Article updated 23/03/2023


Importing from China directly is an excellent opportunity to source goods at a fraction of the cost that would be incurred by manufacturing in Australia.

Thousands of Australian businesses and trading companies successfully import products from China every year. According to the United Nations COMTRADE database on international trade, the value of Australia’s imports from China totalled US$83.73 Billion during 2022

However, importing from China can be complicated and costly, especially for businesses that are new to the importing process.

It’s important to factor in the additional costs, taxes, and duty involved before you import goods from China to Australia. Once you have an understanding of the costs involved, you can apply for trade finance to help you maintain cash flow while your goods are manufactured and shipped to Australia.

Shipping Costs

Importing from China different goods from local companies that manufacture products can be done by sea or by air. However, shipping via sea freight is significantly cheaper than air freight.

Sea Freight Cost Calculations

Sea freight is charged by the full container load (FCL) or less than container load (LCL). You will be quoted a shipping fee based on the cubic metres and weight of your goods by your shipping company.

If you are importing a new product, you will need to ask your supplier to provide you with an estimate for weight and cubic metres of your stock once it is packaged and ready for export.

The cost of renting a FCL varies according to the month during which you plan to import your goods.

For a LCL, the fees can vary according to the size and weight of your shipment. You can expect to pay between $150 to $250 per cubic metre.

The cost of sea freight is generally much smaller than the costs incurred through taxes, duties, and fees. To calculate these outgoings, you will need to determine the customs value of your imported goods.

Air Freight Cost Calculations

Air freight is charged based on chargeable weight, which is either the weight or volume of the shipment–whichever is greater.

These rates can be influenced by many factors and can be charged as either a flat rate or per kilogram of chargeable weight.

Customs Value

The customs value is usually based on the free on board (FOB) price of the goods. Free on board is an Incoterm that refers to the point where the goods have been cleared for export and loaded on board the ship, with responsibility and risk transferred to the buyer.

Incoterms are a defined set of commercial terms published by the International Chamber of Commerce (ICC). These terms help to communicate the obligations, costs, and risks that are associated with transportation (especially sea freight) and delivery of goods. Depending on the arrangement with your manufacturer, you may use a different Incoterm to establish the agreement for the shipping of your goods to Australia.

Free on board price of goods includes:

  • Unit Price
  • Transportation to the Port
  • Export Clearance
  • Customs value does not include the cost of shipping the goods to Australia or the cost of shipping insurance.

Customs Duty

Custom duty rates vary according to the category of goods you are importing. The majority of goods imported from China are subject to a 5% duty.

The amount of import duties you will need to pay depends on the customs value of your shipment.

For example, if your shipment is subject to a 5% customs duty rate, and has a customs value of $20,000, you would need to pay $1,000 in duty.

Goods and Services Tax (GST)

Goods and services tax must be paid on the majority of goods imported to Australia in addition to import duties. You are usually required to pay GST even if your business is not GST registered.

For the majority of products companies are importing from China, GST is usually set at 10%.

If you are GST registered, it may be possible to defer GST payment on imported goods if you participate in the deferred GST scheme.

Businesses that are part of the GST scheme can defer payment of GST on imports until they lodge their first activity statement after the goods have been received.

You can check your eligibility for the scheme on the Australian Taxation Office website.

GST Import Cost Calculation

  • GST is calculated as a percentage of the total shipping cost, including:
  • Customs Value (Free on Board)
  • Customs Duty
  • Shipping fees
  • Insurance

Example of GST Calculation:

Customs Value = $20,000

Customs Duty = 5% x $20,000 = $1,000

Shipping Fees = $1,500

Insurance = $50

$20,000 + $1,000 + $1,500 + $50 = $22,550

10% x $22,550 = GST $2,255

Import Processing Charge

The import processing charge is based on the customs value of your shipment.

It is a fixed cost that varies according to the method of lodging your import declaration.

Electronic import declarations are cheaper than document submission.

Since 2016, import processing charges do not vary according to cargo channels.


For your goods to be imported under Free On Board terms, your Chinese suppliers and manufacturing partner will need to submit a number of documents to your freight forwarder.

The particular documentation required by your freight forwarder include:

  • A commercial invoice detailing the value of the importing goods.
  • A packing list that states the contents of each box
  • A bill of lading that shows the type, quantity, and the destination of the goods

It’s important to note the difference between an invoice and a commercial invoice. A commercial invoice includes additional information to regular invoices such as a description of the goods being shipped by the trading companies, the value, quality and unit price of the importing goods and any applicable trade terms and or import duties.

If you are working with a Chinese supplier or manufacturer that has experience exporting to Australia, they will be familiar with the requirements for Free On Board import/export as well as the documentation required by the freight forwarder.

Before your manufacturer releases the product for export (directly or through freight forwarders), you may need to provide a Letter of Credit or complete a telegraphic transfer to the exporter.

You, as the trading company, will also need to ensure that the goods you import meet Australian customs standards and restrictions. Australia regulates several categories of products, including toys, furniture, vehicles, etc.

It is your responsibility as the importer to ensure your products comply with AS/NZS product safety standards and AZO substance restrictions.

You can use the Product Safety Australia website to access the regulatory information concerning products and imported goods.

The cost of checking suppliers and meeting any requirements should be factored into the overall cost of imported goods from China to Australia.

Licenses and Permits

The majority of consumer goods imported from China do not require import licenses or permits. But there are strict restrictions on the importation of certain chemicals, equipment, plants, and livestock.

You can use the Australian Government’s Biosecurity database to check the import conditions for your goods.

Frequently Asked Questions

Do I have to pay import tax from China?

If you are importing from China, regardless of the goods, you will need to pay import tax, which is also called custom duties or tariffs depending on the particular goods.

The rate of custom duties will vary according to the category of what goods are being imported, with most subject to 5% import tax.

How Long Does It Take for Goods to Arrive in Australia?

Importing from China to Australia will usually take around four weeks by sea freight. If you use a freight forwarder, they will arrange the delivery of your goods to port in China and provide an estimated date of arrival in Australia. For more specific and updated timelines, as well as estimated shipping times from other countries, we recommend getting in touch with your freight forwarder directly.

After your shipment arrives in Australia, it can take up to a week for your goods to go through the process of customs clearance and be delivered to your business location.

Does China and Australia have a free trade agreement?

Yes, the China-Australia FTA (also known as ChAFTA) is a free trade agreement which is designed to reduce barriers to trade between the two countries.

Under this agreement, many goods are subject to less or no tariffs, while other trade barriers are similarly reduced or eliminated altogether to promote Australian and Chinese companies trading.

Many other countries have established free trade agreements with Australia. When one country specialises or has access to resources allowing for production of a particular good needed by another country, and vice versa, free trade agreements can be essential in promoting commerce.

Do I need a license to import from China to Australia?

In general, importing directly from China does not require a specific license. There are set regulations and requirements that you must comply with, however.

There are some goods that may require a particular license in addition to the regular importing regulations. These licenses may be required by the Australian Border Force as part of their border protection service or due to other political and economic factors.

We recommend referring to the Australian Border Force website to search for particular categories of goods and for more information regarding the border protection service regulations.

What is a customs broker?

A customs broker is an individual or company that facilitates imported and exported goods through customs.

Customs brokers work with relevant authorities as intermediaries for the importer and ensure all regulatory requirements are met and the process through customs cleared as efficiently and seamlessly as possible.

Customs brokerage services can vary and include any of the following:

  • Arrangement of paperwork and documentation for submission with customs authorities.
  • Determining the right tax, tariff or customs duties to be charged.
  • Determining the value of the goods being imported.
  • Ensuring overall compliance with any relevant customs regulations.
  • Consulting on any aspects of customs-related issues and regulations.

Working with customs brokers is a good idea for companies who might not have extensive experience in importing from China, have complex supply chains or special shipping requirements. The right customs broker will ensure that your obligations are met and the entire Australian Border Force importing process is cleared as efficiently and seamlessly as possible.

What is a freight forwarder?

A freight forwarder is a company that provides specialised transportation services of goods. They work on behalf of importers and/or exporters.

Freight forwarders’ services can include shipment coordination, logistics, booking cargo space, rate negotiation and documentation preparation.

Many importers choose a freight forwarder with extensive customs clearance experience and who can arrange the process of moving goods into Australia smoothly.

When it comes to global trade, importing/exporting between countries and a free trade agreement, the role of a freight forwarder can be critical.

Trade Finance

If you are looking to import some goods from China, you need to be aware of the costs involved and how it will impact your cash flow. Once you have placed an order with a manufacturer, your capital can be tied up for several weeks until your goods arrive at port and clear customs.

ScotPac offers a range of Trade Finance solutions to help you access the funding you need to increase your buying power and negotiate a discounted bulk price with manufacturers. We can provide a cash injection that enables you to boost your stock inventory without suffering from a cash flow gap while you wait for goods to arrive.

To find out more about our Trade Finance solutions, give us a call today.