About HKTDC (Hong Kong Trade Development Council)
Hong Kong TDC (Trade Development Council)
TDC enhances your efforts to expand your business in international trade by providing marketing opportunities, business matching services, market intelligence and SME development programmes.
TDC is the global marketing arm and service hub for Hong Kong-based manufacturers, traders and service exporters. The TDC has more than 40 offices worldwide, including 11 in the Chinese mainland.
Through just one contact point – 1830 668 – you can access all of TDC’s practical services and activities to assist you.
TDC Business InfoCentre
Hong Kong Convention & Exhibition Centre
1 Expo Drive, Wanchai,
Tel : (852)-1830-668
Fax : (852)-2248-4111
E-mail : email@example.com
HKTDC: Foreign Trade Sector Further Opens
According to the Provisional Measures on the Establishment of Sino-Foreign Joint Venture Foreign Trade Corporations published recently by the Ministry of Foreign Trade and Economic Cooperation, foreign investors will have easier access to the mainland’s import-export sector as from March 2003. The most important step taken is the lowering of the “threshold” for foreign firms, as they will no longer be required to have a turnover of at least US$5 billion in the year prior to submitting their application. This policy change is particularly favourable to Hong Kong’s SMEs.
The new measures, which are expected to attract more foreign capital into China’s import-export sector, stipulate that foreign investors recording an annual average of more than US$30 million in trade with China for three consecutive years may apply to set up a joint venture (JV) foreign trade company anywhere in China. For those establishing such JVs in the central and western regions, the minimum requirement is US$20 million. It is worth noting that under the Provisional Measures on the Establishment of Sino-Foreign Joint Venture Foreign Trade Corporations on a Trial Basis promulgated in 1996, the foreign party of the JV were required to have a turnover of at least US$5 billion in the year prior to application.
Compared with the 1996 version, the new rule has also lowered the minimum registered capital from Rmb100 million to Rmb50 million, and to Rmb30 million in the central and western regions.
The requirement that the foreign party must have set up a representative office in China for at least three years is also dropped. The foreign party of a JV foreign trade company must have a share of over 25%. However, under the new measures, applications with the Chinese party holding a share of less than 51% will not be accepted before 11 December 2003.
Under the new rule, the Chinese party of a proposed JV foreign trade company should already possess foreign trade rights and have an annual import-export turnover of at least US$30 million for three consecutive years. For JVs to be registered in the central and western regions, the minimum requirement is US$20 million.
Geographical and quantitative restrictions have also been lifted. While JV import-export companies were only allowed in Shanghai’s Pudong New Area and the Shenzhen Special Economic Zone, they can now be set up anywhere in the country. The limitation to six pilot projects has also been scrapped. In addition, policy concessions are offered to projects in the central and western regions.
At the early stage of reform and opening up, the Chinese government granted all foreign-invested enterprises (FIEs) the right to export their own products and import equipment and materials for their own use in a bid to attract foreign investment. Subject to approval, foreign-invested foreign trade companies, investment companies, production enterprises with annual export value exceeding US$10 million, FIEs in bonded zones, pilot foreign-invested commercial enterprises, and foreign-invested research and development centres may also engage in import-export business and some foreign trade activities.
The new measures are formulated by the Chinese government in a move to fulfil its WTO commitment to granting import-export rights to all FIEs in China three years after accession. The Provisional Measures on the Establishment of Sino-Foreign Joint Venture Foreign Trade Corporations on a Trial Basis promulgated in 1996 will be abolished when the new measures formally go into force.
By Hong Kong Trade Development Council. All rights reserved.
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