In the last two weeks we’ve worked with two factories and talked with a number of other people about the reality of the new export responsibility enforcement in China. New since the lead-paint problems of last year. Yet, recently (since about Chinese New Year) the enforcement seems to have been ratcheted up another notch.
Example 1 : we’ve been looking to export some electric bikes to the US for a client.
But, unlike just about any other time in the last 10 years, some factories can export them and others really cannot; not right now at least. Very simply put, without an export license factories are not registered to export from China—rarely has that ever been a limitation on actual exports, though. But since China is trying to make sure that everything that leaves the country is traceable back to the site of production, it’s now limiting exports to factories with licenses (or good connections, more on that later). The market for electric bikes in China is huge and the bikes from a number of domestic factories are both good quality and available in foreign markets.
The problem is that enforcement of the rules are at best sporadic but getting stricter. So factories that were indeed (with out a license, through a 3rd party) exporting before have recently taken orders from foreign clients but the products are stuck in the factory and can’t leave the country for the foreseeable future. One of the bike factories is exporting like crazy—orders have gone up because they have a license. Another is telling us their warehouse is full of orders that they can’t get out of the country.
Example 2, dust, powders, fine particulates are currently restricted for export.
Some can’t be air freighted, some can with visas and some, well some are just the luck of the draw it seems. We do a lot of craft glitters and flocks for export and have been hit with a weird series of regulations this year (not last year). Glitter cannot be exported by air in bulk qtty’s. “Bulk qtty’s” could be as small as qtty’s of 5grms per unit. This law seems to be cut in stone. Glitter by sea, no problem. Flock, in similarly small qtty’s is OK for both air and sea. An associate of mine says that his coffee exports are being similarly affected by this but that sufficient testing and paperwork solves most of his problems.
So what to do? Well, you should do the same things now that you we’re doing before—following the laws. If you were using factories that didn’t have export licenses before, now may be difficult for you. I feel your pain, but can’t sympathize much. Domestic factories are cheaper for a reason—and now with exports controlled more tightly foreign buyers are finding out what that reason is. We buy a lot of materials from domestic factories and ship to domestic locations for final assembly, manufacturing—making sure that all our final factories can export.
So confirm BEFORE you order that your factory can export. A quick and relatively painless (few hundred USD) company report from and company like Verify can confirm independently that you’re working with someone that can ship your products regardless of the enforcement status in Chinese Customs.