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New
Opportunities in China for Online Businesses |
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In 2013 China established a Free Trade Zone (FTZ) pilot in
Shanghai. The
zone extends for 29 square kilometers on the outskirts of
Shanghai. The
zone allowed for the for foreign investment in industries
such as finance, telecommunications, shipping, etc.
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Not all industries were permitted access to the Free Trade
Zone. Some 139
industries are still barred from foreign investment or are
subject to stringent government approval before foreign
investment is allowed. |
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After a visit to the FTZ by Premier Li Keqiang in September
2014 China decided to further open 27 sectors to foreign
investors in the Shanghai FTZ.
The relaxing of restrictions include lowering the
foreign investment threshold or allowing for wholly
foreign-owned enterprises.
These industries include transportation,
manufacturing of certain items, inport/export, wholesale and
distribution, engineering services, oil exploration, lumber,
luxury cruise ships and yachts, aircraft maintenance,
photography services, etc. |
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However, the one change that stood out is the one that will
probably be the most attractive to small businesses since
many startups are online businesses.
Mail orders
and online sales of general goods is no longer a
restricted industry for foreign investors.
This means that foreign companies can setup their
online businesses in the FTZ without having to form a joint
venture with a local chinese entity in order to do business
in the country.
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This is an opportunity for online businesses to tap into the
Chinese market and expand their customer base. |
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You can find more details of the changes by visiting
Mondaq. |
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Sources:
Mondaq
MAYER BROWN JSM
Miller Canfield
By Jack
River
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