One less obstacle for western businesses engaging with China. Domestic companies will soon be allowed to freely import a wide range of materials and products that previously required import licences.
Some 338 product categories are affected, ranging from steel products and plastic materials to machinery and electronics products.
From April 1, Chinese businesses no longer need to get official approval for these imports although the transactions still have to be recorded at China’s trade ministry.
No prizes for guessing that the reason for introducing this liberalisation is China’s huge trade surplus and the howls of protest it draws from China’s principal trading partners, such as the EU and US.
To prevent the trade surplus from widening further, the government has taken measures to encourage imports and restructure exports. But so far with no apparent success. Surging exports caused China’s trade
surplus to reach a record $177bn last year and there has been little sign of a slowdown in the the first two months of this year.
Last year, the US reported a record $232bn trade deficit with China.
China’s gap with the US bigger than its global surplus because it runs deficits with other countries. More on the trade surplus in this AP story.