By Edward Barbour-Lacey
Oct. 16 – According to the U.S. Energy Information Administration, last month China imported more oil than any other country in the world, including the United States. China had to import 6.30 million more barrels of oil than it produced domestically, while the United States only imported 6.24 million barrels.
China’s new status will have a number of important ramifications for the country, as it has exposed both the country’s growing strength as well as its weakness. Continue reading
Oct. 14 – China’s Ministry of Finance and State Administration of Taxation jointly released the “Circular on Relevant Issues Concerning the Pre-Tax Deduction of Research and Development Expenses (caishui  No.70, hereinafter referred to as the ‘Circular’ )” on September 29, which is retroactively effective from January 1, 2013. Detailed information can be found below. Continue reading
Oct. 10 – China’s State Council released the “Action Plan for Air Pollution Prevention and Control (guofa  No. 37, hereinafter referred to as the ‘Action Plan’)” on September 12, which puts forward the toughest-ever measures to combat air pollution in the country. Detailed information can be found below. Continue reading
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
By Shirley Zhang, Yao Lu and Eunice Ku
Aug. 9 – In 2012, the number of China’s internet users rose by 10 percent to 564 million, and its e-commerce market increased by 66.5 percent to RMB1.3 trillion (US$190 billion) worth of transactions. These transactions accounted for 6.1 percent of total retail sales of consumer goods that year, compared to 5 percent in the United States. Further, 242 million internet users in China purchased goods online in 2012, up 21 percent from the 203 million recorded a year earlier, and this figure is expected to reach 310 million by the end of 2013. This rapid growth can be partly attributed to the growing use of mobile devices to browse e-commerce merchandise, in addition to the continued development of popular Chinese social media platforms, such as weibo (literally “microblog,” the equivalent of Twitter in China), which are helping to increase the exposure of goods and drive e-commerce sales.
Meanwhile, continuing improvements in online credibility, payment services and express delivery methods have created a beneficial environment for the growth of e-commerce in China. Continue reading
Aug. 8 – While many of China’s key tax incentives dried up with the Corporate Income Tax (CIT) Reform in 2008, the government still offers various tax incentives to promote sectors deemed beneficial to the development of the country’s economy. The technology sector, for instance, is one area that China is keen to promote and, as a result, qualifying enterprises can benefit from preferential tax rates. Continue reading
Hollywood studios owed millions in just one example
Aug. 5 – Following China’s reform of its value-added tax (VAT) system, effective from August 1st, many international businesses have fallen foul of confusion in the regulations, preventing many from being paid. In the Chinese film industry alone, Hollywood studios including Warner Bros, Sony & Paramount have not been paid by the organization which represents Chinese cinema distributors for a number of months, a period during which blockbusters such as Skyfall, Man of Steel and Star Trek Into Darkness have pulled in hundreds of millions of dollars at the local box office. Continue reading
By Christian Fleming and Shirley Zhang
May 28 – Development zones are not a Chinese creation, but China in particular has found tremendous success with this economic tool. Historically, the liberal business environment in these areas have allowed foreign enterprises to operate more comfortably in the Chinese business environment, sheltered from the bureaucracy and red tape that often characterizes the rest of the country while at the same time such businesses could benefit from preferential policies, greater resource availability, and prime locations within regional hubs of creativity and innovation. Continue reading
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