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5 White Paper on the Business Environment in China
A major component of that strategy is likely to be its subsidiary national level, the Circular also stated that local governments
Yihaodian, “which claims 24 million registered users and are responsible for regulating “relevant shadow banking.”
provides same-day delivery services to customers.”64
e new Circular also pinpoints ambiguity of responsibility
China’s information technology sector continues to arising from unclearly written contracts, requiring nancial
develop. e total value of exported software and services was institutions to clearly state who bears the risks in shadow
estimated at $1.8 billion in 2006. In 2008, this gure was banking business contracts. e new Circular further requires
projected to grow by more than 30 percent through 2011.64 the separation of wealth management funds for clients from
January to July of 2011 saw a year-on-year growth rate of 15.7 the banks’ own funds and forbids the use of clients’ money to
percent in exports, accounting for in excess of $15 billion. buy the banks’ own loans.72
Revenues in the sector were reported to have grown by 29.6
percent to reach 958.8 billion yuan (approximately $152 Reforms in Retail
billion) in the same period.65 In April 2014, China embarked on a major overhaul of
According to the U.S. Foreign Commercial Service, the its consumer protection law. According to China Brie ng by
software industry is a major focus of the central government Dezan Shira & Associates, “the new law introduces a number
but remains diverse and “highly fragmented,”66 with the PRC, of important reforms to the Chinese retail environment: In
with the National Copyright Administration reporting an allegations of counterfeiting, the onus of proof is now on the
estimated 80,000 registered software products as of 2010.67 retailer to prove their innocence for the rst 6 months after
the sale, rather than the consumer to prove wrongdoing all the
Finally, China’s telecommunications sector is of continuing time, as previously; Penalties for fraud and false advertising
interest for both foreign and domestic rms, although foreign have been increased; Class-action lawsuits against retailer
malfeasance have been made easier to le (though limited
rms remain barred from o ering telecommunications to state Consumer Associations and their local branches);
services to consumers, e ectively limiting foreign participation Retailers are now required to accept goods for return within
to selling handsets and accessories to the Chinese market.68 7 days of purchase unless agreed otherwise; For online and
other types of delivery purchases, consumers are not required
Notable Policy Activity to provide a reason for returns; and Greater restrictions now
apply to retailers’ collection and use of consumer data.” 73
e 12th Five-Year Plan and Ongoing Attempts to
Accelerate the Development of the Service Sector
Notes released by the State Council on March 11, 2011
cover several measurements for the Central Government’s
ongoing campaign to bolster the nation’s service economy: by
2011, the ratio of value added by the service sector to the
GDP should have grown by four percent over 2010’s value69
and the total amount of imports and exports in services
should have reached $600 billion.70
New Shadow Banking Regulations
In December 2013, the State Council issued “Circular
107”, laying out new intended regulations for shadow
banking, outlining changes for corporates dealing with non-
bank lenders and new regulatory responsibilities by relevant
government authorities. e new regulation gained special
relevance when in January 2014, China Credit Trust (CCT),
a wealth management fund which sold investments via the
Industrial and Commercial Bank of China (ICBC) had to be
bailed out. e new Circular speci cally outlined national
shadow banking regulatory responsibilities among four same-
level government bodies – the People’s Bank of China (PBOC),
China Banking Regulatory Commission (CBRC), China
Securities Regulatory Commission (CSRC) and Insurance
Regulatory Commission (IRC). Besides regulation at the
222
A major component of that strategy is likely to be its subsidiary national level, the Circular also stated that local governments
Yihaodian, “which claims 24 million registered users and are responsible for regulating “relevant shadow banking.”
provides same-day delivery services to customers.”64
e new Circular also pinpoints ambiguity of responsibility
China’s information technology sector continues to arising from unclearly written contracts, requiring nancial
develop. e total value of exported software and services was institutions to clearly state who bears the risks in shadow
estimated at $1.8 billion in 2006. In 2008, this gure was banking business contracts. e new Circular further requires
projected to grow by more than 30 percent through 2011.64 the separation of wealth management funds for clients from
January to July of 2011 saw a year-on-year growth rate of 15.7 the banks’ own funds and forbids the use of clients’ money to
percent in exports, accounting for in excess of $15 billion. buy the banks’ own loans.72
Revenues in the sector were reported to have grown by 29.6
percent to reach 958.8 billion yuan (approximately $152 Reforms in Retail
billion) in the same period.65 In April 2014, China embarked on a major overhaul of
According to the U.S. Foreign Commercial Service, the its consumer protection law. According to China Brie ng by
software industry is a major focus of the central government Dezan Shira & Associates, “the new law introduces a number
but remains diverse and “highly fragmented,”66 with the PRC, of important reforms to the Chinese retail environment: In
with the National Copyright Administration reporting an allegations of counterfeiting, the onus of proof is now on the
estimated 80,000 registered software products as of 2010.67 retailer to prove their innocence for the rst 6 months after
the sale, rather than the consumer to prove wrongdoing all the
Finally, China’s telecommunications sector is of continuing time, as previously; Penalties for fraud and false advertising
interest for both foreign and domestic rms, although foreign have been increased; Class-action lawsuits against retailer
malfeasance have been made easier to le (though limited
rms remain barred from o ering telecommunications to state Consumer Associations and their local branches);
services to consumers, e ectively limiting foreign participation Retailers are now required to accept goods for return within
to selling handsets and accessories to the Chinese market.68 7 days of purchase unless agreed otherwise; For online and
other types of delivery purchases, consumers are not required
Notable Policy Activity to provide a reason for returns; and Greater restrictions now
apply to retailers’ collection and use of consumer data.” 73
e 12th Five-Year Plan and Ongoing Attempts to
Accelerate the Development of the Service Sector
Notes released by the State Council on March 11, 2011
cover several measurements for the Central Government’s
ongoing campaign to bolster the nation’s service economy: by
2011, the ratio of value added by the service sector to the
GDP should have grown by four percent over 2010’s value69
and the total amount of imports and exports in services
should have reached $600 billion.70
New Shadow Banking Regulations
In December 2013, the State Council issued “Circular
107”, laying out new intended regulations for shadow
banking, outlining changes for corporates dealing with non-
bank lenders and new regulatory responsibilities by relevant
government authorities. e new regulation gained special
relevance when in January 2014, China Credit Trust (CCT),
a wealth management fund which sold investments via the
Industrial and Commercial Bank of China (ICBC) had to be
bailed out. e new Circular speci cally outlined national
shadow banking regulatory responsibilities among four same-
level government bodies – the People’s Bank of China (PBOC),
China Banking Regulatory Commission (CBRC), China
Securities Regulatory Commission (CSRC) and Insurance
Regulatory Commission (IRC). Besides regulation at the
222
