West China

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

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Development-Zones-Across-Asia-cover-250May 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…

China Regional Spotlight: Lanzhou, Gansu Province

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Lanzhou: Transportation and Logistics Hub for Northwest China

By Yao Lu

May 9 – Lanzhou, once known as the “Golden City,” has been an important regional commercial center and transportation hub since as early as the Han Dynasty. The city used to be a major link on the ancient Silk Road and has played a vital role in the cultural and economic exchange between China and countries to its west throughout Central Asia, the Middle East and Europe. Today, Lanzhou is the capital of Gansu Province, covering an area of 1,631 square kilometers and home to approximately 3.14 million residents. Continue reading…

Western China, New Powerhouse for China’s Economy

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Mar. 5 – With the introduction of China’s “Go West” policy in 1999, the country’s western region entered into period of consistently elevated economic development.

The ‘Go West’ policy covers 12 provinces and cities in the western part of China, namely:

The territories listed above together account for about 70 percent of the country’s land area and nearly 30 percent of its population. In 2011, imports and exports in the region amounted to US$184 billion (9.4 times that of 1999), meanwhile, foreign direct investment into the region reached US$11.57 billion the same year (10 times the levels seen in 1999). Continue reading…

Chengdu to Become a Municipality?

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If true, Sichuan will need a new capital city

Op-Ed Commentary: Chris Devonshire-Ellis

Aug. 22 – Rumors have been persistent in Sichuan recently that the capital city, Chengdu, may be re-designated as a municipality, just as Chongqing was in 1997. If enacted, the move would see Chengdu’s elevation to municipal status reporting directly to Beijing, rather than to the provincial government. Aside from Chongqing, three other Chinese cities have municipal status; Beijing, Shanghai and Tianjin. Such moves strengthen direct control by Beijing over key strategic locations in China, and one potential reason for the change to occur may lie with Chengdu’s geographic position as an effective gateway to Tibet. Beijing finances a large garrison in Chengdu to support problems in Tibet should they arise. Continue reading…

Joint Ventures Back in Vogue for Accessing China’s Central Regions

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Local knowledge sought out when investing for new market penetration in inland and western regions

Op-Ed Commentary: Chris Devonshire-Ellis

Jul. 18 – A growing trend in China is the desire for MNCs to look at China’s central and western regions for market development and growth, as these areas provide the surest bet of securing high value growth while China’s eastern provinces experience a slowdown in their economies. It also heralds a minor shift in what has been the preferred route for foreign investors to take, namely the wholly foreign-owned enterprise (WFOE).

Yet the popularity of the WFOE has only really been a 10-year cyclical model, dating back to 2002 when China liberalized the foreign investment sector and permitted a far wider range of 100 percent FDI activities than had previously been the case. The 10 years prior to this had seen joint ventures (JVs) rule as the established method of getting into China, with the consequences of running with a Chinese partner providing both amazing tales of growth and success, coupled with stories of disasters as well. Some were painfully recalled in massively popular books such as “Mr. China,” yet such accounts only told part of the JV story – many were and remain quietly successful. Continue reading…

Update: Minimum Wage Hikes Across China

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Shanghai, Shandong, Sichuan and Tianjin hike up minimum wage levels in 2012

Feb. 28 – A number of local governments across China have recently announced plans to further raise minimum wage levels in an effort to keep up with the national minimum wage growth target of 13 percent per year, set in the latest 12th Five-Year Plan on Employment Improvement.

Continue reading…

China Approves 12th Five-Year Plan for Western Regions

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By Julia Gu

Feb. 27 – China’s State Council announced last week that it has approved the 12th Five-Year Plan for Further Promoting the Economy of the Western Regions (“the Plan”), a step that is aimed at narrowing the gap between the country’s wealthy coastal provinces and its under-developed western regions.

Specifically, the Plan will target 12 provinces: Xinjiang, Tibet, Inner Mongolia, Guangxi, Ningxia, Gansu, Qinghai, Sichuan, Chongqing, Shaanxi, Guizhou and Yunnan.

The seven major development goals set by China’s central government are as follows:

  • Increasing economic growth;
  • Expanding infrastructure construction;
  • Improving the ecological environment;
  • Providing better public services;
  • Developing and strengthening local industries;
  • Elevating people’s living standards; and
  • Reforming and opening up the region. Continue reading…

The Chongqing-Xinjiang-Europe International Railway

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By Julia Gu

Feb. 20 – Since separating from Southwest China’s Sichuan Province in 1997, the municipality of Chongqing has emerged as one of China’s fastest developing regions and is regarded by Beijing as the epicenter of the country’s “Go West” campaign.

Last year, the province-sized city with a population of 28.85 million attracted US$11 billion in foreign direct investment and its GDP grew 16.5 percent year-on-year to RMB920 billion (US$145 billion). According to the Chongqing municipal government, the city expects 13.5 percent GDP growth this year. Continue reading…

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