China’s State Council announces additional changes to the current cross-border e-commerce retail import policies that will further reduce barrier to entry for exporters; offers confidence boost to first-time exporters.
Premier Li, who chaired the State Council’s executive meeting on November 21, announced that China will further expand and improve the existing policies on retail imports via cross-border e-commerce, with effect from January 1, 2019. These measures, in effect, will further reduce the barrier to entry for first-time exporters who want to embrace the increasingly important route to market.
Our policy is to give cross-border e-commerce enterprises stable expectations and widen opening-up and unlock the potential of consumption, promoting steady growth of foreign trade imports and exportsPremier Li Keqiang
Boosting cross-border e-commerce will keep on contributing to China’s high-level opening-up, while promoting steady growth in foreign trade, driving consumption and creating jobs.
According to the General Administration of China Customs (GACC), China’s retail imports value through cross-border e-commerce was ¥56.6 billion RMB, up 75.5% year-on-year in 2017. Between January and October 2018, retail imports through cross-border e-commerce increased 53.7% year-on-year, reaching ¥67.2 billion RMB.
“Our policy is to give cross-border e-commerce enterprises stable expectations and widen opening-up and unlock the potential of consumption, promoting steady growth of foreign trade imports and exports” Premier Li said, as he continued to promote the development of new formats such as cross-border e-commerce within the government for four consecutive years.
- No requirements of licensing, registration or record-filing for first-time imports will apply to the retail imports through cross-border e-commerce platforms. Instead, these goods will be treated under the more relaxed rules for imports of goods for personal use.
- For consumers, the limit on retail goods eligible for these preferential policies will be raised from ¥2,000 ($290 USD) to ¥5,000 ($720) per transaction.
- The annual limit will increase from ¥20,000 ($2880) to ¥26,000 ($3740) per person per year. This quota will be further adjusted in the coming years as needed, in line with the increase of per capita income.
- Implementation of the policy will be extended from the 15 cities, such as Hangzhou, to another 22 cities such as Beijing, Shenyang, Nanjing, Wuhan, Xi’an, Xiamen, which are newly established comprehensive cross-border e-commerce pilot zones.
- Goods included in the cross-border e-commerce retail imports list (positive list) have so far enjoyed zero tariffs within a set quota and had their import VAT and consumer tax collected at 70% of the statutory taxable amount. Those preferential policies will be extended to another 63 tax categories of high-demand goods.
Together with the new e-commerce law that was passed by China’s legislative body on August 31 (ACOLINK’s analysis will follow soon), this is a very positive development that will further reduce the barrier to entry for the prospective exporters.
The new e-commerce law focuses on consumers’ rights and addresses the two main areas: protecting the legal rights of all parties, and maintaining the market order, and will take effect from January 1, 2019. ACOLINK will be covering the relevant changes that these measures introduce, together with an analysis of how foreign businesses can leverage them to drive their international sales. As part of ACOLINK’s #LetsDoChina initiative, we will be running a series of workshops in Q1 2019, where we will look at the changes, and example business cases, in more detail.