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Three Components for Market procurement trade mode

Four facilitations

Market procurement trade mode refers to the trade mode that a legally established business buys commodities in a market cluster approved by the department of commerce at a value of less than USD150000 each contract value and all formalities of export commodities are conducted at the place where they are purchased

The pilot scheme for the market procurement mode of trade is consented jointly by eight ministries and commissions including the ministry of trade of the People's Republic of Chinathe National Development and Reform CommissionMinistry of Finance of the People's Republic of  China, General Administration of Customs of the People's Republic of ChinaState  Administration of TaxationState Administration for Industry & Commerce of the People's  Republic of ChinaState Administration of Quality SupervisionInspection and Quarantine of the People's Republic of China and State Administration of Foreign Exchange. 

Due to the increase of variety market products and sub-species through the market transaction. It tends to “multi- species, multi-batch, small- quantity”. In export and customs clearance section, usually multiple buyers declare multiple goods by LCL. This kind of trade pattern does not match with the traditional general trade mode based on large quantities and single item, In order to further develop the market procurement trade modeit is necessary to establish a new trade modewhich is different from the general trade mode and processing trade modethat is the market procurement mode of tradeand fundamentally solves the problem of the absence of policy system.

It is the trade mode that gradually developed by many professional markets from the progress in exploring mainly domestic trade market towards domestic-foreign mixture markets after China joined the WTO. Compared with other mode of trademarket procurement mode of trade has five characteristics: Firstfrom the perspective of main subjectsit showed a large number of market participants and multi-componentssecond ,from the perspective of main objectsmarket procurement mode of trade based on small commodities. Thirdfrom the perspective of formalities, market procurement mode of trade mix domestic trade and foreign trade. Fourthfrom perspective of shipment, LCL is popular in market procurement mode of trade. Fifthfrom the perspective of settlementcash and RMB settlement is more popular

According to the missive from the eight ministries and commissionsthe key policy of market procurement mode of trade comprises the following five aspects: First is to clarify its concept and applicable area. Second is to cultivate diversified trade main bodies and relax the admission of the main bodies. Third is to implement the VAT-exemption policy application to goods exported through the market procurement mode of trade by market operators within the gathering area of markets. Fourth is to expedite the clearance of commodities exported through the market procurement trade. Fifth is to allow the market procurement trade to settle accounts in RMBwhere by main body supervision and managementoverall volume and movement monitoring are carried out on the foreign currency income and expenses of the trade.

The key significance of establishing the market procurement trade mode is: from where an international trade mode is launched and established through the market . The legitimacy of trade models such as the market procurement trade solved. The concerns of market main bodies are eliminated and will therefore help business to expand and grow. The established of the market procurement trade mode is a beneficial attempt in the exploration of building a new trade system and mechanismas intensified reforms as well as pioneering and trials take place in key international trade area and points of the country

In accordance with the pilot scheme of market procurement mode of trade as stated in the documents of the eight state ministries and commissions, market procurement trade operators” registration" must be carried out before the launch of trade. The main bodies refer to operator within the gathering area of market. Once they have registered as market procurement trade operators with the Baigou new city Bureau of Economic Development and obtained such qualification, as well as reported to the related departmentsincluding the customs, inspection and quarantine, State Administration of Taxation and the State Administration of Foreign Exchangethey may begin to conduct business in market procurement trade.

First is the difference in customs supervision and management. For examplethe customs supervision and management code for  "normal trade" is "0110" while that of "market procurement" is "0I39".Second is the difference in taxation policy. Goods exported through the market procurement mode of trade are exempted from VATincluding taxes that are calcu1ated based on itsuch as the urban maintenance and construction taxeducation surcharges and local education surcharges. A no taxno rebate, approach is adopted. That is, operators within the gathering area of market without or unable to obtain VAT invoices may export commodities through the market procurement mode of trade.

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