Import from China to Australia: Shipping, Tariff, and Customs Regulations

Importing from China is an important way of improving profit margin to many business owners.

To many Australian sellers, especially those small and medium sized business owners, manufacturing their products domestically would be way too costly than importing from China.

Sourcing and importing products from China is a more practical and financially efficient way to run an online business in Australia.

Quick Guide

How to Find Chinese Suppliers?
How to Ship Products from China to Australia？
How to Stay in Compliance with Australian Customs Regulations?
How to Calculate the Customs Cost of Imported Goods?
What is the Cost of Importing from China to Australia?
How to Avoid Unnecessary Financial Loss While Importing from China?

How to Find Chinese Suppliers to Import Products into Australia?

After determining the product you want to import from China, the next thing is to find a proper and reliable supplier for it.

There are several common ways of finding Chinese suppliers, and you can either do it online in Australia or on-site in China.

Find Chinese suppliers online

Online wholesale platforms provide an efficient and cheap product sourcing channel for online business owners. For example, you can find suppliers on Alibaba, DHgate, etc.

Alibaba is the largest Chinese international trading platform used not only by business owners in Australia but sellers across the world. So you can source a tremendous amount of products and suppliers on it.

To find a supplier on Alibaba, you can just simply search the keywords of your targeted product and find the best-matched supplier, or submit a Request for Quotation (RFQ) and wait for the suppliers to reach out to you.

Besides wholesale websites, there are also other online channels including search engines like Google and social media platforms like LinkedIn which you can utilize to source suppliers.

Check this video to learn exactly how these supplier sourcing methods work if you’re interested.

Find Chinese suppliers offline

Quite a few sellers prefer to source their products in a more direct way – visiting China, so they can see the products with their own eyes and get the most competitive price.

Trade shows and wholesale markets in China are where most Australian sellers would go for product sourcing.

Spend 10-20 hours taking a flight from Australia to China, and you’ll be able to contact thousands of suppliers in the most directive manner and access and feel millions of products in person.

There are thousands of trade shows going on every year in China, if you want to make sure the ones you attend are the best options for you, you can check this list of the best rated Chinese trade shows.

Wholesale markets are a lot like trade shows, but with fewer product category limits and lower Minimum Order Quantity (MOQ). If you are not able to attend any trade shows, then maybe you can find what you want by visiting those famous wholesale markets in China.

Compared to trade shows and wholesale markets, some of the experienced sellers would choose to go further into industrial clusters. It is common sense that the more original your supply sources are, the more likely you can get lower prices.

If you manage to find a manufacturer that doesn’t go to any trade show and only sell its products through trading companies instead of online e-commerce platforms like Alibaba, then congratulation, you’ll probably get a better price offer than the ones you can get at anywhere else.

How to Ship Back Products Imported from China to Australia？

Shipping from China to Australia is another significant part of the whole importing process, and it is directly related to your import cost and product profit margin.

1. Choose your ship method

There are 3 common options for shipping your product back from China to Australia: sea transport, air transport, and express.

Sea transport is the cheapest way and used by most importers, but it takes the longest delivery time; while air transport is the fastest but also the most expensive way; and express is somewhere between sea transport and air transport.

Based on your actual needs, taking the quantity and properties of your goods into consideration, you should select the most cost-effective way of shipping your goods from China to Australia.

2. Find a Freight forwarder

A freight forwarder is an agency or company that will organize the shipment for you to get your goods from the manufacturer in China to your warehouse in Australia.

As an importer, normally you will be working with one or two freight forwarders, taking care of or respectively taking care of the logistics of your goods in Australia and China.

You can find your own freight forwarder domestically in Australia that you feel comfortable working with, or, you can find a Chinese local freight forwarder whose services tend to be more cost-friendly.

If you don’t like to spend too much time and energy on finding a freight forwarder, you may also ask your suppliers to do it for you as long as you can make sure the prices quoted by them are reasonable.

3. Figure out the logistics Cost

When you ask for a shipping quote from your freight forwarder, you have to make sure the destination, costs, and risks of the relevant shipment are clarified by Incoterms.

According to the International Chamber of Commerce, Incoterms 2020 is the latest version, as shown in the below image. These 11 terms are in essence a set of globally recognized rules that separate the responsibilities between sellers and buyers when trading internationally.

In our case of importing from China to Australia, the most common rule would be FOB (free on board) which means the quoted price should include the fees that occurred before your cargo is delivered on board the vessel at the port designated by you.

Under the FOB rule, the seller should be responsible for the logistics and risks before the cargo is on board, and it should arrange for export clearance as well.

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How to Stay in Compliance with Australian Customs Regulations?

According to Australian Border Force (ABF), you don’t need an import license for import from China to Australia, but there can be requirements covering aspects like valuation, origin, concession, and labeling depending on the nature of your goods.

Let’s get started with a checklist of the aspects involving requirements related to importing that an Australian importer must know about：

Make a declaration to the Australian customs
Identify Prohibited products
Clarify the origin of your goods
abel your products with trade descriptions
Apply for an ABN
Comply with product safety standards and substance restrictions

1. Make a declaration to the Australian customs

All importers need to make declarations in order to clear goods from customs control into home consumption in Australia or into a customs licensed warehouse.

There are 3 declaration types applicable for Australian importers depending on the value of the imported goods: self-assessed clearance declaration, import declaration, and warehouse declaration.

If your imported goods have a value under or equal to AUD1,000, in which case no import duties will be charged generally (except tobacco & alcohol), self-assessed clearance (SAC) declarations can be applied, which can only be lodged electronically through the Integrated Cargo System (ICS).

But if your goods arrive through international mail / as unaccompanied personal effects / under a carnet, then you are not allowed to use SAC declarations.

For imported goods whose value is over AUD1, 000, you have to make an import declaration and pay the relevant import duties.

An import declaration can be lodged either electronically via ICS or documentarily in person.

If you want to store the goods imported from China (value ≥ AUD1,000) into an Australian customs warehouse instead of clearing them into home consumption, then you can make a warehouse declaration, which can also be lodged electronically or documentarily.

If you intend to lodge an import declaration or a warehouse declaration in person, you need to bring the following documents with you:

All relevant documentation must be kept for 5 years after an import declaration.

2. Identify Prohibited Products

The first thing you should keep in mind is that not everything is importable or exportable to or from Australia. There are items absolutely prohibited to be imported by the Australian government. Some can still be imported with certain permission.

As an importer, you are supposed to be fully responsible for the legitimation of your goods. If you are found importing prohibited goods without duly permission and the relevant documents, you might face a huge number of penalties, or even worse – imprisonment up to 10 years.

So, above all other steps, the first thing you should do while importing from China to Australia is to make sure the targeted products are importable. To do that, you could check this list of prohibited items published by ABF.

3. Clarify the origin of your goods

When you perform importation in Australia, you have to clarify the origin of your goods. Australia has signed agreements with many countries and regions, including China, in respect of international trading.

ChAFTA

ChAFTA (China – Australia Free Trade Agreements) entered into force in 2015. After several rounds of tariff concessions, most products imported from China to Australia are duty-free, which are previously levied with 5% import duty rate. Note: ChAFTA only remits the tariff or duty. The import processing charge or GST on imported goods from China is still demanded.

A certificate of origin (COO) is necessary for you to get preferential tariff treatment under ChAFTA. This certificate is used by Customs to determine your eligibility for zero tariffs on imported goods from China.

4. Label your products with trade descriptions

Under the Commerce (Trade Descriptions) Act 1905 (the Act) and the Commerce (Trade Descriptions) Regulation 2016, certain goods should be proper labeled with a trade description so that they can be imported into Australia.

Generally, the trade description must meet the following specific standards:

Be in English and in legible characters.

Include the name of the origin country (e.g. China or PRC).

Include a true description of the goods, if required.

Be in the form of a principal label or brand attached in a prominent position.

Most of the items imported from China to Australia will be subject to this labeling requirement, if you fail to meet this requirement, your goods might be examined and seized by the customs, so don’t forget to ask customs authorities if your goods need to be labeled with a trade description.

5. Apply for an ABN

ABN is the abbreviation of Australian Business Number, an 11 digit number used to identify your business to your customers, suppliers, and the government.

ABN is related to your tax number, when importing to Australia, you need to provide your ABN to the customs so that you can register for tax purposes.

Having an ABN would enable you to:

Identify your business to your customers and suppliers when ordering and invoicing.
Avoid PAYG (pay as you go) tax on payments you get.
Claim GST (goods and services tax) credits.
Claim energy grants credits.
Get an Australian domain name.

You can apply for your ABN for free on the Business Registration Service page of the Australian government website as long as you are entitled to an ABN.

6. Comply with product safety standards and substance restrictions

Many products such as electronics, vehicles, or textiles that you imported from China to Australia will be covered by one or more safety standards or substance restrictions.

Importing products in violation of safety products and substance restrictions into Australia will be deemed as an offense, which may lead to a forced recall or a huge number of penalties.

That is to say, ensuring compliance in this regard is more than important to your importation.

To do that, you could start by knowing the Australian / New Zealand Standard, also known as AS/NZS, which is often referred to in product safety regulations in Australia. And always remember to check out the mandatory safety standards published by the Australian Government on the Product Safety Australia website.

JingSourcing is experienced in handling Australian orders with efficient customs clearance.

How to Calculate the Customs Cost of Imported Goods?

Generally, all goods imported from China to Australia, if not under exemption or concession, are liable for import duties.

Knowing how to calculate these import duties is significant to an importer, it’ll help you to estimate your profit margin and determine your product price on a more precise basis.

1. Calculate customs value

When imported to Australia, your goods will be valued for customs purposes. The customs value is used as the basis to calculate your import duties.

Under most circumstances, the customs value is calculated on the basis of the transaction value of your goods.

But, when there are factors such as the relationship between the buyer and seller that could influence the transaction price, the customs value will be calculated otherwise.

The optional calculate methods of customs value include:

Calculation of customs value can be complicated, so I suggest you seek some advice from a professional customs broker or contact customs authorities directly before importing.

2. Calculate import duties

The calculation formula: Customs Duty = Import Duty Rate x Customs Value

Regarding the import duty rate, it is within the range of 0%-10%. As mentioned above, most products are duty-free under ChAFTA, so you can claim concessions on tariffs. To determine the tariff rate on your product, check the FTA portal.

Here is a list for your reference.

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2. Calculate Goods and Service Tax (GST)

GST stands for Goods and Service Tax, which is payable under most circumstances when you import from China to Australia.

Normally GST is calculated on a 10% basis, and it is the sum of the following values related to the imported goods:

Customs value (usually the FOB price).

Customs Duty (usually 0% – 10% of the customs value).

Cost of shipping to Australia (paid and payable).

Shipping insurance (paid and payable).

3. Calculate your IPC

IPC means Import Processing Charge, which will be applied when you make an import declaration.

The charge rate will vary with the lodgement type and customs value.

If declarations are lodged electronically, then goods whose value is under $1,000 will not be charged; goods whose value is above $1,000 but under $10,000 will be charged $50; goods whose value is above $10,000 will be charged $152.

If declarations are lodged documentarily, then goods whose value is under $1,000 will still not be charged; goods whose value is above $1,000 but under $10,000 will be charged $90; goods whose value is above $10,000 will be charged $192.

Calculate the Cost of Importing from China to Australia

Knowing the landed cost is significant to an importer, it’ll help you to estimate your profit margin and determine your product price on a more precise basis. The overall costs for your importation include:

Example

Assume you’re importing products at the value of 50,000 AUD from China to Australia. And other expenses are as follows:

The service fee charged by your customs broker is too small and here it is ignored.

The land cost = shipment value + shipping fees + cargo insurance + GST + IPC.

Here in the case, the land cost = 50,000 + 5,000 + 100 + 5,510 + 152 = 60,762 AUD

JingSourcing can help you source and ship quality products at reasonable landed costs.

How to Avoid Unnecessary Financial Losses While Importing from China?

Even for those who are familiar with the process of importing from China to Australia, some mistakes leading to financial losses can be hard to avoid.

Bear the following tips in mind would make it easier for you to minimize your losses.

1. Be careful about supplier scams

You can never be too careful when choosing a supplier. Even on big e-commerce platforms such as Alibaba, there are buyers being scammed by suppliers oftentimes.

So, if you don’t know how to avoid supplier scams and how to identify bad suppliers, you might lose money long before you start the importation process.

2. Avoid product quality issues

Before you initiate the shipping process, you have to confirm that the quality of your goods is ensured. Sometimes a quality sample doesn’t represent the bulk products are at the same level of quality as the sample.

If you find quality issues after your goods arrived in Australia, even if your supplier agree to give you a refund, you might still need to ship the goods back to China, which means you have to go through all the shipping and customs clearance and other processes all over again, and this could be both money-consuming and time-consuming.

3. Make sure your supplier fully understand Australian product standards

Compared to the USA or the European market, Australia can be a relatively unfamiliar market to many Chinese suppliers, and so are Australian product standards.

So, it’s on you to make them completely understand the relevant standards and requirements to make sure your goods are properly labeled and have all the necessary certificates so that the customs can’t seize your goods for any reason in this respect.

4. Remember to collect your refund of customs duty

Under certain circumstances, you might be entitled to a refund of some, or all, of the customs duty that you have paid on imported goods. You can check the refundable circumstances published by ABF or just make an inquiry with your import broker or ask the customs directly to see if you are eligible for a refund.

If the answer is positive, then you can submit an application through the Integrated Cargo System.

Jingsourcing helps you import premium goods in China

How to Import from China to Australia | Ultimate Guide