China’s e-commerce boom to get a boost from new regulations to strengthen logistics industry

The wheels of China’s e-commerce economy look set to be further greased by a new regulation mapping out a national logistics system and other measures in key mainland cities from 2015-2020.

Backbone Internet networks will also be strengthened to boost regional economies, according to the regulation released by the Ministry of Commerce last Thursday.

In order to improve current logistics networks, node cities will be divided at the national, regional and district levels and related infrastructure improved, the ministry said on Monday.  

“This will improve the country’s logistics industry in the long run,” Ye Tan, a mainland economist, told China National Radio.
 
“The main problems facing the industry right now are costs that are too high and a lack of unified standards.”
 
The new regulation covers nine key tasks, including improving the flow of information in node cities, establishing trade and logistics centres, developing national e-commerce demonstration bases, and strengthening the implementation of common industry standards.
 
The move is in line with the Internet Plus policy announced by Chinese Premier Li Keqiang in March in a bid to propel the country’s e-commerce boom by creating suitable infrastructure.
 
The unified standards should help lower logistics costs that have been ramped up by high fuel bills and highway maintenance fees, Ye said, pointing out that China’s express-mail services are already faster and more efficient than those of many developed countries.
 
The regulation will help the development of enterprises like Taobao, China’s largest e-commerce platform, which had over 500 million registered users as of last year.
 
Its parent company, Alibaba, announced in 2013 that it would invest 100 billion yuan (US$16.1 billion) within the next decade to build a logistics network capable of delivering its goods to any Chinese city within 24 hours.