Author Archives: China Briefing

Haikou: An Emerging Industrial City

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By Rainy Yao

Source: leadtochina.comOften referred to as the “Coconut City,” Haikou is a prefecture-level city situated on the northern coast of Hainan known for its crystal waters and coconut trees. Haikou literally means “sea mouth”—i.e. the place where rivers and streams meet before joining the sea and accordingly was viewed by its ancient inhabitants as being blessed by Heaven. Rainy Yao from Dezan Shira & Associates takes a look at how this “paradise” is fast becoming the economic and industrial center of Hainan Island.

Economic Overview

Since the Song Dynasty, Haikou has been a trading port and main courier station to the countries to the southeast of China. Following the establishment of the Hainan Special Economic Zone in 1988, Haikou began vigorously promoting itself as China’s Outstanding Tourism City, with an advanced service sector. In 2005, the city established “Haikou Industrial Day” and rolled out various preferential policies to support the development of industry. Continue reading…

China Regulatory Brief: Paperless Clearance System Implemented & SME Tax Registration Streamlined

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China Cancels Three Administrative Approvals for Small and Micro-sized Enterprises

China’s State Council recently released the “Circular on Cancellations and Adjustments for Several Administration Approvals (Guo Fa [2014] No.27)”, which took effect on July 22, 2014. The Circular abolishes the need to apply for administrative approvals pertaining to three preferential tax policies designated for small and micro-sized enterprises, including:

  • The approval for encouraged foreign-invested projects,
  • The examination and approval for small and low-profit enterprises to enjoy the preferential corporate income tax (CIT); and
  • The approval for eligible enterprises engaged in service and foreign trade industries and which hire laid-off workers to enjoy tax reduction or exemption.

These preferential policies will automatically apply to qualified enterprises. Continue reading…

Law Abiding Foreign Executives Can Rest Easy In China

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Directors and officers liability insurance is valid in China to cover legal costs and other expenses while under investigation

Op-Ed Commentary: Chris Devonshire-Ellis

In the wake of the prison sentence handed down to ChinaWhys Founder Peter Humphrey, much commentary has been alluded to that suggests that foreign executives in China are now “nervous” about working in the country. These reports are erroneous.

Foreign direct investment into China is booming, and increasing numbers of executives want to place a “China” position on their international CV. So how high are the risks for foreign executives in China? The answer is, for those who abide by the law, very low. Continue reading…

China’s Domestic Consumer Market in 2020

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By Matthew Zito and Eunice Ku, Dezan Shira & Associates

SHANGHAI – Domestic consumption, particularly among the middle class, is expected to be a major factor in the US$4 trillion of growth forecasted for the Chinese economy over the next decade. Rising wage costs in China may be prompting companies to relocate their manufacturing operations elsewhere, but few are leaving the country entirely—opportunities for growth in the domestic consumer market are simply too lucrative to pass up. Below, we forecast what China’s consumer market will look like in 2020, by which point China will have surpassed the U.S. as the world’s biggest economy, with an estimated gross domestic product of RMB 100 trillion (US$16 trillion). Long before then, China is predicted to become the world’s largest retail market by 2016, at a value of around US$4.2 trillion. Continue reading…

Chengdu Joins Shanghai & Pingtan in Adopting a Negative List for Foreign Investment

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CHENGDU—Located in southwest Sichuan, Chengdu is China’s fifth most populous city with a total population of about 11 million. It is also one of the most important economic, transportation and communication hubs in western China. For decades Chengdu has made great efforts to attract foreign investment, offering various incentives such as preferential tax policies and financial support for foreign investors. Recently, three pilot areas of Chengdu—the Chengdu High-tech Industrial Development Zone, Longquanyi District and Tianfu New District—released the details of their respective negative lists governing foreign investment into the city. Continue reading…

Adapting to a New Climate of Antitrust Investigations in China

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SHANGHAI – Antitrust investigators from China’s State Administration for Industry and Commerce have conducted two raids in as many weeks on Microsoft’s offices across China in connection to software compatibility, bundling and file verification in Windows and Office. A recent spate of such investigations, especially targeting foreign technology firms and automakers, has set off concerns of a new climate of protectionism operative in the country. In this article, we survey the PRC legal framework connected with these investigations and review response strategies adopted by foreign firms under investigation. Continue reading…

China Regulatory Brief: New Shanghai FTZ Clearance System & Negative Lists for Chengdu’s Pilot Areas

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Shanghai FTZ Implements On-Site Examination and Clearance System

On August 5, the Shanghai Entry-Exit Inspection and Quarantine Bureau (Shanghai CIQ) announced that an “on-site examination and clearance system” will be launched in the Shanghai Free Trade Zone (FTZ). To be implemented at eight quarantine inspection centers such as the Airport Comprehensive Bonded Zone, Yangshan Bonded Port Zone and Waigaoqiao Bonded Zone, the system will cover close to 10 kinds of imported goods including clothes, toys, jewelry and small appliances. An online platform enabling the public to view related inspection information will be established soon, said an official of the Shanghai CIQ. Continue reading…

Guangdong Adjusts Base Figure for Social Insurance Contributions

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GUANGDONG— Several major cities in Guangdong, including Shenzhen, Dongguan and Guangzhou, recently released details on their average wages in 2013, which are used as the base figures to calculate the minimum and maximum contributions to social insurance and housing funds for employees. The base figure for social security contributions is usually capped at 300 percent of the average salary in the jurisdiction where the employee pays social security. Therefore, lower average salaries (or lower base figures) will lead to lower labor costs for employers. Continue reading…

Asia Briefing Bookstore Catalogue 2013