SEAFOODNEWS.COM [ifeng.com] Translated by Amy Zhong — Sept. 23, 2014 — About 70% of the imported seafood is not taxed in the Mainland China and many seafood items have been smuggled into China through Vietnam, according to some media.
Although this question may not interest consumers, it is of great importance to ask how the imported seafood they enjoy has entered the Chinese market. Some discreet consumers find it necessary to distinguish the imported seafood of America from those of Australia, however, they are not concerned about whether these seafood have been taxed.
An experienced lobster supplier in Australia has told the reporter from Free Trade Zone Post (FTZ Post) that a comparatively high proportion of imported seafood has been brought into China in an illegal way. The proportion may be as high as 70%, according to his estimation.
Although overseas suppliers know that this kind of smuggling has existed for a long time, they have not intervened but thought that it should be handled by the Chinese. One Australian supplier has warned that although the price of these illegal seafood may be about 20% to 30% less than those imported legally, the safety of the illegal seafood can not be guaranteed owing to a lack of examination and quarantine.
However, the reality is that neither the importers nor the eaters care about if these seafoods are imported legally.
As the data show, Vietnam and China are both among the top three in view of importing the western Australian seafood from July 1, 2013 to June 30, 2014. But China’s import value is only US$100 million, a third of Vietnam’s import value, which is US$320 million.
This clearly doesn’t match the spending power of these two countries. And Vietnam’s seafood demand should have been smaller owing to its long coastline, added an insider. So a great proportion of these seafood worth US$320 million are likely to enter the Chinese market through the border trade, while there are some others which have been smuggled into the market.
This insider has also told the reporter that there are two ways of delivering these seafood. “One is to move the seafood from the Australian boats to the Vietnamese boats directly in the International waters. And then the Vietnamese boats will transport the seafood into China through the border trade, which makes these seafood exempt from tariff. The other is to give the seafood on the Vietnamese boats to the Chinese fishermen directly, in which the seafood are exempt from both the tariff and the value-added tax. ”
According to this insider, although some seafood are labeled as import from Vietnam, it is impossible to fish these kinds of seafood in Vietnam’s sea area. This kind of illegal seafood transportation has occurred quite frequently during the past few years.
The customs of Nanning, Guangxi has released a document in 2013 which reads that the bureau has caught a number of smuggling happening in the border between Guangxi and Vietnam. And the value of these smuggled goods is on the rise and the average cargo value exceeds 100 million yuan. The smugglers have taken advantage of the policies regarding the border trade, which has become a new channel of smuggling goods. Some of them have hired the residents on the border to carry their large quantities of ordered commodities into China bit by bit, while others have used the border residents’ identities to import the goods.
In the border trade, the residents on the border of two countries can buy or sell certain goods with a limit regarding their transaction value in some specific markets or any other permitted places. And the goods are exempt from the tariff and other import linkage duties in the trading. Take the lobsters for example. The tariff rate is 15% for the live lobsters, while it is 10% for the frozen ones. And the value-added tax rate is 13%, which means that the tax rate is high as 28% for the live lobsters.
According to a manager of a lobster export company, the company has knowledge that the lobsters bought by Vietnam will be delivered to the Chinese market in the end. But as a supplier, there is nothing they can do but provide the complete documents in the export. And they have no control over the lobsters’ final destination, although they hope that their lobsters can be transported to China legally, said the manager.
However, the good news is that the policies of Shanghai free trade zones are likely to motivate Chinese buyers to import seafood legally. On September 3, Shanghai’s free trade zones has welcomed the visit of Ken Baston, the Minister for Fisheries in the western Australia, as well as a number of local suppliers for such seafood as lobsters and abalones. Baston has told the reporter from FTZ Post that the free trade zones in Shanghai have provided the Western Australian seafood suppliers a platform to enter the Chinese market.
Hu Haiping is the CEO of Organic Ocean and he has said that the formalization of customs declaration will become the trend. Hu adds that the cost of cold chain logistics is very high in the seafood import, but the company can cut their logistics cost to a great extent if their seafood can be transported to the refrigerated warehouses of Shanghai’s free trade zones after the customs declaration.
In addition, the wastage can also be reduced in this way and the cost of such seafood as lobsters will decrease by about 15% without these formalities.
Some seafood imported by Organic Ocean have become the top sales in the stores of Shanghai’s Waigaoqiao free trade zone which focus on the selling of imported products. What’s more, the importers’ confidence gets strengthened thanks to the convenience in the customs, examination and quarantine of Shanghai’s free trade zones.
Marcus Tromp is the manager of Dragon King Abalone in the western Australia and he has told the reporter from FTZ Post that their company exports 60 tons of abalones on a yearly basis. And 40% of the abalones are delivered to Hong Kong, while only 10% are to the Mainland China. “We hope to increase the proportion to between 20% to 25%”, said Tromp. Tromp has emphasized that their abalones have been transported to China legally and the company has handled the formalities in the customs declaration and the taxation.
“The cost is high to export the abalones to the Chinese market, but I believe that Chinese consumers are willing to pay for the trustworthy products”, added Tromp.
In 2013, the import volume of aquatic products is 4.1703 million tons, increasing by 1.13% compared with that of 2012, while the value reaches US$8.638 billion, rising by 8%. On top of China’s import countries are Russia, America, Peru and the association of Southeast Asian nations, but Australia has failed to make it to the top eight.
This story originally appeared on Seafood.com, a subscription site. It is reprinted with permission.