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Cross-border e-commerce growth in China, and it's opportunities with the rest of the world.

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Cross-border e-commerce growth in China, and it's opportunities with the rest of the world.
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Abstract

This analytical report aims to summarize, compare and contrast three different articles concerning e-commerce trade in China. The purpose of the report is to investigate similarities between these articles with different viewpoints and concerns in regard to cross-border e-commerce, and to examine these similarities, other peer-reviewed studies were introduced. Lastly, this report concluded that China’s e-commerce efforts would benefit from political liberalization towards the industry of e-commerce.

The articles used for analyzation in this article are:

 

Litteratory review

Summarization

The article by Junli Lyu (2024) argues that cross-border e-commerce pilot zones have an impact on tourism consumptions. Pilot zones, also known as ‘test zones’, in several geographical areas of China, were invented to increase the development of cross-border e-commerce to boost China's foreign trade efforts. In this article a ‘pilot zone’ is a geographical area where the local institutions are challenged by the government to innovate and develop their environment to enhance their cross-border e-commerce infrastructure and activities.

Furthermore by conducting a review of the second study provided to complete the assessment, the author Yuzhen Wang and Jiaru Li (2020) are investigating how the government of China can enhance the quality of the legal policies affecting e-commerce trade in the Gansu region. Through internet and database searches for words that in the past have been researched by the public to understand which institutional policies they are operating under, such as ‘trading port’, ‘manufacturer’, ‘payment’, ‘talent’, ‘marketing’ etc., made it possible to combine the most researched of these words into four themes by using the co-word clustering theory. With these findings the authors argue that two of the four themes, specifically the critical group and the attached group with words like; ‘manufacturer’ and ‘marketing’ are the ones the public researched mostly, and thus confused about not being invested in by the government to support e-commerce growth in the Gansu region.

Lastly the piece authored by Yu Zhang et al. (2023) wants to provide perspective on how Logistic Service Quality (LSQ) can be enhanced, by scoping six aspects of the service offerings in the e-commerce supply chain, which could benefit from more acknowledgement to further development. The authors argue that LSQ in the following aspects of the supply chain; timeless, reliability, economy, safety, personal contact quality and information quality; could bring increased satisfaction to the customers, and thus the companies that positively want to enhance their e-commerce activities.

Key concerns and applied theories

Junli Lyu (2024) study addresses how test zones ‘pilot zones’ contribute to growth in urban habitats tourism consumption. To support these findings the authors made use of the theory called an endogeneity analysis to confirm the reliability of the report.

Furthermore in the article authored by Yuzhen Wang and Jiaru Li (2020), the co-word clustering theory was used as the main research approach to figure out how to address the concerns regarding uneven quality of legal policies, affecting e-commerce trade in the province of Gansu, China.

Yu Zhang et al. (2023) study made use of mixed methods and applied both quantitative and qualitative research, as well as use of the Kano-model theory to address concerns about customer satisfaction, product deliverances and transparency in the e-commerce supply chain.

Discussion

To compare the first article by Junli Lyu (2024) with a microeconomic perspective, Bing He et. al. (2024) shows that the income of urban habitants has increased because of China's e-commerce pilot zones. The evidence shows that such a positive impact in their available monthly spendings would affect their turism opportunities. However, further homogeneity between the urban areas of China, could further innovation and increase rural habitants' possibilities to explore other parts of the world.

As well as homogeneity throughout China's domestic pilot zones positively could impact China’s tourism habits, another article by Jing Xu and Qiuping Song (2018) explores how the current regulatory framework directly and in-directly affects small and medium sized enterprises in the Gansu Province and by that limiting their possibilities to conduct foreign e-commerce exports. Specifically, commercial needs such as e-commerce talents, fuzzy operation modes and poor competitiveness due to low development of infrastructure, aligns Jing Xu and Qiuping Song (2018) study with the conclusion of the article by Yuzhen Wang and Jiaru Li (2020). However by introducing the Gansu Province into the pilot project, this province and other domestic areas of China, could benefit from a new format of regulatory framework and by that enhance their e-commerce trading efforts. To support this statement, the study developed by Lifan Yang et al. (2023) shows a ‘Matthew Effect’ between the regions of China which have been a part of these test zones between 2011 and 2020, and the ones which haven’t.

In a practical contrast to the theoretical studies shown in this literature review, to successfully increase e-commerce growth in China, no matter the region, companies would benefit if they compare their efforts with corporations who effectively mitigated liability of foreignness, as demonstrated in the study by Roger Hayter and David Edgington (2021) promoting how Panasonic successfully integrated into China. Such mitigation of foreignness would also positively impact Logistic Service Quality between a pilot zone of China and a foreign country, because of corporations interests on how to provide quality in reliability and personal contact towards consumers, through a proper e-commerce supply chain structure.

Nonetheless several articles show improvement in China’s innovative efforts to sustain e-commerce, they also address despair from local enterprises on how to influence their government's efforts to improve institutional structures and policies, which negatively impacts e-commerce growth opportunities. This evidence is supported by China’s latest efforts to establish domestic growth by supporting legislative access of foreign investments (Arendse Huld, 2024), and thus innovate domestically, from knowledge received by internationally based corporations.

Conclusion

The E-commerce industry in China is in steady growth, and the findings of the main articles shows that official institutions as well as privately owned corporations prosper on these institutional and commercial developments. However, only corporations located in one of China’s pilot zones experience positive economic effects of this innovative legislation, which is fostering unequal cross-border growth through-out China. Furthermore, commercial tools and knowledge are still needed to develop a sustainable supply chain within the rural areas of China, to support further growth in e-commerce exports. To compare the theoretical studies in this literature review, evidence from an article about Panasonic's entry into China was introduced, providing the reader with relevant knowledge to apply the research in a practical manner. Essentially, this report emphasizes that a politically liberative approach towards development of China’s domestic e-commerce efforts would provide local corporations with flexibility to learn, to try, and adapt their trading activities by applying knowledge from similar successful e-commerce market entries which were executed by other corporations.

References

Roger Hayter and David Edgington (2021) Panasonic in China: A Search to Overcome the Liability of Foreignness, Researchgate website, accessed 25 Jan 2021. https://www.researchgate.net/publication/348790979_Panasonic_in_China_A_Search_to_Overcome_the_Liability_of_Foreignness

Arendse Huld (2024) China Issues 24 New Measures to Attract Foreign Investment, China Briefing website, accessed 20 March 2024. https://www.china-briefing.com/news/foreign-capital-in-china-action-plan-attract-fdi/

Bing He et al. (2024) Does the cross-border e-commerce comprehensive pilot zones policy affect the urban–rural income gap in China, Wiley online library website, accessed 10 June 2024. https://onlinelibrary.wiley.com/doi/full/10.1111/ajes.12593?saml_referrer

Jing Xu and Qiuping Song (2018) Analysis of the Influence Factors Affecting the Development of Cross Border E-commerce in Gansu’s Small and Medium Sized Foreign Trade Enterprises. Proquest website, accessed 14 November 2018. https://www.proquest.com/docview/2488026044/fulltextPDF/4525164B1BC44889PQ/1?accountid=13552&sourcetype=Conference%20Papers%20&%20Proceedings

Lifan Yang et al. (2023) Impacts of the Sustainable Development of Cross-Border E-Commerce Pilot Zones on Regional Economic Growth. Proquest website, accessed 18 September 2023. https://www.proquest.com/docview/2869660304/fulltext/A537482488AD4C91PQ/1?accountid=13552&sourcetype=Scholarly%20Journals

Junli Lyu (2024) China cross-border e-commerce comprehensive pilot zone and urban residents' tourism consumption: empirical study based on CHFS data. Science Direct website, accessed 11 April 2024. https://www.sciencedirect.com/science/article/pii/S1544612324004264?via%3Dihub

Yu Zhang et al. (2023) Systematic investigation of the logistics service quality of cross-border e-commerce: a mixed-methods perspective. Emerald Insight website, accessed 7 September 2023. https://www.emerald.com/insight/content/doi/10.1108/APJML-03-2023-0203/full/html

Yuzhen Wang and Jiaru Li (2020) Text Analysis of Cross-border E-commerce Policy Based on Co-word Clustering Method: A Case Study of Gansu Province. IOPScience website, accessed 22 March 2022. https://iopscience.iop.org/article/10.1088/1742-6596/1544/1/012008/meta