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China Country profile

Economic, political and social situation, tax system, opportunities to invest and negotiate...

China

Capital: Beijing

Population

Total Population: 1,412,175,000
Natural Increase: -0.0%
Density: 150 Inhabitants/km²
Urban Population: 63.6%
Population of main cities:Shanghai (21,020,000); Beijing (18,431,000); Shenzhen (12,994,000); Guangzhou (Canton) (12,874,400); Tianjin (12,090,000); Chengdu (9,177,000); Wuhan (8,896,900); Chongqing (7,919,600); Dongguan (7,638,600); Hong Kong SAR (7,572,800); Foshan (7,508,800); Taipei (7,034,500); Hangzhou (6,970,000); Nanjing (6,500,000)
Ethnic Origins: According to Chinese authorities, more than 92% of the population are of Han Chinese origin, with Zhuang, Uighur, Hui, Yi, Tibetan, Miao, Mandchous, Mongol, Buyi, Korean and other ethnic origins forming about 8% of the population. (National Bureau of Statistics of China).
Official Language: The national language is Mandarin; however, there are many different dialects and variants of it.
Other Languages Spoken: There are more than a hundred dialects, with Mandarin in the north and Cantonese in the south of the country. The official language coexists with the other languages (Mongolian, Uyghur, Korean, Tibetan) of the autonomous regions.
Business Language(s): When the foreign party does not speak Chinese, business discussions will generally be held in English.
Religion: The Chinese are generally atheists. That being said, Buddhism, Taoism and Confucianism are relatively widespread amongst senior citizens and attract a part of the well-to-do class today. There are also Christian and Muslim minorities.
Literacy Rate:90.9%
National Currency: Chinese Yuan (Renminbi) (CNY)

Country Overview

Area: 9,562,910 km²
Type of State: The People's Republic of China is a one-party state led by the Chinese Communist Party (CCP). China is characterized by a centralized unitary State under the exclusive political leadership of the Chinese Communist Party (CCP). The Party has full jurisdiction and authority in the country. It consists of legislative, executive, military, supervisory, judicial and procuratorial branches. The National People's Congress (NPC) is the highest state organ, with control over the constitution and basic laws, as well as over the election and supervision of officials of other government organs.
Type of Economy: Second richest country in the world (GDP); emerging financial market.
Largest population in the world; highest GDP growth rate in the world over the last 10 years.
HDI*: 0.727/1
HDI (World Rank): 90/188

Note: (*) The HDI, Human Development Index, is an Indicator Which Synthesizes Several Data Such as Life Expectancy, Level of Education, Professional Careers, Access to Culture etc.

Telecommunication

Telephone Code:
To call from China, dial 00
To call China, dial +86
Internet Suffix:.cn
Computers:4.1 per 100 Inhabitants
Telephone Lines:20.6 per 100 Inhabitants
Internet Users:42.3 per 100 Inhabitants
Access to Electricity: 100% of the Population

Foreign Trade in Figures

 
Foreign Trade Indicators20182019202020212022
Imports of Goods (million USD)2,135,7482,078,3862,065,9642,686,7472,716,151
Exports of Goods (million USD)2,486,6952,499,4572,589,9523,358,1633,593,523
Imports of Services (million USD)525,154500,680381,088426,998465,053
Exports of Services (million USD)271,451283,192280,629392,198424,056

Source: WTO – World Trade Organisation, Latest data available.

 

© eexpand, All Rights Reserved.
Latest Update: April 2024

COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of China, please consult the country's dedicated section in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.
 

© eexpand, All Rights Reserved.
Latest Update: April 2024

In this page: Economic Outline | Political Outline

 

Economic Outline

Economic Overview

China is the second-largest global economy, the largest exporter and has the largest exchange reserves in the world. However, even though China has one of the fastest-growing GDPs worldwide, its economic growth was abruptly slowed by the impact of the COVID-19 pandemic. After growing only 3% in 2022, the sudden abandonment of the zero-tolerance COVID-19 policy in late 2022 prompted a rapid recovery in the first quarter of 2023 when GDP surpassed expectations, expanding by 2.3% quarter-on-quarter, fueled by the resurgence of private consumption and state-owned enterprise investment. However, the rebound proved short-lived due to the deeper-than-expected impact of the pandemic, resulting in households maintaining high precautionary savings. Moreover, ongoing uncertainty from the real estate crisis continued to dampen consumer and investor confidence. Growth softened in the second quarter (0.5% q-o-q) as households, private enterprises, and local governments actively deleveraged, before regaining momentum in the third quarter (1.3% q-o-q). For the year as a whole, China's economy expanded by 5.2%, slightly surpassing the official target. However, the recovery proved much more fragile than anticipated by many analysts and investors. A deepening property crisis, increasing deflationary risks, and subdued demand have overshadowed the outlook for the current year. Projected to decline to 4.2% in 2024 and 4.1% in 2025 (IMF forecast), growth is anticipated to linger well below its pre-pandemic trend for both years. China's current growth model, reliant on substantial investment in real estate and infrastructure fueled by debt, is faltering, while new growth drivers remain underdeveloped. The expected continuation of household consumption recovery is forecasted for both 2024 and 2025.

Concerning public finances, China's fiscal revenue rose 6.4% in 2023, picking up significantly from a 0.6% increase in COVID-hit 2022, while fiscal expenditures rose 5.4% (official government data). The overall budget deficit was estimated at 6.6% of GDP and should remain stable in 2024 (IMF). Meanwhile, the debt-to-GDP ratio rose to 80%, up from 77% in 2022. The IMF expects the debt ratio to rise to 91.8% by 2025. Higher debt poses the most significant risk to China's economy in the next two years, exacerbated by the real estate crisis, which could potentially spill over into the financial sector. At the end of Q1 2023, total non-financial sector debt reached 306% of GDP, nearly 17 percentage points higher than the previous year and 40 points higher than in 2019. Servicing such massive debt, particularly corporate debt, is becoming increasingly challenging amidst the projected growth slowdown. Additional risks stem from weak investor and consumer confidence, geopolitical uncertainties, and adverse demographics. In 2023, China's economy avoided inflation caused by surging global energy and food prices due to its high food self-sufficiency rate and the substitution of some crude oil imports with discounted oil from Russia, resulting in an overall rate of only 0.7% albeit with a slight uptick expected this year (1.7% as per the IMF).

According to the Minister of Human Resources and Social Security, the low unemployment rate of these past years is largely due to the new digital economy and entrepreneurship. Many analysts say, however, that the government figure is an unreliable indicator of national employment levels, as it takes into account only employment in urban areas and does not measure the millions of migrant workers that arrive in the country every year. Despite the global context, the unemployment rate stood at 5.3% last year and should remain stable over the forecast horizon (IMF). A large gap remains between the living standard of the cities and the countryside, between urban zones on the Chinese coast and the interior and western parts of the country, as well as between the urban middle classes and those who have not been able to profit from the growth of recent decades. The COVID-19 pandemic also highlighted weaknesses in the health and social security systems and pushed many households and firms to the brink of bankruptcy. It further widened inequalities between central provinces that have been hardest hit and the coast; between poorer households that had already been indebted and wealthier households and between the private sector, which has limited access to infrastructure contracts and is hard hit by slackened demand and the state-owned sector. Such divides will need to be addressed by the central government to make growth inclusive and sustainable (OECD).

 
Main Indicators20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD)17,886.3317,700.9018,560.0119,781.7021,059.83
GDP (Constant Prices, Annual % Change)3.05.04.24.14.1
GDP per Capita (USD)12,67012,54113,15614,03114,952
General Government Balance (in % of GDP)-6.6-6.6-6.7-7.0-7.4
General Government Gross Debt (in % of GDP)77.083.087.491.895.9
Inflation Rate (%)n/a0.71.72.22.2
Unemployment Rate (% of the Labour Force)5.55.35.25.25.2
Current Account (billions USD)401.86271.44250.86224.86207.85
Current Account (in % of GDP)2.21.51.41.11.0

Source: IMF – World Economic Outlook Database, Latest data available.

Note : (E) Estimated data

 

Main Sectors of Industry

China has a highly diversified economy, dominated by the manufacturing and agricultural sectors. It is the most populated country in the world and one of the largest producers and consumers of agricultural products. The agricultural sector is estimated to employ 24% of the active population (World Bank, latest data available) and to account for 7.3% of GDP, although only 15% of the Chinese soil (about 1.2 M km²) is arable. China is the leading global producer of cereals, rice, cotton, potatoes and tea. In terms of livestock, it also dominates sheep and pork livestock farming as well as the world’s fish production. A series of plans have been aimed at transforming, modernising and diversifying agriculture to increase productivity. Data from the National Bureau of Statistics (NBS) show that China's grain output rose 1.3% year on year to a record high of 695.41 million tonnes in 2023, marking the ninth consecutive year with a grain harvest of over 650 million tonnes. Additionally, the country is rich in natural resources and has significant coal reserves (the country's primary energy source), which account for two-thirds of the total primary energy consumption. China is the world leader in the production of certain ores (tin, iron, gold, phosphates, zinc and titanium) and has significant petrol and natural gas reserves, making the country the 6th-biggest oil producer in the world, with 4.01 million barrels produced per day in 2023.

The industry sector contributed to approximately 39.9% of China's GDP and employed 28% of the population in 2022 (World Bank). China has become one of the most preferred destinations for the outsourcing of global manufacturing units thanks to its cheap labour market, despite an increase in labour costs in recent years. The country is a global leader in various manufacturing sectors like machinery manufacturing; electronics; textiles and garments; and steel and automobiles (the Chinese manufacturer BYD overtook Tesla to become the world's biggest electric car company in the final quarter of 2023). China’s economic growth has coincided primarily with the development of a competitive and outward-oriented manufacturing sector. More than half of the Chinese exports are made by companies with foreign capital. Their share in the sector's added value varies according to the industry: more than 60% for electronics and less than 20% for the majority of producer goods. The value-added industrial output went up 4.6% year on year in 2023 (data NBS). The output of the equipment manufacturing sector expanded 6.8% y-o-y in 2023, faster than the average industrial production growth. The production of solar batteries, new energy vehicles and power generation equipment surged 54%, 30.3%, and 28.5%, respectively.

The services sector in China has witnessed rapid expansion in the last decade, becoming the largest contributor to GDP (52.8%), surpassing manufacturing, and employing around 47% of the workforce (World Bank). Even though the sector's GDP share has been growing in recent years, the service sector as a whole, encumbered by public monopolies and restrictive regulations, has not progressed. The development of the sector has been constrained by the country’s focus on manufactured exports and the substantial barriers to investment in the sector. However, the Chinese government has been focusing more on the services sectors lately, particularly in sub-sectors such as finance, logistics, education, and healthcare, as it is also aiming to rank among the top exporters for transport, tourism and construction. The trade sector is particularly strong and includes online giants like Alibaba and JD.com.

 
Breakdown of Economic Activity By SectorAgricultureIndustryServices
Employment By Sector (in % of Total Employment)24.428.247.4
Value Added (in % of GDP)7.339.952.8
Value Added (Annual % Change)4.13.82.3

Source: World Bank, Latest data available.

 

Indicator of Economic Freedom

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
58,4/100
World Rank:
107
Regional Rank:
20



 

Business environment ranking

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
5.99/10
World Rank:
55/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

See the country risk analysis provided by Coface.

 

Political Outline

Current Political Leaders
General Secretary of the Communist Party: Xi Jinping
President: Xi Jinping (since 14 March 2013)
Vice President: Han Zheng (since 10 March 2023)
Head of government and leader of the State Council: Li Qiang (since 11 March 2023)
Next Election Dates
Presidential: March 2028
National People's Congress: March 2028
Current Political Context
Overall, the political situation in China has been stable, with the Chinese Communist Party (CCP) firmly in power. China's current leader, Xi Jinping, holds a triple title as CCP general secretary, Central Military Commission chairman and state president. After assuming these functions in 2012-13, he was reappointed to them in 2017-18 and then again in 2022.
In the political sphere, 2023 was characterized by the National People’s Congress in March, during which the long-anticipated retirement of Li Keqiang as premier occurred, succeeded by Li Qiang. Li Qiang, former party secretary of Shanghai and a longstanding associate of President Xi Jinping, assumed the premier role, helping Xi  consolidate his power and influence.
Throughout 2023, China's international relations were shaped by several key events, including Russia's ongoing conflict with Ukraine, heightened tensions with the United States, the Hamas terrorist attacks on Israel, and Israel's subsequent response. While China maintained rhetorical support for Russia, it refrained from direct involvement, opting instead to issue a relatively mild peace proposal in February.
Main Political Parties
The only political party in the country is the CCP (Chinese Communist Party). There are eight other registered small parties, but they remain under control of the CCP.
Type of State
The People's Republic of China is a one-party state led by the Chinese Communist Party (CCP). China is characterized by a centralized unitary State under the exclusive political leadership of the Chinese Communist Party (CCP). The Party has full jurisdiction and authority in the country. It consists of legislative, executive, military, supervisory, judicial and procuratorial branches. The National People's Congress (NPC) is the highest state organ, with control over the constitution and basic laws, as well as over the election and supervision of officials of other government organs.
Executive Power
The Chinese executive is supervised by the State Council (a collegial body equipped with important powers and appointed by the National People's Congress) under which are Government commissions, ministries and other organisations with the rank of a ministry. According to the Constitution, the Council is 'the Supreme Administrative Body' of the Chinese Government, even if the majority of important measures are decided by the Political Bureau of the Chinese Communist Party (CCP). The Council thus plays an important role in the economic domain.
The president is the head of state and is elected by the National People's Assembly. In general, he is also the general secretary of the Communist Party. He represents China in international institutions. The prime minister directs and controls government action, assisted by four deputy prime ministers. The State Council also includes 5 state councillors, who, like deputy prime ministers, have jurisdiction over several ministerial departments or commissions. The Secretary General of the Government is also a member of the State Council.
Legislative Power
The legislature is monocameral, composed of the National People's Congress (NPC). It is known as a 'Body of Supreme Power of the Government' and meets once per year in a plenary session. There are approximately 3,000 designated deputies elected to the NPC every five years by indirect vote of local bodies. Since the 1980s, it has been dominated by local or sectional interests. Deputies are the representatives of 23 provinces, five areas and four autonomous municipalities. The NPC comprises a delegation of the People's Liberation Army. The Standing Committee of the National People's Congress is appointed by the Political Bureau of the Central Committee of the Party. It sits instead of the NPC during its recess and exercises all its powers. It is composed of a president, 15 vice-presidents and 176 permanent members. The Standing Committee sits regularly, but it is the Bureau of the NPC which exerts its functions on a daily basis. Eligibility is controlled by the CCP, which also has a right to supervise the appointment of the executives and the senior officials of different administrative units.
 

Indicator of Freedom of the Press

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
177/180
 

Indicator of Political Freedom

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Political Freedom:
7/7
Civil Liberties:
6/7


Source: Freedom in the World Report, Freedom House

 

 

© eexpand, All Rights Reserved.
Latest Update: April 2024

In this page: Foreign Trade in Figures | Trade Compliance | Standards

 

Foreign Trade in Figures

Thanks to its enormous trade surplus over the past few years, China has become the world's largest exporter and ranks second among the world’s largest importers. Despite its strict policies, the country is fairly open to foreign trade, which represented 37% of its GDP in 2022 (World Bank). In the same year, China remained the largest trader of goods throughout the world for the sixth consecutive year. China's main exports include telephones (7.7%), automatic data-processing machines (5.2%), electronic integrated circuits (4.3%), semiconductors (1.8%), and electronic accumulators (1.6%). On the other hand, the country mainly imports electronic integrated circuits (15.3%), petroleum oils (13.5%), iron ores (4.7%), petroleum gas (3.3%), and gold (2.8% - data Comtrade).

In 2022, exports were directed mostly towards the United States (16.2%), Hong Kong SAR, China (8.3%), Japan (4.8%), South Korea (4.5%), and Vietnam (4.1%); whereas imports came chiefly from South Korea (7.4%), Japan (6.8%), the United States (6.6%), Australia (5.2%), and Russia (4.2% - data Comtrade). In the same year, China's trade in goods with the ASEAN, the EU, and the U.S. respectively surged 15%, 5.6%, and 3.7% to CNY 6.52 trillion, CNY 5.65 trillion, and CNY 5.05 trillion. China's trade with countries along the Belt and Road rose 19.4% year-on-year and accounted for 32.9% of the nation's total foreign trade, up 3.2 percentage points. The country's trade with the other 14 members of the Regional Comprehensive Economic Partnership increased by 7.5% (data General Administration of Customs). On the 15th of November 2020, China signed the Regional Comprehensive Economic Partnership (RCEP) with 14 other Indo-Pacific countries. This free trade agreement is the largest trade deal in history, covering 30 per cent of the global economy. It includes the Association of Southeast Asian Nations (ASEAN: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam) and ASEAN’s free trade agreement partners (Australia, China, India, Japan, New Zealand and the Republic of Korea). The RCEP covers goods, services, investment, economic and technical cooperation. It also creates new rules for electronic commerce, intellectual property, government procurement, competition, and small and medium-sized enterprises.

Trade has become an increasingly important part of China’s overall economy, and it has been a significant tool used for economic modernisation. As reported by WTO, in 2022, exports of goods and services reached USD 3.59 trillion and USD 424 billion, respectively (+7% and +8.1% year-on-year). Imports of goods totalled USD 2.71 trillion, and those of services USD 465 billion (+1% and +8.9% year-on-year). According to the World Bank, the overall balance of trade was positive by 3.2% of GDP (from +2.6% one year earlier). In 2023, the country's foreign trade stood at CNY 41.76 trillion (about USD 5.87 trillion ), according to preliminary figures from the General Administration of Customs (GAC). Exports grew 0.6% y-o-y to CNY 23.77 trillion, while imports edged down 0.3% from one year earlier to CNY 17.99 trillion.

 
Foreign Trade Values20182019202020212022
Imports of Goods (million USD)2,135,7482,078,3862,065,9642,686,7472,716,151
Exports of Goods (million USD)2,486,6952,499,4572,589,9523,358,1633,593,523
Imports of Services (million USD)525,154500,680381,088426,998465,053
Exports of Services (million USD)271,451283,192280,629392,198424,056

Source: World Trade Organisation (WTO), Latest data available.

 
Foreign Trade Indicators20182019202020212022
Foreign Trade (in % of GDP)37.635.934.837.338.1
Trade Balance (million USD)380,074392,993511,103562,706668,633
Trade Balance (Including Service) (million USD)87,905131,844358,573461,494576,330
Imports of Goods and Services (in % of GDP)18.517.516.217.417.5
Exports of Goods and Services (in % of GDP)19.118.418.619.920.7

Source: World Bank, Latest data available.

 
Foreign Trade Forecasts20232024 (e)2025 (e)2026 (e)2027 (e)
Volume of exports of goods and services (Annual % change)-1.81.13.03.03.0
Volume of imports of goods and services (Annual % change)-0.62.74.03.93.9

Source: IMF, World Economic Outlook, Latest data available.

Note: (e) Estimated Data

 

Main Partner Countries

Main Customers
(% of Exports)
2022
United States16.2%
Hong Kong SAR, China8.3%
Japan4.8%
South Korea4.5%
Vietnam4.1%
India3.3%
Netherlands3.3%
Germany3.2%
Malaysia2.6%
United Kingdom2.3%
Main Suppliers
(% of Imports)
2022
South Korea7.4%
Japan6.8%
United States6.6%
Australia5.2%
Russia4.2%
Germany4.1%
Malaysia4.0%
Brazil4.0%
Vietnam3.2%

Source: UN Comtrade Database, Latest data available.

 

Main Products

3,593.6 bn USD of products exported in 2022
Telephone sets, incl. telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, incl. apparatus for communication in a wired or wireless network [such as a local or wide area network]; parts thereof (excl. than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528)7.7%
Automatic data-processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s.5.2%
Electronic integrated circuits; parts thereof4.3%
Diodes, transistors and similar semiconductor devices; photosensitive semiconductor devices, incl. photovoltaic cells whether or not assembled in modules or made up into panels (excl. photovotaic generators); light emitting diodes; mounted piezoelectric crystals; parts thereof1.8%
Electric accumulators, incl. separators therefor, whether or not square or rectangular; parts thereof (excl. spent and those of unhardened rubber or textiles)1.6%
Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s.1.4%
Tricycles, scooters, pedal cars and similar wheeled toys; dolls' carriages; dolls; other toys; reduced-size "scale" recreational models, working or not; puzzles of all kinds1.3%
Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals1.3%
Electrical transformers, static converters, e.g. rectifiers, and inductors; parts thereof1.3%
Lamps and lighting fittings, incl. searchlights and spotlights, and parts thereof, n.e.s; illuminated signs, illuminated nameplates and the like having a permanently fixed light source, and parts thereof, n.e.s.1.3%
2,716.0 bn USD of products imported in 2022
Electronic integrated circuits; parts thereof15.3%
Petroleum oils and oils obtained from bituminous minerals, crude13.5%
Iron ores and concentrates, incl. roasted iron pyrites4.7%
Petroleum gas and other gaseous hydrocarbons3.3%
Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form2.8%
Telephone sets, incl. telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, incl. apparatus for communication in a wired or wireless network [such as a local or wide area network]; parts thereof (excl. than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528)2.4%
Soya beans, whether or not broken2.3%
Copper ores and concentrates2.1%
Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702)1.9%
Copper, refined, and copper alloys, unwrought (excl. copper alloys of heading 7405)1.4%

Source: UN Comtrade Database, Latest data available.

 
 
 

Main Services

317.3 bn USD of services exported in 2021
Transportation
40.53%
Other business services
27.39%
Computer and information services
15.98%
Construction services
4.86%
Royalties and license fees
3.70%
Travel
3.57%
Insurance services
1.58%
Financial services
1.44%
Government services
0.49%
Cultural and recreational services
0.45%
436.1 bn USD of services imported in 2021
Transportation
33.63%
Travel
25.09%
Other business services
12.16%
Royalties and license fees
10.75%
Computer and information services
9.17%
Insurance services
4.44%
Construction services
2.23%
Financial services
1.01%
Government services
0.76%
Cultural and recreational services
0.75%

Source: United Nations Statistics Division, Latest data available.

Trade Compliance

International Conventions
Member of the World Trade Organization (WTO)
Party to the Kyoto Protocol
Party to the Washington Convention on International Trade in Endangered Species of Wild Fauna and Flora
Party to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal
Party to the Montreal Protocol on Substances That Deplete the Ozone Layer
International Economic Cooperation
China is a member of the following international economic organisations: Asia-Pacific Economic Cooperation (APEC), Association of Southeast Asian Nations (dialogue partner of ASEAN Plus Three), G-20, G-24 (observer), G-5, G-77, IMF, Pacific Alliance (observer), WTO, among others. For the full list of economic and other international organisations in which participates China click here. International organisation membership of China is also outlined here.
Free Trade Agreements
China is a member of Regional Comprehensive Economic Partnership (RCEP) signed on 15 November 2020. The complete and up-to-date list of Free Trade Agreements signed by China can be consulted here.
Party of the ATA Convention on Temporary Admissions and Use of the Carnets
Yes

As a Reminder, the ATA is a System Allowing the Free Movement of Goods Across Frontiers and Their Temporary Admission Into a Customs Territory With Relief From Duties and Taxes. The Goods Are Covered By a Single Document Known as the ATA Carnet That is Secured By an International Guarantee System.
Party of the TIR Convention
No

As a Reminder, the TIR Convention and its Transit Regime Contribute to the Facilitation of International Transport, Especially International Road Transport, Not Only in Europe and the Middle East, But Also in Other Parts of the World, Such as Africa and Latin America.
Accompanying Documents For Imports
Goods dispatched in China must be accompanied by the following documents:
- Certificates of origin
- The unique data folder (DAU)
- Commercial invoice (in 3 copies and in English.
)
- Sale contract in three copies
- A certificate of plant health (for food and agricultural products
)
- A health certificate (for meat
)
- A certificate indicating fit for human consumption
- A certificate of fumigation (for the wooden pallets).
- Certificate of Community origin (for imports coming from the EU.)
- Certificate of free sale for cosmetics.
- Transport documents and packing lists.
- Translation of the components/ingredients in Chinese.
Free-trade zones
China counts 21 Free-Trade Zones (FTZ). The first designated Free-Trade Zones opened in Shanghai in 2013, followed by Guangdong, Tianjin and Fujian in 2015. The up-to-date full list of Chinese Free Trade Zones, including China’s six new Free Trade Zones established in 2019 (Jiangsu, Shandong, Hebei, Heilongjiang, Guanxi, and Yunnan), can be consulted here.
For Further Information
Ministry of Foreign Affairs
Non Tariff Barriers
Only companies or institutions authorised by the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) can run foreign trade operations. Two methods are possible: Foreign Trade Companies or producing companies entitled to trade with foreigners (import for their personal use provided they have stable export balances). While only 14 companies were authorised to engage in foreign trade operations in China in 1979, there are nearly 9,000 companies authorised today.

More than half of value imports to China are subject to import licenses. Initial authorisation is issued by various organisations (according to the product), but the final delivery is subject to acceptance by the MOFTEC. To obtain these authorisations, the importer must have exact foreign exchange reserves and justify the necessity to import. Delivery of licenses often depends on the sphere of activity, which may be encouraged, allowed, restricted or simply prohibited, according to the investments regulation promulgated by China. In any case, it is imperative to have solid relations within the Chinese Administration for obtaining these licenses.

Many goods imported into China are subject to inspection. In order to ensure conformity with Chinese customs standards, certain products- textiles, in particular- are subject to inspection prior to arrival in China. Other products can undergo inspection at the port of entry.

Sectors or Products For Which Commercial Disagreements Have Been Registered With the WTO
Paper, products containing metals (steel, iron, tin, etc), integrated circuits, automobile parts, intellectual property, etc.
Assessment of Commercial Policy
Pages of WTO dedicated to China
Barriers to exchanges, inventoried by the United States
Barriers to exchanges, inventoried by the EU
Sanitary and phytosanitary barriers, inventoried by the EU

 

Standards

Integration in the International Standards Network
Member of:
- The International Standardisation Organisation (ISO) and of the International Electronic Commission (IEC)
- The APEC/SCSC, Sub-committee of Standards and Conformity of the Organisation of Asia-Pacific Economic Cooperation
- The ASEM/TFAP/SCA, Plan and Standards of action for facilitation of commercial exchanges and evaluation of conformity of the Asia-Europe Dialogue (ASEM)
- The Congress of Standards for the Pacific Zone (PASC)
Obligation to Use Standards
Standards in China fall into at least one of four broad categories: national standards, industry standards, local or regional standards, and enterprise standards for individual companies. National standards can be either mandatory (technical regulations, protection of public health, private property and safety) or voluntary, and take precedence over all other types of standards. Laws and regulations can reference voluntary standards, thereby making the voluntary standard, in effect, mandatory. For certain products, China requires that a safety and quality certification mark (CCC) be obtained. Numerous government agencies in China mandate industry-specific standards or testing requirements for products under their jurisdiction in addition to the GB standards and the CCC mark.
Classification of Standards
List of Chinese Codes and Standards.
Assessment of the System of Standardization
Respect of standards is important for the Chinese.
Online Consultation of Standards
Publications relating to the Chinese standards of the SAC.
Certification Organisations
CCC Chinese Obligatory Certification
Canadian Network on Corporate Accountability (CNCA) Administration of Certification and Accreditation of China
AQSIQ

 

© eexpand, All Rights Reserved.
Latest Update: April 2024

In this page: Business culture | Opening Hours

 

Business culture

The Fundamental Principles of Business Culture
Chinese business culture is largely influenced by Confucianism. Thus, primarily, the Confucian concept of Guanxi implies that a relationship network is crucial and based on the values of solidarity, loyalty, modesty and courtesy. Second, hierarchy in China, both in business and privacy, is purely vertical and highly respected. Third, Chinese people will be careful to save face in order to protect individual reputations, influence and dignity. However it must be emphasized as well that these values have somehow slowed down over the last decade while modern Western business approaches have been increasing gaining ground. Therefore the global convergence on business culture codes and international business values can be increasingly observed in China.

The Chinese are often risk averse. Strict procedures exist for the decision-making process. Decisions are made by all the relevant people after several meetings and subordinates are not expected to express their opinion. Decision-makers will consider problems, alternatives and solutions on a long-term social perspective, as a result of which the process may be perceived as slow-moving. Deciding too quickly will be frowned upon by your Chinese partners. Hierarchical differences must be respected, and trying to circumvent them will almost always retard decision-making.

Chinese people often seek long-term relationships and create relations rather than negotiate contracts. Negligence to cultivate a personal basis of a business relationship might provoke a failure to meet business objectives. Establishing the relationship can last from several days to several months. It includes formal meetings as well as home visits, invitations to sport events, long dinners and drinks.

First Contact
In China, distrust and suspicion often characterise interactions with strangers. The most effective way to develop your relationship is to include an intermediary in the process. Your business associate must be a trusted business associate of your potential partner. The intermediary will help you to be accepted quicker (“Guanxi”); obtain better information on your potential partners and avoid a misstep on local customs.
Time Management
Chinese people value punctuality, so arrive on time for meetings. If you are late, you should call your partner to inform about your delay and be sure to offer an apology for your tardiness. Sticking to a strict meeting schedule is not common, as Chinese prefer meetings where the end of the appointment is rarely timed in advance.
Greetings and Titles
When meeting someone for the first time, the use of some Chinese words will impress. You should give a light and lingering handshake, initiated by your Chinese counterpart. It is customary to look down and physical proximity must be avoided. Nodding and smiling are also very common greetings. It is advised to address your business partners with a professional title and their name. If a person does not have a professional title, use "Mr.", "Madam", "Miss" plus the name. Note that most Chinese names use the surname first (for example a  Mr. Lee Hong would be addressed as Mr. Lee).
Gift Policy
Giving and receiving gifts symbolise the beginning of a relationship. The gift should not be too expensive and always wrapped. Gifts are often refused two or three times before being accepted and are rarely opened in front of the gift giver. The gift must be given and/or received with both hands. 
Dress Code
The dress code is formal and discreet (a suit). However, the dress code is expected to reflect success, without being ostentatious: you should wear good quality clothes, watches, shoes etc.
Business Cards
Business cards are exchanged upon meeting a new person and follow a strict protocol. The card must be printed in Chinese and English. Present your business card with both hands and ensure that the side printed in Chinese is turned towards your contact. Receive the card of your Chinese associate with both hands (never with just the left hand), read it with attention, and put it away carefully. And do not write on the card in the presence of your business partner.
Meetings Management
Business meetings are often long and will be needed several times to establish a sustainable relationship. It is advised to have recourse to interpretation services to avoid the language barrier. During discussions, it is common to have small talk to break the ice.

Most of the time, Chinese are indirect communicators. Disagreement will not be clearly expressed. Phrases such as ‘Yes but it might be difficult’ and ‘Yes, probably’ are preferred. To deliver bad news while preserving a good relationship, it is common to use an intermediary who can soften the blow. Periods of silence are an integral part of the reflection and should not be interrupted.  It is highly recommended not to interrupt the speaker.

Chinese use a very limited amount of body language. The first person of your team to enter in the room must be the highest-ranked and will seat at the place of honour directly in front of the host. He/she will handle negotiations with the Chinese team leader. The rest of the team will support the leader if asked for it. Bargaining is an integral part of Chinese culture, and one should avoid accepting a proposition without bargaining, as it can be viewed as a sign of weakness. During negotiations, do not use psychological pressure tactics, as you could be seen as a manipulator. Only a person of a higher rank will speak, so make sure to appoint a superior of your group. Keep in mind that the objective is to determine if it is possible to establish a harmonious relationship to make a deal.

 It is common that you are offered food and drinks during a meeting. Business meals are an important part of business relations and people must sit down and eat in order of importance. Do not finish all your food because your Chinese partners will think you are still hungry. If you invite someone to an activity or have a meal, you are expected to pay for it. However, try not to show your money in front of your guests.

Sources for Further Information

Commisceo Global


World Business Culture 
Culture Atlas
Expat Cape Town
AFK travel
 
 

Opening Hours

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

New Year1 January
Lunar New YearFebruary
Women's Day8 March
Qing Ming FestivalApril
Labour Day1 May
Youth Day4 May
Children's Day1 June
Dragon Boat FestivalJune
Army Day1 August
Teachers' Day9 September
National Day1 October
 

Periods When Companies Usually Close

Labour Day1 May
Spring FestivalOne week off

 

© eexpand, All Rights Reserved.
Latest Update: April 2024

In this page: Corporate Taxes | Accounting Rules | Consumption Taxes | Individual Taxes | Double Taxation Treaties | Sources of Fiscal Information

 

Corporate Taxes

Tax Base For Resident and Foreign Companies
An enterprise is resident in China if it is established in or if its place of effective management is in China. Effective management is defined as substantial and overall management and control over manufacturing and business operations, human resources, financial and property aspects of the entity. A foreign company will also be subject to tax in China if it has an "establishment" in China or if it derives income from China. The definition of an establishment is broad and includes also independent agents. When a foreign company has an establishment in China, it will be subject to tax on all income effectively connected with that establishment.
 

Tax Rate

Standard rate25%
Small and low-profit enterprises20%, 5%, or 2.5% if certain requirements are met
The portion of annual taxable income that does not exceed CNY 1 million will be calculated as 25% of the original amount from 2023 to 2024
Companies engaged in encouraged industries in certain regions (e.g. Western Regions, Hainan Free Trade Port, Lingang New Area of Shanghai Pilot Free Trade Zone, etc.)15%
Qualified technology-advanced service enterprises and new/high tech enterprises15%
Key software production enterprises and IC design enterprises10%
 
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.
A 10%withholding rate (temporarily reduced from 20%) is applied to China-sourced income not related to a non-resident enterprise’s establishments in China, or China income derived by non-resident enterprises without establishments in China.
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). 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. The tax amortisation value of certain R&D expenses is increased between 175-200%.

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 the 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.

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 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 portal of the State Taxation Administration.

Other Domestic Resources
State Tax Administration
 

Country Comparison For Corporate Taxation

 China
Number of Payments of Taxes per Year7.0
Time Taken For Administrative Formalities (Hours)138.0
Total Share of Taxes (% of Profit)59.2

Source: The World Bank - Doing Business, Latest data available.

Accounting Rules

 

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).
 
 

Consumption Taxes

Nature of the Tax
Value added tax (VAT) and Consumption tax
Standard Rate
While the standard rate is 13%, it varies depending on the taxpayer status, type of product and service and type of sector.
Reduced Tax Rate
Goods and services taxable at 3% include certain taxable used goods; consignment goods sold by consignment agencies; certain goods sold by pawnbrokers; specific duty-free items sold by duty-free shops; certain electricity produced by qualified hydroelectric-generating businesses; certain construction materials; certain biological products; tap water (rate applies if the taxpayer chooses simplified computation method with no input tax recovery); certain concrete cement goods sold by general VAT taxpayers; non-academic education services; interest income from agricultural loans provided by Agricultural Development Bank of China and its affiliates; certain rare disease drugs (orphan drugs).

Goods and services taxable at 5% include labour dispatching services and human resource outsourcing services.

Goods and services taxable at 6% include R&D and technology services; information and technology services; culture and creative services; logistics supporting services; authentication and consulting services; radio, film and television services; business-supporting services; other modern services; value-added telecommunication services; loan services; direct financial services; insurance services; financial product trading; cultural and sports services; education and medical services; tourism and entertainment services; catering and accommodation services; daily services; other lifestyle services; sales of intangible assets.

Goods and services taxable at 9% include agricultural products (including grains); tap water; heating; liquefied petroleum gas; natural gas; edible vegetable oil; air conditioning; hot water; coal gas; coal products for household use; food-grade salt; farm machinery; fodder, pesticides; agricultural film; fertilizers; methane gas; dimethyl ether; books; newspapers; magazines; audio-visual products; transportation services; postal services; basic telecommunication services; construction services; sales of immovable properties acquired or developed after 1 May 2016; leasing of immovable properties; transfer of land use rights.

Zero-rated (exempt-with-credit) goods and services include exports of goods (excluding prohibited or restricted exports) and services rendered by domestic entities or individuals to overseas entities and consumed entirely outside the country, including international transportation services, including transportation services for Hong Kong SAR, Macau SAR and Taiwan, China; space transportation services; research and development services; contractual energy performance services; design services; radio, film and television programs (works) production and distribution services; software services; circuit design and test service; information systems services; business process management services; offshore outsourcing services, including information technology outsourcing (ITO), business process outsourcing (BPO) and knowledge process outsourcing (KPO); technology transfer.

Taxpayers that supply items eligible for VAT reduction must book these sales separately. Otherwise, no reduction applies.

Exclusion From Taxation
Exempt goods include agricultural products produced and sold by primary agricultural producers; contraceptive medicines and appliances; antique books; imported equipment and apparatus used directly for scientific education, scientific research, development and experiments; imported products and equipment in the form of free economic assistance from foreign governments and international organizations; products imported by organizations for the handicapped for their exclusive use; sale of second-hand goods by individuals; etc.
Several cross-border services are also exempt, including construction services for the construction project outside China; warehousing services for storage locations; radio, film and television programs broadcast services; cultural and sports services, education and medical services, tourism and certain postal services; international transportation services provided by non-transport operating carriers; direct chargeable financial services provided for the monetary financing between entities outside the territory and other financial business operations, which are not related to any goods, intangible assets or real property within the territory; etc.
Taxpayers that supply items eligible for tax exemption must book these sales separately. Otherwise, no tax exemption applies.
Method of Calculation, Declaration and Settlement
The sales or importation of goods, the provision of services, and the sales of intangible properties and immovable properties are subject to VAT, whose rate is applicable on volume (taxation by volume) or on the value of the goods (ad valorem taxation). In general, VAT returns must be filed on a monthly basis and submitted before the 15th day of the following month. Those importing goods must pay VAT within 15 days after the issuance of the tax payment certificate by the customs authorities.
There are two classes of taxpayers: general taxpayers, which are taxpayers with an annual turnover of CNY 5 million or more; and small-scale taxpayers, which are taxpayers with an annual turnover below this threshold.

For more information, click here.
Other Consumption Taxes
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 tobacco tax is levied on the purchase of tobacco leaves within the country's territory, at the rate of 20% of the purchasing value.

Stamp duties may be levied on specific legal documents (rates between 0.005%-0.1%).

China levies a motor vehicle acquisition tax on the purchase and importation of cars, motorcycles, trams, trailers, carts, and certain types of trucks. The rate is equal to 10% of the taxable consideration. A vehicle and vessel tax is also levied at fixed amounts according to the weight.

A vessel tonnage tax is levied on any vessel entering a port inside the territory of China from overseas, calculated according to the tonnage multiplied by the applicable tax rate that is determined based on the net tonnage and the term of the tonnage tax license.

Individual Taxes

Tax Base For Residents and Non-Residents
Individuals who reside in China for 183 days or more in a tax year are considered residents for taxation purposes.
Are considered China-domiciled the individuals who maintain residence in China because of their legal residency status, family, or economic ties and who habitually reside in China.
Residents are taxed on their national and international incomes. Non-residents are taxed on the incomes earned in China.
 

Tax Rate

Income from wages/salariesProgressive rates
Annual taxable income (after deducting the standard basic deduction, specific deductions, specific additional deductions, and other allowable deductions)
CNY 0 - 36,0003%
CNY 36,000 - 144,00010%
CNY 144,000 - 300,00020%
CNY 300,000 - 420,00025%
CNY 420,000 - 660,00030%
CNY 660,000 - 960,00035%
CNY 960,001 and above45%
Income from Private BusinessesProgressive rates (Taxable income = Total Revenue - Costs - Expenses - Losses)
CNY 0 - 30,0005%
CNY 30,000 - 90,00010%
CNY 90,000 - 300,00020%
CNY 300,000 - 500,00030%
CNY 500,001 and above35%
Non-resident (employment income, remuneration for labour services, author’s remuneration,royalties - calculated by each category on a monthly or transaction basis)Progressive rates (3-45%)
CNY 0 - 3,0003%
CNY 3,000 - 12,00010%
CNY 12,000 - 25,00020%
CNY 25,000 - 35,00025%
CNY 35,000 - 55,00030%
CNY 55,000 - 80,00035%
CNY 80,001 and above45%
Incidental income, rental income, interest income, dividends, and capital gainsFlat rate at 20%
 
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); care expense for children under the age of 3 (CNY 1,000).

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, and 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.
Foreign individuals are subject to deed tax and stamp duty upon the purchase of real property in China.

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.

Double Taxation Treaties

Withholding Taxes
Withholding tax rates in China are 10% for dividends, interest and royalties paid to non-resident companies (0% for resident companies). When paid to resident and non-resident individuals, the rate is 20%.
A 6% VAT generally applies to interests and royalties (which could be waived in case of royalties paid for technology transfer).

Sources of Fiscal Information

Tax Authorities

State Taxation Administration
Department of Finance
Other Domestic Resources
China Briefing - Tax Guide

 

© eexpand, All Rights Reserved.
Latest Update: April 2024

In this page: Consumer Profile | Marketing opportunities

 

Consumer Profile

Consumer Profile
The Chinese population is estimated at 1.43 billion in 2022 according to UN data, with a relatively small share of young people under 25 due to the one-child policy (1.702 fertility rate in 2022). China has an average population density of 153 inhabitants / km2, with population growth of around 0.4% per year. The ratio of men to women is broadly balanced with the 15-64 age group accounting for 70% of the total population in 2022. The base of Chinese consumers is made up of relatively young people (between 20 and 35 years old): generally educated, they tend to save less spend more on leisure than their parents make increasing purchases online, prioritise more quality over low prices. The areas of higher consumption are concentrated in major cities such as Beijing, Shanghai, Shenzhen and other Chinese urban areas with high per capita income and high purchasing power. According to the latest data, the employment rate of the 2021 Chinese college graduates remained stable at 84,8%, with the private sector being the biggest recruiter for graduates. China’s People’s Daily newspaper reports that there are more than 8.34 million people who graduated from a higher education or university, up from 8.2 million in 2018. The agricultural sector employs about 24.7% of the labour force while the industrial sectors employs 28.2% of the population. Finally, the tertiary sector is the most represented category and employs 47% of the workforce in China.
Purchasing Power
The Gross Domestic Product per capita in China was recorded at $18,210 in 2022, when adjusted by purchasing power parity (PPP). The Chinese market is varied in its composition. Some parts of the country have experienced increases in confidence and spending (particularly in coastal areas such as Shanghai), while others have experienced lower growth or even negative growth. Regional differences are the result of increased demand for labour in China's coastal cities, which has disproportionately pushed the urbanization of the eastern provinces. China’s coastal provinces often boast higher per capita income levels than inland provinces even after taking into account the rural-urban income gap. The middle class represents about 400 million people in 2022, that is, 30% of the total population. According to the National Bureau of Statistics, a middle class household in China earns a monthly income of RMB 2,000 (US$295) to RMB 5,000 (US$740). According to McKinsey, 76% of China’s urban population will enter the middle income bracket by 2022. However, there is a net difference between lower-middle class and upper-middle class. In China, 75% of the middle class falls into the low-income category, earning $10 to $20 a day, while the upper-middle class can rely on $20 to $50 a day.
Today, almost 60% of Chinese people live on 2-10 dollars a day and more than 82 million Chinese still live on less than 1 dollar a day. The Gini coefficient, which measures the level of inequality, decreased slightly in 2019 vs 2018 to 46.5. Gender income inequality was 20.8% lower for women of equal work, placing China in the 103rd place (out of 149 countries) - ILO.
Consumer Behaviour
China is going through a consumption revolution: whereas in the past function and price were important factors in the buying decision buying behaviour has become more complex and Chinese consumers are taking increasing criteria into account when making a purchase. Brand awareness is becoming increasingly important and marketing is starting to play a key role in attracting Chinese consumers with advertising and research techniques. Chinese consumers believe that price is an indicator of the quality of a product, with price and sales services second. Certain aspects such as reimbursement guarantees of a product are less important. In general, the Chinese inquires a lot before purchasing, the main source of information being word of mouth. Chinese consumers are curious about what is on offer, especially with respect to foreign products.

With the improvement of living standards people are increasingly focusing on high quality products (luxury goods manufacturers and service providers are experiencing significant growth in China), making China the largest market for luxury brands. Despite mounting global social and economic challenges, China’s luxury goods market finished 2021 with strong double-digit growth overall, with some brands exceeding a 70% increase. Chinese consumers have continued to shop mostly in the mainland, given limited international travel options. This has led to a 48% increase of China’s domestic sales of personal luxury goods in 2020, and another 36% in 2021 totalling nearly RMB 471 billion, a near doubling in just 2 years (Bain & Company’s annual China Luxury Report 2021). Despite the Covid-19 crisis, consumer confidence is recovering and demand for luxury products from Chinese buyers is expected to increase by as much as 30% in 2021.

The collective feeling is important in Chinese society the group taking precedence over the individual. Thus, the standards, preferences and norms of the group to which an individual belongs have a huge influence on buying habits. For this reason, advertising is often directed towards group recruitment rather than individuals. Today, the elite of the one-child generation aspire to a pleasant life and are not reserved in their spending - including education, luxury goods, travel, leisure and consumer goods - especially in big cities. For more and more Chinese consumption is often targeted at high-end products of major brands, as shown by the strong growth in sales of luxury cars. Similarly, once a product is adopted by the reference group, the craze it generates spreads rapidly and widely. Nevertheless, there is a development of independence and individuality in consumer behaviour in China. In 2022 there is around 983 million social media users in China (DataReportal, 2022). The same year, online retail should generate 1.5 trillion USD, representing a quarter of China’s total retail sales volume, and more than the retail sales of the ten next largest markets in the world combined. Dematerialised and online payments are set to grow. Collaborative platforms like Tujia, Xiaozhu and AirBnb are present and used in China.
Consumer Recourse to Credit
Historically, China is a country with a very high savings rate one of the largest in the world. In recent years, Chinese consumers are getting into debt quickly. Data from China's central bank show that consumer loans are up 50% since 2016, when the government encouraged loans to households. The IMF believes that the debt ratio of Chinese households could double over the 2016-2022 period compared to the previous decade. Real estate loans represent the majority of new loans to Chinese households in terms of value, with auto loans growing even faster in percentage terms. Credit card debt is also growing rapidly: according to Deutsche Bank, short-term consumer credit is growing by 35% a year and could soon reach 40% a year
Growing Sectors
Renewable energies, health, e-commerce, food and beverages, education, consumer goods, automotive, construction products and services, high-tech products.
Consumers Associations
Association of Chinese Consumers
 

Population in Figures

Total Population:
1,412,175,000
Urban Population:
63.6%
Rural Population:
36.4%
Density of Population:
150 Inhab./km²
Men (in %)
51.7%
Women (in %)
49.0%
Natural increase:
-0.01%
Medium Age:
33.0
Ethnic Origins:
According to Chinese authorities, more than 92% of the population are of Han Chinese origin, with Zhuang, Uighur, Hui, Yi, Tibetan, Miao, Mandchous, Mongol, Buyi, Korean and other ethnic origins forming about 8% of the population. (National Bureau of Statistics of China).
 

Population of main cities

CityPopulation
Shanghai21,020,000
Beijing18,431,000
Shenzhen12,994,000
Guangzhou (Canton)12,874,400
Tianjin12,090,000
Chengdu9,177,000
Wuhan8,896,900
Chongqing7,919,600
Dongguan7,638,600
Hong Kong SAR7,572,800
Foshan7,508,800
Taipei7,034,500
Hangzhou6,970,000
Nanjing6,500,000

Source: Citypopulation.deWorldometer, Latest available data.

 

Age of the Population

Life Expectancy in Years
Men:
75.5
Women:
81.2

Source: World Bank, Latest data available.

 
Distribution of the Population By Age Bracket in %
Under 5:
5.2%
6 to 14:
12.4%
16 to 24:
11.3%
25 to 69:
63.1%
Over 70:
7.9%
Over 80:
2.3%

Source: United Nations, Department of Economic and Social Affairs, Population Division, Latest data available.

 

Consumption Expenditure

Purchasing Power Parity202220232024 (e)2025 (e)2026 (e)
Purchasing Power Parity (Local Currency Unit per USD)3.993.813.793.783.79

Source: IMF – World Economic Outlook Database, Latest data available.

Definition: Purchasing Power Parity is the Number of Units of a Country's Currency Required to Buy the Same Amounts of Goods and Services in the Domestic Market as USD Would Buy in the United States.

Note: (e) Estimated Data

 
Household Final Consumption Expenditure201920202021
Household Final Consumption Expenditure
(Million USD, Constant Price 2000)
5,747,9825,604,2476,339,968
Household Final Consumption Expenditure
(Annual Growth, %)
6.4-2.513.1
Household Final Consumption Expenditure per Capita
(USD, Constant Price 2000)
4,0833,9724,489

Source: World Bank, Latest data available.

 
 
Information Technology and Communication Equipment, per 100 Inhabitants%
Telephone Subscribers73.2
Main Telephone Lines20.6
Cellular mobile subscribers73.2
Internet Users42.3
PCs4.1

Source: International Telecommunication Union, Latest data available.

Marketing opportunities

 

Media in Which to Advertise

Television
95% of the Chinese population watch television. Advertising on television is therefore an effective means of reaching a maximum number of users. Overall, TV is estimated to make up for 31.4% of advertising spending in 2017, but as Chinese consumers embraced smartphones and the internet, traditional TV advertising has suffered. Advertising expenditure on traditional TV dropped by 5.2% in 2017, however there was a growth in content marketing and product placements (Ad Age India). 

Main Televisions
Anhui TV (AHTV)
Central Television of China (CCTV)
Beijing TV (BTV)
Sichuan TV
Hunan TV
Shanghai Media Group (SMG)
Hubei TV (HBTV)
Press
Newspapers and magazines are a major advertising medium in China. It is estimated that 2017 has been the first in China’s history when newspaper advertising revenues were lower than those of internet advertising.

Main Newspapers
China Daily Group
Liberty Times Group
People Daily Group
Pekin Times
Mail
Advertising by mail enables reaching a targeted consumer. For the moment, this advertising medium is in a development stage.
In Transportation Venues
The screens in public places in China like malls, restaurants, offices etc. have become an effective medium for advertising. The means of public transportation are also equipped with their own advertising screens which is a great source of reaching out to commuting consumers.
The type of advertising varies according to the city. The number of companies active on a national level is very limited.

Radio
Chinese radio stations are organised according to the four-layer structure of government: national/provincial/municipal/local. Across these layers there are over 600 radio stations in China. With a market share of 54,1%, the radio stations at municipal and local level (towns & counties) are the most popular. Provincial stations hold 35,9% of the market share, and central (national) radio stations hold 10% (source ZIGT Media). It is one of the least expensive advertising mediums which can reach users of different types, especially a younger audience, with good education and a relatively high income. In fact, it is estimated that over half of radio listeners are between 25-34 years old.

Main Radios
China Radio International (CRI)
China National Radio (CNR)
Broadcasting Corporation of China
Radio Guangdong
Web
According to official Chinese figures, the country had 731 million internet users at the end of 2016, more than half of its population. In China, the world's second-largest advertising market, 57% of advertising expenditure in 2017 went toward the web. Advertising by mobile phone and online advertising are increasing rapidly. China is increasingly using social media to promote brands and introduce products. Mobile is still going strong and mobile internet is expected to become the main engine propelling internet advertising spending in the future. About 95% of Chinese internet users went online through mobile devices at the end of 2016, according to official data from the Chinese government.

Market Leaders:
Web2Asia China Marketing
Nurun
Focus Media
Main Advertising Agencies
Wieden+Kennedy
Techworks Asia
Saatchi&Saatchi
 

Main Principles of Advertising Regulations

Beverages/Alcohol
Advertising content for alcoholic drinks must specify health licenses and cannot use medical jargons or words which can be mixed with pharmaceutical products.
Alcohol advertising restrictions are included in article 23 of the 2015 Advertising Law.
Cigarettes
According to article 22 of the 2015 Advertising Law, tobacco advertising is prohibited in mass media, public places, means of public transport, and outdoors. Other forms of tobacco advertising are permitted, including through sponsored events and organizations, promotional discounts, and retailer incentive programs. Sending any  form of  tobacco advertisement to minors is prohibited. It is also prohibited to publicize the name, trademark, packaging, decoration, and other similar aspects of tobacco products through advertisement.
Pharmaceuticals/Drugs
Advertisements for pharmaceutical products, medical devices or instruments cannot contain non scientific information, statements or promises on the effectiveness, a cure note or a rate of effectiveness, comparison with other medicines or medical devices, use the name or the image of a medical research unit, university organization, medical unit or doctor. A "purchase and use under doctor's prescription" note must be shown when necessary. Special pharmaceutical products such as anesthesia, narcotics, psychotropic, toxic and radioactive drugs cannot appear in the advertisements.
Other Rules
Advertisements should "be good for the mental and physical health of the people" and "conform to the professional code of ethics and safeguard the dignity and interests of the State." Specific regulations include the prohibition on the use of national symbols and governmental images, as well as content that is obscene, superstitious, discriminatory and/or dangerous for social stability. The advertising industry in China is heavily regulated, and the Government still exercises ultimate control over content. In 2015 China adopted a new Advertising Law.
Use of Foreign Languages in Advertisement
Majority of the advertisements are in Mandarin.

 

© eexpand, All Rights Reserved.
Latest Update: April 2024

In this page: Market Access Procedures | Distributing a Product

 

Market Access Procedures

 
 

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 refer to the Chinese Customs Authority.
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.

Distributing a Product

 

Distribution Network

Types of Outlet

Hypermarkets and supermarkets
Located in the big Chinese cities, they have food and non food products.
Lianhua Supermarket Holdings Co, Beijing HuaLian, Wu-mart, Ren Ren Le
Specialized Hypermarkets and Supermarkets
Hypermarkets specialized in a range of products. Located in the residential areas or the pedestrian streets.
Guo Mei (home appliances), Farmácia de elefantes (pharmacy), Homejia (decorations), Ikea (furniture)
Department stores
Stores distributed in different specialized ranges. Located in the big Chinese cities.
Wing on, Sincere, Intime, Parkson
Mall centers
Located in periphery of cities, these are large set-ups.
CITIC Plaza, Grand Gateway, New Century Global Center, Eurasia Shopping Mall
 

Evolution of the Retail Sector

Growth and Regulation
China's retail sector offers great opportunities for food product exporters. In 2021, total retail sales of consumer goods in China reached 44,082.3 billion yuan, up by 12.5% over the previous year with an average two-year growth of 3.9%. In December 2021 the retail sales of consumer goods in urban areas was 3.52 trillion yuan (532 bn USD). However, there still are many challenges in selling foreign food products in the retail sector. Demand for imported food and beverage is expected to remain resilient, as consumers  perceive imported products to be safe and of high quality. The major drivers of China's retail growth include rapid urbanisation and an increase in the number of middle class consumers. China's consumers expect their food purchases to be easy and convenient. As a result, electronic commerce (e-Commerce) has become an important tool for businesses in the retail sector to use and to adapt to in order to reach their customers.

Many different business models within the retail industry have emerged recently. Small convenience stores and specialty stores remain the most common retail model. In recent years, however, large retailers are increasing market share as they are able to realise greater efficiencies through better supply chains and wider distribution channels. Furthermore, the industry has undergone many mergers and acquisitions (M&A) which has strengthened the large retailers' position in the market.

Traditional retailers are transitioning to include online components to their business. The era of traditional standalone retail stores is being phased out in China. Offline food retailers include hypermarkets, supermarkets, specialty stores, discount stores, community stores and convenience stores. Online food retailers, who supply food products online and deliver the items to the consumer, are the fastest-growing sector recording record-breaking figures.
In 2021, retail sales of supermarkets increased by 6%, department shops by 11.7% and specialist shops by 12% compared to the previous year. However, the upward trend in China's online retail sales can easily be seen by looking at the 2021 turnover, which reached 198.7 billion USD), an increase of 24.6% over the previous year.

High quality and premium priced food products, including imported food and beverage will remain in demand in the market, although there are some difficulties: high import tariffs, regulations and expensive shipping costs. As a result of globalisation and development, China's younger populations have become accustomed to imported food products being available at retail stores in major cities.
Market share
Mass distribution in China is dominated by large Asian groups, with Chinese distributors taking the most significant market share. According to the USDA Foreign Agricultural Service, the top ten national retailers’ combined sales reached over $88.4 billion in 2019.

Gaoxin Retail semi-annual report for the 2022 fiscal year stated a revenue of 41.534 billion yuan or 6.22 billion USD  (as of September 30, 2021) down 5.0% year-on-year, and net profit of 112 million yuan, down 87.6% year-on-year. CR Vanguard and Lianhua own more than 3,000 shops and have an average turnover of $13.6 billion and $7.8 billion, respectively. Yonghui, is also a major player in China. Among these leading retailers, there are two internationally recognized brands, Walmart and Carrefour. In 2021, Walmart's sales reached 11.43 billion USD.
Convenience stores are widespread and their numbers are increasing in response to a growing number of consumers who are looking to save time and money. The leading chain in terms of outlets is YiJie with more than 27,000. The only international convenience store is 7 eleven.
Moreover, there are five major e-commerce players: Tmall.com is considered the largest, followed by JD.com, VIP.com, Pinduoduo and Suning.

 

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.
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
 
 
 
 

 

© eexpand, All Rights Reserved.
Latest Update: April 2024

In this page: Customs Procedures | Industrial and Manufacturing Profile |Identifying a Supplier | Controlling the Quality of the Products | Organizing Goods Transport To and From China

 

Customs Procedures

Export Clearance
An export license is required for a foreign trade company (FTC) as soon as it wants to export goods from China. However, this may not be necessary if the goods are under incoterm FOB (free on board). An export license or permit is a document that gathers information about the exporter, the buyer, the cargo, the value and the mode of transportation and it is issued to firms by the Ministry of Commerce (MOFCOM).
Necessary Declaration

In general, the supplier provides:

  • export licensed or permit
  • certificate of origin
  • HS Code
  • invoice
  • packing list
  • certificate of fumigation
  • Value and description of the merchandise
  • Composition of the merchandise
  • Finished/semi-finished
  • Name/contacts of the supplier
  • Destination of product
  • Recipient
Restrictions
The China’s Ministry of Commerce has classified goods in three categories in order to determine what type of export license is required for each goods: the permitted goods (automatically licensed), the restricted goods and the prohibited goods.The restricted goodscan be exported, but either license approval or annual quotas allows their control and their regulation. The exportation of prohibited products is absolutely banned and cannot be traded.
Export Taxes
Only a few goods and semi-finished products are subject to export duties. As of January 2020, China continues to impose export tariffs or provisional export duties on 107 commodities with fixed and unchanged tax rates.

Industrial and Manufacturing Profile

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

Identifying a Supplier

Chinese multisector Business 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

 

Chinese Marketplaces

Sample of marketplaces incorporated in China (A to Z)

 

Upcoming Trade shows in China

May 15th, 2024
May 15th, 2024
May 15th, 2024
May 15th, 2024
May 16th, 2024
May 16th, 2024

Controlling the Quality of the Products

Quality Control Organizations
CIS China Inspection Services

Organizing Goods Transport To and From China

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 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

 

© eexpand, All Rights Reserved.
Latest Update: April 2024

In this page: Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labour | Management of Human Resources

 

Legal Forms of Companies

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 Setup Procedures

Setting Up a CompanyChina
Procedures (number)4.00
Time (days)8.50

Source: The World Bank - Doing Business, Latest data available.

 
The Competent Organisation
Ministry of Commerce
For Further Information
Doing Business: China, to learn about procedures to start a business in China
 

Financial Information Directories

Dun & Bradstreet - Worldwide directory with financial information on businesses

Kompass China - Business directory for 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

The Active Population in Figures

201820192020
Labour Force785,986,113783,981,188770,950,792

Source: International Labour Organization - ILOSTAT, Latest data available.

 
201720182019
Total activity rate76.12%76.02%75.88%
Men activity rate82.91%82.85%82.76%
Women activity rate68.93%68.78%68.57%

Source: International Labour Organization - ILOSTAT, Latest data available.

 
For Further Statistics
China Statistics
For Further Information About the Labour Market
ILO, International Labour Organisation

Working Conditions

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.

The Cost of Labour

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%

Management of Human Resources

 

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

Type of Contract
Legal provisions govern work contracts and collective agreements, but may be supplemented by individual negotiations. Formalities regarding employment contracts and recruiting conditions are strict, while dismissal constraints are rather flexible. There are 3 types of contracts: permanent contracts, fixed term contracts and project-specific contracts.

Breach of Contracts

  • Retirement
At the age envisaged, not before.

Necessity for all the projects to submit a business plan subject to approval by the competent authorities.

  • Dismissals
An employee can be dismissed if he has demonstrated during his trial period that he was not qualified for the post, when he violates the company rules, when he causes great loss to the company because of professional misconduct. A dismissal is also accepted when the employee after a long illness cannot resume his job again or another job in the company, if the employee is inefficient even after training, or if no arrangement is possible between the parties on a change of contract.
  • Other Possible Methods
Dismissals.
Labour Laws
Doing Business: China, to obtain a summary of labour regulations that apply to local entreprises
 

Dispute Settlement

 

Conciliation Process

Cases of Dispute
Conflicts between employer and employee on the non respect of the labor law.
  • Legal Framework
In the event of dispute between the employer and employee, the parties can have recourse to mediation or arbitration, present the case before the Court or come to a mutual arrangement. During a mediation or an arbitration if one of the parties has an objection to the resolution, it can proceed to the Court for a lawsuit. Many contracts prescribe arbitration by the China International Economic and Trade Arbitration Commission (CIETAC). For contracts involving at least one foreign party, offshore arbitration may be adopted.
  • Procedure
Employment law
 

Judicial Structures

  • Legal Framework
Employment Law
  • Competent Legal Body
People's court
 

Social Partners

Employer Associations
CISASME - Chinese Association of International SME Cooperation
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.
 
 

 

© eexpand, All Rights Reserved.
Latest Update: April 2024

In this page: FDI in Figures | What to consider if you invest in China | Protection of Foreign Investment | Procedures Relative to Foreign Investment | Office Real Estate and Land Ownership | Investment Aid | Investment Opportunities | Sectors Where Investment Opportunities Are Fewer | Finding Assistance For Further Information

 

FDI in Figures

According to the World Investment Report 2023 published by UNCTAD, FDI inflows into China increased by 4.5% year-on-year in 2022, totalling USD 189.1 billion (above the pre-COVID level), making the country the second-largest host country in the world. The increase was concentrated in manufacturing and high-tech industries (mainly electronics and communication equipment) and came mostly from European MNEs. Cross-border M&A sales tripled to USD 15 billion. The largest deals were the 4 billion USD acquisition by BMW (Germany) of a further 25% stake in BMW Brilliance Automotive, a Beijing-based manufacturer and wholesaler, and the USD 3.4 billion merger of COVA Acquisition (United States) and ECARX Holdings, a Shanghai-based manufacturer of semiconductors and electronics. In the same year, the total stock of FDI stood at USD 3.82 trillion, around 21.1% of the country’s GDP. China is also the third-largest investor worldwide, with a stock of outward FDI estimated at USD 2.93 trillion at the end of 2022. Hong Kong, the Virgin Islands, Japan, Singapore and the United States are among the major investors (data U.S. Trade Administration). Investments are mainly oriented towards manufacturing, real estate, leasing business and services, and computer services. Data from the Peterson Institute for International Economics and sourced from China’s State Administration of Foreign Exchange (SAFE) shows FDI inflows have hit multi-year lows in 2023, totalling only USD 15 billion. Among the reasons for the decrease were escalating geopolitical tensions, as the “chip war” with the U.S. concerns foreign investors, particularly American-headquartered companies operating in China, leading to hesitancy in investing in local firms. Moreover, the closure of due diligence firms, essential for foreign investors to make informed decisions regarding Chinese companies, coupled with a new national security law targeting cross-border data flows, has discouraged significant investments.

Over the last few years, China made improvements in a wide array of subcomponents ranging from procedures for starting a business to measures to improve electricity access and get construction permits. The country demonstrated reform agendas that aim to improve the business regulatory environment. The reforms mainly focus on increasing the efficiency of business processes, such as tax cuts, trade with tariff cuts, and reduced barriers to foreign investors. In order to attract further foreign investment, the country has introduced mechanisms to improve the delivery of major foreign investment projects, reduce import tariffs, streamline customs clearance, and establish an online filing system to regulate FDI. With a wealth of employees and potential partners eager to learn and evolve, the country is a base for low-cost production, which makes it an attractive market for investors. Nevertheless, certain factors can hinder investments, such as China’s lack of transparency, legal uncertainty, low level of protection of intellectual property rights, corruption or protectionist measures which favour local businesses. The revised investment screening mechanism under the Measures on Security Reviews on Foreign Investments took effect on January 18, 2021, without any public comment period or prior consultation with the business community. Foreign investors expressed dissatisfaction with China's new investment screening rules, citing their broad scope, lack of an investment threshold triggering a review, and inclusion of greenfield investments, a departure from practices in most other countries. Additionally, concerns grew among foreign investors due to new guidance on Neutralizing Extra-Territorial Application of Unjustified Foreign Legislation Measures, a measure akin to "blocking statutes" in other markets, exacerbating worries about the legal complexities of complying with both host-country regulations and those in China. Foreign investors lamented that national security-related legislation increasingly undermined market access in China. Finally, the country ranks 12th among the 132 economies on the Global Innovation Index 2023 and 151st out of 184 on the 2023 Index of Economic Freedom.

 
Foreign Direct Investment202020212022
FDI Inward Flow (million USD)149,342180,957189,132
FDI Stock (million USD)1,918,8283,633,317-6,914,969
Number of Greenfield Investments*413482357
Value of Greenfield Investments (million USD)33,63731,71617,966

Source: UNCTAD, Latest data available.

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

 

FDI STOCKS BY COUNTRY AND BY INDUSTRY

Main Investing Countries2019, in %
The Mainland of China69.7
Singapore5.5
South Korea4.0
Virgin Islands3.6
Japan2.7
USA1.9
Cayman Islands1.8
Germany1.2
Main Invested Sectors2019, in %
Manufacturing25.5
Real estate17.0
Leasing and business services16.0
Information transmission, computer services and software10.6
Scientific research, technical service and geologic prospecting8.0
Wholesale and retail trade6.5
Financial intermediation5.1
Transport, storage and post3.3
Production and supply of electricity, gas and water2.5
Construction0.8
 
Form of Company Preferred By Foreign Investors
WFOE
Form of Establishment Preferred By Foreign Investors
Holding
Main Foreign Companies
A substantial number of foreign multinationals operate in China: GM, KFC, Cummins (CMI), Starbucks, Apple, Intel (INTC), Dell Computer (DELL), Texas Instruments (TXN), Walmart, Nike (NKE), Gucci, Abercrombie & Fitch, Toyota and Samsung.
Sources of Statistics
Invest in China

What to consider if you invest in China

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.

Protection of Foreign Investment

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.
 
Country Comparison For the Protection of InvestorsChina
Index of Transaction Transparency*10.0
Index of Manager’s Responsibility**4.0
Index of Shareholders’ Power***5.0

Source: The World Bank - Doing Business, Latest data available.

Procedures Relative to Foreign Investment

Freedom of Establishment
The Foreign Investment Law of the People's Republic of China implements a “pre-establishment national treatment” plus “negative list management” system for foreign investment. “Pre-establishment national treatment” refers to the treatment given to foreign investors and their investments with regard to market access, which may not be less favourable than that given to their domestic investors and their investments. The “negative list” refers to the special administrative measures for the access of foreign investment in specific fields, which will be issued or approved for issue by the State Council. The Law provides that the state grant national treatment to foreign investment that are not included in the negative list.
Acquisition of Holdings
The acquisition of majority interest in a local company is authorised in China. M&A activities are subject to different regulations depending on whether the company is a public, a non-listed public company or foreign.
Obligation to Declare
The China International Investment Promotion Agency facilitates the distribution of information on necessary authorisations for establishing a business in the country. All proposed foreign investment projects in China must be submitted for 'verification' and approval to the National Development and Reform Commission (NDRC) or to provincial or local Development and Reform Commissions (depending on the sector and value of the investment.
Competent Organisation For the Declaration
National Development and Reform Commission (NDRC)
Requests For Specific Authorisations
Business plans must be submitted for approval to competent authorities prior to the beginning of business activity. If a foreign investor intends to establish a foreign-funded enterprise by merging a domestic enterprise in accordance with these provisions, he/she shall be subject to the approval of the “examination and approval organ” and modify the registration or go through the establishment registration in the “registration administrative organ”. “Examination and approval organ” refers to the Ministry of Commerce. The term “registration administrative organ” refers to the State Administration for Industry and Commerce (SAIC) or its authorized local administrations for industry and commerce. Chinese State-Owned Enterprises are often the targets of foreign investors. Although, it is important to note that additional rules apply to the purchase of State-Owned Enterprises by foreign investors in China. Greenfield investment projects must also seek approval from China's Environmental Protection Ministry and its Ministry of Land Resources.

Office Real Estate and Land Ownership

Possible Temporary Solutions
Rental and Business center. 
The Possibility of Buying Land and Industrial and Commercial Buildings
Foreigners are allowed to buy their property only after having worked or studied in China for at least one year.  They are only entitled to own one property in China and it must only be used for residential purposes.  Commercial or industrial property can only be purchased after a company has been incorporated in China.
Risk of Expropriation
The risk of expropriation is high. Article 20 of the Foreign Investment Law of the People's Republic of China stipulates that the government shall not expropriate investments made by foreign investors. Only in special circumstances (national security and obstacles to large civil engineering projects), the State may expropriate or requisition an investment made by foreign investors for public interest in accordance with the law. Such expropriation or requisition shall be carried out in accordance with the procedures of law and fair and reasonable compensation shall be given in a timely manner.

Investment Aid

Forms of Aid
Foreign investors enjoy corporate tax reductions, exemptions of tax on dividends repatriated during a certain period and other tax advantages. Moreover, foreign direct investment incentives include packages of reduced income taxes, resource and land use fees, and import/export duties, as well as priority treatment in obtaining basic infrastructure services, streamlined Government approvals, and funding support for start-ups. The Ministry of Commerce (MOFCOM) can be contacted for any information concerning opportunities in China.

According to the Notice on Implementing the Policy of Inclusive Tax Relief for Small and Micro Enterprises, published by the Ministry of Finance in January 2019, China expanded existing preferential policies for small and low-profit enterprises. Companies with annual taxable income below RMB 1 million (US$147,290) per year can benefit from a preferential corporate income tax (CIT) rate of 20 per cent, they are only taxed on 25 per cent of their income, while the remaining 75 per cent is tax-free.

Privileged Domains
China encourages foreign investment primarily in high technology, clean energy and export-oriented sectors.
Privileged Geographical Zones
China's Economic Development Zones (EDZs) are areas with preferential trade policies which differ from those governing the country as a whole. EDZs provide a wide range of incentives for FDI, which vary according to the EDZ specification. Companies operating in EDZs can expect, among other incentives, a higher level of autonomy over their operations, a variety of tax exemptions, subsidies for land and buildings and preferential employment policies.
Free-trade zones
In China there are many special trade zones. These special zones provide exceptions to the standard customs procedures and allow tax exemptions or tax incentives to attract overseas investments. They are primarily the 5 special economic zones and the 14 coastal cities. The special zones are Shenzhen (at the border of Hong-Kong SAR), Zhuhaï (close to Macau SAR), Shantou, Xiamen (vis-à-vis Taiwan, China) and the island of Hainan. They were selected because they were completely under-developed.

The 14 coastal cities are Dalian (in the province of Liaonong), Shanghai, Ningbo, Wenzhou (in the province of Zhejiang), Fuzhou (in the province of Fujian), Guangzhou, Zhanjiang (in the province of Guangdong), Beihai (in the autonomous region of Guangxi Zhuang), Tianjin, Yantai, Qingdao (in the province of Shandong) and Lianyungang, Nantong (in the province of Jiangsu). For the past few years, other cities have also been regarded as coastal towns profiting from the same status. Unlike the 5 special zones, these cities were not underdeveloped, but key industrial centres in China. Overseas investment has facilitated improvements to the infrastructure and the creation of new, more advanced ones.

In August 2019, China announced that it will expand the Pilot Free Trade Zones (FTZs) to six new provinces across the country. These are Jiangsu, Shandong, Hebei, Heilongjiang, Guanxi and Yunnan, bringing the total number of Chinese FTZs from 12 to 18.

Public aid and funding organisations
Invest in China - Investment Promotion Agency of Ministry of Commerce (CIPA) is engaged in Chinese investment promotion process and in charge of “Inviting in” (FDI in China) and “Going global” (outbound investment) two-way investment promotion work.
 
 

Investment Opportunities

The Key Sectors of the National Economy
Manufacturing sector, automobile industry, information and communication technology, aeronautics, energy (including nuclear energy), services, finance, building, tourism, health, agriculture, mining extraction, health, online sales (largest world market), transport infrastructure
High Potential Sectors
Chemical industry, insurance and bank, high technology, renewable energy, environment, waste treatment, franchises, medical devices. 
Privatization Programmes
China, whose economy is mixed, has a high number of state-owned corporations. Many of these firms suffer from disadvantages such as over-indebtedness and low efficiency, among others. The Chinese state wants to open these firms to private capital. Partial privatisation of numerous Chinese state-owned enterprises has been discussed since 1993, without having led to deep changes in the Chinese economic landscape. Under the government of President Xi Jinping, the mixed-ownership reform, which injects private capital into state-owned enterprises, is being promoted. One example of a privatisation effort is that at the end of 2016, the state announced the end of its monopoly on salt production. To date the effort is progressing but is still subject to resistance.
Tenders, Projects and Public Procurement
Tenders Tiger, Tenders in China
Tenders Info: Global Procurement Facilitator, Tenders in China
DgMarket, Tenders Worldwide

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors
The Negative List for Market Access (2020 chinese edition) refers to a list of prohibited or restricted industries for foreign investment. The new 2020 National Negative List aims to accelerate the process of further opening key areas in service industries. It has further relaxed foreign investment’s access to the manufacturing and agriculture sectors compared to the 2019 Negative List. The main restrictions are on the following sectors: Production and supply of electricity, heat, gas and water; Transportation, warehousing and postal industries; Information transmission, software and information technology services; leasing and business service; Scientific research and technical services. The 2022 list of industries that are either restricted or prohibited has been cut to 117, according to a document released by the National Development and Reform Commission, from 123 on the 2020 list.

Finding Assistance For Further Information

Investment Aid Agency
Invest in China (Ministry of Commerce of the People's Republic of China)
 
 
 
 

 

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Latest Update: April 2024

In this page: Passport and Visa Requirements | Taxes and Restrictions On Persons When Going Through Customs | Health Precautions | Safety Conditions

 

Passport and Visa Requirements

Passport and Visa Service
Consult the Exit Entry Administration Law (PRC)
Addresses of Consulates or Embassies of the People's Republic of China
Hotel reservation websites
 
Check IATA Travel Website for visa requirements and health advices.
 
 
 

Taxes and Restrictions On Persons When Going Through Customs

How to Refund Consumption Tax
Other Requirements
Weapons, ammunition, pornographic material (some photographs from standard western magazines can fall in this category), radio transmitters/receivers, exposed but undeveloped film rolls, fruits, some vegetables, political and religious brochures (a certain number of religious documents for personal use is tolerated) are prohibited.

Health Precautions

Obligatory Vaccination and Other Recommendations
It is recommended that everyone 16 years of age and older should get fully vaccinated for COVID-19 before travel and present, if necessary, evidence of COVID-19 vaccination at the border. 
The updated information on all health entry requirements as well as on routine and recommended vaccines for China are provided on the dedicated pages on TravelHealthPro and CDC websites.
While there are no official requirements for vaccination, the following are strongly recommended: tetanus, diphtheria, typhoid fever, chickenpox, influenza, measles, rabies, hepatitis A and B, meningococcal disease and poliomyelitis. In Yunnan and the island of Hainan, as well as in the provinces of Guangxi and Guizhou, vaccination against Japanese encephalitis is advised if staying in the countryside.
Hotel reservation websites
World Health Organisation: China

 

© eexpand, All Rights Reserved.
Latest Update: April 2024

In this page: Eating Out | Getting Around | Time and Time Difference | Climate | Electrical Standards and Measurement Systems | Paying | Speaking | Emergency Numbers | Communications

 

Eating Out

 
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.

Getting Around

Means of Transport Recommended in Town

Urban transport services
Beijing Metro
Taxi services
Haibo Taxi
Guide to taxis in Shanghai
 

Transportation From Airport to City Centre:


Airport

Distance

Taxi

Bus

Train

Car Rental
Shanghai-Honggiao (SHA) 16 km / 10 miles CNY 60-100/25-40 min CNY 3 / 35-40 min - Available
Beijing-Capital (PEK) 28 km / 17 miles CNY 135 / 30-40 min CNY 16 / 45 min - Available

Time and Time Difference

Summer Time
No time change in China.
 

Climate

 
Type of Climate
Owing to its large size, there is great diversity of climate in China. The climate ranges from hot and very humid (in the southern part of the country) to continental (in the north of the country).
Hotel reservation websites
World Meteorological Organisation
 

Electrical Standards and Measurement Systems

System of Measurement Used
The metric system, but some traditional Chinese units are still in use.
Unit of Measurement of Temperature
Degree Celsius (°C)
 
 
Electricity
 
  • Voltage
220 V
  • Frequency
50 HZ
Type of Electric Socket
CL
Type of Telephone Socket
US RJ-11
DVD Zoning
Zone 6

Paying

Domestic Currency
Chinese Yuan (Renminbi)
ISO Code
CNY
To Obtain Domestic Currency
As the exchange rate is regulated, where you exchange your money is less important than it may be in other countries. Currency exchanges at Chinese airports tend to be good and may offer a more favourable exchange rate than a bank or company abroad. If you prefer, it is fairly simple to withdraw cash with an international card at a local ATM.
Possible Means of Payment
Cash is the primary method of payment, although American Express, Diners Club, Eurocard/MasterCard and Visa are accepted in authorised establishments in the main cities. The availability of ATMs is often limited outside of cities.
 

To Find a Cash Machine Where You Need, Use the ATM locator

 

Speaking

Official Language
The national language is Mandarin; however, there are many different dialects and variants of it.
Other Languages Spoken
There are more than a hundred dialects, with Mandarin in the north and Cantonese in the south of the country. The official language coexists with the other languages (Mongolian, Uyghur, Korean, Tibetan) of the autonomous regions.
Business Language
When the foreign party does not speak Chinese, business discussions will generally be held in English.

 

Emergency Numbers

Police110
Fire Brigade119
Ambulance120 (or 999 in some places)
Road Accident122
Directory Enquiries114

Communications

Telephone Codes
To Make a Call From China, Dial 00
To Make a Call to in China, Dial +86
Mobile Telephone Standards
GSM; CDMA
National Mobile Phone Operators
China Unicom; China Mobile
 

Availability of Internet

Internet Suffix
.cn

 

© eexpand, All Rights Reserved.
Latest Update: April 2024

In this page: Communities of Expatriates | Ranking of Cities | Renting an Apartment | School System | Health System | Tourism and Culture | Individual and Civic Freedoms | Religion

 

Communities of Expatriates

The Number of Expatriates
The sixth national census revealed that a total of 593,832 foreigners are living on the Chinese mainland.
Press for expatriates (examples): That’s, Global Times, Asiaxpat, Geoexpat.
Hotel reservation websites
Moving to China (Expat Arrivals)
China Expat Society
 
 

Ranking of Cities

Cost of Living
Major Chinese cities count among the most expensive in the world. Shanghai and Beijing are respectively ranked 12h and 13th most expensive cities in the world according to the latest available edition of the Cost of Living Worldwide City Rankings Survey by Mercer.
Quality of Life
According to the latest available edition of the Quality of Living Worldwide City Rankings Survey by Mercer, Beijing and Shanghai are ranked 120th and 103rd respectively out of 231 cities worldwide in terms of quality of living.
Hotel reservation websites
Quality of Living Worldwide City Rankings (Survey by Mercer)
Cost of Living Worldwide City Rankings (Survey by Mercer)

Renting an Apartment

Average Lease Term
Usually, one year contract
Average Rental Costs
It is standard practice to collect guarantee of one or two months rent and the agency fees is 1/2 to 1 month's rent
Rental Agency Websites
Century 21

School System

The Education System
The Chinese school system includes day care centers, nursery schools, special schools for the deaf and dumb, "key schools", primary schools, secondary schools (including agricultural and professional schools), schools for teachers, technical schools and several institutions for higher education (general or specialized colleges and universities).
Since 1986, 9 years of schooling is compulsory. The medium of instruction in Chinese schools is Mandarin.
International Schools
There are many international schools in the big cities like Beijing, Shanghai, Shenzhen and Canton. The most common schools are English, American, French and German.

View the list of international schools in China

Health System

The Healthcare System
The healthcare system in China is inadequate. Today, the press estimates that 20% of the people benefit from 80% of medical spending by the government. They are essentially civil servants and employees of state-owned companies. Re-use or poor sterilisation practices are problems in China, contributing to transmission of diseases.
International Hospitals
Western-style medical facilities with international staff are available in Beijing, Shanghai, Guangzhou and a few other large cities. Many other hospitals in major Chinese cities have so-called VIP wards (gaogan bingfang) with good equipment and English-speaking staff. More information is available at the following websites: World Clinic  and China Expat Health.

Tourism and Culture

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

Individual and Civic Freedoms

Civil Liberty
6/7
World Ranking of Freedom of the Press According to "Reporters sans Frontières", 2021 report : 177/180

Religion

Beliefs
The Chinese are generally atheists. That being said, Buddhism, Taoism and Confucianism are relatively widespread amongst senior citizens and attract a part of the well-to-do class today. There are also Christian and Muslim minorities.

 

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Latest Update: April 2024

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