For more, I'm joined in the studio by CCTV reporter Tao Yuan.

Q1. Hi Tao Yuan, can you first explain to us the details of the new cross-border e-commerce tax policy and what products it applies to?

Q2. Food and baby products are two of the big buys for Chinese shoppers online. How does the new policy affect them and the companies that sell these products?

The new system removed the so-called “parcel tax” that was previously levied on imports sold online.

Instead, it will charge value-added and consumption duties that are currently imposed on most products sold in China, but with a 30 percent discount.

So, how does this impact the price of imported goods? Well, the answer depends on what you’re buying.

The old parcel tax ranged anywhere from 10 percent on food and infant items, to 50 percent on cosmetics and alcohol. If the tax was less than 50 yuan, about 7.7 US dollars, you get a waiver.

So say if you bought under 500 yuan worth of baby formula, you didn’t have to pay any tax.

Under the new policy, you pay 70 percent of regular VAT and consumption taxes. That amounts to about 11.9 percent tax.

So if you buy the same amount of baby formula now, you’d be levied around 60 yuan.

But there are also rate cuts for certain products.

For example, cosmetic imports – 50 percent before, now 11.9 percent, down more than 30 percent (38.9%).

The Ministry of Finance also issued a list of over one thousand commodities subject to the new e-commerce tax policy. They cover everything from food and drinks, healthcare products, clothes, electronics, cosmetics and toys.

Well, it’s still too early to tell as it’s only been a week since the new tax policy was implemented. But you’re right – food and baby products form the vast majority of cross-border online sales in China, partly due to concerns of domestic product safety.

Now if you remember, these are the products that are seeing a tax hike. So yes, this could dampen some demand.

China’s cross-border e-commerce companies are quickly responding to the new policy.

Several purchasing platforms have announced that they’ve uploaded all their baby products currently in stock. These will be sold with no new mark-up. They're encouraging e-consumers to stock up on these goods.

Meanwhile, shares of overseas companies who are selling into China are tumbling.

But in the business circle, people don't expect the move to have a long-term impact.

Our correspondent Greg Navarro has visited one company in Australia, which has profited from increasing Chinese demand.

Meanwhile, e-commerce giants in China like Alibaba and JD.com are also saying they expect robust demand from Chinese consumers for overseas products to continue.

Shares have fallen dramatically in some Australian companies - following China’s new tax policy for cross-border e-commerce retail sales. But experts don't expect the move to have a long-term impact - especially for Australian companies that have profited from increasing demand from China. Greg Navarro has the story.

Investors in Aussie supplement maker Blackmores were rattled this week - after China announced it was changing its tax policy on e-commerce retail sales.

"Some companies will claim there is damage to their stock worth, the values of their companies have gone down," said Stewart Jackson of University of Sydney.

Stock values dropped for several Australian companies specialising in consumer-based good.

Especially items that have been in increasing demand from Chinese consumers.

It’s still unclear which items will be subjected to the tax.
 
In 2015, Chinese tourists visiting Australia’s shores spent more than $6 billion USD here. What’s even more significant is that each person spent on average about $5,000.

Analysts believe some of that spending was driven by China’s rising middle class - and an increasing appetite for Aussie products including infant formula and health supplements.

Which is why they believe the new tax system won’t having a lasting impact here.

"Even if we take into consideration the increased tax, we talk about infant formula. If the Chinese customers were to purchase infant formula through the website it is worth roughly around $50 however if they purchase it through the store it is still worth around $80," said Raymond Chan, managing partner of Morgans Financial Limited.

"This is the one that always makes headlines, baby food products where there have been problems with tainted products - people will go, well I will get that overseas where I know the product is good,” said Stewart Jackson.

That’s why some analysts expect those companies currently dealing with rattled investors - to continue to benefit from cross border sales down the road.