• Helping you do business with China - Importers Guide April 2007
Business with China
Over the last 25 years China has seen sustained growth in its economy. and has seen huge increases in foreign trade. Entry into the WTO in December 2001 has further enabled China to enter the global economy and encouraged a standardisation in trade laws. Accession into the WTO has allowed the China market to open up further to the outside world.
Authorities in charge of imports and exports in China include the Ministry of Commerce (MOFCOM), the General Administration of Customs, the State Administration of Foreign Exchange (SAFE), the State Exit and Entrance Inspection and Quarantine Bureau (SEEIQB) and the Administration of Quality Supervision and Inspection and Quarantine (AQSIC).
Only enterprises authorised by MOFCOM can engage in Import and Export trade. Wholly Chinese-funded companies intending to deal in import and export activities are required to apply to MOFCOM in advance for import and export rights.
China prohibits the export of certain goods and technologies on the grounds of public policy or in order to comply with international treaties or agreements. Some of the goods reserved for state trading include corn, cotton, rice, silver, coal and silk. Goods reserved for trading by specially designated traders only include tea (oolong tea, green tea) and certain steel cuts.
China encourages the export of most commodities and most products are duty free, although there are 84 products that carry duty. These include tungsten ore, ferrosilicon and some aluminium products.
China"s manufacturing industry is now very advanced and it is easy to find companies that operate to all the conventional standards such as ISO9002, TUV, CCEE, UL, etc.
When the sale of imported goods threatens the domestic market by being priced lower than the domestic price, or the price of domestic manufacturing, it is known as dumping. Products made cheaply in China and sold cheaply in the UK may be liable for anti-dumping duties. The WTO uses anti-dumping laws to protect markets from alleged unfair competition.
Chinese exporters have historically been a main target for anti-dumping actions by both the EU and the US. For further details on anti-dumping, please go to "Trade Defence" on the DTI"s website. It has links to the European Commission sites as well: www.dti.gov.uk/ewt/antidump.htm.
The HM Revenue & Customs tariff will also indicate all current anti dumping and tariff quotas.
Normally only suppliers for international purchase projects (tender projects financed by international
financial institutions such as the World Bank or foreign government隆炉s aids) are eligible to reclaim VAT but not every eligible exporter or supplier can reclaim the 17%. This depends on what products they supply or export. Only those who export or supply those under government labelled categories can reclaim the full 17% from the Chinese tax authorities. Most exportable products can only reclaim 15%. Products such as coal can only reclaim 9% while for cereals like soybeans, road beans etc, only 3% can be reclaimed.
Many countries (including the UK) aim to limit the quantity of imports on certain categories of goods. This can be achieved through the imposition of import licences, quotas, duties or levies. In the UK, import licensing is administered by H.M Revenue and at ports and airports. HM Revenue and Customs is also responsible for the collection of revenues.
Most goods can be imported without the need to apply for an import licence. However the goods may be restricted or prohibited for a number or reasons and by various Government departments.
For example the Import Licensing Branch (ILB) of the Department of Trade and Industry currently restrict the following when originating in China: clothing and textiles, iron and steel, firearms and nuclear material.
ILB issues either quota import licences or surveillance import licences depending on the regime.
Export administered textile quotas are managed by China by the issuing of export licences that are exchanged for an import licence up to the quota limit. Surveillance import licences are freely available on application as the level and price of imports are only being monitored.
For futher details contact the Import Licensing Branch (ILB) :
Import Licensing Branch, Queensway House, West Precinct, Billingham
Tel: 01642 364333/334, Fax: 01642 533557
Minicom for hard of hearing: 01642 364227
Web address: www.dti.gov.uk/ewt/ilb.htm