The Ministry of Commerce announced on November 15 that the effective date of the New Policies issued earlier this year on 8th of April will be postponed to the end of 2017. This is the second time that the Chinese government postpones the ‘notorious’ new policies while the first occurred on May 24.
The delay of the effective date means that cross-border B2C e-commerce players will have more than one year from now to adjust business models. During this period of transition, products not on the ‘positive list’ are still exempted from checks of their Customs Clearance Certificates, while first-time imported cosmetics, baby formula, medical equipment and special food products are not required to provide import permits, registration or filing. This a great news for businesses that employ bonded import model, while drop ship model is free from the effect.
The Introduction of ‘Positive List’ was an action taken by the Chinese government attempting to regulate the fast-growing cross-border e-commerce sector, after news reporting that there were Chinese companies smuggling local products out of the border and imported them back to the free-trade zone and sell on the e-commerce marketplaces as foreign products.
The postponement is a sign that the policy makers in China are striving to reach a balance between regulation, customs revenue and healthy growth of the industry. While a tighter control of the product registration and import permit would be beneficial to the Chinese consumers as they are less likely to become victims of under-qualified goods when they buy products stored in bonded warehouses, but they are also having fewer foreign products to choose from once ‘Positive List’ is enforced.
It is still unsure whether the effective date of Positive List will be further postponed, but it seems that the Chinese government is satisfied with current level of tax charged under the current model. The Chinese government is also making adjustments to the customs policies from time to time to maintain a balance between cross-border e-commerce and traditional bulk trade.
With an increasing number of Chinese online shoppers start to purchase online for overseas products, cross-border logistics become the core competence of e-commerce businesses. Cross-border e-commerce businesses are also extending their business models and logistics to become less reliant on the bonded model. Before the official effective date of the ‘Positive List’, retailers can still import products into the bonded warehouses. When the ‘Positive List’ is put to effect, e-commerce players can adopt other solutions, for example, drop ship models.