China’s booming e-commerce sector has become an increasingly global phenomenon, but the expansion into international trade has been dogged by a lack of clarity over what is simply a retail product bought abroad, what is cargo that needs to meet import regulations and how it all should be taxed. A pilot program last year that aimed to keep goods moving without quarantine and inspection but with higher tariffs and removal of preferential regulatory treatment saw a large drop in trade.
This confusion around the ins and outs has been reduced by the release of new policies. The spokesperson for China’s Ministry of Commerce said in a speech that the new regulatory policy on cross-border e-commerce retail transactions would come into force on January 1, 2018, after the interim policy expires. According to State Council approval, the current regulation aims to keep the overall transaction mode stable, and e-traders still could import retail items in line with the regulation of personal goods. In short, retail goods that pass through bonded warehouses will still receive some preferential treatment and will avoid inspection and quarantine.
E-commerce operators will continue to enjoy the current benefits, as Cao Lei, an Internet expert and also director of the China Electronic Commerce Research Center, said, if imported items count as “cargo,” meaning that customs clearance documentation is required, some personal items such as health products and cosmetics will not easily enter free trade zones.
Xiao Feng, a vice-president at e-commerce giant Alibaba, noted that cross-border retail is the first step, and its localization would be the next trend. This is not only China’s policy but a global one, he added.
According to Economic Information Daily, authorities have reviewed current regulatory policy on foreign trade and tried to innovate regulation via pilot schemes, in order to make more reasonable regulations on cross-border e-commerce that fit the development of global trade.