French and Chinese authorities to create ‘smart corridors’ for wine exports to China

French customs has reached an agreement with the Chinese quarantine authority to further reduce the time it takes wine to pass through China's border, said French officials at Vinexpo.

Exporters are asked to provide more information about the shipment, such as weight and number of containers, to the French customs, so that the Chinese administration is certain that ‘what was loaded in France is the same as what’s been received in China’, said Jean-Michel Thillier, deputy general manager of French Customs authorities at a conference on the third day of Vinexpo.

The move is part of the French authority’s efforts to create ‘smart custom corridors’ that reduces the transit time after French wines reaching the Chinese border, said the official. Traditionally it takes two weeks for cargos to be cleared at the Chinese customs, according to Angela Zhou, Sales Manager of JF Hillebrand China.

The conference, which was titled ‘Exporting French wines: how to turn supply chain and customs expertise into success for importers and distributors? The China example’, featured five panel speakers from the French customs, the Shanghai Free Trade Zone authority, as well as specialists from international beverage logistics company JF Hillebrand.

Shanghai Free Trade Zone provides incentives for exporters to stock wines in China

Meanwhile, Chinese authorities are encouraging French wine producers intending to explore the Chinese market to stock their wines in the Shanghai Free Trade Zone by offering special arrangements in tax clearance and international payment.

Traditionally it can take as much as three months (excluding time spent on obtaining sanitary certificate) for the wines to travel from French producers’ hands to Chinese consumers. However, if the wines have already been shipped to bonded warehouses in China, the lead time can be shorted to a week (excluding sanitary certificate), said Angela Zhou, Sales Manager of JF Hillebrand China, during the joint presentation with Shanghai Free Trade Zone authorities.

With the new encouraged method, ‘[you can] take your time to find importers in China, then the wines get cleared and delivered to them directly,’ said Zhou.

In addition to the benefits of bonded warehouse, the Shanghai Free Trade Zone allows foreign companies, since September 2013, to set up special ‘offshore accounts’ in the area, said Eric Ni, deputy general manager of Shanghai Free Trade Zones United Development.

These accounts cover both Renminbi and foreign currencies, allowing importers to pay for their wines ‘just like paying another Chinese company’ so as to avoid the delay of payment caused by multi-national currency transaction, said the official.

Besides, the Shanghai Free Trade Zone allows the cargo to exit without immediate taxation, and the duty ‘can be declared monthly’.

These policies intend to shorten the lead time for wine imports, Ni said, ‘so as to respond to the need of the market quickly.’

‘The growth of the market still continues in the Chinese market, but the competition is also booming,’ said the official, warning that 2015 is the last year of the WTO transition period for China, after which ‘a lot of foreign products will squeeze into China’, especially those from countries who have signed free trade agreement with China.

‘The competition is there, the growths is there, and the administration of the Chinese government, customs, CIQ (China Inspection & Quarantine Services) are improving slowly,’ said the official, ‘the government will not react quickly (enough). How to face this kind of challenges? You have to do something by yourself.’