| China Business Advisory 2012 |
| China Business Advisory 2011 |
| China Business Advisory 2010 |
| China Business Advisory 2009 |
| China Business Advisory 2008 |
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| China Business Advisory 2012 Issue 1 - January 2012 |
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Editor’s NoteDespite a spate of uncertainties over the global economy arising from the loose monetary policy in the US and the future of the Euros, China came out with strong data in most economic fronts alongside the issues it has to tackle as is the case with the developed countries. |
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| China Business Advisory 2011 Issue 11 - November 2011 |
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Fundamental changes to tax system
in ShanghaiFurther to what has been said in our last edition, a series of regulations (Caishui [2011] No. 110
and No. 111) were released officially by State Administration of Taxation (“SAT”) and Ministry of Finance (“MOF”) jointly on 16th
November about the pilot program in Shanghai to replace Business Tax (“BT”) by Value Added Tax (“VAT”) for certain industries from
1st January, 2012. |
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| China Business Advisory 2011 Issue 10 - October 2011 |
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Further development on the RMB
Cross-border Settlement SchemeFurther to the various regulations and measures with regard to the RMB Cross-border
Settlement Scheme we brought to attention of our readers in previous editions, Ministry of Commerce (“MOC”) issued a circular on
foreign investments with RMB subject to it being derived from legitimate sources and the investment not in securities, entrusted loan and financial derivatives except those allowed by this regulation. |
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| China Business Advisory 2011 Issue 9 - September 2011 |
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Announcement of pilot program to
further relax foreign exchange controlState Administration of Foreign Exchange (“SAFE”), State Administration of Taxation
(“SAT”) and General Administration of Customs (“GAC”) jointly released a pronouncement in the middle of September 2011 to introduce a pilot program on foreign exchange control reform which will commence on 1st December 2011 in certain areas. |
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| China Business Advisory 2011 Issue 8 - August 2011 |
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Supplementary Individual Income Tax (“IIT”) regulationsFollowing the recently enacted New IIT Provisions on which we briefed you in our last edition, several supplementary regulations have been released by the government. |
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| China Business Advisory 2011 Issue 7 - July 2011 |
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New Individual Income Tax (“IIT”) Law enacted
We introduced the exposure draft of the new Individual Income Tax (“IIT”) Law, which attracted a lot of public discussion and debates, in our April Issue this year. Now it finally was enacted on 30th June and will come into effect on 1st September, 2011.
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| China Business Advisory 2011 Issue 6 - June 2011 |
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Implications of marketing activities on
Individual Income Tax (“IIT”)
In an increasingly competitive business environment, it is important that enterprises differentiate themselves from their competition and one of the ways to do so is through “marketing” which is a broad term.
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| China Business Advisory 2011 Issue 5 - May 2011 |
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Changes to the regulations on cosmetic industry
In the wake of recent food issues, both the governing authorities and regulations related to the cosmetic industry have undergone significant changes in the past year or so.
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| China Business Advisory 2011 Issue 4 - April 2011 |
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Further policy announced to boost
tourism in Hainan Island
Additional to the tax-refund program for overseas tourists in Hainan released in December last year (our CBA February 2011 Issue refers), another policy was announced by Ministry of Finance (Pronouncement NO. 14) on 16th March and became effective from 20th April, 2011, which was called “Pilot Program of Duty-free Shopping for Travelers Departing from Hainan Island”.
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| China Business Advisory 2011 Issue 3 - March 2011 |
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Release of a series of new regulations regarding Representative Office (“RO”)
Following the recently released “Administrative Rules on Registration of Representative Offices of Foreign Enterprises” which became effective on 31st March this year and was brought to your attention in our CBA December 2010 Issue, a series of new regulations have since then been announced by State Administration for Industry & Commerce (“SAIC”) to facilitate their implementation.
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| China Business Advisory 2011 Issue 2 - February 2011 |
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Chinese New Year Holiday schedule and
important issues to be noted
Chinese New Year, the most important festival of China and generally known as the Spring Festival, fell on the very beginning of February this year. The entire Mainland China celebrated it with a 7-day holiday from 2nd to 8th February, during which most businesses and offices closed.
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| China Business Advisory 2010 Issue 12 - December 2010 |
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Central Economic `Conference detailed
five-year plan for economic development
Central Economic Conference took place on 10th December 2010 in Beijing. It was a meeting of the Central Committee of the Communist Party and the State Council held at the end of every year since 1994. It aims to review the country’s economic conditions in the past years and make plans for future years.
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| China Business Advisory 2010 Issue 11 - November 2010 |
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Consumer Price Index (“CPI”) may exceed
3% in 2010
According to the National Bureau of Statistics (“NBS”), China’s CPI, the main gauge of inflation, soared to a 25-month high of 4.4% in October. In addition to the upward pressure from commodity prices domestically, the import led inflation resulting from quantitative easing of the US is a major contributor.
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| China Business Advisory 2010 Issue 10 - October 2010 |
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China’s interest rates rise for the fist time in nearly three years
On 19th of October 2010, the People’s Bank of China, the central bank of China, raised the interest rates for the first time in nearly three years. The benchmark rates were raised by 25 basis points and are effective from 20th October 2010.
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| China Business Advisory 2010 Issue 9 - September 2010 |
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The Chinese Mid-Autumn Festival
22nd September 2010, or the fifteenth day of the
eighth month of the Chinese calendar, was our
Mid-Autumn Festival. It is one of the most
important festivals in China and is a public
holiday. There are many sentimental legends
about it dating back thousands of years.
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| China Business Advisory 2010 Issue 8 - August 2010 |
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Revised agreement for RMB clearing in
HK signed by the Mainland and HK SAR
Soon after the expansion of the RMB
cross-border settlement pilot program
(highlighted in our CBA July issue), the
People’s Bank of China (“PBOC”, the central
bank of China) and Bank of China (HK)
Limited (“BOCHK”), the RMB clearing bank
in HK, signed a revised agreement on the
RMB clearing business in HK.
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| China Business Advisory 2010 Issue 7 - July 2010 |
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China's foreign exchange reserves
2006 saw China’s foreign reserves reach its first
$1 trillion accumulated over a decade. The
second $1 trillion took less than 3 years and by
the end of 2009 it surged to $2.4 trillion which
has remained rather stable ever since.
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| China Business Advisory 2010 Issue 6 - June 2010 |
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Shenzhen Special Economic Zone ("SEZ")
approved for expansion
Shenzhen, the pioneering city of China’s Economic Zones, finally received the approval for expansion from the central government. Historically, the city outside of Shenzhen Economic Zone (SEZ) is divided into two parts, ie Baoan and Longgang Districts totaling 1,553 square km in area or four times the size of SEZ. SEZ benefits from preferential policies and has, to some significant degree, an independent set of legislation.
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| China Business Advisory 2010 Issue 5 - May 2010 |
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Inflation rose to 2.8% in April
The National Bureau of Statistics reported this month that inflation in April went up to 2.8% year on year and the Producer Price Index (“PPI”) hit 6.8%. The rise may result from the record loan surge of 9.6 trillion yuan last year. China is facing greater pressure to control the inflation in the following quarters and there may be little chance of meeting the target rate below 3% for 2010.
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| China Business Advisory 2010 Issue 4 - Apr 2010 |
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New rules for foreign investments unveiled
The State Council released new rules on foreign investments reflecting current government policy trend. According to the new regulations, foreign investments are welcome in the areas of top-end manufacturing, hi-tech industries, modern service sectors, energy-saving and environmental protections. Investments in polluting, high energy-consuming industries and projects in industries with overcapacity will be restricted.
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| China Business Advisory 2010 Issue 3 - Mar 2010 |
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China expects an economic growth rate of 8% in 2010 and will keep Yuan basically stable
During China’s policy-making sessions of the National People's Congress (“NPC”) and
the National Committee of the Chinese People's Political Consultative Conference
(“CPPCC”) held in Beijing this month, Premier Wen Jiabao said when delivering his
annual report that although the environment for economic development this year may
be better than 2009, China will still be faced with undue complication.
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| China Business Advisory 2010 Issue 2 - Feb 2010 |
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China’s current-account surplus fell by 35% in 2009
According to preliminary estimates released by the State Administration of Foreign Exchange (“SAFE”) in
February, China’s current-account surplus fell by more than one third, to US$284.1 billion in 2009. It is the first
significant drop since 2001 and apparently reflects the impact of the global financial crisis.
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| China Business Advisory 2010 Issue 1 - Jan 2010 |
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2010 China recover from Global Recession
China has overtaken Germany as the world’s top exporter. As noted by the government officials at an economic forum in Beijing on January 10th 2010, to strengthen the mainland’s recovery and achieve sustainable development this year, Beijing will pay more attention to economic restructuring. Further to this statement, Beijing jumped in to put a brake on runaway bank lending on January 12th 2010.
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| China Business Advisory 2009 Issue 12 - Dec 2009 |
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China would continue its policies next year
China would continue to adopt the proactive fiscal policy and moderately easy monetary policy
next year and endeavor to improve the economic growth quality, according to the Central
Economic Work Conference. President Hu Jintao and Premier Wen Jiabao addressed the meeting,
which is held once a year to set the tone for economic development for the following year.
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| China Business Advisory 2009 Issue 11 - Nov 2009 |
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China’s GDP growth accelerated to 8.9% in Q3
According to China’s state statistics authority, China’s economic growth rate has risen to 8.9% year on year in
Q3 and 7.7% year on year in the first nine months. The spokesman of the authority states that the various
policies adopted by the government have resulted in significant positive effects and China will be able to
achieve the annual target growth rate of 8%, which the government believes is necessary to generate enough
jobs.
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| China Business Advisory 2009 Issue 10 - Oct 2009 |
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The 60th anniversary of the founding of the People's Republic of China
The biggest-ever military and civilian parade in the morning on October 1st, 2009 kicked off a series of campaigns to celebrate the 60th anniversary of the People’s Republic of China. The parade
started at 10:00am at Tian’anmen Square and showcased a favorable image of the country's armed forces and tremendous progress that the PRC had achieved in the past six decades, especially the latest 30 years of opening-up and reform...
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| China Business Advisory 2009 Issue 9 - Sep 2009 |
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China's PPI falls 7.9%, whereas retail sales were up 15.4% in August
China's producer price index (PPI), a major measurement of inflation at the wholesale level, fell 7.9 percent
from a year earlier in August, the National Bureau of Statistics announced. The rate of decline was 0.3
percentage point lower than that in July. From January to August, the PPI dipped 6.4 percent compared with the
same period last year...
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| China Business Advisory 2009 Issue 8 - Aug 2009 |
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Sino-US pledge on balanced growth
Wang Qishan, Vice Premier of China, said that the differences between China and the US on trade and
foreign-exchange rates could be resolved through cooperation between the two countries which will also help to
work towards a more balanced global economic growth and strengthen the stability of both economies.
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| China Business Advisory 2009 Issue 7 - Jul 2009 |
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China to further improve environment for foreign investments
China's Ministry of Commerce (MOF) issued a report on May 31st, 2009 which suggested that China will make
great efforts to create a stable and transparent environment to attract foreign investments and enhance foreign
capital utilization. A series of measures will be adopted to this end.
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| China Business Advisory 2009 Issue 6 - Jun 2009 |
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Shanghai World Expo ticket sales Start
Shanghai World Expo's organizers launched ticket sales recently for the global gala, to be held in the Chinese
economic hub from May 1 to October 31, 2010. Each visitor can enter the area of Expo 2010 Shanghai China
with a benchmark price of 160 yuan ($23) per visit during the 184-day grand show. The newly unveiled ticket
carries a logo, the mascot Haibao, and the theme catch-line "Better City, Better Life".
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| China Business Advisory 2009 Issue 5 - May 2009 |
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Allowable deductions for loan losses and reserves for financial enterprises
The Ministry of Finance (MOF) and the State Administration of Taxation (SAT) issued a circular jointly, Cai
Shui [2009] No. 64 (Circular 64), on April 30th, 2009, which clarifies the conditions for loan provisions to be
allowable against Corporate Income Tax (CIT) for financial enterprises according to the new CIT law and its
implementation rules. It gives some indication of loans eligible for allowable provision and basis for arriving at
it.
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| China Business Advisory 2009 Issue 4 - Apr 2009 |
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RMB cross-border trade settlement to start in five cities in China
It was reported that China will start a pilot Reminbi (RMB, official currency of China) cross-border trade
settlement program, which was one of the decisions made at the State Council meeting held on 8th April. The
trial program will be implemented in five cities. They are Shanghai, Shenzhen, Guangzhou, Zhuhai and
Dongguan. The latter four are all in Guangdong province.
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| China Business Advisory 2009 Issue 3 - Mar 2009 |
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Coke did not pass anti-monopoly review for purchase of Huiyuan
China Ministry of Commerce (MOC) said on March 18th, 2009 that Coca-Cola's bid to acquire China Huiyuan Juice Group did not pass anti-monopoly review. The Ministry said the acquisition would affect or limit competition and is not conducive to the healthy development of China's juice industry.
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| China Business Advisory 2009 Issue 2 - Feb 2009 |
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China’s Migrant Workforce – A Special Report
It has been said that migrant workers are the fuel that has propelled China’s economy from the ravages of
the Cultural Revolution, to build what is the world’s third largest economy today – and with good reason.
While the lowest rung on the economic hierarchy, they have furnished the muscle to reshape China from
Mao’s inspired upheavals of the 50’s and 60’s, to a country that is the envy of its Asian neighbors and viewed
with a certain awe by the West – and in 30 short years!
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| China Business Advisory 2009 Issue 1 - Jan 2009 |
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China – Is the Glass Half Full or Half Empty?
As China enters its New Year holiday period, it is a good time to reflect on China business and the economic
outlook for the upcoming Year of the Ox.
The Year of the Rat is over, and it certainly had its ups and downs:
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| China Business Advisory 2008 Issue 3 - Dec 2008 |
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China’s Economic Presents for Christmas
China announced additional stimulus measures just in time for
Christmas:
• Special assistance for Hong Kong, Macau & Taiwan
• Tariff rate adjustments
• A fifth round of interest rate cuts, and
• New incentive packages for nine hardest-hit industries.
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| China Business Advisory 2008 Issue 2 - Nov 2008 |
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China’s Stimulus Package – the Right Move at the Right Time
It’s been a tough year in China – starting with snowstorms that virtually paralyzed the country over Chinese New Year, the tragedy of the Sichuan earthquake, the nationwide tainted milk scandal, the deep decline in China’s and Hong Kong’s stock market, declining exports as the west reels under the worst recession since the great depression – but through it all China’s economy keeps on growing....
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| China Business Advisory 2008 Issue 1 - Oct 2008 |
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China Announces New Business and Economic Incentives
China’s Economy keeps rolling merrily along, despite the on-going international financial and credit market upheaval, natural disasters, recent currency revaluations and a global recession. China’s economy showed a 9% quarterly growth for the third quarter, and every indication is that reduced demands for exports will be replaced by domestic growth...
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| Tough Times Tactics No.5 - Feb 2009 |
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Team Up With Others
Being a senior citizen, I can remember when competitors were other local companies located down
the street or across town. Companies like McDonalds (1960’s) and Wal-Mart (1980’s) changed all
that, and today mom and pop stores have gone the way of the Model-T. While these two
companies are representative of the many businesses who are truly international in scope today,
the new generation of companies, such as Microsoft, Yahoo, Amazon and Dell – are Internet-based
businesses that can cheaply and efficiently reach potential clients in the remotest outposts.
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| Tough Times Tactics No.4 - Feb 2009 |
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Ask For Help
When times are tough, we are often too involved in the day to day problems to be objective.
Don't be afraid to seek counsel. Here's where to look:
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| Tough Times Tactics No.3 - Jan 2009 |
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Times are Never Better to Grow Your Business
I certainly agree that Cash is King and that companies are better off that
- Stay lean and mean
- Postpone and reduce spending whenever possible, as well as to
- Use outsourcing as a means to maintain a stable workforce.
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| Tough Times Tactics No.2 - Jan 2009 |
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Let's Make a Deal
A client of mine who owned a small industrial park was concerned that one of his tenants was
six months in arrears on his rent. He took the initiative to learn the "whole story". His
tenant’s sales were down dramatically and the business was experiencing extremely tough times.
He worked with his tenant to develop a cash flow projection and provided help by reducing the
rent by 25 percent, retroactive to the first unpaid month.
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| Tough Times Tactics No.1 - Dec 2008 |
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The Enemies are Outside The Gate
“These are the times that try men's souls.”
Thomas Paine, December 23, 1776
While times may be different, I think his reference is as fitting to the current economic
recession — which promises to be long and cut deep — as it was to America’s fight for
independence over 230 years ago.
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