Hao Liang gave a loud whistle and a V-sign as he passed China Customs officials at Beijing International Airport without being asked to open his two suitcases.

The 30-year-old's heavy bags contained milk powder, cosmetics and Apple iPads purchased in the United States.

"I could earn about 20,000 yuan (US$2,941) by reselling the tax-free products bought on this trip. It is worth the risk of a random inspection by China Customs officials," he said.

"There isn't any spare room for my underwear or electric shaver in the bag," he said.

He flies between China and the US every two months on company business. While he is there, he takes advantage of the opportunity to make cheaper purchases for mainland customers, who have placed orders on his website.

This profit-generating scheme has become increasingly popular. According to a report released on Monday by the China E-Commerce Research Center, e-commerce continues to grow at a dazzling speed in China, with 200 billion yuan of B2C (business to consumer) transactions in the first six months of the year, almost reaching last year's total amount of 260 billion yuan.

The number of online stores run by individual Chinese entrepreneurs has now passed 12 million and is expected to reach 13 million by the end of the year, the report said.

Data gathered by eachnet.com, the Chinese version of ebay, showed monthly transactions have continued to increase since an overseas purchase service began, with cosmetics and powdered milk being the most popular items.

Packages that arrive in China by post from abroad will be required to pay an import tax from September 1, according to the latest Customs regulations. The move has raised concern over the rising cost of purchasing overseas products online.

Previously, if the import tax on a package was lower than 500 yuan, the fee was waived. With the new regulation, the minimum threshold will drop to 50 yuan, as stated on the website of the General Administration of Customs.

The new rule is expected to hit overseas purchasers the hardest, since they buy products on other people's behalf and make a commission on the deals.

However, the Chinese frenzy for overseas purchases is unlikely to be dampened by the new restriction, the report said.

While further growth in the overseas online purchase market may slow down due to the restriction, the market will continue to hold huge potential as a result of its ability to offer desirable products at lower prices, the report said.

(China Daily August 10, 2010)