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China

5 things we can learn from China’s e-commerce explosion

Online marketplace Alibaba saw sales growth of 39% in comparison with the event in 2016, suggesting that Chinese consumers are confident in their spending

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China’s e-commerce market continues to see high double-digit growth year on year. The Double 11 event on 11 November 2017 – also known as Singles’ Day, when single people in China celebrate, and which has become a popular shopping holiday – was a clear example of how China’s consumption-led economy is evolving digitally.

Online marketplace Alibaba saw sales growth of 39% in comparison with the event in 2016, suggesting that Chinese consumers are confident in their spending and that consumption will continue to rise.

China: a booming market

China’s economy continues to grow steadily as it ended 2017 with GDP at 6.8%, according to China’s National Bureau of Statistics (NBS). In line with this positive momentum, at Nielsen we saw China’s consumer confidence index (CCI) reach a historic high of 114 points in both the third and fourth quarters of 2017, up two points from the second quarter of 2017 and six points from 108 in the fourth quarter of 2016.

CCI scores above and below 100 points represent, respectively, positive and negative consumer confidence. An all-time high CCI, coupled with healthy disposable income growth of 7.5%, as reported by the NBS, means that consumers are confident and consumer demand or consumption is expected to remain steady.

We see consumption increasing as consumers in China spend more than ever: 43% more compared with five years ago. That’s leagues ahead of the 24% growth in the US and 33% globally.

Nielsen’s e-commerce tracking data, within 34 fast-moving consumer goods categories, shows that in a 12-month rolling average leading up to November 2017, online sales grew 27% versus the year before, whereas offline sales increased only 6% over the same period.

Meanwhile, the ratio of enterprises with e-commerce services increased significantly in the last year. According to Nielsen’s CCI report, up to Dec 2016, the ratio of enterprises launching online sales reached higher than 45%.

There’s no doubt that China’s e-commerce market is on an overall upward trajectory. In line with this, Nielsen has identified five key trends that we believe are driving the development of the market, and which will be essential for businesses to leverage to ensure success in 2018.

Five key trends driving China’s e-commerce market

1) E-commerce shopping festivals

E-tailers are creating more shopping festivals and themes to unlock consumer desire. Based on Nielsen’s survey, before Double 11 this year, 79% of consumers said they planned to participate in Double 11. Alibaba saw 168 billion RMB in sales and 39% growth on Singles’ Day, while another main competitor, JD.com, achieved RMB 127 billion during 1-11 November, with over 50% growth.

Double 11 and similar shopping festivals are an opportunity for local brands, but these are also key opportunities for foreign brands to leverage the collective enthusiasm for shopping among Chinese consumers. On these holidays, consumers are looking to experiment, try new things and buy products that may be new to them. These festivals are a perfect opportunity for new brands entering the market to get noticed.

2) Consumption upgrade

Two triggers are sparking a trend known as “consumption upgrade”. Rising disposable income means that consumers are more confident in spending their money on a number of categories – especially food, cosmetics and clothing. An emphasis on quality and fashion are growing much faster than other consumer demands. Following this, middle- to upper-class consumers are now increasing their demand for goods that are not available domestically. Online platforms, where international high-end and niche brands are easily accessed, are rising in popularity, while cross-border shopping sites are leading the consumption upgrade movement.

According to Nielsen’s online shopper trend report, the proportion of consumers who had recently made a cross-border…

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China Unveils Plan to Upgrade Industrial Equipment

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China unveiled a comprehensive action plan for upgrading industrial equipment, with a focus on driving technological innovation and economic growth. The plan, released on April 9, 2024, aims to enhance competitiveness and sustainability within the manufacturing sector through extensive investment and regulatory support.


China announced an ambitious action plan for industrial equipment upgrading, which aims to drive technological innovation and economic growth through extensive investment and regulatory support.

On April 9, 2024, China’s Ministry of Industry and Information Technology (MIIT) and six other departments jointly released a notice introducing the Implementation Plan for Promoting Equipment Renewal in the Industrial Sector (hereafter referred to as the “action plan”).

Finalized earlier on March 23, 2024, this comprehensive action plan addresses critical issues related to technological innovation and economic development. It reflects China’s proactive stance in enhancing competitiveness and sustainability within its manufacturing sector. The initiative underscores the recognition of industrial equipment upgrading as a top policy priority.

The scope of China’s action plan to upgrade industrial equipment in manufacturing, is extensive, covering various aspects such as:

In line with China’s ambitious goals for industrial modernization and sustainable development, the action plan outlines several key objectives aimed at driving substantial advancements in the industrial sector by 2027.

These objectives encompass a wide range of areas, from increasing investment to enhancing digitalization and promoting innovation, including:

The objectives and key actions proposed in the action plan are summarized below.

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

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China deepens engagement with new Indonesian president as top diplomat visits Jakarta

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China’s top diplomat met the outgoing Indonesian president and his successor in Jakarta on Thursday, as Beijing deepened its engagement with future leader Prabowo Subianto, amid a competition for regional influence with the United States.

The meeting with Chinese Foreign Minister Wang Yi was part of a joint commitment to advance the partnership between the two countries, said Prabowo, who visited Beijing in early April after his landslide win in the February general election.

“It is a great honor for me to welcome him [Wang] today. Thank you for the kind reception I received in Beijing a few weeks ago,” Prabowo said, according to an Indonesian defense ministry statement.

Chinese President Xi Jinping had invited Prabowo to visit, and the latter accepting the invitation raised eyebrows in Indonesia because no president-elect had made a foreign visit such as this one without being sworn in. China is Indonesia’s largest trading partner.

Wang, too, mentioned Prabowo’s Beijing trip, according to the same statement.

“We really appreciate and welcome Defense Minister Prabowo’s visit to China,” he said.

“We are committed to continuing to increase bilateral cooperation with Indonesia, both in the defense sector and other fields such as economic, social and cultural.”

Wang is scheduled to go to East Nusa Tenggara province on Friday to attend the China-Indonesia High-Level Dialogue Cooperation Mechanism, a process to support more effective bilateral cooperation. His Jakarta stop was the first of a six-day tour that also includes Cambodia and Papua New Guinea.

Chinese Foreign Minister Wang Yi (left) and Indonesian Foreign Minister Retno Marsudi attend a press conference after their meeting at the Ministry of Foreign Affairs in Jakarta, April 18, 2024. (Eko Siswono Toyudho/ BenarNews)

Prabowo and Wang discussed cooperation in the defense industry and sector, with potential measures such as educational and training collaboration, as well as joint exercises, said Brig. Gen. Edwin Adrian Sumantha, spokesman at the Indonesian defense ministry.

In fact, the ministry statement said that “China is Indonesia’s close partner and has had close bilateral relations, especially in the defense sector, for a long time.”

Of course, China has also invested billions of U.S. dollars in infrastructure projects in Indonesia, including as part of Beijing’s Belt and Road Initiative – the Jakarta-Bandung high-speed train, which began commercial operations in October 2023, is one such BRI project.

The two countries have drawn closer during outgoing President Joko “Jokowi” Widodo’s two terms, and Beijing would like that to continue as the U.S. tries to catch up with China’s gargantuan influence in Southeast Asia, analysts have said.

Indonesia, China call for ceasefire in Gaza

Both Indonesia and China shared the same position on Israel’s devastating attacks on Gaza, said Wang’s Indonesian counterpart, Retno Marsudi.

Israel’s air and ground strikes have killed more than 33,000 Palestinians following the Oct. 7 attack on the Jewish state by Palestinian militant group Hamas, which killed around 1,100 Israelis.

“We … have the same view regarding the importance of a ceasefire in Gaza and resolving the Palestinian problem fairly through two state solutions,” Retno told reporters in a joint press conference after meeting with Wang. 

“Indonesia will support full Palestinian membership in the U.N. Middle East stability will not be realized without resolving the Palestinian issue.”

For his part, Wang slammed Washington for repeatedly vetoing resolutions calling for Israel to end the attacks on the Palestinian territory it occupies.

“The conflict in Gaza has lasted for half a year and caused a rare humanitarian tragedy in the 21st century,” Wang told the media at the same press conference, according to the Associated Press.

“The United Nations Security Council responded to the call of the international community and continued to review the resolution draft on the cease-fire in Gaza, but it was repeatedly vetoed by the United States.”

The conflict in the Middle East offered a strategic opportunity for China to further expand its influence in Southeast Asia, said Muhamad Arif, a lecturer in international relations at the University of Indonesia.

“China is trying to strengthen its position as a key player in the region,” Arief told BenarNews.

China could present an alternative approach to the conflict in Gaza, he said, which may find approval in Southeast Asia’s largest country, Indonesia, and other Mulism-majority states in the region, such as Malaysia and Brunei.

BenarNews is an RFA-affiliated online news organization.

Read the rest of this article here >>> China deepens engagement with new Indonesian president as top diplomat visits Jakarta

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New Publication: A Guide for Foreign Investors on Navigating China’s New Company Law

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The sixth revision of China’s Company Law is the most extensive amendment in history, impacting foreign invested enterprises with stricter rules on capital injection and corporate governance. Most FIEs must align with the New Company Law by July 1, 2024, with a deadline of December 31, 2024 for adjustments. Contact Dezan Shira & Associates for assistance.


The sixth revision of China’s Company Law represents the most extensive amendment in its history. From stricter capital injection rules to enhanced corporate governance, the changes introduced in the New Company Law have far-reaching implications for businesses, including foreign invested enterprises (FIEs) operating in or entering the China market.

Since January 1, 2020, the Company Law has governed both wholly foreign-owned enterprises (WFOEs) and joint ventures (JVs), following the enactment of the Foreign Investment Law (FIL). Most FIEs must align with the provisions of the New Company Law from July 1, 2024, while those established before January 1, 2020 have bit more time for adjustments due to the five-year grace period provided by the FIL. The final deadline for their alignment is December 31, 2024.

In this publication, we guide foreign investors through the implications of the New Company Law for existing and new FIEs and relevant stakeholders. We begin with an overview of the revision’s background and objectives, followed by a summary of key changes. Our in-depth analysis, from a foreign stakeholder perspective, illuminates the practical implications. Lastly, we explore tax impacts alongside the revisions, demonstrating how the New Company Law may shape future business transactions and arrangements.

If you or your company require assistance with Company Law adjustments in China, please do not hesitate to contact Dezan Shira & Associates. For more information, feel free to reach us via email at china@dezshira.com.

 

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

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