By Johnny Zhao

Under the current tax system in China, there are 26 types of taxes, which, according to their nature and function, can be divided into the following 8 categories:

• Category of turnover taxes. It includes three kinds of taxes, namely, Value-Added Tax, Consumption Tax and Business Tax. The levy of these taxes are normally based on the volume of turnover or sales of the taxpayers in the manufacturing, circulation or service sectors.

• Category of income taxes. It includes Enterprise Income Tax (applicable to such domestic enterprises as state-owned enterprises, collectively-owned enterprises, private enterprises, joint operation enterprises and joint equity enterprises), Income Tax on Enterprises with Foreign Investment and Foreign Enterprises, and Individual Income Tax. These taxes are levied on the basis of the profits gained by producers or dealers, or the income earned by individuals.
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The consulting industry in China is flourishing. After all, it is the largest potential single market in the world, and everyone is flocking to it. New companies need information and advice about how to tackle the unique challenges of this market. For any MBA who is fluent in Chinese, or who has grown up in China, and is familiar with the tools of the trade, such as financial modeling, business negotiations and company valuations, China represents an “iron rice bowl” which will make their careers for years to come.

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By Gregory Sy and Currie Lee

Needless to say, China has become the world’s leading manufacturing base. However, with the recent product safety scares and the constant media attention, “Made in China” has become a high-profile issue for consumers and retailers. So how does a foreign company minimize the risks of tainted/substandard products manufactured in China? In this article, we discuss contract terms which foreign companies should consider when entering into OEM relationships with Chinese suppliers. (While we highlight some of what we feel are the main issues to be covered by the agreement, we recognize that each case is unique and there is no such thing as a ‘typical’ OEM arrangement.)

Standard Form Agreements
An OEM may have a standard form agreement which they will be more than willing to provide to foreign companies who wish to use their services. Read the rest of “OEM Agreements in China” or post a comment

By Ron Cune

China is often referred too as the awakening dragon. People who have visited China acknowledge the dynamic atmosphere in the country and fully understand the definition of 24-hour economy.  Receiving a production order at Friday 21.30, having a meeting with the production manager on Sunday and realizing delivery at Monday 8:00 common practice in China. The Chinese are experts when it comes to improvisation. An advantage if you are dealing with tight deadlines but challenging for scheduling delegations or for people who are addicted to punctuality.

In most Western countries, confirming a meeting can be done months in advance with 1 telephone call. Operating in China, scheduling meetings can begin only 2-3 weeks in advance. Furthermore, this meeting has to be confirmed many times. Even at the day of the appointment, a final confirmation is conventional. Only by doing so, you and the other party are sure of no last-minute changes.
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By Ron Cune

It is believed that China offers unprecedented possibilities for economic success in any sector. The country has a large well-educated population and employees work hard against competitive salaries. Roaring stories about business success follow one after another. City-life has improved dramatically and consumption is, after 20 years non-stop economic growth, still buoyant.
 
This ever-optimistic approach has, however, it downsides. Many entrepreneurs forget to stay alert. The low salaries and seemingly low costs per product made many entrepreneurs lazy in controlling the overall production standards. A recent McKinsey study under 30 multinationals showed that managers taking their job to easy were responsible for loss of production productivity and rising costs. The study showed cases where net profit lagged 20% to 40% behind the possibilities. In the long run, missing out
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