Background studies
53
An evaluation of the need and cost of selected trade
facilitation measures in China: Implications for
the WTO negotiations on trade facilitation
Chen Wenjing and Li Wei*
Summary
In 2004, China became the third largest trading economy in the world. The official
overall average import tariff rate was reduced to 9.9 per cent as of January 2005, and
actual tariff rates are likely much lower. Although further tariff reductions may lead to
renewed and expanded global trade growth, trade facilitation will play an increasingly
important role in promoting global trade.
The Chinese Government has made great efforts in trade facilitation and huge
investments in related infrastructure, mainly as part of its “Fast Customs Clearance System”.
However, some areas still require improvement. Nearly 40 per cent of Chinese enterprises
surveyed in this study identified “technical or sanitary requirements” as the most problematic
trade facilitation related issue, 25 per cent chose “customs valuation” and “payment of
fees and penalties”, and 12.5 per cent chose “obtaining an import license”.
Based on private sector needs and China’s actual achievements, the following
issues should be at the top of the trade facilitation measures considered for inclusion in
the WTO trade facilitation agreement: improvement of coordination between relevant
agencies; timely and comprehensive publication and dissemination of trade rules and
regulations; reduction and simplification of the documentation requirements for import and
export procedures; and improvement in customs inspection and control procedures.
Costs associated with implementation of trade facilitation measures may be classified
into four categories: new regulations, institutional changes, training, and equipment and
infrastructure. The study was generally not able to determine costs of specific trade
facilitation measures in China. However, Customs and the General Administration of
Quality Supervision, Inspection and Quarantine (AQSIQ) are the two government departments
that are most deeply involved in trade facilitation, and a review of their expenditures in this
field provides useful information on equipment/infrastructure costs that may be associated
with implementing modern trade facilitation systems. The Customs and AQSIQ inputs in
computerization in 2005/06 are estimated at RMB 1,420 million (about USD 176 million)
and RMB 510 million (about USD 63 million), respectively. Major information projects
* Chinese Academy for International Trade and Economic Cooperation (CAITEC). The complete
study is available on the companion CD-ROM to this publication, as well as on the ARTNeT website at:
www.artnetontrade.org. The views presented in this paper are those of the author(s) and do not
necessarily reflect the views of the United Nations or any other ARTNeT members or partners. Any
remaining errors are the responsibility of the author(s).