Economy & Trade

Alternative Investments: China’s Rich Looking to Art, Wine and Jewelry

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By Emily Liu

As the Chinese economy powers ahead, it is catapulting many into the ranks of the wealthy and pulling large swaths of the population into its burgeoning middle class. According to consultancy group Knight Frank’s 2014 Wealth Report, there are currently 7,905 ultra-high net worth individuals (UHNWI) in China—the third largest such population in any country— and this number is set to grow by 80 percent in the next decade.

Not surprisingly, these wealthy individuals, who have at least US$30 million in assets, are constantly in search of avenues to spend and invest their money. In Asia, 39 percent of UHNWIs expect to increase their spending on luxury goods in 2014. The Chinese appetite for luxury has been well documented, but as Chinese consumers mature and growth in the luxury market cools, the state of luxury consumption and investment is rapidly evolving. Continue reading…

McDonald’s, KFC Scandal Exposes Limits of Foreign Reputation for Food Safety in China

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Op-Ed Commentary: Matthew J. Zito

What do milk, meat and dog treats have in common?—For one, each has been the subject of a recent food safety scandal in China. In the most recent incident, a meat and poultry supplier to McDonald’s and Yum Brands (KFC, Taco Bell, Pizza Hut) outlets in China was revealed to be using expired meat in the production of burgers and chicken products.

The seemingly unending string of such incidents, in addition to giving one a certain queasiness of the stomach, also exposes the complex workings of brand reputation in China and the economic and political forces bearing upon it. One thing is clear: gone are the days when foreign brands could rely on a reputation for quality merely by virtue of their foreignness. Continue reading…

Finding Your “Comfort Zone”: A Guide to Industrial Parks in the Yangtze River Delta (Part 2)

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By Rainy Yao

SHANGHAI — Over its four years of development, the Yangtze River Delta (YRD) Economic Region has taken a leading role in China’s economy. In 2013, the region’s GDP was close to RMB10 trillion, accounting for 17.2 percent of national GDP. Attracted by potential revenues and preferential policies, more and more foreign investors have chosen to establish their businesses in the YRD, especially in its many development zones. But given that these zones vary in terms of the tax policies and investment environments they can provide, it can be hard to tell which is right for your business. In this second part of our two-part series, we continue with our comparison of five major types of development zones in the YRD to help foreign investors find the best fit for their specific industry. Continue reading…

Shanghai Chosen as Site of BRICS Development Bank

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SHANGHAI — Things came down to the wire in Brazil this week—not in the World Cup final but for the details of a development bank to be jointly funded by BRICS (Brazil, Russia, India, China and South Africa). In the end it was confirmed that the bank, aptly named the New Development Bank (NDB), would be headquartered in Shanghai and its initial presidency held by an Indian national. The move is widely expected to bolster Shanghai’s bid to become an international financial center by 2020.

The NDB, designed to finance infrastructure projects in BRICS and other emerging nations, will have an initial subscribed capital of US$50 billion, contributed in equal shares of US$10 billion by its 5 member states. Voting rights will be split between the five founding members and decisions made via a two-thirds majority. Although membership will be open to future additions, it is stipulated that BRICS must retain a controlling stake of at least 55 percent. Continue reading…

What China’s Latest Anti-Corruption Campaign Means for Foreign Investment

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SHANGHAI – It has become common practice in China that every major leadership transition be swiftly followed by an anti-corruption campaign, and the last leadership change in March 2013 has certainly proven consistent. President Xi Jinping’s campaign to crack down on “both tigers and flies”— high-ranking officials and lower-level bureaucrats—has adopted a forceful approach to the issue and grown into one of the broadest anti-corruption campaigns in recent memory. Continue reading…

Finding Your “Comfort Zone”: A Guide to Industrial Parks in the Yangtze River Delta (Part 1)

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By Rainy Yao

SHANGHAI — The Yangtze River Delta (YRD) Economic Region, comprised of 16 cities (i.e., Shanghai, Nanjing, Suzhou, Wuxi, Changzhou, Yangzhou, Zhenjiang, Nantong, Taizhou, Hangzhou, Ningbo, Huzhou, Jiaxing, Shaoxing, Zhoushan and Taizhou) in Zhejiang and Jiangsu provinces, is the largest megaregion in the world. In 2010, the State Council released the “Yangtze River Delta Regional Plan,” promoting the YRD as a key international gateway for the Asia-Pacific region, as well as an important global center for the modern service and manufacturing industries. The Plan establishes a target per capita GDP in the region of RMB110,000 by 2020. Continue reading…

Jing-Jin-Ji: The Biggest City in China You’ve Probably Never Heard Of

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By Rainy Yao and Emily Liu

BEIJING — On June 23, the General Administration of Customs (GAC) released an announcement on integrating the customs procedures of Beijing, Tianjin, and Hebei (GAC Announcement [2014] No. 45), marking an important milestone in the integration of the three jurisdictions into a single “megaregion” in China’s northeast. Under the integrated customs system, enterprises established in any of the three jurisdictions can choose between importing/exporting goods via the Customs of their original business registration or alternatively, the Customs through which the goods are actually shipped. The integrated system came into effect in Beijing and Tianjin on July 1, 2014 and will begin in Shijiazhuang, Hebei on October 1, 2014.

This is just the latest in a series of measures announced by the National Development and Reform Commission (NDRC) towards the realization of the Beijing-Tianjin-Hebei megaregion, covering 216,000 square kilometers and home to more than 100 million people. Ultimately, the Chinese leadership has plans to create 10 megaregions around the country, including inland areas such as Shandong and Liaoning. Continue reading…

Hong Kong and South Korea Sign Double Tax Agreement

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HONG KONG – Professor K. C. Chan, Hong Kong’s Secretary for Financial Services and the Treasury, and Cho Yong-chun, the South Korean Consul-General in Hong Kong, signed a comprehensive double taxation agreement (CDTA) on behalf of their respective jurisdictions on July 8th. Chan described the DTA as clearly delineating taxation rights between the two jurisdictions and motivated by a desire to clarify potential tax liabilities incurred by investors’ cross-border economic activities. The agreement is expected to provide added incentives for South Korean companies to do business or invest in Hong Kong, and vice versa. Continue reading…

Asia Briefing Bookstore Catalogue 2013