www.lehmanlaw.com lehman, lee & xu is china taking over the world? is china taking over the...

www.lehmanlaw.com LEHMAN, LEE & XU

Is China Taking Over Is China Taking Over the World?the World?

Edward E. LehmanEdward E. LehmanManaging Director of Managing Director of

LEHMAN, LEE & XULEHMAN, LEE & XU

Past Vice Chairman of the ABA Past Vice Chairman of the ABA China Law CommitteeChina Law Committee

April 5 - 8, 2006April 5 - 8, 2006


What is happening What is happening in China?in China?

Spectacular macroeconomic evolutionSpectacular macroeconomic evolution Economic reforms process market economy Economic reforms process market economy

but strongly monitored and controlled by but strongly monitored and controlled by gov’tgov’t

Integration into the world’s economyIntegration into the world’s economy Deep social changes change in consumption Deep social changes change in consumption

patternspatterns Risks: political instability, regional imbalances, Risks: political instability, regional imbalances,

financial systems, concealed deficit...financial systems, concealed deficit...


Macro EnvironmentMacro Environment

Social stability (priority) requires strong growth rate Social stability (priority) requires strong growth rate (minimum 7%), to create employment due to:(minimum 7%), to create employment due to: Restructuring State Owned EnterprisesRestructuring State Owned Enterprises Increase of urban populationIncrease of urban population

Growth based on foreign trade and investment (public Growth based on foreign trade and investment (public and foreign)and foreign)

Overheating Overheating Weak consumption due to uncertainty Weak consumption due to uncertainty Lack of welfare system Lack of welfare system Savings of 40%, but problems with financial systemSavings of 40%, but problems with financial system


FDI Forecast in ChinaFDI Forecast in China

For 4For 4thth consecutive year China is the most preferred FDI consecutive year China is the most preferred FDI location worldwidelocation worldwide

Global executives are more eager to commit FDI in China Global executives are more eager to commit FDI in China than anytime since 1998than anytime since 1998

Also, China is seen as source of innovation and attractive Also, China is seen as source of innovation and attractive R&D locationR&D location• Lower R&D costsLower R&D costs• Availability and quality of local R&D labourAvailability and quality of local R&D labour• IP protectionIP protection

China FDI destinations (next 3 years):China FDI destinations (next 3 years):• 48% product manufacturing 48% product manufacturing • 18% R&D18% R&D• 13% distribution and logistics13% distribution and logistics


China Integration in China Integration in World’s EconomyWorld’s Economy

ExportsExports 2004 → 593 billion USD 2004 → 593 billion USD

△△ 2004 / 2003 2004 / 2003 → 35.4%→ 35.4% ImportsImports 2004 → 2004 → 561 billion USD 561 billion USD

△△ 2004 / 2003 2004 / 2003 → 36%→ 36% Foreign Direct Investment 2004 → 60.6 billion USDForeign Direct Investment 2004 → 60.6 billion USD Access to WTO: standardization of regulatory Access to WTO: standardization of regulatory

framework framework


Deep Social ChangesDeep Social Changes

Appearance of a young middle classAppearance of a young middle class

Increasing urbanization Increasing urbanization

Assimilation of Western life Assimilation of Western life

Quick development of a private industrial sectorQuick development of a private industrial sector

Appearance of a service and leisure culture Appearance of a service and leisure culture

One-child policyOne-child policy


The RisksThe Risks Economic Imbalances:Economic Imbalances:

OverheatingOverheating Soft or hard landing?Soft or hard landing?

Geographic ImbalancesGeographic Imbalances Financial SystemFinancial System Tax Balances? Contingent liabilities:Tax Balances? Contingent liabilities:

Welfare networksWelfare networks Banking recoveryBanking recovery Local government investmentsLocal government investments

Variations in the exchange rate?Variations in the exchange rate?

Political Political stability?stability?


How does it affect us?How does it affect us?

China will be one of the most dynamic areas in the world China will be one of the most dynamic areas in the world during the next 20 yearsduring the next 20 years

China’s Economy will be the World’s Second-largest by China’s Economy will be the World’s Second-largest by 20302030

How it affect us:How it affect us: China as a market China as a market

China as productive base China as productive base / / providerprovider

China as competitorChina as competitor

China as partnerChina as partner

Not only affects each particular company, also to its Not only affects each particular company, also to its competitors, providers and clients. competitors, providers and clients.


1. China as a Market:1. China as a Market:AdvantagesAdvantages

Market with great opportunitiesMarket with great opportunities• 1.3 billion people, myth and reality 1.3 billion people, myth and reality

• Dynamic EvolutionDynamic Evolution

• Opportunities and challengesOpportunities and challenges

• Foreign presence in the marketForeign presence in the market

SuccessfulSuccessful• More than 400,000 FIEsMore than 400,000 FIEs

• Presence of big multi-nationalsPresence of big multi-nationals

• Presence of main companies in each sectorPresence of main companies in each sector


Market AdvantagesMarket Advantages

Reputable: good reputation of financing institutionsReputable: good reputation of financing institutions

Continued liberalizationContinued liberalization• Political decisionPolitical decision• WTO commitmentsWTO commitments

More integrated in global economyMore integrated in global economy

Good infrastructureGood infrastructure• TelecommunicationsTelecommunications• TransportTransport• A country “which works”A country “which works”

A safe countryA safe country


DifficultiesDifficulties

Very demanding marketVery demanding market• Clients want the bestClients want the best• Idea of “middle technology” is rejectedIdea of “middle technology” is rejected• Clients know what they wantClients know what they want

Very competitiveVery competitive• Wide foreign presenceWide foreign presence• Chinese client knows foreign marketsChinese client knows foreign markets• Compete with Chinese pricesCompete with Chinese prices• Clients with negotiating experienceClients with negotiating experience

ChangingChanging• Frequent changes in national and regional legislationFrequent changes in national and regional legislation• Political changesPolitical changes


DifficultiesDifficulties

CostlyCostly• Geographic distanceGeographic distance• Establishment costs are highEstablishment costs are high• Time factor. Lengthy:Time factor. Lengthy:

Project planning processProject planning process Project approval processProject approval process Project negotiation processProject negotiation process Project implementation processProject implementation process

Increasing capacity of Chinese companiesIncreasing capacity of Chinese companies• Powerful and competitive companiesPowerful and competitive companies• Increasing industrial and technological capacityIncreasing industrial and technological capacity


Chinese Market Chinese Market in numbers (2004)in numbers (2004)

POPULATIONPOPULATION 1.1.3 billion people3 billion people

GDP GDP 1.1.65 trillion USD65 trillion USD

GDP GDP / / Person Person 1,1,200 USD200 USD

△△ GDP GDP 9.9.5%5%

Total Imports Total Imports 561 billion USD561 billion USD

Total ExportsTotal Exports 593 billion USD593 billion USD

Imports toImports to GDPGDP 29.5%29.5%

Huge country with high economic growth. Huge country with high economic growth.

5% of the population have income over 10,000 – 12,000 USD.5% of the population have income over 10,000 – 12,000 USD.

Before the country was closed to foreign trade, now it is progressively opening.Before the country was closed to foreign trade, now it is progressively opening.

Liberalization process; WTO entryLiberalization process; WTO entry..


Chinese Market: Chinese Market: Geographic DelimitationGeographic Delimitation

Continental China (mainland China).Continental China (mainland China). Hong Kong: Redistribution Center and service provider.Hong Kong: Redistribution Center and service provider. Hong Kong and Taiwan: FDI main origin.Hong Kong and Taiwan: FDI main origin. ““Overseas Chinese”: 60 million, 3rd world economy. 65% of FDI Overseas Chinese”: 60 million, 3rd world economy. 65% of FDI

comes from Asia.comes from Asia. Development is concentrated in east coastal cities:Development is concentrated in east coastal cities:

Priority: Development of the Center-west and Northeast areas.Priority: Development of the Center-west and Northeast areas.

Gulf of Bohai area (Beijing-Tianjin Gulf of Bohai area (Beijing-Tianjin corridor).corridor).

Yangze delta area (Shanghai, Nanjing, Yangze delta area (Shanghai, Nanjing, Hangzhou...).Hangzhou...).

Pearl River’s delta area (Guangdong and Pearl River’s delta area (Guangdong and Fujian provinces).Fujian provinces).


The MarketThe Market

StrengthsStrengths

SizeSize Growth and OpeningGrowth and Opening Modernization and Modernization and

dynamismdynamism Multiple opportunity Multiple opportunity

areas areas Liquidity (cash) Liquidity (cash) Human Capital and Human Capital and

organizationorganization

WeaknessesWeaknesses

FragmentationFragmentation CompetitionCompetition Immaturity in the distribution Immaturity in the distribution

channelschannels Logistics InsufficiencyLogistics Insufficiency Quick changes and volatility of Quick changes and volatility of

commercial regulationscommercial regulations Financial system insufficienciesFinancial system insufficiencies State owned enterprise reformState owned enterprise reform


China: China: Business opportunitiesBusiness opportunities

Process of public investment, concessions and privatizations:Process of public investment, concessions and privatizations: Infrastructure Infrastructure Projects.Projects.

o Roads and HighwaysRoads and Highwayso RailwayRailway

Energy Energy Projects Projects

Hydraulic Hydraulic Projects Projects Center and west country developmentCenter and west country development

Growing environmental demands:Growing environmental demands: Garbage collection and treatment systemsGarbage collection and treatment systems

Water treatment systemsWater treatment systems

Alternative Alternative Energies Energies



Fast Urbanization Fast Urbanization (population in rural areas 66%):(population in rural areas 66%):Attention to collectives and public servicesAttention to collectives and public services

Transport urban infrastructures: subway and railwayTransport urban infrastructures: subway and railway

Strong construction processStrong construction process

Increase in living standards:Increase in living standards:Diversification and increase of consumption Diversification and increase of consumption

Sophistication of distribution channelsSophistication of distribution channels

Increase on vehicle demandIncrease on vehicle demand

Potential in the tourist marketPotential in the tourist market



Access to WTO:Access to WTO:Increase opening to exports: Increase opening to exports: Tariff reduction in more than 150 key products. Average tariff from Tariff reduction in more than 150 key products. Average tariff from

17% in 2000 to 10% in 200517% in 2000 to 10% in 2005

Progressive quota increase (i.e. annual increase of import vehicles Progressive quota increase (i.e. annual increase of import vehicles by 15%)by 15%)

Service sector opening: Distribution (2004), Banking (2006), Service sector opening: Distribution (2004), Banking (2006), Telecommunications, Logistics,...Telecommunications, Logistics,...Clarification of the distribution systemClarification of the distribution systemStandarization of legal system regarding foreign Standarization of legal system regarding foreign investments:investments:

Same rights and liabilities for foreign and national companiesSame rights and liabilities for foreign and national companies


Olympic Games 2008Olympic Games 2008

Beijing Investment area: 27.5 billion USD

Comunication Systems

17%

Sport Facilities

7%

Urban supply projects

6%

Transport Projects

50%

Environmental projects

20%


32 Sport facilities (19 new)32 Sport facilities (19 new) Property and managementProperty and management Conceptual designConceptual design

Beijing Public services:Beijing Public services: Transport (subway) Transport (subway) Environment Environment Parking and traffic controlParking and traffic control

Opportunities for Olympic Games Opportunities for Olympic Games 20082008


But some problems…But some problems…

Technical barriers: the other side of the opening Technical barriers: the other side of the opening process within WTOprocess within WTO Certifications:Certifications:

• Industrial Products (CCC)Industrial Products (CCC)• CosmeticsCosmetics• FoodFood• Packing Packing

Contingent managementContingent management Capital requirementsCapital requirements

• Banking Banking • DistributionDistribution• ConstructionConstruction

Local CompetitionLocal Competition


But some problems…But some problems…

IPRs. Counterfeiting problems before WTO’s IPRs. Counterfeiting problems before WTO’s challenge:challenge:

Not only bags, watches, DVDs or software.Not only bags, watches, DVDs or software. Affects everything: from elevators to pastries or wine, Affects everything: from elevators to pastries or wine,

books...books... Notable improvements in legislation and applicable Notable improvements in legislation and applicable

penalties.penalties. However, penalty enforcement is still weak.However, penalty enforcement is still weak.

LackLack of “social censorship”. of “social censorship”.


China as a Market:China as a Market:Access StrategiesAccess Strategies

Export Advantages:Advantages:

Small investment.Small investment.

Problems:Problems: Market fragmentation and real sizeMarket fragmentation and real size Strong foreign and local competitionStrong foreign and local competition Tariff and non-tariff barriersTariff and non-tariff barriers Lack of distribution networks and few specialized distributors.Lack of distribution networks and few specialized distributors. After-sales service.After-sales service. Continuous trips needed.Continuous trips needed. Language.Language.



InvestmentInvestment

Advantages:Advantages:

Permanent presence in the market.Permanent presence in the market.

Huge market (unlimited).Huge market (unlimited).

Lower competition.Lower competition.

Better competitive position. Tariff and non-tariff protectionBetter competitive position. Tariff and non-tariff protection

Tax reliefTax relief

In most sectors it is possible to invest in the form of WFOE In most sectors it is possible to invest in the form of WFOE (80% of investors choose this way)(80% of investors choose this way)



Problems:Problems:

Search for the right partner, if necessary.Search for the right partner, if necessary.

Legal framework still under development.Legal framework still under development.

Not all sectors are open to FDINot all sectors are open to FDI

IPR problems.IPR problems.

Personnel problemsPersonnel problems

LanguageLanguage

InvestmentInvestment


FDI DivisionsFDI Divisions

EncouragedEncouragedAgricultureAgricultureNew/high technologyNew/high technologyIndustries which develop Western/Central regionsIndustries which develop Western/Central regions

RestrictedRestrictedTechnologically-backward industriesTechnologically-backward industriesResource-intensive/wasteful enterprisesResource-intensive/wasteful enterprises

ProhibitedProhibitedIndustries which cause pollution and ruin natural resourcesIndustries which cause pollution and ruin natural resourcesProjects which utilize processes/technologies which are unique to Projects which utilize processes/technologies which are unique to ChinaChina

PermittedPermittedAll other industries not listed in the CatalogueAll other industries not listed in the Catalogue..


FDIFDI Operating Structures Operating Structures

Representative OfficeRepresentative Office Equity Joint VentureEquity Joint Venture Cooperative Joint VentureCooperative Joint Venture Wholly Foreign Owned EnterpriseWholly Foreign Owned Enterprise Holding CompanyHolding Company


Representative OfficeRepresentative Office

AdvantagesAdvantages Quick and simple.Quick and simple. No minimum registered capital.No minimum registered capital. Allows for collection of market information and Allows for collection of market information and

preparation for direct market entry.preparation for direct market entry.

DisadvantagesDisadvantages Cannot engage in revenue generation.Cannot engage in revenue generation. Taxation regardless of prohibition on profit making Taxation regardless of prohibition on profit making

activities.activities.


Representative OfficeRepresentative Office

Set-up RequirementsSet-up Requirements Application letter signed by Chairman of the Board.Application letter signed by Chairman of the Board. Certificate of incorporation.Certificate of incorporation. Credit report by bank.Credit report by bank. CV of foreign representatives and photocopy of passport.CV of foreign representatives and photocopy of passport. Business license in home jurisdictionBusiness license in home jurisdiction Signed Power of Attorney, allowing agent to legally act on Signed Power of Attorney, allowing agent to legally act on

the company’s behalf.the company’s behalf. Lease agreementLease agreement


Equity Joint VentureEquity Joint Venture

Most commonly used among the two types of Joint Most commonly used among the two types of Joint VenturesVentures

Main distinction between EJV and CJV is the Main distinction between EJV and CJV is the requirement that profits must be shared in proportion requirement that profits must be shared in proportion to capital contributions.to capital contributions.

Key considerations:Key considerations:o Selection of Chinese JV Partner after a full due diligence Selection of Chinese JV Partner after a full due diligence

of partner/assets.of partner/assets.

o Selection of location.Selection of location.



AdvantagesAdvantages Chinese partner will bring connections and an established Chinese partner will bring connections and an established

sales and distribution network;sales and distribution network; Local partner will bring local and particularized knowledge Local partner will bring local and particularized knowledge

of both market and bureaucracy.of both market and bureaucracy. Chinese partner will usually have or can easily obtain an Chinese partner will usually have or can easily obtain an

operational site, which aides in efficient start-upoperational site, which aides in efficient start-up

DisadvantagesDisadvantages JV contract often difficult to negotiateJV contract often difficult to negotiate Differing objectives and management styles often result in Differing objectives and management styles often result in

conflict.conflict. Lack of control by foreign partyLack of control by foreign party Difficulty in selling shares in venture.Difficulty in selling shares in venture.



Setup RequirementsSetup Requirementso Project ProposalProject Proposal

o Feasibility StudyFeasibility Study

o JV ContractJV Contract

o Articles of AssociationArticles of Association

o Letter of intentLetter of intent

o Business LicenseBusiness License Capital investment requirements.Capital investment requirements. Minimum equity investment by Foreign investor is Minimum equity investment by Foreign investor is

25%.25%.


Cooperative Cooperative Joint VentureJoint Venture

Similar to Equity Joint Venture in structure but with Similar to Equity Joint Venture in structure but with more flexibility because of the following:more flexibility because of the following:

1.1.Sharing profits is governed entirely by contractSharing profits is governed entirely by contract

2.2.Foreign partner can obtain return of investment in Foreign partner can obtain return of investment in priority to Chinese partner.priority to Chinese partner.

Setup requirements similar to that of Equity Joint Setup requirements similar to that of Equity Joint Venture.Venture.


Wholly Foreign Owned Wholly Foreign Owned Enterprise (WFOE)Enterprise (WFOE)

Essentially a wholly owned subsidiary of a foreign Essentially a wholly owned subsidiary of a foreign enterpriseenterprise

By far, the most commonly used investment vehicleBy far, the most commonly used investment vehicle If there is a significant amount of IP held by the If there is a significant amount of IP held by the

corporation then the WFOE would be the primary corporation then the WFOE would be the primary selectionselection

Generally, WFOE approval is more difficult to obtain Generally, WFOE approval is more difficult to obtain than JV approval.than JV approval.



AdvantagesAdvantages Quicker setup as there is no Chinese partnerQuicker setup as there is no Chinese partner Simpler management structure and objectives which are Simpler management structure and objectives which are

simply those of the parent organization.simply those of the parent organization.

DisadvantagesDisadvantages Independence is often, in itself, a shortcoming because of Independence is often, in itself, a shortcoming because of

lack of connections, established markets, and local lack of connections, established markets, and local knowledge.knowledge.

WFOEs cannot operate in some sensitive areas such as WFOEs cannot operate in some sensitive areas such as securities.securities.



Setup RequirementsSetup Requirements

o Application LetterApplication Letter

o Feasibility studyFeasibility study

o Articles of associationArticles of association

o Evidence of solvency from bankEvidence of solvency from bank

o Business LicenseBusiness License

o Name of the legal representative Name of the legal representative

o CV and copies of passport CV and copies of passport


Exit StrategyExit Strategy

Mauritius holding company for conducting operations in Mauritius holding company for conducting operations in China.China.

Benefits:Benefits:• Cost Cost

establishment is US $1,500establishment is US $1,500 (company secretary, nominee shareholders and bank account)(company secretary, nominee shareholders and bank account)

• Exit StrategyExit Strategy 1) easy transfer of interests in the China operation1) easy transfer of interests in the China operation 2) no approval needed for divestiture of interest in case of 2) no approval needed for divestiture of interest in case of

direct direct investment relationshipinvestment relationship

• Transfer PricingTransfer Pricing


Exit StrategyExit Strategy

Limiting LiabilityLimiting Liability liabilities incurred by the Chinese entity will be the liabilities incurred by the Chinese entity will be the liability of the holding company rather than the parentliability of the holding company rather than the parent Tax BenefitsTax Benefits

• In Mauritius: any money held by the holding company will be In Mauritius: any money held by the holding company will be tax freetax free• In China: impact of China taxation can be managed by In China: impact of China taxation can be managed by

licensing the IP from parent company. licensing the IP from parent company.

• In Spain: money can be repatriated at a tax advantageous In Spain: money can be repatriated at a tax advantageous time or reinvested in other international operations.time or reinvested in other international operations.

ParentCompany

MauritiusCompany

ChineseWFOE IP IP


2. China as a 2. China as a Productive PlatformProductive Platform

Competitiveness of China production implies not only Competitiveness of China production implies not only potential on producing to supply local market, but also potential on producing to supply local market, but also positions:positions: China as a competitorChina as a competitor China as a providerChina as a provider China as a platform to third marketsChina as a platform to third markets


China as a China as a Productive PlatformProductive Platform

Competitiveness derived from:Competitiveness derived from: Labour costs: Unlimited labour reserves (lower wage Labour costs: Unlimited labour reserves (lower wage

preassure).preassure). Technology contributions and Western management Technology contributions and Western management

through FDI.through FDI. State policies to support foreign sector, critical for its State policies to support foreign sector, critical for its

growth (tax relief...).growth (tax relief...).


China as a CompetitorChina as a Competitor

WTO entry also opens international markets to WTO entry also opens international markets to Chinese productsChinese products

Foreign Trade evolutionForeign Trade evolution FDI resounds in technological development: quality FDI resounds in technological development: quality

products...products... Development of its own industrial infrastructureDevelopment of its own industrial infrastructure Protection instruments (anti-dumping measures...). Protection instruments (anti-dumping measures...).

Market Economy?Market Economy?


China as a ProviderChina as a Provider

Competitiveness of Chinese products is not only a Competitiveness of Chinese products is not only a threat but also an opportunity.threat but also an opportunity.

Wide and increasing range of productsWide and increasing range of products Need to make purchasing process more competitiveNeed to make purchasing process more competitive Another way of investing in China: central purchasing Another way of investing in China: central purchasing

officeoffice Cooperation agreements, licensed production. RisksCooperation agreements, licensed production. Risks


China and Third MarketsChina and Third Markets

Production investment in China, not only for Chinese Production investment in China, not only for Chinese market but also to exportmarket but also to export

As Chinese industrial network improves, the foreign As Chinese industrial network improves, the foreign projection will be widerprojection will be wider

FDI companies in 2004 carried out 57% of the total FDI companies in 2004 carried out 57% of the total exports (54.8% in 2003)exports (54.8% in 2003)

Foreign companies are already taking profit from Foreign companies are already taking profit from Chinese foreign competitiviness.Chinese foreign competitiviness.


3. China as a Partner3. China as a Partner

Official interest for the Internationalization of Chinese Official interest for the Internationalization of Chinese companies. Supporting measures:companies. Supporting measures: Goal: establish 6,000 multinationals by 2015Goal: establish 6,000 multinationals by 2015 Sectoral Priorities:Sectoral Priorities:

o Electrical appliances in developing countriesElectrical appliances in developing countrieso High technology in developed countriesHigh technology in developed countrieso Mining, hydrocarbon, raw materialsMining, hydrocarbon, raw materials

New aspects which can include:New aspects which can include: Chinese companies investing abroadChinese companies investing abroad Chinese companies interested in partnership with foreign Chinese companies interested in partnership with foreign

companies to make use of their knowledge and companies to make use of their knowledge and experience of international markets.experience of international markets.


Some advice...Some advice...

1- Get rid of the myths1- Get rid of the myths 2- Get trustworthy information2- Get trustworthy information 3- Identify the oportunities 3- Identify the oportunities 4- Have a clear strategy4- Have a clear strategy 5- Professional assesment5- Professional assesment 6- Conduct market research and due diligence on 6- Conduct market research and due diligence on

partnerspartners 8- Long term commitment is necessary8- Long term commitment is necessary 9- 9- Ensure that IP is fully protectedEnsure that IP is fully protected 10- Watch for personal relations and local customs10- Watch for personal relations and local customs 11- Success in China implies dedication and big effort 11- Success in China implies dedication and big effort


Challenges for China to Challenges for China to Take Over the WorldTake Over the World

China must modify its development model to:China must modify its development model to:• resolve the new problems created by the actual growth resolve the new problems created by the actual growth • avoid jeopardizing the country’s stabilityavoid jeopardizing the country’s stability

Objective: Objective: SUSTAINABLE DEVELOPMENTSUSTAINABLE DEVELOPMENT• Social point of view; Social point of view; Minimize social differencesMinimize social differences

Improve welfare servicesImprove welfare services Increase public expenditure in health and education Increase public expenditure in health and education UnemploymentUnemployment

• Environmental point of viewEnvironmental point of view Avoid exhaustion of energy resourcesAvoid exhaustion of energy resources Use of new renewable energies Use of new renewable energies Fight against environmental pollutionFight against environmental pollution


Challenges for China to Challenges for China to Take Over the WorldTake Over the World

Change from extensive growth (exports and FDI) to Change from extensive growth (exports and FDI) to intensive growing (internal demand and local companies)intensive growing (internal demand and local companies)

• Reduce export participation in its GDPReduce export participation in its GDP

• Increase local consumptionIncrease local consumption Increase income in rural areasIncrease income in rural areas Increase expenditure on social welfare, health and educationIncrease expenditure on social welfare, health and education

Maintain growing stability Soft landing processMaintain growing stability Soft landing process• Reduce growing ratesReduce growing rates

• Not affect social and economic stabilityNot affect social and economic stability


THANK YOUTHANK YOU

LEHMAN, LEE & XULEHMAN, LEE & XU

10-2 Liangmaqiao Diplomatic Compound10-2 Liangmaqiao Diplomatic CompoundNo.22 Dongfang East Road Chaoyang DistrictNo.22 Dongfang East Road Chaoyang District

Beijing 100600 ChinaBeijing 100600 ChinaTel: (86)(10) 8532-1919Tel: (86)(10) 8532-1919Fax: (86)(10) 8532-1999Fax: (86)(10) 8532-1999

E-mail: E-mail: elehmanelehman@@lehmanlawlehmanlaw.com.com

Web site: Web site: http://www.lehmanlaw.comhttp://www.lehmanlaw.com

www.lehmanlaw.com lehman, lee & xu is china taking over the world? is china taking over the...

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