China, ASEAN e-commerce, promising with challenges

NANNING - Founder of the first China-ASEAN e-commerce platform, Sun Suojun from Guangxi Zhuang autonomous region has confidence in cross-border businesses.

"We import fresh fruit and fish from ASEAN and sell the goods through the platform," he said. "Sales volume was over 20 million yuan ($3.14 million), and will be a lot more this year."

The two sides launched a cross-border e-commerce platform during the 12th China-ASEAN Expo which closed on Monday. Problems like slow customs clearance and higher costs are being dealt with.

The platform will provide information on business matching, overseas financing, logistics, customs inspections and legal advice for bilateral enterprises.

Booming e-commerce

"E-commerce has become crucial to efficiency and restructuring," said Nie Linhai of the Ministry of Commerce during the expo. The past decade saw huge increases in online retail and e-commerce in general, and strategies like the Belt and Road Initiative and "Internet Plus" will only help.

"Cross-border e-commerce stood at $480 billion in 2014, and should hit $1 trillion by 2020," said Ma Jixian, deputy commerce director of Guangxi.

By the end of June this year, 374 million Chinese people had made online purchases, 3.5 percent up from last year, and 270 million of them used smartphones.

Li Jingwen of the Chinese Academy of Engineering, said China's e-commerce market is mature with mobile shopping apps prompting traditional industries to reshape their businesses.

Bilateral e-commerce prospect

In early July, China unveiled "Internet Plus" to encourage integration of traditional sectors like manufacturing, agriculture, finance and logistics to do more business online.

As a gateway for cooperation between China and ASEAN, Guangxi also supports local e-commerce, including tax breaks, fee exemptions and incentives for startups and employers.

The China-ASEAN Information Harbor will be established in Nanning city and consist of 34 projects worth 21 billion yuan. Local tariff-free zones and highways to Malaysia, Thailand and Vietnam under construction will be good for cooperation, Ma said.

China is also building a broadband cable across the Southeast Asia, from Guangxi to Malaysia, Indonesia and Brunei, which is expected to lower Internet costs and improve speed.

"Alibaba planned to extend businesses in Singapore. We hope the giant would also consider Kuala Lumpur as an overseas investment target," said Majid Ahmad Khan, chairman of Malaysia-China Friendship Association.

Challenges ahead

Four major areas requiring swift improvement are information sharing, logistics, policy understanding and technical consolidation.

There is still a huge digital gap between developing Asia and the West. A total of 700 million Chinese and 400 million people in Southeast Asia have no access to the Internet, said Lu Wei, minister of the State Council's Cyberspace Administration of China.

Different standards in different areas prevent smooth cross-border communication and trade. A standardized system must cover manufacturing. Online payments are problematic for some ASEAN members.

Better infrastructure will bring about closer and more efficient cooperation.