Trade Confidence Index Q4 2011 FINAL

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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3

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


%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


%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.

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-50

-40

-30

-20

-10

0

10

20

30

0-9 Employees250+ Employees


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.

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-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


11/16Hong KongMacau

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


12/16

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.


13/16

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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UNITED KINGDOM

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Trade Confidence Index Q4 2011 FINAL

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