Push to improve logistics

China's Ministry of Commerce said over the weekend that it would focus on improving logistics efficiency and boosting domestic consumption next year.

Implementing policies to promote logistics development in the country will be the ministry's key task next year, Vice Commerce Minister Gao Hucheng said at the closing ceremony of a two-day national commercial work conference that concluded Saturday.

"Funds would be preferably allocated to support the development of logistics systems for rural markets and agricultural products and development of the service industry," the ministry said in a statement Saturday, citing Gao.

"Logistics is one of the bottlenecks hindering the country's commerce and trade development. Poor logistics efficiency pushes up prices, eventually affecting the release of consumption potential in the country," Zhao Ping, deputy director of the Consumption Economics Department at the Chinese Academy of International Trade and Economic Cooperation (CAITEC), told the Global Times Sunday.

"Taking the '11/11' shopping spree (on November 11, known as Singles' Day) for example, sales were brisk but consumers complained about appallingly slow logistics. Improving management of the supply chain is key to boosting logistics efficiency," Zhao said.

On Wednesday, the State Council announced 10 measures to reduce logistics costs and improve efficiency, including cutting the water and electricity prices for agricultural product processing and circulation and lowering entry fees at agricultural product markets.

"To promote development of the country's logistics industry, the authorities could start with reducing taxes and fees levied on logistics companies, who have seen their transportation costs double after the value-added tax reform," He Dengcai, deputy head of China Federation of Logistics & Purchasing, told the Global Times Sunday.

China launched a trial program for tax reform in Shanghai at the beginning of this year, replacing business tax with value-added tax for companies in the transportation and service industries in order to reduce their tax burden. But some logistics companies complained that it resulted in higher taxes.

"Excessive highway toll fees should also be eliminated to reduce transportation costs for logistics companies," He said.

MOFCOM also said Saturday that the ministry will seek areas in which it can make a breakthrough in boosting domestic consumption.

In a statement Friday, the ministry announced four measures to increase consumption, including boosting credit-based consumption, and encouraging consumption of environmentally friendly products.

"In 2012, the government focused on encouraging credit consumption by giving discounts on interest for consumers who bought home appliances and furnishing products with credit cards," said Zhao from CAITEC.

"Next year, the government will focus on supporting credit consumption of auto vehicles," Zhao said.