China plans to improve its e-commerce policy by enabling consumers to spend 30 percent more on tariff-free goods coming from places outside of the country to boost its imports while trade conflict between the U.S. continuous. After the meeting of the State Council, the Chinese government announced that starting January 1, the annual quota on cross-border e-commerce purchases for individual buyers will increase from 20,000 to 26,000 yuan and the tax-free limit on single transactions will also increase by 150 percent.
Recently, Chinese President Xi Jinping assured the public that China will boost the country's import. During his speech at the China International Import Expo, he noted that China will lower tariff levels, improve its customs clearance processes, decrease the cost of importing goods, and accelerate the growth of the country's cross-border e-commerce.
Chinese customs reported that the 1.3 billion Chinese consumers are drawn to foreign products available on overseas websites. The reports said that the value of e-commerce transactions doubled to 56.59 billion yuan compared to last year's. Chinese Premier Li Keqiang said that increased quota support opening up and stimulate consumption.
China also plans to add 63 items to the list of products that are covered by the tariff-free scheme. The list is composed of a variety of items, from cosmetics to baby milk formula, that has mass demand which was first compiled in 2016. The goods are exempted from the usual trading policies making them easier to purchase.
Currently, 15 Chinese cities are implementing the rules and it is expected that 7 additional cities will follow in 2019. Beijing, Nanjing, Wuhan, and Xiamen are among the seven new additions that will impose the rule.
China also announced that they are planning to improve their export tax rebate policy in 2019 to inspire its vendors to sell their products via cross-border e-commerce platforms. The change in China's policies shows that popularity of its online shopping industry. Popular e-commerce platforms like Alibaba, JD.com, and NetEase sees great opportunity in the change of policies. China's huge market also attracts international online-selling platforms like the Amazon. The e-commerce giant introduced its Prime Day event to China in 2017 and its Chinese website promotes an annual Black Friday event.
China's e-commerce represents a portion of its 36trillion yuan retail sales market. According to the report of the National Bureau of Statistics, the country's latest move to increase consumer spending is timely to its slowing growth.
