Establishing a Data Center in China

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By Gidon Gautel

China’s data center market is poised to see increasing activity following the implementation of new regulations. To comply with China’s controversial new Cybersecurity Law, US tech giant Apple recently announced plans to build a data center in Guizhou designed to store cloud data for Chinese users as part of a US$1 billion regional investment. Apple made the move due to data localization requirements in the law requiring critical information infrastructure (CII) providers to store personal information within mainland China.

Many more firms without China-based data facilities will likely follow Apple’s lead in order to comply with the Cybersecurity Law, which stipulates that even businesses not providing CII services are encouraged to host servers in China. Others, however, are relocating for practical business reasons. Hosting servers within China can help avoid network bottlenecks and provide better and more reliable service within the country, regardless of the industry.

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How to Prevent Corruption in QC Inspections in China

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By John Niggl, Client Manager for InTouch Manufacturing Services

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This is Part 2 of a two-part article about quality control inspections in China. In Part 1, we discussed how corruption typically appears in the quality control process, and some specific problems it may cause. 

Confronting the possibility of integrity risks during your product’s quality control (QC) inspection process in China can be a challenge, especially when doing so from halfway around the world. But there are some actionable steps you and your QC partner can take now that will help you to minimize your risk.

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New VAT Rates in China Simplify Tax Administration

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By Jake Liddle

China has simplified its value-added tax (VAT) regime as part of its efforts to cut US$55.2 billion in taxes. As of July 1, 2017, China’s State Administration of Taxation (SAT) simplified its four tiered VAT system to three tiers. Previously, four brackets of 17 percent, 13 percent, 11 percent, and six percent existed. Under the new system, the 13 percent bracket has been removed. Continue reading…

China Regulatory Brief: Personal Access to VPNs to be Blocked, Tax Approval Items Streamlined

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Telecoms service providers told to block individuals’ access to VPNs

China’s central government has given directives to the country’s three largest telecommunications providers, namely China Telecom, China Unicom, and China Mobile, to block individuals’ access to virtual private networks (VPNs) by February 1, 2018.

Previously, China’s ‘Great Firewall’, the government’s tool to enforce ‘internet sovereignty’, has hindered access to VPNs, but did not make access impossible. While there have been government drives in many forms to crack down on VPN usage and further censorship in the past, few have come to any real result.

However, the latest directive has been a serious concern for internet users. On June 22, VPN service provider Green announced that it would stop operations on July 1, while many other services have disappeared from app stores all together.

Businesses depending on VPNs for operation will also be affected, but may be able to lease lines to access international internet, meaning that the move primarily affects individuals. So far, government authorities have not released any official statements on the matter.

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Asia Investment Brief: Masala Bonds in India, Estonia as an OBOR Port, and Renewables in Vietnam

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Our weekly round up of other news affecting foreign investors throughout Asia:

ASEAN BRIEFING

IP Protection in the Philippines’ Automotive Industry

In this article, South-East Asia IPR SME Helpdesk discusses the strategies foreign companies should adopt to enforce their intellectual property rights in the Philippines’ automotive industry.

INDIA BRIEFING

New RBI Guidelines on Issuance of Masala Bonds

In a bid to strengthen India’s regulations governing external commercial borrowings, the Reserve Bank of India (RBI) recently came up with new guidelines on the issuance of ‘masala bonds’. In this article, we discuss what are masala bonds and the new requirements for its issuance.

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Sales, Import, and Manufacture of Alcoholic Beverages in China

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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.

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China Work Permits: Are You an A, B, or C Tier Talent?

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By Dezan Shira & Associates
Editor: Gidon Gautel

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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.

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What Does Corruption in Your China QC Inspection Process Look Like?

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By John Niggl, Client Manager for InTouch Manufacturing Services

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This is Part 1 of a two-part article about quality control inspections in China. In Part 2, we discuss steps to prevent corruption in your quality control inspection process.

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.

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Dezan Shira & Associates

Meet the firm behind our content. Dezan Shira & Associates have been servicing foreign investors in China, India and the ASEAN region since 1992. Click here to visit their professional services website and discover how they can help your business succeed in Asia.

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