China Releases 12th Five-Year Plan for Foreign Trade Development

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By Xiaolei Gu

May 4 – China’s Ministry of Commerce released the 12th Five-Year Plan (FYP) for Foreign Trade Development last week, which aims at an annual growth of 10 percent during 2011-2015 and a total of US$4.8 trillion by 2015.

The 12th FYP outlines the fruitful achievements made during the 11th FYP, analyzes the new domestic and international environment for foreign trade, and identifies challenges and opportunities during 2011-2015. More importantly, it lays out the development goals accompanied by the major tasks and protective measures necessary to achieve the goals. Below is a brief summary of the key information taken from the 12th FYP for Foreign Trade Development.

Development Goals 2011-2015

Steady growth and balanced foreign trade

  1. China aims at annual growth of 10 percent during 2011-2015, reaching US$4.8 trillion by 2015.
  2. China is seeking more balanced foreign trade during 2011-2015.

Optimization of commodity composition in foreign trade

  1. The import and export of electromechanical products will increase 10 percent year-on-year to US$2.5 trillion by 2015.
  2. The added value of labor intensive exports will be increased.
  3. The percentage of exported Chinese brands, Chinese patented products, and large equipment sets will be largely increased.
  4. The percentage of imported advanced technology, key components, resources that are in short supply in China, and green products will rise further.
  5. The scale of import of consumer goods will be enlarged.

Improved market distribution

  1. Trade with traditional markets such as Europe, the United States, Japan and Hong Kong will rise steadily, but the share of trade with traditional markets with regards to total trade volume will shrink.
  2. Trade with emerging markets and developing countries will grow at a fast pace. By 2015, the percentage of trade with those markets will have increased by 5 percent, accounting for 58 percent of the total foreign trade.
  3. The quality and efficiency of foreign trade in Eastern China will see significant improvements, while the development of foreign trade in Central and Western China will grow rapidly. The percentage of foreign trade in Central and Western China aims at 5 percent growth by 2015, accounting for 15 percent of total foreign trade.

Increased international competitiveness

  1. China is going to form new advantages in foreign trade centering on technology, brand, quality and service, as well as to strengthen the control of trade channels.
  2. A group of multinational corporations with global resource integration competence will be formed in advantaged industries.

Protective Measures for Foreign Trade Development 2011-2015
In order to accomplish the above-listed goals, the Ministry of Commerce calls for inter-departmental cooperation, innovation and comprehensive measures to ensure the sound development of foreign trade during 2011-2015. Below are the key protective measures:

Improved foreign trade administrative system and policies
Efforts for an improved administrative system and policies include working out moderate rules of origins, improving the management of import licenses, improving the monitoring system, curbing unfair competition, and promoting reform in chamber of commerce mechanisms.

Improved foreign-related taxation policies
Measures to improve foreign-related taxation policies include supporting the internationalization of Chinese products and the standardization of industries, improving tax return mechanisms for exports, and expanding the range of zero-rated imports for trade with the least-developed countries.

Improved foreign-related financial policies
Efforts for improved foreign-related financial policies include broadened channels for export enterprises to finance, simplifying the registration for trade credits for exports of key industries and imports of advanced technologies, and improving the RMB exchange rate formation mechanism.

Improved foreign trade regulatory system
Based on the “Foreign Trade Law of the People’s Republic of China,” the Chinese government will adhere to the unity of foreign trade policies and strengthen the inter-departmental cooperation and coordination of foreign-trade related regulations and laws. Other efforts include revisions and amendments to the “Foreign Trade Law of the People’s Republic of China.”

Efforts to reduce trade frictions
In order to reduce trade frictions, the Chinese government is dedicated to building a fair trade environment, including improving the response mechanism of foreign trade among the Ministry of Commerce, local authorities, foreign chambers of commerce and enterprises, strengthening the monitoring mechanism, and improving industry security in China.

Boosting multilateral and bilateral trade cooperation
Efforts to boost multilateral and bilateral trade cooperation include proper use of the WTO system to eliminate local protectionism, accelerated free trade negotiations, establishment of cross-border economic cooperation zones when possible, and further implementation of the Closer Economic Partnership Arrangement.

Simplification of foreign trade process
The Chinese government will further introduce the use of the internet in foreign trade administration to provide better services and more up-to-date information to the public. Other measures to simplify the administration of foreign trade include establishing the electronic inspection and quarantine mechanism and electronic supervision of imports and exports, reducing the cost for customs clearance for enterprises.

Cultivation of foreign trade professionals
The government will put more emphasis on the cultivation of foreign trade professionals, by providing a better professional education, encouraging foreign trade enterprises to invest in human capital and provide more training.

Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients across Asia. The firm was established in 1992 and maintains 12 offices throughout China, in addition to offices in India, Vietnam and Singapore. For advice on investment opportunities or establishing a business in China, please email, visit our web site at, or download our brochure.

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