Guangdong Textile Industry Benefits Processing Trade Margin

The long-awaited processing trade margin "idling" finally came out.

Last Friday, the Ministry of Commerce jointly issued a notice with the General Administration of Customs to suspend the "real pfer" policy of restricted margin accounts for processing trade.

According to the Ministry of Commerce estimates, this measure will help enterprises reduce youth funds about 18 billion 500 million yuan.

As a big province of processing trade, Guangdong is undoubtedly the biggest beneficiary of this policy.

According to the data provided by the Department of foreign trade and economic cooperation, Guangdong's processing trade enterprises paid a deposit margin of up to 15 billion 500 million yuan last year.

According to the latest announcement issued by the Ministry of Commerce and the customs, from December 1st this year, the Ministry of Commerce and General Administration of customs, No. forty-fourth, will be suspended from 2007 this year to limit the export of 1853 categories of Customs coded commodities and the "272 yuan" policy of restricting the import category catalogue of light textile products.

Class A and B enterprises suspend bank margin accounts and turn them into real ones, and carry out "idle" management; C enterprises still carry out 100% "real turn" management.

In addition, the announcement also adjusted the catalogue of processing trade restrictions and eliminated 17 customs coded goods involving furniture.

Guangdong paid a margin of 15 billion 500 million yuan last year. It is reported that the "suspended" commodities that were suspended from the margin account accounted for 95% of the total number of Restricted Commodities in processing trade. In 2007, the processing trade of such goods was exported to US $30 billion and imports amounted to us $4 billion, and the margin paid by the enterprises was about 18 billion 500 million RMB yuan.

Guangdong is undoubtedly the biggest beneficiary of this policy as a large processing trade province. The adjustment of national policies is also inseparable from Guangdong government and enterprises.

It is learnt that at present, there are 48000 processing trade enterprises in Guangdong, of which 35000 are Hong Kong funded enterprises. The total export volume of processing trade enterprises reached 403 billion 400 million US dollars last year, accounting for 63.6% of the total export volume of the province, accounting for 40.9% of the total export volume of processing trade.

According to the data provided by the Department of foreign trade and economic cooperation, the "margin" of processing trade margin accounts for $19 billion in import and export trade in processing trade in Guangdong in 2007, accounting for 15 billion 500 million yuan.

And the suspension of "margin pfer" policy for textile processing trade accounts basically revert to the implementation measures before 2007.

In November 19th, the State Council held a executive meeting to discuss and identify 6 policy measures to promote the healthy development of the textile industry.

In the 1~10 months of this year, China's textile exports were 13 billion 700 million US dollars, an increase of 8.6% over the same period last year, an increase of 15 percentage points.

"Idling" has also benefited the upstream and downstream enterprises. Last year, the state issued a "real pfer" policy for processing trade margin accounts to promote the pformation and upgrading of processing trade and the gradient pfer. This means that when processing trade enterprises import restricted materials, the customs will collect the deposit according to the equivalent tariff and the import value-added tax. The enterprise must process the export within the prescribed time limit and refund the deposit and interest after verification.

This will take up a large amount of liquidity and make small and medium sized enterprises more difficult to finance.

Chen Jingguang, the head of a Dongguan based production company, told reporters: "the total amount of the contract we signed is RMB 46 million yuan. According to the original regulation, it is required to pay 2 million 680 thousand yuan in accordance with the total amount of the contract.

The refund will normally take 1 years.

Chen Jingguang said that their company usually has two or three contracts to do together in a year, and it is very likely that they will have to pay about 6000000 yuan deposit at a time, so it is very easy to have a turnover problem.

The responsible person of the provincial foreign trade and Economic Cooperation Bureau also pointed out that the "idling" of the margin will not only benefit the enterprises paying the deposit, but also benefit the upstream and downstream businesses.

For example, the production of a car involves more than 100 industries, including sofa leather, electrical appliances, textile fabrics and so on.