CBEC pilot zones bring China one step closer to the world

November 30, 2022
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CBEC pilot zones bring China one step closer to the world

The COVID-19 pandemic has caused major disruptions in both developed and emerging markets presenting countless economic challenges and forcing countries to rethink how to conduct business at the global level.

China is not immune to such circumstances. The country has taken initiatives to scale-up favorable policies in order to stabilize and promote foreign trade. Accordingly, cross-border e-commerce (CBEC) has emerged as a key generator of growth, gaining momentum, and becoming a prominent channel for China's imports and exports.

The CBEC, which consists of activities of purchasing or selling products via online shopping across national borders, does not represent a phenomenon grown overnight. China started to set up a comprehensive pilot zone for the CBEC in 2015 and, over the last seven years, the number of such areas has reached a total of 165 nationwide.

On November 24, China announced the establishment of comprehensive pilot zones for the CBEC in 33 cities and regions in order to promote the digital advancement of traditional industries and to fine-tune China's foreign trade to a post pandemic global economy.

From a geographical standpoint, the most evident aspect that can be observed from the announcement is that, unlike previous pilot zones that were mostly located along eastern coastal regions, the newly added pilot zones are all situated in central and western regions where e-commerce is less developed.

The inclusion to the new list of zones of Xinjiang Uygur Autonomous Region, Tibet Autonomous Region, Yunnan Province, Guizhou Province, Guangxi Zhuang Autonomous Region, and Inner Mongolia Autonomous Region, along with various third-tier and fourth-tier cities, represents a crucial message for the national development strategy.

Through the establishment of comprehensive CBEC pilot zones in remote areas, China can promote local market economies through a highly dynamic new form of foreign trade that can boost the opening-up of the country to the rest of the world.