Alibaba’s hometown, Hangzhou, to provide subsidies for e-commerce industry as China moves to shore up battered economy
- The city will establish support mechanisms to help e-commerce enterprises in a variety of areas, including finance, talent, and logistics
- The move is in line with Premier Li Keqiang’s call last month for authorities to spare no effort in stabilising the economy and restoring confidence
Hangzhou, the hometown of Alibaba Group Holding, plans to set up a special fund of 5 billion yuan (US$750 million) to support development of the e-commerce industry, which has taken a hit amid a slowing economy, Covid-19 lockdowns and a downturn in consumer sentiment.
The city, capital of eastern Zhejiang province, will establish support mechanisms to help e-commerce enterprises in a variety of areas, including finance, talent, and logistics, according to policy proposals published by the local government on Thursday. The 22-point long-term plan goes into effect next month and will continue until the end of 2025.
New e-commerce firms registering in Hangzhou will be eligible for subsidies of up to 5 million yuan, while e-commerce platforms in the city with annual turnover above 10 billion yuan will be entitled to a one-off “bonus” of up to one million yuan, according to the proposals.
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Companies that have annual revenue in excess of 20 million yuan and an average annual growth rate of more than 20 per cent over the past three years, will be entitled to a one-time reward of no more than 1 million yuan, according to the Hangzhou government’s announcement.
For qualified institutions that provide training for e-commerce talent, the city will provide subsidies of up to 300,000 yuan. The city will also provide subsidies for delivery companies as their operating costs have increased due to pandemic control measures, according to the announcement.
Hangzhou’s plan to support the local e-commerce industry also comes after a months-long crackdown on Big Tech by the central government, which included a record fine for Alibaba for regulatory lapses and action against many live-steaming stars over tax avoidance.
Alibaba, which owns e-commerce platforms Taobao and Tmall, was fined US$2.8 billion yuan last year for abusing its dominant market position. An array of government bodies, including the Ministry of Commerce, have also rolled out specific regulations for the live-streaming industry aimed at protecting consumer rights. Alibaba also owns the South China Morning Post.
The move is in line with Premier Li Keqiang’s call last month for authorities to spare no effort in stabilising the economy and restoring confidence among foreign investors. Covid-19 related lockdowns have resulted in massive supply chain and logistics disruption, and national retail sales plunged 11 per cent in April, according to official government data.
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Other first-tier cities, such as Shanghai and Shenzhen, are also implementing measures to support businesses and the economy. Shenzhen, the southern tech hub, has rolled out a subsidy programme to boost consumer spending on home appliances and electronic gadgets. Shanghai, the country’s financial hub which officially ended a two-month, citywide lockdown yesterday, said it will encourage e-commerce platforms to offer discounts and offer 10,000 yuan subsidies for electric vehicle purchases.
