China Country profile

Opening Hours and Days

Monday to Friday: 8:30 a.m. to 5:00 p.m.

Saturday: 8:00 a.m. to 1:00 p.m.

Public Holidays

Periods When Companies Usually Close

Tax Rate For Foreign Companies

A non-resident enterprise that has no establishment or place in China is taxed only on its China-source income. A non-tax resident enterprise with an establishment or place in China is subject to corporate taxes on income derived by such establishment or place from sources in China as well as income derived from outside the country that is effectively connected with such establishment or place.

Capital Gains Taxation

There is no separate capital gains tax in China; capital gains (and losses) of companies generally are combined with other operating income and taxed at the corporate income rate (25%).

The sale of real estate and net development costs are subject to the land appreciation tax at four bands ranging from 30 to 60% (depending on the percentage of the gain realised).

Main Allowable Deductions and Tax Credits

Generally, all documented expenses, costs and losses in generating taxable income are deductible up to a limit: entertainment expenses are 60% deductible up to 0.5% of total income, advertising (up to 15% of total income, 30% in some cases) and donations (up to 12% of total income; although donations for poverty alleviation in certain areas can be fully deducted - donations made via charitable organisations or governments to counter the COVID-19 epidemic are fully deductible for CIT purpose). Non-deductible items include dividends, management fees, Enterprise Income Tax (EIT) paid and late tax payment surcharge fees.

A deduction is allowed for the amortisation of intangible assets, including patents, trademarks, copyrights, and land use rights. Intangible assets have to be amortised over a period of at least ten years. Organisational and start-up expenses are tax-deductible fully in the first year of activity. Interest on loans is also tax-deductible (subject to conditions). 200% of the salary expenses paid to handicapped staff are deductible.

Tax losses can normally be carried forward for a maximum of five years starting from the year subsequent to the year in which the loss was incurred, while carryback of losses is not permitted.

Preferential tax treatments in the form of incentives are further granted to new high-technology enterprises (HNTE), companies in special economic zones (SEZ) and pilot free trade zones (FTZ), while exemptions may apply to agriculture, forestry, fishery, software, infrastructure and other specified environment and technology developments.

Other Corporate Taxes

A real estate tax based on the value of the property or rental received is levied annually on land and buildings used for business purposes or leased. The tax rate is 1.2% of the original value of buildings. A tax reduction of 10% to 30% is commonly offered by local governments. Alternatively, tax may be assessed at 12% of the rental value (may be reduced to 4% for the leasing of residential property by individuals).

A deed tax, generally at rates between 3% and 5%, may be levied on the purchase, sale, gift, or exchange of ownership of land use rights or real properties and paid by the transferee/assignee.

An urban and township land-use tax is levied on taxpayers who use land within the area of city, country, township, and mining districts. The due amount depends on the area of land actually occupied multiplied by a fixed amount per square metre determined by the local authorities. The same principle applies to the arable land occupation tax, which is levied on companies and individuals who build houses or carry out non-agricultural construction on arable lands.

The sale of real estate and net development costs (or land use rights) are subject to the Land Appreciation tax at 30 to 60% (depending on the percentage of the gain realised).

Stamp duty (0.005% - 0.1%) is levied on specific legal documents.

The employer contributes around 16% of basic payroll to the state-administered retirement scheme, as well as to medical insurance, maternity insurance, unemployment insurance, and work-related injury insurance funds (bringing the total to approx. 40% of base monthly salary, with actual rates varying across the country).

An urban construction and maintenance tax is levied on the amount of indirect tax (VAT, consumption tax), at a rate of 7% for urban areas, 5% for county areas, and 1% for other areas. The same calculation base is used for the national (3%) and local educational surcharge taxes (2%) paid on the amount of VAT and consumption tax.

A motor vehicle acquisition tax is levied at 10% of consideration on automobiles, tramcars, trailers, and motorcycles. A vehicle and vessel tax also applies (generally at fixed amounts).

Companies and individuals active in the entertainment and advertising businesses are subject to a cultural business development levy at 3% on the relevant income (suspended for the income year 2021 due to the COVID-19 pandemic).

Local authorities levy a resources tax on natural resources, including crude oil, natural gas, coal, salt, raw metallic metals, non-metallic metals, mineral water, carbon dioxide gas, and water (in 10 provinces). This tax is applied on a sales turnover or tonnage/volume basis.

An environmental protection tax (EPT) is levied on enterprises that directly discharge taxable pollutants within the Chinese territory. It is calculated based on the volume of pollutants discharged multiplied by a specific EPT coefficient.

For further information, including the information on other common fees, costs or compulsory donations other than taxes that are collected from companies by the Chinese tax authorities, please consult the following sources:

• the portal of the State Taxation Administration
• Worldwide Tax Summary on Corporate - Other taxes in the People's Republic of China (PwC)
• Global tax guide to doing business in China (Dentons)
• China’s Social Security System: An Explainer (China Briefing)

Other Domestic Resources

Doing Business: China (a summary of taxes and mandatory contributions)

Worlwide Tax Summary on Corporate and Individual Taxes in People's Republic of China (PwC)

Country Comparison For Corporate Taxation

Accounting System

Accounting Standards

The accountancy standards for companies were put into effect by the Ministry of Finances (MOF). China established its first complete standards specific to accountancy in 1997 and the MOF promulgated an additional 13 standards more specific to accountancy since then.

Chinese Accounting Standards for Business Enterprises (ASBEs) are mandatory for listed Chinese enterprises. Other Chinese enterprises are encouraged to apply the ASBEs, which are substantially in line with IFRS, except for certain modifications that reflect China’s circumstances and environment. China is committed to converge with IFRS.

Foreign Invested Enterprises (FIE) may prepare financial statements in accordance with other accounting standards or in other languages for global consolidation purposes. However, the Chinese authorities will only recognise and accept accounts in Chinese that are prepared based on Chinese accounting standards.

Accounting Regulation Bodies

CICPA, Chinese Institute of Chartered Accountants

Accounting Law

Initially promulgated in 1985, the Accounting Law of December 1993 was updated in 1999. It includes the legal standards governing accountancy and forms the base for the formulation of administrative rules and regulations for accounting.

Difference Between National and International Standards (IAS/IFRS)

China adopted Accounting Standards for Business Enterprises (ASBEs) that are substantially converged with IFRS standards. ASBEs are imposed on all Chinese companies whose securities trade in a public market in China. Additionally, Chinese companies whose securities trade on the Stock Exchange of Hong Kong have the option to choose among IFRS Standards, Hong Kong Financial Reporting Standards (HKFRS), and Chinese Accounting Standards (ASBEs). Acccording to latest reports (IFRS Foundation), 30% of Chinese companies that capitalise 69% of the market in Mainland China already use IFRS standards.

Accounting Practices

Tax Year

From 1 January to 31 December

Accounting Reports

Audit reports normally contain a paragraph defining the 'task' or 'scope' and a paragraph of opinion. The paragraph of opinion aims to establish if the accounts were prepared according to the appropriate rules/regulations and any reservations in opinion must be elaborated above.

Statements of financial accounts or reports should comprise a balance sheet, profit and loss accounts, a report of gross self-financing margin, notes on the accounts and an account for appropriation of profits and losses.

For more information consult the website of China Accounting operating under the Ministry of Finance.

Publication Requirements

Annual publication

Accountancy Profession

Accountants

The Chinese Institute of Chartered Accountants oversees accountants in China.

Professional Accountancy Bodies

CICPA, Chinese Institute of Chartered Accountants website

Member of the International Federation of Accountants (IFAC)

Yes

Member of Other Federation of Accountants

Member of the Confederation of Asian and Pacific Accountants (CAPA) which represents national accountancy organisations in the Asia-Pacific region.

Audit Bodies

Chinese law requires representative offices and foreign-invested enterprises to utilise the services of accountants registered in China to prepare official submissions of annual financial statements and other specified financial documents. Only Chinese accountants and joint venture accounting firms may provide these services. Companies must seek a statutory auditor to conduct an annual audit of the financial health of their organisation. To find an auditor, contact the National Audit Office of China (CNAO).

Allowable Deductions and Tax Credits

Deductions and allowances are available, depending on the category of income. For wages and salaries received in China, individuals also receive a flat monthly deduction of CNY 5,000.

Personal basic contributions are deductible. These include payments to housing funds and certain medical insurance, pension and unemployment insurance payments. Taxable income from personal services, royalties and remuneration from manuscripts and the leasing of property is net of a standard deduction for expenses that is equal to 20% of total income. Reasonable business expenses incurred in earning income from a business are deductible. Rental income is also subject to deduction (according to the monthly amount received). For sales of property, the original cost of the property and reasonable expenses incurred are deductible from the sales proceeds to determine the taxable income.

Certain specific deductions also apply, including child education (CNY 1,000 per child per month); continued education (CNY 400 per month or 3,600 per year depending on the type of qualified continued education); mortgage interest (CNY 1,000 per month); rental expense (CNY 800, 1,100, or 1,500 per month depending on the location); elderly care (up to CNY 2,000 per month depending on the status of the taxpayer); major medical expense (qualified self-paid portion above CNY 15,000 and capped at CNY 80,000 per year for each eligible individual).

Charitable contributions to qualified domestic non-profit organisations are deductible up to 30% of taxable income.

Losses from privately-owned businesses and sole proprietorship enterprises can be carried forward for five years.

Special Expatriate Tax Regime

Residents are subject to individual income tax on their worldwide income. Non-residents are generally taxed only on their China-sourced income.
For the rates applied on non-residents' income derived from employment, remuneration for labour services, author’s remuneration, royalties, see the table above.

Certain categories of income are considered China-sourced income regardless of whether the payments are made within China or not, including:

• Income derived from employment or contracted labour services performed within the territory of China
• Rental income in relation to property used within the territory of China
• Income derived from the transfer of real property located within China or other property transfer transactions incurred within the territory of China
• Income derived through the grant of various franchises to be used within the territory of China
• Interest and dividend income paid by companies, enterprises, other organisations, or resident individuals within the territory of China.

When calculating taxable employment income for non-residents, IIT law only allows the standard basic deduction of CNY 5,000 per month.

Capital Tax Rate

A fixed income tax rate of 20% is applicable to income from rental income, interest income, dividends, and capital gains unless specifically reduced.
Social security contributions vary according to the region (consult a list here).

Consumption tax applies to prescribed nonessential and luxury or resource-intensive goods (including alcohol, luxury cosmetics, fuel oil, jewellery, motorcycles, motor vehicles, petrol, yachts, golf products, luxury watches, disposable wood chopsticks, tobacco, certain cell and coating products), and it mainly affects companies involved in producing or importing these goods. The tax is calculated based on the sales value of the goods, the sales volume or a combination of the two. Exports are exempt.

A real estate tax based on the value of the property or rental received is levied annually on land and buildings used for business purposes or leased. The tax rate is 1.2% of the original value of buildings. A tax reduction of 10% to 30% is commonly offered by local governments. Alternatively, tax may be assessed at 12% of the rental value.

A land appreciation tax is levied on the gain from the disposal of properties at progressive rates ranging from 30% to 60%. A deed tax with rates generally ranging between 3% and 5% may be levied on the purchase, sale, gift, or exchange of ownership of land use rights or real properties and paid by the transferee/assignee.

No inheritance, estate, or gift taxes are currently levied in China.

National Regulation and International Agreements

Equity of Judgments

Equal Treatment of Nationals and Foreigners

The judiciary does not guarantee an impartial trial to a foreign national. A high degree of corruption has been reported in the country and within the CCP.

The Language of Justice

Mandarin-Chinese

Recourse to an Interpreter

Possible

Legal Similarities

The legal system is based on the Confucian philosophy of the social order by moral education. After the 1911 revolution, the Republic of China mainly adopted a legal code of Western type inspired by the German law. The establishment of the People's Republic of China in 1949 brought a Soviet system influenced by socialism. There does not exist a tradition of constructive law in China and the first civil code dates from the beginning of the year 1980. As compared to the Western laws, it is written in a rather incomplete fashion, which leaves an important place for arbitrary judgements. The law is subject currently to a progressive reform encouraged by external and internal pressures. The constitution in force currently was promulgated in December 1982.

The Different Legal Codes

Checking National Laws Online

China Legislative Network System

Other Useful Resources

China Law Blog
LLRX.com, research guide to the Laws of China

The Jurisdictions

Court Officials

The judge

The Judge exerts the legal authority of the Government according to the law, he must judge a case according to the law.
The judges are also cross-examiners who examine the witnesses.
Differing from traditional courts, only evidence presented in the court is considered.

The prosecutor

Law minister

Justice and prison administration, governs the lawyer's profession and supervises the examinations of admission to the law profession.

Lawyers

The lawyer has an advisory role towards his client and must defend him.

Ministry of public safety

It is the authority of the police force. The police is responsible for maintenance of law and order, conduct investigations and arrest suspects in criminal cases.
May intervene in settling disagreements between private individuals.

Customs Procedures

Import Procedures

The Chinese importer (agent, distributor, joint-venture partner, or FIE) gathers the documents necessary for importing goods and provide them to Chinese Customs agents. These documents include: the bill of lading, the invoice, the packing list, the customs declaration, the insurance policy, the sale contract and the inspection certificate of the AQSIQ (General Administration of the PRC for Quality Supervision, Inspection, and Quarantine) or other licenses of safety and quality. To reduce customs clearance time, certain companies can- in cases where description, specifications and quantity of import of goods are determined- declare to the customs in advance and present the documents after the imports are dispatched, before the arrival or in the three days which follow the arrival of the goods in a customs surveillance zone. The Customs authorities will examine the goods directly and will release the goods after their arrival.

Customs declarations can be done via the customs site. Exporters must indicate the place of arrival of the goods and they must complete all customs data. Once the data is analysed by the customs, a receipt will be sent, so that the company can complete the cargo of the goods. Custom duties can then be paid by bank transfer.

For more information, please visit the website of Chinese Customs.

Specific Import Procedures

The import of food and beverage in China is supervised by multiple government agencies and departments, mainly the State Administration for Market Regulation (SAMR), the National Health Commission of China (NHCC), and the General Administration of Customs of China (GACC). Exporters and Importers of foreign food and beverage must be recorded through the “Registration Systems of Imported Food and Cosmetic Importers and Exporters” or the “Internet + customs platform” of the GACC. Furthermore, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) requires registrations for the import of cereals and oilseeds and live seafood.  Similarly, the China Food and Drug Administration (CFDA) has issued registration requirements for infant formulae, health food, food for special medical purposes and new requirements for online food trade.

Certain items are prohibited from entering China: arms, counterfeit currencies, documents which are deemed to be detrimental to the political, economic, cultural and moral interests of China, lethal poisons, illicit drugs, disease-carrying animals and plants, foods, medicines, and other articles coming from disease-stricken areas, used garments, local currency, etc.

Importing Samples

From 9 January 2019, the ATA (Temporary Admission) carnet can be used for the import, export and re-export of trade samples. It must be written on the product that it is a free sample and cannot be sold. China now accepts ATA Carnets for Commercial Samples (CS) and Professional Equipment (PE). Previously China only accepted ATA Carnets for Exhibitions and Fairs (EF) which is limited to 6 months or less from the date of entry. Both CS and PE are accepted to stay up to the full validity period of the carnet (up to 12 months).

For more information contact the Customs General Administration of the People's Republic of China.

Customs Duties and Taxes on Imports

Customs threshold (from which tariffs are required)

RMB 50

Average Customs Duty (Excluding Agricultural Products)

7.6% (a relatively low rate). For more information, click here.

Products Having a Higher Customs Tariff

Duties vary from 3% to 30% depending upon whether imports are encouraged or not (import of automobiles is for example discouraged) by the authorities.

Preferential Rates

Granted to imports coming from countries with which China has signed trade agreements (e.g. Asia-Pacific Trade Agreement; ASEAN–China Free Trade Area; Mainland and Macau Closer Economic Partnership Arrangement). China may apply preferential tariff rates in the case of goods that the Government has identified as necessary to the development of a key industry.

Customs Classification

China applies the Customs Harmonised system (on the basis of the international six figure key). 

Method of Calculation of Duties

Customs duties are calculated Ad valorem on the CIF value. The amount of customs duties depends on the price or value of the imported goods. It is calculated on the price of the goods subject to the transaction. Besides the basic value of the goods, this amount also includes transport costs and insurance premiums paid to protect the goods before their arrival in China. The value does not include value added taxes or consumption taxes. To assess a value, all Customs officers have access to a valuation database that lists appropriate valuations for various imports, based on international market prices, foreign market prices and domestic prices. Customs officers check the price reported by the importer against this database. Normally, Customs officers will  accept the importer's price, unless the reported value is too far out of line with the database. For agricultural products, China Customs information frequently does not reflect seasonal changes in pricing or the effects of quality/grade on pricing. As a general rule, China Customs will charge based on the highest price reflected in their database.

Method of Payment of Customs Duties

There are two ways to pay import taxes:

• Pay directly to the customs agency
• Pay through your shipping company, which will pay in advance and require payment before the final delivery of the products.

Import Taxes (Excluding Consumer Taxes)

The following three types of taxes are applicable to companies importing products from or exporting products to China: customs duties, value-added tax and consumption tax. Value-added tax is a form of a consumption tax that is imposed on a product when the value is added at each stage of the supply chain, beginning with production to the end sale. In China, the consumption tax is applied to the following five categories of products:

• Products that are harmful to health, social order and the environment, including tobacco, alcohol, and fireworks
• Luxury goods such as precious jewelry and cosmetics
• High-energy consumption and high-end products like motorcycles and passenger vehicles
• Non-renewable and non-replaceable petroleum products like diesel oil and gasoline
• Financially significant products like tires for motor vehicles

Labeling and Packaging Rules

Packaging

It must be in conformity with medical and safety regulations. Packaging materials must not be poisonous or dangerous and must be easily degradable and recyclable. All wood packages should carry an IPPC mark, or they will be subject to further requirements.

Languages Permitted on Packaging and Labeling

All products sold in China must have their labels or notes in Chinese.

Unit of Measurement

The metric system is used in China, but Chinese measuring units are also used.

Mark of Origin "Made In"

Information on the country of origin of the product must clearly be indicated.

Labeling Requirements

Name and address of the distributor registered in the country.

Specific Regulations

Labels for food products must contain the net weight, the list of ingredients, the address of the Chinese distributer, the date of production and the expiry date.
The General Administration of the RPC Condition for the Supervision of Quality, the Inspection and the Quarantine (AQSIQ) must be competently handled by the labeling management. All wood packages should carry an IPPC mark, or it will be subject to further requirements. Products requiring the China Compulsory Certification CCC mark, in addition to undergoing an application and testing process, must have the mark physically applied on products before entering or being sold in China.

Distribution Network

E-commerce

Internet access

As of July 2017, there were 751 million internet users in China (almost 20 million more than 2016), thus the internet penetration rate in China reached 54.3%, up by 1.1% from the previous year. Nevertheless, the difference in penetration between urban and rural areas remains high, the latter recording a rate of 34% compared to 73.3% of urban areas. In terms of network usage among internet users, the urban-rural gap is smallest in instant messaging, where the rural penetration rate is only 2% lower than urban, but when it comes to business transactions, mobile payments, news, and similar applications, the gap is much higher. Beijing, Shanghai, and Guangdong are the top three regions in China with the highest internet penetration rates of over 74%. The number of mobile internet users in China rose to reach 724 million at the end of the first half of 2017. Smartphones were the top devices for internet access in China in 2016 with over 95% users, followed by desktop computers (60.1%) and laptops (36.8%). The search engines market is dominated by local players, with Baidu having a prominent role (76%), followed by Shenma (8.78%), 360 Search (7.87%) and Sogou (3.31%).

E-commerce market

China is the largest e-commerce market in the world. According to eMarketer, e-commerce sales in China are estimated to have passed US$ 1.13 trillion in 2017, accounting for nearly half of the worldwide retail e-commerce sales and 23.1% of all retail sales in China (with an expected increase to 40.8% by 2021). The growth compared to 2016 reached a spectacular 33%. The total number of e-shoppers is projected to surpass 650 million by 2018. In recent years, the online retailing growth was driven by third and fourth tier cities, and for the first time, these cities have surpassed first and second tier cities, due mostly to Alibaba’s investments in delivery infrastructure across the nation that facilitated greater access to rural and smaller urban areas. The top five categories of internet applications in China are instant messengers, news, search engines, videos, and music. In 2017, 45.3% of Chinese companies deployed online sales activities, 45.6% online purchase and 38.7% online marketing. Alibaba is the biggest Chinese e-commerce platform, with more than 500 million people using its shopping apps. The group as a whole - which includes Taobao, TMall, and Alibaba.com together with the payment platform AliPay and other businesses – had a turnover of US$ 23.8 billion and lead operations in more than 200 countries. Tmall - a Chinese-language website for B2C online retail operated by Alibaba Group and one of the world's top 20 most visited websites – is a platform for local Chinese and international businesses to sell brand name goods to consumers in mainland China, Hong Kong SAR, Macau SAR and Taiwan, China. JD.com is one of China’s largest online retailer by revenue, offering direct sales of electronics products, general merchandise, books, home appliances, digital communications, apparel, food, and other goods. Vipshop Holdings is one of China’s leading online discount retailers and distribution companies, characterised by flash sales and time-limited offers. Other platforms include Suning, Gome, Yihaodian, Dangdang, Amazon.cn, and JMei. China’s whole digital scene is mobile dominated, so that optimising store pages for mobile is of pivotal importance. Virtual reality shopping has also exploded with consumers able to explore products digitally via virtual reality simulations. Intellectual property rights infringement across e-commerce platforms is common in China.

E-commerce sales and customers

According to the U.S.-China Business Council, roughly half of all China’s e-commerce sales are made on mobile devices, nearly 16% more than the global average. The rise of m-commerce is expected to continue, with eMarketer predicting more than 75% of ecommerce sales – over US$ 1 trillion - will be transacted via a mobile device in the next future. Cross-boarder shopping is also growing, with Chinese buying abroad items that are either too expensive or too scarce at domestic vendors. Chinese consumers’ primary motivation for shopping online has moved from price, assortment and convenience to quality, value, service and experience. Thus, developing a platform with a smooth, intuitive shopping experience is evermore an important factor in the Chinese e-commerce market. The ease and security of e-payment (with mobile apps connected to a user’s banking) is also cited as a key reason for the rise of e-retail spending. China’s mobile digital payment systems via WeChat & Alipay are widely used (nearly half a billion businesses within China use Alipay and consumers are now even using it overseas when they travel). Credit card remains the main payment method, while cash on delivery, PayPal, debit card and bank transfer are less used.

Social media

China is the world's largest social network market. As of 2018, there are an estimated 911 million social network users in China (Hootsuite). Leading international social-media platforms (such as Facebook, Twitter, Instagram, WhatsApp, Snapchat, Pinterest, Tumblr etc.) as well as video/audio streaming platforms (such as YouTube, DailyMotion, Vimeo, Twitch, Spotify etc.) are all blocked in China due to the Chinese government’s restrictve internet filtering policy (also referred to as the “Great Firewall”). The majority of Chinese digital consumers use social media to do product research or get recommendations. The three biggest social media players are WeChat (963 million monthly active accounts), a social network QQ Zone (861 million monthly active accounts) and a micro blog Weibo (300 million monthly active users). WeChat allows retailers to feature online stores and has a third-party payment function.  It also features push messages to introduce new product lines or deliver promotions. In early 2018, WeChat reached 1 billion user accounts across the world. With Weibo (a hybrid between Facebook and Twitter), in addition to publishing long articles with images or short posts, hyperlinks or videos, users can also repost, comment, search and send messages on trending topics. Weibo has also had an impact with influencers: Weibo posts for brand influencers are now used for direct product promotion and sales, especially since the platform was purchased by Alibaba. QQ is a messaging platform owned by Tencent, the same company that owns WeChat. It started as a desktop app rather than a phone app, in fact users don't need a phone number to use QQ, which means younger people who don't have a phone yet can use it to send and receive messages. Youku - one of China’s top online video and streaming platforms - is more similar to YouTube, except that it contains more professionally created videos compared to the more user generated content of YouTube.

Direct Selling

Evolution of the Sector

According to the World Federation of Direct Selling Associations, China's direct retail sales in 2016 amounted to USD 33,888 million, a 1.9% increased compared to 2015. Although an official number of independent representatives is not available, deep-rooted problems such as the wealth gap and unbalanced development of urban areas vs provinces make direct selling attractive to Chinese citizens.

Euromonitor International highlights the Chinese government revised its direct selling laws in 2016 to cancel the three-year of experience requirement before companies are allowed to enter China's Free Trade Zones (Shanghai, Guangdong, Tianjin, and Fujian). On March 13, 2016, China's Ministry of Commerce restricted direct sales products to cosmetics, cleaning products, health food products, health care equipment, small kitchen implements, and household electronic appliances.

National companies have fared better than international direct selling companies; Perfect and Amway both saw lowered value in their sales while local companies improved their performance. However, Nature (NSP China) did see a 91.4% increase in net sales in 2017 compared to 2016. Best World International, a Singapore company, has also had success by introducing its products through a network of nail spas, beauty and hair salons in second-tier cities instead of taking the traditional direct selling route in top markets. This strategy allowed them to grow aggressively, with Bloomberg projecting a USD 196 million revenue stream for 2017 and its stock climbing more than 220% in 12 months.

As in other countries, e-commerce poses the greatest threat to the industry. This is especially true in younger generations that prefer to buy health and beauty products online.

Commercial Intermediaries

Trading Companies

 

• Type of Organization

A foreign company wishing to export products in China must obtain distribution and trading rights. The foreign company can have recourse to a Chinese trading company. These trading companies generally have authorizations to trade a vast range of products. The big trading companies have some offices everywhere in the world and on the Chinese territory. However, transport and diversity of the regions do not allow them to operate on the whole of the Chinese territory. The FICEs (Foreign invested commercial enterprises) can also obtain import and export licenses since 2006.

• Main Actors

China Qingdao Hong Jin Trading Company Ltd, Nexfar Ltd, Wenzhou Nanlong import & export trading company Ltd

Wholesalers

 

• Type of Organization

In China, distribution comprises services of an agent, wholesaler and retailer services. A commercial intermediary is indispensable for selling products: a wholesaler, an import-export company, etc.

• Main Actors

Chinese wholesalers

Using a Commercial Agent

The Advantages

Using the services of a commercial agent is generally necessary for business in China. China has many local sales agents who handle internal distribution and marketing. Most of these firms do not have import/export authorisation. Localised agents possess the knowledge and contacts to better promote products and break down institutional, language, and cultural barriers and can assist in keeping track of policy and regulatory updates, collect market data and quickly respond to changes. This is particularly the case in a tender process. Given the width of the Chinese territory, It is advised to have recourse to several agents for each region.

Where to Be Vigilant

Employing a third party results in an additional cost and some control and visibility loss over sales/marketing. It also increases the risk of your product being copied or counterfeited.

Elements of Motivation

The commission amount is an important element of motivation.

The Average Amount of Commission

10 to 20% according to the sectors.

Breach of Contract

During the end of the agency contract or if the agent ends the contract, the agent is entitled to a remuneration of an appropriate amount.

Finding a Commercial Agent

Finding a commercial agent
Alibaba

Setting Up a Commercial Unit

The Advantages

To be able to locally manage its own presence, its own teams and marketing trends. In other words, one can establish commercial relations with China directly from Europe. But to obtain convincing results, investments must be made in developing relations by establishing a local presence. Whether for purchases or sales, the problems faced are primarily dependent on the execution of services.

Where to Be Vigilant

- Cultural differences, difficulties of managing Chinese teams
- administrative difficulties
- Relative absence of legal groundwork (attention copyright)
- Dissensions with foreign partners

Read the work of Benoit AMS on the difficulties faced by foreign companies in making deals in China.

Different Possible Forms of Settlement

 

• A Representative Office

For the majority of the foreign companies, the first form of establishment in China is the representative office. For a long time, it was the only possible form of presence involving 100% of foreign assets. It remains today the fastest and simplest presence to establish, as well as the cheapest (in terms of both establishment and operational fees). The representative office does not facilitate trading in Chinese territory, but enables the following: renting offices (only in certain types of buildings), e-recruiting personnel (via FESCO) and organising follow-up actions to market operations (carrying out market research, promoting products of the parent company, generating customer and supplier contacts and supervising and coordinating the local operations of the parent company).

The representative office of a foreign company is a "hybrid" structure as it does not enjoy any legal status under Chinese law. In other words, a representative office structure does not allow you, for example, to register a brand (which must be done by the parent company) or to initiate legal actions against a third party. A representative office may employ no more than four foreign representatives at a time. Moreover, the existence of an "X" company representative office cannot prevent setting up an "X" Chinese company in the same city. Finally, the representative office head in China is legally responsible on his or her own behalf for the activities of the structure. The office is however a structure adapted relatively well to the management of local partners, suppliers or distributers.

In the last few years many companies have opted for a wholly foreign owned consulting or service enterprise rather than a representative office, as this offers more flexibility and allows invoicing and collection of RMB payments.

• A Branch Office

No possibilities of creating a branch office.

• A Company

Companies with 100% foreign capital (WOFE): this structure presents, on paper, many advantages, including considerable independence as compared to the local partner, which may lead to various "problems." Today, foreign companies can create a WFOE (Wholly foreign owned enterprise) in trade(import/export activities with due respect for local sales), production/assembly (local and foreign sales for local and/or export resale) or in services (to companies or to private individuals).

The concerned activity type will have to be defined very specifically in your project. For example, a distribution firm cannot manage logistics, including storage or delivery (logistics is a closed sector to foreigners) and thus delivery must be sub-contracted to a specialised logistics company.The process of establishing a WFOE is quite long. WFOEs generally have to register capital, unless their scope of business relates to consulting, trading, retailing or information technology. In China, regulations are not the same for everyone; they are arbitrary, complex, in constant change and opaque. Also, general terms presented by the central administration are only a reference base requiring negotiations on a case-by-case basis with authorities responsible for industrial parks, provinces or districts of municipalities,which enjoy broad discretionary power in negotiations with foreign investors. 

Finally, WFOEs are generally set up for a period of 15 to 30 years.

Franchising

Evolution of the Sector

China is one of the largest franchise markets in the world and a key target for international franchisors due to its large middle-class consumer base. In January 2019, the Ministry of Commerce (MOFCOM) reported 4,368 franchisors registered with it, while unofficial statistics indicate that China already has over 4,500 franchises and chains with about 400,000 outlets in operation, making China one of the largest franchise markets in the world. Among the franchises registered , many are national and small brands, with an average of about 90 outlets per franchise system. The Chinese franchising market is dominated by traditional franchise operations like food and beverage (F&B) and retail outlets. According to China Chain store and the China Franchise Association (CCFA), China’s food and beverage sector reached approximately $595 billion in 2019, a 7.8% increase over 2018.

Foreign franchise brands are receiving greater interest from second and third-tier market developers as markets in Beijing and Shanghai become more saturated. It's noteworthy that some major locations that were abandoned by foreign multinationals over the past few years were almost all in first-tier cities where their Chinese story began. High rent is expected to hit more foreign franchises in Beijing and Shanghai. However, there is room for growth in China's west and inland regions that boast advantages such as lower labor costs, reasonably-priced real estate facilities and untapped consumer spending. Additionally, we are seeing an increase in food and beverages companies entering the market as wholly owned enterprises to manage their brand, demonstrate proof-of-concept and create a strong foothold prior to expanding into the franchise model.

The most recent legislation released by the Ministry of Commerce (Commercial Franchise Administration Regulation 2007) stipulates that franchise firms can start franchising in China as long as they own and operate two company-owned stores for one year in any part of the world. In addition, franchise firms must file with the local commercial authority for record within 15 days after the execution of the initial franchise contract.

Some Big Franchises

Mc Donald's, fast food
Subway, fast food
Century 21, real estate agencies
The 10th Shanghai International Franchise Exhibition

Finding Assistance

Export Trading Companies

Be-long Corporation
Chamber of commerce for import export of machines and electronic products
Chamber of commerce for import export of agricultural products

Recommended Resource

NEW STEP INTERNATIONAL LIMITED - INTERNATIONAL BUSINESS CONSULTING

China Trade Portal
Asia Trade Hub

Type of Production

Industry (including construction) amounts to 39% of Chinese GDP, according to the World Bank. Principal industries in China are mining (world leader in reserves of tungsten , molybdenum and titanium), coal (world leader in coal production and consumption), metallurgy, petrochemicals, naval (leading shipbuilding nation), automotive (China was the leading market for motor vehicle production with about 25.7 million cars and commercial vehicles produced in 2019) and energy (second producer in electrical energy). China is also the world's biggest producer of electric household appliances products (creating one third of worldwide production), third largest producer in data-processing products (second for the PC), the largest producer of toys (70% of worldwide production), largest producer of shoes and the largest producer and exporter of textiles.

Type of Manufacturers

Original Equipment Manufacturers

Chinese OEM's are in automobile industry aeronautics industry, mobile phone industry and laptops. Many of these OEM are at the same time, ODM's.

Original Design Manufacturers

The ODM in China specializes in the manufacture of electronic products with a cost advantage. Certain ODM are well internationally established OEM. Several startups are specialized in wireless, digital products or instrumentation. Some examples are: China Electronics Corp., Panda Electronics, Shinko Electronics.

Subcontractors

China is one of the 3 great centers of international subcontracting. Subcontracting is particularly developed in China in the textile and shoe industry, in the mechanical engineering and machinery industry. China has cheap labor, university graduates speaking foreign languages and a telecommunication network and an ever expanding Internet.

Useful Resources

Chinese sourcing summit

Business Directories

Multi-sector Directories

2345 - Multi-sector directory for the Chinese market
2FindLocal China - Multisector directory for the Chinese market
All.biz - China - Directory of companies in China
BizExposed China - Business directory for China
BizPages China - Chinese business directory
Bloombiz China - Business directory for China
Business Directory China - China business directory
China and Taiwan Products Online - Directory of manufacturers from China and Chinese Taipei.
China Business Directory - Business directory for China
China Directory - Chinese business directory

Marketplaces

Marketplaces incorporated in the country

1688
21food
Alibaba
Aliexpress
B2B China Sources
ChemNet
China Textile Network
CHINA.CN
Chinamarket
DHgate

Marketplaces present on the continent

AsiaTradeHub
CargoSmart
EquipNet
FreeMarketsDefence
Komachine
SalvageSale
ShipServ
StoneBTB.com
SupplyOn
SurplusGLOBAL

Fairs and Trade Shows

Upcoming Trade Shows

D•PES SIGN EXPO CHINA - CHANGSHA

February 1st, 2023

CHINA VMF

February 1st, 2023

CSF

February 1st, 2023

PROLIGHT + SOUND GUANGZHOU

February 1st, 2023

CHINA PET FAIR

February 1st, 2023

SOUNDLIGHT GUANGZHOU

February 1st, 2023

PLCE

February 1st, 2023

D•PES SIGN EXPO CHINA - CHONGQING

February 1st, 2023

CIAACE

February 1st, 2023

D•PES SIGN EXPO CHINA - GUANZHOU

February 1st, 2023

Other Useful Resources

Trade Agencies and Their Representations Abroad

Chamber of Commerce for Import and Export of Minerals, Metals and Chemical Products (CCCMC)
Chinese agencies of assistance to investment abroad

 

 

Finding Assistance

Recommended Resource

NEW STEP INTERNATIONAL LIMITED - INTERNATIONAL BUSINESS CONSULTING

Main Useful Means of Transport

Ten ports in mainland China are included among the 30 top container harbors in the world. The port of Shanghai is by far the busiest in the world. The cargo turnover of Shanghai port exceeded 40 million twenty-foot equivalent shipping units (TEUs) in 2018 (latest data available). In 2018, the country shipped 249.8 million TEUs, which was a 5.3% increase on the previous year.

Road freight is the most prominent mode of cargo transportation in China. As of 2018, China had one of the largest road networks in the world. It measured around 4.8 million kilometers, second only to the United States. In 2019 there was a drop in the total volume of goods transported by road in China. Nonetheless, in 2019, cargo road freight traffic volume in China amounted to nearly six trillion ton-kilometers.  

In 2019, the cargo volume of China's air freight traffic amounted to approximately 26.32 billion ton-kilometers. China currently has 238 civil aviation airports, including the world's second busiest in Beijing.

Railroads are the principal mode of transport and the cheapest solution for long distance freight. In 2019, the volume of China's rail freight traffic had amounted to 3.02 trillion ton-kilometers. The country's state railways transported 299 million tons of freight in May 2020, an increase of 11.15 million tons compared to a year ago, according to data from China State Railway Group Co Ltd. There are currently a total of 141,400 km of railway lines in China, including 36,000 km of high-speed lines, the most important in the world, according to China State Railway Group figures. China aims to have about 200,000 kilometers of railway tracks by the end of 2035, including about 70,000 km of high-speed railway.

By Sea

Ports

Shanghai Port
Dalian Port
Guangzhou Port

Transport Professionals

Gefco China
Sinotech International Transportation Co., Ltd.
Zim Integrated Shipping Services

Government Transport Organisations

Ministry of Transport

By Air

Airports

Beijing Airport
Dalian Airport
Shanghai Airport
Chengdu Airport
Guangzhou Airport
Shenzhen Airport

Transport Professionals

Air China
China Southern Airlines
Shanghai Airlines

Government Transport Organisations

Ministry of Transport

By Road

Transport Professionals

Chinese association of road transport (in Chinese)

Government Transport Organisations

Ministry of Transport

By Rail

Transport Professionals

Guangshen Railway Company
China Railway Tielong Container Logistics Co., Ltd

Government Transport Organisations

Ministry of Transport

Wholly foreign-owned enterprise (WFOE)

Number of partners: One juridical person or one or more shareholders.
Entity owned 100% by foreign interests that have the same rights as a local company.
Capital (max/min): Minimum varies according to the sector of activity.
Shareholders and liability: Limited to the amount of contributions.

Equity Joint Venture (EJV)

Number of partners: Minimum of one Chinese entity and minimum one foreign entity.
Capital (max/min): No minimum capital required, but at least 25% must originate from foreign investors.
Shareholders and liability: Limited to the amount of contributions.

Co-operative Joint Ventures (CJV)

Number of partners: Minimum of two partners: one Chinese entity and one foreign entity.
Capital (max/min): No minimum capital required.
Shareholders and liability: Limited to the amount of contributions.

Foreign Investment Joint Stock Company (JSC)

Number of partners: Minimum two partners.
Capital (max/min): Minimum capital needed: CNY 5 million if domestic capital, CNY 30 million if foreign capital.
Shareholders and liability: Each shareholder contributes the same amount to the share capital and is linked to the company by its share of the share capital.

Holding

Number of partners: Minimum one  partner.
Capital (max/min): Minimum capital USD 30 million.
Shareholders and liability: Each shareholder contributes the same amount to the share capital and is linked to the company by its share of the share capital.

Business Directories

Financial Information Directories

Dun & Bradstreet - Worldwide directory with financial information on businesses
Kompass China - Business directory for China

Professional Associations

General Professional Associations

CISASME - Chinese Association of International SME Cooperation

Business Setup Procedures

The Competent Organisation

Ministry of Commerce

For Further Information

Doing Business: China, to learn about procedures to start a business in China

Recovery Procedures

Principle

Minimum Debt-to-Capital Ratio Triggering Liquidation

Bankruptcy Laws

Company bankruptcy laws
The law on bankruptcy is being reshaped in China. It is difficult to be declared as bankrupt. To be declared as bankrupt, equities must be negative.

Reorganization and Rehabilitation Laws

Company bankruptcy laws

For Further Statistics

China Statistics

For Further Information About the Labour Market

ILO, International Labour Organisation

Opening Hours

 

• Legal Weekly Duration

40 hours

• Maximum Duration

8 hours per day with a maximum of 44 hours per week on an average. Not more than additional 36 hours per month.

Working Rest Day

Two-day weekend (Saturday and Sunday off)

Paid Annual Vacation

Retirement Age

The retirement age is 55 for women and 60 for men.

Child Labour and Minimum Age For Employment

More than 15 years for the industry. For other sectors, children can work at 13-14 years under certain conditions.

Informal Labour Market

Moonlighting is estimated at 18.5% of national workers and 72.5% of foreign workers.

Pay

Minimum Wage

The minimum wage varies across the provinces. Currently, the highest monthly minimum wages are in parts of Guangdong, Jiangsu, and Zhejiang provinces, which have all surpassed the RMB 2,000 (US$289) mark. Shanghai continues to have the highest minimum wage in China, at RMB 2,480 (US$358) per month, followed by Shenzhen and Beijing, both at RMB 2,200 (US$318) per month. Among the lowest minimum wages are those in some rural areas: Liaoning (1,120 RMB/US$162), Hunan (1,130 RMB/US$163) and Anhui (1,150 RMB/US$166).

Consult China Briefing's 2020 minimum wage guide for more information.

Average Wage

The average monthly salary was 8,452 yuan ($1,228.38) in 37 major cities during the second quarter of 2019, with Beijing, Shanghai and Shenzhen all topping 10,000 yuan.
NB: the average wage varies according to the provinces.

Other Forms of Pay

• Pay For Overtime

Increase of 150% if the worker is requested to work more.
Increase of 200% if an additional rest day cannot be granted.

Social Security Costs

The Areas Covered

Pension, medical, maternity, unemployment and work-related injury insurance schemes are provided.

Contributions

Contributions Paid By the Employer:

Contributions vary across the country and for different schemes. China’s Social Security System consists of 5 mandatory insurance schemes (pension fund, medical insurance, industrial injury insurance, unemployment insurance, and maternity insurance) and a housing fund (only applicable to Chinese employees). In Beijing, the employer's share of social insurance contributions amounts approximately to 27.8% to 29.5%:

• Pension 16%
• Medical expenses 10%
• Unemployment 0.8%
• Maternity 0.8%
• Work-related injury 0.2% to 1.9%

Contributions Paid By the Employee:

Contributions vary across the country and for different schemes. China’s Social Security System consists of 5 mandatory insurance schemes (pension fund, medical insurance, industrial injury insurance, unemployment insurance, and maternity insurance) and  a housing fund (only applicable to Chinese employees). In Beijing, the employee's share of social insurance contributions amounts approximately to 10.2%:

• Pension 8%
• Medical expenses 2%
• Unemployment 0.2%
• Maternity 0%
• Work-related injury 0%

Recruitment

Method of Recruitment

Recruitment is done more and more through Internet. But announcements in the newspapers are the most used means for the job offers. Numerous trade fairs are also organized and are a good means to recruit. Recruitment campaigns in the universities are also organized. The most prevalent method of recruitment is the interview. Certain companies must also pass technical or English tests. The psychological tests are not used in China, however role playing, simulations or group interviews are becoming more and more common.

Recruitment Agencies

List of the Top Recruitment Agencies in China

Recruitment Websites

ChinaHR.com
Zhaopin.com
51job.com

The Contract

Dispute Settlement

Social Partners

Social Dialogue and Involvement of Social Partners

While worker protests and work stoppages occur regularly, the right to strike is not protected by law. China has not ratified core International Labour Organisation conventions on freedom of association and collective bargaining. The enforcement of existing labour regulations is reportedly insufficient. The only trade union recognised by the Chinese Communist Party is the All China Federation of Trade Unions (ACFTU). As independent trade unions are illegal, some claim that the ACFTU can be an effective voice for workers.

FDI STOCKS BY COUNTRY AND BY INDUSTRY

Strong Points

Strong points for FDI in China include:

• The largest internal market in the world, with 1.44 billion potential customers
• Sovereign risk contained as public debt remains mainly domestic and denominated in local currency
• Importance of foreign currency reserves and public debt owned by Chinese government and individuals
• A well-developed production sector (manufacturing sector and heavy industry)
• A favourable geographic location (close to emerging Asian markets, to Japan, maritime frontage)
• Top economy in terms of purchasing power parity (PPP) thanks to rapid growth of the economy
• Labour costs remain comparatively low, although the situation is changing in certain areas
• New opportunities with the development of the western provinces (particularly Sichuan province)
• Development of a new export network (Silk Road network)

Weak Points

Some of the disadvantages for FDI in China include:

• An ever-changing legal environment
• Bureaucratic and administrative complexities
• A lack of transparency and weak intellectual property rights protection
• Ageing population
• High level of corporate indebtedness
• Production overcapacity in several sectors
• A strongly degraded environmental situation in several big cities
• Cultural differences in business practices that may be difficult for foreigners to learn and apply in new business situations
• Underdeveloped middle management and low rate of qualified workers

Government Measures to Motivate or Restrict FDI

Generally speaking, the Chinese government is more restrictive than other big economies in regard to foreign investment, with numerous sectors closed to FDI. State companies and "national flagships" are protected (discriminatory practises, non-independent judicial power, selective application of regulations). Until a few months ago, the Chinese state required forced technology transfer and its system of intellectual property protection was among the weakest in most industrialised countries.

The Chinese government encourages investment in the following industries or sectors: high technology, production of equipment or new materials, service sector, recycling, use of renewable energies and protection of the environment. In addition, the country appears to discourage foreign investment in key sectors, for which China seeks to transform domestic firms into globally competitive multinational corporations and sectors that have historically benefited from state monopolies or traditionally of State. The government also discourages investments intended to profit from speculation (money, real estate, or assets). In addition, the government plans to limit foreign investment in resource-intensive and highly polluting industries.

The Law on Foreign Investments of the People's Republic of China, adopted at the second session of the 13th National People's Congress on 15 March 2019, has been in force since 1 January 2020. The new Foreign Investment Law seeks to address common complaints from foreign businesses and governments. The Law specifically prohibits the government and government officials from forcing transfer of technology, while technology cooperation on the basis of free will and business rules is encouraged by the state. Indeed, article 22 stats that the State shall protect the intellectual property rights of foreign investors and foreign-funded enterprises. The law also gives the possibility to foreign investors to receive the same treatment when they apply for licences (article 30) and participate in public procurement (article 16). The competent departments for commerce (Ministry of Commerce) and for investment (National Development and Reform Commission) are delegated major responsibility to promote, protect and manage foreign investment.

On June 23, 2020, the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOF) jointly issued two "negative lists" (on Foreign Investment and Free Trade Zone Special Administrative Measures) and a draft edition of the Catalogue of Encouraged Industries for Foreign Investment. Compared with the 2019 edition (full list in Chinese available here), the proposed 2020 Foreign Investment encouraged catalogue has been further lengthened, with 125 new industries added and 76 previously listed industries amended. There are no major changes compared to the 2019 catalogue; it welcomes more FDI in the following three main areas of China: high-end production; production-oriented service industries; China’s central, western, and northeastern provinces.

Bilateral Investment Conventions Signed By China

China has signed bilateral agreements for investments with several countries. To see the list of the countries, consult UNCTAD website.

International Controversies Registered By UNCTAD

The ISDS Navigator contains information about known international arbitration cases initiated by investors against States pursuant to international investment agreements. China is involved in 6 cases as Home State of claimant and in 3 cases as Respondent State.

Organizations Offering Their Assistance in Case of Disagreement

ICSID, International Center for settlement of Investment Disputes

Member of the Multilateral Investment Guarantee Agency

China is a signatory of the Convention of MIGA.

Categories of Restaurant

 

• Fast food

Sandwich, Hamburger

• Western restaurants

European, Asian, American cuisine

• Chinese restaurant

Chinese, regional cuisine

Price Indications

Food Specialties

Chinese cuisine is rich and refined, with several regional varieties:

- Beijing and Shandong cuisine gives a lot of importance to steamed noodles and the specialities are Peking duck and Beggar's chicken (wrapped in lotus leaves and cooked over the embers for a whole day).
- Cantonese and Chaozhou cuisine is the most famous variety of Chinese cuisine abroad. It favours steam cooking, boiled or sauteed preparations. Among its specialities are dim-sum (small, steamed or fried dishes), snake soup, dog, rat or owl stew.
- Eastern Chinese cuisine specialises in spare ribs, seafood and soups.
- Sichuan cuisine is said to have 4,000 dishes, including gonbao jiding (chicken fried with peanuts and chili peppers), mapo doufu (pork with tofu and onions), guoba roupian (puffed rice served with pork in its gravy).
- Cuisine from Shanghai (where Northern and Southern culinary styles meet) is quite sweet. One of the most popular dishes is xiaolongbao.

Drinks

Beer (píjiÇ”) is very common in China and is served everywhere. The most popular label is Tsingtao. Chinese beers are light and generally have an alcohol content of 3%-4%. Their price is from CNY 2.5 to 4in stores, CNY 6 to 20 in restaurants, about CNY 20 in a regular bar and CNY 30 to 60 in the trendiest bars. Red wine is common and reasonably priced at CNY 15 in stores and about CNY 100-150 in trendy bars. Great Wall, Chang Yu and Dynasty are some of the major labels, each with wines at different prices. The Chinese people often translate baijiu (white alcohol) as 'white wine,' but this sorghum spirit has 40-60% alcohol.

Dietary Restrictions

Culinary restrictions vary from one religion to another.

Table Manners

The guest is always seated facing the door, never with his back to the door. Allow the Chinese to seat you since they will show you where to sit.
It is a usual practice to serve you local specialties and to flood the table with a variety of dishes. In return, they will appreciate it if you taste all the dishes, show interest and above all appreciate the dishes.
It is common to talk about one's travel in China and abroad and also about family before starting to talk business. A meal offers a friendly atmosphere to not only talk business but to build a good relationship.

Means of Transport Recommended in Town

Recommendation

Moving about in the city is done primarily by taxis- there are a lot of them (60,000 in Beijing) and they are quite inexpensive. Unregistered 'black' taxis are to be avoided. The size of the cities makes walking around difficult. The cities are very congested, so plan ahead and leave early for an appointment.

Beijing has five metro lines while Shanghai has nine of them. Magnetic charge cards for the metro are very useful since they can also be used to pay taxis. They can be charged at all the metro station ticket counters and at the local grocery stores.

Buses are plenty and cheap, thought may be uncomfortable because they are often jam-packed.

You should always travel with addresses of places where you want to go written in Chinese since the pronunciation does not often correspond to the transcription in Pinyin.

Maps of Urban Networks

Maps of China: University of Texas Library Online
Mapblast

Urban Transport Agencies

Beijing Metro

Taxi Companies

Haibo Taxi
Guide to taxis in Shanghai

Transportation From Airport to City Centre:

Means of Transport Recommended in the Rest of the Country

Recommendation

Bus is the primary means of transport between cities. Trains are generally in good condition, but the links are usually slow (Canton-Beijing can take 36 hours). Air travel is often utilised for longer distances, with travels generally adhered to (although many airports have reached their saturation levels). Domestic airlines have a low rate of accidents.

For more information on the means of transportation, visit the China Vista website.

Airlines

You Can Consult The EU Air Safety List. Look Also at the rating of the United States Federal Aviation Administration (FAA).

Travelling By Yourself

Recommendation

The state of the rapidly developing road network is satisfactory on the major roads, although they are poorly marked. Driving in China may be risky for those unfamiliar with the roadways and driving customs. It is better to rent a car with a driver or to hire a driver if you buy a car.

Driver's License

Holders of a valid driving license for a foreign country are eligible to apply for a driving license in the PRC. Only foreigners with a valid residence permit can apply for a Chinese driver’s license.
China does not recognize the International Driving Permit or other foreign driver’s licenses. For more details on applying for a Chinese driving licience click here.

Conditions For Renting a Vehicle

Foreigners not holding a Chinese driver's license cannot rent a car. It is however possible to rent a car with a driver. Rental agencies and travel agencies provide this type of service.

Rental Agencies

Alibabuy.com World
Website of the Avis car rental agency in China
Shanghai car rental, Shanghai car services

Find an Itinerary

Google Maps

Parking Facilities

The country has limited space to build parking lots. This problem will grow with the increase in the number of cars as the standard of living improves.

Rules of the Road

Minimum Driving Age

18 years

Side of the Road For Driving

Right

Speed Limits

30 km/h (19 mph) in single-lane city roads
100 km/h (62 mph) in express streets of the city
120 km/h (75 mph) on expressways

Safety Belts

Compulsory

Permitted Amount of Alcohol in the Blood

0

Quality of Communications

Good

Telephone Codes

To Make a Call From China, Dial 00
To Make a Call to in China, Dial +86

Number of Digits of National Telephone Numbers

10

Mobile Telephone Standards

GSM; CDMA

National Mobile Phone Operators

China Unicom; China Mobile

Availability of Internet

Internet Suffix

.cn

Access in Public Places

Easily accessible in big cities and small towns.

Access in Hotels

Almost all hotels have internet access.

Different Forms of Tourism

Historical

While Modern China has grown and expanded exponentially, there are still many sites dating back to ancient China.

Some examples of well-preserved ancient cities include Pingyao (in central Shanxi) and Lijiang (in Yunnan). Built in the Song Dynasty, Pingyao has many stone bridges, arches and homes dating back centuries, making it a great location for visitors wishing to study China’s architectural history.

Cultural

China offers many museums and temples for those interested in cultural tourism.

Notable examples include: Tienanmen Square, the Forbidden City and the Great Wall.

Nature

Options abound for natural tourism in China, ranging from rugged mountains to serene valleys.

China’s Five Sacred Mountains: Tài Shān, Huà Shān, Héng Shān (Shanxi), Héng Shān (Hunan) and Sōng Shān.

Gorgeous valleys can be found in southwestern China, including Jiuzhaigou which runs over 40km through mountains, lakes, waterfalls and forest.

Three Gorges of the Yangtze River (Qutang, Wu and Xiling).

Religious

Many Buddhist, Taoist and Confucian temples. Notable examples include the Shaolin Temple in Henan (the birthplace of Chinese Zen Buddhism and known for its Shaolin Kung Fu martial arts) and Mount Emei (dotted with numerous ancient Buddhist temples and structures).

Thermal

There are few European-style spas in China.

Beach

Hainan island, Sanya and the city of Qingdao in the Shandong province all offer spectacular beaches.

Winter Sports

Winter sports are not yet very well developed in China.

Outdoor Activities

Few

Shopping

Big department stores and shopping malls are being built all over the country. Western brands are established in the main Chinese cities. Markets such as Xiushui street and the antique market Panjiayuan in Beijing are good places to buy souvenirs.

Tourism Organisations

Travel China Guide

Cultural Organizations

State cultural heritage administration