Chinese president Hu Jintao has made earthquake rescue and relief top priority at all government levels with the army, armed police, paramilitary forces, and medical personnel deployed to quake-hit areas.

The State Disaster Relief Commission and the Civil Affairs Ministry has issued a Level I emergency response plan to deal with the disaster. The Level I emergency plan is for the highest degree of natural disasters.

(more…)

May 12 – Thousands are feared dead in the aftermath of a massive earthquake that struck Southwestern China’s Sichuan province on Monday. The 7.8 magnitude quake struck Wenchuan county at 2:28 p.m., leveling buildings and trapping those inside. Xinhua reported that 3,000 to 5,000 people were feared dead in Beichuan county near the quake’s epicenter. Roughly 80 percent of buildings in the county had been detroyed according to disaster relief officials. Current estimates are placing the dead at over 7,600 with as many as 10,000 injured, though that figure is expected to rise throughout the night as relief efforts intensify.

Earlier in the day, China’s Ministry of Civil Affairs said that the earthquake killed at least 107 people in the provincial capital of Chengdu, neighboring Chongqing, Gansu and Yunnan provinces. Up to 900 teenagers were feared buried when their high school buildings in suburban Chengdu collapsed. By the evening, at least 50 bodies have been pulled from the rubble. (more…)

The earthquake, centered in Wenchuan county – 146 kilometers northwest of the provincial capital of Chengdu – was felt as far away as Taiwan and Bangkok.

The U. S. Geological reported that aftershocks measuring 6.0 and 5.4 on the Richter scale followed the initial quake. On CNN, Bonnie Thie, country director for the Peace Corps, said that the aftershocks continued throughout the afternoon. State media is reporting that the aftershocks could continue into the evening, measuring from 2.2 to 6.0 in size.

The magnitude of the quake virtually assures that damage will be extensive and Chinese Premier Wen Jiabao is on his way to the area to personally oversee the relief effort. The government has already pledged aid for quake victims and the military has been deployed.

The remoteness of the region has limited damage and death reports, though Xinhua is now reporting that four primary students were killed and more than 100 injured when two schools collapsed in Chongqing.

The earthquake, centered 146 kilometers northwest of the provincial capital of Chengdu, was felt as far away as Taiwan and Bangkok. There have been no reports of damage yet, but the magnitude of the quake would suggest that it could be extensive.

Office buildings in both Beijing and Shanghai – which swayed for up to three minutes following the quake – were evacuated as a precaution against further aftershocks.

Land line and mobile communication networks throughout the country have been erratic for the hour following the quake. Public street announcements in Beijing are urging people to continue to evacuate office buildings and all offices along Jianguomen and Chang An Avenues appear to have been evacuated.

More to come as this story develops.

The company, named Commercial Aircraft Corporation of China Ltd (CACC), will be responsible for researching, developing, manufacturing and marketing large passenger aircraft.

The aviation industry throughout Asia is expected to expand dramatically in the next 10 years. Currently, the industry supports 10.5 million jobs in the Asia Pacific region according to The Hindu. That figure is only going to go up, with over 16,000 new aircraft required to meet demand by 2020.

The CACC has a registered capital of RMB19 billion. The State-owned Assets Supervision and Administration Commission – the new venture’s biggest shareholder – invested RMB6 billion Xinhua reported. (more…)

Passengers will be subject to security checks by machines, dogs or police officers at all subway stations. Subway entries have been equipped by Butno security excluding the Dongzhimen station in eastern Beijing along Line 2.

The Beijing subway system is used by millions of people. Last month alone, passenger volume was estimated at 4.3 million passengers a day.

(more…)

For the first three months of the year, exports reached US$9.35 billion, an increase 9.6 percent year compared to the previous year while imports jumped by 61 percent to US$13.01 billion.

China exported 1.04 million tons of grain for the first quarter, a decrease of 72.8 percent. On the other hand, pork imports almost quadrupled and oilseed imports increased by 36.8 percent from last year.

(more…)

“The devastation of Saturday’s cyclone, which took more than 22,000 lives, has forced the junta to soften its pose of self-sufficiency and ask for help from a world it fears and resents,” says the New York Times’ Seth Mydans in a recent analysis for the newspaper. “The government is showing its reluctance now by accepting the aid it requested only slowly, complicating visa procedures for international donors and apparently seeking to limit the access of foreign relief workers.” (more…)

May 8 - The Olympic Flame has reached the world’s tallest mountain. Chinese climbers reached the summit of Mt. Everest this morning, hoisting the flame at 9:18 am Beijing time.

After a turbulent world relay in which protests dogged the torch, and strict measures by both China and neighboring Nepal to bar access to Mt. Everest during throughout the torch’s ascent drew controversy, Cering Wangmo, a 21-year-old Tibetan woman and the youngest member of the expedition, carried the flame atop the peak. (more…)

“Seasonal changes and government measures to boost agricultural supplies may cause consumer prices to slide in the second quarter,” reported the State Information Center. “But inflationary pressure is still mounting because of domestic and international factors.”

In February, the consumer price index (CPI) gained 8.7 percent - the highest gain in 12 years. Fluctuations in food prices account for an estimated one-third of China’s consumer price index. The CPI indicates the average price of consumer goods and services purchased by households and is used as a measure of inflation. Last year, rising food prices accounted for 70 percent of inflation.

(more…)

Fifty percent of the target 1.2 million jobs are expected to be newly-generated, a 28 percent increase from last year’s figure.

Lin Jingqing, director of the labor relations division of the provincial labor and social security department, told China Daily: “More people will be included in our social security system this year, embodying the Labor Contract Law implemented by the central government at the start of the year.”

For 2007, Guangdong’s 10.55 million resident workers and 13.5 million migrant workers were provided with work and medical insurance - one-third of China’s total. This year, migrant workers with work insurance should increase by 13.3 million while those with medical insurance will jump by 13.6 million. (more…)

According to Xinhua, bilateral trade reached US$202.5 billion last year, representing a year-on-year increase of 26 percent and achieving the trade target of US$200 billion three years ahead of schedule.

Besides trade, two-way investment, contracted engineering and labor cooperation between China and ASEAN members have developed rapidly. (more…)

In this issue, we examine the complexities of managing a joint venture partner in China, including handling due diligence and risk issues. Specifically, we look at regulatory risks, political risks, legal and financial risks, and operational, environmental and motivational risks. We also discuss how, from a minority equity position, JVs may still be effectively controlled, and identify the role technology transfer agreements can play within this situation. We discuss other managerial issues concerning JVs, and also look at the investment environment in some more of China’s second- and third-tier cities.

Included in this issue:

Managing your China joint venture risk

Using technology transfer agreements to manage your joint venture partner

The second- and third-tier cities of Dandong, Shaoxing, Zhaoqing, Nanchang and Yinchuan.

SHANGHAI, April 30 - To understand how China’s economy is evolving, just look at the Yangtze River Delta. With 30 percent of the country’s private sector, this populous and wealthy region including Shanghai, Jiangsu and Zhejiang provinces has relied heavily on its secondary market for growth. But that’s changing as more and more foreign direct investment pours into tertiary businesses focused on finance, wholesale and retail, information technology and real estate. The result is a rising service sector that many believe is China’s next step toward developing a modern economy.

Industrial strengths
With China’s most developed private sector, the delta now accounts for roughly 20 percent of the national GDP, its own total reaching some RMB4,775.4 billion two years ago. Jiangsu contributed most to the region’s GDP, about 45 percent, while Zhejiang and Shanghai represented about 33 percent and 22 percent, respectively. After Shanghai the most economically vibrant cities were, in descending order by economic size, Suzhou, Hangzhou, Wuxi, Ningbo and Nanjing. (more…)

By Andy Scott

WUHAN, April 28 - The Expo Central China 2008 came to a close today in the city of Wuhan, the provincial capital of Hubei province. The third of its kind, the expo is an opportunity for the Central China provinces of Anhui, Henan, Hubei, Hunan, Jiangxi and Shanxi to attract investor attention to a region that has historically lagged in development behind China’s coastal provinces. As investor sentiment has waned for China’s coastal regions where the rising costs of doing business are beginning to force large corporations to rethink their China strategy, the Central China region, and especially Wuhan with its perfectly centered location in China, is looking to take advantage. Long considered a secondary market, the completion of the new, expanded Wuhan Tianhe International airport as well as the continued dredging of the Yangtze downriver is turning Wuhan into destination for foreign investment.

The expo’s theme focused on the region’s belief that industry inside China is indeed beginning to shift, and the main focus of many of the provincial officials at the expo was directing inbound investment from the coast. At the opening ceremony, Vice-Premier Wang Qishan stressed that the region needed further reform and opening-up, stressing awareness of reform, innovation, and the rule of law as keys. (more…)

April 28 - Jack Perkowski of Asimco fame has been in the press a lot recently, not least because of the launch of his new book “Managing The Dragon : How I’m Building a Billion-Dollar Business in China.”

We caught up with him at the YPO event in Beijing last week where he was one of the guest speakers. In his presentation, he told of how he came to China, and began to build his company. In doing so, he made an interesting observation about staffing a business in China. Taking from his pocket a US$100 bill and a RMB100 bill, he then considered the similarities:

* Both are the highest value note in their respective countries
* Both feature previous national leaders on their front
* Both employ similar anti-forging technology with ultraviolet lights, a metal strip and dual colored inks.

Yet, as he pointed out, Americans by and large do not feel US$100 is a lot of money. But Chinese view RMB100 as a lot of money, despite the fact that at current exchange rates, the RMB100 is worth just US$14. (more…)

By Joyce Roque

April 25 - The Kyrgyz Republic remains to be a country in the process of unraveling itself. It is the second smallest country of the five central Asian states bordered by Kazakhstan to the north, Uzbekistan to the west, Tajikistan to the southwest and China to the east. Despite being a land blessed by breathtaking natural beauty - some calling its Tien Shan range the Switzerland of Central Asia – it is one of the poorest in the world with an estimated 40 percent of its population living below the poverty line.

The Tulip Revolution
In 1991, the country declared independence from former Soviet Union led by Askar Akayev. The divorce from Kremlin would lead to devastating effects on its economy when an estimated 98 percent of its exports depended on the Soviet market. It hindered the country’s goal of transitioning to a free market economy. Akayev would later on be ousted in popular revolt in 2005 called the Tulip Revolution on accusations that government interfered with parliamentary elections aggravated by the country’s widespread poverty and corruption. (more…)

The first issue of Vietnam Briefing and the new issue of India Briefing are out now

In this first issue of Vietnam Briefing, we take a look at the current movement of manufacturers away from South China towards Vietnam, and analyze the benefits to having a “China plus one” strategy

This issue, online and available for free download, features:

• A look at why manufacturers are moving to Vietnam
• The China plus one strategy that many multinationals are now adopting
• How infrastructure is the key to Vietnam and ASEAN’s development

Subscription to Vietnam Briefing is complimentary. Please click here to access the subscriber page. (more…)

SHANGHAI, April 24 – The central government lowered the stamp duty on stocks from 0.3 percent to 0.1 percent today in an effort to stabilize the market.

China also introduced two new rules to tighten securities management in a move to restore investor confidence in the beleaguered stock market.

“After the recent drops in share prices, the stock market has already been through sufficient correction, but it needs a trigger to set off a rebound,” said Yan Li, an analyst with Southwest securities. “The stamp tax cut is exactly that trigger,” she told Agence France-Presse. (more…)

The public is being encouraged to voice their opinion on the draft law on the NPC website until May 20.

In a new government initiative, all draft laws are now subject for public comment to allow more participation in politics and new legislation.

“In principle, all draft laws submitted to the National People’s Congress Standing Committee for review will be released in full text to solicit public opinions,” the NPC Standing Committee stated in a press release. (more…)

The world’s largest cafe chain has more than 300 stories in China and plans to hire thousands over the next two years in to support the planned expansion, the company’s greater China president, Wang Jinlong told Bloomberg TV. According to Wang, the company currently has 4,000 employees in China.

Starbucks has long viewed the large potential of the Chinese market with interest, and the improving standard of living in China’s first- and second-tier cities, as well as a growing taste for coffee are both viewed by the company as a large, untapped potential.

According to Bloomberg, China’s per-capita urban disposable income rose 16.2 percent in 2007, the seventh year in a row the number increased by more than 10 percent. (more…)

April 21 - Beijing has instigated massive security clampdowns across China ahead of the Olympics, including closing some of its borders.

This follows on from recent difficulties in obtaining visas to travel to Mainland China from Hong Kong, as the public security network begins a six month policy of complete or partial closure of its borders.

Many of China’s northern and western borders with Russia, Kazakhstan, Pakistan and Mongolia have been effectively sealed on the Chinese side, and trips between these locations are now becoming increasingly difficult to “non-essential” travelers, thus ruling out traditional summer adventure holidays touring of the Southern Silk Road and Karakoram Highway. (more…)

April 18 - Perhaps no other region has played so vital a role in China’s growth as the Yangtze River Delta. Home to Shanghai, Jiangsu and Zhejian provinces, the delta has become the country’s commercial core, accounting for roughly 20 percent of GDP and nearly half of all foreign direct investment, according to Xinhua News Agency. As part of our series focusing on China’s hotspots, we look closely at the YRD and the infrastructure that keeps its economy humming, from the harbors and airports that provide gateways to the outside world to the roads and railways crisscrossing its interior. What emerges is a picture of mixed development that has created benefits—and challenges—for the region.

Harbors and airports
Among the toughest challenges has been implementing a unified plan for the region’s harbors. While Shanghai is still the delta’s major destination point for cargo ships, its rapid growth has brought about opportunities for neighboring cities looking to support their own ports. As a result, some cities now compete almost as much as they cooperate with the region’s megalopolis. Ningbo, for example, is expanding berths at its harbor – considered the nation’s best natural deepwater port – even as Shanghai finishes work on a new deepwater port of its own at Yangshan Island. (more…)

After weeks the Olympic torch relay placing China and its international policies being placed squarely at the center of what has become in many countries an organized street riot, some in the Beijing community are responding by rolling out a concerted PR campaign in the city that is to host the games in little over three months.

All around the capital city tonight, bumper stickers boldly proclaiming “Beijing Jia you,” or “Go Beijing” can be found. From bars to metro walls to taxis, the stickers are everywhere. KFC, one of the largest Western-style fast food restaurants in China has also picked up the promotion. (more…)

“The growth of export orders in the first quarter of this year fell sharply to 20 percent from 140 percent in the same period of last year,” Cao Xiaojian, vice chairman of the Jiangsu Shuntian Co., Ltd. told the People’s Daily at the fair.

According to Ministry of Commerce, China’s trade surplus dipped to 10.2 percent to around US$ 41.6 billion for the first time in more than three years. Exports were up by 21.4 percent compared to last year’s 27.8 percent for the same period.

In 2007, the United States was China’s leading export market at 19.1 percent. It was also the year that Chinese exports finished at an estimated US$1.2 trillion and imports at US$956 billion with a whopping US$261 billion trade surplus. This is bound to change as the United States sorts out its domestic issues. (more…)

April 17 - This is the first of a series of informative historical articles we will be featuring on the development of China’s banks. These articles are condensed from the forthcoming book “A History Of China As Viewed Through Its Bank Notes” to be published by China Briefing.

The Hupu Bank
The Hupu Bank was organized by the Imperial Ministry of Revenues in 1904 during the Qing Dynasty. It is the oldest government owned and operated bank in China and opened its first office in Beijing on September 27, 1905 (August 29, 31st year of Guangxu - Qing Dynasty). In 1907, the Hupu Bank established a Jinan branch. In 1908 its name was changed to “Great Qing Bank” (The Da Ching Government Bank) The Imperial Court of China effectively ended in 1911 when Pu Yi, the young Emperor, abdicated in favor of the new Republic of China envisaged by Sun Yat-Sen. The Republic of China was promulgated on January 1, 1912, with the seat of government being based in Nanjing. (more…)

NINGBO, April 16 - Dezan Shira & Associates, the specialist foreign direct investment firm, has opened an office in the port of Ningbo, on China’s Eastern coast just south of Shanghai.

The practice, which provides legal, tax and due diligence advice to multinationals throughout China, Hong Kong, India and Vietnam, has maintained a large regional office in Shanghai for 14 years and a year ago established a branch in Hangzhou, the capital city of Zhejiang province and situated between Shanghai and Ningbo.

“Business in Shanghai is becoming highly competitive and many companies are more price sensitive than was previously the case,” says Olaf Griese, the firm’s regional manager. “As Shanghai moves more towards becoming a center for services, cities such as Ningbo are developing rapidly and are a major draw to foreign manufacturing investors looking at accessing Shanghai’s wealth yet without the higher cost.” (more…)

“The tax rebate will reduce the refining losses of CNPC and Sinopec to some extent,” Zheng Zhiguo, an energy analyst with Shenyin Wanguo Securities told China Daily, “But the amount is small and cannot fully cover the losses.”

The Ministry of Finance detailed that CNPC tax imports on 500,000 tons of gasoline and one million tons of diesel will be refunded as well as Sinopec’s imports of 500,000 tons of gasoline and 1.5 million tons of diesel. (more…)

The slight slowdown has been attributed to the prolonged winter season that led to factories being shut, damaged crops and disrupted exports. The mortgage crisis that has placed the United States into recession is also another factor to blame. Although sources say that the figure bodes well for the Chinese economy’s stability as this is the ninth straight quarter that it grew by more than 10 percent. (more…)

Updated edition contains new laws and regulatory issues affecting China JVs

China Briefing has just published a new, updated edition of the successful “Setting Up Joint Ventures in China.” Priced at US$25 (RMB200) plus p&p, the handbook is available from sales@china-briefing.com or from our bookstore via credit card payment here.

Details of contents are as follows:

Chapter One
Devising your China investment strategy
Options concerning foreign investment vehicles
JVs versus WFOEs – Working out what’s best for you
JV regulatory issues and implementation rules
Encouraged industry applications (more…)

BEIJING, April 15 - The Peoples Bank of China (PBOC) has claimed some initial success in cooling the economy with slowdowns occurring for the first time in recent months in new money supply and bank loans. With inflation at a 12 year high, chairman of the China Banking Regulatory Commission, Liu Mingkang, has stated that the current growth in loans was acceptable and that he was optimistic that China would be able to turn around the galloping inflation rate.

Credit development had dropped by close to one full percentage point from 17.1 to 16.2 during March compared to that of 2007. However, mainland banks had lent an unprecedented RMB804 billion during January this year, a record high, spurred both by the traditional Chinese New Year celebrations, the rise in edible staple foods such as grains, and the severe weather, with many farmers needing bailing out of trouble from ruined feeds and crops. (more…)

BEIJING, April 15 - The Young Presidents Organization, Beijing Chapter are holding a three day seminar at the Beijing Raffles Hotel from Sunday, April 20th – Tuesday April 22nd.

Featuring some of China’s best known entrepreneurs and successful businessmen, the event program features (speakers in order):

Handel Lee – King & Wood – Introduction
Michael Kwok – Arup – Introduction
Handel Lee is of course the man behind the successful Three on the Bund complex in Shanghai, and owner of the first Armani boutique in the city. He is also a partner of the Beijing-based law firm King & Wood

Michael Kwok is the design engineer for Beijing’s new Capital Airport Terminal Three, and the China World Trade Centre for Arup, whose China offices he first set up in 1992

Jimmy Hexter – Principal, McKinsey & Co – Strategy to Execution
Jimmy is a Harvard Business School alumnus, the CEO of McKinsey in China, and the author of the book “Operation China: From Strategy to Execution”

Chris Devonshire-Ellis – Founding Partner, Dezan Shira & Associates, Publisher, China Briefing – Structuring Your Business for China
Chris of course is well known to our readers having established his Asian tax practice, Dezan Shira & Associates in 1987, now with 17 regional offices, and China Briefing just five years later, with many Asia publishing and books titles in its portfolio including the just released second edition of “Setting up Joint Ventures in China” (more…)

St. Pierre was being held as part of an extensive investigation of wine importers by the Chinese authorities looking for evidence that importers had been understating the value of wines they bring into the country in order to evade high customs duties in the growing Chinese wine market.

St. Pierre Jr., the company’s managing partner, and ASC vice president Carrie Xuan had been held in a customs department building, though neither was officially under arrest.

“The way the system works here is that they detain you while figuring out what to do,” said his father Don St. Pierre Sr. to the industry publication Wine Spectator. St. Pierre Sr., who has been doing business in China for 20 years, founded the company a decade ago with his son and currently serves as chairman. “There are 27 boxes of documents that have to be matched up with other pieces of paper to show that customs duty has been paid,” he said last week, prior to his son’s release. ”They have been going through them for three weeks now and found there is nothing wrong.” (more…)

GUANGZHOU, April 14 – According to the China Import and Export website, registration regulations for foreigners to attend the 103rd session of the annual Canton Fair have been revised.

In order for foreigners to register, a new five step process has been implemented in the attempt to make the Canton Fair a safe trading environment for all attendees according to information provided by the event’s organizers.

The new and updated procedure is as follows: (more…)

 

I cannot forecast to you the action of Russia. It is a riddle wrapped in a mystery inside an enigma.
-Sir Winston Churchill

By Joyce Roque

April 14 - The Russian Federation is a nation foisted in two realities: the East and the West. As the largest country in the world, it hugs the planet starting from northern Asia spanning to about 40 percent of Europe. It is Eurasia; a country with the breath of 11 time zones and the depth of topography that includes vast forzen tundra, grasslands and steppe.

The country’s beginnings can be traced back to as early as the 3rd century A.D. when the East Slavs were ruled by the seafaring Vikings. The centuries have gone and steeped its history rich with culture, science and ideology. There comes to mind the names of such luminaries as Tolstoy, Nabokov, Rachmaninoff, Tchaikovsky to name a few. More importantly, Russia is a self-sufficient with its abundant stores of raw materials needed to keep any industrial economy running. It produces an estimated 20 percent of the world’s total oil and natural gas production making it a global energy leader. (more…)

Signed in the Great Hall of the People, the agreement marked “the culmination of fifteen rounds of negotiations over three years,” New Zealand Prime Minister Helen Clark said.

The agreement, which is scheduled to be implemented October 1, is the first between China and a developed country. “Being the first developed country to sign a comprehensive FTA with China is an enormous achievement for New Zealand,” said New Zealand Trade Minister Phil Goff.

The ceremony, also witnessed by Chinese Premier Wen Jiabao and Prime Minister Clark, marked the beginning of a partnership for the two countries. Early on in the talks, which began in December 2004, Wen had suggested the signing of the agreement would “further the friendly and cooperative relations between the two countries, promote each’s economic growth, and bring practical benefits to the two peoples.” He described the event as “a day of historical significance” and said the move “met the goal” the two countries set during negotiations. (more…)

HONG KONG, April 11 - The escalating price of jet fuel has been pinpointed as the main culprit for the collapse of long-haul budget airline Oasis Hong Kong. Another factor that contributed to strained company finances was the decision to buy instead of leasing the aircrafts. According to the International Air Transport Association, in the past year alone, fuel prices have surged more than 60 percent.

In an open letter Oasis founders Raymond and Priscilla Lee explained, “As oil prices sharply increased, the fuel costs took up the majority of our budget.” (more…)

SHENZHEN, April 11 - South China, long the country’s epicenter of low-end manufacturing and sourcing, is seeing a massive slowdown in new investment as companies look to move further inland and elsewhere.

Dezan Shira & Associates, which has maintained offices in the region for 16 years, reports that its clients’ foreign direct investment (FDI) in South China has seen a steep decrease in the first quarter of 2008. The findings, part of the firm’s first-quarter national assessment of FDI in China, represent the first large-scale decline in the region, with Guangdong province among the hardest hit. Inbound FDI to Shanghai and the Yangtze River Delta, or the Beijing-Tianjin corridor, remains strong.

“What we are seeing in South China is a massive change in the nature of the business environment here,” says Chris Devonshire-Ellis, the firm’s senior partner.

The flagging investment, says Devonshire-Ellis, comes amid a government push to attract added-value businesses and more hi-tech industry, including the development of the Shenzhen Hi Tech Zone. However, new foreign investors in high-tech by and large haven’t yet seen the opportunities here and remain aloof, opting instead for Shanghai and Hangzhou. (more…)

SHANGHAI, April 10 – The second terminal at Shanghai’s Pudong International Airport opened on March 26, more than doubling capacity for the airport to 60 million passengers and year.

Built at a cost of RMB20 billion, the new terminal and third runway, designed to handle the world’s largest aircraft, opens just in time to handle the expected surge of passenger volume from the upcoming Olympic Games and 2010 World Expo.

Current passenger traffic however, remains distinctly low. Arriving at the new terminal, one finds nothing more than vast emptiness. Even with passengers pouring out of two 747s, the anticipated chaos is nowhere to be found, with staff efficiently clearing immigration queues in the shortest amount of time. (more…)

April 10 - The brand new, updated version of our popular guide to setting up representative offices in China is now available. This is the most up-to-date published information currently available on the subject and includes regional variations in the application procedures and tax reporting obligations.

Chapter One
Establishing representative offices
Application procedures and flow chart
RO applications – common mistakes

Chapter Two
Staffing the RO
General issues
Sample labor contract
Dismissing employees
Expatriate individual income tax (more…)

BEIJING, April 9 - Beijing Capital Airport’s new Terminal Three opened to passenger traffic on March 26. Designed by Sir Norman Foster’s architectural practice Foster & Partners, the Dutch airport planners NACO and engineered by Arup, the new terminal is expected to handle the massive increase in passengers expected for the 2008 Olympics and China’s increased role in global economy from its entry to the WTO.

The new terminal will allow Beijing Capital airport to increase capacity from 27 to 60 million passengers annually by 2015. The same team of planners, architects and engineers were responsible for the Chep Lap Kok airport in Hong Kong.

We sent our intrepid staff to find out how the new terminal was stacking up. (more…)

Foreign criticism often misguided

By Chris Devonshire-Ellis

April 9 - With so much talk recently of Tibet for various reasons, and so much Western paranoia about even mentioning the name of the country (blogs running the name as T*bet or T1bet displays rather a lack of confidence, or a somewhat bizarre notion of harboring anti-China naughtiness. It’s almost become a trendy fashion to mistype the capital city that cannot, apparently be actually spelt for great fear of the Chinese police shutting them down) we decided to dig out an old, long deleted back issue of China Briefing about the investment environment there, which we ran in 2002 (click on cover to download the pdf).

Then, China Briefing hadn’t quite reached the glossy professionally produced standards it has today, but it was at the time – pre-blogging of course – pretty much the only source of China investment information available concerning FDI legal and tax issues about China, at least for free. 40,000 print copies were produced for this issue and distributed across China, and online. The issue followed meetings I had with the Tibetan autonomous regional government, at the time headed up by Guo Jinlong, the Party Secretary. Guo, now the mayor of Beijing, spent some time with me explaining the issues China faced with Tibet, and was a generous host, treating us to Tibetan banquets, dancing and singing. He was also obviously a man who enjoyed getting out and about in Tibet’s harsh sunshine; he had become very dark tanned indeed. (more…)

April 9 - The brand new, updated version of our popular China Tax Guide is now available with a complete overview and updates bringing it right up to the moment in dealing with China’s tax laws as they affect foreign investors. This is the third edition of the title and is priced just US$25 (RMB200) plus p&p. The six chapters break down as follows:

Chapter One
An introduction to tax in China
Tax planning as part of your investment strategy
China’s tax law and administration
Glossary of Chinese terminology

Chapter Two
China’s business taxes
Business tax
Value added tax
Obtaining export tax rebates
Consumption tax
State and local tax bureau vs. local government licensing authorities
Tax aspects of operating processing and assembly (LLJG) operations in South China
Special tax incentives in West China
Tax refunds upon reinvestment
Withholding tax
Other specialist and smaller applicable taxes (more…)

Amid growing instability in Tibet and with the Olympics right around the corner, the Chinese government appears to be stepping up restrictions on foreigners entering China from Hong Kong, long a major gateway to the mainland.

According to travel agencies in the region, applicants are only being issued single-entry visas, with double-entry visas only being issued if airline tickets or detailed itinerary can be provided explaining why two entries are required during the same trip. The duration of stay for either single- or double-entry visa is 30 days. (more…)

BEIJING, April 7 - The Indian Minister of Tourism and Culture, Ambika Soni, opened the first Indian Tourism office in Beijing last night in front of the Chairman of the China National Tourism Administration (CNTA), Shao Qiwei at a packed Beijing Hotel gala dinner with over 700 specially invited celebrities and guests.

With the famous Bollywood Indian actor Kabir Bedi as master of ceremonies, the event featured speeches by Mme. Soni, Mr. Shao, the Indian Ambassador to China Nirupama Rao, a 40 minute performance by over 50 Indian classical dancers choreographed by Leela Samson, and a slap up Indian five course dinner prepared by Indian master chefs, specially flown for the event.

Mr. Shao noted that cultural ties were improving and were greatly linked to an increase in cross border trade that was doubling every two years, and looked towards an increase in Indian tourists to China and vice versa. Shao, a long-time personal friend of our Senior Partner and Publisher of China Briefing, Chris Devonshire-Ellis, was congratulated by Chris on the opening of the Chinese equivalent in August last year in New Delhi. Chris commented: “Shao Qiwei and I have known each other since he was the vice-governor of Yunnan province some ten years ago. It’s great to see him now as head of the CNTA and taking such a lead with the promotion of China-India bilateral relations in particular.” (more…)

Foreign businesses in the Western regions, as the Senior Partner of Dezan Shira & Associates, Chris Devonshire-Ellis advises, have all been centered on the local market, and with just a few exceptions, not for export at this stage of the regions development. (more…)

Guoshifa [2008] No. 28 applies to resident enterprises which maintain operating branches or establishments in multiple provinces. Headquarters and second-tier branches with business operations are required to file provisional monthly or quarterly CIT returns with their local tax bureaus.

Third-tier or lower branches whose provisional CIT payable is combined with that of the second-tier branches and second-tier or lower braches that are not VAT or business taxpayers and do not carry out business activities are not required to pay provisional CIT locally. In addition overseas branches and branches of resident enterprises qualified as small-scale enterprises with low profitability in the previous year are exempt from filing. (more…)

During the first two months, the western regions’ actual use of foreign investment was US$1.393 billion, more than double the same period of 2007. A total of 254 foreign companies were approved to invest in the region, said a ministry spokesperson at the ongoing 12th Investment and Trade Forum for Cooperation between East and West China.

Ji Xiaofeng,a ministry official in charge of foreign investment management attributed the increase to the nation’s encouraging policy for foreign investment to the middle and western regions. She said the ministry was advocating a transfer of foreign investment from the eastern regions to the western areas and encouraging local governments to use the investment in an innovative way. (more…)

By Joyce Roque 

April 5 - Like father, like son. When history is written it will remember Kim Jong-Il as remaining true to his father’s memory. Fourteen years after the death of patriarch and founder, Kim Il-sung, North Korea, officially known as the Democratic People’s Republic of Korea, still maintains the distinction of being one of the most secretive and rigid states in the world.

Located in the northern half of the Korean Peninsula, North Korea shares boundaries with China, Russia and South Korea. To its north, it shares a 1,416 kilometer border with China and a 19 kilometer one with Russia; to its south there is the 238 kilometer Korean Demilitarized Zone separating it from South Korea.

North Korea is still largely isolated and cut-off from foreign influences. Kim Jong-Il has continued to rule by the philosophy of Juche, or self-reliance to run the country’s communist regime with no tolerance for any form of dissention. In its annual World Press Freedom Index, Paris-based international non-governmental organization, Reporters Sans Frontiers, ranks North Korea at the bottom for not allowing privately-owned media and having no freedom of expression. (more…)

Technically tagged TD-SCDMA (Time-Division-Synchronous Division Multiple Access), the network was released in eight major cities – Beijing, Shanghai, Guangzhou, Shenzhen, Shenyang, Qinhuangdao, Tianjin, and Xiamen by State-owned China Mobile to a few select customers.

Third generation mobile phone networks are said to be to the telecom industry what broadband was to the internet; revolutionary. They will offer faster download speeds, instant e-mail, web browsing and real time gaming. (more…)