Foreign trade (external trade / international trade), in simple terms, is the exchange of goods and services between different countries. China is the world's largest trading nation in goods, with total import and export volumes exceeding $5 trillion in 2025 — meaning over $13 billion worth of goods flows between China and the rest of the world every day.
📌 Data Source: Import and Export Trade Statistics of the General Administration of Customs of China (2025 data)
1. Basic Concepts of Foreign Trade
What is Foreign Trade?
Foreign trade, short for "external trade," refers to the exchange activities of goods, technology, and services between one country (region) and another.
From the perspective of enterprises:
- Export: Selling goods/services to foreign countries
- Import: Buying goods/services from foreign countries
- Re-export / Transit Trade: Goods are transported from the country of production to an intermediate country, and then on to the country of consumption
Foreign Trade vs. Domestic Sales
| Dimension | Foreign Trade | Domestic Sales |
|---|---|---|
| Customers | Foreign buyers (companies/consumers) | Domestic customers |
| Currency | Foreign currencies like USD, EUR, JPY | RMB |
| Language | Primarily English | Chinese |
| Regulations | Customs laws + International trade rules + Destination country regulations | Domestic trade regulations |
| Logistics | Primarily sea/air freight, complex processes | Primarily road/rail, simpler process |
| Payment Cycle | Longer (30-90 days, involving L/C, T/T) | Shorter (usually payment before delivery or monthly settlement) |
| Risks | Exchange rate risk + Political risk + Credit risk | Relatively controllable |
2. China's Position in Global Trade
China's trade volume plays a pivotal role in global trade:
| Indicator | Data (2025) |
|---|---|
| Total Import & Export Value | Over $5 trillion |
| Global Export Ranking | 1st (for many consecutive years) |
| Global Import Ranking | 2nd |
| Main Export Goods | Mechanical & electrical products, textiles, chemicals, steel, automobiles |
| Main Trade Partners | ASEAN, EU, USA, Japan, South Korea |
📌 Data Source: General Administration of Customs 2025 foreign trade data, WTO International Trade Statistics
3. Three Ways for Companies to Engage in Foreign Trade
| Method | Description | Who Is It For | Advantages | Disadvantages |
|---|---|---|---|---|
| Direct Export | Company handles the entire import/export process on its own | Large and medium-sized companies with import/export rights | Highest profit margin, strong control | High entry barrier, need to understand all processes |
| Indirect Export via Agent | Using a foreign trade company as agent for export | Small and medium enterprises without import/export rights | Low threshold, hassle-free process | Need to pay agency fees |
| Cross-border E-commerce | Selling directly overseas via e-commerce platforms | Factories, small businesses, individuals | Lowest entry point, direct reach to consumers | Logistics and after-sales can be complex |
4. Key Participants in Foreign Trade
A shipment exported from China to a foreign country typically involves the following parties:
| Participant | Role |
|---|---|
| Exporter (Seller) | Person/company selling goods abroad |
| Importer (Buyer) | Person/company purchasing goods from abroad |
| Freight Forwarder | Person/company that arranges logistics for you |
| Customs Broker | Person/company that handles customs clearance procedures |
| Shipping Line / Airline | Entity that actually transports the cargo |
| Customs Authority | Government agency supervising the import and export of goods |
| CIQ (Commodity Inspection Bureau) | Inspects the quality and safety of the goods |
| Bank | Handles payment collection |
| Insurance Company | Provides coverage for the goods during transportation |
5. Simplified Process for an Export Shipment
Domestic Factory → Customs Declaration → Loading onto Vessel → Sea Transportation → Arrival & Customs Clearance → Customer Pick-up Abroad
↓ ↓ ↓ ↓ ↓ ↓
Prepare goods Declare export to the customs Goods loaded Cargo at sea Clearance at foreign customs Delivery completed
Total Time: Generally 20-40 days (by sea) from factory to overseas customer6. First Steps for a Foreign Trade Newcomer
If you are preparing to start in foreign trade, it is recommended to follow this path:
- Learn the basics (the purpose of this manual)
- Determine exported product
- Research target market
- Choose export model (Direct / Intermediary / Cross-border E-commerce)
- Find clients
- Complete first order
💡 The following chapters of this manual will explain each of the above points in depth.
📖 Further Reading:
- 👉 International Shipping Manual: What is International Shipping? — Deeper understanding of international shipping basics
- 👉 International Shipping Manual: International Trade Terms — Introduction to Incoterms
📞 Questions about Logistics? Bofeng Logistics provides one-stop services for international shipping, domestic shipping, and Hong Kong-Macau logistics lines. Contact Us: 13075678958 | info@zhbfwl.com
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