China is the world’s largest food and beverage market. It took the top spot over the US back in 2011 and has kept growing at a robust pace ever since. Thanks to the growing number of middle-class and their increasing demands; China’s appetite for imported F&B is growing and diversifying with its economy shifting towards consumption-driven growth.
In this article, we introduce to you the key steps and information that would help to export food and beverage products to China. Following are 4 important steps investors need to know in the export process.
Pre-import importer and exporter registration
Prior to sending anything to China, foreign exporters need to have a plan on how to sell their F&B products in the market. Foreign exporters might choose to setup trading companies with import and export licenses in China, and to import products through their own companies. They can also work with other importers in China to record products and to complete customs clearance under importers’ companies.
In either way, importers and exporters need to complete this official registration called “Registration Systems of Imported Food and Cosmetic Importers and Exporters”, the registration can be found online at http://ire.customs.gov.cn Once the registrations are completed, all relevant authorities in China should have records of the importers and exporters.
Document preparation and products labeling
Before the products arrive at Chinese ports, exporters should have relevant documents ready and send to importers, these documents include packing list, bill of lading, products invoice, certificate of origin, hygiene certificate, original label…etc. Required documents may vary depends on the product and country of origin.
Importers can use the Harmonized System (HS) codes available on the China Customs’ to check the category of the product, the associated import tax rates, documentation, licenses, and testing requirements.
Every food product imported in China must be labeled in simplified Chinese characters to complete the Customs clearance. Once products have arrived at Chinese ports, importers would be asked to turn in required products documentation. The products will be sent to bonded storage place temporarily for inspection. During this period, importers can work on the Chinese labeling, they would first send the English and Chinese labeling to Inspection and Quarantine (CIQ) for approval. Once approved, the Chinese label will be put on to each product unit.
Companies need to ensure products’ labeling are compliant with Chinese regulations. There are several rules specifying the labeling requirements on layout and content of F&B in China. Companies are advised to speak to specialists about Chinese labeling requirements, and also to seek advice from the marketing perspective.
CIQ and food safety inspection
Before the food products can be cleared at the customs, importers need to schedule with CIQ to conduct an inspection. The process is more complex for the first-time export. The procedure will be relaxed in the future after the first successful shipment.
As a part of the inspection, the CIQ officer would come to the storage place, and take small sample of your products; if necessary, they might take some products back to the testing lab which can prolong the inspection process. If your products pass the inspection, the CIQ office will issue a certificate, allowing you to produce and sell your products on the Chinese market.
If for minor issues products couldn’t pass the inspection, issues such as missing documentation, or Chinese labeling, importers are allowed to fix the mistake on-site. Imported products that eventually fail to pass the inspection may undergo technical treatment and then be re-inspected or be issued a Returns Handling Notice, meaning that the importer must return the product back to the exporter, or the goods have to be destroyed.
Customs clearance and paying import taxes
The final step is to clear the products at the Chinese customs. Importers need to make available of all documentation and certificates prepared before, especially the CIQ certificate and Chinese labels.
Paying for tariffs and import taxes at the customs, importers need to know what costs are involved when exporting to China. There are 3 types of tax applicable at the customs, they are tariff, Value Added Tax (VAT) and consumption tax. Tariff rate depends on the product type, country of origin, whether or not the products are from a country that has trade agreement with China, or in the same organization. Recently VAT has been reduced to a range from 9 to 13 percent base on product categories. Consumption tax only applies to selected products such as tobacco, alcohol, luxury goods, and high-end products.
Export F&B products to China can be a complex and length process. We advise exporters to speak to logistic providers or customs brokers who are familiar with the process to avoid time in delay or taking unnecessary risks.