By Eunice Ku
Sept. 11 – A wholly foreign-owned enterprise (WFOE) is a company established in China according to Chinese laws and wholly owned by one or more foreign investors. A WFOE is a limited liability company, meaning that the liability of the shareholders is limited to the assets they brought to the business. Unlike the simpler representative office setup which is subject to a number of limitations, a WFOE can make profits and issue local invoices in RMB to its customers, which is crucial as invoices are the basis for obtaining tax deductions in China. Compared to a joint venture, a WFOE has greater freedom and independence, and can better protect its intellectual properties. It can also employ local staff directly, without obligation to employ services from employment agencies. Although there is no legal restriction on the number of foreigners a WFOE can employ, in practice the number of foreign employees does depend on the amount of registered capital (discussed below) that the respective company injects. Continue reading
Aug. 14 – China’s National Development and Reform Commission (NDRC) announced the punishments for six milk powder manufacturing companies that were charged with price monopoly practices last week. The six manufacturers are expected to forfeit a total of roughly RMB670 million (US$110 million) in fines as part of their punishment. The six companies are:
- Mead Johnson;
- FrieslandCampina; and
- Fonterra (which is also the lead company involved in the recent milk product recall case) Continue reading
What are the differences between “general invoices” and “special VAT invoices” in China?
Aug. 13 – In China, invoices (or “fapiao” in Chinese) are more than just ordinary receipts. Contrary to other countries, where invoices are usually used simply to record a transaction, in China they are also the way in which the government monitors the tax paid on any transaction. Fapiao are printed, distributed, and administrated by tax authorities, and taxpayers are required to purchase the invoices they need from the tax authorities according to their business scope.
Fapiao can mainly be sorted into two categories – general invoices and special value-added tax (VAT) invoices. Although these terms are often used interchangeably, there are notable differences between the two. Continue reading
Jul. 10 – China’s Ministry of Commerce (MOFCOM) recently held a special press conference on the current situation of the country’s retail and wholesale industries.
MOFCOM’s press spokesman, Yao Jian, representatives from the Department of Circulation Industry Development Wang Desheng and Wang Xuanqing, head of the China Chain Store & Franchise Association (CCSFA) Guo Geping and deputy president of the China Federation of Logistics & Purchasing Cai Jin were in attendance and spoke at the press conference. Continue reading
Jul. 3 – The new issue of China Briefing Magazine, titled E-Commerce in China, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the months of July and August.
China’s online market is highly developed and has become too big for international businesses to ignore. Given the growing importance and huge potential of the country’s online retail industry, foreign investors are keen to tap into this lucrative market, which could also prove to be a useful channel for foreign SMEs intending to sell their products in China.
Online vendors in China have operated in a fairly unregulated environment over the past few years. While this has greatly encouraged entrepreneurship and contributed to the development of the industry within China, it has also given rise to rampant online intellectual property infringements and online fraud. Continue reading
U.S., Chile, Australia as well as old world wines all generating increasing market shares as China develops new tastes
Op-Ed Commentary: Chris Devonshire-Ellis
May 21 – China is a country that continues to surprise, even 20 years after I first established my business there. Back in 1992, drinking coffee was limited to the few hotels that even had such a thing as a Nescafe sachet. Last October, Starbucks opened its 500th store, not bad going for a nation once considered purely tea drinkers. The same story, that of changing consumer tastes, has filtered across many F&B markets, not least with wine. In 1992, red wine would be drunk as a highball with coke, and white wine with 7Up. While that may be understandable given the general quality of wine in China at the time, that is not the case today, and rather like the coffee phenomena, wine consumption has sky rocketed and continues to do so. Continue reading
By Xiaolei Gu
Apr. 19 – To further expound the important role that online shopping is playing with regards to China’s expanding consumption levels, popular shopping website Taobao and China’s largest market research firm CTR jointly released the “Report on China’s Online Shopping Trends 2012 (中国消费风向标报告2012).” The report identifies and extrapolates on online shopping trends in China based on CTR’s continuous single-source survey CNRS-TGI, Kantar Worldpanel, and data collected from Taobao – a facilitator of B2C and C2C retail business run by Chinese internet giant Alibaba Group. Continue reading
Posted in Business, FDI and Foreign Trade, Retail, Science and Tech, Technology
Tagged Alibaba Group, China Consumption, China E-Commerce, China Online Market, China Online Shopping, China's Consumers, CTR, Taobao
Impressive increases in exports drive U.S. businesses to export to China. This is a user’s guide on joining the trend – and includes a complimentary U.S. Dept. of Commerce download
Op-Ed Commentary: Chris Devonshire-Ellis, Founding Partner of Dezan Shira & Associates
Mar. 28 – With the U.S.-China Business Council poised to release a report outlining significant gains in U.S. exports to China over the past 12 months, the opportunities for American companies to sell goods and services to China has never looked brighter. Part of this is a significant and still growing shift concerning China’s own dynamics and demographics – a phenomenon we covered earlier this week in the piece titled “Why China’s Consumer Development is Assured.” Put simply, the article explains that when China began its policy of opening up to foreign investment 25 years ago, it had no developed middle class and there was simply no meaningful Chinese wealth to buy American goods and services. Continue reading