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8/3/2019 Trade Confidence Index Q4 2011 FINAL
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The DHL / British Chambers of Commerce
TRADE CONFIDENCE INDEX
4TH QUARTER 2011
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CONTENTS
THE BRITISH CHAMBERS OFCOMMERCE
The British Chambers o Commerceis the national body or a poweruland infuential Network o AccreditedChambers o Commerce across the UK,a Network that directly serves not onlyits member businesses, but the widerbusiness community. Representing100,000 businesses who togetheremploy more than 4.8 million employees,the British Chambers o Commerce is
The Ultimate Business Network. EveryChamber sits at the very heart o its localcommunity working with businessesto grow and develop by sharingopportunities, knowledge and know-how. No other organisation makes sucha dierence to business as the BritishChambers o Commerce.
For more inormation visit:
www.britishchambers.org.uk
DHL THE LOGISTICS COMPANY FORTHE WORLD
DHL is the global market leader in thelogistics industry and The Logisticscompany or the world. DHL commits itsexpertise in international express, air andocean reight, road and rail transportation,contract logistics and internationalmail services to its customers. A globalnetwork composed o more than 220countries and territories and about275,000 employees worldwide oers
customers superior service quality andlocal knowledge to satisy their supplychain requirements. DHL accepts itssocial responsibility by supporting climateprotection, disaster management andeducation.
DHL is part o Deutsche Post DHL. TheGroup generated revenue o more than 51billion euros in 2010.
For more inormation visit:
www.dp-dhl.com
44 Introduction4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4. 2
44 Executive4Summary4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4 3
44 Key4Indicators4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4. 4
44 Firm4Size4Breakdown44.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4. 6
44 Documentation4Data44.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4. 7
44 In4Focus4-4Infation44.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4 8
44 Country4Guide4-4China44.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4.4 9
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FOREWORD
A lot has happened since the Q3 release o the DHL/BCC Trade Condence Index.Three months ago we warned o the negative impact that economic problemsoutside o the UK were having on the ability o rms to export. Since then, theproblems have become more acute, and policymakers appear unable to getanywhere near a solution. The situation seems to be getting gradually worse, notbetter, as every day passes, and this uncertainty hits order books and corrodescondence.
What is clear rom the results o this survey is that exporters still do indicate thatthey will grow at the start o 2012, albeit at a slower pace than they did beore. Thisisnt great news or the prospects o rebalancing the economy away rom domesticconsumption and Government spending, towards investment and exporting, but it is
no disaster either.
The Chancellor has announced urther measures to help the UKs exportingcommunity, but policymakers can and must go urther in order to generate anexporting culture amongst the UKs SME population. In particular, moves toimprove outbound trade missions and promotional activity, and the implementationo exporting skills within schools would help both current and uture exporters.
Whilst the latter part o 2011 saw the global economic crisis worsen, the UK trade
decit remained lower than it was or much o the year. The DHL/BCC TradeCondence Index Q4 2011 shows that export volumes have slipped rom the peaksseen earlier in the year, and given the worsening global economic crisis they aregrowing, albeit cautiously.
The Index also ound that business condence has declined highlighting anuncertainty amongst exporters about prospects or increasing protability andturnover in 2012.
In spite o this, exporters demonstrated a willingness to invest in training theirworkorce to ensure they are best placed to weather the potential challenges o 2012.Encouragingly, micro-exporters also expect to increase their workorce this year.
These ndings coupled with Government initiatives to solidiy trading relations with
international markets should instil condence in UK exporters. George Osbornesintentions to make the UK a leading oshore trading centre or the Renminbi, as well
as Chinese Government plans to boost imports rom the West to rebalance its own trade surplus present anopportunity or Britain to prosper as a trading partner with one o the astest growing economies in the world.
There are plenty o success stories out there o British companies beginning to export into oreign markets. TheUK automotive industry is seeing an increase in exports to the East as oreign car manuacturers take advantageo the all in Sterling; and an increasing number o UK exporters are seeing fourishing e-commerce sales to thecontinent, and urther aeld, specically Australia as disposable income and avourable exchange rates acrossthe Pacic create inroads or British goods.
Success though is dependent on support. A lack o business condence indicates that companies dont seegrowth opportunities on the horizon. More needs to be done to change this state o mind amongst businesses.
A robust ramework o support to helpbusinesses identiy potential growthmarkets would be a great start i we areto regain our place as a powerul globaltrading partner and increase export salesin this critical year.
Phil Couchman
CEODHL Express UK & Ireland
John Longworth
Director GeneralBritish Chambers of
Commerce
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2
INTRODUCTION METHODOLOGY
The DHL/BCC Trade Condence Index(TCI) is a measure of the UKs exportinghealth. By analysing trends in trading
activity and key factors of exportingrms performance, the TCI gives atruly comprehensive picture of the UKsinternationally trading business community.The index casts new light on exporterslevels of condence and employmentintentions, and paints a picture of regionalexporting performance.
Those wishing to obtain more informationon the Indexs methodology and datasources are invited to contact the British
Chambers of Commerce.
The TCI generates its results rom two datasources:
Questionnaire responses submitted byover 1,000 exporters, derived rom the BCCsQuarterly Economic Survey (QES). The QESis the largest and most representative businesssurvey o its kind.
Data generated rom exporting activitythat requires supporting documentation.
THE SURVEY
Fieldwork or the survey was conductedbetween 14 November and 5 December 2011.Results are split into the ollowing rm size
categories:
0-9 employees (micro rms)
10-49 employees (small rms)
50-249 employees (medium rms)
250+ employees (large rms)
Unless otherwise stated, results reer to allexporters responding to the survey. Whereresults are split between the service andmanuacturing sectors, this is stated clearly inthe text. Results that are not split by rm sizeare weighted by the contribution o rm sizeto total exporting turnover.
Results are represented by either a balancegure or a pure percentage gure. Balancegures are determined by subtracting thepercentage o companies reporting decreasesin a actor rom the percentage o companiesreporting increases. Where a balance gureis positive it represents growth; where it isnegative, it represents contraction.
EXPORT DOCUMENTATION DATA
Many types o exports require supportingand commercial documentation to ensurethe timely delivery o goods and timelypayment. Chambers o Commerce administerthis documentation, and have amassed asignicant dataset around UK goods exportsas a result.
The TCI uses data collected rom this processto show both an index o documentation andregional comparisons o exporting activity.
Written4and4researched4by:
Steve Hughes, Economic Adviser
Acknowledgements:
Sarah Jarvis, design and layout
The4British4Chambers4o4Commerce
65 Petty FranceSt. Jamess ParkLondonSW1H 9EUTel: 020 7654 5800Fax: 020 7654 5819Email: [email protected]
www.britishchambers.org.uk
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EXECUTIVE4SUMMARY Q42011
44 Exporters4are4less4condent4about4their420124prospects.4Nevertheless,4muted4growth4is4expected.
44 Sluggish4investment4and4employment4intentions,4as4well4as4increased4exchange4rate4concerns,4
raise4questions4about4how4quickly4the4economy4can4rebalance.4
The last edition o the DHL/BCC Trade Condence Index (TCI) highlighted the risks and uncertaintywhich the global economy aced through July to September. In Q4 2011 the economic environmentdeteriorated even urther, with more questions being asked o Europes banking industry, andeurozone nations ailing to nd a solution to their sovereign debt problems.
This environment was the backdrop or the Q4 2011 TCI eldwork period, with responses showinga all in exporter condence and a weaker outlook or both domestic and international activity.Sluggish results or indicators show that:
44 the4export4orders4indicator4is4at4its4lowest4level4since4Q3420094(see4Figure4One);4
44 overall,4expectations4to4increase4the4size4o4workorces4are4fat;4and,
44 condence4that4turnover4will4increase4is4at4its4lowest4level4since4Q242009
Results point to a muted expansion in export activity, rather than a contraction. The indications arethat UK exporters are ticking over, but recognise the dangers that 2012 present.
While much o the negative economic pressure is externally generated, the Government still has arole to play, and although the Chancellors announcements in the Autumn Statement provide moremoney to support exporting initiatives, more can be done.
The specic measures that should be adopted are:
44 Ensuring4more4SMEs4are4exposed4to4the4opportunities4o4international4trade44through4improved4
access4to4mentored4outbound4missions,4smarter4use4o4inbound4missions4and4greater4nancial4
support4or4promotional4activity4and4tradeshow4attendance.
44 Improvements4to4the4capacity4and4incentives4to4trade44there4needs4to4be4a4renewed4ocus4on4
generic4exporting4skills4within4school4and4Further4Education4business4curricula.4Publicly4unded4
schemes4aimed4at4placing4export-relevant4skill4sets4within4businesses,4such4as4placements4or4
linguists,4should4be4scaled4up4and4be4better4promoted.4
-40
-30
-20
-10
0
10
20
30
40
Q4 11Q3 11Q2 11Q1 11Q4 10Q3 10Q2 10Q1 10Q4 09Q3 09Q2 09Q1 09Q4 08Q3 08Q2 08Q1 08Q4 07Q3 07
Figure One: Balance of rms reporting an increase in export orders
%B
alance
Recession
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4
KEY4INDICATORS Q42011
EXPORT AND DOMESTIC ORDERS
The balance o rms reporting an increase in export orders in Q4 2011 was at its lowest levelsince Q3 2009, alling rom +11% to +9%. A more dramatic weakening was recorded or exportersdomestic activity, which dropped rom +10% in Q3 2011, to a near stagnant +1% in Q4 2011. Bothsuggest that economic activity was slowing as rms entered the new year (see Figure Two).
44 Export4orders4indicator4at4its4lowest4level4since4Q342009;4Domestic4orders4indicator4at4its4
lowest4level4since4Q142010.4
44 Condence4in4increasing4turnover4and4protability4over4the4next4124months4decreases.444 Investment4intentions4still4well4below4pre-recession4levels.4
When this is broken down into pure percentages, the gures show that 34% o respondentsstated that their export orders increased in Q4 (down rom 35% in both Q2 and Q3 2011, anddown rom 39% in Q1). The equivalent gure in Q4 or domestic orders is 31%, lower than allother results in 2011 (Q1, 32%; Q2, 37%; and Q3, 33%).
Manuacturing rms saw a marginal uplit in the domestic orders result, rom -2% to +2%, butthis still indicates stagnation, whilst export orders dropped rom +9% to +6%. Service sectorrms saw a large all in the domestic orders result, with the balance dropping 15 points to +1%.By way o contrast, export orders were maintained at +12%, and did not change on the previousquarter.
CONFIDENCE
Weakening order books have translated into a all in condence or the prospects o increasingturnover and protability. The overall result or condence in increasing turnover was +31%, aall o eight points, and the second weakest result since the recession ended. Condence inincreasing protability also ell eight points to +17%.
-50
-40
-30
-20
-10
0
10
20
30
40
DOMESTIC
EXPORT
Q4 11Q3 11Q2 11Q1 11Q4 10Q3 10Q2 10Q1 10Q4 09Q3 09Q2 09Q1 09Q4 08Q3 08Q2 08Q1 08Q4 07Q3 07
%B
alance
Figure Two: Balance of rms reporting an increase in domestic and export orders
Recession
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5
KEY4INDICATORS Q42011
Condence results or the manuacturing sector were ar less volatile than those within the
services sector. Manuacturers reported a slight easing o turnover condence, rom +40% to+37%, and a slight increase in protability condence, rom +32% to +36%. By way o contrast,services rms saw turnover expectations drop rom +40% to +29% and protability condencedrop rom +24% to +5%.
INVESTMENT
Logically, a weakened economic outlook and lack o condence in the ability to increaseturnover and protability would impact on investment decisions. The overall results show that orinvestment in plant and machinery this is indeed the case, with a drop rom +15% to +13%, whichis a par result post recession, indicating anaemic growth. The percentage o rms reporting thatinvestment plans or plant and machinery have worsened rose to 18% in Q4 rom 14% in Q3.
Figure Three shows how the percentage o rms that were condent o increasing protabilityhas developed throughout 2011, with alls in successive quarters occurring rom Q2 (where 50% orms were condent o an increase), to Q3 (48% o rms were condent o an increase), and nally
to Q4 (43% o rms were condent o an increase).Figure Three: Percentage of exporters that believe their protability will improve in the coming twelve months.
50% 48% 43%43%
Q1 2011 Q2 2011 Q3 2011 Q4 2011
The investment in training balance, however, rose rom +8% to +12%. This result occurred as aresult o large rms (those with over 250 employees) rom both sectors showing a big rise in theintention to increase investment in training.
EXCHANGE RATES
One nal point to note on the overall results is that exchange rate concerns have risen to theirhighest level since Q4 2010, with 37% o respondents reporting that exchange rates were moreo a concern than three months previously. When looking at the path o exchange rates over theprevious six months, this result does not come as a surprise. When the eldwork or the Q4 TCIwas conducted, sterling was almost 2 per cent higher against the euro than it was in the eldworkperiod or Q3.
-30
-25
-20
-15
-10
-5
0
5
10
15
20
2530
Training
Plant & Machinery
Q4 11Q3 11Q2 11Q1 11Q4 10Q3 10Q2 10Q1 10Q4 09Q3 09Q2 09Q1 09Q4 08Q3 08Q2 08Q1 08Q4 07Q3 07
%B
alance
Figure Four: Balance of rms reporting an increase in intentions to invest in plant & machinery and training
Recession
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6
FIRM4SIZE4BREAKDOWN Q42011
44 Expectations4to4increase4workorces4in4the4rst4three4months4o420124are4weak,4with4large4rms4
showing4a4persistent4reluctance4to4increase4overall4sta4numbers.4
RECRUITMENT AND EMPLOYMENT
All the signs are that 2012 will be a dicult year or the global economy. With weaker order books,and limited investment intentions; rms attitudes towards their workorce will be aected. FigureFive shows the balances or businesses expecting to increase their workorce, or rms with 0-9employees and 250+ employees.
The graphic shows that smaller rms sizes experienced a much shallower dip during the recession,than that o the rms with 250+ employees. While expectations or smaller rms are still positive,they are below levels seen in 2010. For large rms, the expectations or uture employment haveweakened signicantly, and have been largely negative.
Nevertheless, the urther up the rm size scale, the more likely that a business is to recruit. FigureSix quite clearly shows this, with 80% o rms with 250+ employees trying to recruit, compared to28% o rms with 0-9 employees.
-60
-50
-40
-30
-20
-10
0
10
20
30
0-9 Employees250+ Employees
Q4 11Q3 11Q2 11Q1 11Q4 10Q3 10Q2 10Q1 10Q4 09Q3 09Q2 09Q1 09Q4 08Q3 08Q2 08Q1 08Q4 07Q3 07
Recession
%B
alance
Figure Five: Balance of rms reporting an expectation to increase employment over the next three months (by employee size)
0
10
20
30
40
50
60
70
80
90
250+ Employees50 to 249 Employees10 to 49 Employees0 to 9 Employees
%O
fFirms
Figure Six: % of rms trying to recruit (by employee size)
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7
EXPORT4DOCUMENTATION4DATA Q42011
PERCENTAGE CHANGE
Index number 2007 = 100 Most recent quarter on ayear earlier
Most recent quarter onprevious quarter
Volume index of export
documentation 108.2 3.67% -1.48%
INDEX4OF4DOCUMENTATION
44 Documentation4data4shows4growth4when4comparing420114with42010,4but4 recent4activity4is4
more4muted,4with4alls4on4the4quarter.4
NATIONAL DOCUMENTATION VOLUMES
The quarter-on-quarter data shows a drop in the number o export documents being issued,with a 1.48% all in volumes. However, there was a rise rom the equivalent quarter in 2010,showing a 3.67% increase in Q4 2011.
Figure seven shows the regional breakdown o export documentation volumes and thepercentage change in volumes both on the quarter and 2011 rom 2010. There is a broad patterno decline quarter on quarter, but a broad pattern o increases when comparing the percentagerise o 2011 over 2010. This is a urther indication that exporting activity does seem to be
increasing looking at longer-term comparisons, but the economic environment is impacting onthe more recent attempts o British rms to sell goods abroad.
-20
-15
-10
-5
0
5
10
15
20
25
30
35
Year on Year
Qtr on Qtr
N IrelandWalesN EastS WestE MidsW MidsEastY&HScotlandN WestS EastLondon
Figure Seven: % change 2011 on 2010 and quarter-on-quarter (Q4 on Q3)
%c
hange
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8
IN4FOCUS:4INFLATION Q42011
44 Infation4remains4a4big4concern4or4exporting4businesses4-4although4there4are4signs4these4pressures4
are4easing.4
The topic o rising prices has rarely been out o the news over the last year. The cost o energy, uel,and raw materials has contributed to nancial pressures on businesses and consumers alike. Thisenvironment has provided a test or the credibility o the Bank o England, the body responsibleor maintaining low and stable infation. The Banks Governor, Mervyn King, has stuck to the mantrathat infationary pressures were externally generated and temporary, and that increasing interestrates would have limited eectiveness in combating rising prices. The view o the Bank has beenthat infation would all back to its two per cent target in the medium term.
The Q4 TCI shows how rising prices are still a big concern or exporters, but there are very tentativesigns o those infationary pressures easing (supporting recent producer price infation gures).Figure Eight shows that rms still regard infation as the actor o most concern compared withthree months previously. This is ollowed by taxation and then exchange rates.
However, there is a bigger picture, as the sector breakdown below presents.
MANUFACTURING
For manuacturers, the proportion o rms reporting infation as a concern ell rom 42% to40% (and was a lesser concern than both taxation and exchange rates). The proportion o rmsreporting that raw materials were adding pressure to raise prices also ell, rom 81% to 75%, thelowest since Q3 2010.
SERVICES
In the service sector, the proportion o rms reporting infation as a concern was at its highest sinceQ1 2010. However, this was entirely driven by large rms (those with 250+ sta), with all other rmsizes reporting that it was a decreasing concern.
0
10
20
30
40
50
Q4 2011
Q3 2011
TaxationCompetitionInationBusiness ratesExchange ratesInterest rates
%O
fFirms
Figure Eight: % of rms reporting a factor as more of a concern than three months ago
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DHL CHINA FACT SHEET
It seems impossible to discuss or describe any aspect of China
without reaching for an adjective such as largest, fastest or biggest.
It has, to take just a few examples, the worlds largest population
(around 1.3 billion). It has the worlds fastest growing economy and is
the biggest exporter. It is also the worlds largest consumer of energy
and is home to twenty of the thirty most polluted cities on earth. At the
same time it is the worlds largest generator of wind energy.
Today it seems as though everything is made in China. Whilst thatis not strictly true, it has certainly founded its success on being able
to produce (or assemble) certain types of product - such as toys,
computers, electrical items and clothing quicker, cheaper and in
larger quantities than anyone else. Many western companies,
particularly those who use China as a manufacturing centre and
import the finished items, have of course benefited enormously
from this.
But while Chinas manufacturing and exporting capabilities are
usually the main talking point, it should also be considered that China
is the worlds second largest importer. A modern, automated Chinese
factory often includes shiny new machines that are European made
and the increasingly affluent Chinese middle classes inevitably have adesire for western products and services. China is now the second
biggest consumer of luxury goods, second only to Japan.
And even though the Chinese authorities are looking to reduce the
countrys reliance on exports and increase its low domestic demand
to start selling to itself, in other words - China will remain a
massively attractive and important market for UK exporters and
importers alike.
COUNTRY OVERVIEW
DHL FACTS
The time taken to clear Customs is affected by the dutiable value ofthe shipment. Clearance by the Chinese Customs authorities can be aslow process and therefore additional time is allowed in the guidetransit times below.
Gateways into the country: 8
Number of Service Centres: 47
DHL Delivery Zone: 8
Delivery:DHL Express operates in partnership with Sinotrans (China NationalForeign Trade Transportation (Group) Corporation). DHL-Sinotranshas operated since 1986 and is recognised as the market leaderwithin the Chinese Express and Logistics industry.
Invoicing:Exports and Imports are billed in Pounds Sterling in the UK.
Transit Times
Sources: National Geographic, CIA, BBC
Capital Beijing
Population 1.3 billion (Source: CIA - estimate July 2011)
Currency Renminbi Yuan (RMB or CNY)
Time Zones 5 Zones: GMT+5.5, GMT+6, GMT+7, GMT+8, GMT+8.5
China: Country Profile
UK to China - Example Transit Times
Beijing Documents: 2-3 daysDutiable Shipments: 4-8 days
Shanghai Documents: 2-3 daysDutiable Shipments: 4-6 days
Wuhan Documents: 3 daysDutiable Shipments: 5-6 days
Chengdu Documents: 3 daysDutiable: 5-6 days
Shenzhen Documents: 3 daysDutiable Shipments: 5-6 days
Guangzhou Documents: 3 days
Dutiable Shipments: 5-6 days
Hong Kong Documents: 2 daysDutiable Shipments: 2 days
Macau Documents: 2 daysDutiable Shipments: 2-3 days
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China Fact Sheet 2
To avoid delays when sending to and from China, you shouldensure that your documentation always contains the followinginformation:
1. All Importers/Exporters in China must be registered withCustoms. Make sure that your customer/suppliers CustomsRegistration number (CR Number) is stated on your Customsdeclaration forms and ideally on your Pro-Forma/CommercialInvoice.
2. All non-document shipments require a complete and fulldescription of the contents, plus the relevant HarmonisedSystem Code (HS Code) on the Customs declaration form and
ideally on your Pro-Forma/Commercial invoice. HS Codes arestandardised commodity codes that accurately and preciselydescribe the contents of the shipment. HS codes can bedetermined at Business Link UK Trade Tariff
3. All Commercial Invoices must be typed.
4. With the exception of personal effects, all shipments must besent to a company. The destination postcode, consignee(receiver) contact name and phone number must be stated.
5. Power of Attorney (POA) to allow DHL to act on yourcustomer or suppliers behalf needs to be provided by the
consignee (recipient/supplier) to DHL in China.
ESSENTIAL CUSTOMS INFORMATION
RESTRICTED ITEMS SPECIFIC TO CHINA
If you intend to send any of the items listed below, please contactDHL Customer Services to confirm the restriction in place by theChinese authorities.
PROHIBITED ITEMS SPECIFIC TO CHINA
DHLs standard list of prohibited items also applies.
Animal skins
Antiques
Asbestos
Biological Substance Cat B,UN3373
Dangerous goods, hazardousor combustible materials
Firearms, parts of
Furs
Gambling devices
Ivory
Jewellery
Military equipment
Perishables
Personal mail(unless sent as non-document to aforeign student, tourist or chiefrepresentative who can present anon-Chinese passport)
Pornography
Precious metals and stones
Radar equipment
Alcoholic beverages
Communications equipment
Compact disc
Computer components and parts
Cosmetics
Diplomatic mail
Diskettes
Drugs: non-prescription
Drugs: prescription
Foodstuffs
Grain samples
Mobile phones, accessoriesand components
Parts, machine and electronic
Personal effects
Plants
Seeds
Ship spares
Tapes: computer
Tapes: video cassettes
Telecommunication equipment
Tobacco
Used machinery, electrical productsand clothing
EXPORTING TO CHINA
DUTY FREE ALLOWANCE
If the duty amount is less than CNY50.00, the shipment isdeemed as deminimis (so duty will not be charged)
HONG KONG AND MACAU
Hong Kong and Macau are Special Administrative Regions (SAR) of China where taxes are not applied to any goods exceptalcohol and tobacco products, in effect giving a duty free status to the majority of goods. Different prohibited and restrictedgoods regulations apply; please contact DHL Customer Services for details.
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China Fact Sheet 3
ESSENTIAL PAPERWORK
1. DHL Waybill
2. Commercial or Pro-Forma Invoice
(for all non-document shipments) Invoice number, date and place of issue
Name and address of the seller/consignor (shipper) with full
contact details and EORI / VAT number
Name and address of the consignee (receiver), with full contact
details and Customs Registration Number (CR Number)
Country of origin (of goods)
Terms of delivery and payment (INCO terms)
Exact description of goods, with reference to HS Tariff Code
Marks, numbers and types of packages
Quantity of goods
Unit prices and amounts, including nett and gross weight
Total value of goods
Currency
Export license number for UK regulations, if applicable,
or state No License Required
Import license number, if applicable for China
Signed and stamped if applicable
3. Evidence of Value
Its good practice to include evidence of the shipments value to
help prevent a dispute over the declared value. Acceptable
evidence includes:
Manufacturers International Price List or Internet Price List
Purchase Order from customer
Product literature
Manual and Catalogue, write ups or Technical Literature for
laboratory or electronic equipment
4. Packing List (signed)
This is mandatory for all general shipments valued over CNY5,000.00,
consisting of more than 2 pieces and weighing over 100kg
5. Any applicable Import License/Permit
6. Power of Attorney (POA) Letter of Authority
This must be given by the consignee (recipient) to DHL in China
to act on their behalf, and clear the shipment through Customs.
It must be an original copy. Once on file this can be retained for
future shipments.
Advice on shipping to China, license requirements and specific
information can be found at:
Business Link Trading with China
UK Trade and Investment China
Documents
Document shipments are not subject to duty and clear Customs upon
arrival.Please note that Personal Mail cannot be sent as a document, see
Prohibited Items.
Personal Effects
Can be sent from individual to individual only, up to a value of CNY800.00
from Hong Kong / Taiwan / Macau and CNY1,000.00 from other
destinations. Personal ID or a copy of the consignees (recipients) passport
along with a letter of explanation should be provided. Personal Effects
Declaration Form should be completed. For unaccompanied baggage,
Stamped Baggage Declaration Form must be completed.
CUSTOMS CLEARANCE CLASSIFICATIONS
Samples and Advertising
For samples, the word SAMPLE must be stated on each individual Waybill,
Commercial invoice and any other documentation. Shipments valued
under CNY5,000 where the duty is under CNY50.00 are exempt from
charges. For shipments valued under CNY5,000 but with a duty value
above CNY50.00 licenses are not required, but duty will be charged.
General Shipments
Import licenses are required for shipments valued over CNY5,000.00. A
general trade shipment with payment terms shown on the commercial
invoice may be accepted. For shipments of all values in this category, duty
is applicable.
DHL or your Customs broker will complete the relevant Customs
declarations based on the classification of your goods.
Exporting Duties and Taxes Payable
Import VAT: Standard rate for importing into China is 17%. A
lower rate of 13% applies to goods such as books, newspapers and
other goods as decided by the State Council. Small scale taxpayers
are charged a special rate of 6% for certain goods.
Import Duties: The rate of duty depends on the type of goods
shipped, and to a lesser extent the country of origin. The Applied
Tariff database facility on the European Commissions
Market Access website can be used to confirm the applicable duty,which is calculated based on the CIF value (Cost of goods +
insurance + freight/shipping charges)
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China Fact Sheet 4
FOR FURTHER INFORMATION
Valid from: 08/2011 | Version: 01
ESSENTIAL CUSTOMS INFORMATION
To commercially import into the UK, the importer must be in possession of an EconomicOperator Registration Number (EORI), issued by HM Revenue and Customs. Guidance and
application forms can be found here:
HM Revenue & Customs EORI Scheme
General guidance regarding importing into the UK, including restricted items can be found
here:
Business Link Import and Export Procedures
To Import from China, the following documentation is usually required for Customs
clearance in China:
1. DHL Waybill
2. Commercial InvoiceThe minimal information required is:
Name and address of the seller including contact details
Name and address of the consignee (receiver), including contact details, with EORI or
VAT registration number wherever possible
Name and address of the buyer / importer, if other than the consignee, with EORI or VAT
registration number wherever possible
Place and date of issue
Invoice number
Country of origin
Terms of delivery and payment (INCOTERMS)
Marks and numbers, number and type of packages,
Exact description of goods, with reference to HS tariff Code
Quantity of goods
Unit prices and amounts, including net and gross weight
Import licence number, if applicable
Signed - and stamped if applicable
Please note that some non-hazardous chemicals may require additional certification from
the Chinese authorities in order for Customs clearance to be given.
3. Power of Attorney (POA) - Letter of Authority
This must be given by the sender to DHL in China to act on their behalf and clear the
shipment through Customs. It must be an original copy. Once on file this can be retained
for future shipments.
Importing Duties and Taxes Payable
The applicable duty rates can be found here: Business Link UK Trade Tariff
Most goods being imported into the UK from China are subject to the full rate of Customs
duty, and the applicable VAT rate. In addition, many products manufactured in China are
subject to anti-dumping measures and so may require the payment of high additional duties.
IMPORTING FROM CHINA
ESSENTIAL PAPERWORK
Please contact your Account Manager
Contact Customer Services on0844 248 0844
Go to www.dhl.co.ukCustoms Support online
The UK Trade Tariff can be used toconfirm commodity codes, termedHarmonised System (HS) codes. HScodes provide a standardised goodsdescription.Business Link UK Trade Tariff
Business Link has information on howto confirm if your goods require anExport License, and how to obtainany relevant licenses.
Business Link Do You Need anExport or Import Licence?
Support with shipping to China, licenserequirements and specific advice canbe found at:
UK Trade and Investment China
Business Link Getting Ready toExport to Individual Countries
For applicable duty rates whenimporting into the UK:
Business Link UK Trade Tariff
For information on InternationalCommercial Terms (INCOTERMS):Business Link INCOTERMS
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BRITISH CHAMBERS OF COMMERCE
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