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Cross-border e-commerce can put economy back on track, expert says

By Chen Liubing | chinadaily.com.cn | Updated: 2020-07-06 11:33
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Workers are busy at a telecommunications company in Hejian, North China's Hebei province, on June 30, 2020. [Photo/Xinhua]

Cross-border e-commerce, online trading, and service trade are key tools for China in tackling economic downwards amid the COVID-19 pandemic, Guan Tao, chief global economist of BOC International (China) Co Ltd, said, reported China Securities Journal on Monday.

According to WTO statistics, the volume of merchandise trade shrank by 3 percent year-on-year in the first quarter, and initial estimates for the second quarter indicate a drop of around 18.5 percent on a yearly basis.

However, thanks to China's quick response to the pandemic, the country's economy already witnessed a rebound as export growth in April and May exceeded expectations.

To further expand trading, according to Guan, cross-border e-commerce and online trading are new growth engines, as overseas customers are turning to online shopping.

Chinese enterprises should focus on product quality, and maintain global market share as well as international supply chain to promote export, Guan said.

Given the downward pressure of trade in goods, service trade is a new direction of trade transformation, Guan said, adding that trade with the ASEAN countries is a highlight of China's foreign trade export of the year.

The survival of medium-, small- and micro-sized companies, as well as labor intensive enterprises in the coronavirus-driven plunge is key in promoting employment, the economist said.

Tax-reduction, the building of overseas sales channels, as well as training in cross-border ecommerce are all needed to support these enterprises.

To sell commodities originally produced for exports domestically is another way of easing export pressure of certain foreign trade enterprises, Guan said. However, with less brand name and sales channels at home, different production standards and intensive competition, these enterprises require government support in selling commodities domestically.

For example, the government should build platforms for these exporters to sell goods domestically, and promote digital transformation of these enterprises such as holding online trade fair to expand sales channels. Finance and insurance support and transaction supervision are also needed, said the economist.

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