Increase in E-commerce Delivery Charges by China to Prevent Harmful Price Escalation
In a significant move aimed at regulating disorderly low-price competition and improving product quality, China has launched an anti-involution drive. This government initiative, chaired by President Xi Jinping, is not limited to the e-commerce sector, as more regions are expected to follow suit.
On July 1, the Central Financial and Economic Affairs Commission, a national-level body in China, announced the need to "lawfully regulate" disorderly low-price competition. The Commission also aims to promote the orderly exit of outdated capacity and guide companies to improve product quality.
One of the first regions to implement this policy is the e-commerce hub in Guangdong province. As reported by the Shanghai-based business news outlet Yicai on Monday, the e-commerce hub in Guangdong has announced a rate increase of 0.4 yuan. This move primarily affects e-commerce clients.
Guotai Haitong Securities, a financial institution, reported on the rate increase. Despite this change, the impact on individual consumers is expected to be minimal. The e-commerce hub in Guangdong is considered a major e-commerce centre, and this rate increase is likely to set a precedent for other regions in China.
The anti-involution drive in China is part of a broader effort to regulate and improve the economic landscape. By addressing disorderly competition and encouraging the exit of outdated capacity, the Commission hopes to create a more sustainable and competitive market. As the drive expands, it is expected to bring about positive changes in the Chinese economy.
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