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ARTICLE · 26 NOVEMBER 2008

2008 Perspective – China Trends

Blake, Cassels & Graydon LLP
Blake, Cassels & Graydon LLP
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Blake, Cassels & Graydon LLP

Blake, Cassels & Graydon LLP

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Identifying trends in the dynamic legal and business environment that characterizes China is a challenge.

ChinaStrategy
Blake, Cassels & Graydon LLP
Blake, Cassels & Graydon LLP
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Copyright 2008, Blake, Cassels & Graydon LLP

Identifying trends in the dynamic legal and business environment that characterizes China is a challenge. Nonetheless, the following six significant trends will have an impact on how foreign investors conduct their business in China.

1. Shift from a Manufacturing Base

China's economy and its impressive growth rate since its opening up in the late 1970s has been based upon manufacturing and export and processing trade, a system built on an abundance of inexpensive labour and tax breaks and other incentives made available to foreign investors. Now China is actively working towards transitioning from a manufacturing-based economy to one that is positioned higher on the global value chain. China's new tax laws, which entered into force in early 2008, phased out traditional tax incentives for manufacturers and exporters. The incentive structure was repositioned to allow tax breaks to companies engaged in specific industry

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