Foreign Trade Enterprises To Export To Domestic Sales Or New Deal Will Be Introduced

Export-oriented enterprises will usher in a favorable policy.

An official of the Guangdong foreign trade and Economic Cooperation Office said, "if the policy is approved by the General Administration of customs, it will push the policy of" export products domestic sale "which is always encouraged by oral encouragement to the substantive stage of operation.

A local tax official said, "this is the positive policy of the state to encourage domestic sales."

The official of the Guangdong foreign trade and Economic Cooperation Department also said, "if the policy is approved by the General Administration of customs, the policy of" selling domestic products for export products "which is always encouraged by oral encouragement will be pushed to the substantive stage of operation.

The introduction of this favorable policy does not take too long.

An official of the Ministry of Commerce disclosed to our reporter that "the consultation with the General Administration of Customs has entered the final details stage and can be released to the public in the first quarter of 2009."

Specifically, which enterprises can benefit from it is not yet clear.

An official of the Guangdong customs department who had participated in the policy discussion revealed that the question still being considered by the customs is whether the size of the enterprise that has been granted preferential policies will be restricted.

At present, a proposal generally accepted by the customs system is that enterprises with preferential policies will reach a certain scale and be guaranteed by the local government.

However, the official also pointed out that the local foreign trade and economic system still had different views on this because "the most preferential policies for SMEs accounted for most of the total number of enterprises, and such enterprises often had difficulty in obtaining government guarantees".

In addition, the former local tax authorities also pointed out that "the new deal should only deal with the current special period, and the duration of implementation will not be long."

     突圍內銷

The Ministry of Commerce pointed out that "export enterprises' demand for domestic sales is getting stronger and stronger. Policies that have been running for many years and haven't kept pace with market changes need to be changed."

According to the regulations of the customs, the finished products produced by export processing enterprises must be exported for verification within a specified time.

If there is a shortage or larger market in the country, the product can be converted into domestic sales, but it is necessary to "sell after tax first", otherwise it will be regarded as smuggling.

Zhang Huarong, chairman of Huajian shoe industry, a women's shoe export company in Dongguan, said that whether from the long-term interests of the export enterprises or the weakening of the international market demand, domestic sales have been the inevitable choice for the development of enterprises.

Data from the footwear association of Asia showed that the average profit of shoemaking enterprises in 2008 was only 4%-7%.

According to the survey and statistics of the China Foreign Trade Center, the organizers of the Canton Fair, about 70% of the enterprises participating in the autumn trade fair in 2008 are ready to choose "export to domestic sales".

However, the production of processing trade enterprises is carried out under the bonded environment. Once converted into domestic sales, equipment and raw materials must be dutiable, and the amount of taxes and fees involved is considerable.

The official of the Guangdong provincial foreign trade and Economic Cooperation Department said, "with a rough estimate of Dongguan's 167 billion 300 million yuan to domestic sales in 2008, it will pay at least 20 billion of the tax."

A deputy mayor of Dongguan told reporters that the city achieved 167 billion 300 million yuan of domestic sales in 2008. In fact, it was half of the city's tacit approval that enterprises should pay taxes after domestic sales.

"The regulations on sales after tax first have a real negative impact on domestic sales of enterprises."

The above officials of the Guangdong provincial foreign trade and Economic Cooperation Department said.

At present, the general domestic processing trade enterprises in order to avoid the "first tax after sales" brought about by the financial pressure, the general approach is to export products to Hongkong, and then import from Hongkong to the mainland.

It is obvious that this will greatly increase the cost of sales and lose the price advantage.

"It is the most direct way to allow enterprises to pay taxes after domestic sales first."

The former commerce ministry official said.

     內銷門檻

Avoiding the liquidity pressure caused by the "tax collection" is very important to the "export to domestic sales" enterprises.

Financial pressure is a common difficulty for these enterprises in the process of pformation.

Pan Rihui, Secretary General of Dongguan textile and garment industry association, said that such a policy can be implemented, and the liquidity of enterprises will be greatly reduced, which will be of positive significance for enterprises to turn to domestic sales, especially for a large number of small and medium-sized enterprises.

But he also pointed out that the lack of understanding of the domestic market and the lack of domestic sales network are the core issues for Hong Kong processing and trading enterprises.

A survey completed by the Beijing Municipal Commerce Bureau at the end of 2008 shows that export oriented enterprises face many difficulties in the practice of pferring to the domestic market.

The first to bear the brunt is the processing trade enterprises that account for more than 60% of the total number of export enterprises. In the process of selling their products to domestic market, there is a lack of channels and experience, so enterprises need to invest huge amounts of capital and time.

Chen Jian, special assistant to the chairman of Huajian, said that there are essential differences in the operation of enterprises from domestic exports to pure exports.

He pointed out that pure export enterprises directly face the end consumers. They should pay attention to control costs, ensure quality and deliver goods on time. While domestic sales, what they need is the pformation of thinking patterns including elements such as connections and markets.

He pointed out that the main difficulties of domestic sales of export enterprises include channel construction, brand positioning, development and design.

Among them, channel construction is the biggest obstacle and requires a large amount of capital investment.

Nevertheless, there are still some people in charge of processing trade enterprises who believe that this policy will promote enterprises to try domestic sales.