China Works blog: China manufacturing news, analysis and insights

The following article is a guest post from one of our UK partners – the China Visa Bureau. Below you’ll find a step by step guide for obtaining your Visa to China:

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It’s a fact that if you’re going to China, you need a visa. The process can be a daunting process, so the following sets out some easy guidelines for obtaining your Visa:

Step 1- Which visa do you need?

There are 5 common visas’ to choose from:

1. Business visa-for a meeting, lectures, trade shows, short-term studies, internships, or general business, technological, or cultural exchanges.

Letter of invitation required or a letter of duly authorized unit (letter from government)

2. Tourism visa-for holidays, visiting family or friends.

Confirmed flights and hotel bookings needed.

3. Work visa-if you are starting a new job in China.

Employment license and letter of duly authorized unit needed (originals)

4. Study visa-if you are going to study in China.

JW202 and Admission letter (originals)

5. Crew visa-for crew members of planes, boats etc.

Letter of Duly authorized unit and Landing permit

Step 2 – Application form

Everyone needs to fill in an application form and a customer declaration form (5 pages in total)

If you are applying for work or study you need to fill in form B also.

If you are a non UK passport holder you also have to fill in form B.

Step 3 – Applying

You now have numerous choices in methods of applying:

You can apply in person at CVASC London or Manchester with a pre-arranged appointment.

You can apply by post at CVASC London or Manchester using the regular service only. Manchester is the only place that it is possible to do sameday service; at CVASC you cannot post an application to do sameday service. You have to turn up with a pre-arrange appointment.

The difference between services…..Regular service takes 4 working days from the day the application arrives. Sameday service will be ready at about 4pm on the day it is submitted (before 10am)

Frequently asked questions

Q1 , Do I need a Chinese Visa?

A1, ALL travellers to China MUST have a visa. E.g. Tourism, Business, Study, Work, A Cruise, you DO NEED a visa. If you fail to get one you will be refused entry into China.

Q2, When should I apply for my Chinese visa?

A2, We suggest that you apply 1-2 months in advance of travelling. If you apply too early your visa will expire prior to travelling.

Q3, How long is my visa valid for?

A3, Each visa has a different validity…..a single entry visa has a validity of 3 months (from date of issue, you must fly within 3 months), a double entry visa has a validity of 6 months (from date of issue, you must fly within 6 months)

Q4, How long can I stay in China for?

A4, When a visa is applied for, unless specified, 30 days duration is given as standard. If you require more you must state it on your application.

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The China Visa Bureau can be contacted as follows:

CVASC Manchester 0161 236 1070

CVASC London 0207 842 0960

China Visa Bureau 0161 870 9048 (applications from all UK)

www.chinavisabureau.co.uk

If you’re looking to find contract manufacturers directly we now have over 190 different suppliers profiled on our China sourcing directory China Quotes (www.china-quotes.com)

China Quotes is the first China sourcing directory to exclusively on Chinese contract manufacturers, with over 50 production categories represented – from injection moulding to die casting.

If we can help you contact any of the factories on the China Quotes directory then please don’t hesitate to contact us today.

Most people looking to source from China face a basic choice between contacting factories directly via sourcing directories (such as China Quotes or Ali Baba), or using a China sourcing agent such as China Works. What are the pros and cons of each approach, and what is the best model for you?

1.Buying from factories directly

a) Pros

Potentially cheaper – China agents usually add a % commission to the factory’s quote so you can potentially save money by buying direct. You do however need to consider the hidden costs of dealing directly with a factory – such as the time and money you will need to spend managing the factory relationship (both in China and at home).

b) Cons

Time consuming – managing factory relationships can be time consuming. You may need to regularly travel to China and get-up at unsociable times to deal with your factory contact from your home country. The time spent managing your supply chain could also be better spent on the sales and marketing for your product.

Language barriers – your chosen factory may or may not have a good grasp of your local language, meaning key commercial and technical points may be misunderstood by either party

Uncertainty over product quality – A Chinese factory will normally inspect the goods themselves before they are shipped. This may mean you won’t know for sure whether the goods meet your requirements until they arrive at your warehouse (and after you’ve paid for them!)

2. Using a China Sourcing agent

a) Pros

Quality assurance – a China sourcing agent will independently quality inspect goods before they’re sent over,  providing reassurance that the goods are up to scratch before they land in your warehouse

Local point of contact – companies such as China Works will provide an account manager in your country to help with your enquiries, making it easier to deal with suppliers within normal business hours (regardless of which country they’re in)

Access to contacts and expertise – most established China agents will have many years experience of sourcing from China (with projects going well and badly!),  so should be able to pass on that expertise at all stages of the process.  These agents will also have a good network of factories,  enabling you to quickly make contact with the best factories

b) Cons

Not recommended for wholesalers looking to buy “off the shelf” goods – if you’re buying standard items (rather than goods made to your requirements), where cost is critical you may be better off dealing with factories directly. Once you’ve invested the time in developing the initial factory relationship, there should be less that can go wrong.

Conclusions

Unless you are an experienced Chinese buyer, or a wholesaler buying large quantities of standard goods we would always recommend buying via a sourcing agent.  Companies such as China Works can provide advice and contacts to ensure the process is a success,  help with any issues or challenges that arise,  and manage the end to end process on your behalf – giving you more time to run your business locally

Interesting article in this month’s FT on the increase in trade between the UK and China – http://tinyurl.com/686dgam

I wonder how long it will be before the UK becomes a net exporter to China, like Germany?

The FT reports:

“David Cameron has announced the signing of £1.4bn of trade deals between British companies and China, following a London summit with Wen Jiabao, China’s premier.

The deals include an agreement between BG, the UK energy group, and the Bank of China for up to $1.5bn of new funding options to expand projects in China

Mr Cameron said Mr Wen had also agreed to promote opportunities for British companies to invest in China, including through increased opportunities in the country’s booming regional cities outside Beijing and Shanghai.”

China Works has launched a free directory for customers looking to find Chinese manufacturers of bespoke parts and components .  China Quotes (www.china-quotes.com) is the first China sourcing directory to exclusively focus on contract manufacturers in China - enabling users to make contact with Chinese manufacturers of customised products and components

The directory is intended to allow consumers and companies to find businesses within convenient category listings.  Customers can search lists of businesses or organisations by production process or location and find the contact details, websites, email addresses and further information that will help with Chinese production projects.

China Quotes has been built with both consumers and businesses in mind.  It will make it easier for Chinese factories to promote themselves and for potential customers to find the quality services they require.

For potential customers, the China Quotes Directory enables easier  online search and location of suitable factories.  China Quotes has 10 dedicated production categories for listings: Moulding and casting, forming, joining and fabrication, machining, coating, electronic components, industrial components, rapid prototyping, packaging, and support services

China Quotes can be found at http://www.china-quotes.com

The Foreign Entrepreneurs in China blog have listed 36 quick tips for successful communication with factories in China - http://tinyurl.com/5v2yg3u

I’d recommend these tips to anyone starting out with a new China sourcing project, but some points are particularly important to follow:

“Tip 6. Approach them (the factory) first with an introductory email presenting yourself, your company and detailing as much as possible the product you are after

Tip 7. If they do not answer fast (1-3 days) move on, they will give you trouble in the future

Tip 10. If you can’t visit the factory, get an Inspection Company to do it for you. It is not that expensive

Tip 11. If you are not a fluent Chinese speaker, bring a native Chinese speaker to the negotiation- he/she will be a valuable support

Tip 13. Be very clear on who is going to be making decisions

Tip 15. “I can’t” is not in their vocabulary, so be wary if you get silence for an answer…

Tip 17. Give realistic purchase estimates. If you promise 10 more times than you are planning to buy, they will cut corners to meet their profit so it will hit you back with poor quality (they work on small margins)

Tip 19. Pricing: Do not get obsessed with the cheapest deal. Quality has a price and you should also consider that.

Tip 20. Track commodity prices used in your productsTip #26. Visit the factory during production & for quality control

Tip 27. If you can’t visit factory send an inspection company or somebody you trust (and is qualified for the job)

Tip 28. Don’t pay till you are sure all the product is in good condition (make sure the contract is draft that way)

Tip 31. Expect Delays in your Supply Schedule (power shortages are common, national holidays…)

Tip 32. “Problems don’t finish after production. Supervise Logistic Paperwork! There are often mistakes that will get your shipment stuck”

Toyota’s announcement that it will invest almost USD700 million on its first China-based research and development centre in Changshu highlights just how seriously major manufacturers are now taking the diversifying domestic Chinese consumer market.

The Japanese automaker will spend USD689 million to purchase land and build research facilities and a test track for the new R&D base, which will be used to analyse the Chinese auto market – now the world’s largest – study quality control and develop low-emission vehicles and engines for sale in China.

Toyota’s R&D hub announcement is the latest in a series of high-profile R&D investments, following GE’s recent disclosure of plans to spend a further USD500 million for research and development, including regional R&D hubs to serve Chinese consumers. In March, IBM promised to spend USD40 million on an energy and utilities solutions R&D lab.

The Chinese government has targeted R&D as a key economic growth sector, especially “in key technologies.” R&D expenditures in China as a percentage of GDP rose from 0.7% in 1991 to 1.5% by 2007, according to Oxford Analytica. China plans to raise this ratio to 2.5% by 2020.

China’s latest Five Year Economic Plan, announced at the end of October 2010, aims to “nurture and develop seven new strategic industries.”

The 12th Five-Year Program for China’s Economic and Social Development will target “new-generation information technology, energy-saving and environment protection, new energy, biology, high-end equipment manufacturing, new materials and new-energy cars,” as pillar growth sectors between 2011 and 2015. Each of these industries will receive supportive “fiscal, tax and financial policies,” according to Chinese state media.

The new Economic Plan adds that the Chinese government will actively support technology innovation and “reasonably guide mergers and acquisitions to increase manufacturing industry concentration.”

Other highlighted areas for central government funding and tax incentives over the next five years will be “the industrialization of scientific research”, “major state-level science and technology projects” and promoting the development of Chinese “high-tech industries.”

China’s purchasing manager’s index – regarded as a reliable measure of manufacturing sector growth – continued to improve in September. The PMI, published by the China Federation of Logistics and Purchasing, reached a four-month high of 53.8, up from 51.7 in August.

A PMI figure above 50 equates to an expansion of manufacturing activity, and September was the 19 consecutive month that the official index in China had shown growth following the impact of the global recession. According to the CFLP, nine of the 11 sub-indices, including production and new orders, increased month on month in September. New export orders on the September index rose to 52.8 in September, from 52.2 in August.

Meanwhile, the seasonally adjusted HSBC China Manufacturing PMI measured 52.9 in September, up from 51.9 in August.

With economic development now at a fairly advanced stage along the east coast and in southern China, and with central China receiving a welter of grants and subsidies to attract commercial and industrial investment, the government’s next stated economic objective has seen a geography shift.

The economic development of the former ‘rust belt’ of northeastern China is an area that the government has long sought to boost, but it has now accelerated its approach to stimulate both long-term growth and a diversified economic base.

Northeastern China has traditionally been a key centre of heavy manufacturing, shipbuilding and automotive production, particularly during the command economy days of the 1960s and 70s. It has, however, been struggling to adapt to the demands of China’s 21st century economy. Now, Premier Wen Jiabao is pinpointing the region as “a new engine for China’s economic growth,” according to state media.

The Premier’s statement represents a governmental push to ramp up industrial diversification, attract new commercial investment and improve economic efficiency in the northeast – a region encompassing Liaoning, Jilin and Heilongjiang provinces and the Inner Mongolia Autonomous Region. The northeast has received significant foreign investment in recent years, with cities like Dalian, Shenyang and Harbin attracting most interest from both Chinese and foreign companies investing in the region.