An Introduction to Doing Business in China 2025

Doing Businessin China 2025 Special Focus Leveraging Increased PolicySupport in China’s DynamicBusiness Environment THE DOING BUSINESS IN ASIA GUIDES SERIES Available to Download Now: Doing Business in China Portal •ASEAN Guide•China Guide•India Guide•Indonesia Guide•Hong Kong Guide•Singapore Guide•Vietnam Guide•China Super City Clusters•UAE Guide Our latest online Doing Business in China Portal consistsof 100+ guides, videos, publications, and tools that arepractical and easy to navigate, covering: Why China,Regions to Invest, Sector Insights, How to Setup, Tax,Audit and Accounting, HR, Recruitment, PEO, and Payroll,News, Events, and more. This edition of Doing Business in China was produced by a team of professionals atDezan Shira & Associates, with Qian Zhou as editor.Creative design of the guide was provided by Aparajita Zadoo. © 2025, Dezan Shira & Associates. Disclaimer The contents of this guide are for general information only. For advice on your specific business, please contact a qualified professional advisor.Copyright 2025, Asia Briefing Ltd. No reproduction, copying or translation of materials without prior permission of the publisher is permitted. About Dezan Shira & Associates Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax andoperational advisory to international corporate investors. Operational throughout China, India and ASEAN,our mission is to guide foreign companies through Asia’s complex regulatory environment and assist themwith all aspects of establishing, maintaining and growing their business operations in the region. With over30 years of on-the-ground experience and a large team of lawyers, tax experts and auditors, in addition toresearchers and business analysts, we are your partner for growth in Asia. Introduction ALBERTO VETTORETTIManaging PartnerDezan Shira & Associates Doing business in China is getting more challenging than ever. With heightened geopoliticalrisks, growing pressure to diversify supply chains, a slowdown in China’s economic growth, anduncertainties surrounding the potential implications of Trump’s second presidency, companiesmust navigate an increasingly complex environment. Nevertheless, China remains one of the world’s largest consumer markets, essential forany ambitious businesses pursuing global success. China’s unparalleled supply chains aredifficult to replace, and its proposed standards to clearly define “Made in China” and offerpreferential treatment to domestic products in government procurement may necessitate localmanufacturing. Furthermore, China’s continued market opening and intensified fiscal supportpresent new opportunities to foreign investors. Despite fluctuations, China will likely remain one of the most important investment destinationsin emerging Asia for most foreign investors. Under these circumstances, it is vital that foreigninvestors stay informed about the changes in China’s business landscape and adapt theirstrategies accordingly. By identifying potential risks in advance and preparing for new marketopportunities, investors can remain agile in an otherwise challenging environment. Doing Business in China 2025 covers the following: •Establishing and Running a Business•Tax, Audit, and Accounting•Human Resources and Payroll•Cybersecurity and Data Protection Within these chapters, we discuss a range of different topics that affect doing business inChina, including investment models, intellectual property considerations, key taxes applicablefor foreign companies, various types of employment contracts, and a chapter explaining theevolving data and cybersecurity compliance requirements in China. CONTACT Dezan Shira & Associateschina@dezshira.comwww.dezshira.com Why China in 2025 Despite the evolving business landscape and growing challenges, China remains a vital andirreplaceable market for many organizations. The country offers unmatched access to one ofthe world’s largest consumer markets, a highly efficient and competitive supply chain, world-class infrastructure, and a skilled labor force. Additionally, the proposed “Made-in-China”requirements for public procurement highlight the strategic importance of local manufacturing.To stay competitive, informed executives should leverage these advantages by optimizingoperations within China, adapting to local policies, and continuing to capitalize on the country’sunique strengths. Why China Remains a Globally Competitive Investment Destination GDP Outlook Workforce and Talents China has the world’s largest labor market, andworkers in the manufacturing sector tend to bemore experienced, more educated, and betterresourced than their Asian counterparts. China’s GDP per capita is about six timeslower than the US, which means there issignificant room for its economy to grow. Market Size Market Reforms and Opening China’s rising purchasing power,expanding middle class, and a populationover a billion, positions