Individuals in China are set to get import-export rights, which were once the preserve of powerful State monopolies, under proposed amendments to the nation's decade-old Foreign Trade Law, according to a senior trade official.

Zhang Yuqing, director of the Department of Treaty and Law of the Ministry of Commerce, said the draft amendment to the law on foreign trade will, for the first time, define individuals as parties able to engage in foreign trade -- a move to facilitate private foreign trade business and fulfill China's pledges to the World Trade Organization (WTO).

China's WTO promises have set out rules for foreign individuals engaged in import-export activities, while domestic individuals have not been given this legal position.

"The identification of private individuals as foreign traders under the law will strengthen the position of domestic private players in this field," he said.

But Zhang refused to say whether there would be a sharp rise in the number of individuals involved in the business because of the possible change, saying "it all depends on their judgment on business prospects."

The draft amendment to the Foreign Trade Law has been submitted for discussion to the Standing Committee of the National People's Congress, China's top legislature.

The Law on Legislative Procedures said a draft law or draft amendment is likely to be put to a vote after three rounds of discussion by national legislators.

The draft amendment also proposes changing the approval system into a registration system for import-export business, a move to further open the field, said Zhang.

But the possible change has received a cold response from some quarters.

Liu Quan from the China Merchant Securities said he will not participate in the business.

"Foreign trade business does not guarantee profits," he said.

Foreign trade rights meant big money in the 1990s when the rights were monopolized by State companies.

"I would enter the business by registering a company, but not by the form of an individual, which means a larger risk," said Liu, a law major.

The individual bears unlimited liabilities in the business, while the company's liabilities are limited to its assets.

In fact, trading rights have gradually been extended to a much wider range of companies as part of China's market reforms.

The Ministry of Commerce lowered the capital demand for domestic trading companies and offered an easier approval process last December.

The bottom line for registered capital for professional foreign trading companies was lowered from 5 million yuan (US$604,000) to 1 million yuan (US$120,800).

And the amount for manufacturing companies who want to conduct foreign trade was reduced to 50,000 yuan (US$6,040) from 3 million yuan (US$362,450).

These companies only need to get the nod from the provincial-level foreign trade departments or some city-level ones who got special authorization, rather than the Ministry.

Gao Ming, a manager of the State-owned Skyrun International Group, the largest foreign trader in Jiangsu Province, said the granting of import-export rights to individuals will not pose a major threat to the company's business.

"Individuals' operation will be limited, private and foreign-funded companies are the biggest headache,'' he said.

Slices of the State companies have been slashed to less than 20 per cent compared to 80 per cent at their peak time because of the country's relaxed control over the area.

China allowed domestic private businesses to the sector in 1999 and started to approve Sino-foreign joint-venture trading firms from March 2 last year.

Close

Today's Top News		Top Business News
+Was it `road rage' or an accident? ( 2004-01-05) +Migrants may register for equal rights with reforms ( 2004-01-05) +China to place 10 satellites into orbit in 2004 ( 2004-01-05) +Ministry confirms SARS case in Guangzhou ( 2004-01-05) +'Green card' to be introduced in 2004 ( 2004-01-05)		+Possible changes to law ( 2004-01-05) +Individuals to get import-export rights ( 2004-01-05) +Warning of irregularities in forex settlement ( 2004-01-05) +TCL's 1b-share IPO to fund acquisitions ( 2004-01-05) +Brighter prospects for Chinese futures market ( 2004-01-05)