Central China

Picking China’s Middle Hanging Fruit – The New Inland Consumer

Op-Ed Commentary: Chris Devonshire-Ellis

May 13 – Much commentary in the media has recently been focusing on the “China slowdown” and the impact of the country’s lower GDP growth figures going forward. In reality, measuring GDP growth is always a losing game, and not a particularly good indicator of how an economy is progressing. China has had tremendous GDP growth over the past 20 years, but it has always been inevitable that this growth would begin to slow at some point. A country cannot keep expanding its economy indefinitely at 10 percent a year, it is simply not possible. Accordingly, the naysayers over China’s future when it comes to measuring it purely in GDP growth terms are misled about what is really going on. Sure, the economy is slowing, but not all at the same time, and it doesn’t necessarily mean anything bad. Continue reading →

Posted in Business, Central China, Economy and Politics, FDI and Foreign Trade, South China, West China | Leave a comment

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

Central China on the Rise

By Yao Lu

Jan. 8 – Located in the heart of central China, Hubei Province’s capital city of Wuhan has traditionally been one of the country’s most important economic and transportation centers. However, with the introduction of the reform and opening-up policies starting from the late 1970s, Wuhan, like much of Central and West China, fell behind in the wave of economic growth that brought prosperity and development to coastal cities such as Shanghai, Shenzhen, and Beijing.

Now, with implementation of the “Rise of Central China Plan” introduced by Premier Wen Jiabao in 2004, Wuhan has returned to the spotlight. In the first three quarters of 2012, regional GDP grew at 11.5 percent while national GDP growth has slowed to 7.7 percent. At the same time, the city has become a magnet for both domestic and foreign capital. In the first half of 2012, Wuhan attracted total investments of RMB98.8 billion, up 108 percent year-on-year, and introduced seven new projects invested in by Fortune 500 companies. Continue reading →

Posted in Business, Central China, Economy and Politics | Leave a comment

China Approves Plan for Creation of the Central Plains Economic Zone

Jan. 3 – To support the balanced development of different regions within the country, China’s State Council officially approved the “Planning for a Central Plains Economic Zone (2012-2020) (guohan [2012] No.194, hereinafter referred to as the ‘Planning’)” on November 17, 2012. The proposed economic zone would cover the entirety of Henan Province, as well as twelve municipalities and two counties in the adjoining provinces of Shandong, Anhui, Hebei, and Shanxi.

The Central Plains Economic Zone (CPEZ) represents the largest economic zone in the country in terms of area and population, boasting a total area of 289,000 square meters and a population of roughly 179 million. Continue reading →

Posted in Central China, Economy and Politics, Regulatory Update | 1 Comment

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

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 →

Posted in Business, Central China, FDI and Foreign Trade, Legal and Regulatory, West China | Tagged China Joint Ventures, China WFOEs, Chris Devonshire-Ellis | Leave a comment

Taxation on Real Estate Rental Income in China

Including city-specific details on Chengdu, Guangzhou and Shenzhen

Feb. 7 – Both Chinese nationals and a foreign individuals are subject to a combination of taxes on real estate rental income: including individual income tax (IIT), business tax (BT), property tax (PT), urban maintenance and construction tax (UMCT) and an education surcharge (ES).

If simply left to adding up all those rates according to each specific tax law, the taxation on individual rental income would end up pretty high. However, in a move to energize China’s housing supply market, the Chinese government began offering some tax incentives starting in 2008. Continue reading →

Posted in Central China, Finance, Tax and Accounting, Legal and Regulatory, South China | Tagged China Business Tax, China Chengdu, China Education Surcharge, China Guangzhou, China Individual Income Tax, China Individual Rental Income, China Individual Rental Tax, China Property Tax, China Shenzhen, China Urban Maintenence and Construction Tax | 2 Comments

Free China Expat Culture Book Download

Sept. 30 – China Expat, China Briefing’s sister site covering all things concerning the interaction between overseas expatriates and Chinese culture, celebrates 10 years of existence this year and has released a complimentary book – “China Expat – A Decade of Writing: 2001-2011” – with a selection of articles contributed to the title over the past decade. The book is launched today both as a anniversary gift to China expats home and abroad, and also to celebrate China’s National Day, which falls on October 1.

“China Expat – A Decade of Writing: 2001-2011” brings together a collection of the published work of four well known expats for the first time in one volume. With articles taken from the archives of the original China Expat magazine, and more recently the online blog from the past 10 years, this collection will provide memories of days gone by, provoke exclamations of “I didn’t know that!” and inspire today’s generation of expats to get out, about and explore. In an age when blogs are mainly blah, the China Expat articles within will provoke, provide food for thought, and raise a wry smile.
Continue reading →

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A Business Guide to Western China – Local Markets and Exotic Exports

A complete overview of the trade dynamics and foreign investment opportunities from Xi’an to Xinjiang, and from Mongolia to Tibet.

Op-ed Commentary: Chris Devonshire-Ellis

Aug. 26 – China’s western regions have long held a fascination for many. The route of the ancient Silk Road, the mysteries of the orient, huge deserts, enormous mountains, a collision of religious, language and numerous tribal cultures, creating an enigmatic region not short of romance, mystery and intrigue. Continue reading →