- Language, legal and cultural barriers can be resolved
- It is important to have thorough knowledge of the export documentation and formal procedures required
The Chinese market can be both attractive and daunting for small and medium-sized enterprises deciding to export their products. However, the opportunity of selling goods or services in a market of almost 1.35 billion people should not be missed.
Although there are many criteria that businessmen should take into account upon choosing where to export their products, market size is one of the key elements for determining this decision.
Exporting to China can be daunting at first for small and medium-sized enterprises (SMEs), especially taking into account its population of almost 1.35 billion people.
However, Shawn Mahoney, China business expert and Washington University in Saint Louis professor, explains that these fears are unfounded: “Dealing with China customs is a person-to-person interaction.”
A visit to China can provide great insight into the country’s business climate and its people
Cultural, legal and even language barriers separating China from Latin America can be resolved. To facilitate this venture, the following elements should be considered upon exporting products to China:
- The Harmonized Tariff Schedule in China is different from that of Europe and the United States. The first six digits of this code are usually the same around the world, although the last digits may vary. Mahoney mentions that in China: “though the first six digits are the same most of the time, the seventh and eighth digit and the two-digit suffix are often different from what we use in the U.S. To add to this confusion, many items that use the full ten digits in the U.S., only use eight digits in China and vice-versa.”
- Every importer in China must have a Customs Registration Code. Mahoney explains that “all products brought into China require an import license. The registered importer is not necessarily your customer, but the entity that has the import license (like a trading company).” Consult this issue with your buyer, especially if he lacks importing experience.
- All products exported to China must be accompanied by a specific set of documents. Some of the mandatory documents include: an invoice containing the producer’s information, a packing list, a certificate of origin and a bill of lading.
- Certain products require additional documentation. Depending on the product, it may be necessary to include health certificates from the country of origin, production or packaging dates, etc.
- Several products require inspection and certification, including China Compulsory Certification (CCC). Several products require inspection certification by the Chinese government. If a company applies for this certification, inspectors from the China Quality Certification Center (CQC) will visit the factory to verify the production process. The US Department of Commerce’s website lists some companies that can assist with this procedure.
- China has strict rules on food labeling. According to the US Treasury Department, “all imported food is subject to inspection and must receive a clearance certificate by the Customs authority. The information must be present on the label, in Chinese. Labels are required to be accurate, truthful, and non-misleading. Please note that the label must meet these requirements prior to importation.” Label requirements include: product name and brand, the list of ingredients, the volume or weight, the date of production, producer information, country of origin, expiry date, type of product, etc.
- To gain better understanding of these issues it may be advisable to visit China before exporting. The United States Department of Commerce says on its website that “a visit to China can provide great insight into the country’s business climate and its people. Chinese company representatives respect face-to- face meetings.”
- If these issues become complex, it may be useful to work with a trade agent. The same website reports that “local agents possess the knowledge and contacts to better promote U.S. products and break down institutional, language, and cultural barriers.”