Understanding China’s international trade policies and regulations

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As of 2022, China is the world’s largest consumer, accounting for 10% to 15% of the world's consumption of goods and services. With China’s growing middle class and their growth in spending power, they are definitely an attractive export destination for businesses. 

In addition, since becoming a World Trade Organisation (WTO) member in 2001, China has made considerable strides in lowering its import tariffs and export duties. However, there are still some foreign trade policies that businesses should be aware of. For example, China’s import licensing system requires all imported goods to have an import license before they can enter the Chinese market. In order to export your products from India to China successfully, it is crucial that businesses first understand the country’s trade policies and regulations. Here are some helpful tips on understanding China’s export rules, procedures and documentation:

Import duties

Import duty is a tax that is levied on the arrival of exported goods into China, with the amount of import duty payable dependent on the most favoured types of goods in China. These include conventional goods, special preference goods, temporary goods, tariff quota goods, as well as your general types of goods. 

Also, there are two types of duty rates you should keep in mind, they are:

  • Preferential tariff rates: Duty rates are applicable to most favoured types of goods, and they can go from 0% to 1%, and up to a maximum of 121.6%.
  • General tariff rates: Duty rates are applicable for non-favoured types of goods, and they can go from 0% to 8%, and up to a maximum of 270%.

Do note that businesses who wish to export goods to China are required to pay the correct duty rate, you can search through China’s Harmonised System (HS) code to find out the corresponding duty rate that will be applicable to your product.

Restricted and prohibited goods

To protect the country’s citizens and industries against potential risks, China has placed restrictions on certain goods. Some of them can still be exported, but require an import license, while others are completely prohibited from import. For the exporting of restricted goods, businesses will need to apply for an import license from the Chinese Ministry of Commerce (MOFCOM). The application process can be completed online via the MOFCOM website. As for prohibited goods, they cannot be exported to China under any circumstances. These include items such as nuclear materials, chemicals, weapons, and drugs.

Quota and licensing

As mentioned, all goods exported from other countries such as India into China are required to have an import license. Without an import license, you face the risk of not passing the customs clearance, which can be both time-consuming and costly. Application for such licences as mentioned earlier can be done through MOFCOM. Businesses ought to take note that there are four categories of products that require such a licence, they are permitted goods, permitted goods that need to be monitored, restricted goods, and lastly prohibited goods. These four categories fall under two different types of import licences, they are:

  • Automatic import licence - businesses can apply for an automatic import licence if they intend to export products that fall into the “permitted” and “permitted with conditions” categories. 
  • Non-Automatic import licence - businesses need to apply for this type of licence if they want to export products that are “restricted” or “prohibited”.

For ease of your application, you will have to prepare the following documents before applying for your licence: 

  • Your company name and number
  • Your relevant consignee in China (if any)
  • Terms of trade
  • Place of clearance
  • Country of exportation and origin
  • Description of goods and product code of goods
  • Specification, unit, quantity, unit price
  • Authority stamp

Goods labelling

Just like many other countries, one of which being Japan, China also has strict requirements when it comes to the labelling of goods. Before admitting the goods to customs, ensure that they have the necessary labels in Chinese that encompass the accurate description of the contents, specifications, unit price, and quantity. In addition, if you are exporting food items, including pre-packaged food, it is crucial that you have labelled the correct production and expiration dates. For hazardous products, you should also include an explanatory warning of any potential risks or dangers associated with your goods.

Customs check and clearance

Upon arrival at the customs border in China, the goods will be required to go through a customs clearance check, whereby the authorities will ensure that they have met all trade tariff regulations and classifications. In addition, they will assess the value of the goods. This will determine the duties that are required to be paid later on. After the assessment is complete and the duties have been paid, a customs release form will be issued. The form is required for the collection of the goods. It is important to note that the entire customs clearance process can be quite lengthy, so businesses should make sure that they have ample time to get their exported goods through customs before making any final arrangements with their Chinese counterparts.

Product standards

Apart from customs clearance, all export goods are also subjected to inspection by China’s General Administration of Customs. Simply put, your products must meet China’s export regulations and quality standards before it gets cleared through customs. To do so, China has implemented a certification mark for all products, which is compulsory and indicates the approval for your goods to be imported, sold and used in China. 

By applying under the Certification and Accreditation Administration of China (CNCA), you will be able to obtain a China Compulsory Certification (CCC) mark for your goods, which may include details on your product standards, markings, and fees schedule. As there is a variety of products to be exported to China, you will have to search through the CCC catalogue for different markings for your products. Do note that failure to use the CCC mark or correct HS codes can result in a situation where the Chinese customs sends your goods back to you, or in a worst-case scenario, seizes the goods.

Using DHL Express to enhance your export journey

Businesses looking to trade with China must be aware of the country’s complex trade policies and regulations. By understanding the various processes involved in export clearance, businesses can save time and money – and avoid any costly mistakes. To enhance your shipping process and export from India to China with ease, engage the service of a reliable logistics courier service. DHL Express can help in this aspect as we offer logistics solutions to businesses all around the world by providing end-to-end solutions that cover everything from customs clearance to delivery to help you save time and cut down on shipping cost. From offering fast, convenient and versatile international time or day specific export delivery services to offering an array of Customs services which include key aspects such as export declaration for shipments exceeding a value threshold, multiline entry when importing shipments containing multiple commodities etc., DHL Express offers a number of additional services that anticipate your needs and offer the right solution to aid your business grow globally. Moreover, leveraging new age digital solutions, we are consistently one step ahead of the curve in offering only the best to our customers; for example, DHL’s Trade Automation Service (TAS) is a way of obtaining the HS code for your shipment. If you enter where you’re shipping from and to, and the type of goods you’re shipping, TAS will give you the estimated Landed Cost (including Duties, Taxes and other import fees), and tell you which documents you need to import your goods. That’s your two main challenges solved! TAS will provide you with a very good idea of what to expect and this combined with the knowledge and guidance of our certified specialists, ensures for a smooth shipment journey to and from China. 

With our vast experience and network in China, we are well-positioned to help businesses overcome any export challenges they may face. Open a DHL Express account today and let us help you expand your reach into China.