Blog - Israelies doing business in China

China’s non-financial outbound investments reached more than $ 146 billion in 2016. In order to ensure RMB outflow remain controlled, Chinese authorities announced on stricter supervisory measures towards outbound investment. (in Hebrew)

After a 3 years trial run in the free trade zones only, foreign investments in China have been greatly simplified nationwide by adopting a record-filing administration mechanism.  (in Hebrew).

 

Why are foreign internet companies uneasy about recent legislative updates in China? Fast technological advances in China and increased use of websites and apps by consumers pose new challenges for the government in the realms of big data, privacy and data protection. (in hebrew)

Companies, venture capital funds, executives, financial managers, businessmen and investors interested in penetrating the Chinese market or already active in it, must be knowledgeable and keep up-to-date with the biggest tax reform in the last twenty years, which was expanded on May 1, 2016. (in hebrew)

 

With China’s recent years of fast growth in the background, it is not surprising that the state continues to break records, preserving its position as the country with the greatest number of online visitors. (in hebrew)

 

NEEQ is an over-the-counter (OTC) market launched throughout China at the end of 2012 and currently includes more than 3,000 registered companies (mostly in Shenzhen and Shanghai), which raised more than 18 billion Yuan in 2015. (in hebrew)

 

Alongside advanced legislative protection in Chinese corporate law, many companies around the world remain hesitant about importing into China. Concern derives mostly from fraud, unfair competition and breach of various rights by the Chinese counterpart. (in hebrew)

 

A company owned by the Chinese government petitioned for enforcement of pecuniary judgment against an Israeli citizen for breach of contract. The District Court ruled that in light of the current legal condition in China there is reasonable potential of enforcing Israeli judgments in China, satisfying the mutuality requirements of the Enforcement of Foreign Judgments Law. (in hebrew)

 

For the first time the issue of crowdfunding platforms was brought before the court in China. However, in the absence of clear regulation the court avoid discussing the legality of such type of crowdfunding transactions, and related to the contract executed between the parties as a legally binding intermediate agreement. (in hebrew)

 

Until August of this year approximately 400 foreign research and development centers have been established in Shanghai, two-thirds of which in Pudong District. The centers established in Shanghai represent approximately 25% of all foreign R&D centers in China. (in hebrew)

 

On July 1^st the National Security Law of China was published. According to the government the purpose of the law is dealing with complex threats to national interests, from cyber to terror. (in hebrew)

 

Currently the market for advanced medical devices in China relies mostly on import. Approximately 70% of advanced medical devices are imported, mostly from the U.S. (41%), Japan (10%) and Germany (8%), where the brands are held in high esteem and are especially coveted in private hospitals and among the upper class in China. (in hebrew)

 

The Foreign Trade Administration at the Ministry of Economy recently announced plans to assist in the establishment of marketing activity in China, India and Japan (the “Directive”). (in hebrew)

 

Last week GSMA announced a new landmark when it reported that approximately 40,000 participants from 100 countries took part in the Mobile World Congress held in Shanghai. (in hebrew)

 

In the past establishing a company in China was a cumbersome and complex bureaucratic process that lingered on for months. Similarly, there were many areas in which foreign companies were not permitted to conduct business in China. (in hebrew)

 

China’s Ministry of Industry and Information Technology (MIIT) has carried out another reform in favor of foreign investment in China’s profitable e-commerce market. (in hebrew)

 

Providing food for China’s huge population (approximately 1.3 billion citizens) is no small task, however securing sufficient quantities and maintaining the quality of food is the real issue facing the Chinese government. (in hebrew)

 

China’s e-commerce market reached $12.3 trillion (!) in 2014, compared to $2 trillion in the previous year, a substantial increase bearing witness to the increased use of the internet for commerce in China. (in hebrew)

 

A year has lapsed since declaring the pilot program for the Shanghai Free-Trade Zone. In spite of disagreements regarding various reforms, the Free-Trade Zone has proven itself as a source for significant change and as a true step towards an international trade standard.

 

Last April the securities authorities in China announced plans for enabling trade of securities between the Shanghai and Hong Kong stock exchanges. This is a significant and groundbreaking move on the part of the two leading stock markets in the east, which decided to join forces. (in hebrew)

 

Interim provisions regarding employment through hiring agencies have been considered and adopted on December 20, 2013, and became effective on March 1, 2014. (in hebrew)

 

The 3^rd amendment of the trademarks law shall come into effect on May 1, 2014, which significantly amends the law and includes many positive changes. (in hebrew)

 

The amendment to the Chinese companies law, approved on December 28, 2013, and effective as of March 1, 2014, materially changes the issue of registered capital in China. (in hebrew)

 

 

Encouraging foreign investment is the main objective of the Shanghai Free-Trade Zone. Although the new rules apply only in the Free-Trade Zone, they give us an important view to a possible direction of future legislation regarding investment across China. (in hebrew)

 

At the meeting of the State Council held in the presence of the Prime Minister of China on October 25, it was agreed on a reform to the process for registering companies (and specifically to the registered capital requirement). (in hebrew)

 

As part of the government’s attempt to encourage foreign investment in China, emphasis has been placed on enforcement of intellectual property rights with the objective of changing the reputation of the Chinese market as being dangerous to patents and copyright. (in hebrew)

 

The new Chinese Employment Contract Law came into effect in January 2008, imposing many broad limitations on employers and expanding employee rights. (in hebrew)

 

At the end of December 2011 the Chinese Ministry of Commerce and the National Development and Reform Commission published: “Foreign Investment Guidance Catalogue 2011”, which came into effect at the end of January 2012 (the “New Catalogue”). (in hebrew)

 

China is one of the largest and fastest growing markets for the water industry (20% growth per year). China has a water problem and certain areas have no access to sources of clean water, which is a major problem. (in hebrew)

 

Is China’s real-estate market a bubble or will optimistic forecasts of permanent rise in China’s growth rate come true to bring demand for new apartments in the city to a record high? (in hebrew)

 

In recent years China has been one of the most attractive destinations for foreign investments, while most focused on eastern China. A new trend is now driving more international and Israeli hi-tech companies to invest in central and western China. (in hebrew)

 

“If you can’t beat them, join then”. Many Israeli technology companies are asking themselves, in light of the technological flourish in China, whether it may be beneficial to join the trend and impressive growth or are the risks of business and financial operations in China too great!? (in hebrew)

 

Experts estimate that many small Chinese companies can be expected to cease operations during 2011, in response to the requirements of the Chinese government to increase central bank reserve levels. (in hebrew)

 

Chinese New Year was celebrated in the beginning of February 2011, with the Zodiac transition from Tiger to Rabbit. The Rabbit symbolizes calm and optimism, in contrast to the Tiger which symbolized dramatic changes. (in hebrew)

 

In recent years, and particularly since China’s foreign currency deposits grew to immense proportions, China has begun looking abroad for direct or indirect investment opportunities (by government companies and/or loans to Chinese companies), by acquiring shares, companies and assets around the world. (in hebrew)

 

In spite of many changes China has experienced in recent years, many differences still remain between Chinese and western cultural and business thinking. In this post I will focus on one of the best known and most important of such differences, which is the different significance of executing contracts in China. (in hebrew)