Is China Growing Too Big?

Op/Ed Commentary: Chris Devonshire-Ellis

Aug. 23 – For many years now, as I’ve traveled China on business, I’ve been skeptical of the GDP growth figures. From Shenzhen to Changchun and from Wuhan to Kashgar, via Chongqing, buildings have been going up, rather like mushrooms after a rain storm, as signs of the new prosperity and growth of China.

In fact, every single Chinese city, large and small, seems to have acres of new developments – but all lying empty. The giveaway is a quick evening tour of residential and business blocks. If no lights are on, why were they built? Entire development zones with no businesses. Blocks upon blocks of high rise apartments for tens of thousands of families – all unused, empty shells instead of the dream homes the advertising hoardings proclaim they are. Read the rest of this entry »

In China, White Goods Become Red

Op/Ed Commentary: Chris Devonshire-Ellis

Jul. 30 – As the central government encourages a re-balancing of the economy towards more domestic consumption, companies are finding subtleties of selling in China that will shape the way forward for foreign manufacturers doing business here. Gone are the days when a manufacturer would only sell within a region, now the focus is on getting goods to China’s massive rural population; some 900 million people, or three fourths of the total consumer market.

This means that long held wisdom in international and even China sales is being remodeled and, in some situations, rethought. Take Haier for example. Long China’s largest manufacturer of white goods – everything from washing machines to air conditioners to freezers and television sets – they are the archetypal white goods manufacturer. In a delicious twist of irony, they are finding that rural Chinese consumers prefer their products in a more auspicious shade of red. White is a color associated with death and funerals in Chinese culture. Superstitions die hard in the countryside, and red is considered a lucky color linked to fortune and wealth. Read the rest of this entry »

China Releases Foreign Investment Promotion Plan for Central Region

May 14 – The foreign investment promotion plan for central China was released on April 30 aiming to improve the service in urban public utilities, urban finance, commerce, education, medical treatment and logistics to attract foreign investment.

The plan focuses on business-friendly policies, discounted loans, and reduced transaction costs to attract foreign investors setting up business in China’s central provinces. Read the rest of this entry »

Microfinance: The Untapped Chinese Market

By Sophie Cerny and Jessica Tou

May 13 – Microfinance in China has the potential to be one of the leading, innovative approaches to alleviating poverty and boosting rural and regional economic development. This report will take a closer look at how the current Chinese microfinance model came about, the current outcomes of the model, and lastly the problems and solutions of the potential market, which has yet to be tapped by foreign investors. Read the rest of this entry »

Hubei Raises Minimum Wage Levels and Social Benefits

May 11 – The Hubei provincial government has raised monthly minimum wage levels, effective from May 1.

The notice, which was issued April 25, adjusts the minimum wage standards to between RMB900 and RMB600 and the minimum hourly wage to between RMB9 and RMB6.5 dependent on the city.

The notice also states that social security fees, housing funds, overtime wages and allowances or subsidies for meals, transportation and for working in special work environments or conditions such as night shifts, high temperatures or working underground should not be regarded as components of standard minimum wage. Read the rest of this entry »

SAFE to Implement Pilot Reforms of Import Verification System

Apr. 9 – The State Administration of Foreign Exchange is implementing new pilot reforms of China’s import verification system.

Circular Huifa [2010] No. 14, released on April 2, states that seven provinces and cities including Tianjin, Jiangsu, Shandong, Hubei, Inner Mongolia, Fujian and Qingdao, will begin these pilot reforms of their import verification system from May 1, 2010. Read the rest of this entry »

New China Briefing Books Out Now

Jan. 22 – China Briefing just released two new titles on doing business in the country; expanding the Asia Briefing roster of invaluable resources for both the new and experienced foreign investor.

Human Resources in China

Due to the rapidly changing nature of the labor market and the laws that govern it in China, it can be very difficult for foreign investors and managers to understand how to manage human resources on the mainland. Produced in association with the human resource professionals at Direct HR, a specialist China recruitment firm, this technical guide is designed to cover the most important issues related to managing a Chinese workforce and details HR issues that both local managers in China and investors looking to establishing an office on the mainland should be aware about.

For more information on our guide to Human Resources in China, including a list of the topics covered, click here. Read the rest of this entry »

West, Central Regions Recession Proof as Auto Sales Surge

Aug. 20 – China’s Western and Central inland regions have reported a surge in auto sales with growth of 33 percent for the first half year over 2008 figures, according to a report from the global market research firm, Ipsos. The industry average for China this year has been 24 percent.

More than 2.73 million new license plates were issued in China in the first five months of the year, with Shaanxi, Gansu, Ningxia, Heilongjiang, Jiangxi and Sichuan all contributing 35 percent to national growth. Shaanxi reported a growth of 110 percent in issuing license plates, compared to a 12 percent drop in Guangdong.

Read the rest of this entry »

China Briefing Books Now Downloadable in PDF

China Briefing books Jul. 20 – The complete series of China Briefing’s popular legal, tax and regional guides are now available for purchase via PDF downloads here.

Published since 2003 and regularly updated, available titles include guides to the legal procedures and investment implications of establishing Representative Offices, Wholly Foreign Owned Enterprises, Joint Ventures, Mergers & Acquisitions, Intellectual Property Rights, Transfer Pricing and the China Tax Guide.

The complete, five volume series of China’s Regional Investment Guides are also included covering China’s regions with details of investment zones and incentives, local demographics and industry facts and figures.

Read the rest of this entry »

China’s FDI Plateaus as Investment Demographics Shift

By Chris Devonshire-Ellis

SHANGHAI, Jul. 17 – China’s foreign direct investment and the nature of its GDP growth are showing signals of permanent change as the world gradually lifts itself out of the global recession. Dezan Shira & Associates has just released its half year figures and they make for interesting reading in terms of the analysis they present of the nature of doing business in China.

With more than 2,500 multinational clients in the country, we are able to produce a snapshot of what is going on and where. Let’s have a look at some of the behavioral traits.

Foreign Direct Investment

Across the board, FDI into China based on the number of clients we have investing in the country fell by 10 percent. There’s no real surprise there given the lack of investment dollars floating around this year, and this is in line with our budget predictions that we carried out at the back end of 2008.

Read the rest of this entry »

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