China wants to be American.
Over the last week, China’s government rolled out a number of initiatives and promises to promote new technologies, start-ups and small businesses in second and third tier cities. The move is part of China’s shift from an economy dominated by state run enterprises.
On Sunday, China’s State Council announced policies designed to encourage migrant workers, recent college graduates and former military just re-entering civilian life to return to their rural hometowns and start small businesses. To get them started, Beijing said it would ease business registration procedures and allow entrepreneurs to venture into rural infrastructure projects through limited liability arrangements, and set up shop in the public services space, normally operated by the government. Newcomers supposedly get waivers or reduced taxes and administrative fees.
Besides the high tech start-up crowed that Beijing hopes to build into a Chinese Silicon Valley and, probably, a dot-com bubble, small businesses that set up shop in retail, tourism and internet marketing will get the most government support. The government pledged to invest more in rural infrastructure, especially IT facilities, and to provide business training for those just getting started.
On Saturday, the State Council released a guideline to streamline customs procedures for e-commerce exports and imports, the Shanghai Daily reported on Monday. The paper said Beijing will keep export taxes low while reforming import tax policies on certain goods that favor domestic consumption.
Richard Qiangdong Liu, founder, chairman and CEO of JD.com is one of the richest people in the world. The 40-something year old e-commerce executive is one of China’s model Netizens, one China hopes to reproduce like bunnies in the years ahead as the economy moves away from being a low cost export manufacturer.
China is also betting heavy on e-commerce payment platforms. The newspaper said the government will “encourage domestic banks and institutions to launch cross-border electronic payment businesses and advance pilot overseas payments in foreign currencies.”
Chinese e-commerce firms will be given state financial support on international projects while credit insurance services will also be introduced. What does this mean? It means Western firms will soon cry foul and say China is subsidizing the likes of JD.com or even Alibaba.
The announcements come as China’s economy transitions from low cost manufacturer to high tech, value added producer in a middle class society. With most of its market closed to foreign competition, China’s official support for its private tech firms could give some a nice cushion of support when testing the waters outside of the mainland. That being said, most of the revenue from China’s e-commerce players is domestic.
Some of China’s biggest e-commerce investments listed in the U.S. include Alibaba, JD.com and e-Commerce Dang Dang,
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