China has been one of the cheapest countries in the world to source a variety of products. Driven by cheap labor and inputs, exports became a key component of China’s growing economy as the country became the "factory of the world": able to satisfy global demand for the cost-competitive goods on a scale nearly impossible for most countries to meet.
However, over the past decade, China has made a continual shift away from being the factory of the world for two reasons: China has become an expensive place to do business and it has moved up the value chain. As a result, many factories have moved to Southeast Asian countries, in search of cheaper production.
With the help of the government, China’s cross-border e-commerce has become one of the most successful digital e-commerce ecosystems. This report explains how China has transitioned from being the factory of the world to have one of the most flourishing digital payments and cross-border e-commerce ecosystems.