Located along the Northeast corridor of the United States, Rhode Island is a mere 180 miles from New York City. The small coastal state is known for its knowledge economy based on its elite universities and hospitals. In 2013, Rhode Island’s GDP was US$53.2 billion. The largest contributor to the state’s GDP growth was professional and business services sector. Today, Rhode Island’s industry base is dominated by healthcare, education, financial services, defense and advanced manufacturing.
Trade and Exports with China
In 2014, Rhode Island’s export to China was US$116 million, making China its fifth largest export market. The state’s exports to China grew by 18.6 percent compared to the previous year. Major exports to China include primary metal manufacturing goods, chemicals, machinery, waste & scrap and computers & electronics. Rhode Island exporters also have access to great export infrastructure and services, including freight logistics, air cargo, port services and shipping.
Investment Opportunities and Best Locations
Despite its small size, Rhode Island has more colleges, universities and hospitals within a one-hour drive than any other area of the world. These advantages have built the state into a global leader in providing knowledge-intensive business services such as design and healthcare services.
In China, foreign investors are encouraged to participate in creative industries such as industrial design and fashion design, meaning that foreigners may set up a design company without obtaining pre-approval from the Chinese government. They are also encouraged to provide design services for consumer products, airplanes and automobiles. China’s consumers are now increasingly buying unique and highly stylized products.
Known as the “Creative Capital,” Rhode Island has been leading the way on consumer product design since 1790. Hasbro, one of the largest toy makers in the world, set up its headquarters in Rhode Island in 1923. As a leader in art and design education, the Rhode Island School of Design provides talented employees for the leading consumer product makers in the state and beyond. Rhode Island is also home to many innovative design and packaging businesses.
Ocean and Marine Industry
Ocean-related industries are widely seen as the economic future of Qingdao in China’s eastern Shandong Province. As such, it presents significant opportunities for foreign investment. At present, 30 percent of marine research institutions in the country are located in the city. Despite the abundance of marine resources in China, the lack of supporting technology and professional personnel have greatly impaired the country’s development of its ocean and marine industries.
As an ocean state, Rhode Island is a world leader in ocean and marine expertise. The Graduate School of Oceanography (GSO) at the University of Rhode Island is home to more than US$30 million in annual investment in research across the core disciplines of marine geology and geophysics, biology, atmospheric and ocean chemistry, and physics. The state has been designated to develop renewable offshore wind energy projects.
China is the third largest healthcare market in the world and it is growing by double-digits. The Chinese government has made a priority of developing the health care sector, especially in the central and western parts of the country. The country also relies heavily on foreign imports for its medical supplies and devices, given that Chinese consumers prefer imported health care products and medicine.
Rhode Island is home to the headquarters of the industry giant CVS Caremark Corporation, as well as Amgan, the world’s largest independent biotechnology firm. Companies in Rhode Island are concentrating on advancing medicine through areas such as medical device manufacturing and vaccine development.
Tax Treaty – US Trade with China
The United States has signed a Double Tax Treaty with China. This can reduce tax burdens under certain circumstances in both trade and any China legal establishment. Please seek professional advice for specific China investment requirements. Treaty details can be found here.
Further Support from Dezan Shira & Associates
Dezan Shira & Associates can service Rhode Island-based companies that are looking to further develop their operation in China. The firm can help companies establish a direct office in the country and can guide them through the affiliated tax, legal and HR issues that come with doing so. To arrange a free consultation, please contact our U.S. office at firstname.lastname@example.org.
For further Rhode Island-Asia trade data, please see our related article on trade with India.
Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is 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 China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email email@example.com or visit www.dezshira.com.
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In this issue of China Briefing, we discuss the difference between the International Financial Reporting Standards, and the accounting standards mandated by China’s Ministry of Finance. We also pay special attention to the role of foreign currency in accounting, both in remitting funds, and conversion. In an interview with Jenny Liao, Dezan Shira & Associates’ Senior Manager of Corporate Accounting Services in Shanghai, we outline some of the pros and cons of outsourcing one’s accounting function.
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In this issue of China Briefing, we have set out to produce a guide to employing foreign nationals in China, from the initial step of applying for work visas, to more advanced subjects such as determining IIT liability and optimizing employee income packages for tax efficiency. Lastly, recognizing that few foreigners immigrate to China on a permanent basis, we provide an overview of methods for remitting RMB abroad.
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In this issue of China Briefing, we examine the role of Free Trade Agreements and the various regional blocs that China is either a member of or considering becoming so, as well as how these can be of significance to your China business. We also examine the role of Double Tax Treaties, provide a list of active agreements, and explain how to obtain the tax minimization benefits on offer.
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