Factors that may influence your choice of location include local infrastructure, land prices and availability, human resources, local government policies and attitudes, location of your joint venture partner (if any), proximity to suppliers, and proximity to your target market (if you plan to sell your products domestically).
Perhaps even more importantly, however, it is crucial that you locate your company within a designated special investment zone in order to take advantage of significant preferential tax rates, benefits and policies available to foreign investors located in these areas (although these are being phased out over the next few years in line with China's WTO commitments, it remains unclear whether China will raise FIE tax rates, lower general tax rates, or simply use nationality-neutral standards that will nevertheless disproportionately benefit FIEs). There are several types of special economic areas:
Special Economic Zones: Shenzhen, Zhuhai, Xiamen, Hainan and Shantou were designated as Special Economic Zones in the 1980s in order to give local authorities the ability to offer policy and tax incentives to foreign investors. With the rapid progress of economic liberalization throughout China, these zones have gradually lost their competitive advantages, although Shenzhen (next to Hong Kong) remains a popular investment destination.
Export Processing Zones: Goods in these zones may be imported for processing without customs declarations or duties as long as the processed products are then exported.
Free Trade Zones (bonded areas): These areas are treated as outside the customs territory of China, meaning that imported goods are exempt from customs duty and Value Added Tax until they are transferred to an area within China's customs territory.
Economic and Technological Development Zones: These zones offer tax incentives to technology-intensive enterprises.
Hi-Tech Development Zones: These zones also target technology-intensive investments.
Looking to China's Hinterlands
Central and western China have been starved of foreign investment compared to the relatively well-fed coastal areas. In recent years many of these localities have responded by offering incentive packages that are in some cases quite a bit more generous than incentives offered to foreign investors ‘back east'. Beijing is now actively encouraging investors to pour money into these areas in order to distribute wealth more evenly throughout the country and stem the flow of economic migrants to the coast. The natural advantages of these areas include low land and labor costs, ready availability of power (in some areas), large labor pools, and proximity to giant markets (in some areas). Pitfalls to watch out for in some of these areas include insufficient infrastructure, local corruption, and a shortage of educated employees (many of these areas, however, can boast large educated workforces and surpluses of skilled labor).
Business In China Culture
For whatever reason you have decided to set up home in China, your own personal choice or being posted by your host organization for business, here are a few guidelines that may be helpful to make the transition as smooth as possible. The suggestions below are relevant to those who are looking at renting an apartment rather than purchasing.
Finding an agent
If you do not have any personal referrals from friends or colleagues, the best bet is to take some of the free magazine publications available at bars and hotels. These are English magazines with all sorts of handy details on housing and social life (restaurants, bars, events etc.).
Some of the most popular editions are: Time Out Beijing (monthly), That's Beijing (monthly), City Weekend (bi-weekly): all of them are also available online.
Agencies usually charge a fee, which is settled with the landlord. Do not pay anything to the agency in advance since most likely you will never be able to find the person again. Domestic agencies will accept your request only if you are looking at apartments of $120 (per month) and more, foreign agencies cater for rentals of $500 and above.
Good agencies will be able to provide you with information on the benefits and drawbacks of the area and building complex. They will also show a lot of patience understanding your needs and eventually provide you with a substantial choice of apartments suitable for you.
Rental is usually paid 3 months ahead to the landlord and contracts signed for up to 1 year. Landlords may be reluctant to sign a short-term contract. After you have found accommodation that suits you, make sure that you are registered at the local office of the Public Security Bureau (PSB: pai chu suo). The process of registration is quick and free. If you fail to do so you will be fined up to RMB 500/day ($65) and you will not be able to renew your visa.
Working to a budget
These suggestions are just for your reference. There are many more options than those listed below, this is only to give you an idea of what kind of housing you may be looking at according to your budget.
$120 - $250 per month
You will be looking at areas that are outside of central Beijing, Chinese housing, dirty buildings and elevator service that stops at midnight (to name but a few). Some other inconveniences that may follow are: not being accepted by the neighborhood (there is an assumption that all foreigners have lots of money and that they should not be in cheap housing), inconvenient traffic, poor access to foreign food, market etc.). However, you will be immediately immersed in the Chinese lifestyle, and so will quickly gain insight into the local community and Chinese culture.
$250 - $400 per month
Some suggestions on areas you may be looking at
Maizidian
Situated behind the Great Wall Sheraton Hotel: quite a central location, this apartment complex has long been the first choice with foreigners for accessible and convenient low budget accommodation. There are many different apartments you can find, even some duplex at as low as $250/month.
Wang Jing Xin Cheng
Closer to the airport, you can find 3 bedroom apartments with great facilities. Traffic to the city center can be a nightmare though.
Dongzhemen Wai
Old apartments, very central but may be a bit dirty for those interested in better living conditions.
$500 - $1000 per month
Apartments for this price give you the greatest flexibility in choosing the location. Be specific in your demands and agents will be happy to show you around. Traffic in Beijing is a real nightmare so find something close to your work, or if you plan to work at home, look at conveniences such as night life, markets, shops with foreign food (such as dairy produce, fresh meat, good wines etc.)
$1200 - $2000 per month
With this budget you will be able to look for an apartment in one of the Foreign Compounds. There are 5 of them situated in Chaoyang District and near embassies: Tayuan Compund, San Li Tun Compound (2 of them), Qijia Yuan Compound and Jianguomen Wai Compound. There are a lot of embassies as well as business offices and press agencies located there. Until 1997 foreigners were allowed to live only in these five areas surrounded with big walls and strong security. If you are interested in mingling with Chinese people, they will not be allowed to enter the gates without you, which may be inconvenient.
There are other areas with similar settings that you will be able to find housing at. The only difference is that gates are open to everybody as long as you give details of the host (building and apartment number). Some apartment blocks available within this price range: Sunshine 100, Suncity, Lianbao, East Lake Villas etc, all located in the central area.
$3000 per month - and above (Top end housing)
Enjoy the luxury of living in Beijing! Housing at the top end of the market can reach as high as $10-20 000 per month. Villas, courtyards the choice is yours.
Villas are situated closer to the airport, with somewhat fresher air and a better chance to see clear skies (Beijing is very polluted and that may be the biggest problem of all to get accustomed to for those who want to live here, besides the traffic). It is quite remote, requires a car and does not give much feeling that you live in Beijing (quite an American style of architecture)
Courtyard houses are the latest fashion. They are converted typical old-style Beijing housing, where 10 or so families used to live together sharing the same yard, public tap and toilet. In recent years the fast paced Beijing real estate development demolished the majority of courtyard houses, and the few remaining ones have now been newly renovated and are something of a status symbol. What used to be cramped housing with poor facilities is now the ultimate in luxury for one family, who can step outside and enjoy the peace of the yard in the middle of the city centre. Pollution is still a problem but since most courtyard houses are situated in local Chinese communities, it combines the advantages of mingling with the locals and enjoying the benefits of good fengshui.
Both Chuck Thunder & Dalida Turkovic are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Chuck Thunder has sinced written about articles on various topics from . David Carnes is licensed to practice law in California. He speaks and reads Mandarin Chinese and has several years experience working with Chinese law firms and Sino-American joint ventures. His website is called. Chuck Thunder's top article generates over 1300 views. to your Favourites.
Dalida Turkovic has sinced written about articles on various topics from Organizational, Work Life Balance. Dalida Turkovic - Master Coach and Master NLP Practitioner has lived and worked in China since 1990. Please visit her business coaching website
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