BEIJING - EBay Inc's PayPal business will set up an international e-commerce hub in Chongqing, as the company aims to boost exports from the nation by helping merchants conduct faster cross-border trade, Bloomberg News reported Thursday.
PayPal agreed with Chongqing's municipal government to set up the center to offer foreign exchange settlement, telesales, training, verification and other services, said Dickson Seow, a Singapore-based spokesman.
Helping local companies connect with global customers will boost eBay's transaction volume from China more than 80 percent to $4 billion this year, Chief Executive Officer John Donahoe said in September. eBay is counting on PayPal and local partnerships to expand revenue from China after failing to gain a foothold to compete against Alibaba Group, the report said.
"This is the first time in the world for PayPal where we are doing such a wide-ranging, comprehensive partnership with a government," the report cited Seow's e-mail response as saying. "In this case, we are looking to develop the local e-commerce industry in inland China to help Chinese merchants build up their capabilities to conduct cross-border trade."
California-based eBay first entered China in 2002. Competition from Alibaba's auction business Taobao.com cut its market share by half, prompting it to shut down its China site in 2006, according to the report.
PayPal will have more than one million merchants in China by the end of this year, Seow said.
The foreign exchange settlement solution that PayPal will develop with the Chongqing government is needed because China currently allows individuals to convert to yuan overseas payments of only up to $50,000 a year, Seow said.
The Chongqing government will work with agencies including the State Administration of Foreign Exchange to get regulatory approval for a settlement service that is expected to begin in the middle of next year, he said.