Trading with China: Quick Guide to Customs and Duties Regulations in China
With its 1.2 billion potential consumers and expanding middle class, China is clearly the world’s most enticing consumer market, and it is a no-brainer for foreign businesses to want to sell into it. Indeed, China currently imports over US$200 billion of goods from the EU and over US$100 billion from the US, so obviously many businesses have already successfully jumped on the bandwagon.
Despite these whopping figures, selling into China is no cakewalk. For every success story, there are innumerable tales of woe from businesses who have failed to properly navigate the many potential obstacles of selling into China. These include, but are not limited to, issues related to logistics, organisational structure, intellectual property and banking. While these issues can all present major problems, the one that is fraught with the most potential pitfalls is how to properly navigate China’s sometimes Kafkaesque customs regulations.
If businesses do not adhere precisely to China Customs protocol, their goods can either be held up indefinitely or can be compromised entirely. This protocol extends from basic details, such as which shipping documents to provide, to arcane details, such as what duties to pay and what safety standards to follow.
The two key documents required for customs clearance in China are the invoice and packing list, which differ depending on the nature of your goods. For instance, ingredients or raw materials which will be processed in China require specific types of forms.
Even after you arrange the proper shipping documents, it is vitally important that you notify your receiver of the shipment so that they can register and provide the proper documents to China Customs for clearance purposes. Moreover, it is crucial that the information you input on all associated documents is clear and correct. A single typo or a small error in the description, such as listing an incorrect value for the goods, the wrong quantity, an unclear description of the shipment, or missing or erroneous consignee information, can lead to penalty and demurrage charges, delay or even confiscation. These consequences in turn can lead to storage charges and, worst of all, being permanently blacklisted by China Customs, which means that every shipment you make to China in the future will be checked.
ICS TRUST's trade experts can help you handle all the necessary PRC shipping documents as well as the complex China Customs procedures. We have helped clients navigate their way out of a wide range of difficult situations in the past, and in doing so, we have amassed a wealth of experience in dealing with China's ever-changing customs and duties regulations. Before you attempt to sell into China, let ICS TRUST be your guide.