500+ Importers Served · 30+ Countries · 50,000+ Orders Managed · 8,000+ Factories Vetted · 98.5% On-Time Delivery ·  500+ Importers Served · 30+ Countries · 50,000+ Orders Managed · 8,000+ Factories Vetted · 98.5% On-Time Delivery ·  
Reference

China Procurement Glossary — A–Z Trade Terms

A–Z glossary of 50+ China procurement terms: FOB (shipping), MOQ (minimum order quantity), AQL (sampling), Incoterms, HS codes. The essential reference for anyone sourcing from China.

Terms A–Z

Essential Sourcing Terms

50+ terms every China importer should know. Understanding these terms is the first step to confident China procurement.

A statistical sampling method used in quality control to determine the maximum number of defective units acceptable in a batch. Common AQL levels: 2.5 (standard), 1.0 (strict), 0.65 (very strict).
A legal document issued by a carrier that details the shipment of goods. It serves three purposes: receipt of goods, contract of carriage, and document of title. Essential for customs clearance and payment.
Transactions conducted between businesses, such as between a manufacturer and a wholesaler. Most China sourcing is B2B.
An Incoterm where the seller pays for insurance and freight to the destination port. The buyer takes ownership once goods arrive at the destination port. Commonly used for sea freight.
Similar to CIF but without insurance. The seller pays freight to the destination port. The buyer is responsible for insurance.
A document certifying the country of origin of goods. Required for customs clearance in many countries. Can affect tariff rates under free trade agreements.
An Incoterm where the seller handles all costs including duties, taxes, and delivery to the buyer's location. Maximum seller responsibility. Best for buyers who want a turnkey solution.
An Incoterm where the buyer picks up goods directly from the factory and handles all shipping, customs, and costs. Minimum seller responsibility. Buyer has full control over logistics.
Estimated Time of Arrival / Estimated Time of Departure. Key milestones in shipping logistics. ETD is when the vessel leaves, ETA is when it arrives at the destination port.
An Incoterm where the seller handles costs until the goods are loaded onto the shipping vessel. The buyer takes responsibility from there — including freight, insurance, and destination costs. This is the most common Incoterm for China sourcing.
Shipping where a single container is used exclusively for one buyer's goods. Typical container sizes: 20' (28 CBM) and 40' (58 CBM). More cost-effective than LCL for large orders.
An agreement between countries to reduce or eliminate tariffs on certain products. Important for importers as it can significantly reduce costs.
An internationally standardized system of names and numbers for classifying traded products. HS codes determine tariff rates, import restrictions, and documentation requirements. Typically 6-10 digits.
International Commercial Terms published by the International Chamber of Commerce. They define the responsibilities of buyers and sellers in international transactions, including cost, risk, and documentation obligations.
Intellectual property protection is crucial when sourcing from China. Register trademarks in China (first-to-file system), use NDAs, and work with trusted partners to protect your designs.
Shipping where goods from multiple exporters are consolidated into one container. Good for smaller orders but generally more expensive per unit than FCL.
A bank-guaranteed payment method. The buyer's bank promises to pay the seller once specified documents are presented. Provides security for both parties but involves bank fees.
The smallest quantity a supplier is willing to produce or sell in a single order. MOQ varies by product, factory, and production method. Standard products may have lower MOQs than custom manufacturing.
A factory produces goods according to the buyer's design and specifications, branded with the buyer's name. The most common arrangement for custom manufacturing in China.
The factory designs and produces products that the buyer then brands as their own. Faster time-to-market than OEM since the design work is already done.
Samples produced before mass production to verify material, color, finish, dimensions, and functionality. Always request and approve PPS before production begins.
A preliminary invoice sent by the seller to the buyer before shipment. It includes product details, prices, payment terms, and delivery information. Used for payment processing and customs.
Processes to ensure product quality meets specifications. QC involves inspection and testing of products. QA encompasses the entire quality management system including processes and procedures.
A formal document sent to potential suppliers requesting pricing and terms for specified products. A well-prepared RFQ includes product specs, quantities, timeline, and compliance requirements.
An EU directive restricting the use of certain hazardous substances in electrical and electronic equipment. Required for products sold in the European market.
A unique identifier for each distinct product or variant. SKUs help track inventory, manage orders, and communicate product specifications with suppliers clearly.
An electronic method of transferring funds from the buyer's bank to the seller's bank. The most common payment method for China sourcing. Typical terms: 30% T/T deposit, 70% before shipment.
A US-based safety certification organization. Many consumer electronics and appliances require UL certification for sale in the United States.
A consumption tax applied on the value added at each stage of production and distribution. Importers may need to pay VAT plus customs duties when goods enter the destination country.
WeChat is the primary communication tool in China's business ecosystem. Having WeChat is essential for communicating with Chinese factories and partners.

Master Your China Sourcing Vocabulary

Knowledge is power. Use these terms confidently in your next supplier conversation. Need help applying them? Our team is ready.

Get Started Today →Prepare Your Questions
Import Guide
Get Started Today →
Sourcing Mistakes Factory Audit Source Electronics