National Business Daily:

A recent standing committee meeting of the State Council has decided to set up 46 comprehensive cross-border e-commerce test zones. So far, the number has reached 105 in China. What's the purpose of setting such zones？What policy benefits will they bring to enterprises? Thank you.

Ren Hongbin:

Thanks for your questions. As I introduced just now, it has been five years since the first test zone was established in Hangzhou in light of the decision by the CPC Central Committee and the State Council in March 2015. The test zone was set up primarily for exploring and establishing a policy framework for the development of cross-border e-commerce through innovations in institutions, management and services. Simply put, the zone is a highland of innovation rather than a morass of policy. In the past five years, the main development of the comprehensive test zones still focuses on B2B, with exports and B2B modes accounting for 70% of the cross-border e-commerce transactions in the zones. The emphasis is put on implementation and experimentation in technical standards, business processes, supervision modes and information construction. Since the comprehensive test zone in Hangzhou began, a total of six systems and two platforms have been established. The six systems refer to information sharing, financial services, intelligent logistics, e-commerce integrity, statistics monitoring and risk prevention and control. The two platforms include the online comprehensive service platform and the offline industrial parks. This has produced 36 mature practices of experience in 12 aspects that have been replicated and promoted nationwide.

To promote the development of cross-border e-commerce, the State Council has issued a series of policies and measures to support relevant enterprises, mainly in three aspects:

First, in terms of taxation, for e-commerce export enterprises in the comprehensive pilot zones, their goods that have not obtained valid purchase certificates will be exempted from value-added tax and consumption tax in accordance with the regulations. At the same time, we implement the measures to verify and collect corporate income tax at a minimum tax rate of 4%, addressing the industry's concern about the excessive tax burden due to the missing of purchase invoices.

Second, in terms of supervision, if conditions permit, cities where a comprehensive pilot zone is located will be included in the pilot scope of cross-border e-commerce retail imports, and the bonded stocking business can be carried out there. The imported goods will be supervised as items for personal use, and preferential tax rates are applied within the transaction limit.

Third, in terms of facilitation, convenient measures have been carried out, such as applying "simplified classification" and "checklist examination and release," increasing the single transaction limit for cross-border foreign exchange payments by payment institutions, simplifying the income and expenditure procedures for small and micro cross-border e-commerce enterprises' trade in goods, and preferentially adding international mail exchange stations.

Ren Hongbin:

In the past five years, cross-border e-commerce has achieved positive results, mainly demonstrating the following three characteristics:

First, it has become a new engine for the high-quality development of trade. Private enterprises have become the major force of exports, and their proportion of export has risen to 89.9%. At the same time, online brand building has also been actively promoted. At present, enterprises in the comprehensive cross-border e-commerce pilot zones have built up more than 3,000 brands.

Second, it has become a new platform for innovation and start-up entrepreneurship. The comprehensive pilot zones have created an innovation and start-up atmosphere through incubation base platforms.

Third, it has become a new channel for China's opening-up. Overseas warehouses have developed rapidly. Enterprises in various comprehensive pilot zones have built more than 1,200 overseas warehouses, with service covering the whole world.

Next, the Ministry of Commerce will work with relevant departments in the following five aspects:

The first is to encourage traditional enterprises to utilize online means. Cross-border e-commerce businesses - through various technological means and business models, such as intelligent promotion and information publicity - will efficiently connect the supply with the demand, quickly cultivate their own brands, promote the export of high-quality products and empower traditional foreign trade and manufacturing enterprises. In the next step, we will continue to guide the comprehensive pilot zones in building cross-border e-commerce offline parks to achieve industrial agglomeration, main enterprise cluster and functional integration.

The second is to give full play to the role of international platforms. At present, overseas platforms occupy the mainstream market of cross-border e-commerce. These international platforms are well-known, have a wide coverage, and enjoy high market shares. They are the main channels for our enterprises to make exports. In the next step, we will continue to support various foreign trade enterprises and manufacturing enterprises in cooperating with international e-commerce platforms to achieve common development.

The third is to support domestic cross-border e-commerce platforms in going global. In recent years, domestic e-commerce platforms have begun to expand overseas markets through investments, mergers and acquisitions, and self-built platforms. They have enjoyed a certain reputation in emerging markets, including Russia, Southeast Asia, the Middle East, and Africa. In the next step, we will guide the comprehensive pilot zones to improve public services and cultivate and develop China's own cross-border e-commerce platforms.

The fourth is to promote the building of overseas warehouses with high-quality efforts. As an important overseas link for cross-border e-commerce, overseas warehouses are an important support for e-commerce companies to implement localized operations, distribution, services and market expansion in overseas territories. We will encourage enterprises to improve supporting services for overseas warehouses, and we will also provide certain support for them in this aspect.

The fifth is to improve the cross-border e-commerce industry chain and ecosystem. Cross-border e-commerce has grown into a new business form as globalization develops to a certain stage, internet technologies become mature, the international trade business environment is greatly improved, and logistics and other supporting services become well-developed and high-efficient. In the next step, we will continue to guide the comprehensive pilot zones in assembling enterprises of various fields, such as manufacturing, e-commerce platforms, warehouse logistics and financial risk control management, developing service industries in logistics, payment and express delivery, and driving local and peripheral enterprises, as well as upstream and downstream enterprises in the industrial chain to connect online, thereby creating a good environment for the development of cross-border e-commerce. Thank you.