Shipping to China and clearing customs without a hitch is a complex business. It causes endless frustration for many exporters and can result in goods being detained. It can also churn up some nasty hidden costs.
How can logistics departments and supply chain managers get past Chinese customs clearance without running into problems? There are several things to consider.
The terms of an international transaction are defined by “Incoterms”, as published by the International Chamber of Commerce (ICC). These make it clear who, between seller and buyer, is responsible for what, including import duties and taxes.
Some Incoterms (e.g. EXW) place much of the export and import burden onto the buyer, whereas others (e.g. DDP) force the seller to bear most of the responsibility. If you are not sure about what incoterm to use, you can read the article ‘5 Incoterms commonly used to export to China’ at the bottom of this article.
Goods shipped to China must first be tested to all relevant standards and certified. Many products need a China Compulsory Certificate and a “CCC” mark before being offered for sale.
Check CNCA website to check what product need CCC.
Exported goods must carry the correct HS (Harmonized System) codes. These define which Chinese GB (Guobiao) standards they must meet. Ascribing the correct nomenclature to products is a vital part of any shipment.
Chinese importers (i.e. buyers) should hold an import license for goods to be received. Efficient communication between seller and buyer at every stage of a transaction avoids costly errors, regardless of the terms.
The documents needed for Chinese customs clearance include the following:
- Bill of lading
- Customs declaration
- Import license
- Import quota certificate
- Inspection certificates
- Insurance policy
- Packing/shipping list
- Purchase and sale contract
Tariffs & Taxes
Chinese shipments are subject to various tariffs and import taxes (e.g. VAT at 17%). Tariffs have dropped significantly since the nation joined the WTO in 2001.
This article gives an overview of some of the key issues surrounding customs clearance for exporters to China. For further reading and to expand on some of the topics covered, please see the links below, which were used during research (includes two PDFs).
5 INCOTERMS COMMONLY USED IN CHINA’S EXPORT TRANSPORTATION
CCC – China Compulsory Certification