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Chinese Company Registration & Formation

Earlier this week, Beijing led the next dance step in the tango with the Trump administration over trade tariffs. China has published a proclamation detailing its position on China’s corporate formations and practices entitled “The Facts and China’s Position on China-US Trade Friction” which may actually attract a new type of industry seeking Chinese Company registration.

The proclamation was sectioned off into six chapters, one dedicated to “trade bullyism practices” of the Trump administration, but more importantly was the Chinese position. There is still much potential for Setting up wholly foreign owned businesses as China seems eager to negotiate and bring settlements that are “mutually-beneficial and win-win cooperation between China and the U.S.” as reads the very first opening chapter. The Chinese government is still fully open for business serving to reassure those looking to start a foreign enterprise in China.

Wholly Foreign Owned Enterprises

The official position on China’s company formation “is the hope of the government and people of China to promote business cooperation and develop stronger ties with the US … (as) a fast-growing China-US business relationship should be addressed with a positive and cooperative attitude, through bilateral consultation or the WTO dispute settlement mechanism, in a way acceptable to both sides.” detailed in the final section of the document.

This declaration is mainly in response to the Trump administration imposing new 10% tariffs on $200 billion worth of Chinese goods, spanning thousands of products, including food seasonings, baseball gloves, network routers and industrial machinery parts. China then retaliated immediately with new taxes of 5% to 10% on $60 billion of US goods such as meat, chemicals, clothes and auto parts.

There’s no doubt that the moves are a significant escalation in the growing conflict between the world’s top two economies but some strategists report that these could reveal new attractive opportunities for U.S. companies looking to establish a company in China.

The U.S. benefits more than China in bilateral trade

China Daily stated Chinese officials reassuring that investment for foreign owned offices and U.S. owned company formations in China still have a future and even some advantages in setting up wholly foreign owned enterprises. At press conferences, Chinese media outlets reported Vice-Minister of the National Development and Reform Commission Lian Weiliang as saying: “Although the impact is inevitable, the risks are generally under control.”

In response to this new development, Marco Pearman-Parish, CEO of Corporation China, said at a press conference yesterday: “Our offices have been inundated with calls and emails from U.S. companies wanting to set up a company in China. The opportunities lie with those enterprises considering setting up manufacturing in China for goods made in the U.S. and get ahead of any potential import tariffs imposed by China.

Potentially providing a hint that the Chinese government also has alternative approaches the encourage and still develop for China foreign business formation that scoots around demands from the White House.

Chinese Company Registration

In fact, one alternative may be to entice big energy giants to open up an office in China. Statements made by Vice-Minister of Commerce Wang Shouwen remained optimistic and appeared to even somewhat encourage U.S companies to establish Wholly Foreign Owned Enterprises claiming that, in particular, the U.S. benefits from bilateral trade. Special attention was given to foreign businesses that wish to open trade talks and could be in a unique position as China will continue to open up to foreign nations, particularly those seeking Chinese business registration for liquefied natural gas companies. In this way, the Vice-Minister directed attention at Australian corporations which could soon find themselves in an advantageous position to open up offices in China.

The U.S. trading partners could pick up the slack if Trump trade war escalates

A report from Business Insider also claims that U.S. trade tariffs may make China company formation more attractive for the other NAFTA trade partners, Canada and Mexico, as well. A report of import-export estimates compiled by Macqaurie Group showed that certain products, for example, telephone parts, would still potentially have favorable results if enterprises were moving forward with opening up offices in China that focused on manufacturing and foreign import-exports. The U.S currently exports goods totaling $129.9 billion to China at present

 

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