Sales in China

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Reaching the Consumers

Marketing Opportunities

Consumer Behavior
China is a `collectivist' society, group prevailing over the individual. As a result, Chinese consumers largely 'adhere' to the standards and rules of the group to which it belongs. Enormous passion for golf in China (1 million golfers) during the last few years, testifies to this need to belong to a group (the affluent) and the consequent conformity of attitudes of individuals to the group expectations.
Also, advertizing promotions in China frequently directs groups rather than individuals. Today, the single child generation wants to live a very good life and thus spend (education, luxury items, consumption goods), especially in large cities. Theconsumption is often ostentatious as witnessed by the explosion in the number of luxury cars in the Peoples' Republic of China, as the Chinese nesocial recognition and thus membership of a group. Mainly due to the need for conformity with the reference group, there are hardly any individuals ready to run the social risk of being "different" as compared to their reference group. Contrarily, once a product is adopted by the reference group, the passion is extremely rapid and to a wider extent.
Consumer Profile and Purchasing Power
It is not a single China, but many Chinas. The middle-class represents approximately 240,000,000 people, according to the Academy of Social Sciences of China, i.e. 19% of the total population. According to the more realistic estimate of the American firm Mc Kinsey (which tackles the `middle-class' issue from the incomes angle and not under the assets angle of the academy of social sciences); 105 million urban Chinese households, primarily on the coastal strip, should have more than 25,000 RMB per annum in 2009. According to the Mc Kinsey firm, the low middle-class should represent 290 million people in 2011, and would reach 520 million people in 2025. Today, 120 million Chinese still live with less than 1 USD/day.

The Chinese consumer is very brand sensitive. Chinese consumers feel that price is an indicator of the quality of a product. Price and sale service are the most important selection criteria. On the other hand, aspects such as guarantee, possibility of product refunds are less important. Generally, the Chinese attach great importance to information research on a product, before purchasing it. The independent information source is the word of mouth. Chinese consumers are eager to find out what is available, particularly as regards foreign products. They are very curious about foreign products but still prefer domestic products.
Consumers Associations
CCA , The Chinese consumer association
Main Advertising Agencies
Techworks Asia

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Distributing a Product

Evolution of the Sector
Dominated by an official system in the past, distribution today obeys the rules of saving in not structured trade. Principal activity areas of the country are located around Shanghai, Beijing, Guangzhou and HongKong. Retail distribution has developed in big towns, hypermarkets are increasing rapidly in the majority of the big Chinese cities.
Market Shares
Mass distribution is dominated especially by large Asian groups such as Shanghai Bailin which has 5000 sales outlets and a turnover of 6.8 billion Euros. However, foreign groups have successfully established in China, such as Carrefour or Wal-Mart. Chinese distributors have the most significant market share. Asian groups are also present in China, such as the Thai Lotus.
In the rural areas, traditional trade is still significant because foreign firms have not yet established there.
Organizations in the Retail Sector
Chinese Chamber of Commerce (CGCC)
China Chain Store and Franchise Association

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Market Access Procedures

International Conventions
Member of World Trade Organisation
Party to the Kyoto Protocol
Party to the Washington Convention on International Trade in Endangered Species of Wild Fauna and Flora
Party to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal
Party to the Montreal Protocol on Substances That Deplete the Ozone Layer
Main International Economic Cooperation
Asia-Pacific economic cooperation Organization (APEC).
Bilateral Treaties and Accords.
AFTA and ASEAN - China Free Trade Area.
Consult the Free Trade Agreement signed by China
Non Tariff Barriers
Only companies or institutions authorized by the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) can run foreign trade operations. Two methods are possible: Foreign Trade Companies or producing companies entitled to trade with foreigners (import for their personal use provided they have stable export balances). Today, there are nearly 9000 companies authorized to run foreign trade operations in China (14 in 1979).
More than half of value imports of China is subject to import licenses. Initial authorisation is issued by various organisations according to the product, but the final delivery is subject to acceptance by the MOFTEC. To obtain these authorizations, the importer must have exact foreign exchange reserves and justify the necessity to import. Delivery of licenses often depends on the sphere of activity, which may be encouraged, allowed, restricted or simply prohibited, according to the investments regulation promulgated by China. It is essential in all cases to have solids relations within the Chinese Administration for obtaining these licenses.
Many goods imported into China are subject to inspection. Prior inspection in the exporting country for certain products (textile in particular), or inspection at the port or the incoming airport to check that the products are well in conformity with the Chinese standards. These checks are carried out directly and exclusively by the Chinese authorities.
Customs Duties and Taxes on Imports
8.37% according to UNCTAD. A relatively low rate.
Consult customs duties of various products by clicking here.

Customs Classification
China applies the Customs Harmonised system (on the basis of the international 6 figure key). 
Import Procedures
To reduce customs clearance time, certain companies can, in cases where description, specifications and quantity of import of goods are determined, declare to the customs in advance and present the documents after the imports are dispatched or before the arrival or in the 3 days which follow the arrival of the goods in a customs surveillance zone. The Customs will examine the goods directly and will release the goods after their arrival.
The declaration can be done via the customs site, by indicating the place of arrival of the goods, as well as all the customs data. Once the data is analyzed by the customs, a receipt will be sent, so that the company can complete the cargo of the goods. Custom duties is then paid by bank transfer.
Documents to be presented to customs vary according to the products. However there are standard documents to be presented: the bill of lading, the invoice, the packing list, the customs declaration, the insurance policy, the sale contract or the inspection certificate of the AQSIQ (General Administration of the PRC for Quality Supervision, Inspection, and Quarantine) or other licenses of safety and quality.
Importing Samples
Samples imported or exported must be declared at the customs (free or not). The customs examines and releases them.
For Further Information
Ministry of Foreign Affairs
Ministry of Commerce
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Organizing Goods Transport

Main Useful Means of Transport
The largest port is Shanghaï, with an annual ocean freight of 250 million tonnes. In 2006, Chinese ports dispatched 5.6 billion tons of goods and 93 million of containers.
Goods transport by road represents approximately 12 billion tons of freight. Road transport accounts for 13% of cargo in China.
Air transport represents approximately 2.2 million tons of freight of merchandises.
Railroads are the principal mode of transport and the cheapest solution for long distance freight. In 2002, railroads provided the transport of 1,508 billion tons kilometers of goods.
Shanghai port
Dalian port
Tianjin port
Qingdao port
Guangzhou port
Xiamen port
Beijing airport
Dalian airport
Shanghaï airport
Chengdu airport
Guangzhou airport
Shenzhen airport
Sea Transport Organizations
Ministry of Transports
Air Transport Organizations
Ministry of Transports
Road Transport Organizations
Ministry of Transports
Rail Transport Organizations
Ministry of Railways

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Identifying a Supplier

Type of Production
Industry accounts for 49% of the Chinese GDP (including 6% of the construction sector). Principal industries in China are mining industry (world leader in reserves of tungsten , molybdenum and titanium), the coal industry (world leader in coal production and consumption), metallurgical, petrochemical, naval (18% of worldwide production, 3rd world producer), cars (6.6% of the GDP), energy (second producer in electrical energy). China is also the 1st world producer of electric household appliances products (1/3 of the worldwide production), 3rd producer in data-processing products (2nd for the PC), the 1st world producer of toys with 70% of worldwide production, 1st world producer of shoes and finally the 1st producer and exporter country of textile.
Business Directories
Manufacturers Associations of the Main Industries
National council of light industry (CNLIC)
Chinese Association of the renewable energies industry(CREIA)
Chinese Association of leather industry
Chinese Association of pharmaceutical industry (CIPA)
International Association of Chinese Automobile Manufacturers (CAMAI)
Chinese national council of textile and clothing
Trade Agencies and Their Representations Abroad
Chamber of commerce for import and export of light industrial products and arts and crafts (CCCLA)
Chamber of commerce for import and export of minerals, metals and chemical products (CCCMC)
Chamber of commerce for import and export of food products, country products and animal products (CFNA)
Chamber of commerce for import and export of textiles (CCCT)
Enterprises Federation
Chinese association of international cooperation of SME
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