Demographics

Since the 1950s medical care, public hygiene and sanitation improved considerably, and epidemics were controlled. Consecutive generations continuously experienced better health. The population growth rate surged as the mortality rate dropped more rapidly than the birth rate. China’s massive population has always been a major difficulty for the government as it has struggled to provide for it. In the 1950s, food supply was inadequate and the standard of living was generally low. This spurred the authorities to initiate a major birth control program. The Great Leap Forward industrial plan in 1958-60 caused a huge famine which caused the death rate to surpass the birth rate and by 1960, the overall population was declining. A second population control drive began in 1962 with major efforts focused on promoting late marriages and the use of contraceptives. By 1963 the country was in the beginning of recovery from the famine and the birth rate soared to its highest since 1949 with an annual population growth rate of 3%. In 1966, the Cultural Revolution suspended this second family planning program, but resumed four years later with the third attempt by making later marriage and family size limitation an obligation. Since 1970, the efforts have been much more effective. The third family planning program continued until 1979 when the one child per family policy was implemented. By the early 1980s, China’s population reached around 1 billion and by the early 2000s, surpassed 1.3 billion. In the 1980s, the average overall population growth was around 1.5%. In the 1990s, this fell to about 1%. Today it is about 0.6%. China's population growth rate is now among the lowest for a developing country, although, due to its large population, annual net population growth is still considerable. One demographic consequence of the one-child policy is that China is now one of the most rapidly ageing countries in the world.
From 100 million to 150 million surplus rural workers are adrift between the villages and the cities, many subsisting through part-time, low-paying jobs.
According to the latest Forbes China Rich List (2007), China had 66 billionaires, the second largest number after the United States, which had 415. In the 2006 Forbes Rich List it stated that there were 15 Chinese billionaires. In the latest 2007 Hurun Report, it lists 106 billionaires in China.

Trade In China

Today China is a global source for the commodities and is focusing on the international trade day by day. There is tough competition in the market but still China is standing its ground and striving its best. It has proved itself in several kinds of businesses and electronic goods manufacturing industry is on its peak. China is a leading supplier of the electronic toys all over the globe. In-spite of China staying into the international trade for quite a long time, it has stood the examination of time and has survived in-spite of neck-to-neck competition in the market.
It got best processes to work with and day-by-day has improved upon the same too. Several manufacturing companies are coming up everyday and global sourcing is been practiced now. This has boosted the average income of the individual and has improved upon the economic status of the nation too. Though China has the problem of highest population in the world but still it is trying its best to boost up the nation’s economy to give a better living to its people.
More and more companies have been practicing global sourcing for quite some time now, however, there has been seen an immense intensification in the number of organizations. These institutional bodies and organizations are concentrating on better global supply base, which provides better foundation to the booming industry sector. Several countries are focusing for China to be their global outsource plant as the manpower and other goods are cheap and easily available. It is the nation getting utmost consideration and attention these days and is principally supplying immense goods in the international trade.
The increase in the number of exports in China has increased in the international trade and it can compensate the losses, which the country had been bearing all these years due to immense imports it had in the past years. It has been a chief exporter to several countries in Asia and in the international trade too. It is gathering benefits from all of its partner nations too and trying to take its economy to greater heights.
Its global boundaries are increasing every day and there is a shift in its global scenario too. Its trade has improved and is greatly diversified and versatile. It is getting more professional and is adapting to a portfolio approach with the use of multiple global sourcing mechanism. There are generally few different kinds of framework like classification, structured model, which are these days been adapted by the industries to improve their production and are varied source of outsourcing mechanism for international trade. Because of all these China is a perfect source of International trade.
In the field of IT industry due to cost reduction for the development and communication there are several countries sourcing themselves from different markets which helps them to reduce the production costs of the products and pay lesser wages too. This is again beneficial for China and will be a win-win situation for both of the nations.

When And What To Import From China

With everyday newer products being added to the list of products for import and export from and to China – people not importing from China are losing their share of pie. If you are into global sourcing, you must consider launching your import and export China business. Likewise, you must be depriving yourself from your share of profits of import and export business when you have not exported your products to China. Almost every recent news on our Television, radio talks about how vast China is spanning with its endless list of products. From tyres to toys, from seafood to pet food, from lead paints to Square Pants products, diverse range of goods are possible for global sourcing – being available in China. If you have an import and export business to launch as China business, you will be loaded with options. You will be having myriad options to import and export by utilizing your China business. If done properly, the China business will take form of a highly profitable source for global sourcing. All you have to do to come out with the flying colours in your import and export business is to embrace proper techniques of importing goods from China business manufacturers or wholesalers.

- Tips on Importing China Business
If you have chosen China as the first source for global sourcing of the products you sell, you have to keep several points in your mind. Here are four basic rules of importing goods using your China business –
The first point will be to know and understand your vendors to perform global sourcing. To ensure that you are going at the right track of China business, ensure you identify your vendors or local China partners better. As a China business owner, you have to curb expensive expenses and to be ready for some unknown risks and occurrences side by side potential benefits. You may browse Internet for relevant information, articles educating, detailing and guiding new players in China business field. Despite profits, an overseas China business owner must be prepared to some domestic problems. You may confront cheating vendors who do not meet global standard. Evaluate samples of products local partners' work ethics by inspecting their manufacturing process at their factories. Bring test samples of the products you are dealing in China business. Make sure you have made sufficient contacts before you actually agree to work with a vendor and place your order accordingly,
Secondly, choose those reputed vendors to maintain quality of the products you are importing through China business. Choose reputed vendors to identify and improve products, give you ideas on related topics including packaging.
The third important factor involved in China based global sourcing is finding information on shipping and its rates, duties, customs etc. Getting informed about freight forwarder is not enough, focus on some particular goods that they are shipping you, their shipping techniques and delivery schedules.
Finally, stick to only reliable and reputed logistic partners to package what you obtain through global sourcing through your China business. An excellent logistic partner will provide you warehousing, fulfilment etc.

China Shipping

In 1961 China established a state-run marine shipping company and subsequently signed shipping agreements with many countries, laying the foundation for developing the country's ocean transport.
That organization developed into the present-day China Ocean Shipping (Group) Company (COSCO), one of the world's largest shipping corporations.
The Chinese government also invested heavily in water transport infrastructure, constructing new ports and rebuilding and enlarging older facilities.
A major effort has also been made to increase mechanization and containerization at major international ports.
In addition, China has become one of the world's premier shipbuilding countries, satisfying domestic demand and exporting ships and oil-drilling platforms worldwide.
China's shipping industry and container transportation has reached international standards both in handling efficiency and building networks.
The governmental responsibility of the shipping industry is under the Ministry of Communications.
The number of container units handled by mainland Chinese ports in November 2007 reached 100 million, highlighting the country's position as a major player in the industry worldwide. For every two containers traveling along shipping lines in the Pacific Ocean, one is from China. The country also manufactures 90% of the world's containers.
The throughput of cargo and containers at China's ports has been the largest in the world for the past five years, with an annual growth rate of 35%.

Geography
China's 8,700-mile- (14,000-km-) long coastline is indented by some 100 large and small bays and has some 20 deepwater harbours, most of which are ice-free throughout the year.
Coastal shipping is divided into two principal navigation zones, the northern and southern marine districts.
The northern district extends north from Xiamen to the North Korean border, with Shanghai as its administrative centre. The southern district extends south from Xiamen to the Vietnamese border, with Guangzhou as the administrative center.
Most of the ocean-going routes begin from the ports of Dalian, Qinghuangdao, Tanggu, Qingdao, Shanghai, Huangpu, Zhanjiang, or Hong Kong.
Shanghai, the leading port of China from the early 19th century, was eclipsed by Hong Kong when the latter was reincorporated into the country in 1997.

Yangtze River Hu-Yu Route

On June 23, 2007, renovations on the section of the Yangtze River between Luzhou and Chongqing, also known as the Hu-Yu Sea Route, have been completed. This completion of the renovations means that ships over a thousand tons can now arrive in Luzhou.
Before the renovations, the Hu-Yu Sea Route was unable to take advantage of the overall development being enjoyed by the Sichuan economy. In October 2005 renovations started with a total investment of 120 million yuan (US$15.7 million). After two years of work, the Hu-Yu Route has been significantly enhanced: the channel has a depth of 2.7 meters and a width of 50 meters. The result is that vessels as large as 3000 tons can navigate the Hu-Yu Sea Route day and night.

Customer relationship management and China Business Process Outsourcing

The work of our Outsourcing team is all about freeing up our clients to focus on what they do bestâ€"their core business. As well as outsourcing areas such as software maintenance, finance and human resources, Services also improves clients’ key business functions, enabling them to work more efficiently.

Dynasty resources is the official Outsourcing and BPO community forum for independent expert advice, news, knowledge, best practices, opinions, vendor experiences, ratings, reviews, networking, showcasing and sharing global business process outsourcing services. We provide BPO services in general finance and accounting, procurement, and capital market research. We will start to provide services in human resources (HR) and data management services soon. We also plan to provide learning solutions, customer relationship management, insurance and banking back-office processing services in the future.

China had also offered academicians staying outside to come to the mainland and train students. China would emerge as the biggest threat to India in the coming years in the field of IT outsourcing. Chinese were very hard working, competitive, and dedicated, as a result of which they were able to overcome any odds by dint of labour. He said that China had chalked out a massive programme on primary education with focus on training in English.

Dynasty meets china BPO the unique localization demands of multimedia material with strong multimedia and game development experience. Business Process Outsourcing yields substantial savings for American companies, and China is an ideal provider of such services, given its low cost of labor and skilled workforce. Please visit online www.dynastyresources.net in NewYork city.

Electronic Banking & ATM in China

Electronic banking

In 1994, China started the "Golden Card Project," enabling cards issued by banks to be used all over the country through a network. The establishment of the China Association of Banks rapidly promoted the inter-bank card network and by the end of 2004, the inter-region-inter-bank network had reached 600 cities, including all prefecture-level cities and more than 300 economically developed county-level cities.

International ATMs

PRC citizens may apply for an international ATM card corresponding to an interbank network such as Cirrus or PLUS, but foreign residents may not. Foreign residents in PRC, however, may use such interbank networks at ATMs in PRC through ATM cards procured in foreign countries.

Interbank ATMs are common throughout the country, especially in densely-populated urban areas such as Beijing.

Tourism Industry in China

China's tourism industry is one of the fastest-growing industries in the national economy and is also one of the industries with a very distinct global competitive edge. The total revenue of China's tourism industry reached USD 67.3 billion in 2002, accounting for 5.44% of the GDP. It dropped, largely due to SARS, to USD 59 billion in 2003. Nevertheless, for areas rich in tourism resources, tourism has become the main source of tax revenue and the key industry for economic development.
The total number of inbound tourists was 91.66 million in 2003, and that of tourists staying overnight was 32.7 million, about 10 times of the number in 1980. International tourism receipts were USD 17.4 billion in 2003. China's ranking for both the overnight tourist arrivals and tourism receipts were among the world's top five in 2003. However, there is unlikely to be a big increase in the inbound tourism market.
China's domestic tourism market makes up more than 90% of the country's tourism traffic, and contributes more than 70% of total tourism revenue. In 2002, domestic tourists reached 878 million and tourism revenue was USD 46.9 billion. The five-days-per-week and long vacation schemes have increased leisure time for the Chinese people and spurred market demand in domestic tourism and led to its prosperity.
A large middle class population with strong consumption power is emerging in China, especially in major cities. China's outbound tourists reached 20.22 million in 2003, overtaking Japan for the first time. Currently there are 65 countries/areas open to Chinese tour groups. Putting aside the threat of SARS and other unexpected events, based on the current economic growth situation and the social development of China, China's outbound tourism is poised to achieve a new growth peak.
Driven by the flourishing tourism industry, China's tourist hotel sector is expanding rapidly. At the end of 2003, China had a total of 10,093 tourist hotels and more than 820,000 rooms. 773 of these tourist hotels were foreign-funded. The number of foreign-funded (inclusive of Hong Kong, Macau and Taiwan investments) four- and five-star tourist hotels made up 26% and 30.02% of the national total, respectively.
In 2003, there were a total of 11,522 travel agencies in China, among which, 1,349 were international ones and 10,203 were domestic ones. While overall tourism market concentration rose, there was a drop in the market position of the traditional three key travel agencies. As competition heightened, China's tourism industry on the whole, had begun to start earning low profits, even while it was expanding its scale of operations.
Currently, there are approximately 15,000 natural, cultural and man-made places of attraction which are above county level. Presently, Hong Kong investors are the main participants in the establishment of tourist attractions in China. In 2001, Sichuan became the first province to propose renting out the operation rights of 10 scenic areas to foreign investors.
According to the plan by China National Tourism Administration, the number of inbound tourists, foreign exchange earnings from tourism and the domestic market size are targeted to have an annual growth of 4%, 8% and 8%, respectively, in the next five to ten years. It is also forecast by the WTO that China's tourism industry will take up to 8.6% of world market share to become the world's top tourism industry by 2020.

Communications

China possesses a diversified communications system that links all parts of the country by Internet, telephone, telegraph, radio, and television. None of the telecommunications forms are as prevalent or as advanced as those in modern Western countries, but the system includes some of the most sophisticated technology in the world and constitutes a foundation for further development of a modern network.
China's number of Internet users or netizens topped 137 million by the end of 2006, an increase of 23.4% from a year before and 162 million by June 2007, making China the second largest Internet user after the United States, according to China's Ministry of Information Industry (MII). China's mobile phone penetration rate is 34% in 2007. In 2006, mobile phone users sent 429 billion text messages, or on average 967 text messages per user. For 2006, the number of fixed-lines grew by 79%, mainly in the rural areas.

Transportation

Development of the country’s transportation infrastructure is given a high priority because it is so strategically tied to the national economy and national defense. Regardless, the transportation infrastructure is still not fully developed in many aspects and areas, and it constitutes a major hindrance on economic growth and the efficient logistical movement of goods and people. China's transportation policy, influenced by political, military, and economic concerns, have undergone major changes since 1949.
Immediately after the People’s Republic was founded, the primary goal was to repair existing transportation infrastructure in order to meet military transport and logistics needs as well as to strengthen territorial integrity. During most of the 1950s, new road and rail links were built, while at the same time old ones were improved. During the 1960s much of the improvement of regional transportation became the responsibility of the local governments, and many small railways were constructed. Emphasis was also placed on developing transportation in remote rural, mountainous, and forested areas, in order to integrate poorer regions of the country and to help promote economies of scale in the agricultural sector.
Before the reform era began in the late 1970s, China's transportation links were mostly concentrated in the coastal areas and access to the inner regions was generally poor. This situation has been improved considerably since then, as railways and highways have been built in the remote and frontier regions of the northwest and southwest. At the same time, the development of international transportation was also pursued, and the scope of ocean shipping was broadened considerably.
Freight haulage is mainly provided by rail transport. The rail sector is monopolized by China Railways which is controlled by the Ministry of Railways and there is wide variation in services provided. In late 2007 China became one of the few countries in the world to launch its own indigenously developed high-speed train. As rail capacity is struggling to meet demand for the transport of goods and raw materials such as coal, air routes, roads and waterways are rapidly being developed to provide an increasing proportion of China's overall transportation needs.

Labor and Welfare in China

One of the hallmarks of China's socialist economy was its promise of employment to all able and willing to work and job-security with virtually lifelong tenure. Reformers targeted the labor market as unproductive because industries were frequently overstaffed to fulfill socialist goals and job-security reduced workers' incentive to work. This socialist policy was pejoratively called the iron rice bowl.
In 1979-1980, the state reformed factories by giving wage increases to workers, which was immediately offset by sharply rising inflation rates of 6%-7%. In other words, although they were given more pay, their money was worth less and they could buy less, which meant they were poorer. The state remedied this problem, in part, by distributing wage subsidies.
The reforms also dismantled the iron rice bowl, which meant it witnessed a rise in unemployment in the economy. In 1979, immediately after the iron rice bowl was dismantled, there were 20 million unemployed people.[88] Official Chinese statistics reveal that 4.2% of the total urban workforce was unemployed in 2004, although other estimates have reached 10%. As part of its newly developing social security legislation, China has an unemployment insurance system. At the end of 2003, more than 103.7 million people were participating in the plan, and 7.4 million laid-off employees had received benefits.
A 10-percent sample tabulation of census questionnaires from the 1982 census provided needed statistical data on China's working population and allowed the first reliable estimates of the labor force's size and characteristics. The quality of the data was considered to be quite high, although a 40-million-person discrepancy existed between the 10-percent sample and the regular employment statistics. This discrepancy can be explained by the combination of inaccurate employment statistics and varying methods of calculation and scope of coverage. The estimated mid-1982 labor force was 546 million, or approximately 54 percent of the total population. Males accounted for slightly more than half of the estimated labor force, and the labor force participation rates for persons age fifteen years and older were among the highest in the world.
The 10-percent sample showed that approximately three-fourths of the labor force worked in the agricultural sector. According to the National Bureau of Statistics, in the mid-1980s more than 120 million people worked in the nonagricultural sector. The sample revealed that men occupied the great majority of leadership positions. The average worker was about thirty years old, and three out of every four workers were under forty-five years of age. The working population had a low education level. Less than 40 percent of the labor force had more than a primary school education, and 30 percent were illiterate or semiliterate.
In mid-1982 the overall unemployment rate was estimated to be about 5 percent. Of the approximately 25 million unemployed, 12 million were men and 13 million were women. The unemployment rate was highest in the northeast and lowest in the south. The unemployment rates were higher than those of East Asian, Southeast Asian, and Pacific island countries for which data were available but were lower than the rates found in North America and Europe. Virtually all of the unemployed persons in cities and towns were under twenty years of age.
By the 1990s and 2000s, agriculture has remained the largest employer, though its proportion of the workforce has steadily declined; between 1991 and 2001 it dropped from about 60% to 40% of the total. The manufacturing labor force has also become smaller at a slower rate, partially because of reforms implemented at many of the state-run enterprises. Such reforms and other factors have increased unemployment and underemployment in both urban and rural areas. Women have been a major labor presence in China since the People's Republic was established. Some 40-45 percent of all women over age 15 are employed.
China’s estimated employed labor force in 2005 totaled 791.4 million persons, about 60% of the total population. During 2003, 49% of the labor force worked in agriculture, forestry, and fishing; 22% in mining, manufacturing, energy, and construction industries; and 29% in the services sector and other categories. In 2004 some 25 million persons were employed by 743,000 private enterprises. Urban wages rose rapidly from 2004-2007, at a rate of 13 to 19% per year with average wages near $200 in 2007.
The All-China Federation of Trade Unions (ACFTU) was established in 1925 to represent the interests of national and local trade unions and trade union councils. The ACFTU reported a membership of 130 million, out of an estimated 248 million urban workers, at the end of 2002. Chinese trade unions are organized on a broad industrial basis. Membership is open to those who rely on wages for the whole or a large part of their income, a qualification that excludes most agricultural workers. In theory, membership is not compulsory, but in view of the unions' role in the distribution of social benefits, the economic pressure to join is great. The lowest unit is the enterprise union committee. Individual trade unions also operate at the provincial level, and there are trade union councils that coordinate all union activities within a particular area and operate at county, municipal, and provincial levels. At the top of the movement is the ACFTU, which discharges its functions through a number of regional federations.
In theory the appropriate trade union organizations have been consulted on the level of wages as well as on wage differentials, but in practice their role in these and similar matters has been insignificant. They have not engaged in collective bargaining, as their principal duties have included assisting the party and promoting production. In fulfilling these tasks, they have had a role in enforcing labor discipline. From the point of view of the membership, the most important activities have concerned the social and welfare services. Thus, the unions have looked after industrial safety, organized social and cultural activities, and, provided services such as clinics, rest and holiday homes, hostels, libraries, and clubs. They also administer old-age pensions, workers' insurance, disability benefits, and other welfare schemes. More recently, however, reforms of the social security system have involved moving the responsibility for pensions and other welfare to the provinces.
In China there exist labor laws which, if fully enforced, would greatly alleviate common abuses such as not paying workers. In 2006, a new labor law was proposed and submitted for public comment. The new law, as currently drafted, would permit collective bargaining in a form analogous to that standard in Western economies, although the only legal unions would continue to be those affiliated with the All-China Federation of Trade Unions, the Communist Party’s official union organization. The new law has support from labor activists, but has been opposed by some foreign corporations, including the American Chamber of Commerce and the European Chamber of Commerce. There is some expectation that the new law, if enacted, would be enforced. An ongoing effort to organize Chinese operations of foreign companies succeeded in 2006 at Wal-Mart. The campaign is projected to include Eastman Kodak, Dell and other companies. It was reported in 2008 that problems with sweatshops persist. By Fall, 2008 it was apparent that union organizing efforts were widespread with emphasis on foreign corporations.

Enterprise Income Tax of China

(1) Taxpayers
The taxpayers of Enterprise Income Tax include any state-owned enterprise, collective enterprise, private enterprise, joint operation enterprise, joint equity enterprise, and other organizations.
(2) Tax base
The taxpayers' world-wide income from production and business operations and from other sources shall be subject to Enterprise Income Tax according to law. The Enterprise Income Tax is computed on the basis of the taxable income which is equal to the total income earned by the taxpayers in a tax year less allowable deductions for the same tax year.
(3) Tax rates and computation of tax payable
Normally, the amount of Enterprise Income Tax payable is computed on the basis of the taxable income and by applying the rate of 33%. The formula for computing the tax payable is:
Income tax payable= Taxable income × 33%
Besides the statutory rate, two lower rates of 18% and 27% are designed for some less profitable enterprises.
(4) Major tax exemptions and reductions
a. Enterprises operating in autonomous regions requesting for preferential treatment and incentives may be, upon the approval of the People's Government at provincial level, given tax reductions or exemptions for a specified period;
b. Tax exemption or tax reduction may be granted to enterprises or businesses that meet the relevant rules of the State, such as high-technology enterprises and enterprises engaged in tertiary industry set up in line with the relevant regulations of the State, enterprises using wastes as their key raw materials, newly-registered enterprises located in the revolutionary base areas, minority nationality areas, remote areas and poor areas approved by the State, enterprises-suffering from serious natural disasters, newly-registered service enterprises providing social employment opportunities, factories and farms run by schools under the educational administration departments, welfare production enterprises belonging to the civil administration departments, township enterprises, State-owned agricultural enterprises, etc..

Income Tax on Enterprises with Foreign Investment and Foreign Enterprises
(1) Taxpayers
a. Enterprises with foreign investment include Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures and wholly-foreign owned enterprises.
b. Foreign enterprises include foreign companies, enterprises and other economic organizations which have establishments or places in China engaged in production or business operations or which, though without establishments or places in China, have income from sources within China.
(2) Tax base
The enterprises with foreign investment with head office in China pay income tax on their world-wide income. Foreign enterprises pay income tax only on their income derived from sources within China.
The income tax base for enterprises with foreign investment and foreign enterprises is the taxable income which is the amount remaining from its gross income in a tax year after allowable deduction for costs, expenses and losses.
Any foreign enterprise which has no establishment or place in China but derives income of profits, interest, rental, royalties and other income from sources within China or which, though it has an establishment or place in China, the said income is not effectively connected with such establishment or place, is taxed on the basis of the gross amount of such income.
(3) Tax rates and calculation of the amount of tax payable
The income tax on enterprises with foreign investment and foreign enterprises is 30% of the taxable income plus 3% local income tax, totalling 33% rate. Any foreign enterprise which has no establishment or place in China but derives income of profits, interest, rental, royalties and other income from sources within China or which, though it has an establishment or place in China, the said income is not effectively connected with such establishment or place, pays tax of 20% on such income. The formula for computing the amount of tax payable is:
Amount of tax payable = Taxable income ×Applicable tax rate
(4) Main tax incentives
a. Tax exemptions or tax reductions may be granted to enterprises with foreign investment of a production nature, export-oriented enterprises with foreign investment, technologically advanced enterprises with foreign investment, and enterprises with foreign investment and foreign enterprises established in the Special Economic Zones, the Economic and Technological Development Zones, the Coastal Open Economic Zones and the New and High-technology Industrial Development Zones specified by the State.
b. The share of profits earned by foreign investors from their invested enterprises may be exempted from tax. The foreign investor who reinvests its share of profits from enterprises with his investment directly into that enterprise by increasing its registered capital or who uses the profit as capital investment to establish another enterprises with foreign investment may receive some tax refund.
c. The exemption from or reduction of local income tax for any enterprise with foreign investment engaged in an encouraged industry or project may, in accordance with the actual situation, be granted by the People's Government of the relevant Province, Autonomous Region or Municipality directly under the State Council.

China's currency system

The renminbi (“people’s currency”) is the currency of China, denominated as the yuan, subdivided into 10 jiao or 100 fen. The renminbi is issued by the People's Bank of China, the monetary authority of the PRC. The ISO 4217 abbreviation is CNY, although also commonly abbreviated as "RMB". The Latinised symbol is ¥. The yuan is generally considered by outside observers to be undervalued by about 30%.
The renminbi is held in a floating exchange-rate system managed primarily against the US dollar. On July 21, 2005 China revalued its currency by 2.1% against the US dollar and, since then has moved to an exchange rate system that references a basket of currencies and has allowed the renminbi to fluctuate at a daily rate of up to half a percent.
The rate of exchange (Chinese yuan per US$1) on July 31, 2008 was RMB 6.846, in mid-2007 was RMB 7.45, while in early 2006 was RMB 8.07:US $1 = 8.2793 yuan (January 2000), 8.2783 (1999), 8.2790 (1998), 8.2898 (1997), 8.3142 (1996), 8.3514 (1995).
Beginning January 1, 1994, the People's Bank of China quotes the midpoint rate against the US dollar based on the previous day's prevailing rate in the interbank foreign exchange market.
There is a complex relationship between China's balance of trade, inflation, measured by the consumer price index and the value of its currency. Despite allowing the value of the yuan to "float", China's central bank has decisive ability to control its value with relationship to other currencies. Inflation in 2007, reflecting sharply rising prices for meat and fuel, is probably related to the worldwide rise in commodities used as animal feed or as fuel. Thus rapid rises in the value of the yuan permitted in December, 2007 are possibly related to efforts to mitigate inflation by permitting the renminbi to be worth more

Financial & Banking system of China

Most of China's financial institutions are state governed. The chief instruments of financial and fiscal control are the People's Bank of China (PBC) and the Ministry of Finance, both under the authority of the State Council. The People's Bank of China replaced the Central Bank of China in 1950 and gradually took over private banks. It fulfills many of the functions of other central and commercial banks. It issues the currency, controls circulation, and plays an important role in disbursing budgetary expenditures. Additionally, it administers the accounts, payments, and receipts of government organizations and other bodies, which enables it to exert thorough supervision over their financial and general performances in consideration to the government's economic plans. The PBC is also responsible for international trade and other overseas transactions. Remittances by overseas Chinese are managed by the Bank of China (BOC), which has a number of branch offices in several countries.
Other financial institutions that are crucial, include the China Development Bank (CDB), which funds economic development and directs foreign investment; the Agricultural Bank of China (ABC), which provides for the agricultural sector; the China Construction Bank (CCB), which is responsible for capitalizing a portion of overall investment and for providing capital funds for certain industrial and construction enterprises; and the Industrial and Commercial Bank of China (ICBC), which conducts ordinary commercial transactions and acts as a savings bank for the public.

China's economic reforms greatly increased the economic role of the banking system. Enterprises and individuals can go to the banks to obtain loans outside the state plan, and this has proved to be a major source of financing both for start-up companies and businesses and for the expansion, modernization or privatization of existing enterprises. Even though nearly all investment capital was previously provided on a grant basis according to the state plan, policy has since the start of the reform shifted to a loan basis through the various state-directed financial institutions. Increasing amounts of funds are made available through the banks for economic and commercial purposes. Foreign sources of capital have also become increasingly prominent. China has received loans from the World Bank and several United Nations programs, as well as from countries (particularly Japan) and, to a lesser extent, commercial banks. Hong Kong has been a major conduit of this investment, as well as a source itself.
With two stock exchanges (Shanghai Stock Exchange and Shenzhen Stock Exchange), mainland China's stock market had a market value of $1 trillion by January 2007, which became the third largest stock market in Asia, after Japan and Hong Kong. It is estimated to be the world's third largest by 2016.

Foreign Investment climate in China

China's investment climate has changed dramatically with more than two decades of reform. In the early 1980s, China restricted foreign investments to export-oriented operations and required foreign investors to form joint-venture partnerships with Chinese firms. The Encouraged Industry Catalogue sets out the degree of foreign involvement allowed in various industry sectors. Foreign investment slowed in late 1989 in the aftermath of Tiananmen Square protests. In response, the government introduced legislation and regulations designed to encourage foreigners to invest in high-priority sectors and regions.
Since the early 1990s, the government has allowed foreign investors to manufacture and sell a wide range of goods on the domestic market, eliminated time restrictions on the establishment of joint ventures, provided some assurances against nationalization, allowed foreign partners to become chairs of joint venture boards, and authorized the establishment of wholly foreign-owned enterprises, now the preferred form of FDI. In 1991, China granted more preferential tax treatment for Wholly Foreign Owned Enterprises and contractual ventures and for foreign companies, which invested in selected economic zones or in projects encouraged by the state, such as energy, communications and transportation.
China also authorized some foreign banks to open branches in Shanghai and allowed foreign investors to purchase special "B" shares of stock in selected companies listed on the Shanghai and Shenzhen Securities Exchanges. These "B" shares sold to foreigners carried no ownership rights in a company. In 1997, China approved 21,046 foreign investment projects and received over $45 billion in foreign direct investment. China revised significantly its laws on Wholly Foreign-Owned Enterprises and China Foreign Equity Joint Ventures in 2000 and 2001, easing export performance and domestic content requirements.
Foreign investment remains a strong element in China's rapid expansion in world trade and has been an important factor in the growth of urban jobs. In 1998, foreign-invested enterprises produced about 40% of China's exports, and foreign exchange reserves totalled about $145 billion. Foreign-invested enterprises today produce about half of China's exports (note that the majority of China's foreign investment come from Hong Kong, Macau and Taiwan), and China continues to attract large investment inflows. However, the Chinese government's emphasis on guiding FDI into manufacturing has led to market saturation in some industries, while leaving China's services sectors underdeveloped. From 1993-2001, China was the world's second-largest recipient of foreign direct investment after the United States. China received $39 billion FDI in 1999 and $41 billion FDI in 2000. China is now one of the leading FDI recipients in the world, receiving almost $80 billion in 2005 according to World Bank statistics. In 2006, China received $69.47 billion in foreign direct investment.
Foreign exchange reserves totaled $155 billion in 1999 and $165 billion in 2000. Foreign exchange reserves exceeded $800 billion in 2005, more than doubling from 2003. Foreign exchange reserves were $819 billion at the end of 2005, $1.066 trillion at the end of 2006, and have now surpassed those of Japan, making China's foreign exchange reserves the largest in the world.
As part of its WTO accession, China undertook to eliminate certain trade-related investment measures and to open up specified sectors that had previously been closed to foreign investment. New laws, regulations, and administrative measures to implement these commitments are being issued. Major remaining barriers to foreign investment include opaque and inconsistently enforced laws and regulations and the lack of a rules-based legal infrastructure. Warner Bros., for instance, withdrew its cinema business in China as a result of a regulation that requires Chinese investors to own at least a 51 percent stake or play a leading role in a foreign joint venture.

Yangchengtong : China's Smart card

Yangchengtong is an electronic payment system using contactless smart card. Each Yangchengtong card has a built-in microchip containing an electronic purse and other applications which can accurately record cardholders' transaction details. Simply wave your card over a Yangchengtong reader and the correct amount will be deducted from it automatically, you can complete your transaction swiftly without using coins.

Sales & Add-value service
Please charge as follow. Multiple of Y50 for each time. The maximum stored value on a Yangchengtong Card is Y500. (please check the updated at selling point)

Yangchengtong Applications
Public Transport & Transport Related Service : Bus, trolly, metro, taxi.
Telecom : 200 IC telephone, special public telephone.
Retail & others : McDonalds, conveninece stores.

Selling Stand
Service Spot of business Travel.

Enter China

Visa
Foreigners who want to visit China need to apply for tourist visas. Such a visa is valid for two months. If tourist period exceeds two months, a new visa could be acquired in Hong Kong within two days after application.

Credit Card
Major international credit card such as American Express, JCB, VISA & Master, etc. are accpeted in Foreign-involved hotels and large-size shopping centers.

Bank & Currencies
Most foreign currencies can be exchanged into RMB (chinese currency) in bank offices in hotels. Bank of China is the exclusive bank to deal with foreign-issued credit card transactions.
Bank : Business Hours : 9.00 am - 5.00 pm, Mon to Fri and 10.00 am - 4.00 pm, Sat & Sun.

Posts & Telecommunications
Mail services are offered in all hotels, but if the international posted parcels contain any antiques, they should be sent to the international post & telecom bureau for Customs clearance.

Telephone
IDD service is provided in all hotels, but sometimes hotels would request cash payment. IC phone card can be bought at larger hotels or Telecom Business Counters.

China's Government role in Economic

Since 1949 the government, under China's socialist political and economic system, has been responsible for planning and managing the national economy.[44] In the early 1950s, the foreign trade system was monopolized by the state. Nearly all the domestic enterprises were state-owned and the government had set the prices for key commodities, controlled the level and general distribution of investment funds, determined output targets for major enterprises and branches, allocated energy resources, set wage levels and employment targets, operated the wholesale and retail networks, and steered the financial policy and banking system. In the countryside from the mid-1950s, the government established cropping patterns, set the level of prices, and fixed output targets for all major crops.
Since 1978 when economic reforms were instituted, the government role in the economy has lessened to a great degree. Industrial output by state enterprises slowly declined, although a few strategic industries have today remained predominantly state-owned. While the role of the government in managing the economy has been reduced and the role of both private enterprise and market forces increased, the government maintains a major role in the urban economy. With its policies on such issues as agricultural procurement the government also retains a major influence on rural sector performance. The State Constitution of 1982 specified that the state is to guide the country's economic development by making broad decisions on economic priorities and policies, and that the State Council, which exercises executive control, was to direct its subordinate bodies in preparing and implementing the national economic plan and the state budget. A major portion of the government system (bureaucracy) is devoted to managing the economy in a top-down chain of command with all but a few of the more than 100 ministries, commissions, administrations, bureaus, academies, and corporations under the State Council are concerned with economic matters.
Each significant economic sector is supervised and controlled by one or more of these organizations, which includes the People's Bank of China, National Development and Reform Commission, Ministry of Finance, and the ministries of agriculture; coal industry; commerce; communications; education; light industry; metallurgical industry; petroleum industry; railways; textile industry; and water resources and electric power. Several aspects of the economy are administered by specialized departments under the State Council, including the National Bureau of Statistics, Civil Aviation Administration of China, and the tourism bureau. Each of the economic organizations under the State Council directs the units under its jurisdiction through subordinate offices at the provincial and local levels.
The whole policy-making process involves extensive consultation and negotiation.[45] Economic policies and decisions adopted by the National People's Congress and the State Council are to be passed on to the economic organizations under the State Council, which incorporates them into the plans for the various sectors of the economy. Economic plans and policies are implemented by a variety of direct and indirect control mechanisms. Direct control is exercised by designating specific physical output quotas and supply allocations for some goods and services. Indirect instruments — also called "economic levers" — operate by affecting market incentives. These included levying taxes, setting prices for products and supplies, allocating investment funds, monitoring and controlling financial transactions by the banking system, and controlling the allocation of key resources, such as skilled labor, electric power, transportation, steel, and chemicals (including fertilizers). The main advantage of including a project in an annual plan is that the raw materials, labor, financial resources, and markets are guaranteed by directives that have the weight of the law behind them. In reality, however, a great deal of economic activity goes on outside the scope of the detailed plan, and the tendency has been for the plan to become narrower rather than broader in scope. A major objective of the reform program was to reduce the use of direct controls and to increase the role of indirect economic levers. Major state-owned enterprises still receive detailed plans specifying physical quantities of key inputs and products from their ministries. These corporations, however, have been increasingly affected by prices and allocations that were determined through market interaction and only indirectly influenced by the central plan.
Total economic enterprise in China is apportioned along lines of directive planning (mandatory), indicative planning (indirect implementation of central directives), and those left to market forces. In the early 1980s during the initial reforms enterprises began to have increasing discretion over the quantities of inputs purchased, the sources of inputs, the variety of products manufactured, and the production process. Operational supervision over economic projects has devolved primarily to provincial, municipal, and county governments. The majority of state-owned industrial enterprises, which were managed at the provincial level or below, were partially regulated by a combination of specific allocations and indirect controls, but they also produced goods outside the plan for sale in the market. Important, scarce resources — for example, engineers or finished steel — may have been assigned to this kind of unit in exact numbers. Less critical assignments of personnel and materials would have been authorized in a general way by the plan, but with procurement arrangements left up to the enterprise management.
In addition, enterprises themselves are gaining increased independence in a range of activity. While strategically important industry and services and most of large-scale construction have remained under directive planning, the market economy has gained rapidly in scale every year as it subsumes more and more sectors.[46] Overall, the Chinese industrial system contains a complex mixture of relationships. The State Council generally administers relatively strict control over resources deemed to be of vital concern for the performance and health of the entire economy. Less vital aspects of the economy have been transferred to lower levels for detailed decisions and management. Furthermore, the need to coordinate entities that are in different organizational hierarchies generally causes a great deal of informal bargaining and consensus building.[46]
Consumer spending has been subject to a limited degree of direct government influence but is primarily determined by the basic market forces of income levels and commodity prices. Before the reform period, key goods were rationed when they were in short supply, but by the mid-1980s availability had increased to the point that rationing was discontinued for everything except grain, which could also be purchased in the free markets. Collectively owned units and the agricultural sector were regulated primarily by indirect instruments. Each collective unit was "responsible for its own profit and loss," and the prices of its inputs and products provided the major production incentives.
Vast changes were made in relaxing the state control of the agricultural sector from the late 1970s. The structural mechanisms for implementing state objectives — the people's communes and their subordinate teams and brigades — have been either entirely eliminated or greatly diminished.[47] Farm incentives have been boosted both by price increases for state-purchased agricultural products, and it was permitted to sell excess production on a free market. There was more room in the choice of what crops to grow, and peasants are allowed to contract for land that they will work, rather than simply working most of the land collectively. The system of procurement quotas (fixed in the form of contracts) has been being phased out, although the state can still buy farm products and control surpluses in order to affect market conditions.[48]
Foreign trade is supervised by the Ministry of Commerce, customs, and the Bank of China, the foreign exchange arm of the Chinese banking system, which controls access to the foreign currency required for imports. Ever since restrictions on foreign trade were reduced, there have been broad opportunities for individual enterprises to engage in exchanges with foreign firms without much intervention from official agencies.
Although the government still dominates the economy in parts, the extent of its control has been limited by the sheer volume of economic activity. Furthermore, the concept of government supervision of the economy had changed from one of direct state control to one of indirect guidance of a more dynamic economy.