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China Issues 13th Five-Year Plan for Domestic Trade and Circulation

The Ministry of Commerce and nine other government departments recently issued the 13th Five-Year Plan for the Development of Domestic Trade and Circulation. The concrete measures put forward in this top-level design for guiding the development of this industry in the next five years will play an important role in lowering circulation costs.

There are many problems in China’s domestic trade and circulation sector. Urban-rural imbalance, lack of co-ordination between online and offline businesses and mismatching between supply and demand are some of the existing hurdles, which need to be overcome one by one in the course of development. The most crucial task is to establish a more rules-based business environment in accordance with the requirements of the 6th Plenary Session of the 18th CPC Central Committee and the Guofa No. 49 document. The Plan discusses the measures to be taken in this regard, such as improving the legal system in the sphere of circulation, raising the level of supervision and law enforcement, strengthening the building of the system of commercial credit, promoting the building of a single national market, and raising the level of facilitation in administrative services.

In its strategy for upgrading circulation, the Plan puts forward the three concepts of promoting consumption, circulation modernisation and smart supply chain as boosters for the development of innovative modes of circulation.

High circulation costs are a major headache for enterprises as China undergoes economic transformation and upgrading. The lowering of circulation costs may provide a new driver for economic growth.

The Plan puts forward the targets for the development of domestic trade and circulation in the next five years. The main goal is to achieve the widespread application of next-generation information technology, attain substantial progress in the transformation and upgrading of domestic trade and circulation, make omni-channel retailing the mainstream, and basically form a modern and rules-based system of big circulation and big market based on international practices by 2020.

The Plan encourages the integrated development of commerce, tourism, culture and recreation with emphasis on experience and service and the use of big data, internet of things, block chain and other information technologies to expand the use of targeted marketing, first-hand experience and personalised services. Commercial enterprises are encouraged to strengthen their brand awareness, increase the added value of their products and enhance their soft power to meet the demands of an upgraded consumption structure.

Lowering circulation costs and accelerating the establishment of an efficient, fast and smart logistics system to reduce the burdens of enterprises has become a major task of policymakers in recent years and the Chinese government has put forward many policies in this connection.

Policy stimulation has indeed raised the efficiency and improved the quality of China’s logistics industry. The total value of the logistics industry showed a year-on-year increase of 6.2% in the first half of 2016, representing an increase of 0.5 percentage points over the same period of last year. The freight volume of traditional industries like coal and smelting materials showed year-on-year declines, while the flow of high-tech products like pharmaceuticals, computers, communications and electronic equipment, and electrical machinery registered considerable growth. Meanwhile, the volume of courier business showed a year-on-year increase of 56.7%. The growth of total logistics costs slowed down from a year ago, with the share of total logistics costs in GDP dropping to 14.6%.

For details of the Plan in Chinese, please see:

http://www.mofcom.gov.cn/article/ae/ai/201611/20161101779114.shtml

Content provided by Picture: HKTDC Research
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