Digitalization continues to improve China’s e-commerce sector
The level in digitalization in China’s business sectors has continued to improve this year, according to the Ministry of Commerce (MoC).
It said China’s e-commerce activities since the beginning of 2024 have played a positive role in promoting consumption recovery and expanding international economic and trade cooperation.
In the first five months of this year, online retail sales hit 5.77 trillion yuan ($810 billion), representing an increase of 12.4% from a year earlier, the MOC said.
China has also signed new memorandums of e-commerce cooperation with Serbia and Bahrain, expanding the number of Silk Road E-commerce partner countries to 32, according to the ministry.
In the first quarter of 2024, the proportion of cross-border e-commerce increased to 7.8%. Cross-border e-commerce activities contributed more than 1 percentage point to export growth in the first three months, the ministry said.
However, a leading industrialist is urging China’s high-tech manufacturing industry to step up technological innovation and boost its presence in overseas markets.
Li Dongsheng, founder and chairman of Chinese consumer electronics maker TCL Technology Group Corp, said that globalization “is an irresistible trend for Chinese enterprises”, insisting that it is necessary to promote the transformation and upgrade of manufacturing industry.
Li said Chinese enterprises should shift from exporting products to exporting industrial capacity, improve industrial chain systems and support global operations. He said: “China’s manufacturing sector must strive for technological innovation so as to survive in the fierce international competition.”
Li said he believed that Chinese enterprises are capable of coping with the transformation and upgrading of manufacturing industry as well as the challenges arising from globalization.
Free trade agreement talks resume
China, Japan and South Korea have resumed talks over a Free Trade Agreement between the three following a break of almost five years.
Negotiations for the FTA stalled in 2019, but the talks stared again in late May at a trilateral summit attended by leaders from China, Japan and South Korea in Seoul.
“We will keep discussions for speeding up negotiations for a trilateral free trade agreement,” they said in a joint statement after the summit. The three added that any deal that would be “free, fair, comprehensive, high-quality and beneficial for all”.
The FTA, first proposed in 2002, could represent one of China’s most substantial economic partnerships. Trade between the three countries has surged from $130 billion in 1999 to nearly $800 billion in 2022, with China emerging as the top trading partner for both Japan and South Korea.
China is the primary source of imports for Japan and South Korea, and stands as the largest export destination for South Korea and the second largest for Japan.
While China and South Korea signed a bilateral FTA in 2015, no FTAs have been reached between China and Japan or between Japan and South Korea, said Cui Fan, a professor at the University of International Business and Economics in Beijing.
This has resulted in a trade ratio within the China-Japan-South Korea region that has struggled to go above 20%, significantly lower than the 64% within the European Union, 50% within the region under the North American Free Trade Agreement, and 24% within the Association of Southeast Asian Nations, Cui added.
All three countries are signatories to the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement among the Asia-Pacific countries that also included Australia, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, Thailand and Vietnam
However, the ongoing negotiations for a trilateral trade agreement are primarily centred on surpassing the levels of tariffs and rules established by the RCEP, said Ni Yueju, a research fellow at the Chinese Academy of Social Sciences’ Institute of World Economics and Politics.
Under the RCEP framework, 86% of products exported from Japan to China and 88% of products exported from China to Japan will eventually attract zero tariffs, Ni said.
While this represents a substantial improvement compared with previous levels, the figures still fall short of the Comprehensive and Progressive Trans-Pacific Partnership, which boasts a 98% zero-tariff ratio, and also fall behind the 95% zero-tariff ratio achieved under the China-ASEAN Free Trade Agreement, Ni added.
Additionally, the negotiations aim to address areas that RCEP does not cover, such as the automotive sector and certain automotive components, Ni said.
