4 tips for your import/export operations with China

Discover our four essential tips for optimising your import/export business with China and ensuring the long-term success of your company.

The specific characteristics of the Chinese market

China’s economic partners

As the world’s second-largest economy, with a GDP estimated at $16,493 billion for 2021 by the International Monetary Fund (IMF), the People’s Republic of China has enjoyed a substantial trade surplus for several years. 

According to figures from the World Trade Organisation (WTO), China is the world’s leading exporter of goods and also the world’s second-largest importer. Over the past few decades, China has gradually opened up to foreign trade, to the extent that it now accounts for more than 35% of its total GDP.

China’s main economic partners in terms of exports (customer countries) are (Comtrade data):

• The United States (16.8%);
• Hong Kong (11.2%);
• Japan (5.7%);
• South Korea (4.4%);
• Vietnam (3.9%).

China’s main trading partners for imports (supplier countries) are (Comtrade data):

• South Korea (8.4%);
• Japan (8.3%);
• the United States (6%);
• Australia (5.8%);
• Germany (5.1%).

Sino-Swiss bilateral relations

China and Switzerland have maintained bilateral relations since 1950, characterised by numerous dialogues across a wide range of fields, such as development cooperation, science, finance and the environment. 

Since 2010, China has been Switzerland’s third-largest trading partner after the European Union (EU) and the United States, making it Switzerland’s main trading partner in Asia.

Tip 1: Establish an import strategy based on Incoterms

Unfortunately, as a company importing goods into Switzerland from China, you are likely to find that the goods delivered to you have suffered damage in transit. Whether at the factory during production or during loading, goods are not always handled with care…

However, in the context of a relationship between an importer and an exporter, the level of risk for the importer can vary significantly; it is therefore essential to pay close attention to your import contracts and the guarantees they offer, so that you can choose the service that best meets your company’s needs.

In international trade, Incoterms are the linchpin.

These standard terms hold both the seller and the buyer accountable at every stage of the goods’ transit, and specify in particular the precise point at which obligations, responsibility for transport costs, risks, insurance and customs clearance pass from the seller to the buyer.

There are 11 Incoterms in total, with the EXW and DDP Incoterms at either end of the spectrum.

Under the EXW Incoterm, the seller is only responsible for making the goods available, and consequently, the buyer is responsible for the costs and risks of transporting them to the place of delivery.

In contrast, under the DDP Incoterm, the seller is responsible for all costs and risks associated with the shipment, whilst the buyer simply needs to collect the goods. For your information, most online purchases are based on this DDP model.

Tip 2: Find a reliable supplier

As a leading exporting nation, often referred to as the “world’s factory” for many years, China is home to countless potential suppliers for your business. It is therefore advisable to select your partners carefully, based on their reliability.

To do this, you can start with a simple Google search to find customer reviews. You can also check the most popular online directories and platforms such as Alibaba, Global Sources, or the Hong Kong Trade Development Council.

Furthermore, some sites, such as Alibaba, assign different levels of trust and assurance to their suppliers (statuses available in the platform’s search filters):

• Gold Supplier: the supplier pays a monthly subscription fee to retain this status (a mark of professionalism and profitability);
• Assessed Supplier: the supplier has been audited (its factory has been visited and numerous checks relating to its operations have been carried out);
• As a Trade Assurance beneficiary, the supplier’s offer is covered by Alibaba’s service, which allows you to make a claim in the event of any issues.

Good to know: The full name of your prospective supplier’s factory provides valuable information that can help you make your choice. This name should normally be structured as follows: Location (town, region) + Company name + Product + Type of business. But be careful: the Chinese market remains particularly rigid and bureaucratic. Simply forgetting a full stop at the end of your supplier’s name could result in your payment being refused; although they are very similar, the names “XYZ LTD.” and “XYZ LTD” are not the same!

Tip 3: Obtain the CCC (export) certificate

The China Compulsory Certification (CCC) is a type of certification for product quality standardisation (similar to the EU’s CE marking system, although there are some differences). Introduced in 2002, it applies to almost all products that may be exported to China, as well as to certain Chinese products.

In fact, when exporting to China, your goods must comply with the standards and regulations relating to the CCC certificate. Failure to do so will result in your goods being held up at the Chinese border or returned to you.

To obtain this certification, you must:

• submit an application to a relevant Chinese certification authority, the most important of which are the State Administration for Market Regulation (SAMR), the Certification and Accreditation Administration of China (CNCA) and the Standardisation Administration of China (SAC);
• send samples of your products along with their details;
• wait for the relevant Chinese authorities to carry out the tests and checks;
• wait for your factory to be inspected by those same authorities;
• obtain the CCC label for your goods provided all the criteria are met.

Tip 4: Make the most of the Switzerland–China Free Trade Agreement (exports)

Switzerland is fortunate to be the only country in Western Europe to have a comprehensive bilateral free trade agreement with China (which represents a market of nearly 1.3 billion people), a situation that has been in place since 1 July 2014. 

This agreement is of particular interest to import/export companies, as it covers provisions relating to:

• the trade in goods and services;
• non-tariff barriers to trade;
• to trade and sustainable development;
• the protection of intellectual property.

Please note: The evaluation report on the Switzerland–China Free Trade Agreement reveals that only 40% of Swiss companies eligible to use it actually do so, due to the difficulty in obtaining proof of the preferential origin of their goods. So make sure you obtain this proof to take full advantage of the agreement!

Transport insurance, CCC certification, identifying the best supplier… You now know our four tips for carrying out your import/export operations with China under the best possible conditions. 

If you have any further questions, please do not hesitate to contact the SCCC, the Swiss Chinese Chamber of Commerce. With a presence throughout Switzerland, this association is dedicated to improving trade relations between China and Switzerland. With over 40 years’ experience, the SCCC offers a wide range of services to its partners, including conferences, events and expert advice, to provide the best possible support to Swiss companies as they establish and expand their operations in China.

To find out everything you need to know about the intricacies of this sector, please also feel free to consult our Comprehensive Guide to Import/Export in Switzerland.

Please note, however, that import/export activities inevitably expose you to a number of financial risks, particularly exchange rate risk; which is why b-sharpe offers you its online foreign exchange service!