As the world’s largest goods trading nation, China faces immense pressure in import and export supervision, making the development of Smart Customs an essential imperative rather than an option. The concept refers to the use of solutions derived from digital and smart technologies to foster innovative supervision models, ensuring both effective control and smooth trade flows.

Leveraging big data and artificial intelligence (AI), China Customs has significantly enhanced risk identification and mitigation, strengthening anti-smuggling efforts and effectively building a “Smart Great Wall” to safeguard national borders.

• Non-intrusive inspection (NII): The “AI-based Image Analysis System” has already been installed on hundreds of NII devices to facilitate the automated detection of concealed contraband in imports and exports, leading to major seizures of drugs, endangered species and other prohibited items. It has also helped prevent the smuggling of invasive species. More information on this project is available in the June 2024 edition of WCO News.
• Revenue-related risk management: Under the “Big Data Smart Screening Project for Revenue Risks”, risk assessments based on information such as the HS code, value and origin of the commodities have been fine-tuned, thus effectively preventing revenue evasion.
• Big data strategy and practices: By constructing data centres, developing a sound data management policy and deploying analytical models, China Customs has enhanced data application capabilities to empower decision-making. To date, a cluster of intelligent models have been developed. For example, an intelligent targeting model named “tianxuan” has been rolled out at 269 operational sites nationwide. Over the first 11 months of 2024, these models accounted for 4.32% of all targeting operations, with a seizure rate 7 percentage points higher than that of manual targeting.

Smart services

China Customs has made continuous improvements to its procedures aimed at facilitating the cross-border movement of goods and people.

• The Smart Passenger Inspection System leverages advanced technologies such as X-ray scanners and robots with a view to systematically controlling luggage and passengers while making these controls unnoticeable to passengers. Piloted at the passenger arrival terminal of Shanghai Airport, the system made it possible to reduce the clearance time required for a 300-passenger flight to only 30 minutes. Embedded scanning technology for checked baggage allows the inspection of the luggage transported in a single flight to be completed within just 20 minutes.
• Automated cross-border transportation: The use of automated guided vehicles (AGVs) has been piloted at China-Mongolia land borders to move cargo between the two countries.

The journey towards Smart Customs is a comprehensive endeavour requiring systematic thinking in order to ensure that diverse elements are coordinated effectively. The four main takeaways from this experience are as follows:

Implementing the Smart Customs concept has required strategic planning and the development of a comprehensive roadmap and action plans. These encompass 12 key national cross-cutting projects and 22 departmental projects. Local-level initiatives are also making an impact, with 132 applications developed by regional offices. This approach fosters the development of practical innovations at local level, helping to transform local-based small-scale actions into major initiatives.

Implementation of projects follows a phased strategy: breakthroughs within a year, a foundational framework within three years and full system completion within five, with the ultimate objective being the achievement of world-class standards. Annual tasks are planned holistically to integrate regulatory, service, operational, technological, functional and executional needs. Emphasis on breakthroughs, in other words major improvements in key business areas, prevents resource dilution, ensuring that targeted innovations drive systematic progress.

All Customs departments develop their respective implementation plans in a coordinated way. As a result, procedures and tools related to pre-shipment inspections, on-site checks and post-clearance audits are integrated into a cohesive system, preventing fragmented development and isolated applications. This extensive coordination process between different work streams and Customs districts is managed by specific working groups which bring together experts nationwide. Implementation plans are further refined into specific on-site application scenarios which are tailored to business needs through consultation and the participation of external stakeholders in pilots. In this way, Customs controls and services are seamlessly embedded into the operation flows of consignees, consignors, carriers and port entities.

All initiatives are benchmarked against international standards and best practices of other administrations. China Customs promotes the exchange of experience and know-how in the adoption of technologies in order to narrow the existing digital gap between WCO Members. In December 2023, China Customs and the WCO jointly launched the Smart Customs Project, which aims to identify Members’ current status as well as needs, foster the application of technological and innovative solutions in Customs, and help gain a better understanding of the technologies available to Customs in tackling global challenges.

Under its Smart Customs Cooperation Partnership, China Customs will continue to strengthen collaboration with the WCO, its Members and other stakeholders, sharing experiences and insights to foster international cooperation, capacity building and knowledge exchange as part of the Smart Customs journey, while contributing to the modernization of the international Customs community and to a smarter, safer and more prosperous world.

A Detailed Report on the Adoption of Artificial Intelligence (AI) and Machine Learning (ML) in Customs, a Case Study on the Adoption of Artificial Intelligence (AI) and Machine Learning (ML) in China Customs and an AI/ML Readiness Self-Assessment Tool have already been developed as part of the Smart Customs Project. Key factors that contribute to the success of technology adoption as well as common pitfalls that can hinder progress have also been shared on the Smart Customs Community Portal.

It is also worth mentioning that China Customs’ proposal to create a BRICS Customs Centre of Excellence has been endorsed at a meeting of the heads of Customs of the BRICS. It will enable BRICS partners to understand how Smart Customs practices are implemented by means of real-life demonstrations. The Centre will also facilitate exchanges among BRICS Customs administrations and trade partners through a dedicated website, as well as provide a platform for capacity building cooperation.

More information
Smart Customs Community Portal

Requests to access the restricted section of the Smart Customs Community Portal must be sent via nominated National Contact Points to smartcustoms@wcoomd.org.

[1] The BRICS, a group of 11 countries: Brazil, Russia, India, China, South Africa, Saudi Arabia, Egypt, the United Arab Emirates, Ethiopia, Indonesia and Iran. Source: https://brics.br/en/about-the-brics.