1. What is happening in China: an internal view
Qué pasa en China: una mirada interna
Kurt Huang
Shanghai Oheng import & export co., ltd.
March 13th, 2015

2. Who are we?
We are the major fresh fruit import service provider in Shanghai since 2003, now with a team over 50 employees. (We don’t buy or sell fruits) We were previously known as the Consignee: Shanghai New Long March Int’l Trade Co., Ltd. And now: Shanghai Oheng Imp & Exp Co.,Ltd. FruitEase is our service brand, means: Make the fruit business easy! We led the whole industry in Shanghai made the market shift from over crowded old market ( Longwu) to the new one, Shanghai Huizhan Market. BTW, we are the shareholder of Huizhan market.

3. Agent Import Service & Integrated Logistic Service
Import Permit
Customs Clearances
Container Logistics
Import Agent (Shanghai Oheng)
Delivery
Shipment
Sign Service contract
Shipment & Documents
Importers/Wholesalers
(Guys in the market)
Business Negotiation
Concentrate in Sales and Marketing
Exporters

4. Topics Today Market overview What’s happening in China
Possible legal risk to be considered

5. Guangzhou
Beijing
Shanghai
Shenyang
Major Imported Fruit Distribution Centers and Ports of Entry for Fresh Fruits in China
Dalian
Ningbo
Qingdao
Tianjing
Shenzhen, HK
Shanghai
Markets Pi
Pingxiang
Mohan
Ports

6. Disposable income in 2014 (in USD)
PROVINCE
URBAN
RURUAL
Hubei
Shaanxi
Hebei
Shanxi
Henan
Sichuan
Jiling
Jiangxi
Ningxia
Guizhou
974.67
Tibet
Xinjiang
Heilongjiang
Qinghai
Gansu
916.20
PROVINCE
URBAN
RURUAL
Shandong
Liaoning
Inner Mongoia
Chongqing
Hunan
Guangxi
Yunnan
Anhui
Hainan
PROVINCE
URBAN
RURUAL
Shanghai
Beijing
Zhejiang
Guangdong
Tianjin
Jiangsu
Fujian

7. Shanghai Huizhan Market
Imported fresh fruit distribution center in East China
Appointed fresh fruit Quarantine & Customs inspection site by AQSIQ
27 km from Shanghai city center
85 km from Port (Yangshan Terminal)
Waigaoqiao Port
Yangshan Terminal
Biggest container port in the world
Shanghai’s ambition to be the shipping hub in Asia
Hui Zhan Market
Yangshan Port

8. Fruit consumptions in China
Western fruits
Tropical fruits
Domestic fruits
Major origins: Chile, Peru, U.S. South Africa, New Zealand, Australia…
Major items: Citrus, grapes, cherries, kiwi, apple, and etc…
Dragon fruit from Vietnam
Longan from Thailand
Banana from Philippines
Top 3 items takes 50% of total import
China imports over 2 million tons of tropical fruit from South East Asia countries, almost 80% of total fruit import
Cheap & Fresh
Improved quality & packing
More new varieties
Extended availability
China is the leading producer in the world for : APPLE, PEAR, CITRUS, KIWIFRUIT, TABLE GRAPES…

9. “We work very hard, and we don’t make money!”

11. Too much fruits, poor quality……
Data Source
79,000 Tons
+70%

12. Why sending so many cherries to China?+ =

13. The “shared mistakes chain”
Over inflated import industry
Wrong demand signals sent to Chile
Over supply without accurate quality control

14. Why the Chinese market doesn’t grow as expected
Why the Chinese market doesn’t grow as expected? What’s happening in China?
We are adjusting the Chinese economy under the New Normal
and also
We are having a anti-corruption campaign which can not lose…

16. MOUTAI, the best liquor in China
2012:
US$400/bottle
Now:
US$150/bottle

17. Big order from big state owned companies,
Wholesaler is packing 50,000 gift boxes before moon festival in 2013,now you hardly see this……

18. Consuming trend: Less gift giving Rational consumption
Less big corporate orders
Less grey income
Rational consumption
Price-performance
More Stable demand

19. Possible legal risk to be considered…

20. A Chinese Story:
To kill a chicken to scare the monkeys.

21. How the popular game Consignment is played
EXPORTER
WHOLESALER
WHOLESALER
WHOLESALER
COMPETITIONS

22. The contradictory of Cargo Value by Consignment
Invoiced MG price: CIF USD20/Carton
Taxed price: CIF USD30/Carton
Final return: CIF USD40/Carton
Un-taxed Cargo Value: USD10

23. Tax evasion penalites New Zealand Kiwi case:
Evaded Tax Amount
Criminal Penalty
Monetary Penalty
RMB ,000 (USD16,000)
1~ 3 years
1~5 times of Tax
RMB ,000
(USD80,000)
3~10 years
RMB 2,500,000
(USD400,000)
Over 10 years
New Zealand Kiwi case:
Evaded Tax Amount: RMB 37,690,000(USD6,000,000)
Principal criminal 13 years in jail, accessary 5 years
Supplementary payment equivalents of evaded tax and extra penalty.

24. Thank You!
Kurt Huang