Government delivers multiple policies to support distribution sector development; due implementation is crucial

Transcription

1 Ten China Commercial Highlights 2016 series: Government delivers multiple policies to support distribution sector development; due implementation is crucial

2 Fung Business Intelligence Centre Government delivers multiple policies to support distribution sector development; due implementation is crucial The State Council and relevant government departments promulgated a number of major policies in 2015 to facilitate the development of the distribution sector, underlining the government s strong emphasis on domestic trade. To deepen reform of the distribution sector, the General Office of the State Council issued the Notice on Piloting Reforms in Domestic Trade and Distribution System in Nine Cities in August. The nine cities 1 were chosen to carry out pilot reforms related to domestic trade and distribution. The Notice specifically laid out four major tasks: first, to explore an innovation-driven mechanism for the distribution sector; secondly, to establish a favourable business environment with a sound supervisory mechanism and credit system; thirdly, to guide infrastructure construction in various areas, including wholesale farm product markets, community service outlets and large-scale shopping centres; and fourthly, to improve government management. 1 The nine cities are Shanghai, Nanjing in Jiangsu Province, Zhengzhou in Henan Province, Guangzhou in Guangdong Province, Chengdu in Sichuan Province, Xiamen in Fujian Province, Qingdao in Shandong Province, Huangshi in Hubei Province, and Yiwu in Zhejiang Province. 1

3 Ten Highlights of China s Commercial Sector 2016 Other major policy directions include the creation of a better business environment, facilitation of regional development, e-commerce, Internet Plus and O2O development, logistics and consumer services. Key policy directions A better business environment In August, the State Council promulgated the Opinions on Promoting the Modernisation of Domestic Trade and Building the Law-based Business Environment. The Opinions specify that administrative organs are prohibited from abusing administrative power to restrict and exclude competition; they are also prohibited from using market dominant positions to charge unreasonable fees or set up unreasonable trading conditions. These initiatives are deemed essential for creating a conducive business environment and stimulating domestic trade. Regional development The distribution sector plays a crucial role in facilitating regional development. In May, the Ministry of Commerce and nine other ministries released the Layout Plan for National Nodal Circulation Cities ( ). The Plan stresses the importance of speeding up the development of such national nodal cities, as they form an important part of the national transport network and facilitate the distribution of goods and services. Meanwhile, they also contribute significantly to the implementation of the Belt and Road Initiative and other regional development plans, such as the Coordinated Development Plan for Beijing, Tianjin and Hebei and the Development Plan for the Yangtze River Economic Belt. E-commerce, Internet Plus and O2O Development The e-commerce sector has seen explosive growth over recent years, created new demand for consumption while opening up tremendous opportunities for business innovation. The Opinions on Striving to Develop E-commerce to Speed up the Cultivation of the New Economic Driving Force promulgated by the State Council in May calls for a deeper integration of e-commerce and other industries to facilitate the synchronous development of industrialisation, informatisation, urbanisation and agricultural modernisation. Rural e-commerce and cross-border e-commerce particularly caught the attention of the government in Rural e-commerce. Realising the importance of e-commerce in facilitating agricultural development under the new normal economy, the government announced several key policies to boost the development of rural e-commerce. In November, the General Office of the State Council released the Guiding Opinions on the Promotion of the Development of Rural E-commerce and the Circular on Promoting Rural E-commerce Development. The two policies aim to promote agricultural upgrading and rural development, while stressing the importance of developing modern agriculture and cultivating rural e-commerce business. E-commerce is to be applied to wider fields in rural areas such as to agricultural production, processing and distribution. Cross-border e-commerce. The government has placed great emphasis on cross-border e-commerce development. In June, the General Office of the State Council issued the Guiding Opinions on Promoting the Healthy and Rapid Development of Cross-border E-commerce, suggesting supportive measures in five areas: (i) streamlining customs clearance procedures for cross-border e-commerce exports and imports; (ii) providing collective services for customs declaration, examination and release of goods; (iii) clarifying and formulating cross-border e-commerce import and export tax policies; (iv) encouraging domestic banks and third-party payment companies to launch cross-border e-payment services; and (v) offering financing support for key cross-border e-commerce projects such as credit insurance. 2

4 Fung Business Intelligence Centre Given the broad scope and complex principles enshrined in the government policies, our experts urge the government to place more emphasis on implementation. The implementation of the Internet Plus initiative in promoting the development of e-commerce is high on the government s agenda. In July, the State Council promulgated the Guiding Opinions on Actively Propelling the Internet-Plus Action Plan, highlighting the role of the Internet in driving transformation, upgrading traditional industries and facilitating the development of new business models. O2O integration is another key government initiative. To stimulate O2O integration and accelerate innovation, transformation and advancement of commercial distribution, the General Office of the State Council in September released the Opinions on Promoting Online- Offline Interaction to Expedite the Innovative Development, Transformation and Upgrade of Commercial Circulation. According to the Opinions, physical stores are encouraged to adopt O2O initiatives and utilise advanced technologies, such as the mobile Internet, big data and cloud computing, to provide personalised products to consumers. Stores are advised to cooperate with Internet companies to roll out these services. Logistics The rapid development of the logistics sector especially express delivery is also a major government focus. It is generally believed that express delivery is a new growth area for the service industry and can support e-commerce development to facilitate consumption upgrading and allow enterprises to carry out target marketing. In October, the State Council issued the Opinions on Promoting the Development of the Express Delivery Sector, expecting to establish a safe and efficient delivery network that provides quality services to both urban and rural areas through advanced technologies. Consumer services Consumption is a major growth driver in the new normal economy. The government has stepped up efforts to improve the consumer environment. In November, the General Office of the State Council released the Guiding Opinions on Accelerating the Development of Consumer Services to Promote the Upgrading of Consumption Structure, pushing to improve the infrastructure for public services and build a better consumption environment. The government will also strengthen supervision to protect the rights and interests of consumers. 3

5 Ten Highlights of China s Commercial Sector 2016 What the experts say Given the broad scope and complex principles enshrined in the government policies, our experts urge the government to place more emphasis on implementation. Suggestions include the following priorities: To improve the business and consumption environment, strengthen monitoring and the tracking and recall system to ensure the safety and quality of goods. To severely punish the production and sale of counterfeit and shoddy products, and protect the rights and interests of consumers. To further expand the scope of the Business Tax (BT) to the Value-added Tax (VAT) reform programme by including consumer services in the reform. This would help to lower the tax rates for consumer services. To provide financial support for eligible commercial enterprises to expand their business. To provide more land and price support, including favourable land policies for senior citizen care, healthcare and household services. To lower the electricity rates for commercial enterprises. To lower transaction fees on bank cards, especially for the catering industry. To reduce the toll charges for trucks on toll roads and bridges. The Central Committee of the Communist Party of China approved the proposal on the 13th Five-Year Plan (FYP) in October The focus of the 13th FYP is to seek growth through economic transformation, deepening reforms to unleash productivity, optimising industrial structure, improving the environment and enhancing quality and efficiency. As consumption will remain a key component in driving economic development, our experts believe the government will continue to promote consumption, with special focuses on smart, green, healthy and safe consumption. More favourable policies and supportive measures to foster the growth of the distribution sector are expected in 2016, as well as over the entire 13th FYP period. 4

6 Fung Business Intelligence Centre, Member of the Fung Group Authors Teresa Lam and Lucia Leung (Asia Distribution and Retail, Fung Business Intelligence Centre) Contributors Christy Li and Tracy Chan (Asia Distribution and Retail, Fung Business Intelligence Centre) Administrator Yu Di (Secretariat of the Expert Committee of the China General Chamber of Commerce) For more information Secretariat of the Expert Committee of the China General Chamber of Commerce 25 Yuetan North Street, Beijing, China; Postcode: Phone: (010) Fax: (010) Fung Business Intelligence Centre 10/F, LiFung Tower, 888 Cheung Sha Wan Road, Kowloon, Hong Kong Phone: (852) Fax: (852) China Business Herald Research Institute No. 1, Baoguosi, Xi Cheng District, Beijing; Postcode: Phone: (101) Fax: (101) Copyright 2016 Fung Business Intelligence Centre, Secretariat of the Expert Committee of the China General Chamber of Commerce (ECCGCC) and the China Business Herald Research Institute. All rights reserved. Though Fung Business Intelligence Centre, the Secretariat of the ECCGCC and the China Business Herald Research Institute endeavor to ensure the information discussed in this material is accurate and updated, no legal liability can be attached as to the contents hereof. Reproduction or redistribution of this material without Fung Business Intelligence Centre s or the Secretariat of the ECCGCC s or the China Business Herald Research Institute s prior written consent is prohibited.