EXPORTING TO CHINA: OPPORTUNITIES FOR A GROWING COUNTRY
Source: AICEP
07 July 2023
“Although this country is often associated with imports, doing the opposite and exporting to China can mean the entry of Portuguese companies into a market with great potential.
The data and figures speak for themselves. It is the most populous country in the world and has the second highest world GDP in nominal terms. China has more than a billion inhabitants and an economy increasingly focused on consumption and services. With private consumption on an upward trend and inflation under control, China is a promising market, but not without challenges.
Despite being an exporting country, in 2021, China carried out imports worth US $2 685 billion, highlighting products such as Machinery and Appliances (33.5% of total imports), Mineral Fuels (15.0%), Minerals (11.0%), Chemicals (7.31%) and Agricultural Products (6.6%).
The trade balance between Portugal and China means a deficit for our country, a trend that has grown in recent years. Between 2017 and 2021 exports fell by an average of 3.9% per year and imports grew by 17.7%.
Data from the National Institute of Statistics reveal that China was the 14th customer of Portuguese exports of goods in 2021, representing 1.1% in total. Common Metals (20.1% of the total), Minerals (14.5%), Pulp and Paper (10.9%), Machinery and Appliances (10.8%) and Agricultural Products (10.0%) were the main product categories sold to the Chinese market.
From China to Portugal came mainly Machinery and Appliances (48.0% of the total), Common Metals (7.7%), Textiles (6.4%), Chemicals (6.3%) and Plastics and Rubber (5.2%).
E-commerce, food or technology: the paths to the Chinese market
Given the needs of the Chinese market and the characteristics of the Portuguese productive fabric, there are undoubtedly reasons for Portuguese companies to look at China as an opportunity.
Among the areas with the greatest Portuguese export potential are sectors such as agri-food, wine, artificial intelligence, advanced technology solutions and equipment, home row, health care and life sciences, green technology industry and electric mobility, luxury goods and services such as construction and cooperation in third markets.
Since China is the largest e-commerce market in the world, it will be interesting to think about online sales as a way to reach the Chinese market. Alibaba, the world’s largest B2B marketplace, is headquartered in China. This platform has, since October 2021, an aggregator for products from the national agri-food sector, created by AICEP and AMVOS Digital.
THE CHALLENGES OF EXPORTING TO CHINA
In order to export to China, it is essential to know the regulatory framework, namely the rules in force and the existence of trade agreements that can minimize the obstacles that arise when negotiating with a non-EU country.
There is a non-preferential Trade and Economic Cooperation Agreement between the European Union (EU) and China. In other words, there is no place for exemptions or reductions in the rates of customs duties, with the most-favoured-nation treatment between the two parties. This means, in practice, that neither party discriminates against products coming from the other.
When exporting to China, some caution must also be taken into consideration, while approaching the market. AICEP warns of the importance of enlisting the support of an official broker, importer or legal advisor so that it can have guidance on goods requirements, labelling and other issues related to commercial and business transactions. ”
