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Costs of importing from China to Australia

Last updated: 30.09.2024

Planning to import from China to Australia? Discover the total import costs involved and the best ways to reduce them

Key takeaways

The China-Australia Free Trade Agreement (ChAFTA) has improved Australia’s access to China by removing tariffs on a number of trade goods
When importing products, make sure all your customs clearance documentation is in place
When calculating import costs, consider the actual costs of goods, shipping costs, import processing charges, customs duty and GST

Introduction

Australia’s largest trade partner is China. According to the Australian Bureau of Statistics, the total Australian imports from China amounted to $108.137 billion in 2023.

The China-Australia Free Trade Agreement (ChAFTA) has improved Australia’s access to China by removing tariffs on a number of trade goods. The agreement benefits Australian businesses that import Chinese goods to Australia or export Australian goods to China.

Since the agreement was first introduced in 2015, Australia has removed tariffs on over 82% (by value) of imported goods from China.

As a direct result of ChAFTA, exports and imports with China have significantly increased since 2015.

For importers, online sellers and retailers, China’s streamlined manufacturing sector and reduced customs duties present a unique opportunity to boost profit margins.

As a direct result of ChAFTA, exports and imports with China have significantly increased since 2015.

For importers, online sellers and retailers, China’s streamlined manufacturing sector and reduced customs duties present a unique opportunity to boost profit margins.

How to import from China to Australia: The complete checklist

1. Sign up for Shopify

You should ensure all your customs clearance documentation is in place when importing products.

Here’s an estimated list of documents you will need:

(Note: The list below is indicative only, as regulations and procedures change over time. Please seek professional advice before proceeding with your imports and exports)

Pre-shipping

This involves preparing your goods for export, getting the required permits and arranging pick up.

Export licence
Permit (The Australian government requires permits for certain goods)
Proforma invoice
Export letter of credit
Australian Business Number (ABN)

Preparing for shipment

This involves getting the goods onto the aircraft or vessels and into the arrival port in Australia.

Certificate of inspection
Commercial invoice
Bill of exchange
Export packing list
Packing Declaration (ocean freight only)

Arrival

Here are some of the main documents you’ll need at arrival:

Cargo insurance certificate
Bill of lading
Certificate of origin

2. Pay special attention to goods that require additional permits

The Australian Government decides what you can and cannot import into the country. Unless there’s an exemption, you need to declare all the goods you are importing to Australia from China. For some types of goods like antiques, precious coins and jewellery, you may even need to apply for a special licence or permit before they are imported.

There are also certain products that are prohibited from being imported into Australia. Before you finalise an order with a supplier, check the list of officially prohibited items from the Australian Border Force’s website.

3. Check the import labelling requirements

Your goods should meet the necessary labelling requirements, or they may not be allowed entry into the country.

Usually, you’ll have to label goods with a trade description—a statement or indication detailing how goods were made, produced, and packed. The trade description should be in English and include the name of the country of origin of goods.

Though, not every imported item requires labelling. Some product categories that require labelling include kitchenware, foods, textile products and toys.

The Australian Border Force has a complete list of labelling and packaging requirements that you can check.

What are the costs of importing from China to Australia?

When it comes to import costs, there are many variables involved which you need to consider, including:

Actual cost of goods: This is the total cost of wholesale goods you import from China. You may have to contact multiple suppliers and verify product quality before finalising a supplier that fits your budget

→ Take a look at everything you should know about product sourcing from China

Freight: The shipping cost will depend on the volume of your shipment and the mode of shipping. Air freight is faster than ocean freight but is also more expensive

Import processing charges: The customs department charges a fee, usually under AUD 200, for processing goods

Source

Customs import duty: The import duty can range from 0% to 10% of the price you paid for the goods, depending on the type of goods

Goods and Service Taxes (GST): GST is payable on all imported goods unless they are covered by an exemption. You are usually required to pay 10% GST at the same time as customs duty. (Note: If your business has an ABN and you are registered for GST, you may be eligible for a GST credit)

Other charges: There can also be other charges involved, including document fees and wharf charges

How to calculate import costs?

Start by determining the total taxable value of goods, which is usually the total sum of:

The customs value of all the imported goods
Cost for shipping from China to Australia
The total payable custom import duty/ tariffs
Any cargo insurance (if applicable)

Now, we’ll calculate GST by considering the applicable GST rate (usually 10%, but it can change.)

Let’s take an example

Customs value of the goods: AUD 20,000

Customs duty: 5% of AUD 20,000, which is AUD 1,000
Shipping cost: AUD 1,200
Insurance fee: AUD 100

Adding all of the above, the taxable value will be AUD 22,300

Goods and Services Tax (GST) charged will be 10% of 22,300, which is AUD 2,230

How to reduce import costs?

While you cannot reduce the customs duty or GST charged on imported goods, there are a few ways to reduce the overall costs of imported goods.

Find suppliers that can offer wholesale product prices
Use ocean freight instead of air freight to save on shipping costs (Although, keep in mind ocean freight has longer delivery times than airmail)
Choose an international payment provider that offers low markups and transaction fees on international transfers

Pay shipping partners at competitive exchange rates with WorldFirst

WorldFirst is a global payment provider that makes paying suppliers, shipping partners and tax authorities easy. You can make fast, secure and reliable international transfers in 90+ currencies across 130 countries and regions.

With a World Account, you can:

Reach a wide range of Chinese suppliers: WorldFirst is the only payment provider that supports direct and instant payments to suppliers on 1688.com

Build trust with suppliers through timely payments: You can pay suppliers in their preferred currency, whether CNH, USD, or HKD

Get your goods shipped on time: You can make same-day or next-day payments. All you have to do is authorise transfers before the cut-off times and WorldFirst handles the rest

Boost your profit margins: WorldFirst offers competitive exchange rates and lets you lock in exchange rates through forward contracts

Disclaimer: The information contained is general only and largely our views. Before acting on the information you should consider whether it is appropriate for you, in light of your objectives, financial situation or needs. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions, estimates, mentioned products/services and referenced material constitute the author’s own judgement as of the date of the briefing and are subject to change without notice. WorldFirst shall not be responsible for any losses or damages arising from your reliance of such information.

Written by Nidhi Kataria, Head of Commercial Strategy & Operations, ANZ at WorldFirst

Nidhi Kataria has worked in marketing since 2009 across various functions, specializing in acquisition growth. She has held regional and global marketing roles at notable financial and technology firms and has lived in Australia since 2014. She believes that businesses can benefit from WorldFirst to make finances clearer, easier, and simpler to manage, allowing them to focus on growing their businesses.