G20 suggested to focus on SME access to global trade

Shi Dongwei, vice-president of Alibaba Group Holding Ltd, has urged that more global trading information be made available online to Chinese small- and medium-sized enterprises, as they strive to expand overseas.

Speaking at the G20 Trade and Investment Working Group meeting in Nanjing, Jiangsu province, on Monday, Shi said 60 percent of the SMEs using Alibaba's trading platforms still had limited access to information on other global markets.

He said Alibaba's e-commerce platform Taobao has been used by millions of small business owners to trade their services and products online, and as such has made a series of proposals to the working group meeting with a view to increasing opportunities for SMEs.

"We suggest a capability-building mechanism to allow SMEs to reap more benefits in the 'global value chain', such as knowing what products are needed in which parts of the world, or how to increase the appeal of their products in the global market," said Shi.

The company also supports the creation of a new Internet-based trading mechanism for SMEs and young entrepreneurs which could be a complementary mechanism to the World Trade Organization.

"The WTO is a product-based trading mechanism, which offers a lot of opportunities for large companies.

"Now the Internet is generating so many opportunities for SMEs to compete, a new mechanism needs to be formulated to lay down the ground rules," said Shi, adding the e-commerce giant also has proposals for facilitating financing and policymaking for SMEs.

Wang Shouwen, vice-minister of commerce, said building global value chain capacity is top of the agenda at the G20 working group meeting.

With that firmly in mind, Wang said seminars are due to be held and case studies presented to help create a collaboration platform for companies in developing countries to benefit from the global value chain.

Zhou Mi, a researcher at the Chinese Academy of International Trade and Economic Cooperation, said G20 member countries, as the world's economic power houses, have to take the lead in tackling the current economic headwinds.

"The stakeholders vary greatly in terms of strength and growth.

"The working group has particular emphasis on developing countries and SMEs within the global value chain. The G20's efforts are being directed at narrowing the gap between the development of great power and disadvantageous groups."

Zhou noted that incorporation into the global value chain takes time, and that in turn depends on individual national and corporate resources and advantages.

"For instance, it has taken China decades to gradually move up the global value chain. It's a process that cannot be rushed," said Zhou.

It is hoped this week's meeting will result in a non-binding global strategy for trade and investment that discourages any new protectionism measures and offers guiding principles on policies.

"Bilateral and multilateral investment agreements are plentiful, while global investment guidance is lacking," said Zhang Shaogang, director of the international department of the Ministry of Commerce.

"The strategies being created are going to provide references for countries when they are formulating their own investment policies."

James Zhan, senior director of investment and enterprise of the United Nations Conference on Trade and Development, said global foreign direct investment could decline further in 2016, before recovering a little in 2017 and 2018. But it will still remain far lower than the $2.1 trillion pre-crisis level in 2007.

"In the bumpy road to recovery, the G20's initiative to form a set of global investment guidelines will provide a systemic approach to policymaking on a lot of detailed international transactions, such as contract manufacturing, contract farming, licensing and franchising," said Zhan.