Studying How to Import Products Into China

In china business by Michael Michelini31 Comments

Update This post is so popular, I made a much more detailed and specific guide on my business blog: 3 Ways to Import Products Into China Check it out!

Monday morning here in factory land Dongguan, China! I went over the process of importing into China via Hong Kong this past saturday at the Sheznhen ecommerce meeting, and because so many people were interested in it, I thought I would blog about it as well. Really, its because I’m involved in it, but all I hear about is IMPORTING INTO CHINA, spinning the tables!! I keep on looking for good products to import into China. And when I blog, I become even more familiar with it, as re-iterating it makes things more clear and organized in my mind.

As China grows, it is consuming more and more. Its middle class has been hungry for foreign brands and foreign goods. So how do you take advantage of this boomtown in China?

If you have a product that you think would rock in China, but not sure how to logistically get it into Mainland, then read on!

There are 3 methods, (a) traditional and legal way, (b) newer, newly developing method of utilizing logistics companies trucking services, and (c) illegal border smuggling. Lets go through each of the methods:

(a) Traditional, 100% legal way – This is shipping it from the county of origin, with the proper invoices and packing slips and going through customs yourself. There is the base VAT (value added tax, commonly known as Fa Piao) fee of 17% no matter what product it is, plus the tarffi tax, which is a percentage dependant on the classification of the goods, which can get extremely high. No only will you pay a high tax rate, making your newly imported goods more expensive off the bat, you will also have to spend a lot of time with paperwork, and proving the country of origin, the core ingredients of the products – food and other digestable items such as vitamins are highly regulated and difficult to import.

(b) Utilizing a 3rd party Mainland China registered logistics company (import company) – this has become a very popular method, especially for SME (small and medium sized enterprises) that have online shops such as Tao Bao. The method involves having the foreign goods sent to Hong Kong, to the logistic companies warehouse. You then have them take care of all filiing and documentation with the Mainland Chinese government, therefore making the requirements for official invoices and other paperwork much less stringent. The cost for this is also a variable one, but much more straight forward and manageable. For example, if you are importing powdered baby’s milk – the cost (at the time of this article being published) is 14 – 18 chinese yuan (RMB) per KG. Another popular product for sale in china is foreign cosmetics, and the current rate for importing into Mainland China is at least 18 reminbi per kilogram.

(c) Illigal smuggling – This has to be listed in the article to complete the whole story of how goods are currently imported into main land China, but we do not endorse, assist, or support this method. For those who have cross the hong kong / Shenzhen border, you must have noticed the massive boxes and bags some travellers were carrying. There are certain quantities of goods individuals can carry legally across the border, depending on the product – and it is rapidly changing, with the trend in the direction of decreasing the quantity of goods. But for those who risk this method, it makes sense to do this for high value, smaller items – which normally is electronics. In current times, this is iphones and ipads, because the Chinese tax on the domestic Chinese electronics are so high, its significantly cheaper to buy it outside of mainlaind…and in Hong kong or USA.

These are the current three methods of importing merchandise into Mainland China. If you would like us to assist you in the first 2 ways, I will gladly speak to you about your specific case and products. If you are interested in smuggling, good luck and don’t call me!

  • Sunny_Irish

    great, it helped a lot! thank you!

  • Thanks for the comment Sunny – yea I’m still learning about importing into china …. 4 years here. but sharing what i can and getting lots of great emails and feedback.

  • Christian

    Have you successfully imported american products legitimately?

    I was in GZ for 4 years and still have an office with a few staff where I export mainly hotel supplies.  I’m in NY now where I bought into a retail shop (and import all the products directly ^__^)

    Now I have an awesome product that I know will do well in China, but not sure how to go about it.  I have a girlfriend of 2 years that I’m probably going to marry and my thought was just to open the Chinese import company in her name and use my American LLC to export it.
    Any advice is appreciated, and if you went to college in America, you definitely know the product I’m working with

  • Hey Christian,

    Nice to connect and thanks for the detailed comment.

    I have not imported for my own “account” but have many friends here in Shenzhen who have successfully imported products from America, in all of the above choices (white and….grey, heh)

    I think, again, THINK if you will really marry your gf and you trust her, then that would by far be the fastest and cheapest way. But you should get some quotes on the import tax before sending anything – you have samples in China already for a customs agent then that would be the best.

    I did register a WFOE in China (I recently blogged it here – https://mikesblog.com/2011/12/registering-a-chinese-business.html) which outlines costs / options for company formation in China – but for
    an import licence in a WFOE, in 2008 when I registered my company, minimum capital investment in the company was 300,000rmb (currently now about 45,000usd) and then you can import goods in your own 100% foreign owned company. DEPENDING ON THIS PRODUCT LINE, it has to be allowed by the Chinese government that a foreigner can sell/ deal with these kinds of products.

    A local Chinese (your girlfriend/ possible future wife) can open a company
    very quickly and easily, but they would own and control the inventory.

    Also, what is your distribution model, B2B, B2C in China?

    Maybe you can email me more info at site @ michaelmichelini.com if you want
    to get into specifics on products.

    _____________
    Michael Michelini
    eCommerce Consultant

  • Susan

    hello. Can I have a questions. your articles really help to me.

    I want to know is if we importing products from HQ in Germany. should I pay back EUR within 90 days? can I call you ?

    Susan

  • hi Susan,

    glad this article on importing into china helped. maybe Email me more details at my company email mike @ shadstone.com to understand more, then we schedule a call 🙂

    ___________________________________
    Michael Michelini
    eCommerce Consultant
    twitter/weibo @michelini
    On Jan 31, 2012 11:13 PM, “Disqus”

  • Louise

    Hi Michael

    Great blog. Do you have any info on import licences for gold & diamond jewellery? There is so little clarity on the net and we have come across this via a Chinese logistics company. Its baffling as when we had meetings with DHL, Fedex and TNT in the UK there was no mention of needing a licence to import gold/diamond jewellery. 

  • Hi Louise,

    This is why I decided to stay in China! Things are so unclear, the best way I can do things is sit right next to the logistics company in their office, drink tea, and wait for a couple hours to get the full story!

    The best is to mail samples to China…but since this is a high value item, I would think you can’t budget this! Maybe send me high res photos and product information and I can talk to some Chinese logistics guys – site @ michaelmichelini.com

  • Babak Nabavian

    Hello 
    Michael Michelini, 
    I like to export frozen chicken parts into China. but the problem is the origin of the products are Bulgaria and Israel and Turkey. Can you help?

  • Jie Fv

    Hi Michael 
    Thanks for the clearest information i,ve found so far online in regards to importing into China.

  • Howardl

    Hi Michael,  I have a branded product made in Canada and would like to sell it into China, I already have orders from Watsons and a distributor. All I hear are horror stories about registering the product into China. we have 7 flavors of shampoo and 7 flavors of conditioner. again people tell me that i must register all 14 items and other people tell me I only need to register 1 sh and 1 con.. as the ingredients are all the same except for the color and scent.. 

  • hi Howard…. yes Importing into China is never a fun process. Never a clear answer here, but again its bette we take this into email and I’ll have my team look into it. Have you already sent samples into China? We can also help you by first getting some smaller orders to Hong Kong first and then moved into Mainland China as you go.

  • Leon

    Hi Babak, Nice to see you on this site.

  • Dan

    Michael, was wondering if you’re still there in Shenzhen at this time. I’m in a very similar situation but a little different all at the same time. I know this was posted a little whiles back so let me know so we can share some experiences. I am a freight forwarder in the States and because of that I know local agents in China. Instead of handling cargo for other customers I figure it’s time I give it a try myself. Let me know.

  • yup i am still in shenzhen…. helping westerners sell in china via http://www.socialagent.me startup would love to catch up with you for a drink here in shenzhen

  • NotMe

    Is it illegal to buy small quantities of items in Us from Stores such as Best Buy or Macys and ship them thru. Hong kong for sale in mainland China? I know some Asians in Us that do so sending it to a family member in China who in turn sells for a profit.

  • small amounts for wgift or personal use is ok. but when its for resale…. that is when it becomes illegal imports

  • Eric Meslier

    Hello Micheal, thanks for this very interesting blog. I would wish to import UK infant milk to shenzhen. Can you refer any logisctic company in HK, who can do all the paperwork? any idean about the price today and taxes? my email is [email protected]

  • Raquel

    I need to send material/fabric(from the USA) to Ningbo, China to be manufactured into a final product. Then after it is sewn, I need to send it back to the US to use for myself. I cannot figure out how to import the material into China.. I am having a really hard time with this because the manufacturer does not have an import permit. What do I do? Do I even need an import permit if I am not selling it in China? please email [email protected] Thank you!

  • rem

    Thanks Michael for your article.
    Just wondering, do you where to start looking for details on safety requirements for machinery in China? Do they have to meet a certain level of safety? is it CCC? Is the Chinese Regulations requiring machines to pretty much conform to CE (European legislation) before you can sell your machine into China?

    Just trying to find a starting place to do my research.

    Thank you!
    Rem

  • james

    Michael, great post on the subject of imports. I’m aware that this blog is quite dated now and you might have already moved on to bigger and better things, but if you are still in the business of imports, shoot me an email: [email protected]. I have a great business opportunity in china and could you your knowledge of imports. Thank you.

  • jack

    useful article but fa piao is not VAT ! fa piao means ivoice and refers to the bill that you can ask for in most businesses in china. It is necessary for tax returns.

  • jack

    *invoice

  • jack

    i did the ccc for our company before, you need to apply for it for any kind of machinery. chinese officials will come to your company and test the equipment you will end up paying around 15.000usd just for them(not including agency fees). it is expensive to have CCC because you have to pay the travel and expenses for the chinese engineers. [email protected]

  • Lisa Bui

    Thanks Michael for the information. I have a product I would like to sell online in China. But I haven’t established any legal entity in China yet. What we would like to do is to import the products into China as a foreign entity (have the registered logistics company do all the customs for us), storing our products in the warehouses provided by a warehousing service company. And whenever an order is placed, the warehousing company is responsible for the fullfilment service. Is that possible in China?
    Thanks a lot!

  • Can you please confirm what special rules or regulations apply to importing food products into China, especially breakfast cereals (porridge).

  • Ray

    Hi Lisa, I have some idea to your logistic question, how can we contact each other to discuss further? My name is Ray

  • Ray

    my email contact is [email protected]

  • Debra Blalock

    Hi Michael – Can you shed some light on the import regulations for Used equipment importing into China

  • hi Debra,
    This is a tough one! But in my experience hearing about used cars it is pretty high as it is seen as a luxury / non essential good…but that is about all I know.

  • Brandon Long

    Very interested in suplimnets from the USA to china. If you are still available for contact please email me @ [email protected]