Cross-border e-commerce a trade priority

Customs pledges to maintain accommodating approach to sector

When Hangzhou Kaite Electrical Appliance, a producer of power strips, sockets and plugs, launched sales on online retail giant Amazon in the United States two years ago it was looking to boost its business.

Despite recent trade frictions, those hopes have been borne out, with cross-border e-commerce sales through Amazon now raking in $10,000 a day on average, company vice-president Ma Gaodong said.

The US market still accounted for 70 percent of the company's exports in the first half of this year, down from at least 90 percent two years ago.

"We expect the sales volume (through cross-border e-commerce) to double this year," said Ma, who is in charge of sales at Kaite, which is based in Jiande county, Zhejiang province.

The State Council, China's Cabinet, has made cross-border e-commerce a priority in its efforts to stabilize foreign trade.

At an executive meeting on Wednesday, it again called for efforts to accelerate the growth of the new business model. A week earlier it said more cities would be encouraged to launch cross-border e-commerce pilot zones, on top of the 35 existing zones nationwide.

The government has also decided to exempt retail goods exported from the pilot zones from value-added tax and to simplify the verification and collection of corporate income tax.

During an inspection trip to Zhejiang province last month, Premier Li Keqiang called for greater policy support and innovations in government oversight to shore up the growth of crossborder e-commerce.

He underlined the role of crossborder e-commerce in enabling more businesses to sell products overseas, saying the business model is a major trend for the future development of international trade.

China's foreign trade in the first half of the year increased by 3.9 percent year-on-year to 14.67 trillion yuan ($2.16 trillion), with exports growing by 6.1 percent year-on-year, the General Administration of Customs said on Friday. Imports rose 1.4 percent during the same period, while trade with the US was down by 9 percent.

Customs administration spokesman Li Kuiwen told a news conference on Friday that the country is facing a series of challenges in achieving stable foreign trade growth.

However, he said most Chinese businesses remain confident about their prospects, and the country has sufficient policy tools and new measures to further optimize its foreign trade structure.

The customs administration will continue to adopt a prudent and accommodating approach in its oversight of the cross-border e-commerce sector, Li added.

Statistics from the administration show that the total volume of imports and exports from crossborder e-commerce reached 134.7 billion yuan last year, up 50 percent year-on-year.

Exports were up by 67 percent, and imports increased by 39.8 percent. The sector maintained doubled-digit growth in the first half of this year, according to the Ministry of Commerce.

Ma said the business model could give rise to a large number of startups.

"It frees us from the constraints of retailing chains overseas and enables us to sell our products directly to our customers," he said. "We can also pitch our new products more quickly."

Meanwhile, the streamlining of retailing procedures also gives the company more say in the pricing of products, he said.

Despite the higher tariffs on exports to the US, Ma said Kaite can still fine tune the price of its products to maintain an edge in the market.

The State Council meeting on Wednesday also came up with measures to make it more convenient to use yuan in cross-border settlement, which Ma said would protect businesses from fluctuating exchange rates.

Bai Ming, a researcher at the Chinese Academy of International Trade and Cooperation who focuses on the international market and trade policies, said the State Council has prioritized support to businesses in its latest measures to boost foreign trade.

"The key is to help businesses build their core competitiveness in the international market and to stimulate their vitality through the policies," he said.