China Regulatory Brief: 2015 Guidance Catalogue for Foreign Investment Industries Released

March 16, 2015 Posted by China Briefing Reading Time: 4 minutes

Updated Guidance Catalogue for Foreign Investment Industries (2015) Released

On March 10, the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) jointly released the “ Catalogue for the Guidance of Foreign Investment Industries (2015),” which will take effect on April 10. The Catalogue lifts restrictions on foreign investments in various industries, including logistics, e-commerce and finance. The Catalogue also encourages foreign investment into modern agriculture, high technology and environmental protection. Specifically, the limit of shares of a foreign entity may own in a telecommunications company providing value-added telecommunication services has been raised to 50 percent (exclude e-commerce services). Foreign investors may own 49 percent of shares in securities investment funds management companies.

The Catalogue follows a draft version released in November 2014.

Cross-Border E-commerce Pilot Zone to be Established in Hangzhou

On March 12, China’s State Council officially announced its plan to establish a cross-border e-commerce pilot zone in Hangzhou, the capital of Zhejiang province in Eastern China. The zone is the first of its kind in China with a focus on cross-border e-commerce transactions, payment, logistics, customs clearance and exchange settlement. Hangzhou is China’s cradle of e-commerce giant Alibaba, and home to many internet companies. Alibaba has shown its willingness to cooperate with the Hangzhou e-commerce pilot zone via its Tmall Global platform right after the official announcement was made.

Compared with the previously approved seven cross-border e-commerce pilot cities such as Ningbo and Shanghai, the new zone in Hangzhou will mainly offer tax incentives. In 2014, the online sales volume in Zhejiang province alone reached RMB 564.2 billion. More details about the plan will be published by the Zhejiang provincial government soon.

China Adjusts Unemployment Insurance Rate

The Ministry of Human Resources & Social Security and the Ministry of Finance jointly released the “Circular on Adjusting the Unemployment Insurance Rate (Ren She Bu Fa[2015] No.24),” which took effect on March 1, 2015. According to the Circular, the unemployment insurance rate would be reduced from three percent to two percent. The proportion paid by employees and employers will be determined by the local government.

China’s social insurance system is comprised of pension, medical insurance, unemployment insurance, maternity insurance and work-related injury insurance. Employers in all major cities are required by law to make a contribution towards unemployment insurance and most cities employees need to make a contribution as well.

AIC Strengthens Protection for Consumer Rights

On the occasion of World Consumer Rights Day, the State Administration of Industry and Commerce (AIC) issued an Opinion to enhance protection for consumer rights. The Opinion stipulates that online shoppers can demand compensation from the online platform if the platform cannot provide the real names and addresses of vendors where any infringement on consumers’ rights occurs. The AIC is also making an effort to establish a sound compensation system, which requires shopping malls, markets and online platforms to sign a compensation rules agreement with sellers or service providers in advance. In this case, malls and platforms may make compensation to consumers first and then get paid back by the relevant sellers.

About Us

Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email china@dezshira.com or visit www.dezshira.com.

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.

‍

Adapting Your China WFOE to Service China’s Consumers
In this issue of China Briefing Magazine, we look at the challenges posed to manufacturers amidst China’s rising labor costs and stricter environmental regulations. Manufacturing WFOEs in China should adapt by expanding their business scope to include distribution and determine suitable supply chain solutions. In this regard, we will take a look at the opportunities in China’s domestic consumer market and forecast the sectors that are set to boom in the coming years.

Human Resources and Payroll in China 2015
This edition of Human Resources and Payroll in China, updated for 2015, provides a firm understanding of China’s laws and regulations related to human resources and payroll management – essential information for foreign investors looking to establish or already running a foreign-invested entity in China, local managers, and HR professionals needing to explain complex points of China’s labor policies.

E-Commerce in China
In this issue of China Briefing Magazine, we cover the current laws pertinent to the e-commerce industry in China, as well as introduce the steps involved in setting up an online shop in the country in order to help provide foreign investors with an overview of the e-commerce landscape in China.