20120828 Kansenrapport Top Sector High Tech Equipment Manufacturing and Machinery Industries

7/27/2019 20120828 Kansenrapport Top Sector High Tech Equipment Manufacturing and Machinery Industries

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OppOrtunities fOr Dutch cOmpaniestOp sectOr high tech: eQuipment manufacturing anD machinerY inDustries

chinaTop SecTor HigH TecH:eQUipMeNT MANUFAcTUriNg ANDMAcHiNerY iNDUSTrieSOppOrtunities fOr Dutch cOmpanies


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chinaTop SecTor HigH TecH:eQUipMeNT MANUFAcTUriNg ANDMAcHiNerY iNDUSTrieSOppOrtunities fOr Dutch cOmpanies


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2012

Focal point:Netherlands Business Support Oce [email protected]

Other participating ofces:Embassy of the Netherlands in BeijingConsulate-General ShanghaiConsulate-General GuangzhouNetherlands Business Support Oce JinanNetherlands Business Support Oce QingdaoNetherlands Business Support Oce Wuhan

www.zakendoeninchina.org

The business opportunity reports are a joined production of the Netherlands eco-nomic government network in China consisting of the Embassy of the Kingdom ofthe Netherlands in Beijing, the Consulates-General in Shanghai, Guangzhou andHong Kong, and the Netherlands Business Support Oces (NBSOs) in Chengdu,

Dalian, Jinan, Nanjing, Qingdao and Wuhan.

Unauthorized use, disclosure or copying without permission of the publisher isstrictly prohibited. The information contained herein, including any expression ofopinion, analysis, charting or tables, and statistics has been obtained from or isbased upon sources believed to be reliable but is not guaranteed as to accuracy orcompleteness.


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1. Opportunities for equipment manufacturing in China 5

1.1 The Chinese equipment manufacturing industry 6

1.2 Chinese government stimulation and 12th Five Year Plan 10

2. Chinas importance for the Dutch manufacturing

and technological industry 13

2.1 Case study: VMI Group 16

2.2 Case study: D&D Safe Sourcing BV 19

3. Practical tips and guidelines when setting up a

production facility in China 22

3.1 Choosing your business structure 22

3.2 Choosing a location for your production facility 24

3.3 Product liability 27

3.4 Employment 28

3.5 Human Resources 30

3.6 Issues when setting up a factory in China 31

3.7 Intellectual Property Rights 33

3.8 Concluding points 35

References 37

cOntents


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OppOrtunities fOreQuipment manufacturing in china

Equipment manufacturing is the key supporting industry of economic de-velopment in many countries, and became an integral part of the productionchain in most of the key industrial industries around the world. Equipmentmanufacturing has developed into a complex technological industry thatrequires a highly skilled work force and extensive research and develop-ment capacity. Next to this, the global equipment manufacturing industry

is restructuring and relocating from developed countries to emerging mar-kets such as China. The rise of the Chinese manufacturing industry duringthe last few decades has been exceptional. Today China is the most commonprimary manufacturing source of any country (35 percent of total globaloutput). And secondly, by a clear margin, countries also plan to invest morein China over the next two years than in any other country (39 percent).

The need to switch from labor-intensive production to knowledge-intensive

production is clearly felt in the machinery and equipment manufacturingindustry in China. Already, many Chinese (mostly state-owned) companiesin this sector are traveling around the world to seek cooperation or acquirecompanies with technologies they need for further development. An equip-ment manufacturing sector based on knowledge, innovation and high qual-ity products forms the foundation on which China can further develop someof its key sectors such as aerospace, automotive and green technologies.Opportunities for Dutch companies therefore lie in the areas of technologytransfer, process engineering, sustainable production methods and exportof high value-added components. Many Dutch companies in this sector are

already looking into opportunities to establish (more) presence in the Chi-nese market; frequently through a combination of an assembly plant (withnon-essential components sourced in China) and a sales oce.

The main objective of this report is to help Dutch SMEs to gain a betterunderstanding of their opportunities in mainland China. In the rst chap-ter we provide an overview of the key sectors in the dierent regions inChina and introduce some of the Chinese government policies towards theindustry. In the second chapter, we look at current Dutch manufacturing

1.

The global equipment manufacturing industry is restructuring

and relocating

Today, China is the primary manufacturing source of any country


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1.1

activities in relation to China in order to learn more about its importanceand be inspired by the two case-studies. The third and nal chapter providesyou with some key points any company needs to consider when it decidesto either start or further develop the business and/or production in China.In a single report it is impossible to provide all the necessary details and in-dustry information needed to develop a clear strategy for your companysfuture, so please refer to the fourth section of this report for the contactdetails of the organizations that contributed whilst writing this report, andsee what services they can oer to support you in your development in theChinese market (many of the services are free of charge).

the chinese eQuipment manufacturing inDustrY

China has become the largest manufacturing country in the world. Theadded value of Chinas manufacturing industry now accounts for almostone-third of the countrys total GDP, which currently stands at EUR 4,1 tril-lion (USD 5,88 trillion). Of the total manufacturing output machinery andtransport equipment accounts for about a quarter of the total manufactur-ing output in China, and if metal and the equipment related to this industry

is taken into account the percentage would be a lot higher. Being the largestindustrial sector in China, the equipment manufacturing industry in Chinaitself is classied into 12 major categories:

transportation equipment manufacturing industryelectrical equipment manufacturingheavy-duty and mining equipment manufacturingpetrochemical and general equipment manufacturingagricultural equipment manufacturingconstruction equipment manufacturinginternal combustion engine manufacturing

machine tool and tools industryinstruments and metersgeneral equipment manufacturing basic componentsenvironmental protection equipment manufacturingfood processingpackaging equipment manufacturing.

The scope of the industry is extremely broad and the many dierent re-gions in China all facilitate a large variety of dierent sub-sectors of theequipment manufacturing industry. Therefore the industry is not easily

segmented into the dierent regions of China. However the dierent prov-


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Chinese private companies are quickly upgrading their product quality

inces have some focal points and local specic industries in which they out-perform other provinces; these will be outlined in this chapter, and providean initial insight into the Chinese market.

In China, most of the industrys main forces lie in the Eastern coastal areas.Jiangsu, Guangdong, Shanghai, Shandong and Liaoning are in the top veof all provinces in China, both in terms of the number of the corporationsand the industrial added value and prots. However, in the 12th 5-year plan(2011-2015) the Chinese government outlined the clear ambition, in linewith the Go-west policy introduced a few years earlier, to move low-techmanufacturing from the Eastern provinces to the Western provinces suchas Sichuan, Guizhou, Yunnan and the municipality Chongqing, and upgradethe manufacturing industry in the Eastern provinces to more high-techmanufacturing. A further general division in East coast operations can bemade between the North and the South, in which the North (Liaoning, Ji-lin, Heilongjiang) specializes in more heavy equipment manufacturing forindustries such as steel, automotive, shipbuilding, aircraft manufacturingand (petro)chemical, whilst the South (Guangzhou) performs well in lightmanufacturing industry with many electrical appliances such as television

sets, electrical fans and refrigerators, and other consumer products like gar-ments, toys, shoes and electronics.

The recent developments in the Chinese equipment manufacturing marketare very dynamic. Many large state-owned manufacturing companies areunder extensive reform, and are seeking ways to become less dependent onforeign manufacturing techniques and knowledge. Chinese private compa-nies are quickly upgrading their product quality and their production e-ciency, and are actively looking to exploit both domestic and international

markets. Similarly, there is the above mentioned trend of international pro-ducers relocating to China, where high-tech production becomes more andmore important. The low costs advantage in China is disappearing in theEastern coastal provinces, however quality of personnel, suppliers and in-frastructure is increasing. Also, the Chinese domestic demand for high-techproducts and production techniques is growing quickly, which makes theseregions now interesting locations for the Western high-tech manufacturingcompanies. And for most foreign companies in China, the desire to sell inChina means a local presence is required.

Quality of personnel, suppliers and infrastructure is increasing.


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Below we provide some basic information on the manufacturing industryin nine dierent regions in China:

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chinese gOvernment stimulatiOn anD the 12th 5 Year plan

Foreign advanced equipment manufacturing entering China is encouragedby the Chinese central government as China is looking to upgrade its equip-ment manufacturing sector. Ultimately, an advanced equipment manufac-turing sector is an important key element for the further development ofother focus industries for China such as petrochemical, new energy, aero-space, automotive etc. In the 12th Five Year Plan the Chinese governmentoutlines this ambition clearly and identied the key growth industries forthe period of 2011 to 2015. High-end equipment manufacturing was men -tioned in the Plan as one the important seven strategic industries, whichare:

energy-eciency and environmental protectionnew-generation information technologybio-technologyhigh-end equipment manufacturingrenewable energynew materialsnew-energy cars.

As outlined above, investments in high-tech, advanced manufacturing, en-ergy saving, environmental protection and new energy are all encouragedin the 12th Five-Year Plan, with energy conservation, advanced technol-ogy and environmentally friendly products highlighted as the key areasof growth. Such encouragement underscores the commitment to upgrademanufacturing from the earlier model of low cost labor and simple assem-bly.

It is important to note that the Five Year Plan serves as a general guideline;

each province, city, district and county has its own preferential policies, in-centives depending on what their priorities are. Besides, the plans on mul-tiple levels are focusing more on the State Owned Enterprises (SOEs) andlarge companies, rather than Chinese SMEs, resulting in an uneven develop-ment within the industry and between regions. However, the overall maininvestment and development plans for the equipment manufacturing sec-tor concern improving innovation and core competences in this sector. Oneof the methods used by local governments is to promote the developmentof key equipment manufacturing development zones in which they aimto cluster relevant companies, research facilities, laboratories, etc. In many

cases local governments have funds available to support certain projects

1.2

Each province, city, district and county has its own preferential policies


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within the dedicated zones, such as helping existing companies establishresearch facilities, laboratories etc. In addition, the government can oerlow land prices to relevant companies in return for establishing presence inthe dedicated zones. Similarly, banks are instructed to provide preferentialloan rates to these companies.

Since the beginning of the 1980s, the number of Special Economic, High-Tech, and Development & Free Trade zones throughout China has grownrapidly. Nearly all 1st and 2nd Tier-Cities (the largest and most developedones) in China belonging to these zones have already or will soon be es-tablished. Information for your company regarding the relevant regions/zones is readily available online; normally, there will be particular focus oncertain industries in such zones. Economic policies of these zones include:special tax incentives of foreign investments and great interdependence oninternational trade activities.

Some of the local governments have oered to give support to equipmentmanufacturing industries in the following forms:

Financial subsidies for key industries.Launch of innovation promotion programs.

Priority in approval of companys listing in the stock market, issuingshares, short term nancing, and medium term bonds; and supportbanks to release loans to the companies in this industry.Encouraging mergers and acquisitions in this industry to form largercompanies.Encouraging international cooperation and exchanges.Supporting brand building of enterprises.Exemption from import tari and import linked VAT (value added tax) -for importing self-use equipment, or renewal of equipment and its sup-porting technology components, spare parts etc.Foreign-funded enterprises are encouraged to purchase domestic equip-

ment and will enjoy tax reimbursement when they purchase accord-ingly.In addition, foreign investors currently operating in the coastal regionswho wish to relocate their operations to western and interior regionsmay enjoy streamlined administrative, tax, foreign exchange and socialsecurity related lings and approvals.

It is important to stress that these programs, tax agreements and benetscan dier greatly throughout the dierent regions (also between provinc-es and/or cities) and the dierent Economic Zones in China. It is therefore

advisable when considering setting up a production location in China to


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conduct thorough research on the dierent possibilities and benets in thepreferred areas. It is also highlighted that favorable policy and a healthybusiness climate on paper does not guarantee business success or fulll -ment of any agreements entered. Some regions will present more dicul -ties in terms of business culture, logistics, employment of schooled labor,along with other factors that may aect business operations. Ultimately,success may be achieved more eectively by building long term mutuallybenecial relationships with local government and companies as opposedto shallow policies and promises.


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2. chinas impOrtance fOr theDutch manufacturing anD technOlOgical inDustrYThe rst chapter gave a glimpse at the equipment manufacturing industryin Mainland China. In this chapter we will address the relevance of it in re-lation to the Netherlands. Firstly, we will provide some statistics, followedby two case-studies of inspiring examples of Dutch manufacturing com-panies that are active in the Chinese marketplace. The Chinese market isincreasingly important for the Dutch economy; currently, China is alreadythe largest importer of Dutch goods and services of the emerging BRIC-

countries, and amongst the emerging economies China is by far the largestexporter to the Netherlands.

The majority of the Dutch exports to China consist of goods (80%), whileonly 20% comes from the export of services. Manufacturing goods, mainlycoming from the technological industry, accounts for more than half of ourtotal goods exports (see also the gure 1 below). The export of machines byitself is already responsible for more than a quarter of Dutch export goods.

2009 (usD )

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Figure 1: Dutch Export goods to China

A study of FME-CWM, the Netherlands largest association for the techno-logical industry, showed that, amongst its members, the Dutch technologycompanies believe that China will be the most important emerging econo-my with regards to their growth abroad (with Chinas importance for theDutch exporters increasing fast), see also gure 2. Similarly, the study showsthat China is already the most important country for the Netherlands withrespect to outsourcing. Almost a quarter of the respondents also has theirown oce or production facility in China. Lastly, again by a large margin,China is the country preferred by Dutch technology companies for future

outsourcing or as FDI-location (see gure 3).

55%


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Land pnta

gy 80%

uK 42%

B 41%

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us 31%

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Brazil 24%

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Figure 2: Growth countries for the Dutch technology Industry 2011

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Czech Rep 16% uK 24% Brazil 14%

pod 15% c 23% tky 11%

hy 10% f 19% v 10%id 10% B 14% pod 7%

Figure 3: China as outsourcing and FDI location for Dutch technology industry

Although the importance of China for the Dutch technology and manufac-turing industry is rising, China is still not a particularly accessible countryfor foreigners to set up a business. But China still scores far better thanthe other emerging BRIC-countries with regards to their ease of doingbusiness. See also gure 4 below (the Netherlands holds the 30th position


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worldwide). Next to this, in the World Banks Doing Business-report it isoutlined that China has improved its ease in doing business more than theother BRIC-countries over the last ve years.

Figure 4: Ease of doing business - global rank

European Unions Trade and Investment Barriers 2011-report still identi-es a number of important diculties for European companies when doingbusiness in China, the following issues are mentioned:

restrictions in obtaining raw materialsdiscrimination towards foreign companies at public tendersno adequate IPR protectionno conformity to international standards (also, working with Chinese

standards and managing long and dicult processes of certication)Chinese law systems do not oer stable enforcement on a par with West-ern standards.

Other concerns reported by Dutch companies operating in China are:

Subsidies on various goods are only oered to Chinese companies ormanufacturing joint ventures with a Chinese partner (which might alsopresent an opportunity if one gets listed).Business environments are dicult due to language, business and cul-

tural dierences.

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Opaque system of pricing (cost breakdown) with many hidden costswhich will reveal themselves only later on in the process.Competition and contradiction measures between various governmentauthorities.Local protectionism.

Considering the several diculties mentioned above that you may experi-ence when entering the Chinese market (although there are many morehurdles to overcome), why or when should you as a manufacturer go toChina? Traditionally, manufacturing in China was viewed as a way to cutcosts and increase prots. However increasingly, companies now see Chinaas a strategic position that ts their global strategy. The advantages of lowcost labor is already disappearing in certain areas in China, so when con-sidering investing in China it is essential to have some long term strategicreasons next to those cost advantages, for example: (1) access to Chinas rap-idly growing domestic market, (2) to bring production closer to the Asianmarket, (3) to increase proximity to other manufacturers (increasinglybased in China) for makers of intermediate goods, and (4) to gain access to

increasingly competitive and sophisticated Chinese research, science andtechnology both in personnel and technologies. When entering the Chinesemarket, long term strategic reasons must be the key decision points. Thetwo case-studies below will provide a more practical description about set-ting up production in China. In the third chapter more insights and tips onsetting up production in China will be shared.

case stuDY: vmi grOup

Based on an interview with COO Guido Roncken.

In this case-study, we discuss the business development of the Dutch VMIGroup in China, and share their lessons learned. VMI is the worlds leadingsupplier of machinery and services for tire manufacturers in radial passen-ger, light truck, all steel radial truck, bus tires and o-the-road (OTR) tiresspecializing in the technical rubber industry, tire industry, and tire retread-ing industry sectors.

VMI Group has been trading in China since the late 1980s and at that timesaw a growing number of Western companies move production to the East

to enjoy cheap labor costs (VMI requires a relatively large amount of labor).

China is still not a particularly accessible country for foreigners toset up a business.

2.1


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In 1994 a Chinese government agency organized a matchmaking programto attract foreign investments. Through this program, VMI found a Chi-nese partner with whom they started a small joint venture (10-12 people) in1996. The partner of VMI was based in Yantai (Shandong). It was concludedthat this city would be a good location for VMI in China, because the city isnot too big (ensuring relatively low costs for land and labor), it is a harborcity and lastly, part of the province Shandong, which has a powerful tireindustry. Starting small allows a company time to become familiar with thesurrounding law systems and build up government relations. In the begin-ning stages when things go wrong, the impact stays limited. Although VMIstarted small and cautious, it was using those rst years to prepare itself forlarge growth in the region.

Originally VMI Group started in China with a Western general manager,but quickly found out that this did not work well for them, and changed toa Chinese general manger, a former employer of the Chinese governmentagency that invited VMI to come to China a few years before. With the Chi-nese GM appointed in 1997, operations started to run more smoothly, and

diculties with Chinese government, clients and partners where dealt witheectively. A Chinese management team can deal more eectively withthe (day-to-day) problems VMI experiences in China. They have the rightknowledge and personal networks to solve more problems than a Westerncounterpart can. The whole management team now is Chinese, but all speakuent English, which is the companys global communication language. Theonly exception VMI makes in this respect is the Head of Production, whomis always a Western expert.

After a few years being active under the radar with a small oce focus -ing solely on sales support, in 2002 VMI opened its rst factory in Yantai(Shandong province). The joint venture was closed and this factory was es-tablished in 100% ownership of VMI Group in the Netherlands. After theopening of the rst factory VMI Group experienced a very strong growth inChina, and in the summer of 2011 the fourth factory opened in Yantai. Withover 26,000m2 and more than 300 employees, about one-third of VMIsglobal turnover comes from China and 50% of total production is based inChina. The speed of growth depends on the developments in the market,but by growing the company you can organize things more eectively and

cut costs; this results in even more new clients.

A Chinese management team can deal more eectively with the(day-to-day) problems.

The speed of growth depends on the developments in the market.


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Thanks to the Chinese factories in Yantai the number of Chinese and Asianclients is also growing rapidly. In some cases VMI nds that some Chineseclients (mostly government related) even require that a part of the produc-tion facilities are based in China. For VMI the quality of their products fromboth China and Europe is the same, and after proving this fact to their cli -ents, VMIs European clients are now also buying the VMI machines madein their Chinese factories.

However some high-end machines are still only produced in Europe, mostlybecause of VMIs internal safety measures on Intellectual Property. Next tosaving costs the factory facilities in China also opened new markets for VMI.In the low-end tire machinery VMI Europe couldnt be competitive on theglobal market. With the lower costs in China, VMI can now be competitiveand with some of these products they acquired a global market share of upto 80%, these China specic products generate a large part of the companysannual turnover. The prospects for the coming years look good, and VMIis expecting a continuation of the growth, but at the same time it sees thatmany Chinese local competitors are improving the quality of their productsvery fast.

With more than 15 years China experience VMI would like to share somelessons learned to Dutch SMEs starting or expanding in China. We alreadymentioned VMIs preference to start small, and work with a local manage -ment team. Next to this VMI stresses the importance of investing in youremployees; VMI invests heavily in the education of their employees, bothon technical expertise and language expertise (everybody has English class-es), this is to ensure that people stay loyal to the company and thus reduc -ing sta turnover. Similarly, a large amount of time and money is invested

in sourcing and retaining suppliers. VMIs machines need a lot of dierentparts, coming from dierent suppliers, and everything needs to be of thehighest quality. Without these suppliers your business is lost, and just likeemployees, suppliers can leave any minute.

Next to the willingness to pay premium prices for good quality and ser -vice, VMI keeps strong relations with all it suppliers and makes sure notonly now, but also in the future VMI can stay an important client for them.

Because you cannot inuence your suppliers as directly as your employ-

Some high-end machines are still only produced in Europe

VMI stresses the importance of investing in your employees

There are dierent roads to reach the same end result


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ees, the latter is probably an even more dicult task for the company. Thelast, but denitely the most important notion, is that when you want to dobusiness in another culture, you have to make an eort to understand thisculture and society and most of all respect the dierences. In the rst yearsVMI was lacking on this point, and after changing the internal attitude to-wards this, and accepted things in China went dierently, it made it all a loteasier. There are dierent roads to reach the same end result.

case stuDY: D&D safe sOurcing Bv

Based on an interview with CEO Jan van der Donk

In this case-study, we discuss the business development of the Dutch D&DSafe Sourcing BV. D&D is a company with oces in the Netherlands andin China (Shanghai) and oers sourcing of (assembled) metal products forthird parties. D&D has been active in China since 5 years, opening its ownfactory for assembly and production in Shanghai in the summer of 2011.

Director Jan van der Donk started to work in the outsourcing business in Chi-na in 1999 when he was employed by an American company. This companyset up an oce in Shanghai and after six years of experience in China, Vander Donk saw enough opportunities to start his own company focusing onoutsourcing. Familiar with the potential diculties companies may experi-ence whilst setting up production and assembly in China and the problemsforeign companies experience when dealing directly with Chinese agents,it was clear that there was a business case for an intermediary role for D&Din helping western SME-companies produce in China. Being familiar withShanghai and knowing another friendly Dutch company there that agreed

to let D&D use its legal entity (a Wholly Foreign Owned Enterprise - WFOE)to start their business, the choice for a location in China was made.

D&D in China is led by a Dutch person who is uent in Chinese and alsovery familiar with the Chinese culture. This combination works well forthe company. Before that they had a Chinese general manager for a periodof time, who was ineective and prior to that a western engineer without

experience in China had also proven to be unable to do the job. Therefore

D&D needed its own assembly and production facility in order to guaranteethe safety of Intellectual Property for its clients

The choice to stay in Shanghai was made to be able to retaintheir employees

2.2


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upon nding a Dutchman with uent Chinese language skills, D&D knewthis would work for them. Initially the manager was unfamiliar with theengineering world, however he proved to be a quick learner. So a Westerngeneral manager for communication and strategy, supported by a group oflocal Chinese engineers for the technical know-how is the formula in whichthe company can grow.

After four years of steady growth, a turning point for D&D arrived in 2010when they won a big production order from the Dutch Nedap to producetheir pig feeding stations, which are now being sold all over China. TheNedap-machines consist of over 400 parts, some highly innovative partsthat are produced in the Netherlands, however the majority comes fromwithin China. Because of D&Ds position in China, the company has the pos-sibility to outsource production of these parts to four dierent players andassemble it at a fth, separate location, something that would be impossiblewithout the right connections and local presence. Even though Nedap has apresence itself in China, it prefers to outsource the production to a trustedparty in China. This order made D&D aware of the enormous sales-potentialthe Chinese market oers, and the company now sees many opportunitiesfor similar middle-sized European companies to sell their innovative prod-ucts in the Chinese market.

After winning the Nedap order, it was clear that D&D needed its own assem-bly and production facility in order to guarantee the safety of IntellectualProperty for its clients. Even though the majority of the work is still out -sourced to Chinese parties, the critical parts of the production process willbe handled by D&D itself. The earlier legal construction with the friendlyDutch company will not be sucient for this new phase, so D&D has set upits own production-WFOE.The application process required a lot of time and eort, mostly because

D&D did the whole thing themselves without help from intermediary of-ces. Over the years a good relationship has been established with the lo-cal Chinese government, which also helped them to nd a good location inShanghai for the new factory. The choice to stay in Shanghai was made tobe able to retain their employees. If D&D were to move to another cheapercity, it would probably lose most of its local sta, the good understandingbetween management and the technical sta acquired over the years, andtheir technical know-how; all of which are too important for the companyto lose.

Use time to slowly build up your connections


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With over 10 years of China experience in the Chinese market Jan vander Donk would like to share some experiences relating to production andsourcing in China. Building on the notion of the value of a western generalmanager, whom is familiar with the Chinese language and culture, we canpropose that when doing business in China, you need to use time to slowlybuild up your connections and with this you can build up your business;there are no quick wins in China. And lastly concerning the business ofsourcing there are two golden rules in China: 1) check, check, check!, and 2)always have a second source. If you are depend on one party for production,there is a possibility that you may encounter dicult problems if anythinguntoward happens with the supplier.

In the Western business cultures, these issues are no longer regarded as po-tential problems; now, there the focus is on single sourcing, just in time,lean manufacturing, etc. etc. These are solid, ecient concepts, but theoperational culture in China is such that it doesnt work like that yet.

There are no quick wins in China


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practical tips anD guiDelinesWhen setting up a prODuctiOn facilitY in china

Previously, most European companies were looking at cheap manufactur-ing in China and export products back to the developed countries; howeverthe new trend is manufacturing in China in order to sell to the Chinesemarket. The huge potential and increasing spending power of the growingChinese middle class and the rise of Chinas domestic demand, has led manyEuropean companies to shift their business operational focus from Europe

to China. The buying power of the Chinese middle class is expected to riselargely in the coming decades, and eventually China will become the big-gest buying power in the world. In order to sell in China, companies needto be able to compete with international competitors who already manu -facture in China, as well with local Chinese manufacturers who are rapidlyclosing the quality gap.

Companies that are selling their products in China need to be able to oerafter sales service such as installation, technical support, maintenance etc.

Similarly, Chinese clients expects a quick delivery time, the ability to buy inRMB, technical support and a competitive price. Manufacturing in China isan answer that satises all of these needs. Furthermore, many manufactur-ers already see that a growing number of their suppliers are based in Chinaand want to bring the production closer to them. When a company is al -ready sourcing from China and is looking to expand sales in China and otherparts of Asia, it makes sense to bring the manufacturing facilities closer tothe target market. In this chapter we will elaborate on the process of settingup a production site in China, emphasizing on the choice of location and wewill give a general overview of important recent developments in the eld

of product quality requirements and product liability. In addition, we willshortly discuss some HR and employment issues, as well as other sensitiveparts of the process.

chOOsing YOur Business structure

a. WFoe

Wholly Foreign Owned Enterprises (WFOEs) are the most common vehiclesused by foreign companies when setting up a manufacturing company inChina. It is much easier to protect intellectual property rights using a WFOE

3.

3.1

China will become the biggest buying power in the world


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rather than a riskier joint venture. The advantages of owning your ownfactory are: complete control, including production cycles, quality and IP.When setting up a production facility, it is extremely important to knowthe relevant industry regulations rst, so you can develop a strategy or atarget list for acquisition; this should include the skilled labor force neededand possibly important licenses and permits. Challenges faced when settingup your own factory include: amount of research needed on issues such aslocation, regulations and stang, length of time needed to set up the fac-tory, having to deal with government regulations and local laws.

Choosing a WFOE will require a signicant investment, however, startingfrom scratch and building your own factory can be a good way of puttingyour companys mark on a factory and overcoming the problems youd en-counter with a joint venture or an existing facility. The amount of manage-ment attention needed back home to open a new factory in a distant siteshould not be underestimated. During registration of the WFOE, the key isto get a wide scope of operation when you apply for a license. This can keepfuture costs down and allow you to run other operations as your businesschanges. WFOEs are able to issue invoices and receive payments in RMB

that can then be remitted back to the Netherlands after taxes have beenpaid.

Once your company name and application to set up a WFOE is approved, youwill need to apply for a business license. Then you need to register the busi-ness with several government agencies, including tax, customs, and foreignexchange administrations. When getting help to establish a WFOE, be waryof using a local agent who will often follow the standard steps without con-sidering your particular requirements or needs. The worst-case scenario is

a company nding itself unable to perform some assumed functions. Thebusiness scope or articles are very dicult to change later so it is essentialto get this right from the start. It is advisable that you seek help from some-one who understands your particular needs.

b. Jnt Vntu

Forming a manufacturing joint venture (JV) is a dicult process and it canbe hard for foreign companies to negotiate a favorable position. You needto have a very good strategic or regulatory reason to want to, or need togo down the JV path. They are notoriously dicult and if you can use a

WFOE, do so. The past has shown many JV failures because of mismatches

It is much easier to protect intellectual property rights using a WFOE

The key is to get a wide scope of operation when you apply for a license


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in expectations, concerns over conicts of interest, violations of intellectualproperty rights, dierence in business culture, poor checks and balances inthe organization or poor choice of JV partner. There are however some verysuccessful JVs such as for example Wellhope-De Heus (located in Shenyang,Liaoning) in the feed market with a 85:15 percent share in which the Chi -nese side holds the majority!

If you do decide to go down the JV route, it is essential that you carry outthorough due diligence checks on your potential partner. Also dene thelong term benet of cooperation for both parties to be able to see if youwill have something to oer each other in the long run. Plan for your exitfrom a JV from the outset as it is rare that JVs are permanent and its betterto have an exit preparation in place. When you do choose a JV structure, itis important to use independent Chinese lawyers or excellent foreign law-yers to draft all JV documents and contingencies for exit, arbitration andother issues. Many industries restrict foreign ownership to 49 percent orless. In these cases you need to try to inuence operational control throughthe agreed appointment of key senior management and board members,although this strategy might fail as some companies found out when the JVpartner outmaneuvered them by controlling the all-important HR depart-ment. Also one needs to nd out who is behind or backing your JV partner

and who are your friends on local, regional and central levels in order toinuence decision making.

chOOsing a lOcatiOn fOr YOur prODuctiOn facilitY

The decision where to locate the factory is probably the most important de-cision and this stage should take as long as it needs to insure that all aspectsof the decision making have been checked. There are many factors thatneed to be taken into consideration: the Chinese region youre interestedin, the size of the city and the nature of its industries, the availability of hu-

man resources, the availability of inputs, the distance from your suppliers,the location of the nearest international port, the location of your potentialcustomers, your business network (guanxi) or that of your partners, andmany more. Once you have decided on the top 3 regions, you will need tond the various Industrial Zones or Industrial Parks located in those areaswhich will give you the best returns on your investments in setup costs andoperational expenses. Though all the parks will state benets in their pub-lications it is crucial to trace the park with a real need for new factories in aspecic industry and open a face-to-face negotiation on the detailed termsof benets and operational factors as listed below.

3.2


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The search for location should be done with the assistance of an experi-enced, independent advisory company (check its allegiances) who has theright connections and the ability to check and conrm all aspects neededfor a successful factory set up. All negotiations should be managed by theadvisory company, making sure the industrial park is aware of involvementof a local company, which in general results in more realistic promises.

Aspects that need to be checked:

Appropriate site for the factory in terms of size, facilities, infrastructure1.(electricity, steam, sewerage), according to Chinese proper environmentfor the relevant industry, environmental issues etc.Cooperative, exible local government that can assist with nancing,2.licenses, tax benets and other incentive plans.The industrial park should preferably have enough foreign factories3.with several years of experience who can serve as referees (being therst foreign enterprise can hold some benets but is more risky).Availability and costs of high level managers who can run the factory,4.as well as availability of technical experts and factory workers. Capablesenior managers are in short supply and costly in China.Ensuring that there are no potential competitors in the same area, espe-5.

cially if it is a local company.Transportation infrastructure: ports, roads, trains etc. especially if long6.trucks are required for carrying special size products it is important tocheck if transportation is possible. Check future plans though as cir-cumstances can change rapidly to your benet.Locating the factory as close as possible to the main potential market to7.provide short delivery times, provide good after sales service and sup-ply spare parts quickly.If possible, to nd a location with easy access to the raw material needed8.for the production.It is also important to nd a site that has quick access and proper infra-9.

structure for the overseas managers when they visit the factory.In case a foreigner will be sent to manage the factory, a proper infra-10.structure of medical services and education for the children could alsobe something to consider.

It goes without saying that this Zone or Park must be managed and oper-ated at the highest possible professional standards.


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There are many locations for production set up in China. They generally be-long to one of the two main types: Special Economic Zones oering benetsand incentives, Governmentrun Industrial Parks and Privately-owned In-dustrial Parks. Several kinds of parks can be found in one area and might tyour business.

a. Sal enm Zns

Chinas Special Economic Zones have dierent names. They might be calledFree Trade Zones, Export Development Areas or Technological Devel-opment Areas. They might dier in form or size. At the end of the day,what they all ultimately oer is incentives and benets to foreign compa-nies. Chinas Special Economic Zones are managed by the national, regionaland municipal governments. Their aim is to try and attract (largely foreign)manufacturers by oering them a variety of incentives tax breaks, no cus-toms and duties, relaxed employment laws and lowered barriers of entryinto the local market. There are sometimes additional incentives such assupport for the registration process or additional tax breaks not ociallymentioned in the relevant regulations for foreign investments.

The many advantages of concentrating industries in relatively small dedi-cated zones have been proven again and again and not only in China. The

Chinese Special Economic Zones are usually located near transportationhubs and have excellent infrastructures: good roads, easy access to ports,railways and airports, fast telecommunications, plentiful and reliable en-ergy supplies, etc. Companies can enjoy these benets and access a plentifulsupply of potential local employees who are encouraged to relocate to theseareas by the Chinese government. However, many small and medium-sizedcompanies have complained about a lack of support from and problemscommunicating with Zone Authorities whether bureaucratic or logistic.

b. pvatly-wnd industal pak

The diculties faced by small and medium-sized companies in the Special

Economic Zones led to the establishment of the so-called Privately-held In-dustrial Parks. These parks are usually started by foreign companies whopurchase, lease or rent partially developed areas within larger government-run Industrial Zones, construct better facilities and infrastructures withinthem, and set-up a management support system in order to make it easierfor their clients to establish and operate their business.

While many of the Special Economic Zones try to attract the larger mul -tinationals, most of the Privately-owned Industrial Parks target small andmedium-sized companies and are particularly suited to their needs. When

joining such a park, one does not have to compete with the big multination-


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als and can enjoy the many services the Park provides especially duringthe earlier stages of penetrating the Chinese market.

The parks are usually managed by English-speaking foreigners, and oerhigh quality facilities and infrastructures. The lease in the Privately-ownedIndustrial Parks is shorter than the customary 50 years at the Government-run Industrial Parks, and most of them oer management services, businesssupport and consulting services in addition to oce spaces, manufactur-ing spaces and warehouses. This is why they are very popular especiallyamong small and medium-sized foreign companies establishing indepen-dent manufacturing and marketing operations in China. In conclusion: Themanagement support provided by the Privately-owned Industrial Parkshelps foreign companies focus on manufacturing and sales without all thebureaucratic overheads.

. industal inubat

Small or medium-sized companies looking for a quick, ecient and cost-eective way of establishing Chinese manufacturing operations could con-sider the Industrial Incubator. The Incubator helps companies to set-up

manufacturing operations in record time at minimum risk. It oers com-panies a modular approach, from setting up an assembly line to a fully op-erating manufacturing plant within a short time period of approximately6 months. It oers comprehensive support services: localization and engi-neering, quality control, procurement, logistics, nances, installation andmaintenance of an ERP system, obtaining certications and permits (ISO,SFDA), recruiting, training and developing a local workforce, dealing withthe local authorities etc.

prODuct liaBilitY

Dutch companies that wish to engage in equipment manufacturing in Chinaand selling products to Chinese customers need to keep into considerationtheir exposure to product liability claims. In an attempt to battle growingconcerns on domestically produced goods, the Chinese government hasover the last years tightened the legal framework for product quality re-quirements and consumer action. Moreover, in 2010, a new Tort LiabilityLaw was introduced, which specically deals with product liability.

The new product liability rules make both producers and sellers of defective

products liable for damage caused by the defect. Injured consumers have

3.3

Privately-owned Industrial Parks target small and medium-sized companies


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the right to pursue either the producer or the seller, with rights of contri -bution for the pursued party to seek recovery of its losses from the partyresponsible for causing the defect, including from third parties involved inthe supply chain. The law also permits the recovery of punitive damages ifa product caused death or serious injury to a consumer, while the produceror seller was aware of the defectiveness of the product.

In addition, the new law deals with remedial actions if a defective producthas been put into circulation. It requires the producer or the seller to, in atimely manner, take remedial action such as the issuance of a warning orrecalling the product. If this requirement is not - or insuciently - met,the producer or seller can be held liable by an injured party. This provi-sion has led to a signicant expansion of recall obligations in China, whichpreviously only applied to pharmaceuticals, foodstus and other speciedcategories of products.

These developments may impact Dutch companies with manufacturing fa-cilities in China. Although this type of litigation has been limited so far, agrowing sense of consumer rights combined with a stronger legal frame-

work to enforce these rights, might lead to cases being initiated against for-eign invested companies in China. Therefore, it is of growing importancefor their directors and senior management to be aware of the developmentson product quality standards, product liability, recall measures and con-sumer protection.

emplOYment

Chinas labor law legislations mainly consist of two laws of the national lev-el, the Labor Law and the Labor Contract Law, as well as various regulations

and circulars issued by local governments. The Labor Law and the LaborContract Law provide the general principles regulating the employment re-lationship while the local regulations and circulars specify the details basedon regional economic conditions. This legislation structure leaves sucientexibility to accommodate dierent developing levels but also leads to theside eect that the labor practice and interpretation diers greatly by local-ity. Even in the same city, the practice and the judges interpretation of lawmight change according to the economic climate. Therefore, the investor isrecommended to do a due diligence on the labor legislations and practice ofthe place where the manufacturing entity is located and shall not take for

granted and simply adopt the practice in other cities of China.

Injured consumers have the right to pursue either the producer or the seller

3.4


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A written employment contract is required for the establishment of em-ployment relationship, the absence of which will result in severe penaltyto the employer. The company could choose to conclude either xed termcontract or permanent contract with the employee but under some circum-stances, the employment contract has been renewed twice for instance, thecompany must establish permanent relationship at the request of the em-ployee.

The employment contract could only be terminated on the basis of legiti -mate reasons enumerated by the Labor Contract Law, e.g., expiry of the con-tract, severe violation against company bylaws, incompetence after trainingand position adjust. The fact that the terminating party shall provide solidevidences to justify the termination and that the judge tends to protect theemployee makes the termination, especially large scale retrenchment, al-ways a bad headache for the employers in China.

The Labor Contract Law also provides the standard of severance compen -sation, which is basically one month salary for one year service capped bythree times of the local average salary. If the employer fails to justify thetermination with legitimate reason, it shall pay doubled compensation tothe employee.

Technically the Trade Union of China is a non-government organization butin fact it has a deep government background and works closely with theMinistry of Labor and Social Security. Therefore, in China the Union willnot take aggressive action when conict between the enterprise and thesta occurs, especially in state owned enterprises, as the government giveseconomic reform and political stability the highest priority. Furthermore,the right to strike was removed from the existing PRC Constitution and ex-

ercising the right to demonstration shall be subject to strict pre-approvingprocedures of the government, which causes the role of the trade unioneven weaker. In that case, it is understandable that the employees are notenthusiastic to establish trade union in the company even though the PRCTrade Union Law requires the company to assist the trade union setup andallocate proper funds (2% of the total monthly salary cost) to the union.Most private companies and FIEs in China do not have trade unions. Even inthose, which have trade unions, the unions are either mild or inactive.

The government gives economic reform and political stabilitythe highest priority


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human resOurces

Human resources are a big challenge facing multinational companies in Chi-na. The most important aspect of employment is hiring and retaining loyal,dedicated sta in key positions. It is often seen as the number one chal-lenge for businesses in China. Talent recruitment and retention, high turn-over rates, shortage of managerial talent and lack of availability of skilled,technical or professional workers are among the top concerns that continueto be raised by foreign companies in China across virtually all sectors ofbusiness and industry. As Chinas state-owned enterprises (SOEs) grow insize and capability, foreign companies are also reporting increased competi-tion from SOEs for high quality talent. Companies need to take into consid-eration the amount of time that is needed to nd experienced and capablemanagers for the local entity. It is a process that can take many months,thus should be followed in parallel to the construction of the factory.

It is of great importance to have an experienced and capable manager forthe local entity. This can be a foreign or a local Chinese person, both willhave advantages and disadvantages; a foreign manager will be more expen-

sive and might not have the necessary experience in China. However, theywill have a better understanding of the product and the factory needs. Com-munications with the HQ abroad goes smoother, simply because there areno language or cultural barriers.

A Chinese manager can be an excellent choice to sell the products in themarket and will also be less expensive. He or she will know how to man-age Chinese employees, though in many cases lacks transparency andthe ability to work in a matrix mentality. Furthermore, dierences inwork culture will put a strain on communications with the HQ abroad.In both cases it is crucial to control and support the manager by creating a

supervising mechanism to secure transparency and continuation of experi-ence accumulated over the years. An external local service company mightbe a good solution to give your company support in HR recruitment andmanagement.

Finally, labor costs for skilled professionals in China are not as cheap asthey have been in the past. Competition for retaining skilled employeeshas risen, which has resulted in higher salaries, especially for the retentionof experienced sales managers and General Managers in specic industrialsectors.

HR is often seen as the number one challenge for businesses in China

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issues tO cOnsiDer When setting up a factOrY in china

Manufacturing in China is a balance between keeping costs down and ex -erting operational control. Seek expert advice before making any decisionsand consider all options in the context of what is right for your company.There are several sensitive issues to consider when setting up a factory inChina.

a. Tms ntatns

Each industrial park will oer many tempting benets before the registra-tion. A very experienced negotiator will agree the proper terms in such away that there will be no surprises once the factory is ready to start op -erations. There are several options to be considered: buying the land andbuilding the factory, leasing the land and building the factory, renting anexisting factory and making some adjustments etc. Some industrial parksoer special arrangements of leasing the land, building the factory by theindustrial park and giving a generous package of benets as well as the op-tion to buy the factory later down the road if the factory proved to be a suc-cess. Such oers are unique and need to be examined carefully.

b. Th nstutn jt

A construction project is a tough challenge in general, and it can becomemore challenging when executed in China. To achieve the required results,very good preparation should be made with the assistance of a local engi-neering company and local supervising companies to make sure the plansare conforming Chinese standards and accepted by the investors and theirclients requirements. Plans for the production lines should be approvedbefore construction begins and sourcing the equipment for the productionline should be done once the construction starts so adjustments can be madeif the proper equipment cannot be found in China.

. cmany st u

When choosing the most suitable industrial park, one of the factors shouldbe a quick and easy set up of the local entity, which can be achieved eas-ily with the support of the local government. It is extremely important tomake sure that all the required licenses for manufacturing, selling, import-ing /exporting can be obtained with the local governments support.

d. rutmnt

It is important to nd an area that has enough human resources to recruit

high-level stable managers as well as factory employees. It is also important

3.6

Consider all options in the context of what is right for your company


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to check the average cost of employees as well as the regulations regardingsocial benets that the employer has to pay according to the local regula-tions. The dierences in salaries and social benets can make a huge dier-ence in the cost structure of a company. Therefore, it is advisable to havean external local HR consultant who has the knowledge to manage the com-plete HR process from the recruiting stage, negotiate salaries, signing thecontract, payment and calculation of salaries and social benets.

. Fnanal manamnt

Proper management of the nancial aspects of the project is key to thesuccess of the project. Professional nancial experts should be involvedthroughout the negotiations of the nancial terms of the deal (lease, rent,purchase, tax benets and other benets). Once the factory has been set up,an external nancial expert will be able to set up all the procedures and con-trol mechanisms for the daily operations of the company. Below are someissues that require nancial experts advice:

Budget planning & controlControl & monitor the budgets & expenses of local staPlan cash-ow for the local activitiesTax planning in China

Set up of ERP and nancial report system (Western GAAP if needed)Invoicing in local currencyHandle AR and AP with clients and suppliersCredibility, reference checks & controllingFacilitating local currency sales contractsReviewing contracts between the client and local customersReviews of business deals and negotiationsAccounts receivables collection & credit managementTransfer funds out of China, inter-pricing planningFind, consult & provide the best solutions for tax planning in ChinaSales and cost analysis per project/contract

Preparation of tax declarationsMonthly tax audit and visit to tax bureauClaiming tax rebates and deductionsSetting up and maintaining the relationship with the bank and the -nancial institutes.

Using external advisors will allow you to reduce the companys relevantemployees to the minimum needed and allow the company to locate itselfout of the big city centres. Financial positions (CFO, nancial manager lev-els) are among the highest paid individuals in the Chinese labor market to-

day.


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strategy is to take the right steps to eliminate or at least limit the biggestIP infringements. Companies should start by understanding the followinggolden rules:

Identify which IP is important to the business, and eectively protect1.such IP without delay, if possible before entering the Chinese market.Why? Another company may register your IP rst!Take protective measures against abuse of IP (incl. condential informa-2.tion) by business partners and employees by signing agreements thatinclude non-disclosure and IPR protection, and take measures to ensurethat such agreements are followed.Why? Most IP infringements are by business partners!Do not presume that your IPR is automatically protected in China if you3.already have registrations in other countries.Why? Most IP (trademarks, patents, domain names) must be registered inChina.Do not rely on others (employees, distributors, suppliers, agents,4.friends) to register your IPR for you.Why? If the other party registers the IP in its own name, it can claim againstyou.

Hw t stablsh ip hts und chns law

Brand names, logos and other marks that are associated with the com-pany or its products can be registered in China as trademarks. Upon reg-istration, you will have exclusive rights to use the trademark on goodsin the relevant class. Foreign companies should not forget to registertheir Chinese brand names, as they often become very popular.Chinese domain names (i.e. ending with .cn) should be recorded withthe CNNIC.

Copyright arises out of the creation of a piece of work, but can be re -corded to facilitate enforcement proceedings.Designs and technological solutions can be registered as patents, as longas novelty, inventiveness and practical application requirements aremet. This means that new designs or inventions should be registeredbefore publication or use, or within a (6 or 12 month) period from regis-tration in another jurisdiction.Adequate measures should be taken to ensure that sensitive informationand valuable know-how used in dealings with business partners (suppli-ers, distributors, JV partners, employees) are recognized and therefore

protected as trade secrets.

The protection of IP rights is a necessary component ofstrategic business planning


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China applies a rst-to-le principle for trademarks, patents and domainnames, and so it is crucial for IP owners to le for registration as early aspossible. If you discover that another company has already registered yourIP rights, then immediately discuss with your lawyer to establish if or howyou can get these rights back. If you dont, your competitor may preventyou from using your own IP in the future!

Hw t nf ip hts n chna

As long as IP is protected under Chinese law, owners have a number of op-tions to enforce such rights against infringers. Each method of enforcementcomes with its own benets and drawbacks, and so a case-by-case assess-ment should be made on how to tackle a certain type of infringement.

A cease and desist letter drafted and sent in Chinese by a Chinese lawrm is an inexpensive step that may help to pressure an infringer intocompliance, or it may create an opening for negotiations.In an administrative action, the support of a competent administra-tive department (e.g. the AIC, the IPO, or Customs) is enlisted to raidthe premises of the infringer; upon conrmation of the infringement,counterfeits are conscated, an injunction is issued and the infringer

can be ned.Civil lawsuits allow IP owners to demand not only for an injunction, butalso to claim for compensation. As long as damages remain dicult toprove however, awards will remain low by international standards,Criminal prosecution of individual infringers is by far the most eec-tive means to IP enforcement, but is only available if specic, relativelyhigh thresholds are met.

cOncluDing pOints

In conclusion, as China has relaxed its laws regarding international tradelinks and domestic consumer power is rising quickly, there has been a surgein foreign businesses looking to setup a manufacturing facility and sell inChina. There are, however, as is evident from the above information in thisreport, many things that a company wishing to establish a production facil-ity in China must consider in order to maximize their potential earningsand minimize risk of failure. Initial decisions are incredibly important andfor one who is generally unaware of the markets and business culture inChina, setting up an independent production facility in China is a dauntingprocess and can easily fail if decisions are not made carefully.

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references

AmCham Shanghai and Booz Company, (2010), China ManufacturingCompetitiveness study-report 2009-2010China EU IPR Helpdesk, The Dos and Donts of IPR Strategy to PrepareYourself for Doing Business in ChinaConsulate-General of the Kingdom of the Netherlands (2011), Outsourc-ing Comparison Study South-East Asia (China, India and Vietnam 2011-2012)

EVD (2011), ITC Trade Map European Commission (2011), Trade and Investment BarriersFME-CWM (2011), China: Kansen en Knelpunten voor de Technologi-sche industrieING Economisch Bureau (2010), My industry outlook 2010; De crisisvoorbijING Economisch Bureau (2011), My industry 2030; Nederland gaat hethelemaal makenInternational Strategy & Investment (Dec 30, 2010), China 2011 Invest-ment Themes and 7 Strategic IndustriesKPMG (2008), New Markets; cost, insight and opportunity

KPMG (2009), A new dawn; Chinas emerging role in Global Outsourc-ingKPMG (2010), Global Manufacturing OutlookRoos, Maarten (2010), Chinese Commercial Law: A Practical Guide,ISBN 9041132546World Bank (2011), Doing Business 2011: ChinaWorld Bank (2011), World development indicators

More detailed industry information was also acquired by using sources in Chineselanguage that are not listed here.

Netherlands Economic Network www.zakendoeninchina.orgNetherlands Business Support Oces www.hollandtrade.com/nbsoPTL Group www.ptl-group.comFME-CWM www.fme.nlGMV www.gmv-fme.nlEVD / Agentschap NL www.agentschapnl.nl/evdR&P China Lawyers www.rplawyers.comHIL International Lawyers & Advisers www.hil-law.com


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Hongkong

Nanjing

Jinan

Nanning

Changsha Nanchang

Fuzhou

Hefei

Xian

Zhengzhou

Taiyuan

Hohhot

Shenyang

Changchun

Harbin

Urumqi

Xining

Lanzhou

Chengdu

Chongqing

Guiyang

Kunming

Lasha

Nanjing

Shanghai

Guangzhou

Hong Kong

Wuhan

Tianjin

Qingdao

Dalian

Hangzhou

Shijiazhuang

BEIJING

Yinchuan

TIBET

XINJIANG

QINGHAI

SICHUAN

YUNNAN

GUANXI

GUIZHOUHUNAN

GUANGDONG

GANSU INNER MONGOLIA

SHANXISHANDONG

SHAANXI

HENAN

HUBEI

JIANGXI

NINGXIAHEBEI

LIAONING

JILIN

HEILONGJIANG

ANHUI

JIANGSU

ZHEJIANG

FUJIAN

HAINAN

CHONGQING

nd eoo nwok cpo cprOvince name

po Bod


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20120828 Kansenrapport Top Sector High Tech Equipment Manufacturing and Machinery Industries

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