A relief for foreign firms: China to continue present CBEC regulatory framework, more pilot zones introduced

By Tingmin Koe

- Last updated on GMT

China will continue existing cross-border e-commerce regulations, a move lauded by the industry.
China will continue existing cross-border e-commerce regulations, a move lauded by the industry.

Related tags CBEC regulations Tax

China will not implement a new set of cross-border e-commerce (CBEC) regulations in January next year and will instead continue with existing regulations.

The State Council’s executive meeting chaired by Chinese Premier Li Keqiang made the announcement during last Wednesday's (Nov 21) meeting.

The present CBEC regulations were previously slated for revamp​ by the end of this year, and some industry players have expressed concerns​ that stricter policies would be implemented. 

With the extension of existing CBEC import rules, this means that registration or record-filling process, or first import licence approval is not required.

In other words, goods imported will be regarded as personal trade, rather than for commercial distribution.

Speeding up the development of CBEC and other new forms of trade would benefit the further opening up of the economy, drive steady growth of import-export activities and other new engines of growth, and increase consumption and jobs creation, the council highlighted.

Four other points were also made at the council’s meeting.

First, the CBEC import regulations will be extended to 22 more pilot zones, in addition to the present 15 pilot cities.

The additional pilot zones are mainly provincial capitals, including Beijing, Shenyang, Nanjing, Wuhan, Xi’an, and Xiamen.

CBEC trading activities in non-pilot cities should refer to the relevant regulatory authorities for CBEC guidelines.

Second, imported positive list items will continue to enjoy zero tariffs within a set quota and had their import VAT and consumer tax collected at 70% of the statutory taxable amount. Such preferential policies will be extended to another 63 categories of high-demand goods.

The quota of goods eligible for these preferential policies will also be raised from RMB$2,000 to RMB$5,000 per transaction and from RMB$20,000 to RMB$26,000 yuan for each person each year. The quota will be further adjusted as needed as the population enjoy a higher income.

Third, the Chinese authorities will follow international practices to further support exports via CBEC and craft out a holistic set of policies, including those relating to export tax rebate.

Enforcing responsibility

The last point pertains to a stricter enforcement to ensure product quality and safety.

The council said that CBEC businesses, platforms, logistics service providers, and payment methods must fully discharge their responsibilities as required by law.

Quality and safety inspection of products will also be strengthened, while fair market competition and consumers’ rights will be protected.  

Positive responses, higher share price

The announcements were welcomed by industry players.

One of which was Complementary Medicines Australia (CMA).

 “The Chinese government has announced it will improve and expand the cross-border e-commerce import policy, and transform China’s e-commerce rules for imported products from a transitional state to a stable one, which is very welcome news for the Australian complementary medicines industry,”​ said Carl Gibson, chief executive of CMA.

 “Trade with international markets is crucial for the long term prosperity of the Australian complementary medicines industry, and China, in particular, is a very significant trading partner, with more than half of our exports destined for China and Hong Kong.”

Amid the positive regulatory environment, Australian food and supplements firms saw a leap in their share prices.

The a2 Milk Company’s share price closed at $9.90 on the ASX, 5.88% higher than a day before, while Bellamy’s Australia share price closed at $7.55, and was 4.72% higher.

On a statement filed with ASX, Jayne Hrdlicka, managing director and CEO of the a2 Milk Company said “the company welcomes the new e-commerce law and policy and the Chinese government’s continued support of CBEC.”

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