Plans for China CBEC

International eCommerce, or selling across a border using an online marketplace, as opposed to domestic eCommerce transactions, is referred to as “Cross-Border eCommerce” (CBEC). Here, MOREXGE will introduce four CBEC options that are available.

Plans for China CBEC​

B2C (Business to Customer)
Direct Shipping Imports

B2C direct shipping imports are the second dedicated method for eCommerce shipping that the Chinese government has been promoting since 2014.

It only takes 24 hours to clear customs, and the whole transit time is compressed to 5-12 days. Some logistic service providers will manage the customs tax on behalf of the retailers, and the packages will be combined with bulky products and freight routed to a China-bonded area for quick customs processing.

In addition, the retailers’ online stores or selling platforms must support Chinese payment options like Alipay and WeChat Pay because China customs demand this information to verify the worth of the items.

There are no upfront shipping fees unless an order is placed because the goods are kept in the merchants’ overseas warehouse. This provides retailers with great inventory flexibility and is frequently employed in the early stages of CBEC selling to China.

Lastly, it is commonly utilised by somewhat expensive commodities with fewer orders. The majority of our partners widely use this approach. It can lower most of the risks for the merchant.

B2B2C (Business to Business to Customer)
Bonded Warehouse Imports

Regarding logistics, bonded warehousing (B2B2C or BBC) is a more suitable choice when selling goods through CBEC to China. In China, dutiable commodities may be housed in a building or other secure facility within a specific customs surveillance area without having to pay duty to them. Thus, ordered goods typically reach the customer’s home quickly, offering the best purchasing experience to the customer.

eCommerce Retail lmportation Tax Rules

The single transaction limit for CBEC imports is ¥5,000.

The annual individual transaction limit is ¥26,000.

For CBEC imports within the limit value, the tariff rate is temporarily set at 0%.

VAT and GST exemptions for imports will be abolished and levied temporarily at 70% of the statutory tax payable.

CBEC Composite tax rate= (GST + VAT)/(1-GST)×70%

Tax Fee = Product Unit Price × PCS × CBEC Composite Tax Rate

C2C (Consumer to Consumer)
Personal Express

The most traditional way for China CBEC is C2C personal express (Consumer to Consumer).

This is the most traditional way and has existed in China for over 20 years. It’s set for personal use at first and enjoys some tax-free policies. Nowadays, it’s mainly used for trade between two individuals (e.g., non-certificated purchasing agents) because of saving taxes. The value of the contents of a parcel cannot exceed ¥1000 unless it solely contains one item that cannot be separated (e.g., a t-shirt or a pair of shoes). The personal postal articles tax will be applied using this approach (please read Personal Postal Articles Tax), and the tax will be waived at a tax value of less than ¥50.

C2C (Consumer to Consumer)
Postal

In this method, China Post, which since 2019 has amalgamated with the well-known EMS service but continues to operate solely under the China Post moniker, clears the products via customs. Since approval will be based on the description and value listed on the postal label, there is no need for a data interface. Products may not be taxed because the customs inspection will only be conducted on sample size.

But the customs system has lately been incorporated into a national system, providing a comprehensive database for tighter controls on mail-order items. Besides, the following personal express and direct purchase import options were introduced. The volume of postal parcels has drastically decreased. Few people want to take a risk to face the tax penalty.

Differences between 3 Models

lmport Modes Under CBEC Retail lmportation Program
 Import Mode Operation Mode Regulatory Policy Commodity Scope Advantages & Disadvantages

 Direct Shipping Mode (Customs Supervision Code 9610)

 CBEC operator ships the goods directly from overseas to China
  • Supervised as products for personal use;
  •  Licensing for first-time Imports is not needed; and 
  • No registration / record filing is needed.
 Goods in the positive list that are not labeled as “only limited to commodities Imported through CBEC under the bonded warehouse model”.This mode is primarily applied to small-scale B2C models and does not require domestic inventory but is more complicated than bonded importation because of the delivery arrangements. Customer satisfaction may be impacted depending on the efficiency of international transportation.
Online shopping bonded import mode (Customs Supervision Code 1210) Bonded imports are applied In special customs supervision areas or bonded logistics centers Inside the CBEC pilot cities.
  •  Supervised as products for personal use;
  •  Licensing for first-time Imports is not needed; and 
  • No registration/record filing is needed.
Goods on the positive list This mode entails a large inventory. but the goods are delivered quickly.
Online shopping bonded import A mode (Customs Supervision Code 1239)Bonded imports applied In special customs supervision areas or bonded logistics centers outside the CBEC pilot cities
  •  Licensing for first-time Imports Is not needed.
  •  When products enter the bonded area from abroad. they are supervised as goods for special purposes that need registration or record filling; and 
  • When products are delivered from the bonded area to consumers, they are supervised as products for personal use.
Goods on the positive list This mode entails a large inventory. But the goods are delivered quickly.

Summary

Every business should be profitable. For various products, businesses need to consider different import methods to benefit from tax reduction plans. Companies should be aware that their export methods can change significantly over time.