China Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in china, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Distribution and Sales Channels
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U.S. exporters entering the market in China should consider the most appropriate sales channel for their products and services. Options include working with:  

  • Trading companies: Act as intermediaries buying goods in large quantities to resell to retailers.  
  • Distributors: Take ownership of the goods, then market and service the products.  
  • Sales agents: Earn a commission for selling U.S. products.  
  • eCommerce: Conduct commercial transactions online.    

Distributors and agents may operate within specific provinces or areas across the country and may have exclusive rights to sell products within a particular area. By putting in time and effort to select the most appropriate distributor, U.S. companies not only benefit from a larger customer base and distribution networks but also gain access to additional market and industry insights. Depending on the distributor selected, the distributor may also offer a wide variety of value-added services, such as warehousing, marketing, shipping, and sales support. Conversely, selecting an unreliable local distributor could result in issues ranging from intellectual property theft to unfavorable sales and marketing terms. Regardless of the selected distribution method, exporters may have multiple sales channels (i.e., direct or indirect sales) that may vary by industry or region.  

To learn more about matchmaking and due diligence services available to help U.S. companies considering entering or expanding into the Chinese market, please contact a U.S. Commercial Service Specialist or visit the U.S. Commercial Service website for a list of export promotion services offered. 

eCommerce

Whether through cross-border channels or domestic channels, eCommerce remains a common distribution method that U.S. companies can use to sell products to Chinese consumers without needing to establish a physical presence in China. Through this method, U.S. exporters can either send products directly to Chinese consumers through various popular Chinese eCommerce platforms or store products in a customs bonded warehouse by using the cross-border e-Commerce sales channel. For some consumer products (e.g., cosmetics and supplements), the Chinese government imposes specific Chinese product registration and testing requirements before allowing the products to be sold on domestic eCommerce platforms. However, if U.S. companies use the cross-border eCommerce channel, these exporters are not subject to these same product registration and testing requirements.

Licensing of Products 

Certain goods require an import license. Generally, applications for import licenses are submitted to the central government’s Ministry of Commerce (MOFCOM) or an authorized local office. These import licenses are typically divided into two main categories: automatic import licenses (i.e., permitted goods) or non-automatic import licenses (i.e., restricted goods). Applications for permitted goods are approved as a matter of course; in these cases, the license is primarily used to collect trade statistics. For restricted goods, approval is not automatic because PRC authorities wish to control the importation of such goods for reasons such as public health and safety or the existence of tariff-rate quotas (i.e., two-stage tariffs, where the right to pay a lower tariff is granted to import up to a specific total quantity of goods).  

For most manufactured goods, the Chinese importer should apply for an automatic import license, which is free, through MOFCOM. It can take up to two weeks or more for MOFCOM to review and approve the application, which can be downloaded from MOFCOM’s official website (in Chinese only). Once approved, the automatic import licenses are typically valid for 6 months, whereas non-automatic import licenses are valid for one year. U.S. exporters should ensure that their Chinese importer can determine whether the product requires an import license and will follow the necessary application procedures.   

Business Licenses & Permits 

Most businesses require additional permits and permissions from regulators specific to their industry. Depending on the sector, U.S. companies may need to seek business permits from multiple PRC agencies, including but not limited to: 

  • Ministry of Commerce
  • State Administration for Market Regulation (SAMR)
  • State Administration of Taxation
  • State Administration of Foreign Exchange (SAFE)
  • General Administration of Customs of China (GACC)
  • General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ)
  • Local Public Security Bureau  

In general, obtaining the required business licenses and permits to legally operate in China can be a time-consuming process, which will largely depend on the type of business you intend to establish in China: a representative office (RO), wholly foreign-owned enterprise (WFOE), foreign invested commercial enterprise (FICE), joint venture (JV), or foreign invested partnership (FIP). The first steps toward obtaining a business license involve working with the SAMR to submit your Chinese business name for registration and obtaining approval from MOFCOM.  

To obtain more knowledge about the required business licenses or permits for a specific industry, U.S. companies can work with a specialized service provider or consult with a U.S. Commercial Service Specialist.