An Introduction to Doing Business in China 2024Published: December 2023
Doing Business in China 2024 is designed to introduce the fundamentals of investing in China. Compiled by the professionals at Dezan Shira & Associates in December 2023, this comprehensive guide is designed to let foreign investors get familiar with the changes happening in China’s business landscape and explore new methods of doing business in and with China—to identify areas of risk in advance and take steps to prepare for new market opportunities.
Doing business in China has changed dramatically in the past few years. With uneven recovery of the Chinese economy, rising geopolitical risks, increasing supply chain diversification pressure, and evolving tax data compliance regimes—both in China and globally, companies are operating in an increasingly complex environment.
A notable shift emerges as China's FDI flow turned negative for the first time since 1998. In Q3 2023, China’s direct investment liabilities in its balance of payments declined by US$11.8 billion, partly reflecting the fact that more foreign firms are repatriating earnings from China instead of reinvesting them. According to the latest data from China’s Ministry of Commerce (MOFCOM), the actual use of foreign capital declined by 9.4 percent year-on-year between January and October, demonstrating foreign investors’ cautiousness in committing new capital into China.
Nevertheless, China remains among the world’s largest consumer markets and ambitious businesses aiming for global success cannot afford to overlook it. China’s unparalleled supply chains are also not easily replaceable in the short term. Furthermore, the Chinese government has intensified its initiatives to attract foreign investment by optimizing the business environment for international companies and investors.
This explains why despite the decline in the actual use of foreign investment amount, the number of newly registered foreign companies grew by 32.1 percent year-on-year between January and October 2023, with a total of 41,947 new foreign-invested enterprises registered.
Moreover, foreign investment has still grown in certain industries. Manufacturing, for instance, utilized US$40 billion in foreign capital over this period, an increase of 1.9 percent year-on-year. Of this, utilized foreign capital in the medical equipment and instrument manufacturing industry and in the electronics and communication equipment manufacturing grew by 34.6 percent and 14.8 percent year-on-year, respectively. China still presents high-value opportunities for informed executives.
Under these circumstances, it is vital that foreign investors are familiar with the changes happening in China’s business landscape and explore new methods of doing business in and with China—to identify areas of risk in advance and take steps to prepare for new market opportunities. This is the only way investors can stay nimble in an otherwise difficult time.
Designed to introduce the fundamentals of investing in China, this publication is compiled by experts at Dezan Shira & Associates, a specialist foreign direct investment firm providing corporate establishment services, business advisory, tax advisory and compliance, accounting, payroll, due diligence, and financial review services to multinationals investing in emerging Asia.
Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore, Vietnam, and Indonesia. The firm also maintains partner firms across the ASEAN region and in Bangladesh and client liaison offices in the United States, Europe, and Russia.
Doing Business in China 2024 covers the following:
- Establishing and Running a Business
- Tax, Audit, and Accounting
- Human Resources and Payroll
- Cybersecurity and Data Protection
Within these chapters, we discuss a range of different topics that affect doing business in China, including investment models, intellectual property considerations, key taxes applicable for foreign companies, various types of employment contracts, and a chapter explaining the evolving data and cybersecurity compliance requirements in China.