AEO companies vital in Shanghai development

Along with the continued optimized business environment regarding the authorized economic operator (AEO) agreements, companies holding AEO status have become the ballast for Shanghai's high-quality development in trades, according to official sources.

Less than 1 percent of Shanghai's total companies specialized in foreign trade business have obtained AEO certifications, but they are the major contributor of the city's economy, said Zhang Jie, deputy director of the Shanghai Municipal Commission of Commerce during a news conference on Wednesday.

In total, 517 companies holding AEO status by the end of 2023 contributed to more than one-third of the city's imports and exports value, and nearly a quarter of the combined output value generated by industrial enterprises above the designated size, or enterprises with annual revenue of at least 20 million yuan ($2.7 million) each .

According to the World Customs Organization's definition, the AEO is a partnership program adopted by customs administrations to secure and facilitate global trade, which provides incentives and benefits to both customs and traders that have decided to work in partnership to improve supply chain security.

To better facilitate the high-quality development of the companies with AEO certifications, a package of 25 measures were made public in Shanghai in January this year, including cultivating more enterprises to obtain the AEO status, better enabling business of the companies and optimizing related services, according to Zhang.

To date, China has signed AEO agreements with 52 countries and regions. Companies with AEO status can enjoy simplified customs procedures, such as reduced examination and prioritized clearance. This will significantly shorten customs clearance time and reduce storage and logistics costs, said Yu Bin, deputy head of the Shanghai Customs District.

Further efforts will be made to create a fine environment for the high-quality development of the AEO, which includes enhancing customs clearance efficiency, optimizing cross-border trade business environment, helping companies to win broader recognition globally, allowing foreign trade to be conducted more convenient with lower cost and risks, so as to strengthen Shanghai's position as a global trade center, Zhang said.