Hunan Provincial People's Government Office issued the Circular on Several Measures to Promote High-Quality Development of Cross-Border e-Commerce."

Hunan Government Doc. No.9 [2023]

To the People's Governments of all cities, prefectures, counties and districts, and all departments, commissions and subordinate agencies under the Provincial Government:

Several Measures to Promote High-Quality Development of Cross-Border e-Commerce have been approved by the Provincial People’s Government and are hereby issued to you for serious implementation.

General Office of Hunan Provincial People's Government

March 3, 2023

(This Document is proactively disclosed.)

To effectively elevate the high-quality development of cross-border e-Commerce in our province, cultivate new advantages in foreign trade, stimulate new growth drivers and support building an inland reform and opening-up hub, the following measures are proposed to take:

I. Strengthen Industrial Development

(1) Support cross-border e-Commerce entities to scale up and become stronger. Accelerate the cultivation of local benchmark cross-border e-Commerce enterprises and encourage businesses to establish their own independent cross-border e-Commerce platforms. Support eligible cross-border e-Commerce enterprises in application for the status of national high-tech enterprise or technologically-advanced service enterprise. Grant maximum rewards of cny 200,000 and cny 1 million respectively to enterprises whose annual turnover of cross-border e-Commerce reaches cny 100 million or cny 1 billion for the first time based on their annual import-export volume, tax payment and employment contribution in Hunan. Attract industry leaders; grant a maximum reward of cny 5 million to the Hunan-based new corporate (group) headquarters founded by cross-border e-Commerce industry leaders with registered capital over cny 20 million. Grant a maximum reward of cny 3 million to the Hunan-based new functional headquarters founded by cross-border e-Commerce industry leaders. Support traditional enterprises in our province to pilot cross-border e-Commerce operations with subsidies for annual incubation service fees. Encourage innovation and entrepreneurship in cross-border e-Commerce to cultivate and strengthen corporate champion. Strive to cultivate 20 cross-border e-Commerce enterprises with annual turnover of cny 100 million and 5 with cny 1 billion by 2025, enabling them to play a more active role in job creation and tax revenue growth. (within the responsibility of the Provincial Department of Commerce, Department of Education, Department of Science and Technology, Department of Finance, Department of Natural Resources and each municipal/prefecture government based on their respective terms of reference, and the unit ranked first shall take the lead (similarly hereinafter). Each of the following tasks shall be implemented by each municipal and prefectural government (not listed separately)).

(2) Foster self-owned cross-border e-Commerce brands. Encourage cross-border e-Commerce enterprises to register overseas trademarks and seek international certifications for their brands; prioritize provincial project approval for any enterprise with its own trademark in the country of destination; grant a lump-sum reward up to cny 500,000 (capped at 80% of the cost for international certification) for each newly certified enterprise. Encourage cross-border e-Commerce enterprises to operate under their own brands, utilizing digital platforms such as social media and search engines, as well as cross-border e-Commerce platforms, for their global brand promotion. Grant a lump-sum reward up to cny 500,000 to each enterprise using their self-owned brand for global promotion, capped at 30% of their annual cost for marketing of cross-border e-Commerce. Strive to cultivate 20 self-owned cross-border e-Commerce brands with annual turnover over cny 50 million across the province by 2025. (within the responsibility of the Provincial Department of Commerce, Department of Finance, Provincial Administration for Market Regulation, etc., based on their respective terms of reference)

(3) Promote the construction of cross-border e-Commerce industrial belt. Leverage Hunan's existing industrial clusters to foster integrated cross-border e-Commerce development. Grant a lump-sum reward up to cny 1 million to each county/district hosting cross-border e-Commerce industrial clusters with suppliers concentrated (≥20 enterprises) and annual import-export over cny 1 billion. Support cross-border e-Commerce in empowering the real economy, explore the export of Hunan's advantageous and distinctive industries through cross-border e-Commerce, and facilitate "Hunan Product Going Global". Strengthen international exchanges and cooperation in cross-border e-Commerce, consolidate traditional markets, and expand into the BRI and African market. Leverage platforms such as the China-Africa Economic and Trade Expo and the Pilot Zone for In-Depth China-Africa Economic and Trade Cooperation to expand cross-border e-Commerce business with Africa. Strive to develop over 3 cross-border e-Commerce industrial clusters with annual import-export over cny 1 billion by 2025. (within the responsibility of the Provincial Department of Commerce, Department of Industry and Information Technology, Department of Finance, Department of Agriculture and Rural Affairs, etc., based on their respective terms of reference)

II. Promote Agglomerative Development

(4) Promote differentiated development of cross-border e-Commerce comprehensive pilot zones. Support the comprehensive cross-border e-Commerce pilot zones in Changsha, Hengyang, Zhuzhou, Xiangtan, Yueyang and Chenzhou to explore differentiated development based on local industrial foundations, geographical conditions and resource endowments, while advancing institutional, managerial, service and model innovations in cross-border e-Commerce. Support cities with strong foundations, high willingness and broad prospects in cross-border e-Commerce to apply for the status of comprehensive pilot zones, accelerating the development of cross-border e-Commerce across the province. The provincial financial authorities will provide funding support for construction of cross-border e-Commerce comprehensive pilot zones and business development in other cities and prefectures, based on their achievement of performance target from the previous year. [within the responsibility of the Provincial Department of Commerce, Department of Finance, Changsha Central Sub-branch of the People's Bank of China (State Administration of Foreign Exchange Hunan Branch), Changsha Customs, Provincial Tax Bureau, Provincial Postal Administration, etc., based on their respective terms of reference]

(5) Establish cross-border e-Commerce cluster development zones. Fully utilize platforms such as cross-border e-Commerce comprehensive pilot zones and retail import pilot cities to drive the development of cross-border e-Commerce across the province. Support the introduction of service-oriented enterprises in customs clearance, payment settlement, tax and insurance, software development and big data analysis to enhance the cross-border e-Commerce ecosystem and develop clusters of cross-border e-Commerce parks. Support the introduction of professional cross-border e-Commerce park operators to establish or renovate and upgrade parks using old factory buildings and commercial buildings. Formulate provincial cross-border e-Commerce industrial park recognition and administration measures; grant a lump-sum reward up to cny 5 million based on tax payment and employment contribution to each eligible park operating with cross-border e-Commerce with area over 4,000 square meters, equipped with supporting service facilities and one-stop comprehensive cross-border e-Commerce services, hosting over 20 cross-border e-Commerce enterprises, and achieving annual turnover of cny 2 billion or annual import-export of cny 500 million. Encourage cities and prefectures to propose tailored incentives to attract enterprises to be settled in cross-border e-Commerce industrial parks. Strive to establish over 10 cross-border e-Commerce industrial parks with annual turnover over cny 2 billion each by 2025. (within the responsibility of the Provincial Department of Commerce, Department of Finance, Provincial Tax Bureau, etc., based on their respective terms of reference)

III. Improve Factor Support

(6) Improve public services for cross-border e-Commerce. Support the construction of operational public service platforms for cross-border e-Commerce. Encourage enterprises to declare business operations via the online comprehensive service platform of cross-border e-Commerce pilot zones. Support the construction of incubation centers for cross-border e-Commerce; grant a lump-sum reward up to cny 500,000 to eligible operators of incubation centers that successfully nurture more than 10 cross-border e-Commerce enterprises. Support the construction of support service systems for cross-border e-Commerce; and grant a lump-sum reward up to cny 1 million to each enterprise or institution driving and promoting SME's development of cross-border e-Commerce, serving over 100 entities and engaging in actual import-export business. [within the responsibility of the Provincial Department of Commerce, Department of Finance, Changsha Central Sub-branch of the People's Bank of China (State Administration of Foreign Exchange Hunan Branch), Provincial Tax Bureau, etc., based on their respective terms of reference]

(7) Promote the construction of overseas warehouses for cross-border e-Commerce. Encourage and guide cross-border e-Commerce enterprises, traditional foreign trade enterprises, logistics companies and the like diverse entities to comprehensively utilize various investment and financing methods for construction of overseas warehouses; support enterprises in deployment of overseas warehouses at critical channels and nodes in Africa, regions along the Belt and Road, and key RCEP markets. Encourage and guide the integration of overseas warehouse resources and functional upgrades into public overseas warehouses. Give a financial support up to cny 600,000 to each provincial public overseas warehouse for the first year and up to cny 300,000 annually for the subsequent 2 years, with the cumulative cap of cny 5 million per enterprise over three years. Guide Hunan-based enterprises to compete for MOFCOM exemplary overseas warehouse cases and grant a lump-sum reward up to cny 1 million for each case selected. Grant a lump-sum reward up to cny 500,000 to each enterprise self-building and self-using overseas warehouses over 3,000 square meters with import/export over CNY 100 million in the host country/region based on their warehouse size and import/export volume. Support the establishment of a full-chain cross-border e-Commerce logistics service system from provincial consolidation warehouses to public overseas warehouses under "Hunan Product Going Global" initiative; grant a lump-sum reward up to CNY 500,000 to each consolidation warehouse serving over 10 SMEs in the province with annual cross-border e-Commerce import-export up to CNY 100 million. Increase credit insurance support for construction and operation of overseas warehouses, and encourage financial institutions to enhance financial services for overseas warehouse enterprises. Prioritize promotion and resource matching for outstanding overseas warehouse enterprises in investment promotion, public-private partnerships and major trade events. Strive to develop over 20 provincial consolidation warehouses and public overseas warehouses established and operated by enterprises within our province by 2025. (within the responsibility of the Provincial Department of Commerce, Development and Reform Commission, Department of Finance, Local Financial Regulatory Bureau, Postal Administration and Sinosure Hunan Branch, based on their respective terms of reference)

(8) Strengthen the development of talented personnel for cross-border e-Commerce. Encourage local authorities to include professionals in cross-border e-Commerce platform operations, IT product development, supply chain management and overseas media placement in local talent support policies, incorporate cross-border e-Commerce-related occupations into training subsidy programs, and provide subsidies in accordance with vocational training policies where applicable. Encourage higher education institutions to strengthen the development of cross-border e-Commerce professionals and establish cross-border e-Commerce programs tailored to the strength of each institution. Leverage the roles of industrial associations and professional institutions to support cross-border e-Commerce industry exchanges. Encourage stronger collaboration among government, academia, enterprises and associations to establish cross-border e-Commerce training bases, develop instructor and expert teams, launch specialized talent training programs for lesser-known languages in cross-border e-Commerce, organize vocational skills competitions, and develop versatile cross-border e-Commerce professionals. (within the responsibility of the Provincial Department of Commerce, Department of Education, Department of Human Resources and Social Security, and Department of Finance based on their respective terms of reference)

(9) Enhance financial support for cross-border e-Commerce. Encourage financial institutions to innovate cross-border e-Commerce investment and financing services, develop innovative credit products, utilize supply chain logistics and capital flow information to innovate financial products such as accounts receivable financing, warehouse receipt financing and integrated warehouse financing, thereby alleviating corporate financing difficulties. Support state-owned financial platform companies to collaborate with cross-border e-Commerce enterprises. Encourage venture capital funds to support cross-border e-Commerce industry development. Grant full-premium subsidies to SMEs engaged in cross-border e-Commerce through the "China Single Window for International Trade" under our prevailing provincial export credit insurance support policies, with relevant support extended to general enterprises for premiums and export credit insurance financing interest subsidies. [within the responsibility of Changsha Central Sub-branch of the People's Bank of China (State Administration of Foreign Exchange Hunan Branch), Local Financial Regulatory Bureau and Sinosure Hunan Branch based on their respective terms of reference]

IV. Facilitate Cross-Border Trade

(10) Strengthen cross-border e-Commerce enterprise linkage services. Promote the establishment of a cross-border e-Commerce operation monitoring mechanism, create a tiered linkage service mechanism for key cross-border e-Commerce enterprises, and address their common challenges, prominent challenges and innovative breakthroughs through coordinated support from provincial-level commerce, customs, taxation and foreign exchange authorities under the principle of inclusive and prudent regulation. [within the responsibility of the Provincial Department of Commerce, Department of Finance, Changsha Central Sub-branch of the People's Bank of China (State Administration of Foreign Exchange Hunan Branch), Changsha Customs, Provincial Tax Bureau, etc., based on their respective terms of reference]

(11) Optimize Customs Clearance Services for Cross-border e-Commerce. Apply "simplified declarations," "list-based clearance and summary statistics" for each enterprise in the cross-border e-Commerce comprehensive pilot zones, prioritize inspection of cross-border e-Commerce import and export goods, and practice "24/7" appointment-based customs clearance. Include cross-border e-Commerce platform enterprises in the list of key AEO-certified enterprises by Customs. Actively promote the pilot reform of logistics supervision for cross-border e-Commerce regulatory workplaces in customs zones, featuring "zone-port and zone-zone linkage". Allow cross-border e-Commerce retail export (1210) from special zones to overseas warehouses and cross-border e-Commerce parcel retail export from special zones to be shipped together under the transit customs transportation mode. Expand the cross-border e-Commerce retail import return center warehouse model. Apply the "two-step declaration" process to cross-border e-Commerce online shopping bonded import (1210), and the "two-stage access" for eligible cross-border e-Commerce bonded import of commodities (1210). Continuously advance the reform of cross-border e-Commerce business-to-business (B2B) export supervision. Make steady progress in new retail operation of cross-border e-Commerce. (within the responsibility of Changsha Customs, Provincial Department of Commerce and Provincial Postal Administration, based on their respective terms of reference)

(12) Facilitate foreign exchange settlements for cross-border e-Commerce. Banks and payment agents may exempt cross-border e-Commerce SMEs with annual trade receipts/payments under $200,000 from "Foreign Exchange Trade Enterprise Directory" registration when processing forex transactions based on electronic records. Support relevant banks in applying to provide foreign exchange settlement and payment services for cross-border e-Commerce entities based on electronic transaction information. Cross-border e-Commerce enterprises may offset their expenses for overseas-incurred storage, logistics, tax and the like against payments of export for net settlement. The actual sales revenue repatriated by cross-border e-Commerce enterprises for goods sold through overseas warehouses may differ from the declared export value of the corresponding goods. Domestic individuals engaged in cross-border e-Commerce can make foreign exchange settlements through personal foreign exchange accounts. If they can provide evidentiary matters of transaction amount or electronic transaction information, it will not count against their annual quota of facilitation. [within the responsibility of Changsha Central Sub-branch of the People's Bank of China (State Administration of Foreign Exchange Hunan Branch), Provincial Commerce Department, Changsha Customs etc., based on their respective terms of reference]

(13) Implement tax policies for cross-border e-Commerce. Guide enterprises to leverage policies like VAT/consumption tax exemptions for cross-border retail exports and income tax assessed collection. Promote improvements in VAT and income tax policies for cross-border e-Commerce B2B export, facilitating tax rebate for B2B export and overseas warehouse models. Provide customized tax guidance services for cross-border e-Commerce enterprises. (within the responsibility of the Provincial Tax Bureau, Provincial Department of Commerce, etc., based on their respective terms of reference)

Of the aforementioned policy measures, the introduction of leading cross-border e-Commerce enterprises, export credit insurance premiums and interest subsidies for financing under export credit insurance are directly supported by provincial fiscal funds. For other fiscal support initiatives, provincial fiscal funds will be allocated to relevant cities or prefectures through factor-based distribution, with local governmental authorities responsible for policy implementation. Cities/prefectures, counties and districts utilizing the fund must establish annual performance goals for cross-border e-Commerce; and provincial authorities will dynamically adjust the funding support based on performance evaluation and goal achievement.