Alibaba.com announced on Tuesday that it will start paying subsidies to Chinese suppliers to boost the revenue of its foreign export services.

Alibaba will give manufacturers and suppliers a maximum of CNY0.03 for every export transaction worth $1 done through its foreign trade services firm OneTouch, according to China Daily.

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OneTouch is a subsidiary of Alibaba.com which provides customs clearance, foreign exchange, logistics, trade financing, and other online services to Chinese exporters.

Alibaba Group vice-president Wu Minzhi said the conglomerate has built its whole system on a foundation of local commerce because of the large volume of deals conducted through tmall.com and ontaobao.com. She then said the firm is now trying to branch out into foreign trade.

Wu also explained that export transactions can produce big amounts of data because it involves a long process of customs clearance and application for tax rebates. Up until now, there is still no single platform that can combine all the data in a credit system to help buyers and suppliers gauge the trustworthiness of their clients.

Through the export subsidies, Alibaba will be able to gather online data in its OneTouch service and put together a credit system that can evaluate buyers' qualification for loans.

Last week, Alibaba Group filed for an initial public offering (IPO) in what could be the biggest deal of its kind in the US. According to Wu, the subsidies they will offer is only a means to facilitate easier business-to-business transactions and is not connected with the company going public.

At present, exporters are facing setbacks in their businesses because labor and material costs are increasing and the export markets of China are going through a sluggish recovery phase.

During the Canton Fair in early May, the country's export volume plunged by 12.64% compared to the previous year to $31.05 billion (CNY191.18 billion).

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