China has announced plans to boost support for e-commerce as its economy moves to embrace more non-manufacturing services. The announcement was posted on the Chinese government's website revealing that power brokers behind the world's second largest economy are looking to instigate tax policies aimed at boosting China's domestic consumer demand, as well as measures to make overseas payments easier.
The country's financial engine has previously been highly dependent on manufacturing as a source of economic growth, but the resulting emergence of a moneyed middle class in the communist state has seen growth in demand for e-commerce services.
China's ruling party recently unveiled new guidelines that include taxation policies to boost consumer spending, along with new projects to streamline overseas payments for simpler order fulfilment. Relaxation in overseas payment procedures should see a boost for international parcel services.
The statement released on the government's website says e-commerce exports will qualify for some forms of tax relief, and that payment in the domestic currency will also be promoted. The news came hot of the heels of a recent announcement that China will begin to permit foreign ownership of some e-commerce firms as a means to increase competitiveness in the e-commerce and deliveries marketplace, a potential vast source of revenue for e-commerce sits.
The country first accepted foreign exchange payments in 2013 and the move has since seen the e-commerce industry accrue a $3.32 billion turnover. Meanwhile, trade in the first half of 2015 alone is expected to be equal to that of the trade volume in the whole of last year, indicating the breakneck speed of this industry's development in the country.
The country's recent announcement of permitted foreign ownership also saw China's ruling cabinet call on banks and payment institutions to increase their cross-border business to help increase employment and consumer spending.
Many observers have welcomed the move, claiming the country's previous economic model of manufacturing fuelled by inward investment was unsustainable in the long term, despite fuelling massive economic growth over the last two decades.