China, the most important textile supplier of the global market, has intense legal and bureaucratic foreign trade legislation. The mixed structure formed by communist regime formed with liberal economic policies defines manufacturers and sellers as separate players Agencies guiding the export of Chinese manufacturers or the import of Chinese market are carrying out a very important task. We as Textil Dunyasi Magazine, have interviewed with Mr.Erdem Gülen, the company representative of Hongli Buye (HLBY) and he gave important statements. Hongli Buye (HLBY), which was founded in 2009 in Beijing, handles the import and export studies of important textile companies from Turkey. Gülen stated that he has been living in Beijing for 6 years and noted that he works with his Chinese partners at Hongli Buye (HLBY) Company serving as a fabric agency.
Gülen stated that they do not import but deal with the European Fabric import to the Chinese market as Hongli Buye company and informed that they achieved a turnover over 1 million euro in 2012. Gulen said that they realized a fabric import figure of 70-80 thousand meters in total for this year and that their target for 2013 is 110-120 thousand meters. Gülen: “These fabrics are of high price and high quality. Even if we have started at a market, where competition is high, we had already achieved a turnover of 100 thousand dollars before our office was founded,” he said.
High Quality Products Receive Demand
Erdem Gülen informing that mainly import and sell fabrics of European trademarks, especially from Italy, to Chinese market noted that among their important customers are also Turkish manufacturers. Erdem informed us about their studies: “We have 3 kinds of profile in China. The first one is the ones directly purchasing the fabric from Europe and manufacture apparel to sell to the Chinese market, the second one is the ones manufacturing fason apparel and the third one is the Chinese manufacturers having their own trademarks in Europe and USA. Among the companies for whom we provide agency service and who manufacture in Turkey are Teknik Mensucat, Bez Tekstil, Akın Tekstil and İrteks. In addition, I also have the sample cards of Özlem Tekstil, Sanko and Matesa.”
Gülen informing that they give importance to quality in their studies also added that they work with medium and senior level manufacturers. Gülen: “In order to work in the Chinese market, besides being trustable you also need to be quick. No company dealing with basic production can be successful in the Chinese market, he said. High quality fabric is consumed adequately in China and in order to be successful in the Chinese market, a special study should be done for this market. Gülen; “As an agency, we bring together the client and manufacturer at a common point. Thus, besides being a place where we see fabrics, exhibitions are of great importance in terms of face to face meetings.”
Manufacturers Cannot Directly Import!
Erdem Gülen reminded that Chinese manufacturing companies cannot directly import and that this is defined as two separate business branch in China and thus cannot be performed together. Gülen continued his words: “For example you are a Chinese fabric manufacturer. You manufacture basic fabric but you need a special fabric. You cannot directly purchase this from Turkey or another country. Furthermore you cannot also export directly. Here the agencies are in contact. Agencies handle the purchase-sale on their behalf. Consequently the first official client of import or export are agencies.”
Gülen stated that they have over 50 clients now and they sell to 30-35 companies adding that their main problem is that it is difficult to find suitable fabric for the Chinese market. Gülen informing that Italian, South Korean and Japanese manufacturers are strong in the Chinese market underlined that the Turkish manufacturers need to contact agencies for export to China. Gülen: “China wants to put obstacles in imports with this practice. We pay 32% of customs, funds and tax tariff when we import a good. And then 17% of value added tax is calculated. This means that you pay 32 Turkish liras tax for a good of 100 Turkish liras and then add a 17% vat to 132 Turkish Liras. Then the price becomes around 150-160 Turkish liras. Exporters are refunded but importers are not refunded. Furthermore additional hinders are available. Many tests are asked about the products, there are many fabric test centers and tests are applied there,” he said.
Gülen explained that a second test is realized during the sales stage and especially noted that for jeans and 100% cotton products other hinders are implemented. Test results are given too late and the products are kept waiting. Thus agencies are of crucial importance for companies willing to work with China.
China is a trustable country
China is not a country welcoming strangers but has recently started to open itself. Erdem Gülen underlined that China is a trustable country. “China is a country even more trustable than Turkey and Russia,” and stated that the penalties are too harsh and deterrent. Gülen stated the followings in that issue: “Normally fraud is common as it is difficult to prove but no one touches your domicile or vehicle. Penalties are really heavy. Theft is punished with a working camp penalty of 6-7 years. However, fraud is harder to prove as sales without invoice is also possible.
Erdem Gülen pointed out that Turkey could not create a specific synergy in the Chinese market expressed that it is absolutely necessary that promotion studies are done. Gülen urged that Turkey and India are the countries who cannot bring tourists and sell goods to China and up to now no promotion studies about Turkey has been carried out in china. Gülen added that a promotion study to follow the changes in China is very important.
