This report mainly consists of two parts: a qualitative analysis based on an article-by-article review of China’s
implementation of the WTO Trade Facilitation Agreement and a quantitative analysis based on a quantitative assessment of
China’s trade facilitation level. Last year, we have significantly adjusted and optimized the quantitative assessment
method, enhanced the integration of quantitative analysis and qualitative analysis and revised the compilation style and
volume of the report. This year we continue to use the same research methodology and compilation methods as those of the
previous version in order to maintain the comparability of the findings in a reasonable time dimension. The results of the
two analysis both show that China's trade facilitation level remained basically steady while rising slightly in this year.
In 2023, the score of China’s trade facilitation quantitative assessment index is 87.25 points (with a full mark of 100
points), up 1.02 points from the previous year, a slight increase of 1.18%.
Although the increase of 1.02 points was slightly higher than the previous year, the pace of China's moving its trade
facilitation forward has yet to return to the levels before the COVID-19 pandemic. In fact, if we exclude the temporary
variable of the adjustment of the COVID-19 prevention and control policy, this may be the year that had the least changes
in China's trade facilitation development policy environment since this series of reports was compiled. In stark contrast
to this, this may be the most changing year in the global geopolitical environment in more than a decade. Domestically,
the leadership of the Communist Party of China and the Chinese government have successively completed the transition, the
COVID-19 prevention and control policy has undergone a major adjustment, economic development has regained the focus of
social operations and foreign trade has returned to its normal track of operation. Internationally, added to the flame of
the Ukraine crisis was the gunfire of the Palestinian-Israeli conflict, the deterioration of
the international market conditions is getting obvious, and the challenges that global trade is facing increase
unabatedly. In the face of the complex situation, the Chinese government responded cautiously with few major policy
adjustments made in the field of trade facilitation. The increase of the quantitative assessment index of trade
facilitation is largely attributed to the addition of relevant information on inspection and quarantine under Customs
Information Disclosure as well as the improvement of port infrastructure and
the recovery of customs law enforcement effectiveness after the impact of the pandemic subsided. It is particularly
noteworthy that China Customs has launched the ambitious construction of Smart Customs and "Smarter Customs for Stronger
Nation" action, which is expected to bring comprehensive and leapfrog innovation to the customs system and mechanism.
Currently the work has just started and the effect is yet to be seen.
There has been little change in the score of most sub-indicators
of trade facilitation. Same as the previous year, "Opportunity
to Comment and Information before Entry into Force, and
Consultations" was the index with the largest increase in score,
rising from 75.00 to 84.38, an increase of 9.38 points. After two
consecutive years of sharp increases, this index has broken away from
the situation where it had been tied with the index of "Border Agency
Cooperation" at the bottom. In spite of the strong efforts to push forward the
integration of customs and inspection, the progress in the field of "Border
Agency Cooperation" is still not obvious over recent years, with the score
being still 75.00 at the bottom which remains the weakest point in China's
trade facilitation and business environment.
Major changes in trade facilitation include the follows:
- The customs continued to deepen reform of supervision and control.
In the field of verification during the stage of follow-up supervision, the system
of acceptance of third-party reports as evidence have been implemented on a
pilot basis, and the pilot program of cross-region bonded display and sales have
been carried out in the customs special control areas in Tianjin, Dalian and
other customs regions. In particular, a series of measures has been introduced
to promote the pilot reform of processing trade, namely: comprehensively
promoting the supervision mode of processing trade of conglomerates, extending
the time limit for reporting inter-plant transfer for deeper processing, optimizing
the management of returns and exchanges of exported processed goods in
processing trade, optimizing the formalities of reporting unit consumption before
validation, allowing the reporting of consumption in the electronic assembly
industry, innovating the parametric management mode of unit consumption,
implementing the reform of "short or over range", advancing the reform of
defective and substandard goods management, supporting the development
of bonded repair and maintenance, optimizing the layout of customs
controlled bonded premises, allowing the free flow, exchange and disposal
of bonded components and materials between the member enterprises within
a conglomerate (including enterprises within a conglomerate located across
different customs regions). These reforms make the movement of imported
goods subject to customs supervision in processing trade easier and cheaper, and
effectively make up for the shortcoming of lacking fault tolerance and remedy
mechanisms in the current system, addressing institutional violations caused
by non-subjective errors made by enterprises and greatly reducing the risk of
violations by enterprises.
- The development of the legal environment maintains a good trend. Following the significant increase in public
participation in the customs legislation process last year, the fairness and transparency of the rule of law of
China Customs continued to improve this year. A column "Consultation Results" has been added to the "Soliciting
Comments" section of the website of the General Administration of China Customs (GACC) to publicize the result of
the consultations. Results have been published for 9 consultations of public opinion with an adoption rate of 39.6%.
The GACC began to publicly solicit opinions on its proposed Announcements, which is the first time to
solicit opinions from the public in advance of the issuance of its normative documents. Furthermore, it has solicited
public opinions regarding the discretionary criteria for administrative penalty for three times.
- The customs has launched large-scale smartization construction.
Customs has launched the construction of Smart Customs and "Smarter
Customs for Stronger Nation" action, which is expected to use artificial
intelligence, big data and other advanced technologies to realize a full range
of intelligent transformation and upgrade of the customs supervision and
control systems and mechanisms. Such action is expected to bring epoch-making innovation of customs work.
Currently the relevant work is still in its embryonic stage.
- Information disclosure continues to improve. Except the repealed
regulations, the newly formulated or modified regulations all meet the
requirement of implementation 30 days after the date of promulgation,
maintaining the good momentum of the previous year. Since the launching
of the column "Database of Customs Regulations" on the GACC website
last year, the laws and regulations of the former entry-exit inspection and
quarantine agency have also been added this year, making the content more
complete.
- While China's domestic single-window construction and
paperless trade promotion have made achievements of international
recognition, China's cross-border paperless trade facilitation level still
needs to be improved. Cross-border paperless trade is not only a global
trend, but also highly aligned with China's strategic goals of development.
China has become an international leader in Joint Electronic Verification of
Origin, but there is still a lot of work to be done.
Main suggestions:
- Promote the construction of Smart Customs and the implementation
of the "Smart Customs for Stronger Nation" action as soon as possible, and
actively engage civil think tanks, technical institutions, and foreign trade
companies in the design and construction process to avoid working behind
closed doors and preventing construction results from being disconnected or
misaligned with actual needs.
- Following the fanfare generated by the strong promotion of customs
and inspection integration and the expansion of the functions of the standard
version of China’s International Trade Single Window, cooperation among
border management agencies such as customs, border control, finance,
transportation, and ports has become rather lacklustre and, to certain extent,
even diluted the actual effect of the shortening of customs clearance time
and the reduction of customs clearance costs. Trade facilitation is system
engineering. It is suggested that communication and cooperation among relevant agencies be strengthened.
In particular, the National Trade
Facilitation Committee of China should play a leading role and multi-agencies
should work together to promote trade facilitation so as to maximize the
effect of trade facilitation. In addition, border agency cooperation should not
be limited to the regulatory bodies but should also include the enterprises
as stakeholders in the scope of cooperation. In 2023, the Customs has made
positive progress in organizing and mobilizing the enterprises to participate in
the construction of the system, but there is still a lot of room for improvement.
It is recommended that all regulatory bodies attach great importance to
"Public Private Partnership" in all enterprise-related work, so that the
enterprises can widely participate in various issues such as policy formulation,
regulatory reform, informatization and intelligent construction, as well as
business innovation.
- In recent years, except the relatively obvious improvement in the
participation of the business community in the formulation of customs
policy, several other issues have been lingering for many years and have
not yet been resolved. It is suggested that improvement be made as soon as
possible. These problems include: the content coverage of the English website
of China Customs and the timeliness of updating are obviously insufficient;
the functions of China National Trade Facilitation Committee have not
been fully played; and the introduction and full participation of third-party
professional institutions in the design of reform, policy making, AEO and
other matters is still lacking.
- We suggest that intergovernmental cooperation be strengthened to
further promote Electronic Certificates of Origin (eCO) and Electronic
Phytosanitary Certificates (ePhyto). In particular, efforts should be made
to develop pilot projects on ePhyto with ASEAN countries, Central Asian
Regional Economic Cooperation countries and Brazil, and gradually increase
the product coverage and countries applicable to cross-border electronic data
exchange.