REGIONS

Guangdong Party Boss Warns CPPCC of Hard Times Ahead

Jan. 13 – Wang Yang, the head of the Communist Party for China’s wealthy Guangdong Province, has alerted the Chinese People’s Political Consultative Conference (CPPCC) that the province faces a tough and difficult year ahead in 2012. Guangdong is by far the richest province in China, having boomed during China’s export crescendo, but has been hit with rising labor costs and falling orders. Many businesses in the province over the last three years have either closed or relocated to cheaper destinations in China or to Vietnam, Bangladesh or India.

Yang told the CCPPC that the next 12 months would likely be the toughest the province would face in the past 30 years of China’s reform and development, and stated the province “sat on the edge of economic difficulty, social conflicts and even political risk.” Continue reading →

Posted in Business, Economy and Politics, Markets, South China | Tagged China Manufacturing, China Wage Overheads, Chinese Communist Party, Guangdong, Labor Unrest, Moving Inland, South China | Leave a comment

Shenzhen, Beijing Raise Minimum Wage Standards

Jan. 12 – On December 31, 2011, both Shenzhen and Beijing announced their new minimum wage standards for 2012. Following the adjustment, Shenzhen’s minimum wage standard will reach RMB1,500, the highest in the whole country.

Shenzhen
According to the “Circular on Minimum Wage Standards Adjustment in Shenzhen (shenrenshegui [2011] No.19),” starting on February 1, 2012, Shenzhen’s minimum wage standards will be raised as follows:

Continue reading →

Posted in Business, Legal and Regulatory, Minimum Wages, Regulatory Update, South China | Tagged Beijing Minimum Wage, Beijing Piece-rates, China Minimum Wage, Full-time Minimum Wage, Part-time Minimum Wage, Shenzhen Minimum Wage | 2 Comments

Beijing Details Foreigners’ Mandatory Social Insurance Participation

Jan. 11 – Following the promulgation of a national decree ordering foreign employees’ mandatory participation in China’s social insurance system, Beijing recently issued its own implementation details in a bid to strengthen the enforcement of the new policy.

On December 20, 2011, the Beijing Social Insurance Fund Management Center (BSIFMC) released the “Circular on Issues Concerning the Improvement of Participation in Social Insurance by Foreigners Employed in Beijing (the new Circular).” The document details issues related to foreigners’ social insurance registration, backdated premium payments, charges of late fees, and the participation of foreigners from those countries that have signed a bilateral or multilateral agreement on social insurance with China. Continue reading →

Posted in Business, Finance, Tax and Accounting, Legal and Regulatory, Northeast China, Regulatory Update | Tagged Beijing, China Regulatory, China Social Insurance Law, Foreigner Social Insurance | 4 Comments

China Specifies Services Eligible for Zero VAT Rate and VAT Exemption

Jan. 10 – The beginning of China’s pilot value-added tax (VAT) reform has aimed to make transport services and a list of modern services in pilot areas subject to VAT, instead of business tax. Recently, as a new update to the implementation details of the ongoing VAT reform, China’s Ministry of Finance (MoF) and State Administration of Taxation (SAT) clarified that some of these VATable services can enjoy zero VAT rate and VAT exemption.

Zero VAT rate
According to the “Circular on the Application of Zero VAT Rate and VAT Exemption on VATable Services (caishui [2011] No. 131)” issued on December 20, 2011, the following VATable services provided by taxpayers in pilot areas are subject to the zero VAT rate: Continue reading →

Posted in Business, East China, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update, Shipping & Logistics | Tagged China Tax, China Tax Exemption, China Tax Rebates, China VAT Exemption, China VAT Reform, China Zero VAT Rate, Deduction and Refund, Shanghai VAT Reform | Leave a comment

Shanghai SAFE Requires Additional Documents for Forex Settlement

Jan. 3 – The State Administration of Foreign Exchange (SAFE) issued the “Supplementary Circular on Issues Relating to Improving Business Operations with Respect to the Administration over Payment and Settlement of Foreign Exchange Capital of Foreign-invested Enterprises” (Huizongfa [2011] No. 88, “Supplementary Circular”) on July 18, 2011, which came into effect on August 1, 2011. Our previous posting on the content of the Supplementary Circular can be found here.

On July 29, 2011, the Shanghai branch of SAFE issued a Circular (“Shanghai Circular”) requiring designated foreign exchange banks to comply with the Supplementary Circular. However, for small-amount invoices under RMB2,000, the Shanghai Circular states that an enterprise applying for foreign exchange capital settlement only needs to submit written documents guaranteeing the authenticity of the small-amount invoices, signed by the legal representative and stamped with the official seal of the enterprise. This requirement replaces the Supplementary Circular’s requirement of providing hard copies of results of the tax department’s Internet invoice authenticity inquiry system stamped with the official or financial seal of the enterprise. Continue reading →

Posted in Business, East China, FDI and Foreign Trade, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update | Tagged Foreign Exchange Settlement, Shanghai, State Administration of Foreign Exchange | Leave a comment

China Visas Explained

China clamps down on expats working in China – but which visa type is required?

Dec. 30 – China currently issues nine different types of visa for various purposes, however for foreign nationals working in China, only the Z visa is valid. Here we provide details on all of the different types of visas and their applications and permitted uses as follows. A summary on the Z visa situation and the required supporting documentation is provided at the end.

The nine types of Chinese visas fall into two categories, namely, ordinary and diplomatic visas. The ordinary visa consists of eight types, which are respectively marked with Chinese phonetic letters F, L, Z, X, C, J-1, J-2, G and D. Continue reading →

Posted in Business, East China, FDI and Foreign Trade, Legal and Regulatory | Tagged China Business Visit Visa, China C Visa, China Crewmember Visa, China D Visa, China Diplomatic and Service Visa, China F Visa, China G Visa, China J Visa, China Journalist Visa, China L Visa, China Residence Permit, China Residence Visa, China Student Visa, China Tourist Visa, China Transit Visa, China Visa, China Work Permit, China Work Visa, China X Visa, China Z Visa | 16 Comments

Dalian Re-instates Caps on Social Insurance Contributions

By Adam Livermore

Dec. 29 – On December 27 the Dalian Social Insurance Fund Management Centre released a document stating that the caps on contributions by employers to the various social insurance funds are to be re-instated (as they had been removed from September 2011) and that the previous method for the calculation of bases for contributions would also be re-adopted (this was also changed as of September 2011).

This is fantastic news for companies based in Dalian, who have been paying higher social insurance contributions on behalf of their high-earning employees compared to companies in other cities. From January 2012 the employer burden for each individual employee will again be limited to a maximum of RMB3,503 per month. Continue reading →