China's policy support to speed up overseas warehouse construction

2024-06-05 09:04:43Global Times Editor : Li Yan ECNS App Download

Move expected to drive growth in China's foreign trade

The Ministry of Commerce (MOFCOM) will announce policies to accelerate the construction of overseas warehouses to enhance China's cross-border e-commerce sector, the People's Daily reported on Tuesday.

Industry observers said that this move will help optimize the cross-border e-commerce landscape and drive growth in China's foreign trade.

Chinese companies have more than 2,500 warehouses overseas with a total area of 30 million square meters. There are more than 1,800 warehouses specifically dedicated to serving cross-border e-commerce, with a total area of 22 million square meters.

The number of cross-border e-commerce entities in China has exceeded 120,000, with more than 1,000 cross-border e-commerce industrial parks, according to the report.

Overseas warehouses are an important form of support for cross-border e-commerce. By building or renting storage facilities abroad, part of the trade process is transferred overseas, and it ensures that many orders are no longer missed opportunities, which benefits the cross-border e-commerce industry, analysts said.

Overseas warehouses raise the efficiency of exports and enable overseas customers to observe the products in person, Wang Ping, a manager at Xi'an-based Danmk Industry Co, an overseas warehouse operator, told the Global Times on Tuesday.

"With the changes in the market, we started to do cross-border e-commerce, and we set up overseas warehouses in the US state of Texas as well as Istanbul in Turkey," said Wang, a veteran of international trade.

Goods exported through the overseas warehouses are equivalent to wholesale goods, and prices are more affordable than those transported in the traditional ways, Wang said.

Companies can utilize intelligent and automated warehouse systems to receive timely feedback on demand changes, further reduce the information gap between demand and supply, and optimize the supply chain, analysts said.

Wang's company also provides third-party services to other exporters, including import and export declarations, customs clearance and shipments.

The MOFCOM plans to leverage the 165 cross-border e-commerce pilot zones in China to drive more firms to participate in international trade, nurture key industry players to lead the digitalization of the supply chain, and promote cooperation and negotiations for cross-border e-commerce in free trade agreement negotiations.

In the past five years, China's cross-border e-commerce has grown by more than 10 times, becoming a driving force of China's foreign trade.

In the first quarter of 2024, total shipments of cross-border e-commerce reached 577.6 billion yuan ($79.73 billion), an increase of 9.6 percent from last year. Exports reached 448 billion yuan, an increase of 14 percent year-on-year.

Wang Xin, president of the Shenzhen Cross-Border E-Commerce Association, told the Global Times on Tuesday that in the first half of the year, cross-border e-commerce exports showed steady growth, with particularly strong increases in the South American and Southeast Asian markets. Another growing market is the Middle East, where investment sentiment from Chinese companies is strong and favorable tax policies are being implemented.

"In the second half of the year, I am optimistic about the growth potential in the Southeast Asian and Central Asian markets, as more businesses are expanding into these regions rapidly," Wang Xin said.

Shenzhen, South China's Guangdong Province is to hold the 9th Shenzhen International Cross-Border E-commerce Trade Expo from June 15 to 17, bringing more than 2,000 traders to accelerate the expansion of the industry, according to Wang Xin.

China has established bilateral e-commerce cooperation mechanisms with 31 countries and regions. The proportion of cross-border e-commerce exports in total merchandise exports has also been steadily increasing, according to the MOFCOM.

Exports rose 4.9 percent year-on-year in the January-April period to 7.81 trillion yuan, according to the General Administration of Customs.

The export recovery will continue in the second quarter, Wu Chaoming, a deputy head of the Chasing Research Institute, told the Global Times on Tuesday.

"Factors such as a low base provide strong support for export growth, along with a moderate global manufacturing recovery and the upgrading of the export product structure," Wu said.

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