China's Trade
China’s Import Policy
Import rights have been expanded much enough to cover foreign-invested holding companies in China. Besides, a foreign-invested research & development center may import limited number of new and high technology products in order to determine the demand in China market for such products. If production oriented foreign-invested enterprises, holding companies or research & development centers are dealing with expanded commercial operations, then they have to apply for inspection, and also if they expand the scope of their business activities, then they have to obtain approval and give a report to MOFCOM every year regarding their operations.
Subject goods of imports are classified in 3 categories:
(1) Import-prohibited goods,
(2) Import-restricted goods,
(3) Freely importable goods.
Import-ProhibitedGoods
The goods in the first category cannot be imported to China in any case. The list of these goods is prepared and updated by MOFCOM.
Import-Restricted Goods
The goods in the second category are subject to import license and/or quota control and the list of these goods is prepared periodically by MOFCOM. Import quota (quota license) should be obtained in order to import the goods the importation quantities of which are restricted by the government. And import licenses should be obtained in order to import other goods subject to restriction. The legislation provides some exemptions for the imports of goods for processing purposes.
Freely Importable Goods
The term; freely importable goods, actually means the goods, the imports of which are subject to automatic license. In other words, the importers are also required to make an application to import the goods which are freely importable. However, this application is concluded by MOFCOM in a very short time. Some of the freely importable goods are under the monopoly of certain public organizations. These goods can only be imported by such organizations.
Import Quotas;
The total quantity of import quotas determined for the next year is announced by MOFCOM’s Quota and License Management Administration every year before July 31. Import quota applications for the next year are made every year before August 31 to importation quota control authorities. The authorized body provides the quota before October 31. In some cases, the authorized body may determine a common quota distribution system instead of allocating quota one by one for individual applications.
The basic issues taken into consideration by the authorized bodies during the evaluation are:
(1) actual import performance of the applicant,
(2) whether the previously given quotas are fully used or not,
(3) the production capacity, business scale, sales status of the applicant,
(4) if the applicant is a new exporter, then the specific condition of the importer,
(5) the requested quota amount,
(6) other issues.
The importer, who obtains quota, may complete his customs transactions. However, if the import goods are also subject to import license in the meantime, then a separate application is required for that.
Tariff Quota
Tariff quotas are applied in order to import the goods which are subject to the tariff quota (these are the goods that are charged with a low customs tariff when imported in certain quantities). The list of these items is prepared and updated by MOFCOM.
Tariff quota control body announces the total quantity of tariff quotas for the following year, between September 15 and October 14 of every year. The applications for tariff quota are made every year between October 15 and 30. After the tariff quota license is obtained, the importer may complete the customs formalities.
The unused import quotas and tariff quotas are returned to the relevant authorities. Otherwise, the unused quantities are deducted from next year’s quota calculations.
Import Licenses
The authorized body for import licenses in China is MOFCOM and the local offices attached to it. According to the License Organization Catalogue dated 2002, import licenses are prepared at three levels:
(1) MOFCOM: The import license for the goods in some categories is required to be issued by MOFCOM (Quota and License Administration Office) directly. Currently, there are 112 categories of goods subject to control at this level.
(2) MOFCOM Special Commissioner Offices: There are 7 categories of goods subject to control at this level. The regions with Special Commissioner Offices are Tianjin, Dalian, Shanghai, Guangzhou, Shenzhen, Hainan, Nanjing, Fuzhou, Qingdao, Zhengzhou, Wuhan, Nanning, Chengdu, Kunming, Xian and Hangzhou. These offices may also issue import licenses according to the authorization given by MOFCOM.
(3) Provincial Economy and Trade Offices: These offices are attached to local governments and there are currently 6 categories of goods subject to control at this level.
The enterprises that wish to import the goods the importation of which are subject to restrictions, are required to apply to the relevant authority with the following documents in order to obtain the import license:
- application form sealed by the applicant,
- the approval document (control certificate) prepared by the relevant administrative unit according to the import category:
- if the application is being made for the machinery and electronic products subject to quota control; then the “Machinery and Electronic Products’ Import Quotas Certificate” will be presented,
- if the application is being made to import natural rubber subject to quota control, then the quota approval certificate prepared by National Development and Reform Commission (NDRC) and MOFCOM will be presented,
- if the application is being made to import processed oil and car tires, than the quota approval certificate issued by the State Economy and Trade Commission and MOFCOM will be required,
- if the application is to import chemicals subject to monitoring, then the approval of the office responsible for the chemical arms contract and the copy of the import contract are sought for,
- for the application to import easily produced poisonous chemicals, a copy of MOFCOM’s approval certificate and the import contract are required,
- if the application is being made to import disc production equipment, then the approval certificate of State Press and Publication Administration and MOFTEC regarding the subject are required,
- if the application is to import materials harmful to the ozone layer, than the approval certificate of the Ozone Depletory Materials Import and Export Office,
- the approval certificate from the relevant public authorities will be required according to the properties of other special products.
- supporting documents indicating that the importer has the necessary qualities to conduct the import business ( “Foreign Invested Enterprise Approval Document” for foreign companies, etc.),
- other documents that might be required by the relevant authorities.
Import licenses are valid for single customs and single customs entry declarations. However, in specific cases, import licenses for multi-use (maximum 12 times) can be provided so long as it is mentioned on the document.
Automatic Import Licenses
These are the licenses that should be obtained to import the freely importable goods. The following documents are required for such applications:
- application form,
- import agreement,
- workplace document,
- if the trade is made through a foreign trade agency, then the agreement between the agency and the importer,
- if required, end user document and other documents.
Automatic import license is valid for a customs entry declaration for 6 months. No extension or modification can be made. Re-application should be made if extension or modification is required