EU turns protectionist eye on Chinese e-commerce giants Shein and Temu


Insights from The Wall Street Journal, Bloomberg and Nikkei Asia

The news

The European Union should restrictions for various Chinese online retailersparticularly Shein and Temu, the Financial Times reported.

In particular, the EU is considering abolishing a rule that exempts individually wrapped purchases imported from non-EU countries and worth less than €150 ($162) from customs duties.

The bloc wants to stop what it sees as a flood of “substandard”, low-priced goods from China to protect local businesses.


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Chinese companies’ dependence on air transport has implications for freight costs

Source: The Wall Street Journal

Shein and Temu send their packages by air, and that has made the freight cost skyrocket. It has also gone up fear of a bottleneck at capacity as the annual retail season peaks in December, The Wall Street Journal reported. Air freight is typically dominated by products like phones and computers, but the two Chinese retailers are filling cargo planes with small packages of clothing and household items. “The e-commerce boom out of China has transformed the air freight market in an incredibly short time,” one analyst told the Journal. Shein and Temu aren’t the only ones being blamed for rising freight costs, though: Houthi rebel attacks targeting shipping in the Red Sea have also forced retailers to send more by air, pushing up prices.

‘Growing momentum’ behind protectionist agenda

Source: Bloomberg

The proposed measure, which requires the approval of each EU member state, is the latest in a series of protectionist measures to curb imports of cheap Chinese goods that the EU sees as a threat to local manufacturers, particularly in the auto sector, Bloomberg noted. The efforts could be coordinated across the Atlantic: The U.S. is also considering a similar measure when it comes to exempting “low-value personal packages” from import duties, the outlet reported.

China’s neighbors could soon join the West’s protectionist advance

Source: Nikkei Asia

The West’s protectionist agenda could serve as an inspiration for China’s regional neighbors, an economist wrote in Nikkei: “Ultimately, it comes down to protecting domestic companies and jobs. While many Asian policymakers will face tough decisions, the path is clear.” The laissez-faire approach adopted by many Asian countries has presented challenges as China’s overcapacity in several key sectors puts pressure on local firms. Manufacturers in Thailand, Indonesia and South Korea have felt the pinch from Chinese goods, while entire industries such as metals and chemicals have been hit, the economist added.

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