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Week
13 March, 2008
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Dear Zinester,
Here is this
week’s edition, covering:
- Luxury Brands in China: Part V
- Protection vs. Enforcement: Where to start your China IPR Strategy?
- China Entrepreneurs Need an Incremental Exit Strategy
- Dealmaking in China: Getting In on the Action
We hope you will enjoy reading this edition.
Have a nice weekend!
All of us at China Success Stories
PS. There is one question waiting for you in our Q & A section.
Chinese
Expert Guest Blog
Luxury Brands in China: Part V
 The process of importing, distributing and selling luxury
goods in China raises further challenges for companies, including a number
of difficult questions regarding tax treatment, customs duty, logistics and
the transfer of intellectual property.
Customs duty, import VAT and consumption tax can all be
charged on luxury goods imported into China. The ability of brands to mark
up their goods at dramatic premiums can also prove difficult to explain to
tax authorities when the time comes to file income tax returns. Companies
producing or trading luxury items need to understand how to avoid
unnecessary or overlapping burden of tax and other duties. For example, VAT
and business tax should in theory be mutually exclusive, since both are
turnover taxes.
Read the rest or post a comment >>
Q & A
Private Equity
Every day you see tons of investments, venture and otherwise
being done. I’m having trouble cracking open a door. I’m
working with a group who wants to effect an MBO for a greater china media
company. It’s a “small deal” in most people’s
vernacular, 25 mil USD. So looking for a PEG or VC actively interested in
traditional and new media deals in greater china…
Answer this question >>
Chinese Expert Guest Blog
Protection vs. Enforcement: Where to start
your China IPR Strategy?
 The continued pervasiveness of counterfeiting in China is
not only a problem of law, but also one of enforcement. While China’s
laws and regulations conform to the agreement on trade-related aspects of
intellectual property rights (TRIPS) and other widely accepted
international principles, certain parts of China’s protection
mechanism have proven ineffective. Common examples are the high standards
for criminal liability of counterfeiters, the high burden of evidence to
prove bad faith registrations, and the difficulty to prove damages in civil
proceedings. On the other hand, it is abundantly clear that the police,
administrative authorities and courts often lack the resources, the
knowledge or the determination to effectively combat
infringements.
China’s own continuing development, and to a lesser
extent international pressure, will gradually lead to improvements on the
above issues, but this is not a process individual intellectual property
(IP) owners can influence.
Read the rest or post a comment
>>
Facts &
Figures
Tourists
You never know when these statistics might prove to
be of value to you. So without further ado, here's our weekly top 10.
Top 10 International Tourist Arrivals
| |
Country |
Arrivals '05 (mln.) |
Arrivals '06 (mln.) |
| 1 |
France |
75.9 |
79.1 |
| 2 |
Spain |
55.9 |
58.5 |
| 3 |
United States |
49.2 |
51.1 |
| 4 |
China |
46.8 |
49.6 |
| 5 |
Italy |
36.5 |
41.1 |
| 6 |
United Kingdom |
28.0 |
30.7 |
| 7 |
Germany |
21.5 |
23.6 |
| 8 |
Mexico |
21.9 |
21.4 |
| 9 |
Austria |
20.0 |
20.3 |
| 10 |
Russian Federation |
19.9 |
20.2 |
(Source: World Tourism Organization)
Chinese Expert Guest Blog
China Entrepreneurs Need an Incremental Exit Strategy
 Successful entrepreneurs in China will tell you that success took longer
than they had originally planned. Ex-pat owners of businesses in China who
have been slugging away for 5+ years can suddenly find themselves on a
steep growth curve. Many of these ‘overnight success stories’
that were years in the making end up leaving their owners hostages to the
business. The founders are cash-poor while the business gets bigger and
richer.
What can successful China entrepreneurs do to boost their household
finances without destroying the company balance sheet?
Over the years you’ve tweaked the business model, found the right
marketing & sales mix and were ready when demand caught up with your
offering. What happens when your 5 year old business becomes an overnight
success?
Read the rest or post a comment >>
Chinese Expert Guest
Blog
Dealmaking in China: Getting In on the
Action
 Having a meaningful footprint in China has become a strategic imperative
for multinational companies from around the world. The attraction is
China’s seemingly insatiable demand for products, services, capital
and technology. George D. Martin, partner and chair of the Faegre &
Benson China Practice, sees the current acquisition boom in China as the
logical culmination of foreign investment trends that he first observed
when practicing in Shanghai in the mid-1990s. Martin expects this M&A
trend to continue. But in the years to come, he advises, it won’t be
just foreign companies on the buy-side of cross-border M&A deals
involving China.
China’s accession to the World Trade Organization (WTO) in 2001
opened new sectors to foreign investment and eliminated many restrictions
on structuring those investments. As a result, joint ventures that were in
vogue among early China investors waned.
Read the rest or post a comment >>
Comments
Paul Tittmann in reply to Tool and Die experts in China
I’b be interested in hearing more of your professional expertise,
specific to processes, industries, and customers in North America.
I’m responsible for growth of that market in sourcing …
Terri in reply to Tool and Die experts in China
I have several contacts in tool and die manufacturing in China who would
likely be interested.
Terri in reply to Cheap or value added
Is there a formula you can apply to working out how much to spend on
labour? Is this something that can be taught, or something that can only be
learnt? Yes. Absolutely yes! There are …
Douglas Peacock in reply to Tool and Die experts in China
Martin, A manufacturing and sourcing company called Creative Resources is
well established in China and might find this to be a unique opportunity.
They currently do quite a bit of tooling…
Terri in reply to Marketing-China and Getting it Right
Best practices have no nationality and are not limited by race or
geography. While cultural considerations must be included in any management
strategy, the hubris...
Tina in reply to Cheap or value added
As a Chinese, I know the Guanxi is very important. Just
for an example, you want to get a special license for exporting wood, then
you...
Laura in reply to Why would a US-based company want to create an Individual Investment
Advisory Firm in China (pros/cons)?
I am also working on research in the wealth management sphere in china -
might be interesting to compare notes.
Clayton in reply to Tool and Die experts in China
I have built a personal relationship with a company in China that is
aggressively seeking to expand into the North American Market. There is no
language barrier when it comes to …
Clayton in reply to Tool and Die experts in China
Martin, here is my cell number if you need to contact me...
Roger in reply to Tool and Die experts in China
Dear Martin, since 2005 I have worked with several tooling companies in
china, as I am a industrial designer and parts designer. I especially
worked closely with one toolshop near …
Ken in reply to Marketing-China and Getting it Right
We have 2-year experience of change management deployment in China. I must
admit that the pure western management style will not work in the local
communities. However, one …
Jules in reply to Selling in the world's largest consumer market
Tsering - great article. One of the more “realistic”
perspectives relating to the Chinese marketplace that I’ve read.
Incredibly interesting to read. China has great potential, but it
…
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