Exporting China: Everything You Need to Know
How to export to China from the UK, what documents you need, what compliance hurdles you’ll face, and what trends to consider.
Exporting to China from the UK has never been more lucrative — and hasn’t been this difficult since China opened up its doors to foreign business in 1978.
Security concerns led the US to increase tariffs on Chinese imports and blocked Chinese firms like Huawei from reaching key sectors. Multinationals like Apple have declared they’re friend-shoring to countries like Vietnam, India and even the US.
In response, China restricted the export of rare metals used to manufacture semiconductors. This dealt a killer blow to many Western countries. According to the European Commission, China accounts for around 80% of the global production of gallium, and 60% of germanium.
And this is “just the start”, according to one former Chinese commerce minister.
So how can a UK business export to China during a time of political tensions and economic protectionism?
Let’s explore the current trends and facts around exporting to China. What you can export. The necessary documents. The compliance issues you will face.
Exporting to China: Trends and Facts
China imports a whole array of goods from its main trade partners, which include Japan, South Korea, the US, Australia, Vietnam and Germany. According to recent data, Japan is the largest exporter to China.
Electronic equipment and mineral fuels. Oils and machinery. Nuclear reactors, boilers and iron ores. Medical apparatus and vehicles.
With a massive population, China is a big family to feed, relying heavily on the importation of soya beans, maize, wheat and other cereals to feed its pigs, cattle and chickens and ducks.
This could change. China is losing more manufacturing and export market share in key sectors to Asian neighbours, with countries like Vietnam, India and the Philippines jostling for position.
Trade between the UK and China is looking surprisingly rosy, considering the recent restrictions. The value of UK exports to China has increased over the last four years.
Let’s look back to 2019. Then the UK exported $ 25.1 billion worth of goods to China. By the end of 2022, the UK was exporting £37.6 billion in goods.
Bear in mind, the ‘trade deficit' is still large — total UK imports from China by the end of 2022 was £73.4 billion.
What can UK businesses export to China?
The most common goods exported to China include machinery, fuels, and transport equipment.
But it would be easier to go through what UK businesses cannot export to China.
China is a protectionist state. The Government strictly monitors what goods come in and out of the country, as evidenced by its strict currency controls. If you want to know why China has two currencies, check out this article.
You cannot export weapons or counterfeit currencies. As we’ll go on to explain, technology and software face regulatory roadblocks too.
But goods legal in the UK face unusually stringent controls in China — like media deemed immoral by the Chinese government. China limits the number of foreign films available in China each year, and major blockbusters like Call Me By Your Name and Seven Years in Tibet are banned.
You can’t export second-hand clothes either, and the importation of food is, understandably, highly-regulated — you’ll have to get a certificate from the Ministry of Agriculture.
Restrictions are also in place for artificial breeding technology for agricultural wild plants, space material production technology, laser technology and more.
What documents are needed to export to China?
Before exporting to China, check government guidelines in both your country and China — regulations are constantly changing and adapting to new protectionist measures.
For the UK, several documents may be needed. They depend on the items you’re exporting, the importer, and your sector.
You will need:
- A commercial invoice
- Certificates of Origin (these may not be required if not specifically requested by the importer)
- Transport documents
- Packing lists
- Single Administrative Document (SAD)
- Pro forma invoice
- Import licence
- Confirmation certificate
- Customs registration
For more information, visit the UK government’s website.
We recommend that you also do the following:
- Engage a specialist to help you.
- Register your Intellectual Property in China as soon as possible. China abides by a ‘first to file' system, whereby someone has the legal right to trade names or trademarks if they register them before you do.
- Ensure your business name doesn’t have an unintended meaning in Chinese and is easy to pronounce.
- Ensure all labels and packaging are translated by a native speaker.
Bear in mind that Chinese businesses prefer to work with trusted or respected friends and referrals. Networking is critical.
So speak to an official from the UK Government’s Department for Business and Trade — they help UK companies succeed in China and have staff located in the British Embassy in Beijing as well as in Chongqing, Guangzhou, Shanghai and Wuhan.
If you’re already scoping out the market in China or need support while visiting, the British Embassy supports British nationals establishing businesses in China.
Export Compliance Issues When Exporting to China
Western businesses have always faced compliance hurdles when exporting to China, and the ongoing trade war between the US and China has only made matters worse.
But what is the UK doing?
In 2021, the UK Strategic Export Licensing Criteria was updated. It grants power to the UK authorities to grant or reject export licenses based on whether goods might be used to facilitate or commit human rights abuses or undermine national security. China was added to the list of countries subject to these controls.
This includes dangerous chemicals and weapons. But software and technology are also on the list too. There are exemptions for medical supplies and equipment, food, clothing and other consumer goods.
Certain goods must also be approved by the Chinese authorities and receive proper certification — like medicine and food. The Standardization Administration of the People’s Republic of China is responsible — check them out for more information.
Banks may block your payments to China too. Learn how to send money to China here.
What are the main opportunities for exporters?
China may be highly protectionist, but it isn’t immune from the logic of global trade. What one country lacks, another country has plenty of.
Goods from other countries are especially needed in China due to the rapidly ageing population and burgeoning middle class. Here are some other key areas where China is hoping to gain support from exporters.
Retail and Consumer Products
China is soon set to overtake the USA as the world’s largest retail market and food importer.
China is home to the largest middle-class cohort in the world. They want better education, health care — even plant-based products. New markets are also opening for premium brands and products, and many buy online.
Health and life sciences
President Xi put healthcare at the cornerstone of policy-making. This makes sense. China has one of the world’s largest ageing populations.
By 2035, an estimated 400 million people in China will be 60 or over — that’s 30% of the population. This trend is being felt across all developed countries, with a larger non-working population claiming more resources and leaving the healthcare system overburdened.
Understandably, healthcare products are increasingly in demand in China.
China’s a world leader in technology and with the rise of ‘smart cities' across the mainland, daring new technologies are in high demand.
However, it’s not easy for UK companies to get a foot in the door. Third-party payment apps like Alibaba must be licensed by the Government. Moreover, the Government maintains enormous influence over its tech sector, enjoying ‘golden shares' in two of its biggest tech firms — Alibaba and Tencent.
Technology is in high demand, but difficult to export. For one, the UK Government has tight controls on the export of software and technology to China.
In June 2023, the EU made a similar move by clamping down on companies outsourcing key supply chains to autocratic countries — sensitive technology like supercomputers, artificial intelligence and advanced microchips.
Open an import-export business account with Silverbird
Paying Chinese suppliers isn’t easy. Receiving money from Chinese clients isn’t easy either. That is if you use traditional banks or most online payment gateways. Blocked transactions. Frozen accounts. Delayed payments.
You’re not an ordinary business — you need a business account primed for global trade.
Silverbird is an EMI-certified cross-border payment solution that offers you a multi-currency account and a dedicated account manager — no matter the size of your business. Open an account in minutes, onboard in days.
Chat with a Silverbird representative now.