Recently, the Tianjin Free Trade Zone Office of the Binhai New Area Central Branch of the State Administration of Foreign Exchange (SAFE) and the Tianjin Airport Area Office of the Tianjin Pilot Free Trade Zone held a meeting at Goglio (Tianjin) Packaging Co., Ltd. to provide policy solutions for offshore trade business of related enterprises. So far, in the context of China's pilot free trade zone, a "Binhai Model" in supporting the new offshore trade of real economy companies has been created in Tianjin Binhai New Area, following the "White List Model" in Shanghai and the "Customized Industry Model" in Suzhou.

Difficulties Encountered in Offshore Trade

Goglio (Tianjin) Packaging Co., Ltd., a wholly-owned subsidiary of Italian Goglio Group, was incorporated in 2004 to provide flexible packaging, packaging components, filling equipment and services for food manufacturers in China and Asia concerning tomato sauce, concentrate juice and coffee. Over the past 18 years, the company has produced more than 170 million pieces of various flexible packages. The third phase of its expansion project is under construction with an investment of 15 million euros this year.

The business model is to provide products made by its parent company - the Italian Goglio Group, for its Asian customers, which requires the goods to be shipped directly to the Asian countries outside China. At the same time, the direct payment of foreign exchange is made in the Tianjin company. "At the time, the company's offshore trade was plagued by problems of 'receipt and payment of foreign exchange' and could not be carried out." A person in charge of Tianjin Airport Area Work Bureau of Tianjin Pilot Free Trade Zone introduced, "First, the handling bank requirements to complete the collection and payment of foreign exchange before the goods arrive at the port does not match the actual accounting period of the company, which is not conducive to customer relations; Secondly, due to the long circulation time of the original sea bill of lading during the epidemic, the sea bill of lading may be changed to air or electric release bill of lading. However, when handling foreign exchange settlement of offshore trade, banks do not accept air waybill or electric release bills of lading in rem, thus causing inconvenience in receiving and paying foreign exchange under offshore business; in addition, banks do not support the demand of enterprises to receive payment in installments for equipment re-export. "

Jointly Creating a "Binhai Model" for offshore trade

Upon learning of the problems faced by the companies, the General Office of China (Tianjin) Pilot Free Trade Zone Administrative Committee, together with the Binhai New Area Central Branch of SAFE, held a special seminar on "Supporting the Development of New Offshore Trade in the Pilot Free Trade Zone" with the Tianjin Branch of the People's Bank of China, the Tianjin Airport Area Working Bureau of Tianjin Pilot Free Trade Zone, relevant commercial banks and enterprises, to study policy support for the offshore trade needs of the real economy company represented by Goglio Tianjin.

In early 2022, the State issued the Notice on Issues Relating to Support the Development of New Offshore International Trade, focusing on supporting new offshore international trade based on the innovative development of the real economy and granting banks greater vetting autonomy and flexibility. According to the policy needs of offshore trade in the real business of companies, ICBC Tianjin Branch, Agricultural Bank of China Tianjin Branch and Bank of China Tianjin Branch have proposed their solutions.

"Whichever bank's solution is chosen, it will solve the practical difficulties encountered by the companies. The new offshore international trade model can not only significantly reduce the logistics and transportation costs of multinational enterprises but also allocate functions of orders and trade settlement in Tianjin, thus enhancing the status of Tianjin subsidiaries in the industrial chain and value chain and improving their international competitiveness and trade discourse." the responsible person of Goglio (Tianjin) Packaging Co., Ltd. said. Based on the "Binhai model", the first offshore trade business has been launched.

The person in charge of the Binhai New Area Central Branch of the State Administration of Foreign Exchange said that the foreign administration department fully supports the new type of trade carried out by Goliath and other enterprises based on the innovative development of the real economy and the transformation and upgrading of the manufacturing industry and the improvement of the supply chain integrity of the industrial chain. For the real business needs of enterprises, based on not only the relevant trade documents but also the actual assessment. It is necessary to strengthen the communication and cooperation between the authorities in charge of all aspects of the trade and use the policy advantages to support the regional multinational manufacturing enterprises to upgrade to the headquarters economy.

"We will actively promote the full collaboration between companies and banks under the guidance of the foreign administration department and reach the successful completion of the first new offshore international trade business. On this basis, we will sort out and form replicable cases and promote them to the whole region, the city and even the whole country to support the innovative development of more real economy enterprises in need." said the responsible person of the Tianjin Airport Area Working Bureau of China (Tianjin) Pilot Free Trade Zone.