China Market Intelligence

October 24th, 2007

As the January 1 implementation date of the PRC Enterprise Income Tax Law approaches, major accounting firms have begun discussions on the law's draft implementing regulations with the Ministry of Finance (MOF) and State Administration of Taxation (SAT). The implementing regulations, which are expected to be released in early November, reportedly contain a number of provisions that will directly impact the operations and tax planning of foreign-invested enterprises (FIEs) in China.

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October 24th, 2007
Food and product safety legislation

Food and product safety has remained a prominent focus of the US Congress over the past few weeks and has been the subject of several hearings in September and October. Several pieces of food and product safety-related legislation appear to be gaining momentum, and at least one representative who works on China-related issues is convinced that there is plenty of support for the bills to pass.

The House and Senate have created bills...

October 24th, 2007

China's expanding global trade surplus and resulting foreign currency inflows are putting pressure on the PRC government to allow the renminbi (RMB) to rise more quickly against the dollar and euro. China announced a global trade surplus through the third quarter of $185.6 billion, already exceeding the $177.5 billion surplus recorded for all of 2006. Exports totaled $878.6 billion through September 2007, up 27.1 over the same period in 2006, and imports totaled $692.6 billion, up 19.1...

October 17th, 2007

More than 2,200 delegates convened in Beijing on October 15 for the national Congress of the Chinese Communist Party (CCP), one of the most important events in PRC politics. Every five years, the CCP meets to elevate new leaders and members to the highest CCP organs, specifically the party's Central Committee, Politburo, and Politburo Standing Committee, and to announce the retirement of others. The congress is also the occasion for policy speeches that lay out the broad outlines of the...

October 17th, 2007

Although Chinese Communist Party (CCP) leadership changes will not be announced until the CCP Congress ends on Sunday, October 21, the PRC State Council recently made several government personnel appointments. The following officials were appointed:

Appointments, October 2007 Note: In some cases, it is unclear whether the officials will be leaving their former position. NA = not available Name New position Former Position Lou Jiwei Board chair, China Investment Corp. (CIC) Deputy...
October 17th, 2007
US-China exchanges on environmental issues

US Environmental Protection Agency (EPA) officials in late September met with their PRC counterparts to advance cooperation and dialogue on a host of environmental issues. EPA Administrator Stephen Johnson and National Development and Reform Commission (NDRC) Vice Minister Xie Zhenhua held substantive discussions on the sidelines of the Major Economies Meeting on Energy Security and Climate Change, which took place on September 27...

October 17th, 2007

China's total 2006 research and development (R&D) expenditures jumped RMB 55.3 billion ($7.4 billion) to reach RMB 300.3 billion ($39.9 billion), up nearly 23 percent over 2005, according to the PRC National Bureau of Statistics (NBS). R&D spending by all enterprises hit RMB 214.5 billion ($28.5 billion), up 18.8 percent; government research institutions hit RMB 56.7 billion ($7.5 billion), up 10.6 percent; and universities reached RMB 27.7 billion ($3.7 billion), up 14.2 percent....

October 10th, 2007

The results of USCBC's annual survey, released last week, revealed that market expansion in China in the last year was tempered by difficulties in finding qualified personnel, obtaining business licenses in many sectors, and enforcing intellectual property rights (IPR). Rising protectionist sentiments in both China and the United States also threaten to undermine the gains made to date, according to results of the survey.

Aside from the top 10 issues (see table below), companies are...

October 10th, 2007
WTO establishes dispute panel to focus on China's IPR regime

The World Trade Organization's (WTO) Dispute Settlement Body on September 25 established a dispute panel to investigate US complaints that China is taking insufficient means to protect intellectual property rights (IPR), a further step in the WTO case initiated by the United States in April. A response released by the PRC mission to the WTO reiterated that China has made reforms to protect IPR and claimed that...

October 10th, 2007

The US Department of Transportation (DOT) last week approved two nonstop flights to China that will start daily operation next year: a route from Atlanta to Shanghai operated by Delta Air Lines, Inc. and a route from San Francisco to Guangzhou, Guangdong, operated by United Airlines Corp. DOT also proposed to award four other US carriers with nonstop routes beginning in 2009.

According to DOT Secretary Mary E. Peters, following a period for public comments on the proposed routes, DOT...

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