Pilot programs in various regions showing progress

China has had a pilot program in place on the integration of domestic and foreign trade in nine provincial-level regions since mid-2022, in which various places have rolled out well-calibrated measures in line with their local conditions and have made solid progress, officials said.

The Ministry of Commerce, along with 14 other departments, initiated the program in selected regions in May 2022. The program is currently operating in Beijing, Shanghai and Chongqing municipalities, as well as the provinces of Jiangsu, Zhejiang, Fujian, Hunan and Guangdong and the Xinjiang Uygur autonomous region.

The chosen pilot regions, each with their own unique economic strengths and trade potential, have been cultivating integrated trade players, and over the past year they have established a number of platforms that help businesses on the supply and demand sides find each other, said Zhou Qiang, director of the department of market system development at the ministry, at a news conference.

In Zhejiang, the provincial government has taken steps to create a more favorable business environment and nurture 827 enterprises, which serve as pioneers in promoting integrated trade practices, along with 84 related industrial bases, Zhang said.

Moreover, standards for inspection, testing, certification, accreditation and safety assessment for the export of used construction machinery equipment, which have been summarized based on experience in a free trade zone, will be promoted across Hunan for greater trade facilitation and regulatory efficiency, Zhang added.

Guangdong has established a cooperative mechanism to facilitate the development of universal standards in the Guangdong-Hong Kong-Macao Greater Bay Area, to harmonize regulations and enhance cooperation within the area, said Sun Bin, deputy director of the provincial department of commerce.

A total of 628 enterprises and organizations are currently participating in the formulation of 110 Bay Area standards across 25 sectors, including food safety, transportation, education, healthcare, and cross-border e-commerce, Sun said.

So far, as many as 748 enterprises have adopted the Bay Area standards, including 169 from Hong Kong and Macao, Sun said, noting that by expanding the list of Bay Area standards and actively involving enterprises and organizations from different sectors, the province aims to create a unified and standardized regulatory framework that facilitates seamless trade and collaboration.

The success stories and lessons learned from these pilot initiatives will help inform future policies and strategies aimed at promoting integrated domestic and foreign trade across the country, Zhou said.

As the concept of integrated domestic and foreign trade gains traction in China, regions outside the designated pilot areas are also actively exploring and implementing strategies to foster better coordination between domestic and international markets.

Na Jian, the executive director of Shengfei Technology Co, based in the Inner Mongolia autonomous region, said that a growing number of companies realize that this approach enables them to leverage the resources of both domestic and international markets, mitigate market risks and expand their development opportunities.

As a comprehensive cross-border e-commerce pilot zone has been set up in Baotou, the company is taking advantage of these opportunities to establish a cross-border e-commerce service platform that connects domestic and international markets, and explore new customers from overseas, Na said.

Industry insiders cautioned that it is important to acknowledge the numerous challenges and obstacles that lie ahead in achieving integration between domestic and foreign trade.

Gong Ping, the secretary-general of the Cross-border E-commerce Industry Association in Huizhou, Guangdong, said that various factors, including consumer preferences, sales teams, product quality and business models, could impede the success of domestic enterprises venturing into foreign markets.

There is also a lack of motivation for foreign trade businesses to transition to domestic trade. Some foreign trade enterprises, particularly those with supply chain advantages, operate under an order-based production model, Gong said.

Additionally, they often lack their own brands and patents and face limitations in terms of distribution networks. Their ability and experience in developing domestic market channels are also insufficient, he added.