[Q&A] How to Determine Origin Under Preferential Trade Pacts

2025. 6. 12

Question: How is the origin of goods determined under preferential trade agreements?

Answer: The origin of goods may be determined in accordance with the following provisions of the Regulations of the People’s Republic of China on the Administration of Preferential Origin of Import and Export Goods:

Article 3: For goods directly imported from a member country or region of a preferential trade agreement (hereinafter referred to as "member country/region"), the origin shall be deemed as the member country/region—and the corresponding preferential tariff rate or special preferential tariff rate (hereinafter referred to as "preferential tariff rate") under the Customs Import and Export Tariff of the People’s Republic of China shall apply—if either of the following conditions is met:

1.The goods are wholly obtained or produced in the member country/region;

2.The goods are not wholly obtained or produced in the member country/region but comply with Article 5 or 6 of these Regulations.

Article 5: For goods under Article 3(2) ("not wholly obtained or produced"), the origin shall be determined based on the applicable criteria under the relevant preferential trade agreement, including:

・ Change in tariff classification (CTC): Non-originating materials undergo manufacturing or processing in the member country/region, resulting in a change of tariff classification under the Harmonized Commodity Description and Coding System;

・ Regional value content (RVC): The percentage of the good’s FOB value minus the value of non-originating materials used in production;

・ Manufacturing or processing operation (MPO): The process that confers the essential character of the finished good;

・ Other criteria: Additional rules mutually agreed by member countries/regions.

Article 6: If goods or materials originating from one member country/region of a preferential trade agreement are used in the production of another good within another member country/region of the same agreement and become part of that good, such goods/materials shall be deemed as originating from the latter member country/region.

Accordingly, for goods exported to China, importers must determine origin based on the specific rules (CTC, RVC, MPO, or other criteria) of the preferential trade agreement they seek to apply (e.g., China-ASEAN FTA or RCEP rules, depending on the chosen agreement).