Doing Business and Investing in ChinaWelcomeDear Readers,PricewaterhouseCoopers China is proud to present you with the latest “Doing Business and Investing in China” guide.China is the most dynamic trading economy in the world, so it should be no surprise that companies who are serious about expanding and remaining globally competitive continue to head to China. Ever since 1978, when Chinas economic reforms began, the nation has been developing at an unprecedented pace. Today, Chinas economy continues to power ahead, presenting ever greater opportunities for foreign investors. In fact, Chinas Foreign Direct Investment increased to about US$75 billion in 2007, while merger and acquisition activities in China also continue to grow in strength.As China rapidly transforms to becoming one of the worlds largest and fastest growing marketplaces, and a home for the worlds emerging global companies, the question on most executives minds is this: How can I become part of the action at this unique time in Chinas history?Multinational investors have entered into an era where they are facing new challenges in operating their business in China issues of increasing complexity that touch on the war for talent, local market expansion and competition, risk management and frequent regulatory change. These issues form the foremost concerns for corporate executives in China.This guide has been prepared to assist foreign investors who are taking initial steps to establish and grow their business in China, as well as those who have significant operations in China and are interested in being updated with the most recent important changes in tax, accounting and investment related regulations.Doing Business and Investing in ChinaWelcomeAll the chapters in this guide are contributed by the practice leaders in the PricewaterhouseCoopers China Assurance, Tax and Advisory lines of services. The material contained in this guide was assembled on 31 December 2007 and, unless otherwise indicated, is based on information available at that time.We hope you find this guide practical and insightful and that it will become your regular reference material. That said, please note that the guide is not intended to exhaustively cover the subjects it addresses but rather to answer some of the important, broad questions that may arise for investors. When specific problems occur in practice, it will be necessary to refer to the specific laws and practices and to obtain appropriate professional advice.Please contact us at one of our 12 offices in China should you wish to know more about how we can help you do business in China. We look forward to helping you succeed in one of the fastest growing emerging markets in the world.Silas Yang (楊紹信) Executive Chairmanone yuan equals 100 fen.Notes of the latest version are issued in denominations of 100 yuan, 50 yuan, 20 yuan, 10 yuan, 5 yuan, 2 and 1 yuan as well as 5 jiao, 2 and 1 jiao. Coins are in denominations of 1 yuan, 5 jiao, 1 jiao, 5 fen, 2 and 1 fen.Doing Business and Investing in China18Peoples Republic of China A ProfilePrevailing exchange rates as at 3 April 2008 were as follows:Table 1Currency American DollarAustralian DollarBritish PoundCanadian DollarEuroHong Kong DollarJapanese YenNew Zealand DollarSingapore DollarSouth Korean WonSwiss FrancTaiwan DollarRMB 7.01856.410713.91566.899110.96150.90120.0682935.54815.09030.0071936.91610.2311using values from 3 April 2008. Source http:/www.x-rates.comInternational TimeAll of China is on Beijing time. China is 8 hours ahead of Greenwich Mean Time and 12 -13 hours ahead of US Eastern Standard Time.Business HoursIn most cities in China, businesses and government offices are usually open Monday through Friday and from 8:00am to noon and from about 1:00pm to 5:00pm, although this can vary depending on the organisation. China has a five-day working week consisting of 40 hours. Banks are open Monday through Friday from 9:00am to 5:00pm. Shops are generally open every day.Doing Business and Investing in China19Peoples Republic of China A ProfileMost of Chinas business world slows down considerably during the spring festival in late January and early February. Business visitors would be wise to avoid this two to three week holiday period.Statutory HolidaysChinas public holidays are:January 1 New Years DayJanuary/February (depending on the lunar calendar) Chinese New Year (3 days)April (depending on the lunar calendar) Qing Ming FestivalMay 1 Labour DayJune (depending on the lunar calendar) Duan Wu FestivalSeptember (depending on the lunar calendar) Mid-Autumn FestivalOctober 1-3 National DayNote that in addition to the holidays listed above, individual provinces may observe provincial holidays.Weights and MeasurementsConducted mainly in the metric system.Dates and NumbersFor dates written in English, sequence of day, month, year is normally adopted, e.g. 15 June 2007 or 15/06/2007. In Chinese characters, the reverse is the case.Doing Business