Welcome to the last edition of the Hongda Business Services Roundup for January! We are as busy as ever and I can't believe that it is already the end of the month, and Chinese New Year is almost upon us!
The mass exodus of people heading 'home' in China to celebrate the Year of The Monkey is still a week and a half away and we have some great posts to get you all there:- Some of the smartest minds in finance are making a prediction about China that was once taboo - China, a deflationary force?
- WFOE set up 101: 3 types of WFOE one can set up in China
- China’s Alibaba mulling 10 ‘creative’ start-ups in Hong Kong for HK$1 billion investment fund
- Why Starting A Business In Shenzhen Is Ideal For Foreign Tech Startups
Let's get right into it!
1) China, a deflationary force?
It was once taboo to say that China could be a deflationary force, dragging the world into a slowdown as its own economy modernized.
Serious economists and investors pooh-poohed the idea, saying that China's economy just didn't have that kind of global impact. Just last weekend in a note to clients, Deutsche Bank's Torsten Slok said the idea was overblown.
But it seems like all of that is changing. The once taboo deflation talk is all over the World Economic Forum at Davos, and the people who are doing the talking are some of the most brilliant minds in the market.
"I think the Chinese situation with the currency is very important," said Ray Dalio, founder of $160 billion hedge fund Bridgewater Associates.
"If there is significant currency weakness for the yuan that will mean more imported deflation, and it will make things more difficult."
2) WFOE set up 101: 3 types of WFOE one can set up in China
Following China's entry into the WTO (World Trade Organization) in 2001, foreigners looking to set up their own company within Chinese borders have found the process a whole lot easier. Through the years the limited liability company that is a WFOE (Wholly Foreign Owned Enterprise) has become one of the more favored platforms to tackle business in China, with other investment vehicles including a Joint Venture and a Representative Office.
Want to know how to set up a WFOE by converting from a Rep Office? Click here!
Registering a WFOE requires no minimum registered capital investment and provides foreigners with many other advantages such as:
- complete control of their own business
- able to hire low cost local staff
- protect their intellectual property
- all the profits belong to the WFOE
- business license is valid for 15-30 years
WFOEs are mainly classified into three types, namely a Consulting WFOE, Manufacturing WFOE and Trading WFOE (also known as Foreign Invested Commercial Enterprises or FICE). There are other types of China WFOEs that can be established in other industries such as investment or food and beverage, but for the purpose of this blog we will take a brief look at the three types mentioned above.
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3) China’s Alibaba mulling 10 ‘creative’ start-ups in Hong Kong for HK$1 billion investment fund
Chinese leaders have been struggling to put a floor under the economy, even as a fresh plunge in its stock markets and yuan currency have stoked worries from Washington to Wellington that conditions may be rapidly deteriorating.
Fourth-quarter gr ..
Chinese leaders have been struggling to put a floor under the economy, even as a fresh plunge in its stock markets and yuan currency have stoked worries from Washington to Wellington that conditions may be rapidly deteriorating.
Fourth-quarter gr ..
E-commerce giant Alibaba has shortlisted more than 10 Hong Kong start-ups to receive investment from its HK$1 billion fund for entrepreneurs in the city.
Cindy Chow, executive director of the Alibaba Entrepreneurs Fund, said today that the company is in talks with young entrepreneurs who have applied for the programme, which was formally launched in November.
“We have actually shortlisted a couple of proposals and we are doing our due diligence and further contact with the entrepreneurs,” Chow said.
4) Why Starting A Business In Shenzhen Is Ideal For Foreign Tech Startups
Today new tech startups may do worse than to consider starting starting a business in Shenzhen.
Even though China is very far from the West, it offers startups many benefits aside from its traditional strengths of relatively low-cost manufacturing.
The China startup scene is beginning to take off now, and this is being helped along by the government there who seek to start diversifying the industry in China away from the manufacture and exporting based model.
Let's take a look in more detail why Shenzhen could be right for your technology business...
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That it for this week's edition of the Hongda Business Services Roundup! Please let us know about any of your thoughts regarding some of the topics we recapped this week in the comments below, or let us know about any other topics you'd like for us to cover.
See you all again next week for another roundup before the whole of China takes a week off!
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