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China will establish 50 overseas economic and trade cooperative areas to cope with foreign trade disputes, Chai Haitao, president of the International Trade Research Institute under the Ministry of Commerce (MOFCOM), was quoted by the China Economic Net as saying at an entrepreneurs' forum on June 18.

MOFCOM recently issued the "Basic Requirements and Procedures on the Application for Overseas Chinese Economic and Trade Cooperative Areas." The application work has started. "The action means that public bidding for the projects is drawing near," said Chai.

Earlier this year MOFCOM released the information on the establishment of around 10 foreign economic and trade cooperative areas with maximum government loans standing at 2 billion yuan (US$249.9 million) each. The research work had actually started earlier.

On February 25, the Shanghai Industrial Investment (Holdings) Co Ltd and the Shanghai Overseas United Investment (Holdings) Co Ltd briefed Chen Jian, assistant minister of commerce, on their plans to establish economic and trade cooperative areas overseas.

On March 20, a delegation led by Xu Tongkai, director general of MOFCOM's Department of European Affairs, visited Korgas Port in northwest China's Xinjiang Uygur Autonomous Region where they studied the potential of establishing an economic and trade cooperative area in the border city.

According to Haifeng Electric Appliance Co Ltd of Manzhouli City, north China's Inner Mongolia Autonomous Region, it had already signed a contract with Russia on the establishment of the Duet economic and trade cooperative area in Russia's Zabajkal'sk and construction had started in April. The Duet cooperative area is one of the priority projects promoted by MOFCOM this year.

The construction of a Sino-Mongolian cooperative area has also started, MOFCOM revealed.

The cooperative partners are mainly from Asian and African countries that have stable political circumstances and good relationships with China. They include North Korea, Russia, Kazakhstan and Nigeria. Cooperative fields include traditional industries like energy, agriculture, light industry, metallurgy and electronics.

MOFCOM would not limit the market to such cooperative areas. Both scientific and technological parks and processing plants for manufacturing industries would be welcomed, said Zhao Chuang, vice director general in charge of MOFCOM's Department of International Cooperation.

The move has far-reaching significance, according to MOFCOM. On the one hand, such cooperative areas could assist in solving foreign trade disputes and expanding exports. On the other hand, they could help to reduce a large foreign exchange reserve.

According to Chong Quan, a MOFCOM spokesman, 18 countries and regions initiated 25 trade remedy investigations into Chinese products during the first five months of 2006, involving US$480 million.

The establishment of overseas economic and trade cooperative areas could alleviate trade disputes and also prevent Chinese funds from being used by foreign countries.

The State Administration of Foreign Exchange recently issued a notice on the adjustment of polices on foreign exchange management of overseas investments. The notice stipulates that from July 1 domestic investors who engage in overseas investment will have easy access to foreign exchanges; and if the domestic investors have to pay early-stage expenses related to overseas investment, such payments can be remitted in advance after examination and approval.

The administration stated that this step is aimed at encouraging the comparatively powerful domestic enterprises to participate in international economic and technological cooperation and competition.

(China.org.cn by Li Jingrong, June 22, 2006)