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Business in China
For Articles Covering Special Topics on Business in China and doing Business with China, check out our Articles Section.
Here you will find business tools for getting China Visas, travel to China, doing business in China, export to China, import from China, and understanding the Chinese culture.
Below are our recent Business in China articles and China research:
China's Internet Market
China Visa Instruction at Chinese Consulate
Guide to Investing in Chinese Real Estate
Different Types of China Visas, Get Your China Visa Today
Tips on Importing from China, Our Baby Gift Story
How to establish a Joint Venture in China
China Technology Imports
Chinese Consumer Trends
China Business Visa Forms and Our 6 Steps to Get One
Application for a Patent in China (Part 1 of 2)
Application for a Patent in China (Part 1 of 2)
Customs Tips - Travel Entry and Exit from China
Logistics Industry in China
Business Meeting Tips
How to Establish Foreign Offices in China
New Travel Tips and China Visa Information
Modern Chinese Business Etiquette Survey and Findings
Romance of the Three Kingdoms
China's Economic Growth in 2005
China Visa Frequently Asked Questions
Our 5 Step Plan for You to do Business in China
Business in China Information Below:
So you want to do business in China. How do you get started when you are an American with no business contacts, no family or friends in China and absolutely no clue where to start? First you should understand that to do business in China successfully you need a long term game plan where you can expect to take 12 months to get your first shipment from start to finish. Second you need to understand that to do any business in China you must deal with the government much more so than in the U.S., just ask Google, Yahoo and Microsoft. Finally you need to understand that although the situation is improving, many business people still pay "guanxi" money to grease the wheels of government officials.
Before you read on you need to make travel plans to China and most importantly obtain a China Visa.
Many government officials in China expect it or even blantantly demand it. Of course, you can refuse to pay these "bribes" but think about how your competitors are doing so and you realize you are at a disadvantage. Your permit may delayed, your paperwork may stall indefinitely. And the difference with the U.S. is there are no real avenues to legally pursue these corrupt officials. We are not saying all Chinese officials that deal with foreign businesspersons are like this but there are enough of them so that you need to be aware of the situation. So what is guanxi? A lot of times it can be a simple "red envelope" (red envelopes are what Chinese married adults give younger children during Chinese New Year). The information
That is why we are describing three main business zones in China and why we recommend starting off in the South.
As we have come to discover, many U.S. business professionals consider China as three main business zone corridors for entry. Each corridor is anchored by a leading city and an entry port city. The southern zone is anchored by Canton in Guangzhou Province. Canton is the central trade city for a slew of major industry cities in the south. The main port of entry for Canton is Shenzhen which also is right next to Hong Kong. This zone is special because of Hong Kong's proximity and business prowess serving as a second port of entry. In Hong Kong you find a plethora of business professionals who can help do business in China. This zone is the first area we would recommend to start. Here you will find the Canton fair and a lot of the tradeshows in China. There are more business friendly government officials here as well.
The second middle zone of business is located up the coast in the famous city of Shanghai. Shanghai is unique because of its proximity to the Pacific and can serve as its own port city. Shanghai has access to the Yangtze river which leads through 200 smaller cities and villages, home of the future Three Gorges Dam and up river to the major city of Chengde. Shanghai has historically served as the New York City of business in Asia prior to China's loss in the Opium Wars. In the past twenty years Shanghai is reemerging to overshadow Hong Kong to once again become the leading business center in China.
The northern and final zone of business is Beijing. Being the capital has distinct advantages of political power and the anchor to alot of train routes. The port city of entry is Tianjin located 70 miles southeast of Beijing. Unless you are a major conglomerate such as Boeing and General Electric with the U.S. President and the U.S. military backing there negotiations, we think this zone is probably the hardest for first time entrepreneurs to try due to heavier regulations.
Tips on importing:
You can have the manufacturer insure and ship the products or find third parties to do so. The manufacturer will charge
You can expect the shipment (depending on the size) to take 3 to 6 months on average so be sure to give some lead time.
You can pick up your cargo from your local docks yourself. However, it is recommended to hire a customs broker to get the product through customs quickly and efficiently. They will know the process much better. The customs broker will usually charge a flat fee. The broker will handle everything from offloading the product and getting it to your destination.
China has huge outgrowth potential with more and more millionaires and middle class families. The increase in fortune is projected to swell Chinese citizens' appepitite to travel and spend during trips. China could rival Japan in the 80s and 90s as the world's largest travelling population and economy.
According to a recent 2005 report by Merrill Lynch/Capgemini, China now has approximately 236,000 millionaires. That's a 12% growth from 2004 and is only second in the world compared with the United States' 14% growth in the exclusive club.
Topic |
U.S. |
China |
Land Cost |
$200 / sq. ft. |
$90 / sq. ft. |
Land Ownership |
Full ownership (indefinite) |
70 year lease |
Building to land ratio |
Variable |
50-60% |
Building Cost |
$50 /sq ft. |
For similar structure - $22/sq ft |
Rent |
$2 to $5 /sq. ft. |
$0.25 to $4 /sq. ft. |
Taxes |
Tiered system, with deductions |
2 yr exempt – 3 yrs at 50% |
Import Tax on Raw Materials |
Yes, check with U.S. Customs |
No Customs Duty if for Export Only |
Value Added Tax |
None, but AMT for individuals |
17% |
Annual Licenses and Fees |
Average $800 per year |
Average $400 per year |
Unskilled Labor |
Most states have minimum wage such as $6.75 per hour for CA |
China cost of unskilled worker $60/month |
Skilled Labor |
Much more expensive, expect to pay twice as much |
Harder to find in China , but skilled labor is cheaper |
Shipping Costs for a 40 ft. Container |
Approximately $4,000 |
About $2,000 |
Additional Shipping Fees |
Standard |
China more Costly |
Protection of Intellectual Property |
Strong, over 200 years of IP protection laws and extensive legal system support |
China Weak |
Size of Domestic Market |
285 million |
1.3 billion |
Per Capita Output |
$31,000 |
$2,000 |
Industry & Business Associations
The United States - China Business Council
American Chamber of Commerce
Canada - China Business Council
Current Economy
The economy is bustling with an average 9.1% growth in the past two decades. It is important that you are aware that services are playing a larger percentage of the Chinese economy. Although only 29% of the Chinese working force are in the Services Sector, the GDP produced is 33% of the economy and that percentage has been growing for the past decade. Industry still dominates with 53% of the GDP while only representing 22% of the workforce. (Source Central Intelligence Agency of the United States).
Key Business Stastics
| GDP (2004 est) |
$7.26 trillion |
| GDP Rank |
2nd |
| GDP Growth |
9.1% |
| GDP by Sect. |
Industry 53%, Services 33%, Agriculture 14% |
| Labor Force |
780 million |
| Unemployment |
9.8% |
| Labor by Sect. |
Agriculture 49%, Industry 22%, Services 29% |
| Inflation |
4.1% |
| Exports |
$583.1 billion (2004 est) |
| Agricultural Products |
rice, wheat, potatoes, corn, peanuts, tea, millet, barley, apples, cotton, oilseed, pork, fish |
| Industrial Products |
mining, metals, alloys, coal; machines, armaments; textiles and apparel, petroleum, cement, chemicals; fertilizers, consumer products, food processing, semiconductors, transportation equipment, telecommunications equipment, commercial space launch vehicles and satellites |
| Services |
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| Imports |
$552.4 billion |
| Major Imports |
machinery and equipment, oil and mineral fuels, plastics, optical and medical equipment, organic chemicals, iron and steel |
| Currency |
Yuan, also known as Renminbi (RMB) or Chinese Dollar. Fixed to the U.S. dollar at 8 RMB per dollar. |
| Telephone lines |
Over 300 million in 2004 est. |
| Cell Phones |
Over 300 million in 2004 est. |
| Internet Users |
Approximately 100 million in 2004 est. |
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Main Ports of Entry
Air: Beijing, Hong Kong, Guangzhou, Shanghai, Chengdu, Dalian, Hangzhou, Harbin, Hohhot, Kunming, Qingdao, Shenyang, Tianjin, Urumqi, Xiamen and Xi'an .
Sea: Beihai, Dalian, Dangdong, Guangzhou, Haikou, Hankou, Huangpu, Jiujiang, Lianyungang, Nanjing, Ningbo, Qingdao, Qinhuangdao, Sanya, Shanghai, Shantou, Shenzhen, Tianjin, Weihai, Yangzhou, Yantai, Zhangjiang and Zhenjiang.
Land: Alataw, Baketu, Erenhot, Friendship Pass, Hunchun, Ji'an, Kunjirap, Manzhouli, Mohe, Nyalam (Zhangmu), Pingxiang, Ruili, Suifenhe, Tumen, Wanding, Xunke, and Yadong.
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