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B2C to A-plus for China's E-commerce

Stocks in this article: YHOO WMT DANG

TAIPEI ( TheStreet) -- It's easy to get cynical when China announces a new slew of rules. Chinese officials throw rules at sticky issues the way Americans throw committees at them.

But the sudden emergence of rules, whether enforced or ignored, usually means there's a problem far-reaching enough to merit the attention of a busy government. That pattern explains why Chinese commerce officials are working on 40 guidelines to promote the stable growth of e-commerce.

Stable growth should, in turn, shore up investments in the shares of overseas-listed companies that are increasingly "bound-2-China."

About 210 million people in China do some kind of business online, leading to a 51.6% increase in total e-sales volume in the second quarter, year-on-year, to 268.4 billion yuan ($42.7 billion), the official Xinhua News Agency reported, citing Internet industry research agency iResearch.

It makes sense. Traffic congestion in larger Chinese cities would naturally deter drivers from popping over to the mall, which may be as crowded as the roads. Parking is tough in city centers and public transit so packed that a passenger may miss a stop just by being wedged too deep inside the bus or train.

This week, as the country takes its annual National Day vacation, local news media say 530 people will jam roads, railways and airports -- more incentive to stay home.

Nice then when China's overall adventurous consumers can place orders from their home PCs and find the stuff at a neighborhood store or in their building lobbies a few days later. It's just that when it comes to making secure payments or settling disputes, today's laws are weak or confusing.

So the Ministry of Commerce has said it would "promote the launch" of its "Network Retailing Management Approach," the 40 guidelines. Then it will "research and formulate" regulations known as the "Third-Party Network Trading Platform Management Approach," the news Web site China Tech News reported last week.

I'm guessing from this language that China can expect broadly worded suggestions (as opposed to hard, cold, do-or-don't rules) for cops and courts to consult when taking sides in e-commerce disputes that escalate past the blood-stained private chatroom.

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