Import & Export Policies Boost Business To Business (B2B) Transactions in China

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Did you know that the prevailing import/export policies of China present business opportunities to start import/export business to business on your own provided you are organized and raring to make it in global sourcing arena? Import/export opportunities galore with the booming online business to business boosted by China's Import and Export Policies.

China's Import/Export Policies and Its Effect on B2B and Global Sourcing
Reforms pertaining to China's import/export policy have largely been focusing on improving import/export but the pace of advances in the import/export has been comparatively slow although barriers like export/import planning and quotas, which affected global sourcing, are removed.

Import/Export, B2B and Global Sourcing Policy Reforms
The recent economic emergence has positioned China as preferred global sourcing destination, thanks to bold steps with regards to import licensing. Pre-reform import/export policies regarded foreign trade as necessary evil and global sourcing, a strict taboo, regulated by a few FTCs. Trade reforms are linked to broader economic reforms and have two major components:
1. Decentralization of policy making authority
2. Price rationalization supported by market forces
As a result, prices are determined by market forces, which is great news for business to business (B2B) which trades in the now deregulated foreign exchange.
The scope of import & export as well as global sourcing now falls with local authorities without having to go through the rigid FTCs, which as of now have become efficient. The mandatory policy planning had changed protocol into more liberal, non-binding guidance boosting increased business to business (B2B) and global sourcing activities.

Incentives to Import/Export and Overseas B2B
Reforms to foreign exchange systems reinforced the much awaited boost to overseas business to business and import and export transactions. Regulated foreign exchange rates and tabooed imports presented little incentive to Chinese B2B and import/export operators in the pre-reforms era rendering earnings on par with domestic regardless of overseas trading; worst- B2B companies did not enjoy freedom to retain foreign exchange earned by them. Regulated RMB also meant global sourcing companies paid unnecessary rates.

The real boost to international business to business came by in three phases through foreign exchange reforms.

1. Reforms with planning framework (1979-86) allowed for foreign exchange retention by B2B and devaluation of RMB

2. Dual foreign exchange system (1987-93) allowed market controlled currency swapping which resulted in significant devaluation of RMB, welcomed by both global sourcing and business to business community

3. Foreign exchange rate re-unification (1994 onwards) more or less stabilized RMB on the basis of stupendous reserves


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