Investment Basics in China Know what you are looking for Jane Zhao Jelart Enterprises Inc., U.S.A. October 13, 2004

Why Invest in China Material Resource Rich and abundant in some; Sparse and expensive in others Labor Cost Basic living standard vs. minimum wages Foreign enterprises vs. local enterprises Employee vs. employer Enterprises vs. government Technology vs. skills

Why Invest in China (cont’d) Market Potentials Time and budget needed for market penetration Partners or Competitors Consumer Trend Tax Relief and Incentives Offered Tax Reduction Governmental and local incentives

Where to Invest in China The Zones 57 National Level Zone 137 Provincial Level Zone 12 Tax Free Zone 14 None Coastal Border Zone Second Tiers inland provinces

Where to Invest in China (cont’d) Preferences High tech/new technology advanced equipment larger investment employment Back ground of the area Education/Migration Work Force/Industrial History

Where to Invest in China (cont’d) The Government Administration's Agenda National Priority Provincial Priority Political Career Monumental Honor

How to Invest in China Get your own books ready Get your counterpart's books if you are looking for a JV The understanding of registered capital and working capital Go through the registration procedure Wholly owned enterprises should be the best and fastest vehicle

How to Invest in China (cont’d) Intellectual Property Protection Never under estimate the risk high automation/ low tech consumer products high demand products Trademark and patent to protect yourself qualified law firm lengthy procedure Use the law enforcement to eradicate the offenders