E-commerce trade between China and other nations is growing rapidly.
The value of goods passing through industrial parks in 13 Chinese cities designed to facilitate cross-border e-commerce, including imports and exports, totaled 100 billion yuan ($15 billion) in the first half of 2017, according to data released this week by China’s Ministry of Commerce. That’s more than double the volume from the same period last year. In contrast, the total value of China’ imports and exports grew 19.6% to 13.141 trillion yuan ($1.97 trillion) in the first six months of the year.
The ministry didn’t specify the value of exports versus imports. However, the agency operating Hangzhou’s cross-border e-commerce industrial park has said that imports accounted for about 40% of the transactions it handled in 2016.
Frequently imported items include food, beverages and cigarettes, while electronics and machine tools are top-growing export categories in 2017. China’s major trading partners include the U.S., U.K., Australia, France and Italy, says the ministry.
Since opening Shanghai Free-Trade Zone in 2013, China has operated cross-border e-commerce industrial parks in 13 cities in a test of new policies designed to expedite customs clearance of items consumers buy from foreign websites. Those cities have built warehouses where such foreign retailers as Amazon.com Inc., No. 1 in the Internet Retailer Top 1000 ranking of North America’s leading online retailers, and Costco Wholesale Corp. (No. 8), store merchandise and then send items as they are ordered through customs under the relaxed cross-border e-commerce rules.
The new policies reduced tariffs by 10% to 30% and simplified applications for sales permits to make it easier for Chinese consumers to purchase products from overseas retail websites.
Besides those 13 cities, many other cities have set up similar e-commerce parks with a similar goal of expediting international shipping and reducing handling costs. Those industrial parks typically have offices of government agencies, payment organizations and shipping operators in an effort to streamline operations for cross-border e-commerce businesses, making customs clearance, international payment and shipping much faster than before.
The Ministry of Commerce estimates that the value of cross-border e-commerce, including the purchases from consumers and companies, accounted for 27% of total trade in 2016 and says that number could surpass 37% in 2020. Business-to-business transactions made up nearly 90% of China’s cross-border e-commerce transactions in 2015.
On the consumer side, China’s growing middle class increasingly seeks premium products from foreign websites. The number of Chinese online shoppers who purchased from overseas websites topped 42 million in 2016, an increase of 82.6% from a year earlier, according to a just-released report by research company China E-commerce Research Center.
The report also says most cross-border online shoppers are young consumers, many about 30 years old, and 62.6% are male.
Besides buying directly from overseas websites, Chinese consumers also purchase foreign products from Chinese websites specifically designed to sell goods from abroad. Some leading examples include Kaola.com, Tmall.hk, Global.vip.com, JD.hk and Jumeiglobal.com, according to the report.