China Automotive Market: The Ultimate FAQ Guide

Dec. 09, 2024

China Automotive Market: The Ultimate FAQ Guide

If you&#;re starting an automotive shop or, you may want to import from China automotive market.

If you want to learn more, please visit our website MOTEC.

Or, you would like to explore and find reliable suppliers in the automotive market in China.

If that&#;s the case, then you&#;re in the right place.

Because this guide will help you find suppliers, understand the market and save time when importing from China automotive market.

Let&#;s dive right in.

How Big is China Automotive Market?

China automotive market tops the world.

It&#;s estimated to hit an output of 30 million and 35 million by the year and respectively.

saw China selling over 27 million Chinese vehicles not only to Local markets but also internationally.

The steady growth can be attributed to the increasing living standards which have lead people into acquiring items that were previously out of reach.

The automotive sector stands to be one of the leading pillars of the economy in China through which several people have gained employment.

Which are the Best Chinese Car Brands?

China being the leading automotive market globally, expect to find several varieties of car brands.

Some of the best Chinese car brands are not limited to;

BYD
Chery
Wuling
JAC
Changan
Great Wall
Baojun
Roewe
Lifan
Zotye
Ranz
Hafei
Geely
Brilliance
Qoros
JMC
Maxus
Haima
Gonow
Englon

What are the Benefits of Buying from the China Automotive Market?

There are several reasons why most automotive importers choose to buy automotive from the China Automotive market.

Let&#;s have a look at some of the benefits below;

Cost-effective &#; Cars in the China automotive market are sold at relatively affordable prices as compared to other countries.

This is because of the cheap labor forces and the presence of many factories.

In addition to that, the favorable import policies and availability of raw materials also contribute to the cost-effective prices.

Availability of a wide range of spare parts &#; Most if not all spare parts of vehicles can be found in the China automotive market.

Not to mention that most countries have shops that specialize in selling Chinese spare parts.

Therefore, you won&#;t have to worry about lacking spare parts as seen with some car designs.

Modern design &#;Chinese manufacturers ensure that they keep up with emerging trends and produce the best card designs.

To achieve this, they compile parts from well-known cars and come up with a unique result.

Good basic equipment in the cars&#; Regardless of the cheap price of a car, it might have functional features such as air conditioning, airbag, heated seats, and power windows. This not only makes it convenient but also practical.
Wide variety &#; China automotive market offers a wide variety of automotive selections including spare parts.

Therefore it&#;s a great one-stop market for everything you will need for your automotive business.

The flexible import policies in China facilitate easy and smooth importation from China&#;s
automotive market.

Which Automotive Parts can you Import from China?

If you&#;re planning to import all your automotive parts, China would be the ideal place.

Whether used or brand new you can easily find the best automotive parts from China automotive market.

Some of these parts are not limited to;

Axle
Car batteries
Brakes
AC compressor
Pistons
Fuel injector
Spare Tire
Clutch
Radiator
Engine fan
Sensors
Optics
Engine and drivechain
Filters
Chassis
Steering system
Rubber mount
Belt
Gaskets and seals
Shock absorbers and lifters
Driveshaft and axle
Muffler
Starter and alternator
Glow plug and spark plug

Can you Import Used Vehicles from China?

Yes.

Used vehicles are readily available in the China automotive market and you can import at reasonable prices.

Can you Import used Automotive Spare Parts from China?

Yes. Several auto dealers specialize in used automotive spare parts and therefore importing shouldn&#;t be much of a hassle.

However, you need to keenly assess the automotive spare parts before purchasing as some might either be faulty or counterfeit.

What are the Challenges when Importing from China Automotive Market?

Just like any other import-export business, importing automotive from China could be challenging at some point.

Let&#;s have a look at some of the challenges you should be prepared for below;

Language barrier &#;English is not an official language in China and therefore communication might be a huge challenge.

To overcome this, you might choose to seek the services of a sourcing agent.

Quality issues &#; Before finalizing your order, ensure that you have received a sample and confirmed that it meets the expected quality standards.

Failure to this might result in disappointments after production.

Scammers &#;There exist several scammers in the market and therefore you need to very vigilant when carrying out your deals with different auto dealers.

Confirm that they are legally authorized before initiating any purchases.

Middlemen &#; When working with middlemen, be prepared to be presented with higher prices. Therefore, if you want to get the actual price consider working directly with the company or hire a certified agent.
Finding a suitable supplier &#;With the huge saturation of suppliers in China, it might be difficult to identify the ideal one for your products.

In this case, you could consider working with a sourcing agent.

Delays in delivery- Apart from National holiday&#;s delays in delivery could also as a result of emergence of a more profitable order.

As such, the manufacturer is likely to concentrate more on that and delay your order.

To prevent such instances, always provide accurate time schedule for your production before it starts and ensure that you conduct regular follow ups.

How much Duty will you Pay to Import Automotive Products from China?

Duties and taxes are part of any form of importation and the cost might vary depending on the country of importation.

The value of imports and weight are some of the factors that will determine the amount of duty you will pay.

That said, you need to confirm with your country&#;s customs authorities on the applicable duty for your China imports.

Which are the Leading Automotive Markets in China?

Automotive markets in China are located in cities such as Yiwu, Guangzhou, and Shenzhen among others.

Some of the leading automotive markets in China are not limited to;

Yiwu Automobile Accessories Wholesale Market
Guangzhou wholesale market
Bagualing car accessories market
Yiru autoparts market
Yiyou market
Guangzhou automobile components market
Sanyuanli Auto fitting Foreign Trade market
Xinguangcong Automobile parts city
Guangdong Express Automobile Accessories market
Yi Yun International Automobile Accessories Plaza

How do you get the Best Prices when Importing from China Automotive Market?

Getting the best prices for your automotive requires you to know the tricks on how Chinese suppliers and manufacturers operate.

Let&#;s have a look at some tips below;

Bargain &#;Bargaining is an important aspect of any successful purchase.

Chinese suppliers and manufacturers are aware of this and that&#;s why you should never settle on the actual prices.

Just by bargaining, you will be surprised at how much less you will buy the same product.

Make bulk purchases &#;A simple trick that most big businesses use is buying in bulk.

The reason being most if not all suppliers are willing to offer large discounts on bulk purchases as compared to smaller purchases.

Buy directly from the factory &#; If you want to increase your profit margin further, consider purchasing your products directly from the manufacturer.

Not only does this reduce the number of middlemen but also puts you in a better chance to establish lasting business bonds with the manufacturer.

Keep in mind that the more the middlemen involved the higher the price of commodities.

Hire a sourcing agent &#; Sourcing agents will not only identify a suitable supplier for your products but also bargain on your behalf.

This way you reduce the probability of being scammed and eliminate the language barrier.

Not forgetting landing at unbeatable prices from the best suppliers.

Therefore if you are a newbie in the business it would be of great help working with a sourcing agent.

Which Quality Standards should Automotive Products in China conform to?

Every automotive product should conform to the set quality standards to ensure proper functioning and safety of the vehicle.

The automotive products should be designed in a manner that;

They last longer without wearing out.
They function effectively with other car components without difficulties.
They withstand harsh environmental conditions

That said, here are some of the quality standards to look out for when importing automotive products from China;

ISO -2 &#; For auto-ignition parts and systems
CPA 101-102 covers external parts that are made of plastic, panels, fenders, grilles, door shells, and bezels just to mention a few.
ISO defines the standards required to assess the performance of fuel injectors.
SAE J for radiator hoses and their respective electrical conductivity.
AS covers requirements for copper alloy materials that are used in the manufacturing of auto.
ISO for braking components and systems
ISO for health and safety
ISO

How do you Ship Product from China Automotive Market?

There are four main methods through which you can ship your products from China automotive market;

Airfreight -Air freight is the costliest shipping method while at the same time the fastest. It&#;s suitable if you are shipping urgent and less bulky products.

Most importers prefer not using this method due to the high costs involved.

Sea freight &#;Sea freight is the commonly preferred shipping method.

This is because it is cost-efficient and suitable for shipping bulky products.

Nevertheless, you will need to wait longer for your products to be delivered.

The brighter side is that you will save on costs which in turn increases your business profit margins.

Rail freight &#; Rail freight would be another alternative option for sea freight more so if you&#;re shipping to countries connected to China by rail transport.

Not only is it faster than sea freight but also less costly as compared to air freight.

Not forgetting it&#;s also suitable for shipping bulky products.

Door to door shipping &#; If you want to save on cost, effort, and time then the door to door shipping would be the ideal choice.

With this method, your products will be shipped directly to your doorstep and therefore it saves you from a lot of inconveniences.

Which Incoterms can you use when Importing from China Automotive Market?

There are several incoterms available and therefore your choice will be determined by your import needs.

FOB and EXW are some of the suitable incoterms to use when importing from China automotive market.

EXW is ideal if so you are looking forward to saving on your costs.

Other available incoterms are not limited to;

Why should you Hire Freight Forwarder when Importing from China Automotive Market?

Hiring a freight forwarder is always quite advantageous in several ways.

Freight forwarders smoothen your importation process as outlined below;

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Custom clearance &#; Custom clearance is one of the difficult processes for any importer since it involves a lot of documentation.

A freight forwarder is accustomed and has experience in this job and will do it in a short period without much hassle.

Identifying warehouse for your products &#;A Freight forwarder will identify and secure suitable storage for your products.
Freight forwarders also help in loading and offloading your goods.
Timely delivery of goods &#;freight forwarders work on a strict schedule to ensure that they deliver their clients&#; goods at the expected time.
Cost-effective &#; Due to their experience in the field, freight forwarders have established networks with several couriers.

For this reason, they easily get to negotiate on prices and offer you the best prices available for your shipment options.

Efficiency &#; Freight forwarders are skilled in quickly adapting to sudden changes made during the shipping process.

Can you Import Automotive Products from Alibaba?

Yes, you can easily import automotive products from online platforms such as Alibaba.

Other online platforms that you could as well consider include; Global sources Made in China, and DH Gate.

Which are the Leading Automotive Trade Shows in China?

To get the most out of your importation, attending trade shows would be of great significance.

It will broaden up your knowledge of the specific products you intend to purchase.

Not forgetting that you might easily bump into a suitable supplier for your future purchases.

Here are some of the leading automotive trade shows in China;

China International Auto parts expo
The Chengdu International Trade Fair for automotive parts and aftermarket services
Bi-annual Canton Fair
China international auto modification and accessories expo
Guangzhou International automotive fair
Auto Maintenance and Repair Expo
Beijing International Automobile Exhibition

What are the Benefits of Working with China Automotive OEM Suppliers?

Several benefits come with partnering with China automotive OEM suppliers.

With OEM the products produced by one company will be used by another company to manufacture finished goods.

Let&#;s have a look at some of the benefits of OEM suppliers;

Customization &#;Working with an OEM supplier allows you to customize your products to suit your specifications.
Direct shipping options &#; You will have the option to directly ship to your customer when working with China automotive OEM supplier.
You as the buyer will own the intellectual property of the products.
Working with China automotive OEM suppliers guarantees you support when the need arises.
Ensures the smooth flow of business &#; It&#;s easier and faster to replace parts as the supplier already has your product specifications.

Who are the Leading Automobile Manufacturers in China?

Some of the leading automobile manufacturers in China are not limited to;

FAW
SAIC Motor Corporation
Chang&#;an automobile Co.
Brilliance automotive
Guangzhou Automobile Group
Geely
Beijing automotive group
BYD Auto Co.Ltd
Dongfeng Motor Corporation
Baoding Great WallSutomobile Holding Co.
Lifan group
Green Field Motors

How do you Identify Fake Automotive Products from China?

China is a country saturated with both quality and fake products.

Meaning, having the skill to quickly rule out between the two is critical.

You hack this and your business is set for impressive growth. To identify fake products;

Check the pricing -Too good to be true prices should be a red flag.
Inspect the branding and confirm the labeling and packaging details.

Most fake products will have names that appear similar to real brands to fool customers.

Also, a fake product won&#;t fit well in the packaging provided.

Not forgetting spelling mistakes on the products.

Take an old part and compare the two side by side.
Be on the lookout for products that lack labels or any identification numbers as they might be counterfeit.

Why Import Directly from Automotive Factories in China?

If you ask several automotive importers where they purchase their products from most will mention buying directly from factories.

This is because of the following reasons;

Importing directly from the factory allows you to build solid bonds with the manufacturer for future business.
You get huge discounts when you purchase directly from the automotive factories.
Most if not all manufacturers will be willing to offer you customization services.
By importing directly from the automotive factories you curb the chances of being scammed.
Most factory manufacturers in China are conversant with English and therefore language barrier wouldn&#;t be a challenge.

Are there Special Requirements when Importing Automotive Products from China?

Yes, there are special requirements when importing automotive products from China.

First, your automotive products need to meet the quality requirements. Some of these include;

ISO
CPA 101-102
ISO -2
AS

In addition to that, you need to have a license when importing automotive products from China.

Ensure that you have all the required import documents to avoid inconveniences during your importation process.

How do you Package Automotive Parts in China Ready for Shipping?

Different automotive parts will require different types of packaging for proper protection.

Some of the packaging items you will require for your automotive parts include;

Foam
Taped plastic film
Cushioning
Padding
Bubble wrap

You can package your products in plastic or metal wired boxes that can bear the capacity, tensile strength, and are durable.

Also, triple-walled corrugated boxes and honeycomb protective packaging would be good packaging options.

Keep in mind the thickness, size, and design of the packaging will be determined by the type of automotive part.

Can you Find a Warehouse when Importing China Automotive Market?

Yes, there are several warehouses in China owing to the presence of various businesses.

However, sometimes you might find it challenging to locate a suitable warehouse for your products.

In such instances, freight forwarders would be of great help.

They have experience in this field and can easily identify an ideal warehouse for your automotive products.

Is there MOQ when Importing from China Automotive Market?

Yes, different suppliers will have different MOQs for their products.

The Minimum Order Quantity will also be determined by a couple of factors such as;

Sizes of the product &#; Smaller-sized products often have a higher MOQ as compared to huge products.
Size of the factory &#;Big factories will have a higher MOQ owing to the overheads that need to be covered.
Customization &#; The more the customization the higher the MOQ.
Raw materials and parts &#; When selecting your raw materials, you should keep in mind that costly or rare materials will raise the MOQ of your products.

Which Documents do you need to Import from China Automotive Market?

There are several documents that you need to have before commencing your importation process.

Some of these documents will be determined by the custom requirements of your country or the type of product part that you are importing.

Let&#;s have look at some of the needed documents;

Packing list
Import license
Import declaration
Commercial invoice
Bill of lading
Bill of entry
Insurance certificate
Import declaration
Country of origin certificate
Technical write-up

Is there Right Time to Import from China Automotive Market?

Yes, there is an appropriate time to import from China&#;s automotive market.

Before indulging in your importation take proper notice of the public holidays.

Most businesses remain closed during such occasions and therefore it would be the worst time to import from China.

Keep in mind that certain Chinese holidays such as the Chinese new year lasts for weeks.

Avoid making orders a few weeks to or a few days after the Chinese holidays.

The best part &#; Tj chinafreight will help you import all automotive products from China to your destination.

Whether you&#;re importing car parts from China, automotive engines, or vehicles, we will facilitate everything for you.

Contact Tj chinafreight today for all your freight forwarding needs.

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OEM China – What to Expect and What to Look out For

What is OEM? Short for Original Equipment Manufacturer, it is an acronym you might be familiar with if you get your products manufactured by another company, possibly in another country such as China, for example. By its basic definition, an OEM is a manufacturer that specializes in making a particular product or part for another company that provides it with the design and specifications. An OEM part therefore is manufactured to order.

China is the world&#;s largest manufacturer by output, a position it has held on to for 11 years. It is also the world&#;s largest automotive manufacturer. It produces more vehicles in a year than the United States, Europe and Japan combined, accounting for 30% of global production. The success of China&#;s automotive industry rests largely on the performance of its OEMs. China&#;s auto parts industry is estimated to be worth $550 billion. This is just one example of how China is a specialist when it comes to OEM products.

In this piece, we take an in-depth look at OEMs, how they work and how you can do business with one, especially in China. Read on to know:

What is an OEM?
The benefits and challenges of working with an OEM
What to watch out for when working with OEM China

What is an OEM and how does it work?

To fully understand what an OEM is, we need to go beyond the simple definition provided above. An OEM manufactures goods not for retailers but for another company, which sells these goods under its own brand. This explains the origin of the term OEM, which is said to come from the Dutch phrase &#;onder eigen merk&#;, loosely translated as &#;under own brand&#;. The company that buys an OEM product is called a &#;value-added reseller&#; (VAR). Usually, it improves the product or component or adds more components to it, thereby adding value to it before selling it.

Traditionally, an OEM works on a business-to-business (B2B) model while a VAR sells directly to customers. However, recently, more and more OEMs are selling directly to niche groups of customers (for example, technology enthusiasts who customize and assemble their own computers).

An OEM works in one of the following two ways:

1. It manufactures specific components for the VAR, which uses these in its final product. For example, Microsoft sells its Windows operating system and Intel sells its chip to PC maker Dell. This makes Microsoft and Intel the OEMs and Dell the VAR.

2. It assembles and completes the product for the VAR to resell. Taiwan-based Foxconn, which assembles Apple iPhones, is one such OEM. Its largest factory &#; a 1.4-square-mile iPhone plant &#; located in the Longhua District of Shenzhen city, China. If you look at the back of any Apple product, you will find the printed statement &#;Designed by Apple in California Assembled in China&#;.

Working with an OEM &#; Benefits and Challenges

Outsourcing your manufacturing to an OEM can be lucrative for the following reasons:

Expertise: An OEM does not make hundreds of different types of products but specializes in just a few. It mass-produces these goods, which means it knows the most efficient and cost-effective way to manufacture them. Because it might make similar products for other clients, its knowledge of the engineering and development processes of such goods is the best in the business. An OEM product is almost always associated with quality and originality.
Inexpensive: It costs much less for an OEM to manufacture a product or part than for the reseller to do it themselves. Low cost is a huge benefit of mass production, especially in a low-cost manufacturing region like China. By outsourcing production to an OEM, the reseller is also saved the expense of setting up and operating their own manufacturing unit.
Fast: Being a specialist, an OEM can fulfil large orders in a short amount of time. This ensures your final product reaches the market that much faster.
Flexibility: By leaving the manufacturing to an OEM, you can focus on other areas of your business, especially research and development (R&D). Do not forget, an OEM is just the manufacturer. It only produces goods you have designed and conducted market research for. Hence, time spent on R&D is time well spent.
Warranty: A reputed OEM will back up its products with a manufacturer&#;s warranty. Insist on one when you outsource to a China OEM.

Read our detailed blog on the &#;Four advantages of OEM&#;

That said, buying an OEM product can be challenging if you are not careful. Here is what can go wrong:

Risk to intellectual property: When working with a China OEM, one of the risks you open yourself up to is compromising your intellectual property (IP), such as trademarks, design patents and copyrights. China is a first-to-file country, which means IP rights are awarded to those who register them first. So, your OEM product might bear a trademark you own in your country or in the country where you intend to export that product. But a domestic company might have registered the same trademark in China and might claim trademark infringement, leading to your product being detained by Chinese customs. There have been several high-profile trademark infringement cases involving OEMs in China. And with the Chinese courts interpreting the country&#;s laws in conflicting ways in these cases, it is advised that you follow steps to avoid a similar situation.
Lack of visibility: While you might know your OEM well, you might not know their suppliers down the supply chain. Chinese manufacturers are not known to freely give out information of any kind, including details about their suppliers. If the OEM changes suppliers somewhere down the line without your knowledge, the resultant change (for example, in the raw materials used) could seriously impact the quality of your goods.
Collaborator to competitor: An ambitious OEM might be tempted to compete with you. Having made your products for years and being privy to your designs and IP rights, it might use this knowledge to build its own brand and establish direct ties with customers, including your own. An OEM has the advantage of knowing how to manufacture the product in the most profitable way without making any investment in R&D. A famous example of a collaborator turning competitor comes to mind. Chinese tech major Lenovo started off assembling and distributing IBM equipment in China but bought the American company's PC business in , allowing it to sell IBM PCs under its own logo.

3 must-dos when working with a China OEM&#;

Protect your IP locally in China.

1. Protect your IP: China only acknowledges trademarks that are registered locally. This, coupled with its first-to-file system, makes it extremely important to register your trademark in that country if you intend to manufacture there. You can register your trademark either through the China Trademark Office or World Intellectual Property Organization (in the latter case, you must apply from the country where you trademark is currently registered). Manufacturing in China without a locally registered trademark leaves you open to:

Having your goods blocked by Chinese customs, which does not permit the export of goods that infringe upon IP registered by others.
Infringement lawsuits from companies holding the same trademark in China, even if they might be squatters and sellers of counterfeit goods.
Your Chinese OEM registering your trademark in their name and threatening you with a lawsuit if you attempt to switch to another OEM.

While registering your trademark in China, keep a few things in mind:

China&#;s unique sub-classification system &#; While the country accepts the International Classification of Goods and Services for the Purposes of Registration of Marks established by the Nice Agreement, it divides the classes into sub-classes based on the product&#;s features, including function, usage and raw materials. For example, Class 25 includes clothing, footwear and headwear. But under Class 25 in the Chinese system, boots, sandals and sports shoes come under different sub-classes. It is important to find the right sub-class to register your product under.
Registering your trademark in Chinese characters &#; If your register just the Roman characters that make up your trademark, you run the risk of another business registering the same trademark in Chinese. This might adversely impact your business and brand value. This is even more important if you plan to sell your product in China itself, because China requires Chinese names on products. But be careful when deciding on a Chinese version. Direct translations don&#;t always work. It is more important for the Chinese characters to signify what your product or brand stands for.

Registering your trademark in China can be a complicated process and can take a year or more to complete. But it is an important step to complete. A trademark attorney/agent can make the process easier.

2. Negotiate an airtight contract: Make it comprehensive, covering everything from product design, specifications, raw material and equipment choices, production deadlines, packaging, and quality control procedures to branding, pricing, the contract duration and everything in between. This will save you a lot of legal hassles down the road. Remember, just signing a purchase order is not good enough. Negotiate an airtight contract, paying special attention to the following aspects:

NNN agreement &#; Make your China OEM signs an NNN agreement, where NNN stands for &#;non-use&#;, &#;non-disclosure&#; and &#;non-circumvention&#;. This means the manufacturer agrees to, a) not use your product/design/concept in a way that makes them your competitor, b) not disclose information about your product/design to a third party, and c) not sell your product at a lower price. An NNN agreement helps protect your IP in a foreign country.
Termination terms &#; Clearly spell out the events that can lead to contract termination (unauthorized use of IP by the OEM, for example) as well as the consequences of termination (for example, what is to be done with products that have already been completed, steps for return of confidential information).
Exclusivity agreement &#; You need an exclusivity agreement if you plan to give your OEM exclusive rights to produce all or a part of your products, or if you want to ensure that you are the sole seller of a particular product in a particular market. The exclusivity terms must be spelled out clearly in the contract and must extend to the OEM&#;s sub-contractors, if there are any. Exclusivity agreements are a powerful protection when you have a unique product or one that is in high demand.
Non-compete terms &#; An OEM usually has more than one client. Given that it specializes in a particular product, your competitor might be among its clientele. Your contract should include a provision prohibiting the OEM and its affiliates from producing additional products that might be used by competitors.
Payment terms &#; Set a firm payment schedule. It is always more advisable to pay after the goods have been inspected rather than after shipping.

3. Ensure quality control: The entire point of working with an OEM is to get quality products. Hence, it is important you pick an OEM with an in-built quality control system. Some manufacturers might have their own quality control department. Some might use the services of third-party quality inspectors. What is important is that the OEM is transparent about the measures they take to uphold quality standards. Before signing a contract, make sure you ask the manufacturer about their processes and checks. If you can, visit their factory for a physical audit. Even if you are convinced, don&#;t just take their word for it. Insist on samples before finalizing the purchase order.

4. Get yourself a China sourcing agent: Outsourcing your manufacturing to a China OEM becomes a lot easier when you work with a China sourcing agent. From helping you verify and select an OEM to monitoring production, a sourcing agent increases your chances of receiving a quality product for the best price and on time. Advantages they have that you might not, such as:

A local presence in China, which means they can visit the OEM&#;s premises for verification and checks.
Fluency in local languages, which is useful when communicating with the manufacturer, drawing up contracts and filing paperwork in Chinese.
Years of experience working with Chinese manufacturers, which means they know the best deals and can also help you detect and avoid shady manufacturers.
In-depth knowledge of Chinese business culture, so they can help you build long-term ties with your OEM.

In conclusion, outsourcing to an OEM in China has many advantages &#; high quality products at low costs and the satisfaction of working with experts being just a few. However, do not forget to take the necessary precaution of protecting your trademarks in that country.

Sourcing Allies is a team of expert China sourcing agents that has helped western customers manufacture and source products from low-cost regions since .