Processing trade in China

Processing trade refers to the business activity of importing all, or part of, the raw and auxiliary materials, parts and components, accessories, and packaging materials from abroad in bond, and re-exporting the finished products after processing or assembly by enterprises within mainland China. China has a bonded system on processing trade. Under this system, the amount of materials and components imported for the purpose of processing trade is exempt from tariffs. This document outlines the legal framework of processing trade, the advantage of taxation and customs supervision.