Free myNZTE article: Intro to China

With 1.4 billion people, China is the world's most populous nation and has one of the fastest-growing economies.

NZTE
NZTE
6 Apr 20218 mins

Following 40 years of reform, China has experienced unprecedented economic growth and become the world's second largest economy. Despite trade tensions with the United States, the country's consumers remain confident and resilient.

China's growing middle class continues to demand high-quality products, with a focus on lifestyle and experiences. Not only is this boosting the retail market and driving China's economic growth, but it also provides excellent opportunities for New Zealand exporters.

Trade agreements

New Zealand was the first developed country to negotiate a free trade agreement with China. Since the New Zealand-China Free Trade Agreement came into force in 2008, annual two-way trade has more than tripled to over NZ$32 billion. China is now our largest trading partner in goods.

In November 2019, New Zealand and China agreed on an upgraded FTA, to be signed and released in early 2020. This upgrade will include new chapters on e-commerce, government procurement, environment and competition policy, further reducing barriers impacting exports, and boosting trade.

Under the original agreement, over 97% of New Zealand exports to China became tariff free by 2019. The upgrade will make exporting to China easier and reduce compliance costs for New Zealand exports by millions of dollars each year. For example, there will be faster border release of fresh food products, and nearly all wood and paper trade to China will have preferential access for the next decade.

Political structure

China is effectively a one-party government with a pyramid-like political structure. Around 90 million (7% of the population) are members of the Communist Party of China. At the top, the 25-member Politburo ensures the party line is upheld, and controls three other important bodies: the State Council (government that implements Party policies, currently led by Premier Li Keqiang), the military, and the National People's Congress (legislative power, made up of nearly 3000 delegates).

The heart of the decision-making body is the seven-member Politburo Standing Committee (PSC) headed by President Xi Jinping. This leadership team will govern China from 2017 until late 2022.

Learn more about China's political system in this short video from China Global Television Network.

Ongoing institutional reform

In March 2018, the National People's Congress approved the comprehensive plan to overhaul and restructure more than two dozen government bodies. These reforms included changes designed to strengthen supervision of food safety and to simplify and speed up the import-clearance process.

Three key entities, China Food and Drug Administration (CFDA), Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) and State Administration for Industry and Commerce (SAIC), were incorporated into a new department called State Administration for Market Regulation. The entry/exit inspection and quarantine function of AQSIQ was also merged into China Customs.

Want to find out more on exporting to China?

'Intro to China' is the first article in the China Market Guide, available on myNZTE.

By signing up to become a NZTE customer below, you'll have access to all NZTE has to offer, with one-to-one support and services that grow with you. You just need to be a registered New Zealand business.

You'll also be signed up to myNZTE, NZTE's free online portal that's packed with curated, in-depth information and guidance to help you navigate your export journey.

Connections with other markets

Originally announced in 2013, the Chinese government's ambitious Belt and Road Initiative (also known as 'One Belt, One Road') was created to improve connectivity, trade and co-operation on a transcontinental scale.

It involves two main components underpinned by significant infrastructure investment: the overland 'belt' links China to Central and South Asia and on to Europe; and the maritime 'road' links China to Southeast Asia, the Gulf countries, East and North Africa, and on to Europe.

More than 60 countries along these routes have now signed on to projects or shown interest in doing so. The BRI is a way to maximise the impact of China's contribution to the global infrastructure gap, develop new investment opportunities, cultivate export markets, and boost domestic consumption and incomes.

Infrastructure

With the world's largest online community (~850 million), China's internet penetration hit 61.2% in mid 2019. Mobile phone users made up 99.1% of the nation's total netizens.

China's broad and diverse mobile ecosystem has had a profound impact on consumers, businesses and society as a whole, with consumers adopting a 'mobile-first' approach in their daily lives.

At the end of 2018, 77% of total connections used 4G, but China is aiming to be part of the first wave of 5G commercialisation and successfully rolled out its 5G network in October 2019.

It initially launched in major cities such as Beijing, Shanghai, Guangzhou and Hangzhou, but is now available to consumers in 50 cities. It's estimated that by the end of 2020, China will have 110 million 5G users (about 7% of the population).

Transportation

High-speed rail (HSR) in China has developed rapidly since 2008 when the country's service began operating. The government has subsequently put into operation more than 25,000km of dedicated high-speed railway lines.

By 2025, the network is expected to reach 38,000km and far exceed the total HSR lines operating in the rest of the world. The expansion of coverage has improved the accessibility of different regions and cities and led to the formation of megacities across China surrounded by a cluster of provincial cities. China's HSR now carries more than twice as many passengers as its domestic airlines. Learn more here.

Visas and immigration

As a foreign citizen, unless you fall into a visa-exempt category, you will need to apply
for and obtain the appropriate visas before entering Mainland China. To obtain a business visa, you will need:

  • A valid passport with at least six months' validity remaining

  • A recent colour headshot attached to the typed application form

  • A business invitation letter issued by a trade fair, a Chinese business/trade partner, or an authorised Chinese institute. The letter must include the applicant's full name, birth date and passport number, details of the person issuing the invitation (name, contact details, signature, official stamp), and details of the purpose, arrival/departure dates and locations of the business visit.

Find out about visa costs and processing times via the China Embassy.

Wellington: Embassy of the People's Republic of China

Auckland: Consulate-General of the People's Republic of China

Christchurch: Consulate-General of the People's Republic of China

Payments

The currency used in mainland China is the Yuan Renminbi. China is rapidly moving towards a cashless society with Alipay and WeChat Pay the main payment methods used by people of all ages. International credit cards such as Visa and MasterCard are only accepted at large shopping malls, brand chain stores, and some hotels and tourist spots.

The ATMs of banks such as Bank of China, China Merchant Bank and the Industrial and Commercial Bank of China accept international cards and dispense Chinese currency. Note that different banks have different daily maximum withdrawal limits from ATMs.

Public holidays

There are seven official public holidays in Mainland China:

  • Spring Festival (incorporates Chinese New Year and lasts around two weeks). Based on the lunar calendar, it falls in mid-January to mid-February, depending on the year.

  • International Labour Day (1 May)

  • Chinese National Day (a week-long holiday beginning 1 October)

During the Spring Festival and National Day holidays, much of China shuts down and the transportation networks are overloaded with people heading home or back to work.