8 Key Trends that will Shape Business in China in 2016

China has changed a lot much more than usual in 2015. Indeed, the China’s economy has slowed down. That’s why, the President Xi Jinping has strengthened his power, which will involve huge shifts for 2016.

Here are the eight main Chinese trends:

1- Actions against foreign companies

China will increasingly take action against foreign companies which want to launch business in China without paying Chinese taxes. Indeed, China will in particular strengthen the enforcement against US and European companies that operate in China only by a Hong Kong entity.

2- Sue court action

Chinese companies and employees were said to cancel any sue court action. Therefore, this is a wrong idea even if it is more and more true each year. Indeed, Chinese companies are becoming aggressive in the prosecution of their foreign counterparts, both inside and outside China. So if you move away from your agreement with a Chinese company or you cancel your Chinese supplier, you should expect to be sued. Also, it is the same if you put unemployed or if you transfer a Chinese employee without first having them to sign a settlement and release agreement that works in a Chinese court.

3- China’s crackdown on corruption

China’s crackdown on corruption is real, and it is not likely to disappear. In addition, this feature is also true  for the anti-corruption laws’ implementation for United States and European Union against US or European companies getting into the Chinese Market.

Moreover, Chinese lawyers are actively looking for whistleblowers and Chinese employees. Then, they won’t hesitate to give reward of several million of dollars rewards to their local employers.

4- Scams against companies overseas

Scams against companies overseas will keep going on getting further sophisticated and the most common will be still China bank fraud switch.

5- Foreign companies

Foreign companies will choose more and more not to « go to China » through WFOE formations instead of selling their products in China through distribution agreements, dealer agreements, or through e-commerce.

6- Intellectual property rights

The intellectual property rights have been encouraged and still increased in China. Then, the new law on trademarks in China has not only increased the statutory damages, but it also makes it easier for an intellectual property rights holder to prove damages against notorious counterfeiters.

China’s design patents is becoming a part of increasingly important companies overseas’ PI, as they have become relatively cheap to insure, and can provide substantial protection.

7- E-commerce in China will continue to rise up

E-commerce in China will continue to rise up. This feature means foreign companies want to protect intellectual property in China by using anti-counterfeiting strategies including the IP’s recording in China.

Moreover, it is especially true for trademarks, copyright and design patents, Chinese websites’ monitoring, and continuous interaction with Chinese e-commerce websites sites like Alibaba,  JD.com and DHgate.com.

8- One Belt One Road policy

China is still pressing its « One Belt One Road policy ». This policy focuses on China by using the land routes in order to expand trade with Central Asia and Europe, and it seems to have been designed to be a backdoor way around the United States and TPP.