China has designated another 24 cities as cross-border e-commerce pilot zones, in an effort to boost exports amid a slowing economy and the ongoing US-China trade war.
These strategically located zones are designated to facilitate and support cross-border e-commerce.
According to a statement released in late-December by the State Council, the country’s cabinet, the new pilot zones should replicate and promote successful practices adopted by the existing three batches of e-commerce zones and introduce exemptions on value-added tax and consumption tax for retail and exported goods.
These new additions include Hebei province capital Shijiazhuang, Fuzhou in Fujian province, and Yantai in Shandong province, according to the statement.
Prior to the latest batch of cites, China had designated a total of 35 cities as venues for cross-border e-commerce since 2012. The new additions will extend the pilot programme to most of China’s largest cities, including Shanghai, Guangzhou and Shenzhen.
The establishment of free trade zones for e-commerce in Hangzhou and other 13 zones first began in 2015 aimed at boosting the growth of cross-border e-commerce sales. The pilot project now includes some 59 cities in China.
Customs clearance and logistics are a key focus of these reforms, with the aim of creating a standard and shared approach to global markets, thus driving business innovation and industry upgrade.
The aim is to further simplify the whole e-commerce process: Examination and approval, customs clearance integration, information sharing, all resulting in a more expeditious yet effective clearance process.
The pilot zones in well-known cities like Beijing and Shanghai, and in up-and-coming cities like Kunming and Changsha. The zones – aimed at both foreign imports and domestic exports – bring advantages for businesses through geographic location, speciality, and favourable Customs policy.
Hong Kong Air Cargo Industry Services Limited (Hacis) – the value-added logistics arm of Hong Kong Air Cargo Terminals Limited (Hactl) – was an early mover in the pilot free trade zones with its SuperLink China Direct (SLCD) scheduled road feeder services.
Hacis opened its seventh Inland Cargo Depot in mainland China and the first directly targeting e-commerce logistics in 2015 with the Hacis Nansha depot, in southern Guangzhou. It then went on to establish a SLCD link to Zhuhai Free Trade Zone after the Pearl River Delta city was included as a cross-border e-commerce zone. Zhuhai is now connected more directly to Hong Kong via the new Hong Kong-Zhuhai-Macau Bridge (HZMB), a 55-kilometre bridge-tunnel system.
A 2018 government review of the progress so far, has identified the top three performing zones as Shenzhen, Guangzhou and Hangzhou.
In Shenzhen southern China, next to Hong Kong, there are around 100,000 product types traded by 500 businesses. Cross-border e-commerce transactions in this zone reached USD 49 billion in 2017, a 21.8 per cent year-on-year increase.
Shenzhen is an important electronics hub and also home to Sam’s Club supermarket, a member’s only store specialising in imported foods. Shenzhen was the biggest importer of fruit in China in 2017.
Brands in this zone benefit from four import models, including direct purchase import. Shenzhen’s network of bonded warehouses aims to reduce storage and logistics costs for exporters.
Popular product categories are healthcare, baby & mum, and cosmetics.
Guangzhou, also located in southern China not far from Hong Kong, boasts a prime location and well-connected transport system.
Guangzhou’s cross-border e-commerce cluster is located between the Nansha Bonded Port and Baiyun Airport Comprehensive Protection Area. Together, they helped boost Guangzhou’s cross-border e-commerce trade volume by 55.1 per cent, increasing to CNY 22.77 billion (USD 3.27 billion) in 2017 compared to 2016.
Hangzhou was the first pilot zone and located near Shanghai, is also headquarters of Alibaba and major logistics and e-payment systems. It’s fostered the growth of some of the largest e-commerce platforms such as Tmall and Kaola.
This zone’s ’one district thirteen parks’ includes thirteen industrial parks acting as strategic trade channels. As of February 2018, nearly 8,000 foreign trade and manufacturing enterprises engaged in cross-border e-commerce through it.
It features a comprehensive range of products and specialises in clothing, home furnishings, and lighting.
Hangzhou has a five-year plan to develop into an international artificial intelligence and robotics hub. It also has a thriving textiles industry, particularly silk.
Among the latest designated areas are: Beijing, Hohhot, Shenyang Changchun, Harbin, Nanjing, Nanchang, Wuhan, Changsha, Nanning, Haikou, Guiyang, Kunming, Xi’An, Lanzhou, Tangshan, Wuxi, Weihai, Zhuhai, Dongguan, Yiwu and Xiamen.