Tang Min: Push Forward EWTO Promote Cross-border E-commerce Rules Reform
Time: 2016-01-29 13:37   Views:1892
Tang Min: Push Forward EWTO Promote Cross-border E-commerce Rules Reform

Tang Min Counsellor from Counsellors’ Office of the State Council

Cross-border e-commerce is of great significance to China’s economy

Cross-border e-commerce is of great significance to China’s economic reform and opening-up under the new stage. In the short term, China’s economy needs the imports and exports via cross-border e-commerce to promote sustained economic growth. In 2015, China’s import and export have seen a negative growth for the first time in decades with a rather big decline. Because of global economic recession, currently the import and export industry is in a very difficult situation. But even under such difficult circumstances, the field of cross-border e-commerce has still maintained rapid growth.

In 2014, China’s import and export transaction size of cross-border e-commerce is RMB 4.2 trillion, with a growth rate at 35.5%, which accounts for 15.9% of the total volume of import and export trade. That is to say, the trading volume of cross-border e-commerce has surpassed the total import and export volume of 2002 in China. It’s estimated that China’s cross-border e-commerce import and export growth will still be over 20% in 2015.

A few days ago, I went to Dongguan, Guangdong. The local government officials told me that only Dongguan alone, the export via small parcel of Postal Logistics has reached 12 million pieces. All these small postal parcels may not be calculated into the foreign trade statistics. Only Dongguan alone has tens of millions of small parcels exported, which do not include other logistics companies. It’s thus obvious that even in such a global economic depression, cross-border e-commerce, to some extent, can expand the market and make up for the demand insufficiency of traditional trade, thus promoting the growth of small enterprises, import and export enterprises. Therefore in a short term, cross-border e-commerce is of great significance to China’s economy.

In the long term, cross-border e-commerce is of even greater significance to China’s economy since China is now in transition period. If we follow traditional transformation models, China’s economy needs to transfer a lot of labor-intensive industries such as apparel industry and shoemaking industry, etc. to Vietnam, India and Cambodia. However, for our industries to be upgraded, we should make something innovative. But in terms of this model, it’s easier said than done. The essence of this transformation is to compete with developed countries and to grab a place in their markets. For many enterprises, the upgrading and transformation is far from easy. Many entrepreneurs said that if we don’t transform, we’re just waiting to die, but if we don’t transform well, we’re courting death.

However, now there is a new opportunity and new transformation model. The world is now undergoing a transformation towards the third Industrial Revolution, towards individual consumption, personalized production and customized society. At the stage of customized society, consumption, production, business and trade patterns will all undergo great changes. For example, in the era of customization, the well-known shopping mall business model may become weaker, since only a small amount of items are displayed in shopping malls, which cannot satisfy the needs of various people. At that time, the manufacturer can directly make products for individual customers, and the e-commerce directly serving customers is the best business model. As a matter of fact, some manufacturers in Jiangsu and Zhejiang area have already undergone such transformation. After taking a few pictures of yourself, the manufacturer can produce the clothes that fit you. Fundamental changes may take place in import and export, and cross-border e-commerce will become the major import and export model.

Maybe there is no need for China’s manufacturing industry, such as shoemaking industry and apparel industry, to be all transferred to foreign countries. The manufacturing industry can carry out flexible production and transform itself towards customized and small-batch production, so as to provide direct services to overseas customers or to manufacture specially-needed products for local small stores in a customized way. In that case, the cross-border e-commerce may help a large number of Chinese enterprises to transform towards new model. This phenomenon has begun to sprout, and many enterprises have already started to transform towards it. If the cross-border e-commerce can have faster and better development, then it can be helpful to China’s economic transformation. In that sense, cross-border e-commerce is of greater significance to China compared to other countries.

Nevertheless, to promote the faster and better development of cross-border e-commerce, there are still a lot of things to be done and a lot of policies to be modified. Our current foreign trade formulations are still designed for traditional trade modes. Customs clearance, inspection and quarantine, foreign exchange control and so on still have so many obstacles for cross-border e-commerce, which cover the obstacles caused by China’s own rules and regulations and the ones from foreign countries. If we want to reform, then we shall reform on a large scale and in an all-round way. Therefore, I’m in full favor of the EWTO thoughts put forward by Mr. Ma Yun. If we want to promote cross-border e-commerce on an even larger scale, then we shall make big reforms on government regulation concerning customs, trade, transportation and logistics, etc. These reforms need coordination from various governments. It also needs such global mechanism as WTO to study, discuss and formulate the new rules suitable for cross-border e-commerce development.

eWTO mechanism seeks a breakthrough for WTO negotiations in a deadlock

Therefore, a new mechanism should be put forward, that is eWTO mechanism. This mechanism is not a temporary expedient, nor a short-term measure, but is designed to help human beings to better enter the third Industrial Revolution, and seek a breakthrough for stagnant world trade and WTO negotiations in a deadlock.

eWTO is a multilateral mechanism, which requires all countries to discuss this issue together. Of course, it doesn’t need over 100 countries all around the world to negotiate together in the very beginning. It can first be discussed by several interested countries. And the think tanks of different countries can first conduct a cooperative research so as to come up with one or several plans. Or it can be first discussed and experimented by bilateral governments or governments of several countries, and then to slowly promote other countries to develop towards this direction. China has already signed free trade agreements with South Korea and Australia, etc., thus it would be possible to consider countries with free trade agreements to develop more open cross-border e-commerce rules first, with exploratory and experimental work, they will be benefited.

(This text is a revised version of Tang Min’s speech at 2016 Think Tank Summit on New Economy)

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