China Business

China is evolving and one of the biggest changes has been how China has greatly tightened up its enforcement of its laws, particularly against foreign companies; certain things that were “no big deal” five years ago are a big deal now. Dealing with China customs law is a prime example of that. If you are a foreign company doing business in China that involves importing products into China (or exporting, but less so), it behooves you now more than ever to get things right. This is part three of a four part series of posts by Shawn Mahoney designed to help you avoid China customs problems.  Go here for Part I, China Importation 101, which dealt mostly with the core concepts related to importing product into China.  Go here for China Importation 101. Part II, which mostly discussed China’s Harmonized Tariff Schedule and the similarities between China customs laws and US and EU customs laws. This and the next post will examine the most effective ways to communicate and interact with China’s main importation enforcement agencies, GACC (the General Administration of Customs) and AQSIQ (The General Administration of Quality Supervision, Inspection and Quarantine).  Here is part III of Shawn’s series: The core to any interaction with GACC and AQSIQ is relationship building. My good friend Professor John Osburg writes, “Information in China flows through personal relationships. These relationships are best viewed as communication channels which equal resources for assistance.” It is vitally important to the success of your ongoing China importations to create communication channels with both GACC and AQSIQ in a legal and legitimate manner. One of the complaints I consistently hear is about the capriciousness and unpredictability of Chinese customs officials. The reality is China’s system is no less capricious than in the US. Both countries provide ample flexibility for customs enforcement of ambiguously written laws. In the end, dealing with China customs is a person-to-person interaction and there are some people, regardless of country, that are harder to deal with than others. In many ways, dealing with China Customs is no different from dealing with US customs. They are not your friends, but if you take the time to treat them as humans and to create a relationship, they typically will not make your life any harder than it has to be as an importer. No one likes it, government official, vendor or customer, when you only talk with them when you have a problem that needs to be solved. In our experience if you follow three simple rules, your interactions with GACC should be greatly improved. Understand the laws and regulations as they pertain to your specific product. Whether you are acting as the importer of record (IOR), or another organization is the IOR, it is your responsibility to make sure all documentation is accurate and correct. There is no faster way to get on a custom official’s bad side than by you or your IOR importing goods incorrectly, especially if you are not using accurate information that is basic to any importation in China.  Guanxi, or relationships, will not excuse you or your importer from failing to import goods under the laws and regulations of the PRC. In the end, it is your product and your brand name that will be negatively impacted by importing goods incorrectly. All the knowledge in the world only goes so far when dealing with an individual government official. Someone in the importation chain must have a working relationship with China customs. Whether you are importing for yourself, using a broker, or relying on your customer to import, it is vital to build a legitimate relationship with your local GACC office. The best way to do this is via the Enterprise Classification Management (MCME) system, which I will discuss below. We always advise to maintain a wide breadth of contacts at your local customs office, as part of your ongoing transactions and for maintaining or imp

China’s relationship with India has been in the news over the past few days, mostly because of the visit of Premier Li Keqiang to Delhi. Coincidentally, I am also in Delhi at the moment (been here for a week, studiously avoiding this blog thus far). I’m here negotiating the border dispute visiting some colleagues and negotiating a couple deals for my employer. This is the point where I am supposed to point out all the differences between the two nations and explain why/why not the bilateral relationship is going in the right/wrong direction, as the case may be. If I throw in some amusing observations about how and to what extent Indian culture is different from China, all the better, particularly if I can refer to toilet habits and/or diet — even better, an eyebrow-raising story about a severe case of Delhi Belly (no, I have been lucky so far). To be honest, though, my view of the country so far has been from behind either a car, plane or hotel window, and whatever I bloviate about would be useless crap. So I’m not going to bother. Well, one exception: yes, it has hovered around 46 degrees here this week, but it’s not as bad as it sounds since it’s rather arid here at the moment. In other words, it’s a dry heat. Instead of empty travelogueing, I’ll try to catch up on my news and maybe even try to throw out a post or two this weekend about what’s going on at home. You know, something I actually know about. © Stan for China Hearsay, 2013. | Permalink | No comment | Add to del.icio.us Post tags:

In China you may be the last to know that your counter-party has become aggressive and competitive. In many cases, competitive behavior is the finale in a combination of tactics that begins with flattery and relationship-building.

Hangouts becoming mainstream Today's +China Weekly Hangout was unfortunately aborted, as our main guest +Dee Lee (Inno) from Inno in Guangzhou could not jump all the barriers to enter the hangout. But his exceptional story - with his hotline, he negotiated an end to a strike of 4000 workers this week - is worth to be told, so we give the subject a second run tomorrow, on Friday 24 May. The hangout is live broadcasted on YouTube, here and on our event page. We start at 10pm Beijing Time, 4pm CEST and 10am EST. The participants of yesterday will be invited again, and others are kindly requested to go to our event page. Please only do so, if you intend the participate in the hangout. Others can watch the YouTube clip, or can during the event send questions and remarks via Twitter and Google+ (add hashtag #CWHCWH). And we keep our fingers crossed for less technical problems tomorrow. We are working with emerging technology, and often working with people from behind China's firewall. But we will get there. The +China Weekly Hangout is, if possible, a weekly feature where we discuss current affairs in China with an international audience. Moderator +Fons Tuinstra of the +China Speakers Bureau gives here a short introduction. Next week, we discuss the question what Chinese tourists want, exceptionally earlier than our normal hangouts, on the request of participants in New Zealand and Australia. You can read our announcement here.

Chunyu Tianxia, a Beijing-based medical app developer launched its first vertical B2C healthcare product the “Chunyu Pediatrician”. Aimed at young parents and those inexperienced parents-to-be, the offerings include baby-care medical services and personalized shopping features. This new product focuses on the key word “Doctor”. The first point is “Made by Doctor” which indicates that all the content and diagnostic consulting sources (blogs or videos) will be provided by famous doctors and baby-care experts covering popular topics like vaccines and breast feeding. The second point is “Online Doctors” which guarantees that users’ questions coming from mobile devices will be answered by doctors within a very short time. “Staff that helps” is a customized function, which is able to recommend users personalized weekly collection of baby-care products based on the data of baby’s profiles. This new feature is added at the bottom of the weekly knowledge collection column. After browsing all the healthy tips and articles, users are allowed to choose what kind of products they want and can purchase easily by tapping the pictures. Chunyu Doctor, the first app rolled out by Chunyu Tianxia last year now has over 10m users. The company has not started the monetization yet, according to CEO Zhang Rui, and among all the users, around 40% are with pregnant mothers and also make up a large portion of the daily active users. Related posts: Qihoo, Unsurprisingly,Launches A Separate Medical & Health Search Service [2013 ChinaBang Awards Nominees] The Best Healthcare & Fitness Services Jimdo Launched New Blog Feature

Baidu Wenku, Baidu’s answer to Google Books and who is notorious for offering pirated e-books or copyright materials for free, launched an e-publishing platform yesterday. It is meant to solve the copyright problem once and forever by having copyright-holding agencies or individuals to publish e-books or any other form of writing on the platform. Any individual or organization is allowed to apply. Payments are supported by online banking services. Baidu promises not to interfere in pricing and not to take a revenue cut in three years. Some online content providers and individual authors have got on board, its official site shows. More traditional publishing houses will join in. Baidu claims there have been three million pieces of copyrighted works on the platform. In the past years Baidu Wenku was sued for copyright infringement by Chinese publishing organizations or writers from time to time. Cloudary, the online original literature platform, sued it in 2010, asserting pirated books downloaded through Baidu Wenku caused Cloudary a revenue loss of more than one billion yuan. Other publishers and even the industry association joined in Cloudary to called for shutdown of it. Baidu, failing in getting away with it by citing DMCA safe harbor provisions, offered to share advertising revenues from Wenku with those angry parties, but the latter were unsatisfied with the proposal. In 2011 Baidu Wenku removed all the pirated books by dozens of Chinese writers after being sued by them. The company lost the latest case to Hanhan, one of the most famous young writers in nowadays China, in late 2012. Related posts: Baidu Acquires 40% of Digital Distribution Channel Fanshu.com'>Baidu Acquires 40% of Digital Distribution Channel Fanshu.com Innobook, A New Open Publishing and Sharing Platform Chinese government investigating Baidu for copyright infringement of books

China-based online retailer LightInTheBox sets IPO price range at $8.50 – $10.50 per ADs that will raise up to $87.15 million from this offering, according to the latest file on the SEC. The listing date will be June 6, according to iposcoop.com. The company recorded $73.31 million in net revenue and $3.2 in operation income in Q1 2013. It’s the second quarter, after Q4 2012, it makes positive profit. 64.7%, 19.8% and 7% of the net revenues from Europe, North America and South America, respectively. Starting from outside China, it is establishing a presence in China. As of March 31, 2013, its customers was approximately 1.1 million. Founded in 2007 and operated through a subsidiary in Hong Kong, the company incorporated LightInTheBox Holding Co., Ltd. in the Cayman Islands, as its ultimate holding company, in March 2008. It conduct operations through the Hong Kong subsidiary, Light In The Box Limited, and the PRC subsidiary, Lanting Jishi. Related posts: Online Retailer LightInTheBox Files For An $86 mn IPO on the NYSE LightInTheBox.com will get IPO by year end Tencent Raises Salaries by 10%, Sets Up Housing Fund with interest-free mortgage

It's ominous in China to give someone a timepiece as a gift, but that may soon be happening as a Chinese software company unveils a new smart watch. Nut Shell Electronics, a subsidiary of China's Shanda, announced that the company will launch several new products on June 17, 2013, including two second-generation Shanda smartphones, a [...]

So far China’s new leadership has resisted short-term fixes to the country’s slower growth and held true to the need for deeper structural reforms to rebalance the economy. The latest measure of economic activity — HSBC’s flash purchasing managers’ index … Continue reading →

Dee Lee What is happening to China's labor force? That will be a recurring theme in the +China Weekly Hangout and on Thursday 23 May we will start discussing the state of China factory floor. Together with +Dee Lee (Inno) of Inno in Guangzhou we will explore the current state of the blue collar workers. This is how the +Asia Society described Dee Lee in 2012 when he was one of their fellows: Dee Lee is Director of the Inno Community Development Organization which focuses on public health, poverty alleviation and emerging issues. The organization currently manages nine ongoing projects that include the workers’ hotline, fair-trade online, HBV advocacy campaign. Together with sixteen colleagues spread across three offices in China, Dee is working with thirteen international foundations and brands to provide assistance to more than two million beneficiaries, most of whom are migrant workers in China. Dee started his Labour NGO career in 2007 with the first systematic workers’ hotline in China. He has a Master’s Degree in marketing communication and five years of work experience at a marketing research and PR firm. Of course you are welcome to join us, you can register here at our event page and join the discussion. A few subjects that might come up in our exchange: has the position of workers changed now there is a relative shortage of factory workers? What is the influence on social media (Inno works mainly through QQ)? How different are today's factory workers from their parents? How are the wages developing, and what are the trade union doing? To mention a few possible subjects. The China Weekly Hangout on labor will take place on Thursday 23 May, 10pm Beijing Time, 4pm CEST (Europe) and 10am EST (US/Canada). You can register here for participation, leave you comments here or at the event page. During the event you can watch also our YouTube video here and at our event page. You can also go directly to our live YouTube channel. During the event you can leave comments and questions at Twitter and Google+ (add the hash tag #CWHCWH). Later this year we will discuss the position of white collar workers, whether we can call them the 'middle class', who is going to save China's economy with their consumption - or not. For next week we are still looking for a subject, but we might selection one from our Australia/New Zealand planning session on Monday. You can register here if you are interested. Last month the +China Weekly Hangout discussed how political reform could take place under Xi Jinping's tenure with +Steve Barru and +Fons Tuinstra. Related articles How to pitch your China book to a publisher - Paul French Australia/New Zealand session - China Weekly Hangout Australia goes easy on China's military rise - Wendell Minnick Chinese brands fighting global heavyweights - Shaun Rein Bird flu: what learned China from SARS? - China Weekly Hangout