Manufacturing

New Issue of Asia Briefing: An Introduction to Development Zones Across Asia

May 10 – The new issue of Asia Briefing Magazine, titled An Introduction to Development Zones Across Asia, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the months of May and June.

The use of development zones in their different guises has been an effective model essentially brought to prominence by China over the past 25 years to help both foreign investors and domestic companies meet in a relationship that provides tax advantages to both. Development zones typically permit the foreign investor to bring component parts into a country for assembly without having to pay import duties. Investors may then add in locally-sourced components, assemble the final product, and warehouse it all duty free before then having the option of exporting the finished product (collecting some VAT rebates on the locally sourced portion) or entering the domestic market with a product assembled at local labor costs. Continue reading →

Posted in Business, Central China, East China, FDI and Foreign Trade, Featured, Manufacturing, Northeast China, Shipping & Logistics, South China, West China | Leave a comment

Vietnam vs. China Part II: Corporate Income Tax

This is the second article in a series dedicated to comparing the costs and ease of doing business in Vietnam and China from the standpoint of a foreign investor.

By Rosario Di Maggio

Jan. 21 – Many foreign investors operating in China today are looking at Vietnam as a sort of additional “province” or alternative hub to integrate into their current Chinese or Asian supply chain. This is particularly true in sectors where China and Vietnam often compete, such as leather goods, shoes, textiles, furniture and light electronics. This list is set to expand as Vietnam is upgrading its industrial base to high-end and high-tech manufacturing investments. Small-sized companies, however, are often discouraged by the idea that expanding into another country would mean massively increasing overheads or that the returns would not be worthwhile when considering the initial investment.

After comparing the costs of registering and maintaining representative offices in the first article, this piece now looks at the current regulations on corporate income tax as they apply to foreign investors to check whether Vietnam offers any additional advantages over its neighboring country to the north. Continue reading →

Posted in Business, FDI and Foreign Trade, Legal and Regulatory, Manufacturing | Leave a comment

Shenzhen GDP Growth Rate Lowest Since 1979

Jan. 17 – The Shenzhen government has issued a 9 percent GDP growth rate target for 2013, down from the 10 percent achieved last year and against a background of the city mayor, Xu Qin, stating that “double digit growth rates are in the past.” The 2012 growth was the lowest since the city became a special economic zone in 1979. Between 1980 and 2006, Shenzhen achieved annual growth rates averaging 27 percent. Continue reading →

Posted in Business, Manufacturing, South China | Leave a comment

Letters from America: Vietnam as a Manufacturing Destination for U.S. Companies

Manufacturers in China are adding manufacturing capacity in Hanoi and Ho Chi Minh City for export back to China and beyond

This is Part X of our ongoing Letters from America to Asia Series, featuring opinions and observations on America’s trade relations with China and emerging Asia from Chris Devonshire-Ellis.

Dec. 3 – Over the past few months as I’ve been speaking at events across the United States, many questions have been raised about all sorts of subjects – from the differences in tax rates and legal structures within individual countries, such as China or India, to the primary differences between entire countries. Concerning the latter, the country-to-country comparison that gets raised most often is between China and Vietnam.

It’s a timely comparison to examine, not least because Vietnam is one of Asia’s “Tiger Economies” and due to the fact that, although it has suffered over the past three years like everyone else in the wake of the Global Financial Crisis, the country has proven remarkably resilient. Continue reading →

Posted in FDI and Foreign Trade, Letters to China from America Series, Manufacturing | Tagged Chris Devonshire-Ellis | 2 Comments

CEPA Rules of Origin for Hong Kong-Mainland Trade in Goods

Apr. 24 – In order to enjoy zero tariffs under the Closer Economic Partnership Agreement (CEPA), goods exported from Hong Kong to Mainland China must fulfill the rules of origin and show evidence of being “made in Hong Kong.”

The execution of the rules of origin is detailed in the “Customs Provisions of the People’s Republic of China on Executing the Rules of Origin for Trade in Goods under the Mainland/Hong Kong Closer Economic Partnership Arrangement (haiguanshuling No.106, hereinafter refers as ‘Provisions’),” which was promulgated in December 2003 and came in effect from January 1, 2004. Continue reading →

Posted in Business, FDI and Foreign Trade, Finance, Tax and Accounting, Legal and Regulatory, Manufacturing, Shipping & Logistics | Tagged CEPA, Closer Economic Partnership Agreement, Hong Kong, Made in Hong Kong | Leave a comment

Suzhou’s Development Zones – An Introduction to Xiangcheng District

By Michael Keller

Apr. 24 – An opening and project signing ceremony was held at Suzhou’s Xiangcheng District on January 11 in which 16 projects were allocated to different firms – 8 domestic and 8 foreign – with total investment amounting to RMB7.7 billion.

Twelve of these projects are in the categories of either advanced manufacturing (precision machinery, electronic equipment components) or emerging sectors (new materials, environmental protection). Among the firms included were PolyOne, Evans, Digital Innovation Display, and Doony. Continue reading →

Posted in Business, FDI and Foreign Trade, Manufacturing | Tagged Development Zones, Suzhou, Suzhou Industrial Park, Suzhou New District, Wuzhong, Xiangcheng District | Leave a comment

Why China’s Consumer Development is Assured

Lewisian turning point impacts upon China demographics with India close behind, meaning sales opportunities in China exist as never before

Op-Ed Commentary: Chris Devonshire-Ellis

Mar. 27 – China is about to become a great market for international businesses to sell to. That’s quite a statement, and I can recall similar proclamations being bandied about 20 years ago during the early days of Deng Xiaoping’s reforms, and then 10 years later when China eventually joined the WTO. Yet, as many a wise man noted – unless you were in the chopstick business, there weren’t actually a whole bunch of affluent Chinese looking to buy goods and services. That is now changing. But why? Continue reading →

Posted in Business, Economy and Politics, FDI and Foreign Trade, Manufacturing, Markets, Retail | Tagged Arthur Lewis, China Consumers, China Consumption, China Demographics, China Market, India Demographics, Lewisian Turning Point | 4 Comments

China’s Industry Clusters

Where to source Chinese expertise and academic research from within city clusters around China

Feb. 23 – China originally began clustering its national industries under directives from Chairman Mao Zedong in the early 1950s. This occurred during the Cold War era when it was feared that either Soviet or American attacks on cities such as Beijing and Shanghai could wipe out much of the nation’s industry, centered at that time in these cities. Strategic industries were thus spread across the country to protect against attack and invasion.

The legacy of this today has been that different industrial clusters have developed in different areas of China. In order to develop an effective supply chain, source universities with the right set of talents, and recruit the right type of workers, attention needs to be paid to the regional differences around China as concerns available expertise. Continue reading →