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China Automotive Roundup 2018

China Automotive Roundup 2018

According to the China Association of Automobile Manufacturers (CAAM), domestic vehicle sales increased 3% year-on-year in 2017, to 28.88 million units, a sales increase far lower than the 10% rise seen in 2016. The slower growth was due to higher taxes on smaller cars and subsidy adjustments on electric vehicles. Passenger car sales, led by Volkswage, increased 1.4% (among those SUV sales rose by 13.3%, to 10.25 million units), while sales of minibuses/multi-purpose vehicles plunged 20% and 17% respectively. Commercial vehicles recorded robust demand with sales increasing 14%, to 4.16 million units. In 2018 it is expected that vehicle sales will increase as much as 5% year on-year.

 

 

Whilst Government of China views its automotive industry, including the auto parts sector, as one of the country’s pillar industries, Electric cars remain a promising segment, as the government still provides substantial subsidies to manufacturers, while customers are offered incentive and favourable discounts for purchasing. State-owned institutions are encouraged to buy more new energy vehicles. The electric car market grew 53.3% in 2017, to about 780,000 units, while sales increased 111.5% in H1 of 2018

 

 

However, concerns over overcapacity are rising, as there are currently more than 200 electric-vehicle projects in China with investment of over CNY 1,026 billion and a potential capacity of more than 21 million units, while the government-set target aims at just 7 million units on the road by 2025. In order to guide the industry, the Chinese state is gradually reducing subsidies. Stricter rules are also set to raise the subsidy threshold, which will force automakers to increasingly convert themselves into hi-tech companies with core competencies. In this way, low-cost manufactures will leave the stage.

 

 

It seems that the Chinese car market is rather resilient in the light of the ongoing Sino-US trade dispute. Vehicle import and export volumes (1.25 million units and 1.06 million units respectively) are quite small compared to the industry output (29 million in 2017). The government has recently taken several measures to boost the automotive market. Since July 2018 import duties on vehicles have been slashed to 15% from 25%, while duties for car parts have been lowered to 6% from around 10%. The additional 25% tit-for-tat tariff is only imposed on products made in the USA. At the same time China announced it will ease limits on joint ventures within five years and open up the market to overseas carmakers. The rules will be loosened on electric cars this year, commercial vehicles by 2020 and passenger cars in 2022. All that should ensure a solid and steady performance of the domestic automotive market in the coming years. However, despite its resilience a major escalation of the current Sino-US trade dispute would surely impact the automotive business along with other sectors (e.g. potential deterioration of business and consumer sentiment).

 

 

New Energy Vehicles

Made in China 2025 is an initiative to upgrade the country’s industry from low cost mass production to higher value-added advanced manufacturing.  It prioritizes 10 sectors, including the auto sector (and NEVs). The initiative’s objectives are to sell one million units of domestically produced pure electric and plug-in hybrid cars in China by 2020, which should account for a minimum of 70% of the country’s market share. Moreover, it aims to sell three million domestic brand units by 2025, and account for a minimum of 80% of the country’s market share.

 

 

The NEV market in China is dominated by domestic brands including BAIC, BYD, and JAC.  A draft measure has been released for public comment that aims to set NEV production targets for both domestic and foreign automakers operating in the Chinese market.  Automakers that do not meet this target would need to purchase NEV credits from other automakers that exceeded it.

 

 

Recreational Vehicles


China’s RV market has undergone significant changes over the past several years, including a national focus on the development of tourism, campgrounds and the RV industry. With a growing demand for RVs and a shift in consumers' travel preferences, tourism experts in China anticipate a surge of RV-related businesses in the coming years. According to the “2016 China Campground Industry Report”, there are total of 958 campgrounds in China, of which 489 are under construction. There were about 25,000 RVs in China by 2016. 33% of the campgrounds are located along the eastern part of China, for instance Shandong, Jiangsu, Shanghai, Zhejiang, Fujian and Guangdong), while another 22% are in western China, for instance Inner Mongolia, Gansu, Sichuan and Yunnan. There are currently around 80 RV manufacturers in China, of which 56 are active. It is predicted that the campground industry will hit a trillion RMB market ($145 billion USD) by 2020, which will also stimulate the RV industry’s development.

 


China has made a push in recent years to develop domestic tourism, including campgrounds and the RV industry. Campground development has received great support from the central government.  The China National Tourism Administration, together with 10 other ministries, released “Several Opinions on Promoting the Development of Self-Driving Tourism” on November 9, 2016. This set a target of building 2,000 campgrounds by 2020, and allows vehicles to tow trailers which are less than 2.5 tons.

 



However, the RV industry faces issues such as lack of standards and regulations, as well as the luxury car consumption tax challenge. China Customs does not have an HS code for RVs, so RVs are treated as automobiles upon import.  This means imported RVs have to pay the same high tariffs and duties as imported cars.

 

 

China’s Belt and Road Initiative:...

China’s Belt and Road Initiative: Heightened Debt Risks to Countries

The following article is reproduced here in it's entiety from the Center for Global Development

 

China’s Belt and Road Initiative – which plans to invest as much as $8 trillion in infrastructure projects across Europe, Africa, and Asia – raises serious concerns about sovereign debt sustainability in eight countries it funds, according to a new study from the Center for Global Development.

 

 

The study evaluated the current and future debt levels of the 68 countries hosting BRI-funded projects. It found that of the 23 countries that are at risk of debt distress today, in eight of those countries, future BRI-related financing will significantly add to the risk of debt distress. You can see the full list of countries, their external debt levels, and China’s portion of that debt in the new study here.

 

 

“Belt and Road provides something that countries desperately want – financing for infrastructure,” said John Hurley, a visiting fellow at the Center for Global Development and a coauthor of the study. “But when it comes to this type of lending, there can be too much of a good thing.”

 

 

According to the study, China’s track record managing debt distress has been problematic, and unlike the world’s other leading government creditors, China has not signed on to a binding set of rules of the road when it comes to avoiding unsustainable lending and addressing debt problems when they arise.

 

 

“Our research makes clear that China needs to adopt standards and improve its debt practices – and soon,” said Scott Morris, a senior fellow at the Center for Global Development and a coauthor of the paper.

 

 

The study recommends that China:

  • Multilateralize the Belt and Road Initiative: Currently, the multilateral development institutions like the World Bank are lending their reputations to the broader initiative while only seeking to obtain operational standards that will apply to a very narrow slice of BRI projects: those financed by the MDBs themselves. Before going further, the MDBs should work toward a more detailed agreement with the Chinese government when it comes to the lending standards that will apply to any BRI project, no matter the lender.

 

  • Consider additional mechanisms to agree to lending standards: Some methods might include a post-Paris Club approach to collective creditor action, implementing a China-led G-20 sustainable financing agenda, and using China’s aid dollars to mitigate risks of default.

 

 

In all eight highest risk countries, the proportion of external debt that is owed to China and its banks will rise, sometimes dramatically, under the Belt and Road Initiative:

 

 

  • Pakistan: Pakistan, by far the largest country at high risk, currently projects an estimated $62 billion in additional debt, with China reportedly financing roughly 80 percent of that. Big-ticket BRI projects and the relatively high interest rates being charged by China add to Pakistan’s risk of debt distress.

 

 

  • Djibouti: The most recent IMF assessment stresses the extremely risky nature of Djibouti’s borrowing program, noting that in just two years, public external debt has increased from 50 to 85 percent of GDP, the highest of any low-income country. Much of the debt consists of government-guaranteed public enterprise debt and is owed to China Exim Bank.

 

 

  • Maldives: China is heavily involved in the Maldives’ three most prominent investment projects: an upgrade of the international airport costing around US$830 million, the development of a new population center and bridge near the airport costing around US$400 million, and the relocation of the major port (no cost estimate). The country is considered by the World Bank and the IMF to be at a high risk of debt distress and is currently being buffeted by domestic political turmoil.

 

 

  • Lao, P.D.R. (Laos): Laos, one of the poorest countries in Southeast Asia, has several BRI-linked projects. The largest, a $6.7 billion China-Laos railway, represents almost half the country’s GDP, which led the IMF to warn that the project might threaten the country’s ability to service its debts.

 

 

  • Mongolia: Mongolia’s future economic prosperity depends on major infrastructure investments. Recognizing Mongolia’s difficult situation, China Exim Bank agreed in early 2017 to provide financing under its US$1 billion line of credit at concessional rates for a hydropower project and a highway project. If reports of an additional $30 billion in credit for BRI-related projects over the next five to ten years are true, then the prospect of a Mongolia default is extremely high, regardless of the concessional nature of the financing.

 

 

  • Montenegro: The World Bank estimates that public debt as a share of GDP will climb to a whopping 83 percent in 2018. The source of the problem is one very large infrastructure project, a motorway linking the port of Bar with Serbia that would integrate the Montenegrin transport network with other Baltic countries. The Montenegro authorities concluded an agreement with China Exim Bank in 2014 to finance 85 percent of the estimated US$1 billion cost for the first phase of the project, with the second and third phases likely to lead to default if financing is not provided on highly concessional terms.

 

 

  • Tajikistan: One of the poorest countries in Asia, Tajikistan is already assessed by the IMF and World Bank to be at “high risk” of debt distress. Despite this, it is planning to increase its external debt to pay for infrastructure investments in the power and transportation sectors. Debt to China, Tajikistan’s single largest creditor, accounts for almost 80 percent of the total increase in Tajikistan’s external debt over the 2007-2016 period.

 

 

  • Kyrgyzstan: Kyrgyzstan is a relatively poor country with significant new BRI-related infrastructure projects, much of it financed by external debt. China Exim Bank is the largest single creditor, with reported loans by the end of 2016 totaling US$1.5 billion, or roughly 40 percent of the country's total external debt. While currently considered to be at a “moderate” risk of debt distress, Kyrgyzstan remains vulnerable.

 

 

The full study, “Examining the Debt Implications of the Belt and Road Initiative from a Policy Perspective” can be found at: https://www.cgdev.org/publication/examining-debt-implications-belt-and-road-initiative-policy-perspective.

Revisions to the China Tax Law for forei...

Revisions to the China Tax Law for foreigners

This June, China’s Ministry of Finance has unveiled a series of Draft Amendments to its individual income tax (IIT) Laws. These proposed changes are aimed at easing the tax burden for lower-income earners in particular, while taking a tougher stance on both foreigner workers and high-income earners. Below are summarized parts of the Draft Amendments that may affect foreign in China.

 

 

The effects of the proposed changes are fourfold: 

  • raise the IIT threshold
  • consolidate income categories
  • introduce new deductible expenses
  • tighten the IIT’s overall application and enforcement

 

 

Already confirmed by the State Council, the Draft Amendments have now been published for public opinion and will undergo further revision before finally coming into effect on January 1, 2019.

 

 

If these proposals are enacted, foreign companies should pay special attention to changes affecting the timing of the tax levy on foreign employees, foreign labor costs, contract profitability, and budgeting requirements, as well as the rippling effects they have on withholding and tax equalizations.

Foreigners living and working in China will now be subject to the 183-day test—a rule that draws upon recognized international practices. This test deems a foreign individual who resides in China for 183 days or more in a year a ‘resident’ and subjects them to Chinese tax on their worldwide income.

 

 

How to tell the tax identity of foreign individuals?

Resident taxpayers

Foreign individuals reside in China ≥ 183 days (within a tax year)

Non-resident taxpayers

Foreign individuals reside in China < 183 days (within a tax year)

 

 

This new 183-day-test will replace the previous five-year-rule under which a foreign individual will be subject to Chinese tax on their worldwide income if they live in China for more than five years. Previously, IIT liability contained a well-known loophole whereby foreigners could ‘reset the clock’. The amendments in effect will make it harder for foreigners to avoid paying tax on their worldwide income tax liability by removing this loophole.

 

 

The graphic below is the CURRENT calculation of taxable income of foreign individuals. Once the Draft Amendments come into effect,  this Five Year Tax Rule is no longer valid. Under the new system, a foreign individual who resides in China for 183 days or more in a year a ‘resident’ and subjects them to Chinese tax on their worldwide income.

 

 

Deductibles

 

 

For resident taxpayers, the Draft Amendments propose raising the personal deduction on comprehensive income from RMB 3,500 to RMB 5,000 per month, raising the annual threshold to RMB 60,000 per year, to take effect from October 1, 2018.

 

 

Additionally, resident taxpayers will be allowed to deduct certain additional items from the comprehensive income. These additional deductible items are categorized as ‘additional itemized deductions for specific expenditures’, which include:

  • Education expenses for children
  • Expenses for further self-education
  • Health care costs for serious illness
  • Housing loan interest
  • Housing rent

 

 

For non-resident taxpayers, the RMB 5,000 per month standard deduction will also be applicable to them, to replace the current RMB 4,800 per month standard deduction.

 

 

However, the current deductible allowances applicable to non-resident taxpayers are no longer available. That is to say, the deductibles for non-resident taxpayers are very likely to be shrinking. If you don't know the current deduction and allowance, check the background below.

 

 

Background

Deduction 

Foreign individuals employed in China are eligible to a standard deduction of RMB 4,800. On top of this, there are a number of allowances that may be deducted off an individual’s income, including the mandatory Chinese social security payments for foreigners. Note: at the time of writing, not all Chinese cities have implemented social security for foreigners yet.

 

 

Permitted allowances

The Chinese Tax Bureau allows foreign staff to deduct certain “allowances” before calculating the tax burden on their monthly salary. This is something that should be discussed between an employee and employer as part of the discussion of an overall salary package. These include:

 

  • Allowances for housing, meals, relocation, and laundry expenses
  • Relocation expenses upon commencement or cessation of employment in China
  • Reasonable business travel expenses and two personal trips to the individual’s country of origin
  • Reasonable allowances for language training and children’s education
  • The tax authorities will only permit these allowances to be deducted if they are included in the employee’s contract. The employee needs to produce an official fapiao (receipt) every month for the expenses, in addition to meeting other conditions.

 

 

Tax brackets

For comprehensive income: The lower tax brackets have also been expanded—meaning the lower tax rates are now applied on a wider range of income levels, while the higher tax brackets remain the same. Practically, this means that more people can access lower IIT rates.

For example, under the old system, an individual with a taxable income (after deductions) of RMB 10,000 per month will be subject to 25 percent of tax resulting in RMB 1,495 levy every month. Assuming their taxable income remained consistent, in a year they would pay RMB 17,940 in IIT.

 

 

Under the new system, an individual with the same taxable income will be subject to a 10 percent tax rate and will only need to pay RMB 9,480 (RMB 790 x 12 months) levy every year. Under the new system, the taxpayer would pay little over half the previous tax amount and save RMB 8,460  per year.

 

 

The formulas for calculating an individual’s tax payable are:

Monthly taxable income = Monthly income – RMB 4,800 – Allowances

Tax payable = Monthly taxable income × Applicable tax rate – Quick calculation deduction

The final revision will be coming into effect on January 1, 2019. These proposals form part of larger series of tax reforms being implemented by the Chinese Authorities in order to boost consumption amid a slowing economy. Authorities have promised to cut taxes by more than RMB 800 billion in 2018, which will have the effect of reducing government revenue by over five percent.

Still in its infant stages of development, many of the details of the Draft Amendments are yet to be released—including details of the residency rules for expatriates and elaboration on the implementation and ongoing administration of many of the rules.

 

 

If the draft amendment survives the final rounds of scrutiny, the tax burden will be alleviated for the working class of Chinese citizens. The adoption of an annual levy system and the 183-day residence rule also marks a gradual shift towards more international tax practices.

 

Source: 中华人民共和国个人所得税法修正案(草案), KPMG Tax Alert

 

Craft Beer in China, a growing taste

Craft Beer in China, a growing taste

China has always been a huge consumer of beer (it is the world’s largest consumer and producer of beer), but tastes have recently been shifting away from masse produced beers, such as Snow, Qingdao and Budweiser to more premium and craft flavors. Sales volumes of cheaper Chinese beers have been falling—both Tsingtao and Yanjing posted losses in sales in 2016. However, demand for high-end beers is growing, and China’s market is ripe with opportunities for both domestic and foreign craft brewers.

 

 

China’s craft beer market

During the Olympics, in 2008, there was virtually no craft beer available in China: the industry can thank millennials and a growing middle class for its rise. According to McKinsey & Company, Chinese consumers are maturing and more willing to spend more on premier products, such as alcohol. Although the overall volume has decreased, the overall value of Chinese beer sales has actually risen slightly. Chinese millennial consumers are increasingly attracted to premium products and services, and are more and more likely to buy from local brands: consumers want to try something good, or better and are willing to pay a premium for such.

 

 

Crafting opportunities in China

Although China only comprises 2.5 percent of American craft beer exports in 2017 it has a burgeoning domestic craft beer industry, China—and the Asia-Pacific region, in general—is one of the fastest growing regions for craft beer. According to the Financial Times, 40 percent of all beer consumed in China was imported, which means that there is substantial room for growth for international brewers, particularly in the premium alcohol segment. Even Anheuser-Busch InBev (AB InBev), the maker of America’s top-selling beer Budweiser, has aggressively been expanding into China to capitalize on the market: The company purchased a stake in popular Shanghai-based craft brewer, Boxing Cat, which introduced Chicago-based Goose Island (which AB InBev bought in 2011) into China, and plans to launch a Goose Island brewery in the country.

 

 

China’s craft beer culture is still young and has primarily been driven by foreigners living and working abroad, which makes them the perfect target demographic for craft brewers first entering the Chinese market. However, craft beer is becoming increasingly popular among locals, particularly the worldly younger generations who seek out “trendy and high-quality” products.

 

 

Despite the influx of foreign and domestic brewers, competition is still relatively low. Ninety percent of consumers are still drinking mass produced industrial beer. Most consumers don’t know what craft beer is and haven’t tried it before; hence a lot of resources are spent an education and marketing.

 

 

Appealing to Chinese taste buds

For drinkers that are not as familiar with the bitter beers [like IPAs], Chinese consumers exhibit a preference for slightly fruitier, sweeter beers, like wheat beers and hefeweizens.  It’s an easier transition for first time drinkers, especially for a country of consumers that’s used to drinking beers that are much lower in alcohol content and have a whole lot less flavor.

 

 

Although flavor is perhaps the most important part of craft beer, the packaging is also important in appealing to Chinese consumers: Craft brewers often have creative and illustrative designs that stand out on store shelves, especially when compared to their domestic mass produced counterparts.

 

 

Challenges of the Chinese market

Because craft beer is relatively new and consumption is concentrated among foreigners, not many people outside of Tier 1 cities understand what it is, although the trend is starting to spread. There are also logistical challenges to consider when exporting to China. Craft beer is best served as fresh as possible to get the full impact of the flavor, which means that overseas brewers trying to export to China have to contend with the additional costs of shipping long distances, as well as the extended shipping time and lack of proper storage facilities. However China has seen improvements in storage and handling over the years, so a growing number of importers are investing in upgraded infrastructure that maintains cold-chain throughout the beer’s life cycle: being kept cold from when it leaves the brewery, to when it gets to the customers’ hands.

 

 

The future of craft beer in China

As consumer tastes mature and become more diverse, so will the number of local breweries that operate in China. As local craft beer becomes adopted by local consumers, there will be more options and opportunities to sample such beer—or create that desire to experiment with more than the domestic mass produced beer on offer in supermarkets.

 

 

For those wishing to conduct a little further research in this field, this list contains China’s top breweries.

 

 

China Web & Software development environ...

China Web & Software development environment

The sheer volume of information being generated in China is having a huge impact on how business operate in China. What was not possible to code and develop in China just 3 years ago, is now possibly, more efficient than coding and development in traditional locations such as the US and India. China’s ability to develop, search and hyperlinking technologies has risen exponentially. However, the challenge has now become one of attracting talent rather than searching for non-existent competencies or trying to develop technical expertise in-house.

 

 

The China's Developer Survey Report 2017, commissioned by Alibaba Cloud Developer Community (ACDC), surveyed over 7,032 developers in Mainland China. In this report, developers shared their preferences for software development, including their favorite OS, development environment, programming language, database, framework, and codebase. Among other things, you can find out about China's software development trends and practices in fields such as cloud computing, big data, artificial intelligence, blockchain, and security.

 

 

Top 25 trends of developers in China.

1. Windows is still the favorite OS

67.2% of developers prefer Windows, 20.3% prefer MacOS (OS X), while only 12.5% prefer Linux or other operating systems (OS). Some of the main motivations of using Windows include the familiarity of the OS and the availability of platform resources in China.

2. JavaScript is the most widely used development language

While SQL is the most popular development language worldwide, developers in China still prefer JavaScript and Java. Developers proficient in Java and Python paid significantly higher than peers.

 

 

3. WordPress and Discuz! are the top web applications used by web developers

Owing to the popularity of blogs and forums in Mainland China, Discuz! and WordPress are the heavy favorites among web developers.

 

 

4. 92.1% of developers in China are male

The developer community in China is heavily male dominated, with only 7.9% of developers are female. This number is slightly higher than the global average of 88.6% (2017 Stack Overflow Global Developer Survey).

5. Beijing is the most popular city for developers, followed by Hangzhou

Hangzhou, with the presence of Internet giants such as Alibaba, has transformed from being a fairly unpopular city to the second most preferred city for developers in China.

6. Front-end engineering is the most important skill for front-end developers

Developers with "front-end engineering" skills are highly employable in Mainland China. Front-end engineering mostly involves feasibility analysis and optimization of projects through detailed planning.

7. Eclipse is the most popular development environment

The top four integrated development environment (IDE) in China are Eclipse, Notepad++, Visual Studio, and Sublime Text. Major factors for deciding on a development environment include cost and ease of use.

8. MySQL is the most widely adopted database

The “Open Source” nature of MySQL makes it a popular choice among developers compared with more traditional databases such as SQL Server. Oracle is also a popular option, but its adoption is hampered by its price tag.

9. There is no preferred cloud deployment model among developers in China

Private, public, and hybrid cloud are all of equal importance in China. Instead of having preference on a single deployment model, developers in China focus on the coexistence of multiple alternatives for different applications.

10. Being a developer pays well in China

A typical developer in Beijing earns an average of RMB 9,240 (USD 1457) a month, which is higher than the city average. The monthly income for 32.2% of developers in China falls within the RMB 10,000 – RMB 20,000 range.

11. DingTalk is becoming increasingly popular among high-income developers

In China, there are no concrete distinctions between enterprise and social communication tools. Developers prefer to use social IM tools, such as DingTalk, QQ, and WeChat, as their primary communication tool. DingTalk users tend to be those from higher income levels.

12. 49.2% of China's developers have started using Big Data storage solutions

Hadoop HDFS offline storage and Hbase online storage are two popular alternatives to relational databases for data storage. More and more enterprises in China are embracing Big Data and its technologies, specifically in the IoT, finance, and e-commerce industries.

13. Developers in China are a relatively young workforce

A majority (56.7%) of developers in China have only 0-3 years of work experience. This suggests that the developer community in China is less experienced as compared with international peers (42% have 3-10 years of experience).

14. Computer vision, NLP, and voice recognition are the three hottest topics in AI among China's developers

Developers in China are facing a multitude of challenges when dealing with neuro-linguistic programming (NLP) and voice recognition. These challenges stem from the complex structure of the Chinese language, as well as limited resources for voice data.

15. 71.8% of China's developers have Bachelor's degree or higher

This result suggests that China's developer are better educated than their global peers on average. According to the 2017 Stack Overflow Global Developer Survey, only 56.6% of developers globally have bachelor or higher degrees.

16. Node.js is China's favorite code operating environment

Similar to developers from around the world, Node.js, AngularJS, and .NET Core are the three most preferred application framework and codebase in China.

17. React Native is the leading cross-platform solution for mobile development

From food delivery to bike renting, mobile applications have become a necessity in China. For mobile developers, React Native and jQuery Mobile are the two most popular cross-platform solutions in China.

18. GitHub is the preferred repository for source code

30.7% of developers use GitHub to host source codes, while 30.5% of developers use internal corporate tools. China-developed repositories are still not widely adopted, with Alibaba Cloud Code repository being used by only 10.2% of developers.

19. China developers prefer Git over SVN

When teamwork is required, China's developers would first choose Git (45.9%) as the version management tool, while SVN (38.9%) comes second.

20. Agile development is widely adopted by developers in China

45.6% of developers choose agile/scrum development models as their first choice, followed by the traditional waterfall development model (36.4%).

21. Ethereum is the most widely used blockchain product

Ethereum is popular among China's developers because it is open source and provides good support for new developers. Because Bitcoin transactions is suspended in China (as of 2018), many developers are still exploring other possibilities of using blockchain as a service.

22. Continuous integration is still not widely adopted in China

As many as 49.5% of developers have never used any development integration management tools. However, there is also a significant minority (31.8%) of developers who use Jenkins to automate software development processes.

23. Security is a big concern for developers in China

70% of developers in China are well aware of the importance of security for enterprises, with a strong emphasis on invasion detection and loophole scanning. However, enterprises in China do not invest enough on security.

24. Web development, front-end development, and mobile development are the largest fields for China's developers

In China, 52.7% of developers are working on web development-related projects. Emerging fields such as Big Data, cloud computing, and security are still in great need for experienced developers.

25. …and finally, China's developers are in many ways similar to their international counterparts

From denim jeans to generic brand T-shirts, the go-to attire for China's developers is pretty similar with developers from across the globe. Furthermore, the vast majority of developers in China are self-proclaimed introverts and have close affinity for computer games.

 

 

English Heritage China

Search Engine Optimization for China

Search Engine Optimization for China

By Saurav Bhattacharyya for China Brain.

 

When you are looking at optimizing your online presence in China, there’s really only one search engine to worry about; Baidu, which until recently claimed almost 80% of the search share. Last year it took a small dip when Qihoo, a local security vendor and internet provider, launched its own search engine, 360 Search and gained around 15% market share but it still handles 60-70% of all web searches in China.

 

 

In the same way that Google dominates the search space in the United States, Baidu dominate the mainland China search market. A combination of government restrictions, local knowledge, language skills, and more than a little skill has seen Baidu emerge as the search engine of choice for the half a billion Chinese who use the internet regularly.

 

 

As a result, Baidu’s search engine is the cornerstone for companies looking to expand their businesses in China. But even if a company has a handle on how to negotiate and optimize their website for foreign search engines attempting to do the same for Baidu is not possible: Baidu is not Google, and optimizing your site for Baidu is a different process than optimizing for Google.

 

 

Basics

  • Domain Name. Baidu prefers domains that use a .cn top level domain (TLD). While there will be .com and .net sites ranked by Baidu, and especially as the search engine expands its reach, Baidu continues to favor .cn domains and they consistently rank higher
  • Hosting. Whereas other search engines don’t particularly care where your site is hosted (save for any impact on site speed, of course) Baidu wants your site hosted in China. While Hong Kong servers also count for this purpose and has the bandwidth to serve the mainland, Taiwan definitely does not.
  • Physical Address. Baidu favors sites that have a physical presence in China, or at least the semblance of a physical presence. This doesn’t mean that you need to open and staff a Beijing office or rent space in Shanghai. But you should make sure that you have local Chinese contact details on your site.
  • Censorship. The Chinese government enforces a strict censorship regime for all online activities in China. Baidu indexes sites in line with this policy so anything that violates the censorship regime will see a site either refused listing or de-indexed from Baidu’s database.
  • ICP License. Typical of China’s bureaucratic governance all websites should apply for an Internet Content Publishing (ICP) license. It is not difficult to obtain but generally takes around a month to secure when documents are all in order. Without an ICP license, ranking high on a Baidu is difficult.

 

 

Content

  • Language. Your site should present its content in Chinese, but be warned: not all Chinese is Chinese to Baidu. Baidu has a strong preference for Simplified Chinese (otherwise know as Mandarin) and while it will also index Traditional Chinese, it doesn’t rank dialects, Cantonese, or other foreign language sites (English, French, Spanish, or German) highly.
  • Meta-Tags. According to Search Engine Land Baidu’s ranking algorithm pays close attention to the meta-tags that Western search engines place less importance upon. A good web developer will help you get all these points right. These include:
    1. Title Tags. These should include your keyword and be written in the same style as per Google or another search engine. However, Baidu also encourages sites to put their brand or company name in every title, too, preferably at the end of the title.
    2. Meta-Descriptions. While a minor ranking factor for Google, Baidu ranks sites with relevant meta-descriptions that include the page or post’s keyword higher than those that ignore this meta-element. Make sure your meta-descriptions are well written to rank higher.
    3. Alt-Tags. Baidu prefers all images include an alt-tag that is relevant to the post and page it is published on. For businesses building a local Chinese site based on an existing English language site, these tags are so easily overlooked. Make it part of your initial site build to add these.
    4. H-Tags. Baidu treats h-tags similarly to other search engines. Every page should have at least a H1 tag, and H2 and H3 tags should be used to break up content without skipping any heading levels. Make sure your keywords are repeated in your H-Tags.
  • New Content. Baidu favors newer content over older content and so a useful optimization strategy is the regular creation and publication of new, fresh content. For business this could include hosting a blog, regularly adding press releases and media releases, and ensuring that content is engaging and is published on a regular schedule.
  • Unique Content. All search engine penalize duplicate content but Baidu is particularly harsh. Your content should be unique, not only on your site but also online. This means being aware of ‘scrapers’ and bots that take your content and republish it elsewhere on the web. Acting quickly to address instances of plagiarism will help avoid penalties from Baidu for duplicate content.
  • Anchor Text. Baidu pays close attention to your anchor text so for internal links (those directing users to another part of your site instead of an external URL) you should make sure you are aligning the anchor text with the nominated keyword for that page or blog post. This is good SEO practice for other search engines, too, but especially important for Baidu and in China more generally.
  • To the Top. Numerous China-based SEOs report that the Baidu crawlers are not as powerful as Google’s bots, and recommend placing important keywords near the top of the page. While this is a good strategy for Western search engines, too, it is especially important if Baidu’s crawler does not manage to make it to the bottom of your content before moving on.

 

 

Technical

  • Load Time/Speed. Speed is a ranking signal for most search engines, but for Baidu it is a very important signal. As a result you should aim to keep your page load times as low as possible. Having a local host and stripping the site of extraneous code (in particular anything that uses the Google API), heavy images, and unnecessary code will help here
  • Multiple Domains. Baidu penalizes sites that include multiple domains and sub-domains. Your Chinese site (.cn) should be only your Chinese site. Do not host your Taiwanese, Mongolian, or Vietnamese site on a sub-domain, or even on the same server. Stick to a single Chinese language or bi-lingual site with a single domain hosted in China.
  • Flash. While Google has had the ability to crawl and index Flash-based sites and Flash elements since 2008, Baidu does not crawl Flash and will not index Flash elements in its database. Avoid Flash altogether for your Chinese.
  • Baidu Webmaster Tools. Like other search engines, Baidu has its own Webmaster Tools package. It i worth registering with Baidu’s Webmaster Tools for, even if they remain less advanced than Google or Bing, they allow website owners to gather basic statistics, check sitemaps are correct, and check robots.txt films are in order. Find the (Chinese language only) Webmaster Tools here.

 

 

Link Building

  • Quantity Counts. Baidu is a little different to other search engines in that it considers the number of backlinks pointing to your site an important ranking factor in determining your site ranking. This, of course, opens the door to link farming and all sorts of black-hat SEO techniques that fail on Google but still work – to a certain extent – on Baidu. However, engaging in these sorts of practices is something you’ll do at your own risk: Baidu is constantly improving and while the end is not yet nigh for this sort of thing, it is growing closer every day.
  • Quality Counts. The quality of the backlinks pointing to your site continues to grow in importance on Baidu. As the search engine evolves, this is expected to only become more important, too. Hence, building quality backlinks to your website is going to be a key to achieving and maintaining a ranking for the keywords that you’ve identified as important for your Chinese language business activities.

 

 

Conclusions

Search engine optimization (SEO) should be seen and a progressive thing done over months, not a one time fix: its all about making small changes and refinements over time. Expect your site to progressively gain viewers and site search position for your main keywords.

 

 

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Saurav Bhattacharyya is Managing Director of China Web Designers, a Beijing based website localization and development company. Having lived and workied in China since 1997, he has an excellent understading of the China internet landscape and issues foreign companies, in particular, face when considering their on-line presence.

 

Guangdong-Hong Kong-Macao Greater Ba...

Guangdong-Hong Kong-Macao Greater Bay Area

Located in the Pearl River Delta of South China, the Guangdong-Hong Kong and Macao Greater Bay Area is an agglomeration of cities and special administrative regions which serve as a must path for the routes leading to countries along the Belt and Road. The area is adjacent to the Beibu Gulf Economic Zone, southeast Asia and the vast central China urban agglomeration as well. It is a major international land and maritime corridor linking the hinterland of China and facing the ASEAN countries.

 

 

The Guangdong-Hong Kong and Macao Greater Bay Area comprises cities of “9+2”, that is Guangzhou, Foshan, Zhaoqing, Shenzhen, Dongguan, Huizhou, Zhuhai, Zhongshan and Jiangmen as well as two SARs of Hong Kong and Macao. Yet the positioning of each city is different.

 

 

 

City or SAR VS Development Goal

Hong Kong  --    global financial center and logistics center

Shenzhen    --    international innovation service center

Guangzhou  --    three international strategic hubs

Dongguan   --     international manufacturing service center

Foshan        --     international industrial manufacturing center

Zhuhai        --     expanding bridgehead and the innovation plateau

Zhongshan  --     state-level advanced manufacturing base

Macao         --     world tourism leisure center

Huizhou      --      ecological tour of "green city", taking ecological responsibility of the Greater Bay Area

Jiangmen    --      state-level advanced manufacturing base

Zhaoqing     --      agglomeration area of upgrading traditional industries

 

 

Supported by advanced manufacturing, modern service and leading emerging industries, the area is positioned to become the world's innovation and development highlands, the most dynamic area in the world’s economy, the world famous high-quality living quarters, the world civilization exchange and mutual learning place and the demonstration zone of deepening reform in the country.

 

 

The Guangdong-Hong Kong-Macao Greater Bay Area is most likely to become a vital giant portal for the Belt and Road, for that the area is a geographical node closest to the market along the route among all the urban agglomerations in China, with the most convenient infrastructure, developed supply chain network and domestically leading position in electronics, construction, energy, finance, telecommunications etc.

 

 

Additionally compared with other domestic areas, the area is in a relatively high position in the international value chain, especially considering two free ports of Hong Kong and Macao and Free Trade Zone (Guangdong) including Qianhai, Nansha and Hengqin. For a long time ahead, the development of the Guangdong-Hong Kong-Macao Greater Bay Area is expected to be an important regional development priority in China. It is likely that four sorts of investment opportunities may be produced.

 

 

The first is connection of traffic infrastructure. Generally, the improvement of traffic technology facilities is the basis for free flow of resource elements. As the main direction of traffic construction in the area is building of cross-border transport infrastructure and improvement of the comprehensive transportation network connecting Hong Kong, Macao and the Chinese mainland, investors shall attach importance to the potential investment opportunities hidden in traffic infrastructure-related projects and programs.

 

 

The second sort of investment opportunities lies in construction of ports and shipping center. The Guangdong-Hong Kong-Macao Greater Bay Area is the key area of opening-up for the 21st Century Maritime Silk Road and Hong Kong is an international hub and shipping center. In the future, overall shipping routes planning, customs clearance facilitation level among the Chinese mainland, Hong Kong and Macao and cooperation strengthening between ports in the Pan-Pearl River Delta region are highly expectable thus investors are suggested seeking fortune in this regard.

 

 

The third may be found in regional function remolding and industrial gathering in the area. Investors are expected to explore the opportunities in the functional transformation of the area and the integration of resources brought about industrial agglomeration and industrial upgrading.

 

 

Lastly opportunities exists in upgrading of industrial cooperation. The Guangdong-Hong Kong-Macao Greater Bay Area represents a coordinated development mode after development of more monomer cities matures. Enterprises from the Chinese mainland, Hong Kong and Macao shall thus make mutual investment to jointly “go out”. Other investment opportunities may arise from the expansion of two-way flow of Renminbi, Hong Kong-centered science and technology exchanges and cooperation, intellectual property rights trade, and exhibition, commerce and traditional Chinese medicines with Macao.

 

 

China How To: hosting your website in...

China How To: hosting your website in China

Want to sell a product or target visitors in China, in which case you will need a China server for your website. Whilst there are hundreds of hosting platform with a data center in USA, Europe, and Asia, you have limited choices in China.

If you are looking to do business in China you really need to host your site locally to ensure speed of user access, Regulatory compliance, better search engine rankings and to ensure that your site is withing the Great Chinese Firewall.

Lastly be aware that hosting in China is more expensive than in another region.

 

 

 

 

The list below commprises the main hosting providers with data centers in China.

A word of Warning: Unfortunately most of the following mentioned sites are in the Chinese language. So be ready to use a translation tool if Chinese is not your language.

 

 

1. AWS

AWS (Amazon Web Services) has collaborated with a local partner to offer cloud services. Currently, AWS is available in the following locations.

  • Beijing
  • Ningxia

You won’t see all the products offered in China as you may see in AWS global. However, it got sufficient list of products to fit from small to enterprise level of applications.

If you are looking for a vast range of products and cost-effective solutions, then AWS would be a good choice.

 

 

2. Sino Hosting

One of the popular one out there offers shared hosting, VPS, and dedicated servers. Sino got servers in the following locations.

  • Shanghai
  • Beijing
  • Changsha
  • Hong Kong

You can get it started with shared hosting from less than $10 per month. Sino provides one-click software installation like WordPress, Joomla, Drupal, Magento, etc.

Support is available in English and provides ten days refund for shared hosting.

 

 

3. Alibaba Cloud

Need more coverage in Mainland China?

Probably Alibaba Cloud has got the highest number of data center locations in China.

  • Hangzhou
  • Shanghai
  • Qingdao
  • Beijing
  • Zhangjiakou
  • Shenzhen
  • Hong Kong

If you are not from China and need support on ICP application, then Alibaba Cloud would be a lifesaver.

Similar to AWS, Alibaba Cloud offers a full range of infrastructure services like CDN, VM, load balancer, database, backup, storage, etc

 

 

4. GZIDC

GZIDC provide a large number of hosting related services including the following.

  • Web hosting
  • Domain registration
  • Cloud services
  • Host rental
  • and much more…

Under cloud services, you can choose to host your applications in the following multi-line DC.

  • Guangdong
  • South and North China
  • Hong Kong

 

 

5. Western Digital

West is another popular offer all-in-one hosting solution. With more than 15 years in the industry, West has a good name in support and uptime.

 

 

6. HA Bang Net

Optimized Hosting for WordPress, HaBangNet server is located in Beijing.

The starter plan cost around $10 per month, and it comes with cPanel where you can install your favorite software like Joomla, WordPress, etc.

In starter plan, you get 5GB SSD storage, one free domain, 100GB bandwidth, etc.

 

 

7. Jinshan Cloud

Jinshan cloud is one of the top three public clouds in China. They got multiple products.

  • Server
  • Database
  • Object storage
  • CDN
  • Load balancing
  • Security-related
  • Video solution
  • Web application firewall

Jinshan is available with 19 data centers.

 

 

8. Tencent

Tencent cloud is trusted by more than 10,000 developers worldwide including popular products in China like QQ, WeChat.

 

Provisioning servers and other cloud services are easy with Tencent, and you pay for what you use.

If you are a startup or running existing business in a traditional data center, it would be worth to include Tencent in the list while moving the Cloud for lower cost.

 

 

9. Baidu Cloud

Baidu is not just a Google search competitor but also the Cloud. You can choose to host in Beijing, Guangzhou, Suzhou and Hong Kong.

Similar go to GCP, Baidu Cloud has many IaaS products like compute, networking, storage, database, big data, AI, etc.

 

 

10. UCloud

Ucloud has served more than 50,000 enterprise customers and got 21 global data center including 5 in China.

 

It has a function rich control panel to manage cloud services and recently container services. You can also use their pricing calculator to estimate the cost of required cloud services.

 

 

China How To: Registering staff for...

China How To: Registering staff for Social Welfare

Once you’ve set up your own company, you can start to hire Chinese staff, but to do that you’ll need to register them for China’s social welfare programs. Here’s an introduction to some of the rules concerning the recruitment of Chinese labor: whereas hiring foreign staff requires one to apply to the authorities to get them a work visa and work permit, and you are automatically eligible to hire Chinese as soon as you finish registering your employees’ social welfare accounts, as outlined below.

 

 

What are the Five ‘Insurances’ Plus the Housing Fund?

  • Pension: Cost to Company is usually 20% of the Employee’s salary, substantially lower in some cities and cost to the Employee is usually 8% of the Employee’s salary, uniform rate nationwide.
  • Medical Insurance: Cost to Company is usually between 7%-12% of the salary, substantially lower in some cities and cost to the Employee is usually 2% of the Employee’s salary, substantially lower in some cities.
  • Work-Related Injury Insurance: Cost to Company from 0.4%-3% of salary depending on the location and degree of danger of business engaged in and cost to the Employee ‘ No contribution required.
  • Unemployment Insurance: Cost to Company is usually 2% of salary but sometimes 1% and only 0.4% in Shenzhen and cost to the Employee is usually 1% of the Employee’s salary.
  • Maternity Insurance: Cost to Company from 0.5% of salary depending on location (no contribution at all in Dongguan). Cost to the Company.
  • Housing Fund: Contribution towards Housing Funds are mandatory and come from both the Company and the Employee determined by local Government, Housing Fund regulations apply to the Employees in all geographic regions of the country. Contributions must be calculated based on each Employee’s average monthly wage over the last year. The actual percentage differs per city or province.

 

 

Registering for your employees’ social welfare accounts

Go to your local Social Insurance Management Center to set up an account for your company. Each city will usually have one of these in each district. For the addresses of the first-tier Chinese cities, look towards the bottom of this article.

 

 

You will need the following documents to set up the account:

  1. The original copy of your company’s business license, and a photocopy 
  2. The original copy of your company’s organization code certificate, and a photocopy 
  3. A stamp by your company chop
  4. Company Registration Form of Social Insurance; you can get this at the center
  5. The company bank account number
  6. The company’s tax registration number
  7. A commitment letter of use social insurance card signed, which you can obtain at the center

You can now start employing Chinese staff!

 

 

Registering your employees onto the employment record

Next, you need go to the local Human Resource and Social Security Bureau to register your employees onto the employment record.

 

 

You will need the following documents:

  1. The original copy of your company’s business license, and a photocopy 
  2. The original copy of your company’s organization code certificate, and a photocopy 
  3. Your company’s official “chop” (aka stamp or seal)
  4. Completed registration form of employment record with your new employees’ names and a brief introduction of each of them. You can get this in the bureau and it should be completed in triplicate; one should be submitted with the above documents at the Human Resource and Social Security Bureau, one copy should be submitted when you return to the Social Insurance Management Center (see below), and one should be kept for your company’s files.

 

 

Registering the employees

Now you must actually register your specific employees. You will only need to do the above two procedures the first time you employ a Chinese person; the following procedure applies for each Chinese person you hire from then on. Return to the Social Insurance Management Center with the following documents to register the employee (or, if they already have a social insurance card, use the following documents to change their employer’s information to your company).

 

 

  1. Company Registration Form of Social Insurance 
  2. Employee Personal Information Registration Form; you can get this at the talent center in the district where the company is registered (for first-tier-city addresses, see bottom of article)
  3. A list of all the employees at your company
  4. The original copy of your company’s business license, and a photocopy
  5. The original copy of your local tax registration certificate, and a photocopy
  6. A spreadsheet showing how much your employees are paid, how much is paid into their insurance and housing fund, and any bonuses they have been paid
  7. Photocopy of insured employees’ ID cards

 

 

It takes about two months to get the new employee’s social insurance card ready, but they can begin working straight away and you will need to start paying into their social security account from their very first paycheck. 

 

 

Registering your employees with the housing fund

You can do this at any point in the process outlined above, or afterward. Go to the local Public Housing Fund Management Center (you can find addresses for the first-tier cities towards the bottom of this article) to set up a housing fund account. You will need the following documents, and it will take five working days to process: 

 

 

  1. Public Housing Fund Deposit Form, which you can get at the center 
  2. Your company’s business license and a photocopy 
  3. Your company’s organization code certificate and a photocopy 

 

 

Once the account is set up, you can place your employees’ personal accounts under your company account. The documents needed to do this are: 

 

 

  1. Personal Housing Fund Account Set-up Form, which you can get at the center
  2. A photocopy of the employee’s ID card

 

 

How to transfer your employees’ personal archives

Every Chinese citizen at birth is given a personal archive, which is stored at the same local talent center where their hukou is registered. When people move home from area to area – for study or for employment – their personal archives are transferred along with them, to the relevant talent center. 

 

 

In order for the employee to get a Personal Archive Transfer Letter, you should give them a letter (with your company’s official stamp or “chop”) stating that they work for your company, as well as a stamped copy of your company’s license. They will then take this to the talent center in which your company is registered (depending on the size of the city in which your business is registered, this will either be a city talent center or a district talent center). 

 

 

After the talent center has given them the Personal Archive Transfer Letter, the employee should take it and their ID card to the talent center where their personal archive is stored; the transfer will then be processed.

 

 

Standing Committee of the Political...

Standing Committee of the Political Bureau of the 19th CPC (2017-2022)

Last week saw The Communist Party of China (CPC) unveiled a new leadership line-up for the next 5 years. Xi Jinping was again elected general secretary of the CPC Central Committee, leading its seven-seat Political Bureau Standing Committee. The other six members of the top leadership are Li Keqiang, Li Zhanshu, Wang Yang, Wang Huning, Zhao Leji and Han Zheng. For the first time, all Standing Committee members of the Political Bureau were born after the founding of the People's Republic of China in 1949.

 

 

 

 

Personal Profiles of the Standing Committee:

 

Xi Jinping

Xi Jinping, 64, retains his spot on top of the Party pecking order, entering his second term as General Secretary and third term on the PSC.

 

 

Xi is considered China’s most powerful leader since at least Deng Xiaoping, and perhaps even Mao Zedong. At the 19th Party Congress, he became the only leader besides Mao to have his name written into the Party constitution while living. Last year, he earned the designation of “core leader” of the Party, a title his predecessor Hu Jintao did not obtain.

 

 

Xi also holds the titles of President of the People’s Republic of China and Chairman of the Central Military Commission.

 

 

Born in Beijing, he is the son of Party legend Xi Zhongxun. During the Cultural Revolution, he lived in a cave and performed manual labor in Shaanxi province. Before rising to the PSC in 2007, Xi held leadership positions in Fujian and Zhejiang provinces, as well as a brief stop in Shanghai.

 

 

Li Keqiang

Li Keqiang, 62, continues to hold the number two position on the PSC as Premier of the State Council, China’s cabinet. The position makes him head of the Chinese government and economic affairs.

 

 

Li holds a PhD in economics from China’s prestigious Peking University, and is known to hold more market-oriented policy preferences than many others in the Party. He rose through Party ranks as a member of the Communist Youth League, and was a protégé of former president Hu Jintao, who reportedly wanted Li to be his successor.

 

 

Prior to joining the PSC alongside Xi in 2007, Li held leadership posts in Henan province from 2002 to 2004 and Liaoning province from 2004 to 2007. He was born in Hefei, the capital of Anhui province.

 

 

Although he carries several responsibilities as Premier, including instituting economic reforms and combatting pollution, he is generally considered less powerful than his predecessors Wen Jiabao and Zhu Rongji.

 

 

Li Zhanshu

Li Zhanshu enters the PSC as the third-ranking member. He is a trusted associate of Xi, having been his chief of staff since 2012. At 67 years old, he narrowly avoided the age cut-off to join the PSC.

 

 

With his ascension to the PSC, Li is expected to head the National People’s Congress, China’s parliament. Currently, he is the Director of the General Office of the Communist Party of China and Chief of the General Office of the National Security Commission.

 

 

Li first met Xi when the two held Party positions in Hebei province, where he was born, in the 1980s. Li later held leadership positions in Heilongjiang and Guizhou provinces, as well as in the city of Xi’an, the capital of Shaanxi province.

 

 

Wang Yang

Wang Yang, 62, is the fourth-ranking member of the new PSC. He will reportedly take the position of Chairman of the Chinese People’s Consultative Conference, China’s top political advisory body.

 

 

Currently, Wang is China’s Vice Premier. Along with Li Keqiang, he is widely considered one of the most liberal reformers among China’s leadership, and is also connected to former president Hu Jintao.

 

 

Wang is credited with being instrumental in the development of Chongqing, where he was Party Secretary from 2005 to 2007. From 2007 to 2012, he was Party Secretary of Guangdong province, which has the highest GDP and largest population of China’s provinces.

 

 

Wang Huning

Wang Huning, 62, emerged from the 19th Party Congress ranking fifth on the PSC. Wang has long been considered one of the Party’s top political theorists, and will head ideology, propaganda, and party organization.

 

 

He is currently the Director of the Central Policy Research Office, which is responsible for drafting the guiding theories and ideology of the Party.

 

 

Wang is widely considered to have been essential in forming the former president Jiang Zemin’s “Three Represents” theory, Hu Jintao’s “Scientific Development” theory, as well as Xi’s “China Dream” and “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era”.

 

Wang rose to prominence through a brief but prolific career as an academic at Shanghai’s Fudan University, where he wrote on both foreign and domestic affairs. He is considered a close confidante of Xi, with whom his theory of “neo-authoritarianism” and tough stance on corruption has proved highly influential.

 

 

Zhao Leji

Zhao Leji, 60, enters the PSC in the sixth spot. He is poised to take over Wang Qishan’s role as Secretary of the Central Commission for Discipline Inspection, making him China’s anti-corruption czar.

 

 

Currently, Zhao is the head of the powerful Organization Department of the Central Committee, which manages personnel and promotions within the Party.

 

 

From 2003 to 2007, Zhao was Party Secretary of Qinghai province, where he was born, and from 2007 to 2012 was the Party Secretary of Shaanxi province. Zhao’s connections to Shaanxi province, where is family is originally from, are believed to be how he formed ties with Xi, with whom he is a strong supporter.

 

 

Han Zheng

Han Zheng, 63, takes the seventh and final spot on the PSC. He is tipped to take over the role of Executive Vice Premier.

 

 

Han has deep ties to Shanghai, where he was born, grew up, and attended university. He was Mayor of Shanghai from 2003 to 2012, and acting Party Secretary of Shanghai from 2006 to 2007. He succeeded Xi as Shanghai’s full time Party Secretary in 2012.

 

 

Han was known as a close associate of Jiang Zemin, who also has strong ties to Shanghai. He became acquainted with Xi when the two overlapped in Shanghai, with Han as Mayor and Xi and Party Secretary.

 

The Liaoning FTZ: A portal to emerging...

The Liaoning FTZ: A portal to emerging regional markets
The establishment of the Liaoning Free Trade Zone (FTZ) was approved in September 2017 and since then, Dalian’s goal is to create a sufficient and stable business environment. The new FTZ will involve three major cities of Liaoning province, including Dalian, Shenyang and Yingkou. Dalian is already part of the Jinpu New Area, which helped to increase its international and domestic trade levels, including international partnerships with South Korea, Japan and Russia.
 
 
More than 70 percent of bulk goods transported by sea and more than 90 percent of container transportation in China's northeastern region are shipped via Dalian. 
 
Jinpu New Area is a strategic region for regional co-operation of firms in Northeast Asia. It was formed in 2014 and became the 10th of China’s Big National Districts as part of the 13th Five-Year Plan. The main aim of the Dalian Jinpu New Area is to develop the opening-up and reform of China, as well as to expand the coastal economic relationships in Liaoning Province and to boost the economic growth in the North-Eastern part of the country. The Jinpu New Area was approved by the State Council, in the hope of making Dalian a pilot zone for innovation. Since the formation of the New Area, large number of functional zones have been set up within the district. Some of these functional zones, include tariff-free zone, bonded port areas, national tourist resorts and export processing zones. The New Area helped Dalian to become a global logistics and international shipping centre. The New Area has both economic and geographical advantages for businesses, operating in Dalian and its surroundings.
 
 
The Free trade zone is made up of three sectors, Dalian, Shenyang and Yingkou. The new Liaoning Free Trade Zone covers state-level high-tech zones, bonded harbour area, the Jinpu New District as well as numerous industrial parks. The regions that will have special customs supervision, will have a focus on the search for institutional innovation that can improve the accessibility of trade, logistics and the processing of bonded services. On the other hand, areas which are not under special customs supervision will focus on exploring potential reforms of the investment system, innovation of the finance sector, the promotion of transformation of the manufacturing industry as well as on the opening-up of the Chinese service industry.  The government made registration convenient for companies, which are located at the Dalian Area of China, Liaoning Free Trade Zone, by setting up a special registration service window for organisations based in the Jinpu New Area and by helping companies to adopt a virtual registration service. Reports of the registration shows that half of the firms used the virtual registration mode to settle down in Jinpu New Area. These organisations include firms in the finance, trade, biological science, equipment manufacturing and port and shipping logistics industries. According to reports, Dalian has copied and promoted around 102 innovative measures of the Shanghai FTZ, as well as of other pilot Free Trade Zones.
 
 
The main gols of the zone are: to focus on speeding up the market-orientated institutional mechanism reforms. In order to do this, the Liaoning Free Trade Zone will mostly be based on the Shanghai Pilot Free Trade Zone and adapt new reforms and accomplish further institutional innovations, which are easily adaptable by the cities covered by the Liaoning Free Trade Zone. These changes should mainly focus on the function of the local government and expand the power of decentralization, improve services and to authorize supervision. These changes should help to improve the business environment and the restructuring and upgrading of industries in the involved areas.
 
 
Secondly, to focus equally on the introduction, development and show a new image in team building of talents. Introduction of new talents is important and should be done efficiently and high-level talents should be brought from global and international perspective. The involved are should improve the training and education and overall quality of cadres as well as to work hard, overcome difficulties and try to create a dynamic situation of competing for development.
 
 
Lastly, the cities in the Liaoning Free Trade Zone should also open-up further to the outside world in order to help to build and achieve a new economic system. They should take part in the international competition and cooperate with other areas, but at the same time fully connect to the national “One Belt One Road” strategy. They should improve their trade systems, so that it meets common rules of international investment and trade, and look for new competitive advantages in foreign trade. Regions in the Liaoning Free Trade Zone can achieve development in its foreign trade system by enhance their technologies, investment attractions and intelligence attractions.
 
 
Further information and current investment news can be found on the Dalian Governmental website: https://english.dlftz.gov.cn/
 
 

China How To: Applying for a Patent

China How To: Applying for a Patent

Whether you’re a full-time inventor or just someone with a really good idea, don’t wait around to patent your inventions and designs – because if you do, you risk having it stolen away from you, with no way to get it back.

 

 

You can register your patent within China through the State Intellectual Property Office. And because China is one of the 176 member countries of the Paris Convention on the Protection of Industrial Property, patents registered in China enjoy a “priority right” when being registered in other countries. This means that within 12 months (for invention patents) or six months (for patents based on exterior design appearance) of applying in China, the owner can apply for patents in other member countries within Paris Convention at the same time, with each country’s registration date for the foreign patents being backdated to when it was first given within China. 

 

 

Alternatively, if you want to get an internationally effective patent from the beginning, you can choose to apply for the PCT patent protocol. This is supervised by the World Intellectual Property Organization, of which China is a member country. This option (as an alternative to just registering in China) will be given to you during the registration process. If you choose to follow the PCT protocol then your patent will be automatically registered in all member countries, including China. However, this method costs more money and means a longer wait for the patent to be granted.

 

 

Step-by-step guide

  1. If you want to register a patent you should make sure that nobody else has had the same idea. To do that you’ll need to search the State Intellectual Property Office’s database of patents that have already been registered – you can check that out by clicking here.
  2. After making sure that your patent is still available for registration, you have to prepare two copies of each of the following documents: 
            •    A patent statement describing what it is you’re patenting and how it works/looks

            •    Abstract and accompanying diagram (if applicable) 

            •    Specification and accompanying diagram (if applicable)

            •    The rights you wish to claim for the patent (who owns it, whether the rights are to be transferred, who receives profits on the patent etc)

 

 

  1. After preparing all files needed, you can post all files to the State Intellectual Property Office (the postal address is listed at the bottom of this article), or hand-deliver to reception offices in some cities in China.
  2. The application fee can be paid at one of the offices when hand-delivering files, through a bank transfer, or through a postal transfer. If you post the application documents, a fee should be paid after the applicant receiving notice of acceptance from the office.

 

 

Postal address of State Intellectual Property Office

State Intellectual Property Office, No. 6, Xitucheng lu, Jimen qiao, Haidian district, Beijing.

北京市海淀区蓟门桥西土城路6号国家知识产权局专利局受理处

Post code: 100088

Contact: 010-6208-5588 / 6208-5599 / 6235-6655

www.http://english.sipo.gov.cn

www.http://www.sipo.gov.cn

 

 

Will tax breaks boost Private Health...

Will tax breaks boost Private Health Insurance?

In 2017 Chinese authorities begun offering tax incentives to encourage middle-class families to purchase private health insurance. Beginning July 1, individuals who buy eligible insurance products can reduce person income tax by up to 2,400 yuan a year.

 

 

The tax cuts fall under a host of reforms aimed at rethinking health care provision for the nation’s vast and aging population. For most people in China, health care means public hospitals; treatment is partly paid out of pocket and partly reimbursed through compulsory insurance provided by their employers or state pension. Reforms aim to give patients more choices and ease the burden on the public purse.

 

 

Market solutions are playing an increasing role in health care: According to state news agency Xinhua, the number of private hospitals in China more than doubled from 2010 to 2015. By the end of 2015, there were 14,500 private hospitals, accounting for 52.7 percent of total hospitals in the country. The government hopes that greater uptake of private health insurance, alongside the rapid growth of private medicine, will reduce pressure on overworked, overcrowded public hospitals.

 

 

The private health insurance sector is thriving. From 2013 to 2014, total medical insurance premiums increased 41%, from RMB112.3 billion to RMB158.7 billion, rising another 52.5% to RMB241.1 billion in 2015. According to the China Insurance Regulatory Commission (CIRC), 5 insurance companies specialize in health insurance and another 100 offer health insurance products, including 28 foreign life insurance companies. CIRC reported more than 2,300 health insurance products in the market

 

 

But public awareness of and consumer confidence in private health insurance is low, even among those who can afford it — and most of the products eligible for tax cuts under the recent policy still only reimburse treatment at public hospitals.

 

 

There are two main types of private health insurance on the mainland: The more popular products are life insurance-like critical illness policies that pay out lump sums if the policyholder is diagnosed with certain conditions. If the holder makes no claims within a set period, their premiums will be returned with interest, meaning the policy operates as a form of investment or retirement plan in addition to offering indemnity. On the other hand, health insurance policies that reimburse treatment are often seen as a waste of money, as there is no return if the holder makes no claims — though these policies typically offer more comprehensive coverage.

 

 

Only about one in 20 people in China has a reimbursement health insurance policy, according to a 2016 joint report by global business consultancy Boston Consulting Group and reinsurance company Munich Re. Though the market for private health insurance saw consistent year-on-year growth of around 31 percent between 2010 and 2015, more than 70 percent of its 241 billion-yuan value in 2015 was made up of critical illness policies. But as indemnity policies for critical illness do little to support the growth of China’s burgeoning private hospital sector, authorities are working to promote private reimbursement health insurance that covers outpatient consultations as well as inpatient treatment.

 

 

Tax incentives for purchasing private health insurance were piloted in 31 cities including Shanghai and Beijing beginning Jan. 1, 2016, but only a handful of domestic insurance companies have offered eligible products. Most of the eligible insurance products target employers rather than individuals.

 

 

The report above forecasts that the market for private health insurance in China will increase fivefold between 2015 and 2020, and that reimbursement policies will see the fastest growth. Government tax incentives can help foster the mindset that health insurance is necessary and financially advantageous: once people buy the incentivized insurance, they are more likely to research and consider other private health insurance options in the future.

 

 

Chinese private insurers

The number of foreign companies in the Chinese market is increasing, but the dominant players in China’s private health insurance market are large domestic insurers. The three largest health insurers are Ping An Health Insurance Company, PICC Health Insurance Company and China Life Insurance. China Life is the largest domestic life insurance company (and the world’s largest life insurer), with 10% of its total premium income derived from health insurance. Other large Chinese health insurance companies include Hexie Health Insurance Company, which is part of the Anbang Insurance Group and Kunlun Health Insurance Company.

 

 

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