/ By ASI Movers / Chinese Economy • Expat Lifestyle/ 0 Comments

Being a Foreign Entrepreneur in China: a Guideline

If you are to come to China or are already here, there are great chances that the vitality of the business environment plants the seed of entrepreneurship in your brain.

Why not start a company in China?

Chinese Government is well aware of the potential entrepreneurship represents, as well as the role it played in the country’s development.

Accounting for 60% of the nation’s GDP, and providing 80% of the jobs, the private sector is essential to Chinese economy. Even though some argue that it has been the consequence of the Middle Kingdom’s development rather than its cause, entrepreneurship remains key.

The truth lying in one or the other of these two causality chains, it still remains that many foreigners have had the envy to try to make it in China.

ASI Movers is aware of this tendency. Having moved thousands of expats throughout our 10 years of activity, we have decided to introduce you the Chinese entrepreneurial environment and the opportunities of founding your own business here.

The Entrepreneurship Landscape in China

Background

For many years, China bore the image of a state-owned economy for observers outside its borders. It is still true that entering an industry dominated by a state-owned enterprise is quite risky since. The latter will indeed benefit from financial advantages, and connections ensuring its quasi monopoly on the market.

Yet, the reforms initiated in 1978 and which developed in the 1980s paved the ground for an economy based on private companies and entrepreneurship.

The 1990s have seen the rise of the Internet entrepreneurs. The 2000s saw the emergence – apart for the stable growth of the Internet and mobile technology sectors – of entrepreneurship in sectors such as energy, healthcare, financial services, or consumer retail among others.

Nowadays, China is the second largest host of so called unicorns i.e. non-listed companies valued at over USD 1Bn.

Entrepreneurship Culture in China

The entrepreneurship culture in China is different from the one in the West, firstly because of the environmental and institutional context. China’s economy being driven by the state, young innovative companies having connections bear a huge competitive advantage compared to their peers. Investing in political connections and network is thus as important as securing monetary investment.

It mainly came from the urban youth raised in the 1980s and 1990s in the midst of the economic reforms.
Young entrepreneurs are partisans of the “trial and error” technique and do not consider a failure as the end of their promising career, but rather as a step in their journey. They are less risk averse and more opportunistic than their peers, they also focus largely on personal success.

An aspect that might be considered as a drawback by foreigners is the education system. The latter shaped the locals' mind: rote learning is the core of their school life. One might thus think it can undermine Chinese entrepreneurs’ critical thinking spirit.

Not only is the entrepreneurial spirit different from the one in the West, the projects developed also bear specific features:

  • Integrated Innovation i.e. adapting an existing (often Western) business to Chinese market is huge.
  • Answering unmet needs in, specifically, Chinese society is the main focus (mainly due to the the relative closure of the Internet, some Western businesses did not make their way into China, leaving an empty space for Chinese companies).
  • Monitoring and acting in accordance with the government policies and interventions is important in China. Entrepreneurs should target industries defined as key by the latter as to benefit from the current environment.
  • Combining online commerce and marketing with relevant infrastructures and forwarding system enables the products to be delivered anywhere in a very short time. This feature is key in China.

Foreign Entrepreneurs in China

As China is becoming more and more interested in welcoming foreign talents, the environment for foreign entrepreneurs is warmer and warmer. It also participates in giving a positive image of China overseas.

Some local governments such as the city of Hangzhou even provide incentives for foreign entrepreneurs to come: in 2018, the city of Hangzhou offered subsidies ranging from RMB 200,000 to RMB 5 million to foreign entrepreneurs bringing projects fitting the city development path.

One of the first advice one could give to a soon to be foreign entrepreneur in China is to not blindly see the Middle Kingdom as a huge market of 1.3 billion people of which even 1% market share is profitable.

To successfully start a business in China

  • Learn about your customers: Chinese habits, tastes, mindset is different from the one in the West. Ensure there is a market for your potential offer, and adapt your practices and products if necessary.
  • Take advantage of the barter economy i.e. non-monetary reciprocity, which recent resurgence is mainly due to insecurity, the rise of the Internet and the importance networking has taken (especially in China where the concept of Guanxi dominates).

How to Set-Up a Business in China

If you are a Laowai eager to sell your products or services in China, you can choose between 3 kinds of businesses:

  • Joint Venture
  • Representative Office
  • WFOE or Wholly Foreign-Owned Enterprises

The landscape for entrepreneurship seems paved with gold for the ones keen to really understand the peculiarities of the Chinese economy, get inspired by the local features of the private companies, and explore the opportunities, them being obvious or less visible.

Starting a business in China is a definitely a worth it experience. For you to focus on this life project, ASI Movers is here to provide you the smoothest moving process possible. Focus on what matters, we take care of the rest!

/ By ASI Movers / Chinese Economy • Expat Lifestyle • Uncategorized/ 0 Comments

Environmental Protection in China: What Lies Ahead

As winter is slowly approaching the Middle Kingdom, locals and expats get more and more concerned over the air quality, and more broadly the environment. During the cold season, centralized heating is switched on in Chinese cities, them being fueled by coal makes the air quality drop significantly.

Nevertheless, China has been switching toward a new attitude regarding the environment, aiming at a “Greener China”, which should contribute to a brighter winter sky. Following our introduction to China’s Green policy in our article “Chinese New Economic Orientations: What You Need to Know”, we will now go in more details into what you need to know about the topic, exploring what lies ahead in terms of policies, outcomes, and also the opportunities one could take advantage of in the near future.

The Current Situation

For many years, economic growth has been China’s first priority, focusing on its GDP and people’s standard of living. However, it is no longer the case, as it appears pollution represents a threat for Chinese economy and as Chinese population gets more and more concerned over the danger pollution represents for its daily life and the one of its children.

China is famous for being the 2nd world’s greatest polluter, factories and power plants are held responsible for major part of the country’s air, soil, and water pollution, which most noticeable consequences have been heavy smog and tap water being unhealthy.

Objectives & Measures

4 main objectives have been highlighted by the Chinese government:

  • Reduce the weight of coal industry to reach better air quality, which translates into dismantling coal-fired power plants, and cutting particulate-matter emission rate.
  • Better regulation in the implementation of the following policies thanks to relevant government's administration being more powerful than before.
  • Foster and invest in greener companies, thanks to an environment tax and thanks to attracting foreign green investments.
  • Make the Belt and Road Initiative – China’s greatest economic project – green.

In 2015, the new Environment Protection Law came into effect, whose main measures are:

  • Allowing environment protection department to seize, impound or close facilities that cause serious environmental pollution, penalties and punishments for non-compliance have also been made heavier. In 2016 the Ministry of Environmental Protection set up the Central Environmental Protection Inspection as to monitor the implementation of the policies previously listed resulting in 1, 140 officials to be disciplined. Factories have been moved away from big cities as to reduce air pollution, and even private households in the North of the country have been demanded to switch from coal heating to natural gas.

  • Fiscal advantages are granted to industries complying with the government’s agenda, as well lenient borrowing policies. The solar panel industry has been one of the main beneficiary of this policy, to the point that without the government’s support, a majority of the companies would have to cease their activity.

Economic Opportunities

As we evoked earlier, China is - and plans to continue - investing heavily in the environmental industry, investment in the environmental sector is projected to exceed RMB15 trillion during the 13th Five-Year Plan period (2016-2020).

Which industry could one invest or develop a business in?

  • Provision of equipment and services for environmental pollution control;
  • Removal of pollutants;
  • Water treatment;
  • Energy conservation;
  • Clean production;
  • Collection, safe disposal, recycling and recovery of waste resources;
  • Services related to the protection of resources and the natural ecology.

Pollution is an issue China targets heavily, even making it an economic orientation as the country is aiming at becoming an international leader in this particular topic.

In the meantime, ASI Movers knows that expatriates are still concerned about the air quality as well as by how to avoid suffering short or long term pollution side effects. Here are few tips one should follow as to minimize the effects of current Chinese environment:

  • Wear a mask: as to prevent yourself from absorbing harmful particules, wearing a mask is a good option. However, make sure to choose a qualitative one: too often people wear surgical masks or simply one made out of cloth, both not protecting you efficiently. As such, make sure yours features a carbon filter, that its rating is good, that it fits your face securely, and that you can easily breathe in.
  • Buy an air purifier for your home, the best always being having one in each room.
  • Surround yourself with plants as they are natural air purifiers.
  • Exercise regularly: people doing so enjoy a better respiratory system which regenerates faster.
  • Check the air quality before leaving your home: many Apps having this feature are available, which can help you plan your day accordingly (if the air quality is too poor, outdoor physical activity for instance is not recommended).

 

ASI Movers has been helping expats relocate from, to, and within China for more than 10 years, we know the problematics and concerns expats face on a daily basis and try our best for your experience in China to be the smoothest possible!

/ By ASI Movers / Chinese Economy/ 0 Comments

Shanghai Business Startup Visa: What You Need to Know With ASI Movers

THE SHANGHAI BUSINESS STARTUP VISA EXPLAINED

On May 2018, the Shanghai Public Security Bureau announced a new type of visa, available for some Shanghai districts only (including Changning and Yangpu).

  • What is its scope?
  • How does it work?
  • Who is eligible?

Let’s find out with ASI Movers, expats’ moving partner.

What Is Its Scope?

The “Private Resident Permit (entrepreneurship)” - commonly referred at as “business startup visa” – is aimed at allowing foreigners to live in China while launching their innovative business.

It also allows its owners to conduct auxiliary businesses while developing their main activity – businesses that are essential for them to launch their startup correctly – such as recruiting staff, searching for a lease, initiating the company setup procedure, etc.

How Does This Visa Work?

This visa will be valid for one year, and can then either be renewed or turned into a Work Permit once the company is setup. If one wants to extend it further for another year, one needs to prove “successful incorporation of the company” over the previous year.

The documents required are similar to the ones demanded for any other type of visa, plus an entrepreneurship or investment certificate delivered by institutions designated by the Government (economic development zones, high-tech parks, corporate incubators).

Who Is Eligible?

The scope of eligibility is expansive given the fact that categories excluded from any other type of visa (notably fresh graduates) can apply.

3 categories of people are eligible:

  • Foreign students willing to innovate and start their business in Shanghai and graduates from a higher education in China.
  • Foreigners planning to invest in Shanghai or innovate in business.
  • Excellent overseas graduates from top Universities, the latter need to have been graduated for no more than two years and have completed outstanding achievements in innovation and entrepreneurship in Shanghai.

Such an initiative is in accordance with Shanghai’s agenda of attracting foreign and local talents, as to foster the city’s entrepreneurial spirit and stimulate its economic development through innovation. Nevertheless, Shanghai is not the first city to promote such initiatives as Beijing and Yunnan province already paved the road earlier this year.

 

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What Global Individuals Need to Know About the Belt And Road Initiative

The Belt And Road Initiative

Shaping International Trade

In 2013, Chinese Premier Li Keqiang unveiled one of the biggest projects of the 21st, one that will probably change the paradigm of global trade, its scope not only being wide regarding the fields targeted, but also regarding the number of geographic zones that are to be involved.

Being globally mobile individuals, ASI Movers customers’ will be, if not stakeholders, at least impacted by this new roads China will, and has already been building. As such, let’s explore the key features one needs to know about!

What Is the Belt and Road Initiative (BRI)?

China's proposed Belt and Road Initiative will be composed of 3 land-based roads, and a maritime one, connecting China to Europe through Central Asia, South East Asia, South Asia, the Middle East, Africa and Central Europe. Graphic by Raffy Guzman on China Daily Map.

The Belt & Road Initiative (BRI) can be labelled by different names: New Silk Road Economic Belt and, before 2016, the One Belt One Road Policy, are two of them.

As already stated, it has been introduced in 2013 as a “bid to enhance regional connectivity and embrace a brighter future”, the aim being constructing a unified and larger market, both maritime (MSR Maritime Silk Road) and land-based (SREB Silk Road Economic Belt), connecting the domestic markets, enhancing the exchanges in culture, knowledge, and goods & services with reduced trade barriers.

      As for today, 68 countries are involved in Asia, Europe, Oceania and Africa, accounting for 4.4 billion people and 40% of global GDP.

      The land-based road is itself divided into 3: a North Belt, a Central Belt, and a South Belt, and is completed by a Maritime Road.

What Is Its Scope?

What are concretely the fields China want to invest in and the projects the country wants to foster through the BRI, which is one of the largest infrastructure and investment project in History?

Infrastructure

The main focus of the project is on infrastructure, and addressing the “infrastructure gap” between the different regions involved. China is a perfect candidate for promoting such an orientation since – unlike the major part of the industrialized world after 1980 – the country pursued an infrastructure-based strategy, modernizing and investing heavily in this field, becoming the world’s leader in infrastructure and investment.

Concretely, this means building ports, roads, railways (and any other form of infrastructure) in the least developed part of Eurasia and Africa. Some of these regions are geographically isolated, which makes taking part in the international trade difficult and the scale of it limited, thus the infrastructure investment and works made under the BRI would have a positive impact on the local economies and on their economic integration of these regions, also fostering their production potential. Some critics are concerned about the genuine local demand for such investment and warn them about the risks coming with them.

Investment & Banking

Many of the countries involved in the BRI are also part of the China-led Asian Infrastructure Investment Bank (AIIB). This investment bank is directly aims at financing the infrastructure projects evoked above. As of 2015, already 160 billion USD of infrastructure projects were in planning or construction. Apart from purely financing infrastructure projects, its aim is also to foster regional integration, economic development and access to social services.

A Silk Road Fund has also been announced.

Advocating for an Asia-Pacific Free Trade Zone

Through this initiative, China is advocating in favor of the Asia-Pacific FTZ, “we support the multilateral trading system, devote ourselves to the Doha Round negotiations; advocate the Asia-Pacific free trade zone, promote negotiations on regional comprehensive economic partnership […] as an active promoter of economic globalization and regional integration” said President Xi JinPing.

Reducing physical barriers to trade, goes along with reducing regulatory barriers as well, by aligning standards.

What Is Going to Be Its Impact On International Trade?

Being the large-scale initiative we know, the BRI will certainly have a major impact on international trade. Let’s then explore how it will precisely impact it.

  • Directly linked to the infrastructure investment and lending policy, it will foster domestic flows and exports from and to central Asia. New trade agreements linked to the latter regions will emerge and thus one will witness trade diversion effects.
  • It will lower the cost of transportation and thus trade costs, especially with China, and thus will eventually result in a larger amount of goods and services flowing to and from the country. Using rail transportation where maritime roads were used before will become more and more common, but also cheaper and faster (making for instance seasonal products more responsive). New ports and roads will appear, with more efficient and more modern operations.
  • Even more standardized products and services will emerge from this increase and facilitation of trade.
  • Facilitation of trade also means a facilitation of knowledge and technology flows, making progress in these fields and new technologies and products very likely.

As your trusted relocation partner to, from, and within China, ASI Movers knows how important it is to its customers to stay aware of the latest economic orientation of China, and of how it can impact their business. 

We dedicate ourselves to provide you the best quality relocation services worldwide and domestically, because we know that a great moving service is a moving service that does not provoke disruption in your business and ensures you peace of mind.

/ By ASI Movers / Chinese Economy/ 0 Comments

Exploring the Chinese Avantgarde of AI: BAT, TMD and their specificities

China has indubitably conquered the 2nd spot of the podium of World’s Leading Power, becoming one of the major actors of the economy and making itself unavoidable as a trade partner.

When it comes to Chinese economic miracle, one should not assume that its success is entirely due to applying the methods that worked in the West, but should look up into the specificities of its economy and of its economic actors.

While America relies on its FANG (Facebook, Amazon, Netflix, Google) to shape the New Technology field, China raised some of its own, the so-called BAT.

The key to understand Chinese society but also world’s future trends in the AI and software field is to explore what are these three companies, and what are their specificities. As your trusted partner in global relocation, ASI Movers understands that learning about new business trends greatly helps any international individuals to better integrate, be more responsive to one’s environment and make the right business decisions. That is the reason why we now present you what you need to know about the Chinese BAT.

What Are Chinese AI Leaders: Baidu, Alibaba, Tencent.

Baidu, Alibaba, Tencent. Here are the three company that have been and will be shaping AI, not only in China but also internationally.

 

Baidu

Baidu is China’s first search engine, we could assimilate it to Google back in the West. The main focus of the latter is AI and thus intelligent search, as to go beyond simply being a search engine and integrate big data, cloud computing, deep learning, and other core technologies.

To achieve this, Baidu invested heavily in R&D (from $1.6B in 2016 to $2B only one year later, the increase nurturing its American its Chinese and American research Institutes).

 

Alibaba

Created by the now famous Jack Ma, Alibaba is Chinese E-Commerce giant, running both Taobao for consumer-to-consumer commerce, and Tmall for business-to-consumer commerce. Its activities also include Alipay – successful payment service – and the South China Morning Post.

 

Tencent

Tencent is the giant behind WeChat, the 1B-user Chinese equivalent for nearly any social media you can find in the West, its major feature being instant messaging, and which includes a payment service feature. Apart from WeChat, Tencent has invested the multiplayer online game field by acquiring the very popular Game Clash of Clans (among others).

What Are BAT’s Particularities?

As already stated, the main focus of these three companies is Artificial Intelligence and all the R&D and investment that come with it. Instead of viewing it as a trend, they see it as an element that will soon be – if not already – integrated in every aspect of our daily life, in any object we will use, in any service we will buy.

 

Investing in AI also means for them investing in promising businesses, especially in the U.S., the latter welcoming such initiatives as them taking part in the company usually means a road paved with gold for a future development in China.

The first step of their development has sure been to conquer the Chinese market, but their ambitions go far beyond, targeting the international market, thanks to acquisitions and investments.

 

A third important feature is the support these BAT receive from the Chinese government, the latter indeed labelling them the AI national team.

China’s Ministry of Science and Technology does not hesitate to publicly announce its support to them, and even integrated them in its plan for the first wave of open AI platforms, each one of the BAT having a dedicated field to develop: Baidu autonomous vehicles, Alibaba smart cities, and Tencent medical imaging and diagnostics.

What Lies Ahead: The Example of TMD

Baidu, Alibaba and Tencent have been the pioneers of Chinese AI Development, and if you are a bit interested in Chinese economy, or simply live in China, you sure know them. Nowadays, a new generation is emerging, inspired by these 3 giants, and this new wave is best embodied by the acronym TMD, which stands for Toutiao, Meituan-Dianping and Didi Chuxing. 

 

Toutiao

Toutiao is a News App, its name can be translated by “Today’s Headlines". 120 million daily active users have been consulting in 2018 the news written by traditional medias, Government Agencies, Celebrities and bloggers on their Toutiao timeline. As for its predecessors, Toutiao wants to deepen its understanding of its users' habits and preferences thanks to machine-learning; and also wants to develop internationally, having already acquired famous platforms Musical.ly and Flipagram, and running TopBuzz, the English equivalent of Toutiao App.

 

Meituan-Dianping

Meituan leads the largest platform for lifestyle services and products ordered through smartphone. Similar to Groupon, this App encompasses everything you could need from food delivery, movie tickets, restaurant reviews, group discounts, and so on.

 

Didi Chuxing

Instead of Uber, Chinese people use Didi. Based on the same principal, it extended its offers to car-rental, electric vehicles, on-demand bike services, and food delivery. Again, the company is now looking abroad and recently acquired 99, Latin-America major ride-hailing service.

With a vivid tech industry, a taste for technology, and the eagerness to develop new user experiences centered on Artificial Intelligence, China is the chosen place for companies such as the ones introduced above to grow and test their concept. Given their eagerness to conquer the international market, there is no doubt that what is happening in China right now – i.e. the penetration of AI in every aspect of the daily-life and the constant resorting to Apps – will soon be part of our routine in the years to come.

ASI Movers has been accompanying its customers worldwide for more than 10 years in their relocation from, to or within China. We know how crucial it is for global individuals to keep updated about the trends that are emerging worldwide especially in the AI field. Having had an experience of living in China enables those who did to forecast what companies all around the globe will most likely head to.