Transnational E-commerce Stabilizes Global Trade

Online shopping has become an important part of life during lockdowns to contain the spread of the novel coronavirus disease (COVID-19). A range of ecommerce platforms have made it possible for people to get whatever they need from home, and this shopping model has contributed to China’s consumption growth significantly.

At a time when international trade is being restricted by the COVID-19 pandemic, online shopping is a good alternative to other traditional forms of trade, able to stimulate global logistics and maintain supply chains.

The 127th China Import and Export Fair (CIEF), or Canton Fair, which is to be held online for the first time in late June, will be based on this logic. The CIEF, which originated in 1957, takes place biannually in Guangzhou, capital city of Guangdong Province in south China, in spring and autumn. It is seen as a barometer of China’s foreign trade, attracting a multitude of businesses from home and abroad every year. Usually the spring CIEF opens on April 15, but this year’s event was postponed until June and moved online due to COVID-19.

The online version of the fair is to be composed of online cooperation platforms, transnational e-commerce zones and lives-stream marketing services. Up to 25,000 businesses are expected to participate as sellers turn to exhibiting their products online.

Trade will be centered on a business-to-business model, but with some business-to-customer platforms. The trade platform will be in operation around the clock, providing buyers and sellers with integral services such as online presentations, connecting suppliers and purchasers and online trade negotiations. In this way, businesses around the globe will be able to trade with each other without leaving their homes.

The replacement of the physical event with an online exhibition not only guards against the spread of the virus but is a major innovation in its own right. The synergy of this massive trade expo with Internet technology can help to stabilize world trade and the global economy.

The rapid development of transnational e-commerce in recent years forms the bedrock of this year’s online Canton Fair. As the fastest growing form of exchange in the Internet age, e-commerce defies the usual restrictions of time and space, and can directly connect suppliers and customers. These opportunities have benefited a growing number of businesses around the world.

In addition to taking the CIEF online, the Chinese Government is working to add 46 transnational e-business pilot zones to its existing 59 to support large-scale online international trade in the future. Retail sales for the exports and imports of China’s transnational e-commerce platforms reached 186.21 billion yuan ($26.6 billion) in 2019, registering an average growth rate of 49.5 percent in the past five years. Transnational e-business pilot zones are playing an increasingly critical role in foreign trade.

COVID-19 creates bad influence to China’s foreign trade more than anything else so far. According to statistics from the General Administration of Customs of China, imports, exports, and imports and exports dropped by 2.4 percent, 15.9 percent and 9.6 percent respectively, during January and February.

Although the virus has been largely contained inside China, and foreign trade companies are returning to work, its rapid spread around the world is greatly affecting international trade and the global economy. According to a survey of chambers of commerce and companies in provinces and municipalities active in foreign trade by the Ministry of Commerce, such companies are facing a string of difficulties, such as canceling of orders, delayed delivery of goods, blocks in logistics and difficulty procuring new business.

Overseas transnational e-commerce platforms currently possess the lion’s share of the global ecommerce market. Well-known and covering vast regions, these international platforms are major channels for many companies’ exports. Recent years have seen Chinese e-commerce platforms explore overseas markets through investments, and mergers and acquisitions. In doing so they have secured a foothold in emerging markets, helping to promote the development of Chinese e-commerce in foreign trade.

Transnational e-commerce is a relatively new industry which has arisen from globalization, advancing Internet technology and more efficient logistics by combining manufacturing, e-commerce platforms, warehousing logistics and financial risk management. China plans to accelerate the development of delivery and payment services to help upstream and downstream firms get online, and to establish a healthy environment for the development of transnational e-commerce.

There are plans to take the China International Import Expo online too. It won’t be long before other businesses engaged in international trade turn their attention to the possibility of online exhibitions. If online transnational e-commerce becomes the norm, businesses will be able to explore new markets and attract orders, contributing to a more stable international trading landscape.

If online transnational ecommerce becomes the norm, businesses will be able to explore new markets and keep orders, contributing to a more stable international

trading landscape