By Elizabeth Leclaire
The rapid development of China’s aviation industry has created new investment opportunities for foreign companies looking to enter the Chinese market. Within the next 20 years, China is predicted to witness ten percent annual growth in demand for air transport (compared to two percent U.S. growth), US$64 billion worth of governmental investment into China’s airport development, and an increase of 4,583 civilian airliners.
The 2008 establishment of China’s first aircraft manufacturing company, Comac (Commercial Aircraft Cooperation of China), marks a turning point in an industry long dominated by American aircraft manufacturing company Boeing and its European counterpart Airbus. According to Marwan Lahoud, the head of Airbus’ strategy and marketing, Comac is expected to rise up as a major competitor against both Boeing and Airbus by 2020. Comac’s development of the 156-174 seat commercial airliner C919 is predicted to stand as the primary competition to the commercial aircrafts Boeing 737 and Airbus A320.
Our Latest Round-Up of Business News Affecting China-Based Businesses Investing in Asia
In this edition of China Outbound, we delve into the bilateral trade treaties and regional economic cooperation agreements involving China, ASEAN countries and India, as well as review the impact of these initiatives on investment opportunities for foreign enterprises. Most significantly, the bilateral relationship between China and India has been strengthened as Prime Minister Narendra Modi helped secure over US$22 billion in investments from China during his trip to the country. We also include permanent residency and other programs available for foreigners who wish to reside in any of nine ASEAN nations.
China is set to lose out as the United States Senate voted on June 23rd to allow the much-vaunted Trans-Pacific Partnership free trade deal to go ahead. That senate deal effectively paved the way for the TPP to progress unimpeded and prevents Congress from interfering with negotiated trade agreements.
It’s been a long time coming. It is now ten years since the TPP was first mooted as a Free Trade area, and it is a significant one at that. The United States, in conjunction with Canada, Chile, Mexico and Peru on the Eastern Pacific, and with Australia, Brunei, Japan, Malaysia, New Zealand, Singapore and Vietnam on the Asian side, represents 40 percent of global GDP and a combined economic strength of US$28 trillion. China, however, is not part of the TPP negotiations and has understandably been somewhat critical about them.
China Reduces the Social Insurance Contribution Amount of Employers
On June 24, Chinese Premier Li Keqiang announced his decision to reduce the contribution amount for employers in the work injury and maternity insurances. Specifically, the average work injury contribution percentage for employers will be reduced from one percent to 0.75 percent; and the percentage of maternity insurance contribution shall be reduced from the current one percent maximum to 0.5 percent, starting October 1, 2015. There are five categories of social security funds that employers in China need to contribute to: pension, medical, unemployment, maternity and work injury insurance. Both the employer and employee need to contribute to each of the abovementioned categories, but at different percentages.
By Xu Zhijun
Being dubbed as two of the Asian Four Small Dragons, Hong Kong and Singapore have been in constant competition with each other to be the easiest place to do business. The two rivaling cities have each attracted large amounts of foreign investment over the years with their geographical advantages and open attitude to free trade, as well as strong infrastructure and favorable business policies.
With the rule of law firmly established in both cities, staying in compliance with local regulations is key. Among these is the requirement to file financial statements in accordance with local accounting standards. In an effort to appeal to foreign investors, these standards are largely aligned with internationally accepted standards: the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB). Continue reading…
Dezan Shira & Associates has published a free, 112 page Guide to the entire ASEAN region, covering the demographics of each of the ASEAN member states in addition to comprehensive details of the China-ASEAN free trade agreement. It also includes case studies that compare manufacturing costs in China with ASEAN.
The India-ASEAN Free Trade Agreement and The Australia-New Zealand Free Trade Agreements are also covered in some detail. This is one of the most in depth guides to Doing Business in ASEAN yet published.
Dezan Shira & Associates took 9 months to research and gather this data. The firm maintains 12 China offices, as well as ASEAN offices in Vietnam and Singapore, and Dezan Shira Asian Alliance offices in Indonesia, Philippines, Malaysia and Thailand and has additional offices in India, the United States and Europe.
The Dezan Shira & Associates “Doing Business in ASEAN” guide may be downloaded on a complimentary basis from the Asia Briefing bookstore here.
Our recent series on China-ASEAN cost comparisons may be accessed here.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email firstname.lastname@example.org or visit www.dezshira.com.
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An Introduction to Doing Business in India 2015 (Second Edition)
Doing Business in India 2015 is designed to introduce the fundamentals of investing in India. As such, this comprehensive guide is ideal not only for businesses looking to enter the Indian market, but also for companies who already have a presence here and want to keep up-to-date with the most recent and relevant policy changes. We discuss a range of pertinent issues for foreign businesses, including India’s most recent FDI caps and restrictions, the key taxes applicable to foreign companies, how to conduct a successful audit, and the procedures for obtaining an employment visa.
An Introduction to Doing Business in Vietnam 2014 (Second Edition)
An Introduction to Doing Business in Vietnam 2014 (Second Edition) provides readers with an overview of the fundamentals of investing and conducting business in Vietnam. Compiled by Dezan Shira & Associates, a specialist foreign direct investment practice, this guide explains the basics of company establishment, annual compliance, taxation, human resources, payroll, and social insurance in the country.
An Introduction to Doing Business in China 2015
Doing Business in China 2015 is designed to introduce the fundamentals of investing in China. Compiled by the professionals at Dezan Shira & Associates, this comprehensive guide is ideal not only for businesses looking to enter the Chinese market, but also for companies that already have a presence here and want to keep up-to-date with the most recent and relevant policy changes.
An Introduction to Doing Business in China 2015, now available through the Asia Briefing Bookstore, is designed to introduce the fundamentals of investing in China. Compiled by the professionals at Dezan Shira & Associates, this comprehensive guide is ideal not only for businesses looking to enter the Chinese market, but also for companies who already have a presence here and want to keep up-to-date with the most recent and relevant policy changes.
Now the world’s second largest economy and long since the most populous nation on earth, China offers enormous opportunities for foreign companies, both as a manufacturing labor pool and increasingly, as a consumer market of seemingly endless potential. Continue reading…
By Andrea Tonini
In China, the Housing Fund is a particular kind of social insurance that stands out from the other types of welfare, both in the way it is regulated and administered. Established in 1999, the fund allows Chinese employees to save money towards purchasing their own house, thus representing one of the means to ensure social security and stability in the country. As with other welfare schemes, the key points of the Housing Fund system are legislated at the national level – Regulations on Management of Housing Provident Fund. However, the regional governments have far reaching autonomy in regulating the Housing Fund in their own jurisdictions, which includes setting the contribution rates. Continue reading…