This document may not be fully accessible. For an accessible version, please visit www.tradecommissioner.gc.ca/eng/document.jsp?did=132288

This guide, brought to you by the Canadian Trade Commissioner Service, is designed to help companies navigate the complexities of doing business in China. Whether firms are looking to export, invest abroad or develop R&D partnerships, this guide will point companies in the right direction. Readers will find hands-on knowledge that comes from Trade Commissioners helping thousands of companies each year tackle some of the most common challenges in the Chinese market.
Selling to China: A Guide for Canadian Companies

The Canadian Trade Commissioner Service (TCS) helps companies navigate the complexities of international markets. The TCS is on the ground in more than 150 cities worldwide, gaining market intelligence, uncovering opportunities for Canadian companies and helping reduce business costs and risks. The TCS is a free service of the Government of Canada, helping companies prepare for international markets, assess market potential, find qualified contacts and resolve business problems.
Our network of international contacts is unbeatable. As part of Foreign Affairs and International Trade
Canada (DFAIT) and of Canada’s network of embassies, the TCS has access to local governments and key business leaders and decision makers. We can help increase the credibility of Canadian companies in foreign markets, helping them gain access to local contacts not readily available to outside businesses.
TCS insights can help you save time and money by avoiding costly mistakes that can result from trial and error. We often know the answers to questions that companies don’t know to ask. Research shows that companies that use TCS services are more successful at exporting than those that don’t: the value of their exports is 18 percent higher, and they export to 36 percent more markets. Learn more at www.tradecommissioner.gc.ca
.
Selling to China: A Guide for Canadian Companies

[1] The Government of Canada has prepared this report based on primary and secondary sources of information. Readers should take note that the Government of Canada does not guarantee the accuracy of any of the information contained in this report. Readers should independently verify the accuracy and reliability of the information.

• Due diligence: A must for doing business in China ................................................. 2
• Due diligence: Best practices .......................................................................................... 4
• A checklist for conducting due diligence ................................................................... 6
• Negotiating a commercial agreement in China ........................................................ 8
• Fraud awareness in China: Always a good idea ........................................................ 11
• Fraud warning to Canadian companies doing business in China ....................... 13
• Import regulations in China ............................................................................................. 15
• Certification regulation for Canadian exporters in China .................................... 18
• Exchange controls in China ............................................................................................. 23
• Measures for the administration of the pollution control of electronic information products (China RoHS) ......................................................... 26
• Protecting your intellectual property ........................................................................... 32
• Establishing a representative office in China ............................................................ 33
• Establishing a joint venture in China ............................................................................ 36
• Establishing a wholly foreign-owned enterprise in China ..................................... 41
• Domain name registration in China ............................................................................... 45
• Business taxes in China ..................................................................................................... 49
• Key elements of hiring in China ..................................................................................... 53
• Financing your Business in China .................................................................................. 58
• Doing business with Export Development Canada ................................................. 62
• Sourcing road map .............................................................................................................. 67
• Useful resources for sourcing products in China ..................................................... 71
• Market reports and business climate ........................................................................... 78
Selling to China: A Guide for Canadian Companies

1
For Canadian companies looking to do business in China, no matter the business model, whether through trading, investment or joint research, the key is to find the right partner. How do you do that?
By conducting due diligence.
• Operational due diligence to confirm identity and legitimacy of business partners.
• Financial due diligence when considering joint ventures or mergers and acquisitions.
• Governmental due diligence to ensure that your business plans and interaction with Chinese authorities will not lead to inter-governmental conflicts down the road.
Based on the Canadian Trade Commissioner Service’s experience in China, Canadian companies involved in problematic cases could have avoided or minimized their issues through thorough and extensive due diligence at the front end of their business planning.
Due diligence is an essential first step for Canadian companies doing business in China. You may find a local partner on alibaba.com, elsewhere on the internet, or through referrals by friends but the fact remains that due diligence is required to reduce the risk to your business.
Below are situations that careful due diligence can help you avoid.
• Fake companies — A company approaches and offers a big deal with too-good-to-be-true margins.
You are asked to pay a certain amount of “relationship building” fees so they can clear the relationship with important local stakeholders. The company disappears soon after you transmit the money to its account.
• Paper tigers — A company promotes itself a leading company in its industry but fails to present you with any strong and persuasive evidence to substantiate its claims.
• Shell companies — A company with registration information but with no significant assets or active business records.
• Parasite companies — A company relying heavily on its relationship with local government officials. Being too dependent could be problematic and risky, especially when a company relies on one single influential figure for its success. Such a company may find itself operating in a legal grey area.
Selling to China: A Guide for Canadian Companies 2

While China’s legal systems has made great progress in becoming more business friendly, legal and regulatory enforcement in China can still be unsatisfactory. As a result, prevention and preparation is key to success in the Chinese market. Due diligence is a prerequisite for any transaction with Chinese parties.
Where can you get assistance with due diligence?
• The Canadian Trade Commissioner Service in China can do preliminary research on a local company from public sources. In order to perform our research, we need to know the Chinese name and phone number of a local company. We can then investigate whether or not the company has registered with their local State Administration of Industry and Commerce (SAIC), government agency in charge of all business registrations in the city, how much registered capital the company has, who the chief representative is, how long the company has been registered, what type of phone listing they have [mobile only as opposed to a landline, which would indicate in some way the reliability and longevity of the firm].
• As we are not mandated to conduct a thorough background check on a local company, we can provide you with a listing of firms that perform company background checks from our listing of
Credit Checks and Debt Collection Services .
Selling to China: A Guide for Canadian Companies 3

You put your business at risk by making any assumptions with potential business partners.  Though the majority of Chinese businesses want to act in good-faith, proper due diligence will help weed out the problem cases. Even for vetted partners, due diligence offers additional intelligence for your negotiations and strategy.
Due diligence is not a one-time task. It is worthwhile conducting due diligence throughout your time in the market. Trusted partners today may be less reliable in the future and you need to be prepared. Maintain ongoing due diligence as an integral part of your business.
In China, it is not uncommon for Chinese business people to use public domain emails (e.g. sina.com,
163.com) rather than a company email address. While a public email address should not be an immediate red flag, it does mean that more work will need to be done to verify the identity and claims of your potential business partner. Also, beware the company that can only provide its English version website — be alert to the possibility that the Chinese company is phishing.
Geographical distance makes it difficult to know your partner’s background, capability, credibility and performance.  For sizable deals, on-site inspection or an on-the-ground presence is important. If your situation does not allow you to travel, find a trusted associate based in the country to pay a visit, either with notice or without notice, to your partner.
In China, company seals (also known as chops) are a key component of control for a company. All legally registered companies in China are required to apply for an official company chop from the local
Public Security Bureau (PSB). The PSB will keep a specimen for any future dispute or fraud verification.
The company chop will be used on all official documents such as contracts, memos, bank account applications, labour contracts etc. It is round- shaped. Aside from the official company chop, there can be many other chops such as financial chop, contract chop or legal representative chop. A key part of due diligence in China is to ensure that the chop being used by the other party is legitimate, that it is being used in an authorized manner and by an authorized person.
Selling to China: A Guide for Canadian Companies 4

To do so requires a visit to the company or local authorities to ask whether the person holding the seal is the right person authorized to sign and stamp the documents. Since local authorities rarely open their files to private individuals, you may hire a local service provider who can be a licensed lawyer or a due diligence company to do so on your behalf.
For sourcing in China, the key is to obtain products that meet your standards and to minimize defects. To ensure proper quality control, your due diligence must continue even after you have struck an agreement.
Ask for samples and qualification certificates beforehand. Understand that flawless samples will not translate to flawless mass production. Obtain references from your partner and speak with them. If a supplier offers an incredibly low price compared with others, be confident that quality is likely to take a hit. While adding to costs, having a quality control inspector of your own in the factory or one that checks regularly on production is important. Provide specific penalty terms on your purchase orders.
Make sure your product design is manufacturing friendly, audit and approve factories based on a relevant checklist, obtain the manufacturer’s approval of the quality control plan and write down detailed product specifications. Perform quality control at several points of mass production, follow up with a corrective/ preventive action plan, re-engineering production process and revisit product specification for the next production batch.
You can conduct some initial checks based on your own network and knowledge. But given the complexity of the China market and the difficulties in gaining access to information, most of the time you require the services of a professional service provider to conduct due diligence or quality control on your behalf.
Compared to the potential losses as a result of conducting insufficient due diligence, paying up front can be a worthwhile investment.
Selling to China: A Guide for Canadian Companies 5

Canadian companies looking to complete a significant transaction or business deal in China should seriously consider the use of a professional service provider to conduct thorough and comprehensive due diligence on business partners. For those working on a business scale where it may not be worth hiring a professional service provider, but want to conduct due diligence on their own, here is a checklist of some key steps:
It is ultimately your responsibility to make sure that you are dealing with a legitimate company. It is mandatory for a Chinese company to register with State Administration of Industry and Commerce (SAIC) or local SAICs, government agency in charge of all business registrations.
The registration information is accessible on most local SAIC’s websites. It provides an effective way for you to verify the information with what you have been told by the local company, such as the registered capital (indicating the amount of legal limited liability), registered legal person, registered address, scope of activity as permitted, and license expiry date.
Compliance with the business license can be an indicator of the reliability and longevity of the company.
Furthermore, it is relatively common to not be dealing with the person listed on the business license. That said it is still important to confirm whether the person you are dealing with is who they claim to be or whether he/she has the negotiation/decision-making power in the company they represent.
Once you are confident that you are dealing with a lawful legal entity, next, you can turn to the Chinese party’s financial accountability, especially when considering significant transactions.  Below are areas that you should look into:
• For a listed company, equity structure, percentage of shares, capital availability ratio, forms of investment, major shareholders, etc.
• Regarding financial statements, cash flow statements are hard to access in China, but balance sheets can be obtained through certain channels, which provide useful information on current assets, current debts and long-term liabilities etc.
• Other financial information you should consider include bank statements, bank loans or other credits with any financial institutions, institutional or private lenders, real estate mortgage records
(either the company’s or a founder’s), debt records, promissory note, letter of credit, government grants, subsidies, etc.
Selling to China: A Guide for Canadian Companies 6

It is worthwhile involving a professional service provider to conduct financial due diligence due to the limited open channels to the public for accessing financial information in China.
A well-established company should always be open and ready to provide references.  Its suppliers, customers, even competitors, are all good sources for you to talk with. A company with a single supplier or with limited market may entail more risk. Depending on the nature of the potential transaction, it would be useful to learn about the procurement policy, quality and frequency, and payment status of the company from its suppliers, and about the sales channel, sales markets, market segments, numbers of customers, and relationships with customers, receivables  etc.
Obtain a description of their business with foreign companies, requesting names and coordinates and if at all possible, try to speak to references that speak the same language as you.
Selling to China: A Guide for Canadian Companies 7

• A written agreement is important, even if you believe your business partner to be trustworthy.
Trust is a prerequisite for a successful business relationship, but trust alone is not enough — that is where the agreement comes in.
• Clarity on the business arrangement, including agreed-upon terms and conditions. A large percentage of business disputes arise because of misunderstanding between parties. A written agreement minimizes the risks of misunderstanding.
• By including specific measures in cases where the terms are breached, both parties will be more inclined to carry out the transaction in a way that is acceptable to both sides.
• An agreed-upon way to resolve disputes. Having formal procedures for dispute resolution can prevent problems from becoming overly value-destroying.
• An important document should legal proceedings be required. Courts will have a detailed understanding of the terms and conditions of the agreement and intentions of the parties.
• Contracts are important, and though they require time and resources to complete, they are worthwhile. That said you should negotiate agreements that are commensurate with the importance/size of the deal you are doing. There is likely no point to having dozens of pages of complex terms and conditions when you are negotiating a straightforward purchase.
• The Chinese side may also be avoiding complex contracts for fear of having to understand detailed legal language in English or French. However, written commercial agreements are increasingly commonplace in China and are routinely prepared in both parties’ languages.
• An over-the-top and uncompromising refusal to negotiate a written agreement may be a warning sign about your Chinese partner’s intentions or commitment to the transaction.
• A standard contract used in North America is unlikely to provide much protection should real problems arise. In fact, any off-the-shelf agreement should be avoided. To have an effective agreement, you should adapt the agreement terms to the specific transaction and have a Chinese lawyer draft, or review, the agreement prior to signing.
Selling to China: A Guide for Canadian Companies 8

• Make sure you truly understand who the other contracting party is. Be wary if your agreement is signed by a company other than the one that negotiated the agreement, as it may mean the
Chinese side is looking to shift its legal liabilities.
• Ensure that you are signing an agreement with a legally registered company. You can only find this out by conducting due diligence that includes reviewing the Chinese company’s business license to confirm its validity, the official Chinese name, address and legal representative. Your investigations may also lead to useful information such as the company’s ownership and business scope.
• Ensure that the Chinese representative signing the agreement actually has the authorization to sign the contract. Commercial agreements should be signed under the authorization of the
Chinese company’s legal representative. If someone other than the legal representative is signing, written authorization should be obtained to verify the signer’s authority.
• Having the Chinese side use its official chop (stamp) to stamp the agreement is an important way to ensure the Chinese party is consenting to the terms of the deal. The Chinese company’s official chop is registered with the Public Security Bureau (PSB). You can also request that the Chinese company’s chop be used to stamp/initial each page of the agreement separately to avoid the possibility of pages being replaced at a later date.
• Pay attention to the translation of your written agreement. Ideally, you should have a bilingual lawyer preparing the documents to ensure that the content is identical. If not, be sure to have the translation reviewed by a qualified translator. Translation errors in written agreements in China can be the result of negligence, but can also be deliberate. In any case, it is not uncommon for disputes to result from bad translations.
• Agreements can be considered invalid if they do not comply with Chinese laws or regulations.
Ensure that the terms of your agreement are lawful. One area where invalidation becomes a possibility is when a deal falls outside the business scope of your Chinese partner. Business scope is a relatively rigid concept in China, with each Chinese company having an approved and registered business scope. The business scope determines what activities the Chinese party can and cannot engage in. Having your Chinese partner engage in activities that are not permitted under its business scope can be grounds for invalidating the agreement. You can validate business scope through a company’s business license or its file with the State Administration for Industry and Commerce (SAIC).
• If a breach of your agreement results in damages, you can claim for compensation. The method for calculating compensation is based on the losses suffered, but it is also possible for parties to include clauses that specify specific damages or ways to calculate specific damages. Such clauses need to be fair and reasonable/proportionate, but have the added benefit of giving you recourse where it is difficult to prove how much damage you have suffered.
Selling to China: A Guide for Canadian Companies 9

• For a variety of reasons, your business agreement may no longer be suitable for you or your Chinese partner. Without a well thought out exit clause in your agreement, ending a business agreement can become complicated and costly. Inserting an exit clause allows clarity on how a non-breaching party can terminate the contract. Included in this could be what happens to any IP that was transferred
(i.e. it returns all back to you, etc.).
• Clearly, having an agreement be interpreted by foreign law, Canadian law for example, will be convenient for you, but you have to weigh the benefits with the potential costs. Chinese parties will be reluctant to submit themselves to foreign law, and Chinese courts do not have significant experience applying foreign law, in which case Chinese law may end up prevailing by default.
• Referring disputes to a foreign court also has benefits and advantages that need to be considered carefully. While foreign courts may provide a more familiar environment, perceived fairness and impartiality, you have to consider whether it will be practical to resolve all issues that come up in a foreign court. In addition, the chances of a favourable foreign judgement or award being enforced in
China are unlikely, with a small exception for Hong Kong judgements.
• Under Chinese law, the parties are free to choose binding arbitration as dispute resolution mechanism. Arbitration can be quicker and less expensive than litigation. However, access to arbitration is only possible if your commercial agreement expressly provides for it. At a minimum, an arbitration clause would state that both sides agree to arbitration, what will be subject to arbitration and the specific arbitration commission that will do the arbitrating.
• For arbitration within China, the CIETAC (China International Economic and Trade Arbitration
Commission) is the most frequently selected arbitration forums. Foreign Arbitration forums are also possible and this should be negotiated at the outset and included in your agreement’s arbitration clause.
China is a party to the New York Convention on the Recognition and Enforcement of Arbitral Awards
(New York Convention), meaning that most foreign awards obtained in arbitration can be enforced in
China as long as the arbitration clause is compliant with Chinese legal requirements.
Selling to China: A Guide for Canadian Companies 10

“Hello, my friend! We are pleased to inform you of our interest in your product and would like to make a purchase worth $250,000. Please come to China to discuss with us further and sign our contract as soon as possible. We look forward to seeing you!”
If you were a Canadian business person, what would your first reaction be to this kind of message?
You might get really excited and rush to China to pursue this deal…or you might think it is too good to be true.
Our advice? Play it safe. While the China market offers many business opportunities; fraud and scams purveyed on unsuspecting business persons are a reality in China. For the sake of protecting your business, be mindful that an out-of-the-blue deal from an unknown Chinese entity may not be quite what it appears to be.
The Canadian Trade Commissioner Service in China has seen many cases in which a Canadian company is randomly approached by an unknown Chinese firm offering them a contract of substantial amount and asking them to come to China to sign the contract. How does this play out? When the Canadian company arrives, they are usually told that they need to throw a banquet for the host company, pay a notary fee, and offer gifts to company officials. As you may well imagine, these types of fees — and business practices — are not legitimate, and are a key part of the scam. Over time, we have gathered the following observations similarities in these types of cases:
• the local company contacts a foreign company via random internet search;
• the local company is reluctant to provide any verifiable references;
• the local company often wants to buy products in large quantity;
• the local company insists that the foreign company travels to China to sign the contract without ever seeing the actual products.
• Perform an Internet search specifying “company + scam or fraud”;
• Check online forums dedicated to listing potential scams such as www.fraudwatchers.org
;
• Contact our office to perform a basic due diligence investigation;
• View our list of firms which specialize in investigations and due diligence;
• Know your partners: use industry associations and other contacts you might have to develop a local network;
• Contact our office to find legitimate prospects and suppliers in your industry.
Selling to China: A Guide for Canadian Companies 11

The Government of Canada cannot intervene in private dispute of a strictly commercial nature, but we can offer some guidance to enable you to take your own initiative to seek resolution.
• The Chinese Ministry of Commerce operates a complaint line in English for firms to register complaints about Chinese businesses. Complaints can be lodged through them and request assistance through their online service .
• You may contact the China Council for the Promotion of International Trade (CCPIT), a Chinese government organization established to help Chinese as well as foreign businesses resolve commercial disputes. On their website, there is a special featured page on settlement of disputes , which has information on ways of settling a commercial dispute. CCPIT has an office in Toronto . You could consult with them before approaching their Beijing office, as they may offer additional advice.
• If you decide to take legal action, you can consult with a legal firm from our listing of
Legal Services .
• The Chinese Embassy and Consulates General in Canada could also be helpful for resolving the dispute.
If you have any questions or comments, feel free to contact China InfoCentre .
Selling to China: A Guide for Canadian Companies 12

Have you received an unsolicited business order from China? China has experienced tremendous growth in the number of credible private sector firms, and many Canadian firms have done business successfully with them. The number, however, of import/export-related scams associated with private sector firms in
China is increasing.
The Canadian Trade Commissioner Service in China is aware of a number of Canadian companies that have received trade enquiries from Chinese enterprises located in various regions. Enquiries typically come in the form of an unsolicited email from a “representative” of a purported China-based state-owned enterprise or an import/export intermediary seeking to have the Canadian company enter into a lucrative supply contract. Over the course of follow-up exchanges, the recipient Canadian company is asked to quote on an unusually large order, and provide specifications, delivery times, banking information, etc. Often a “draft” English-language contract is sent and negotiations begin in earnest. Eventually, the
Canadian company is invited to come to China to sign the purchasing agreement or contract.
In several instances, this has resulted in a Canadian company travelling to China only to be asked to cover expenses for staff fees, commissions, gifts, hosting of “official banquets” or similar “closing” inducements.
After the contract is signed, many of these apparent deals eventually fall through and the Canadian company loses out on time and money spent pursuing the deal.
Another instance of well-known fraud experienced by clients is known as “representative cheque fraud” or “representative scams”, where a Canadian company receives an unsolicited email from a Chinese company (which, it turns out, is actually not based in China). The company is seeking Canada-based representatives to establish a business practice in Canada, and more importantly, to transfer payments from Canadian or U.S. customers. In exchange, the Chinese company promises five to ten percent of the payments as transactional commission. These cases are invariably fraudulent and should be regarded with appropriate caution.
Before pursuing any deals, Canadian companies should also consider the following steps:
• Proceed slowly and cautiously;
• Conduct due diligence on financials, clients, references, etc.;
• Confirm legitimacy through business associations or other contacts;
• Ensure that funds are not advanced and that travel expenses are not incurred without due caution being exercised; and
• Consult with legal counsel.
Selling to China: A Guide for Canadian Companies 13

To support your efforts, the Canadian Trade Commissioner Service in China has developed lists of local service providers for various regions ( Beijing , Guangzhou , Chongqing and Shanghai ) that can help to qualify companies on your behalf. Sales of product (through orders or agreements) should be insured through Export Development Canada or via letters of credit from financial institutions, both of whom check out firms via their Chinese banking channels. Finally, before any travel or outlay of resources, contact the Canadian Trade Commissioner Service in China through the China InfoCentre to advise them of your plans well enough in advance so that they may make some preliminary enquiries or trouble-shoot, if required, on your behalf.
Selling to China: A Guide for Canadian Companies 14

2
As with most countries, regulations governing the import of goods and their subsequent sale on China’s domestic market are complex. In China’s case, they are also changing rapidly. This overview of import regulations aims to provide some insight into the complexities of exporting to China.
In the past, only a very restrictive number of Chinese companies with foreign trading rights were approved to import products into China. Further to China’s accession to the WTO, companies seeking to engage in import trade only need to register with the Ministry of Commerce (MOFCOM) or its authorized local offices according to the Foreign Trade Law and the Measures on Filing and Registration of Foreign
Trade Operators in 2004.
All companies (Chinese and foreign) have the right to import most products but a limited number of goods are reserved for importation through state trading enterprises.
China classifies imports into three categories - prohibited, restricted and permitted categories. Certain goods (e.g. wastes, toxics) are banned from being imported, while select products in the restricted category are subject to strict restrictions by requiring quotas or licenses.
Most goods fall into the permitted category. Importers are free to decide how much and when to purchase. MOFCOM implements an Automatic Licensing system to monitor the import of part of these goods (e.g. machinery, electrical products). A detailed list of merchandise categories can be obtained from
MOFCOM or through the one of Canada’s missions in China.
China charges tariffs on most imports, primarily ad valorem. These tariffs are assessed on the transaction value of the goods, including packing charges, freight, insurance premiums and other service charges incurred prior to the unloading of the goods at the place of destination. Many tariffs have been lowered since China’s accession to the WTO. The average tariff dropped from 15.3% in 2000 to 9.8% in 2012.
Selling to China: A Guide for Canadian Companies 15

The General Administration of Customs administers the tariff and publishes a tariff schedule on an annual basis available from:
Economic Daily Press
65 Youanmen Nei Da Jie,
Xuanwu District,
Beijing, 100054
Tel: 86-10-8599 7935.
Value added tax (on almost all products) and consumption tax (on some products) are also assessed at the point of importation. The normal VAT rate ranges from 17% to 13% for certain items. Importers of certain consumer goods (e.g. tobacco, liquor and cosmetics) must pay consumption tax at a rate varying between 1% and 40%.
In China, free trade zones (FTZ) provide exceptions to the usual customs procedures and allow for preferential tariff and tax treatment. All forms of trade conducted between companies in FTZs and areas in China outside the zones are subject to the usual rules that would apply to imports into China.
Special provisions (e.g. refunds of VAT and duty) apply to goods imported under export processing trade arrangements involving manufacturing contracts where all of the manufactured goods are exported. All such arrangements must be approved by MOFCOM or its local offices.
The importation of certain goods requires an import licence. Generally speaking, applications for import licences are submitted to MOFCOM or its authorized local offices. For some goods (e.g. machinery, electrical products), the licence is issued automatically to all applicants and is only used to track imports more accurately. In other cases, approval is not automatic. Such non-automatic import licences are used to control the importation of dangerous goods and to implement tariff rate quotas (i.e. two-stage tariffs, where the right to pay a lower tariff is granted to importers up to a certain total quantity of goods).
TRQs (i.e. two-stage tariffs, where the right to pay a lower tariff is granted to importers up to a certain total quantity of goods) are in place for wheat, corn, rice, sugar, wool, cotton, certain fertilizers, and wool tops.
Chinese companies seeking to import at the lower TRQ tariff rate must apply to MOFCOM for an allocation between in the fall of the preceding year (or for re-allocations of unused TRQ, the fall of the current year).
Selling to China: A Guide for Canadian Companies 16

Complex inspection and certification requirements are in place, requiring certain goods to be inspected on arrival and/or to be accompanied by formal certification recognized by the Chinese government
(e.g. CCC and RoHS for electrical goods or pest-free certification for certain agricultural products).
Goods that fail to pass the required inspections and/or that are not accompanied by the required certification may be confiscated. Certification requirements may include factory inspections in Canada.
In some cases, China recognizes certification provided in Canada (e.g. by the Canadian Standards
Association or the Canadian Food Inspection Agency). In other cases, testing needs to be conducted in China to obtain the necessary certification. For some goods (primarily agricultural goods and electrical/electronic products), it may also necessary to have the Canadian factory or processing facility certified by the Chinese government (which may require site visits by Chinese inspectors paid for by the Canadian company).
China has a range of labelling and packaging requirements in place that are particularly important for consumer goods. In some cases, goods that do not meet these requirements will be refused entry to China.
Chinese importers may freely convert renminbi [yuan] to foreign currencies for the purpose of purchasing goods for import, but must complete the necessary formalities with the State Administration of Foreign
Exchange to demonstrate that all of the foreign currency is being used to fund imports and is not being transferred abroad for other purposes.
Clients of the Canadian Trade Commissioner Service with questions about tariffs and market access information should refer to the Canadian Trade Commissioner Service and contact the Trade
Commissioner in China responsible for their sector. In terms of tariff requests, please provide the appropriate Harmonized System (HS) code for the product concerned. If the HS code is unavailable, refer to the Canadian Export Classification ( Online Catalogue — 65-209 ) to identify the code.
Selling to China: A Guide for Canadian Companies 17

China Compulsory Certification (CCC) is a compulsory product certification system covering
157 types of products. If you intend to export products to China , you need to be aware of CCC’s coverage and requirements.
Some of the principal product categories covered by the regulations include:
• electrical wires and cables
• switches for circuits, protective installation and connective devices
• low-voltage electrical equipment
• small power motors
• electric tools; welding machines
• household and similar electrical appliances
• audio and video equipment (excluding acoustics equipment for broadcasting service)
• information technology equipment
• lighting electrical appliances
• telecommunication terminal equipment
• motor vehicles and safety parts
• motor vehicle tires
• safety glasses
• agricultural machinery
• latex products
• medical devices
• fire-fighting equipment
• safety precaution products
• wireless LAN (local area network) products
• decoration and fitting products
• toys
For a comprehensive list of the products covered by the new regulations, refer to www.cnca.gov.cn
.
This website is run by the Certification and Accreditation Administration of China (CNCA), the Chinese government agency that regulates the CCC.
Selling to China: A Guide for Canadian Companies 18

The CCC mark replaced the old Conformity Certification of Electrical Equipment (CCEE) mark (quality assurance symbol for China-made products) and the China Commodity Inspection Bureau (CCIB) mark
(quality assurance symbol for imported products). The CCC scheme standardises technical regulations, certification marks, and fee schedules for both domestic and imported products. These changes stem from China’s commitment to conform to the World Trade Organisation’s Agreement on Technical Barriers to Trade.
When Canadian companies are exporting to China, their products, if identified under the CCC regime, must be certified with the CCC mark. The length of time needed to obtain certification varies. CCC’s service standard is three months, but the time required can be much longer depending on the nature of the product and required testing.
There are five major steps in the CCC mark application process:
1. Submission of an application and supporting materials, including credentials of the applicant, a general assembly diagram, an electrical schematic diagram, a circuit diagram, a list of key components and/or main raw materials, a copy of the contract, and other information. A Canadian company can apply on its own, or use an agent or a consultant to manage the application.
2. Type testing. A CNCA-designated test laboratory in China will test product samples.
3. Initial factory inspection. A CNCA-designated certification body will send representatives to inspect the manufacturing facilities for the product.
4. Evaluation of certification results, and approval (or failure or retesting)
5. Follow-up factory inspection. The certification body will re-inspect the product and the manufacturing facilities on a regular basis. The frequency of follow-up inspection depends on the security level and quality stability of the product and the record of the manufacturer.
Applicants must pay the following fees: the application fees, product testing, initial factory inspections, follow-up inspections, and label costs. Once the application is approved, a CCC certificate is valid for five years. Applicants can apply for the renewal of the CCC certificate beginning 90 days before the expiry of the certificate.
Since the short description in the product catalogue may not be specific enough to determine whether the CCC mark applies to your products, we encourage exporters and potential exporters to review:
• CNCA’s “Implementation Rules for Compulsory Certification” booklets which outline detailed technical application requirements for each of the 159 product categories. The booklets each provide a “scope” section, which in some cases includes a more detailed description of which products require the CCC mark. There are currently 87 booklets which are available at www.cnca.gov.cn
.
Selling to China: A Guide for Canadian Companies 19

• CNCA’s announcements linking harmonized system (HS) codes to products which require the CCC mark. The documents are only available in Chinese, but you should be able to locate the HS codes of your products. The documents are available at www.cnca.gov.cn
.
The CCC regime stipulates special conditions under which CCC requirements do not apply, as follows:
• Those which diplomatic agencies and personnel use;
• Those which Hong Kong and Macao SAR agencies and personnel use;
• Those brought by travelers into China for self-use;
• Those with the nature of governmental aid and gift.
CNCA also grants exemptions upon application in order to address special situations in the commercial activities such as manufacturing and importing.
• Those for research and testing;
• Those parts for testing the production lines with an intention of importing technology;
• Those directly used for maintenance for end users;
• Those equipments/parts complementing the factory production lines/sets of production lines
(excluding office supplies);
• Those exclusively for commercial exhibition, but not for sale;
• Those imported temporarily and then outbound (exhibition commodities included);
• Those parts imported in general trade with a purpose of exporting the complete machines;
• Those spare parts imported in imported materials processing trade or supplied materials processing trade with a purpose of exporting the complete machines.
To obtain exemptions, manufacturers, distributors, or agents, have to apply directly to local inspection and quarantine bureaus, with sufficient evidence such as responsibility guarantee certificates, and product compliance announcements (including testing reports). After being approved and obtaining exemption certificates, products can be sold, imported or used for other commercial activities.
Under special circumstances (P.R.C. CNCA Announcement No. 38, 2008), low-volume goods, which are used as a production input and for household consumption do not need CCC certification due to
“special use” or “special reasons”, may be exempted from CCC after inspections administered by local inspection and quarantine bureaus and authorized laboratories. Applications for this type of exemption should be addressed to local inspection and quarantine bureaus.
Selling to China: A Guide for Canadian Companies 20

Regarding components, CNCA informs us that if a complete product does not require CCC, a component subject to CCC will generally not need a CCC label as long as it is an integral part of the finished product and so shipped. However, a lack of clarity exists regarding the treatment of finished products’ components. Therefore, we strongly recommend that exporters consult a certification body or CNCA directly for clarification prior to export. CCC requirements for parts used for maintenance, repair or operations purposes may be waived, but an application should be made directly to CNCA.
To reach China’s Administration of Accreditation and Certification directly, contact CNCA’s
CCC hotline: (86-10) 8226-0830 (from 9:00 to 17:00 Beijing time) or post your questions on the
CNCA inquiry webpage .
The Trade Commissioner Service can assist you by conducting a preliminary check to see whether your products are likely covered by CCC. Contact:
China InfoCentre
Email: infocentrechina@international.gc.ca
To make further technical inquiries regarding CCC, for formal confirmation, and to proceed with a
CCC application, we recommend contacting a CNCA-designated certification body, including one of the following:
China Quality Certification Center
(certification body dealing with a comprehensive range of products)
District 9, South Fourth Ring West Rd #188
Beijing 100070, P.R. China
Tel: (86-10) 8388-6666
Fax: (86-10) 8388-6282
Email: cqcsc@cqc.com.cn
China Certification Centre for Security and Protection
Floor 3, 89 West Third Ring North Road
Haidian District
Beijing 100089, P.R. China
Tel: (86-10) 6334-5560
Beijing Zhonghua Combination Quality
Certification Co., Ltd.
Building #16, District 4, An Hui Li, Ya Yun Chun
Chaoyang District
Beijing 100723, P.R. China
Tel: (86-10) 8488-5497, 8488-5201
Certification Center for Light Industry Council
Yi #22, Fuwai Dajie
Xicheng District
Beijing 100833, P.R. China
Tel: (86-10) 6839-6402, 6839-6564, 6839-6589
Fax: (86-10) 6839-6563
Email: rzb@cclc.cn
Selling to China: A Guide for Canadian Companies 21

Guojian Lianxin Certification Center
11 Sanlihe Road
Haidian District
Beijing 100831, P.R. China
Tel: (86-10) 8838-6260 ext. 539/535/561
Fax: (86-10) 88387-0972
China Certification Center for
Agricultural Machinery
96 East Third Ring South Rd
Chaoyang District
Beijing 100021, P.R. China
Tel: (86-10) 6734-7471
Fax: (86-10) 6731-6737
China Certification Center for
Automotive Products
Floor 11, 2 Shouti South Road
Haidian District
Beijing 100044, P.R. China
Tel: (86-10) 6641-8592, 8830-1244
Fax: (86-10) 8830-1243
Email: ccap@mail.cccap.org.cn
China Information Security Certification Center
Jia #10, Chaowai Dajie
Chaoyang District
Beijing 100020, P.R. China
Tel: (86-10) 6599-4323
Fax: (86-10) 6599-4271
Email: product@isccc.gov.cn
China Building Material Test &
Certification Center
#1, Guan Zhuang Dong Li
Chaoyang District
Beijing 100024, P.R. China
Tel: (86-10) 5116-7395, 5116-7396, 5116-7303
China Quality Mark Certification Group
33 Zengguang Road
Haidian District
Beijing 100037, P.R. China
Tel: (86-10) 8841-1888
Fax: (86-10) 8841-4325
Email: cqm@cqm.com.cn
China Certification Center for Fire Products
Jia #108, Yong Wai Xi Ge Xin Li
Chongwen District
Beijing 100077, P.R. China
Tel: (86-10) 6727-4320, 6727-4308
Fax: (86-10) 8727-8660
Email: cccf@263.net
Hundreds of Chinese and international agents and consultants are in the business of assisting companies apply and manage applications for
CCC certification. Below, we have provided the weblinks to a number of agents. Please note that this is not a comprehensive list. The inclusion of the listed third party service providers should not be considered to be an endorsement. You should independently verify any service providers and complete all reasonable due diligence prior to engaging their services.
CCC US Office (English only)
EMC Compliance Management (English only)
SIMCOM International (English only)
TUV Rheinland of North America (English and
Chinese)
Siemic, Inc.
(English and Chinese)
Intertek Testing Services (English, Chinese and French)
Selling to China: A Guide for Canadian Companies 22

The Chinese government still maintains relatively strict exchange controls, but the general trend over the past decade has been towards a gradual liberalization of China’s forex market. The new Foreign Exchange
Control Regulations in 1996 essentially lifted exchange controls on current account items; capital account items are still restricted.
The National Development and Reform Commission (NDRC)
NDRC is a macro-economic regulatory department under the State Council. It is responsible for developing national economic strategies, long-term economic plans and annual plans.
People’s Bank of China (PBOC)
As the central bank of China, the PBOC, sets policies for credits and loans available to Chinese enterprises. Its decisions can affect the cash flow of Chinese importers and final consumers.
State Administration of Foreign Exchange (SAFE)
Together with the PBOC, the SAFE manages and controls foreign currencies in China. The two entities determine the official exchange rate for the Renminbi and the availability of foreign currencies on capital account items. Foreign investment enterprises (FIEs) are required to register all foreign debts with the SAFE.
China has been moving towards a more flexible currency system. Although the Chinese currency, renminbi, is still not a freely convertible currency, China has made a significant move toward free convertibility by lifting controls over current account items. Businesses will be able to convert currencies for their equities or debts more freely if restrictions on capital account items are lifted as well.
Current account items are transactional items, including payments and receipts with respect to trading of goods, provision of services and other normal fund transfers, that occur in the ordinary course of business.
At present, businesses are allowed to convert foreign exchanges freely in current account items. For instance, if a Chinese enterprise imports goods from overseas, the importer is able to purchase foreign exchanges to pay to the overseas exporter.
Selling to China: A Guide for Canadian Companies 23

Foreign exchange revenue derived from current account items by Chinese entities (including FIEs) must be sold to, or, subject to the approval of SAFE, deposited in a foreign exchange account in a designated foreign exchange bank. To purchase foreign exchange from a designated bank for the payment of current account items, evidence of the transaction as well as relevant tax payment certificates has to be presented to the bank.
Capital account items are items that serve to increase or decrease the debt or equity of an entity through the inflow or outflow of capital. This includes direct investment, all forms of loans, and investment in securities. All foreign exchange revenue derived from capital account items by Chinese entities must be repatriated to China and, unless approved otherwise by SAFE, sold to a designated foreign exchange bank.
Foreign debts are debts borrowed from overseas including loans provided by overseas headquarters or financial institutions. FIEs are required to register their foreign debts with SAFE. Unregistered foreign debts are not enforceable under Chinese law. The aggregate amount of foreign debts of an FIE should be maintained within the difference between its aggregate investment and registered capital approved by the government authorities.
FIEs may not pay dividends unless profits are available for distribution. In determining whether profits are available, cumulative losses carried forward from earlier years must be fully set off against profits of later years. Furthermore, before any dividends are paid, a portion of each year’s after-tax profits must be allocated to the employees’ bonus and welfare fund, the enterprise expansion fund, and the reserve fund.
After the termination or liquidation of the FIE, the process of which could take months to complete, the foreign investors may repatriate their share of capital, provided that the approval from SAFE is obtained.
Interest and royalties may be paid to foreign companies. The Chinese payer (including an FIE) has to present either the tax completion certificate or the tax exemption certificate to the remitting bank evidencing that proper taxes have been paid. In the case of an interest payment, the foreign debt should have already been registered with SAFE within 15 days after the signing of the foreign loan contract. All technology transfer contracts must have been registered with Ministry of Commerce before the royalties are paid.
Selling to China: A Guide for Canadian Companies 24

In general, in order for FIEs to remit dividends abroad, they are required to submit the following documents to the bank:
• Certificate of tax clearance from the tax authority and a copy of the tax return;
• Audited financial report issued by a certified public accounting firm with respect to the FIE’s current year profit and dividend;
• Board of Directors’ Resolutions with respect to the declaration of dividend;
• Foreign Currency Registration Certificate of the FIE;
• Certificate of Capital Verification issued by a certified public accounting firm;
• Other documentation as required by SAFE, such as an application for remittance, etc.
Selling to China: A Guide for Canadian Companies 25

On Feb 28th, 2006, the Ministry of Industry and Information Technology (formerly called the Ministry of Information Industry before 2008) of the People’s Republic of China issued the Measures for
Administration of the Pollution Control of Electronic Information Products (see references for text), commonly known as “China RoHS”, which aims to restrict the use of toxic and harzardous materials in electronic equipment. Entering into force on March 1st, 2007, China RoHS affects a wide variety of electronic products with the intention to eventually capture all electronics.
China RoHS is to be implemented using three pillars:
• The Measures — China RoHS Legislation
• Standards — To supplement the legislation by defining methods of complying
• The Key Catalogue — To list products affected by material restrictions
There is no broad definition of what encompasses an EIP but over 30 pages of specifically listed products that qualify have been posted by the Ministry of Industry and Information Technology in the “EIP
Classifications and Explanations explanatory note” (see references).
This explanatory note includes components as well as finished products, placing the burden of compliance on the whole supply chain.  The requirements for end products are directly applied to electronic components and materials produced by the industry’s upstream and downstream supply chains. Thus,
China RoHS sets forth a clearer scope of products than the EU RoHS Directive.
The EU RoHS Directive has no legal relevance whatsoever with China RoHS and, therefore, if a product is compliant with the EU RoHS Directive this has absolutely no bearing on a product being compliant with
China RoHS.
China RoHS places mandatory China specific labeling and material declaration requirements on EIPs before they are allowed for sale in China, while EU RoHS has no labeling requirements and material declarations are only to be provided at the request of EU enforcement agencies and not prior to entry into market.
Selling to China: A Guide for Canadian Companies 26

China RoHS does not acknowledge EU RoHS exemptions but uses the Key Catalogue to place material restrictions on EIPs when they have reached “mature technology” to eliminate certain hazardous substances. As time goes on, only those products which are technologically mature and economically feasible would be added to the Key Catalogue and hence be subject to material restrictions. If a product is not listed in the Key Catalogue, it is “exempted”. So China RoHS does not need to contain exemption rules, as exemptions are granted automatically unless being explicitly revoked.
China RoHS is being implemented in two stages:
• The first stage enacted the following on March 1st, 2007
• Product Labeling
• Table of Names and Contents of Toxic and Hazardous Material (provided in the EIP user manual)
• Packaging Labeling
• The second stage enacts the following on a yet to be determined date when an EIP is added to the Key Catalogue
• Material Restrictions
• Conformity Assessment Procedures
Although China Customs is not yet implementing compulsory enforcement of RoHS on imports and exports, all products that are manufactured on or after March 1st, 2007 must adhere to Stage 1 requirements.
If an EIP does not contain any hazardous substances (Pb, Hg, Cd, Cr6+, PBDE, and PBBE) above the maximum concentration values, then the following symbol must be applied on the EIP or the product instructions.
If an EIP contains any hazardous substances (Pb, Hg, Cd, Cr6+, PBDE, and PBBE) above the maximum concentration values, then the following symbol must be applied on the EIP unless the EIP has an irregular shape or a maximum surface area less than 5×103mm. If the product has an irregular shape or surface area smaller than 5×103mm then the symbol must instead be specified in the product instructions. Note: An irregularly shaped product may be that with a large surface area but which is very narrow and long, such as a cable.  The number inside the symbol is called the Environmental Friendly Use Period (EFUP) and is represented in years from the date of manufacturing.
Selling to China: A Guide for Canadian Companies 27

China RoHS provides for three different classifications for MCVs:
• EIP-A  Each Homogenous Material
• EIP-B  Metal Plating
• EIP-C  Small Components/Materials (generally less than 4.0mm
3 )
Application of MCVs:
• EIP-A  Same as EU RoHS
• EIP-B  Shall not be intentionally added
• EIP-C  Same as EU RoHS
China uses the same MCVs as EU RoHS except for metal plating:
• 0.1% for Pb, Hg, Cr6+, PBDE, PBBE
• 0.01% for Cd
Table of Toxic and Hazardous Substances:
If a product contains any toxic or hazardous substances (Pb, Hg, Cd, Cr6+, PBDE, and PBBE) above the maximum concentration values, then the names and contents of toxic or hazardous substances shall be specified in the product instructions in CHINESE in the format shown below:
Toxic and Hazardous Substances or Elements
Names of Parts
LCD Display
Power Supply
Motherboard
Fan Assembly
Keyboard
Pb Hg Cd Cr6+ PBB PBDE
O: Indicates that this toxic or hazardous substance contained in all of the homogeneous materials for this part is below the limit requirements in SJ/T11363-2006
X: Indicates that this toxic or hazardous substance contained in at least one of the homogeneous materials used for this part is above the limit requirements in SJ/T11363-2006 (Enterprises may further provide in this box technical explanations for marking “X” based on their actual conditions.)
Selling to China: A Guide for Canadian Companies 28

China does not have a special law or standard regulating the packaging of electronic information products. However, the packaging of EIPs must be marked according to the label codes defined in the
GB18455-2001 standard.
Example of plastic materials:
04--Plastic code
LDPE--Type of Plastic
EFUP is defined as the period during which the toxic and hazardous substances or elements contained in electronic information products do not leak or mutate, potentially causing serious pollution to the environment and damages to human life and properties.
Two fundamental methods have been considered (all under normal use conditions) to determine EFUP:
• Technical-type methods
• Conceptual-type methods
The technical-type methods for EFUP can be based on the “Practical method” (when an EIP has been observed to have an external leak or mutation of hazardous substances), or the “Experimental method” to determine the rate of leakage of hazardous substances from a product. Such experimental techniques may be particularly applicable for externally accessible materials that contain hazardous substances.
There are several conceptual-type methods for determining EFUP:
• Safe use period — the time period over which the product will meet the safe performance requirements, typically referred to as electrical safety
• Techno-life —  the expected service life of the product
• Analogy —  if it is a new product, EFUP would be based on existing products with similar manufacturing and use conditions
• Table method — a working group that puts together a table of average EFUP for common EIPs
Selling to China: A Guide for Canadian Companies 29

This stage begins when an EIP is added to the Key Catalogue (Catalogue for Priority Prevention of
Pollution from Electronic Information Products). The Key Catalogue will impose substance restriction requirements on the EIPs listed therein and a date when the listed EIPs must adhere to the substance restriction requirements. Pre-market certification of EIPs listed in the Key Catalogue is required under the conformity assessment procedures. However, as the Ministry of Industry and Information Technology and the other relevant agencies have not yet finalized procedures or related measures for such certification, it has yet to be determined whether or how the existing compulsory certification procedures will be modified to take into account China RoHS catalogue products.
The Key Catalogue, issued in batches, is currently blank but the work in ongoing in conjunction with the China RoHS Standards Working Group. On Oct 9, 2009, the Ministry of Industry and Information
Technology announced the draft of the first batch of the Key Catalogue and invited public comments.
The draft included three types of EIPs — mobile user terminals, telephones, and printers linked to computers, though some changes may be made on final publication, following public consultations.
Watch for final announcements at the Ministry of Industry and Information Technology of the people’s
Republic of China website .
The China RoHS Standards Working Group has been operating under the China Electronic
Standardization Institute of the Ministry of Industry and Information Technology as a platform for consultations with the industry on RoHS legislation since 2004. The membership of the Working Group is open for companies with legal person status in China. The annual membership fee is RMB 10,000 yuan.
So far there are over 130 members in the group, including industrial associations, research institutes, multinational companies, and local companies. Interested companies are welcome to contact the
Working Group about the procedures of joining as members.
• China RoHS affects all EIPs listed in the “explanatory note” that are manufactured on or after
March 1st, 2007 and sold into China.  It does not affect products that are exclusively meant for export from China.
• Parts for manufacturing and repair are not within the RoHS scope unless they are sold independently.
• Hong Kong and Taiwan are not included within the jurisdiction of the China RoHS requirements but sales from these countries into mainland China must meet all China RoHS requirements.
Selling to China: A Guide for Canadian Companies 30

• Manufacturers or importers of final products sold to Chinese users are responsible for overall compliance and are held accountable for non-compliance.
• The Ministry of Industry and Information Technology has provided initial guidance that it is only mandatory to label the outermost packaging materials of EIPs with the Packaging Recycling Mark.
However, they encourage labeling of all packaging.
The information presented in this chapter is a general briefing based on the translation of legal instruments, standards, and the written and verbal guidance of the Ministry of Industry and
Information Technology.  Companies are encouraged to investigate specific requirements for their products and business.
• Measures for Administration of the Pollution Control of Electronic Information Products
(China RoHS Legislation) (English version)
• Measures for Administration of the Pollution Control of Electronic Information Products
(China RoHS Legislation) (Chinese version)
• EIP Classifications and Explanations explanatory note (Chinese version)
• RoHS Concentration Standards (SJ/T 11363-2006) (Chinese version)
• ROHS Testing Standards (SJ/T 11365-2006) (Chinese version)
• RoHS Frequently Asked Questions (Chinese version)
China Compulsory Certification (CCC)
Website: www.cnca.gov.cn
Website: www.ccc-mark.com
The Secretariat of the China RoHS Standards Working Group
Contact: Ms. GUO Li
Tel: 86-10-84029060
Fax: 86-10-84029060
Address: P.O.Box 1101,
An Ding Men Dong Da Jie #1,
Beijing, P.R.China, 100007
Clients of the Canadian Trade Commissioner Service with questions about the regulations should refer to The Canadian Trade Commissioner Service and contact the Trade Commissioner in China responsible for their sector.
Selling to China: A Guide for Canadian Companies 31

3
China is a dynamic and growing market full of opportunities for Canadian companies looking to grow their business. As with any new market, however, Canadian companies doing business in China need to take measures to minimize the risks to their intellectual property. What are the risks? What should your first steps be? Here are some useful links:
• Guidelines on registering your trademarks in China
• Registering your copyrights in China
• Patent options in China
• Before you meet with your potential Chinese commercial partner
• Keeping tabs on your intellectual property when you manufacture in or source from China
• Trade secrets
• Knock-off products
• Who registered my trademark?
• Cloned website
• What do you do if a Chinese company is using your copyright material on their website?
If you have any questions or would like more detailed information, do not hesitate to contact
China InfoCentre .
Domain name registration is an important part of intellectual property protection in China. For more information, see Chapter 4.
Selling to China: A Guide for Canadian Companies 32

4
As an extension of its foreign parent company, a representative office (RO) is the least expensive and often easiest way to make contact with, and establish a presence in, the Chinese market. An RO can engage in indirect business activities such as the promotion of its parent company and foreign headquarters, and co-ordinating activities and strategies in China.
A RO is not recognized as a separate legal entity from its foreign parent company under Chinese law, and as such, legal liability remains with the parent company. Non-compliance with Chinese policies and regulations governing ROs may result in fines, permit revocation and company blacklisting from future business in China. An RO is the most basic of foreign invested enterprises (FIE) in both form and function; easy to set up, but subject to tight restrictions.
ROs have long been regarded as an easy entry vehicle into China. However, with the increasing number of businesses abusing the RO non-profiting requirement, the government has adopted stricter measures to crack down on illegal activities.  The State Administration of Taxation (SAT) issued the Interim Measures on Tax Administration of Representative Offices of Foreign Enterprises (Circular 18) which came into effect in
March 2011. Circular 18 contains new rules on the taxation of representative offices of foreign enterprises and add annual reporting obligations which requires official audit done by a third party accounting agency.
• Requires minimal overhead investment, least complex FIE approval procedures
• A relatively safe first step into the Chinese market
• An opportunity for first hand market research and development of business contacts
• Can engage in various consultation and service functions
• Generally cannot engage in profit making activities; cannot accept payment for services or issue receipts
• ROs may not have more than four foreign representatives
• ROs are subject to declare and pay enterprise income tax (EIT) on income attributed to it, and business tax (BT) and value-added tax (VAT) on taxable turnover (Circular 18)
Selling to China: A Guide for Canadian Companies 33

• New annual reporting obligations and requirement for submissions of official audits (Circular 18)
• Parent company must have been established for a minimum of two years
• Cannot directly hire local employees, must engage an official Chinese employment agency
• Registration certificate issued for a one year term, subject to annual renewal
• Cannot restructure into a more comprehensive form of FIE
The parent company must apply for a business license by submitting an application with the local
Administration for Industry and Commerce (AIC) followed by registration with other relevant authorities.  In certain industry sectors, an approval from relevant regulatory authorities is required prior to submitting the AIC application.  The AIC registration process generally takes between
3 to 4 months. Foreign investors may find it difficult and time consuming to submit their application documents directly to authorities, choosing instead to engage a consulting company, benefiting from their long standing relationships with local authorities and procedural knowledge.
All applications must be submitted in Chinese and, in addition, may be written in a foreign language.
Documents in both languages shall have equal validity. Approval permits are usually issued within one month of application submission.
The following documents should be included in the application to AIC:
• Certificate of incorporation for the parent company (notarized and legalized)
• Lease or purchase contract for office space in China
In duplicate with Chinese translation:
• Application letter to establish the RO
• Appointment letters for the Chief representative and all overseas representatives (including copies of identification documents and resumes)
• Capital credit certification for the parent company (notarized and legalized)
• Standard AIC application forms (in Chinese)
AIC may request additional documentation at its discretion.
Selling to China: A Guide for Canadian Companies 34

1. Once AIC has provided a registration certificate for the establishment of the RO, the following registration procedures must be completed within a designated timeframe which varies by geographic location and industry.
• Create a record of establishment and have the official seals engraved with the Division of
Entry & Exit Administration of the local Public Security Bureau;
• Obtain the organization’s code number from the Technical Supervision Bureau;
• Register with and obtain certificates from both the state and local tax authorities ;l a) ROs are subject to several different taxes varying with business scope and location, the effective tax rate is generally 11% of expenditures.
Due to frequent abuses of the RO restrictions on business activities, authorities have recently increased their focus on tax compliance.
Register with and obtain a certificate from the Bureau of Statistics ;
Register with the Administration of Foreign Exchange to create a foreign currency account;
Open a local bank account .
2. Register with the Customs House to create a customs record.
3. Apply for work and resident permits for foreign representatives and apply to hire local employees through government authorized employment agency.
In the past there have been significant breaches in the business restrictions placed on ROs, these abuses have caused authorities to be stricter in terms of granting establishment and dealing with compliance issues. Supervision falls under the jurisdiction of both the AIC and the Public Security Bureau. ROs should be prepared for an onsite inspection within the first 3 months of establishment.
For more specific information or questions related to your foreign invested enterprise or the services offered by the Trade Commissioner Service in China, contact China InfoCentre .
Selling to China: A Guide for Canadian Companies 35

A joint venture (JV) is a form of foreign invested enterprise (FIE) that is created through a partnership between foreign and Chinese investors, who together share the profits, losses and management of the JV.
As a foreign investor, there are two major reasons to create a JV, (1) when entering a certain industry requires a local partner according to the restrictions outlined in the PRC Foreign Investment Industrial Guidance
Catalogue , (2) when a local partner is able to offer tangible benefits such as well-established distribution channels, government relationships or significant knowledge of the local market. As with any partnership, in addition to the advantages of working together, JVs also face serious challenges. It is strongly recommended that prior to choosing this form of investment vehicle you consult with the foreign partner of an existing JV in order to better understand the advantages and disadvantages of the JV structure.
The “total investment” of a JV is the amount of capital required to start-up the business until it becomes self-sufficient from its investors.  Total investment is made up of two components: the registered capital portion, and the non-registered capital portion.  “Registered capital” refers to the equity investment in a
JV.  This amount is fixed in the articles of association of a JV, and constitutes an investment commitment on the part of the investors to the JV (subject to any increase or decrease of registered capital approved by the government).  The non-registered capital portion of the total investment of a JV is essentially the amount of debt financing which the JV is permitted to obtain.  Unlike registered capital, there is no commitment to finance the non-registered capital portion of a JV’s total investment (such debt financing may be obtained at the JV’s discretion).
The JV’s investors must pay 15% of the registered capital of the JV within the first three months after issuance of the business license (similar to a certificate of incorporation under Canadian law), with the balance due within the first two years.  The minimum legal requirement is 30,000 RMB if the JV has two or more foreign investors, or 100,000 RMB if the JV has only one foreign investor.  Despite these minimum amounts, the authorities will approve the amount of registered capital on a case-by-case basis depending on the intended business activities, scale of operation and location of the JV.  The amount is then written into the company’s articles of association.
• The use of local partner’s existing workforce and facilities
• Existing channels for sales and distribution
• Use of a partner’s network to build good relationships, avoid red tape and other bureaucratic complexities
• Entry into industrial sectors which exclude wholly foreign-owned investment
Selling to China: A Guide for Canadian Companies 36

• Cost & complexity of establishment – authorities carefully inspect all documents presented to them and may ask for clarification or changes
• Conflicting interests with partners
• Merging different management styles
• Liability associated with inheriting staff
• Risks with technology transfer and intellectual property management
• Division of profits
The JV model presents a variety of options for management and financial structures broadly divided into the following two groups.
An Equity Joint Venture (EJV) is an enterprise created with capital investments from both foreign entities and domestic companies, where profits are distributed according to the ratio of contributions.
A minimum of 25% of the investment must come from the foreign partner. An EJV is a limited liability company, holding an independent legal identity.
EJVs must have a two-tiered management structure made up of a board of directors and a management team (general manager and deputies) that is contractually appointed and legally responsible for the daily operations of the company. The EJV structure is much more rigid than that of the CJV, particularly with respect to profit sharing.
A Cooperative Joint Venture (CJV) is similar in form but more flexible than an EJV. CJV is an enterprise created with capital investment from both foreign entities and domestic companies, where profits are distributed between the investors in a proportion that may differ from the proportionate ownership interest of each investor.  Additionally, the CJV structure can allow for the recovery of the foreign partner’s capital to be accelerated, though new regulations make this difficult to achieve.  CJV was a more common model in the past, when Chinese partners supplied land and labour, while the foreign partner supplied technology and capital.  A CJV can be structured as a limited liability company or a non-legal person (similar to a partnership formed by contract).  Where established as a non-legal person, the liabilities of the CJV flow through to the investors of the CJV.
CJVs require the same two-tiered management as EJVs.
The process to establish a JV will generally take between 4 to 6 months. Foreign investors may wish to engage a consulting company to represent their interests while establishing the JV, benefiting as well from their long standing relationships with local authorities and procedural know-how.
Selling to China: A Guide for Canadian Companies 37

All applications must be submitted in Chinese and, in addition, may be written in a foreign language.
Documents in both languages shall have equal validity.
1. A letter of intent or memorandum of understanding must be written and signed by all partners.
2. Submit JV name for approval by the local Administration for Industry and Commerce (AIC);
a) AIC requires one name and two alternates to be submitted.
3. A JV contract and articles of association must be written and signed by all partners.
4. Where the JV will be acquiring land or other fixed assets, or where the capital investment in the JV will be significant, pre-approval from the National Development and Reform Commission (NDRC) may be required.
5. Certain other government ministries may need to be consulted and to provide approval where the
JV is to do business in a relatively regulated industry (for example health or education) or where the collateral impact of the JV’s proposed business activities require review (for example pollution, heavy energy usage).
6. Obtain a certificate of approval for the establishment of the JV from the Municipal Commission of
Commerce (MOC).  The MOC application should include the following documents: a) Name pre-approval from AIC; b) Project proposal briefly describing the JV; c) Feasibility study setting out the JV’s investment size and purpose, operational and management structure, number of employees, utility requirements such as power and water, brief description of supply and distribution network, brief estimate of revenues and expenses. d) JV contract and articles of association. e) Certificate of incorporation or equivalent of the corporate investor(s) (certified by the
Chinese Embassy or equivalent overseas).  For individual investors a passport copy is required (certified by the Chinese Embassy) f) Capital credit certification from each investor’s bank g) Copy of passport for (i) JV’s director, (ii) JV’s legal representative, and (iii) JV’s supervisor h) Leasing contract for office space in China, certification of real-estate ownership, landlord’s identification i) Letter of authorization (authorizing the JV to accept service in China on behalf of the investor(s)) j) In some cases, latest annual audit report from the foreign investor provided by a certified public accountant k) Any prior reviews or approvals from government branches (for example land-use rights if required). l) Standard MOC filing forms
Selling to China: A Guide for Canadian Companies 38

Once the approval certificate has been received, investors must apply and register for a business license with the AIC.  AIC requires most of the same documents as MOC, plus its own standard filing forms.
Once a business license is issued, certain post-registration formalities must be completed including:
1. Record establishment of the business and official seal engraving with the Division of
Entry & Exit Administration of the local Public Security Bureau;
2. Obtain certificate with the organization’s code number from the Technical Supervision Bureau;
3. Register with and obtain certificates from both the state and local tax authorities ; a) Tax reports should be submitted to the Tax Administration Department on a monthly, quarterly and annual basis
4. Register with the Administration of Foreign Exchange to create a foreign currency account;
5. Open a local bank account ;
6. Register with and obtain a certificate from the Bureau of Statistics ;
7. Obtain certificate of financial registration from the local Finance Bureau; and
8. Obtain an import-export license from the Customs House .
JVs are also required to appoint at least one individual (of any nationality and residency) as the supervisor of the JV.  The supervisor’s primary role is to monitor the affairs of the JV and the directors of the JV, and to report any irregularities to the board of directors of the JV and to the investor(s) of the JV.
In addition to filling annual taxes, JVs must submit an annual audit report to the AIC.
A JV is a limited liability company, where the liability of the JV’s investor(s) is generally limited to the assets of the JV.
Before beginning the application process investors must lease office space for their future business. It is recommended that a clause be added to the lease voiding the contract without penalty should the JV application be rejected. Office relocation requires a tax clearance declaration report, essentially an audit of the company.
Selling to China: A Guide for Canadian Companies 39

Registering changes Despite any agreements that may be made between JV partners, it is important to register any changes in business scope or investment with the appropriate authorities as the documents that are registered with authorities will be those upheld in the event of a legal dispute between partners.
For more specific information or questions related to your foreign invested enterprise or the services offered by the Trade Commissioner Service in China, contact China InfoCentre .
Selling to China: A Guide for Canadian Companies 40

A Wholly Foreign-Owned Enterprise (WFOE) is a limited liability company that is entirely funded by one or more foreign entities. WFOE is the most popular form of foreign invested enterprise (FIE) in
China because it allows for the most freedom in business management. While establishing a WFOE requires large overhead investment (in comparison to a representative office), it creates an independent legal entity that can engage in profit making business, address human resources of its own accord, and expand to create subsidiaries. The term for a business license is generally 30 years with opportunities for extension (although shorter or longer terms may be granted).
A WFOE cannot be incorporated to conduct general business activities. In China, the specific business scope and investment must be clearly defined in the application phase, and are subject to government approval. It is critical that both the business scope and total investment are accurately defined because once established the WFOE is legally obliged to remain within the parameters of its business scope and meet its financial commitments.
The “total investment” of a WFOE is the amount of capital required to start-up the business until it becomes self-sufficient from its investors. Total investment is made up of two components: the registered capital portion, and the non-registered capital portion. “Registered capital” refers to the equity investment in a WFOE. This amount is fixed in the articles of association of a WFOE, and constitutes an investment commitment on the part of the investor(s) to the WFOE (subject to any increase or decrease of registered capital approved by the government). The non-registered capital portion of the total investment of a WFOE is essentially the amount of debt financing which the WFOE is permitted to obtain. Unlike registered capital, there is no commitment to finance the non-registered capital portion of a WFOE’s total investment (such debt financing may be obtained at the WFOE’s discretion).
The WFOE’s investors must pay 15% of the registered capital of the WFOE within the first three months after issuance of the WFOE’s business license (similar to a certificate of incorporation under Canadian law), with the balance due in the first two years. The minimum legal requirement is 30,000 RMB if the
WFOE has two or more investors, or 100,000 RMB if the WFOE has only one investor. Despite these minimum amounts, the authorities will approve the amount of registered capital on a case-by-case basis depending on the intended business activities, scale of operation and location of the WFOE. The amount is then written into the company’s articles of association.
Selling to China: A Guide for Canadian Companies 41

• WFOE allows for complete control over business decision making, without considering a Chinese partner.
• Can formally engage in business activities; issuing RMB invoices to clients and receiving
RMB revenues
• Profits can be converted to foreign currency for repatriation.
• Can engage in product sales both domestically and internationally.
• More effective means of protecting technical information and trade secrets.
• Allows for full authority over staffing.
• In many cases, requires only one director (there may be additional directors required in some cases), who can be of any nationality and reside anywhere outside of China.
• Requires only one investor, can be of any nationality and reside anywhere outside of China.
Corporate investors are also permitted.
• Establishment is complex and time consuming, with approvals required by multiple authorities.
• Incorporation is expensive, 15% of the investment is required within the first three months.
• Corporate directors are not permitted.
Establishing a WFOE will generally take between 4 to 6 months. Foreign investors may find it difficult and time consuming to submit their application documents directly to authorities, choosing instead to engage a consulting company, benefiting from their long standing relationships with local authorities and procedural knowledge.
1. Submit WFOE name for approval by the local Administration for Industry and Commerce (AIC); a) AIC requires one name and two alternates to be submitted.
2. Where the WFOE will be acquiring land or other fixed assets, or where the capital investment in the WFOE will be significant, pre-approval from the National Development and Reform
Commission (NDRC) may be required.
3. Certain other government ministries may need to be consulted and to provide approval where the WFOE is to do business in a relatively regulated industry (for example health or education) or where the collateral impact of the WFOE’s proposed business activities require review
(for example pollution, heavy energy usage).
Selling to China: A Guide for Canadian Companies 42

4. Obtain a certificate of approval for the establishment of the WFOE from the Municipal Commission of Commerce (MOC). The MOC application should include the following documents: a) Name pre-approval from AIC; b) Project proposal briefly describing the WFOE; c) Feasibility study setting out the WFOE’s investment size and purpose, operational and management structure, number of employees, utility requirements such as power and water, brief description of supply and distribution network, brief estimate of revenues and expenses. d) Articles of association of the WFOE. e) Certificate of incorporation or equivalent of the corporate investor(s) (certified by the
Chinese Embassy or equivalent overseas). For individual investors a passport copy is required (certified by the Chinese Embassy f) Capital credit certification from each investor’s bank g) Copy of passport for (i) WFOE’s director, (ii) WFOE’s legal representative, and
WFOE’s supervisor h) Leasing contract for office space in China, certification of real-estate ownership, landlord’s identification i) Letter of authorization (authorizing the WFOE to accept service in China on behalf of the investor(s)) j) In some cases, latest annual audit report from the foreign investor provided by a certified public accountant k) Any prior reviews or approvals from government branches (for example land-use rights if required). l) Standard MOC filing forms
Once the approval certificate has been received, investors must apply and register for a business license with the AIC. AIC requires most of the same documents as MOC, plus its own standard filing forms.
Once a business license is issued, certain post-registration formalities must be completed including: a) Record establishment of the business and official seal engraving with the Division of Entry & Exit
Administration of the local Public Security Bureau; b) Obtain certificate with the organization’s code number from the Technical Supervision Bureau; c) Register with and obtain certificates from both the state and local tax authorities ; i. WFOE structure allows for a more sophisticated tax optimization which varies by industry, business scope and location ii. General corporate income tax rates are 25%, with some industries still enjoying 15% rate iii. Tax reports should be submitted to the Tax Administration Department on a monthly, quarterly and annual basis
Selling to China: A Guide for Canadian Companies 43

d) Register with the Administration of Foreign Exchange to create a foreign currency account; e) Open a local bank account ; f) Register with and obtain a certificate from the Bureau of Statistics ; g) Obtain certificate of financial registration from the local Finance Bureau; and h) Obtain an import-export license from the Customs House .
WFOEs are also required to appoint at least one individual (of any nationality and residency) as the supervisor of the WFOE. The supervisor’s primary role is to monitor the affairs of the WFOE and the directors of the WFOE, and to report any irregularities to the board of directors of the WFOE and to the investor(s) of the WFOE.
In addition to filling annual taxes, WFOEs must submit an annual audit report to the AIC.
A WFOE is a limited liability company, where the liability of the WFOE’s investor(s) is generally limited to the assets of the WFOE.
Before beginning the application process investors must lease office space for their future business. It is recommended that a clause be added to the lease voiding the contract without penalty should the WFOE application be rejected. Office relocation requires a tax clearance declaration report, essentially an audit of the company.
The legal minimum investment required is 30,000 RMB, though it is unlikely a WFOE can reach self-sufficiency. Listed below are more realistic figures:
• Consulting WFOE: 100,000 – 500,000 RMB
• Service WFOE: 100,000 – 500,000 RMB
• Hi-tech WFOE :100,000 – 500,000 RMB
• Retail WFOE: 500,000 – 1 million RMB
• Food & Beverage WFOE: 500,000 – 1 million RMB
• Manufacturing WFOE: 1 million RMB – 140,000 USD
For more specific information or questions related to your foreign invested enterprise or the services offered by the Trade Commissioner Service in China, contact China InfoCentre .
Selling to China: A Guide for Canadian Companies 44

Have you received unsolicited correspondence relating to the existence, non-existence, or opportunity to register the domain name of your company business in China?
While China has experienced tremendous growth in the number of credible private sector firms and many
Canadian firms have done business successfully with them, the number of scams associated with domain names in China is increasing.
The Canadian Trade Commissioner Service in China is aware of a number of Canadian companies that have received domain registration enquiries from Chinese enterprises located in various regions.
Chinese companies who claim that they are authorized registrars of CNNIC (the China Internet Network
Information Centre, a non-profit organization authorized by the Ministry of Information Industry to operate and administer China’s domain name registry for China’s country code Top Level Domain known as “.cn”) or other official bodies have been known to approach foreign companies, asserting that a third party has applied for a certain domain name whose keywords are identical to that of the foreign company.
• The Chinese party indicates that they want to, seemingly out of goodwill alone, remind the foreign company of the possible negative consequences of their brand name being registered by others in China. The Chinese company then suggests that the foreign company apply through them for a Chinese domain name, of course, for a fee. Some of these unsolicited e-mails have requested documentation from the foreign company to substantiate their name and trademark, which ultimately could then be used to their own end.
• The other form this scam takes is by Chinese companies, again claiming to be authorised by an official body, approach random foreign companies, warning that their validity of holding certain
Chinese domain names will expire soon, and asking for renewal fees.
• Additionally, other fraud scenarios see an unassociated company having registered a “.cn” domain name that is very similar to a legitimate company’s, with the associated website copied directly from the legitimate business’, negatively impacting on the true company’s commercial interests.
The following information is intended to clarify the process for such registration and to assist Canadian businesses in identifying illegitimate practices.
The China Internet Network Information Centre (CNNIC) is the official Chinese government body with this responsibility. The CNNIC is a non-profit organization with English and Chinese language capability authorized by the Ministry of Information Industry (MII) to operate and administer China’s domain name
Selling to China: A Guide for Canadian Companies 45

registry for China’s country code Top Level Domain known as “.cn”. Based in Beijing, all .cn domain name registrations are centralized through the CNNIC . Embassy officials in both Beijing and Shanghai have met with the CNNIC to familiarize themselves with this organization and advise them of current issues in this area. The CNNIC has confirmed that they will verify any complaint reports and refer them to the proper authorities.
• More than 60 registrars are accredited by the CNNIC to undertake the registration of “.cn”
Chinese domain names. Applications may be collected by other agencies around the country, but only the CNNIC in Beijing has the power to approve. The list of accredited domestic registrars is available at CNNIC .
• Applicants can choose any one of those local registrars to carry out the registration in the
People’s Republic of China. Some foreign applicants, e.g. Canadian companies, may find it more convenient to turn to the accredited overseas registrars authorized to register .cn domain names outside of China. In these instances, companies should contact CNNIC’s partner for the overseas market, NeuLevel . On their website, you can find accredited agencies in Canada.
• After the submission of the domain name registration form, it takes 15 days for CNNIC to review the application documents and render a decision. Generally, approval is fairly straightforward, as long as the domain name has not been registered and the related company exists (the .cn domain names are not for personal users). This is how local Chinese companies successfully register domain names without any documents from the original company.
• An important point to note is that brand name or trademark registration in China is independent from domain name registration. Brand name and trademark registration are administered by the
Trademark Office of China (CTMO). Both registrations are on a first-to-file system. Applications from non-Chinese nationals must be made through an accredited agent. For more information, visit the CTMO site .
• While the cost may differ from year to year, under the government’s policy of “serve Chinese internet users, facilitate the sound and orderly development of the internet in China,” the current cost is RMB1 [currently less than 0.15 CAD] for the initial year of registration.
• Registration for “.cn” domain names is based on the “first-to-file” principle. Some multinational corporations operating in China, e.g. Samsung, Motorola, etc. have registered a number of
“.cn” domain names (even in the hundreds) that contain the keywords of their brand names or trademarks in order to secure their distinct identity and avoid them being registered by others.
Selling to China: A Guide for Canadian Companies 46

• Add an additional hyphen, letters or numbers to make a new name;
• negotiate with the registrant in person; or
• follow the dispute resolution procedures as detailed below.
If an organisation deems that its legal rights and interests have been breached as a result of a particular domain name being registered by another party, either of the two CNNIC-accredited domain name dispute resolution institutions should be contacted.
• China International Economic and Trade Arbitration Commission (CIETAC) — Domain Name Dispute
Resolution Center
Is a “.cn” domain name is of interest to you and your business?
• A Chinese domain name is a distinct on-line identifier, representing registrants’ value and orientation here in the mainland China. A foreign company which has set up its business network here, e.g. branch company, representative office, distributing channels etc., or is planning to expand its business scope to China’s market soon may deem a Chinese domain name containing the company’s brand name or relevant keywords is a very important way of enhancing its corporate image and promoting its commercial success in the Chinese market.
• CNNIC’s “.cn” Domain Name page , relates all useful information with regard to regulations and policies, registration procedures, etc. Applicants are highly encouraged to read through the website thoroughly. Note that there are some unaccredited Chinese companies, which falsely claim that they are able to provide same registration services, yet they are not under the administration of CNNIC and their services are unqualified.
If you have been approached with an unsolicited request to register a domain name, been warned that the name will expire, or have noted a duplicate registration of your name, here are some suggestions:
• Entrust only those accredited registrars as listed by CNNIC for “.cn” domain name registry. Consult
CNNIC directly when you are not sure or sceptical with respect to pricing, terms of agreement, provision of documents and so on.
• If you don’t have any registered Chinese domain names, simply ignore such requests, or report them to the CNNIC. Two non-accredited registrars have already been identified as conducting illegal activities and have been posted on the CNNIC website.
Selling to China: A Guide for Canadian Companies 47

• If you do have a registered “.cn” domain name, the only entitled renewal payment collector is the same registrar with whom the registration was originally made. The expiration date as well as the entitled payment collector can be verified with the CNNIC.
• Consult the CNNIC and/or its recognized arbitration organizations, namely CIETAC and HKIAC .
You may be responsible to collect supporting evidence to prove violation of copyright and provide enough documentation to quote your actual loss suffered from a violation.
Canadian companies who would like to contact CNNIC directly may do so through its service line in
China: service@cnnic.cn
, or by phone in China: (86-10) 5881- 3000, or fax: (86-10) 5881-2666.
Selling to China: A Guide for Canadian Companies 48

5
Tax is never an easy topic for businesses but it is too essential to be ignored.  For a Canadian company, it is of great importance to understand its tax liabilities when doing business in China. Canadian companies are recommended to seek professional advice at an early stage in their China business planning in order to avoid any violation of the local laws and regulations and to take advantage of any tax relief or exemptions which the business may be eligible for.
Tax revenues in China are collected and split between central and local government. The State
Administration of Taxation (SAT) is the highest tax authority in China and it has SAT offices at the provincial and city levels responsible for collection of value added tax (VAT), consumption tax, business tax, corporate income tax and other specialized taxes. There are also local tax offices reporting to the local governments and responsible for collecting business tax, individual income tax, and other specialized taxes. In addition, imports and exports are subject to customs duties, and notably, VAT and consumption tax which are collected by the General Administration of Customs and its subsidiaries around the country.
Every company has to register with both the SAT and the local tax bureau, and customs as required.
Given the complexity of the taxation structure, tax regulations can be interpreted in different ways by different offices and officials, even among the different districts of the same city. Offices in regions may have differing interpretations towards tax regulations released by the central government, and their implementation efforts may vary.  Check with local tax administrations or reputable service providers for the latest tax policy in the location where you are based.
Major taxes that Canadian companies should be aware of include corporate income tax, business tax, withholding tax, value-added tax and consumption tax. General information about each tax can be found below.
Generally speaking, the corporate income tax is a tax against profits. In the past, there used to be two different corporate income taxes applied for domestic enterprises and foreign–invested enterprises.
Enacted on March 16, 2007, the Corporate Income Tax Law unified the treatment of the corporate income tax for domestic and foreign enterprises. As a result, the income tax rate for both domestic and foreign enterprises is now 25%. Small companies [1] can pay a reduced rate of 20% in certain cases.
Selling to China: A Guide for Canadian Companies 49

The new Corporate Income Tax Law offers tax incentives to certain enterprises in the high-tech, infrastructure, agriculture, environmental protection and energy saving industries. The tax rate can be reduced to 15%. Enterprises need to be qualified by relevant government authorities to benefit from the tax incentives.
From January 1, 2010, representative offices are subject to corporate income tax on their taxable income, as well as business tax and VAT. ROs are required to keep proper accounting records and declare their taxable income to tax authorities within 15 days at the end of each quarter. Failure to be compliant with the regulations will result in penalties.
The withholding tax is a tax levied on China-derived income that non-resident enterprises [2] make by providing services to companies based in China. Taxes will be deducted at the source from your gross invoice amount. The Chinese companies who you deal with and who remit the fund to your overseas bank account have the responsibility to withhold the amounts and pass to the tax bureaus. The withholding income tax rate for non-tax resident companies is 10%.
Income subject to withholding taxes include: income from sales of goods, income from services provided, income from technology transfer, dividends and profits, income from equity investment, interests, rentals, royalties and income from donations.
VAT applies to all enterprises and individuals engaged in the sales of tangible goods, provisions of processing, repairs and replacement services, and import of goods in China [3] . Except the import VAT which is collected by Chinese Customs on behalf of the SAT, the VAT revenue is shared between the central government and local governments (75% vs. 25%). In January 2009, China’s VAT regime shifted from production-based to consumption-based, which means in most cases companies can offset the
VAT amount paid on newly purchased machinery and equipment against VAT collected when they sell their products.
The VAT rate is generally 17% or 13% for some goods. For small-scale taxpayers the VAT rate is 3%.
The Chinese government is making efforts to reform the country’s fiscal system in order to stabilize growth and adjust the economic structure. Replacing the traditional Business Tax with a new
Value Added Tax (VAT) will be an important part of this fiscal reform and will help to eliminate the duplicate taxation of many goods and services.
Selling to China: A Guide for Canadian Companies 50

On January 1, 2011, Shanghai formally launched a pilot program to replace the Business Tax with a
VAT in the transportation industry and certain modern service sectors. This VAT reform program was expanded in August 2012 to include nine provincial regions and three cities, including Beijing,
Guangdong and Zhejiang provinces. Further expansion of the program is planned and will eventually be applied nationwide.
Business tax is a tax applied to all enterprises and individuals engaged in providing taxable services, transferring intangible assets or selling immovable properties in China. .  Business tax is collected by the local tax bureau every month.
Business tax rates vary from industries.
Communications and transportation — 3%
Building work — 3%
Financial and insurance business — 3%
Post and tele-communication — 3%
Culture and sports — 3%
Entertainment — 5-20%
Services — 5%
Transfer of intangible asserts — 5%
Sales of immovable properties — 5%
Note that the business tax is not levied on dividends paid overseas.
Consult with a professional service provider, particularly if your business is involved in selling both goods and services, since it is more complicated to justify whether your business is subject to business tax or VAT.
Consumption tax mainly applies to luxury goods and non-necessities, products which could be harmful to health or environment (e.g. tobacco, alcohol, fireworks), high-energy consumption and high-end products, non-renewable and non-replaceable petroleum products. Consumption tax rates can vary from 1% to 56%.
Selling to China: A Guide for Canadian Companies 51

Besides the tax categories mentioned above, there are a number of taxes that may be applicable to foreign enterprises or expatriates when doing business in China, including urban construction and maintenance taxes and education surcharge, land appreciation tax, vehicle and vessel usage license plate tax, stamp tax, deed tax and custom duties.
If you have any questions or would like to learn more about the services offered by the Trade
Commissioner Service in China, feel free to contact China InfoCentre .
[1] Small-scale taxpayers refer to those with sales volume less than RMB500,000 for enterprise engaged primarily in the production of goods or the provision of taxable services, and RMB800,000 for enterprises engaged in the wholesaling or retailing of goods.
[2] As stipulated by Enterprise Income Tax Law by the People’s Republic of China, non-resident enterprise refers to an enterprise established in accordance with the law of a foreign country (region) whose actual administration institution is located outside the territory of the People’s Republic of China but with organizations or establishments within the territory of the People’s Republic of China; or without organizations or establishments within the territory of the People’s Republic of China but which have income derived from the territory of the People’s Republic of China.
[3] VAT exceptions include: self-produced agricultural products sold by agricultural producers, contraceptive medicines and devices, antique books, importation of instruments and equipment directly used in scientific research, experiment and education, importation of materials and equipment from foreign governments and international organizations as assistance free of charge, articles imported directly by organizations of the disabled for special use by the disabled, and sale of goods which have been used by the sellers.
Selling to China: A Guide for Canadian Companies 52

6
Hiring in China is subject to two major laws in China: the Labor Law of the People’s Republic of China implemented on January 1, 1995 and the Labor Contract Law implemented on January 1, 2008. There are a number of key issues that a foreign entity in China must know when hiring in China.
1. Minimum Wage and 2010 Average Wages
2. Minimum Working Age
3. Standard Working Hours and Overtime
4. Social Security System
5. Probation
6. Written Labour Contract
7. Annual Leave
8. Hiring a Freelancer
9. Hiring an Expatriate
10. Firing in China
China has a minimum wage requirement. Given the disparity among regions in terms of economic development, the minimum salary levels differ. And for the same reason, the average wages vary in different regions or cities. Below are the minimum wages and average wages in select cities in 2010.
Minimum Wages and Average Wages
City Minimum Wage RMB/Month (last revised)
Beijing
Shanghai
1,400 (Jan 2013)
1,450
Guangzhou
Qingdao
Shenzhen
Nanjing
1,300 (March 2011)
1,240 (March 2012)
1,500 (Dec 2012)
1,320 (June 2012)
Average Wage RMB/Month
Xi’an 1,150 (Jan 2013)
Chongqing 1,050 (April 2012)
Source: Online public releases by government agencies at the city or national levels
4,672 (2011)
4,331
4,789
2,730
4,595
4,559
3,473
3,337
Selling to China: A Guide for Canadian Companies 53

The minimum working age in China is 16 years old. Requesting a candidate’s ID is a simple way to verify age.
The standard working hours for an employee’s normal working day is eight hours and the normal working week should not exceed 40 hours.  An employer cannot legally require an employee to work overtime exceeding three hours in any one weekday or 36 hours in any one month.
Generally speaking, China’s social security system is made up of five kinds of insurance and one fund: pension, unemployment insurance, medical insurance, occupational injury insurance and maternity insurance, as well as a housing provident fund.  Pension, medical insurance, unemployment insurance and the housing provident fund are financed by both the employee and the employer. Occupational injury insurance and maternity insurance are only financed by the employer.
Monthly contributions to the social security system vary from region to region. Calculation of the social security system is complex and requires sound understanding of the system.
To give an idea to new Canadian incomers, the portion to be calculated for each insurance and the fund is shown in the table below:
Percentage of month salary
Name
Pension
Unemployment Insurance
Medical Insurance
Occupational Injury Insurance
Maternity Insurance
Housing Provident Fund
% of month salary
10–20%
2%
5–12%
0.5–2%
0.5–1%
7–13%
Note that there is a cap for social insurance contribution, which is 300 percent of the local social average salary, therefore it is possible to clarify in the offer letter that your contribution base to the employee’s social security system shall not exceed 300 percent of the local social average salary.
Employers are responsible for withholding the social security contributions from the employee’s salary and also make their own contribution together.
Selling to China: A Guide for Canadian Companies 54

Given the difference in local economic development in different regions, the social average salary is different. Therefore, the location where you decide to locate does have an impact on your operational costs.
The labour contract law implemented in 2008 stipulates the maximum length of a probation period. The probation period depends on the length of the fixed term contract detailed as below:
Maximum length of a probation period
Term of the Contract
1 t<3 months
2 3 months<t<1 year
3 1 year<t<3 years
Probation Period
N/A one month
2 months
4 t> 3 years 6 months
5 open-term contract (not recommended) 6 months
It is important to enter into a written labour contract with your employees and to insert clauses on confidentiality clauses, allowances and benefits, length of probationary period and stock options as appropriate.
In some cities the contract template needs to be verified by the local labour bureau. If you fail to do so, it may be possible for your employee to challenge the validity of the contract if there is a dispute. Each time the labour contract is amended, it will need to be approved by the local labour bureau.
The contract shall be sealed using your company chop (and signed by the legal representative) before it comes into effect.
Minimum amount of annual leave in China is five days (excluding at least one rest day per week and the public holidays).  This only applies to the employee who has worked for one employer for one continuous year. Most foreign companies provide 15 to 25 days of annual leave per year.
Generally, it is not lawful for a foreign entity which is not established in China to hire a Chinese citizen to work for said company in China, whether as an employee or on a freelance basis.  According to
Chinese law, only those who are in certain industries can act as freelancers, such as babysitters,
Selling to China: A Guide for Canadian Companies 55

housekeepers, hourly workers, insurance brokers, interpreters etc.  Hiring a salesperson on a freelance basis will put your company at risk of breaking Chinese law.  Given that your company is not registered in
China, your company will not enjoy Chinese legal protection. Therefore, if the freelancer does anything against your interests, you will not have recourse in the Chinese legal system.
The one exception where hiring a freelancer is allowed is when a person is hired for early-stage market research and investigation prior to a company’s decision on establishment in China. The term shall not exceed six months and has to be arranged through an intermediary (i.e. an HR service provider). The service provider’s role is to sign the employment contract with the person on your behalf after reaching an agreement with your company and to help him/her with necessary filings and social welfare.  This is not a very common service offering so you will want to ask your potential service provider ahead of time whether this can be done. Alternatively, you may consider exploring the China market via a distributor/or an agency.
Foreign employees in China require a visa to work in China. There are two categories of visas that your foreign staff can apply for, F visa and Z visa. F visa is a visitor visa. To obtain one, a foreigner needs an invitation from a company that is established in China. Your Chinese partners, your Chinese companies, or some agents can issue the invitation letter. The term of an F visa is typically under six months. For foreign employees who are foreseen to work long-term in China, a Z visa, often referred to as a working visa, may be more convenient.  A foreigner that possesses a Z visa can apply for a residence permit, which allows the foreigner to travel in and out of the country without limitation during the term of the visa.
Another option for foreigners who travel to China for a short period of time (less than one month) can be to apply for an L visa (tourist visa), which does not require invitation and can be approved at a short notice, but where extensions can be problematic.
On September 6, 2011, the Ministry of Human Resources and Social Security issued the Interim Measures on Participation in PRC Social Insurance of Foreigners Employed in China. Under the new regulations, expatriates working in China (either being employed or seconded) are required to contribute to all five kinds of insurance at the same rate as the Chinese nationals, including pension, medical insurance, occupational injury insurance, unemployment insurance and maternity insurance. Both employers and employees are required to make contributions in accordance with local regulations, rules and rates by location and administered by local labour and social security bureaus. The new regulations will increase the administrative costs of hiring foreigners in China.
As in most other countries, labour disputes can be time-consuming and costly for employers in China. The legal system tends to be more favourable towards employees than employers. Therefore, it is critical for employers to keep good records of the documents signed with the employees.
Selling to China: A Guide for Canadian Companies 56

According to the labour contract law, a company may dissolve the labour contract if the labourer demonstrates that he/she does not satisfy the requirements of employment during the initial probation period. To do so, the company must gather clear evidence to prove the employee does not meet the requirements that were agreed upon at the start of employment, which necessitates a probation period appraisal that assesses the employee’s performance.
If an employer and an employee enter into a fixed-term contract, only under certain circumstances can the employer dismiss an employee without compensation:
• The employee is deemed to  have committed a serious violation of the company’s internal regulations;
• The employer suffers a serious loss that can be attributable to the conduct of the employee;
• The employee is convicted of a criminal offence during the term of the labour contract;
• Labour contract signed by employer under false assumptions or coercion from the employee;
• Employer’s interests harmed due to the employee taking up a post at a separate entity.
Otherwise, the employer should pay one month of compensation to the employee for each year of service at the company (effective from 1st January 2008 when the current labour contract law was implemented).
The expiry of a fixed-term contract provides a good opportunity for the employer to terminate the contract if the employee’s performance is unsatisfactory.  As the current labour contract law promulgates, from January 1, 2008, after the second renewal of a fixed-term contract, or once an employee continues to work for the employer for a consecutive period of ten years, it is obligatory for the employer to offer the employee an open-term contract, which means that it will be more difficult for the employer to terminate the contract without a valid reason.
The Chinese labour market is far more complicated than we have space here to introduce. Depending on the complexity of your HR needs, it may be worthwhile to involve professional service providers to ensure that your company’s employment relationships are lawful.
If you have any questions or would like to learn more about the services offered by the Trade
Commissioner Service in China, feel free to contact the China Infocentre .
Selling to China: A Guide for Canadian Companies 57

7
Often one of the most important and challenging elements in closing a business deal in China is obtaining the required financing. Companies need to be able to deliver a variety of financing options when negotiating projects in China. One cannot over emphasize the need for a Canadian company to understand and communicate with both sides of the financing issue (i.e. the western financier’s perspective and the Chinese official’s perspective). If you don’t have in-house expertise that speaks the language of the banking community and fully appreciates the Chinese perspective, think about engaging a specialist who does.
This paper briefly explores the available sources of financing support both in Canada and in China and some of the issues related to financing in China. The Government of Canada also produced documents on sources of project financing for SMEs in China, and are aimed at assisting SMEs in finding financing for investment projects. Fact sheets are available for the main commercial banks doing business in China, and contain a brief description of their operations in China, types of projects funded and financial instruments offered, assessment on whether or not their financing is suitable for Canadian SMEs, how to apply for financing and, finally contact information.
The State Administration of Foreign Exchange (SAFE), an organization under the People’s Bank of China advises on exchange control policy. Designated state and approved foreign banks are permitted to engage in foreign exchange business, as are a number of non-banking financial institutions.
In January 1994, a new foreign exchange management system was implemented that unified the official and swap exchange rates. Under the old system, foreign-invested enterprises (FIEs) were restricted to the swap centres for their foreign exchange transactions, and could not use designated banks. However, the swap centres have been disbanded and all foreign-invested and domestic firms must now obtain foreign exchange from the designated foreign exchange banks.
Further reforms took place in July 1996 when designated foreign exchange banks were permitted to buy and sell foreign exchange to FIEs. Simultaneously, a ceiling was imposed on the amount of foreign exchange that FIEs are permitted to retain in their bank accounts. In December 1996, China
Selling to China: A Guide for Canadian Companies 58

allowed convertibility of the renminbi for current account transactions as defined under Article 8 of the
International Monetary Fund’s Articles of Agreement - a move achieved four years ahead of schedule. In
July 2002, Chinese government authorities said that foreign-invested enterprises no longer needed to obtain prior approval before converting invested forex into the local currency.
For a foreign business to repatriate foreign exchange out of China, it needs to provide its foreign banker with proof of needs for current account purposes, such as dividend/interest payment notices and import/ export invoices. For dividend repatriation, a resolution of the board of directors of a foreign-invested enterprise is all that is required. For foreign exchange required to pay for imports, the invoice, customs documentation and bills of lading is usually what is required. The banker will then present the application to SAFE for approval. The banker will carry out the remittance instruction upon approval by SAFE.
(Please note that only amounts above US$100,000 in general would need to require SAFE approval and this amount varies from location to location. Otherwise the domestic bank is usually authorized to allow conversion to forex based on documentation required.). SAFE approval is required for Chinese companies on foreign currency borrowing, while joint venture and wholly owned foreign enterprises do not require such approval but simply registering it with SAFE. One way for Canadian subsidiaries in China to pay for in-Canada as in the case for one of my former employer is through transfer pricing.
It is important to note that all imports into China can only be paid for in foreign exchange, not in renminbi.
In some cases, Chinese buyers will want to pay for these imports in renminbi, but regulations don’t permit it. Similarly some Canadian companies in China may want to use their in-China revenues to finance expenses, including expenses incurred in Canada. These in-Canada expenses would have to be paid for in foreign exchange and approval must be obtained from SAFE, through its foreign banker. It is not clear that approval will be given.
Export Development Canada (EDC)
EDC provides Canadian exporters with financing, insurance and bonding services as well as foreign market expertise.
As a recognized leader in providing groundbreaking commercial financial solutions, EDC is constantly looking for new, innovative ways to serve its customers. At EDC, the door to exporting options is always open. There are always new markets to explore and new opportunities to seize. EDC?s goal is to help
Canadian companies, no matter how big or small, capitalize on all the exciting opportunities that exporting offers.
www.edc.ca
or 1-888-332-4593
Selling to China: A Guide for Canadian Companies 59

Canadian Commercial Corporation (CCC)
The CCC is a federal Crown Corporation. Its mandate is to act as prime contractor in export sales by Canadian suppliers to foreign governments, international agencies and other overseas buyers. By guaranteeing the exporter’s contract performance, CCC provides the firm with the added credibility that puts potential clients at ease. In addition, CCC provides a number of services aimed at facilitating such export transactions. These include helping in preparing and transmitting bids, assessing risks, assisting in negotiations and executing and managing contracts.
CCC can also facilitate access to pre-shipment, working capital financing using the Progress Payment
Program, and may be able to offer better payment terms on open account transactions.
Toll Free in Canada: (800) 748-8191
Email: info@ccc.ca
Website: www.ccc.ca
Northstar Trade Finance (NTF)
NTF provides fixed-rate medium-term loans to eligible Chinese buyers of Canadian equipment and services. The loan is secured by a registered lien over the exported goods and insured by the Export
Development Corporation. Northstar’s shareholders are the Bank of Montreal, the Royal Bank of
Canada, HSBC Bank Canada, the National Bank of Canada, the Government of British Columbia and the
Government of Ontario. Northstar’s loans are particularly relevant to small and medium-sized exporters that require financing from $100,000 to $5 million with repayment terms of one to five years. It will process a complete application in seven days.
Website: www.northstar.ca
Canadian Banks
All major Canadian commercial banks are active in China, particularly in the area of trade finance. Scotia
Bank has branches in Guangzhou, Chongqing, and Hong Kong and a representative office in Beijing and in
Shanghai. The Bank of Montreal has branches in Beijing, Guangzhou, and Hong Kong and a representative office in Shanghai. The Canadian Imperial Bank of Commerce has a representative office in Beijing and in Shanghai, and the Royal Bank of Canada have representative offices in Beijing. The National Bank of
Canada and the Toronto-Dominion Bank are present in Hong Kong. Major international banks, such as
HSBC, with a Canadian client base, are well represented in China.
• Bank of Montreal : www.bmo.com
• CIBC : www.cibc.com
• HSBC Bank of Canada : www.hsbc.com
Selling to China: A Guide for Canadian Companies 60

• National Bank of Canada : www.bnc.ca
• Royal Bank of Canada : www.rbc.com
• Scotia Bank : www.scotiabank.com
• Toronto-Dominion Bank : www.tdbank.com
They Canadian banks normally look to EDC to provide insurance on letters of credit. They also accept/ confirm Chinese bank letters of credit do lending to select Canadian/foreign clients who have investment projects in China. The letters of credit are normally issued by acceptable Chinese banks and confirmed by the Canadian bank. These banks can also provide operating loans and term loans for appropriate projects and, in some cases, forfeiting for longer payment terms. Increasing opportunities are arising for Canadian and other international banks to participate as advisor, arranger, or lead manager in project finance.
To get more information on the Canadian banks activities in China, you can consult their respective website or the fact sheets that were produced by the Government of Canada at tradecommissioner.gc.ca
, under the China section.
Chinese Banks
There are many Chinese banks, which have correspondent banking arrangements with Canadian banks and issue letters of credit, for confirmation by Canadian banks. For the Canadian exporter, it is important to know which Chinese bank their Chinese customer uses and to ensure that that particular bank is acceptable to their Canadian bank to issue the letter of credit. Their Canadian bank can tell them which
Chinese banks they work with in on this type of arrangement.
The four main Chinese banks which are perhaps most relevant for Canadian exporters are the Bank of China, the China Construction Bank, the Industrial and Commercial Bank of China, and the Bank of
Communications. China also has 11 shareholding bank and 112 city commercial banks, however their impact has been limited. EDC has credit facilities in place with the Bank of Communications, the Industrial and
Commercial Bank of China, and the Export-Import Bank of China, that are available to Chinese importers of Canadian goods and services. In a few cases, Canadian companies have received direct financing from
Chinese banks for their China operations.
In some cases, cash deals are occurring because Chinese buyers are trying to avoid bureaucracy in obtaining a letter of credit. Getting a letter of credit is not always convenient for the buyer because the funds needed are frozen temporarily by the bank. Therefore, they often prefer doing cash advance or cash on delivery deals in certain sectors where there are strong cash flows. The oil and telecommunications sectors are two areas where cash deals frequently occur. There are also more and more efficient small and medium-sized Chinese enterprises willing to pay cash.
Selling to China: A Guide for Canadian Companies 61

Export Development Canada (EDC) is a unique financial institution that has been helping Canadian businesses grow and prosper through exports and international investment since 1944. EDC’s sophisticated trade finance solutions can help exporters compete in more than 200 countries, including higher-risk and emerging markets. EDC is a Crown corporation that operates as a commercial financial institution.
The Corporation is governed by a board of directors composed of representatives from both the private and public sectors, and reports to the Canadian Parliament through the minister for international trade.
EDC delivers its products and services through sector-based business teams plus a cross-sector team dedicated to serving smaller exporters. These business teams are supported by a network of experts who provide in-depth market and product knowledge, research, analysis and skills.
EDC has considerable experience in supporting Canadian exporters and investors in the China market.
The Corporation’s involvement in China extends back to 1979, when it established a relationship with the Bank of China. Since then, more than 300 Canadian contracts have been supported, involving over
$8 billion of Canadian goods and services. Today, as the dynamic China market continues to flourish, an array of EDC insurance, financing, guarantee and bonding programs is available to support Canadian firms in penetrating or expanding their businesses in China.
• EDC’s insurance services include:
• insurance for sales on short- and medium-term credit;
• bid/performance-related insurance and guarantees;
• surety bond support;
• equipment (political risk) insurance; and
• foreign Investment Insurance.
EDC insurance policies protect exporters against various losses due to commercial and political risks.
Examples include buyer insolvency, default on payments, repudiation of goods, contract termination, foreign exchange conversion or transfer payment difficulties, war, revolution or insurrection preventing payment, cancellation of government import or export permits, wrongful calls on bid/performance letters of guarantee, and inability to repatriate capital or equipment due to political problems.
Selling to China: A Guide for Canadian Companies 62

EDC’s export credit insurance is available to help Canadian exporters manage the commercial and political risks involved in extending short-term credit (generally up to 180 days) to their buyers. Today,
EDC is supporting a wide variety of goods and services sold on short-term credit to the China market, including base minerals, forestry products, building materials and information technology.
The commercial and political risk coverage offered by EDC’s export credit insurance can help protect an exporter’s cash flow, assist in structuring more attractive payment terms for buyers, and increase an exporter’s access to working capital.
EDC’s overall experience in China has been favorable, and coverage is available to support sovereign, quasi-sovereign and private buyers. The biggest challenge for EDC in supporting short-term credit sales to China is the lack of availability of good credit and financial information on buyers. EDC is continuing to develop relationships with key credit reporting agencies in the China market to assist exporters in this area.
Insurance support for contracts involving the provision of medium-term credit to Chinese buyers is also available from EDC. This support is particularly applicable for the sale of capital equipment and services, including projects such as the establishment of turnkey plants.
Historically, medium-term credit transactions that EDC has supported have involved projects supported by Chinese government-owned banks.
In addition to credit insurance covering certain commercial and political risks of non-payment, EDC’s
Performance Security Insurance and Guarantees have been important tools for exporters.
These programs protect against certain calls on performance instruments which are established in favour of Chinese buyers. The protection can be instrumental in allowing exporters to free up their working capital lines with their banks. Under the Performance Security Guarantee program, a full guarantee is offered to the exporter’s bank against any call on the bid/performance bond.
As the Chinese market continues to expand, Canadian firms need to participate through investment in order to compete effectively. More and more Canadian firms are establishing an ongoing presence, often through a joint venture company in China. To date, many of these joint ventures have involved Chinese entities owned by state, provincial or municipal governments.
Selling to China: A Guide for Canadian Companies 63

EDC’s Political Risk Insurance (PRI): EDC’s PRI indemnifies investors for up to 90 per cent of losses caused by three types of political risk: transfer and inconvertibility of funds, expropriation and political violence. With this protection in hand, investors are able to focus on what has made them successful in the first place — the commercial and technical aspects of their businesses.
Expropriation is a risk of particular significance to Canadian firms operating in China. In this regard, the risk is not so much that of overt nationalization, but whether the laws and regulations governing foreign investment will be consistently implemented and enforced by the various levels of government in China.
EDC’s FII mitigates this uncertainty in that investors are indemnified if such creeping expropriation threatens the viability of their investments.
EDC’s financing services include:
• lines of credit with foreign banks or agencies worldwide;
• note purchase arrangements;
• direct buyer loans; and
• project risk financing packages.
EDC’s financing services enable Canadian exporters to provide their customers with flexible medium- or long-term financing. Support is provided for the sale of capital equipment and services, with repayment terms generally extending up to 10 years, depending on the nature of the product or service. Under EDC financing arrangements, EDC disburses funds directly to the Canadian exporter. All transactions financed must meet EDC’s normal criteria relating to Canadian benefits, the exporter’s technical and financial capability and the credit worthiness of the borrower/country.
The provision of competitive and flexible medium- to long-term financing to Chinese buyers by Canadian exporters is often crucial in winning capital equipment and services contracts. EDC financing, which is in conformity with the Guidelines of the OECD Consensus Arrangement, has been instrumental in supporting contracts both large and small in sectors as diverse as electric power, telecommunications, environmental equipment and industrial machinery.
Almost all of the Canadian contracts supported by EDC to date have involved Chinese government-owned banks such as the State Development Bank, a key policy bank involved in the development of China’s infrastructure projects.
To facilitate transaction support, EDC has credit facilities in place with the Bank of Communications
(US$50 million), the Industrial and Commercial Bank of China (US$25 million), and the Export-Import Bank of China. These credit facilities allow for easy access by Canadian suppliers and Chinese buyers, as the
Selling to China: A Guide for Canadian Companies 64

terms of the financing have been established between EDC and the Chinese bank. EDC’s credit facilities are ideal for small- or medium-sized transactions, and depending on the nature of the goods and services involved, repayment terms generally extend up to 10 years.
In addition to working with the three above-mentioned banks, EDC is happy to work with other key
Chinese financial institutions such as China Development Bank, the Bank of China, China Construction
Bank, and SinoSure. EDC is also able to work with foreign banks and selected two tier Chinese regional banks which are able to act as onlenders or guarantors for transactions.
The buyer must apply to a Chinese bank to qualify for financing support.
The exporter should contact EDC in the early stages of the commercial discussions with the buyer, and provide EDC with:
• a description of the proposed transaction;
• a Canadian Benefits Report and other relevant technical and financial information on the exporter’s business; and
• a draft copy of the commercial contract (when available).
Once the Chinese bank approves the transaction and the commercial contract is signed, it will submit an application for financing to EDC.
EDC will process the application and, if it’s approved, respond with a formal offer of financing to the bank in China.
Once the financing offer has been accepted and all documentation has been submitted to EDC, EDC will pay the exporter directly on behalf of the borrower, according to the terms of the commercial contract.
Thousands of small- and medium-sized enterprises (SMEs) rely on EDC’s support. Some of the ways in which EDC is helping SMEs grow their export business in China include:
• Emerging Exporters Team , which focuses exclusively on helping smaller exporters manage risks associated with exporting. Exporters can access a team member by calling 1-888-332-4593. These small-business specialists can put insurance coverage in place on the spot and can approve sales to foreign buyers.
• SME Financial Services Team , which co-ordinates all EDC initiatives aimed at SME capital goods and services exporters.
Selling to China: A Guide for Canadian Companies 65

• Northstar Trade Finance Inc.
, which, through a partnership with EDC, helps Canada’s SMEs boost their competitive edge. Northstar provides loans ranging from $100,000 to $3 million to, primarily, buyers of capital goods or services. EDC insurance protects Northstar against buyer non-payment.
Exporters can contact Northstar at 1-800-663-9288.
As the Chinese market continues to evolve, EDC is familiarizing itself with issues related to transactions involving new risk (non-sovereign) structures, as well as the dynamic new Chinese entities involved. All creditors, including EDC, are struggling with some of the issues behind new risk transactions in China.
However, EDC is well-positioned to consider providing support for creditworthy joint venture projects, as well as for projects involving corporate risk, commercial bank risk and project financing/limited recourse structures.
As part of its approach to addressing new risks, EDC now has an ongoing presence in China, and thus will gain enhanced market intelligence on issues relating to new risk transactions. Furthermore, EDC’s business teams and financing and insurance specialists closely follow developments in the China market, helping EDC to underwrite new risks in support of Canadian exporters and investors.
As the process of commercialization continues, EDC will consider providing support for new risk transactions on a case-by-case basis, taking into account risk mitigating factors such as:
• borrowers with U.S. dollar or hard-currency earnings;
• exporters having previous favorable experience with their buyers;
• involvement of foreign investors familiar to EDC in the project;
• involvement of a highly regarded local bank in the project;
• opportunity to risk share with highly regarded financial institutions;
• strong degree of government support/approval for the project;
• participants or sponsors being listed on a reputable stock exchange; and
• security previously having been successfully enforced in the market.
Each new risk transaction will, of course, be considered on its own merits, and early contact with EDC on potential transactions is highly recommended, given the challenges involved.
For more information about EDC support for doing business in China, call 1-888-332-3320 to contact:
EDC office in Canada
Website:  www.edc.ca
EDC Services Toll Free Number: 1-888-235-6148
Online: EDC Inquiry Form
EDC Representative Office in China
Denis L’Heureux — Shanghai, China
EDC Chief Representative
Email: DLHeureux@edc.ca
Selling to China: A Guide for Canadian Companies 66

8
China has been viewed as a low-cost and manufacturing-for-export market for decades.  With years of government efforts and economic development, this image of China is changing. Instead of continuing to produce low-end products like toys or garments, the country is climbing up the value chain successfully.
More and more foreign companies rush into the country for sourcing, not only for the comparatively low-cost labour, but also for creating competitive advantages by integrating China into their global supply chains.
For companies looking to add a China component to their supply chain, we encourage you to explore the following:
1. Before You Begin Your Sourcing Research
2. Starting Sourcing Research
3. Selection
4. Placing Orders
5. Quality Control
6. Ready for Delivery
7. Receiving your Goods
First, assess whether sourcing from China is really what your company needs.  You should consider questions like, what are the benefits of sourcing from China, are there better locations aside from
China that you may source from, what sourcing model you would like to adopt, e.g. simply buying from a local manufacturer, or through an intermediate agent, or setting up a strategic partnership with a local manufacturer?
To begin, it is important to prepare proper drawings and specifications for the products that you are looking for.
It is also vital for you to know your requirements. You need to have a clear understanding of the category, as well as what type of suppliers you are looking for, such as a manufacturer vs. a 3rd party supplier, a large manufacturer vs. a family-owned business, a 3rd party supplier with in-house development capability vs. a 3rd party supplier that just buys-in and sells-out, vertically integrated manufacturer or assembly based manufacturer, etc.
Selling to China: A Guide for Canadian Companies 67

There are various resources that you can approach to find one supplier/several suppliers.
The internet is a good place to begin your search for a supplier, and will give you a good sense of the range of options available to you. Many foreign buyers start from www.alibaba.com
or www.china-quotes.com
.
You will obtain hundreds of results, which can be overwhelming, but treat your internet research as basic research.
Exhibitions serve as a good one-stop shop for you to find potential suppliers. There are numerous exhibitions every day all over the country, focusing on different industries. Find the top ones with convincing size and exposure. Usually exhibitions in big cities such as Beijing, Shanghai, and Guangzhou are of better quality than those in lesser known cities. That said there are well-known technical trade fairs held in tier-two or tier-three cities which you should seek out. Look for exhibitions with more than
200 exhibitors and more than 20,000 visitors.  Choose the right exhibition, make the trip and meet the people face-to-face.
As you narrow your search down, you can contact the Chinese Embassy in Canada or the Canadian
Trade Commissioner Service for advice and assistance in your search. You can also contact the numerous industry associations based in China, either Chinese ones, or ones with Canadian backgrounds, such as
CCPIT , CCBC , or industry-focused ones such as the China Medical Devices Association .
Nothing encapsulates better the selection process than the phrase ‘seeing is believing’. It is important to talk to potential suppliers face-to-face and to pay a visit to the local factories if possible. You should also ask the supplier for its certification or qualifications (e.g. ISO or GMP etc.), if any. Look for recognizable standards followed such as ISO.  Ask whether the supplier has any experience in exporting overseas, particularly to your region.  It would help if the supplier can provide you its client contacts as reference, particularly if they are based in North America.  Due diligence in advance is very useful and can minimize the risk of your sourcing activities in China. You may wish to consider using a third party to conduct various levels of credit checks and due diligence.
Find suppliers who will take your business seriously which means finding one that has the right operational size for your intended sourcing needs. For instance, a manufacturer will not give priority to a $10,000 project if it often deals with $100,000 projects. It is important to ensure that your order will not be subcontracted to smaller manufacturers as quality may be affected.
Provide specifications and drawings and ask for samples. Note that you may have to pay the shipping costs. Remember that a high quality sample does not mean that you can avoid conducting quality control during mass production. Samples are only a beginning, but if the supplier cannot even get the sample right than you may wish to look for another supplier.
Selling to China: A Guide for Canadian Companies 68

Understand the import & export rules and regulations . It may apply to payment terms, import duties, shipment terms, logistics costs, etc.
Select your supplier(s) carefully. Pricing, service, lead times, and terms and conditions should be considered well before you make any decision.  Remember that there is generally no such thing as a free lunch - if one manufacturer offers a much lower price than the average, you can be confident that there will be quality issues. As you make your selection and negotiate specific terms, be wary of simply negotiating down the price. Offering a reasonable margin for your supplier can mean that the supplier is not forced to degrade the quality of the product to make ends meet.
A well-written contract may not prevent you from any disputes with your suppliers but it can provide you options when disputes arise, including the threat to your supplier of legal action. A good contract needs to be clear, comprehensive, and enforceable.  Address payment terms, safety and quality control terms, inspection rights, compensation terms and dispute resolution. If intellectual property is a key consideration for you, then consider signing a Non-Disclosure Agreement (NDA) that is drafted in
Chinese by Chinese lawyers. According to a World Bank survey, China ranks 16th among 183 countries in terms of enforcing contracts, meaning that a quality, enforceable contract is not without value in
China. It is also important to prepare your contract in both English and Chinese. A Chinese-version contract can better protect you at the courts and avoid your supplier using it as an excuse for any non-compliance.
Ask the manufacturer to provide pre-production samples before production starts. One is to ensure that the samples are in keeping with your drawings and specifications. And also, the samples will help to demonstrate what has been promised versus what is delivered.
Pay attention not only to the samples, but packaging. Good packaging can protect your products from any damages caused during shipment.
Count Chinese holidays into your lead time. There are two long holidays each year, i.e. the Chinese
New Year (usually around January or February), and the Chinese National Day in early October. People often take 2-3 or more weeks off during this period, which often slows production significantly.
Allow the learning curve to develop by working closely with your supplier and assisting the supplier in working through any deficiencies at the beginning.
Selling to China: A Guide for Canadian Companies 69

How you conduct quality control will depend on the volume and value of your order. If you place a small order, such as 1% of the supplier’s total production, you may have to rely on the supplier’s quality control methods. If it is a large order, however, it is important to seriously consider hiring a dedicated person who can be on the ground to keep a close eye on quality control throughout the production process, including the raw material procurement. And if it is a large volume order, you can also consider hiring a professional service provider to conduct the inspection on your behalf. There are many ways to help you ensure the quality of the products you source.
Quality control is a never-ending process and should be applied throughout the course of production.
Ensure your order is quality checked before shipment. Do it either through your own staff or through a 3rd party quality inspection vendor.
Ensure your goods are packaged according to your requirements. Poor packaging may ruin the quality control efforts made during the production, particularly if your products are delicate or fragile or sensitive to the environment.
Use a freight forwarder to organize shipping, paying duties and VATs as needed. Many Chinese manufacturers quote on an ex-works or FOB basis (i.e. quotation from the factory gates or at the port) so you have to arrange the shipping and delivery to your warehouse. Alternatively, you can ask for quotations based on CIF during your initial negotiations.
Check your goods as soon as they are delivered to your warehouse. Provide the manufacturer detailed feedback and tell them clearly where improvements can be made for the next shipment. The contract signed between you and your supplier shall have stipulated the measures for any deficiencies being discovered upon delivery.
Decide whether to continue the relationship or terminate it. Make sure that you have some substitutes which can start the production as soon as needed.  And make sure that you always have some inventory in your warehouse for any contingency caused by failed performance of your supplier.
To learn more about importing to Canada, refer to the website of Canada Border Service Agency .
If you have any questions or would like to learn more about the services offered by the Trade Commissioner
Service in China, feel free to contact China InfoCentre .
Selling to China: A Guide for Canadian Companies 70

The Canadian Trade Commissioner Service offers services for export-ready Canadian companies wanting to export goods, services or technologies to foreign markets. However, we are often contacted to assist
Canadian companies in importing products or to source manufacturing inputs.
Your search for products from China can begin in Canada. There are a number of Canada-based, overseas organizations that can provide useful information and assistance. Below is a list of contacts — in Canada,
China, and Hong Kong — that you may approach to begin your sourcing research.
The CCBC is a private-sector, non-profit membership organization incorporated in 1978 to facilitate and promote trade and investment between Canada and the People’s Republic of China. The CCBC provides services in six key areas through eight offices, of which six located in China:
1. event management
2. facilitation & marketing
3. consulting
4. policy advocacy & mediation
5. business operation and administration support
6. access to analyzed information
Address: Suite 1501, 330 Bay Street, Toronto, ON
M5H 2S8
Tel: (416) 954-3800
Fax: (416) 954-3806
Email: ccbc@ccbc.com
Website: www.ccbc.com
The “Traditional Champion” of Canadian research and development, CATA Alliance’s mission is to stimulate “Global Business Growth” through the forces of Canadian innovation and strategic partnership.
Selling to China: A Guide for Canadian Companies 71

CATA’s goal is to provide market intelligence, business connections and on-site support to help Canadian companies build their success map to this fast growth marketplace. Anything that is marketable in technology can now be developed, designed and manufactured in China. Any company with global objectives or supplying products or services to others with such ambitions will now have to play in China.
Additional services offered by CATA include:
• An online Guide to Business Development in China focuses on the practical modalities of interaction between Canadian high technology enterprises and the China market;
• Greater China website — as a source of strategic advice to high tech enterprises through case studies, corporate mentoring, online advice on North American and Chinese market conditions, timely research and delivery of topics of importance to the growth of the high tech economy;
• A database of Chinese telecom distributor/system integrator in major Chinese cities launched on
CATA’s website in 2007.
Ongoing business seminars providing advice and business contacts to CATA members on opportunities and strategies to successfully expand into China
National Headquarters
(Operations Office)
Telfer School of Management
Desmarais Building, room 6119
55 Laurier E.
Ottawa, Ontario
Tel: (613) 236-6550
Website: www.cata.ca/About_Cata/Contact_Us.html
The Trade Facilitation Office Canada (TFOC) was founded in 1980 by Canadian International Development
Agency (CIDA) to assist developing countries to export to the Canadian market. Two decades later,
TFOC, operating as a non-governmental, not-for-profit organization, has become the primary provider of information on the Canadian import market and a source of training for exporting and for investment attraction for developing and transition economy countries.
Address: Suite 300, 56 Sparks Street Ottawa, Ontario K1P 5A9, Canada
Tel: (613) 233-3925 or 1-800-267-9674 (in Canada)
Fax: (613) 233-7860
Email: tfoc@tfoc.ca
Website: www.tfoc.ca
Selling to China: A Guide for Canadian Companies 72

Economic and Commercial Counsellor’s Office
Address: 401 King Edward Avenue Ottawa, Ontario K1N 9C9, Canada
Tel: (613) 236-8828
Fax: (613) 236-5078
Email: ecoffice@buildlink.com
Consular District: Provinces of Alberta and Saskatchewan and Northwest Territories
Address: 1011 6th Ave. S.W., Suite 100 Calgary, Alberta T2P 0W1, Canada
Tel: (403) 264-3322
Fax: (403) 264-6656
Consular District: Provinces of Ontario and Manitoba
Address: 240 St. George Street Toronto, Ontario M5R 2P4, Canada
Tel: (416) 964-7260
Fax: (416) 324-6468
Consular District: Provinces of British Colombia and the Yukon Territory
Address: 3380 Granville Street Vancouver, British Columbia V6H 3K3, Canada
Tel: (604) 734-7492
Fax: (604) 737-0154
Address: G/F, Hong Kong Trade Centre
9 Temperance Street Toronto, Ontario M5H 1Y6, Canada
Tel: (416) 366-3594
Fax: (416) 366-1569
Email: toronto.office@tdc.org.hk
Selling to China: A Guide for Canadian Companies 73

TDC is the global marketing arm and service hub for Hong Kong-based manufacturers, traders and service exporters. They have more than 40 offices around the world, including Canada (see address in the section entitled Sourcing contacts in Canada). Its activities are especially geared to helping small and mediumsized enterprises (SMEs) and enhance Hong Kong’s reputation as a partner and platform for global business. With an unparalleled database of Chinese companies, suppliers and manufacturers numbering in the thousands covering multiple sectors, Canadian firms can use this trusted intermediary to find Made in China goods. Of particular strength is its knowledge of, and links into, the South China/Guangdong industry. Here is their sourcing guide .
Premier Connect : Another service offered by TDC is Premier Connect which is its customized business matching service. The service is affordably priced and will guarantee you up to 3 pre-screened potential
Hong Kong partners with a confirmed interest in your company within 4 weeks, all based on your requirements. The aim is to match Hong Kong product suppliers, service providers, agents, distributors, licensees, franchisees to partners on technology transfer, joint venture or other strategic partners.
b2s.com
is an Internet trade portal, with daily hits of approximately 13,000. With its roots in Hong Kong and operated by Marketplace Publications Limited, the company’s reach now extends into China and
Taiwan. Its mission is to link both buyers and suppliers within trade activities. Via the B2S portal, suppliers can promote their products, spread their trade messages and build up their brand images. Buyers can benefit from the business matching system to easily locate their desired products or business partners.
For additional information or to request specific services, contact:
Hong Kong (Head office)
5/F, Pan Asia Centre, No. 137 Wai Yip Street, Kwun Tong, Kowloon, Hong Kong
Tel: +852 2191 7808
Fax: +852 2191 7816
Email: service@b2s.com
Address: Room 02, 39/F, Block A,
Shen Fang Plaza, 3005 Renmin Nan Road, Luo Hu District, Shenzhen, China 518001
Email: sales@b2s.com.cn
Selling to China: A Guide for Canadian Companies 74

Address: 5/F, No 7, Lane 167, Yuan Tung Road, Chung Ho City, Taipei Hsien, Taiwan
Email: tw@b2s.com
1 Fuxingmenwai Street, Beijing 100860, P.R.China
Tel.: 86-10-8807.5769/5729
Email: BCNweb@ccpit.org
Websites: www.bizchinanow.com
and www.ccpit.org
Address: Rm. 972, Office Tower, Central Hotel, Jichang Rd, Guangzhou, China 510405
Tel: (86-20) 8655-0807
Fax: (86-20) 8655-0807
Website: www.gdefair.com/en/
Address: Jinling Mansions 5F,
28 Jinling Xi Rd.
Shanghai, China
200021
Tel: (86-21) 5306-0228 ext. 707
Fax: (86-21) 6386-9915
Website: www.ccpitsh.org/ccpit/en/index.asp
It offers a one-stop-shop for product needs with over 50 years of experience in both manufacturing and sourcing products in China. This website works with companies around the world to help them source products, or set up complete manufacturing of their product(s) in China.
Address: Room 101, no. 5, lane 888
Jin Xiu Road, Pu Dong
Shanghai, China
Tel: (86-21) 6854-6078
Fax: (86-21) 6854-6588
Email: sales@builtinchina.com
Selling to China: A Guide for Canadian Companies 75

China Buy assists clients with their China sourcing and import projects. China Buy currently specializes in the following popular Chinese imports: textiles, ready-made apparel, housewares, bedding and linen, computer peripherals, arts and crafts, interior decoration, and construction materials. For all enquiries, email sandy@china-buy.com
.
The China Chamber of Commerce for the Import and Export of Machinery and Electronic Products
(CCCME) is a nationwide trade organization. Formed jointly by various economic organizations and engaged in the import and export of machinery and electronic products and related activities, the group now has more than 6,500 members.
CIE is a bridge and link between China and foreign economic and trade circles. It is a non-profit quasiofficial organ. Supported by China Tianjin Municipal Foreign Economic Relations & Trade Committee,
China Council for the Promotion of International Trade, CIE has established long-standing business contacts with more than 180 overseas chambers of commerce and industry, foreign trade associations and multinational companies.
Comprehensive B2B directory including Chinese and Taiwanese products manufacturers, exporters, suppliers, producers, trading companies, sourcing services, and contract manufacturing companies.
China Trade Vista is an online community for business-to-business trading and cooperation. Both
Chinese and western companies interested in international trade can use the site to post their buy and sell offerings, publish their company product and service information, and have effective and interactive exchanges with international targeted business partners.
Global Sources creates and facilitates global trade between buyers and suppliers, through integrated sourcing and marketing solutions. Global Sources facilitates international trade in multiple vertical markets between global suppliers and buyers that purchase in volume for resale. Global Sources China offers extensive supplier enablement capabilities in Greater China and other leading supply markets through
63 content management offices and 700 sales representatives, who make approximately 40,000 supplier visits monthly.
Selling to China: A Guide for Canadian Companies 76

Made-in-China provides access to Chinese products and suppliers, offers the ability to send inquiries directly to companies, provides access to a wealth of useful trade information, and provides information on the latest trade developments in both China and abroad.
• Alibaba
• Business China
• ChinaE
• Sparkice
• Trade Big
Visit the Canada Border Service Agency to get information on importing goods into Canada.
The Canada Border Service Agency contains information including:
How to get started, frequently asked importing questions, brokers licensing, registering your business, reporting your shipment, required documents, release of your shipment, anti-dumping and countervailing, special import measures act, and much more.
Visit the Canadian Trade Commissioner Service website for information on services offered by the Trade
Commissioner Service abroad.
For additional assistance to meet your sourcing needs, beyond the ‘self-help tools’ contained in this document, contact the Canadian Trade Commissioner Service in China or visit our Canada in China website .
(Note that trade information is directed at local business contacts and is in Mandarin language only).
Selling to China: A Guide for Canadian Companies 77

Registration is required to access the following reports.
• Aerospace: Airport Development Opportunities — China (2012/10/11)
• Aerospace: General Aviation Opportunities — China (2012/10/11)
• Aerospace: Pilot Training Opportunities — China (2012/10/11)
• Aerospace Sector Profile — China (2011/03/29)
• Airport Development Opportunities — China (2010/12/10)
• Aerospace Market Opportunities — China (2010/12/02)
• Agriculture and Agri-Food Profile — Shanghai, China (2013/01/10)
• Fish and Seafood Products Sector Profile — Beijing, China (2011/01/27)
• Cultural Industries Sector Profile — China (2011/06/06)
• The Automotive and Advanced Manufacturing Sector in Chengdu (2011/12/31)
• The Automotive and Advanced Manufacturing Sector in Chongqing (2011/12/31)
• Automotive Sector Profile — East China and Hubei Province (2011/07/29)
• Automotive Sector Profile — Beijing, China (2011/03/07)
• Electric Vehicle (EV) Sector Profile — China (2010/09/30)
• 2010: A Very Successful Year for The Canadian Wood Industry in China (2011/02/08)
• Building Products and Construction Sector Profile — East China (2011/02/07)
9
Selling to China: A Guide for Canadian Companies 78

• E-Learning Sector Profile — China (2013/01/28)
• Opportunities in East China’s Applied Learning Sector (2012/10/11)
• The Vocational Education Market in China (2012/10/09)
• Education Sector Profile — Beijing, China (2011/10/27)
• The Daily Education Buzz (2011/06/27)
• The International Education Market in China: Executive Summary (2011/06/27)
• Establishing a Presence in the Chinese Education Market — Beijing, China (2011/05/24)
• Beyond the Classroom: Opportunities for Canadian Involvement in Extra-Curricular Programs in China (2010/12/31)
• China Education Expo 2010: Three years on and going strong (2010/11/30)
• Summary: ACCC’S First National Report on International Education and Mobility (2010/08/17)
• China’s New Ten-Year Education Plan: Opportunities for Canadian Institutions (2010/08/03)
• Guidance on the Submission of Study Permit Applications — Canadian Embassy, Beijing (2010/06/09)
• China Scholarship Council PhD Scholarships: Useful Information (2010/04/09)
• Electric Power Equipment and Services Sector Profile — Beijing, China (2011/06/06)
• Clean Energy Sector Profile — China (2013/01/25)
• Environment Sector Profile — Shanghai, China (2012/11/28)
• The Cleantech Sector in Southwest China (2011/12/21)
• Smart Grid Market Brief — China (2010/10/07)
• Renewable Energy Market Brief — China (2010/07/14)
• Fish and Seafood Market Profile — for East China and Hubei Province (2011/08/16)
• Fish and Seafood Products Sector Profile — Beijing, China (2011/01/27)
Selling to China: A Guide for Canadian Companies 79

• Information Communication Technologies Sector Profile — Guangzhou, China (2013/05/03)
• Update on China’s Mobile Game Market (2012/11/19)
• China — Information and Communication Technologies (ICT) Market Update (2010/12/31)
• Information and Communications Technologies Profile — Chongqing, China (2010/12/31)
• China — Information and Communication Technologies (ICT) Market Update (2010/07/20)
• Metals Minerals and Related Equipment Sector Profile — Beijing, China (2010/09/10)
• Clean Energy Sector Profile — China (2013/01/25)
• Selling to Sinopec (2010/10/20)
• Rail and Urban Transit Market Sector Profile — Chongqing, China (2010/12/31)
• Rail and Urban Transit Sector Profile — Beijing, China (2010/04/16)
Selling to China: A Guide for Canadian Companies 80