Really Useful Information for Selling to China A bi-weekly service from
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Published by China Import Network Issue 7 Monday, Jul 16, 2007

IN THIS ISSUE

Textile machinery imports enjoy preferential duties in ChinaTOP

China will carry out its policy of preferential duties on parts and components imports in 16 key technical equipment fields and the policy will be first implemented on textile machinery, according to the Ministry of Finance. The document on policy implementation details was released recently.

From January 1, 2007, China implemented rebates on import tariffs and value-added taxes for some key parts and components imported by domestic companies to develop and manufacture high-speed air-jet looms and automatic winders. The rebates were treated as national investment used mainly in product development and technological innovation.

As part of the new policy, the country also abolished import tax exemptions on related whole machines. During the transition period, all automatic winders and air-jet looms will enjoy zero import tariffs from July 1, 2007. The move is an effort to adjust structure of the textile industry and help textiles and garment producers shift their focus to value-added exports from low-priced and low value-added goods.

The launch of the new policy signals that preferential import duties to revive domestic equipment manufacturing have entered substantial implementation. Policies of preferential duties on other equipment imports will be launched in succession. China's textile industry had entered a crucial phase of upgrading instead of simple expansion in quantity.

As a basic industry, China's equipment manufacturing currently has many problems, such as the inability to innovate, high dependency on foreign products, unreasonable industrial structure and weak international competitiveness.

China's textile machinery sector has two tasks - the revival of textile equipment manufacturing and the promotion of textile industry upgrading during the 11th Five-Year Program, according to the Ministry of Finance. The import duty adjustment aims at creating fair competition for textile machinery enterprises, it added.

Business Culture in ShanghaiTOP

Situated in the middle of China's eastern coastline, Shanghai sits at the mouth of the Yangtze River at the heart of the Yangtze River Delta. Shanghai is China's economic center, an important industrial base, as well as its largest port. Finance, insurance, domestic and international trade, and other services are concentrated here. Various businesses are well-developed and competition is stiff.

Because of Shanghai's history as an immigrant city with strong foreign influence, it has developed a unique culture that combines West with East. This mix has given Shanghainese certain tendencies and characteristics, often called haipai, or Shanghai style. Both men and women should dress in neutral colours and avoid using large hand gestures, personal contact and pointing. Gifts often help open initial contacts, although these should never be open to misinterpretation as bribes. In many companies, especially larger and older ones, a party appointee, who has an honorary or nominal senior post in the company, will preside at the first sessions, then leave the real business to the operational management. Business hours are usually 0800-1700 weekdays, with one or two hours for lunch.

Because they are more familiar with Westerners than Chinese in other parts of China, Shanghainese tend to treat Westerners more equally, thus allowing Western businesspeople to cooperate more easily with the Shanghainese. Shanghainese also tend to adopt Western ways of business and conform to international standards.

Unlike Beijingers, who tend to forge friendships with business partners and sometimes take risks for their friends, Shanghainese seldom mix emotions with business. Shanghainese tend to accept renqing (interpersonal harmony) reluctantly, return renqing quickly, and exchange favors of equal value.

Finally, Shanghainese have a reputation for knowing how to obtain and protect personal rights and interests. In Shanghai markets, it is not unusual to see a well-dressed gentleman arguing with a vegetable seller for a few cents. In business negotiations, Shanghainese are generally professional, discreet, and attentive to minute details. Therefore, negotiations with Shanghainese over even minor issues may be lengthy. Canny Shanghai businesspeople tend to avoid taking big risks and prefer steady and stable business.

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TianJin Investment EnvironmentTOP

Tianjin

To the east of Tianjin is the Bohai Sea and not far to the west is Beijing. It covers an area of 11,300 square kilometers and there are 13 districts and five counties under its jurisdiction.

Tianjin is one of the four municipal cities under the jurisdiction of the Chinese central government and is the largest industrial and port in north China.

Tianjin Harbor is the largest manual harbor in China having business with over 300 ports of more than 170 countries and regions with 75 berths, among them, 48 deepwater berths with 10 thousand tons. In 1997, its annual loading and unloading capacity is 67.89 million tons and it's in the front raw of China for the container capacity and loading and unloading capacity of groceries.

Approved by the State Council on December 29, 1997, and promulgated by the

State Planning Commission, the State Economic and Trade Commission and the

Ministry of Foreign Trade and Economic Cooperation on December 31, 1997.

Encouraged Foreign Investment Industries

1. Agriculture, Forestry, Animal Husbandry, Fishery and Related Industries

2. Light Industry

3. Textile Industry

4. Communication and Transportation as well as Post & Telecommunications

Services

5. Coal Industry

6. Power Industry

7. Ferrous Metallurgical Industry

8. Non-Ferrous Metal Industry

9. Petroleum, Petrochemical and Chemistry Industries

10. Mechanical Industry

11. Electronic Industry

12. Building Materials, Equipment and Other Non-metal Mineral Product

Industries

13. Medicine Industry

14. Medical Equipment Industry

15. Aerospace Industry

16. New Industries

17. Service Business

18. Permitted projects whose products are to be wholly exported directly

Chinese Kung FuTOP

Chinese Kung Fu

Kung fu, (also known as wushu or martial arts) is one of the most well known examples of traditional Chinese culture. It is probably one of the earliest and longest lasting sports which utilize both brawn and brain. The theory of Kung Fu is based upon classical Chinese philosophy. Over its long history it has developed as a unique combination of exercise, practical self-defense, self-discipline and art. In sports like track and field, ball sports, weightlifting, and boxing, an athlete typically has to retire from full participation in his 30s. Injuries sustained during years of active sport participation at a young age can that affect our health in later life. In Chinese Kung fu however, a distinction is made between "external" and "internal" kung fu. It is said that "In external kung fu, you exercise your tendons, bones, and skin; in internal kung fu, you train your spirit, your qi and your mind."

wushu

It is estimated that Chinese Kung Fu can be dated back to primeval society. At that time people use cudgels to fight against wild beasts. Gradually they accumulated experience of self defense. When Shang Dynasty began, hunting was considered as an important measure of Kung Fu training.

During Shang and Zhou Dynasties, martial arts evolved to be a kind of dancing. Usually the dancing of martial arts is utilized to train soldiers and inspire their morale. During Zhou Dynasty, martial-arts dancing was designated as a component of education. The application of wrestling techniques at the battlefield received much attention from various states during the period of Spring and Autumn. The then emperor held twice wrestling contests every year respectively in spring and autumn so as to select excellent people of martial arts. At the same time, the skill and technology of sword forging as well as sword ceremony achieved rapid development.

In Qin and Han Dynasties, wrestling, swordplay, and martial arts dancing were very popular. A well known instance was Xiang Zhuang’s Sword Dancing in Hongmen Banquet at the same period. His performance was very close to today’s martial arts. The application of spear play in Han Dynasty reached its summit along with the appearance of many other techniques of spear usage. It is said the Five-animal-style exercise was another innovation by Hua Tuo on the development of Chinese martial arts.

Starting from Tang Dynasty, Kung Fu examination was proposed and implemented. Excellent candidates would receive titles and awards through the examination, largely propelling the development of martial arts. By then martial arts had evolved to be an artistic form and an independent genre. It was gradually introduced to many countries in Southeast Asia. Today Kung Fu was honored as the ancestor of kickboxing, karate, aikido, and judo.

Song and Yuan Dynasties witnessed the climax of Kung Fu development. Practice of Kung Fu by civil organizations became more and more popular. Some organizations or clubs centered on the use of spear play and cudgel, and they were called Yinglue Organization; while others majored in the practice of arching and therefore called Arching Origination. Besides, there appeared another genre called Luqi People. They made a living as performer of martial arts all over the country. Usually their performance was carried out by a single person or two persons as a pair. 

Chinese Kung Fu achieved larger development in Ming and Qing Dynasties. In Ming Dynasty, a lot of genres came into being and numerous books on martial arts were published. In Qing Dynasty, the ruling empire banned the practice of martial arts, and the folk had to set up various clubs or societies to pass down feat secretly. Therefore tens of schools of martial arts came into being, such as taiji,xingyi shadowboxing, eight–diagram shadowboxing, etc. Qing Dynasty is the times of integration among different martial arts genres. Wrestling techniques were introduced into martial arts, facilitating the improvement and mature of martial arts. This period is the shed between genres for appreciation and those for actual combat.

Chinese Kung Fu is really a large system of theory and practice. It combines techniques of self-defense and health-keeping.

How to export to ChinaTOP

It may be a good time to enter the China market now but it is not an easy task. Many have failed entry into the China market as they do not fully understand the seriousness of the complications of the Chinese business culture in the China market.

China is growing as such a fast rate that many foreign companies are attracted to it. However, foreign investors need to understand China itself as a country economically and culturally.

China market is a good investment but also a big problem to many foreign companies. Due to language and culture barriers, many foreign companies do not have the ability to communicate in the China market and many ideas and opportunities are interpreted the wrong way. Hence, foreign companies would need to fully understand the Chinese culture and language before entering the China market.

Mainly there are 3 ways whereby one can export his/her goods in China:

1. Distribute your goods directly

2. Establish a joint venture

3. Find a qualified agent or distributor with a vast sales network

For small and medium sized companies, the best way to enter the China market is through a reputable or well-known agent or distributor. These companies are located regionally and typically have large sales network. Thus they will be able to have a better understanding of the China’s market and can provide assistance in developing distribution strategies in China and the region. In this way, new products can be launched easier into the market and distribution network can be set up rapidly without any problems dealing with distribution rights and licensing.

Besides all these, the most important step that one must take before exporting his/her products into China will be have a thorough understanding China’s customs, regulations and controls towards imported goods. A sound market entry strategy is also necessary in order to penetrate the China’s market. An assessment of your goods’ strengths, weakness, opportunities and threats can allow you to promote and distribute your products better. Understanding the profitability and marketability of your products in the China’s market is thus vital before exporting your products into China.

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Chief Editor: Sherry Yang           Associate Editor: Lark Huang, Jimmy Jiang

Graphic Designer: Sam Chow

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