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What is happening in China: an internal view

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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

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

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