Individuals in China are set to get import-export rights, which
were once the preserve of powerful state monopolies, under proposed
amendments to the nation's decade-old Foreign Trade Law, according
to a senior trade official.
Zhang Yuqing, director of the Department of Treaty and Law of
the Ministry of Commerce, said the draft amendment to the law on
foreign trade will, for the first time, define individuals as
parties able to engage in foreign trade as a move to facilitate
private foreign trade business and fulfill China's pledges to the
World Trade Organization (WTO).
China's WTO promises have set out rules for foreign individuals
engaged in import-export activities, while domestic individuals
have not been given this legal position.
"The identification of private individuals as foreign traders
under the law will strengthen the position of domestic private
players in this field," he said.
But Zhang refused to say whether there would be a sharp rise in
the number of individuals involved in the business because of the
possible change, saying "it all depends on their judgment on
business prospects."
The draft amendment to the Foreign Trade Law has been submitted
for discussion to the Standing Committee of the National People's
Congress, China's top legislature.
The Law on Legislative Procedures said a draft law or draft
amendment is likely to be put to a vote after three rounds of
discussion by national legislators.
The draft amendment also proposes changing the approval system
into a registration system for import-export business, a move to
further open the field, said Zhang.
But the possible change has received a cold response from some
quarters.
Liu Quan from the China Merchant Securities said he will not
participate in the business.
"Foreign trade business does not guarantee profits," he
said.
Foreign trade rights meant big money in the 1990s when the
rights were monopolized by state companies.
"I would enter the business by registering a company, but not by
the form of an individual, which means a larger risk," said Liu, a
law major.
The individual bears unlimited liabilities in the business,
while the company's liabilities are limited to its assets.
In fact, trading rights have gradually been extended to a much
wider range of companies as part of China's market reforms.
The Ministry of
Commerce lowered the capital demand for domestic trading
companies and offered an easier approval process last December.
The bottom line for registered capital for professional foreign
trading companies was lowered from 5 million yuan (US$604,000) to 1
million yuan (US$120,800).
Gao Ming, a manager of the state-owned Skyrun International
Group in Jiangsu Province said the granting of import-export rights
to individuals will not pose a major threat to the company's
business.
(China Daily January 6, 2004)