Since signing the China Free Trade Agreement (ChAFTA) in Canberra on 17 June 2015, many Australian companies are considering exporting to China for the first time.
The agreement takes effect from 1 January 2016 and many have predicted this will represent a major boost for the Australian economy, as China is our biggest trading partner.
It is especially significant for industries such as agriculture which have been disadvantaged in the past because they have had to compete for trade against nations who have had a Foreign Trader Agreement in place.
What does it mean for your business?
Under the China Free Trade Agreement (ChAFTA), 85.4% of Australian goods exported to China will be tariff free, with that figure rising to 95% at the end of the interim implementation period in 11 years’ time.
This table provides easy clarification.
Tariff on Australian goods exports
|Items||Current Tariff||FTA Tariff||Interim Period|
|Dairy Product||10-15%||0||4-11 years|
|Infant Formula||15%||0||4 years|
|Live cattle||5%||0||4 years|
Does this mean that you should jump straight into exporting to China?
No, it doesn’t. While our goods might be very appealing now that they are tariff-free, there are still many requirements that must be met before they will actually be allowed onto the Chinese market.
You may be surprised to know that Chinese import standards are stricter even than Australian or EU standards. China has its own product certification, product standard and testing standards that your products must meet. That means your products need to undergo a rigorous assessment before they can enter the Chinese market.
Exporting to China – Compliance hurdles
There are three main requirements for exporting any product into China: CCC certification (or CCC mark), Guobiao (GB) testing standards and ISO standards.
- A sample of products requiring the CCC mark include electrical and electronic products, household electrical appliances, small power motors, motor vehicles and safety parts, motor vehicle tyres, agricultural machinery, firefighting equipment and much more.
- The Guobiao (GB) is a set of testing standards which are the equivalent of our national standards. Any product that requires the CCC mark will have a matching GB standard against which it is assessed.
- Almost every Chinese buyer would ask you to provide ISO 9001 Certification and, if the products to be purchased fall in the categories of high risk of environmental pollution and safety risk, they will also require environmental management and occupational safety management certifications (ISO 14001 and OHSAS 18001).