Import/export guide: China
If you’re a people person with an interest in China, an import/export business could be for you.
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Do you speak Mandarin or another Chinese dialect? Do you have connections in Shenzhen? Maybe you simply love Chinese culture. In the import/export industry, you can use your own interests to help match product manufacturers with markets. If Chinese businesses want to export their goods, you help them find buyers. If they’re looking for specific merchandise, you help them find sellers.
With dedication and this guide, you can become a part of the estimated $164.7 billion in goods and services traded between Australia and China.
Types of import/export businesses
Although there's a bit of variation, import/export businesses usually fall into three main categories.
Export management company
If a company in China wants to export electronic equipment, for example, an export management company (EMC) would be the one to help. An EMC takes care of all the finer details involved with shipping goods overseas. This could include hiring distributors, creating marketing materials and preparing shipping logistics.
Export trading company
An export trading company (ETC) finds out what foreign buyers want and then locates domestic companies that can export the goods.
Import/export merchant (or free agent)
Import/export merchants buy merchandise from a manufacturer, foreign or domestic, then resell it around the world. They'll generally have no speciality in an industry. It's often a high-risk, high-reward scenario.
How to find your target market
Once you've decided on what type of import/export business you're interested in, it's time to figure out your target market.
By focusing in, you can focus your attention on a market you can serve best. Think about:
- Who are your customers?
- What parts of the world are you targeting?
- What types of goods will you offer?
Take the time to be as thorough as you can with your market research, as it'll pay off in the long run.
Your target customer will be someone who wants to trade globally. They’ll either want to sell goods overseas or buy goods from international sources.
Beyond that, you can choose any type of customer you wish. Maybe you’ll cater to companies that sell China’s number one export, electronics. Or perhaps your interest lies more in medical equipment.
As soon as you identify a need, you'll be able to target a group of companies as customers.
China’s top 10 exports
- Broadcasting equipment
- Integrated circuits
- Office machine parts
- Electrical transformers
- Semiconductor devices
- Vehicle parts
- Light fixtures
Source: The Observatory of Economic Complexity, 2016
Permits and licences
You won't have to worry about a licence to import goods into Australia, but you may need a permit. With Australia's quarantine regulations, plant, mineral, human and animal products are all subject to a permit and will take time to go through quarantine.
A permit for these goods comes from the Biosecurity Import Conditions Systems (BICON) and you can search its database to see if your goods fall into this category. To avoid your goods being re-exported or destroyed, apply for a permit well in advance.
Similarly to importing, Australia doesn't require you to have a licence to export goods, though you may need a permit. Certain weapons and heritage items are among the list of things you can't export.
Other goods, like wine and brandy, will need a permit from a specific issuing agency. You can find more about specific goods and their restrictions on the Australian Border Force's website.
You'll need to fill in an Export Declaration for everything you export. This tells the DHA what you're exporting and what it's worth. Once approval has been given from the DHA, you'll be able to export your goods.
For many years, the Chinese government limited the number of companies able to import goods into the country. Since China’s acceptance to the WTO, you need only register with the Chinese Ministry of Commerce.
Contact a professional to learn more about registration, tariffs and special trade zones that could affect your business.
What risks are there?
Unpredictable shipping logistics
Getting your goods to their destination safely and efficiently is your number one priority. You'll be responsible for making sure the product leaves the local port and arrives on time, as well as damage to the cargo. Staying organised and partnering with a well-known freight forwarder can help with this.
Not doing enough market research
It’s a good idea to thoroughly research a market before entering into this business, though even that may not be enough.
Consider hiring an expert who understands your specific market. This is important, as you’ll need to sell products that resonate in countries you’re unfamiliar with.
Running into problems at the border
Customs rules vary from country to country. Expect to encounter many different regulations while transporting goods. To avoid drowning in a swamp of border regulations, hire experts in customs law and trade compliance.
International billing and payments
Your new business will require you to make and receive international payments, which means you’ll be working with multiple currencies.
You can safely and affordably manage your business payments, with lower fees and stronger exchange rates, by comparing the services of a money transfer specialist. Check out our calculator below to see what fees and exchange rates a range of providers are offering.
How to send money to China
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Exchange rates are volatile and change often. As a result, the exchange rate listed on Finder may vary to the actual exchange rate quoted for the brand. Please confirm the actual exchange rate and mention "Finder" before you commit to a brand.
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