Hong Kong the Logistics Hub of China
Manufacturers have a temporary exemption provided they have a Materials License registered with Customs. This allows them to import without having to pay the VAT provided the material is exported as a finished product within the allowable time window.
Every delivery into the country must be declared by a licensed Customs Broker, which is not an expeditious or inexpensive proposition. Also, the import and export quantities (measured by weight of each commodity type) must be in balance. That is why most China-based manufacturers consolidate their inbound materials and distribute their completed products through logistics facilities based in Hong Kong, which is a free-trade port.
This is precisely why White Horse has always maintained our Hong Kong logistics facility, which we have recently expanded to provide even more warehousing and staging capacity.