China

Understanding the customs and trade landscape in China 

In terms of total output, China is now the world’s second largest economy, second only to the United States. The quick rate at which China has moved towards a free market economy has allowed many multi-national companies to enjoy rapid growth not only by using China as the centre point of their manufacturing and distribution activities but by also tapping into the growing domestic demand for goods . However a more dynamic business environment has bought with it an increase in regulatory complexity at every level. This may now be leading companies to temper their growth outlook due to concerns about transparency and the fairness of the playing field.

The regulatory environment in China is complex and continually evolving. The decentralised structure of Customs and CIQ creates local interpretation, resulting in a gap between the national regulations and the local practices. For example, standard operating practice for Processing Trade is different in Southern China when compared to the rest of the country. Meanwhile, business models often evolve at a much faster pace than the regulations. Companies can conduct self-assessments, implement best-in-class procedures, and adopt other customs automation strategies in order to ensure compliance and avoid unwanted surprises.

It is our experience that companies with a “best in class” customs programme typically started from a low baseline. In many cases companies have been subject to a Customs investigation (including employee detention) and significant financial, operational and reputation exposures resulted. Consequently a new approach to resourcing the customs function and elevating its priority in company strategy has significantly improved their compliance record in China.
 

Our services

Our specialist customs and international trade practice provides a wide range of tailored solutions, including:

Creating value

  • Upgrading the enterprise classification
  • Using free trade agreements
  • Applying Interim Duty Rates
  • Customs supply-chain business modelling
  • Upgrading the customs handbook
  • Reducing the VAT leakage on exports
  • Optimising use of bonded zones
  • Optimising duty-free quota for imported capital equipment
  • Establishing and managing a customs centre of excellence in China
  • Establishing bonded international repair centre
  • Assisting in response to the imposition of anti-dumping duties and implanting a strategic plan to reduce/eliminate such duties

Ensuring compliance

  • Managing customs valuation and transfer pricing documentation
  • Establishing and implementing KPI/KOI for customs and trade compliance
  • Conducting compliance assessments
  • Conducting training
  • Obtaining advanced ruling on tariff classification and goods valuation
  • Conducting tariff classification technical analysis
  • Completion of foreign exchange verification and cancellation for trade payables/receivables with the State Administration for Foreign Exchange (SAFE)
  • Completing commodity inspection, import/export licensing and related matters with the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) , the Ministry of Commerce (MOFCOM) and the Ministry of Environment Protection (MEP)
  • Evaluating and assisting in selection of customs brokers and I/E agents
  • Managing customs handbook
  • China export controls — Export general license for dual-use items

Managing risk

  • Defence documentation for Customs disputes on tariff classification and valuation
  • Best-in-class operating procedures
  • Tactical and technical support during audits and investigations by customs officials Tactical and technical support during audits and investigations by intermediate agency

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Contact us

Asta Nie

Asta Nie

Worldtrade Management Services Leader, China, PwC Asia Pacific Customs and Trade

Tel: +86 (21) 2323 2269

Helen Y Han

Helen Y Han

Partner, Beijing China, PwC Asia Pacific Customs and Trade

Tel: +86 (10) 6533 2811

Nathan Pan

Nathan Pan

Partner, Beijing China, PwC Asia Pacific Customs and Trade

Tel: +86 (10) 6533 3730

Ryan Wu

Ryan Wu

South China (incl. Hong Kong SAR), PwC Asia Pacific Customs and Trade

Tel: +86 0755 8261 8891

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