China implements new tax on cross-border e-commerce

http://www.chinadaily.com.cn/business/tech/2016-03/25/content_24100577.htm

The article examines the introduction of tax on cross border ecommerce in China. Earlier the tax was taken as a small collective tax including the tariff and the Import duty; The Chinese government has decided to levy the new tax system in line with the changing nature of the International Trade across its borders. The cross border ecommerce grew at 30 % while the traditional wholesale Trade across the border decreased by 6%.

 

Topics include Protectionism, Tariffs and Arguments for /against Protectionism. Also discuss the inelastic nature of the ecommerce imports and explain the impact of tax incorporating the Tariffs diagram.

Evaluation will cover the Arguments for/against Protectionism – increase in revenue for the Chinese government, fair competition to the domestic producers, increase in prices for consumers and welfare loss.

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