Manufacturing

Relax. South China Exports and Manufacturers are Doing Just Fine

Op/Ed Commentary: Chris Devonshire-Ellis

Feb. 1 – With some media spotlighting potential problems in South China – and one blog even going so far as to suggest smart Chinese businessmen are queuing up to attract orders, only to deliberately declare bankruptcy – it’s time to look again at the realities of the situation. The actual business environment in South China is something we are qualified to discuss with some knowledge – our firm, Dezan Shira & Associates, has four regional offices there (Hong Kong, Shenzhen, Guangzhou and Zhongshan) and has conducted business in the region for 20 years, while our Regional Partner Alberto Vettoretti is an adviser to the Shenzhen Government. Continue reading →

Posted in Business, FDI and Foreign Trade, Manufacturing, South China | Tagged China Exports, China Manufacturing, Chris Devonshire-Ellis, Dezan Shira & Associates, Guangzhou, Hong Kong, Shenzhen, South China, Zhongshan | 9 Comments

China Sets New Greenhouse Gas Emission Reduction Goals

By Vivian Ni

Jan. 18 – In its newest “12th Five-year Plan on Greenhouse Emission Control (guofa [2011] No. 41),” China has set its new goals of reducing carbon emissions in the next five years and called for pilot programs that aim to promote a low-carbon economy.

New goals
The newly released Plan aims to reduce China’s carbon intensity – the amount of carbon emitted per unit of GDP – by 17 percent by 2015, compared with 2010 levels. Energy consumption intensity by GDP will also be reduced by 16 percent during the same period. Continue reading →

Posted in Economy and Politics, Legal and Regulatory, Manufacturing, Regulatory Update, Science and Tech, Technology | Tagged Carbon Tax, China Carbon Dioxide Emission, China Carbon Emission, China Carbon Emission Right Exchange, China Carbon Trading, China Greenhouse Emission, China New Energy, China New-energy Vehicles, China Non-fossil Energy, EU Emission Trading System | Leave a comment

China Briefing Releases New Business Guide for the Greater Pearl River Delta

Dec. 14 – China Briefing has just released the fourth edition of its regional business guide “The Greater Pearl River Delta: Business Guide to South China” – offering business-minded individuals an up-to-date reference source for all of the key issues concerning setting up and successfully operating a business in South China.

By leveraging its proximity to the special administrative regions of Hong Kong and Macau, the Pearl River Delta (PRD) became the “Greater PRD” – China’s manufacturing heart and a region connected not only through financial ties but through a web of government initiatives to encourage its integration. This has included Closer Economic Partnership Arrangements and massive infrastructure developments such as the Hong Kong-Zhuhai-Macau Bridge.

Having risen to prominence around the pillar cities of Guangzhou and Shenzhen, the Greater PRD today is the home of high-technology in China. While Hong Kong is the regional management center for many high-technology firms, Shenzhen, Dongguan, and Guangzhou are being joined by Zhuhai and Huizhou as centers for the manufacturing of high-technology goods. Continue reading →

Posted in Business, Economy and Politics, FDI and Foreign Trade, Manufacturing, Markets, Shipping & Logistics, South China, Technology | Tagged China Briefing Regional Guides, Doing Business in China, Fujian, Fuzhou, Guangdong, Guangxi, Guangzhou, Haikou, Hainan, Hong Kong, Macau, Pearl River Delta, Shenzhen, South China | 3 Comments

Foreign Investors Should Be Aware of Labor Strike Tactics in China

By Vivian Ni

Nov. 29 – Increasing labor costs have become a major concern for foreign companies mulling whether or not to invest in China, but this may not be the only labor-related issue they should be watching out for. As the recent global economic downturn brings about falling factory orders, an abundance of young, well-educated and computer-savvy Chinese workers are leading one of the country’s strongest waves of labor unrest and labor disputes, which could cause real damage to companies’ regular day-to-day operations.

Intensified labor unrest
Over a one-week period in mid-November, more than 10,000 workers in Shenzhen and Dongguan – the two leading export hubs in South China’s Guangdong Province – went on strike. Continue reading →

Posted in Business, Manufacturing, Minimum Wages, South China | Tagged Adidas, China CPI, China Dongguan, China Guangdong, China Inflation, China Labor Activists, China Labor Bulletin, China Labor Relations, China Labor Unrest, China Labor Watch, China Minimum Wages, China Shenzhen, China Strikes, Global Economic Downturn, Gucci, Honda, Labor Costs, Nike, Shenzhen Minimum Wage, Toyota | 3 Comments

China Expands Tax Incentives to Promote Circular Economy

Nov. 28 – China will reduce or eliminate value-added tax (VAT) burdens on enterprises that recycle wasted resources during production, in a bid to further promote the country’s circular economy that makes industrial manufacturing more environmentally friendly.

The “Circular on Adjustments of VAT Treatment to Products and Services Output through Comprehensive Utilization of Resources (caishui [2011] No.115)” released by the State Administration of Taxation and Ministry of Finance on November 21, grants an increasing number of recycling companies the eligibility to enjoy favorable VAT treatment. Continue reading →

Posted in Finance, Tax and Accounting, Legal and Regulatory, Manufacturing, Regulatory Update | Tagged China Circular Economy, China Environmental Protection, China Recycling Industries, China Regulatory Update, China Tax, China Value Added Tax, China VAT Exemption, China VAT Refund upon Collection | 1 Comment

China’s PMI Drop Adds to Concerns over Global Recession

Nov. 25 – The HSBC flash purchasing managers’ index (PMI) – the preliminary readout of China’s industrial activity – fell sharply this month to 48 from October’s 51, reflecting signs of a domestic economic slowdown. The contraction of China’s manufacturing sector has further unnerved investors who are already fearful of an expanding global recession amid persistent signs of a struggling U.S. economy and the rampant debt crisis affecting the Eurozone.

PMI plummet
With a reading above 50 indicating expansion, and below 50 signalling contraction, November’s flash PMI reached a 32-month low, revealing a decline in both industrial output and new orders even as export orders continue to grow. Continue reading →

Posted in Economy and Politics, Manufacturing | Tagged Australian Dollar, China Economic Slowdown, China Economy, China Manufacturing Slowdown, China Reserve Requirement, China Small and Medium-sized Enterprises, Dow Jones Industrial Average, EU Debt Crisis, Global Economic Recession, Hang Seng Index, Nasdaq Composite, Shanghai Composite Index, Shenzhen Component Index, U.S. Economic Slowdown | Leave a comment

How Much Does it Cost to Set Up a WFOE in China?

“I have spoken to many lawyers and they are all quoting something different”

Op-Ed Commentary: Chris Devonshire-Ellis

Nov. 15 – Our firm, Dezan Shira & Associates, has been involved with legal establishment and tax work in China for nearly 20 years. In fact, the practice’s 20th birthday is November next year, so we’ll be having some parties to celebrate. Over the years, we have constantly been engaged in setting up wholly foreign owned enterprises (WFOEs) for our clients and, during that time, we’ve seen considerable changes to how WFOEs can operate, and what they can do. We’ve also written about WFOEs many times in dealing with the updates, and continue to do so – our popular guide “Setting Up Wholly Foreign Owned Enterprises in China” is now in its third edition.

Yet one question that always crops up is – “How much does it cost to set up a WFOE?” – often without any reference to what the WFOE scope of business is expected to be. It’s an impossible question to answer at such a basic level, as WFOEs can be extremely diverse. Continue reading →

Posted in Business, FDI and Foreign Trade, Legal and Regulatory, Manufacturing | Tagged China Capitilization, China Corporate Establishment, China FDI, China FICE, China Financial Planning, China Legal, China Tax, China VAT, China VAT Payer, China WFOEs | Leave a comment

The United States: A New China Alternative?

By Vivian Ni

Nov. 3 – China is gradually shifting away from its position as the world’s default production base for manufacturers. In this country, factor costs are surging and government incentives for foreign investors are diminishing, forcing more and more companies to seek new and attractive destinations where they can relocate their factories. While emerging Asian countries boasting low overhead costs – such as India, Vietnam, Thailand and Indonesia – are undoubtedly attracting mounting attention, the United States is also growing back into an increasingly reasonable option for manufacturing, according to an intensive study conducted by the U.S.-based advisory firm The Boston Consulting Group (BCG).

The BCG report, which suggests manufacturers take “a hard, fresh look” at the United States, pointed out that China’s manufacturing cost advantage over the United States is shrinking fast due to Chinese labor becoming more expensive and local currency gaining value while productivity is not catching up as rapidly. When making their investment decisions, investors should take total costs – rather than only labor costs – into consideration and choose manufacturing locations based on product-by-product analyses. Continue reading →