Home > Economy & Society >Economic/Social News
The First New Type Offshore International Trade Order in Northeast China Having Landed in Dalian Free Trade Area

OnNov. 29, under the full cooperation of such four parties as Dalian Free TradeAreaManagement Commission, Dalian Branch of the State Administration of ForeignExchange, Dalian Branch of Bank of China and TrafiguraLiaogang InternationalTrade (Liaoning) Co., Ltd., a crude oil offshore trade business order worth USD63 million was successfully completed to mark the successful landing of thefirst new offshore international trade business order in Dalian Free Trade Areain Northeast China.

Accordingto the “Notice on Related Issues in Supporting the Development of Offshore InternationalTradesof New Types (Draft)” drawn up jointly by the People's Bank of Chinaand theState Administration of Foreign Exchange on Nov. 11, 2021, the offshoreinternational trades of new types refer to those between residents andnon-residents happening in China, in which the transaction related goods do notcome into and out ofChinese first-line customs borders or are not included in Chinesecustoms statistics. Due to the significant characteristic of "three-streamseparation", i.e. goods stream, capital stream and document stream, the banksare unable to accurately identify the authenticity of trade behaviors accordingto general principles, which limits the large-scale development of offshoretrades of new types.

Sincethis year, in order to further promote the development of offshoreinternational trades of new types, a series of related documents have beenissued at the national level. In particular, The State Council issued Measureson Promoting the Reform and Innovation of Trade and Investment Facilitation inPilot Free Trade Zones (GuoFa (2021) No.12) in this August, in whichthespecific requirements for supporting the pilot free trade zones to develop theoffshore trades of new types and supporting banks to explore the innovation inrespect of newtype offshore trade authenticity management are clearly made. Inorder to accelerate the landing of the offshore trades of new types in DalianFree Trade Area, the zone actively organized various parties to have multiplesymposiums, audio and video meetings for an in-depth study of the businessprocess and risk prevention measures. Under the guidance of Dalian Branch of theState Administration of Foreign Exchange, Dalian Branch of Bank of China has finally formed a full set of innovative management and servicesystem in terms of enhancingadvance due diligence, optimizing business review,strengthening post monitoring, etc. to take the lead in providing enterpriseswith high-level financial supports and cross-border fund settlementfacilitation services for them to carry out new type offshore trade business,andcreate conditions for the landing and large-scale development of the new type offshoretrade business.

Asa special form of international trade, offshore trades have become the largesttrade mode in the advanced international free trade ports in Hong Kong, London,Dubai, Singapore, etc.The development of offshore trades will accelerate thegathering of such high-end elements as capital, talent, logistics, information,data, trade decision-making, etc., to have a far-reaching significance inserving the innovative development of the real economy, improving the integrityof the industrial and supply chains, and enhancing the ability in respect ofthe allocation of the resources in the international market. Through the newtype offshore trade mode, such companies asTrafiguraLiaogang can give full playto their advantage in allocating international bulk commodity resources toreduce the transaction costs for the upstream and downstream enterprises;at thesame time, it also promotes the pooling of capital stream and information streamto makea great contribution to local economic development.

Next,Dalian Free Trade Area will have the international advanced free trade ports asthe benchmark,and rely on the development advantage of such bulk commodities asoil and gas, etc. to further deepen the first go and first type work foroffshore trades of new types, introduce more capable international financialinstitutions and trade enterprises by establishing a coordination mechanism andinformation platform for the development of offshore trades of new types toprovide the first-class market conditions and facilitation services forenterprises to carry out offshore trades of new types.