China has decided to adopt policy measures to encourage the stabilization of imports and exports, and will upgrade and transform China's foreign trade. The decision was made at a State Council meeting chaired by Chinese Premier Li Keqiang on April 20.

China's total value of imports and exports decreased by 5.9% in the first quarter of this year, according to recently released economic figures. For the same period last year imports and exports fell 6%. The State Council said the stabilizing of China's imports and exports cannot be neglected despite a lower decline this quarter.

Foreign trade plays an essential role in maintaining the stability of the economy and aiding economic development. In the current economic climate, foreign trade also needs the support of financial institutions in order to maintain sound development. According to the conference, favourable measures for foreign trade enterprises with sound performance will be encouraged such as offering more loans and offering a tax refund rate for some mechanical and electrical products. The export of mechanical and electrical products in China reached 1.74 billion yuan in the first quarter, a decrease of 4.2% compared with the same period last year. The export of such products accounts for 57.7% of gross exports. In order to stabilise foreign trade, it is essential to provide favourable policies to support such products.

It is also important to offer policies that support traditionally labor-intensive industries. These industries are strong and will play an important role in stabilizing foreign trade.

The transformation and upgrading of foreign trade needs the support of a new mode of foreign trade. In January China's State Council piloted cross-border e-commerce as a new mode to support foreign trade.

Furthermore, the recent conference proposes to implement a positive import policy. It especially aims to support the import of advanced equipment and technology, give foreign investment a greater role in promoting trade, and undertake a pilot scheme of the classification of goods in special supervision areas of Customs.

With the global economic downturn, there is a great pressure for China to upgrade and transform its foreign trade industry. The reform of the trade system coupled with supportive policies can be a strong driver for trade. The key is that the reform, and appropriate measures, must be implemented efficiently so that foreign trade enterprises and industries can benefit as soon as possible.