Economic Daily: Cross-cycle adjustment to stabilize foreign trade

2022-05-12 0 By

The General Office of the State Council recently issued the “Opinions on doing a good job in cross-cycle adjustment to further stabilize foreign trade”, put forward to further expand opening up, do a good job in cross-cycle adjustment, help enterprises, especially support small, medium and micro foreign trade enterprises, and strive to ensure orders, stabilize expectations, promote the steady development of foreign trade.Why is cross-cycle regulation important?At present, China’s foreign trade is facing uncertain, unstable, unbalanced factors increase, the foundation of foreign trade operation is not solid.On the demand side, there are uncertainties in global external demand growth due to repeated delays in COVID-19.On the supply side, in the short term, the high price of raw materials and the shortage of chips and other important parts will continue. These problems have raised the overall operating costs and risks of China’s foreign trade enterprises, causing them to “dare not accept orders” and “increase revenues but not profits”.In the face of the above problems, we should not only face up to the difficulties, but also strengthen confidence.We need to make cross-cycle adjustments in a forward-looking manner, maintain continuity and stability in our policies, and use policy stability to stabilize foreign trade entities and market expectations.To ensure early implementation of policies and early results, we need to focus on the following four areas.First, continue to accelerate the progress of export tax rebate;Second, consolidate and enhance the role of export credit insurance;Third, increase export credit support;Fourth, keep the RMB exchange rate basically stable at a reasonable and balanced level and improve the awareness and ability of foreign trade enterprises to avoid risks in the exchange rate.Among the policies and measures to support foreign trade enterprises, export credit insurance is one of the international common practices.At present, China’s foreign trade enterprises generally face four kinds of common risks, namely, importers refuse to accept and refuse to pay, international freight high, small, medium and micro enterprises financing difficulties, “go global” risk rising.To this end, it is suggested that relevant financial institutions speed up the innovation of products and services, so that small, medium and micro foreign trade enterprises can enjoy more accurate, more professional and more convenient services.In addition, relevant departments also need to guide enterprises to improve the ability to deal with exchange rate risks.On the one hand, foreign trade enterprises should “due to the situation”, establish a “risk-neutral” concept, learn to use hedging tools;On the other hand, banking financial institutions should adopt “enterprise-specific policies” and thoroughly study the personalized exchange rate hedging needs of different types of enterprises.(Economic Daily By Guo Ziyuan)