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Projects Bidding Information - update daily Are you ready to export your product or service? You will find out in 3 minutes with resources to help you - enter to give it a try A Turbulent Year Ahead in 2004 for China-US Trade Relations? Special Report - China Northeast updated on Oct 14, 2004
Old Trade Issues Page BEFORE July 8, 2004 July 9 - Dec 31, 2004
December 29, 2004
China to Abolish Import License for
All General Goods in 2005
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Category |
Description |
Quota Limit |
Released |
% Filled |
|
350/650 |
Cotton and man-made fibre dressing gowns |
4,094,382 doz |
4,024,575 doz |
98.3 |
|
222 |
Knit fabric |
9,664,477 kg |
8,464,868 kg |
87.6 |
|
349/649 |
Cotton and man-made fibre brassiere |
16,828,971 doz |
13,526,353 doz |
80.4 |
To keep track of the utilization of US textile quotas, please go to CBP's website: http://www.customs.gov/quotas/files/cntxtrpt.htm
China to Decentralize Offshore Investment
Approval Right
To encourage Chinese enterprises to invest abroad, the Ministry of Commerce
(MOFCOM) has recently decentralised to local provincial departments of commerce
the right to examine and approve applications by local enterprises to invest in
setting up companies in 135 countries. At the same time, the number of documents
required to be submitted by applicants for examination has been reduced from 10
to five.
The principle of equality among enterprises of different forms of ownership is
further realised in the Provisions for Approving Enterprises to Establish
Companies Abroad promulgated lately by MOFCOM. The regulations stipulate that
“the state supports and encourages enterprises of various forms of ownership
with comparative advantages to go abroad and invest in setting up companies”.
There are no detailed provisions in the regulations specifying different rules
for enterprises with different ownership, thereby ensuring them equal treatment
in setting up companies outside the country.
In accordance with the principle of “he who invests will make decisions, he who
reap benefits will bear risks”, the regulations also set out that the onus is on
the mainland company which invests in setting up companies abroad to decide if
the venture is economically and technically viable.
MOFCOM and provincial departments of commerce will no longer screen feasibility
study reports when examining and approving mainland enterprises’ applications
for establishing companies in other countries (regions). Instead, they will
approve applications based on the following:
(1) the investment environment of the country (region);
(2) the security status of the country (region);
(3) the political and economic relations of the country (region) with China;
(4) the guiding policy on offshore investment at home;
(5) the rational distribution of the country (region);
(6) any obligations to fulfil relevant international agreements;
(7) protection of the lawful rights of the enterprise.
Guangzhou used car market gears up to
better sales
The mainland's used car market is lagging behind its new car sector in sales
growth. Many potential car buyers are held back by the absence of after-sales
service, complicated formalities and inadequate access to information in respect
of used cars.
Statistics show that used cars account for 75% of all car sales every year in
the US, hitting more than 43 million cars in 2002, roughly 3.5 times the number
of new car transactions in the same year.
In China, used cars take up just 30% of total car sales, with auctions playing
only a small part in the trade.
According to Shenzhen Pengqi Vehicle Auction Centre, the largest of its kind in
the city for used cars, only some 100 of the 300 or so used cars that change
hands through the centre every year are sold by auction.
Following the implementation of the new policy on development of the automotive
industry by the National Development and Reform Commission on 1 June, the Policy
on Trade in Automotives is in the pipeline.
Meanwhile, the long-awaited Measures for the Administration of the Used Car
Market were released at the end of September to canvass public opinion. The
official version may be introduced by the year-end. All these measures are
believed to be set to invigorate the used car market.
Recently, 12 distributors were awarded licences by the Shanghai Economic
Commission to deal in used cars. They launched a promotion, Shanghai Volkswagen
Select Used Cars, in September.
One of the distributors, Shenyin Volkswagen, offered to sign a quality warranty
covering the first six months, or alternatively 10,000 km in mileage with every
car buyer, partially solving the problem of after-sales service for secondhand
cars.
Attracted by the considerable potential of China's used car market, foreign auto
makers are trying to enter the market through partnering with local players.
Some foreign auto companies specializing in the used car business have embarked
on detailed research on the mainland market.
Hong Kong companies should be ready to tap the market by introducing to the
mainland proper trading formats for used cars that are practicing in the
international arena.
These services include offering technical talks, test driving, business
consultation and free evaluation and acquisition of used cars.
Shilihe lights up Beijing
Located along Dayang Road east of Shilihe Bridge on the eastern third ring road
in Beijing's Chaoyang district, Shilihe Lighting City was established in 1999
and started business in the second half of 2000. Though not the oldest among the
capital's specialised lighting marts, the facility has firmly established itself
as the largest in terms of business area in less than five years, covering
23,000 sqm.
In 2003, Shilihe was rated by the industry as one of the top 10 lighting cities
in the country, the only one in Beijing.
Today, Shilihe Lighting City has not only been shaped into a major distribution
centre specialising in the wholesaling and retailing of lighting products to the
whole country, but is also the market leader in Beijing.
Either for personal consumption or construction projects, users who need to
source lighting products will first check out Shilihe before visiting other
marts in the city.
Space at Shilihe Lighting City is rented out to lighting manufacturers and
companies to set up shops, which range from 100 sqm to several hundred sqm in
business area.
Rentals vary according to location, and averages Rmb150 (HK$141) per sqm
monthly, which is at medium rental in Beijing.
Thanks to the increasingly heavy visitor traffic, Shilihe Lighting City is
currently fully occupied, with a total of 166 tenants, 80% of which are from
Guangdong, Fujian and Zhejiang.
According to market sources, for want of space, some lighting companies that
intend to open shops can only do so by buying existing tenants' occupation
rights. It is understood that there have been successful cases of transfer of
such rights at Rmb380,000 (HK$358,490) per transaction.
Hu Chunming, deputy general manager of Shilihe Lighting City, said expansion
works of the mart are underway, which will hopefully increase its business area
by 3,000 sqm in 2004, in a bid to satisfy tenants' demands. There are plans to
take in some 40 more tenants, bringing the total to above 200.
According to the home market division of Beijing Marketing Association, the
trend for home decoration first emerged in Beijing a few years ago, leading to a
mushrooming of building material and lighting marts able to do good business.
Even two to three years ago, new entrants to Beijing's lighting market were
still making a profit, according to the association.
From 2002 onwards, however, there has been an over-supply. As at the end of
2002, there were more than 40 large and small lighting marts and shops in the
capital, of which over 10 were of a considerable scale.
The figure further increased at an annual rate of 300,000 sqm in business area
in 2003. While demand is growing, consumers are also increasingly conscious
about branding and require closer attention to be paid to shop image and scale.
Last year's SARS outbreak catalysed the fall of lighting marts with weak
foundations while this year has further witnessed the transformation of many
larger ones.
In the face of such fierce competition, Shilihe Lighting City has been able to
maintain a busy visitor flow. Its annual sales turnover is conservatively
estimated at up to Rmb700 million (HK$660 million), with an average of over
2,000 visitors daily.
The success of Shilihe Lighting City could be attributed to its geographical
advantage. Dayang Road, which houses the lighting city, is also home to a number
of building and decorative materials marts.
Led by Baojia Building Materials Mart which first set up there several years
ago, over 10 other large home centres have subsequently moved in, forming a
1,500 m-long building materials street along Dayang Road. They include
Dongfanghuimei Home Furnishings Plaza, Jiahejiamei Home Furnishings Mart,
Juranzhijia Shilihe Branch, Shilihe Lighting Wholesale City, Shilihe Caihong
Fabrics City, Minlong Ceramics Wholesale Mart, Caixuan Hardware World, Minle
Building Materials Mart and Dayang Road Building Materials Wholesale Mart.
Today, more than 5,000 building materials shops cluster there with business area
totalling some 300,000 sqm. Such a heavy concentration naturally makes it the
first choice for consumers looking to source building materials and lighting
products.
The geographical advantage of Shilihe Lighting City is also manifested in its
ease of access. Located in the southeastern part of Beijing between two major
thoroughfares - the third and the fourth ring roads, 500 m from the former and
800 m from the latter, the lighting city is in the inner part of Beijing's
ever-expanding metropolis, just 25 minutes' drive from the city centre.
Furthermore, the mart is easily accessible by means of public transport, such as
bus routes number 28, 300, 368, 378 and 907 as well as minibus routes number 10
and 35, making it convenient for consumers to go there to make purchases.
In order to attract car owners, there is also a 10,000-sqm parking lot offering
free parking to visitors. In addition, the Beijing-Tianjin Highway just 1 km
away, along with the Beijing-Shenyang and Beijing-Kaifeng Highways which are
just 10 km away, provide an unparalleled advantage in extending the sales reach
of Shilihe Lighting City to neighbouring provinces and cities. According to Hu,
aside from Beijing residents and local engineering purchasing teams, people who
patronise Shilihe Lighting City are mostly merchandisers from the northern and
northeastern regions while Russian traders form the bulk of foreign buyers.
Wide variety, low prices - Another major advantage of Shilihe Lighting City lies
in its economies of scale, comprehensive product variety and low prices.
The mart is divided into two zones, namely household lighting zone and
construction lighting zone, covering both international and domestic lighting
fixtures, products and materials of differing brands and for different purposes.
The household lighting zone mainly sells various kinds of hanging lamps, wall
lamps, ceiling lights and standing lamps for home decoration use as well as
special-purpose lighting such as cabinet lights, range hood lights, mirror
lights and night lights. The construction lighting zone primarily offers
professional lights, light source equipment and lighting accessories.
Due to the busy visitor traffic and massive turnover, new products are offered
in the mart at an amazing speed, reflecting the styles in vogue in the country.
Development of the logistics sector has made it possible for the latest products
designed and made by manufacturers at the country's major lighting production
bases such as Guangdong's Guzhen and Zhejiang's Yuyao to be presented to
customers at Shilihe Lighting City in five to seven days.
Hu pointed out that the huge trading volume of the mart enables high-quality
goods to be sold with small profit margins at low prices, thereby enhancing
their appeal to consumers. It is understood that lighting products are priced at
5%-10% lower at Shilihe Lighting City than its peers in Beijing. Many consumers,
after having visited other lighting marts in the capital city and decided on
their preferred brands and styles, would eventually make their purchases at
Shilihe. A business operator at Shilihe said the brand he carries sells three
times more there than at supermarkets.
Enhancing facilities to provide comprehensive services - Investment has been
made in enhancing both the hardware and software of Shilihe Lighting City for
its long-term development.
In respect of hardware, the mart is equipped with central air-conditioning, an
automatic smoke-detecting alarm and sprinkling system and an 800-kVA electricity
distribution capacity.
The lighting city is installed with automatic teller machines and operates a car
fleet in a bid to provide consumers with financial and transportation
convenience.
October 12, 2004
China to Regulate Alcohol Wholesalers and
Retailers
Following the guidelines of the General Administration of Quality Supervision,
Inspection and Quarantine (AQSIQ) and the Standardization Administration of
China (SAC), the Ministry of Commerce (MOFCOM) is drafting two sets of standards
for the regulation of alcohol wholesalers and retailers in a move to establish a
mechanism for the management of alcohol distribution. As disclosed by a MOFCOM
official, opinions are now solicited for the draft regulations, which are
expected to be introduced before the end of the year.
According to the MOFCOM official, the following measures will be taken to
establish an effective mechanism for managing the distribution of alcohol.
Accelerate the establishment of legal standards for the management of alcohol.
Two sets of industry standards for the regulation of alcohol wholesalers and
retailers will be launched before the end of this year. At the same time, MOFCOM
will, in association with other departments concerned, accelerate the drafting
of regulations on the distribution of alcohol in line with international
practice.
Implement a system of market access control. Commerce departments at all levels
will strictly control access to the alcohol market in accordance with the
requirements of the State Council’s decision on further strengthening food
safety work. A screening system for alcohol business operators will be
implemented. To operate in the alcohol market, a company must have good credit
standing and financial strength. It must also have the necessary permit and
business licence and carry out strict management. A system of market inspection
will be introduced, whereby substandard goods will be rejected, recalled,
destroyed and publicised to ensure that all alcohol products on sale are safe.
Establish credit records on the distribution of alcohol products. Making use of
the e-government system and information technology, MOFCOM has already
established a system of credit records on the safety of alcohols, meats and
vegetables in distribution in the country. This will become the honour roll for
outstanding enterprises, blacklist for discredited enterprises, and safety guide
for consumers. Meanwhile, efforts will be made to modernise the distribution of
alcohols, develop modern forms of distribution such as chain operation and
modern logistics, and publicise scientific concepts of alcohol consumption and
the importance of lawful operation.
The world's largest city of stone shaped in Fujian Province
Nanan is the most populous provincial city in Fujian and has earned itself a
reputation as the country's home for building materials. It has a nationally
renowned market for stone products, Minnan First Building Materials Market, or
more colloquially, China Stone City.
The market has drawn the attention of the construction and engineering
industries since it opened for business in May 1999. Mining, processing and
trading companies, as well as dealers from other provinces and from Hong Kong,
Macau, Taiwan or abroad have flocked in. The working area is in great demand,
despite the constant expansion.
The market has a business area of 300,000 sqm and is divided into different
specialty sections that include the stone slab city, Minnan raw stone market,
the stone and ceramics area and the stone processing zone.
The stone slab city and the stone and ceramics area have a total floor area of
over 50,000 sqm, with 800 shops of various sizes. More than 500 businesses are
operating, selling all the 625 varieties of registered Chinese stones and over
100 types of imported ones.
Granites, marbles, large slabs, stripes, cut-to-size and thin slabs, ultra-thin
laminated slabs, stone carvings and various types of stone sculptures are all on
sale, as are cultural stones and stone processing machinery, as well as tools.
Minnan raw stone market is the largest of its kind in the country and handles
over 1,000 tonnes of stones a day. Its imported raw stones account for 80% of
national demand. Meanwhile, the stone and ceramics area brings together
prominent brands of foreign and domestic architectural ceramics, aesthetic
stones and sanitary products.
The entire facility handles Rmb3 billion (HK$2.8 billion) in direct
transactions, Rmb5 billion (HK$4.7 billion) in indirect transactions, and Rmb1.5
billion (HK$1.4 billion) in exports, accounting for 80% of China's stone
exports.
Business is carried out both in shops and in the open. Rent is Rmb35 (HK$33)
per/sqm/month for shops and between Rmb15 and Rmb25 (HK$14.1 and HK$23) for raw
space.
All 900 shops are rented out. It is understood that one company actually paid
Rmb100,000 (HK$94,339) for every shop, to buy the leasing rights for four of
them in prime location. This shows just how sought after shop space has become.
The market has various supporting facilities, including an e-commerce platform,
legal services, foreign trade and financial services, post and
telecommunications, forwarding facilities, guesthouses, restaurants,
supermarkets and entertainment outlets.
In fact, China's Stone City exemplifies the smooth interaction of market and
industry.
The market itself has developed into the largest distribution centre for stone
products in China, and more than 500 stone enterprises, including more than 50
large and medium-sized domestic enterprises - each with a capital of over Rmb10
million (HK$9.4 million) - have built up around the market, creating an economic
zone for the stone industry.
Some large, backbone enterprises have invested millions of yuan to import
advanced technology and equipment from abroad and set up modernised stone
processing factories.
The city hosts the Nanan Building Materials Fair and Shuitou International Stone
Materials Expo on 18th May each year.
The fair and expo are now in their fifth year and have become crucial business
negotiating platforms, as well as being important for information and technology
exchange for the building materials industries. The fair and expo attract a
large crowd of domestic and foreign traders.
The stone market is still expanding. The large slab market, which sits on a 13.3
hectare site and involves an investment of Rmb30 million (HK$28 million), is now
taking shape. When completed, annual transactions will top Rmb3 billion (HK$2.8
billion) from the sale of large stone slabs alone.
A centre devoted to stone sculptures and stone art is currently under
construction. The project includes an Rmb60 million (HK$56.6 million)
multifunctional exhibition and trading centre, with an area of 3.335 hectares
for display, business negotiations, international conventions and exhibitions,
and e-commerce.
When all projects are completed, the stone market will have a total area of over
66.7 hectares and is expected to become a modern stone materials logistics
centre for all categories and varieties of stones in a global context, with
facilities for regular exhibitions, traditional trading, processing, warehousing
and e-commerce. It is shaping to become the largest stone works of its kind in
the world, with the aim of being run with the aid of advanced management
expertise.
The market is at the midway point and intersection between Quanzhou and Xiamen,
and easily accessible. In addition to the national highway, the Quanzhou-Xiamen
Expressway also has an exit and the market is only 58 km from Xiamen
International Airport, or 15 km from Jinjiang Airport.
Nearby Shuitou also boasts five piers for 100-tonne class vessels and is only
eight km from Nanan, where ocean-going 5,000-tonne class vessels can berth. This
network of air, land and sea transport is a great asset to the market.
Kunming's property boom begets agency upturn
Kunming's steady secondary property market has suddenly seen rapid growth this
year, with turnover increasing by 150%. The secondary market now overwhelmingly
dominates the real estate sector in the city.
Some 21,000 second-hand properties, with a total area of 2.5 million sqm,
exchanged hands in Kunming between January and June this year, with total
turnover amounting to Rmb3.5 billion (HK$3.3 billion), up 20% year-on-year.
About 4,800 units are classified as public housing, up 83% year-on-year in
numbers on the market and involving a total floor area of 340,000 sqm. Overall
in this subsector, there has been an increase of available space up 113%, with
gross turnover of Rmb600 million (HK$566 million) up 150% over the January to
June period.
There are many reasons for the huge growth in real estate transactions. Apart
from rapid economic growth and greater purchasing power, the city owes its
secondary market property boom to the efforts made by the Yunnan provincial
government and Kunming city government to expedite the drafting and
implementation of liberalization measures.
The introduction of regulations for purchasing public housing and housing reform
scheme units, more freely-given provident fund housing loans and lower taxes and
fees on deeds and transactions have each helped to free up the sector, as has
the waiver of market access approval and consent required from original owners.
Property prices have also been traditionally quite high in downtown Kunming and
these are going up fast as demand increases.
Many salaried city workers, even with limited incomes, are also turning their
eyes to secondary housing in areas with lower property prices.
Moreover, secondary properties, with their economic sizes and prices, as well as
better facilities and locations, are more affordable than homes in the suburbs.
Inevitably, Kunming's fast growing secondary market is making a lot of property
agents very happy. At present, agents charge both buyers and sellers between 1%
and 3% of the transaction price, as commission. Normally a 3% commission is
charged on a two-bedroom flat, for example.
There are about 1,000 real estate agents in Kunming, but only 30% are registered
and have legal status, while the remaining 70% have only opened for business
this year. The demand for professional agencies and instructors is already
definitely appearing.
October 7, 2004
US Chamber Criticizes China for Inadequate
IPR Protection
On 22 September 2004 the US Chamber of Commerce released its third annual report
on Beijing's efforts to meet China's World Trade Organization (WTO) accession
obligations. The report is highly critical of Beijing's implementation efforts.
In particular, the US Chamber finds fault with China's lack of effective
intellectual property rights (IPR) enforcement.
In a statement, Myron Brilliant, the US Chamber's vice president for East Asia,
stressed that "China needs to do more to protect intellectual property rights
and we are urging Chinese authorities to take action in this area this year". He
added, "We want to see prosecutions". The report underlines that rampant piracy
of copyrighted products, including music, movies and software, as well as
counterfeiting of patented and trademarked goods has long been and remains one
of the greatest irritants to Sino-American trade relations.
The US Chamber's report bluntly observes that China's IPR enforcement efforts
are "inadequate". It adds the following prescription, "The US business community
is seeking immediate and demonstrable evidence from Chinese authorities that the
IPR climate in China is improving. Short of that evidence emerging quickly, the
US business community will be fully justified in working with the US government
to explore other courses of action to address China's failure to comply with its
IPR commitments under its Trade-Related Aspects of Intellectual Property Rights
(TRIPS) obligations".
For the time being, however, the US Chamber would prefer the US government to
continue to pursue a policy of constructive engagement with China. Nonetheless,
its patience is beginning to wear thin. Brilliant went as far as to indicate
that the US Chamber may at some point in the future request a Section 301
investigation into China's IPR enforcement if the situation does not improve.
Presumably, that point may come in the not all-too-distant future.
Earlier in September, C. Fred Bergsten's renowned Washington-based Institute for
International Economics (IIE) issued a new 53-page policy brief, entitled China
Bashing 2004. The report, authored by Gary Hufbauer and Yee Wong, presents an
overall optimistic assessment of Sino-American trade relations. And as its title
suggests, the IIE's report attributes much of the current China-bashing to the
political season, presenting extensive evidence refuting some of claims that by
sheer repetition have come to be regarded as gospel by China bashers and those
who are receptive to the arguments of the latter. That said, the IIE also
underlines, "Despite considerable progress, China remains the principal exporter
of counterfeit and pirated goods, both to the United States and the world.
Counterfeiting and piracy pay, and some Chinese firms take advantage of their
technical skills and marketing opportunities to pursue these activities".
The IIE report also cites International Intellectual Property Alliance (IIPA)
estimates, which claim that Chinese piracy cost US firms US$2.6 billion in lost
sales in 2003. Echoing corporate America's assessment, the IIE report notes,
"Poor enforcement of IPR is partly rooted in a weak legal system. It also
emphasises, "Fines for retail piracy are reportedly as low as between US$6 and
US$25. Another problem is the high monetary threshold (about US$6,000 in the
Supreme People's Court) before a criminal investigation for IPR theft can be
initiated".
Chinese IPR piracy has also incurred the wrath of some very important members of
Congress. At a hearing of the House Government Reform Committee on 23 September,
Thomas Davis (Republican-Virginia), the committee's chairman, stated that
counterfeiting and piracy of US intellectual property in several countries, but
most notably in China, costs US businesses US$200-250 billion annually in lost
revenue. In 2003, the US Department of Homeland Security (DHS) seized
counterfeit products at the US border worth US$90 million, with Chinese-made
goods accounting for some two-thirds of the total value.
Also at the House panel's hearing, Congressman Robert Simmons
(Republican-Connecticut) complained that counterfeiting of American products
hurts small and medium-size US businesses as much as large American
corporations. To illustrate his point, Simmons explained how counterfeit gauges
made in China, knock-offs of gauges made for vehicles and boats by a small
Connecticut company, had a devastating ripple effect. Not only was Faria Corp,
the company in his Connecticut district, deprived of millions of dollars in
revenue, in an attempt to defend its reputation it lost yet more money replacing
for free the defective Chinese-made gauges that were returned to the company.
The Office of the US Trade Representative already announced on 16 September that
it will conduct a widespread survey of US businesses regarding China's IPR
enforcement efforts. USTR has sent a letter to companies and trade associations
requesting IPR-related information, such as market surveys and statistical data
on enforcement actions by Chinese authorities. USTR will conduct this survey as
part of an out-of-cycle review of China's IPR enforcement efforts, part of the
annual "Special 301" process that USTR will complete early next year. USTR has
acknowledged that the requested information would be necessary if the US
government decided to bring an IPR complaint against China at the WTO.
Specifically, USTR's letter requests detailed reports on (1) particular
geographic areas or sectors where China's enforcement of IPR is either
positively or negatively notable; (2) whether infringing products are made by
individuals, companies, state-supported corporations or organized criminal
organizations; and (3) estimates showing the effect of IPR-infringing goods on
trade.
Beyond the IPR protection issue, not all is gloom and doom in Sino-American
trade relations. There is some significant praise in the report from the US
Chamber of Commerce as well. For example, the report notes, "The process by
which the business community in both China and the US and their governments are
working together to fully implement China's WTO commitments is fostering
positive changes in China's trade and investment regimes".
Among the positive achievements cited are China's early phase-in of trading
rights for wholly-owned companies, the reduction in "burdensome" capitalization
requirements for foreign investment in the insurance and trading sectors and
growing transparency in the way China's Ministry of Commerce drafts new
regulations. The US Chamber also states that China has made some progress in
addressing such longstanding problems as the implementation of its tariff-rate
quota (TRQ) system.
Yet, in its overall tone, the US Chamber of Commerce's report this year is far
more critical than its two predecessors. It stresses unequivocally that Beijing
needs to fully open its market in such critical areas as agriculture,
automotive, construction and engineering, express delivery, insurance and
telecoms. Moreover, China's record on standards and granting trading rights and
distribution services to foreign companies is an issue that needs to be
clarified in the coming year as well.
It should be noted that there are significant differences in the overall
assessment between different sectors and even within industries, depending on
the aptitude of individual US firms to come to terms with the opportunities and
challenges posed by China. While the report notes concerns about continued
confusion in the regulatory environment for foreign companies, Richard Holwill,
Alticor, Inc's vice president for public policy and the co-chair of the US
Chamber's East Asia Task Force, noted that his company has seen significant
progress with regard to regulations governing sales away from a fixed location.
Holwill stressed, "We praise Chinese officials for their efforts to consult with
us on regulations that govern the direct selling industry".
In other words, while the criticism of Beijing actions in this year's US Chamber
report is a bit more strident than was the case in the last two years, the US
business community continues to have a positive attitude toward evolving
commercial relations between the two countries. Nevertheless, it is clear that
the IPR protection issue threatens to seriously disrupt bilateral relations if
China does not redouble its enforcement efforts.
DOC Seeks Comments on Changes to NME
Practice in AD Proceedings, Targets China
The US Department of Commerce (DOC) has solicited public comments, which are to
be submitted no later than 15 October 2004, on its "separate rate" practice in
anti-dumping duty (AD) proceedings that deal with non-market-economy (NME)
countries. In response to its previous request for comments, of 3 May 2004, the
DOC had received twenty-three submissions. Taking into account these
submissions, the current notice outlines revised options for such changes and
gives the public the opportunity to comment on whether those changes would be
consistent with the statute and would redress problems that have been identified
concerning separate rates appropriately. The DOC intends to consider additional
modifications to its NME practice and may solicit additional public comment in
the future.
NME practice stipulates that producers in countries like China or Vietnam are
subject to government control and thus should all be assigned a single,
countrywide rate unless they can demonstrate an absence, both de jure and de
facto, of governmental control over their export activities. AD orders are
assigned only to exporters, regardless of which entity produces the subject
merchandise. The DOC's "separate rate" test is not concerned, in general, with
macro-economic or border-type controls, such as export licenses, quotas and
minimum export prices. Instead, the test focuses on controls over the
investment, pricing and output decision-making processes at the individual
firm's level.
To establish whether a firm is sufficiently independent from government control
of its export activities to be entitled to "separate rate" treatment, the DOC
analyses each entity that exports the subject merchandise. If a company can
prove that it is not subject to governmental control, then the DOC assigns the
respondent its own, individually calculated rate. In the case of a
non-investigated or non-reviewed firm, the DOC assigns a weighted-average of the
rates of the fully analysed companies, excluding any rates that were zero, de
minimis or based entirely on facts available.
Currently, DOC considers all submitted requests to review their eligibility and
may ask for further proof in separate communications. However, the increasing
number of requests for "separate rate" treatment in recent years as well as the
increasing need to issue supplemental questionnaires have created a significant
administrative burden for the US government.
Moreover, the situation has been complicated by foreign trade practices. For
example, in cases where the rates vary from exporter to exporter, there exists
an incentive for exporters assigned with a higher rate to ship the merchandise
through an exporter assigned a lower rate. If NME producers sell subject
merchandise through exporters located outside the NME country, the DOC applies a
rate to the NME producer only where there is evidence that the NME producer
knows that the ultimate destination of the merchandise is the US. In particular,
the DOC has noted that recent AD actions have revealed that the relationship
between Chinese producers and resellers outside the Chinese mainland can be
complex and difficult to assess.
In an effort to remedy these shortcomings, the DOC has proposed to process only
those "separate rate" requests from respondents that submit completed
applications with all the required documentary proof certifying their
eligibility for separate rates. In addition, the DOC will require respondents to
complete and submit the application forms electronically on the Import
Administration's website. Moreover, to prevent the potential evasion of dumping
duties by NME producers that ship through exporters enjoying lower AD rates, the
DOC has proposed to assign exporter-producer combination rates, instead of
exporter-specific rates, as is currently the case.
Finally, to prevent the evasion of AD orders, the DOC has proposed to institute
a rebuttable presumption that NME producers are aware that their goods will be
destined for the US market, and that they set the export price of the goods. The
DOC will assign AD rates to these producers, not the resellers
APHIS Issues Rule on Importation of Wood
Packaging Material
The Animal and Plant Health Inspection Service (APHIS), US Department of
Agriculture (USDA), has issued a final rule amending the regulations for the
importation of un-manufactured wood articles to adopt an international standard.
The standard, entitled "Guidelines for Regulating Wood Packaging Material in
International Trade" (ISPM guidelines) was approved by the Interim Commission on
Phytosanitary Measures of the International Plant Protection Convention on 15
March 2002.
The final rule, which will take effect on 16 September 2005, calls for
"regulated wood packaging material" - a term which replaces the previously used
term "solid wood packing materials" - to be either heat treated or fumigated
with methyl bromide, and marked with an approved international mark certifying
that the treatment has occurred. The US may demand immediate re-export of
regulated wood packaging material without the required mark. The modification
will affect all persons using wood packaging material in connection with
exporting goods to the US. The final rule also exempts from the rule wood pieces
that are less than 6 mm (0.24 inches) thick in any dimension.
October 6, 2004
Congestion at the Ports of the West Coast,
USA
Due to the peak season for shipping holiday merchandise to the US, a congestion
has built up recently at the ports of Los Angeles and Long Beach in California.
It is now taking about six to eight days to unload the cargoes from a vessel,
twice as long as the normal time.
To relieve the congestion, the port authorities are hiring an additional 3,000
to 4,000 workers and extending terminal gate hours. But the congestion may not
be solved in a short period of time. As such, exporters should take into
consideration a possible delay of their delivery. They are advised to try to
make earlier shipments, and to check with their shipping companies for the
latest developments.
HK officials to attend PPRD forum
Chief Secretary for Administration Donald Tsang will attend the opening ceremony
of the "Pan-Pearl River Delta Provincial Capital City Mayors' Forum" in
Guangzhou on Thursday.
Secretary for Commerce, Industry and Technology Mr John Tsang will speak at the
forum, which is jointly organised by the nine PRD provincial capital cities:
Fuzhou, Nanchang, Changsha, Guangzhou, Nanning, Haikou, Chengdu, Guiyang and
Kunming.
The forum will open on Thursday afternoon, to be followed by the formal session
on Friday morning. The mayors will address the forum on how to make full use of
the advantages and synergies of these cities, Hong Kong and Macau in promoting
co-operation and development of the Pan-PRD region.
HK Gov't to showcase IT at Guangzhou Fair
Mr Tsang will also attend the opening ceremony of the Guangzhou Fair which will
be held on Thursday morning.
Government Chief Information Officer Alan Wong's office will take part in a
thematic exhibition on electronic government application and exchange to
showcase the achievements of the Hong Kong government in e-government and
information infrastructure.
Hong Kong Economic & Trade Affairs Director for Guangdong Peter Leung, Deputy
Secretary for Constitutional Affairs Grace Lui and a few other related officers
will also attend these events.
Green Light for Four Major Incentives to
Revitalize Northeast
According to Zhang Guobao, deputy director of the National Development and
Reform Commission and director of the State Council's Northeast Revitalization
Office, the central government has given the green light to four major policies
in support of revitalising the old industrial bases in the Northeast. These are:
The State Council has approved the overall policy for VAT pilot reforms, and the
Ministry of Finance and State Administration of Taxation have issued the
implementation details which went into effect on 1 July 2004.
The pilot reforms in social security have been extended from Liaoning to
Heilongjiang and Jilin, and full-scale implementation is now under way. The
3.75% contribution by central coffers and 1.25% by the employer now make up the
5% personal account. This paves the way for further reforms of state-owned
enterprises.
Pilot reforms have been launched to relieve enterprises from certain social
duties in the Northeast. The authorities in the region and the four state-owned
commercial banks have worked together and proposed policies and measures to
resolve the issue of mounting non-performing loans. Also, the policy of
extending pilot reforms in the economic restructuring of resource-type cities is
under study.
Agricultural tax exemption and reduction have been introduced in Heilongjiang
and Jilin to reduce the burden of farmers.
Zhang also revealed that the state is formulating policies to support the
development of the key equipment industry in the Northeast. A total of 160
projects have been launched to renovate old industrial bases and industrialise
new technologies in the region. Work has also begun on 15 subsided mine
management projects.
Spain's air links with China grow, global cargo sales slow - report from Air Cargo Forum and Exposition 2004, Bilbao 5 Oct 2004
World air cargo is set to grow at only 5.3% between 2004 and 2006, according to
data delivered by the International Air Transport Association (IATA) at the
world's largest international air cargo show held this year in Bilbao, Spain.
The Air Cargo Forum and Exposition delegates heard that the estimated slower
world traffic into the coming two years contrasts with a projected growth of
11.3% in 2004 over 2003, largely propelled by the massive leap of trade in and
out of China.
The lower growth going forward will be due to expected large hikes in the price
of aviation fuel, which will represent up to 16% of air cargo operators' costs,
said IATA's director, Giovanni Bisignani.
But the uncertainty of the air cargo business was not the only issue in the
minds of the 5,000 visitors, representing companies from 50 countries at the
two-day event held in late September.
It emerged that Spain is beginning to take a more pro-active role in attracting
Asian trade, with designs on becoming the major aviation passenger and cargo hub
between the EU and China.
The leading Spanish tourism operator, Maresans-Spanair, reported that it plans
to start direct flights between Barcelona and Beijing/Shanghai, with two or
three departures per week. The company also intends to develop an aviation
maintenance hub.
At Barcelona Airport, work is underway for a third runway (formally open on 29th
September 2004), with a new passenger terminal - and officials expect passenger
capacity to leap from 20 million a year currently, to over 50 million.
There are also moves by the Spanish Ministry of Industry to request that
national carrier Iberia Airlines to establish regular routes between Madrid and
Beijing, while no-frills Air Europa also plans to fly to China.
The
dash for the faux eyelash is a wink in the right direction
Over 100 beauty parlours in Kunming are in the business of eyelash grafting. The
polyethylene eyelashes used for the operation are made in China and come in
black, dark brown, deep purple, dark blue, as well as in other colours.
Customers can choose their favourite lash colour or take the advice of
professional beauticians, and there is even a choice of glue to be used for the
graft.
Imported glue mainly comes from Germany and Japan, while local products are made
in Guangdong.
Prices vary according to the type of glue to be used, with the grafting taking
place using imported glues. The actual glue costs between Rmb160 and Rmb300
(between HK$150.9 and HK$283), while grafting with glue made in China is priced
at between Rmb100 and Rmb200 (between HK$94.3 and HK$188.6).
There is usually a three-month warranty, with free replacement any time within
three months of the date of graft being offered.
Unlike traditional false eyelashes, these nifty eyelashes are grafted one by one
onto the natural eyelash, and therefore look fuller and more natural. They can
be applied to suit different features and effects, and make sparse eyelashes
look much fuller.
These polyethylene lashes also make it possible to change the shape and colour
of one's eyelashes at any time.
The drawback for grafted eyelashes? They do not last long, but it is precisely
for this reason that beauty parlours can look forward to a steady source of
income.
One beautician who specialises in eyelash grafting says she mostly handles four
clients a day, sometimes as many as eight, with each client taking between one
and two hours of her time.
Many women who want to look more fetching in these more dashing lashes are
willing to try grafting, despite the relatively high price.
For some, the temptation of looking more attractive is so great that they go
back at least once every three months, suggesting that this is a feature which
is due to make a big difference to the fortunes of the parlours that accommodate
the new "dash for the lash" craze.
October 2, 2004
Jiangmen: Gateway to Western PRD Market
With the implementation of CEPA, proposed construction of the Hong Kong-Zhuhai-Macau
bridge, and launch of the pan-PRD and Greater PRD strategies, Jiangmen's role as
the gateway for Hong Kong, Macau and PRD to the markets in western Guangdong and
China's southwestern region has been further enhanced.
The city of Jiangmen is administratively divided into three districts, namely
Pengjiang, Jianghai and Xinhui, and four county-level cities, namely Taishan,
Kaiping, Enping and Heshan. Jiangmen boasts a well-developed transport network,
with the total length of highways ranking top among all prefectural cities in
Guangdong province. Plans are afoot to build a so-called "90-minute economic
circle" incorporating Hong Kong, Macau and Jiangmen. The city is developing
itself into a leading energy base in Guangdong. Construction of the 9 million-kwh
Taishan Power Plant -- the largest of its kind in Asia -- is gathering momentum,
with the first two generator units of 1.2 million-kwh each being operational.
Its excellent ecosystem and living environment have won the city several awards
in recent years, including "China's Top Tourist Cities", "National Garden
Cities", "National Hygienic Cities" and "Cities with Excellent Living
Environment in China". This year, Jiangmen strives to achieve the status of
"National Environmental Protection Model Cities". The municipal government is
also introducing the ISO quality management system to help raise administrative
efficiency and provide quality service to investors in the city.
Advantages for Development Highly Recognised
Jiangmen is a pilot city for both the informatisation initiative in China and
the Regional Infrastructure for Sustainable Economies (RISE) plan of the Pacific
Economic Cooperation Council (PECC). In the investment climate survey report
compiled by the World Bank in 2003, Jiangmen was ranked fourth among 23 mainland
cities after Shanghai, Hangzhou and Dalian. Jiangmen's ratings are the most
outstanding in seven areas, namely infrastructure facilities, labour supply,
ratio of joint venture enterprises, government informal charges, taxation,
productivity and investment rate. Jiangmen is also the only city in Guangdong
that has been rated as one of China's top 50 zones with favourable investment
climate.
Sound Manufacturing Base
The economic development of Jiangmen had topped the provincial league during the
early days of reform and opening up, with a sound manufacturing foundation being
laid in the city. However, due to the lack of convenient transport links,
relatively low degree of informatisation of the traditional industries, limited
clustering effect, and inadequate innovative capability, the pace of development
of Jiangmen has gradually lagged behind that of cities on the east bank of the
Pearl River such as Dongguan and Shenzhen. At present, the economy of Jiangmen
ranks fourth among all cities in Guangdong. In 2003, the city's GDP reached
Rmb73.1 billion, with per capita GDP reaching Rmb19,200. Industrial output value
stood at Rmb153.9 billion.
A comprehensive, outward-oriented industrial sector spanning from traditional
processing activities to new- and high-tech industries has taken shape in
Jiangmen. The city boasts the capability to design and manufacture more than
5,000 types of industrial products. Among these, Jiangmen is the largest
producer of 20 types in terms of production scale in Guangdong or across China.
Today, the city has grown into one of China's leading production bases for
textiles and garment, chemical fibres, leather goods, food and paper products.
Of these, Jiangmen's motorcycle output accounts for 10% of the national total
and commands over 6% of market shares. Its outputs of chemical fibres and
washing machines make up 80% and 43% of the Guangdong market respectively.
The pillar industries of Jiangmen are: electronic information products,
electrical machinery and equipment with home appliances as the core products,
textiles, chemical fibres and garment, food processing and production, and
transport equipment such as motorcycles and parts and components thereof.
At present, several industry clusters have emerged in Jiangmen, including
motorcycles and related parts and components in the city itself; glass,
jewellery and hardware and sanitaryware in Pengjiang district; stainless steel
products, containers and ship breaking in Xinhui; food, textiles and chemical
fibres, and water heating and sanitaryware in Kaiping; microphone and audio
equipment in Enping; and footwear and printing in Heshan.
Continuous Improvement in Infrastructure
The natural barrier of the Pearl River estuary and inefficient transport links
have for a long time put the city of Jiangmen in a disadvantaged position as a
destination for relocating manufacturing activities from overseas. In view of
its lag behind cities on the east bank in terms of development, Jiangmen
attaches great importance to the construction of transport and infrastructure
facilities.
Over the past few years, Jiangmen has spent an average Rmb2 billion a year to
improve its infrastructure with emphasis on highways. A modern road network
comprising highways, first-, second- and third-class roads has been established
in the city. Highways that are now fully operational include the Foshan-Kaiping,
Jiangmen-Heshan, Kaiping-Yangjiang, coastal western Guangdong, and Taishan
south-north highways. Highways that are under construction include
Jiangmen-Zhuhai and Jiangmen-Zhongshan. Upon completion, the total length of
highways in Jiangmen will increase to 310 km, the longest among all prefectural
cities in the province.
Jiangmen is served by six wharves totalling 360 berths with a combined annual
throughput of 20.32 million tonnes. In 2001, the State Council approved the port
of Xinhui to operate freight forwarding service and open to foreign-registered
vessels. The 65 sqm Yingzhou Lake area, a national first-grade open port, enjoys
the status of an open zone. During the Tenth Five-year Plan period, the
5,000-tonne class waterway access to international waters at Yamen and the ones
at Laolonghu and Tanjiang have begun dredging work. Meanwhile, the 3,000-tonne
class waterway section between Xinhui and Zhaoqing is being dredged, and the
port of Yutang in Taishan is being upgraded to an international freight
distribution centre comparable to the ones in western PRD and in western
Guangdong.
With improvements in the pipeline and growing economic integration of the areas
along the Xijiang River, Xinhui is poised to become a leading port in western
PRD while Yingzhou Lake will become an economic zone specially targeted at both
domestic and foreign investors. In 2003, the container throughput of Jiangmen
port ranked tenth in the country and fourth in Guangdong.
As for railways, the Jiangmen section of the Guangzhou-Zhuhai railway and the
Jiangmen line of the Guangzhou-Zhuhai Inter-city Express Light Rail are both in
the preparation stage. Upon completion, these lines will significantly boost the
city's infrastructure.
All these are paving the way for Jiangmen to develop into a logistics hub in
western PRD.
Changes under CEPA
In the 1990s, Jiangmen had lagged behind cities in the east bank of the Pearl
River because of its less advantageous geographic location. This explains why
Jiangmen has been so pro-active in leveraging the new opportunities under CEPA
to propel its development to a new level. Since the signing of CEPA, the city
has hosted a series of promotions including a seminar on Guangdong-Hong
Kong-Macau economic cooperation and the development of Jiangmen, and a seminar
on SMEs going global in conjunction with a presentation introducing the services
of the Hong Kong Trade Development Council. These events explored the benefits
of CEPA to Jiangmen's economy and explained the investment climate and related
policies of Jiangmen to prospective Hong Kong investors.
The Jiangmen municipal bureau of foreign trade and economic cooperation has
established a dedicated unit to provide advisory service to foreign investors on
issues concerning investment environment, laws, regulations and policies, and
administration and registration procedures. Special counters known as "green
channel" have also been opened at the city's industry and commerce
administration offices to serve investors from Hong Kong and Macau.
In August 2003, the 6th Hong Kong/Guangdong Cooperation Joint Conference decided
to set up a coordination committee for the preparation of the Hong Kong-Zhuhai-Macau
bridge and the project formally entered the implementation stage. When the
bridge is completed, the role of Jiangmen in linking western Guangdong with the
transport hub in the PRD will become more important. Hong Kong's logistics
services are expected to penetrate the whole western PRD market with the
completion of the bridge. The increases in sea and air freight volume for Hong
Kong are projected at 30% and 35% respectively.
In April 2004, the foundation laying ceremony for the Xinhua Guanhui Car City in
Heshan, a Hong Kong-invested project with a total investment of Rmb200 million,
was held. Occupying an area of 700 mu, the car city will feature 100 exhibition
halls offering cars of different famous brands both from overseas and within
China. A full range of support and logistics services will also be available. It
is the largest Hong Kong investment project in the city after the signing of
CEPA.
Opportunities for Hong Kong
The greatest opportunities for Hong Kong companies in Jiangmen under CEPA lie in
services. Jiangmen has a sound economic foundation and comprehensive
manufacturing sector but a relatively backward services sector. It urgently
needs to raise the efficiency of its services sector to facilitate the further
development of its industries. There is enormous development potential in
services such as management consultancy, convention and exhibition,
construction, logistics, franchising, advertising and tourism. These are
promising sectors for Hong Kong service providers.
Due to limited land resources and the environmental constraint in the east bank
of Pearl River, the core region driving economic growth in Guangdong may shift
from the east bank to the west in future. Growing industrialisation has taken
its toll on rising operating cost and saturation in eastern PRD both in terms of
land, industry type and talent. Industries are seen to be gradually shifting to
the west.
By comparison, wages and other operating costs are lower in western PRD.
Besides, as mentioned above, the western part has its share of advantages
including a strong manufacturing base. Home electrical appliances, motorcycles,
lighting and furniture produced in Jiangmen are very well received. What the
city lacks is experience in product design, sales and overseas marketing. Hong
Kong can play an important role in these areas by providing a full range of top
quality producer services and professional services to help mainland enterprises
increase competitiveness and speed up the convergence of western PRD with
international practice in terms of production.
As a gateway for Hong Kong to enter the western PRD market, Jiangmen has a
unique advantage over neighbouring Zhuhai, Zhongshan, Foshan and Zhaoqing,
thanks to its abundant land resources (10 times the area of Hong Kong). Besides,
upon completion of the Hong Kong-Zhuhai-Macau bridge, Jiangmen will become
closer to Hong Kong.
Jiangmen has always been an investment hot spot for Hong Kong companies among
other western PRD cities. Hong Kong is currently the largest source of foreign
investment in the city, accounting for 70% of the total. There are over 2,100
Hong Kong-invested enterprises operating in Jiangmen, making up more than half
of the total number of foreign-invested enterprises, with total investment close
to US$7 billion. Among these, more than 1,700 are engaged in manufacturing, with
total investment exceeding US$4.4 billion. Investments in the services sector
are concentrated in real estate, hospitality, restaurants, construction and
other public services. Among these, investment in real estate alone amounts to
nearly US$900 million, or one-third of the total in the services sector.
At present, due to state policy restrictions in areas such as wholesale and
retail, warehousing and business services, less than 100 foreign-invested
enterprises have been established in the services sector in Jiangmen. None has
been established in the management consultancy and finance sectors. With the
lowering of market entry threshold and decentralization of approval right under
CEPA, Hong Kong companies will find more opportunities to invest in the
above-mentioned sectors.
Catalogue of Priority Industries for
Foreign Investment in Central & Western Regions Revised
The State Council-approved Catalogue of Priority Industries for Foreign
Investment in the Central and Western Regions (2004 Revision) was jointly
released by the National Development and Reform Commission (NDRC) and the
Ministry of Commerce on 23 July and went into force on 1 September 2004. The
move signals the central government's support for expediting the development of
the western region, fostering economic growth of the central region, and
reviving old industrial bases in the northeast.
According to NDRC, it took two years to revise the catalogue which embodies four
major principles:
Competitive advantage. Support will be given to priority industries and
enterprises in the central and western regions with abundant supply of certain
resources and niche products, and a good foundation in terms of foreign
investment and cooperation.
Timeliness. Strong support will be given to key projects and enterprises which
are in line with state industrial policy and attract the interest of foreign
investors. Preferential policies will be offered.
Efficiency. Energy-saving, environmental protection, and avoidance of low-end,
overlapping construction are encouraged.
Further liberalisation. All of the items listed in the catalogue belong to the
permitted or restricted category under the Catalogue for the Guidance of Foreign
Investment Industries, while the number of items under the encouraged category
is significantly increased in the central and western regions. This further
liberalisation is in line with China's WTO commitment and overall strategy of
opening up.
The revised catalogue contains a total of 267 priority industries in 20
provinces and autonomous regions in the central and western regions, namely
Shanxi, Jilin, Heilongjiang, Anhui, Jiangxi, Henan, Hubei, Hunan, Chongqing,
Sichuan, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang,
Inner Mongolia and Guangxi. These industries come under the following sectors:
Exploration of certain mineral resources, such as the mining and processing of
borax, szaibelyite ore and chrome ore, deep processing of tungsten and
molybdenum, and exploration of nickel ore.
Reforestation of cultivated land and deep processing of special animal and plant
resources, such as development of grains and oil seeds, deep processing of
grease, comprehensive processing of tea leaves, planting and deep processing of
lycium, processing of beet sugar, and comprehensive utilisation of by-products.
Development of priority industries at local level, such as the processing of
auto parts and components, production and development of downstream chemical
products of natural gas, production of chip solid tantalum capacitors, and other
ethnic products.
Liberalisation of public utilities, such as the construction and operation of
pipeline network for gas supply, heat supply and drainage in urban areas
(originally under the restricted category), development of tourist scenic spots
and construction and operation of supporting facilities, and development of
grassland ecosystem, snowland tourist resources and forest tourist resources.
According to the Rules on the Guidance of Foreign Investment Industries
promulgated by the State Council, this catalogue and the Catalogue for the
Guidance of Foreign Investment Industries are the two sets of approval
guidelines for foreign investment projects which form the basis of policies
governing foreign-invested enterprises. Foreign investment projects covered by
the revised catalogue are entitled to policies extended to "encouraged" projects
under the Rules on the Guidance of Foreign Investment Industries and
preferential policies listed in the Circular of the General Office of the State
Council on the Views on Further Promoting Foreign Investment.
Compared to the Catalogue for the Guidance of Foreign Investment Industries, the
revised catalogue features a new "encouraged" category of 267 projects and the
number of projects subject to equity ratio restrictions has been reduced from 48
in the former to six. This reflects the policy support given to the further
opening up of the central and western regions.
The revised catalogue replaced the 2000 version on the date of its
implementation. Projects approved prior to the implementation date will continue
to be subject to the relevant policies. Projects in the planning stage that come
under the revised catalogue may follow the respective polices stipulated
therein.
Details are available at NDRC's website at
http://www.sdpc.gov.cn/
17 Retail Business Modes Clearly Defined
The new national standards on the Classification of Retail Business Modes,
jointly promulgated by the Ministry of Commerce (MOFCOM), General Administration
of Quality Supervision, Inspection and Quarantine, and Standardisation
Administration of China and to be implemented on 1 October, give clear
definitions on 17 retail business modes, their classification criteria and
functions.
As stressed by MOFCOM, the standards should provide a basis for cities to map
out their commercial layout and structure so that commercial, economic and
social developments are in line with people's changing consumption trends and
various business modes can develop in a complementary, coordinated way. Cities
which have completed their commercial layout planning should further amend and
refine it according to the new standards. During the planning process, attention
should be given to combining the development of new business modes with the
upgrading and reform of traditional ones, as well as coordinating mainstream and
niche business modes. Development of convenience stores, discount stores and
small- and medium-sized supermarkets will be encouraged while new business modes
such as warehousing-style supermarkets, professional stores and specialty stores
will be emphasised.
Under the new standards, retail outlets are classified by their structural
characteristics, operation mode, product mix, functions, location, scale,
in-store facilities, target customers and business premises into 17 business
modes. The 17 are: grocery stores, convenience stores, discount stores,
supermarkets, hyperrmarkets, membership warehouse-style supermarkets, department
stores, professional stores, specialty stores, home centres, shopping malls,
factory outlets, TV shopping, mail order, on-line shops, automatic vending
machines and tele-shopping.
"Green Card" to Attract Foreign Talent
With State Council approval, the Ministry of Public Security and Ministry of
Foreign Affairs promulgated on 15 August the Administrative Measures on the
Examination and Approval of Permanent Residence of Aliens in China, a vital step
towards instituting a standardised system regarding the granting of permanent
residence to foreign nationals.
The move underlines the Chinese government's efforts to align with the rising
trend of economic globalisation and to further reform and open up its domestic
market, which have created an urgent need for attracting foreigners to China to
invest, do business or engage in various technological and cultural endeavours.
At the same time, a number of high-level foreign personnel have also requested
permanent residence in the mainland.
In response to this need, the Chinese government has, in the past, announced a
series of laws and regulations concerning foreigners' entry/exit and permanent
residence. To date, over 3,000 foreigners have been granted the right to stay
permanently in the country.
The new measures contain altogether 29 articles which stipulate clearly, in
regard to foreigners' application for permanent residence in China, the
eligibility criteria, examination and approval procedures, and legal validity of
the Alien Permanent Residence Permit, offering legal protection to the granting
of "green cards" in China.
Marked Prices for Property Management
Services
In order to increase the transparency of charges of property management services
and protect the legitimate rights and interests of property owners, the Ministry
of Construction and the National Development and Reform Commission jointly
promulgated the Regulations on Marked Prices for Property Management Services,
which will take effect on 1 October 2004.
Under these regulations, property management enterprises must make use of notice
boards, rate charts, fee lists, fee brochures or multimedia search terminals to
implement marked prices. They must clearly indicate in prominent positions in
their service area or fee collection points their name, the chargeable items,
content and standard of services, charging method, charging period, items and
standards of charges, forms of price management, basis of charges, and telephone
number for fee-related complaints.
For government-guided property services, it is necessary to indicate the
benchmark rates, floating rates and actual rates at the same time. Property
management companies entrusted to collect charges for water, electricity, gas,
heating, telecommunication, cable TV and other services should also clearly
indicate the charging standards in accordance with regulations. For services
outside the property service contract provided by property management companies
to owners, the charging standards should also be clearly communicated to owners
by appropriate means upon agreement between the two parties.
In case of changes in charging standards, property management companies must
make the necessary adjustments one month before the new standards take effect
and indicate the date the new standards become effective. Property management
companies failing to implement marked prices or practising price frauds will be
punished by the government's price department.
September 30, 2004
US companies urged to adjust to world
changes - Bing Lan
United States' companies that are less competitive in global trade may need to
make adjustments to cope with "structural changes of the world economy that
follow China's development," said Robert Kapp, president of the US-China
Business Council, the principal organization for US companies engaged in
business with China.
Kapp said he believed it would be inevitable that there would be job losses in
the US because of exports of inexpensive Chinese products.
Sometimes when he heard accusations that Chinese products were making Americans
unemployed, he would remind them that Chinese workers had been laid off in the
process of the country's reform and opening up to the world.
"It is all about modernization," said Kapp, a former Yale professor on Chinese
history, in an interview with China Daily at the World Economic Forum's Beijing
meeting earlier this month.
Still, Kapp said the United States is now delicately balanced between supporting
free trade and supporting protectionism and that was a reality that people doing
business in China-US trade have to face.
But by and large, China-US trade is on a more predictable course than it used to
be, he said.
Kapp, who took up his present position in 1994, said the most stressful years
for US' companies doing business in China were 1994 to 2000, when they had to
lobby hard for Normal Trade Relations (NTR) with China.
During those six years, the US Congress would engage in with politically-charged
debate on NTR with China every year. Without NTR, the China-US trade would have
been subject to high trade barriers that would have hurt the commercial
interests of both sides.
In 2000, the US decided to have Permanent Normal Trade Relations (PNTR) with
China, which paved the way for the endorsement of bilateral negotiations for
China's joining of the World Trade Organization.
Kapp declined to tell in detail how US' business circles lobbied for the NTR and
PNTR with China, but he said they did put considerable efforts into mobilizing
forces in their favor.
"Our efforts are quietly effective," he said.
Now life seems more easy than those days.
There is no coalition in the US that fights for strong US-China trade relations
despite expanding business ties between the two.
According to statistics compiled by China's Ministry of Commerce, bilateral
trade volume reached US$126 billion last year. So far, US companies have
invested more than US$45 billion in China.
But Kapp said US' businesses in China trade did not have to worry about an
immediate crisis such as the NTR debate.
He said that in some US' businesspeople's minds, China was still stereotyped as
a mysterious oriental country.
But as China's market economy develops and US' companies' experiences grow, they
are seeing more familiar phenomena in the market and it is more
"comprehensible," Kapp said.
He said romantic imaginings about the enormous Chinese market were already over.
"Nobody is talking about selling to everyone of 1 billion people. They are now
more sophisticated in spotting which part of the Chinese population they should
target.
"However, as ever, new challenges keep emerging."
As China integrates into the global economy, the challenge now is that "every
company has to decide how China fits into its overall operations," he said.
Lots of US' companies have been in the Chinese market for years, but today they
still have to work out a new answer to the question about what they should do to
be able to succeed in China.
But they might need to do it again tomorrow because "China is not static... it
is moving."
September 29, 2004
China-made furniture, European design, US
market - European furniture - but made in Asia
With the US construction boom has come a
major up-tick in opportunities for different styles of furniture - and China is
accommodating European styles, but at much lower prices, for American consumers.
The rising market has contributed to the success of retail giants such as
Pottery Barn, Z Gallery, as well as smaller players such as West Elm.
Although much of the furniture may appear to be expensively made, labels printed
with "Made in China" (or alternatively India, Malaysia or the Philippines) adorn
the bottoms of an estimated 50% or more of the products.
With the ever-rising currency valuation of the Euro against the US dollar, this
was the best idea US importers could think of to keep the trade active and their
margins at acceptable levels.
The trouble is that importers are facing a bigger challenge as major retailers
seek lower wholesale prices - and the thinnest margins are often the ones that
make the deals.
"With the rising cost of the Euro, we can't stay competitive," says Emilio Mila
of Mila International Corp, the Miami-based importer of mid to high quality
glass and crystal decorations.
Although the company has imported for over 35 years in Europe, there could be
new leads out of Hong Kong. Mila International attended the Hong Kong Gifts,
Houseware & Toys fair in search of new leads, and plans to communicate with
companies encountered.
Mila said that the quality of China-made goods have increased from when he
encountered them earlier in his career, a welcome surprise and an incentive for
exploring quality and competitive pricing in Asia.
Shenzhen Sets Penalty for Wage Arrears
The Standing Committee of the Shenzhen City People's Congress recently passed
the Regulations on the Payment of Wages to Employees. The draft regulations set
standards for the payment of wages and make provisions for the prevention and
tackling of wage arrears and of withholding workers’ wages, relief for affected
workers, and other aspects. Hong Kong companies must take note in order not to
commit offences.
It is understood that over 70% of labour disputes in Shenzhen this year are
related to wage payment. The draft legislation stipulates that "an employment
unit that withholds its employees' wages or delays wage payment for no reason
must pay its employees the full amount due within a time limit set by the labour
department in addition to a financial compensation equivalent to 25% of the
unpaid wages." It also provides that “the labour department may impose a fine of
Rmb10,000 to Rmb50,000 if an employment unit refuses to pay the withheld or
arrears wages within a prescribed period of time."
Some units do not issue pay slips to their employees or pay no attention to the
safekeeping of information on the payment of wages. Such negligence on the
payment of wages can easily lead to labour disputes. The draft regulations
clearly stipulate that an employment unit should maintain a detailed payroll
sheet on the payment of wages, and that these payroll sheets should be kept for
at least two years. The employment unit should also issue pay slips to
individual employees, the content of which should be identical to the payroll
sheet, to be signed by the employees. The draft also states that the labour and
social security department may impose a fine of Rmb20,000 to Rmb50,000 on units
that fail to maintain or keep payroll sheets, issue pay slips to their employees
or ask their employees to sign their pay slips.
Some construction units subcontract jobs to unqualified subcontractors who do
not sign any labour contracts with migrant workers, resulting in serious
defaults of wage payment. In view of this, the draft specially stipulates that
if a construction unit, general contractor or other unit subcontracts jobs
illegally to organisations or individuals that are not registered, not qualified
to employ workers or do not have the necessary qualifications in construction
activities, and these organisations or individuals delay wage payment, the unit
that subcontracts the jobs should pay for the arrears wages.
The new measures also make clear provisions for issues such as overtime pay,
holiday pay, wage payment under special circumstances, wage deductions and
minimum wage.
First
pedestrian shopping area for Northwest China
The newly-completed Luomashi Pedestrian Shopping Area combines shops with
leisure, catering, entertainment and tourism. Its completion will further expand
the scope and influence of Xian's Bell Tower area and give a boost to commercial
diversification of the area.
The project involves a total investment of Rmb1.5 billion (HK$1.4 billion), with
a total construction area of 250,000 sqm.
The shopping centre is divided into three zones which comprise the central
square, the northern district near Dongdajie and the southern district near
Dongmutoushi.
The central square, with an area of 7,000 sqm, will include the Liyuan Cultural
Square, a museum, a large performing arts centre and an artificial waterfall.
The 1,000 sqm theme museum is on the ground level, adjacent to which is a 27 m
by 6 m waterfall cascading into a 700 sqm pool. The performing arts centre is on
the first floor, with an area of 5,000 sqm and 800 seats.
The northern district has a total area of 78,000 sqm and comprises six levels.
The first five levels are for shops and the sixth is taken up by key units: a
cinema complex, an indoor ice skating ring, a large games parlor, and a food
hall.
The southern district has a total area of 79,000 sqm and comprises seven levels,
with a 1,300 sqm resting area. On the fifth to seventh levels is a 24,000 sqm
complex which includes baths and spas, venues for performing arts and a
star-class hotel.
The complex could well comprise the main form of night life in Xian, come 2005.
The northern and southern districts have an upper underground level with a
combined area of 36,000 sqm.
There is an underground shopping street linking the two districts - which is
lined with shops and supermarkets.
There is also an underground traffic lane 300 m long and 10 m wide to provide a
waiting area for cars.
The lower underground level of the northern district has an area of 18,000 sqm
encompassing streets of different styles. These include four western-style
streets, named after European and American thoroughfares. They include Boulevard
Champs-Elysee, Ancient Roman Boulevard, Las Vegas Boulevard and Hollywood Star
Boulevard.
There is an auto exhibition hall in the northern district and a 20,000 sqm
carpark for 800 cars in the southern district.
Luomashi Pedestrian Shopping Area includes five shopping streets above and below
ground level, with each more than eight m wide and over 300 m long.
There are 140 escalators in the entire shopping area.
After the completion of the pedestrian shopping area, Luomashi Street will be
widened from 20 m to 25 m, the North and South Liuxiang lanes will be widened to
15 m and Dongmutoushi will be widened to 25 m. Together with Dongdajie Street,
Luomashi will be surrounded by thoroughfares on all four sides.
All transport stations are within 300 m of the shopping street.
Debenham Tie Leung, a leading property management company in Hong Kong, is said
to have been appointed leasing manager of the project, which has Hong Kong
brands and consumer goods as major targets.
September 21, 2004
It's hard to imagine that this modest
nine-storey building, sheathed in white tiles and jammed up against a
residential compound for traffic police, is the headquarters of the world's
largest TV manufacturer and one of China's first true multinationals.
Yet TCL, with 28.2 billion yuan (HK$26.59 billion) in sales last year, and an
average annual growth rate of 40 per cent for the past 13 years, has been
astonishing people for years. The Shenzhen-listed firm has mushroomed from a
small-time maker of audio tapes to a 40,000-worker conglomerate producing
everything from TVs and mobile phones to power plugs and batteries.
TCL got its start in low-tech manufacturing. Yet from its earliest days, there
was something different about the company. Where other outfits focused on
manufacturing, TCL was intent on building a brand name first and worrying later
about where it was made.
September 16, 2004
China to Implement Energy Efficiency Label
System Next March
The National Development and Reform Commission (NDRC) and the General
Administration of Quality Supervision, Inspection and Quarantine (AQSIQ)
recently jointly promulgated a new set of Measures for the Management of Energy
Efficiency Labels, which will become effective on 1 March 2005 and will apply
first to refrigerators. This represents a move by China in implementing a system
of energy efficiency labels.
NDRC, AQSIQ and the State Commission of Certification and Accreditation
Administration are responsible for the establishment and implementation of an
energy efficiency label system for products with great energy-saving potential
and wide applications. Meanwhile, the Catalogue for Products Subject to Energy
Efficiency Labels defines universally applicable energy efficiency standards,
implementation rules, and samples and specifications of energy efficiency
labels, and enforces a system of compulsory energy efficiency labelling in the
light of the successful experience in other countries. Products included in the
catalogue must bear a standardised energy efficiency label in a conspicuous
position on the product or its packaging, with explanations given in the manual.
The system is implemented by way of self-declaration and registration by
producers or importers and strict supervision and management by the government
departments concerned.
According to an NDRC official, energy efficiency labels are information labels
on the product or its packaging. As indicators of the energy efficiency level
and other performance indicators of products, they provide users and consumers
with the necessary information for making purchase decisions, so that they can
choose energy-efficient products.
Ministry of Information Industry Sets Up
Examination Centre in Hong Kong
With the approval of the Ministry of Personnel and Ministry of Information
Industry, an examination centre for the National Computer and Software
Technology Qualifications Examination will be set up in Hong Kong. Starting from
this year, Hong Kong IT professionals will be able to sit for this examination
and obtain mainland qualifications locally. In light of the frequent exchanges
between mainland and Hong Kong IT professionals in recent years, the
establishment of the examination centre will further promote exchanges in
information, personnel and technology between the two places.
The move also represents a step forward in the cooperation in trade in services
under CEPA. It can be expected that following the certification of IT
professional qualifications in Hong Kong, progress will be made in the mutual
recognition of corporate qualifications.
The National Computer and Software Technology Qualifications Examination was
first launched on the mainland in 1991. About 50,000 people take part in this
examination each year. There are 20 examinations for senior, middle and junior
positions, held twice a year, one in the first half of the year and the other in
the second half.
The non-profit Beijing-Hong Kong Academic Exchange Centre in Hong Kong will be
in charge of this new examination centre. The centre’s vice president Kwok Ming-wa
said the fair and strict operation of this examination centre for mainland
professional services, the first of its kind in Hong Kong, should effectively
promote the entry of local IT professionals into the vast mainland market.
September 15, 2004
New tools to help US exporters
The US Commerce Department yesterday unveiled new tools in Beijing to help US
companies expand exports to China's growing market, one of their fastest-growing
export markets.
The tools include the China Business Information Centre, American Trade Centres
and the Global Supply Chain Initiative.
According to US statistics, US exports to China were up 36 per cent in the first
half of the year, making China one of the fastest-growing US export destinations
and the sixth-largest US export market overall.
The US Under Secretary of Commerce for International Trade Grant Aldonas said
one of the biggest hurdles US small and medium-sized companies (SMEs) face in
trying to export to China is a lack of information.
Some 86 per cent of all US firms exporting to China are SMEs.
The China Business Information Centre is the first comprehensive US federal
government resource aimed at helping US businesses take advantage of China's
rapid integration into the global economy.
The centre consists of an 800 telephone number that the public can use to speak
with a China specialist, a website with China-focused information and export
tools, and a series of foreign-oriented events planned throughout the United
States.
American Trade Centres are designed to increase the US Commerce Department's
ability to help US companies tap export markets in second-tier but very large
commercial centres in China.
The Global Supply Chain Initiative aims to help US small businesses identify
global supply chains that will take US manufactured goods to China.
September 4, 2004
Pacific Business News September 10, 2004
Foreign Retailers and Wholesalers have long realized that China's "opening" did not include them. But new regulations going into effect after December 2004 will allow fully foreign-owned enterprises to establish wholesale and retail operations anywhere in the country, and promise to dramatically change China's commercial landscape.
New Measures at a Glance
Rarely has a new set of regulations possessed the potential to expand the businesses opportunities of so many foreign enterprises in China. Below is a snapshot of the major changes introduced by the Administration of Foreign Investment in the Commercial Sector (a.k.a. Commercial Sector Measures) and the recently amended Foreign Trade Law.
What's new? Foreign investors will be able to set up wholly-foreign-owned wholesale and retail companies from December 11, 2004. This will allow them to engage in wholesale and retail, import/export, franchising (up to now this has been a gray area) and distribution.
Not on the Guest List
Just to make things interesting, foreign-invested commercial enterprises are still restricted from wholesaling or retailing certain categories of products.
They are as follow:
Restricted Temporarily
Restricted Indefinitely
More Regulations Coming
Wholesaling and retailing of the following products are subject to additional (mostly as-of-yet-unwritten) legislation:
| Type of Company | Regulations Before | Regulation After |
| Wholly Foreign-owned Enterprises (WFOEs) | Not Permitted (only Joint Ventures (JVs) were allowed) | As of December 11, 2004: Foreign investors receive national treatment. Minimum registered capital: RMB$500,000 (US$61,000) |
| Joint Venture (JV) Wholesale Company | Minimum registered capital: RMB80 million (US$9.76 million). Asset, turnover requirements. | As of June 1, 2004: No minimum asset value. No annual turnover requirement. Foreign investors receive national treatment. Minimum registered capital: RMB$500,000 (US$61,000) |
| WFOE Retail Company | Not permitted | As of December 11, 2004: Foreign investors received national treatment. Minimum registered capital: RMB$300,000 (US$37,000) |
| JV Retail Company | Minimum registered capital: RMB$50 million (US$6.1 million). Asset turnover requirements. | As of June 1, 2004: Foreign investor receive national treatment. No minimum asset, no annual turnover requirement. Minimum registered capital: RMB$300,000 (US$37,000). |
| Manufacturing Enterprises | Can sell only products made by the company in China | As of December 11, 2004: Can sell self-manufactured products, sourced in China and imported. |
September 3, 2004
'Fortune' magazine publishes top 100
Chinese listed companies
US "Fortune" magazine, issue September 13, published ahead of time, has
appraised and selected "top 100 Chinese listed companies 2003" in accordance
with their annual business incomes, the first 10 companies ranked in order
respectively are: Sinopec, Petro-China, China Mobile, China Telecom, China Life
Insurance, China Unicom, the People's Property Insurance of China, Five Minerals
Development, Baoshan Steel Group Co. Ltd. and the China National Offshore Oil
Company.
The list of the "top 100 Chinese listed companies 2003" was completed jointly by
"Fortune" (Chinese Edition) and HK-based Finet Group. The scope of selection
through appraisal encompasses Chinese companies listed in the markets of China's
inland, China's Hong Kong, New York, Singapore and London. The various companies
are placed in order on the basis of the 2003 business volumes provided by these
firms to related securities exchanges. It is reported that this year is the
fourth time that "Fortune" (Chinese Edition) published the list of "top 100
Chinese listed companies".
The threshold for the inclusion of "top 100 Chinese listed companies" this year
has again dramatically raised, with the business volume being raised from 4.45
billion yuan in 2002 to 5.99 billion yuan, a 35 percent rate of increase. On the
ranking lists published in 2000 and 2001, the business income of the company
placed the last one was 3 billion yuan and 3.3 billion yuan respectively, These
figures reflect the rapid growth and change of the Chinese economy and its
listed companies. According to the estimate of the "Fortune" magazine, in the
next three years, the qualifications for being included into the "top 100
Chinese listed companies" will be raised to 10 billion yuan, equivalent to the
scale of medium-sized enterprises in the world.
The year 2003 witnessed the continued growth of China's securities market. Under
the background of sustained economic growth and the gradual standardization of
markets, more listed firms were carrying out IPO (initial public offer) in
internal and external markets, in the meantime, listed companies scored greater
achievements. What's more, because large State-owned enterprises vie with one
another for restructuring and listing, listed companies have augmented their
strength. For example, the China Life Insurance Company and the People's
Property Insurance Company of China were placed fifth and seventh respectively
as they appeared on Hong Kong markets.
The enterprises chosen and included into the "top 100 Chinese listed companies"
are distributed mainly in petroleum and natural gas, iron and steel,
communication and auto-making industries. For instance, Sinopec, Petro-China and
China Mobile, which were ranked the first three A for four straight years, the
business incomes of the iron and steel industrial enterprises, such as Baoshan
Steel (ranked 9th) the Shaoshan Steel Songshan (81st) and Guangzhou Iron and
Steel (92nd) have surged dramatically, the incomes of auto-building enterprises
represented by the Chang'an Automotive (ranked 33rd) and Beijing Auto Fukuda
(38th) have grown by more than 50 percent, thus further raising their status on
the list.
The gross incomes of communication enterprises in 2003 had a 70 percent increase
year on year. . Besides the three telecommunication giants China Mobile, China
Telecom and China Unicom which are placed among the top 10, the Zhongxing
Communication (ranked 27th), Ningbo Bird (58th) and Amoi (88th) have continued
to raise their position on the list.
September 2, 2004
Chinese Medicine Distributors Have New
Legal Status in EU
The European Directive on the Registration Procedures of Traditional Herbal
Medicines released by the EU formally entered into force on 30 April 2004, under
which various member states are to incorporate the EU's traditional medicine
laws into their national drug laws within 18 months after the latter takes
effect and implement them in accordance with their local conditions. May 2004 to
April 2011 is given as the transition period during which traditional medicines
already on the market can enter and be sold in EU countries. In the wake of this
directive, Guangdong-based Chinese medicine manufacturers are among the first to
make a foray into the EU market.
Albeit being national treasures, traditional Chinese medicine (TCM) including
medicinal herbs and patent Chinese drugs has yet to be legally recognized in
most countries with a western medical background due to the lack of theoretical
support and standardisation in the dosage, composition and efficacy of TCM. As a
result, China's TCM exports can only be marketed internationally as health
products, food or food supplements and are mainly sold to overseas Chinese.
Market expansion has long been an onerous task.
The new EU directive, however, represents a significant stride in recognising
the status of TCM. Marked impact is immediately seen in pertinent exports from
Guangdong to the 25 EU member states. Patent Chinese drug exports, for instance,
jumped 3.4 times in May 2004 just after the directive became effective. Although
exports to the EU only make up a fraction of the total exports, many
Guangdong-based TCM exporters are excited about such robust growth.
While the new directive has opened a door for the export of TCM to the EU, it
also means that a series of laws and regulations concerning drug administration
now apply to the production, import and wholesale of traditional medicines. The
impact on TCM entering the EU market is far-reaching, with TCM exports now
having to pass various certifications such as GMP and complying with quality
standards in the EU Pharmacopoeia. Fulfiling these two requirements alone is no
easy task for mainland TCM enterprises.
Faced with such unparalleled opportunities and challenges, people in the
industry reckon that it is high time for the mainland TCM industry to step up
publicity to the outside world while expediting the establishment of a system
standardising the dosage, composition and efficacy of patent Chinese drugs. Such
attempts at meeting major international pharmaceutical standards and passing
clinical tests may one day enable TCM to be recognized globally as drugs.
Safety Requirements for Toys to Come into
Force on 1 October
With the entry into force of the National Technical Safety Requirements for Toys
on 1 October, China's toy industry will be subject to regulation. According to
the Ministry of Commerce, most stipulations in the new requirements comply with
ISO8124. Fulfiling them will bring the safety level of China-made toys to world
standards and contribute to the growth of Chinaˇ¦s toy exports.
The new requirements, covering all toys on sale in the market including those
for trial use and giveaway, contain more comprehensive stipulations and
illustrations on safety labelling than before. For instance, toys unsuitable for
children below the age of three due to their features, sizes or characteristics
will carry safety labels as such together with illustrations on their potential
risks. Signs of warning for certain small parts and toys containing such parts
or beads or pellets must be shown on the toys or their packaging.
There are also detailed provisions on the criteria of classifying toys by age
group. Consumers can choose the most suitable toys for their children of a
certain age group based on their capabilities and interest and the safety level
of the toys.
The new rules also contain explicit regulations on the testing of toys.
Furthermore, the new requirements have lowered the heavy metals content of toys
by half and widened the scope of inspection.
State Council to Deepen Investment Reform
The State Council recently promulgated its Decision on Reforming the Investment
System. The reform aims to:
Fully bring into play the basic role of the market in resource allocation,
separate government and enterprise functions, and reduce administrative
intervention;
Establish the position of enterprises as investors whereby enterprises can make
their own decisions on investment and be responsible for their own profits and
losses, while banks can make their own decisions on loan approval and bear the
risks;
Rationally define the functions of government investment and guide social
investment through the formulation of development plans and industrial policies
and the use of economic and legal means;
Improve the decision-making rules and procedures for government-funded projects,
make investment decisions more scientific and democratic, and establish a strict
system of accountability for investment decisions.
In implementing the reform, emphasis would be placed on the following:
Reform the investment management system and establish the position of
enterprises as investors. Enterprises should have their own say in investment
matters. Government approval will no longer be required for projects not funded
by the government. Instead, the systems of authorization and record-filing will
be implemented where appropriate. Large enterprises will be given greater power
to make investment decisions, and companies will have more financing channels.
The government encourages social investment and social capital will be allowed
into sectors not prohibited by laws and regulations. Financial institutions must
improve their system of fixed asset loans, continuously enhance their ability
and level of loan approval, and effectively ward off financial risks.
Perfect the government investment system and improve the social benefits and
efficiency of government investment. Government investment will mainly be used
in economic and social fields related to national security and in which the
market cannot make effective allocation of resources. A mechanism for government
investment accountability should be established, and authority for examination
and approval should be rationally determined. Approval procedures should be
streamlined and the management of investment funds should be put under proper
control. The contractor system should be put in place as soon as possible for
non-profit government investment projects. Local governments at all levels
should create conditions to attract social capital into public welfare
undertakings and infrastructure projects.
Strengthen and improve the macro-control of investment to achieve an overall
balance and an optimised structure. Investment in the whole society should be
brought under indirect regulation and control through the comprehensive use of
economic, legal and administrative means and economic levers such as investment
approval, prices, interest rates and taxation. The government should guide
social investment through planning and policy guidance, dissemination of
information, and market access control.
Strengthen and improve the supervision and management of investment in order to
regulate and protect market order in investment and construction. It is
necessary to establish and perfect a system of supervision and control over
corporate investment, government investment and investment intermediaries.
Legislation on investment will be strengthened, stricter supervision will be
exercised on law enforcement, and investors of all categories will be required
to act within the legal framework.
NDRC Official: China to Actively and
Steadily Promote Investment Reform
The State Council's Decision on Reforming the System of Investment was recently
promulgated. An official in charge of the National Development and Reform
Commission answered questions relating to the deepening of the investment reform
in an interview.
Q. Why is it necessary to push ahead with the reform of the investment system?
A. A series of reforms has been carried out in the field of investment since the
beginning of reform and opening up, as a result of which a new pattern of
investment featuring pluralistic investors, multi-channel financing, diversified
means of investment and marketisation of project construction has emerged.
However, deep-structured conflicts and problems have not been thoroughly
resolved. In particular, the power of enterprises to make their own decisions
has not been fully put in place and the basic role of the market in resource
allocation has not been fully brought into play. The decision-making process for
government investment has to be made more scientific and democratic, and the
efficiency of macro-control and supervision of investment needs to be enhanced.
The deepening of investment reform has great importance and far-reaching
historical significance under the new situation. Promoting the investment reform
is an important measure for establishing and perfecting the socialist market
economy system and is of special importance in strengthening and improving
macro-control.
First, establishing the position of enterprises as investors and reducing direct
government intervention in the production and operation of enterprises will help
the market better play its role in resource allocation, optimise the investment
structure, improve investment returns, and promote the sustained, rapid,
coordinated and sound development of the national economy and the all-round
progress of society.
Second, promoting the reform of administrative management, state-owned
enterprises, revenue and taxation, and finance and credit will help enterprises
and banks establish mechanisms of self-motivation and self-restraint and promote
the further perfection of the socialist market economy system.
Third, improving the management of foreign investment and offshore investment
will help open the country wider to the outside world, utilise the international
and domestic markets and resources in a better way, and expand the scope of
economic development.
Fourth, accelerating the change of government functions will help the government
shift the focus of its work to economic regulation, market supervision, social
management and public service.
Fifth, deepening the investment reform will help eliminate blind investment and
other problems and increase the internal vitality and drive for sound economic
development.
Q. What is the relationship between the deepening of investment reform and the
current policy of strengthening and improving macro-control?
A. Deepening investment reform is an important measure for strengthening and
improving macro-control. Objectively speaking, poor systems, sluggish change of
operating mechanisms, irrational economic structure and crude mode of growth are
fundamental reasons why conflicts and problems have repeatedly occurred in
China's economic development. In order to thoroughly implement macro-control
measures for the elimination of problems of blind investment and expansion at a
low level in some sectors, it is necessary to tackle both the root cause and
deepen the reform of the economic system. In particular, it is necessary to
further reform the investment system, establish and improve a mechanism of
self-determination and self-restraint by investors, enhance the responsibility
of banks in independent loan approvals, reduce administrative intervention, and
improve the system of government macro-control on investment. This will help
fundamentally eliminate rash impulses for blind investment, resolve
deep-structured conflicts and problems in economic development, and achieve
steady and rapid economic expansion. On the other hand, strengthening and
improving macro-control will create favourable conditions for promoting the
investment reform.
Q. What are the major objectives of the deepening of investment reform?
A. It is aimed to give greater scope to the basic role of the market in resource
allocation in accordance with the requirements of perfecting the socialist
market economy system, and to ultimately establish a new investment system with
market-led investment, autonomy for enterprises, independent loan approval by
banks, diversified financing means, regulated intermediary services and
effective macro-control. Specifically speaking, efforts will be made to reform
the management of government investment in enterprises and allow enterprises
greater autonomy in investment. The government's functions in investment will be
defined rationally, investment decisions will be more scientific and democratic,
and an accountability mechanism for investment decisions will be established.
Project financing channels will be further widened and diversified financing
means will be developed. Regulated investment intermediaries will be nurtured,
industry self-regulation will be strengthened and fair competition will be
promoted. Macro-control on investment will be perfected and the ways and means
of regulation and control will be improved. Steps will also be taken to speed up
investment legislation, strengthen the supervision and management of investment,
and regulate and protect market order in investment and construction.
Q. What are the major new measures of the State Council's Decision on Reforming
the Investment System?
A. In general, major new measures cover four aspects:
First, replacing the system of examination and approval for enterprise
investment projects with the systems of authorisation and record filing. From
now on, enterprises will not have to seek approval for construction projects if
government investment is not involved. Government authorization will be required
for major projects and projects of restricted categories, and only record-filing
will be required for other projects.
Second, rationally defining the functions of government investment. Government
investment will mainly be used in economic and social fields related to national
security and in which the market cannot make efficient allocation of resources,
in improving public welfare undertakings and infrastructure projects, protecting
and improving the ecological environment, promoting economic and social
development in the less-developed regions, and advancing scientific and
technological progress and the industrialisation of high technologies.
Government investment funds will be rationally utilised by means of direct
investment, capital injection, investment subsidies, on-lending, discounted
loans etc. For non-operational government investment projects, implementation of
the contractor system will be accelerated.
Third, perfecting the system of macro-control on investment and improving the
means of regulation and control. Making comprehensive use of economic, legal and
necessary administrative means, investment in the whole society will be
effectively regulated and controlled by indirect means.
Fourth, a government investment accountability system will be established to
perfect the supervision and management of government investment; a system of
post evaluation and social supervision of government-funded projects will be
established to strengthen checks and balances on government investment; a
coordinated enterprise investment supervision system will be established and put
on a sound footing to strengthen and improve the supervision and management of
social investment; a system of fiduciary duty will be established to strengthen
supervision on enterprise investment; and a system of qualifications will be
implemented on consultancies, assessment agencies, tendering agencies and other
intermediaries to strengthen supervision over investment intermediaries.
Q. What are the differences between the system of authorisation and the system
of examination and approval?
A. First, the scope of applicability is different. The examination and approval
system is only applicable to government investments and government-funded
projects of enterprises, while the system of authorisation is applicable to
major projects and projects of restricted categories not using government funds.
Second, the content of examination is different. Under the examination and
approval system in the past, the government examined investment projects from
the angles of managers of society as well as investors. Under the system of
authorisation, the government will examine investment projects from the angle of
public managers of society and economy. It will make sure that the projects
safeguard economic security, make rational utilization of resources, protect the
ecological environment, optimise the structure of the economy, protect public
interests and prevent monopolies, and will not look into market prospects,
economic benefits, sources of funds and product technologies, which should be
the concerns of investors. Third, the procedures are different. Under the
examination and approval system, the project proposal, feasibility study report
and project commencement report have to be approved. For the authorisation
system, only the project application report will be required.
Q. What is the meaning and importance of the record filing system?
A. The implementation of the system of record filing forms an important part of
the deepening of investment reform. Examination and approval by the government
will no longer be required for the majority of enterprise investment projects.
Instead, enterprises can make their own decisions and file records with the
department of the local government in charge of investment. Through the
effective implementation of the record filing system, the government can fully
grasp information on the propensity to invest, promptly and accurately monitor
investment, publish timely information on investment, and guide the direction of
investment in society. The government will strengthen guidance and supervision
over the filing of records, making sure that the system is effectively
implemented and not turned into examination and approval in disguise.
August 31, 2004
Mutual Recognition of Qualifications of
Mainland Real Estate Appraisers and Hong Kong Surveyors
On 20 August the mainland and Hong Kong completed the mutual recognition of
qualifications for the first batch of mainland real estate appraisers and Hong
Kong surveyors under CEPA. A total of 97 surveyors from Hong Kong became
chartered real estate appraisers on the mainland. This was the first instance of
the mutual recognition of professional qualifications under CEPA.
According to an agreement reached between the Hong Kong Institute of Surveyors (HKIS)
and the China Institute of Real Estate Appraisers (CIREA) in February this year,
Hong Kong surveyors who have been professional members of HKIS for more than
five years and have worked for at least one year (could be cumulative) in real
estate appraisal, development, agency, research or consultancy on the mainland
in the past three years may apply for the mutual recognition of qualifications.
All applicants who meet the requirements and are recommended by HKIS will have
to sit for a short training session and a test. Those who pass the test will
become chartered members of CIREA and be allowed to practise on the mainland.
Vice Minister of Construction Liu Zhifeng said at the ceremony for the
presentation of professional certificates that the mutual recognition of
qualifications between mainland real estate appraisers and Hong Kong surveyors
marked an important move in the implementation of CEPA, as it would help
strengthen exchanges and cooperation between real estate professionals in the
two places and improve their professional standards. Liu urged real estate
appraisers and surveyors to conscientiously study the laws, regulations and
appraisal standards in both places, observe professional ethics, and
continuously improve their professional skills.
New Rules on Processing Trade Offcuts
The Measures of the General Administration of Customs for the Administration of
Offcuts, Leftover Bits and Pieces, Sub-standard Products and By-Products from
Processing Trade and Bonded Goods Damaged by Natural Adversities came into force
in July 2004.
The measures, promulgated by the General Administration of Customs (GAC),
represent the revised version of the Measures for the Administration of Offcuts,
Saved Bits and Pieces, Sub-standard Products and By-Products from Processing
Trade and Bonded Goods Damaged by Natural Adversities.
Article 2 of the measures sets out the revised definitions of "saved bits and
pieces", "sub-standard products" and "by-products". "Leftover bits and pieces"
are no longer differentiated. The stipulations concerning saved bits and pieces
and leftover bits and pieces are now merged under leftover bits and pieces. The
definition of sub-standard products and bonded goods damaged by natural
adversities is revised to cover unfinished products. The scope of by-products
has been extended and industry-specific restrictions on by-products have been
lifted. The revisions are designed to make the definitions more comprehensive
and accurate, as well as to clearly spell out the scope of the measures.
Articles 4, 12, 13 and 14 clearly set out the classification principle for
offcuts, which is the classification as assigned by Customs based on their
condition at the time of domestic sale.
Articles 8, 12, 13 and 14 clearly define the classification principle for
by-products, which is the classification as assigned by Customs based on the
condition declared by the enterprise at the time of domestic sale. And the
corresponding tax rates will be applied. The revised measures cancelled the
provision for depreciation of by-products under the previous version. The
objectives are to simplify and speed up clearance procedures, giving greater
convenience to enterprises.
Article 9 provides for different treatments of bonded goods damaged by different
types of natural adversities. The major principle of differentiation is "lax
treatment for force majeure and strict enforcement otherwise". In more concrete
terms, it means that if the bonded goods are damaged by force majeure, the
licence will be waived. If the goods concerned still have a value, the
enterprise does not have to pay the tax that should have been due. If the bonded
goods are damaged by factors other than force majeure, the enterprise has to pay
the tax that should have been due and present the required licence to Customs.
The reasons for these changes are to standardise enterprise management, increase
the awareness of risk among enterprises, as well as their ability to avert risk.
Article 11 stipulates that: "Upon submission of application by an enterprise to
surrender a certain shipment of bonded goods and presentation of proof that
Customs is processing such a request, the verification and cancellation
procedure will be processed after Customs has duly verified it." In the previous
version, "proof of Customs having taken over and sold off the goods" was a
prerequisite for verification and cancellation. The revision will help simplify
the procedure and speed up the processing time of such cases. As for the
workflow of goods confiscation and destruction, the previous requirement for
"proof from authority supervising the destruction" and "supervision by Customs
officers" have been cancelled. Under the revised stipulation, Customs will
complete the verification and cancellation procedure upon presentation of proof
pertaining to the confiscation and destruction.
Article 12 is a new provision concerning the administration of "offcuts,
leftover bits and pieces, sub-standard products and by-products that are subject
to import tariff and quota management and bonded goods damaged by natural
adversities". Article 13 is a new provision concerning the administration of
offcuts, leftover bits and pieces, sub-standard products and by-products that
are subject to anti-dumping duty, anti-subsidy duty, safeguard measure duty or
retaliatory duty (collectively known as special tariffs). Article 15 states that
the measures do not apply to the administration of offcuts, leftover bits and
pieces, sub-standard products and by-products that are produced with parts and
materials imported by processing trade enterprises operating in bonded zones and
export processing zones.
Unified Corporate Income Tax Likely by
2005
With the proposed unified corporate income tax regime taking shape, the existing
system where the tax rate of domestic enterprises is double that of
foreign-invested enterprises (FIEs) will soon come to an end. The revised
legislation will likely be passed this year and unified corporate income tax
could materialise in 2005 at the earliest.
With accounting giant Ernst & Young as facilitator, senior officials of the
State Administration of Taxation (SAT) recently had a useful dialogue on the new
tax regime with senior managers of the world's 30 leading multinational
companies (MNCs).
The message that emerged from the meeting was that the unified rate would be set
at 25-28%. Although the spokesperson reiterated that the figures are not
official, industry sources reckon the range is very likely the compromised
outcome of the meeting. Sun Ruibiao, director of SAT's income tax division, once
remarked that the shortcomings of China's tax system pose severe challenges to
the survival and development of indigenous and domestically-funded enterprises.
In other words, the real objective of "unified tax rate" is to boost indigenous
industries.
In keeping with the "principle of neutrality" under WTO, unified tax rate will
inevitably become a fact of life for FIEs in China soon. However, speculation
that existing preferential tax treatment will be scrapped is causing serious
concern. Reportedly, the MNCs at the meeting have strongly urged for the
existing preferential treatment to stay.
No Change in Individual Income Tax Over
Next Two Years
Corporate income tax, individual income tax and value-added tax (VAT) are the
key items of the current round of tax system reforms in China.
According to SAT deputy director Xu Shanda, the amendment of the Individual
Income Tax Law is not scheduled for legislation over the next two years whereas
"unified corporate income tax" may be submitted to the National People's
Congress for approval in March 2005 at the earliest. Pilot VAT reform in the old
industrial base in the Northeast is the only major tax reform at the present
stage.
The pilot reform in the Northeast was launched on 1 July. However, as the reform
will in theory stimulate investment, it goes against the current policy of
investment curbs in certain overheated sectors and macro economic control. It is
therefore questionable if VAT reform will proceed further before over-investment
is considered to have been put under control.
Moreover, VAT reform is closely related to pension and old-age insurance. If the
amount of tax payment is reduced due to VAT reform, the source of fund for such
insurance could become an issue of concern. Liaoning is the only one out of the
three northeastern provinces which has implemented pension and old-age insurance
reform for four years and will be better off than Heilongjiang and Jilin when
tax revenue drops. Besides, while the priority industry sectors vary in the
three provinces, pilot VAT reform is designed to launch in eight sectors. Hence,
the effectiveness of the trial and the exemplary function it serves to the
nationwide implementation of VAT reform are both big question marks.
The prospect of tax revenue in the latter half of 2004 is also a cause for
worry. If the tax revenue is not satisfactory, the commitment of senior
government leaders to such reforms will understandably be dented.
Industry sources pointed out that major sectors contributing to tax revenue
growth during the first half of the year have been raw materials such as
building materials, steel, cement and oil, as well as tobacco products. The
effect of macro-control measures implemented during the first half will be felt
in the second half. Moreover, with the sale ban of high-tar tobacco products
from 1 July, tax revenue from tobacco enterprises will likely decrease. The
prospect of tax revenue growth in the second half will be less promising than
the first. With the effect of macro-control becoming more apparent, economic
growth in the second half of the year may slow down and impact on the pace of
tax revenue growth.
Promising Outlook for Investment in YRD
Power Sector
Despite continued rapid economic development, enterprises in the Yangtze River
Delta (YRD) are plagued by power shortage which has become a major complaint of
many foreign investors. According to experts, the power shortage situation is
manageable in Shanghai, serious in Jiangsu and critical in Zhejiang. It is
estimated that shortfall will exceed 19 million kw for the entire YRD this
summer.
To minimise loss to companies under the current circumstances, different
provinces and cities in the YRD have come up with different measures. Jiangsu
province, for instance, has in place a power staggering policy whereby
electricity supply to companies remains normal for five days a week and during
non-peak hours (i.e. other than 8:30-22:30) on the remaining two days. On the
other hand, the Shanghai municipal government has adopted five measures to cope
with the power consumption peak season, namely industrial policy guidance,
leveraging on electricity prices, strengthening power demand administration,
arranging company breaks by turns and encouraging community-wide energy
conservation. Furthermore, a power consumption restriction policy has been
introduced, and companies using more electricity than planned during peak hours
(13:00-15:00) will be charged double.
To ease the power shortage problem and to further improve the investment
environment, Jiangsu, Zhejiang and Shanghai have stepped up efforts in related
infrastructure development. While Shanghai will invest Rmb20 billion in building
electricity grids, Zhejiang has decided to inject Rmb50 billion and streamline
relevant local approval procedures in order to accelerate the construction of
power plants and electricity grids. Presently, 77 local power plant projects
have been approved with a total capacity of 1.283 million kw. Meanwhile, Jiangsu
has expanded relevant investments from Rmb13.1 billion in 2003 to Rmb16.1
billion in 2004.
It is predicted that investment in power infrastructure will grow at around 40%
annually from 2003 to 2005, and will focus on the construction of electricity
grids starting from 2006. This has led to a substantial increase in related
equipment imports. Statistics compiled by Shanghai customs show that 1,806 power
generation units worth USD68.92 million were imported through Shanghai in the
first five months of 2004, up 120% and 220% respectively year-on-year. Imports
of power generators and power generation units by Jiangsu in the first four
months of 2004 also registered increases of 77% and 140% respectively
year-on-year, totalling 400 sets.
August 25, 2004
WEBCAST: Licensing Your Property in China - Rebecca Lo, Esquire (English / Putonghua)
August 24, 2004
Individuals Allowed to Open Foreign Trade
Settlement Accounts
Hong Kong residents who have registered as individually-owned business operators
and obtained foreign trade rights will be allowed to open foreign trade
settlement accounts for forex receipts and payments starting from 10 September.
This means that individual foreign trade operators can purchase hard currency
for external forex payments and settle forex receipts directly with the bank
through their foreign trade settlement accounts. However, they may not use their
personal foreign currency savings accounts to make external forex payments.
Also, the foreign trade settlement account may not be used together with other
foreign currency savings accounts.
The State Administration of Foreign Exchange (SAFE) issued a circular on 10
August on forex administration over individual foreign trade operators.
According to this circular, individual foreign trade operators should register
with the “Directory of Import Units Permitted to Make Outward Remittances” or
file for forex receipt verification at the local foreign exchange administration
office where they registered for business after completing customs registration
online at China e-Port. They may open individual foreign trade settlement
accounts for forex receipts and payments only after completing these
formalities.
Individual foreign trade operators refer to individuals who have been granted
foreign trade rights to engage in foreign trade activities after completing
their business registration and obtaining their individual business licence in
accordance with law and filing for registration in accordance with the
regulations of the department of commerce under the State Council (except where
registration is not required). Details for the registration of foreign trade
rights are given in the Foreign Trade Operators Registration Measures issued by
the Ministry of Commerce on 25 June 2004.
August 16, 2004
China
Business Open Doors for American Firms
Hong Kong China Hawaii Chamber of Commerce (HKCHcc) is part of the International Business Delegation from Hawaii, California, Oklahoma, Hong Kong and Guangzhou visited Urumqi, Xinjiang China between Aug 10 - 15 to explore multi-million business opportunities in Real Estates, Wine, Meat Operation and Water Park worth RMB$400 millions. This successful business mission was lead by private sectors business leaders. There was no government official accompany the business delegation. During the 5 days visit, we have met with Honorable Wang Lequan - Full Politburo Members and Secretary of CCP Xinjiang Autonomous Region, Honorable Yang Gang - Secretary of CCP Wulumuqi City of Xinjiang Province, Honorable Shokrat Zakir - Mayor of Urumqi City of Xinjiang Province and Honorable Ms. Wang Jian Ling - Vice Major Urumqi City of Xinjiang Province. It was rare and exception for the top Officials from the Provincial and City level to receive the small but powerful business delegation to work on projects benefiting the City of Urumqi and the Province of Xinjiang.
When we first visited China to sign the Sister-City Agreement between the City of Honolulu and the Hainan Island in 1984. The entire visit must be handled by the 2 governments including all business meetings. Businesses in Hawaii were playing a minor role during the visit there. Increasingly the 1980 government/business model does not work for the modern China. More and more businesses in China want to engage Western businesses on the front line, prefer to have governments on both sides to play an important, but supportive role. China Government does not want to be in the way of business. In fact China has turned most of its State Owned Enterprises (SOE) into the hands of private business owners. They have further encouraged business enterprises to contact individual business directly.
Business Executives in China has been instrumental to set up meetings with Government Official when needed, rather than a requirement to do business there. Many preferred no Government Official to tag along with a business delegation as they must schedule meetings with local Governmental Officials even when there is no need to do so, thus taking away valuable time on serious business dealings and negotiations.
The Western Regions of China has presented exceptional opportunities for Hawaii and Smaller Companies. The impression by most Americans never visited Western China thought the area to be backward and difficult to do business there. But many upon their first visit were surprised on the ease to do business there without facing fierce competitions from the big Enterprises around the world. Most of the modern amenities are there. Internet and the tools of doing business are readily available at a very reasonable price. If the business delegation wish to schedule meetings with local government official, support letter from your own Federal, City and State Government Official is more than sufficient therefore saving the taxpayer 1,000s of dollars of travel expenses.
For a small State like Hawaii, Hong Kong China Hawaii Chamber of Commerce (HKCHcc) has been very successful working with businesses in Mainland USA and Asia to increase Hawaiian Companies' financial resources and diversities.
We are expecting to undertake more similar business mission and initiative in the future focusing on tangible and measurable results.
August 5, 2004
Construction Design Service in Enormous
Demand
China's construction market is worth an estimated Rmb1,600 billion. Given that
construction design accounts for 0.5-3% of the construction cost, it translates
into a market of Rmb8 billion to Rmb48 billion. To improve the environment, many
cities in the Pearl River Delta (PRD) are stepping up urban construction. Demand
for construction design service is set to surge over the next few years. With
the recent signing of the Mainland/Hong Kong Closer Economic Partnership
Arrangement (CEPA), Hong Kong's construction design service companies can expect
greater room for development in the mainland market.
Urban Construction Fuels Demand for Design Service
With rising living standard and gradual transformation from a relatively
well-off society to a wealthy one, the PRD currently ranks among the top regions
in the country in terms of per capita income and consumption. Both government
authorities and the residents are increasingly demanding about the living
environment. In 2002, investment in real property development topped Rmb111.525
billion in Guangdong, accounting for 28% of the total fixed asset investment in
the province and ranking first among all mainland provinces.
A new wave of construction boom is in the making in the PRD. To achieve the
urban development goal of "major transformation by 2010", Guangzhou has
earmarked more than Rmb180 billion for urban redevelopment and construction over
the next 10 years as it targets to become a modern metropolis in southern China.
The city will continue to focus on the three key construction projects involving
its airports, ports and information infrastructure. It will also promote urban
landscaping with an emphasis on natural ecology, greenery and human
architecture. Furthermore, urban planning will be upgraded and landmarks such as
city squares, parks and statues will be built. In the next five years, a number
of landmarks will be completed in Guangzhou, including a new airport, an
international convention and exhibition centre, a new port, a new youth centre,
the Guangzhou Opera House, Guangzhou Newspaper Plaza, Haizhu City Plaza, a
sightseeing tower, the South Yue Palace Museum, and the Shamian Modern History
Museum. Priority will also be given to develop the Nansha Development Zone,
modern city clusters such as Zhujiang New City and Baiyun New City, as well as
science city, university city, international biology island, and new and
high-tech industrial parks such as the four major logistics centres.
During its tenth five-year plan period, Shenzhen plans to invest Rmb50.764
billion in building roads, water and energy supplies, public venues and
facilities, and dedicated zones. Another Rmb25.219 billion will be spent on a
series of infrastructure projects including phase one of its underground
railway, the Shenzhen-Hong Kong western corridor (Shenzhen Bay highway bridge),
Shenzhen Tonggu Channel, Huanggang/Lok Ma Chau pedestrian footbridge, section B
of Yanba highway, phase two of the underground railway, and a transport
intersection in Zhuzilin district.
As for Dongguan, the following infrastructure projects are included in its tenth
five-year plan: a technology service centre, an international convention and
exhibition centre, an opera house, a guesthouse, and phase three of the cultural
plaza project. In a bid to raise the cultural level of the city, several squares
and parks will be built in the urban area, as well as country parks in the
suburbs of Dongguan.
Other cities in the PRD such as Foshan, Zhongshan and Shunde are also understood
to be either planning or implementing their respective urban construction
projects.
The rapid growth of urban construction in the PRD cities, coupled with the
lowering of entry threshold for Hong Kong players in the mainland construction
design service market, translates into enormous room for development for Hong
Kong.
Entry Threshold of Construction Design Service Market
The Regulations on the Administration of Foreign-invested Construction Design
Enterprises introduced on 1 December 2002 stipulate that foreign investors may
establish construction design enterprises in the form of Sino-foreign equity or
contractual joint venture. Under CEPA, Hong Kong construction design firms may
set up wholly-owned enterprises in the mainland. In Sino-foreign equity or
cooperative JVs, the foreign equity ratio must not exceed 75%.
The regulations also require that a certain percentage of the certified
professionals and key technical personnel of a construction design enterprise
must be architects and engineers certified in China. Where a wholly
foreign-owned construction and engineering design enterprise applies for the
construction and engineering design enterprise qualifications, its foreign
service providers who have been qualified as certified architects or certified
engineers in China must not be less than one quarter of the total certified
professionals required under the qualification grading criteria, and the foreign
service providers who have the relevant design experience must not be less than
one quarter of the total key technical personnel required under the
qualification grading criteria. Where a Sino-foreign equity or cooperative
construction and engineering design joint venture applies for the construction
and engineering design enterprise qualifications, its foreign service providers
who have been qualified as certified architects or certified engineers in China
must not be less than one-eighth of the total certified professionals required
under the qualification grading criteria, and its foreign service providers who
have the relevant design experience must not be less than one-eighth of the
total key technical staff required under the qualification grading criteria. The
foreign service providers of a wholly foreign-owned enterprise who have been
qualified as certified architects, engineers or technical personnel in China
must reside in the Chinese mainland for no less than six months a year.
In a bid to introduce standardization to the construction design market in
Guangdong, the provincial authorities will implement the Regulations of
Guangdong Province on the Administration of Construction Engineering Exploration
and Design on 1 October 2003. According to the Guangdong Department of
Construction's website, the consultation paper of the regulations covers the
following aspects: the grading and approval system governing entities engaged in
engineering exploration and design activities; registration system for qualified
technical personnel; documentation approval system governing construction
engineering exploration and construction drawings and designs; and approval
system for the preliminary design of large- and medium-scale construction
engineering projects. Entities engaged in engineering exploration and design
should apply for the relevant qualification certificate, namely for engineering
exploration, design and general contracting work based primarily on design.
Market Competition and Entry Options for Hong Kong Firms
With a growing cluster of architects and construction groups from around the
world, the PRD has become the largest construction market in China. Different
players are competing in the market much like in a "design contest".
According to market analysts, foreign construction design firms often target
large-scale public construction projects and upmarket apartments as an entry
point to the China market. However, hefty design cost means it is not always
smooth sailing for these firms. As a property developer who has the experience
of using the services of a foreign designer points out, the designs and
architectural concepts of foreign designers are admittedly more advanced, but
cost is an important consideration. For instance, construction design usually
takes up about 0.5% of the total investment cost of a local property development
project, but the fee charged by a foreign design firm can go up to as much as
3%.
There are currently 1,254 organizations engaged in exploration and design work
in Guangdong province. Of these, 267 are Grade A, 335 are Grade B, 627 are Grade
C, 10 are Grade D, and 15 are at township-level. Among the 46,744 employees,
2,731 are certified architects (of which 906 are Class 1), and 2,141 are
certified structural engineers (of which 1,737 are Class 1). Overall, certified
practitioners with different qualifications make up 10.8% of the total.
In terms of revenue, the construction industry grew by 14.2% year-on-year to
reach Rmb7.938 billion in 2002, while profits totalled Rmb557 million. To date,
the industry has achieved 45 patents, 78 specialised technologies and 150
science and technology achievements.
At present, two major types of construction design organisations are active in
the market. First, wholly state-owned large- and medium-sized architectural
design institutes which have a relatively long history and are the key players
in the market. Second, the smaller design firms which sprang up in recent years
and have different ownership structures.
To encourage the establishment of professional design firms, Guangdong is in the
process of easing the qualifying criteria for professional construction design
enterprises (firms), including professional construction design consulting
firms. The province is also committed to supporting the reforms of large
state-owned construction design institutes, as well as fostering the development
of a number of "celebrity" designers and "star" design firms. In 2002, the
Ministry of Construction approved 108 private architectural firms across the
mainland of which eight were located in Guangdong. These partnership private
firms were encouraged to use the names of individuals as their company name.
According to sources from the Guangdong Exploration and Design Association,
provincial authorities are currently carrying out system reforms of construction
design enterprises. The reform package, which has been approved by the Guangdong
provincial government, encourages state-owned exploration and design
organisations to transform into popular company types found in the international
marketplace such as engineering firm, engineering consulting and design firm,
specialised rock and soil project firm, project exploration firm and design
firm. In terms of company structure, these organisations can be reorganised into
limited liability company, limited company, joint stock company or partnership
through various means such as restructuring, merger and acquisition, and sale.
Hong Kong architects are well-versed in international concepts, trends and
standards, and have a wide international exposure. They should capitalize on
these advantages to seek cooperation with well-established mainland counterparts
in the form of equity or contractual joint venture.
New Tax Rules for Foreign-Invested Venture
Capital Companies
The State Administration of Taxation has recently issued a circular on new
regulations relating to enterprise income tax payable by foreign-invested
venture capital companies in China. Some of the existing tax concessions will be
abolished under the new regulations.
Pursuant to the Income Tax Law of the PRC for Foreign-Invested Enterprises and
Foreign Enterprises and its implementing rules:
Venture capital enterprises engaged in equity investment and transfer as well as
those providing venture capital management and consulting services to
enterprises according to relevant regulations, do not belong to production
enterprises and are therefore not entitled to the preferential taxation
treatment granted to foreign-invested production enterprises in China's tax law.
A venture capital enterprise established as a corporate entity should take the
venture capital enterprise as the taxpayer and declare and pay enterprise income
tax in a unified way according to the provisions of China's tax law.
For a venture capital enterprise established as a non-corporate entity, the
enterprise income tax may be declared and paid separately by its investors, or
declared and paid in a unified way according to tax laws upon application by the
venture capital enterprise and approval by the local taxation authority. If
investors of a non-corporate entity venture capital enterprise opt to declare
and pay enterprise income tax separately, the foreign investors should compute
and pay the tax as foreign companies with organizations or business venues in
China. If the non-corporate entity venture capital enterprise does not have any
venture capital management organization and does not directly engage in venture
capital management or consulting services but merely operate as a normal
investment enterprise, it may declare and pay enterprise income tax as a foreign
enterprise without organization or business venue in China.
Venture capital enterprises mentioned in this circular refer to foreign-invested
enterprises established in accordance with the requirements and conditions of
the relevant administrative regulations and legal procedures to engage in
venture capital business. Their names must bear the words "venture capital".
July 27, 2004
First Individually-Owned Foreign Trade
Business in Shenzhen
The first individually-owned foreign trade business in Shenzhen was born 20 days
after the Foreign Trade Law entered into force. The owner, Mr Fu, operates an
individually-owned enterprise in Nanshan district for the production and
marketing of hardware. He has never been involved in import-export business
before and his products were mainly exported through other enterprises. His
enterprise is the first individually-owned business to have completed
registration as a foreign trader.
According to Fu, his overseas clients repeatedly asked him to handle his own
exports, as this could lower costs for both sides and help him win more overseas
orders. At the end of June this year, when he learned from the media that
individually-owned enterprises were allowed to engage in foreign trade, he
consulted his clients at once and decided to register. He registered online the
day after the Foreign Trade Law went into force and submitted the registration
form and other necessary documents on 16 July, completing the registration
procedures the same day. Fu said foreign trade right is a big help to his
business and gives individually-owned operations like his more room for
expansion.
Many people are concerned about the provision in the Measures for the
Registration of Foreign Trade Businesses on the submission of notarial
certificate of property issued by public notaries. Fu said he went to a public
notary on 15 July and received the notarial certificate the following day. In
fact, public notaries are ready to issue notarial certificates upon presentation
of proofs of credit standing issued by the bank.
Under the new Foreign Trade Law, foreign-invested enterprises, individually
wholly-owned enterprises and foreign (regional) enterprises may apply for
permission to engage in foreign trade by submitting the necessary documents. For
details, please visit
http://www.chinacourt.org/flwk/show1.php?file_id=94603.
As many as 92 Hong Kong and Macau individually-owned businesses have registered
in Shenzhen between 1 January this year when CEPA went into effect and mid-May.
They mainly engage in the retailing of jewellery, electronic products, health
care products, garments, decorative materials and daily consumer goods.
July 14, 2004
Jiangsu Shoe City kicks in on fashion
Established in 1995, Jiangsu Shoe City has won a reputation among customers with
its pledges: "money back guarantee" and "guaranteed return, replacement and
repair". The Shoe City is known for its fine products, low prices, and positive
business environment.
The market has six floors and nearly 200 shops, with some 5,000 visitors every
day. About 30,000 pairs of shoes of different types are sold daily, so annual
turnover exceeds Rmb100 million (HK$94.3 million).
There are standard shops on the first two levels, specialized boutiques on the
third floor, and warehouses on the fourth to sixth floors.
About 10,000 types of shoes, including leather shoes for men and women,
children's shoes, cloth shoes, slippers, cotton padded shoes, Wellington boots,
sandals, students' shoes, baby shoes - as well as shoes for casual wear, the
beach, sports, work and a host of specialist occupations or activities, are
available.
Shoes come in all forms and quality, with medium and low-end products making up
the bulk. The producing areas include Jiangsu, Guangzhou, Wenzhou, Fuzhou,
Shanghai and Shenyang.
All goods are directly marketed by manufacturers without going through middlemen
- the idea being to make small profits but on quick turnover. Prices here are
the lowest in eastern China.
The market opens for business at six in the morning and is packed with visitors
all day. Trading is brisk and cash transactions form the predominant medium of
business. Most buyers are from large and small shopping centres in Jiangsu and
Anhui, as well as from supermarkets and shoe shops in eastern China.
Jiangsu Shoe City has assigned great importance to the style of shoes since it
was first established.
Every attempt is made to look for new styles and new sources of goods. Each
year, the shoe city sends representatives to other markets to find out about the
latest trends and information about the industry.
Today, all shoes sold at Jiangsu Shoe City reflect the latest styles at home and
abroad and set consumption trends in the whole of eastern China.
The most recent designs can be found at Jiangsu Shoe City within three days of
being presented on the market. At least 30 new designs are launched at the shoe
city each day.
Footwear for women in the latest designs are prominently displayed, including
the new open-toe styles, with their colourful designs and simple but elegant
shapes.
At the same time, "cage-design" shoes, which were top sellers last year,
continue to lead the trend. Currently, they are offered in colourful patent
leather and with simple plaited leather straps.
With women's footwear designed to make legs look longer and slimmer, comfort and
styling are at a premium.
Dancing shoes with slim or thick heels in silver, light sandy gold, rose gold,
golden bronze and beige tend to be complementary, and with embellishments on the
uppers and straps, they go very well with the graceful dancing dresses that are
immensely popular this summer.
Two-tone shoes inspired by black-and-white dress shoes for men, look subtly
refined when worn with long slacks and suits.
Round-toe shoes are making their appearance in the spotlight, as pointed toes
decline in popularity. The new styles may have a fine strap across the instep or
around the ankle and go very well with full pleated skirts, shorts or suits.
Wedge heels are back from the 1970s. With their thick soles, they are more
easily manageable than stilettos. A major improvement of wedge heels this summer
is their tapered soles, and colourful, light-weight products with cork or
rope-textured heels are a match for hot pants, knee length skirts of ethnic
designs and full-pleated skirts.
Clear-crystal shoes are very much in: their transparent sole, body and heel make
the wearer look taller and more slender. The slightly raised sole adds a touch
of elegance. They go best with tight, three-quarter-length slacks and vacation
outfits.
Cage design shoes are sliding into the picture: the shallow, netted upper design
gives a carefree touch to the otherwise extravagant style of ladies' wear this
season. They go well with floral dresses, flared skirts, slip dresses and shirt
dresses.
Open-toe high heel shoes are classic in style and are a cross between high-heel
shoes and open-toe sandals. With open side and colourful patent leather uppers
of various designs, they match well with full pleated skirts, flared dresses and
three-quarter-length slacks.
Glamorous shoes in crocodile skin, satin, crystals, embroideries, silk and
dye-printed fabrics are becoming popular, and pair well with short skirts and
hot pants.
Jiangsu Shoe City brings together brands from home and abroad, including Camel,
Julu, Hang Ten, Juri, Jinlaike, Crocodile, Bage, Xiaotuge, Huabin, Hongchen,
Shanghai Danling, and Ouniaowang, along with Bolong, Caolong, Tilesi, Lanlier,
Bingting, Daminghuang, Yaqili, Red Ant, and Qiaofeng.
Service facilities have been improved since the market was first established.
Also, the shoe city has its own consumer council, individual workers
association, product quality control office, security guards, cleaning brigade
and other service and support units.
The Industrial and Commercial Bank, Communications Bank, Agricultural Bank,
Construction Bank and Bank of China have branches close by. There are also
industrial, commercial and taxation departments and freight forwarding centres
in the vicinity.
The shoe city provides pre-, during- and after-sales services, while regularly
evaluating the credibility and product quality of suppliers. Manufacturers
reputed for products of good quality are invited to set up direct sales outlets
there.
A special office has been set up to handle customers' complaints and a quality
complains registration system has been put in place.
Jiangsu Shoe City is situated in a prime section of Nanjing near Shuiximen. Its
location is characterized by heavy pedestrian flow and convenient transport.
Rents are cheap. A monthly rent per 100 sqm ranges between Rmb90 and Rmb180
(HK$84.9 and HK169.8), depending on location.
Qualified help at hand in Shenzhen
Most families in Shenzhen employ part-time or stand-in nannies to look after
their little ones. Some companies set up to develop childcare have so-called
"child care workers" for babies aged up to three, but all of these people are
untrained.
Under the National Professional Standards for Childcare Workers, published by
the Ministry of Labor and Social Security, childcare workers are one of the
eight new types of job announced by the ministry. According to the new
regulations, child care workers must be able to "choose the right disinfectants
for babies" and "correctly record a baby's growth curve and use growth
monitoring charts", in addition to taking basic daily care of the child.
These better-trained nannies are also expected to work out personalized teaching
plans according to the level of development of children, choose and design
games, train the infants in sports, recognition, language, social skills and
other abilities, as well as perform all kinds of educational tasks. These
workouts could involve movement and skill training, intellectual development,
social behavior and character training for children.
Among the various types of domestic service in Shenzhen, caring for old people
accounts for 5%, housework for another 25% while looking after children
represents a massive 70% of services.
The average age of the urban population in Shenzhen is 28.6 and the birth rate
of registered residents is 10.63%. With about 70,000 new babies born each year,
there is bound to be a concerted cry for professional childcare help from busy
parents!
July 11, 2004
Policy and Law
Crackdown on VAT Violations
The State Administration of Taxation (SAT) issued two circulars on 30 April
regarding its crackdown on tax-related violations, such as the issuance of
fraudulent freight invoice and the production and sale of fake invoice, and the
launch of special tax inspection work for 2004.
The key points of the circulars are as
follows:
The deliberate issuance or acceptance of fake special VAT invoice, and issuance
of other invoices for the purpose of cheating export rebate or tax deduction are
violations of tax collection laws. Tax authorities at all levels have to take
stringent measures to combat such tax-related violations and bring offenders to
justice. They should carry out a thorough checking of general taxpayers in their
respective jurisdictions, especially the smaller businesses with irregular tax
records.
Tax authorities at all levels should strictly enforce the law and seriously
punish those enterprises engaged in the issuance of fraudulent special VAT
invoice or other tax deductible invoices in addition to imposing the tax
originally due and the overdue surcharge. For offences punishable by law, tax
authorities should promptly refer the case to public security departments.
For enterprises which deliberately accept fraudulent special VAT invoice or
other tax deductible invoices for the purpose of tax evasion and cheating export
rebate, tax authorities must thoroughly review their tax payment records for at
least the preceding three years. Once an investigation confirms that the
fraudulent invoice has been accepted deliberately, the party concerned will be
punished in accordance with law.
Tax authorities at all levels should bear in mind the dual purpose of combat and
publicise at the same time. Comprehensive plans should be formulated to combat
illegal activities while positive results of the exercise should be publicised.
July 8, 2004
Guangdong Commences Credit Legislation
Guangdong has embarked on credit legislation and will establish a system of
credit rating for individuals and enterprises. In future, people will be able to
check the credit-worthiness of enterprises at any time.
Led by the government and with the participation of the People's Bank of China
and the departments concerned taking part as members, a personal
credit-worthiness and personal credit rating system will be established in
Guangzhou, Shenzhen and Shantou. The government will authorize an intermediary
to set up the system, which will operate according to the market mechanism and
provide charged services. Initially the system will be available to members
only. When the whole project is up and running, its service would be extended to
institutions authorized by laws and regulations and to citizens and legal
persons authorised by the parties concerned. A personal credit-worthiness and
credit rating supervisory committee formed by the members will supervise the
operation of companies.
At the end of the first half of 2004, an information network connecting 21
cities in Guangdong was built to provide online search service for the credit
records of enterprises throughout the province. The network will be eventually
extended to all cities in the province and will cover information from different
departments on enterprises. When the project is completed, a corporate and
personal credit worthiness system connecting all government departments,
intermediaries, banks and securities markets will be established whereby
individuals and enterprises will be able to check the credit records of all
enterprises in the province at any time. Relevant information analysis,
forecasting and early warning systems will also be established for the credit
rating of enterprises and individuals.
Meanwhile, Guangdong is taking steps to legislate credit checking and
disclosure. The provincial department of information industry is taking the lead
to organize credit legislation for all enterprises in the province and has
started the drafting of the Regulations for the Opening of Credit Information on
Enterprises in Guangdong and the Regulations for the Opening of Administrative
Affairs in Guangdong.
Hong Kong
doctors, medical insurance in Shenzhen
As ties between Shenzhen and Hong Kong grow with the implementation of the
individual travel scheme for mainlanders, more and more Shenzhen people arrive
in Hong Kong to visit relatives, and as tourists. Conversely, the number of Hong
Kong people living and working in the Pearl River Delta is also rising sharply.
How can adequate medical services for all these travelling people from one
jurisdiction to another be provided, if not guaranteed?
Shenzhen's health department and labour and social security department indicated
in meetings with the Hong Kong Association of Registered Medical Practitioners
recently, that Shenzhen citizens with medical coverage can make claims from the
mainland labour and social security department.
Mainland patients can present bills for detailed medical checkups and other
medical expenses, medical reports and associated documents issued by Hong Kong
hospitals in cases of emergencies such as sudden illness, a traffic accident or
in childbirth while they are visiting Hong Kong.
The Hong Kong Association and Shenzhen authorities also agreed that Hong Kong
people working and living across the Special Administrative Region boundary
should be able to enjoy timely medical support and services provided by the Hong
Kong government. The Association will designate one or two large hospitals in
Shenzhen, where Hong Kong residents can enjoy medical protection and benefits as
if they were in Hong Kong.
Both parties also discussed another way of addressing this issue. It was
suggested that Hong Kong's Hospital Authority may invest in a large
joint-venture general hospital in Shenzhen through arrangements between the two
governments.
While providing medical services to Hong Kong residents in Shenzhen and the
Pearl River Delta, the hospital will also gear itself to the local medical
market and serve the residents of Shenzhen.
Under the specific commitments set out under the Closer Economic Partnership
Arrangement, CEPA, the majority of medical personnel employed by joint-venture
hospitals and clinics can be permanent Hong Kong residents. Hong Kong doctors
may engage in long-term medical practice in Shenzhen.
Zhou Jun'an, director of Shenzhen's health department, explained how Hong Kong
doctors can practice in the Special Economic Zone.
According to Ministry of Health policies, and given the actual situation in
Shenzhen, there are basically two criteria under which Hong Kong doctors can
practice in Shenzhen.
The first is for doctors to present themselves as specialists. Hong Kong doctors
may practise in Shenzhen provided that they are employed by a legally licensed
medical institution there, file their Hong Kong qualifications for medical
practice and personal resume with the local health department, and obtain a
provisional certificate for medical practice.
Such certificates have to be renewed once every three years.
To avoid this procedure, doctors may apply for a permanent certificate. To do
this, they must first sit for the annual national examination for medical
practitioners and may take the examination in Shenzhen.
"Pet economy"
off the leash in Shanghai
Pet lovers are in Shanghai in greater numbers. The opportunity to offer a range
of pet products on the market grows commensurate with that.
In some major retail outlets, over 200 varieties of products, including toys,
ropes, travel carriers, health products, beds and kennels, bones and chews, are
available and sell very well.
Specialty stores, tailors' shops, beauty saloons and hospitals for pets have
mushroomed. In particular, pet clinics affiliated to universities and research
institutions have attracted a large number of clients.
Pet hospitals provide more than medical services. These also include adoption
and sale of pets, sale of pet goods and food, pet boarding and grooming.
Pet goods attract a high profit margin. For example, a dog jacket may cost as
much as Rmb180 (HK$169.8).
Pet hospitals are doing great business in spite of their hefty charges. Nail and
hair trimming and regular checkups cost nearly Rmb100 a month (HK$94.3). When a
pet gets sick, drips may be needed and a visit to the vet costs Rmb300 (HK$283),
on average.
For a medium-sized pet hospital, after making deductions for rent, costs of
medicine, salaries for vets and depreciation for x-ray, ultra-sound, lab
facilities and other equipment, it is reckoned that a net monthly income of
between Rmb15,000 and Rmb60,000 (HK$13,760 and HK$$56,600) can be expected, with
incomes higher for hospitals in better locations.
Compared with the mature and systematic pet-related industries in other
countries, China's pet industry has had a late start. It is not yet a regular
trade but a new, emerging business that is gradually taking shape.
The sector covers manufacturing (such as the production of pet food, medicines,
supplies, toys and garments), as well as services such as pet hospitals, pet
training, boarding and health care consultancy.
Business comes in to play in every aspect of a pet's life, from food, clothing,
accommodation and transport to sickness, birth and death.
There are about 200 pet goods producers in China, most of which are private
operations. Since the market was still immature just a few years ago, products
have been mostly for export. Business has mainly been in export processing,
according to buyer's samples - and products are mostly destined for affluent
countries in the West. The majority of exports involve labour-intensive
industry.
Overseas companies see growing prospects for making money in this market and all
kinds of pet shows are staged in Shanghai.
In 2003, several pet shows were held in the city. Professionals from the US,
Australia, the UK, Japan, South Korea, Taiwan, Hong Kong and other countries and
regions came to familiarise themselves with China's pet goods market, and look
for cooperative opportunities.
Pet lovers in Shanghai and neighbouring areas also visit shows with their pets.
Some have made purchases of pets at the shows - meaning that the popularity of
the events gave the exhibitors confidence in investing in Shanghai's pet goods
market.
July 5, 2004
The US textile industry petitioned the Bush administration to
curb the import of socks from China. The industry asked that a quota be imposed
that would cap the growth in Chinese sock imports at 7.5 per cent over the next
year.
(Information Source & Credit: Hong Kong Trade Development Council)
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EDITORIAL:
All roads in
the global supply chain run through China but appearances can be deceptive.
Editorial Director Neil Shister went there to see for himself what's going on -
By Neil Shister
Xian's
greater concern with leisure and health
Yuzhou Mart: cradle of Chinese herbal
medicines
Wankelai Food City: the hypermarket for
hypermarkets, and more
Small furnished flats are hot properties in Shanghai
The
business of nostalgia in Shanghai
Ten design teams vie for World Expo
planning contract
Rugao is China's flower world
A forum for Hawaii's business
community to discuss current events and issues Sunday, November 28, 2004 -
Convenience food in a hurry in Shanghai
Chongqing's red hot thermal underwear competition
Joinbuy City Plaza becomes Shanghai's new
retail landmark
China's rail development on the line
