The import and export license system is an important administrative measure in China's foreign trade management.
In 1950, the Central People's Government issued the "Interim Regulations on Foreign Trade Management,'' in which it was stated, " While importing and exporting any goods, the importer and exporter must apply to their local foreign trade administrative department for an import and export license." This represents the beginning of the import and export license system after the founding of the People's Republic.
From 1959 to 1979, all imports and exports were put in the hands of the special national import and export companies under the former Ministry of Foreign Trade and their branch companies. These companies handled imports and exports in strict accordance with state plans, thus the role of import and export licenses was reduced. During this period, the import and export license system was mainly directed at those departments outside of foreign trade enterprises, which, with the approval of the state, wanted to import a small amount of equipment and goods for scientific research, educational, cultural, sport and publish health purposes, and export a small amount of non-trade commodities.
Since adopting the policy for reform and opening to the outside world, China's foreign trade has witnessed continuous development, and the operation of import and export business had expanded the specific national import and export companies under of Ministry of Foreign Trade and Economic Relations to the foreign trade companies in various localities and under various ministries. While bringing some vitality to the work of foreign trade, this had also resulted in some confusion in the normal order of foreign trade and incurred certain losses to the state. Therefore, the government again decided to re-institute and strengthen the import and export license system.
In June 1980, the Ministry of Foreign Trade and Economic Relations enacted the "Interim Rules on the Export License System." The document stipulated that firms that engage in export business must file in advance applications to the Ministry of Foreign Trade and Economic Relations or the foreign trade administrative departments under in the various provinces, autonomous regions and municipalities directly under the central government that have been authorized by Ministry of Foreign Trade and Economic Relations. Having been approved, they must register with the local foreign trade administrative departments and the relevant customs houses while presenting the documents of approval. Only then could they engage in export business.
In January 1984, the State Council issued the "Interim Regulations of the People's Republic of China on License System for Imported and Exported Goods." It stated that for the import of all goods that need licenses to import according to state regulations, it is necessary to apply for import licenses beforehand and only then orders could be placed with the relevant foreign trade companies. It also stipulated that that the Ministry of Foreign Trade and Economic Relations was responsible to draft and adjust the list of goods whose import calls for licenses. In this period, the control was enforced on all foreign trade enterprises dealing with import and export business.
Since 1992, China gradually relaxed the control over import. For instance, it abolished or reduced the range of import licenses, import quotas as well as import control.
In January 1994, the Ministry of Foreign Trade and Economic Relations again issued the "Interim Provisions Regarding Import Quota Control over Commonplace Commodities." It marked that China's import management system was reformed in line with the relevant regulations of GATT.
In 1998, China removed control by import licenses and import quotas over the overwhelming majority of commodities that needed licenses to be imported formerly, while only continuing to enforce import license control over the products of a small number of infant industries that call for special protection.