In the 1970s, the modernization drive reversed the Maoist economic development strategy in China. It opened up the clouds for the dragons as they committed themselves to the world outside. A legal framework integrated China into the world economy.
The Golden Road had been established and China gained world dominance for trading. It surpassed the expectations with the highest recorded exports in 2013 and has been on the rise ever since.
China has impacted the whole world. “Fluctuations in capital markets, interest rates, currencies and commodities are routinely credited to — or blamed on — economic developments in China,” says Scott Clemons, the chief investment strategist for Brown Brothers Harriman in New York.
The Sino-India trade angle seems to defy the political gravity. China is India’s largest trading partner with bilateral trade set. Both the countries have signed the Double Taxation Avoidance Agreement (DTAA) and entered into the Bangkok agreement in which China and India provide concessions for few products exported to each other.
The level of demand for Chinese products in Indian markets reflect the vast opportunity China unfolds. The e-commerce industry in China has generated ¥5.16 trillion in 2016. The historical boom in the economy of China denotes the existence of large markets and the reason why many Indian businessmen have aligned their business with China.
The mark of distinction for importing from China is the large profit margins it offers when compared to importing from other countries or buying from home country. The profits measure up even after levying the costs of transport and import duties. The competitive pricing is a result of its cheap labour and low currency value. China creates an ideal environment for its importers by providing ease of doing business and better response times.
However, in order to facilitate smooth imports from China, the Indian exporter needs to bear the following in mind. These are precautions that prevent deals from going sour.
So being forewarned is forearmed:
# Supplier Kingpins: There have been many instances where the aspirations of many Indian businessmen have been dashed as they did not find the right suppliers. Scurrying around China to procure materials that offer the best value for money has also not helped. However, identifying the right supplier is a critical aspect for successful import. That is why engaging in business transactions with suppliers has to be handled with precaution. So, how to find the right supplier?
Googling your way through various search engines or B2B sourcing platforms could kick-start the process. Before you pass the verdict, carry out a factory audit or consult business service companies where the real physical existence of every supplier is verified by a core team of analysts and a report is submitted.
A checklist of key parameters to be careful about:
- Credibility of the sellers
- Business licences
- Financial health
# Quality Measures: Mass-manufacturing affordable products has been the unique selling point for China. It is a haven of products with different qualities. So, it’s the buyer who must play the lead role in carefully evaluating the different parameters.
Don’t fall prey to favourable negotiation terms. Test the specifications by asking for samples. Before you wire the deposits, ensure you have a detailed written specification on products like:
- Product labelling
- Product characteristics
- Product testing specifications
- Packaging concerns
- Safety standards
Scale up gradually after reassurance of the product quality.
# Crackdown scams: There have been trade related issues where Indian businessmen have not received the same products, upon delivery of the consignment, as compared with the samples provided initially. Imagine the fury of an Indian businessman who receives mud and stones instead of chemicals like silicon carbide and zinc ingots.
The Indian diplomatic missions have derived a list of risks that are registered periodically by the Indian traders:
- Quantity disputes
- Quality disputes
- Refusal to send consignments on receipt of payment
- Non-release of Pre-Shipment Inspection Reports/Certificates in due time
- Diversion of payments by the third party fraudulent company
# Combat kickback: The ‘kickback’ culture prevailing in China is yet another deterrent faced by the Indian traders. There have been prevailing issues where quality check firms in China approve of defective products by accepting bribes.
The trade brokers, local employees and distributors in China use their positions to multiply their income by providing inflated invoices or choosing illegal suppliers.
So, be prepared to combat the bribery transgressions by being vigilant. Business transparency should be the global imperative.
#Restrictions apparatus: Delays are roadblocks to deadlines. Avoid import barriers with China by ensuring compliance with the rules and regulations.
Importing few goods from China have been banned by the government of India on April 25,2016.The list includes steel products, electronic items, mobile phones and many more.
Being legitimate should be your trade mantra. Classify your import products before taking up the import decision based on the investment catalogue as follows:
Make sure you have supporting formal documents for every step. They reinforce the authenticity of the import transaction and call for a hassle-free profitable experience.
Thus, in short, by avoiding these pitfalls, you can tap the most while importing from China. After all being forewarned is being forearmed.