LOGO Doing Business in China .

LOGO

Doing Business in China

www.epowerpoint.com1

Presentation structure

Some facts about China

Regulatory and Tax System

1. Forms of Doing Business in China

2 . China’s tax reform in 2007

3. Emerging Market Opportunities

www.epowerpoint.com 2

Map of China


PopulationPopulation China, as the world's most populous

country, has a population exceeding 1.3 billion, which makes up 22 percent of the world total. It is concentrated in the east and south of China. To bring population growth under control, the country has followed a family planning policy since the 1970s. We have adopted the one-child policy since late 1970s.


Ethnic Groups (Chinese Minorities)

China is a multiracial country with 56 ethnic groups,,The Han people account for 92 percent of the population. No matter how big or small the population is, all peoples share equal rights.


ReligionReligion

China is a multi-religious country. Taoism, Buddhism, Islamism, Protestantism and Catholicism have all developed quite a lot in this country. Freedom of belief is a government policy, and normal religious activities are protected by the constitution.


Administrative UnitsAdministrative Units

China is divided into 35 administrative regions. They are 23 provinces, five autonomous regions, four municipalities under the direct jurisdiction of the Central Government, two special administrative regions and Taiwan. The four municipalities are Beijing, Shanghai, Tianjin, and Chongqing; Hong Kong and Macao are the special administrative regions. Taiwan is to be reunited with the mainland of China.


CapitalCapital

Beijing is the capital of the People's Republic of China. A center for politics, economy and culture, Beijing has been developed into a world-class metropolis in which the modern world is blended harmoniously with the glory of an imperial past.


Opening policies and Reform Opening policies and Reform ( 1978-now)( 1978-now)

Chinese students who studied abroad during 1978-2008 reached 933,400,but only 232,900 (25%) returned to China.

International students studying in China: over 160,000 in 2008

Foreign direct investment in China: the biggest recipient of FDI among the developing countries for the last 15 years.

Foreign-invested enterprises: 508,941

Over 400 of 500 biggest transnational corporations invested in China and about 30 of them have established or moved their head-quarters to China.

86% of FDI is in the east and southeast regions


9.3% annual economic growth during the last 28 years

No. 3 trading power in the world, its trade volume amounted to US$2561.63 billion in 2008 and maintained the trade surplus value reaching as much as US$290 billion

China WTO entry on December 11, 2001

Foreign exchange reserves amounted to US$875.1 billion by March 2006, No. 1 in the world

Foreign exchange reserves reached US$1950 billion till 2008.

Women’s increase in their social status


The Trade Relations with its major trading partners

EU: The biggest trading partner and the biggest export market. The bilateral trade volume reached US$425.58 billion IN 2008.USA: The second trading partner. The bilateral trade volume reached US$333.74 billion in 2008.JapanASEANHong KongSouth KoreaTaiwanIndiaRussiaAustralia


Capital Outflow from Top-10 FDI Participants in China 2009(1-6)

Unit:US$100million

Country/RegionInvestment in

China Share in

China

H.K 1999896 46.5

British Virgin Island 585220 13.61

Japan 203497 4.73

Singapore 190447 4.43

Caymen Island 157668 3.67

United States 137405 3.19

Korea,Rep.of 135263 3.15

Samoa 117596 2.73

Taiwan Province 87152 2.03

Germany 51317 1.19


New Economic Development Plan China’s 11th 5-year Socioeconomic Development Plan (2006-2010)

Establish a “harmonious society”

Coordinate growth among different regions

Stimulate development of the agricultural sectors

Facilitate healthy growth in urban areas

Transform from export-processing to higher-technology-content products

Convert from a manufacturing driven economy to a more diversified domestic services economy

Targets by end of 2010 Double 2000 GDP per capita by 2010 (US$856)

Reduce energy consumption per GDP unit by 20% from 2005 level

[1.21tons of coal equivalent per 10000 RMB(1292 USDollars) in 2006]


China Regional Economy

Northeast Region

Shanghai

Xian

Dalian

Beijing

Tianjin

GuangzhouShenzhen

Hong Kong

Chongqing

Suzhou

Macau

Beijing-Tianjin-Hebei Region

Pearl River Delta Region

Yangzi River Delta Region

Chengdu-Chongqing Region

West and Central Regions

China

Northeast Region

Shanghai

Xian

Dalian

Beijing

Tianjin

GuangzhouShenzhen

Hong Kong

Chongqing

Suzhou

Macau

Beijing-Tianjin-Hebei Region

Pearl River Delta Region

Yangzi River Delta Region

Chengdu-Chongqing Region

West and Central Regions

China


Regulatory and Tax System

Forms of Doing Business in China Direct Investment Forms

• Equity Joint Venture (EJV)

• Contractual Joint Venture (CJV)

• Wholly Foreign-Owned Enterprise (WFOE)

• Investment Holding Company (CHC)

• Joint Stock Company

Indirect Investment Forms• Direct purchase and sales

• Toll/Contract manufacturing

• Licensing

• Financing

• Representative offices

Foreign Investment

Enterprise (FIE)

Foreign Enterprise

(FE)


China’s tax reform in 2007

Chinese domestic

owned companies

Chinese domestic

owned companies

Foreign-owned

companies

Foreign-owned

companies

BeforeBefore

Income tax at a rate of 33 percent

Dual tax system

AfterAfter


Income tax at a rate of approximately 15

percent



Industrial Zones

Industrial zones provide various incentives and opportunities for US companies with different business models Special Economic Zone (SEZ)

Free Trade Zone (FTZ)

High-Tech Park

Export Processing Zone (EPZ)

Boned logistics area


Export processing zone

Presently , in China , there are about 40 export processing zones, mainly distributing in Yangtze River Delta Areas, Pearl River Delta Area, Bohai area.

For example:

1.Shanghai:JinQiao export processing zone

2.Guangzhou:Guangzhou export processing zone

3.Shandong:Weihai export processing zone


Free trade Areas

Presently , only Hong Kong serves as the Free trade area in China.

Hainan is applying for being the FTA soon.

Tax Heaven: income tax rate at about 10.5%


Encourages and discourages

investment sectors

High-tech service sectors

Environmentally friendly

investment

New restriction

and prohibition

Logistic or business outsourcing are encouraging sectors

Chemical, auto parts meet new restriction, media-related industries are prohibited

Encouraging sectors


Foreign Investment Regulatory Framework

Principal Laws Applicable to Foreign Investment(Company Law, Wholly Foreign-Owned Enterprise Law,

Equity Joint Venture Law, Contractual Joint Venture Law )

Industry RegulationsGovernment Department

RegulationsEconomic Zone

Regulations

“Administrative Measure for Free Trade Zone”

“Administrative Measure for Export Processing Zone”

… …

“Foreign Investment Enterprise Income tax Law”

“Rules of the PRC on Foreign Exchange Control”

… …

“Catalogue on Guiding Foreign Investment ”

“Administrative Measure for Foreign Investment in the Commercial Sector”

… ...


Emerging Market Opportunities


Manufacturing in China

Take advantage of low cost, skillful labor force and college-graduated engineers, lower manufacturing cost

Incentive income tax rates and other tax holidays

For some products, Chinese government only allows those manufactured in China to enter into China domestic market

Good OEM/ODM capability, covering almost all industrial sectors of consumer and capital products


US Companies – China Manufacturing Facilities


Shanghai Bonded Logistics Park


LOGO

Questions?

www.epowerpoint.com26

LOGO Doing Business in China .

Documents

Transcript of LOGO Doing Business in China .