Industries

Bitcoin Market Unfazed by China Ban

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By Melissa Cyrill

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Bitcoin trading recently bounced back to US$7,000, recovering after a historic dip in value following Beijing’s crackdown on cryptocurrencies in September. Bitcoin is both a digital currency and payment system that is managed by decentralized computer networks.

The ten-fold increase in bitcoin’s value over last year reflects a level of market optimism that is puzzling for independent observers. This has not gone unnoticed by the country’s regulators, which recently banned all initial coin offerings (ICOs), or fund raising activities, for new cryptocurrency ventures.

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China Bans Imports of Foreign Waste to Combat Pollution

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By Alexander Chipman Koty

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China will ban the import of 24 types of waste by the end of the year as part of a campaign against “foreign garbage”.

The ban was announced by five government agencies in July and will go into effect on December 31, 2017. It affects several classes of waste including waste plastic, glass, slag, waste wool, ash, cotton, yarn, and unsorted paper.

The ban has already affected both overseas exporters of waste and China-based purchasers of waste, as well as companies who purchase raw materials made from reprocessed waste.

Many developed countries depend on Chinese demand to handle their excess waste, which Chinese recyclers purchase, sort, process, and subsequently re-sell. As a result of the ban, prices of materials like paper and plastic have skyrocketed, driving up costs for businesses reliant on cheap recycled goods.

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Coworking Spaces in China: No Longer Just for Tech Startups

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By Zolzaya Erdenebileg

While the sharing economy has taken off globally, it has gripped China in particular. This development can be seen across a multitude of industries and products, including bikes, taxis, hospitality, and even umbrellas.

Now, coworking spaces are in the spotlight. These shareable work and office spaces are rentable on a ‘desk’ rate instead of square meters like traditional office spaces, and they are popping up all around major cities in China.

Usually, coworking spaces conjure up images of tech startups in the incubation stage and millennial entrepreneurs on the go. However, coworking is developing beyond the stereotypes and starting to service more sectors of the economy that had previously been limited to traditional office spaces.

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China Releases New Medical Device Classification Catalogue

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By Alexander Chipman Koty

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The China Food and Drug Administration (CFDA) recently announced revisions to the Medical Device Classification Catalogue, marking its first update in 15 years. The new catalogue, which will come into effect on August 1, 2018, is more comprehensive than the original 2002 version and includes new measures to address changes in technology.

The catalogue is one of the most important documents for regulating and classifying China’s medical device industry, which was worth US$53.62 billion in 2016. Medical device companies must undergo different registration procedures depending on the classification listed in the catalogue, while those not represented in the catalogue must face an expert panel for classification.

The revised catalogue lowers the risk level of 40 types of devices, reduces the number of device categories from 43 to 22, reclassifies several devices, and makes the classification system more transparent by offering significantly more details and examples.

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Investment Opportunities in China Open Up Following Regulatory Changes

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By Alexander Chipman Koty

Recent reforms to China’s foreign investment regime have lifted ownership restrictions and offered new preferential policies in a number of industries.

The updated Catalogue of Industries for Guiding Foreign Investment (Catalogue) and Free Trade Zone (FTZ) Negative List, both released in June 2017, remove a variety of restrictions on foreign investment, offering new opportunities for businesses previously handcuffed from doing business in China.

New opportunities arise in different contexts. Domestic demands, such as environmental and energy needs, have led the government to remove restrictions on certain industries, while policies to encourage the development of strategic sectors have driven other reforms.

This article outlines some of the intriguing new industry opportunities emerging because of the latest regulatory changes.

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Multi-Level Marketing: China Isn’t Buying It

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Mlm-softwareBy Stephen O’Regan
Senior Associate, International Business Advisory
Dezan Shira & Associates, Guangzhou

The Chinese government has launched a three-month campaign to crack down on pyramid schemes. The campaign follows a series of frauds that recently led to four deaths, and associated protests that erupted in downtown Beijing this summer.

The campaign, which will last until November 15, 2017, aims to eliminate gangs and scammers that lure and mislead job seekers into participating in pyramid schemes. The government’s announcement of the crackdown sent stocks of Multi-Level Marketing (MLM) companies – such as Herbalife and Nu Skin – tumbling, due to fears that the campaign could disrupt their operations.

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Eco-Friendly Investment Opportunities in China: The Rise of Green Bonds

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By Maurizio Mazzoni

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China is embracing green bonds as part of its efforts to combat the country’s notorious pollution problems.

China Securities Regulatory Commission (CSRC), the main regulator of the securities industry in China, released a new set of guidelines to support the issuance of green bonds on March 2, 2017.

Promoting green bonds could be considered the latest in the government’s efforts aimed at promoting environmental protection and to reduce the effects of pollution as a result of its rapid industrial growth over the past decades.

China has the world’s largest green bond market, with more than RMB 200 billion (US$ 30.3 billion) worth of green bonds issued in 2016 alone – almost 40 percent of green bonds issued globally that year.

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China’s Sharing Economy

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By Jake Liddle

China is fast embracing the sharing economy, having come up with its own innovative resource sharing platforms to rival foreign counterparts such as Uber and Airbnb.

According to a report published by China’s State Information Center, the sharing economy is expected to maintain a 40 percent annual growth rate over the next few years, and is officially forecast to account for over 10 percent of the country’s GDP by the year 2020, and 20 percent by 2025. The sharing economy in China is expected to generate revenues of up to RMB 5.7 trillion (around US$915 billion) in 2017.

Many people see the sharing economy as a logical and positive development because it turns excess supply into revenue, and fits into the state’s larger initiatives to transform the country from an economy driven by manufacturing to one driven by services, by means of nurturing innovation.

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