I. Current Position

To meet the needs of further development of its socialist market economy and to bring domestic regulations on trade and investment more in line with the international practices, China has done massive work towards deregulation.

--After several rounds of unilateral tariff reduction, China brought its simple average tariff rate down to the present level of 23%;

--Since 1992, China has reduced the number of products subject to import quota, license administration and import control from 1,247 to 385, accounting for 5% of the total import tariff lines as compared with previous 20%;

--China has relaxed its conditions for market access in areas such as financial services, commercial retailing, energy, transportation and tourism sectors. Pilot programs are being actively explored for further deregulation. At present, the majority sectors are open to foreign investment except a few categorized as prohibited;

--Foreign-invested enterprises started to have access to foreign trade. The first two foreign trade companies of joint venture nature were approved to be established in Shanghai;

--China has eased its restrictions on trading rights for production enterprises, simplified its procedures and accelerated processing of applications;

--Since the end of 1996, registration system for trading rights of manufacturing enterprises has been formally endorsed in special economic zones (Shenzhen, Zhuhai, Shantou, Xiamen and Hainan);

--China introduced unified exchange rate system in 1994 by adopting single floating rate. It was announced in 1996 to materialize free convertibility of RMB on current accounts by the end of the same year;

--China has liberalized importation of all products except for 8 products through state trading and 6 through designated importers.

II. Objectives

A. Increase transparency of regulations

--Actively help with the compiling of the report on APEC deregulation and liberalization measures;

--Continue to publish the latest laws, rules and regulations related to trade and investment through MOFTEC Gazette;

--Continue to seek other channels to promote transparency of regulatory regime.

B. Further liberalize trade and investment regimes

Short-term (1997--2000):

--Review the regulations on trade and investment, simplify licensing procedures, promote and improve fair competition mechanism;

--Reduce the number of import products handled by designated companies;

--After China's accession to WTO, 100 import products in term of 8 digits HS Code will be removed from the List of Import and Export Commodities Subject to the Inspection Enforced by the Commodity Inspection Authorities, which includes 834 import products at present.

Mid- and Long-term(2001--2020):

--Replace the approval system with registration system for granting trading rights within 5 years upon China's entry into the WTO;

--Phase out, within 5 years upon China's entry into the WTO, the practice of designating importers for the 5 items including rubber, timber, plywood, wool and acrylic fibers, for steel products, within 6 years;

--Further review and liberalize regulations on trade and investment and seek to remove obstacles standing in the way of trade and investment.