Glossary of terms: Certificate of Origin

The knowledge of the most important terms used in international trade is crucial for mutual understanding. We will present the most common international trade terms accompanied with the detailed definition.

What is the Certificate of Origin?
Generally speaking, it is a document, which proves that the goods in a particular export shipment have been wholly obtained, produced, manufactured or processed in a particular country. The name can be abbreviated to C/O or COO. The origin of goods is important for tax and tariff authorities (for example duty is applicable in the case of buying goods in country A, but not in country B). While a lot of Chinese products are exempted from duty, there are still some categories in which the EU uses duty as a market protection tool.


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Transferring money to China

As soon as you are able to sign a contract with your Chinese partner, the problem of transferring money to China arises. Normally, we now longer perceive China to be far away from us – it is easily reachable by plane, various technologies enable us to get in touch with people from Shanghai or Beijing, disregarding where we are. But when it comes to sending money, things get more complicated.

transfering money to China

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Will the Chinese export rate drop?

Since the economic crisis hit the Western countries, many have thought that unfavorable course of events may be somehow reverted by the positive influence of the growing Chinese economy. It swiftly recovered after 2009, reacted well for the governmental stimulus pack and regained its previous growth rate. For many years the export was the Chinese economy main driving force, but will it be the same in the future?

chinese export

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10 steps for your success in China

How to achieve success in China? We prepared the short guide for everyone, who wishes to enter this promising market. If you want to start your business operations in China, you should remember about following 10 things:

1.      Make market research

Chinese people have their own ways of doing business and the whole market is unique, you need to devote some time in order to grasp the basic knowledge about it. It is better than reconnaissance by fire, no big risks are involved. Another good way is visiting trade fairs in China: you can present your products there, find out whether is there a demand for them, trade fair is a great opportunity to start some business relationships. You can also download online reports about your branch of industry – in many cases it is free of charge, you will save a lot of time.

success China

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Trade with China – Arbitrage in China

It is very hard to avoid conflicts in business. It gets even harder, when both parties come from two different countries and represent two different cultures and traditions. That’s the case of doing business in China. Sometimes it is the court passes the judgment and resolves the matter, but it takes a lot of time and money, hence the growing popularity of arbitrage and mediation.


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Your trademark in China

China is not only the source of cheap labor and the manufacturer of various goods, which are being sold in every corner of the world. It is also the home of emerging middle class, and the big potential market for every Western company willing to take the risk. If you have a good product, you may try to enter the Chinese market, but without the proper legal protection of your trademark, implications for your business may be huge.

About ten years ago Starbucks, the American global coffee company, decided to enter the Chinese market and open their coffee houses there. “Starbucks” was translated to Chinese as Xingbake (星巴克), but the corporation realized that this particular trademark is already registered by an entity known as Shanghai Xingbake Co. Ltd. And if that’s not enough, the Shanghai company started to open its own coffee houses, which very much resembled the original ones, with the close copy of its world-renowned logo. Finally, the case was settled by the Shanghai court after two years of proceedings – Shanghai Xingbake was ruled to stop copyright infringement practices and pay the compensation of 500 000 RMB. This case is the important lesson in China’s copyright protection situation – the whole dispute might have never take place, if only Starbucks had taken certain necessary steps before entering the Chinese market.


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Baidu – a persistent search for the ideal

A typical internet user has several habits that he formed during the years. If we want to search for information, we usually open Google even without thinking. The corporation from Mountain View has practically monopolized world’s internet search market, nobody remembers about Altavista, Bing is more often mocked and satirized than actually used. There is only one country which is exceptional: China, of course. There, a home-grown Baidu has 60% of market share, a number that outdistances Google and other competitors.
The history of Baidu starts in 2000. The founder of the company, Robin Li, somehow contributed to the creation of his greatest competitor: it was Google which used his patent to create page indexing mechanism called PageRank. When Li realized how big is the success of Brin and Page, he no longer hesitated – and this is how Baidu was founded. At the beginning, the company was struggling to survive, but the Chinese internet developed so fast that Baidu jumped on the bandwagon. The company was not sold to some influential and strong market player, as happened to many others, but it went public on NASDAQ – doubling the value of market shares during the years 2005- 2007.


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WeChat – mobile communication, mobile business

Tablets and smartphones have conquered Chinese market – this is the truth that nobody doubts. According to 2012 statistics, more than 150 millions of Chinese use devices capable of 3G connections, the growth is breathtakingly fast. Therefore Chinese mobile apps market seems to be the perfect place for investment. Tencent Holding, who developed popular QQ messenger software, is well aware of it – so it came up with WeChat.

WeChat, previously known as Weixin, is a mobile text and voice messaging communication software, similar to WhatsApp frequently used in Western countries. The user can talk with his friends using text messaging, or use Walkie Talkie function to record short voice messages, which can be listened any time. This is not everything: Moments is an embedded personal space, which looks very much like Facebook’s News Feed, it allows the users to publish pictures, statuses and getting into interactions with each other. The Look Around option allows us to find users in our vicinity, while Drift Bottle is a plugin, which allows you to send voice message “to the sea” and wait for whoever “picks it up”.


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Android in China – what kind of apps are popular?

Many people think that Google is not present in China, but it is not true. The company has some offices in the country and often recruits new workers, developing rapidly. It is true though that the Google search engine is blocked or hard to reach – depending on the internet service provider, you may either access the Hong Kong version of the search engine, or get simply nothing. But there is a product of Google, which has already conquered the Chinese market – it is, of course, Android operating system, used mostly on tablets and smartphones.


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Cellphones and tablets from China – European duty rates

We often receive inquiries from entrepreneurs, who are willing to import cellphones or tablets from China, but are not sure how much duty they are supposed to pay.

First of all, some basic facts: European Union countries have unilateral customs policy, which means that duty rate is the same in the every member state and is regulated by the EU law, not by the particular countries legislative. Sometimes, the EU raises duty rates in order to protect the internal market and local producers, recent conflict over solar panels with China is a fine example of this policy. Nevertheless, cellphones are exempted from duty, duty rate is 0%, (VAT rates vary between the countries, and this should be checked in the particular country’s customs office). In order to verify duty-related information, you can use TARIC database, which provides information for EU countries. The products are categorized, every product has its code, which, in the case of cellphones is 8517 12 00 90. If you search for products using the code, you may determine the duty rate and find its legal basis.

tablets from China


The tablet – what it is after all?

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The new trend in Chinese visa policy

Everyone, who visited China in the last years, is well aware that in order to pass the customs and enter China, a valid visa is necessary. The whole procedure may not be complicated and you can always ask some specialized company for help, but it takes time and money: filling the form, preparing the documents, delivering them to the embassy or consulate, waiting for decision – surely, nobody enjoys those.

Visa in China

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Searching for products in China – China sourcing success story: GoPro

We have been receiving numerous questions about the manufacturing our own product in China: whether is it possible or not, to what the attention must be paid, how to begin with the so-called China sourcing. We also have received a lot of questions about high-quality products from China, which are not ordered by big companies such as Nike or Apple, but by small entrepreneurs, who started their way to business with dreams and ambitious plans only.


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Export to China – types of business presence in China

Types of business presence in China

Registering a company in China is still a relatively complicated procedure, despite the fact that the People’s Republic of China authorities are struggling to make those procedures easier for foreign businessmen. In China, there are four basic types of business presence. We need to keep in mind that every province has its own distinctive features which should be analyzed before choosing the place for our business. Every potential investor should evaluate his time and financial capabilities before making such decisions. As the opening business in China may take a lot of time, we present some basic modes of operation accompanied with the short description. While registering the company in China, we should seek help of the professional companies and institutions which already have the experience in this field; they will help us to choose the most suitable type of business presence.

Representantive Offices, RO

The main advantage of this type of business presence is the low cost, this type is the most popular among the foreign entrepreneurs. It enables them to obtain residence permits. There are several disadvantages though: ROs do not have legal personality, they cannot issue invoices, the personnel must be employed through the governmental agencies. This type is chosen mostly by companies which are performing market surveys or are overseeing the Chinese contracting party (ie. factory) while importing from China.

Types of Business Companies

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