China Oks Foreign Business to Do Trading of General Goods

Datedback three years ago on April 16, 2004, the Ministry of Commerce ofP.R. China promulgated a Rule on Regulating the Foreign Business to DoTrading. The Rule formally opened the door for foreign companies to dotrading of general goods in China. The trading allowed under that Ruleincludes wholesale, retail sale, direct sale, telemarketing, internetmarketing, import, export, consignment sale, franchise of general goods.The general goods do not include the special goods, such salt andtobacco. As a result of the commitment of China’s entry of WTO, therestriction and barrier for foreign business to do sale in China, suchas the billions of turnover of parent company or years of experience intrading business, were almost all lifted by that Rule. However in theearly date of that Rule, as the application procedure must go as highand far as the Ministry of Commerce in Beijing, few foreign companiestried to apply the approval and license to do trading in China. Not longtime ago, the Ministry of Commerce delegated its power to theprovincial government, there quite many foreign companies havesuccessfully secured the approval and license to do trading of generalgoods in China. 

Thereis no particular requirement applied to foreign invested tradingbusiness. The only few things special to a foreign invested tradingbusiness are (1) specify the source of goods and channel of sale, (2)list the merchandise to be carried per the catalogue of CustomClassification, (3) as implied, the authorized and to be paid in capitalis the higher the better though seventy thousands US dollar is minimum,(4) experience in doing trading. The rest requirement is almost thesame as those for a foreign invested manufacturing business.

Asthe approving operation is new to the government officer, a lawyer withsmooth contact of the approving authority will save time and avoidbureaucacy.(March 14, 2007)