China yesterday issued draft rules to promote construction of overseas warehouses and expand cross-border e-commerce businesses, which have become a vital element of its foreign trade, the Chinese Ministry of Commerce said.
Companies including Shein (希音), PDD Holdings Inc’s (拼多多) Temu and Alibaba Group Holding Ltd’s (阿里巴巴) AliExpress (全球速賣通), which predominantly ship made-in-China products “cross-border” to markets around the world have been rapidly growing in the past few years.
This has opened a new avenue of growth for some firms previously focused on domestic consumption, which remains muted by a macroeconomic slowdown, prolonged property crisis and income insecurity.
Photo: Reuters
The ministry’s announcement, which covered draft rules for inbound cross-border e-commerce, as well as outbound, said it would also seek to improve cross-border data management and optimize the supervision of cross-border exports.
National ministries and government departments would smooth financing channels and help cross-border e-commerce companies to “go global,” the ministry said.
The announcement also comes as an aggressive market grab by low-cost Chinese retailers has delivered bumper earnings for some firms, but has also intensified a bruising price war, exacerbating deflationary fears in the world’s second-largest economy.
“If this situation continues, China may end up with what we call a vicious cycle: lower value added consumption, deflation, low profit rates leading to low wages, which further pushes consumers to downgrade their consumption,” said Shi He-ling (史鶴凌), an economics professor at Monash University in Melbourne.
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