China Looks To E-Commerce To Drive Growth

China’s cabinet called for supporting the country’s e-commerce industry with preferential policies — a shift that would benefit Alibaba and, China’s biggest online retailers, Reuters reported.

The State Council said in a paper released Sunday (Nov. 16) that the government should explicitly support the e-commerce industry and the development of related technologies, such as online payment processing and e-commerce logistics. The statement comes as China’s leadership tries to boost domestic consumption as economic growth slows. The $9.3 billion in sales on Singles Day demonstrate that Chinese consumers can serve as the country’s economic engine, state media have said.

Alibaba, which sponsors the annual Nov. 11 selling festival, will likely be one of the main beneficiaries of policies that favor domestic Chinese companies in the world’s second-largest e-commerce market., China’s second largest e-commerce company, would benefit as well. But outside payments companies, including Apple, OKPay and Paymentwall, would face tougher competition in the face of domestic preferences.

The State Council did not issue any specific policy recommendations for e-commerce, but its periodic opinions are viewed as indicative of the direction of Chinese industrial policy. Chinese policymakers have emphasized promoting IT companies as a way to move the country beyond export-based manufacturing and up the economic value chain.

The move comes amid mounting concerns of a potentially sharp slowdown. Chinese official data showed third-quarter gross domestic product grew 7.3 percent, the slowest pace since the global financial crisis.