As 2021 is coming to an end, and hopefully your plans are almost in place for 2022, we would like to wish you all a happy and prosperous new year! We would also like to remind you that there is still a month before the Chinese New Year (CNY), so you still have some time left to refine those plans. 😉
And as with every other month, we present you the recap email, with a special look into the new year.
Planning for 2022, keep in mind that borders will probably remain closed for much of the year, so don’t count on making any trips to China. The latest news is forecasting a potential opening up only in 2023. In the meantime, we learned from our clients and partners managing operations in China that careful planning is required. Travel difficulties aside, it seems that for those already active in the Chinese market, 2021 was a very good year for doing business in China. Several chambers of commerce surveys show this trend too, with promising findings in their annual reports.
Other hot issues in China are the “decoupling” trend and the growing favoritism towards products ‘Made in China’. Therefore, moving part or all of your manufacturing capabilities to China, could be a smart strategy for the new year. Even if you are not planning on establishing your production or assembly in China yet, make sure you are seriously investing in localizing your products, to gradually grow your local market share.
The soaring prices of international shipping keep breaking records and unfortunately, we are yet to see the light at the end of the tunnel. However, some encouraging signs are reflected in the new land routes that were inaugurated between China and Europe this year, and the Regional Treaty signed between China and ASIAN countries, which would reduce tariffs and taxes of more than 900 traded products.
The PIPL was probably the most talked-about topic in the last few months, making global organizations worry about how it will affect their employees in China. Though the law might not affect HR related-issues as much as we thought, you should still keep up-to-date to comply with local regulations concerning your Chinese employees. In some places around the country, these regulations are currently already in a draft stage (Shanghai, for instance), and we expect to have some more concrete details shortly after CNY.
A friendly reminder for budget planning in 2022 – if you are employing foreigners in China, make sure to consider the Individual Income Tax reform and its effects on foreign employees. Another issue to point at are the social benefits payments for those working in Shanghai.
Last but not least, we want to thank all of our partners and experts who joined us throughout 2021 for the online events, sharing your knowledge and tips on China operations. We are looking forward to seeing you again in January.
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The China Business Circles Team