As China's foreign trade languishes in the doldrums, speedy growth of cross-border e-commerce has brought some breezy optimism to a depressed marketplace.
Cross-border retail orders of e-commerce firm vip.com increased sharply this year, with some 500,000 packages handled per day. Warehouse space is at a premium as the current 5,000 square meter distribution center is full, said Wang Bobo, head of customs affairs for imported commodities of a logistics firm.
In the first five months, the volume of cross-border e-commerce trade via Guangzhou Customs was 18 times the total of last year. Other provinces such as Zhejiang and Shandong are also finding ways of using cross-border e-commerce to increase foreign trade.
"Though sales volume has not grown much, our gross profit has doubled through e-commerce," said Ma Fangda, general manager of Shunshi Photovoltaics in Qingdao, Shandong.
China's economy posted slightly better than expected growth of 7 percent in Q2, the same as Q1. It is widely hoped that reforms will kick in during the second half of the year and steady improvement will follow.
PRESSURE
China has been trying to shift to quality growth driven by innovation, and the required structural reforms are far from easy to implement. Cutting excess industrial capacity is difficult to execute and industrial upgrades need innovation. Innovation must precede upgrades, another hard nut to crack.
The northern province of Hebei, for example, faces the tasks of cutting iron, steel, cement and glass capacities. Liaoning Province in the northeast, the old industrial base, is locked in a similar struggle.
Statistics for the first half of the year have not been officially announced by provinces, but Q1 performance may offer some clues.
Hebei's economy grew by an annualized 6.2 percent in Q1, two percentage points higher than the same period last year. Added-value growth in equipment manufacturing was almost double that of other industries in the first five months. The problem is that Hebei's foreign trade from January to May actually fell 12.6 percent year-on-year.
"The effects of structural adjustments have become more obvious in the first half and, on the whole, the economy is on the up." This was the word from a meeting of the Hebei provincial committee of the Communist Party of China (CPC) held on Monday. According to the committee, the picture is certainly not entirely one of doom and gloom. There are many favorable factors, particularly the Beijing-Tianjin-Hebei integrated development strategy.
