China Focus: cross-border e-commerce emerges as new growth engine
BEIJING, Mar.16 (Xinhua) -- Cross-border electronic commerce is emerging as a new engine for Chinese economic growth, according to Yang Guoxun, deputy director of the Advisory Committee for State Informatization, a government think-tank.
China has been playing a role as the world's factory for years. Made-in-China exports usually find themselves in a quite awkward position with most of profits going to overseas distributors. Take for example a Barbie Doll which is priced at only one dollar before leaving Chinese toy makers and is then sold at almost 10 dollars at a Wal-Mart store in the U.S.
Yang says unlike traditional trade, cross-border e-commerce can be a solution to this problem as it can reach end-users directly.
Meanwhile, Chinese consumers will find easier to buy overseas products via the cross-border e-commerce platforms. Bermasde, an Italian luxurious department store company which was approval to pilot cross-border e-business in southwest China's Chongqing Municipality, says cross-border e-commerce offers Chinese consumers easier access to cheaper goods from overseas markets.
Like Bermasde, an increasing number of companies, domestic or international, are piling into China's cross-border e-commerce sector. Data from e-commerce research firm China E-business Research Center showed that the country's cross-border e-commerce transactions amounted to three trillion yuan in the first half of 2014, of which 300 billion yuan were retail sales.
While developing rapidly, China's cross-border e-commerce is faced with restrictions due to a backward regulation model. In the absence of a complete regulatory framework, some businesses would escape regulation when selling foreign currencies gained from cross-border electronic trade. Meanwhile, current customs clearance rules also become a barrier for the sector.
To solve these issues and boost e-commerce, the State Council, China's cabinet, said in a statement last week that it has approved an application by Zhejiang Provincial government to set up a cross-border e-commerce pilot zone in its capital city Hangzhou, which is home to China's e-commerce giant Alibaba Group Holding Ltd. (BABA.NYSE).
The zone will take the lead in setting standards on cross-border e-commerce transactions, payment, logistics, customs clearance, tax refund and exchange settlement, said the statement.
It will work to settle deep problems in cross-border e-commerce, build complete industrial chains and provide experience that can be used by the sector across the country, according to the statement.
A report by the Ministry of Commerce shows that China's cross-border e-commerce transactions are forecast to reach 6.5 trillion yuan by 2016. (Edited by Ding Lei, email@example.com)