The State Council pushes rural e-commerce to invest 140 billion yuan in five years to open up rural broadband

On October 14th, Premier Li Keqiang presided over an executive meeting of the State Council, which decided to improve the compensation mechanism for broadband telecommunications universal services in rural and remote areas, narrow the digital gap between urban and rural areas, and deploy to speed up the development of rural e-commerce. New business type to promote consumption and people's livelihood; determine measures to promote the development of the express industry, and cultivate new growth points of modern service industry.

A few days ago, the Ministry of Commerce has allocated 3.7 billion yuan of support funds to carry out a comprehensive demonstration of e-commerce in rural areas in 2015. Soochow Securities Research newspaper believes that after the increase in farmers' income and consumption, the demand for high-quality goods increases. However, the rural population is scattered, it is difficult for shopping malls to enter, and there is a huge gap between supply and demand. With the gradual increase of Internet penetration in rural areas, rural e-commerce can effectively solve this pain point.

The logistics "deficiency" of rural e-commerce development

According to the forecasts of several brokerages, the size of China's rural online shopping market is about 180 billion yuan in 2014, and it is expected to rise sharply to 460 billion yuan in 2016, with a compound growth rate of 60 percent. However, at the initial stage, new business type was faced with many problems such as logistics, capital, and infrastructure, and could not find an effective grasp at the moment.

In view of the outstanding problems in the development of rural e-commerce, the meeting decided to increase central financial investment, guide local governments to strengthen policy and financial support, encourage basic telecommunications, radio and television enterprises and private capital to fairly participate in rural broadband construction, operation and maintenance through competitive bidding, and at the same time explore market-oriented ways such as PPP and entrusted operation to mobilize the enthusiasm of all kinds of subjects to participate. By 2020, we will strive to achieve broadband access to about 50, 000 unconnected administrative villages, upgrade broadband for more than 30 million rural households, make broadband coverage for 98% of administrative villages, and gradually achieve wireless broadband coverage, with a total investment of more than 140 billion yuan.

In addition, the meeting also identified measures to promote the development of the express industry, including the improvement of express service networks in rural and western regions, the construction of an express delivery system covering both domestic and foreign countries, and the investment in the central budget to support the construction of public welfare and basic express facilities in rural and western regions.

"this meeting can be said to have clearly defined the priorities for the development of rural e-commerce," said Zhang Li, deputy director of the e-commerce research department of the Research Institute of the Ministry of Commerce. Wang Yang, vice premier of the State Council, went to the place to investigate rural e-commerce. The core issue reflected was the logistics "deficiency". After the investigation, specific opinions were fed back to the relevant departments.

"in some remote rural areas, an express delivery needs a person to deliver it for a day, and the cost is at least 10-15 yuan, while the logistics cost accepted by farmers is only about 5 yuan at most." Zhang Li said.

Obviously drive farmers to start their own businesses

The above executive meeting held that through mass entrepreneurship and innovation, give full play to the role of market mechanism, speed up the development of rural e-commerce, organically combine physical stores with e-commerce, produce a superposition effect between the real economy and the Internet, help promote consumption and expand domestic demand, promote agricultural upgrading, rural development, and increase farmers' income, and let hundreds of millions of farmers onto the new stage of the mass entrepreneurship and innovation Initiative by "touching the net."

To this end, it is necessary to expand the application of e-commerce in agricultural and rural areas. We will encourage social capital, supply and marketing cooperatives and other subjects to build agriculture-related e-commerce platforms, broaden markets for agricultural products, folk products, and rural tourism, and expand more space for agricultural products to go to the countryside while promoting industrial products to the countryside. Priority will be given to carrying out comprehensive demonstration of e-commerce in rural areas in old revolutionary base areas and poor areas, increasing employment and income channels, and promoting poverty alleviation and development. Second, the environment for the development of rural e-commerce should be improved. Improve transportation, information, distribution of producing areas, cold chain and other related facilities, encourage rural commercial and trade enterprises to build distribution centers, develop third-party distribution, and improve circulation efficiency.

Third, it is necessary to create a good environment for online consumption and crack down on illegal acts such as the online sale of fake and shoddy commodities. Great efforts should be made to train rural e-commerce talents and encourage them to start a business through the Internet. Fourth, we should increase policy support for rural e-commerce. Guarantee loans and discount interest shall be given to those who meet the conditions. Financial institutions are encouraged to innovate online payment, supply chain loans and other products, simplify small short-term loan procedures, and increase credit support for e-commerce start-ups.

"this will obviously promote our entrepreneurship," said Song Junwen, founder of the former fresh Life. For young entrepreneurs returning to their hometown, the threshold for rural e-commerce as an entrepreneurial project is much lower. "third-party platforms, entrepreneurial training from the local government, coupled with special support from poor counties," the wave of rural e-commerce entrepreneurship will become more and more obvious.

Song Junwen is a representative of returning to his hometown to start a business. he once worked as a university student village official and a civil servant, but now he starts his own business and does rural e-commerce.

Allowing hundreds of millions of farmers to return to their hometown to be their own bosses has not only driven the "going out" of rural characteristic products, but also enriched the consumption choice of rural residents in both directions. More importantly, in 2013, 630 million people still lived in rural areas of our country. There are still 240 million people in the agricultural labor force, and the proportion of the agricultural labor force in the whole society is 31.4%.

Zheng Xinli, executive vice chairman of the China Center for International Economic Exchange, said publicly that releasing the consumption potential of the 630 million rural population is enough to support China's economy to develop at a rate of more than 7.5 per cent by 2030.