He estimated industrial enterprise profits might bounce back to a growth of 30 percent year on year in the fourth quarter.

Large-scale industrial enterprises in 22 Chinese provinces saw their profits decline 21.2 percent year on year to 894.14 billion yuan in the first half, but the decline rate was 11 percentage points lower from the first quarter, which shows signs of recovery, according to National Bureau of Statistics figures.

Profit in 27 of the total 39 industrial sectors had reported a profit increase or at least a slowdown in decline.

A senior analyst said that the overall economic stabilization, the expansion of investment this year and low raw material prices helped the profit rise of industrial enterprises.

Source : Konaxis

The 136 SOEs directly under central government?s control notched up profits of 316.03 billion yuan in the first half, said Li Rongrong, director of the State-owned Assets Supervision and Administration Commission.

Profits dropped 26.2 percent over the same period last year, but the rate of decrease was 15.6 percentage points lower than the first quarter. In June alone, the profits hit 75.19 billion yuan, an increase of 29.5 percent over that in May.

The business revenue of the 136 SOEs in the first half stood at 5.36 trillion yuan, down 6.3 percent year on year, but the rate of decrease was 2.8 percentage points lower than the first quarter.

Business revenue last month was 1.17 trillion yuan, an increase of 2.4 percent over June last year, an increase of 23.2 percent over May.

Li attributed the slowing decline to government efforts to improve SOE asset quality and competitiveness through consolidation this year.

Source : Konaxis

Above-the-line distributions are expenses charged to China operations, usually by the foreign parent directly, and thus are legitimate fees for which an invoice is presented to the China business as part of its normal operational procedure.

These can include: royalty charges for trademarks or patents owned by the parent; ?foreign management expertise,? full expenses and pay for any head of office or overseas personnel visiting China, even if just for a short period; and royalty fees for technology transfers interest on loans, including penalties for late payment.

Above-the-line distributions need to be agreed upon and identified in the articles prior to submission to the authorities for approval of an operation?s business license. When levying such charges onto a China business, it is important to be aware that such payments are subject to Chinese tax (amounts vary depending upon the service), prior to the China entity being able to remit back to the foreign parent. But even accounting for this, the amount of money able to be remitted back to the parent pre-tax can be quite significant with careful preparation and planning.

To know more, the whole issue is available (after a free subscription) on China Briefing website with others archives
For more information on China’s legal and tax issues or to ask for professional advices in related matters, please write to info@dezshira.com

When setting up in China, foreign investors are confronted with a myriad of complex issues, from local
regulatory variances, to confusing tax compliance issues and licensing procedures. With all the complexities over submitting business license applications, scant regard is often paid to one of the
most important parts of overall business planning, the mechanism to facilitate the effective repatriation and maximization of profits. This is something that should be dealt with during the planning stages of setting up in China.

The following article will present some issues to consider when preparing to repatriate profits out of China, as well as the way withholding and business taxes affect an enterprise in China. Understanding the processes and having proper structures in place from the beginning can vastly improve an enterprises ability to maximize and repatriate profits.

To know more, the whole issue is available (after a free subscription) on China Briefing website with others archives
For more information on China’s legal and tax issues or to ask for professional advices in related matters, please write to info@dezshira.com

Baidu?s Q1 revenue of $118.6 million beats the expected $115.9 million.

While Baidu’s current sales growth is not as high as those attained from its historical pace, Pali Research analyst Tian Hou said the company nonetheless outperformed the target it had set for itself.

Earlier this year, Baidu said its growth would moderate in the first quarter because of the weak Chinese economy and a decision to remove paid listings of unlicensed medical companies from its site.

“If you look at China’s market there’s a rebound. If you look at Baidu, there’s better performance than expectations. And also if you look at the pools of investable stock from the China Internet space, you really don’t have a lot,” said Hou.

Shares of Baidu rose $10.14 to $235 in after-market on Monday (Apr 27). The stock is up more than 70 percent since February.

Baidu trails Google and Yahoo in Internet search worldwide, but is the No. 1 player in China according to research firm comScore.

Google stepped up its efforts in China last month, with the introduction of free downloads of licensed music.

Still on Baidu, it plans to offer $1.5 million of advertising on its platform to small and medium-sized enterprises in May.

Baidu has announced the launch of a “Confidence Plan”, and has established a fund that will be used to help small and medium enterprises (SMEs) obtain additional business opportunities. Shen Haoyu, vice president of Baidu’s commercial operations, stated that initial investments will amount to RMB 10 mln, with funds to be released in May.

Baidu has additional plans to begin large-scale enterprise training in 2009, with the goal of aiding companies to develop and implement search engine marketing plans.

Source : Konaxis