November 7, 2022
China Manufacturing -
How to Import From China: A Guide for Australian Businesses | OneLink Holdings
Australian brands and companies look to China for the majority of their international manufacturing requirements. This guide will help Australian businesses understand the process and costs of importing from China.
As an Australia-based business, you may be looking to source goods from China in order to take advantage of the country’s low labour costs and vast manufacturing capabilities. However, before you can start importing products from China, there are a few things you need to know about the process.
In this guide, we’ll cover the basics of importing from China, including the necessary paperwork, shipping considerations, and estimated costs.
By the time you’re finished reading, you’ll have a good understanding of what’s required in order to start importing from China. So, let’s get started!
What documentation and paperwork do I need?
Before importing goods to Australia, you will need documentation such as a commercial invoice, packing list and certificate of origin (COO). These documents are legal documents; so, they must be correct to ensure a smooth import process. An import declaration will also need to be submitted to Australian Customs, so that the goods can be released from Customs control to the importer (owner of the goods).
List of documentation needed
Commercial Invoice
The commercial invoice includes the terms between the two parties involved in the goods, the quantity and weight of the goods, the payment terms, and the total invoice value.
Packing List
The packing list includes a description of the goods; including the quantity, weight and measurements, and has the type of packaging used for the goods (eg, box, carton etc). It also features both the importer and exporter details and the Commercial Invoice Number.
Certificate of Origin (COO)
The Certificate of Origin (COO) is a legal document that contains the country of origin of the manufactured goods. This certificate is used by customs to determine whether its legal for the goods to enter Australia, and whether there’s any special tax or duty obligations.
Packing Declaration
If the goods are being shipped by sea, a packing declaration needs to be included. The declaration contains information regarding the packing materials that have been used. Packing material must be free of any animal or plant matter, due to biosecurity requirements.
Import declaration
An Import Declaration will need to be submitted by the importer or an agent (licensed customs broker). This declaration will state the goods being imported, details on the importer (owner of the goods), the method of transport for the goods and the tariff classification and customs value. This can be submitted online in the Integrated Cargo System (ICS) or lodged by presenting a completed, signed copy of the import declaration document at an Australian Border Force counter.
Labelling Requirements
Correct labelling must be included on the goods being sent to Australia, otherwise they risk being returned to the origin. The shipping label must include how the goods were made, produced, packed or prepared for shipment as well as an accurate description of the goods. This label must be in English and include the country of manufacture.
Shipping Considerations
When shipping your goods from China, you have two main options: sea freight and air freight. Sea freight is generally cheaper than air freight but takes longer, so it’s important to consider how quickly you need your goods delivered when making your decision. Sea freight can take from 12 to 30 days to arrive, while air freight can take 1-7 days to arrive; so, if your wanting a product quickly, air freight would be the best option. Other factors to consider when basing your timeline around shipping times is the event of inclement weather, which could delay both sea and air freight delivery times.
Keep in mind that most Chinese manufacturers require payment upfront before they will begin production on your order, so you’ll need to factor that into your timeline as well.
Another consideration is whether you want to use a freight forwarder. A forwarder is a company that specializes in arranging shipments, acting as an intermediary between the company’s shipment and the destination. They can be helpful in ensuring that your goods are properly packaged and labelled for customs clearance. They use trusted contacts with carriers including air transport, trucking companies and transoceanic lines. It’s important to remember using a freight forwarder can add notable costs to your shipment.
Does Australia have a free trade agreement with China?
The China-Australia Free Trade Agreement (ChAFTA), which entered into force on 20 December 2015, improves Australia’s access to our largest trading partner. To make use of the free trade agreement, importers will need to obtain a ChAFTA Certificate of Origin, which completely nullifies the tariffs that otherwise would be charged.
Australian Importing Costs
The cost of importing from China will vary depending on several factors, such as the type of product being imported, the quantity being ordered, and the shipping method chosen. However, there are a few general estimates that can help give you an idea of what to expect:
Do I need to pay Customs Duty on my imported goods?
Yes, customs duty can range from 0 to 10% of the value of imported goods, depending on what is being imported. The standard Australian Customs Duty is 5% of the value of imported goods.
What is the cost of an Import Processing charge?
If the value of the goods is under $1,000 there is no import processing charge. If the value of the goods is between $1000 and $10,000 the cost for an electronic submission is $50, while a manual (documentary) submission is $90. If the goods are valued over $10,000 the cost for an electronic submission is $152 or $192 for a manual submission.
Conclusion
As you can see, there are a lot of variables that can affect the cost of importing from China. However, if you’re careful about planning and budgeting for all the necessary expenses, it can be a very cost-effective way to source goods for your business. The estimate figure in the table above of $752.50 doesn’t include the cost of shipping, so it is important to factor in other variable costs you may encounter.
Importing from China can be a great way to source high-quality goods at low prices. However, there are several things Australian businesses need to keep in mind when undertaking this process. By familiarising yourself with the necessary paperwork and shipping considerations ahead of time, you can avoid any surprises down the road.
Need a hand with sourcing and importing products from China? OneLink Holdings can help. We are a leading provider of supply chain management solutions, and we are dedicated to helping our clients run their businesses more efficiently and effectively. We offer a comprehensive suite of services that can streamline your supply chain and help you save time and money. Our team of experts will work with you to customize a solution that fits your specific needs. We’re here to help you optimize your operation and improve your bottom line. Contact us today to learn more about how we can help you!
Written By
One Link Holding team
With our experience it puts us in a very unique position in being able to take your business from idea to reality, or if you’re part of the way there we can help with a number of individual areas in your business.