China Bonded Warehouse vs. Non-bonded Warehouse

What is the China bonded warehouse?

A bonded warehouse is a storage warehouse for your order fulfillment service, which can store a lot of products and save your money. Meanwhile, the order fulfillment suppliers might develop some of your business operations. However, the case for non-bonded warehouses is slightly different, where foreign traders have to pay taxes and ensure full inspection beforehand.

Here is a video introduction about China bonded warehouse on Youtube. I hope it can help you.

The following post will study the differences and benefits between bonded and non-boned warehouses in China.

Part one Cross-bonded e-Commerce bonded warehousing. 

The global e-commerce system is developing. There are continuous changes in this china bonded warehouse model to host the needs and demands of the world’s largest population. Hence, this development and changes also translate into the changes and progression of the logistics system. 

The main issue that logistic solution companies face is dealing with the regulations such as import customs clearance. However, the logistics companies don’t have to pay any taxes or duties on a product until delivered with the bonded warehouse solution. They don’t have to inspect items before delivery, unlike non-bonded warehouses in China. Delivery of an item to the customer is the easiest part of the product; things get complex when you have to face legal things like regulations, import licenses, product registrations, etc. Hence, overall, the delivery part of the process may make it look straightforward, but the legal side is a little complicated. Bonded warehouse system takes away the legal troubles by a lot of margins. It is significantly easier to only process and pays taxes on products entering the delivery process.

Part two China logistics infrastructure 

As we all know, China can offer lower labor costs to supply better shipping and logistics infrastructure in the global economy. Meanwhile, China has become the world’s largest manufacturing country. If you use China bonded warehouse, you will do more business in China. And China will become the largest market for you. By this fact, many companies are looking to China bonded warehouses to promote their sales in the world.The government has control over the shipping department. It is vital to have thoroughly learned of their infrastructure to operate in China. China has a well-developed logistics system, including 241 airports, a high-speed railway network, and an extensive, designated national logistics hub. The logistics system in bigger cities is so advanced that most people expect same-day delivery.

a.History of bonded warehousing in China 

Previously, one of the largest manufacturers was China in the world. Imports weren’t at a very high rate. Cross-bonded e-commerce primarily started in China when Chinese individuals living abroad started to offer foreign products into China. China CFC is a non-bonded warehouse. However, it enjoys the same treatment as a bonded warehouse China.

b.Development of bonded warehousing in China 

In response to this increase in semi-legal cross-bonded trade, the Chinese government launched six e-commerce comprehensive pilot cities. The great advantage of pilot cities is bonded warehouses. A bonded warehouse is one kind of customs warehouse used for stocking related products. Since 2012, the number of these pilot city zones has substantially increased up to 105 across 30 provinces of China. 

c.Status of bonded warehousing in China 

Bonded warehousing has, and it continues to progress in the forward direction. We can see an increase in the numbers of bonded customs warehouses and pilot city zones around large cities for trade. We continue to measure the rise in technological advancement in China and the betterment of their citizens’ lifestyles. Hence, the bonded warehouse is at its peak after the pandemic. 

Part three Cross-bonded e-commerce import China model

Two major cross-bonded import models are operating for cross bonded e-commerce in china;

• Bonded import model: 

In this model, you can import many products in bulk and store them in bonded storage. The customs put on a positive list about the products. This model is faster, and foreign traders can postpone import duty and taxes.

• Direct purchase import model: 

The direct purchase import model differs from the China bonded warehouse model. This model starts after a Chinese customer places an order. The required goods go through customs, and the foreign trader has to get them approved and pay taxes on them. It is significantly slower because the customs clearance and registration process can take time. You can’t deliver the product before clearing and the taxes paid. China CFC is a non-bonded warehouse. However, it enjoys the same treatment as a bonded warehouse China.

As we discuss the question at the be this article, a bonded inventory is a bonded warehouse stock numbers of SKU before delivery. 

Logistics used all of these models in China at the moment. However, bonded import model prevails because of its speed for the customers. It is also very reliable and convenient for the merchants to go through this process.

Part four  Cross bonded e-commerce tax reforms

The Chinese government views cross-bonded e-commerce trades as a particular import channel. Hence, the General Administration of Customs department has created several different pilot zones since 2012, hosting multiple bonded warehouses. The Chinese government continues to review and update its policy related to cross-bonded trading. China CFC is a non-bonded warehouse. However, it enjoys the same treatment as a bonded warehouse China.

Before the most recent tax reforms, they list some e-Commerce products under personal use to tax individual parcel rates. Additionally, this rate will wave off if it is below 50 RMB. This newer policy any customer who buys goods that total over a specific value will have to pay;

• Import taxes
• Tariffs
• VAT
• Consumption taxes

The country revised the limit of tax implementation in 2018 and listed it in a circular of the General Administration of Taxation. As of now, the products which don’t qualify for the minimum value of the threshold have to pay 70% less VAT and consumption rate. They also enjoy a 0% duty rate if they are under the limit of 5000 RMB for one transaction and 26 thousand RMB per person annually. China CFC is a non-bonded warehouse. However, it enjoys the same treatment as a bonded warehouse China.

According to the tax reforms, the goods will be taxed according to the new parcel rates if the customs fail to estimate the parcel’s value. These more special rates are at 13%, 20%, and 50%, and products under 50 RMB are not taxable.

Part five Frontlist of warehousing into China bonded warehouse

In addition to the newest released Tax policy of the Chinese government, there are two lists published as well;

• Positive list 
• Negative list

These lists limit the scope of items sold through cross-bonded e-commerce trading. According to these lists, foreign traders can sell and import the products with HS codes through CBEC. However, the other group of items has to go through the general trade model. The country also updated a few listed times. The most recent version of the positive list holds a total of 1413 items. China bonded warehouse approved and included 15 approved pilot zones in China, which have excellent development. Foreign traders can visit this link that is https://www.cfulfillmentc.com/ , which is one of the approved non-bonded warehouses in China. However, it enjoys the same treatment as a bonded warehouse China.The CFC will offer you the best order fulfillment service.

When it comes to the direct selling model, it is also applicable to the items on the positive list. You must ship these items overseas without an import license or certificate. China CFC is a non-bonded warehouse. However, it enjoys the same treatment as a bonded warehouse China.Hence, if your product is on the positive list, it is very suitable to go through either of the import models. You get relaxed processing and regulations, and there is also a lot of relief offered in terms of taxes and duties on these items.

Attachment: Registration Form of Bonded Warehouse
(For details, please click this https://www.cfulfillmentc.com/contact-us/ )

Summary

China has recently become of the largest available markets in the world. So, foreign traders are promoting and increasing their product sales in China. The china bonded warehouse model is best for faster deliveries; it is also far superior and convenient for the merchants. If your items make it to the positive list issued by China, you get additional relaxations in sales. CFC Fulfillment is the fastest and most reliable logistics solution company in China.China CFC is a non-bonded warehouse. However, it enjoys the same treatment as a bonded warehouse China. Make sure to check out CFC solutions before you trade in China. In Addition, CFC’s website is https://www.cfulfillmentc.com/.