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China bonded zone entrepot trade


China bonded zone entrepot trade


Re-export trade refers to the business of importing and exporting goods in international trade, not directly between the producing country and the consuming country, but through a third country. This kind of trade is entrepot trade for the transit country. Traded goods can be shipped from the exporting country to a third country, and then sold to the consumer country without processing in the third country (changing packaging, sorting, selection, packing, etc. are not regarded as processing); they can also be shipped directly from the producing country to the consumer country without passing through the third country. There is no trade connection between the producing country and the consuming country, but the transit country trades with the producing country and the consuming country respectively.

Re-export trade is not a mainstream trade method, and re-export trade does not violate any laws. Entrepot trade is a common way of international trade. Under the increasingly severe environment of international trade barriers, entrepot trade is a very common way of avoiding high anti-dumping duties.

The conditions for entrepot trade include the following aspects:

    1. International division of labor: International division of labor and cooperation is the prerequisite for the formation of entrepot trade. Countries have unique advantages and conditions in different fields. Through cooperation, they can complement each other's advantages and form a more effective international division of labor.

    2. Good facilities and infrastructure: Good infrastructure such as ports, airports, and transportation networks can make entrepot trade more convenient and efficient.

    3. Special resources: Some scarce resources only exist in some specific areas, such as oil, natural gas, etc. In this case, international commodity circulation needs to be carried out through entrepot trade.

    4. Labor costs: In order to save costs, some enterprises will choose to import raw materials or primary products from developed countries, and then export them to other countries after simple processing, because labor costs in developing countries are relatively low, which can save costs.

    5. Trade policy: The trade policy between countries will also directly affect the development of entrepot trade. Some countries have relaxed import policies and at the same time have restrictions on export policies, which will stimulate the development of entrepot trade.

In short, entrepot trade is a form of trade developed on the basis of the existence of comparative advantages among countries. The conditions for its production mainly include factors such as international division of labor, facilities and infrastructure, special resources, labor costs, and trade policies.

The specific operation process of entrepot trade: (taking Europe-Russia as an example)  

    1. Import from Europe to China: Arrange transportation from any European port/airport/railway station to a bonded area in China (such as Xi'an, Beijing, Shenzhen, etc.), Viputrans provides the consignee, and arranges customs declaration and container replacement

    2. Bonded area re-export: After the goods arrive in China, we will transport the goods to the bonded area for import customs clearance, and then replace the container in the bonded warehouse or change the packaging according to the customer's requirements. Certificate of Origin and or other required documents.

    3. Export from China to Russia: Viputrans can arrange air/sea/auto/truck transportation to Russia

    4. Destination customs clearance: Viputrans can also complete customs clearance on behalf of customers, the specific situation needs to be confirmed before shipment.

Time required for entrepot trade: 

    1. European countries --> air freight/railway/truck/sea freight --> China about 1/18/23/30 days

    2. Time for operation in China bonded area + container reloading about 4-7 days

    3. China --> Air/Railway/Truck/Sea --> Russia about 1/16/20/30 days

Being good at handling entrepot trade in China can realize the confidentiality of commercial information such as intermediate traders, and can solve the current plight of Russia's import and export.

Matters needing attention in re-export operation:

    1. The third-country re-export method can only be applied after the exporter and the importer have fully communicated and reached an agreement. It is absolutely impossible for one party to conceal the other party and use the third-country re-export method alone.

    2. For the exporter, it is necessary to prepare the re-export goods in terms of product packaging. Therefore, the outer packaging of the product can only use neutral packaging or indicate the third country of origin. Because the exporting country declared by the importer at the time of import is the third country that issued the document.

    3. As far as the importer is concerned, he must know that the customs clearance documents are from the re-export country or neighboring countries and regions when declaring import. 

Risk control of entrepot trade:

It must be stated that any trade method has risks, but the risk of re-export trade is not higher than that of ordinary trade methods.

The main risks of third-country entrepot logistics are as follows:

    1. The risk of losing control of the goods

    2. The risk of inability to clear customs at the port of destination

    3. Policy risks

In summary, when deciding to do re-export trade, one must carefully select a re-export logistics service provider. Viputrans has many years of experience in entrepot trade operations, and can guarantee the authenticity of documents issued by third countries. Only in this way can the risk of entrepot trade be minimized!

Lora Yang       E-mail:   SKYPE|WECHAT|WHATSAPP|MOB:+86 13424468029


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