China Country Briefing

8 Pages 1884 Words

t half of GDP; while communications, computer, and electronic components sectors are on the rise. Prices in housing, health, education, and other needs are on the rise because people want to put money in these things; as opposed to the past when most people spent their money on eating-out, because they are use to the government covering many of their needs such as their free housing.
Investment in infrastructure is a key to china’s growth economically. China has many plans for roads, railways, ports, telecommunications, oil and gas, and coal. Infrastructures projects that are supported by the state are considered “safe” investments anywhere between fifteen to twenty percent of infrastructure investment is what official would like to see from foreign investors.

2. Trade Details
1. Trade barriers
a. The Customs General Administration (CGA) assesses and collects tariffs.
2. Import tariff rates:
a. General tariff
b. Minimum Tariff (most favored nations)
i. US is in the minimum (Reciprocal preferential tariff clauses
3. VAT (value-added tax) or business tax
a. Foreign and domestic companies pay these depending on their nature of business
i. VAT applied to companies engaged in:
1. Import-export
2. Production
3. Distribution
4. Retailing activities
4. The Bilateral Agreement
a. China has to eliminate existing quotas with US dealing with top products
5. Import quotas
a. Gradually being eliminated
b. Over forty import quota categories
i. Automobiles, grains, edible oils, and some textile products
6. High tariffs
a. Motor vehicle may receive an 80% tariff
i. High because china is trying to become competitive in this industry
ii. Eventually it will fall to about 25%
b. US agriculture fell from 31.5% to 14.4%
c. When china signs the Information Technology Agreement (ITA); tariffs on goods will cease to exist
7. Tariff rate quotas
a. Put on some agricultural imports
8. Import licensing
a. Many have been ...