Exporting foods to China – the opportunities and the challenges

Having recently joined a trade fair attended by foreign food companies seeking to gain a foothold in the China market, it would seem a good time to provide an overview of the various options, opportunities and challenges facing foreign food producers.

China represents a huge market opportunity. Its burgeoning, and increasingly sophisticated, middle class has developed an insatiable appetite for foreign foodstuffs, which a plethora of domestic food scandals has only served to drive further.

Foreign companies are scrambling to get a slice of the pie but should tread carefully in what is a complex environment. Foreign companies will need to comply with a variety of laws and regulations including: the food safety law, the import and export commodity inspection law, the imported food importers and exporters filing regulations, and the imports and export animal and plant quarantine law, amongst others.

Vast amounts of imported food are destroyed each year due to issues surrounding quality or misunderstanding of the regulatory requirements. In the worst-case scenario, the import licence could be revoked and the company barred from future trade.

This article outlines some of the issues that foreign food exporters should consider when approaching the market in China. It will also outline the main governmental agencies involved in the process.

Both the importer and exporter must comply with registration requirements in order to import food products into China. Regardless of whether the importer is Chinese-owned or foreign-owned, all importers of food products must be established in China with a registered business scope that includes the business activities of importing and distributing food products, even if the importer does not intend to commercially distribute the products. An importer must also be registered as a foreign trade operator with the Ministry of Commerce (MOFCOM).

Licensing – In general, foodstuffs destined for the China market do not require pre-import licensing but certain products will need additional licensing. Producers must register with the State Certification and Accreditation Administration (CAA) if the food in question is on the “List of Food Imports Subject to Enterprise Registration.” Typically, the food on this list requires additional registration because it has heightened safety requirements (e.g. meat, health products etc). The registration is valid for four years and is extendable.

Labelling – There are specific requirements regarding how products are labelled in China. Failure to adhere to these requirements can be costly and time consuming. Products should be labelled in simplified Chinese. Some of the main requirements include:

• Ingredients
• Net weight and solid content
• Name, address and telephone number of the manufacturer
• Production date (year/month/date) and storage instructions
• Packer / distributor (name and address)
• Batch number
• Country of origin
• Quality guarantee and/or storage period (year/month/date)
• Usage instructions.

Please note that all labels will need to be approved by the Chinese Inspection and Quarantine Service (CIQS).

Government agencies – There are a number of government departments that are involved in the importation process. These include:

• MOFCOM – An Automatic Import Licence application can be downloaded from the MOFCOM website. In most cases this will be handled by a local agent/distributor and there is no fee. However it is recommended to check with potential agents/distributors on their ability and experience in this regard.
• CIQS – This service performs checks on all products arriving in China to ensure that they comply with labeling requirements and that all shipping documentation, bills of lading etc. are in order. Missing or incorrect documentation can result in the destruction of the product or return of the goods to their country of origin.
• General Administration of Quality, Supervision, Inspection and Quarantine (AQSIQ) – As of October 2015, it is mandatory for exporters to register each shipment of food products online with AQSIQ for tracking purposes. This is a body directly under the control of the State Council that is responsible for national quality, inspection, import-export food safety, certification and accreditation, standardisation, as well as administrative law enforcement. An import permit is sometimes required from AQSIQ or other specialist departments to import food products such as meat, dairy, fish and other aquatic products. Your Chinese partner will generally handle import registration.

Some other points to note:

• Branding – In addition to labeling, specialist branding advice may assist you to stand out from your competitors
• Finding an agent/distributor – Some effort should be taken to ensure that your chosen partner has the requisite experience and is the right fit for your particular needs.

In summary, the China market offers great opportunities for quality foreign food but to get your products into China, you’ll need to navigate China’s customs and border regulations, as well as meeting local labelling rules and product safety standards. Chinese regulations can change rapidly, and application can vary across ports and regions – so this definitely isn’t an area where you can do it yourself.

Make sure you’re in close contact and getting detailed advice from your Chinese in-market partners, right from the very start of the import process. Check early on if your Chinese agent or distributor has an import licence. If they don’t, they’ll need to subcontract out to a specialised importer – which creates another failure point in your export chain, more paperwork, and higher costs.

China’s various product and safety standards sometimes overlap or contradict each another, and it can be hard to track down official English versions of some standards. It’s a good idea to get professional help in this area, rather than trying to make sense of it on your own.

Contact our China offices here.