New technologies have created new ways for companies here in the U.S. to get their products to customers in foreign markets. One of these new methods is cross-border ecommerce. This is when a company in one country sells its products to customers in another country through an online platform.
Cross-border ecommerce is one of the routes a U.S. company may opt to go for making forays into the Chinese market. Just as is the case with more traditional business methods, when a company is using newer methods (such as ecommerce) to get involved in the Chinese market, knowledgeable legal guidance can be a critical thing for it to have. Among the special legal issues that can come up in connection to such newer methods are issues stemming from how in-flux the legal framework that applies to them in China can be.
One area that there remains a fair amount of uncertainty in when it comes to cross-border ecommerce in China is what regulations will apply to such commerce in the future.
A new rule had been put forward in China which would have upped the regulation of cross-border ecommerce. One of the things the rule would have done was make it so goods that foreign companies send to Chinese customers in connection to cross-border ecommerce would no longer be treated as personal parcels. Such a change would add additional regulatory requirements for such shipments.
The Chinese government has since opted to temporarily suspend the new rule and the changes it would bring about. So, for the time being, ecommerce shipments will continue to be considered personal parcels.
In the wake of these developments, significant questions remain on what the future will be regarding what regulatory framework applies to cross-border ecommerce in China. What regulations a company is subject to when it comes to the commerce methods it uses can have considerable impacts for the company. So, U.S. businesses involved in cross-border ecommerce in China could be greatly impacted by what decisions China ultimately makes on the regulatory front when it comes to such commerce.
Source: China Business Review, “Officials Reverse Course on Cross-border Ecommerce,” Patrick Lozada, Aug. 9, 2017