Economy & Trade

China Extends Export Tax Rebate Scheme

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SHANGHAI – China’s General Administration of Customs, Ministry of Finance and State Administration of Taxation jointly announced that they will be expanding the scope of the national export tax rebate pilot program to cover eight ports starting from September 1. The purpose of this is to encourage exports through Shanghai’s Yangshan Free Trade Port, and is also hoped to incentivize exports amidst the country’s slowing foreign trade sector. Export tax rebates refer to the refunds of indirect taxes, including value-added, business and consumption taxes, paid by exporting businesses in the production and distribution of goods and services. Continue reading…

The Competitive Advantages of Manufacturing in Vietnam

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SHANGHAI — ­The state of manufacturing in Vietnam today so closely parallels that of China ten or more years ago—when low-wage, low-tech, low-added value manufacturing acted as a magnet for FDI into the country—that many foreign investors with existing China operations are actively inquiring about the payoffs of moving to Vietnam. As China moves further up the value chain in manufacturing, Vietnam has been well-poised to pick up the slack. As a result, Vietnam’s manufacturing sector grew at a compound annual growth rate of more than 9 percent between 2005 and 2010 and today accounts for 25 percent of GDP. Continue reading…

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’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…

Stalled China-Taiwan Trade Talks to be Resumed by End of Month

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Despite heated dispute over the cross-strait services treaty signed in June of last year, Taiwanese officials announced on Tuesday that talks with China on further tariff reductions within the bilateral economic cooperation framework agreement (ECFA) would be resumed by the end of the month.

The announcement, made by Taiwan’s Vice Economics Minister Cho Shih-chao following the Cross-strait Economic Cooperation Committee’s bi-annual meeting in Beijing, comes at a time when export-dependent Taiwan is growing increasingly uneasy at the prospect of China’s impending FTA with economic rival South Korea. Continue reading…

“Informatization” Spreads to SMEs in China

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By Emily Liu

Investing in the internet stands to bring immense economic and productivity gains for China, and accelerate its economic restructuring towards a consumer-driven, innovation-intensive economy, according to a Mckinsey Global Institute report. China’s internet economy has been on a strong upward trajectory, growing to 4.4 percent of GDP in 2013, on par with the ratio of most advanced economies.

The growth achieved thus far, however, is just the tip of the iceberg. The digital revolution has been largely consumer-driven, and Chinese businesses are only just beginning to open up to the potential that the Internet can bring. Currently, Chinese companies spend on average 2 percent of their revenue on IT, much lower than the 4 percent international average, though strong growth momentum is slated to bring this to 3 percent by 2015. Continue reading…

China Outbound: Cost Considerations Boost ASEAN and India’s Manufacturing Advantage

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Our Latest Round-Up of Business News Affecting China-Based Businesses Investing in Asia

In this edition of China Outbound, we highlight the impact of growing labor costs in China and consider the many solutions available to China-based manufacturers, including the benefits of a China +1 strategy, the implications of adapting your enterprise to meet the country’s evolving consumer market, and the competitive advantages found throughout ASEAN and India for manufacturing operations. Understanding the benefits of regional FTA agreements and grasping the region’s shifting cost structures is more important than ever as Asia’s emerging markets rapidly adapt to production and consumer demands. Continue reading…

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…

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