The Shanghai Lawyer
Vol. 1 , No. 05 - April 5, 2002
Shanghai is one of the most dynamic and fastest growing mega-cities in the world. It is quickly establishing itself as the leading financial and economic center of the Far East, on par with the likes of Paris and New York. The Shanghai Lawyer is a bi-weekly publication providing up-to-date newsworthy articles and legal information to professional and business persons around the world. We hope you enjoy the newsletter and welcome your comments and feedback.
Did you know?
The Shanghai government will transfer all international flights to Pudong International Airport from October 28, 2002. Hongqiao Airport, currently handling most international flights, will thereafter only handle domestic flights. This shift is part of the government's plan to establish Pudong International Airport as the premier aviation hub in Asia by 2010. |
Expats on the Move, Shanghai has the Buzz
Former Hong Kong governor Chris Patten noticed it right away when he got out of the car: Shanghai has the buzz that Hong Kong used to have. The current EU commissioner for external relations visited Shanghai last week for the first time in 14 years.
Patten was convinced that both Shanghai and Hong Kong could survive next to each other, he warned, as long as Hong Kong's rulers would not try to outsmart the market or the Chinese entrepreneurial spirit.
In his speech at Fudan University on Friday, Patten praised Shanghai as the example globalization could take. What Patten did not mention was that Hong Kong no longer seems to have the buzz their former governor liked so much. And the same goes for Taipei and Singapore, where the buzz at least has diminished and both locals and expat managers are increasingly packing their bags to move to Shanghai. The recession in all three cities is causing its own kind of economic refugees.
In Singapore, where foreigners make up one fifth of the workforce, upscale car showrooms, restaurants and clothing stores are scrambling for business, writes Bloomberg on Monday. Apartments and art remains unsold.
"Signs of the exodus abound, from the notices at the American Club seeking new employers for housekeepers or owners for pets, to the garage sales and ``for rent'' notices that dot the residential neighborhoods where foreigners live," writes Bloomberg about Singapore. "In Holland Village, an expat enclave, sales of German beer have fallen by half at Baden-Baden restaurant."
China and especially Shanghai is taking up the resources and even when the ongoing recession might reverse, the exodus to Shanghai might continue. Since China's accession into the WTO in December last year, new business has been moving into the city.
Shanghai had already proved it could build skyscrapers, high-class apartments, bridges and subways. Its main problem was the lack of managerial talent to deal with international standards many industries need under the WTO regime. Lack of experience and lack of funding for its educational institutions has hampered China's economic development. But part of it can be helped by the new influx of both Chinese returnees and expats, eager to pick up career opportunities they lost in Hong Kong, Singapore and Taipei.
Upscale new business and entertainment centers like the western part of Nanjing Road and Xintiandi underline a new development. Tightfisted Shanghai is changing once again its character: the big spenders are moving in. Shanghai most certainly has the buzz.
(Source: Chinabiz.org)
Foreign Firms Listing is Coming in the Near Future
Foreign companies that want to sell shares in China may get their wish to list with Shanghai Stock Exchange, Asia's second largest market, as early as October. Wang Zingsong, manager of the Shanghai Stock Exchange's listing department, said he expected a listing by a foreign-funded company in the next six months.
The China Securities Regulatory Commission yesterday said foreign companies seeking to sell shares in units in China must disclose overseas shareholders, debt and other related transactions between the parents and the unit, and the effect of earnings of the government plans to equalize corporate income taxes with domestic companies who now pay twice the rate. Eventually all new share listings in China will be subject to the rules, Wang said.
(Source: Shanghai Daily)
Shanghai Essentials
Foreign companies that have commercial disputes with either Chinese or other foreign companies can apply to the Chinese International Chamber of Commerce Dispute Resolution Center for resolution, provided both parties agree. Parties must submit an application to the Center, pay the necessary fees and then either appoint a representative or have a representative appointed for them by the Center. The parties are encouraged to resolve the dispute on their own and if at any time during the process they reach a settlement, they can withdraw from the formal process. The Center has a branch in Pudong district, Shanghai. |
Shanghai Aims High in Agriculture
China's leading industrial and financial hub, Shanghai, is hoping to take another title as a world trading center of agricultural products.
Speaking at a municipal conference on agriculture, Vice Mayor Feng Guoqin said that the city would work in two major fields to help achieve this goal.
In agricultural production, the city planned to allocate one third of its agricultural land to the growing of vegetables and fruits for export.
In marketing, the city intended to set a platform for Chinese agricultural products to enter the international market and a platform for overseas agricultural products to enter China. It intends to be a world center of information on agricultural products.
Feng said the move followed China's entry into the WTO. "Overseas fruits have landed in Shanghai and begun to compete for market share. Meanwhile, weakened demand on the international market means more difficulties in exporting agricultural products," said Feng.
He believes that opportunities outweigh difficulties stating, "International capital favors Shanghai and this means more financing channels for opening up of Shanghai's agriculture".
(Source: Shanghai Morning Post)
Overseas Talent Sought in Pudong
The eastern Shanghai area of Pudong, along with about 100 companies based in the district, will embark on an overseas recruitment tour later this month in an effort to recruit talented foreigners and Chinese living overseas to fill up to 500 job vacancies.
Organizers of the tour, which will make stops in Boston, San Francisco, Toronto, Vancouver and Hong Kong from April 26 to May 5, hope to attract potential employees with salaries ranging from 200,000 Yuan (US$24,000) to RMB 1.2 million a year.
"The district government is looking for talented people in the areas of urban planning, economic analysis and information networks," said Zhang Jie, an official with the district's personnel bureau.
Zhang said the government offers "competitive" compensation and bonuses, adding, "above all, we offer a great opportunity for personal development as Pudong is one of the world's most- dynamic economic development zones."
Potential candidates should hold a degree from an overseas university, have work experience at a Western enterprise and understand international business principles and cultures, said Chen Huiming, deputy director of the Pudong Human Resources Service Center.
The organizers will also use the event to promote the city's new preferential policies to attract Chinese students studying abroad and foreigners to work in Shanghai. The policies, which haven't been announced yet, will make it easier to start a business, exchange foreign currencies and buy a home, while reducing education expenses for children.
Additionally, there are about one dozen venture capital firms joining the trip to seek investment opportunities and another 20 firms searching for investors and business partners.
This recruitment trip is the second of its kind for Pudong companies, following a similar tour of several US cities last July. About a dozen people, mostly Chinese studying and working overseas were recruited during that event.
(Source: Shanghai Daily News)
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Fulfilling WTO Commitments a Priority - Officials
Senior officials said on Sunday the government would make more efforts to fulfill its World Trade Organization (WTO) commitments.
The new opportunity allows China to be more proactive in participating in international economic co-operation and competition, and it accelerates economic reform and development, said Vice-Premier Wen Jiabao.
China will continue its WTO commitments and expand areas of opening up step by step, he stressed. In the coming five years, China will open its goods market, which will provide trade partners a share of US$1.5 trillion. The further opening up of the service and trade market will also bring new fields for foreign investment.
Wen made the remarks at the 2002 China Development Forum, which opened on Sunday. "WTO accession symbolizes China has entered a new phase of opening up to the outside world, and has turned a new page of restructuring its economic system,'' Wen said.
The annual forum is sponsored by the Development and Research Center under the State Council and aims to erect a new exchange channel among entrepreneurs, scholars and government officials from home and abroad.
Called "China -- a member of the WTO,'' the two-day forum addresses six topics: fiscal policy adjustment, capital market opening and banking reform, governance of large state-owned enterprises (SOEs), eradicating regional protectionism and nourishing an integrated market, opening of the farm products market, and changes in foreign investment policies.
Vice-Financial Minister Lou Jiwei said his ministry would continue to streamline all kinds of preferential tax treatment and subsidies, and cancel favorable tax policies for some enterprises and regions. "We are considering unifying tax policies between foreign and domestic companies,'' he said. Lou predicted it would take three to four years for the ministry to finish its fiscal reform. To improve fiscal transparency, the ministry will publish newly-staged rules and regulations.
Jiang Qiangui, vice-minister of the State Economic and Trade Commission, assured foreign investors that China's progress of forming competitive conglomerates will be carried out in a fair market environment, rather than offering them preferential policies. "We have drafted rules to allow foreign investors to hold stakes in large state-owned enterprises. The official version will be staged after negotiations with related departments,'' Jiang said.
She said that China would introduce a series of significant measures step by step to push forward the on-going reform of its state-owned enterprises. Jiang said the measures may touch upon the issues of improving the state property management system, exploring proper incentives fit for managers of large SOEs, and strengthening the reform of the investment administration mechanism and monopolized industries.
The central bank governor Dai Xianglong said China will further open China's capital market and absorb more overseas financial capital to boost the current reform in China's financial system. In the reform of four major State-owned commercial banks, Dai aims to lower their ratio of non-performing loans by an average three percentage points every year.
(Source: China Daily)
Shanghai to Build China's Largest Silicon Production Base
In the coming five years, Shanghai will invest RMB 150 billion (approximately US $18 billion) in its IT industry, half of which will be used for IC development - some 10 chip production lines will be set up.
The main silicon chips produced by domestic semi-conductor chip manufactures are 5-6 inches silicon, which accounts for about one third of the country's silicon products. As Shanghai Hua Hong NEC Electronics Co.'s 8-inch chip production line has been put into operation, demands for 6-8 inch chips will see increase. Japanese companies have co-invested 1.2 billion Yuan (approximately 150 million US$) for producing monocrystalline silicon and other related products in the city.
A 2-6 inch monocrystalline silicon furnace in Shanghai Shenhe Thermo-Magnetic Electronics Co. Ltd has entered assembling and debugging phase. The company will begin small scale production in August, mass production will start next January with an initial production capacity of 200,000, next October's volume will top 400,000. The company will become China's largest silicon production base.
Insiders say that although domestic IC market showed slow growth, Chinese semi-conductor market still outshines others, the market volume in world IC market had increased to 13 percent in 2001 from 7 percent in 2000. China has become the second largest IC market only next to Japan in the Asia Pacific region. China is expected to overtake Europe to turn into world's third largest IC market.
(Source: Beijing Times)
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