- Sourcing in China in 2020
- New Foreign Investment Law
- Social Credit System
- Will the Shanghai Import Fair make a dent in the China trade surplus
- Scandic Sourcing's Shanghai Office is Hiring!
- China's new cybersecurity law
- 6 tips to avoid problems with your Chinese suppliers
- Register your trademark in China before someone else does!
- Stricter control of HR compliance – get in line or get in trouble
- New law for companies to check suppliers code of conduct
- Scandic Procurement Solution
Scandic Sourcing has developed a new Procurement Solution on a subscription basis. For a monthly sum, your company gets a package of procurement and supplier management services to ensure that your supply chain in China runs safely and without interruptions.
Scandic Sourcing evaluates your supplier pool to identify potential risks and prevent interruptions in your supply chain. We make sure to communicate directly with the factory owners or the management to circumvent costly middlemen and third-party agents. We can communicate directly with all layers of the suppliers organisation to get you the best price and conditions and build transparent and long-term relations with the suppliers in the process to ensure favorable working conditions.
We also handle quote requests and organise the bidding process for new orders. We also do continous research to keep you updated on the cost structure for your industry in China, including raw material /material costs and market price.
Scandic Sourcing can be the partner in China you can trust; it doesn’t only save you regular trips to China or having to station employees here, but also makes sure your supply chain is managed cost-efficiently and that it is stable and risk free. The subscription service also includes reduced rates on our regular services such as supplier searches, field audits and supplier code of conduct programs.
As the Chinese stock market went plummeting in a 23% fall during the first week of trading in January of this year, doubts have been raised about the state of the Chinese economy and what broader implications a general slowdown might have. After giving a brief overview of the current situation, Scandic Sourcing talks to renowned financial journalist Roger Aitken to get a grip on where the Chinese economy is heading.
Stock market chaos
The Shanghai composite index is down almost 40% since its June 2014 high, and growth is continuing to decline especially in the manufacturing sector. Beijing’s unpredictable response to the issues are sometimes contributing factors to the fall such as the use of circuit breakers which shut down trading once the market had fallen below 5%. This new practice caused even more panic and was quickly suspended.
The January crash came after a weak year of 2015 that saw the lowest growth numbers in a quarter century, halting at 6.8% after a slow last quarter with especially poor growth in the industrial sector. This ties in to the broader story of China’s ambition to transition from a manufacturing driven economy to a consumption driven one. Thus, large parts of the Chinese service sector is growing, while traditional industrial sectors continue to decline.
What exactly is 'Smurfing'?
The shaky economy has also triggered a mass exodus of capital last year which continues in 2016 as well. Chinese citizens are not entirely free to take capital out of the country, though many are trying to do so illegally. Currently, the cap is set to $50 000/year. This is overcome by a procedure known as “Smurfing”, where wealthy Chinese employ the services of relatives to help them get money out of China. One woman, using than 140 relatives and friends was able to convert $7 million from renminbi into dollars. Over the last year, companies and individuals moved nearly $1 trillion from China which has continued to lessen confidence in the Chinese economy.
The Chinese central bank is fighting the pressure by selling dollars from its currency reserves and purchasing renminbi. China's foreign currency reserves is taking a toll, sinking by $108 billion in December and an additional $99 billion in January, to $3.23 trillion down from $4 trillion a year and a half ago.
To straighten out where things are headed and what implications China’s economic turmoil might have for the world at large, Scandic Sourcing talks to financial journalist Roger Aitken, former Financial Times staff writer in London who writes on markets, exchanges, trading and IT. Currently he contributes to Forbes and other titles.
If China’s economy keeps stumbling, is there a risk for a domino effect a causing global recession?
It seems like the extreme stock market turmoil has not caused any great harm to China’s economy and the individual Chinese saver. How come?
The Swedish cleantech company OrganoClick wanted to find a Chinese distributor of finishing treatment Chemicals for their environmental friendly functional material and hired Scandic Sourcing who conducted a distributor search in China. After Scandic Sourcing made their recommendations, OrganoClick signed a distribution deal with a Chinese distributor with a large customer base in Shanghai for the sales of OrganoClick’s patented water repellant OrganoTex®.
OrganoClick is a public Swedish cleantech company listed on Nasdaq First North. The company develops, produces and markets functional materials based on environmentally friendly fiber chemistry. Examples of products that are marketed by OrganoClick are the water repellent fabric treatment OrganoTex®, the flame and rot-resistant timber OrganoWood® and bio composite materials. OrganoClick was founded in 2006 as a commercial spin-off company based on research performed at Stockholm University and the Swedish University of Agricultural Sciences within environmentally friendly fiber chemistry. OrganoClick has won a number of prizes, such as "Sweden's Most Promising Start-up" and "Sweden's Best Environmental Innovation", and has also the WWF "Climate Solver" award and has also appeared for two years on the Affärsvärldens and NyTekniks list of Sweden's top hottest technology companies.
“The cooperation that now starts with Shanghai Amazingtex Trading Co, Ltd is a good first step for us in Asia. We will now continue our work to set up distribution networks in Taiwan, South Korea and Japan" - Mårten Hellberg, CEO OrganoClick
OrganoClick has as part of their expansion focused on the Asian markets through co-operation with local distributors in China, Taiwan, South Korea and Japan. About 77% of the world’s total production of functional textiles is produced here; China is the dominant player with more than 15.000 textile factories, the largest concentration of which can be found in Shanghai.
OrganoClick wanted to find a Chinese distributor for their durable water repellent that is used for the production of OrganoTex® and hired Scandic Sourcing to do a distributor search for the Chinese market.
Scandic Sourcing identified over 50 companies according to the specifications made by Organo Click and qualified 12 possible partners.Scandic Sourcing put each possible partner through a detailed survey and scored each one according to a number of specifications and shortlisted the 5 highest scoring candidates.
OrganoClick reached an agreement with one of the distributors on the short-list that was their best fit and also had a broad customer network in China. "This is a first important step for us in our ambition to get a good geographical distribution of our textile products and technologies on the Asian textile market”, says Mårten Hellberg, CEO OrganoClick in a Press Release. “The cooperation that now starts with Shanghai Amazingtex Trading Co, Ltd is a good first step for us in Asia. We will now continue our work to set up distribution networks in Taiwan, South Korea and Japan".
The Swedish Plastic Component company KB Components is in a start-up phase in China and needed help to construct and decorate an office inside their factory in Wuxi, China. They hired Scandic Sourcing who provided a project manager to oversee the project, attain local permits, and handle negotiations with third parties. With the help of Scandic Sourcing’s project management, the office was constructed and completed within the time frame and the budget set out by KB Components.
KB Components is one of the leading suppliers in Scandinavia of advanced plastic components with their bulk of their operations located in Sweden and Lithuania. As part of a global growth strategy, KB Components is following their customers and establishing factories locally where their customers operate. Thus they have established a factory in Wuxi, West of Shanghai to reach the Chinese market. Their main focus is to construct a factory that is comparable in standard with other factories in the KB-group. KB Components also needed to establish an office in the factory to gather all parts of their staff under one roof and hired Scandic Sourcing to facilitate the construction, project manage the day to day construction, and to negotiate and handle the decoration of the office.
Scandic Sourcings project manager Edvard Olsson negotiates with the design firm in charge of decorating the office.
Edvard inspects the work inside KB's factory.
The project manager that Scandic Sourcing provided had three main goals: to ensure that the construction and decoration were done according to the client’s specifications and requirements, aim to have the factory ready for use by October 31, 2015, and to minimize the clients cost and risk. These targets were reached and the construction was finished on time, ready to serve KB Component's China expansion.
”Scandic Sourcing have handled and followed through with the project in a detailed and professional manner and have during the whole project had an open and clear communication. This has given us good insight and lessened our concern in the headquarters in Sweden, which has been important since this is a green-field operation", says Robert Ramner, CEO at KB Components about Scandic Sourcing's project management.
The finished result
There are many types of visas to China, (C, D, F, G, J1, J2, L, M) etc. according to all circumstances, but if you are visiting on business, you should apply for an M visa. Typically the M-visa is for 90 days, and can be extended to up to a maximum of 180 days without leaving China.
Original passport with at least six months of remaining validity and four blank visa pages
2. Visa Application Form and Photo
3. An invitation letter which contains:
Information on the applicant (full name, gender, date of birth, etc.)
Information on the planned visit (purpose of visit, arrival and departure dates, place(s) to be visited, relations between the applicant and the inviting entity or individual, financial source for expenditures)
Information on the inviting entity or individual (name, contact telephone number, address, official stamp, signature of the legal representative or the inviting individual). These documents may be handed over as photocopies, but in some cases the consulate will require the original document.
4. A copy of the Chinese firm’s business license
5. A business card with your company’s name and contact information (telephone, email, etc)
If you want to go to China on a tourist visa you should apply about at least about a month before departure and the application can be handled either by yourself or through an agency. To complete the application you need a passport valid for at least 6 months, and a photocopy of it, as well as a properly filled out visa application, two passport photos, a return ticket, a hotel booking for at least the first night, and a written travel plan. You can alternatively present an invitation letter from a contact with a Chinese residence permit instead of the hotel booking if you are visiting a friend.
If you stop over in China for three days or less, it’s possible to do so without a visa. This is only possible in the following cities and if you stay within the city limits:
Beijing (Beijing Capital International Airport);
Shanghai (Shanghai Pudong International Airport or Shanghai Hongqiao International Airport);
Guangzhou (Guangzhou Baiyu International Airport);
Chengdu (Chengdu ShuangLiu International Airport);
Chongqing (Chongqing Jiangbei International Airport);
Shenyang (Shenyang Taoxian Internatioanl Airport);
Dalian (Dalian International Airport);
Xian (Xian Xianyang International Airport);
Guilin (Guilin Liangjiang International Airport);
Kunming (Kunming Changshui International Airport);
Hangzhou (Hangzhou Xiaoshan International Airport).
Besides a valid passport, you’ll have to have a visa for your destination country (if required) and an airline ticket – with a departure time within 72 hours, – for the country you are traveling to.
Note that the countries of origin and destination cannot be the same. For this reason a ticket Rome-Shanghai-Milan won’t allow you an exemption; you’ll need a ticket such as Rome-Beijing-Tokyo or Rome-Shanghai-Seoul. The final destination can also be Hong Kong, Macau or Taiwan.
How do I request the 72 hour exemption?
You can forward your request for transit to your airline in advance, so that the airline can declare this to the Immigration Inspection prior to your visit. You will be granted a transit permit at the airport if you meet all requirements. NOTE: Beijing Capital International Airport has now changed this procedure; passengers can apply directly for 72 hour free transit permit after arrival at the airport.
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