Deloitte: Doing Business in China-Final-July 2012
Deloitte: Doing Business in China-Final-July 2012
Deloitte: Doing Business in China-Final-July 2012
Table of Contents
Preface 1 Foreign Investment in the PRC Setting up your business in China Business Taxation in China China's 12 Five-Year Plan: Effects on foreign investors M&A in China A profile of China A closer look Regional Profiles Eastern China Southern China Central China Northern China Northwest China Southwest China Northeast China Hong Kong and Macau
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2 7 12 23 25 28 37 37 44 48 53 60 66 72 76 77 80 81 84 88
What is the Chinese Services Group (CSG)? The CSG around the world Global CSG contacts What is the Asia Pacific International Core of Excellence (AP ICE)? Deloitte's China Research and Insight Centre (CRIC)
Preface
In late 2001, China joined the World Trade Organization, signaling its entrance onto the global stage and participation as an emerging power in the world economy. Since then, China has achieved unprecedented levels of growth, becoming one of the most popular destinations for foreign investment. In 2011 alone, foreign direct investment reached US$116 billion, an increase of 8% from 2010, and that figure is expected to climb over the next decade. During the same year, China surpassed Japan to become the world's second-largest economy. Some even predict that it will transcend the United States as the world's largest economy by 2020. Even without these projections, however, it has become apparent to all investors that China presents many opportunities for investment within its borders, and that it wields considerable economic power. As China's economy has increased in size, however, it has also increased in complexity, and multinational companies now face a host of new challenges when investing in China. While the atmosphere is far more transparent and organized than in previous years, there still remain many regulatory differences between investment procedures in China and all investors' home countries. Thus, the question on the minds of prospective investors is: What is the best way to get in on the action in China? Deloitte's Doing Business In China Guide has been created to help you see the opportunities and address those challenges. As the first foreign accounting firm to establish itself in China, Deloitte is uniquely qualified to aid foreign investors into China. With decades worth of experience dealing with all sectors of the Chinese market and a presence in 16 cities, Deloitte is well-positioned to aid its clients, whether they are new investors taking the first steps, or the executives of extensive operations looking to expand still further. We hope you find our insights useful and that it will help you to succeed in the world's fastest growing market.
Another part of Chinas investment attraction strategy is the customized liberalization of trade with some of its key partners, in the form of a Free Trade Agreement (FTA). Below follows a list of countries with which China has signed an FTA, along with a list of countries with whom it is currently negotiating an FTA:
FTA Completed
ASEAN* (January 2010) Chile (November 2005) Costa Rica (April 2010) New Zealand (April 2008) Pakistan (November 2006) Peru (April 2009) Singapore (October 2008) Thailand (October 2003)
*The Association of Southeast Nations (ASEAN) is an economic organization consisting of 10 states: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.
Although the parameters of each FTA are country-specific, there are key elements in common the removal of tariffs, import quotas, and preferences for certain goods are included in every FTA, and all are implemented within a year of the completion of the FTA. The new lack of trade barriers allows many companies to sharply reduce supply chain costs, and to attain price competitiveness without additional costs. Aside from the Free Trade Agreements, China has also entered into other partnerships with other locations, including the signing of an Economic Cooperation Framework Agreement (ECFA) with Taiwan, which accomplishes many of the aims of an FTA. China is also negotiating a Customs Union Agreement with the South African Customs Union, with the intent of bringing the Chinese and South African trade systems closer together, since they are too far apart for an FTA to be feasible at this time.
The second form of a CJV involves a situation in which both the foreign investor and Chinese party assume unlimited liability for the debts that result from their partnership However, in this situation, no separate legal entity is created, and the foreign investor is required to invest a minimum amount, usually resulting in a majority stake being held by the foreign investor.
Foreign Enterprises
Enterprises which fall under this category are typically those other than investment enterprises that have a presence in China, up to and including a representative office, sites contracted for natural resource extraction or use, or even entities which do not have a presence in China (although these entities must have some China-based source of income to be included in this category.)
Capital & Corporate Structure: Of all the different options available to investors, cooperative joint ventures (CJVs) offer the most flexibility. In this type of JV, capital may be provided by both parties in the form of cash or other kinds of capital contributions, which may include rights to land, buildings, equipment, and intellectual property rights, among other forms of capital. Unlike other types of joint venture, the CJV sets no threshold capital investment requirement that a foreign investor must meet, allowing the foreign investor to be a minority stakeholder in the JV. In addition, the profits and losses from a CJV are uniquely distributed in that they do not necessarily need to follow the ratio of capital contribution, and are instead set by agreement and contract between the two partners. Since control is also not allocated according to equity stakes, the two partners can also freely negotiate staffing levels and responsibility at their discretion. Multiple management structures are applicable to a CJV, including: a board of shareholders, a board of directors, a joint management
committee, or management by proxy. Hybrid CJVs tend to adopt management systems resembling those of the EJV; true CJVs tend to take the more flexible form of a joint management office. Under the latter structure, no general manager exists as such, although the parties usually appoint a legal representative. Generally, true CJVs, which do not have independent legal status in China, allow the Chinese partner to enter into such contracts under a grant of power of attorney by the foreign party.
Capital & Corporate Structure: By necessity, the capital structure of an EJV is more limited than that of a Cooperative Joint Venture foreign partners must contribute a minimum of 25% of the companys registered capital. There is no upper limit on a foreign partners equity share, although the laws of some industries in China specifically mandate that the Chinese partner must hold the majority share. Additionally, all liabilities assumed by both partners are to be strictly in proportion to the partners equity shares and cannot be determined by contract or negotiation. Partners must pay their contribution within the timetable fixed in the contract. Failure to make timely capital contributions may result in the cancellation and compulsory surrender or revocation of the business license. The governance of an EJV is different from that of corporations in western countries. Investors hold equity interest, but no stock. Voting authority is vested in the board of directors rather than the shareholders. The directors are appointed by the investors and in general reflect the ratio of the capital contributions of the partners.
Capital & Corporate Structure: In some ways, the capital requirements of a joint stock company resemble those of an equity joint venture both vehicles require the foreign partner to contribute at least 25% of the companys registered capital. In the case of a joint stock company, however, the minimum registered capital required for approval is RMB 30 million. All capital from the company must be divided into equal shares between partners. Companies must receive approval before they can issue A shares (denominated in yuan and available to Chinese citizens and to qualified foreign institutional investors) and B shares (denominated in U.S. dollars). A shares and B shares are tradable on stock exchanges. A shares are further divided into shares owned by individuals, legal persons and the state. Unlisted shares owned by foreign investors of the qualified foreign investment joint stock company may be traded on the B share market with the approval of the Ministry of Commerce.
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technology) should not exceed 70% of the registered capital of the enterprise. When capital is contributed in installments, the first installment must be not less than 15% of the registered capital or the minimum capital requirement, and must be delivered within three months from the date the business license is issued. The deadline for completing the contribution is normally two years from the date the business license is issued. The company is required to arrange for capital verification by a CPA firm in China and apply for an updated business license after each capital contribution. A WFOE must establish a board of directors or a managing director for its management structure. For corporate governance purposes, the company is required to have an independent supervisor (similar to non-executive director in Western countries). A detailed management structure must be set forth in the articles of association (including the duties and limits of authority of the legal representative, chief accountant, general manager and supervisor). The articles of association must specify procedures for termination and liquidation and for amending the articles.
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Income taxes:
Enterprise Income Tax Individual Income Tax
Transaction-focused taxes:
Business Tax Consumption Tax Value-Added Tax (VAT)
Tax Overview
The 2008 Enterprise Income Tax (EIT) Law applies to both domestic and foreign-invested enterprises and, subject to transitional rules, enterprises that have enjoyed preferential treatment. In addition to the enterprise income tax, enterprises may be subject to the Business Tax, Value Added Tax (VAT), Consumption Tax, Land Appreciation Tax, customs duties, and stamp duty. Employers in China are required to withhold the individual income tax on behalf of their employees. There is no excess profits tax or alternative minimum tax. The following is a list and descriptions of the common taxes that foreign investment enterprises may expect
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Miscellaneous taxes:
Customs duties Stamp duty Vehicle and vessel licensing tax Land appreciation tax Real estate tax Natural Resources tax The EIT Law contains a general anti-avoidance rule that allows the tax authorities to make adjustments when an enterprise has entered into an arrangement with limited commercial purposes or no effects other than reducing taxes.
with effect from the sixth year, provided the individual continues to reside in China for a full year. Any absence from China for more than 30 days during a temporary trip, or cumulatively for more than 90 days over numerous trips within calendar year, allows the individual to break up the "full tax year." Individuals in China are taxed on specific types of income, such as employment income, business income and investment income, at different rates of tax. The tax rates can be progressive or flat. Wage and salary income is subject to progressive tax rates ranging from 3% to 45%. Tax is withheld by a paying unit or entity each month and paid over to the tax authorities. The same progressive rate schedule applies to both Chinese citizens and foreigners except for a differential in basic monthly exemptions, with a standard monthly deduction of RMB 3,500 for local citizens and RMB 4,800 for expatriates and certain nationals.
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A separate tax schedule applies to income from the operation of a private business (including on a contractual or lease basis). For a private business, taxable income is defined as the total revenue net of costs, expenses and losses incurred. For a business operated on a contractual or lease basis, taxable income is the total revenue net of necessary expenses. Personal services income is subject to tax at progressive rates ranging from 20% to 40%. A flat 20% tax (withheld at source) applies to certain income such as dividends, interest earnings (except interest on bank deposits), royalties and remuneration from manuscripts, etc. As an incentive to authors, remuneration from manuscripts is subject to a 30% deduction in tax payable. In addition, taxable income from personal services, royalties and remuneration from manuscripts or the leasing of property is net of a standard deduction for expenses that is 20% of total income with a minimum amount of RMB 800 per payment. The tax year is the calendar year and tax quarters are calendar quarters. Enterprises are required to file provisional EIT returns with the local tax authorities within 15 days of the end of each quarter.
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These installments are generally calculated on actual quarterly profits. Enterprises that have difficulty prepaying tax based on actual quarterly profits may make prepayments based on the quarterly average taxable income for the preceding year, or by another method approved by the authorities. Final settlement of tax liability must be made within five months of the end of the year. Returns must be filed regardless of whether the enterprises operations resulted in a profit or a loss. A late payment surcharge will be imposed on a daily basis at the rate of 0.05% of the amount of underpaid tax. Penalties may be imposed in addition to the late payment surcharge. An interest-based penalty was added in 2008 for transfer pricing, thin capitalization, controlled foreign corporation (CFC), and general anti-avoidance tax adjustments. The tax authorities may issue rulings for special cases. Resident enterprises with branches registered in different regions in China and operating cross-regionally are required to make a provisional quarterly filing and a combined annual filing by the head office.
Business Tax
Business Tax generally applies to the provision of services that are not subject to VAT; the assigning of intangible assets, such as patents, trademarks, copyrights, and land use rights; and the sale of fixed assets. Services are subject to Business Tax where either the service provider or the recipient is located in China. Before 1 January 2009, only services performed within China were subject to Business Tax. The Business Tax does not cover processing, repair and replacement services, which are instead subject to the value-added tax. Business Tax rates are set at 3%-5% for most sectors, except for the entertainment business, which is taxed at a significantly higher 20%. Enterprises operating within the service sector and liable for Business Tax have no mechanism to claim a VAT credit for inputs of goods subject to VAT. Unlike VAT, no credit is granted for paying Business Tax the exception being that in some cases, Business Tax can be levied on the difference between the revenue and deductible costs. Tax paid on services received or property acquired may not be deducted from the Business Tax, although deductions of costs are allowed for designated activities. The Chinese State Council announced on 26 October 2011 the launch of the pilot VAT reform program on 1 January 2012. The pilot program initially will apply to transportation and modern service industries in Shanghai and will be rolled out nationwide when conditions permit. Under the framework of the pilot program, the taxation of specified sectors in Shanghai will transition to being subject to VAT rather than Business Tax. The sectors affected include transportation industry and certain modern service sectors (including R&D and technology service, information and technology service, creative cultural service, logistics and ancillary service, leasing of moveable and tangible goods, attestation and consulting service). While there is no official announcement, the VAT reform is anticipated to be completed by 2015.
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Consumption Tax
The Consumption Tax is solely aimed at prescribed non-essential and luxury goods, including alcohol, cosmetics, fuel oil, jewelry, tires, motorcycles, motor vehicles, petrol, yachts, golf products, luxury watches, disposable wood chopsticks and tobacco. The Consumption Tax mainly affects companies involved in producing or importing these goods, but exports are exempt. The tax is calculated based on the sales value of the goods, the sales volume, or a composite of the two. The proportional Consumption Tax rate is set from 3% to 45% on the sales revenue of the goods.
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The VAT rate for a general VAT payer is 17%, which is applicable to the value of products at the time of import and sales and the provision of certain services. A reduced rate of 13% applies to certain food staples, goods, books and utilities. Small-scale VAT payers are required to pay VAT at a rate of 3% as of 1 January 2009 (previously 6% or 4%). VAT incurred on the purchase or construction of fixed assets may be credited against output VAT. Input VAT incurred under the following conditions, however, are not deductible against output VAT: The purchase of goods and services for the exclusive use for non-VAT taxable or VAT exempt projects, welfare activities or individual consumption;
The purchase of yachts, motorcycles and motor vehicles that are subject to the Consumption Tax and used for the taxpayer's self-use; Goods and taxable services purchased that are lost in an unusual manner; Goods and relevant taxable services purchased and consumed or used for products or finished goods that are lost in an unusual manner.
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Customs Duties
Import duties are levied at both general and preferential rates. The preferential rates apply to imports originating from countries or regions that have signed agreements with China containing reciprocal preferential tariff clauses. The general tariff rates apply to imports originating from all other jurisdictions. However, if the State Council Customs Tariff Commission gives special approval, preferential tariff rates may be applied to imports that otherwise would be subject to the general rates. To encourage foreign investment, foreign investment enterprises that meet certain requirements may be exempt from custom duties on the imports of machinery and equipment for personal use.
Stamp Duty
Stamp duty, ranging from 0.005% (for loan agreements) to 0.1% (for leases and agreements, warehousing and storage contracts) applies to prescribed contracts, written certificates of transfer of property rights, business account books and permits. The rate on share transactions is 0.1% for shares listed on a domestic stock exchange.
Licensing Taxes
Licensing tax can apply at the discretion of the local authorities on vehicles and vessels belonging to enterprises (and individuals).
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Tax Deductions
All documented costs that are related to generating taxable income are deductible unless the law specifically provides otherwise. Non-deductible expenses include: costs to purchase or construct fixed assets (such items must be capitalized); costs incurred to acquire and/or develop intangible assets; interest costs that must be capitalized; distributions with respect to equity interests paid to investors; royalties from a branch office paid to a head office; various income taxes paid, as
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well as late payment surcharges and fines incurred with respect to various tax payments; fines for unlawful operations and losses sustained as a result of the confiscation of property; losses incurred in the course of manufacturing or business activities that are compensated by responsible parties or insurance; non-verified provisions; and certain donations and sponsorship fees. Additionally, deductible depreciation is calculated using the straight-line method and subject to certain minimum depreciation periods. Under certain circumstances, an accelerated depreciation method may be applied. Minimum salvage value should be reasonably determined by a taxpayer according to the nature and condition of the fixed assets. Special depreciation rules apply to enterprises engaged in oil and gas exploration.
Withholding EIT
Dividends: A 10% withholding tax on dividends paid to nonresident companies was introduced in 2008. Previously, dividends paid by a Chinese company with at least 25% foreign participation were exempt. It should be noted, however, that dividends paid out of pre-2008 earnings continue to be exempt from withholding tax. The 10% withholding tax may be reduced under an applicable tax treaty. Interest: Interest is generally subject to a 10% withholding tax unless the rate is reduced under an applicable tax treaty. Interest from certain loans made to the Chinese government or state banks is exempt. A 5% business tax also applies to interest payments.
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Royalties and fees: The withholding tax rate on royalties and fees arising from the licensing of trademarks, copyrights, know-how intellectual property and technical service fees is generally 10%. Royalties are generally subject to a 5% business tax except for payments made in connection with the use of technology, for which an exemption may be allowed.
Transfer Pricing
The EIT Law and its implementation rules establish the basis for the Chinese tax authorities to make special adjustments related to transfer pricing. Related entities' intercompany transactions must be at arms length. Transactions covered by the Chinese rules include both tangible and intangible transactions, intra-group services and intercompany financing activities. A related party is defined as one with a 25% direct or indirect ownership. A multi-layer calculation for indirect shareholdings also applies. Great emphasis is also put on control when defining associated enterprises. An entity with significant control over another entity's senior management, purchases, sales, production intangibles, and technologies required
for the business is defined as a related party. Where intercompany charges or fees are not at arms length arrangement, the tax authorities may make compensatory adjustments by reference to normal market rates or prices for similar services or goods. In certain cases, the tax authorities are entitled to levy tax retroactively on transactions between affiliated companies that took place up to 10 years ago. China has adopted the "best method" approach for selecting a transfer pricing method, with no specific ranking among the following reasonable methods: comparable uncontrolled price method, resale price method, cost plus method, transactional net margin method, profit split method and other arm's length methods. Contemporaneous documentation rules apply to an enterprise unless the annual amount of related-party purchases and sales is less than RMB 200 million and the annual amount of other related party transactions is less than RMB 40 million; or foreign shareholding in the enterprise is less than 50% and the enterprise only transacted with domestic related parties (not including those domiciled in Hong Kong, Taiwan, or Macau). Additionally, enterprises established by multinationals in China with
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limited functions and risks and solely performing manufacturing/ processing, distribution or contract R&D activities should prepare and submit contemporaneous documentation by 20 June of the subsequent tax year if they incur a loss. The contemporaneous documentation should include information on the structure of the organization, a summary of business operations, information about related-party transactions, a comparability analysis, and the selection and application of any transfer pricing methodology.
The mandatory PRC Social Security contributions for foreign individuals include basic pension, basic medical insurance, work-related injury insurance, unemployment insurance, and maternity insurance schemes. Employers are required to contribute to all the five schemes. Employees, however, may only be required to contribute to some of these schemes according to local social security rules (e.g. basic pension, basic medical insurance and unemployment insurance in Beijing). Social security codes will be set up for foreign individuals coming from different countries for tracking and administration purposes, where social security cards will be issued by the relevant authorities to all registered foreign individuals. Foreign individuals can apply to withdraw the contributions allocated to their personal accounts upon repatriation.
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Pharmaceuticals and biotechnology; High-end manufacturing; New energy; New materials; Alternative automotive technology. The initiatives and goals outlined in the 12th Five-Year Plan will have effects both positive and negative on foreign investors in China. One of the more salient effects of the coming changes in policy is the indication that the Chinese government will begin scrutinizing FDI more closely and becoming more selective about approval for projects, due to its new emphasis on domestic-led growth. Furthermore, China's push to shore up domestic firms may also lead to the elimination of preferential incentives given to foreign investors, which may slightly increase costs for those investors. This effort, however, does have a silver lining as a direct result of the focus on increasing domestic consumption and the initiative to shift away from an export-led economy, the new Five-Year Plan also indicates the Chinese government's intention to increase importation of consumer goods to China over the next several years. Increased imports
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will offer opportunities to many MNCs with interests in China and allow them new paths into the Chinese market. Additionally, the Plan maintains a rigid focus on the importance of growth in the aforementioned strategic sectors, and a likely outcome of this is the support of increased private investment both foreign and domestic into these sectors. MNCs may in particular enjoy improved market access to previously restricted sectors, such as oil & gas, railroad, and telecommunications sectors. Additionally, increased urbanization over the next few years will also allow MNCs to make inroads into larger and more concentrated markets, increasing their ability to reach consumers. Overall, the PRC's 12th Five-Year Plan offers MNCs many new opportunities. In order to take advantage of them, MNCs are best advised to stay abreast of the regulatory situation in China and to formulate their strategies and goals accordingly.
China's rules on merger and acquisition of domestic enterprises by foreign investors describe two types of operations permitted: (1) equity acquisitions, where foreign investors purchase existing shares of a Chinese enterprise or subscribe to new shares issued by a Chinese enterprise; and (2) asset acquisitions, where foreign investors purchase the assets of a Chinese enterprise. The Regulations on Mergers and Divisions of Enterprises with Foreign Investment established the rights and obligations of merging and dividing foreign investment enterprises (FIEs), approval authority, capital requirements and share distributions. Generally, a foreignheld stake in a merged or divided entity should amount to not less
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The newly merged entity must then apply to the authority in charge of registration of enterprises to amend its registration. The tax treatment of the major forms of M&A is governed by the merger and acquisition tax rules. An M&A is classified as either an ordinary or a special reorganization. In the case of an ordinary reorganization, any taxable gain/loss derived by the transferor is recognized at the time of the transaction; however, in a special reorganization, the taxpayers may elect to temporarily defer recognizing a taxable gain, or loss on the transactions provided certain requirements are met. If the mergers involve a stateowned enterprise then special approvals above and beyond what was discussed earlier, need to be obtained. When SOEs or state-owned assets are involved, a valuation process by an official valuer may be required to determine the purchase price of the deal. The purchase price cannot be significantly different from the appraised value by the official valuers. In practice, the discrepancy
may need to be limited to 10 percent of the appraised value in certain locations. All inbound mergers and acquisitions in China generally follow the order of procedures below to successfully close the transaction: Sign a letter of intent for cooperation and a confidentiality agreement with the target company or other parties concerned; Conduct due diligence investigations; Finalize the M&A plan based on the results of due diligence investigations and the negotiations with the target company and other parties concerned; The parties concerned negotiate the terms and conditions of M&A; Sign the agreement and other relevant documents; Apply to the relevant Chinese government departments for approval; Fulfill the obligations of payment and delivery, transfer, licensing, and other obligations;
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Complete the modification of the outstanding registration records at relevant Chinese government departments. Another of the more important regulatory requirements in China relates to foreign currency. China is still a foreign exchange-controlled country and the regulations and approvals around foreign currency can make it difficult to navigate an M&A deal with respect to China. For example, a government approval and registration process must be completed before a special purpose vehicle (SPV) can be set up outside of China by Chinese nationals (including Chinese corporations and individuals) to purchase businesses or operate in China. The original Chinese owner's failure to comply with the initial approval or registration process may raise obstacles to the validity of a foreign investor's subsequent indirect purchase of the SPV (which owns the business in China). Legal advice should be sought in this type of situation. Other significant regulations that must be considered in respect of M&A deals in China which both
relate to investments or takeovers of listed companies. These regulations dictate the additional rules and requirements for when foreign companies invest or perform takeovers of listed companies from the Ministry of Commerce, the China Securities Regulatory Commission, the State Administration of Taxation, the State Administration for Industry and Commerce, and the State Administration of Foreign Exchange. Some of the rules concern such matters as ensuring that foreign investments into restricted and forbidden industries are maintained, setting reporting requirements to various agencies and the public, and describing the documents required for the approval process. The rules are extensive and complex, and those subject to them should consult legal advice when someone is venturing down the path of an acquisition of a listed company.
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Land area: 9,561,000 sq km Population: 1.34bn (2010; official census) Climate: Continental, with extremes of temperature; subtropical in the Southeast Language: Standard Chinese, based on northern Chinese (the Beijing dialect known as Mandarin); local dialects and languages are also used. Currency: renminbi (RMB), or yuan. RMB 1=10jiao=100 fen. Time: GMT +8
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Market opportunities
Foreign companies will continue to be attracted by the opportunities offered by Chinas large and fastgrowing economy. China has a population of 1.3 billion people, and according to the EIU, the size of the economy will grow to nearly US$13 trillion a year (at market exchange rates) by 2015. Although there will remain large income gaps between provinces in China, the rapid growth of the economy as a whole and the continued openness of the investment environment will provide a solid footing for incoming foreign companies.
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GDP
Nominal GDP (US$ 1 bln) Nominal GDP (RMB 1 bln) Real GDP growth (%) Private consumption Government consumption Gross fixed investment Exports of goods & services Imports of goods & services 2,787 22,224 12.67 9.2 11.7 12.9 17.7 15.9 5 13.4 14.1 1,283 4,920 3,494 26,583 14.166 10.8 11.9 13.7 16.7 13.8 3.7 15.1 16 1,290 5,750 4,532 31,490 9.634 8.4 9 9.8 4.7 3.8 5.4 9.9 10.4 1,297 6,410 5,069 34,632 9.2 9.1 9 23.5 -4.2 4.5 4.2 9.9 9.3 1,305 7,030 5,824 39,431 10.4 5.9 12.9 11.9 20.3 20.7 4.3 12.3 9.8 1,312 7,800 6,898 44,565 9.1 9 9.8 10.1 10.1 10.9 4.5 10.6 8.9 1,320 8,600 8,197 50,901 8.3 9.2 12.5 8.5 7.6 9.7 3 8.5 9.1 1,328 9,480
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2006
2007
2008
2009
2010
2011 (f)
2012 (f)
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7,000,000 6,000,000 21% 23% 5,000,000 4,000,000 3,000,000 2,000,000 15% 5% 10% 20% 1,000,000 0 2005 2006 2007 2008 2009 2010
Source: World Bank Database
6%
Consumer Business & Transportation Energy & Resources Financial Services Life Sciences & Healthcare Manufacturing Real Estate Technology, Media & Communications
Source: Deloitte research
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60 50 40 30 20 10 0
2006 2007 2008 Deal Value (US$ bln)
Source: Deloitte research
Target Company
Festival Walk (2011)Ltd C P Pokphand Co Ltd Hsu Fu Chi International Ltd Beijing Jingdong Century Taikang Life Insurance Co Ltd ERA Mining Machinery Ltd Bank of Guangzhou
Bidder Location
Singapore Thailand
Status
Completed Completed
Luxembourg Intended* Canada France Japan France Pending* Pending* Completed Completed
Leader Harvest Manufacturing Power Tech Hldg New China Life Ins Co Ltd Zhejiang Supor Co Ltd FSI Energy & Resources
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10 Ningbo 11 Zhuhai 12 Dongying 13 Shenyang 14 Yantai 15 Zhongshan 16 Shanghai 17 Tangshan 18 Anshan 19 Xiamen 20 Maanshan 21 Dongguan 22 Wuhu 23 Baotou 24 Huaian 25 Shenzhen 26 Zaozhuang 27 Guangzhou 28 Xuzhou 29 Nanjing 30 Zibo 31 Panzhihua 34
Rank Economy 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 Shantou Qingdao Changchun Beijing Xiangfan Chongqing Jining Linyi Baoding Xiangtan Jilin Liuzhou Wuhan Fushun Changde Puyang Weifang Huaibei Zhuzhou Zhanjiang Jiujiang Nanchang Chengdu Mianyang Changsha Wenzhou Hefei Jinan Bengbu
Consumer markets Logistics Yangzhou Wuhan Tangshan Changchun Chengdu Huaian Dongying Nanning Linyi Xi'an Xuzhou Weifang Chongqing Xiangfan Tai'an Jining Anshan Hefei Maanshan Haikou Taiyuan Yinchuan Zaozhuang Yueyang Liuzhou Kunming Nanchang Guiyang Zhengzhou Linyi Guiyang Harbin Dongguan Suzhou (Jiangsu) Taizhou (Zhejiang) Kunming Tangshan Xuzhou Hefei Wenzhou Weifang Handan Zaozhuang Zhuhai Changchun Nanning Shijiazhuang Urumqi Hengyang Wuhu Pingdingshan Huainan Zunyi Changzhou Anshan Jilin Bengbu Luoyang Qiqihar Nanchang
IT connectivity Haikou Dongying jiujiang Fuzhou (Fujian) Xi'an Xuzhou Qingdao Urumqi Jilin Nanning Daqing Baoding Hohhot Mianyang Jining Tai'an Chongqing Kunming Xiangfan Wuhan Weifang Xining Taiyuan Xinxiang Luoyang Fushun Zunyi Guiyang Chengdu Jiaozuo Nanchang
Education Puyang Baoding Zhongshan Xinxiang Nanchang Taiyuan Fuzhou (Fujian) Wuhu Urumqi Jiujiang Ningbo Yantai Dalian Jilin Xiamen Xingtai Jiaozuo Shenyang Xuzhou Qiqihar Lanzhou Huainan Daqing Hengyang Wuhan Zibo Beijing Xiangtan Tianjin Wuxi
Healthcare Xinxiang Zunyi Jiujiang Chongqing Beijing Changchun Luoyang Yueyang Anshan Zhenjiang Wenzhou Guiyang Jinan Anyang Shijiazhuang Taizhou (Zhejiang) Daqing Dalian Bengbu Dongying Taiyuan Shantou Kunming Pingdingshan Zhuzhou Wuhu Shenyang Hohhot Wuxi Changzhou 35
Pingdingshan Jilin
Rank Economy 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 Hohhot Yueyang Harbin Xianyang Handan Fuzhou (Fujian) Anyang Luoyang Huainan Xingtai Xi'an Jiaozuo Qinhuangdao Hengyang Tai'an Urumqi Haikou Xinxiang Yinchuan Taiyuan Zhangjiakou Datong Lanzhou Kunming Nanning Guilin Xining fdGuiyang Qiqihar Zhengzhou Zunyi Shijiazhuang
Consumer markets Logistics Changde Zhuzhou Wuhu Fushun Xiangtan Guilin Qinhuangdao Urumqi Panzhihua Mianyang Hengyang Xinxiang Jiujiang Xining Anyang Datong Pingdingshan Lanzhou Bengbu Shijiazhuang Xianyang Jiaozuo Handan Zunyi Huainan Huaibei Baoding Zhanjiang Puyang Xingtai Zhangjiakou Qiqihar Guilin Baoding Yinchuan Panzhihua Maanshan Zhuzhou Anyang Jiujiang Zhongshan Huaibei Lanzhou Xiangfan Jiaozuo Tai'an Hohhot Zhenjiang Changde Yangzhou Qinhuangdao Huaian Xingtai Liuzhou Zhangjiakou Xinxiang Mianyang Xiangtan Fushun Xianyang Dongying Shantou Xining Puyang
IT connectivity Zibo Guilin Xingtai Wuhu Liuzhou Qinhuangdao Handan Xianyang Panzhihua Changsha Zhangjiakou Xiangtan Qiqihar Baotou Shijiazhuang Anyang Zhengzhou Datong Bengbu Yinchuan Changde Pingdingshan Maanshan Hengyang Hefei Puyang Zhuzhou Huaibei Lanzhou Huainan Yueyang Harbin
Education Dongying Jining Hefei Shijiazhuang Xining Anyang Wenzhou Guilin Bengbu Baotou Pingdingshan Luoyang Zhengzhou Yueyang Qingdao Changsha Liuzhou Handan Qinhuangdao Panzhihua Shanghai Dongguan Fushun Anshan Chengdu Maanshan Guangzhou Zhuzhou Kunming Zhangjiakou Shenzhen
Healthcare Shanghai Fuzhou (Fujian) Haikou Xiangtan Zibo Xining Chengdu Zhuhai Panzhihua Guangzhou Guilin Lanzhou Qinhuangdao Huainan Xi'an Changsha Fushun Liuzhou Baotou Qingdao Nanjing Tianjin Xiamen Zhengzhou Zhangjiakou Hefei Wuhan Dongguan Maanshan Shenzhen Nanchang
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Provinces
Region Anhui Fujian Jiangsu Shandong Zhejiang Provincial Capital Hefei Fuzhou Nanjing Jinan Hangzhou Area Km 139,600 121,400 102,600 156,700 101,800 Nominal GDP 2010 (US$ 1 bln) 220 Nominal GDP 2010 (US$ 1 bln) 147 179 505 497 337 Total FDI Value 2010 (US$ 1 bln) 11.10 Total FDI Value 2010 (US$ 1 bln) 5.01 5.80 28.5 9.20 11.00 Population (1 mln) 59.30 36.27 77.25 93.30 54.42
Municipalities
Region Shanghai Area Km 17,037 Population (1 mln) 19.40
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Anhui
Key Sectors
Anhui is one of China's most important production bases in the agricultural sector. The grain crops mainly include wheat, peas, corn, sorghum, yams, rice, and several others. Other crops include cotton, oil seeds, tobacco, and other commonly exported plants. Animal product exports tend to be very basic, limited mostly to different kinds of animal leather and meat. Along with the continuing development of industry and agriculture, the province of Anhui can also be seen as a viable place for service-oriented industries. Furthermore, Anhui is developing a manufacturing base: in 2010, its provincial capital of Hefei was the third-largest producer of household appliances in China; and Maanshan, one of its local cities, is host to a growing steel trade. As more industries look for alternatives from the rising costs on the coastlines, it is likely that this upward trend in investment will continue.
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Fujian
Key Sectors
Fujian, although not as developed as some of China's provinces, possesses a viable and growing agricultural base with a number of key crops, including rice and other field crops. In 2010, the local heavy industry sector began to grow, especially the markets for petrochemical and mineral refinement, and the production of large-scale equipment. As costs in neighboring provinces increase, foreign investors may turn to Fujian as a top investment prospect in these sectors. Fujians seafood industry is also growing to a commercially important level. Additionally, Fujian is one of the largest textile-manufacturing bases in China. foreign and domestic enterprises and are set up with the intention of attracting new business projects.
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Jiangsu
Key Sectors
Jiangsu is one of the most developed provinces in China, with impressive infrastructure in its agricultural sector and light industries, including the food and textile sectors. Additionally, Jiangsu encourages strong growth in its energy and resources sectorsits resources include petroleum, coal, and natural gas, each of which China consumes in great quantities every year. Jiangsu is also emphasizing scientific research and innovation. Under the terms of the 12th Five-Year Plan, the province will be receiving RMB 20 billion in state funds to invest in research over the next five years, and will augment that investment by directing another RMB 80 billion in profits from foreign and domestic investment into research as well.
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Shandong
Key Sectors
Shandong is one of China's major economic powerhouses, located on China's coast. Shandongs largest sector is the agricultural sector, followed closely by the production of wine and similar industrial endeavors. Shandong is also prominent in China for its high level of participation in Chinas energy sector, especially in the areas of nuclear power and petroleum production. Popular locations for investment in Shandong include the city of Yantai, which is home to a growing automotive sector, and Qingdao, which is a strong producer of export goods and has thriving oil-refining facilities. lowest regulatory and tax burdens in China. Located in Jinan, Qingdao, Weifang, Weihai, Yantai, and Zibo, these Economic & Technological Development Zones have proven very successful in promoting economic growth and a higher concentration of economic activities.
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Zhejiang
Key Sectors
Zhejiang is one of the largest agricultural producers in China, and is popularly known as the Land of Fish and Rice. The latter is Zhejiangs staple crop, and is accompanied by other well-known commercial crops like jute and cotton. Zhejiang is also known for its production of Chinas famous Dragon Well green tea. Other important sectors in Zhejiang province include the textile and manufacturing industries. Popular locations for investment in Zhejiang include Hangzhou, its capital city and Ningbo, a pioneer in China's steel industry.
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Shanghai
Key Sectors
Hosting the world's busiest port and China's leading stock exchange, Shanghai is known as a major center of trade, finance, information technology and culture in China. Shanghai is also Chinas second largest steel and iron producer, and has a thriving materials industry. Furthermore, Shanghai is one of Chinas major textile manufacturing cities, which makes it very important to Chinas fashion industry. Lastly, Shanghai is a major destination for certain types of manufacturing, including jewelry and other luxury products.
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Southern China is one of the major tourist destinations in the country, and is also home to some of China's most important industries.
Provinces
Region Guangdong Guangxi Hainan Provincial Capital Guangzhou Nanning Haikou Area Km 177,900 236,700 33,920 Nominal GDP 2010 (US$ 1 bln) 578 113 24 Total FDI Value 2010 (US$ 1 bln) 20.26 5.80 1.50 Population (1 mln) 97.0 47.6 8.9
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Guangdong
Key Sectors
Guangdong is the most affluent province in China by gross domestic product, and the second-largest recipient of FDI in China, also some of China's fastest growing industries are based in this province. Key sectors include manufacturing of all types, the power industry, and the natural resources industry. Most recently, several prominent carmakers from Europe have begun implementing plans to open production lines in Guangdong. Popular investment locations in the province include the cities of Guangzhou - a noted destination for automotive investment - and Shenzhen. China's first location to be designated a Special Economic Zone in 1980, and home to one of the Mainland's two stock exchanges. Together Shenzhen and Guangzhou are pillars of China's hyperindustrial Pearl River Delta.
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Guangxi
Key Sectors
Agriculture is the foremost pillar of Guangxis economy. Important crops in Guangxi include rice, wheat, corn, and yam. Other commercial crops grown in Guangxi are tobacco, sugar cane, and peanuts. Additionally, 85% of the world's star anise, a popular spice with medicinal properties, is grown in Guangxi. In recent months, Guangxi has also begun to see a significant level of growth in its automotive sector one of its largest cities, Liuzhou, has become a wellknown investment destination in the auto market.
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Hainan
Key Sectors
Although Hainan is not one of the major contributors to Chinas overall economy, its tourism industry is strong, and its agricultural industry is growing. Hainan makes up for its lack of industrial development in other ways, however for instance, it is the host province to the Boao Forum for Asia, one of the most important annual conferences in the region. Additionally, its unique position as a tourist resort in China has led to a notable amount of investment in its property sector.
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Central China is one of China's major agricultural regions, and also includes a solid
industrial base.
Provinces
Region Hubei Hunan Henan Jiangxi Provincial Capital Wuhan Changsha Zhengzhou Nanchang Area Km 185,900 211,800 167,000 166,900 Nominal GDP 2010 (US$ 1 bln) 188 191 285 111 Total FDI Value 2010 (US$ 1 bln) 4.05 5.18 6.24 5.1 Population (1 mln) 55.3 63.7 92.6 42.7
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Hubei
Key Sectors
In addition to Hubei's possession of strong agricultural and industrial sectors, the province's main attraction is its energy & resources sector. The province contains large deposits of rare earths (of which China produces 97% of the world's total supply) and key metals like copper, iron, vanadium, and phosphorus. Other minerals include hongshiite, borax, and manganese. Several key parts of the hydroelectricity industry in China are also heavily invested in Hubei and more dam projects are planned in the future. Hubei is also home to a modest and growing gemstone industry, which includes high-quality turquoise, garnets, and multiple varieties of faustite.
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Hunan
Key Sectors
Hunan is mainly known in China as a chief agricultural province, producing copious amounts of rice and ramie for consumption around the country - in fact, Hunan is China's largest producer of rice, and also China's fourth largest producer of tea. There have been recent developments, however, in both the industrial and mining sectors key companies like Valin Steel and Hunan Nonferrous Metals have chosen Hunan as their industrial base, and this is a clear indication that the metallurgical industry is set to grow.
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Henan
Key Sectors
Henans key areas of trade are the agriculture sector, textile industry and other types of light industry. Henan is Chinas largest producer of wheat, and it ranks only behind Hunan in rice production thanks to its large contribution to food staples, it is known as the breadbasket of China. Additionally, although Henan has only recently begun to develop heavy industry, there are large reserves of natural resources available in the province, including molybdenum, coal, aluminum, and alkaline metals.
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Jiangxi
Key Sectors
The main developed industry in Jiangxi is agriculture Jiangxi primarily produces rice, and several other food staple crops. Jiangxi also contains several large deposits of minerals and rare earths, including tungsten, tantalum, and niobium. These deposits, however, are largely undeveloped, and the mining industry is only a fledgling industry in Jiangxi.
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Northern China is defined by the Chinese government to include the municipalities of Beijing and Tianjin, the provinces of Hebei and Shanxi, and Inner Mongolia Autonomous Region. This region possesses some of Chinas most extensive natural resource deposits, making it a key destination for foreign investment, as well as the overall capital of China and several of its highly developed provinces.
Provinces
Region Hebei Shanxi Provincial Capital Shijiazhuang Taiyuan Area Km 187,700 156,800 1,183.000 Nominal GDP 2010 (US$ 1 bln) 249 143 108 Total FDI Population Value 2010 (1 mln) (US$ 1 bln) 3.80 69.8 0.71 3.38 34.6 24.3
Municipalities
Region Beijing Tianjin Area Km 16,801 11.760 Total FDI Nominal GDP 2010 Value 2010 (US$ 1 bln) (US$ 1 bln) 178 6.4 110 9.2 Population (1 mln) 17.2 11.9
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Hebei
Key Sectors
Steel is one of Hebei's most important industries - the province is one of China's largest producers of iron and steel, and its production of both metals ranks first and third in the country respectively. Furthermore, China's stimulus specifically targeted Hebei as a place for consolidation of a fragmented metals market, helping it to maximize its industrial output. Hebei's other key sectors include agriculture and manufacturing.
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Shanxi
Key Sectors
Shanxi's largest market is its local coal industry - with the largest deposits of coal in China, Shanxi is one of the most important sources of China's energy. Despite the large coal reserves, however, Shanxi is actually the second largest producer of coal in China after Inner Mongolia-mostly due to a lack of effective exploitation of these resources. Its energy markets are responsible for over 80% of its GDP, so there are no other significant sectors in its economy, although the Chinese government is implementing some drastic steps to remedy this situation.
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Inner Mongolia
Key Sectors
Inner Mongolias economy is largely based on its abundance of natural resources, which includes a large supply of rare earth metals, extensive reserves of coal (of which Inner Mongolia is Chinas largest producer), and many other key resources which make it a large contributor to the Chinese energy industry. Although full-scale exploitation of these resources only began recently, the province has seen spectacular results from 2005 to 2008, Inner Mongolia boasted a faster rate of growth than any of Chinas other provinces and grew at a healthy double-digit rate during the global recession. Rising sectors also include a rapidly growing alternative energy industry and stable agricultural sector, both bolstered by the increasing interest in the province as a whole. The regions renewable energy industry has also expanded rapidly. Windpower generating capacity has risen from 170-mw in 2005 to 10-gw by end 2010, accounting for one-fifth of power generated in Inner Mongolia.
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Beijing
Key Sectors
As Chinas capital city, Beijing is one of the countrys largest citybased economies. With a GDP of US$208 billion in 2010, its growth rate reached 10.2%, almost exactly equal to the national average GDP growth rate. Its information technology sector alone houses over 4000 enterprises, and this sector is supplemented by Beijings equally strong manufacturing center, which produces everything from textiles to heavy industry. Beijing is also one of Chinas largest automotive industry centers, and places great priority on its infrastructure, which was buoyed by Chinas stimulus package in 2009. borders, including zones devoted to certain counties and certain industries.
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Tianjin
Key Sectors
One of the key pillars of Tianjin's economy is its manufacturing sector, which makes up over 50% of Tianjin's total economy and also fosters double-digit growth every year. In the future, however, Tianjin is looking to its resources to drive economic growth. In addition to possessing large oilfields, Tianjin is one of China's biggest promoters of alternative energy. It is the center of geothermal energy production in China, and invests heavily in other forms of green energy, including solar power and wind power production. In the way of key projects, the government of Tianjin partnered with Singaporean authorities to create the Sino-Singapore Eco-City, a community east of Tianjin City devoted to energy-saving technologies and efficient use of energy. Paramount in Tianjin's economy, however, is the Port of Tianjin, which acts as an economic trade zone in itself and draws investment from all over the world into the city. Thanks to its status as one of China's top ports, Tianjin enjoys very strong trade values in the ports & logistics sector.
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buyers andsuppliers. In March 2011, Total Group, one of the largest integrated oil and gas companies in the world, announced a plan to invest US$42.6 million in a new lubricant blending plant in Tianjin. The investment will help the company expand its presence in the world's second-
largest lubricant market. Tianjin Lubrication Oil Blending Plant, a new subsidiary of Total China, will produce a full range of lubricant and grease products. The plant, which is expected to be operational by late 2012, is designed to reach a maximum capacity of 200,000 metric tons per year.
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Northwest China includes the autonomous regions of Xinjiang and Ningxia and the provinces of Shaanxi, Gansu, and Qinghai. This region as a whole is a large contributor to Chinas energy and mining industry, and is a key target of China's Western Development Strategy.
Provinces
Region Ningxia Xinjiang Shaanxi Qinghai Gansu Provincial Capital Yinchuan Urumqi Xi'an Xining Lanzhou Area Km 66,000 1,660,001 205,800 721,000 454,000 Total FDI Nominal Population GDP 2010 Value 2010 (1 mln) (US$ 1 bln) (US$ 1 bln) 19 0.23 6.2 63 196 16 50 0.24 1.82 0.22 0.14 21.2 37.3 5.5 26.2
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Ningxia
Key Sectors
With a GDP of around US$12.5 billion, Ningxia is one of China's smallest provinces. Ningxia's economy is based mostly on agricultural endeavors, including its herbal contributions to Traditional Chinese Medicine, which is an industry of considerable size in China. Other industries which are currently under development include the business and tourism industries, and Ningxia possesses large deposits of coal, which can be a key target for investors.
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Xinjiang
Key Sectors
One of the key pillars of Xinjiang's economy is its agricultural produce. The region is popularly known as China's fruit capital, and produces grapes, melons, wheat, and many other dietary staples. The real economic potential of Xinjiang, however lies in its natural resources - in addition to possessing large reserves of oil, Xinjiang is China's largest producer of natural gas, which is becoming a highly demanded commodity in the global economy. Xinjiang's growing petrochemical industry and natural resource production account for well over 50% of its GDP.
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Shaanxi
Key Sectors
Shaanxi boasts the strongest local economy of the entire Northwest China bloc, its GDP clocking in at US$196.7 billion. One of Shaanxi's major economic points of focus is mainly centered around its thriving natural resources sector, which helps it to rank China's top five domestic producers of key resources like coal and natural gas. Additionally, Shaanxi is one of China's most historically significant provinces and thus maintains a thriving tourism industry, which produces a significant amount of revenue for the province. Lastly, Shaanxi is home to China's developing aerospace and aviation industry, which plays a large role in both domestic and foreign aviation. Development Zones, most of them geared toward high-technology and research & development initiatives. Furthermore, Shaanxi attracted the highest rate of foreign investment in Northwest China at US$1.82 billion, and is still developing several industries ripe for investment.
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Qinghai
Key Sectors
Qinghai's key pillars of industry are its petrochemical and mining industries. Qinghai's production of iron & steel has helped to support its economy, and so has its limited production of oil and natural gas, both resources crucial to other provinces in China. Qinghai, moreover is another province with an abundance of rare earth deposits, including those which are crucial to telecommunications equipment, aircraft, and other forms of technology. concerned about environmental energy to the extent that the local government has announced that the province is willing to sacrifice GDP growth to make sure that its energy is green and its environment unharmed by the ongoing mining interest present. Qinghai is home to only one Economic and Technological Development Zone in Xining which focuses exclusively on energy companies both conventional and renewable.
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Gansu
Key Sectors
Gansu's economy is centered on the extraction and utilization of metals within the province. Like the other provinces in Northwest China, Gansu possesses extensive deposits of rare earth metals, and is reasonably efficient at utilizing these resources. Gansu also has a strong coal industry and receives nearly 80% of its power from this resource. In order to get out from under the yoke of coal, Gansu prioritized its renewable energy sector as part of the 11th 5-Year Plan, and it is also developing in the areas of wind power, solar energy, hydropower, and biomass. In 2010, Gansu's GDP was US$59.6 billion - almost 20% higher than the same figure in 2009. look at Gansu much more seriously. In truth, however, Gansu's current dearth of developed infrastructure and its general lack of accessibility will force it to climb a long way before it breaks out of the domestic market. Gansu is home to two different Economic & Technological Development Zones, both focused on different forms of energy development.
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Southwest China consists of the municipality of Chongqing and the following provinces: Guizhou, Sichuan, Yunnan, and the Tibet Autonomous Region.
Provinces
Region Guizhou Sichuan Yunan Tibet Provincial Capital Guiyang Chengdu Kunming Lhasa Area Km 176,100 485,000 394,100 1,220,000 Total FDI Nominal Population GDP 2010 Value 2010 (1 mln) (US$ 1 bln) (US$ 1 bln) 57 0.29 38.1 207 90 6 7.01 1.33 0.02 81.2 45.4 2.9
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Guizhou
Key Sectors
Guizhou's economy, while mostly rural, sees potential in developing its vast supply of natural resources. Among other minerals, Guizhou contains key deposits of oil shale and accessible deposits of coal, and has managed to utilize these resources to a large enough extent to begin exporting its energy to neighboring provinces like Guangdong. Other sectors which contribute a significant amount Guizhou's revenue total include agriculture and tourism, and it is also developing a growing interest in transportation and infrastructure.
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Sichuan
Key Sectors
Sichuan is one of China's strongest and most diverse economies, with a wide range of sectors which all meet a certain standard of prosperity. In terms of agriculture and livestock, Sichuan is China's largest pork producer, its second largest silk spinner, and among the top exporters of wheat and grain crops. Sichuan is also heavily resource-laden with all types of metals, including chromium, vanadium, lithium and steel. Sichuan uses these resources effectively and is one of China's largest industrial centers as well, encouraging a range of industries from steel foundries to silk factories, and also a growing market for electronics. Sichuan's GDP in 2010 was US$249 billion, an increase of 15.1% from 2009 - well above the national average. provinces in the category of foreign trade, according to MOFCOM. Furthermore, in 2010 Sichuan's volume of actual utilized FDI came to a total of US$7.01 billion, which as stated previously was the highest value in China.
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Yunnan
Key Sectors
Yunnan is one of China's key suppliers of various key metals, most notably copper and zinc. Other metals produced include aluminum, lead, and tin. Other sectors that contribute to Yunnan's growth include the agriculture sector, which is famous for its productive growth and export of tobacco throughout China and abroad. Yunnan's major problem in becoming a first-tier economy, though, is its ongoing lack of investment in infrastructure and development, of which it has little. In 2010, Yunnan's GDP reached US$112 billion, an increase of 11% from 2009. Yunnan to become Southwest China's third biggest FDI destination in 2010, bringing in a total of US$1.3 billion through various sectors.
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Tibet
Key Sectors
Due to a lack of arable land in Tibet and some difficult times since the global financial crisis of 2008, the chief sector that supports Tibet is its tourism industry. Because of the history and the Buddhist attractions available for public viewing in Tibet, the government actively seeks to promote as much tourism as possible in the province, and Tibet's manufacturing tends to work according to this industry, producing textiles and items commensurate with tourists' expectations. In 2010, Tibet's overall GDP came to US$7.9 billion.
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Chongqing
Key Sectors
Chongqing's largest sector by far is its manufacturing sector, and in particular its automotive sector. As China's third largest automobile producer and largest producer of some types of vehicles, Chongqing maintains a thriving manufacturing base for high-quality automotive components. Additionally, Chongqing's manufacturing base includes textiles, electronic components, and consumer products. Also strong is Chongqing's stock of natural resources, which includes oil, various minerals, coal, iron ore, and aluminum. Chongqing has a growing agricultural sector as well, although this is not one of its key moneymakers. Chongqing's GDP in 2010 was US$118 billion, up roughly 400% since 2005. doubt continue to do so. In addition to its policies, Chongqing contains six Economic & Technological Development Zones, each with a focus on a different manufacturing and technology sector. As further proof of Chongqing's viability as an investment destination, its FDI value in 2010 was US$6.3 billion - second only to Sichuan in its region, and representing a staggering 58% increase over the 2009 figure.
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Northeast China consists of the three provinces of Liaoning, Jilin and Heilongjiang. The region is also informally known as the "Three Northeast Provinces."
Provinces
Region Liaoning Jilin Heilongjiang Provincial Capital Shenyang Changchun Harbin Area Km 145,900 187,400 460,000 Total FDI Nominal Population GDP 2010 Value 2010 (1 mln) (US$ 1 bln) (US$ 1 bln) 221 20.8 43.0 105 125 1.3 2.7 27.1 37.2
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Liaoning
Key Sectors
For years now, Liaoning has been China's seventh largest province by GDP. Its top industries are all components of a heavily developed and advancing economy the mining and energy sector, chemicals, communications equipment, and industrial-size machinery. Liaoning is also rich in natural resources, being Northeast Chinas leading source of oil and natural gas. Liaonings GDP in 2010 amounted to US$249 billion, an increase of 13.1% from the previous year. cities a large number of Economic & Technological Development Zones, numbering 14 in total. Foreign direct investment into Liaoning also rose to US$20.8 billion, representing a dramatic increase from 2009.
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Jilin
Key Sectors
Industry in Jilin is concentrated on automobiles, train carriages, and iron alloy. Jilin is one of the most important commodity grain bases in China and it ranks 6th in timber production. Ginseng and deer antlers, which are used extensively in Traditional Chinese medicine, are also produced mainly in Jilin.
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Heilongjiang
Key Sectors
Heilongjiangs chief draw in terms of foreign investment is its industrial sector, which produces strong growth in automotive markets and other electronic equipment industries. Also important is Heilongjiangs production and utilization of petroleum resources, which are an important component of infrastructure in such a cold climate. Recently, Heilongjiang has also begun to promote its agricultural sector as well, and there is ample reason for optimism in this area development has been rapid, and now Heilongjiang's agriculture plays an important role in China. With large amounts of arable land and many forests, Heilongjiang has become a prime producer of oil, coal, and wood. Heilongjiangs GDP in 2010 was US$151.2 billion, which represents 12.6% growth over the 2009 figure.
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Hong Kong
Key Sectors
Hong Kong SARs economy is driven mainly by four key sectorsfinancial services, tourism, logistics, and professional services. These four industries drive almost all of Hong Kong SARs growth on a global scale, and are highly popular and profitable areas of foreign investment as well. In addition, Hong Kong also maintains thriving cultural and medical industries.
economic model, and serves as an excellent benchmark for many of Chinas provincial economies.
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Macau
Key Sectors
Macau, sometimes called the "Las Vegas" of China, is an economy based mostly on the tourism and entertainment industries. Its textile manufacturing industry, however, is also growing well, providing more than 75% of Macau's total exports. The profits from the gaming, hospitality, and tourism industries in Macau collectively constitute more than 50% of the region's GDP, and are a key draw for many different investors.
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Due to the acceleration, global taxes become more important as tax laws continually change. The AP ICE presence in Asia Pacific offers tailor-made international tax solutions not only to the multinational companies, but also to the companies who want to extend their global footprint.
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Measuring Value China and Asia - The Forum and the Formula
This publication deals with one of the rising forums in the region. As the Boao Forum for Asia Annual Conference (BFA AC) enters its second decade, the discussion and potential of Asia as an integrated economic region also are entering a new stage. As a result of the global financial crisis and several aspects of integration proceeded smoothly, it has become increasingly common to look to Asia as the worlds engine of recovery from the crisis and as the epicenter of future growth.
March 2012
Where Is China Manufacturing Industry Going? Deloitte China Manufacturing Competitiveness Survey 2011
Through a survey of 150 enterprises and interviews, the report analyzesChina's manufacturing competitiveness, comparing with other Asian countries competitiveness , and pointed out the current problems facing the manufacturing industry and the future direction of China's manufacturing industry.
November 2011
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Business activity in the life sciences & healthcare (LSHC) sector in China is growing increasingly robust. Top international and domestic Chinese pharmaceutical companies, as well as a host of smaller players, are moving to secure market share along with drug and device development permissions and capabilities in the context of China's evolving regulatory regime. Companies who might have hesitated before now see that China is moving past its phase as a supply market for ingredients and generic finished drugs, and on to a new phase as the world's second-largest LSHC market within this decade.
November 2011
The total M&A marketin China will continue to grow, but the paces are varying among the three segmented markets by deal type. Domestic M&A market is to be pushed by government policy including 12th FYP and tight monetary policy, and will see more vertical integration deals. In addition, the inbound M&A market is expected to hike as the government is encouraging better utilization of foreign capital serving the countrys industrial upgrading and technology innovation. Meanwhile, Chinese enterprises have become more prudent in conducting overseas acquisition, but the possible revisit of global financial crisis may make more bargain targets available.
September 2011
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