4 tips for your import/export operations with China

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

The specific characteristics of the Chinese market

China’s economic partners

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

According to figures from the World Trade Organisation (WTO), the Middle Kingdom 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 point where it now accounts for more than 35% of its total GDP.

China’s main economic partners for 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 economic 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, marked 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, behind the European Union (EU) and the United States, making it Switzerland’s leading trading partner in Asia.

Tip 1: Build an import strategy based on Incoterms

Unfortunately, as a company importing goods into Switzerland from China, you will probably find that some of the goods delivered to you have suffered transport damage. Whether at the factory during production or during loading, freight is not always handled with care…

However, in a relationship between an importer and an exporter, the level of risk can vary considerably for the importer, so it is essential to pay close attention to your import contracts and the guarantees they offer, in order to choose the service that best matches your company’s expectations.

In international trade, Incoterms are what really matters.

These standardised terms make the seller and the buyer accountable at every stage of the delivery of the goods, and specify in particular the exact 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 sitting at either end of the range.

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

Conversely, under the DDP Incoterm, the seller is responsible for all costs and risks of delivery, while the buyer simply has to collect the goods. For information, most purchases made online are based on this DDP model.

Tip 2: Identify a reliable supplier

As an exporting nation par excellence, referred to for years as “the world’s workshop,” China has countless potential suppliers for your business. It is therefore worth selecting 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.

What’s more, some sites such as Alibaba assign different trust and guarantee levels 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 sign of professionalism and profitability);
• Assessed Supplier: the supplier has been audited (its factory has been visited and numerous checks on its operations have been carried out);
• Trade Assurance beneficiary: the supplier’s offer is covered by Alibaba’s service, which lets you file a claim in the event of any problems.

Good to know: The full name of your future supplier’s factory offers valuable information that can help you make your choice. This name should normally be structured as follows: Location (city, region) + Company name + Product + Type of business. But beware: 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 rejected; despite being very close, the names “XYZ LTD.” and “XYZ LTD” are not the same thing!

Tip 3: Obtain the CCC certificate (export)

The China Compulsory Certification (CCC) is a type of certification for standardising product quality (similar to the EU’s CE 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.

As such, when carrying out export activities to China, your goods must comply with the standards and regulations relating to the CCC certificate. Failure to comply will result in your goods being held at the Chinese border or returned to you.

To obtain this certification, you must:

• submit an application to a responsible 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 Standardization Administration of China (SAC);
• send samples of your products together with their details;
• wait for the tests and checks to be carried out by the relevant Chinese authorities;
• wait for your factory to be inspected by those same authorities;
• obtain the CCC mark for your goods, provided all the criteria are met.

Tip 4: Take advantage of the Switzerland–China Free Trade Agreement (export)

Switzerland is fortunate to be the only country in Western Europe with a wide-ranging 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 is a particularly interesting agreement for import/export businesses, as it includes provisions relating to:

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

Please note: The evaluation report on the Switzerland–China Free Trade Agreement shows that only 40% of Swiss companies that could benefit from it actually use it, owing to the difficulty of obtaining proof of the preferential origin of their goods. So make sure you obtain this proof in order to make the most of the agreement!

Transport insurance, the CCC certificate, 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 other questions, please do not hesitate to contact the SCCC, the Swiss Chinese Chamber of Commerce. Present throughout Switzerland, this association’s mission is to improve trade relations between China and Switzerland. With more than 40 years of experience, the SCCC offers its partners a wide range of services, including conferences, events and expert advice, to provide the best possible support for Swiss companies setting up and growing their business in China.

To find out everything about the finer points of this sector, feel free to consult our Comprehensive Guide to Import/Export in Switzerland.

Do bear in mind, however, that an import/export business inevitably exposes you to a number of financial risks, particularly exchange rate risk; which is why b-sharpe offers you its online currency exchange service!