“Our products are significantly affected by the processing trade material consumption standards. Before the reform, any excess materials beyond the standards had to be imported with taxes through general trade. After the reform, we are no longer constrained by these standards and can declare material consumption based on actual production. This change saved us 500,000 yuan in the first half of the year, reducing costs and boosting our export confidence”, said Feng Yaxian, the customs manager at Dongguan Dachen Electric Products Co., Ltd.
Dongguan Primax Electronic & Telecommunication Products Ltd. (“Dongguan Primax”) has also benefited from the reform. As a large manufacturer of computer peripheral products within the Huangpu Customs jurisdiction, Dongguan Primax collaborates with around 50 deep processing transfer customers and suppliers, handling over 100 transfer declarations and nearly 6 tons of goods valued at approximately 15 million yuan each month. The deep processing transfers require coordination among multiple upstream and downstream enterprises, presenting challenges with extensive documentation and tight deadlines. After the reform, companies can now consolidate declarations for the previous month’s deep processing transfers by the end of each month. “Now we have an extra 15 days each month to organize documents, giving us ample time to handle the declaration procedures and avoid procedural violations effectively. The customs measures to promote high-quality development in processing trade safeguard our growth and enhance our competitiveness,” said Yan Jiye, the customs manager at Dongguan Primax.
In May this year, in order to support the stable development of processing trade and strengthen the stability and competitiveness of the industry & supply chains, the city’s Bureau of Commerce recently issued the Work Plan of Dongguan City to Fully Enhance the Development Level of Processing Trade. Known as the Dongguan Processing Trade 10 Measures, the Plan includes specific policies and substantial financial subsidies to support capital expansion, equipment upgrades, product innovation, emerging market exploration, bonded business development, and integration of domestic and foreign trade.
Dongguan is one of the earliest regions to develop processing trade and is known as the Capital of Processing Trade. As the birthplace of China’s first processing trade enterprise, Dongguan is considered an important indicator of the country’s foreign trade. In the first two months of 2024, Dongguan’s processing trade imports and exports achieved positive growth for the first time since last year, totaling 53.41 billion yuan, a 6.7% year-on-year increase. Despite the complex and volatile global trade environment, Dongguan’s processing trade has demonstrated robust resilience, continuing its positive trend in the first half of the year. From January to June, Dongguan’s processing trade import and export values reached 177.32 billion yuan, representing a year-on-year growth of 5.7%, outpacing the city’s overall import and export growth rate by 2.3 percentage points, contributing to a 1.5 percentage point increase in the overall growth rate, and accounting for 27.8% of Dongguan’s total imports and exports for the period.
Extended reading
Highlights of Dongguan’s processing trade development in the first half of 2024
In the first half of 2024, Dongguan’s processing trade imports and exports totaled 177.32 billion yuan, a 5.7% year-on-year increase. The following two characteristics also stood out:
Both traditional and emerging markets have shown strong performance. Dongguan’s processing trade with Hong Kong, ASEAN, Japan, Taiwan, and South Korea reached 26.18 billion yuan, 24.85 billion yuan, 19.04 billion yuan, 14.07 billion yuan, and 8.63 billion yuan respectively, reflecting year-on-year increases of 6.2%, 5.4%, 4.3%, 5.1%, and 51.6%. These five traditional markets collectively accounted for 52.3% of the import and export trade. Additionally, trade with emerging markets like Latin America grew by 18.5% year-on-year.
Certain electromechanical products in processing trade saw rapid growth in imports and exports. Imports of flat panel display modules rose by 72.8% to 4.33 billion yuan, while exports increased by 33.3% to 5.42 billion yuan. Imports of automatic data processing equipment and components grew by 20.3% to 2.69 billion yuan, with exports rising by 4.7% to 16.37 billion yuan.
