and Contract Brokers
The following reasons creates an unprecedented business environment
Why ICCB suggests China
and especially Kunming and the Yunnan Province
Low labor costs: Labor is relatively inexpensive and supply exceeds demand. The wage is still a fraction of that in the USA and Western European countries.
Outsourcing: China is a very able supplier for Outsourcing. Inward investment topping 11 billion yuan (1.3 billion US dollars) has already been attracted to the development zones from the USA, Britain, Germany, Belgium, Japan, Singapore, Philippines, Malaysia, Thailand, and from China’s mainland, Hong Kong and Taiwan.
Country's goal: International outsourcing with a fast growing National Economic and Technological Development Zones. Foreign-funded enterprises with an intended operational period of more than 10 years will be exempted from income tax for their first and second profit-making years with tax reduced to 50% for the following 3 years. Starting from the sixth year in profit, income tax is levied at 15% but this is reduced to 10% in any year when 70% of production is exported.
English Speaking Population: China has a large, college educated, English speaking population. English is taught in school and is now compulsory for all primary school children. In China, English is popular and considered academically important.
Established Service Providers: China has an established a capable service provider's base, with a strong client service attitude and a "High Quality Mentality".
Highly educated population: There is a highly educated population, which is ready for retraining. The workforce is qualified and eager to work.
Still Maturing Market: The market is still maturing.
Ideal location between the West and the East: China is strategically located between the USA and many developing countries and emerging markets.
Window to Asia: Many USA companies have already chosen the China to serve its Asian Operations.
Strong support for investors from federal; and regional authorities: The Chinese Government has been adopting regulations that are friendly to businesses, including tax-free zones.
Many of the same advantages can apply to other Asian
Countries, such as Singapore, Malaysia,
Vietnam, and Thailand
Software outsourcing, an example:
For many in the west, Kunming is still one of China’s best kept secrets. But this could soon change as it is well placed to become a fast growing player in today’s international world of computer software. Perhaps more so than in any other industry, software outsourcing grows up around and is nurtured by a key university. The School of Software of Yunnan University is one of China’s select group of National Pilot Schools of Software. This is a well resourced new school, in a top university, on a new campus, and in a new and fast growing National Economic and Technological Development Zone.
As China’s rapid and sustained modernization, development and opening-up are pushed inexorably westwards by major policy decisions already in place, the world is sure to hear more about the southwest province of Yunnan (it means south of the clouds) and its capital Kunming. Known as the City of Eternal Spring for its gentle climate, Kunming is not too hot in summer nor too cold in winter and has one of the world’s largest cut-flower markets. Dianchi Lake reaches into its suburbs. Kunming’s key geographical location in southwest China makes it the country’s gateway to and from South East Asia. It has long-standing links with its near-neighbours in Vietnam, Thailand, Laos, Cambodia, Malaysia, Singapore and Myanmar (Burma). This city was once home to one of the world’s truly great navigators, explorers and diplomats, for 600 years ago in the Ming Dynasty, Zheng He’s epic voyages did much to influence China’s relationships with Southeast Asia and beyond.
Meanwhile, Local Government in Yunnan Province has done much to promote and develop the IT and tourism industries and to create the first class infrastructure that is so necessary in the drive towards modernization. Today, Kunming is one of China’s major domestic tourist destinations.
This frontier province is a place of landscapes, mountains, rivers, valleys, rare plants, exotic animals and legends. This is where you really can find Shangrila, Lijiang, Dali and the Stone Forest. Yunnan population 43 million (UK 60 million), area 394,000 square km (UK 244,000 square km), is a particularly beautiful part of the world and is well known throughout China for its natural resources. Its 26 minority peoples endow it with a wealth of human heritage and a tradition of welcoming visitors.
Established in May 1992, the national-level economic and technological development zone is playing an increasingly important role in this rapidly developing provincial capital. Located in the south east of fast developing, Kunming city it has a designated area of 9.8 square kilometers. Here the focus is on development, hi-tech industries, modern manufacturing processes, foreign investment and export markets. Inward investment topping 11 billion yuan (1.3 billion US dollars) has already been attracted to the zone from the US, Britain, Germany, Belgium, Japan, Singapore, Philippines, Malaysia, Thailand, and from China’s mainland, Hong Kong and Taiwan.
Early players in the new zone include an industrial group formed to develop opportunities in tobacco processing, mechanical manufacturing, and the IT and bio-technology industries.
With an attractive green environment and all the necessary infrastructure including hospitals, schools and the new campus of a renowned university, it is fast becoming one of the biggest industrial parks in the whole of Yunnan Province (population 43 million). The zone is well placed to exploit Kunming’s strategically important geographical location facing its near neighbours in South East Asia and beyond within the context of the China-ASEAN Free Trade Zone. Here development is being promoted on a most ambitious scale with plans already in place for this to become a model zone in terms of its international investment environment, funding, and orientation towards high value-added industries.
The zone is set to become a significant international manufacturing base and a modern information and logistics hub. Environmental factors are important here too for due emphasis is being placed on creating a well integrated industrial, urban and landscaped environment where people can live and work in harmony with nature.
Yunnan University can make a fair claim to be one of China’s top universities. It is the oldest university in China’s southwest and one of the oldest in China as a whole. Today it enjoys an excellent reputation as one of the country’s eighty-eight National Key Universities and is listed as one of the ‘Leading Universities in China’ in the sci-tech section on www.china.org.cn the authorized government portal site to China.
It was Founded in 1922 on the site of much earlier examination halls dating back to the Ming and Ching Dynasties. In 1997 it was designated for government support within the 211 Project for the hundred or so best universities in China. Then in 2000 it was listed among the Key Universities identified to receive special support in the national program for the development of western China. Founded in 2002 this is one of China’s thirty-five National Pilot Schools of Software. Already it is home to some 1,200 undergraduate and 500 postgraduate software students. This success of this well-resourced school is already exerting an influence and a fast-emerging software industry in the locale is winning government contracts.
Among the staff, thirteen are professors or associate professors, many have studied overseas, and some are foreign nationals contributing to the modern international flavor of the school. The School of Software highly values its international orientation and looks towards Southeast Asia and beyond as a matter of policy. This is a place where the English language is no stranger for everyone prefers the best and most modern textbooks and research papers available from anywhere around the world
1. Foreign-funded enterprises with an intended operational period of more than 10 years will be exempted from income tax for their first and second profit-making years with tax reduced to 50% for the following 3 years. Starting from the sixth year in profit, income tax is levied at 15% but this is reduced to 10% in any year when 70% of production is exported.
2. Enterprises are to be exempted from value-added tax in the planned Export Processing Zone. Machinery, equipment, construction materials, mould, etc. can be imported into the processing zone free of custom’s duty. Raw materials, spare parts, etc. imported to the processing zone will be bonded. Meanwhile tax-refunds will be provided in respect of Domestically-produced machinery, equipment, raw materials, etc.
3. The Local Finance Bureau has established funds to encourage and support high-technology and new-technology industry projects.
4. Enterprise development funding is also available from the Local Finance Bureau to encourage the development of enterprises bringing particular benefits to the zone.
5. Award Funds have been set up to provide a means of acknowledging individuals who contribute to attracting foreign investment.
6. The Regulations on Land Transfer Prices and Comprehensive Project Evaluation include provision for favorable land transfer prices.
7. Scientific and technological enterprises can benefit from certain preferential policies on office rental fees in the Scientific and Technological Innovation Centre.
8. Foreign-invested projects involving technology transfer identified for encouragement under category B as per the Industrial Guide to Foreign Investment, together with domestic-invested projects as per the List of Industries, Products and Technologies Presently Encouraged by the State, attract exemption in full from customs duty and value-added tax on the importation of equipment (subject to certain exceptions involving commodities that cannot be exempted from taxes).
9. Enterprises also participate fully in all other preferential policies brought in by both central and local governments.
List of documents and certificates required for presentation
to the Economic Development Bureau.
Application for establishing a company.
Feasibility study report or project proposal.
Letter of intent re cooperation (only for joint venture).
Contract (only for joint venture) together with constitution and enclosures and a list of the equipment to be imported.
Investors’ credit certificate (foreign nationals present documentation from their banks with details of personal funds; state-owned Chinese partners present an evaluation certificate and confirmation document regarding the state-owned assets).
Copy of a valid registration document or business license issued by the investors’ own government. Foreign individuals also provide a copy of a valid identification card.
Documentation to describe proposed office and production site requirements.
‘Note Form’ (4 copies).
List of board members with signatures, directors’ letters of appointment and general manager’s letter of appointment.
‘Notice for Organization Code’.
Documents showing investors’ representatives together with certificates of identification.
Company Name Registration Document.
Other documentation, for example as required by investment confirmation procedures for Taiwan Compatriots and overseas Chinese, etc.
Local dialects are widely spoken in China. Standard Spoken Chinese (Mandarin) is taught in the schools and understood by about 60% of the population. About half of that proportion understand English, which is also taught in school and is now compulsory for all primary school kids. English is popular and considered academically important here. It’s now likely that and the number of people in China who can use English significantly exceeds the population of the USA. Some Chinese scholars have expressed concern that there is a danger that English may overtake standard spoken Chinese as the lingua franca. Students enrolled in the School of Software having already studied English for six years at school. This is topped up with six formal English classes a week in the first undergraduate year. There are also supplementary activities in English language aimed at those with a particular interest in the international language. They have good reason to have an interest in English for most of the textbooks and much of the tuition in the School of Software are in English.