A step-by-step guide to importing from China

China has begun to dominate almost every business sector in the world lately. With a population of 1.3 billion, it is a workforce capable of building all types of products at low prices, which, in turn, have captivated importers from all over the world, including Chile.

If you add the 2005 Chile-China FTA to this scenario, the horizon becomes even more attractive to entrepreneurs. Although the size of our market quite small for Chinese tastes, it is no impediment to buying imports. No one in China or Chile will tell you no.
If you are planning to become an importer, this guide may come in handy.

The first step: Information

What allows anyone (with the concomitant financial resources) to import from China is the fact that all the information on contacts, negotiations and transactions can be found on the Net, which is globalization’s great enabler. You can get basic information to start a business; what types of products are offered, and by whom, at what price and via which shipping option.

Well aware of this situation, China has centralized their companies on the Net. www.alibaba.com allows you to find thousands of Chinese companies. They are divided by category and offer descriptions of their products. There is also information such as the minimum order quantity, and of course, seller’s contact information. Email is the easiest option and most export agents speak English. Once contact has been made and sales increase, many entrepreneurs choose to travel to monitor the quality of products shipped.

Initiating contact

Having reviewed the complete spectrum of companies offering the product you want, you should contact those that seem most reliable (at this point there are no rules, we must rely on intuition), in order to ask for more information. But this first communication is only the first of many.

Before writing the e-mail asking for preliminary information, two things must also be considered. First, reading the FTA chapter that refers to your proposed import. You can check the import tax rate on the item, and also any other agreement may benefit your import business.

Second, listen to the words of Cheng Yuming, who is Charge D'affaires of the Embassy of China in Chile: "To do business, you first need friends. And to have friends, you must first get to know one another."

That means that the negotiations may be somewhat longer, step by step, where you can even request samples of the product (in general must also pay for samples, unless a large company is involved). This stage involves negotiating. The Chinese style of doing business involves a great deal of trust, and when you take into account that its economy depends on exports, responsible exporting abounds, even though there are negative experiences to be had in any market.

Chinese export managers are young and know more about the West than their predecessors. They are highly trained, speak different languages, including Spanish, and know their business.

If you decide to travel to perform the negotiations, be aware that the Asian style involves groups meeting with an executive board, where you must use a feature that does not exist in this part of the world: listening before speaking. You must never go alone and always use consultants and translators, if necessary. The important thing is to handle all the technical details of the business, and never seem uninformed or vague during presentations.

Seal the deal

Once negotiations are ended and you are ready to sign a deal, the bureaucratic part begins. The important thing is to clearly define the forms of payment, shipping arrangements and deadlines, insurance, customs issues and any permits you may need in the case of a special import item.

If the amounts involved are low, the likelihood is that you can use an international credit card to pay for everything. But if we are talking about larger numbers, the usual method involves a Letter of Credit and bank transfer.

Next, we immediately have to consider insurance and shipping issues. Contract terms must be completely clear.

Then you wait until the shipment arrives, in order to begin the paperwork in Chile, which vary according to the import policy governing a given import item.

The important thing, when it comes to doing business with China, is to be well informed about products and the Chinese way of doing business. It is essential to learn English and all aspects of trade, as well as a bit of Chinese culture. Learning Mandarin isn’t a bad idea either.