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Economics Indices

The Agency System in Foreign Trade

Foreign trade agency system is also called "import and export agency system." It is a form in which the foreign trade enterprises offer services to domestic commodity suppliers and recipients, that is, representing the productive enterprises and domestic recipients in handling import and export. Foreign trade agency system is an important measure that China has adopted in its foreign trade reform.

For a long time, China had mainly employed the purchasing system in its import and export trade. Since 1979, along with the continuous development of the foreign trade reform, the purchasing system can no longer fit the requirement of the economic development. In 1984, China began to introduce the foreign trade agency system, first making the recipients of imported equipment and goods responsible for their own profits and losses. And in 1988 the foreign trade agency system was fully practiced.

As the foreign trade agency system is not adopted to counter specifically the state monopoly of foreign trade or the foreign trade purchasing system, it existed side by side with other forms of operation as new form of foreign trade. In August 1991, the Ministry of Foreign Trade and Economic Relations (now the Ministry of Foreign Trade and Economic Cooperation) issued the "Interim Regulations Concerning the Foreign Trade Agency System," and later it issued an interpretation to Article 24 of this document to standardize the foreign trade agency system.

After 1995, the "Ninth Five-Year Plan for National Economic and Social Development and the Long-Term Target Through the Year 2010" stipulated that China's economic restructuring has achieved further progress, and the import and export in foreign trade, which primarily based on purchasing, has lost the objective foundation for existence, and a foreign trade agency system has developed under the guidance of state policies.