If you’ve got business in China, there’s far more to follow than tariffs.
In the ongoing trade war between the United States and China, tariffs make headlines for good reason: Their impacts tend to be both public and immediate. For importers and exporters operating on razor-thin margins, lucrative markets can be lost overnight.
What those stories don’t often cover, however, concerns developments taking place in China of equal importance — and more lasting significance.
China’s government is engaged in a sweeping reform of the nation’s trade regulations and procedures. Importers and exporters must become aware of the changes, if they are to ensure an uninterrupted flow of goods to and from this crucial market.
The latest set of reforms stems from recommendations by the State Council, adopted by the National People’s Congress of China in March of 2018. They call for extensive reorganization of multiple government agencies, with a special emphasis on those overseeing trade. The intention is to streamline regulatory procedures and boost the Chinese economy, which has recently seen signs of a slowdown.
Among the most dramatic actions taken by the government is the integration of two major agencies: China Customs and China and Inspection Quarantine (CIQ). With the merger, Customs becomes responsible for measures controlling the admittance of foreign goods, as well as the taxation of imports and exports. In the U.S., that would be akin to combining Customs and Border Protection with the Food and Drug Administration and agencies overseeing consumer product safety.
In all, the China General Administration of Customs (GAC) announced the revision of 71 regulations, and abolition of two more, concerning customs activities. Here are a few of the additional changes enacted in the wake of that action:
Many of these government actions are expected to cut down on red tape and lighten the procedural burden on companies shipping goods into China. At the same time, they require traders to enact major changes in their documentation and submission practices. Even with the reforms in place, China trade will continue to be more complex than that of most countries. The price for ignorance of the rules is steep.
It’s crucial, therefore, that traders acquire the expertise needed to comply with the new procedures. With the help of a skilled third party, they can implement a China trade-management technology solution that effectively creates “a window through the wall.”
The benefits of a comprehensive Global Trade Management (GTM) platform are extensive: lower costs, reduced risk, improved supply-chain efficiencies, and access to timely regulatory updates. China will continue to make changes that impact its foreign trade regime, and traders must stay on top of developments.
Gary Barraco is director of global product marketing for Amber Road.
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