The most popular products exported to China included consumer electronic devices, data processing technologies apparel, textiles, optical equipment, and medical devices.
Exports are products and services produced in one country and then are sold to customers from another. Exports, as well as imports, comprise international trade.
2. How Does The Export System Of China Work?
In 2020, China’s top exports included computers for data processing and components, followed by textiles, clothing, and accessories for clothes, mobile phones, and integrated circuits.
China is the biggest exporter of computer equipment, telecommunications equipment, and telephones around the globe and has the US as the most important destination.
It also exports digital infrastructure to over 60 predominantly developing countries under its Belt and Road Initiative. The value of its exports (FOB) totals US$2,498,570 million.
The value of all imported goods (CIF) amounts to US$ 2,068,950. In the HS6 digits, 423 items are exported to 215 nations and 425 imported from 215 nations.
3. Significance Of Exporting Goods From China
Utilizing a more nuanced approach that is not typically used to this issue, the report shows that exports were responsible for about 19% of China’s overall increase in its gross domestic product–far from the figure generally thought to be.
Although expanding trade with other countries could affect US jobs, trading with China can also generate and create an enormous amount of American jobs.
Exports to China provide around one million US jobs. Chinese firms that invest in America employ over 120,000 people. The United States employs over 120,000 employees. This helps US businesses compete internationally.
The most well-known items in the final products exported from China included consumer electronics and data processing technologies garments, clothing, textiles, optical equipment, and medical devices.
The EU and China, the U.S., Japan, and South Korea were China’s biggest trading partners.
4. Pros And Cons Of Exporting Goods From China
Benefits Of Exporting
Benefits Of Exporting
-You could greatly increase your market share, making the possibility of being less dependent upon a single source.
-More production could lead to more efficient economies of scale and higher margins.
-Your budget for research and development will be stronger since you can modify existing products to meet new markets.
-This is the primary reason, though it is not the only reason that draws many businesses to import their goods from the Asian country. We must not ignore it.
-Making our products in China is cheaper than in any European country.
-While we might consider that imports increase the cost for the item, it’s evident that the manufacturing costs and transport expenses are lower than those produced in our country. A business is more competitive when it has less cost and a higher profit margin.
-Contrary to the common belief about the inferior quality of Chinese products, the goods produced within the Asian country are usually superior to goods imported in the other Asian nations, such as India or Vietnam.
-This is due to them being familiar with working in China with the numerous and stringent requirements from that European market.
Disadvantages of Exporting
Disadvantages of Exporting
-If you’re not cautious, you could get distracted from your home markets and your existing customers.
-The administration cost could increase because you will need to comply with export regulations when you trade with countries outside of the European Union.
-You’ll be managing more remote relationships, at times many thousands of miles from home. When you shop in foreign markets, you can relinquish some control you have at home.
-You’ll need to think about your market differently from the domestic market. There will be different buyers with their motives for purchasing your products.
5. Export system of China – a statistical approach
This factsheet provides the most recent data on investment and trade in China, the UK, and China.
It summarizes a range of publicly available data from data providers like the Office for National Statistics (ONS), HM Revenue and Customs (HMRC), and International data suppliers.
This factsheet forms part of an overall collection created by the Department for International Trade which gathers a variety of data sources into one compendium for each investor and trade partner.
-When Data Are Available, These Factsheets Include:
Top figures on the trade relationship between the UK and all trading partners for the most recent four quarters. Statistics on trade by commodity and type of service.
The trade between the UK and each of its trading partners is divided into the UK nation and the English region. Market share of the UK in total imports from each trading partner.
The UK’s Foreign Direct Investment (FDI) with each investment partner. Summary of investment and trade information as presented by each investment and trade partner, along with estimates and data on the economy.
Change to the data source headline trade statistics on the 27th of January, 2022, ONS released an updated dataset that presents UK trade between each partner market in a seasonally adjusted manner.
Every factsheet now includes the headline trade statistics adjusted for the season from the ONS “UK total trade all countries, seasonal adjusted’ quarterly data.
6. Fee And Taxes To Export From China
Export taxes (percent in tax revenues) for China were recorded at 0.1 % in 2018 as per the World Bank collection of development indicators, compiled using officially acknowledged reliable sources.
You’ll need to pay customs duty (or import tax) for any item you cross the US border with China, even though products from certain countries are exempt from this due to various international trade agreements.
In the United States, United States Customs and Border Protection (CBP) enforce regulations governing customs.
Chapter 2: Step By Step Procedure to Export From China
1. Step 1: Identification of Goods And Their Permittance
Determine your rights to import. If you purchase goods from foreign suppliers, then you are the importer.
A courier like DHL/UPS/FedEx will take care of everything and deliver to your home if the parcel is small and intended solely for personal use or the value isn’t too high. If this is the case, it will help you save time and cost.
But before importing commercial items to your country, either as a company or as an individual, you need to determine if you have the right to import.
If you’re from America, the U.S., your Social Security Number (SSN as an individual) or your company’s Internal Revenue Service Number (IRS EIN for business) is sufficient. (Learn more details on the import process into the USA).
If you’re using EURO as your currency, you’ll need to sign up for the role of an economic operator (EORI number).
If Japan wishes to import goods, all persons who wish to import goods have to declare them to the Director-General of Customs and obtain an import license following a thorough examination of the products involved.
If you’re in Canada is your destination, you’ll have to get a Corporate Number granted from the Canada Revenue Agency (CRA) first if Australia does not require importers (companies or individuals) to possess an import license.
Some import regulations only apply to products imported for business – commercial or resale-related reasons.
Only the customs authorities can decide what is considered personal usage.
Several suits that look identical or several similar handbags are likely to have a tough time passing the test of credibility as personal items.
2. Step 2: Calculate The Costs
Find ten digits of tariff classification code for each item you are importing. These numbers, along with your Certificate of Origin, can be used to calculate what rate of duty you have to pay when you import. You can then do the cost of land calculation.
Be aware of the Inco terms’ terms and determine the total landing cost before placing your order. For example, FOB refers to adding three of the following terms to get the total landed cost.
-Find the price of the product from the seller.
-Find the shipping costs from a freight agent (if door-to-door shipping is offered, it will suffice.)
-Pay the costs of customs clearance, duty, tax, and land transportation from the land to your warehouse.
-It’s essential to determine the landing cost sooner; nobody would like to lose clients (due to too expensive estimates) or earn (estimating costs that are too low).
-If it’s more expensive than you expected, then you should seek ways to lessen the costs. If the cost is within your budget, you’re able to start the process.
-It’s possible not to be aware of the exact cost of something until your shipment is delivered.
-It is essential to determine your costs as accurately as possible in such cases.
-Request estimates from the companies you deal with and review the costs of previous deliveries to determine the amount you’ll need to spend.
3. Step 3: Find suppliers in China
Unexpected charges that might pop out of the shipping process can cause fluctuations in the total landing cost and is completely normal. Although you must identify as many of your costs ahead of time as you can, a well-informed estimation will go a long way.
Once you have your final, actual expenses, compare them to the estimates you made.
You can place your order with the seller, vendor, or exporter. You must also specify the shipping terms to be applied.
Once you’ve selected your preferred supplier, you must request a (Performa invoicing or quote sheet) for the items you’re considering purchasing, including the Harmonized System Number, Description, and the price per item.
The invoice must include the weight and dimensions of the package along with the date of purchase.
-We recommend NOT:
Always looking for the lowest cost
It is a red flag if you find an offer substantially lower than other quotes. Be aware that there isn’t any most affordable price available in China and only the cheaper and less expensive.
The lowest price has always been associated with the risk of high reputation, quality, or quantity.
You need to find an experienced supplier and sustainably work with them.
Failure to clarify product information
If you’re not completely explicit with your supplier about the specifications you require, there’s a high likelihood that you’ll receive the thing you didn’t need.
In the absence of clarity, the factory will decide in your favor based on the savings in cost.
Be sure to double-check your materials and manufacturing process for every quote to be confident about your purchase product.
Check to see if your supplier has verified every detail of your product and packaging. Sometimes, it’s required to provide the sample for an additional check.
Showing distrust towards your supplier
International trade is built on trust. If you aren’t confident in your supplier, no one will oversee your production in your factory, and no one will be able to help you in case of trouble.
4. Step 4: Arrange Transport
There are numerous costs associated with shipping goods, including containers, packaging costs, terminal handling, and broker charges. To get an accurate view of the shipping cost, every one of these aspects must be considered.
After you’re satisfied, you are satisfied with your freight estimate. Once you’re satisfied with the quote, you’ll have to give us or your forwarder your supplier’s contact information.
We’ll handle the details from there. We’ll stay in contact with you and your supplier, making sure that your shipment’s transportation is quick and secure.
Find out more about the following:
Two items to be aware of in shipping to China
Freight by air
Service for Couriers
Always consider that delays could occur in the course of your work, like when goods could not be delivered in time, the vessel may not be able to sail in the time scheduled, or goods may be held in the hands of customs.
Plan and be prepared. Don’t expect your cargo to leave the port when it is finished at the factory. It takes at least 12 days to transfer through the facility to port.
Also, the procedure for Customs Declaration needs your cargo to remain in ports for at least 12 days.
In addition, there’s only one schedule frequency each week, but in certain cases. If you miss a day during this week, you’ll need to wait until the following week.
Logistics is a much-appreciated aspect of modern-day business. Shipping costs cover both direct and indirect costs of transporting items from the source to the market they are destined for.
If they can get it right and choose a reputable logistics service provider, they can be assured of smooth operations, controllable costs, and constant cash flow.
If they, do it wrong, they’ll face increasing costs and waste if they make a mistake. In the worst case, they may face a failed business model that needs to be closed down.
The companies are likely to continue losing cash if their logistics are poorly managed.
5. Step 5: Make Necessary Preparations At The Arrival Port
International shipping requires time. For instance, items shipped from China typically require around 14 days before they reach the West Coast of the United States or 30 days to get to the East Coast.
Normally, the consignee is informed via an arrival notification within five days or less from the date of arrival by the sourcing agent for a destination that is listed on the bill of lading.
Once a shipment is in the U.S., the importer of record (i.e., the purchaser, owner, or licensed customs broker appointed by the purchaser, owner, or consignee) will file entry documentation for the shipment in the hands of the port manager at the port of entry.
Entry documents include:
A bill of lading lists the items to be brought into the country.
A valid invoice lists where the goods originated from, the purchase cost, and the tariff classification of the products purchased.
A packing list that outlines the goods that are imported.
The agent provides an arrival notice for freight.
It will be easier to expedite the clearing of your goods at the border if
Invoice your items in a structured manner
Display the exact amount of each item in every box, bale case, package.
Place numbers and marks on each package.
Display these numbers or marks on the invoice to the right of the description of the goods inside the package bearing the numbers and marks.
The importer’s responsibility is to organize the inspection and release of the merchandise.
If you encounter issues you must resolve, it is important to know the procedures your goods must pass through before being cleared by customs authorities of your country.
6. Step 6: Receive Your Goods
Once the items arrive, you must arrange with your customs broker to let the shipment be by customs (and quarantine, if necessary). If everything is in order, you are entitled to take your shipment.
If you opt for our door-to-door service, you’ll need to patiently wait for the delivery to arrive at the address you specified.
After you’ve received your items and determined the quality, the packaging, the instructions, and labels be smart to send an email to your supplier to inform them that you’ve received the goods but haven’t yet looked over the items.
Tell them you’ll be in touch with them once you’ve reviewed the products, and, hopefully, you will be able to place another order.
Chapter 3: Licenses and permits for export from China
1. What is an export permit/license?
An Export license, also known as an Export permit, is a document given to businesses from the Chinese Ministry of Foreign Trade and Economic Cooperation.
The Export license is needed to ship goods from China. Without this permit, goods cannot be cleared by Chinese customs. In this way, most export-oriented suppliers, including traders and manufacturers, have Export licenses.
The Export licenses are granted to Chinese businesses that want to export their goods from China to foreign markets. So, buyers from overseas do not require permission or a license in China.
2. Significance of export permit
When I was in the past, about 10-15 years ago, it was common for producers not to have export licenses and thus relied on export companies and trading agents to export their goods.
There are a variety of reasons for this. The first is that getting an export permit required a lot of paperwork, and it was expensive too.
The world has changed, and China is much more business-friendly in 2017 compared to 1997. Furthermore, production costs are more expensive, which means lower profits for the producers who share it with trading firms.
However, some companies still do not have export licenses. These are usually smaller companies with no access to the markets of other manufacturers.
3. License required to export from China
Importing most industry goods into the UK does not require an import license. However, some industrial commodities require licensing as a result of national or UN controls.
4. Working with suppliers having a license to export from China
In many instances, they are subcontractors focused on producing a specific product or component or even processing for a larger and more export-oriented manufacturer. In the majority of cases, there is a yes answer.
It would help if you only dealt with suppliers with an export license. Export licenses can be accepted as a given in the present.
Therefore, you should, however, not believe that a company is qualified only because they have an Export license.
Although ‘holding a license’ might not add one point to the score of a supplier but ‘not having the permit can take a lot of points off – since it has negative consequences for your company.
As I said, companies who do not have Export licenses are typically not directly exposed to markets in other countries.
Although these factories may be a bit more expensive, they also come with many issues for the buyer. You have to manage the bureaucratic process of exporting your products from China.
They only speak Chinese since they don’t require to recruit English sales representatives who speak English.
The Exporter’s function is to monitor their subcontractors generally and then implement quality assurance processes.
If you want to eliminate them to control quality ‘on-site at the manufacturing facility. Please don’t depend on them to perform the job for you.
Chapter 4: Things to Consider Before You Export From China
1. Surplus charges for the export and import of specific goods
If the country’s exports exceed imports, that country is said to have a favorable balance of trade or excess in trade. If imports are greater than exports, an imbalance of trade is not favorable, or a trade deficit is present.
The relation between a nation’s exports and imports and their exchange rate is complex because a continuous feedback loop runs through international trade and how the value of a currency’s worth is determined.
The exchange rate influences the deficit or surplus in trade, affecting the exchange rate and vice versa.
However, generally speaking, the country’s weaker currency boosts exports and makes imports more costly.
However, a strong domestic currency hinders exports and makes imports more affordable.
Consider, for instance, an electronic component valued at $1 in the U.S. that will be exported to India. Consider that the exchange rate is 50 rupees per U.S. dollar.
By omitting shipping costs and other expenses like import duties, the electronic component of $10 will cost an Indian exporter of 500 rupees.
If the U.S. dollar was to rise about the Indian rupee, to a value at 55 rupees (to one U.S. dollar), and taking into consideration there is no guarantee that it is the U.S. exporter does not raise the cost of its component, the price will increase to 550 rupees ($10 55) for the Indian importer.
This could force the Indian importer to seek lower-cost components from other countries. The 10percent appreciation in the value of the dollar in comparison to the rupee has weakened this U.S. exporter’s competition on this Indian market.
The effect of the appreciation of 10% of the dollar compared to the rupee has made U.S. exports of electronic components ineffective. However, it has also made imports of Indian clothing more affordable for U.S. consumers.
On the other hand, the 10% appreciation of the rupee has increased the efficiency of Indian exports of clothing. Still, it has also made electronics more expensive to Indian consumers.
If this situation gets multiplied over millions of transactions, changes in currency can significantly impact exports and exports.
2. Chinese regulations about export
Certain items, including but not limited to: not allowed from being brought into China including ammunition, arms, and explosives of any types; counterfeit currency and counterfeit negotiable securities; magnetic media, printed matter films, photographs, or printed matter which are considered to be harmful to the economic, political as well as moral rights of China;
3. Goods prohibited to be exported from China
Certain items listed below are banned from being brought into China, including ammunition, arms, and explosives of all types; counterfeit currency and counterfeit negotiable securities; printed matter film, magnetic media, or photos which are considered as a threat to the economic, political moral, cultural, or social concerns that are the interests of China.
It is illegal to export or import any threatened wild animals or plants and their products, whose export or import is forbidden under the Convention to any use other than commercial commerce.
4. Chinese regulations about the export of endangered species
It is not permitted to import or export endangered wild animals or plants in addition to their product of them, whose import or export is forbidden under the Convention for any reason, including commercial commerce.
5. Goods prohibited to be imported in your country
Prohibited and Restricted Goods To/From India
Psychotropic and narcotic drugs.
Material that is pornographic and sexually explicit.
Pirated and counterfeit goods and items that infringe any legally enforced Intellectual property Rights.
Pig fat, uncontaminated by the leanness of poultry and meat fats that have not been rendered or extracted fresh chilled frozen, salted, in brine dried or smoking.
Chapter 5: Frequently Asked Questions about Export from China
1. Is it safe to export goods from China?
All shipments arriving in Canada will be inspected. However, there is a 99.999 percent probability of having your initial two or three shipments examined for a first-time importer. It’s almost certain.
The odds of being inspected for regular importers are around 1 out of 15.
2. Is export from China costly?
China is being hammered by rising costs which have brought up inflation of producer prices to the highest levels in nearly thirteen years.
Inflation that is soaring in the world’s factories is likely to spill into the rest of the world and push prices that were already soaring higher.
3. Which goods are most suitable to be exported from China?
The most popular items among the final products imported from China included consumer electronics, data processing technology garments, clothing, and other items like optical gear, textiles, and medical devices.
4. What is the rough estimated cost of exporting goods from China?
At present, the average cost of freight for various shipping methods could range from Air Express from China to the US $5-$9 per Kilo.
The cost of air freight From China towards the US is $4-$8 per Kilo. Shipping Freight comes from China into the US 3000-$3900 for a container.
5. What if I do not have a license to export from China?
There isn’t a general import permit to import products from China. But you may require an import permit through federal agency items from China. Different federal agencies regulate different imports, and the requirements may differ.
6. Does a buyer need to pay any export fee in China?
The export duty is applied to a handful of commodities and semi-manufactured items. Since January 1st, 2022, China will continue to enforce export tariffs or provisionally charge export duties on 106 export products with fixed and unchanging tax rates.