Relocating Your China Business

2 Introduction ALBERTO VETTORETTI Managing Partner Dezan Shira & Associates Hong Kong Office China’s economy is undergoing a structural shift. A massive labor pool, combined with integration into the global trade system, propelled China towards decades of unprecedented economic expansion. Now, China is an increasingly mature economy, and has priorities that go beyond growth at any cost. At the same time, trade frictionswith theUS and a slowing domestic economy are giving foreign businesses challenges unseen in their years of doing business in China. Faced with heightened geopolitical risks, and rising land and labor costs, many foreign investors are looking to restructure their China-based businesses. Restructuring and relocation plans, however, are being expressed in different ways, depending on the nature and needs of the business. Many manufacturers producing labor-intensive goods for export toWesternmarkets are looking to relocate to low-cost Southeast Asian economies like Vietnam and Indonesia. Meanwhile, manufacturersof similar typesof products, but forwhomtheChinesemarket is thefinal destination, might prefer relocation toa lower-cost jurisdictionwithinChina, suchas in the country’s emerging inland regions. On the other hand, businesses that see potential in China’s new economy might upgrade their investments by moving to one of the country’s dynamic coastal cities for more advanced functions thatmaypreviouslyhavebeenexecutedprimarilywithin their homemarkets. In this issue of China Briefing magazine, we walk foreign investors through the process of relocating their China businesses. First, we look at why businesses might relocate, before identifying where they are ultimately moving to. Then, we guide investors on how tomanage the legal, tax, and HR issues that arise during relocation. We hope this magazine serves your business well in achieving its relocation goals. With kind regards, Alberto Vettoretti Credits Publisher / Alberto Vettoretti Managing Editor / Adam Pitman Editor / Qian Zhou Contributors / Vivian Mao, Allan Xu, Paul Dwyer Design / Belén Rodríguez Reference China Briefing and related titles are produced by Asia Briefing Ltd., a wholly owned subsidiary of Dezan Shira Group. Content is provided by Dezan Shira & Associates. No liability may be accepted for any of the contents of this publication. Readers are strongly advised to seek professional advice when actively looking to implement suggestions made within this publication. For queries regarding the content of this magazine, please contact: editor@asiabriefing.com All materials and contents © 2018 Asia Briefing Ltd. Asia Briefing Ltd. Unit 507, 5/F, Chinachem Golden Plaza, 77 Mody Road, Tsim Sha Tsui East Kowloon, Hong Kong. www.asiabriefing.com www.dezshira.com www.aseanbriefing.com www.india-briefing.com www.indonesiabriefing.com www.vietnam-briefing.com www.china-briefing.com