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Various Trade Regulations of China

Listed below are various trade regulations involving foreign companies trading with the People's Republic of China. They are listed under appropriate headings.

China Foreign Trade Relations

Sixty percent of re-exports of mainland China originating goods and fifty percent of re-export goods destined for mainland China go through Hong Kong. It is the most important entry and exit port in the country.

The EU imposed quotas to safeguard ten types of Chinese textile goods covering years 2005 through 2007. This was in June of 2005. This provision is for a smooth transition to liberalizing the textile trade for 2008.

The EU Generalized Preference Scheme of 2006 through 2008 gave several tariff rate benefits to Chinese for many products. Exceptions to the Scheme include furniture, toys, clothing, jewellery, watches and consumer electronics.

Virtually all goods to China are eligible for zero percent of duty if their origin criteria are fulfilled. This is under CEPA IV and includes such items as exhibition and convention, securities, tourism, services for the elderly, market research and other areas.

Thirty-one clothing and textile products were involved in an agreement between the USA and China in November of 2005. This bilateral agreement imposed quotas between January, 2006, through December, 2008.

Trade Description and Labelling Requirements

China's Measures for Agricultural GMO marking requires labelling for imported genetically modified organisms (GMO) from March of 2002.

All goods which are to be sold in China must have Chinese language labelling, giving true descriptions of the contents, the grades and quantity specifications. On food items, production dates and expiration dates must also be supplied. If there are any hazards for use of the products, warnings must be included on the labels.

Standards of Various Products

A new law in China now protects consumers from toxic or hazardous products used in the production of electronic information products.

The China Compulsory Certification (CCC) mark is a mandatory mark to certify the safety and quality of 132 types of products sold in Chinese markets. This has been effective since May of 2002. Among the products involved are electronic and electrical goods, machines for agriculture, medical devices and motorized vehicles. An addendum to the law was added for toys and playthings in 2007.

Besides the certification listed above, additional requirements apply to telecom and Internet equipment, air conditioners, refrigerators, engines for motorcycles and household appliances including televisions.

Wines, cosmetics, food and agricultural products fall under a complex governing standard concerning hygiene in the production of the products. This applies to imported products.

All goods imported into China must go through an import commodity inspection to ensure safety and quality standards are maintained in imported foodstuffs, medicines and plant and animal products.

Requirements for Import Documentation

A certificate of origin is required upon request by officials.

A commercial invoice must include the shipper's name, address and any details about contacting the shipper. This must give a detailed description of the goods, their value, the currency used, where the shipment came from and the weight of the shipment.

A bill of lading and packing list must be included with all pertinent information given.

Requirements for Customs

Most goods must go through an inspection and possible quarantine before clearing customs.

A pre-shipment inspection must be done for shipments of wastes to be sure the materials meet China's environmental protection standards.

Customs is the authority which determines the duty values of goods imported.

China's Fair Trade Agreements

Shipments from Macao and Hong Kong qualify for zero tariffs. This is due to the Closer Economic Partnership Arrangement (CEPA).

Several countries have free trade agreements with China. This includes all of the ASEAN members as well as Pakistan, Thailand, Jordan and Chile. Trade agreements are proposed for New Zealand, Australia and India. These countries get reduced import duties on goods brought into China.

Import Licensing Available

China has in import licensing procedure for some laser discs, electronics products, chemicals which can be used as weapons and ozone depleting materials.

China restricts the importation of imported metal or plastic waste materials, electrical products and used machinery.

Various products have been removed from quantitative restrictions. These products now are listed under free imports. Products included are poultry, tobacco, wines, vegetable oils, copper ore, asbestos, plastic raw materials, waste paper, rubber, chemical fertilizers and many other products.

Taxes and Import Duties for Imported Foreign Trade

China reduced tariffs after joining the WTO. Average tariffs are now around 9.8% with agricultural products having a level of 15.2% and industrial goods at 8.95%. China now has duty-free importation of computers and their accessories.

An export tax was increased on iron and steel products since 2007.

There are now quotas on some import products such as wheat, rice, corn, soybean oil, sugar, cotton, wool and palm oil.

VAT rates in China are 17% for general goods and 13% for food products.

There is a consumption tax on such products as alcoholic drinks, tobacco, skin and hair care products, precious stones, gasoline and diesel fuel and various other luxury type items.

Business taxes exist in China. Finance, insurance, construction and sale of immovable property in the country are taxed at 3% to 20 %. The entertainment sector tax is from 10 % to 15 %.

Individual income tax for foreigners working in China is at 5 % to 45 % on progressive rates.

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