Tariffs and regulations

Tariffs

Tariffs and duty rates are constantly revised and are subject to change without notice. Austrade strongly recommends you reconfirm these prior to selling to China.

Many Australian products attract tariffs upon import into China but Australian companies have access to increasingly preferential rates as the China Australia Free Trade Agreement (ChAFTA) is implemented. It is important to understand if quotas, discretionary safeguards or other mechanisms apply to the preferential rates listed in the agreement, as they can potentially increase the tariff rate payable for a period of time.

The Australian Government’s Free Trade Agreement Portal includes a section on ChAFTA, and provides Australian exporters with China tariff information by Harmonised System Code, as well as details for certificates or origin, exporter case studies and links for importing country requirements. Exporters should be aware that they do not automatically enjoy preferential tariff rates through free trade agreements. Documentary evidence, in the form of a certificate of origin is required to access preferential tariff rates.

Exporters must meet the rules of origin for goods to be considered Australian under the agreement. The Australian Industry Group (Ai Group) and the Australian Chamber of Commerce and Industry (ACCI) provide a certificate of origin service to Australian exporters.

Regulations and non-tariff measures

For many sectors, China is a heavily regulated market. Stringent regulations are in place for food quality, safety and labelling, product testing and registration as well as requirements for adherence to Chinese standards. Many Australian service businesses find that issues around qualification recognition or limitations on business scope can complicate or, in some cases, prevent entry into the Chinese market.

As one example, Australian agricultural products such as meat, fish, fruit and vegetables require China and Australia to have finalised an import protocol prior to the opening of trade for that product. Only agricultural products which adhere to the terms of an agreed protocol are granted market access to China. More information on this can be found on the Department of Agriculture and Water Resources (DAWR) website.

Another example are cosmetics products. All imported personal care and cosmetics products to China must have Registration Credence of Imported Cosmetics of Non-special Purpose or the Document for Hygiene Permit for Imported Cosmetics for Special Purpose from the China Food and Drug Administration (CFDA). Please refer to the basic process for this application, with more information in Chinese available on the CFDA’s website.

Methods of quoting and payment

Austrade can provide advice to Australian exporters on common practice for quoting and payment for key industries in China. Australian companies should expect to negotiate both price and terms with commercially savvy Chinese business partners.

Incoterms are international rules for the interpretation of trade terms, and are used extensively in international trade, including with China. The International Chamber of Commerce provides details of frequently used INCOTERMS on their website which are often included in commercial documents by exporters to define the terms of sale in the quotation, sales and delivery processes.

Historically, most trade between Australia and China has been denominated in United States Dollars (USD), however this is changing with the Chinese Renminbi (RMB) and Australian Dollar becoming directly convertible in 2013, and with the establishment of an RMB clearing bank in Sydney at the Bank of China. It is anticipated that the RMB’s use in international transactions will continue to increase.

The Australian Export Finance and Insurance Corporation (Efic) operates on a commercial basis and works with banks to provide financial solutions to Australian exporters including through loans, guarantees, bonds and insurance products.

Documentary requirements

Chinese Customs authorities are very precise about import documentation being provided completely and accurately. Any error can cause major problems, risking delays or seizure of goods.

Documentation requirements can be extensive and may include commercial invoice, certificate of origin, bill of lading, packaging list and special certificates.

Exporters should work with their customs broker, freight forwarder and Chinese partner to confirm the documentary requirements for their product prior to exporting to China.

Austrade can provide details of customs brokers and freight forwarders as part of our referral service.

Insurance

Companies should consider what insurance may be required for business in and with China. There are a number of insurance products frequently considered by companies engaged in international trade:

  • trade credit insurance
  • marine insurance
  • bond insurance
  • product liability insurance
  • foreign exchange risk management products.

For more information contact your insurance broker or underwriter. Austrade can provide referrals to service providers through our referral service.

The Australian Export Finance and Insurance Corporation (Efic) operates on a commercial basis and works with banks to provide financial solutions to Australian exporters including through loans, guarantees, bonds and insurance products.

Weights and measures

China uses the metric system.

Further information

China Food and Drug Administration (CFDA)
China’s new Food Safety Law
China Ministry of Commerce (MOFCOM)
General Administration of Customs of the People's Republic of China
General Administration of Quality Supervision, Inspection, and Quarantine (AQSIQ)
Standardisation Administration of the People’s Republic of China (SAC)