Chinese media are reporting that the country’s new cross-border...

Chinese media are reporting that the country’s new cross-border e-commerce regulations — including a value-added tax on goods bought through that route — will be suspended for a year.
The new rules, introduced on April 8 with just a fortnight’s notice, were initially greeted with dismay by Australian investors in companies such as Blackmores and Bellamy’s, whose China sales through that channel had soared. Their share prices were hit, but have since begun to recover.
The goods are shipped to free-trade zones around China, and then from vast warehouses directly to consumers, by the country’s online trading companies, including Tmall — owned by Alibaba — JD.com, VIP and Jumei.
This new business-to-consumer path has been a huge hit in China.
Typically, online customers can choose whether to order products through the general trade channel or through the crossborder route.
Sales through the latter option to customers of JD.com — “JD worldwide” — soared by 600 per cent last year.
These online-based corporations, in many ways China’s most successful at home and abroad, have massive influence in the country’s top circles, but were surprised by the rapid introduction of the new rules — which were intended chiefly to level the playing field with China’s struggling traditional retail sector.
Shanghai Securities News, one of China’s leading financial newspapers, has reported that last week senior officials of the most powerful bodies involved in taxation — the State Council which comprises the Cabinet Office, the Ministries of Finance and Commerce, and Customs — met with company executives to discuss the crossborder rules.
The latter, according to Securities News, reported that some of their trade had suffered severely — with cosmetics and health products especially impacted.
As a result, it is believed that the new regulations are likely to be suspended for a year — during which the central government will conduct an in-depth review.
It is considered likely that the new “positive list” of products that are permitted to be sold to Chinese consumers through this crossborder route will be retained during the review period.
This is especially important for winemakers, since they have only been allowed to supply through this route with the simultaneous introduction of the new tax rules.