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Policy briefing: Full transcript, June 12

Updated: Jun 12,2015 4:33 PM

The State Council holds the weekly policy briefing on June 12, focusing on the development of cross-border e-commerce, and measures supporting migrant workers to return home to start up their own businesses.[Photo by Wang Zhuangfei/China Daily]

Hu Kaihong (host):

Ladies and gentlemen, welcome to today’s policy briefing. The State Council executive meeting on June 10 decided to facilitate the development of cross-border e-commerce, and roll out measures to encourage migrant workers to return home to start up their own businesses. In order to help you to get more information in these fields, we are honored to have Zhong Shan, international trade representative and Vice-Minister of Commerce, and Xin Changxing, Vice-Minister of Human Resources and Social Security to give you a brief introduction and take your questions. First, let’s welcome Minister Zhong.

Zhong Shan:

Friends from the media, good morning. I’m very happy to attend today’s policy briefing and I want to thank you all for caring about the work of the Ministry of Commerce. Now, I’m going to make a brief introduction on the guideline issued by the State Council to boost cross-border e-commerce.

Zhong Shan:

Both President Xi Jinping and Premier Li Keqiang have attached great importance to the development of cross-border e-commerce and issued a number of orders concerning it. The past two years have seen rapid growth of cross-border e-commerce of China. From Jan to April this year, the sales volume of China’s e-commerce, including cross-border e-commerce, reached 4.4 trillion yuan, an increase of 20 percent. More people are using cross-border e-commerce and the guideline is aiming to solve the prominent problems facing cross-border e-commerce and create a favorable environment for its development. As a matter of fact, this guideline is systematic and comprehensive and gives specific requirements for related government bodies and enterprises.

Zhong Shan:

We had four principles while making this guideline. First, we endeavored to make a series of supporting policies to create a better environment for fair competition for all market players. Second, we are making efforts to establish a new regulatory system and a policy system to help better develop cross-border e-commerce. Third, we encourage our companies to find innovative business models, strengthen international cooperation and take steps to develop into scaled, standardized and regulated companies. Fourth, we should control possible risks to prevent the safety of our economy and network, as well as guarantee the quality of import and export commodities.

Zhong Shan:

The guideline had four aspects. First, it clarifies the goals of developing cross-border e-commerce. It supports all domestic companies to boost foreign trade by developing cross-border e-commerce and encourages experienced companies to be bigger and stronger. Second, the guideline will optimize customs policies, improve the supervision and quarantine policies, clarify related tax policies, standardize payment procedures and provide financial support. Third, the guideline proposed to build a comprehensive service system to standardize cross-border e-commerce activities and support the work of industry associations. Fourth, the guideline made clear requirements to related government bodies.

Zhong Shan:

Ordered by the State Council, the Ministry of Commerce will give out opinions on how to implement the guideline and will do what we can to help boost the healthy development of cross-border e-commerce. Thanks.

Hu Kaihong:

Thank you, Minister Zhong. Now let’s invite Minister Xin.

Xin Changxing:

Hello, everyone. I would like to take questions concerning the Opinions supporting migrant workers and other groups to return home to set up business. Thank you.

Hu Kaihong (host):

Questions, please.

Economic Daily:

Minister Zhong, could you tell us the reason the State Council issued the document on cross-border e-commerce?

Zhong Shan:

The cross-border e-commerce sector has been growing fast and has become an important driver of innovation-motivated development. We should encourage its growth. The document issued in June aims to address some prominent issues occurring during the growth. We hope the document will guide the sector and help it grow fast and healthily.

Companies doing cross-border e-commerce need specific policies to guide their businesses. Our survey showed that many such companies believe the current system of regulations and services don’t suit their businesses and hope that there will be more specific guidance and support. For example, most of the cross-border trades we did in the past were bulk orders worth at least tens of thousands of dollars. Now cross-border Business-to-Customer online shopping transactions are often no more than tens of dollars. Thus it’s fair to say that the current system of regulations does not suit the development of cross-border e-commerce. Last year, more than 10 million orders of cross-border express deliveries were taken, which is hard to supervise under current regulations. As a result, we need to readjust the ways we have been regulating cross-border e-commerce.

Though the sector is developing fast, different industries, companies, authorities and regions involved in the business haven’t been able to interact and collaborate smoothly and efficiently. Government supervision even fails to cover some of the business parties. This also highlights the need for more specific policies.

Zhong Shan:

The healthy development of cross-border e-commerce is necessary for the healthy development of the country’s foreign trade. Cross-border e-commerce helps domestic companies to explore international markets and expand their businesses abroad. While conducting a survey in Yiwu, Zhejiang province, we came across a young couple conducting foreign trade in their home in the countryside. They did their business in a small room with a computer. They took orders online, got their supplies of stock from Jiangxi province and Anhui province, and sold them to the US and Latin American countries. Their way of doing business also helped them save money on advertising. Their three-year-old kid was their model for the children’s clothes they sold. Their goods were delivered very quickly. Such a way of doing business has cut many of the steps previously needed in traditional trades, quickened communication, improved efficiency and created a lot of jobs. As a result, cross-border e-commerce is a new way of doing foreign trade as well as a new growth point of foreign trade. It is vital to reshape the country’s ways of doing foreign trade.

Cross-border e-commerce business is important for achieving the country’s strategies, such as the Belt and Road Initiative. In the past year, the country has been cooperating more and more with countries covered by the initiative on cross-border e-commerce. A majority of the countries along the Belt and the Road are developing and underdeveloped countries. E-commerce took up a relatively small portion of their trade with China. Cross-border e-commerce in the countries covered by the Belt and Road Initiative has been developing much faster than business developing around the globe as a whole. The business is also developing fast in Europe, which has been showing a strong interest in cooperating with China in the business. An example is the 3rd Cross-Border e-Commerce Conference and Exhibition held in Shanghai last month. The reason why other countries want to cooperate with us in cross-border e-commerce is that it benefits both sides.

China Radio International:

My question is to Minister Xin Changxing. I want to know how the migrant workers who have gone back to their hometowns to start businesses are doing. As we know, migrant workers face a lot of difficulties. If they go to counties, districts and townships, the policies are different. I want to know what your plan is to further encourage their entrepreneurship. On the other hand, we’ve been promoting public entrepreneurship and innovation for more than a year. Why are you paying special attentions to this group? When you made the policy, what did you expect? Have you foreseen a surge in the number of migrant workers who went back home to start businesses?

Xin Changxing:

You are actually asking two questions. The second question can be answered first. That is, why we issued a new policy and what are our considerations and expectations. As this is a policy briefing, I will give you some background information of the policy, so you can have the gist of it when you write about the new policy later.

Encouraging people to go back home and start businesses is a significant part of the public entrepreneurship and innovation, which in essence includes everybody who has the willingness and capability to start businesses, such as migrant workers with money, technique and management experience, in addition to college graduates and veterans who are willing to go back and have their own businesses. They are all important forces of the public entrepreneurship and innovation.

The migrant workers represent a large proportion of the population. Last year, the total number was 274 million, which equals the total population of several big countries. This group has many exceptional talents.

Starting businesses does not have to be in cities or by urban residents. The stage, the opportunities, the space of the Internet Plus, the talent, the passion, none of them are unique to cities. Many opportunities and talent can be found in villages as well.

In recent years, some migrant workers with money, expertise and market accesses have done well when they moved back to start their own businesses. In some places, they’ve become important contributors to the local economy. Some companies started by migrant workers account for more than 30 percent of the local economy, becoming a pillar for local economic growth. This is just the beginning. The potential is huge.

Xin Changxing:

Looking at the bigger picture, I think there are several favorable conditions for people to go back home and start businesses.

First, it has met the momentum for mass entrepreneurship and innovation. The environment and atmosphere for entrepreneurship is continuously being optimized and improving. The support for entrepreneurship is also enhancing. To borrow a word from the media, this is the era of creating. The conditions for migrant workers to go back home and start businesses are getting better.

Second, the trend complies with the process of industrial shift. The labor-intensive industries first entered China in the eastern coastal areas. Now after decades of development, the industries have started to shift inland. In economics, this is called the Flying Geese Model. Internationally, the industries are shifted from one nation to another. In China, with its vast territory, the shift is inter-regional, from eastern coastal areas to middle and western regions. In that process, great business opportunities lie in the shifted industries as well as in their supporting industries, which is good for people to go back to villages and establish businesses.

Third, the trend also adapts to the structural change in labor.

Xin Changxing:

Migrant workers of the first generation have started to return to their hometowns, and most of them are my age, born in the 1960s and now they are in their 50s. Currently, millions of migrant workers from the countryside are returning to their hometowns annually. Meanwhile, farmers of a younger generation are going to towns, getting jobs in the cities, and regions, a new trend in achieving relocated employment.

Since 2012, I have been tracking the relevant figures. First in the provinces such as Henan and Sichuan, the relocated employment realized within the provinces themselves outnumbered those realized outside the provinces. Such portions have been increasing in recent years, and last year several provinces witnessed more than 60 percent of localized employment at the same place or in the neighborhood.

Returning to hometowns for entrepreneurship, indeed, better satisfies the wishes of the migrant workers to realize employment back home. Such an approach also better taps the full potential of the abundant manpower in the rural areas. As for labor forces in the countryside at my age, for example, it is unlikely they will go back to towns to work on the production chains. Even if they get back to the cities, they would only get trivial jobs. If they get employed at businesses in or near their hometowns, they could settle there. Job opportunities could be created to utilize the labor force who are older, having no plans to leave their hometowns. As stated above, starting entrepreneurship back in the hometown is a trend of huge potential.

Xin Changxing:

I believe there are multiple positive results and benefits. First, it could help the labor force to realize that dream of starting a business and getting rich. Second, it helps boost employment. Third, it helps promote development within the local county area and facilitate the urbanization process there. Fourth, it helps increase the incomes of the farmers and accelerate the process of achieving a moderately prosperous society in a balanced way.

Xin Changxing:

On the policies part, this document fundamentally sticks to the principle of ensuring both the inclusive nature and supportive nature. It makes sure that those who go back to hometowns can enjoy all the policies of inclusiveness, and it is a benefit as it combines various policies to boost their employment. The guidelines introduce a range of policies to lower the threshold for starting entrepreneurship in hometown, offer targeted tax cuts and all-out reduction of administrative fees, enforce financial support and enhance financing services. As for our next steps, we were working along with relevant departments to further boost implementation of such policies. The document itself also maps out an action plan, stating seven detailed tasks; beefing up services at ground-level administration; integrally develop entrepreneurship parks for migrant workers and develop rural resources to support entrepreneurship; perfect infrastructure for entrepreneurship; develop e-commerce and initiate e-commerce campaigns in the villages; implement action plans to exercise training for entrepreneurship and adapt entrepreneurship back in hometowns to the country’s plan to boost mass innovation. Implementing efforts are expected for realizing the seven detailed tasks.

Hu Kaihong (host):

That’s the end of today’s policy briefing. Thanks to the two ministers! Thanks to everyone!