China will set up 46 new integrated pilot zones for cross-border e-commerce, support processing trade with new steps and hold the Canton Fair online to keep foreign trade and investment broadly stable under the outbreak impact, the State Council’s executive meeting chaired Premier Li Keqiang decided on April 7.
The Chinese government attaches great importance to the development of cross-border e-commerce. General Secretary Xi Jinping stressed the imperative to boost foreign trade, and raise the quality of imports and exports while maintaining their steady growth. He also highlighted the importance of accelerating the growth of new business models and new forms of industry, such as cross-border e-commerce. Premier Li Keqiang set out clear-cut requirements for promptly delivering all policies designed to stabilize foreign trade, and taking multi-pronged measures to boost cross-border e-commerce.
Figures from the General Administration of Customs show that retail sales of China’s cross-border e-commerce businesses reached 186.21 billion yuan in 2019.
The meeting noted the massive impact of the escalating outbreak worldwide on global economy, trade and investment. The fast growth of cross-border e-commerce in recent years has become a new highlight in the country’s foreign trade. It is important to leverage the unique strength of cross-border e-commerce when traditional sectors in foreign trade are hit hard in the COVID-19 outbreak, in order to drive foreign trade with new forms of industry in this trying time.
“Tackling the economic impact of the outbreak abroad is a pressing task. With the tight containment measures introduced across countries, foreign trade and investment is persistently going downward,” Premier Li said.
The meeting decided to set up another 46 integrated pilot zones for cross-border e-commerce on top of the 59 existing ones. In addition to applying the practices proven effective in boosting the flow of commerce, firms in these zones will enjoy such support policies as exemption of value added and excise taxes on retail exports, and assessed levy of the corporate income tax.
Consideration will be given to including the host cities of these zones, where conditions allow, into the pilot program on retail imports of cross-border e-commerce. Companies will be supported in joint building and sharing of overseas warehouses.
“We must accelerate the development of cross-border e-commerce and other new models to boost foreign trade and investment. Competent departments must exercise sound quality supervision and ensure unimpeded logistics services,” Premier Li said.
Measures to boost processing trade were also discussed at the meeting. With processing trade taking up one-fourth of the country’s foreign trade, the meeting stressed the need to coordinate domestic and foreign trade and help companies engaged in processing trade tackle any difficulties, to stabilize foreign investment and sustain employment.
“In a globalized world, countries all have a stake in each other’s future. The Chinese economy has been deeply integrated into the world economy. We must promptly analyze the outbreak’s impact on the industrial chains and work out our policy response accordingly. This is vitally important for sustaining employment,” Premier Li said.
It was decided at the meeting that interest on the deferred tax for bonded materials or finished products in processing trade sold domestically will be temporarily waived until the end of this year. The pilot program where processing trade companies may pay duty for their domestic sales as either imported materials or finished goods will be extended to all the integrated bonded zones.
The category of industries where foreign investment is encouraged will be expanded, and the list of prohibited goods in processing trade will be shortened.
“We must take a holistic approach in developing domestic and foreign trade, and swiftly introduce support policies prioritizing domestic sales by processing trade companies,” Premier Li added.
It was also decided that given the serious outbreak situation globally, the 127th China Import and Export Fair (Canton Fair) will be hosted online in mid- to late June.
Companies from home and abroad will be widely invited to exhibit their products online. Powered by advanced information technology, the Fair will provide around-the-clock services for online product promotion, matchmaking and business negotiations. It will be an Internet-enabled foreign trade platform of quality and specialty products where Chinese and foreign businesses may place orders and cut deals without the hassle of travel.