Foreign beer and wine consumption is increasing significantly in China. In 2016, Chinese consumed 567.5 million liters of imported wine, with bottled wine leading the total imports, followed by bulk wines and sparkling wines, according to statistics from the China Association for Imports and Exports of Wine and Spirits. During the same period, beer imports grew by 18.7 percent in volume to 598.5 million liters.
The rise of global consumer culture in China and consumers’ increased desire for premium liquor has largely driven this growth. Rising disposable income, increased exposure to Western lifestyles, and growing distrust of domestic liquor are among other factors that have contributed to the changing trend.
By Dezan Shira & Associates
Editor: Gidon Gautel
China’s new work permit system for foreigners was rolled out nationwide on April 1 this year. Under the new framework, the previous Alien Employment Permit and the Foreign Expert Permit have been combined into a single work permit, issued to any foreigner eligible to take up work in China.
The changes to the system result in a more streamlined process, doing away with inconsistent regional administration, and allows for employers to submit applications online. Furthermore, the change has removed any confusion foreigners may have had as to which permit to apply for.
The new system has also introduced a three-tier talent grading system for expatriates, the benefits of which are less clear. While A-grade expats enjoy some additional advantages, those falling in Tier B and Tier C may face tougher entry requirements, lower permit validity, and longer waiting times than before.
By John Niggl, Client Manager for InTouch Manufacturing Services
Transparency International’s latest Corruption Perception Index places most countries in the Asia Pacific region in the bottom half of their world ranking. And given the prevalence of contract manufacturing in countries like China, India, and Vietnam — all of which scored 40 or less out of a possible 100 points — these results continue to give importers cause for concern.
If you’re like most importers, your supply chain probably contains tens, if not hundreds, of different suppliers, though you may have only directly contacted a few. And even if you’re careful to conduct quality control inspection at various stages of production, you may still be vulnerable to corruption and its consequences.
In fact, high integrity is one of the traits importers most often seek in a quality control (QC) inspector, whether hiring their own staff or an independent inspection firm. But even despite your best efforts at due diligence, corruption can still impact your inspections. Results can vary from receiving defective or otherwise unsellable goods, to losing valued customers and distribution channels when retailers refuse to stock your products.
By Gidon Gautel
Billions lie within China’s e-commerce market. Online sales in 2016 amounted to RMB 5.16 trillion – approximately US$758 billion. E-commerce giant Alibaba saw US$17.8 billion in sales last November 11 during China’s largest e-shopping festival, Singles’ Day. However, although China has a plethora of other online shopping events, few beyond Single’s Day have gained Western recognition.
Just last month, JD.com, Alibaba’s main competitor in China, celebrated its own shopping festival: “618.” Over the course of 18 days, the website amassed US$17.6 billion in income from sales. Large shopping festivals such as this hold significant potential for foreign businesses looking to sell their products in China.
Foreign brands losing popularity among Chinese consumers
Market reports have shown that the popularity of foreign brands’ consumer goods are gradually being over taken by domestic Chinese competitors.
Foreign brands’ market share fell from 33.5 percent in 2006 to 30.2 percent last year, having only increased market share in four out of 26 product categories.
Domestic brands have been employing more natural and health oriented marketing strategies to gain greater market share, and are able to adapt to the changing consumer base quicker than their foreign counterparts. This is mainly due to their deeper understanding of Chinese consumers’ preferences, and their ability to make faster marketing decisions.
A more stable economy and steady wage growth has fueled consumption, contributing 77.2 percent to China’s economic expansion in the first quarter of this year, an increase of 64.6 percent from the previous year.
Our weekly round up of other news affecting foreign investors throughout Asia:
Import and Export Procedures in Brunei – Best Practices
With Brunei’s single window customs clearance and low tariff rates, exporting into and importing out of the small sovereign state is considerably easier than trading with some of its Southeast Asian neighbors. In this article, we explain best practices for importing into and exporting out of Brunei.
Foreign Investment in Indian Retail: Challenges and Opportunities
India’s regulatory framework on foreign direct investment in retail is one of the most complex in the world. In this article, we offer advice on how best to navigate these regulations and access India’s dynamic consumer market.
As predicted, a significant array of economic cooperation agreements were signed between Russia and China during President Xi Jinping’s visit to Moscow last week.
The deals include the creation of the new US$10 billion China-Russia RMB Investment Cooperation Fund, which provides access to RMB financing for Russian projects, including under the One Belt, One Road and Eurasian Economic Union initiatives. China was recently given permission to offer settlement services in RMB in Moscow through the ICBC.
Other deals include commitments from China Development Bank, China National Petroleum Corporation, the Silk Road Fund, China Investment Corporation, the Russian Direct Investment Fund, and from the Russia-China Investment Fund. These are examined as follows:
By Alexander Chipman Koty
Uncertainties in the China-US trade relationship remain in advance of July 16, the deadline of the 100-day action plan to resolve trade disputes agreed to by Chinese President Xi Jinping and US President Donald Trump in April.
The 100-day action plan got off to a productive start with the signing of the China-US trade deal on May 11, which re-introduced US beef to the Chinese market and brought Chinese cooked poultry to the US, among other measures. However, efforts to resolve more fundamental economic disputes have since slowed, with longstanding political disagreements instead taking center stage.
Although the implementation of the China-US trade deal is well underway, the relationship between the world’s two largest economies appears to be deteriorating rather than strengthening as the 100-day window draws to a close. While bilateral trade and investment discussions are ongoing, political friction between the two countries may stall the arrival of additional market access for US businesses in China. Continue reading…