The mainland plans to grant foreign trade rights to more domestic and foreign-funded enterprises and is prepared to allow more foreign investors to set up foreign trade joint ventures, a senior foreign trade official said yesterday. It also expects to make some progress on its proposed entry into the World Trade Organisation during President Jiang Zemin's visit to the United States in October but is not 'optimistic' about an agreement amid a widening surplus with the US, the vice-minister of foreign trade and economic co-operation, Sun Zhenyu, said. Mr Sun said the government was formulating preferential measures to encourage imports of hi-tech and advanced equipment by foreign investors on the mainland who were faced with new custom duties and value-added tax, resulting in an additional 40 per cent in total costs. He said the foreign trade ministry would promote the registration system of foreign trade rights among foreign-funded and domestic industrial enterprises nationwide. The system, which is now being experimented with in special economic zones, will automatically grant domestic and foreign-funded firms full foreign trade rights after putting in registration forms with the authorities. So far, there are 1,500 foreign trade firms which have full foreign trade rights, while the 145,000 foreign-funded enterprises have already acquired partial foreign trade rights. Mr Sun said the mainland had already allowed several foreign investors to set up foreign trade joint ventures in Shanghai and Shenzhen as an experiment. It is going to extend the experiment to other parts of the mainland and allow more foreign traders to set up bases across the country. Mr Sun said the mainland would continue its negotiations with the US about its entry into the WTO in the run-up to Mr Jiang's visit. He said the visit and the decision to lower custom tariffs from an average of 23 to 17 per cent on October 1 would create a constructive environment for the negotiations. Serious gaps on the trade services and agricultural products would largely remain, he said. The mainland's disputed trade surplus with the US is expected to widen further this year as a bumper harvest would reduce agricultural imports from the US. China and the US have different calculations on the bilateral trade. Last year the mainland claimed its trade surplus with the US was US$10.6 billion while the US, counting the processing trade going through Hong Kong, said its trade deficit was $39.5 billion. Mr Sun said China was taking steps to encourage mainland firms to import US products, coupled with tariff cuts. He said the US should also relax controls on hi-tech exports to the mainland and provide more soft loans to US firms. Mr Sun admitted the decision to abolish tax-free status on imports of capital equipment by foreign-funded enterprises had produced an adverse impact on the country's effort to attract hi-tech investment projects. He said the government was considering a series of supplementary measures to provide preferential treatment to those investors but did not give any specific details.