July 25, 2018
The famous French military leader and emperor Napoleon Bonaparte once said, “There lies a sleeping giant. Let him sleep! For when he wakes, he will shake the world.” This was in reference to China, and quite the prediction for someone who only lived until 1821. While Napoleon Bonaparte may or may not have had the vision to predict the technological and economic landscape we now live in, he knew China was the one to watch. This is a giant who is waking from its slumber, and this is partly due to the importing and exporting capabilities of a nation of approximately 1.35 billion people, which is slowly creeping closer to the power of the US economy.
An Economic Choice
China has become the number one nation for exporting, and even though there is often a focus on what we get from there, it still comes in second place for importing. This is because they need those larger scale items such as crude oil, iron ore, copper and plastics which they don’t already have access to. When it comes to the Australian relationship with China, it isn’t just one sided, for example they are one of our biggest customers when it comes to agricultural produce.
So, what makes China a popular choice for businesses? Companies from all over the world have jumped on the China train and this is mostly due to the economic benefits. The labour market in China is competitive and their products are low cost, this equals higher profit margins which can be difficult to compete with locally.
When businesses think about importing from overseas, there are a few logistical boundaries to consider. It is recommended an experienced freight forwarding company such as MYC International Logistics is utilised as without the right knowledge and expertise the process may become a stressful one.
There are a few key areas businesses need to be aware of when working with China:
The cheap prices businesses are likely to find in China will be quickly overshadowed if excessive logistical fees are charged. Shipping costs will vary depending on the size of the package, but freight forwarders with international partners will be able to negotiate the best price. Some items will be subject to additional taxes and export duties. These are usually found on resource products and goods which are semi-manufactured. GST might be placed on imports, and if items are quarantined there may be additional fees to retrieve them.
Importing goods does come with restrictions. Companies can’t simply choose anything they like and bring it into Australia for resale. Banned items such as guns, asbestos and counterfeit goods are obviously going to be prohibited. You can find the full list of restricted items at The Department of Home Affairs.
There are strict procedures in regard to importing and exporting from China, and the right freight forwarding company will be able to follow a standardised process. There are documents required, customs, clearances and the management of bookings to deal with. For companies, purchasing the goods is the easy part, it is getting them to their doorstep which can be tricky which is why a freight forwarder will be their new best friend. Items should be visible throughout the journey, with the use of track and trace.
The internet has brought countries closer together and allowed for better trade communications and more streamlined processes. With the support of strong logistical procedures, companies are embracing the potential growth this brings. As a result, China is quickly escalating as a leader of commercial innovation, and this is one giant who is unlikely to go back to bed any time soon.