China's cross-border e-commerce bids farewell to 'tax-free' age

Fairer market

China currently has over 5,000 cross-border e-commerce platforms. The Ministry of Commerce predicted the volume of cross-border e-commerce in 2016 will reach 6.5 trillion yuan and will soon account for 20 percent of China's foreign trade.

Industry insiders believe that the new policy will help promote fair competition and create a more orderly cross-border e-commerce sector.

Zhang Bin, researcher with the Chinese Academy of Social Sciences, said personal postal article tax is not for trade purposes, which is exactly what online retailing is. It is unfair for conventional importers and domestic producers.

The new policy will benefit traditional imports and real economy, he said, adding that it will also prevent tax evasion and improve market order, since under the previous policy, some online purchasing agents have taken advantage of postal article tax and used new methods such as repackaging and mailing products separately to avoid tax.

Zhang also noted that consumers' rights will be better protected under the new policy, as products imported through online platforms will have to submit to the customs their transaction, payment and logistics information.

At the same time, the new policy will speed up customs clearance so consumers will receive most orders from overseas within two weeks, instead of the previous two months, he added.

Liu Peng said the cross-border e-commerce sector lacked entering threshold and oversight mechanism in the past. The new tax policy and online retail imports list encourage healthy development of e-commerce companies.

Companies with more product variety and higher ability to readjust supply chains and products structure will get more development chances, while those that solely relied on price competition and imported products through illegal means will be regulated, he said.