Doing Business: How to Export your Business to China

In China they say hello as ‘Ni Hao’. You’ll need to know that, because you’ll be using it a lot when you start exporting there. After all, with a billion or so calling China home, that’s a lot of meeting and greeting. Don’t let that get to you though; with such a big market waiting, making the effort can net you big rewards. And since Fastlane has shipped the world over, we know just how to get started – whether you’re shipping from Brussels to Beijing or Sweden to Shanghai.

Why China?

Unlike other potential destinations, China needs little introduction. The largest market in the world and, at times, among the most difficult to break into. Thanks to the different social structure and cultural priorities, the Chinese market seldom behaves exactly as expected, and a niche may not be as empty as it seems.

The rewards for breaking into the Chinese markets are remarkable however, with an audience larger than anywhere else in the world. Having a strong presence in China can help faltering businesses maintain their footing just as easily as it can help a small business explode in popularity. And with the market only growing, everyone wants a slice of the pie.

Don’t fear the prospect of competition however – just being a large business before making a Chinese debut does not guarantee success. In fact, small and medium businesses make up 65 percent of China’s Gross Domestic Product and, according to Forbes, have driven the majority of China’s growth since 1978.

Shipping to China

The United Kingdom has a long history of exporting to China, and though there are difficulties in getting established, many British companies have proven that it is worth the efforts. For example, Jaguar Land Rover (JLR) is the UK’s biggest exporter to China, and is doubtless the reason that some of the UK’s main exports to China include vehicles, electrical machinery and equipment, and mechanical appliances.

Among the other important Chinese imports from the UK are

  • Copper
  • Plastics
  • Oily seeds, fruits and grains
  • Mineral oils and fuels
  • Organic chemicals
  • Precision equipment including medical, optical and measuring equipment

Because China is such an important market for traders throughout the world, there is plenty of information available about the most popular imports. It’s vital to make sure you have done plenty of research about the state of the market, and whether your goods fit well within it. Be sure to investigate what China imports on World’s Top Exports, and have a look at the value of China’s top imports at the International Trade Centre (ITC).

Getting Started in Shipping to China

Although China is a popular destination for exporters, there are a host of unique challenges involved in establishing a presence in the country. Before you can even begin addressing issues like the time difference or language barriers, you will need to take the time to build personal relationships with your suppliers, workers and partners in China. A personal relationship is vital to continued success in China, as building business relationships as a stranger is impossible.

And because it’s important to have a personal presence, you will also require a local partner to take the lead on your Chinese interests. This is again a highly personal relationship, and will often require meetings in person before a partnership can be forged.

It’s also important to keep in mind that some parts of the economy are not fully open to businesses from outside China. Before committing your time and money to attempting to establish a presence there, be sure to make sure the potential rewards are definitely there.

Customs in China

With so many parcels flowing in and out of China, it’s important to make sure that your package is both properly packaged and has the correct paperwork in order to clear customs quickly and easily. Keep in mind that China’s customs officers have plenty of practice, so there’s no pulling the wool over their eyes – it’s best to be clear and honest.

You’ll also need to do your research, as each item imported has to include the Harmonised System Code for that item. This will allow your shipment to be cleared as quickly as possible, and should ensure that the correct duties and taxes are applied. Your goods will also be assessed to decide if they may enter the country duty free – though this is not the case for goods worth less than 50 Yuan. If your goods are allowed to enter without duties applied, this is only to a value of 400 Yuan.

You’ll also need to be sure that your goods are not on China’s prohibited goods lists, which includes items like radios and radio transmitters. For a full list, you can visit China’s Customs website.

Challenges in doing business in China

Perhaps the most significant challenge you face when doing business in China is the unique cultural differences present in the country. With a different social structure and culture, many areas that appear to be unexplored or ripe for representation may just be different in China, or not required. This is one of the many reasons that creating a personal relationship with partners in China is so important – they can help you understand whether the opportunities you are chasing are opportunities in reality.

It is also difficult to establish yourself as superior to local competitors – a difficulty that has been faced by the beer industry for over two decades. With so many local alternatives, it is extraordinarily difficult to emerge as a market leader – a challenge that must be understood and overcome.

With many industries facing the same problem, it becomes even clearer that getting established is the main difficulty when it comes to doing business in China. We have already explored some of the ways you can mitigate this challenge, but it will always be a problem – no matter the precautions you take.

Further reading

  • Sending large and heavy packages
  • How to track your delivery
  • Ask us a question

 

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