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Cross-border e-commerce enhances China's resilience in foreign trade

Liu Chunsheng

 , Updated 19:53, 23-Jan-2024

Editor's note: Liu Chunsheng is an associate professor at the Beijing-based Central University of Finance and Economics. The article reflects the author's opinions and not necessarily the views of CGTN.

In recent years, with the continuous development and changes in the global economy, China's foreign trade faces new challenges and opportunities. In this context, cross-border e-commerce, as an innovative trade model, is rapidly gaining prominence, injecting new vitality into China's foreign trade and enhancing its resilience.

According to data from China's Ministry of Commerce, over the past five years, the scale of China's cross-border e-commerce has grown nearly 10 times. Policy support, expedited logistics clearance and accelerated expansion of e-commerce platforms have propelled cross-border e-commerce to advance rapidly and helped it emerge as a new highlight in the growth of foreign trade.

Since 2023, e-commerce platforms such as Alibaba, PDD, JD.com, ByteDance and others have continuously intensified their efforts in the cross-border e-commerce business. Alibaba has launched the "Business Assistant," an AI product for foreign trade. PDD's subsidiary, Temu, introduced a "fully managed" model, and JD Logistics has accelerated its layout in the international supply chain. 

These e-commerce giants are constantly opening up new opportunities for the development of cross-border e-commerce, simultaneously becoming a "new channel" for many small and medium-sized enterprises to expedite their international expansion.

The development of cross-border e-commerce is inseparable from institutional innovation. In 2015, the first batch of comprehensive pilot zones for cross-border e-commerce was established in Hangzhou. The following year, it expanded to 12 cities, including Tianjin, Shanghai and Chongqing. In the subsequent years, there were five more expansions nationwide, reflecting China's determination to further expand reform and opening up. As of now, the number of China's comprehensive pilot zones for cross-border e-commerce have expanded to 165.

The development of comprehensive pilot zones for cross-border e-commerce has significantly promoted the industry's growth, greatly increased cross-border e-commerce transaction volume, facilitated the registration of cross-border e-commerce enterprises and contributed to the improvement of supporting facilities. 

This includes optimizing payment, customs clearance, logistics and warehousing, simplifying transaction processes and reducing transaction costs. This not only stimulates the development of small and medium-sized cross-border enterprises but also attracts more businesses and talent to enter the cross-border e-commerce market.

Furthermore, it has spurred innovation in cross-border e-commerce models. Examples include Hangzhou's "Six Systems, Two Platforms" model and the "List Release, Aggregate Declaration" customs clearance model. Shenzhen introduced the "Bonded + Physical New Retail" model in 2017, while Jiangsu proposed the "Cross-border E-commerce + New Retail" and "Online Exhibition + Cross-border E-commerce" models.

These initiatives aim to drive the industry forward by combining various systems and platforms, facilitating customs procedures and exploring new modes of cross-border e-commerce.

The rise of cross-border e-commerce is closely tied to the rapid development of digital technologies. The widespread application of the internet, big data, artificial intelligence and other technologies enables cross-border e-commerce to efficiently connect international trade chains, reduce trade costs and improve trade efficiency. Through online platforms, small and micro-enterprises in China can more conveniently enter international markets, expand trade partners and optimize global resource allocation.

On one end, cross-border e-commerce rejuvenates traditional industries in China. With the coordination of the global supply chain, China's manufacturing industry can respond more flexibly to market demands, achieving an upgrade in industrial structure. 

On the other end, as cross-border e-commerce expands, it greatly stimulates China's services trade. Not only can goods be traded internationally through e-commerce platforms, but the service industry can also provide global services through online means, winning more international market share for China.

In terms of trade models, cross-border e-commerce not only provides traditional B2B (business to business) and B2C (business to consumer) models but continuously innovates by introducing new models such as C2M (consumer to manufacturer), social commerce and so on, better meeting the needs of different levels and market segments. Through social commerce, Chinese enterprises can interact more directly with consumers on social platforms, enhancing product awareness and reputation, thereby driving sales growth.

Furthermore, the development of cross-border e-commerce contributes to building a more robust foreign trade system for China. In the face of increased uncertainty in the global economy, diversified trade channels make China more resilient when dealing with external shocks. By establishing e-commerce trade partnerships with different countries and regions, China can better respond to changes in international trade policies, reducing the risks of trade friction.

However, it is important to note that with the rapid development of cross-border e-commerce, related regulations and standards need to be strengthened. Strengthening supervision of e-commerce platforms, regulating market order and protecting consumer rights will be crucial for future development. Additionally, enhancing the formulation and coordination of international trade rules to promote the liberalization and facilitation of global trade is also a key direction for the development of cross-border e-commerce in China.

In summary, cross-border e-commerce, as an innovative trade model, injects new momentum into the enhancement of China's foreign trade. Through the application of digital technology, China demonstrates greater flexibility and resilience in global trade. 

In the future, with continuous technological development and changes in the trade environment, China's cross-border e-commerce is expected to continue innovating, propelling China's foreign trade towards a more stable and sustainable development path.

(Cover via CFP)

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