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Shanghai FTZ Regulator Sets Up First E-commerce Demo Zones

| Mar 17, 2016 08:42 AM EDT

China (Shanghai) Pilot Free Trade Zone Administration is setting up demonstration areas to help cross-border e-commerce firms improve their services.

The administrator for Shanghai’s pilot free trade zone is setting up a demonstration area to help improve the services of cross-border e-commerce firms, Shanghai Daily reported.

The report said that the demonstration area is the first of its kind in China, and will cover Waigaoqiao, Yangshan port and the Pudong International Airport, after authorities approved to set up cross-border e-commerce pilot zones in 12 cities in January.

Wang Xinling, deputy director of China (Shanghai) Pilot Free Trade Zone Administration, said that the costs of clearance for customers will be reduced and efficiency will be enhanced as they will coordinate with inspection and quarantine, foreign exchange and taxation departments in the implementation.

Wang added that to cultivate an ecosystem of cross-border e-commerce, the regulator will also promote the development of finance, logistics and business consulting services in the area.

The report said that the construction and operation of the demonstration area will be undertaken by six trading and logistics companies, which include Shanghai Waigaoqiao International Trading Operation Center Co., Shanghai Waigaoqiao Logistics Center Co., and Shanghai FTZ United Development Co.

According to the report, JD.com and Suning Commerce Group Co. have signed agreements on March 16 to set up businesses in the area.

The boom in cross-border e-commerce was driven by the increasing demand for foreign goods in China.

As the first platform for online purchasing of imported goods established in the FTZ, Kuajingtong has attracted more than 400 vendors, reaching almost 10,000 orders daily.

The South China Morning Post reported in January that the Chinese government has allowed foreign firms to own 100 percent of online shops in Shanghai FTZ, seen as a major step toward the full opening of the country's e-commerce market.

According to the report, the pilot scheme is part of liberalization efforts to enliven e-commerce in China, to the benefit of 330 million shoppers in the mainland.

Foreign investors based in the zone were previously allowed only 55 percent stake in joint venture, but now they could own 100 percent of e-commerce based in the area, the report said.

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