Delve into the core of AI and e-commerce in Guangzhou

From 1978 to 2017, the number of people living under the poverty line in rural China decreased by 740 million. The incidence of rural poverty fell by 94.4 percentage points. It is a stunning contribution to the global fight against poverty. China, however, is not yet satisfied with this result.

China’s Guangdong Province, a long-time trailblazer over the decades of reform and opening-up, plays an important role in the search for an answer to change the service industry and benefit the people. Currently, the answer is technology.

For years, Guangdong has been exploring a new way to develop itself into a technological haven. Nansha Area, one of three new areas in the Guangdong Pilot Free Trade Zone (FTZ), shoulders part the responsibility of propelling innovation through technology.

By shifting its focus onto “IAB”, namely Information Technology, Artificial Intelligence and Biopharmaceuticals, Nansha New Area, the sixth state-level New Area in China of its kind, rose in response. It has developed into a new harbor for entrepreneurs in pursuit of notable achievements in technological industries, such as AI and e-commerce.

Administrative simplification for hi-tech companies

“The facilitation of strategical emerging industries is a major feature of Nansha Area. The AI industry, especially, is the core of a new round of technological innovation. AI technology penetrates through the advanced manufacturing industry, modern service industry and the construction of smart cities,” said Mao Yanhua, Vice Dean of Sun Yat-sen University’s Institute for FTZ Research.

In recent years, one of the only words that we hear time and time again when it comes to cars is "electric", indicating a relatively slow development in the car industry, especially when it covers a timespan of over 150 years. Its infusion with AI technology, however, might change the game.

“We say, ‘self-driving car projects are the mother of all AI projects,’” said Dai Xiaoming, an employee of the Strategic Development Department of Pony.ai, a self-driving car unicorn company with offices in China and Silicon Valley.

The phrase he quoted was once said by Tim Cook, the CEO of Apple, on the future dominance of the autonomous car industry.

Entrepreneurs aren't the only ones who see a future in AI, so too does the government. In Oct. 2017, Nansha Development Zone sealed a deal with Pony.ai to reach an agreement to locate the company headquarter in the Nansha Area for further research and development.

Talking about the support from the local authorities, Cao Tiantian, Business Development Director of Pony.ai said, “We’ve received lots of support from the local government. We would often report to the government in advance, asking for a specific area in the city to test our product.”

She added that the only way to make AI even smarter is to retrieve valid data from real road tests, and Nansha Area plays an essential role in making that happen.

An official experimental instruction for the road test of autonomous-vehicles released by Nansha Area earlier this year prioritizes the idea “Be propelled by innovation, be the first to carry and try.”

It only takes 15 days for a self-driving car company to receive a governmental reply granting permission for a real road trial.

Aiming to become the world’s best autonomous car company, Pony.ai pays particular attention to employing more adroit talents in the industry. “The basic rule to compete in this industry is to attract as many talented people as you can,” said Dai.

Adding to this, Cao mentioned that there are collaborations among local authorities to cater to their needs. “The FTZ offers us huge support when it comes to employee settlement, tax preference and talent attraction. Most importantly, it takes much less time for an employee to settle down because of the simplification of the administrative procedure.”

Technological advantages make a smarter customs system

The past 40 years have witnessed a soaring change in per capita disposable income of Chinese citizens, from an average of 171 yuan (24.8 U.S. dollars) to 25,974 yuan (3768.4 U.S. dollars). The growing desire for high-quality products acts as a stimulus to the market that eventually incubates high-end e-commerce companies such as VIPSHOP (China), one of the leading B2C online retailers in China.

As an e-commerce company born and raised locally, VIPSHOP couldn’t be a better embodiment of the advancement of its mother town.

“Since the trial of cross-border e-commerce business started, VIPSHOP’s cross-border business has generated a revenue of over 8.24 billion yuan (1.2 billion U.S. dollars) as well as 1.1 billion (159 million U.S. dollars) in tax in the year of 2017,” said Peng Xinguo, Senior Warehouse Manager of VIPSHOP’s warehouse located near the Nansha harbor.

None of these achievements could’ve been made without the help of technology, especially the GQTS, aka the Global Quality Traceability System.

The Global Quality Traceability System, according to Yangcheng Evening News, is the world’s first quality inspection system which ensures the customers have complete knowledge about their imported products.

“It’s urgent for Guangzhou Harbor, which is now the fifth largest harbor in the world, to necessitate the smart custom clearance system,” said professor Mao.“The GQTS remains a pivotal part in the development of cross-border e-commerce through its advanced quality inspection system,” he added.

According to International Business Daily, by 2017, over 44 million tracing codes had been issued for products worth over 50.4 billion U.S. dollars.

Taking advantage of technological innovations and applying them to the construction of “smart harbors”, according to professor Mao, is a method that could be applied to other harbors in China along the 21st Century Maritime Silk Road under the Belt and Road Initiative.

By He Zhuoyan (People's Daily Online)

Brief Introduction To Guangzhou Business Environment,Set Up Business,Company Registration,Corporate Formation In Guangzhou

Guangzhou, the capital of Guangdong province, is a national historical and cultural city, an international business center and an integrated transport hub.

As China's southern gateway, it is located in the geometric center of the Asia-Pacific area, adjacent to the South China Sea, Hong Kong and Macao. Spreading over 7,434 square kilometers, it has a population of over 16 million. For more than 2,000 years, Guangzhou, known as the Millennial Commerce Metropolis, has always been China's most important trading port and was the starting point of the ancient Maritime Silk Road.

With over 30 years of reform and opening-up, Guangzhou relies on openness to promote development and innovation, and has become an important transport hub, logistics and trade center in South China. As a core area for attracting international capital, Guangzhou has been transforming from Millennial Commerce Capital to Modern Commerce Capital.

In 2016, Guangzhou's GDP stood at 1.96 trillion yuan ($296.9 billion), with retail sales of consumer goods reaching 0.87 trillion yuan and foreign trade volume reaching 0.85 trillion yuan. Guangzhou's actual use of foreign capital reached $5.7 billion and overseas investment reached $5.28 billion. Guangzhou has formed an all-round, wide-ranging and multi-level opening-up pattern and become one of the most open and marketized regions.

At the end of 2016, the United Nations released two reports showing that Guangzhou is the world's fastest-growing mega-city and tops the list on UNDP's Human Development Index. In the Chinese Cities of Opportunities Report 2016 jointly released by PwC and China Development Research Foundation, Guangzhou ranked first again.

The main advantages of the investment environment in Guangzhou are as follows:

I. Well-equipped infrastructure

As a harbor city, Guangzhou Port's cargo throughput in 2016 reached 540 million metric tons and container throughput reached 18.85 million TEUs in, which ranked sixth and seventh in the world.

In terms of the airport, Guangzhou Baiyun International Airport is a hub for the Belt and Road Initiative. Handling more than 59.78 million passengers, it was the third busiest airport in China in 2016.

In railways, Guangzhou railway hub is one of China's four major rail centers.

In highways, Guangzhou is a national highway hubs and one of the most connected cities in the national expressway network.

As an information port, Guangzhou is one of China's three largest major communication hubs, a major internet switching center and exporter of international internet in the country.

II. Strong industrial base

Guangzhou is now home to 320 enterprise headquarters. The top 10 pillar industries are automobile manufacturing, fine chemical engineering, key equipment, commercial exhibitions, banking and insurance, modern logistics, new generation information technology, bio-medicine, new materials, new energy and energy saving, and environmental protection.

Guangzhou's industrial manufacturing and research and development (R&D) capabilities are second to none in China. In 2016, the added value of advanced and high-tech manufacturing industries increased by 6.6 percent and 7.5 percent. The service industry is growing with added value accounting for 68.6 percent of GDP.

By the end of 2016, 288 Fortune Global 500 companies had invested in Guangzhou, setting up 797 projects.

III. Sufficient innovation and entrepreneurship support

Guangzhou is home to two-thirds of Guangdong province's universities, 97 percent of national key disciplines and all national key laboratories.

Guangzhou is approved as a Self-dependent Innovation Demonstration Area and a Comprehensive Pilot Innovation and Reform Core Area. There are more than 120,000 scientific and technology innovation enterprises, 44 new R&D institutions, and more than 8 million square meters of space for high-tech business incubators. The daily average number of registered trademarks ranks first among sub-provincial cities.

Guangzhou Science City is approved to be among the first batch of Regional Innovation and Entrepreneurship Demonstration Bases. The city has many  institutions that can provide strong support and protection for enterprises and individuals. They include Guangzhou Intellectual Property Court, Guangzhou Intellectual Property Trading Centre, the National Trademark Brand Innovation and Entrepreneurship Base, the Trademark Examination Cooperation Center of the State Administration for Industry and Commerce in Guangzhou.

IV. Wealth of institutional innovation

Guangzhou has been approved as a national service trade innovation and development pilot, a domestic trade circulation system reform and development pilot, a cross-border e-business comprehensive pilot area, a national market procurement method pilot as well as other reform pilots. This provides strong endogenous motivation for the city's institutional innovation in different areas.

Relying on the Nansha Pilot Free Trade Zone, Guangzhou explores the establishment of institutional mechanisms, which link up with international investment trade rules. A total of 209 innovation items have been created, 85 of which have been replicated and generalized in the province and the country. The market supervision of corporate information credit platform and other policies has a leading position in China that boosts economic growth and transformation.

V. Convenient government service

Guangzhou currently is focusing on creating a market-oriented, law-based and internationalized business environment and continues to enhance the level of trade and investment facilitation.

The government continues to deepen reform of administration simplification, fair regulation and effective services. A new list of administrative approval procedures was introduced, with 176 items streamlined in 2016.

Guangzhou has launched the "one-window" integration service, put fewer restraints on registration requirements for business entities, and made business registration available throughout the city.

The government has replaced a business tax with a value-added tax. In addition to reducing 52 administrative fees and eight government-managed funds, it also reduced the rate of four social insurances and one housing fund.

In 2016, more than 70 billion yuan was saved for enterprises in Guangzhou. The cost of pre-tax profits per 100 yuan of core business sales of industrial enterprises above state designated scale is 1.9 yuan and 2.9 yuan, lower than the average level of the province and the nation.

Trade facilitation has been improved with the construction of international trade "single window" 2.0 version. There are 13 modules: cargo declaration, declaration of the means of transport, cross-border e-commerce, information query, manifest declaration, international conference and exhibition, international express mail, logistics dynamics, logistics services, import and export licenses, enterprise qualifications, and payment and settlement. These cover businesses in 21 departments, including customs, inspection and quarantine, border inspection, maritime affairs, foreign exchange, taxation, and Hong Kong affairs.

The burden of enterprises has been eased because declaration fees for customs, inspection and quarantine, are exempt from "single window" charges. Also, the pilot work of exempting the lifting, shifting and warehousing costs of foreign trade enterprises has been better organized.

VI. Pleasant living environment

Guangzhou has improved the level of life service facilitation by creating a clean and neat, secure and orderly urban environment. The air quality is the best among China's five central cities and the average concentration of PM2.5 declined by 7.7 percent in 2016. Green coverage has reached 41.5 percent and the forest coverage rate is 42 percent.

Cantonese cuisine is one of the eight major cuisines in China, with a good reputation both at home and abroad, so there is a folk adage in China about "eating in Guangzhou". There are 10 international schools in Guangzhou, and many international medical institutions, catering enterprises, and religious sites. There are 52 museums and memorial halls, including the Guangdong Museum and the Museum of the Western Han Dynasty Mausoleum of the Nanyue King, and 19 public libraries. All of these bring convenient pleasure to investors who live in Guangzhou.

To facilitate people who want to invest and set up business in Guangzhou, here is an introduction of Types of business presence in China: 

Before starting up a business in China, you have to know what are the options. Foreign Investors generally establish a business presence in China in one of five modes: Wholly Foreign Owned Enterprise(WFOE); Representative Office; Foreign Invested Partnership Enterprises (FIPE); Joint Venture and Hong Kong Holding Company.

Wholly Foreign OwnedEnterprise (WFOE) is a Limited liability company wholly owned by the foreign investor. WFOE requires no registered capital and it's liability of equity , can generate income, pay tax in China and it's profit could be repatriate back to investor's home country. Any enterprise in China which is 100 percent owned by a foreign company or companies can be called as WFOE.

Representative Office (RO) is aLiaison Office of it's parent company. It requires no registered capital. It's activities would be: product or service promotion, market research of it's parent company's business, Quality Control liaison office etc in China. RO generally is prohibited to generate any revenue nor generating contracts with local businesses in China.

Joint Venture (JV) is a Limitedliability company formed between Chinese investor and Foreign investor. The parties agree to create a entity by both contributing equity, and they then share in the revenues, expenses, and control of the enterprise. JV usually been used by foreign investor to engage the so called restricted in areas such like: Education, Mining, Hospital etc.

Since March 1, 2010: Measures ofEstablishment of Foreign Invested Partnership Enterprises (FIPE) in China is taking effect. The regulation, which take effect since March 1, 2010, are known as the Administrative Measures for the Establishment of Partnership Enterprise in China by Foreign Enterprises or Individuals. There's no required minimum registered capital for a Foreign Invested Partnership Enterprise (FIPE) in Shanghai, Beijing, Guangzhou, Shenzhen, Hangzhou and rest cities of China

Hong Kong Company usually been used as a Special Purpose vehicle (SPV) to invest Mainland China. Hong Kong is one of the quickest locations to Incorporate a business. Although a HK company is not a legal entity in Mainland China (Mainland China and Hong Kong, See Wiki 1 country, 2 systems), lots foreign investors, especially investors from Europe and North America still chose to setting up a Hong Kong company as SPV to invest China.

After China's entry to WTO, most industries in China welcome foreign investment, WFOE setting up in Chinabecomes the first option of foreign investment's entity structures instead of Rep. Office setting up in China. At the mean time, for tax purpose, effective licensing system etc more and more investors use Hong Kong as the holding company to invest China mainland, using this offshore company to hold their operations in China.

Business set-up in Guangzhou is a big project by itself, which requires financial and time commitments, business management knowledge and China expertise. Identifying a competent agent to manage the complex process will be a cost and time effective way to avoid potential pitfalls . Tommy China Business Consulting has direct connections in the local government

Since 2006, TCBC has been focusing on consulting services for our clients to invest in Guangzhou China. We are specialized in establishment of wholly foreign owned enterprises (WFOEs), setting up of offshore companies, trading services, tax minimization, Assist in obtaining government approvals and certificates for running business, negotiate and draft various legal documents provide legal advice, negotiate government officer for Land acquisition. Advising on formation of WOFE and business structures, managing and controlling WOFE in Guangzhou China, drafting privacy policies and structuring commercial transactions

TCBC will manage all aspects of incorporation to get you a business license in Guangzhou China. We offer a range of company formation services including helping you to set up:

-Wholly Foreign Owned Enterprises (WFOE )

-Representative Offices

-Joint Ventures (Equity/Co-operative)

-Foreign Invested Partnership Enterprises (FIPE)

-HongKong Holding Company.

Contact Tom Lee for business set up in Guangzhou now.

Guangzhou enters race to attract international biotech companies with new supportive policies

Feb 11, 2019 (China Knowledge) - In its bid to catchup to cities such as Beijing, Suzhou and Shanghai, the city is now offering drug companies incentives to set-up operations in the city to develop new, novel drugs.

Such incentives have attracted companies such as GE Healthcare, which is subsidiary of conglomerate General Electric and specializes in medical imaging, diagnostics equipment and pharmaceutical manufacturing technologies.

The company is planning to build its first Asian biotech campus which spans 350,000 square meters in the China-Singapore Guangzhou Knowledge City 35 kilometers downtown of Guangzhou by investing up to USD 800 million into the project.

In addition, GE will also work with the Guangzhou government and biotech industry players to fund “KUBio” modular bio-pharmaceutical factories which can shorten completion time from 30 months to 18 months, cut construction costs by half and accelerate the commercialization of drugs.

Guangzhou's move to turn itself into a biopharmaceutical hub comes as China emerges as the world’s second largest pharmaceutical market with cities such as Beijing, Shanghai and Suzhou being key drug development centers.

To attract more international companies to choose Guangzhou over other Chinese cities, the city's government is offering companies with government investment, cheap land as well as loans. Some companies that have taken advantage of the government's supportive policies to start operations there include, Lonza which is one of the world's largest biopharmaceutical contract manufacturer and Beijing-based oncology firm Beigene.

Copyright © 2018 www.chinaknowledge.com

Guangzhou offers lots of carrots to win over international biotech players in race to catch up with Beijing and Shanghai

The southern Chinese city of Guangzhou thinks it has found the formula to catch up with Beijing and the eastern cities of Shanghai and Suzhou in the development of novel drugs: incentives to win over big international players.

Government incentives have attracted investment from such companies as GE Healthcare, a subsidiary of American conglomerate General Electric that focuses on medical imaging and diagnostics equipment and bio-pharmaceutical manufacturing technologies.

GE is building its first Asia biotech campus – covering 350,000 square metres and requiring US$800 million of investment – in the Sino-Singapore Guangzhou Knowledge City, some 35 kilometres northeast of downtown Guangzhou.

The “city” – a joint development project between Guangdong and Singapore in an area one-ninth the land area of Hong Kong – aims to house half a million people and foster high-tech industrial clusters in the high-growth emerging fields of information technology, artificial intelligence, biotechnology, clean energy and advance industrial materials.

China pharma must swallow that jagged little pill called R&D as government slashes profit margins of generic drugs

GE will join the Guangzhou government and biotech industry players to fund the construction of several “KUBio” modular bio-pharmaceutical factories, which the healthcare giant says will shorten the completion time from 30 months to 18 months, cut construction cost by half, and quicken drugs commercialisation.

SCMP Graphics

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Guanghzhou’s push comes as China has emerged as the world’s second-largest pharmaceutical market, with Beijing, Shanghai and Suzhou key centres of drug development. The country now has 67 biopharmaceutical industrial parks, according to healthcare database compiler hsmap.com, though many are lacking in innovation capabilities.

Three of Guangzhou’s biggest competitors are: Beijing’s 2.5-square kilometre Zhongguancun Life Science Park, set up 18 years ago, whose 60-plus tenants include the National institute of Biological Sciences, Tsinghua University-affiliated genomic and diagnostics kits developer Capital Bio, Denmark’s Novo Nordisk and US biotech firm Sanofi Genzyme; Shanghai’s 3-square kilometre Zhangjiang Biomedical Industry Base established in 1996 that houses more than 400 biopharmaceutical firms, and Suzhou Industry Park’s BioBay that opened in 2007 and is home to more than 400 start-ups.

To try to persuade international players to set up shop in Guangzhou, the city is offering government investment into enterprises’ projects, as well as cheap land and loans.

Under an investment intent agreement signed in December, one KUBio modular factory will be built for Basel, Switzerland-based Lonza, a 121 year-old company and one of the world’s biggest suppliers of custom development and manufacturing services to drug developers.

Marc Funk, chief operating officer of pharmaceutical and biotechnology business at Lonza, says Guangzhou was a good spot for another facility because of government support.

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Asked why Lonza, which has production facilities in around 60 cities globally, decided to set up another facility in Guangzhou – whose novel drugs discovery industry is less developed than cities such as Beijing, Shanghai and Suzhou – its incoming chief executive Marc Funk said government support plays a key role.

“Back in 2004, Lonza was the first to say ‘yes’ to the Singapore government’s request to build a plant there,” said Funk, currently chief operating officer of pharma and biotech. “We had the same discussion at the time [including the question of] why do it in a place where nobody knows how to do it.”

“With the right combination of government ambition, industry desire and knowledge of this part of the world, we have successfully built two plants in Asia … we see no reason why we can’t replicate the same success [in Guangzhou].”

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Lonza already has a “small molecule” chemicals drugs factory in Guangzhou built in 2003.

Funk said It will enter into a “sale and leaseback” arrangement with GE, under which it will “rent” a “large molecule” biological therapeutics plant to be built by GE to Lonza’s specification for a number of years before taking ownership.

Some 160 workers are expected to be recruited to run the plant, which will be its first biological products facility in China and is scheduled to be completed next year.

Although biologics only accounted for 8.7 per cent of the global pharmaceutical research and development services market, it is forecast to grow by an average 16.8 per cent in the five years to 2022, much faster than 10.8 per cent of chemical drugs, according to the projections by market research consultancy Frost & Sullivan. Most novel cutting-edge cancer treatments are biologics products.

Funk said two reform policies by Beijing to speed up drug innovation were key to Lonza’s decision to boost its investment in China to meet surging demand for its services.

First, since 2016, a pilot project in 10 municipalities and provinces has allowed license holders seeking to commercialise their new drugs to use third-party manufacturers, instead of building capabilities in-house, as previously required.

This has benefited drug developers, particularly small and mid-size life sciences firms.

Second, a law change in July last year has also allowed foreign clinical trial data to be admitted in China for drug approval purposes, which has reduced the need for local clinical trials in China.

Johnson & Johnson still bullish on Chinese health care industry even as US-China trade war rages on

“Those two changes changed immensely the opportunities to bring our manufacturing expertise to China,” Funk said. “They have allowed foreign firms to accelerate entrance into China.”

Beijing-based and Hong Kong and New York-listed cancer treatments developer Beigene is another company taking advantage of the Guangzhou government’s incentives, which include “strong support in funding, management service and a good business environment” according to a government statement.

A 2.2 billion yuan plant being built in the “knowledge city” will be funded with 200 million yuan of cash from Beigene, one billion yuan of cash and shareholder loan from the government, and one billion yuan of commercial loans.

The first phase construction of Beigene’s Guangzhou plant is expected to be completed in this year’s fourth quarter, a spokesman told the South China Morning Post.

The joint venture plant, in which Beigene has controlling stake, will produce biological therapies including Tislelizumab, an immuno-oncology drug under trials to prove its efficacy in manipulating the immune system to attack solid tumours and blood cancer cells.

Asked why Beigene decided to bolster facilities in Guangzhou given it also has facilities in Beijing and Suzhou, he said the Beijing premises are used for research and development, while the Suzhou plant focuses on small molecule drugs manufacturing and small-scale production of biologicals for clinical trials.

“The Guangzhou facility, on the other hand, is specifically built for large molecule biological drugs and is located in a much larger land lot … the local government has given us very favourable policy support,” he said.

Not all companies are as keen as Lonza and Beigene on what Guangzhou offers.

Bioduro, a San Diego, US-based supplier of outsourced drugs development services to drug discoverers with facilities in Beijing and Shanghai, is looking for a third site in China and is leaning towards cities not too far from the two Chinese cities for easier management.

“We did consider Guangzhou as our new site location,” its China general manager Deng Tianjing told the Post. “The city has attracted many big names to set up [facilities there], and there is no contract research organisation there yet which is attractive to us,” Deng said.

“However, compared to north and east China where we have been operating for years, we are less familiar with this region,” Deng added.

This article appeared in the South China Morning Post print edition as: Guangzhou seeks a slice of booming drug market Guangzhou seeks slice of drug market