How to open the "blue ocean" of offshore trade?

Continuously promoting the innovative development of foreign trade is an important work in the business field this year. On the eve of the national two sessions this year, the Ministry of Commerce released the information that "a number of offshore trade center cities (regions) will be cultivated this year". As a new trade model, what are the significant advantages of offshore trade and what role will it play in accelerating the construction of a new development pattern in China? What are the advantages and conditions for cities to make offshore trade their home? What risks should be controlled and what problems should be solved in the development of offshore trade? What international advanced experience and practices can China learn from? International business daily specially invited industry experts and scholars to present their thoughts and bring analysis around various hot topics of offshore trade.

Expert round table

Shi Xianjin, assistant researcher, Institute of world economy and politics, Chinese Academy of Social Sciences
Liu Ying, academician of Chongyang Institute of finance, Renmin University of China, director and researcher of Cooperative Research Department
Han Jian, professor and doctoral supervisor of Business School of Nanjing University, and President of Jiangsu Free Trade Research Institute
(in no order)
one
Why does the state attach so much importance to the development of offshore trade and what role can it play in accelerating the construction of a new development pattern in China?
Shi Xianjin: offshore trade is a new trade model formed in recent 20 years. The trading parties of importing and exporting countries directly complete the purchase and sale of goods according to the requirements of offshore companies located in third countries. During this period, all logistics does not go through third countries, but the trade settlement is the responsibility of offshore companies in third countries. Therefore, the trading company in the form of offshore trade plays the role of transaction matching, capital settlement and information integration, and realizes the "three flows" separation of order flow, goods logistics and capital flow. In the context of double circulation, the development of offshore trade can not only enrich China's current trade form, but also enhance the integration between China and the world system in terms of trade information integration and trade capital settlement. In the future, China will not only be the buyer or seller, but also the transaction matchmaker of Global trade.
China covid-19 Liu Ying: in the context of the current Ukraine crisis's increasing geopolitical risks and the repeated impact of the new crown pneumonia epidemic, China's economy is facing three pressures, namely, supply shocks, demand contraction and expected weakness. As offshore trade can facilitate the free access of goods and funds, reduce various time costs and expenses required by buyers and sellers in cross-border trade, so as to further improve the efficiency of international trade and promote the improvement of economic strength, China should pay particular attention to the development of offshore trade and the construction of international or regional trade center cities, which will help China speed up the construction of a large domestic cycle A new development pattern in which domestic and international double cycles promote each other.
Han Jian: offshore trade is the inevitable result of the division of labor in the global value chain led by multinational corporations and the development of the network layout of international trade globalization to a certain stage. It is a brand-new way of international trade in recent 20 or 30 years. Under the background of the impact of the global epidemic, the intensification of trade protectionism, the deep promotion of the new scientific and technological revolution and the acceleration of regional economic integration, the reconstruction of global value chain, industrial chain and supply chain has accelerated, and the "nearshore production" of multinational corporations has sprung up, tending to diversification, regionalization and localization. As a new type of international trade, offshore trade plays an important role in improving the position of the region in the global industrial chain, supply chain value chain, global resource allocation ability and regional headquarters economy.
two
What advantages and conditions do you think cities are most likely to become offshore trade centers?
Shi Xianjin: first, cities with mature experience in the construction of pilot free trade zones have rich experience in the operation of pilot free trade zones and a good trade environment. Local governments can also play a certain role in promoting resource integration and information integration. Second, cities with mature experience in offshore financial development, in addition to order and information processing, offshore trade also needs to be based on perfect financial services. In addition to banking business, it needs mature international financial supporting services such as fund, management, insurance, trust business, tax planning and IBC activities. Third, there is a better international environment. Cities that do well in trade opening, personnel exchange and capital opening, such as Shanghai, Guangzhou, Shenzhen, Ningbo, Hangzhou and Qingdao, of course, Hainan can also use the window period of national policies to develop offshore trade.
Han Jian: at present, China is facing new opportunities in developing offshore trade. From the practice of various places, especially Shanghai and Hainan in recent years, vigorously promoting the development of offshore trade has become an important way to gather high-energy trade headquarters, build an international trade center and enhance the radiation and influence of the region in the international economic and trade pattern. Shanghai, Hainan, Yangpu, Xiamen, Ningbo, Guangzhou and other ports with early start and good foundation in China are most likely to become offshore trade center cities (regions). In addition, the headquarters gathering areas of multinational companies such as Suzhou also have the conditions to focus on the development of supply chain hub offshore trade.
Liu Ying: cities with hardware conditions such as ports and software conditions such as pilot free trade zones and free trade ports are more likely to become offshore trade centers, such as Shanghai, Hainan, Sanya, Qingdao, etc.
three
It is difficult to supervise the main body, and the convenience of foreign exchange revenue and expenditure is insufficient... What risks should be controlled and problems should be solved to better develop offshore trade?
Han Jian: first, support qualified places to use scientific and technological means to improve the supervision ability of offshore trade, solve the problem of trade authenticity audit through big data and blockchain technology, provide important support for promoting offshore trade, make full use of the latest information technology and sandbox supervision, and firmly hold the bottom line of risk prevention and control. Second, study and formulate fiscal and tax policies to encourage the development of offshore trade and reduce the tax rate of offshore trade. Third, learn from the experience of first-class offshore financial centers such as London, Hong Kong and Singapore, build a legal environment in line with international standards, create an efficient legal mechanism, and form a consistent law enforcement caliber at home and abroad. Fourth, it is necessary to reduce the interest rate and exchange rate difference between offshore and onshore RMB by facilitating cross-border capital flow, and reduce the motivation of enterprises to use the carrier of offshore resale trade for arbitrage.
Shi Xianjin: at present, the development of China's offshore trade is still in its infancy. There is still a large gap with the world-class market in terms of management experience, legal rules, business foundation and scale, financial opening conditions and so on. For example, China still has great room for improvement in system openness, information disclosure and transparency. Although it has a large trade scale, it does not mean that it has strong international business matching ability. China needs to gather a large number of international trade institutions, financial and service institutions, have high international standards of laws and regulations, and the degree of financial openness. In addition, China's existing laws and regulations on foreign exchange management do not match the operation mode of multinational companies in carrying out offshore trade business. For example, the customs declaration and foreign exchange verification form required for foreign exchange settlement, sales and payment may not be provided by offshore trading companies in the state of "three streams" separation.
Liu Ying: first, control the abnormal flow of cross-border funds to prevent abnormal outflow of funds. Secondly, do a good job in the internal control of banks and other financial institutions to prevent financial risks. The offshore trade zone should be located in areas with good financial development, financial supervision and risk prevention and control. Finally, do a good job in the authenticity review of the new offshore trade to prevent false trade.
four
As a special form of international trade, offshore trade has become the largest trade mode of international advanced free trade ports such as London, Dubai and Singapore. Stones from other mountains can attack jade. What experiences and practices can we learn from it?
Shi Xianjin: reducing the opening cost and operation risk of enterprises is the key. For example, the Singapore government provides various incentives for entrepreneurs to set up new companies, including regional / international headquarters plan, land intensive tax exemption plan, comprehensive investment incentive plan, M & a plan, pioneer enterprise incentive plan, development and expansion incentive plan, financial and capital management center tax preference, aircraft leasing plan, enterprise research incentive plan, new skill subsidy plan, land use subsidy, etc. At the same time, the Singapore government encourages international trade, assists companies in developing overseas business and greatly reduces the risk of enterprise establishment.
Han Jian: the development of typical offshore trade has certain commonalities: first, a convenient and open international trade environment. The attractiveness of offshore trade is formed through policies such as optimizing logistics services, improving capital settlement efficiency and reducing market access threshold. The second is the tax environment with simple tax system and low tax burden. A typical free trade port can simplify the tax system, streamline the tax related transaction process, reduce the institutional transaction cost, reduce the market operation cost and broaden the profit space of traders. Third, a fair and transparent legal environment. Continuously improving the legal system can create a fair, transparent, stable and predictable business environment for the development of offshore trade and ensure the security of cross regional trade. Fourth, a complete and efficient trade service system. Typical free trade ports have established high-level information platforms to improve the level of trade services through multi sectoral sharing of trade data.
Liu Ying: London, Dubai, Singapore and other international advanced free trade ports can learn from their offshore trade experience:
First, build a financial center matching offshore trade. By establishing an offshore trade settlement center, the capital settlement of cross-border trade is more convenient.
The second is to provide tax relief for offshore trade and continuously improve the level of facilitation. To build an internationally competitive international free trade port, we need to create matching facilitation conditions and implement competitive tax relief policies.
Third, there are matching international professionals. The development of new offshore trade is inseparable from the support of relevant financial, legal, accounting and other intermediaries, and needs the support of international professionals.