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Contents

China in Brief

China in Brief

General Section

General Information

Economy Data

Infrastructure

Introduction

Railways

Roads

Ports

Telecom

Industry

Manufacturing

Agriculture

Energy

Power

Oil & Gas

Banking

Banking

Travel

Travel

Policies

Exim Policy

Trade

Trade

Exim

Tax Structure

Tax System

Important Contacts

Important Contacts

   
 

 

 
   

 

 
 
President Mr. Hu Jintao
Prime Minister Mr. Wen Jia Bao
Capital Beijing
Area 9.5 million Sq Km
Climate Extremly diverse; tropical in south to subarctic in north
Natural Resources Coal, iron ore, petroleum, natural gas, mercury, tungsten, antimony, maganese, vanadium, molybdenum, aluminium, lead, zinc, uranium, hydropower potential (world's largest)
Population & its structure 1.24 billion
93% Han Chinese, 55 recognised minorities
Legislative Body National People's Congress and its standing Committe exercise legislative power
Official Languages Standard Chinese & Mandarin
Major Industrial Cities Beijing, Shanghai, Kunming, Guangzhou
Currency Yuan / Renminbi (BMB)
Bank Exchange Rate (Nov '99) 1 US$ = 8.27 RMB
Inflation 2% (approx)
Legal System A complex amalgam of custom and statue; rudimentary civil code in effect since 1 January 1987; new legal codes in effect since 1 January 1980; continuing efforts are being made to improve civil, administrative, criminal and commercial law
GDP: Purchasing Power Parity $4.42 trillion (approx)
GDP - real growth rate 7.8% (approx)
GDP - per capita $3600 (approx)
GDP - Composition by sector Agriculture - 19%
Industry - 49%
Services - 32%
Foreign Exchange Reserves ($Billion) 149
Economic Overview The authorities switched to a system of house hold responsibility in agriculture in place of old collectivization, increased the authority of local officials and plant managers in industry, permitted a wide varity of small-scale enterprise in services and light manufacturing and opened the economy to increased foreign trade and investment. The result has been a quadrupling of GDP since 1978. Agriculture output doubled in the 1980s, and industry also posted major gains. In late 1993 China's leadership approved additional long-term reforms aimed at giving still more play to market-oriented institutions and at strengthening the centre's role over the financial system. In 1995-97 inflation dropped sharply, reflecting tighter monetary policies
Industries Iron & Steel coal, machine building, armaments, textile and apperal, petroleum, cement, chemical fertizilers, footwear, toys, food processing, autos, consumer electronics, telecommunications.
Tax Rates Enterprises with FI and Foreign Enterprises established in SEZs that engage in production or business operations are eligible for a reduced tax rate 15%.

Financial institutions, such as foreign banks and Chinese-foreign equity JV banks establised in SEZs, are eligible for the reduces rate of 15% with investment exceeding US$ 10 million and the schedule term of 10 years or more.
Tax Holidays Production oriented enterprise with foreign investment that are scheduled to operate in an SEZ for a period of at least 10 years are entitled to a tax holiday of 5 years.

Eligible busine4s are exempt from the enterprise tax for the first two years after the first profit making year and are granted a 50% reduction in the tax in the 3rd, 4rd and 5th years.

Enterprises with FI engaged in the service trade are entitled to a tax holiday of 3 years, if they operate for at least 10 years or their FI exceeds US$ 5 million.

Chinese foreign equity joint ventures with a term of 15 years or more that are engaged in harbour and wharf construction projects are entitled to a tax holiday of 10 years. 
Tax Reduction An eligible FI enterprise approved by local tax authorities, are exempt from the enterprise tax in the first profit - making year and are granted a 50% reduction in the preferential rate in the following two years.

Financial institutions, on the other hand, are eligible for a tax exemption during the first profit making year, followed by a 50% reduction in the enterprise tax for the subsequent two years.

Chinese foreign equity JVs are exempt from the enterprise tax begining with the first profit making year to the 5th years and is granted a 50% reduction in the preferntial rate in the 6th to 10th year.
Withholding Tax Rate A reduced withholding tax at 10% applies to foreign Investors that do not have an establishment in China but earn passive income, including rents, from sources within the SEZs.

A withholding tax exemption also is available for certain royalties associated with advanced technology and for interest on preferential loans between banks.

Foreign Investors are exempt from the withholding tax on passive dividends from SEZ business that are remitted out of China.
International Memberships UN, APEC, IMF, WB, WTO
Exports Total value: $ 183.8 Billion (f.o.b., approx)

Commodities :  Electrical machinery and mechanical appliances, woven apparel, knit apparel, footwear, toys and sporting goods (approx)
Imports Total value : $ 140.17 Billion (c.i.f., approx)

Commodities :  Electrical machineary and equipment, machinery and mechinical appliances, plastics, iron and steel, scientific and photographic equipment, paper and paperboard.
Principal Exports Japan, ASEAN, ROK, UK, USA, Hong Kong, EU, Taiwan, Russia, Australia
Origin of Imports Japan, Taiwan, USA, EU, South Korea, Hong Kong, Germany, Russia
Foreign Trade In the first half of the year China's exports reached US $ 83 Bn, down 4.6% over the same period of 1998. Import surged 16.6% to US $ 75 bn, bringing the total trade volume to US $ 158 bn, up 4.4 %.
Basic Items of Export to India Edible vegitables, Coffee, Tea, Spices, Sugar, Mineral fuels, Organic Chemicals, Silk, Cotton, Glass & Glassware, Precious stores, Iron & Steel, Electrical Machinery, Toys etc.
Basic Items of Import from India Organic Chemicals, Pharmaceuticals & Drugs, Raw Hides, Leather, Cotton, Ores, Slag & ash, Sugar, animal & vegitable fats and oils, Iron & steel, Machinery, Soymeal etc.
Organisations providing business information China Council for Promotion of International trade (CCPIT)
Machinery & Electronics Sub Council
MMEI Building 100823 Beijing
Tel: 86 1 3294976,   Fax: 86 1 8013867

All China Federation of Industry & commerce (ACFIC)
93 Bei He Yan Street, Beijing 100006
Tel:  86 1 5136677;  Fax:  86 1 5131769

China Enterprise Management Association (CEMA)    
17 Zizhuyan Nanlu
Haidian District 100044 Beijing, China
Tel:  00 86 1 68414280/ 68416622
Fax: 0086 1 68414280

China Chamber of International Commerce
Machinary & Electronics Chamber of Commerce (MECC)
MMEI Building, Sanlihe Road
Beijing 100823, China
Tel: 0086 1 329476
Fax :  00 86 1 8013867
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