Stabilising trade amid COVID-19: Supplements competition to intensify in China with 46 new CBEC zones

By Tingmin Koe contact

- Last updated on GMT

China now has over 100 cross-border e-commerce pilot zones.  © Getty Images
China now has over 100 cross-border e-commerce pilot zones. © Getty Images

Related tags: China, CBEC, COVID-19, Trade

China’s addition of 46 cross-border e-commerce (CBEC) pilot zones will lead to the further influx of imported dietary supplements, with the healthy competition between local and imported goods helping to raise the bar for China’s domestic industry, according to a leading industry body.

On April 7, the Chinese government, during state council executive meeting chaired by Premier Li Keqiang, have agreed to add 46 CBEC pilot zones to the existing 59 zones.

“Tackling the economic impact of the outbreak abroad is a pressing task. With the tight containment measures introduced across countries, foreign trade and investment is persistently going downward,”​ Premier Li said.

“We must accelerate the development of cross-border e-commerce and other new models to boost foreign trade and investment. Competent departments must exercise sound quality supervision and ensure unimpeded logistics services,”​ he added.

CBEC pilot zones allow foreign companies to get their products into China without going through the customs and the related inspection procedures.

According to the new announcements, the Chinese government will also implement preferential policies, such as exemption of value-added tax, consumption tax, and assessed levy of corporate income tax for retail export goods within the zones.

More foreign brands

Speaking to NutraIngredients-Asia, ​US-China Health Products Association’s regulatory manager Charles Diao expects that the opening of more CBEC zones will lead to more imported goods entering the company, as more local retailers will start to take an interest in conducting CBEC business.

“When you have a pilot zone set up in a particular area, it is likely that more companies and people from that area will be interested in doing CBEC businesses.

“Those doing CBEC businesses will then take the initiative to source for foreign brands, find their desired products, and bring them into China. Thus, I feel that the addition of CBEC pilot zones will definitely lead to the influx of more foreign goods into China,”​ Diao said. 

In the dietary supplement space, he said that while more imported goods could intensify the market competition, this was not necessarily detrimental to the local Chinese firms, since it could spur local firms to do better. 

“As you know, while the standards of China’s dietary supplement have slightly improved, it is still a long way to achieving excellence.

“Bringing more quality products in can speed up the competition and I feel that this is a good thing for the entire industry in the long run.”

Data from China’s General Administration of Customs shows that the retail sales of China’s cross-border e-commerce businesses reached RMB$186.21bn (US$26.3bn) last year.

Canton fair goes online

One of the mega exhibitions, China will hold its 127th​ China Import and Export Fair (Canton Fair) online during mid to late June.

This is to cope with the ongoing COVID-19 outbreak, while stabilising foreign trade and investment at the same time.

The Fair will provide around-the-clock services for online product promotion, matchmaking and business negotiations. 

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