Wednesday, May 30, 2012

China Market Overview

China is a rapidly rising global economic power. Overall growth has averaged a robust 7% to 8% for more than a decade, with some markets expanding much more rapidly:
1. China's auto market exploded in 2003, passenger car sales jumping 82% year-over-year. Yet China's auto industry is still in early stages with strong growth projected for years ahead.
2. China is the world's largest telecommunications market with some 280 million mobile subscribers and 270 million wireline subscribers. New wireline subscribers are being connected at close to two million per month while mobile subscribers are growing at four million per month, overall at 14% growth rate.
3. Chinese household appliance manufacturers are experiencing growth in excess of 35% per year. The demand for China's household electric appliances, both domestic and for export, pushed production levels overall for many small and major appliance product categories up 40 to 50 percent or more in 2003.
4. At approximately 1.29 billion people, China is the world's most populous nation, yet Internet penetration and ecommerce are still in the developmental growth stages. According to statistics released by the China Internet Network Information Center, China, with nearly 80 million Internet users, currently trails only the USA and Japan. With the number of Internet users growing at around 5% a month, a household penetration rate of 25% percent is conceivably only three or four years off.


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Establishing a Foreign-Owned Restaurant Business in Beijing

1. INTRODUCTION
 
For all of us (foreign) ‘locals’ in Beijing, we have seen the massive growth in foreign-owned restaurants over the past several years. Not only are such establishments popular (and very profitable), they are adding to the international cuisine and outlook of the nation’s capital. In this article, we outline the various procedures required to establish a restaurant. (There are alternatives in establishing a management office first, then a restaurant as a branch of the office; however, we will discuss this in later articles.)

2. BUSINESS ENTITY
In order to establish a restaurant, the owner must decide what type of entity will own and operate the establishment. In China, this is much more difficult than in other markets such as the US, where individuals can own and operate businesses. Fortunately, the restaurant industry is quite open and the operating entity may be either a Wholly Foreign Owned Enterprise (WFOE) (owned by a company or individual) or a Joint Venture (JV) (if partnering up with a Chinese national), though it is not possible for a foreigner to own the restaurant business directly as a sole proprietorship. Further, to open a restaurant, there are additional licenses and approvals that are necessary in addition to the traditional requirements of a limited liability company. However, once the company is set up with the proper business scope and registered capital, it can be used to open additional branches, though, of course, each branch will require certain approvals for that specific location (see below Health and Hygiene, Environmental Impact, etc.)

Unless there are compelling reasons otherwise, such as locating and trusting a suitable Chinese partner, the WFOE, a limited liability company wholly owned by the investor, is the likely choice for foreigners, as it offers the most autonomy. Although previously quite common and unfortunately still prevalent, for the sake of simplicity, many foreigners opt to allow Chinese partners to open the restaurant as a domestic (Chinese) company. In this case, the Chinese partner(s) will be sole shareholder(s) of the company, leaving the foreign investor with no legal ownership rights. (Given the often very large upfront personal investment, we caution investors to consider the appropriateness of such an ownership structure.)

3. Initial Procedures (Unique to Restaurants)

In chronological order, the following procedures must take place prior to establishment of the business entity, itself:

i) Apply and obtain company name approval notification with the Beijing Administration of Industry and Commerce (BAIC)
The name (in Chinese) will be in composed of, and in the following order:
Part 1 - City of WFOE: In this case it would be: Beijing; Part 2 – Company name (i.e. Bill’s BBQ); Part 3 - Business type (i.e. Restaurant); Part 4 - Form of organization (i.e. Limited Liability Company).

All together, the Registered Chinese name would read: Beijing Bill’s BBQ Restaurant Co., Ltd. It is advisable that the applicant chooses at least three names to be checked for availability. The company name should be consistent with the actual business type, and should not explicitly or implicitly step beyond the scope of business.

ii) Selecting a Restaurant Location

The location of the restaurant is obviously important from a business standpoint, but based on the Beijing Municipal Environmental Protection Bureau’s (BMEPB) regulations if the restaurant is located near residential areas (within 50 meters), the residents will need to approve. At this point there are no regulations defining “approval by the residents”, and, currently, the BMEPB has found the following to be sufficient (depending on the circumstances): survey or completed questionnaire of residents, and approval letter by the local residents association.
iii) Apply and Obtain Health and Food Hygiene License with the Municipal Health Bureau

Various documentation must be furnished, including but not limited to the location and site map of the restaurant and the restaurant’s internal health and safety rules. Within 10 days of the documents submission, the Health Bureau will notify applicant and arrange the on-site inspection. The primary areas of inspection will include the hygiene and safety of; 1) raw foods preparation area; 2) kitchen area; 3) employee changing area; 4) faucet and sink area; and 5) waste disposal area. Inspectors should provide an on-the-spot list of non-compliance and recommendations to remedy the situation. For certain minor problems, a submission of a photo by the applicant of the modified area should suffice, so as to not require a second visit by the inspector. Notification of approval, assuming all areas of inspection do not require repeat visits, should be within 20 days.
iv) Alcohol Permit Registration
Though the registration of Alcohol Permit will not be completed until after issuance of the business license, Tax Registration Permit, and Health and Food Hygiene License, the applicant will need to reflect its intent to sell alcohol in the Health and Hygiene application. The Health and Food Hygiene License application will need to include the approved wording in the business scope to note that it will sell alcohol.
v) Environmental Protections (EP) Examination and Approval (District Level) Restaurant applications do not require a separate EP Impact Report. The two forms required include: 1) Environmental Impact Application form – to be completed by the applicant; and 2) Environmental Impact Report Form – to be completed and stamped by an authorized environmental evaluation entity.

The Report Form shall primarily examine, among others, the following: an environmental evaluation of the indoor and outdoor surroundings and near by building, an environmental analysis of the site, potential and future environmental impact of the surroundings, and recommendations for environmental protection. The primary focus of the environmental impact application is to assess potential and actual noise and water pollution, fire protection, and waste disposal of the site.

In selecting a restaurant location (see above) it is important to note that the outdoor smoke ventilation exhaust fixture shall be located at least 20 meters from any residence or above any residential area.

vi) No Tobacco Permits As of March 2007, the laws state that foreign commercial enterprises are not allowed to sell tobacco related products. Those foreign enterprises currently selling tobacco will not be permitted to sell these products after their permits expire in late 2008.
4. Establishing the Entity: WFOE or JV
i) Apply for Approval Certificate

Once all the above approvals are obtained, they shall be submitted with the articles of incorporation, and feasibility report (along with supporting documentation) in order to obtain the Letter of Approval with the Beijing Municipal Bureau of Commerce.

ii) Registered Capital

The registered capital is the stated amount of capital that will be invested in the business. The registered capital will be reflected in the company’s articles of association, and recorded with the relevant government authorities. Since the entire amount of the registered capital must be invested (subject to cancellation), it is a very important legal and business decision.

Though the minimum amount of registered capital, based on the Company Law, may be as low as RMB 30,000, this will definitely not be applicable for restaurant companies.

Note that the investor is allowed to contribute non-monetary registered capital, among other things, in the form of technology/intellectual property rights. Cash contribution to registered capital may not be less than 30%.

iii) Capital Contribution Capital contribution may be made through a lump sum payment or by installments. The lump sum shall be paid within 90 days from the issuance of the temporary business license. If paying by installments, a minimum 20% shall be paid within 90 days. The total amount shall be paid off within 1 year from the date of the establishment of the company.
iv) Apply and Obtain Temporary Business License with Beijing Administration for Industry and Commerce

With the Certificate of Approval, the applicant may apply and obtain the temporary business license. The restaurant cannot begin operations at this point.
v) Additional Certificates to obtain Permanent business License
Once the temporary business license is issued, the applicant may apply for the various approval certificates and the injection of capital. Before the permanent business license the applicant must obtain the following certificates, reports, and take care of the following banking issues:
  • Organization Code Registration Certificate with the Organization Code Bureau;
  • Tax Registration Certificate with the Taxation Bureau;
  • Statistics Registration Certificate with the Statistics Bureau;
  • Foreign Exchange Registration Certificate with the Foreign Exchange Supervision Bureau;
  • Exit-Entry Administration Bureau of the Public Security Bureau registration
  • Open RMB Basic Bank Account with the Designated Bank;
  • Open Foreign Currency Capital Bank Account with a Designated Bank;
  • Inject capital after the opening of Foreign exchange capital bank account by the client; and
  • Capital Verification Report with a Chinese CPA firm.


vi) Permanent Business License with the BAIC

With the permanent business license issued the restaurant will be legally established and can fully operate within the business scope.

5. Other Issues i) Logo / Trademark Registration
As China is a first-to-file jurisdiction, the general rule is to register any trademarks as soon as possible, basically meaning whoever files first is presumed to be the trademark holder. The company logo, and the Chinese and English names can be registered with the China Trademark Office.ii) Carve Company Chop (seal), and other related chops Once the business license is issued, and the company has registered with the Exit-Entry Administration Bureau of the Public Security Bureau, the applicant can apply for the chops of the company, the legal representative and other related chops with the Public Security Bureau. They will designate an authorized carving seal agent to carve the chops. iii) Other Applications and Registration
  • Register business license with the district Administration for Industry and Commerce and with the district Municipal Bureau of Commerce
  • Finance Registration Certificate with the Finance Bureau
  • Customs Registration Certificate with the Customs Bureau
6. CONCLUSION All foreign investors setting up a business in China will be presented with many obstacles. Establishing a restaurant will add many other variables to the issues involved. Proper planning, professional advice and set-up can reduce and avoid unnecessary delays and risks, so that the business can begin to operate and generate income.


Contact info:

Email: en@chinacir.com.cn    

           chinacirmo@gmail.com

    Tel:+86-10-82250824  

          +86-10-82252636

MSN: chinacir2012@hotmail.com


China Business Entertainment

Evening banquets are the most popular occasions for business entertaining. Generally, they start between 5:30 p.m.- 6:00 p.m. and last for two hours. Guests should arrive on time. Chinese hosts and counterparts will probably be present before the proceedings officially begin. Banquets are hosted with varying degrees of extravagance, usually in a restaurant.
The meal begins with the entry of the revelers into the banqueting room. An elaborate ceremony of deference may take place at the door, where the most honored guest is supposed to enter first. Two or more guests may hold up this entry for some time, each insisting that the other is more worthy of this honor. The ensuing debate can, among good friends, lead to a bit of pushing, as the struggle escalates. Once through the door, the process may begin again, this time over the issue of precedence at the table. Usually, the guest of honor sits directly across from the host, who takes the least honorable seat near the serving door.
Wait to be seated, as there is a seating etiquette based on hierarchy in Chinese business culture.
Generally, the seat in the middle of the table, facing the door, is reserved for the guest of honor. The host sits directly to the left. Everyone else is seated in descending order of status. The most senior member sits in the center seat. Follow this seating pattern if you are hosting a banquet or a meal in your residence, whether for business or purely social reasons.
The host is the first person at the table allowed to begin eating and drinking. Then, the rest of the company can proceed with the meal.
Business is usually not discussed during the meal.
It is not uncommon for a host to order enough food for ten people at a table of five. He or she loses face if there are not plenty of leftovers at the end of a meal. Rice, considered by many Chinese to be filler, is generally not served until the end of a meal. So, if you want to eat rice with your meal, be sure to ask the waitress (or "Xiaojie" in Chinese) to serve it early, particularly if the food is spicy.
During a meal, as many as 20 courses can be served, so try not to eat too much at once. The best policy is to lightly sample each dish.
Leaving a "clean plate" is perceived to mean that you were not given enough food-a terrible insult here. On the other hand, leaving a food offering untouched will also give offense; even if you find a dish unappealing, try a small portion for the sake of politeness.
One important part of Chinese business entertaining is a tea drinking ritual known as "yum cha." It is used to establish rapport before a meeting or during meals.
If you do not want a "refill" of tea, leave some in your cup.
If you are served food that does not require utensils, you may be given a second cup of tea for the purpose of dipping and cleaning your fingers.
It's perfectly acceptable to reach in front of others for dishes and other items.
Seeds and bones are placed on the table or in a specially reserved dish; never place these objects in your bowl.
It will be appreciated if you use chopsticks. When you are finished eating, place your chopsticks on the table or a chopstick rest.
Placing your chopsticks parallel on top of your bowl is believed to bring bad luck.
Sticking your chopsticks straight up in your rice bowl is considered rude because in this position, they resemble the joss sticks that are used in Chinese religious rituals.
Do not put the end of the chopstick in your mouth.
When eating rice, follow Chinese custom by holding the bowl close to your mouth. Slurping and belching at the table can be perfectly acceptable: they are perceived as signs that you are appreciating the meal. Scorpions, locusts, snake skin, bile, and blood are considered delicacies.
Toothpicks are usually offered between courses and at the conclusion of a meal. When using a toothpick, cover your mouth with your free hand for concealment.
Forming a personal relationship ("guanxi" in Chinese) in your business dealings is very important. Little or no distinction is made between business and personal relationships and to succeed in China, you must establish close personal ties with your Chinese business colleagues. Respect and trust must be earned before the Chinese will do business with you. Part of this involves participating in the strong drinking culture that exists here. Generally, the Chinese regard with suspicion anyone who does not participate in the inevitable drinking that takes place during almost all business dinners. And it is at these kinds of social occasions that most negotiating breakthroughs are made.
Toasting, usually with beer, is an important part of Chinese business etiquette.
The host of a banquet offers the first toast. If you prefer not to drink alcohol, it's perfectly acceptable to toast with a soft drink, glass of juice, or mineral water.
Toasts will be proposed throughout the meal. The popular toast is "ganbei" ("bottoms up!").
Sometimes, the Chinese enjoy testing the ability of a foreigner ("laowai" in Chinese) to handle his or her alcohol, especially "er gua toe", a potent clear alcohol that one might compare to airline fuel. A good practice would be to eat something beforehand.
Before smoking, it's polite to offer cigarettes to those in your company.
The meal has reached a definite conclusion when fruit is served and hot towels are presented. Shortly after these items are offered, guests should make preparations to leave. In accordance with Chinese business etiquette, the host will not initiate the guests' departure.
Tipping is generally considered an insult in China. It is sometimes expected, however, in some of the bigger hotels and by younger service personnel.
Follow Chinese business protocol and reciprocate with a banquet of the same value; never surpass your host by arranging a more lavish gathering.
Generally, the Chinese are not great experimenters when it comes to their diet. Unless he or she has traveled extensively, the typical Chinese buisnessperson doesn't like Western food. Better to take your guests to a good Chinese restaurant rather than, for example, the latest French restaurant opening in Beijing. They'll appreciate it.
If you are hosting a banquet, you should arrive at least 30 minutes before your guests.
Home entertaining is very popular in China. If you are invited to a Chinese home, you will probably be asked to remove your shoes. Arrive on time, but not too early.
When inviting people to your home, avoid serving cheese: it is usually incompatible with the national diet.


Contact info:

Email: en@chinacir.com.cn    

           chinacirmo@gmail.com

    Tel:+86-10-82250824  

          +86-10-82252636

MSN: chinacir2012@hotmail.com


Thursday, May 3, 2012

2012 the world packaging machinery market demand will reach $39.8 billion




According to authoritative experts predict that despite the financial crisis hit, but the world packaging machinery market demand will remain an average annual growth rate of 5.2%, to 2012 is expected to reach us $39.8 billion by. Though slowing economy, but is still in the way forward, People's Daily consumption (especially food) is still in the ranks of the increase and thus promote the development of the market for packaging, packaging and production enterprise for packing equipment needs.
According to fritz in northern consulting company survey data showed that in 2008, the world packaging equipment market demand by the influence of the financial crisis because, once expected hit $31 billion discount, down to about $28 billion.

According to authoritative experts predict that despite the financial crisis hit, but the world packaging machinery market demand will remain an average annual growth rate of 5.2%, to 2012 is expected to reach us $39.8 billion by. Is this speech, because of economic slowdown though, but still in the way forward, People's Daily consumption (especially food) is still in the ranks of the increase and thus promote the development of the market for packaging, packaging and production enterprise for packing equipment needs. At present, many world packaging equipment in renewal period, the investment in fixed assets is the enterprise in order to in the increasingly fierce market competition survival must do. Invest in new equipment can improve the production efficiency, flexibility and reliability, and then reduce the material waste.

In the next few years, packing equipment in developing countries and regions will be sold more than in the developed countries and districts (such as Japan, the United States and Western Europe) sales. And the biggest developing countries in China, the demand of packaging equipment in 2012 to more than $3.3 billion, more than the United States to become the world's biggest market. In India and Russia, and low capacity in the market, such as Ukraine, Iran, Indonesia, Malaysia, Saudi Arabia, Mexico, South Africa and Turkey, to packing equipment market demand also have some room to rise.

Although in some developed countries, such as Britain, Germany, Italy and Japan, to the needs of packaging equipment will be relatively slow, but also can have certain growth. On the other hand, packing equipment manufacturing also will be faster speed in developing countries rise, but equipment manufacturing capacity or led by industrialized countries. By 2012, Western Europe, Japan and the United States will continue to occupy the two-thirds of packaging machinery manufacturing market.

Label and play yards equipment will set a new record for the packaging market

Label and play yards equipment will in all packing equipment sales of the largest set in, thanks to the growing non-permanence label products of consumption, guarantee food security and industry to develop the upsurge of calls for more label use standard. In addition, the market for package, strapping and accumulation of equipment demand is also with higher speeds up, and the technical improvement in mechanical design, the progress and also promoted such equipment sales. Filling and sealing equipment is still fill/most widely used packaging equipment, to 2012 will make up a quarter of packaging equipment market.

Medicine, personal care products market to grow rapidly

Used in the production of medicine and personal care products packaging equipment market will remain faster development speed, the reason is developing countries to increase the investment of equipment, used more and more in the one-time medical apparatus and aging population in developed countries increasingly serious. With the rapid increase of the kind of drug, the market demand of packaging equipment is rising. Beverage packaging machinery market also will present steady development situation, because many developing countries to beverage packaging of consumer products is rising, and more use more efficient, high-end packaging equipment, and in industrialised countries is even more so. The most compelling is, food processing field will still be the biggest packaging equipment market demand, to 2012 will account for 43% of the global packaging equipment needs.

2010 world pharmaceutical packaging needs of more than 30 billion dollars

Global pharmaceutical products industry is packaging industry focus on the development of a field, but from the global financial crisis, pharmaceutical enterprise also by a stroke, such as medical enterprise giant Pfizer January this year announced the planned layoffs. However, according to the American market research institutions fritz in northern group company forecast, the world pharmaceutical packaging the demand of the market still expected to rising at an annual rate of 6.3%, through the first half of 2010 is expected to more than 30 billion dollars.

The United States, Japan and Western Europe and other developed countries continues to dominate the global pharmaceutical packaging market demand more than 70%. Just for development in the future, because of the rapid increase in drug manufacturing capacity and the government to make a number of aims to improve the quality of products of the medicine policy measures, China pharmaceutical packaging market will remain strong development situation.
In other major developing countries, India and Brazil will also have to strong growth potential, but in 2009 they in the world drug packaging market share of won't have big changes.

If you want to know more about China packaging machinery market,you can visit: 2012 china machinery & electronics reports ,China's packaging machinery will have new opportunities