The State Council has approved another (4th) batch of cross border e-commerce pilot zones in 24 cities across 19 provinces. The new zones were announced in a circular released on 24 December, and are in addition to already established 35 pilot zones.

Related provincial-level governments were given the task to implement the new pilot zones whilst ensuring streamlined administration, exempting value-added and consumption taxes, and further stimulating the development of trade environment. Each pilot zone will take into consideration local features and advantages.

The pilot zones are coordinated, evaluated, and supervised by the Ministry of Commerce, with the State Council departments responsible for strengthening the guidance and policy support.

Accelerating international trade

The first such national-level pilot zone was established in Hangzhou in March 2015. Following this, many innovative measures have been put into trial application, with majority of these being introduced for the first time in the country. Between 2015 and 2018, the government approved further creation of additional zones in batches of 12, and 22.

The latest announcement calls for implementation of 24 more zones sending a very positive message to the international business community. "This is a clear sign (that) the Chinese government is actively delivering on its promise to continue opening up to international trade, accelerating the implementation of the new policies, and creating a level playing field for both domestic and foreign companies", said Anita Zhang, ACOLINK’s CEO.

The new 24 zones will soon (starting from 1st quarter 2020) be implemented in the following cities: Chifeng (赤峰市), Foshan (佛山市), Fushun (抚顺市), Fuzhou (福州市), Ganzhou (赣州市), Haidong (海东市), Huangshi (黄石市), Hunchun (珲春市), Jinan (济南市), Luoyang (洛阳市), Luzhou (泸州市), Nantong (南通市), Quanzhou (泉州市), Shantou (汕头市), Shaoxing (绍兴市), Shijiazhuang (石家庄市), Suifenhe (绥芬河市), Taiyuan (太原市), Wenzhou (温州市), Wuhu (芜湖市), Xuzhou (徐州市), Yantai (烟台市), Yinchuan (银川市), Yueyang (岳阳市).

59 Cross Border E-commerce Pilot Zones in 5 years

The new batch adds to the package of a total of 59 cross-border e-commerce pilot zones across China; adding to the growing list of cities and provinces (previous list of 35 zones) that can now leverage their individual unique position and upgrade the role they play in cross-border e-commerce trade.

The first two batches were established to fulfil the ongoing consumption upgrade, with the purpose of testing this new model and giving the first few selected pilot cities an opportunity to learn, adjust, and improve their business and regulatory environment.

Demographically, the 2nd and 3rd batch was concentrating on first- and second-tier cities covering China’s central (Zhengzhou, Hefei), western (Chengdu, Chongqing), northern (Tianjin, Dalian, Qingdao), and north-eastern regions (Shenyang, Changchun, and Harbin). Many of those cities are provincial capitals.

The latest list demonstrates that the pilot zones are now being expanded into many Tier 3 and Tier 4 cities.

In the span of five years, China have been rapidly developing this mode of international trade that allows both importers and exporters seize the opportunities that cross-border e-commerce model creates.

What products are eligible

There are restrictions on the type of commodities that are allowed to enter these zones.

When the first national-level zone (Hangzhou Cross-Border E-Commerce Pilot Zone) was implemented, the local authorities used an innovative “negative list” approach in managing the scope of imported goods entering the zone

This approach allowed a degree of flexibility for entities to test these measures in practice. In Q2 2016, the Ministry of Finance announced the first “positive list” which took effect from 8 April 2016.

Since then imports of eligible commodities are regulated by the positive list that is being periodically updated by the Ministry. Furthermore, different zones have focus on specific classes of goods taking into consideration their local circumstances and advantages.