby given therefor as follows:

1.

The guiding principle and objectives of the export of electromechanical products during the Eleventh Five-year Plan period.

(1)

Guiding thought. In accordance with the spirit of the Fifth Plenary Session of the 16th CPC Central Committee and under the general requirements of the 11th Five-year Program for National Economic and Social Development, we shall realize fundamental transition of export growth mode by seizing the new opportunities in global flow of production factors and industry transfer, basing ourselves on independent innovation and enhanced international competitiveness, pursuing brand strategy of the export of electromechanical products, intensifying the establishment of export production system, adjusting export structure, improving the quality of the product, increasing technology content and added value and rectifying export order.

(2)

Objectives. We shall actualize apparent optimization of the export structure of electromechanical products, remarkable improvements in independent innovation capacity and export order, further diversification of export market, essential improvement in the internal and external environment of export, and by 2010, high-and-new-tech electromechanical products accounting for 55% of the total export volume of the electromechanical product while products with independent brands and independent intellectual property rights accounting for 20%

2.

Accelerating the adjustment of the export structure of electromechanical products and improving the quality of the products.

(3)

While increasing the technology content and added value of traditional exported electromechanical products, we shall strive to expand the export of technology-extensive products with high added value, and vigorously develop and expand the export of key components, elements, and accessories for the machines. The key export products are: aircrafts and aviation equipment, ship and marine equipment, railway vehicles, automobiles and auto parts, machine tools, engineering and agriculture machinery, integrated circuits, communication equipment and electric power, metallurgy, petrochemical complete equipment, the new generation communication products, digital household appliances and audio-visual equipment, computer network, etc.

(4)

We shall curb the production and export of high energy consumption and high pollution products, encourage electromechanical enterprises to further develop energy conservation, environment protection technologies and products, and progressively introduce such factors as environment, labor insurance, hygiene, social responsibilities to design and production management.

(5)

We shall support the electromechanical enterprises to further improve the quality of the exported products, to strive to acquire ISO9000 Quality Certification, and ISO14000 Environment Certification; we shall also promote them win relevant international certifications for security, hygiene, resource conservation and social responsibilities.

(6)

On the basis of risk analysis, we shall execute timely dynamic management over the security and quality of the exported electromechanical products, intensify classification management of manufacturing enterprises, enlarge the scope of the exemption of export inspection, lower the cost for inspection and quarantine, and broaden the green channel for export.

3.

Intensifying effort for independent innovation, nurturing a fleet of exported electromechanical products with independent brands.

(7)

We shall continue to reinforce the establishment of export production system, and nurture a fleet of exported electromechanical products with independent brands, give priority to technology reform, research and development, loan, insurance, and information services, and strengthen the construction of base enterprises, and that of export base of the automobile and auto parts. Then we shall select several key industries that are capable of driving the development of other industries to foster several export industry bases and a number of export base enterprises. Local authorities shall, in accordance with local realities, select a number of potential enterprises with independent brands for export to establish primary contact.

(8)

We shall encourage and guide export enterprises of electromechanical products to lift the scale benefit through listing, merging, associating, regrouping, and transnational acquisition, and give key support to a number of competitive enterprises with independent intellectual property rights and famous brands. We shall also progressively found and perfect the statistics system of exported electromechanical product brands and products with independent intellectual property rights.

(9)

We shall encourage the electromechanical enterprises to scale up investment in research and development to develop critical technology and core technology with independent intellectual property rights. We shall also support the research and development of common technology concerning export. The research and development expenditure of the enterprises may be listed before tax collection.

(10)

We shall support the electromechanical enterprises to induct advanced technologies, critical equipment and parts, and help them comprehend, absorb and re-innovate those technologies. With respect to those advanced foreign technologies and critical equipment, tariffs and value-added tax in import link shall be exempted in accordance with the related provisions of the State Council.

(11)

We shall boost the capacity building of technology innovation of exported electromechanical products, push forward the electromechanical enterprises to be the main part of technology innovation, promote technology development and achievement industrialization through coordination among enterprises or cooperation among industries, universities and research institutes, and encourage the enterprises to open information and R&D centers abroad to understand the trend of the advanced technologies and develop new products suitable for the local market.

4.

Deepening the strategy of market diversification, and strengthening the construction of foreign marketing network and after-sale service system.

(12)

On the basis of consolidating the traditional export markets in Southeast Asia, Europe and North America, we shall intensify effort to develop the emerging markets in Russia, Eastern Europe, Africa, Latin America and India, and raise the export proportion in these markets.

(13)

We shall encourage and support competitive electromechanical enterprises to make investment in foreign countries so as to facilitate the export of equipment, capital, technologies and materials by utilizing foreign aid, contracting with own capital and other ways. The electromechanical enterprises will realize the localization of production, sale and financing through the joint-venture and cooperation with the countries that they invest in.

(14)

We shall encourage and support the enterprises to form a worldwide sales network of China's exported electromechanical products through establishing representative offices or sales organizations, selecting distribution agents, or utilizing foreign companies' sales network, etc. We shall also, on the basis of sales network, set up a perfect maintenance service network, gradually solve the problems in the after-sale maintenance service of electromechanical products, and strive to make breakthrough in the establishment of worldwide sales network and after-sale maintenance service network for key products, such as engineering machinery, agriculture machinery, communication equipment, automobiles, motorcycles, etc.

(15)

We shall encourage and support the electromechanical enterprises to participate in the well known foreign professional exhibitions, organize counterpart communication on a regular basis between small and medium-sized enterprises and the business people in such key export markets as EU, North America, Japan, to help them search cooperation opportunities to explore international market.

(16)

We shall enhance public information service and training in talented people for small and medium-sized enterprises, establish and perfect the information network service system of electromechanical products so as to provide export enterprises with accurate, prompt and convenient information of trade and investment as well as information service of product standards, market laws and policies, etc.

(17)

On the basis of the measure of examination and approval for one time and effectiveness for multiple times within one year for the trips abroad made by staff working in business, technology, after-sale service and responding to anti-dumping claims, we shall further simplify procedures of staff employed in electromechanical export enterprises going abroad.

5.

Supporting the export of electromechanical products via multiple means.

(18)

We shall continue to arrange part of the central foreign trade development fund to be used for supporting the research and development of exported electromechanical products and interest subsidies for technology reform loans. Regions£¬if better positioned, shall also be given fund support. We shall employ the small and medium-sized enterprises to explore fund in international market and support the activities of exploring fund by electromechanical enterprises in international market, adjust the export tax refund rate for the electromechanical products and encourage the export of electromechanical products with high technology content and high added value.

(19)

We shall strengthen the policy export credit support for the export of electromechanical products, and perfect the forming mechanism of interest rate. For those medium and long-term projects in line with the loan terms, their terms of loans may be, subject to loan principle, properly extended; for those well-performing key enterprises which have debt service capacity and can turn out the right products for the right markets, their line of credit may be properly raised. We shall also improve financial services, stimulate financial innovation, expand the scale and types of export credits, and provide preferential export buyer's credits, promote the combination of policy credit for export, commercial loan, and capital from international financial institutions to spur the export of large-scale equipment and complete equipment.

(20)

We shall accelerate the speed of export credit insurance, add new insurance products for the exported electromechanical products based on the need of the development of the market. We shall also establish and perfect credit guarantee system, encourage regions better positioned to found credit guarantee fund and regional re-guarantee institutions for small and medium-sized enterprises, and study and explore various effective means to solve the guarantee difficulties for small and medium-sized enterprises.

6.

Creating sound external environment, and realizing healthy development of the export of electromechanical products

(21)

We shall launch an early-warning mechanism of the export of electromechanical products, a quick-response mechanism of trade frictions, and a mechanism of responding to claims with industries and enterprises as the main parts. We shall carry out key monitoring over commodities whose export over-grows, and whose prices plunge due to excessive quantities, and take effective measures to exercise control when necessary. We shall also reinforce multi and bilateral consultations to respond well to anti-dumping, anti-subsidy and safeguard measures.

(22)

We shall study deeply foreign regulations concerning technical barrier, and break the barrier by leading the enterprises to carry out R&D and Design conforming international standard, organize production and acquire relevant certifications. We shall set up several internationally authoritative electromechanical product testing laboratories providing services for enterprises to win international certification and helping broaden the cooperative fields with foreign testing agencies. We shall also press ahead the bilateral mutual recognition with relevant countries and regions.

(23)

We shall intensify the training of the protection of intellectual property rights and enhance the enterprises' consciousness and ability of independently safeguarding their legitimate rights and interests, encourage the electromechanical enterprises to avoid disputes over intellectual property rights through applying for patents, registering trademarks abroad, promote the entry of enterprises with patent technologies to International Union of Technology, Standard Forum and Patent Pool, and also take part in the formulation of international standard.

(24)

We shall launch a mechanism to provide convenience to those honest and lawful enterprises and to discipline the dishonest and illegal ones, implement a system of trade risk management and export credit rating, identify credit ratings for export enterprises by comprehensive evaluation over the selected large-scale and complete equipment and motorcycles and several other key products, publicize on a regular basis, the products that cause serious disturbances in the export order, and adopt measures to curb or forbid their export accordingly.

(25)

We shall push forward the reforms of Chamber of Commerce and the Industry Association to reinforce their authoritativeness in coordination and self-control, establish a work system with perfect mechanism and effective coordination to maximize the role of Chamber of Commerce and Industry Association in boosting the export of electromechanical products.

(26)

The ministries and departments concerned under the State Council and the local People's Governments at different levels shall continue to reinforce their leadership over the export of electromechanical products. They shall make new contributions to advancing the sustained, healthy and rapid development of foreign trade by studying new situations, solving new problems, helping the transition of the growth mode of electromechanical products.