Platform economy likely to continue robust growth in China

26 Jul '19

2 min read

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The platform economy—economic and social activity facilitated by online or digital platforms—is likely to continue its robust growth in China as the government has pledged more facilitating measures. At the latest executive meeting of the State Council recently, authorities vowed another basket of measures to beef up the growth of the sector.

Analysts believe the string of new measures will benefit the upgrading of the industry and consumption, serve the supply-side structural reform and promote the establishment of a strong domestic market, according to official Chinese media.

China will foster new growth models of the platform economy, promote the development of the ‘Internet plus service industry’ and support social capitals to invest in sectors including medicare, education and tourism, according to a statement released after the meeting.

The business climate will be further optimized and the approval procedures for the set-up of new platform firms and their branches will be further streamlined, said the statement.

The latest policy push comes after China unveiled a guideline on facilitating the sector in March, which promised to foster a batch of $14.5 billion commodity markets by 2020.

Through the development of the platform economy, China aims to build a commodity circulation system that fits the modern economic system, said the guideline jointly released by the commerce ministry and 11 other departments.

In the first half of 2019, online sales of physical goods rallied 21.6 per cent to 3.82 trillion yuan, accounting for 19.6 per cent of the total retail sales, according to the ministry of commerce data.

The State Council meeting has also called for enhanced information sharing between government departments and platforms, vowing to introduce an unified national electronic licenses sharing system and electronic invoice service platform.

Meanwhile, financial institutions will be encouraged to provide financing for platform firms.

However, observers have also expressed concerns over negative effects felt during the rapid expansion of the sector such as unfair competition, infringement and other issues.

Targeting these challenges for regulation, an arrangement was also reached at the meeting. China will follow an accommodative and prudential approach and seek fair regulating methods conducive to fair competition, said the statement. (DS)

Fibre2Fashion News Desk – India

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