Credit Crunch effects in China
May 6, 2009
The FT story makes the following key points:
– A rapid deterioration in the ability of Chinese companies to pay their suppliers “is significantly increasing the risk of doing business in China.”
– Chinese companies are facing “a liquidity crunch” due to China’s plummeting exports. “Many of them were also unable to access bank loans to tide them over the tough times, especially if they were small to medium-sized private businesses.”
– Though Chinese banks have “ample liquidity,” they usually do not lend to small private companies.
– Many Chinese companies have turned to their suppliers for credit, “thus forcing the pain up the supply chain.”
– Chinese suppliers are extending credit now more than a year ago. This is “bad credit management.” “Now is not the time to extend credit, it is time to restrict it.” “Most Chinese suppliers, however, have never experienced such a downturn.” “A lot of these companies never had to deal with the problem of not getting paid, because sales had always been increasing,” he said, “There’s not enough financial resource, not enough management.”
Tags: supply, US, ExportRelated Posts:
Tax Regulations for Non-Resident Enterprises in China
April 4, 2009
The State Administration of Taxation (SAT) has issued the tax regulations for non-resident enterprises that do business and have establishments or places of business in China.
Tax registration and filing for non-resident enterprises in China is set to begin from March 1, 2009 while 2008 corporate income tax filing should be done by May 31, 2009.
Under SAT’s “Decree 19 on Provisional Administrative Measures Governing Tax Collection on Contracted Projects and Provision of Services by Non-resident Enterprises,” companies that contract in projects or provide services in China should register with the tax bureau where the project is located within 30 days of finalizing the contract. Companies should then register again within 15 days after the project has been completed.
Source: China Briefing
Tags: income, state administration, Non-residentRelated Posts:
