- There is growing resentment across Southeast Asia against Chinese e-commerce firms.__
- Import tariffs can create tensions and hurt some local businesses.__
- Southeast Asian nations are also pulling out all the stops to welcome Chinese electric vehicle makers such as BYD and GWM, with subsidies and other incentives to set up manufacturing plants, due to growing trade deficits with China.__
Indonesia is Southeast Asia’s largest e-commerce market, accounting for nearly half the gross merchandise value of the eight top platforms, according to advisory firm Momentum Works. The value of e-commerce sales in Indonesia hit $77 billion last year, authorities say.
Chinese imports had enjoyed low, or zero, duties in Indonesia under regional trade agreements. But as sales of cheap clothes, shoes, and electronics surged online, the government stepped in to protect local businesses. President Joko Widodo has repeatedly raised concerns about low-priced Chinese-made goods, and urged consumers to shun imported products. The country has imposed the strictest curbs on cross-border e-commerce sales in the region. It set a de minimis limit — the threshold below which goods are not subject to import duties — at $100, then lowered that to $75, and then to $3. Authorities also banned shopping on social media platforms last year, forcing TikTok Shop to close. But the platform was back online after about two months, saying it had met the requirements.
Across Southeast Asia, other governments are also cracking down with higher import duties and outright bans on some goods. Malaysia has a 10% sales tax on imported goods priced below 500 ringgit ($106), while the Philippines has imposed a 1% withholding tax on online merchants. In Thailand, the entry of Chinese e-commerce firm Temu has sparked calls for higher tariffs on some imported goods. More taxes and curbs on e-commerce firms may be imminent across the region, Simon Torring, co-founder of research firm Cube Asia, says.
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While Southeast Asian nations are trying to rein in Chinese e-commerce firms, they are also pulling out all the stops to welcome Chinese electric vehicle makers such as BYD and GWM, with subsidies and other incentives to set up manufacturing plants. Indonesia has a trade deficit with China, but authorities were forced to roll back some import restrictions earlier this year after complaints that they led to a slowdown in manufacturing.