Sanctioned by the State council, the Ministry of Commerce and China Customs Bureau co-released the No. 44 Notice of 2007, announcing a new list of restricted processing trade products, mainly involving labor-intense industries such as plastic raw material and plastic processed products, yarn, textile, and furniture. Altogether 1,853 tariff numbers were included in the list, accounting for 15% of all encoded customs products.

The recent modification of restricted trade policy is meant to optimize our exporting structure, put strong curbs on the export of “high-polluting, high-energy-consuming and resource-dependent” products, discourage the export of low added value, low technical content products, and to reduce trade conflicts, promote trade balance, and ease the tension caused by an ever increasing trade surplus.

The change is instrumental in upgrading our present processing trade system, transforming the pattern of trade growth, and promoting the sustainable development of social economy.

The recent change also conforms to China’s regional development strategy, which orients processing trade towards the Central and Western region. With a view to expediting the establishment of a regional pattern with optimal structure and distinct characteristics, the recent change applies different policies to the Center/West, and the East.

For the newly established foreign-invested ventures in the Eastern region, none would be allowed to engage in process trade involving the blacklisted products, while for the Central and Western region, enterprises exporting A- and B-class products will not be required to establish guarantee deposits in the designated bank of China Customs.

The recent policy modification emphasized the structural transformation of products and manufacturing regions, and made proper arrangements for the transitional period.

On the whole, it will contribute to the development of Chinese enterprises towards higher technical level and higher added value, and to the upgrade and healthy growth of processing trade.
 
Ministry of Commerce of the People's Republic of China