By Alexander Chipman Koty
China has announced that it will eliminate ownership limits on automotive enterprises by 2023, allowing foreign investors to establish wholly foreign-owned enterprises (WFOEs) in the industry.
According to the National Development and Reform Commission, ownership limits on new energy vehicles (NEVs) will be scrapped this year, commercial vehicles by 2020, and passenger vehicles by 2022. By 2023, all other ownership limits on autos will be eliminated.
China will also remove ownership limits in the shipbuilding and aircraft industries later this year.
The latest issue of China Briefing Magazine, titled “Cross Border e-Commerce in China“, is out now and currently available to subscribers as a complimentary download from the Asia Briefing Publication Store.
In this issue:
- China’s cross border e-commerce Market
- Cross border e-commerce in China: Regulatory Updates and Trends
- Business Models for China’s cross border e-commerce Market
- Managing Intellectual Property in e-Commerce Markets
By Dezan Shira & Associates
Editor: Alexander Chipman Koty
A series of highly publicized scandals at Chinese preschools rocked the country in recent years, which increased both government and parental scrutiny on private education. Observers were shocked that such maltreatment could occur at well-regarded private preschools in wealthy neighborhoods, including at RYB Education – China’s largest private preschool chain, which is listed on the New York Stock Exchange.
Rather than discouraging participation in private education, however, the scandals underscore the need for more reliable, high-quality schools. And China’s education industry – already enormous – is poised to grow even larger. With the rise of China’s lower tier and inland cities, and a government interested in equipping the workforce for a changing economy, demand for education continues to grow.
By Dezan Shira & Associates
Editor: Qian Zhou
Due to its size and growth potential, China’s healthcare market is one of the most attractive in the world for foreign investors. China surpassed Japan to become the world’s second-largest healthcare market in 2013 and continues to develop at double-digit rates. Indeed, it’s the fastest-growing healthcare market of all large emerging economies.
Recently in 2016, China’s healthcare market reached RMB 5,670.3 billion (US$853.7 billion), an increase of 12 percent in local currency when compared with that of 2015. Among others, the medical device market grew 20.1 percent to RMB 370 billion (US$56 billion) in 2016, while pharmaceutical and health products sales reached RMB 1,839 billion (US$277 billion), up 10.4 percent year-on-year.
By Nayoung Mathiesen
Foreign investors that would like to understand the senior care sector in China may find a comparison to the hospitality sector helpful.
The hospitality sector boomed over the past 30 years as the Chinese economy grew and visitors poured in. Chinese real estate players rushed into the sector, and they absolutely wanted to work with well-known global luxury brands to develop the sector. Domestic investors were totally dependent on their Western partners’ management and operational know-how – there were no local culture or competence in the sector.
As a result, global hotel brands had been given relative autonomy in how they operate their branded hotels in China. Global rating systems and training programs obligated Chinese owners to stick to their agreements.
How does this compare to the senior care sector?
By Mark Preen
Traditional financial centers such as London and New York are witnessing increased competition from Chinese cities like Shanghai and Shenzhen with the rise of FinTech. While China’s traditional financial sector is relatively undeveloped and restricted from foreign participation, the country’s Internet Finance, or Financial Technology (FinTech), industry has developed rapidly in recent years with an outburst of innovations and startups.
Now, China is in many respects a leader in this emerging industry. By the end of 2015, the country had 500 million FinTech users, and its overall market size exceeded RMB 12 trillion (US$1.87 trillion). Four Chinese companies, namely Tencent, Alibaba, Baidu, and JD, were also amongst the top 10 public internet companies in the world. In 2016, China had eight of the world’s 27 FinTech “unicorns”- companies that investors value at more than US$1 billion.
By any measure, China’s FinTech industry is rapidly expanding, presenting opportunities for both FinTech companies and complementary firms. However, like China’s traditional financial sector, foreign participation in the industry can be challenging.
The latest issue of China Briefing Magazine, titled “China Industries Outlook 2018“, is out now and currently available to subscribers as a complimentary download from the Asia Briefing Publication Store.
In this issue:
- Foreign Investment Performance
- Healthcare Reforms Underscore Market Growth
- How to Invest in China’s Growing Education Subsectors
- Pollution Controls Create Green Industry Opportunities
By Ana Cicenia
Recently, the city of Wuhan announced that they will be opening a police station run solely by artificial intelligence (AI) – no employees need apply. Although the station would be limited to vehicle and driver related administrative work, the government anticipates increasing AI use in many other areas of governance.
Automated government offices like these are just one way that new technologies are being integrated into the Chinese society. It also represents a larger trend in the Chinese economy: the growth of the digital economy. In 2016, China’s digital economy accounted for 30.3 percent of GDP, an 18.9 percent rise from 2015, according to a China Academy of Information and Communications Technology (CAICT) white paper.
The digital economy is part of the government’s vision of an economy driven by innovation – a key part of their goal of making domestic firms more competitive globally. In recent years, the Chinese government has pushed several national economic initiatives aimed at the development of the digital economy. These include the 13th Five Year Plan (March 2015), Made in China 2025 (May 2016), the Robotics Industry Development Plan (April 2016), and the Three-year Guidance for Internet Plus Artificial Intelligence Plan (May 2016).