China Market Watch: Dairy Industry Recovers from Scandals, and Hunan Province Builds New Maglev Lines
China’s Agriculture Minister, Han Changfu, commented on the country’s dairy sector, saying that it has reached new heights since melamine scandals hit the industry in 2008. Large scale domestic dairy farms, consisting mostly of the top 20 milk enterprises, now account for 50 percent of dairy produce sold in China. The milk industry provided an industry outline for the 13th Five Year Plan, aiming to create a world-class advanced industry by 2020, by which time safety levels of Chinese-produced milk will reach those of foreign companies. To do so, the industry aims to improve regulation of milk sources and dairy farm conditions, and encourage large scale dairy producers to further develop.
China removes fees for long distance domestic calls and roaming data
At the opening of National People’s Congress this Sunday, Premier Li Keqiang announced that as part of the Government Work Report, telecom charges for domestic roaming will be dropped. This comes as part of the government’s larger initiative to improve China’s internet industry, with China Telecom being the first telecom giant to cancel roaming fees last October. Hefty fees can be incurred by using roaming data, or making long distance domestic calls within China, but this will no longer be the case. Li has stated that faster and more cost effective information networks are crucial to the development of every sector. The Work Report also says that small and medium enterprises can also expect a reduction in broadband service costs later this year.
Hunan province releases plans to build additional Maglev lines
China’s Hunan province has released plans to build more mid to low speed magnetically levitated (Maglev) rail lines, after the successful operation of its first domestic line in the capital city of Changsha last year. Changsha’s Maglev line runs from its South Railway Station to the city’s Huanghua International Airport at speeds of around 100 km per hour. According to the city’s development and reform commission, plans to build another line from Changsha South Station to the new state level Xiangjiang New Area will reduce the journey to 30 minutes. In addition to this, another Maglev line will be finished in the prefecture level city Zhuzhou, after three years of construction. The line will span 27.9 km with 24 stops. Lower speed Maglev trains are cheaper and safer to produce, and create less noise and zero emissions.
China urges development of smart manufacturing
At an inspection tour of Liaoning province last week, Vice Premier Ma Kai urged China’s manufacturing industry to become smarter and more competitive, following the “Made in China 2025” initiative launched in 2015. It aims to shift China away from being a manufacturing location to a world manufacturing power based on innovation. To do so, authorities and companies must focus on smart technology to further develop the manufacturing sector. Efforts should be made to achieve breakthroughs in key technologies, such as digitally controlled machine tools, robotics and smart sensors. In addition, smart software should be developed to support smart manufacturing production lines, in combination with new business models, customized production and transitioning of smaller firms and traditional industries into smart businesses.
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Doing Business in China 2017 is designed to introduce the fundamentals of investing in China. Compiled by the professionals at Dezan Shira & Associates in January 2017, this comprehensive guide is ideal not only for businesses looking to enter the Chinese market, but also for companies who already have a presence here and want to keep up-to-date with the most recent and relevant policy changes.
New Considerations when Establishing a China WFOE in 2017
In this edition of China Briefing, we guide readers through a range of topics, from the reasons behind foreign investors’ preference for the WFOE as an investment model, to managing China’s new regulations. We discuss how economic transformations have favored the WFOE, as well as the investment model’s utility, and detail key requirements that businesspeople need to examine before initiating the WFOE setup process. We then walk investors through the WFOE establishment process, and, finally, explain the new and idiosyncratic “Actual Controlling Person” regulation.
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