China hits pause on tougher e-commerce laws

Beijing has delayed tough new e-commerce laws that were set to hit Australian products popular with Chinese shoppers.

'Daigou' shoppers are seen introducing Australian brands to their customers via a permanent live-stream. Picture: AAP

China’s Ministry of Commerce will delay the implementation of tough new laws on e-commerce which were expected to come into force in January.

The laws could have hit sales of Australian infant milk and vitamins made to China via the daigou network of personal shoppers in Australia.

News that there will be some more grace time for the implementation of the new laws was announced by Yan Fangli, the director of the Department of Electronic Commerce and Information Technology in China’s Ministry of Commerce at the Shanghai import expo this week.

He said goods deemed “personal use” that were being sent through e-commerce channels to China from overseas would have more time to comply with the stricter new laws.

The new period of grace follows lobbying by foreign importers as well as the Australia’s federal government.

The new laws, which would have required higher standards of labelling and product safety assurances and a stricter new tax regime, had the potential to discourage sales by personal shoppers in Australia to friends and family in China — an active channel for sales of many Australian goods including vitamins and food products, potentially hitting companies like Blackmores and Suisse.

Mr Yan did not indicate how much longer the extension would last except to say it would go into “next year” some time.

The news follows comments by federal Minister for Trade Simon Birmingham in Shanghai this week that Australia was watching the issue closely.

In his opening speech to the expo on Monday, China’s President Xi said encouraging China’s e-commerce trade was a key priority for his government.

In an interview with Australian media, Mr Birmingham indicated that the Australian government was lobbying Chinese authorities to delay the imposition of the laws.

“I would urge China to act in the spirit of President Xi’s comments in his speech this week, where he acknowledged the importance of digital trade and e-commerce and committed to continued opening-up,” Mr Birmingham said before the news of the changes leaked out in discussions at the expo on Wednesday night.

“We would want to make sure that as China works to modernise some of its rules in that regard, it also ensures that it give appropriate transition for businesses to be ready to comply with them.”

“We are monitoring it closely in terms of whether both sides of the relationship are ready in terms of meeting those rules.”

In an interview with The Australian in China last week, A2 Milk chief executive Jayne Hrdlicka said the company would not be affected by the new rules, as most of its daigou vendors in Australia were larger companies which already complied with the laws.

She said the new regulations were designed to ensure people selling consumer products into China paid tax and complied with food and drug safety standards.

She said A2 Milk had arrangements with large daigou companies which were already registered and complied with the new laws.

While A2 Milk’s initial sales to China came into through informal e-commerce channels, the company has been working to diversify its distribution channels including through the growing network of mother and baby stores expanding across the country.