How to Export to China?

As world economy and market are down-turn, China is likely the only country who can recover quickest than the other countries. The Chinese government has encouraged pushing up the demand in the local market as export market are still sluggish. They will also have to keep the GDP growth at 8% level minimum. Compared to other countries, e.g. US and European countries, are still trying to stop the declining economy and the financial industry, China has apparently become a very strong economical entity. Recently, Chinese has voiced out the new policies of buying US bonds and the attitudes on currency rate of RMB again USD. So China is the next after Unite State.

Export to China has been hot in recent years. How to start and carry on? Here are some tips and procedures.

There are 3 major ways whereby one can export the goods to China:

• Distribute your goods directly
• Establish a joint venture
• Find a qualified agent or distributor with a vast sales network

Before exporting your goods into China or choosing a Chinese partner, it is advised for you to conduct the market research and due diligence. Companies should be mindful of possible problems in export rights, regulations and intellectual property rights protection. If the company decides to distribute the goods directly, then it will have to be aware of the distribution rights and understand the licensing process in China. The flow of export is as:

• Filing and registration of foreign trade operators
• Appointment of foreign trade cooperation as import-export agent
• Foreign-invested Commercial Enterprises handles own export not required to apply
• Customs registration. Customs registration is not required if agent is appointed to complete customs declaration
• Application for export quotas and licenses prior to customs declaration. It is applicable to commodities subject to quota and licensing control
• Signing of foreign trade contract
• Completion of foreign exchange formalities
• Application for inspection of export. Commodities subject to inspection and quarantine
• Customs formalities (customs declaration, tariff payment, inspection and delivery)
• Verification and cancellation formalities

Distributing your goods directly may be a complicated and time-consuming process as one may not be familiar with China’s business practices and government regulations. Application for distribution rights and establishment of own distribution channels will be difficult. Chances of failure will be higher as a result. Establishing a joint venture would be a better option. Establishing cooperation with a local partner can allow you to have faster access into China’s market and with the local partner’s knowledge and experiences of China’s market, your success rate will be higher and goods can be better distributed. Acquiring help from a local partner does give you many advantages in penetrating the China’s market. A side issue to note will be that joint venture usually requires large amount of capital and China’s government may have capital control towards outflow of funds should one transfer his/her funds back to his/her home country. The government will also need to assess the potential economic benefits that it can bring to China, e.g. does it create job opportunities for the local population before approving it.

For small and medium sized companies, the best way to enter the China market is through a reputable or well-known agent or distributor. These companies are located regionally and typically have large sales network. Thus they will be able to have a better understanding of the China’s market and can provide assistance in developing distribution strategies in China and the region. In this way, new products can be launched easier into the market and distribution network can be set up rapidly without any problems dealing with distribution rights and licensing.

Besides all these, the most important step that one must take before exporting his/her products into China will be have a deep understanding China’s customs, regulations and controls towards imported goods. A sound market entry strategy is also necessary in order to penetrate the China’s market. An assessment of your goods’ strengths, weakness, opportunities and threats can allow you to promote and distribute your products better. Understanding the profitability and marketability of your products in the China’s market is thus vital before exporting your products into China.

The real-time communication for Suppliers & Buyers on B2B platform

B2B web portal is a place for suppliers and buyers to exchange the information so as to conclude the trade. Most B2B websites provide the offline communication for the member. That is the suppliers / buyers have to click on the “Contact Now” button and then send the messages. After that, they have to wait for the reply from another side. In this case, the contact might be lost because the email address might be wrong or they never check the Inbox on the B2B platform. So how to resolve this problem? Let them telephone call each other. This will increase the cost and take the time.

I think the best solution is to enable the Internet Messenger (MSN, Skype, AIM, GTalk, Yahoo! Messenger) on the B2B web and pages. All internet messengers (IM) have web page embedding features. You can program the internet messengers scripting and trigger them on the page. So if the members store their IM type and account in B2B websites. Once they go online and open the IM, their IM status will be indicated as “Online” in B2B web page. If the buyer is interest in your product, he can trigger to call with you in IM, other than send you the message. It is perfect that your potential buyer can contact you in real-time. He does not go to other suppliers at the moment but chat with you for more information about your products.

You can also speak to buyers via the talk feature in IM. Almost all IM have talk features and they are free. So you will save a lot of time and money. Also the all the chatting history can be saved in IM file base. You can review them at any time if you want to recall something from your memory.

In the internet world, we should fully utilize the automatic tool to increase the work efficiency. We won’t totally relay on it but they have become must-have in our business operation. In addition the B2B websites market your products worldwide. You should grasp all opportunities come from there. The combination of B2B and IM is wonderful. It will become main stream in the global trade.