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Tales from the Development Frontier
and set up a development fund and a venture fund for exports. In the early years of the first decade of the 2000s, it also initiated an extensive customs clearance system to promote exports. Ending state trading monopolies and facilitating the entry of producers and traders. In 1978, the government initiated the reform and
opening-up policy, which emphasized economic reform and the importance of foreign trade. It ended state monopolies through a series of gradual reforms and allowed private companies to conduct foreign trade transactions. Reforms were piloted in the special economic zones and then extended to coastal regions before being adopted throughout the country. In 1979, Fujian and Guangdong were the first provinces granted foreign trade authority, followed by Beijing, Shanghai, and Tianjin. The government has since delegated the right to engage in foreign trade to all provinces. Through this reform, local governments could now establish FTCs to handle the trade in their jurisdictions. Both provinces and special economic zones are allowed to open foreign trade ports. Approval has also been given to national production ministries and large state enterprises to establish FTCs. By 1985, the Ministry of Commerce had licensed the establishment of more than 800 FTCs. By the end of 1988, about 5,000 state-owned FTCs and 10,000 manufacturing enterprises had the right to export (Yu 2008). Meanwhile, through the Foreign Investment Law of the late 1970s, foreign-invested enterprises were entitled to import production inputs and to export final products. In the 1990s, the government extended direct trading rights to more manufacturing enterprises, joint ventures, and, eventually, private trading firms. Starting in 1998, the eligibility requirements for foreign trade licenses were reduced several times and began being waived in 2004.16 Eliminating mandatory export targets and import plans. In the 1980s,
the government gradually reduced the number of commodities subject to mandatory foreign trade plans and began allowing enterprises to make import and export decisions about most commodities based on market forces. Starting in 1999, the government no longer issued mandatory and directive import plans. Then, in compliance with the WTO accession agreement, China eliminated import licensing requirements