What does China import and how to enter the Chinese market?

China main economic facts

China is the world’s most inhabited country with a population of almost 1.4 billion and rising. The country’s disposable income per capita is around 7,000 USD. As costs of living are half of in the USA, the income corrected for buying power, the GPD ppp per capita, is around 14,000 USD>. This is the point where people can afford more than basic necessities, and be aware that there is an uneven income distribution in China. People in the cities on the East cost have much higher incomes than the people more in the East.

Massive migration to urban sections has caused rapid and widespread expansion. More than 100 Chinese cities hold excess to a million people each. The three most inhabited cities in China are Shanghai, Beijing and Chongqing. 54% of China’s population lives in urbanised areas. Urban living quarters are packed with people living wherever they can, including basements and shacks while the traffic in urban China moves in half the time that it does in New York.

China’s main imports

The top import products of China are: crude petroleum, integrated circuits, iron ore, gold and cars. This top 5 is mainly dominated by the fact that China does not have big oil and gas reserves, nor iron mines, there is a lot of electronics manufacturing, and the mobility in the country is on the rise.

Who are China’s top import partners?

  • Japan (10%)
  • South Korea (9.3%)
  • Other Asian countries (8.1%)
  • United States (8%)
  • Germany (6%)

China’s Foreign and Free Trade Agreements

China’s Foreign Trade Law allows all kinds of enterprises including international companies to trade with China under a fairly liberalized system.

China holds special agreements with Hong Kong and Macau regarding economic activity and other partnerships. Its current Free Trade agreements are with the following countries:

  • Australia
  • New Zealand
  • Singapore
  • Costa Rica
  • Pakistan
  • Chile
  • Iceland
  • Switzerland
  • Korea

It is also negotiating FTA’s with the Gulf Cooperation Council, Norway, Sri Lanka, Japan and Korea.

How to import into China?

Though China’s import regulations and rules have eased up over the years, it’s still a complicated process. Working with a local agent or distributor who can also arrange import is the best option.

Permitted products are monitored by an Automatic Licensing System administered by the Ministry of Commerce. Products that are restricted require permits or licenses while some others, such as wastes or toxins, are banned. Inspection and certification processes in China are detailed and rigorous.

What are the import tariffs and taxes in China?

Most imports are charged 9.8% of the value of the goods as tariff charge. Value added tax (13% to 17%) is payable on certain items while consumption tax (1% to 40%) is added for products such as tobacco, liquor and cosmetics. Lower tariffs are levied on certain agricultural products such as wheat, sugar, wool, corn and rice.

Another important aspect is packaging and labeling, in which China has a few highly specific requirements. China’s booming consumer base, financially stable market and innovative approach make it a viable import destination but with some tricky procedures.

The Chinese market place and distribution channels

The Chinese market is a complex one and many players utilize a multi-distribution route for wider and better consumer accessibility. Its industry is characterized by a prominent services sector that operates in both the wholesale and retail sectors. Some retail brands have developed a wholesale distribution method in order to reach their customers quickly and easily. Apart from directly operated stores and franchisee ones, the warehouse style supermarket is a popular option in China.

Selling in China requires effort. Your potential distributors also want to see your market research and promotion plans. A local intermediary will help you with this. Also see our article How to make your company visible online in China?

This entry in Asia was updated on 8 April 2022 by specialist.