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Adjustments to China import-export tariffs for 2023 simplify procedures for foreign trade operators

China is slowly recovering after a trade slowdown triggered by the COVID-19 pandemic, with exports expected to grow by double digits in 2023. A flourishing business ecosystem, robust logistics network, efficient supply chain management, and currency regulation practices make exporting and importing from China relatively manageable for global players.

Foreign companies operating import and export business in China will be subject to new regulations in 2023, which will simplify registration procedures and lower tariffs, among other things.

Last December, the Ministry of Commerce (MOFCOM) and the General Administration of Customs (GAC) published the updated catalogues of goods subject to automatic import licensing and import licensing on an annual basis, and catalogues of goods that are prohibited from import from time to time.

Goods restricted from export are subject to the export licensing management and some have an additional quota. MOFCOM and GAC jointly published a list of export goods that need licenses on an annual basis.

China’s customs authorities require a trading company to be equipped with proper import and/or export licenses based on the specific category of goods being traded.

An export/import license is a government document that authorizes a supplier to export certain goods and commodities from China.

While most goods are permitted to be imported and subjected to an automatic licensing system, hazardous or prohibited goods require special export licenses and are monitored via quotas.

MOFCOM also creates and maintains the Catalogue of Technologies Prohibited and Restricted from Import and the Catalogue of Technologies Prohibited and Restricted from Export in China.

The Catalogue of Import and Export Licenses for Dual-Use Items and Technologies is a separate system, which refers to sensitive and potentially dangerous products or technologies capable of dual military and civil application. Dual-use products on the directory include chemicals, radioisotopes, weapon-related items and technologies, commercial cipher codes, among others.

Automatic import licensing management is applied to most imported goods that fall under the permitted category. MOFCOM and the GAC jointly publish a catalogue of goods subject to automatic licensing annually. The most recent one was released in December 2022—the Catalogue of Goods subject to Automatic Import Licensing Administration (2023).

Certain goods subject to automatic import licensing are exempt from licenses (e.g., goods imported for processing trade and re-export).

Each automatic import license is valid for six calendar months, and, in principle, each license should only be used for one batch of goods (with certain exceptions).

Import licensing management is applied to some items restricted from import. Licenses are issued according to domestic needs as well as to fulfill the provisions of relevant international treaties.

Common categories for import licenses include substances that deplete the ozone layer, some mechanicals, and electronics, etc. An import license is generally valid for one year.

Products under the Tariff rate quota (TRQ) management include wheat, corn, rice, sugar, cotton, wool, wool tops, and fertilizer.

Under TRQ administration, goods imported within the quota are subject to a lower tariff rate, and goods imported beyond the quota are subject to higher rates.

Companies seeking to import at the lower TRQ tariff rate must apply to MOFCOM for quota allocation each year.

Every year, MOFCOM and GAC publish a catalogue of export goods requiring licenses. The latest list was specified in the Catalogue of Goods subject to Export License Administration (2023).

The export license is divided into two categories—those only valid for one batch of goods export and those valid for multiple batches (up to 12 batches) within the validity period.

Some products are restricted to an export quantity through the export quota management.

There are a total of 17 categories of goods subject to export quota management in 2023, including licorice and licorice products, rush grass and rush grass products, live cattle (to Hong Kong and Macao), live pigs (to Hong Kong and Macao), live chickens (to Hong Kong), wheat, corn, rice, wheat flour, corn flour, rice flour, artificial cultivation of ephedrine grass for medicinal materials, coal, crude oil, refined oil (excluding lubricating oil, grease and lubricating oil base oil), sawn timber, and cotton.

Traders should obtain quotas from MOFCOM for exporting these products and apply for export license by submitting the certificate of quotas or the certificate of winning the bidding for quotas.

The latest import-restricted technologies are listed in the Catalogue of Technologies Prohibited and Restricted from Import in China (2021) and include biotechnology, chemical technology, petroleum refining technology, petrochemical technology, biochemical technology, and coinage technology.

Certain technologies can be imported after acquiring a technology import license.

The latest import-restricted technologies are stated in the Catalogue of Technologies Prohibited and Restricted from Export in China (2020).

Technologies restricted from export can be exported after acquiring a letter of intent for technology export licensing, a technology export license, and written approval from the local intellectual property administration department.

Dual-use items and technologies can be imported and exported after obtaining an import and export license, generally valid for no more than one year.

MOFCOM also publishes a list of authorized import and export license issuing agencies annually.

Starting on January 1, 2023, four adjusted catalogues regarding import and export have taken effect.

The Catalogue of goods subject to automatic import licensing administration (2023), which includes a total of 45 categories, including food products, mechanical and electronic products, ore, chemical products, and medical products, etc. Compared to the 2022 catalogue, perchloroethylene (PCE) was newly added. PCE is used as a raw material for refrigerants.

The Catalogue of goods subject to import licensing administration (2023) has been updated, covering a total of 14 categories of import goods in chemical equipment, machines, ships, etc.

There are some small adjustments, including a few chemical items that have been added under the “ozone depleting substances” category, while the custom series numbers are altered under the “electric power equipment” category.

The Catalogue of goods subject to export license administration (2023) includes 43 categories of export goods, including food, raw materials, equipment, and manufactured goods. While most of the content remains the same, there are a few newly added products under chemical, ozone-depleting substances, sawn timber, and automobile categories. Certain rare earth materials and lubricating oil products will continue to face restrictions on exporting.

The Catalogue of import and export licenses for dual-use items and technologies (2023) added seven new items, all of which are export controlled commodities, involving chemical equipment/technologies (one item – potassium perchlorate) and special civilian items/technologies (six items – high-pressure water cannon and its supporting equipment, such as vane pumps and control systems).

China’s government is looking to boost the economy and stimulate foreign trade, which plays a significant role in the development of advanced technology, important equipment, energy resources, and other commodities.

These new adjustments to the China import-export tariffs for 2023 and the amended Foreign Trade Law aim to simplify procedures for foreign trade operators and create a friendlier business environment in China.

It is recommended that international companies interested in operating an import-export business in China keep informed of all relevant policy changes to be able to profit from new opportunities.

To learn more about our services in China, contact our Head of Business Advisory - Ms. Kristina Koehler-Coluccia at DISCLAIMER: All information in this article is verified to the best of our ability and is assumed to be correct at time of release; however, Woodburn Accountants & Advisors does not accept responsibility for any losses arising from reliance on the information provided within. The information provided is for general guidance and does not replace specialized advice.


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