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Understanding China Trade Restrictions

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By far, China has the world's largest consumer economy, as evidenced by McKinsey & Company, so exporting to China is an engine for global growth. Furthermore, its large population presents a massive opportunity for small businesses in New Zealand. The FTA between the two countries gives New Zealand's businesses a considerable advantage due to the predominant lack of China import duty. Of course, there are still some regulations that SMEs need to follow to ensure successful exportation of goods to China.

One way that many companies can do to increase sales and expand their businesses would be to build lasting relationships with countries outside of New Zealand. This means that many businesses ought to export their products to countries with a sizable consumer market, one of which being China. In this article, we will be analysing China’s trade tariffs, export procedures, and documentation. 

An Economic Overview

The exported products to the People’s Republic of China valued at a total of NZ$4.32 trillion in 2022, according to Statista. Although New Zealand exported only NZ$846 million to China in 2022, according to estimates by New Zealand Foreign Affairs & Trade, they still maintain a close trading relationship with them. China still remains one of the most viable export destinations for small and medium-sized enterprises (SMEs). One of the primary inhibitors of active trade between the countries is China's trade tariffs. However, many businesses have reaped benefits thanks to the Free Trade Agreement (FTA) between New Zealand and the People's Republic of China. 

In this regard, companies in New Zealand have more exporting opportunities than ever before. Essentially, outsourcing can significantly increase a company’s sales and market share, effectively broadening the user base and improving competitiveness. This is because outsourcing enables the company’s staff to focus on revenue increasing activities.

What Is Needed for Exporting to China?

New Zealand businesses looking to enter the Chinese market must obtain a certificate of origin that meets the FTA requirements. The certificate's purpose is to assure the Chinese Customs that the exported goods are entirely produced or manufactured in New Zealand. Keep in mind that all certificates of origin must adhere to the format’s requirements. They must be obtained from organisations that are certified by FTA and are designated by the New Zealand Customs Service.

It should be noted that one of the most crucial rules when exporting goods to China is the consignment rule whereby all goods originating from New Zealand are directly transferred to China. If not, there is a risk of losing the preferential duty rate treatment. It is important to also note that there are strict rules with regards to transits through third countries. Transition through third countries is only possible should these following conditions as set by the China Customs be met: 

  • Transiting goods must not undergo any treatment apart from those necessary for keeping them in good condition;

  • Storing goods in a third country should be done under the Customs supervision; 

  • Goods in transit should not be stored for a duration that is longer than six months;

In case of transit, the Chinese Customs may request relevant documentation to confirm the goods' rule of origin eligibility:

  • Invoice and a through bill;

  • If the goods are transiting through Hong Kong or Macau, the importer must supply documents issued by the China Inspection Company Limited (Hong Kong) or CCIC Macau Company;

Bear in mind that the Chinese Customs may request for an inspection if the relevant documents are not present. Also, there might be customs tariffs that you might need to pay. 

What Can We Export to China?

Many business owners often wonder what they can sell in China. It is good to know that there are few trade restrictions imposed by China on New Zealand, if any. According to New Zealand Foreign Affairs & Trade, oOne of China’s main imports would be dairy, wool, meat, and wood products. Additionally, The Observatory of Economic Complexity (OEC) found that consumers in China demand for preparations of cereals, flour, and starch. From this, we can see that food items are in high demand. As a matter of fact, China imported a record 164.5 million tonnes of grains in 2021, and the country’s food self-sufficiency rate is expected to drop to 65% by 2035, reported South China Morning Post. Hence, this gives companies a good reason and opportunity to enter the exporting business.

Start Exporting to China Today 

China takes up a large share of New Zealand’s total exports to the world, according to a report commissioned by New Zealand China Council. Which means that there is viable demand by the Chinese for consumer goods from New Zealand. Moreover, the FTA between the two nations gives local businesses a huge advantage against the otherwise fierce competition. This is a boon to SMEs, as they can quickly establish their presence in the Chinese market.

All things considered, expanding your business overseas would require a reliable and experienced delivery partner. DHL Express is a leading global logistics company that provides businesses in New Zealand access to the international market. We provide some of the most competitive international shipping rates with standard international shipping and economy international shipping options. Open a DHL Express business account and get started with us today.