China Based Foreign Manufacturers – Finding “Beyond China” Investment Intelligence

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CDE Op-Ed Commentary

As China’s economy continues its path towards reform, the make up of its still-growing receipts of foreign investment dollars continue apace. China’s FDI increased by 4.7 percent in 2015, yet the form of investment is changing. A whopping 72 percent of the US$126.3 billion invested last year was in the services sector, as global businesses continue to invest to support the selling of goods and services to Chinese consumers.

This fits right in line with Chinese government policy – China wants and needs to attract dollars into services, and has said as much.  According to President Xi, “The economy has entered a new stage of slower but more resilient growth.” which Xi calls the new normal. “The essence of which is an improved economic structure that relies more on domestic consumption, the service sector and innovation.”

It’s important to reiterate that President Xi himself refers to the development of China’s services sector, and foreign direct investment within that, as ‘the new normal’. But there is a caveat. What is to become of the foreign invested manufacturing entities in China?

Once feted and attracted to invest their dollars in China by means of low (15 percent) income tax rates, five year tax holidays and low China wages, these investors are now increasingly at odds with China’s own plans for development. China’s wages are now higher than much of the rest of Asia, and at a senior level are outstripping salaries in Japan, the EU and the United States. Manufacturing in China, once the darling of sharp penciled  in-house accountants,  is now becoming a headache for many. But where to turn to for considered market intelligence and  financial comparisons?

Happily, our own China Briefing facility has over the years been quietly adding additional strings to its bow, as has Dezan Shira & Associates, the consulting practice behind it. If you’re not already familiar with these titles, check out our additional, well established portals and magazines below:




Regular updates on all matters relating to foreign investment trends, laws, taxes and costs throughout ASEAN. Includes updates investing in Singapore, Indonesia, Malaysia, Philippines, Thailand and Vietnam as well as Cambodia, Laos & Myanmar.

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Cambodia, Laos & Myanmar – 2016 Foreign Investment Outlook

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With U.S. President Barack Obama about to visit Vietnam, and the TPP agreement signed, Vietnam is poised to attract a lot of investment previously destined for China. Read all about Vietnam’s regulatory, investment law and tax updates on this popular portal.

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Complimentary Subscriptions, inclusive of updates containing the best of each of these websites, together with the most important news from China Briefing, can be obtained by clicking here.

Chris Devonshire-Ellis
is the Founding Partner of Dezan Shira & Associates – a specialist foreign direct investment practice providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam, in addition to alliances in Indonesia, Malaysia, Philippines and Thailand, as well as liaison offices in Italy, Germany and the United States. For further information, please email or visit

Chris can be followed on Twitter at @CDE_Asia.

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