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Cabinet backing for e-commerce exports

Xu Wei
Updated: April 14, 2020 07:23    China Daily

The State Council pinpointed cross-border e-commerce as a new pillar for China's foreign trade sector as it rolled out measures to establish 46 new pilot zones to counter the blow dealt to world trade by novel coronavirus pneumonia.

The Cabinet said after its executive meeting on April 7 that the unique edge of cross-border e-commerce must be honed as traditional foreign trade sectors are hit hard by the pandemic.

The 46 new cross-border e-commerce pilot zones will be in addition to 59 existing ones. Businesses in such zones enjoy preferential policies such as exemptions on value-added and excise taxes on retail exports.

China is also weighing measures to include cities hosting the zones in a pilot program focusing on retail e-commerce imports, and to support businesses that build shared overseas warehouses, the Cabinet said.

The executive meeting was the fourth in a month at which the Cabinet discussed measures to stabilize foreign trade.

The World Trade Organization said in a report published on April 8 that global trade is expected to fall between 13 percent and 32 percent this year as the pandemic disrupts normal economic activity and life around the world.

Over 120 countries and regions have imposed restrictions on cargo and passenger flows, according to the Ministry of Commerce.

The downturn in the global trade and investment caused by the pandemic is set to have a huge impact on China's industry and supply chains, Premier Li Keqiang said at the Cabinet meeting.

"More importantly, the foreign trade sector, directly or indirectly, accounted for the employment of 180 million people," he said. "A downturn in foreign trade will almost certainly hit the job market hard."

Retail sales by China's cross-border e-commerce sector were worth 186.2 billion yuan ($26.4 billion) last year, up 38.3 percent year-on-year, according to the General Administration of Customs.

Ren Hongbin, an assistant minister at the Ministry of Commerce, told a news briefing on April 9 that private businesses accounted for 89.9 percent of the country's e-commerce exports, with over 1,200 overseas warehouses having been established by Chinese businesses.

Over 76 percent of China's key foreign trade businesses have resumed at least 70 percent of their production, Ren said.

However, sluggish international demand meant many were faced with challenges such as canceled or delayed orders and hurdles in sea and air logistics.

The ministry will encourage more traditional businesses to go online and further emphasize the role of international platforms in spurring growth of the sector, he said.

Ren said the authorities will also offer incentives to domestic platforms to encourage them to go global and support the high-quality development of overseas warehouses.

The Cabinet meeting also decided that this year's China Import and Export Fair will be hosted online from mid-to late June. It will offer round-the-clock services for online product promotion, matchmaking, and business negotiations.

The meeting also underscored the need to boost the capacity of China-Europe freight train services, including steps to improve the transfer of cargoes and to pick up services previously operated by sea and air transport — an important measure to stabilize international supply chains.

Pan Helin, acting dean of the Digital Economy Institute at Zhongnan University of Economics and Law in Hunan province, said the pandemic posed a major challenge to China's traditional trade sector but it would also spawn major opportunities for transformational growth among cross-border e-commerce businesses.

However, he warned that e-commerce businesses would also be hit by the crippling of global supply chains, and stronger support measures were needed to protect them from the shock caused by the pandemic.

"The pandemic might usher in a reshuffle of businesses in the sector in which only competitive businesses and resources will survive," he said. "It is also important for small and medium-sized businesses to adapt to the changes in the market, or they will be overwhelmed by the tide."