Shipment Speedup

On July 1, China will for the first time integrate customs clearance in the Beijing-Tianjin region in order to speed up cargo clearance. According to an agreement by the customs authorities in Beijing and Tianjin, the closest port city to the capital, imports and exports will no longer have to rush between the two cities in order to clear cargo. Businesses based in Beijing that import or export cargo from Tianjin can go through declaration and inspection procedures in a single day, and the same will apply to Tianjin-based companies trading from Beijing, said Xie Jinyong, deputy head of the Beijing Customs. The cargo clearance trial project will be gradually expanded from Beijing and Tianjin to neighboring Hebei Province.

Bigger Stakes

Foreign investors can own more of a listed Chinese company, after rules were relaxed to draw long-term overseas capital. Qualified Foreign Institutional Investors (QFII) and Renminbi Qualified Foreign Institutional Investors (RQFII) can hold up to 30 percent of a company, under a guideline issued by the Shanghai Stock Exchange in March. That had earlier been capped at 20 percent of total outstanding shares in a company. Foreign investors will soon also be able to invest in more financial products, including asset-backed securities and preferred shares, said the authority. QFII and RQFII are programs for licensed foreign investors to buy and sell yuan-dominated A shares on the Shanghai and Shenzhen stock exchanges.

Tax Breaks

More small businesses in China will enjoy tax breaks as part of the governmentís efforts to address the pressure on economic growth, said a joint statement of the Ministry of Finance and the State Administration of Taxation in early April. Any company with annual taxable income under 100,000 yuan ($16,000) will have its business income tax halved starting from January 1, this year, to the end of 2016, according to the statement, adding the move is aimed to promote economic growth and create jobs. This means the tax breaks apply to more small businesses. Chinaís State Council decided in 2011 that any company with annual taxable income under 60,000 yuan ($9,600) will have its business income tax halved during 2012-15.

Arbitration Rules

Consistent with international standards, China (Shanghai) Pilot Free Trade Zone Arbitration Rules, tailored for the Free Trade Zone as claimed by legal experts, take effect on May 1. The rules, which consist of 10 chapters and 85 articles, include innovations that are brought into China for the first time and consider the characteristics of businesses in the zone. Under the rules, people can choose either outside arbitrators or arbitrators from the panel of mediators, which is composed of 625 arbitrators, including 199 from 37 foreign countries and regions. Besides, companies involved in commercial disputes relating to less than 100,000 yuan ($16,000) can apply for a summary procedure of arbitration, meaning a lower service fee and an earlier date for the case to be heard.

Micro-company Credit

Chinaís central bank has issued a guideline to step up the creation of a credit system for serving small and micro-sized companies and farming households. It aims to help small companies and farmers with good credit secure loans, and promote their healthy growth, the Peopleís Bank of China (PBOC) said in a statement in late March. Relevant efforts started from 2006. By the end of last year, the central bank had compiled credit archives for 2.43 million small and micro-sized companies and 151 million farming households, the statement said. The PBOC has chosen 31 cities and 32 counties as pilot zones to encourage innovation in establishing the credit system.

Foreign Business Approval

Shanghai Pudong New Areaís approval process for establishment and change of projects backed by foreign capital has shortened to two days, following the governmentís call to streamline the administrative process and vitalize the market. This will make Pudong, one of the countryís earliest reform testing grounds, the fastest hub to provide market access to multinational companies. China (Shanghai) Pilot Free Trade Zone previously had the record of a minimum four days for a company to receive business license.

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