U.S. Commercial Service - American Embassy, Beijing
Vol. 2 No. 137
The China Commercial Brief is a biweekly publication including summaries about developments in China's various commercial sectors, tips on doing business in China, and U.S. Embassy news. This publication is free of charge: please forward it to your colleagues and friends who are interested in China.
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Editor: Jennifer Chang
Contributors: CS Shenyang,Xi Xianmin, Zhao Peining, Cindy Wang, Wan Xiaolei, Sun Shuyu
News Briefs
In addition to the article summaries provided by CS Beijing, our four China branch offices - Chengdu, Guangzhou, Shanghai and Shenyang - submit summaries of commercial articles from their local press to the CCB on a rotating schedule. This week we are pleased to feature a contribution from our Shenyang post.
1.Shenyang Post Commercial News
2.China’s Electronics and Information Industry Grew by 30% During the First Quarter of 2003
3.China Security Market Briefing
4.The Significance of Developing Ethanol Gasoline and the Pilot Use of Ethanol Gasoline
5.Leakage Control on China Municipal Water Supply System
6.Foreign Representative Offices Decide How to Pay Business Tax
1.Shenyang Post Commercial News
(Source: FCS Shenyang)
CS Shenyang recently learned that the incidence of trademark infringement in Liaoning Province appears to be substantially less than that which occurs in other regions within China. During meetings this week between PCO Sullivan and the Trademark Managemt Division (TMD) of the Liaoning Administration for Industry and Commerce, the TMD director stated that its subordinate city-level offices investigated 1,258 complaints in 2002, among which 61 involved foreign trademark rights holders. Every case resulted in imposition of fines in the amount of RMB 100,000 (USD 12,106) or less, in addition to confiscation of infringing products. The TMD director stated that sufficient resources have been allocated by the Liaoning provincial government, and the TMD believes that its system for enforcement of trademark law is effective. The TMD coordinates the enforcement activity of 30,000 persons(investigators, administrators, managers) throughout the province. American companies that desire more details, or would like to obtain guidance on the process for trademark registration are encouraged to contact CS Shenyang.
2.China’s Electronics and Information Industry Grew by 30% During the First Quarter of 2003
(Source: China Computer World, 06/02/ 2003 - Translated by Xi Xianmin)
According to the "Analysis of the Economic Performance of Information Industry from January – April, 2003" a report recently released by the Ministry of Information Industry, China’s information industry experienced strong growth in the first quarter of 2003. The computer sector’s growth led all theelectronics and information industry for the first time.
The report indicates that product sales revenue for electronics and information manufacturing industry reached RMB 452.4 billion (USD 54.8 billion), up 28.9% over the same period last year. The computer sector realized RMB137.4 billion (USD 16.6 billion) sales revenue, increasing 46% over the same period last year, the highest among all sectors of the electronics and information industry.
According to the report, software sales reached RMB 45 billion (USD 5.4 billion), increasing by 22% over the same period of the previous year. The sales and output of most products demonstrated significant increase, particularly mobile handsets, computers, monitors, integrated circuits, all of which grew by over 40%. The report further indicates that the outbreak of SARS in April expedited the development of office networking, negotiating of business through the Internet, teaching over the Internet as well as e-government, which accounted for the rapid growth in demand for computer products. Sales of PCs and monitors grew by 60.1% and 53% respectively over the same period last year, which were 20 and 10.2 percent point higher than the growth rates of last year. Sales of laptop computers in particular increased dramatically, accounting for 20.2% of all PC sales, compared with 7.2% last year. The sales and output growth rates of laptops were twice those for desktop PC’s.
This was the first time the computer sector surpassed the telecommunications sector in terms of growth rate. Total sales revenue for computer industry realized RMB 3.6 billion (USD 400 million) in profit, accounting for 31% of sales value and 21.2% of profit, respectively, for the entire industry sector.
3.China Security Market Briefing
(Source: www.security.sinobnet.com - Translated by Zhao Peining)
In the next three years (2003-2005), the Chinese government will invest USD 36 million in anti-terrorism, safety and security measures. They will focus on earthquake, public emergency, and fire rescue, as well as nuclear pollution concerns. The Ministry of Finance and the Civil Aviation Administration of China will spend an additional USD 96 million to support establishing security systems for airline companies. The fund will be used to transform passenger compartments, add cargo security equipment, and equip planes with collision avoidance systems.
China’s safety and security market has furthermore expanded from its traditional industry base in the financial, insurance, customs, police, airport and IT fields, to include expansion into construction, transportation, and education. This expansion demonstrates the increasing in market demand in China for safety and security equipment.
Beijing’s selection as the host for the 2008 Olympic Games has also increased the demand for safety and security equipment. Numerous types of safety and security equipment will be needed to protect the basic infrastructure and professional facilities being built for the Olympic Games.
4.The Significance of Developing Ethanol Gasoline and the Pilot Use of Ethanol Gasoline
(Source: China Chemical Industry News Vol 6, 2003 - Translated by Cindy Wang)
Based on the experiences of the United States and Brazil, the Chinese government recognizes the significance of developing ethanol gasoline, and is conducting the pilot use of ethanol gasoline in Henan, Heilongjiang, Anhui and Jilin provinces. Among those provinces where the pilot projects have begun, Heilongjiang Project will base its sales within the province; while for other three projects, PetroChina and Sinopec will conduct sales based on the most reasonable transmission plan of the product in North-eastern, Northern, Eastern, and Central China. Pilot use period is from October in 2001 to 2003 and the application and development period is from 2004 to 2005.
Ethanol gasoline is a compound of modified fuel ethanol and lead-free gasoline with a volumetric proportion of 1:9. Developing ethanol gasoline is of great strategic significance to easing oil shortages, solving grain oversupply, adjusting the agricultural structure, protecting environment, and promoting the development of the national economy. China has begun a trial use of ethanol gasoline in five cities: Zhengzhou, Nanyang and Luoyang in Henan Province, Harbin and Zhaodong in Heilongjiang Province. Due to the high cost of grain production in China, the price of ethanol is relatively high. Because of profit constraints in marketing ethanol gasoline, production costs of ethanol gasoline should be taken into account. Some preparatory work, such as calculating the economic results of mixed ethanol gasoline, has been completed, and relevant departments in the government have promulgated trial plans and detailed rules for ethanol gasoline, defining corresponding policies concerning finance, taxation, and price. The launching of this pilot program will lay a foundation for increased use of ethanol gasoline throughout the country.
5.Leakage Control on China Municipal Water Supply System
(Source: FCS Beijing - Translated by Wan Xiaolei)
According to the Ministry of Construction (MOC)’s current survey of 125 cities with a population of over two million, the average leakage rate of water supply systems is 18.57 percent. This is due to old pipeline distribution systems and lack of sufficient management control.
In order to reduce the leakage rate, Chinese government issued a regulation on "Leakage Control and Evaluation Standard for Municipal Water Supply Networks". The leakage target will be less than 12 percent. Meanwhile, each city is making efforts on leakage reduction and water supply network renovation.
The main objective will focus on analyzing the cause of water leakage problems, understanding the available leakage detecting and control alternatives, and developing and implementing appropriate leakage control systems.
According to the survey, the 12,647kn of water supply networks shall undergo renovation, requiring a total investment of RMB 16.5 billion (USD 2 billion). The potential market opportunities created include:
Consultation services on city water supply leakage control;
Software for leakage control: GIS systems, hydro-system models, SCADA systems, pressure and leakage estimation and modeling;
Management system engineering and software: toll collection systems, management information systems;
Leakage detection equipment, including underground pipeline detectors, leakage detectors, leakage detecting probes, pipeline positioning technology, and relevant analytical instruments;
Pipeline maintenance, and replacement equipment.
6.Foreign Representative Offices Decide How to Pay Business Tax
(Source: Beijing Business Today, 07/01/2003 -Translated by Sun Shuyu)
The State Administration of Taxation has issued a recent notice stating that beginning July 1, tax obligations by resident foreign representative offices in China will no longer determined by the tax authority, but will be determined based on the business nature of their company's headquarters their actual operating situation in accordance with tax policies.
Foreign representative offices are divided into 4 major categories:
A. Firms engaged in commercial, legal, tax, accounting, auditing and consulting business and services shall set up complete accounting books, correctly calculating income, and file tax applications according to the real situation.
B. Firms engaged in trade (including self-operated trade and agent trade), advertisement, tourism and other service representative institutions shall adopt a unified tax payment based on the converted income from expenditures.
C. Representative institutions engaged in other business activities excluded in the above two shall file tax application based
on the actual income gained from its business.
D. For representative offices located in Beijing for foreign government, international organizations, non-profit institutions and various people-to-people organizations, a tax free application should be filed to the tax authority by the representative office (or its
eadquarters or its superior institutions) when engaged in tax-free activities. The application should be verified by the tax institutions before being reported to the State Administration of Taxation for approval.
For the resident foreign representative offices that have already filed tax registration, tax obligations shall be re-evaluated according to these new definitions based on the status of their headquarters. All applicants shall begin filing applications or new applications based on the new definitions, beginning July 1.
Embassy News
NPE/Guangdong Plastics Industry Association Commercial Service China (Guangzhou) assisted the Guangdong Plastics Industry Association to send 14 of its members to the National Plastics Expo 2003 (NPE) to be held in Chicago during June 23-27, 2003. Held once every three years, NPE is one of the largest exhibitions in the U.S. that showcase plastics products and services and sis upported by the IBP program of the U.S. Commercial Service. The delegation from Guangdong consisted of potential buyers of raw materials, machinery, and semi-finished products. CS Guangzhou contacted various U.S. plastics associations and companies to arrange meetings for the Chinese buyers during their trade mission to the U.S.
Consulate News: Shenyang
In keeping with our goal of making the CCB a more integrated publication, our four China branch offices - Chengdu, Guangzhou, Shanghai and Shenyang - submit consulate news to the CCB on a rotating schedule. This week, we are pleased to feature a contribution from CS Shenyang:
Consul General Kennon will be hosting an outreach event on July 10. Members of the American business community in Shenyang will be invited to express their views on the effectiveness of China's enforcement of laws that protect intellectual property. This outreach event is a part of the United States Ambassador's initiative to actively engage in a dialogue with the American business community on these issues.
For more information on CS Shenyang and the Shenyang consular region, visit our website at http://www.buyusa.gov/china/en/shenyang.html
DISCLAIMER: CS China does not guarantee the veracity of the original sources of our news summaries. While we do our best to report accurate and timely articles and news sources, you should always check the source for further information.
The China Commercial Brief is a free newsletter published by the U.S. Embassy- Beijing.
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INTERNATIONAL COPYRIGHT, U.S. COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2002. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES.