Only the companies or institutions authorised by the Ministry of Foreign Trade and Economic Co-operation are allowed to carry out international operations. There are two possibilities: either companies of foreign trade or productive companies are entitled to trade on an international basis (import for their personal use conditioned by steady flows of export). There are currently about 9,000 companies authorised to carry out foreign trade operations in China (14 in 1979).
More than half of the imports towards China are subject to import licenses. The initial license is issued by various organisations according to the product, but the final license is granted by the MOFTEC. In order to obtain these licenses, the importer must hold an exact reserve of exchange and prove that the import is necessary. The grant of licenses often depends on the domain of activity, being able to be encouraged, allowed, restricted or simply forbidden, according to the rule of investments promulgated by China. It is in any case imperative to have strong relations with the Chinese Administration to succeed in obtaining these licenses.
There are import quotas for more than 400 products, such as cars and textile. The criteria to establish these quotas is not public and it is extremely difficult to get information on this matter.
Most imported goods in China are subject to inspection. Either a preliminary inspection takes place in the exporting country for some products ( textile for instance), or either there is an inspection in the port or in the airport of arrival to check that the products meet the Chinese standards. These controls are led directly and exclusively by Chinese Authorities.
|Textile industry and clothing items
In order to sell in China, it is best to have a specialized agent having good institutional relations. If an export company wants to have a large trade volume in the country, the opening of a representative office in China should be considered. In fact, the Chinese government incontestably wants to have more and more foreign companies and encourages them to set up representative offices; that being the first stage towards setting up in China. However, setting up of a company in China is still subject to a process of surveillance under the control of the official authorities.
The other difficulty is to get the various permissions & certificates to enter this market: in fact, companies often get permission from local authorities but not necessarily from the central authority. Because of this, Carrefour had to give up some of its stores to its competitors.
Since joining the WTO in 2001, the Chinese government has opened its doors to foreign firms, and as a result, has attracted more than 34 billion investment dollars in 2004, a growth of 150% as compared to 2003. In addition, the government adopted a law on 1 June 2004 allowing companies create their own chains stores.