China changed a lot, from the “factory of the world” to the world forerunner, PRC’s economy Great Leap is touchable. Today the country is becoming a major consumer basin and the most dynamic in the world. Nevertheless China’s economy is slowing down due to novel coronavirus outbreak, the country is still the top market in retail and e-commerce sectors. There are many ways to export in China, but one of the most effectives is e-commerce.
Chinese Cross Border Retail has never been more developed. There is now a powerful infrastructure offered by the largest players such as Alibaba, JD.com, Little Red Book, Pinduoduo and more as well as smaller players. Cross border e-commerce platforms allows brands to sell online without having a physical presence in China.
And its convenient. Setting up a shop on a China’s cross-border platforms allows brands to utilize Chinese mobile payment methods as well as the logistics infrastructure offered by many of these companies. But what about regulations? How to export to China?
As with most countries, regulations governing the import of goods and their subsequent sale on China’s domestic market are complex. In the past, only a small number of Chinese companies with foreign trading rights were approved to import products into China. Following China’s accession to the WTO, companies seeking to engage in import trade only need to register with the Ministry of Commerce (MOFCOM) or its authorized local offices according to the Foreign Trade Law and the Measures on Filing and Registration of Foreign Trade Operators.
According to Chinese law, all companies (Chinese and foreign) have the right to import most products but a limited number of goods are reserved for importation through state trading enterprises. China classifies imports into three categories: prohibited, restricted and permitted, while select products in the restricted category require quotas or licenses. Generally speaking, applications for import licences are submitted to MOFCOM or its authorized local offices. For some goods (e.g. machinery, electrical products), the licence is issued automatically to all applicants and is only used to track imports more accurately.
Most goods fall into the permitted category. Importers are free to decide how much and when to purchase. MOFCOM implements an Automatic Licensing system to monitor the import of part of these goods (e.g. machinery, electrical products). A detailed list of merchandise categories can be obtained from MOFCOM or through the trade commissioner in China.
What about FTZs? In China, there are many special trade zones (e.g. bonded zones, economic development zones etc.). These special zones provide exceptions to the usual customs procedures and allow for preferential tariff and tax treatment. All forms of trade conducted between companies in the zones and areas in China outside the zones are subject to the usual rules that would apply to imports into China.
Retail sales at China’s cross-border e-commerce businesses recorded a 38.3% increase and reached US$26.4 billion in 2019, contributing 5% of PRC’s overall foreign trade growth last year, according to data from the General Administration of Customs. Thus, the fast growth of cross-border e-commerce in recent years has become a new highlight in the country’s foreign trade, that’s why on April 8th, Chinese Premier Li Keqiang announced China is going to build 46 new integrated pilot zones for cross-border e-commerce around the country to help revive its pandemic-hit foreign trade.