Govt seeks to create new growth point as trade drops
A newly released guideline to promote cross-border -e--commerce is meant to create a new source of growth for China in the face of a decline in foreign trade, an expert said Monday.
The State Council has issued a dozen measures to promote the development of the cross-border e-commerce sector, including streamlining administrative procedures, offering -financial support and -facilitating cross-border payment, read a guideline released by the central government on Saturday.
"The government needs to foster a new economic growth point amid the drop in the country's foreign trade," Li Jian, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times Monday.
The total value of China's exports and imports in the first five months of this year stood at 9.47 trillion yuan ($1.52 trillion), falling by 7.8 percent year-on-year, according to statistics released by the General Administration of Customs.
The guideline requires the customs authorities to further optimize and simplify the clearance procedure for imports and exports in cross-border e-commerce.
The existing favorable export tax policies for cross-border e-commerce will be continued, according to the guideline. It also requires several government departments to formulate preferential import tax policies with the aim of boosting domestic consumption and promoting fair competition.
The government is asking domestic banks and institutions to promote cross-border electronic payment businesses so as to meet the rising demand from both enterprises and individuals at home and abroad. It is also encouraging the use of yuan in cross-border e-commerce settlements.
The current guideline follows two other guidelines from the State Council earlier this month on promoting China's cross-border e-commerce to create new competitive advantages in foreign trade.
The support for cross-border e-commerce can immensely help Chinese manufacturing enterprises expand into overseas markets. It is also conducive to creating jobs by encouraging entrepreneurship and innovation as well as supporting China's "One Belt, One Road" initiative.
"The government's favorable policies can greatly boost cross-border e-commerce business which is still a new area for many Chinese consumers," Li said.
The value of China's cross-border e-commerce reached 4.2 trillion yuan in 2014, increasing by 33.3 percent year-on-year, according to a report released in April by the China Electronic Commerce Research Center.
The value is expected to reach 6.5 trillion yuan in 2016, the Ministry of Commerce (MOFCOM) said in November 2014.
"Many of China's small and medium-sized enterprises (SMEs) can benefit from these favorable policies which will simplify transaction procedures and lower transaction costs," Li said.
SMEs and individual households account for more than 90 percent of the new business entities that register on cross-border e-commerce platforms annually, MOFCOM data shows.
"The government needs to make greater efforts to improve regulations related to customs procedures, tariffs, inspection and quarantine," Li noted.
