China bans processing trade

China bans processing trade

Ministry of Commerce and Customs General Administration of China recently announced that China decided to cancel processing trading of iron ore, pig iron, scrap steel, billet/slab, ingot and phosphorite. The cancellation will come into force on May 19, 2005. The decision cancels the benefits obtained with the exportation of the end products processed from imported raw materials. For the time being, the imported raw materials can still be processed for exports until August 1, 2005. Under the existing law, the domestic manufacturers import the raw materials duty-free and export their end products to overseas markets where they also get a tax rebate for exports.