China Customs Enterprise Classification is a system used by China Customs to grade companies which engage in foreign trade.
Following a long implementation phase, a new classification system was confirmed in May 2018. It had been updated primarily to reflect China's broader implementation of a nationwide social credit system in recent years.
Under the new China Customs Enterprise Classification system, companies are no longer ranked AA, A, B, C or D - there are now 4 different categories which are introduced in this article.
Although China Customs have had a system in place for grading Chinese companies for many years, a big change was announced in 2014.
The previous China Customs Compliance Rating Scheme, which graded companies either AA, A, B, C or D, was to be replaced by a method based more closely on China's new Social Credit System.
With the new classification system, companies can apply for "Authorized Economic Operator" status which offers preferential treatment such as fewer inspections and simplified Customs processing.
On the other hand, companies with a bad social credit rating are subject to much tighter regulations which can really impede their business operations.
A decree from China Customs on 1 May 2018 heralded that implementation of the new Enterprise Classification system had been completed.
The below chart gives a simple approximation of how the new classification system compares with the previous one.
Note however that not all companies previously rated C or D are necessarily now considered to be "Discredited".
|Customs Accreditation Classification||Accreditation Logo||Previous Compliance Rating Scheme|
|Advanced Certified Enterprise||AA|
|General Certified Enterprise||A|
N.B. the text "AEO" present in the first 2 accreditation logos stands for "Authorized Economic Operator" and is given to all China Customs "certified" enterprises.
As you can see from the table above China Customs assesses 4 different levels for Chinese trading enterprises:
Companies with this authorization enjoy significantly reduced inspection rates, can declare goods prior to arrival at Customs and have a coordinator assigned. Re-authorization for advanced level is required once every 3 years.
With General Certified status companies are subject to inspection at a reduced rate and get priority in Customs clearance.
This is the default category for companies which haven't applied for "Authorized Economic Operator" status and have a regular social credit rating.
Discredited enterprises are still able to engage in foreign trade, but do so under much stricter conditions, such as enduring an increased rate of inspections & audits.
Here are some examples from our research in August 2018 of the current China Customs enterprise classification for some of the more famous of China's millions of companies:
|Customs Accreditation Classification||Company Name|
|Advanced Certified Enterprise||Lenovo (Shanghai) Electronics Technology Co., Ltd.|
|Tsingtao Brewery Co.,Ltd.|
|General Certified Enterprise||Sichuan Changhong Electric Co., Ltd.|
|General-Credit Enterprise||Beijing Jingdong Century Trading Co., Ltd.|
|Shenzhen Tencent Computer Systems Company Limited|
|Discredited Enterprise||Sinotrans (Tianjin) Storage and Transportation Co., Ltd.|
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Here we give some background on China company English names and introduce the 5 ways in which we find they can be misleading.
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