China’s plan to develop E-commerce

In its efforts to increase domestic consumption and investment in the economy, China’s government is looking at e-commerce. It seeks to increase the role of e-commerce to promote consumer-driven, private investment. The government takes the lead by developing an e-commerce plan.

China Law Blog analyses the plan that aims to resolve some important barriers to developing a modern e-commerce industry in China, as listed by China’s State Council. In his blog, Steve Dickinson mentions the high minimum capital requirements and related licensing restrictions that keep SMEs and individuals out of the market. Another barrier is taxation, social benefit and registration requirements that prevent lower wage individuals from using e-commerce as a supplementary form of income.

According to Dickinson, there is also a lack of effective online payment mechanism, as well as inadequate consumer protection and associated lack of trust in products purchased from e-commerce platforms. The primitive and unreliable package delivery systems also form a barrier. There is also a lack of coordination and procedures in international e-commerce, both for import and export.

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