Importing to China: The 10 Steps to a Successful Import

 

 What to import, how to do it, who to trust, are the questions that arise when deciding to import products from China. There is a clear fact: be it a natural person or a company, without the necessary information on the "step by step" or import process, this venture can turn into a nightmare. For this reason, the Asia Pacific Portal of the Library of Congress prepared a “check list” of the key steps to embark on a business adventure with China.

 What to import, how to do it, who to trust, are the questions that arise when deciding to import products from China. There is a clear fact: be it a natural person or a company, without the necessary information on the "step by step" or import process, this venture can turn into a nightmare. For this reason, the Asia Pacific Portal of the Library of Congress prepared a “check list” of the key steps to embark on a business adventure with China.

 Step by Step

 1.- What to import : If you are not clear about which product to import, you can search for them through the Chinese portal, where you will find the companies and their offer classified by category.

 2.- Where to certify the veracity of Chinese exporting companies: One of the bottlenecks when importing is knowing whether the company with which you want to do business exists or not. Although the Chinese government does not manage an official directory, in Chile the Asia Pacific Chamber of Commerce has made great efforts to create a database that certifies and confirms legal registration, import / export permits, experience, payment capabilities and status. financials of exporting companies.

 3.- Contact with exporter: "To do business you have to be friends", as the Chinese say when starting negotiations with any Westerner. For this reason it is crucial for the success of the import to maintain and develop direct contact with the exporter.

 Although this relationship can be built via email, experts in the field recommend, above anything else, “person-to-person” contact and travel to China to meet the exporting company. If this is not possible, one of the alternatives that facilitates and ensures that the business becomes a reality, is to hire the service of a trader. The trader is the person who acts as a bridge between the supplier and the buyer.

 Usually not only handles Chinese, but also cultural codes, essential when closing a transaction.

 4.- Product sample: One way to ensure the quality of imported cargo is to request a product sample. However, great care must be taken when closing the transaction, since blind reliance on the sample does not ensure the quality of the entire shipment. For this reason, the Trader's service is recommended if traveling to China is not an option. If you do not take either of these two alternatives, you will always run the risk of faulty shipments.

 5.- Benefits of FTA: It is essential to find out about the benefits of the trade agreements determined in the Free Trade Agreement between Chile and import  China.  Knowing if the required product has tariff and customs advantages can be decisive in the importation.

 6.- Definition of payment methods: The most common and internationally validated are documentary credit, foreign or bank collection and cash payment (advance).

 Foreign or bank collection refers to payment through commercial banks corresponding to each country. It is necessary to underline that in this type of payment, the bank only complies with the instructions given by the drawer.

 Cash payment is the riskiest, although if the company meets all the certification requirements, it can provide greater security at the time of the transaction.

 If the operation is carried out by a certified broker or Trader, the risk of scams in this regard is reduced.

 7.- Shipping operation, contracting freight and insurance: If the purchase clause agreed by the parties (Inco terms) requires the supplier to contract freight and / or insurance, it must do so and confirm to the buyer the means of transport that the merchandise, departure date, flight number, ship name, travel delay time and estimated date of arrival.

 If there are no clauses that hold the provider of these services responsible, you must arrange the delivery of goods at a place established by both. Transportation is the buyer's full responsibility, in addition to coordinating with a customs agent the reception of the products at the port of arrival and the internment.

 8.- Reception of products: Upon receipt of the product at the customs office of entry, the customs agent will proceed to the customs processing that allows the admission of the product, the payment corresponding to the taxes and charges to which it is released. The importer will receive from the commercial bank the documents that will be used by the agent to carry out the customs destination.

 9.- Customs processing: This stage is also carried out by a customs agent, having three important aspects under his responsibility: customs valuation, where the payment of taxes is determined. The tariff classification, where the tariff preferences that products have when negotiated in the FTA are set. And finally, the description of the merchandise and registration of the products in the Customs databases.

10.- Withdrawal of merchandise: Upon declaration of acceptance of the income. Customs determines the selection of Capacity, being able to determine Physical, Documentary, or No Review.

 If the operation is selected for "Physical Gauging" or "Documentary", upon cancellation of the internment charges, Customs officials certify that there is agreement between documents and physical merchandise contained in the shipments, in addition to supervising the correct application of legal regulations current.

 If the operation was selected as "No Review", once the internment charges are canceled, the goods are immediately removed.

  Imports can be carried out without problems if you have the key knowledge and are attentive to bureaucratic and cultural details. A good option to reduce uncertainty is to seek advice from Chambers of Commerce such as the Chilean Chinese Chamber of Commerce, Industry and Tourism.

 Facts to consider: Cultural differences

 Not knowing the cultural differences have also been one of the most common mistakes of entrepreneurs when starting a business with China. The negotiation process is conditioned by their customs and traditions, and trust is one of the most valued characteristics in a commercial exchange.

  The requirement, and meticulousness in a job is essential for a Chinese businessman, and these singularities should also be part of those who do business with them, especially if they are foreigners. Likewise, listening before you speak, and showing an honest interest in the other party, will facilitate communication considerably. The key to achieving a good agreement is to be culturally sensitive, careful and above all flexible to your culture when starting a business.

Read also: What do I need to know to import and export goods?