China Focus

Why China?

A Railway of Opportunities

Located in eastern Asia on the western shores of the Pacific Ocean, China holds a vast territory endowed with rich resources and diverse products. With a land area of approximately 9.6 million square kilometers, China is the world’s third-largest country territorially. China’s land frontier stretches for 22,800 kilometers, bordering 14 countries; China’s territorial waters border eight countries by sea. The eastern and southern continental coastlines span over 18,000 kilometers, with enclosed sea and near-shore seas exceeding 4.7 million square kilometers in area. More than 7,600 islands of different sizes are scattered across this area, among which Taiwan is the largest, with an area of 35,798 square kilometers.

China is designated one of the world’s largest economies. With an annual GDP growth of more than 9% on average for the previous three decades, the sheer pace and scale of its development had been unprecedented. Despite its slackening growth since 2015, it still manages to boast a healthy growth of 6.5% when pitted against other major global economies. In addition, a cheaper yuan as a result of the recent devaluation helps to lower operating costs in China and enhance the competitiveness of export sales.

Investors and the likes also wait with eager anticipation to jump on board the Shenzhen-Hong Kong Stock Connect train launched in December 2016, which grants overseas investors access to the Shenzhen Stock Exchange whilst allowing mainland brokers to trade stocks in Hong Kong. This adds to the fleet of “through trains” with the first one between Shanghai and Hong Kong introduced in 2014. Further developments that are also being hailed as positive milestones in the liberalisation of China’s capital accounts include the setting up of offshore RMB centres in major financial hubs, such as Hong Kong, Singapore and London, in order to promote the use of the yuan in international trade; and the admittance of the yuan into IMF’s select basket of Special Drawing Rights (SDR) reserve currencies alongside the euro, dollar, pound and yen, which will pave the way for the enshrining of the yuan as an international currency.

China encourages foreign investors to invest in China in accordance with the law. China also protects the legitimate rights and interests of foreign investors and foreign-invested enterprises in accordance with the law. China has always followed the rule of law in utilizing foreign investment.

Massive market size

Efficient transportation network

Sophisticated supply chain infrastructure

Rising innovation capabilities

Sufficient number of high-quality talents

Continuously relaxed market access

Full-fledged foreign investment promotion service system

Abundant special economic areas

China's Market Potential

Consumer Market

China has grown into the world's second-largest consumer market, the largest trader in goods, the second-largest trader in services, the holder of the largest foreign exchange reserves, and the second-largest economy in use of foreign capital.

Contribution to the World Economy

From 2013 to 2018, China contributed an average of 28.1% to global economic growth every year, ranking first in the world. In 2018, China contributed 27.5% of the global economic growth, up 24.4 percentage points from 1978, becoming the world economy’s largest engine for growth.

Middle-Income Population

In 2019, the total population on the Chinese Mainland was 1.4 billion. With the largest middle-income population in the world, China is the world’s most promising consumer market. In the same year, final consumption expenditures contributed to 57.8% of economic growth, 26.6 percentage points higher than gross capital formation.

Role of the Services Sector

Since the 2008 global economic crisis, big changes have taken place in China’s economic structure. In 2015, for the first time, the services sector contributed over 50% to China's GDP. China’s services sector accounted for 54 per cent of gross domestic product (GDP) in 2019. It includes various service industries such as transport services, information services, investment services and health care, as well as arts, entertainment and recreation.

Transformation and Upgrade in Manufacturing Industry

China has established an independent modern industrial system with complete categories of industries, including 41 large categories, 207 medium sectors, and 666 small subsectors, making it the only country covering all industrial categories indexed in the United Nations (UN) International Standard Industrial Classification of All Economic Activities (ISIC).

New Business Types Restructuring Economic Development Model

In recent years, the Internet, big data, and artificial intelligence have been deeply integrated into the real economy. New hotspots like intelligent retail and production capacity sharing are continuously emerging. Technological innovations are nearly non-stop in such fields as mobile communication, the Internet of Things, blockchain, smart wearables, and artificial intelligence, while their application scenarios in traffic, medical services, tourism, and smart city construction are increasingly sophisticated.

CW's China Focus

By keeping abreast of changes and developments in the macro environment and carefully assessing the impact they have on our clients, we are ideally placed to help and guide overseas enterprises in sailing through the mainland Chinese market.

With our presence in Hong Kong, Guangzhou, Shenzhen and Shanghai, we can help you:

  • to determine the feasibility of the legal entity structure and establish operations in mainland China;
  • to ensure compliance with audit and other assurance requirements;
  • to manage tax-related obligations in accordance with local taxation laws, regulations and practices;
  • to ensure compliance with local customs and excise laws and regulations;
  • to take care of time-consuming business processes, e.g. accounting, payroll and other HR operations.

Our China Consultancy Team, a team of multinational, multilingual and experienced professionals with accounting advisory and consulting capability, offers practical insights to help our clients make better judgement with their investment and expansion plan.


Articles & News

China Updates — 12 January 2023

FAQs on Employment Concerns During the Covid-19 Pandemic

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