Doing business with China

In this article, you will find out more about business opportunities in China and how to comply with specific rules when importing and exporting goods and services.

Latest news

EU agrees to increase import duty on Chinese electric cars

EU countries have agreed to increase the import duty on electric cars from China. This is aimed at protecting European countries' own auto industry. The import duties range from 7.8% to 35.3%. China is considering countermeasures. The country wants to introduce import duties on European pork, dairy products, and cognac. 

Higher exchange rate for Chinese currency 

The Chinese government wants to use stimulus measures to improve the economy. As a result, the value of the Chinese currency has risen. Do you import products from China? Then take into account a more expensive yuan and check the exchange rate regularly. Due to the more expensive currency, your imported product will cost more. If you have been importing for some time, you will be familiar with the consequences of currency fluctuations. 

Provisional import duties on electric cars from China

The European Commission has announced provisional import duties on electric cars from China from 4 July 2024. The provisional duties will apply until 30 October 2024. Within this period, EU member states must vote on a final decision. If the import duties become final, they will apply for 5 years. 

China demands removal of import tariff increase

The European Commission wants to increase import duties on Chinese electric cars from 4 July 2024. According to the commission, Chinese car manufacturers receive subsidies from the government. This allows them to charge lower prices than European manufacturers. This creates unfair competition. Brussels will first hold talks with the Chinese government. If nothing changes, there will be levies between 9% and 36,3%. China wants further talks with Brussels. But only if the high import duties are dropped. China has also already threatened countermeasures. The Chinese government wants to impose levies on EU pork. China imported over 1.5 million tonnes of pork in 2023. More than half of it came from Europe.

Trade with China

China’s economy is mainly focused on manufacturing and the primary sector, the economic sector that provides raw materials and food. Figures from Statistics Netherlands (CBS) show that Dutch companies imported €59 billion worth of goods from China in 2023. Telecommunications devices, electrical appliances, office equipment, and automatic data processing machines were the main imports.

In 2023, Dutch exports to China totalled more than €30 billion. These consisted primarily of prepared foodstuffs, specialised machinery, and electrical appliances. Check out the key figures (in Dutch) on trade between the Netherlands and China.

Promising sectors

With a population of more than 1.4 billion, China is the most populous country on earth. It is a massive country and there are stark differences between regions. So focus on the region in which your product or service is most likely to succeed.

There are many opportunities in the e-commerce, energy, maritime, and agrifood sectors. The Netherlands is a front-runner in these sectors when it comes to knowledge, development, and innovation. If you have a new product or service to offer that China needs for the growth and development of the country but cannot provide itself, you can be very successful. The Chinese government is investing heavily in generating energy from hydrogen, for example, and making its ports more sustainable. Discover more business opportunities in China (in Dutch).

Finding partners

Finding the right suppliers or buyers takes time. Local trade fairs can serve as a valuable source of information on the Chinese market. Here you can meet new people and start building up a network. You could also consider partnering up with a Chinese business and attending the fair together. Taking part in a trade mission to China (in Dutch) may open doors for you that would otherwise remain closed. For a list of trade fairs and exhibitions, visit AUMA or TradeFairDates.

Chinese business partners

You find a Chinese supplier or buyer and would like to do business. First, check that you are dealing with a reliable party. Most countries have a commercial register where a company must be registered. This does not yet say anything about the reliability of a supplier. But it does tell you whether the company is registered according to the law and has a right to exist. In China, the National Enterprise Credit Information Publicity System manages the Business Register. In its register, you can find company information such as the company name, registration number and activities of the company. This website is only available in Chinese languages.

You can check a registered company in Hong Kong on the Hong Kong government website. This is the Companies Registry.

Ask the local embassy network for support on this. Upon request, they will carry out a company check (in Dutch) for you. This way, you can be sure that the Chinese company exists.

And you can also show that you are a reliable business partner. Check your Business Register details regularly to be sure that potential partners see correct information about your business.

Smartphones

China has the largest number of smartphone users in the world. Messaging apps like WeChat and Sina Weibo are widely used in China. While WhatsApp is popular in Europe, it cannot be used in China. When communicating with Chinese business partners, it is best to use a Chinese app.

Do you have questions about doing business with China? Contact the KVK Advice Team.

Business culture

Doing business in China requires a lot of effort, but you will reap the benefits over time. To a Chinese company, who you know is more important than your company’s track record. And Chinese people will often prioritise trust over a signed contract.

Because of the language barrier, many Dutch entrepreneurs struggle to communicate with their Chinese counterparts, few of whom speak English. Bring your own interpreter to meetings. And if you plan to give a presentation or bring written materials, have them translated before you leave for China. For more do’s and don’ts, visit RVO’s China country page.

Payments

To make payments to other countries, your Chinese business partner will have to request a foreign exchange rate from SAFE, the State Administration of Foreign Exchange. As a result, payments from China always take longer to process, regardless of which form of payment you choose.

Advance payments are particularly common, often in combination with a Letter of Credit (L/C). Chinese businesses prefer not to deliver goods on credit. Always consult your bank on which form of payment is the best fit for the transaction in question. Also ask about common payment habits and behaviour in China.

Put contracts in writing

Even though Chinese people put more faith in trust than in signed contracts, you should always set out agreements in writing. Have contracts reviewed by a lawyer who is familiar with the Chinese legal system.

You should also make clear agreements on who will arrange and pay for transportation. Agree on an Incoterm® and set it down in writing in the contract. To avoid having to draw up a contract from scratch, consider using one of these model contracts.

Exporting goods

You have received an order and are about to export your products to China. You will always need an invoice, transport document, and packing slip. But you may also need additional export documents. Use Access2Markets to find out which documents you need to import your products into China.

The Chinese importer usually pays the import duty in China. This duty increases the cost price for your Chinese customer. As an exporter, you arrange this for your Chinese customer only if you have made agreements about it.

Ust the step-by-step plan to exporting to prepare for exporting to China.

Product requirements

Product requirements in China (in Dutch) are very strict. Imported products are always registered when they enter the country and have to meet Chinese standards. Products that do not comply with local requirements are not allowed to enter the country. The same goes for products that do not bear the CCC mark (China Compulsory Certification) and a commodity code. Product requirements vary between different product types. China does not recognise CE marking. You can find more information about product groups and the corresponding product requirements, documents and certificates, and import duties in China on Access2Markets.

Watch the video for more information about how to use Access2Markets

Mandatory registration of foodstuffs

IIf you produce, process, or store food, you must be officially registered (in Dutch) to export food products to China. New labelling rules (in Dutch) for foodstuffs were also introduced. Your registration number now has to be printed on the inner and outer packaging of your product, for example. The inner packaging is the consumer packaging. Outer packaging is the packaging used for transport.

Importing goods

Dutch companies import more from China than they export to it. Of everything we import from China, about two thirds leave the Netherlands in an unprocessed state.

Check which documents you need and whether there are any additional costs. This is how you tackle importing products from China.

Transportation

There are many experienced logistics service providers in the Netherlands who are familiar with customs procedures in China. You can also hire a freight forwarder to ensure that your goods are processed quickly and efficiently and avoid having to worry about customs formalities yourself.

Goods are generally transported to and from China by sea or by rail. Smaller consignments are also sent by air freight. Make clear arrangements with your Chinese business partner prior to shipping. Agree on an Incoterm® and lay it down in writing in the contract.

Services

To provide services in China, you need an official invitation from your Chinese business partner and a so-called Z visa. You can apply for this work visa via the China Visa Application Service Centre. This organisation handles visa applications for the Chinese Embassy in The Hague.

If you bring tools to China for work and will be taking them back with you, you can use an ATA Carnet to bring them into the country. With this goods passport, you will not have to pay import duties, VAT, or a deposit for temporary imports into China and re-imports into the EU.

Use the Overseas Services tool (in Dutch), created by the Tax Administration, to check regulations relating to VAT.