China Allows Fully Owned Foreign E-Commerce Companies in FTZ
Jan. 19, 2015
The Chinese government last week unveiled a plan to allow fully owned foreign e-commerce companies to operate in the Shanghai Free Trade Zone (FTZ). The pilot test will be regulated and supervised by the Chinese Ministry of Industry and Information Technology, according to state-owned news agency Xinghua. Until now, the government has only allowed foreign e-commerce companies to participate in joint ventures with domestic firms.
The Shanghai FTZ was launched in September 2013 to give the Chinese government a laboratory to test economic reforms. The e-commerce market in China, which surpassed the U.S. market in total sales in 2013 and continues to grow at a faster rate, has been dominated largely by Alibaba Group. Industry experts say the FTZ is creating a more level playing field, which China may need as Chinese firms seek greater access to big e-commerce markets outside of China, particularly in the U.S. and in Europe.