Why China hopes the US won’t touch a century-old trade rule affecting imports under US$800

by Ji Siqi at scmp.com

Like many entrepreneurs handling exports in the business powerhouse that is China’s Guangdong province, Victor Wang’s freight company has leapt into cross-border e-commerce.

Transitioning away from placing large containers of bulk cargo on overseas-bound ships, Wang over the past year has embraced a sea change in volume and scale that has proved lucrative.

Now, Wang sends small parcels – usually containing a jacket, two pairs of earrings or a rice bucket – via air directly from local factories to shoppers in the United States.
The company’s dramatic shift seemed inevitable: its customer base comprising hundreds of thousands of manufacturing factories in the region had already been flocking to e-commerce.
It strives to fill a void created by dwindling wholesale orders from foreign retailers, especially Americans, resulting from punitive tariffs imposed by former US president Donald Trump.
Then came efforts by Joe Biden, Trump’s successor, to get US companies to relocate their supply chains outside China.

“Foreign trade, gloomy as it is overall, actually has little impact on cross-border e-commerce,” Wang said, noting the US was the leading destination for these parcels “by a large margin”.

A look at recent Chinese government data illustrates how crucial small-item trade has become in shoring up a decline in the country’s traditional export channels, with such parcels surpassing a quarter of a trillion dollars in value annually.