Shenzhen’s city government has apparently decided to not intervene in the blowup that has been taking place between Chinese cross-border e-commerce firms and Amazon, the American giant.
According to sources quoted by SCMP, the city has been turning down requests to back thousands of vendors’ legal actions against the US company. The same official told the merchants that the government cannot help their cause if they cannot prove that no rules of the US e-commerce platform were violated, these sources said. The government, however, will assist the affected merchants by introducing them to legal counsel.
What the report does not mention is that the city government has been massively supporting all of these companies while they were busy building up their businesses on Amazon, providing subsidies, cheaper office and warehousing space, and export rebates. It does note, however, that once the storm broke over how these companies had been flooding Amazon with fake user reviews, the city government decided to grant them a subsidy of 2 million yuan for each independent online store.
Shenzhen is home to more than 40,000 firms involved in cross-border e-commerce, accounting for about 35 per cent of the entire sector across mainland China.