Paywall Archives - Focus - China Britain Business Council https://focus.cbbc.org/tag/paywall/ FOCUS is the content arm of The China-Britain Business Council Wed, 30 Jul 2025 09:07:57 +0000 en-GB hourly 1 https://wordpress.org/?v=6.9 https://focus.cbbc.org/wp-content/uploads/2020/04/focus-favicon.jpeg Paywall Archives - Focus - China Britain Business Council https://focus.cbbc.org/tag/paywall/ 32 32 What is cross-border restructuring? https://focus.cbbc.org/cross%e2%80%91border-restructuring/ Tue, 29 Jul 2025 09:55:41 +0000 https://focus.cbbc.org/?p=16424 Foreign‑invested firms in China are increasingly turning to cross‑border restructuring to reduce risk while keeping a foothold in the Chinese market Cross‑border restructuring offers a way to de‑risk supply chains, sidestep punitive tariffs, and build operational resilience without abandoning China entirely. It is not just moving factories from China to Vietnam or Indonesia. It requires a strategic overhaul of tax structures, legal entities, workforce plans, intellectual property arrangements, supplier networks,…

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Foreign‑invested firms in China are increasingly turning to cross‑border restructuring to reduce risk while keeping a foothold in the Chinese market

Cross‑border restructuring offers a way to de‑risk supply chains, sidestep punitive tariffs, and build operational resilience without abandoning China entirely. It is not just moving factories from China to Vietnam or Indonesia. It requires a strategic overhaul of tax structures, legal entities, workforce plans, intellectual property arrangements, supplier networks, and leadership models. When done well, it shifts China’s role from a one‑dimensional manufacturing base to a high‑value node in a broader regional strategy.

Why companies are choosing restructuring

Over recent years, geopolitical tensions, especially US–China trade and export controls, have disrupted once‑stable global supply chains. Rising costs and regulatory complexity in China have meant many multinationals are reassessing their entire China footprint. Yet for most, exiting China is simply impractical: the supply‑chain ecosystem is highly specialised; infrastructure is world‑class; R&D capability remains strong; and the domestic market continues to grow.

Instead, cross‑border restructuring provides a more balanced path. Companies can reduce geopolitical exposure while retaining China’s strengths by shifting certain parts of production, typically low‑value or labour‑intensive activities, to ASEAN or South Asia, while keeping R&D, quality control or domestic sales operations in China.

What to keep in China and why

The first step is understanding which parts of the operation truly belong in China. For some businesses, China is an export hub. For others, it’s a domestic market centre, an innovation base or a quality control node. That functional mapping is essential. Labour‑intensive assembly might be moved offshore, but high‑value engineering, regulatory liaison or customer service may remain.

Downsizing China operations isn’t simple. Legal obligations under labour laws mean consultations, severance and possibly union involvement. Equipment sales or asset transfer may require local approvals, particularly in sensitive sectors. And shifting assets can trigger tax liabilities, companies must weigh exit costs against long‑term benefits carefully.

Sensitive relationships can suffer if the process isn’t handled transparently. Government incentives or supplier ties may be put at risk if local stakeholders feel blindsided. Clear communication and compliance are crucial to preserving goodwill.

Choosing a new host location with purpose

The decision of where to locate new operations goes far beyond low labour cost. Strategic choice today must consider trade agreements, regulatory alignment, infrastructure, talent pools, and industry‑specific incentives.

For example, moving final assembly to Vietnam or Malaysia can help firms meet rules‑of‑origin requirements for free trade agreements, qualifying goods for tariff‑free export to the EU or US. But achieving this advantage depends on genuine manufacturing value‑add, not merely repackaging.

Market access also matters: Indonesia may suit consumer‑goods businesses seeking scale, while Singapore could be preferable for regulated sectors needing compliance clarity. Infrastructure readiness varies, from ports to digital readiness, and needs to match sectoral demands.

Many emerging markets now offer sector‑targeted incentives, India’s PLI (Production‑Linked Incentive) for electronics, or Thailand’s R&D grants for biotech. It’s vital to assess these offers relative to specific company needs.

Structuring the new entity and planning the timeline

How new operations are structured affects control, regulatory exposure, and cost. Options include a wholly foreign‑owned enterprise (WFOE), joint venture, contract manufacturing agreement or strategic alliance – all with different implications for tariff control, governance and local compliance.

To qualify for tariff benefits under agreements like RCEP or CPTPP, companies need to ensure local transformation thresholds are met, not just shipment points moved. That shapes decisions around what functions to relocate and what suppliers to localise.

A phased rollout is often wiser than a big‑bang relocation. Pilot operations allow evaluation of delivery performance, compliance fit, quality standards and cost savings before full-scale implementation. Project timelines must reflect construction, licensing, recruitment, training and partner onboarding timeframes.

Tax, transfer pricing and fiscal design

Restructuring often reshapes where value is created, and that impacts tax. Multinationals must ensure operations reflect substance: functions, risks and assets must align with where profits are allocated to avoid transfer pricing disputes across jurisdictions.

China is increasingly vigilant about outbound restructuring, especially where high‑value functions or IP are shifted. Early engagement with local tax bureaus and careful planning of asset transfers, or equity restructuring, is key to managing capital gains exposure and compliance risk.

Transfer pricing models must be updated to reflect new functional roles. Suppose China becomes a limited‑risk distributor rather than the main manufacturer. Then profit allocation and intercompany pricing must align with legal reality, not just historic structure.

People, leadership and morale

The human side of restructuring is often underestimated. Talent is hard to replace, and morale can suffer if staff in China feel abandoned or insecure. Leadership continuity, internal communications, retention plans, or even relocation programmes, must be carefully managed.

Mobilising key personnel from China to the new site raises immigration, tax and cultural adaptation issues. Host countries may limit work permits or raise residency hurdles. Companies need clear plans and legal advice on visas, taxation and support for expat staff.

At the same time, building a skilled local workforce requires labour‑market mapping, training initiatives, localisation planning and collaboration with vocational schools or employment agencies.

Protecting intellectual property and data

Moving operations can expose IP and data to new risks. Protection regimes vary by jurisdiction, patent law enforcement, judicial capacity and digital data governance differ greatly. IP risk assessments should be specific to each location and business model.

Companies must decide whether to hold IP in China, in a regional headquarters, or a neutral jurisdiction, understanding the impacts on tax, licensing arrangements and exit liabilities. Licensing terms between entities need to be clear, reflecting royalty terms, legal risks, and control frameworks.

If operations shift to territories with weaker IP regimes, greater vigilance, not just contracts, is required. Partner vetting, in‑house retention of core know‑how and regional IP strategies help limit leakage.

Managing supplier and customer relationships through transition

Supply change disruption is a real danger. Long‑standing supplier ties and delivery expectations can be upended if operations move too quickly. Identifying sole‑source vulnerabilities or critical clients is essential before the transition begins.

Maintaining customer service levels during the shift requires interim logistics planning, buffer stock, possible dual sourcing and renegotiation of contracts to reflect new transit routes or import/export jurisdictions.

Proactive, transparent communication builds trust. Customers and suppliers benefit from clear timelines and commitment to quality. In some cases, joint planning with anchor suppliers or logistics partners can smooth the transition; others may mean onboarding new local sourcing partners in the host country.

When is restructuring the right move?

Cross‑border restructuring may sound complex, but it offers more than risk mitigation. For many companies, it is a strategic move designed to future‑proof operations in a world where agility and resilience matter as much as efficiency.

Businesses must assess their own vulnerabilities: Are specific tariff risks or export controls exposing particular product lines? Is there over‑reliance on a single site or region? Which functions are portable? Which need to stay in China? Will a partnership model or contract manufacturing serve just as well as full investment offshore?

Cost savings alone are rarely enough. Firms must weigh infrastructure limitations, legal unknowns, language or cultural barriers, and balance must favour long‑term operational stability over sheer low cost.

Finally, internal alignment is critical. Leadership must treat restructuring as organisational change, not just logistics: reshaping workflows, managing talent, and preserving morale during the shift, all while sustaining governance, communication and the integrity of service delivery.

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How is China’s influencer economy different from the UK’s? https://focus.cbbc.org/how-is-chinas-influencer-economy-different-from-the-uks/ Fri, 25 Jul 2025 10:32:10 +0000 https://focus.cbbc.org/?p=16407 Influencer marketing in China is often the engine of sales; UK brands must adapt to thrive in its unique ecosystem China’s social commerce space revolves not around ambient influencer posts, but an intricate ecosystem where content, commerce and credibility converge. British brands stepping into this arena must unlearn much of what they assume about sponsorship in the UK and embrace the layered roles of KOLs (Key Opinion Leaders), KOCs (Key…

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Influencer marketing in China is often the engine of sales; UK brands must adapt to thrive in its unique ecosystem

China’s social commerce space revolves not around ambient influencer posts, but an intricate ecosystem where content, commerce and credibility converge. British brands stepping into this arena must unlearn much of what they assume about sponsorship in the UK and embrace the layered roles of KOLs (Key Opinion Leaders), KOCs (Key Opinion Consumers) and KOSs (Key Opinion Sellers).

“China is a global leader in influencer marketing, with the market for key opinion leaders (KOLs) reaching billions of pounds worth of sales, a scale unmatched in the West,” says CBBC’s Director, Consumer Economy Antoaneta Becker. KOLs like Li Jiaqi the ‘lipstick king‘, regularly drive hyper‑growth via marathon livestreams. Becker reminds us that “big isn’t always better” — sometimes niche, mid-sized creators outperform giants on return on investment. KOCs —micro‑influencers with smaller but highly engaged followings — often play the most effective role in initial trust building. They provide authenticity, especially among Chinese consumers who tend to trust peer reviews more than polished celebrity endorsements.

Platform dynamics differ sharply, too. In the UK, an influencer post may raise awareness; purchases generally happen later, off‑platform. In China, platforms like Douyin (short video plus Mini Shops), Xiaohongshu (content-led discovery), Taobao Live (livestream‑driven sales) and WeChat mini‑programs link community, content and commerce in real time. A single livestream can sell out stock in minutes if logistical readiness, message alignment and platform strategy are in place.

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The contrast is striking: whereas UK shoppers are comfortable with keyword search and independent product research, Chinese consumers rely on multiple touchpoints — sometimes eight or more — before buying, placing influencer-driven livestreams or lifestyle content at the centre of the journey.

This difference produces very real errors. UK brands can fall into the traps of misallocating budgets, chasing marquee KOLs without matching audiences or not ensuring inventory readiness. Some refused to adapt messaging or packaging after KOC-led feedback, and ultimately saw partnerships cancelled or campaign efficacy drop dramatically.

By contrast, successful brands use KOCs early to validate messaging and packaging through Influencer Focus Group or similar sessions. Once the story resonates, they scale via KOL livestream collaborations — yet always with careful alignment of inventory, platform mechanics and sales fulfilment. In a recent CBBC panel, Ntola Obazee of Emma Bridgewater explained that “live streaming in China now accounts for 10% of Emma Bridgewater’s sales, with live streamers often creating videos of the unboxing experience and doing live reviews of products” — demonstrating the power of co-created content paired with real-time conversion via influencer formats.

The benefits are compelling: livestream-led campaigns can produce dramatic sales spikes, micro‑influencers seed grassroots trust, and private‑domain marketing via WeChat mini‑programs or group chats fosters loyalty and repeat purchase. WeChat groups in China can be very effective if key opinion communities are pushing products through and mobilising with great content and brand support.

However, the influencer economy brings real risk. Fake followers and inflated engagement are widespread; studies suggest up to 45% of influencer metrics may be fabricated, often through Multi-Channel Network (MNC)-driven embellishment. High-profile scandals — such as livestreamer Viya’s abrupt ban for regulatory infractions — can trigger blackout-like disruptions and literary vanish entire campaign plans overnight.

Cost structures also diverge. In the UK, flat‑fee sponsorship is common; in China, KOL deals often involve commission-based remuneration (typically 10–30 %) or MCN-managed bundles. Brands must account not only for talent cost but stock readiness, logistics and contingency planning — missing stock at the moment of conversion can immediately undermine credibility.

To compete effectively, UK brands must recalibrate their strategy. They should engage micro‑influencers early, adapt assets and packaging via focus testing, co-design livestream programmes, plan inventory and logistics robustly, and use KOLs and KOCs in tandem to seed trust and scale. They must prepare to build community in WeChat private domains rather than assume platform checkout alone will convert UK-style posts into sales.

China’s influencer ecosystem demands theatre and trust anchored in real-time commerce. Brands that replicate a UK influencer playbook — isolated macro-influencer mentions or studio shoots — are unlikely to make an impact. Those that design a multi-tiered influencer strategy — seed with KOCs, amplify with KOL livestreams, convert on Douyin or Taobao, and retain via WeChat — stand to perform at a level far beyond UK norms.

UK brands engaging in China’s social commerce must treat influencer marketing less as sponsorship and more as an integrated sales channel, rooted in live content, platform-native formats, tight logistics and trust-led storytelling. Those that get the ecosystem right unlock not just sales spikes, but scalable, sustainable consumer journeys.

Join CBBC’s China Consumer 2025 to learn more about the social selling sector in China

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What does Shanghai’s minimum wage rise imply for the economy? https://focus.cbbc.org/what-does-shanghais-minimum-wage-rise-imply-for-the-economy/ Sun, 20 Jul 2025 08:58:13 +0000 https://focus.cbbc.org/?p=16409 A modest pay increase in China’s financial hub reflects wider national efforts to balance economic pressures with social stability From 1 July 2025, Shanghai raised its monthly minimum wage from RMB 2,690 (£288) to RMB 2,740 (£294), a relatively conservative increase of less than 2%. The city’s hourly minimum wage also climbed from RMB 24 (£2.57) to RMB 25 (£2.68). While Shanghai retains the highest minimum wage in the country,…

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A modest pay increase in China’s financial hub reflects wider national efforts to balance economic pressures with social stability

From 1 July 2025, Shanghai raised its monthly minimum wage from RMB 2,690 (£288) to RMB 2,740 (£294), a relatively conservative increase of less than 2%. The city’s hourly minimum wage also climbed from RMB 24 (£2.57) to RMB 25 (£2.68). While Shanghai retains the highest minimum wage in the country, the small increment marks its lowest annual increase in over a decade — signalling a broader strategic shift in China’s approach to wage setting.

The restrained increase comes at a time when many Chinese cities are weighing the need to support workers against mounting pressure on businesses. For low-income workers in the city, the additional RMB 50 (£5.36) a month may be welcome but is unlikely to keep pace with rising costs for essentials like rent, transport and food. Meanwhile, employers — particularly in the private sector and among SMEs — have been wary of sharper increases that could hit hiring and operating margins.

Shanghai’s move follows a pattern seen in other economically advanced parts of China, such as Beijing, Shenzhen and Guangdong, where minimum wage growth has slowed in recent years. Beijing now has the country’s highest hourly minimum wage at RMB 26.4 (£2.83), while Shenzhen and Guangdong follow closely behind Shanghai with monthly minimum wages of RMB 2,520 (£270) and RMB 2,500 (£267) respectively. Coastal cities continue to lead the pack, but the difference with other regions is narrowing as inland provinces roll out more substantial hikes.

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China allows each of its 31 provincial-level regions to set their own wage levels, leading to wide disparities. While most now have minimum monthly wages above RMB 2,000 (£214), some less developed provinces such as Hunan and Liaoning still sit closer to RMB 1,700 (£182). Regional authorities are required by law to review wages at least every two to three years, but increases are not guaranteed. Shanghai skipped adjustments altogether in both 2022 and 2024, reflecting the uncertain post-Covid economic environment and the government’s cautious fiscal outlook.

The wider context for these adjustments is China’s drive towards “common prosperity”, a national policy ambition aimed at reducing inequality and spreading the benefits of growth more evenly. While minimum wage rises are just one part of this broader agenda, they remain a critical lever for supporting working-class incomes and boosting domestic consumption.

Still, policymakers are walking a tightrope. Labour-intensive industries such as manufacturing, retail and logistics remain sensitive to wage increases, particularly in regions where businesses already face thin margins. Some firms may respond by relocating operations to lower-cost inland areas, or by investing in automation. Others may reduce hiring or move workers to informal, lower-paid roles not protected by minimum wage regulations.

There is also a generational and demographic dimension. Migrant workers and young people are disproportionately represented in low-wage and part-time employment, and thus stand to benefit from wage increases, but they are also most at risk if businesses trim staff to offset higher costs.

Shanghai’s modest wage rise this year suggests a preference for gradualism. The increase was likely designed to signal continued government support for workers, without destabilising local businesses or contributing to inflation. Analysts expect other cities to follow similar trajectories: small, measured increases tied closely to local economic indicators such as productivity growth, employment rates and cost-of-living data.

With China’s economy facing slower growth, soft domestic demand and ongoing global trade pressures, wage-setting will remain a key balancing act for local and national authorities. The 2025 update may be modest on paper, but it offers insight into how China is managing its transition from high-growth industrial powerhouse to a more service-led, consumption-driven economy.

For now, Shanghai leads the country in both pay and prudence. The rest of China is watching closely.

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Navigating the Chinese consumer market in a post-tariff world https://focus.cbbc.org/what-is-chinese-consumer-market-in-a-post-tariff-world/ Wed, 16 Jul 2025 07:00:00 +0000 https://focus.cbbc.org/?p=16380 The lifting of tariffs marks a potential turning point for British brands in China, but understanding local sentiment, policy shifts, and the role of soft power is more important than ever China’s decision to reduce or remove some retaliatory tariffs has encouraged a cautious optimism among British businesses. Yet while the trade climate appears to be improving, brands entering or re-entering the Chinese market are faced with the more complex…

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The lifting of tariffs marks a potential turning point for British brands in China, but understanding local sentiment, policy shifts, and the role of soft power is more important than ever

China’s decision to reduce or remove some retaliatory tariffs has encouraged a cautious optimism among British businesses. Yet while the trade climate appears to be improving, brands entering or re-entering the Chinese market are faced with the more complex challenge of navigating a complex consumer ecosystem shaped by policy shifts, cultural expectations and rising nationalism.

The reality is that while some trade barriers have lowered, others, especially those linked to regulation, culture and politics, remain significant.

Regulatory headwinds

China’s business environment has become more tightly governed in recent years. Foreign firms must now comply with a range of new requirements, from data privacy and security laws to investment restrictions and evolving digital content regulations.

Entire industries have undergone sweeping regulatory changes. From livestream ecommerce to education, the rules are continually being rewritten—often at short notice and with opaque enforcement. Understanding these changes is critical for British brands seeking market entry or expansion.

“In an unstable environment, I believe in a ‘Ready, fire, aim’ approach. Move quickly, test early, then refine your strategy. Those who wait for certainty may miss the window,” says Yang Ding, Founder and Director of New Silk Route Digital.

New Silk Route supports British brands across sectors such as sport, education and culture. Their work involves localising campaigns for Chinese audiences through livestreaming, influencer partnerships and culturally attuned storytelling. “It’s not just about exporting products,” Yang adds. “It’s about exporting values, and doing so in a way that resonates locally.”

Cultural literacy and soft power

British culture retains a powerful pull for many Chinese consumers. From the Premier League to Harry Potter, the UK continues to enjoy strong cultural cachet. But audiences today demand more than surface-level branding. They want relevance, authenticity and an understanding of what truly matters to them.

This was evident in the years leading up to the pandemic, when tourism was a central pillar of UK–China engagement. Public-private collaboration enabled large-scale, coordinated efforts to attract Chinese visitors to Britain’s regions.

“Before the pandemic, when China was a key visitor market and the UK government was investing heavily to keep Britain competitive, we had the opportunity to work with some of Britain’s most popular tourism destinations,” says Meimei Zhao, Founder of Variety Plus. “One standout project was in collaboration with London & Partners, where we supported the development and launch of tourism products designed specifically for the Chinese market — connecting London and Manchester with surrounding regions.”

Variety Plus helps UK and European brands expand into China, and Chinese brands go global. Zhao credits the success of these campaigns to the Discover England Fund — a £40 million government initiative that united airlines, hotels, attractions, and metro mayors around a shared vision. “It was a strong example of what’s possible when public and private sectors align,” she says. “Sadly, in the absence of sustained, large-scale funding for multi-year programmes, initiatives of this scale have become much harder to deliver.”

Despite this, British institutions and brands continue to foster cultural links through partnerships, creative collaborations and targeted campaigns — especially in education, design, heritage and lifestyle.

Shifting consumer dynamics

Today’s Chinese consumers are more value-driven, digitally fluent and locally proud. While international brands are still welcomed, especially in sectors like skincare, nutrition and premium fashion, they face stiff competition from high-quality domestic players.

British brands must bring more than heritage. They need relevance and adaptability, especially online. Digital ecosystems such as WeChat, Xiaohongshu and Douyin dominate daily life. Brands that localise their presence within these platforms are best placed to build lasting engagement.

Live commerce and influencer-led marketing are no longer optional, they’re central to the brand discovery journey. But execution matters. Chinese consumers are sensitive to tone, aesthetics and messaging. A misstep can be costly, while a well-executed campaign can deliver exponential returns. “Influencers in China are not just marketers,” says Yang Ding. “They’re cultural translators. The right partnership can open doors that advertising alone never will.”

Some of the most successful British brands in China today are those that combine product excellence with credible storytelling. This often involves deeper collaborations with local communities, creators and cultural tastemakers.

Political context and risk

While trade relations may be warming in some areas, wider UK–China relations remain complex. Issues such as technology, national security and academic exchange continue to shape the bilateral relationship. And for brands, politics cannot be ignored.

Chinese consumers are increasingly attuned to perceived slights, whether real or manufactured. Misjudged campaigns, poorly timed statements or partnerships with controversial figures can quickly spark backlash. State media and social platforms can amplify reputational risk within hours.

As a result, many brands are treading carefully. Some are pivoting to lower-risk sectors, such as health and wellbeing, education technology or sustainability. Others are investing more in market intelligence and crisis planning.

Still, there are windows of opportunity. Regional governments in China remain enthusiastic about foreign investment, particularly when it brings innovation, jobs or exports. British firms with a clear offer and flexible delivery models can still gain traction—if they act decisively. “We are in an era where agility beats certainty,” says Yang Ding. “It’s no longer about finding the ‘perfect’ strategy. It’s about learning fast, acting local, and building real human connections. That’s how you build brand equity in China today.”

Join CBBC’s China Consumer 2025 to learn more about the consumer and retail sector in China

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Part 2: What to do if your relationship with a Chinese distributor goes wrong https://focus.cbbc.org/part-2-what-to-do-if-your-relationship-with-a-chinese-distributor-goes-wrong/ Sat, 12 Jul 2025 13:45:05 +0000 https://focus.cbbc.org/?p=16366 Whether you want to regain control, stay in the market or make a clean break, here’s how to manage a breakdown with your Chinese distributor, and how to avoid it becoming a full-blown disaster If Part 1 of this series focused on what brands must do to prepare before signing with a Chinese distributor, Part 2 explores the more difficult scenario: what happens if that relationship breaks down? As Zarina…

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Whether you want to regain control, stay in the market or make a clean break, here’s how to manage a breakdown with your Chinese distributor, and how to avoid it becoming a full-blown disaster

If Part 1 of this series focused on what brands must do to prepare before signing with a Chinese distributor, Part 2 explores the more difficult scenario: what happens if that relationship breaks down?

As Zarina Kanji, Managing Director UK & Europe at WPIC, puts it: “The best thing is to avoid getting stuck in the first place.” But if things do go wrong, whether the distributor isn’t delivering, the market strategy has changed, or the working relationship has simply soured, brands must move swiftly, strategically and with clarity.

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“Trust is absolutely fundamental in Asia,” says Kanji. “It’s a region where relationships matter. The number of UK brands and beauty partners is small, people talk. If you can keep things professional and polite, you’ll stand a better chance of exiting on good terms.”

That’s not always easy, but it’s critical. “If you’re planning to stay in the Chinese market, you’ll need to line up a new partner and manage the transition carefully,” she explains. “Platforms like Alibaba or an agency like WPIC can sometimes support the handover. The new partner might help with transferring stock, keeping the store live and downtime minimal. But this is only possible if the breakup isn’t acrimonious.”

If tempers flare or the relationship turns hostile, things can spiral quickly: stores shut down, sales data is lost, and customer reviews disappear. “In the worst-case scenario,” she adds, “it’s a reminder of why doing due diligence upfront— and retaining ownership of your store — is so important.”

A phased approach—not a scorched earth

Kristina Koehler-Coluccia, Head of Business Advisory at Woodburn Accountants & Advisors, has seen this scenario play out many times, including with long-established brands.

“I’ve worked with companies that started with wholesale, then expanded into e-commerce and even hired staff. When the time was right, they decided to set up their own company in China. But instead of cutting ties with their distributor, they took a phased approach.” In this case, the company drew up a list of everything the distributor controlled — logistics, warehousing, customs clearance — and identified what to take back in-house and what to leave in place.

“Just because the distributor’s no longer right for the e-commerce or brand management side, doesn’t mean they’re not good at operations,” says Koehler-Coluccia. “So rather than burn the bridge, keep them doing what they’re good at. It also avoids triggering hostility.”

This type of staged transition can be particularly valuable for brands that rely on physical stock management. “Distributors don’t always just run the store,” she says. “They may also hold your inventory, fulfil orders, or handle customer service. You need to think about the whole supply chain, not just the front end.”

If it turns ugly, get legal, get local

But what if the distributor won’t cooperate? What if they refuse to transfer ownership of assets – or worse, continue using your brand? “If it turns ugly, you need a Chinese lawyer,” says Koehler-Coluccia. “Don’t try to manage this through a UK firm. Chinese law, Chinese platforms – this is where you need expertise on the ground.”

The first step is to review your contract. Hopefully, it includes clear terms on asset ownership and an exit clause (as advised in Part 1). If the distributor has no licensing rights and doesn’t own the trademark, you have leverage. “If they’re still using your brand post-termination, you can stop shipping,” she says. “That gets their attention. Meanwhile, your legal team can engage directly with the platform—whether that’s Tmall, JD, or another.”

She also recommends reaching out to the platform itself. “Tmall and JD don’t want this conflict either,” she explains. “They earn off your sales. They want to keep your brand active. You can get a client manager, and in some cases, they’ll help you change usernames and passwords. But you need a lawyer to do this—it’s not a simple customer service job.”

Keep your company structure in mind

For brands with serious long-term ambitions in China, one option is to incorporate locally. “Platforms will only let you own your store directly if you have a Chinese entity,” explains Koehler-Coluccia. “So many companies we work with start by using a distributor, but then form their own local company to take over.” That local entity can then contract directly with the platform, manage invoicing, repatriate profits, and even hire staff. “You can still outsource warehousing and logistics, even keep the same partner in a reduced role,” she adds. “But you control the brand and the data.”

For brands exiting completely, the priorities are slightly different. “If you’re done with the market,” says Kanji, “then the key is to get everything closed as quickly and cleanly as possible. Connect with the platforms and ask to close the stores, retrieve any stock, reclaim your platform deposit and close contracts—especially if you’ve got months left and nothing’s happening.”

Think strategically, not emotionally

In Kanji’s experience, British brands often get caught up in the heat of a bad situation. “But think long term,” she advises. “If you might want to come back to China, then it’s worth leaving on good terms.”

She recommends again using the CBBC, DBT, or approaching platforms directly for guidance. “There are people who’ve done this before and can help. Don’t go it alone.” And ultimately, as Koehler-Coluccia points out, this is about thinking operationally. “Too many brands only think about the e-commerce channel. But if you’ve been doing wholesale too, that’s a whole different relationship. Do a SWOT analysis. What are your distributor’s strengths? Where are the weaknesses? How much can you do yourself—and how much do you need help with?” She concludes with a reminder: “If your distributor has done a good job with logistics, why change it? The goal is to regain control, not destroy what’s working.”


Part 1 Recap: What to do before engaging a Chinese distributor
Read the first feature in this two-part series for a full breakdown of how to choose the right distributor, avoid common mistakes, and ensure you retain control of your brand in China.

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Part 1: What to do before engaging a Chinese distributor https://focus.cbbc.org/part-1-what-to-do-before-engaging-a-chinese-distributor/ Fri, 11 Jul 2025 13:42:33 +0000 https://focus.cbbc.org/?p=16364 Making sure you have the right distributor before you enter the market is essential to ensure your brand’s IP is protected and you won’t come unstuck further down the line. In the first of this two-part series, we explain what to do in advance of finding a Chinese partner It’s no secret that the Chinese market offers immense opportunities for international brands. But engaging a distributor without thorough preparation can…

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Making sure you have the right distributor before you enter the market is essential to ensure your brand’s IP is protected and you won’t come unstuck further down the line. In the first of this two-part series, we explain what to do in advance of finding a Chinese partner

It’s no secret that the Chinese market offers immense opportunities for international brands. But engaging a distributor without thorough preparation can leave businesses exposed, misrepresented, or worse, locked out of their own success. Two experts, Zarina Kanji, Managing Director UK & Europe at WPIC, and Kristina Koehler-Coluccia, Head of Business Advisory at Woodburn Accountants & Advisors, offer a clear-eyed look at the key steps British companies must take before signing anything.

The first lesson: do your homework. “Due diligence is everything,” says Kanji. “Ask for case studies from the distributor of companies they have worked with before and speak to them about their experience with that distributor. Ask partners within the network for their insights. It’s a relatively small community, so introductions are possible. Speak to other brands about their experience—but be discerning. Some may have had a bad story, but that might be down to getting the price wrong, or targeting the wrong market.”

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She recommends using networks like the China-Britain Business Council (CBBC) and the Department for Business and Trade (DBT) to get introductions and independent perspectives. But due diligence isn’t just about reputation, it’s also about understanding what’s actually being offered.

“Governance is important,” she says. “You need to know the breadth of services on offer. Is it an end-to-end service? Are they only running social campaigns, or are they also providing logistics, data reporting, and customer service? Some brands charge less, but do a lot less. You have to understand what’s required of you as the brand.”

For example, larger partners like WPIC may put 10 to 15 people on a single brand account. But smaller partners often require brands to provide considerable input, time and resources of their own. If your internal team can’t handle the load, the relationship may suffer.

Know your value…and your size

A common mistake, Kanji warns, is choosing a distributor that’s either too big or too small. “If your brand is under £10 million in annual turnover, don’t go for a giant partner like Baozun. You’ll be competing with Nike or Lululemon and you simply won’t get the attention.”

Instead, she advises finding partners at a comparable size. “You want someone who sees value in your business and is incentivised to make it grow, not just to hit quotas.”

Own your store. Protect your IP.

Perhaps the most critical red flag is giving away too much control, too early. “Make sure you own your store in China,” says Kanji. “The worst-case scenario is handing ownership of your Tmall or JD store to the distributor. Once they have that, they have the upper hand. That’s where the most costly and complex challenges come from.”

Koehler-Coluccia agrees emphatically. “There must be a clause in the distribution agreement that clearly states: all collateral belongs to the brand,” she says. “That includes the Tmall and JD stores, the inventory, all the digital assets. And if the contract ends, there must be a clean transfer of those assets back to the brand.”

In practice, she adds, this means spelling everything out in the contract—including an itemised list of what the distributor is setting up, and who owns what. Too often, British companies rely on UK lawyers for contracts that will be enforced in China. “Don’t do that,” she says. “Hire a Chinese law firm. You’re playing by Chinese rules—use someone who knows the game.”

Plan your exit before you start

One of Koehler-Coluccia’s most repeated mantras is simple: have an exit strategy. “There needs to be a section in the contract that says: if this doesn’t work, here’s how we unwind it. That includes transferring stores, assets, remaining stock. Don’t wait until things go wrong to figure that out.” It’s also worth accounting for the possibility that the distributor might lose money on the venture. “If they spend on marketing or logistics and don’t see ROI, what happens? That needs to be agreed up front—whether that’s clawback clauses or refund triggers.”

Understand the costs…and how to get paid

The Chinese e-commerce ecosystem is expensive and complex. Brands must factor in multiple layers of fees: platform deposits (for Tmall, JD, etc.), annual platform charges, partner fees, and campaign costs. All of these need to be fully itemised from the beginning.

“Get a full breakdown,” says Kanji. “You need to know what the fees are, what frequency they’re paid, and what happens if something goes wrong. Budgeting without this knowledge is asking for trouble.”

Remittance is another challenge. How will profits be repatriated? What’s the process for converting RMB back into pounds? These issues need to be clarified up front, with support from tax and legal advisors familiar with Chinese rules.

Stay involved from day one

For companies that assume the distributor will handle everything, both experts sound a stark warning. “Too many brands just want to delegate,” says Koehler-Coluccia. “They don’t have the internal capacity, so they assume they can just hand it off and watch the money roll in. That’s a fantasy.” Instead, she stresses the need for active involvement: “Set KPIs. Have monthly meetings. Monitor performance. If targets aren’t being hit, have that conversation early.”

It’s not uncommon, she says, for companies to ignore the setup process, then try to take control later, only to find the distributor has more leverage than expected.

“They’ll say: we put in the capital, the resources, the attention. And now you want to terminate us? If you’re not willing to pay attention from day one, what do you expect?”

Choose partners with platform access and influence

Relationships still matter in China, particularly when it comes to access and visibility. “Ask how long they’ve been in business, and how well integrated they are with platforms like Alibaba, Douyin, Xiaohongshu (RED),” says Kanji. “At WPIC, we have longstanding partnerships, so we get early access to marketing campaigns or new tools. That gives our clients first-mover advantage. Some agencies don’t have those connections., they can’t pull favours, they can’t get you in early.” That kind of platform integration can be the difference between a flagship campaign and being lost in the crowd.

Eyes wide open

Ultimately, both Kanji and Koehler-Coluccia stress the same thing: be realistic. China is not a plug-and-play market. It takes time, investment, clarity, and ongoing engagement. British brands that treat their Chinese distributor as a plug-in growth engine are almost always disappointed. But with the right preparation, the right legal safeguards, and a partner aligned to your scale and ambition, the rewards can be substantial. As Koehler-Coluccia puts it, “You can’t just hand it off and hope. This is your brand. Protect it.”

Read Part 2 here: What to do if your relationship with a Chinese distributor goes wrong

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How do Chinese consumers perceive UK brands? https://focus.cbbc.org/how-do-chinese-consumers-perceive-uk-brands/ Tue, 08 Jul 2025 08:26:22 +0000 https://focus.cbbc.org/?p=16329 Chinese consumers view UK brands through a lens of heritage and quality, but success in this dynamic market demands cultural sensitivity and strategic adaptation In the bustling marketplaces of Shanghai and Beijing, where modernity intertwines with tradition, UK brands have carved a unique niche among Chinese consumers. From the tartan elegance of Burberry to the refined engineering of Jaguar Land Rover, British products are often synonymous with luxury, craftsmanship, and…

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Chinese consumers view UK brands through a lens of heritage and quality, but success in this dynamic market demands cultural sensitivity and strategic adaptation

In the bustling marketplaces of Shanghai and Beijing, where modernity intertwines with tradition, UK brands have carved a unique niche among Chinese consumers. From the tartan elegance of Burberry to the refined engineering of Jaguar Land Rover, British products are often synonymous with luxury, craftsmanship, and a storied heritage. Yet, as China’s consumer landscape evolves, driven by rising affluence, digital innovation, and cultural pride, the perception of UK brands is not static. It is a complex interplay of admiration for British legacy and demand for relevance in a market that increasingly celebrates its own identity.

The allure of British brands in China is deeply rooted in their association with quality and authenticity. For decades, Chinese consumers have viewed products labelled “Made in Britain” as hallmarks of sophistication and reliability. The UK is associated with qualities like ‘trustworthy’ and ‘reliable’. This perception stems from Britain’s long history of craftsmanship, from Savile Row tailoring to Wedgwood ceramics, which resonates with affluent Chinese consumers seeking status and prestige. The concept of “keeping face,” where social image is paramount, further amplifies the appeal of British luxury goods. Owning a Rolls-Royce or a Burberry trench coat signals not just wealth but discernment, aligning with the aspirations of China’s growing middle and upper classes.

However, this admiration is not unconditional. Chinese consumers, particularly the younger, tech-savvy generation, are increasingly sophisticated and discerning. Young Chinese consumers value foreign cultures and products, but their attitudes toward Western brands can be tempered by slightly negative perceptions of corporate social responsibility (CSR) initiatives. This suggests that while UK brands benefit from their heritage, they must actively engage with local values to maintain relevance. For instance, Burberry’s attempt to blend British heritage with Chinese elements, such as incorporating Chinese characters into its iconic check scarves, met with resistance from some consumers who found it incongruent. This highlights a critical challenge: UK brands must navigate the fine line between preserving their British identity and adapting to Chinese cultural nuances.

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The rise of the “guochao” phenomenon — those choosing to buy domestic goods due to nationalism — further complicates this dynamic. Guochao reflects a surge in pride for Chinese heritage and domestic brands, driven by political and socio-economic undercurrents. Chinese consumers no longer universally lionise foreign brands, as evidenced by the backlash against H&M over its stance on Xinjiang cotton. This shift does not spell doom for UK brands but demands a strategic pivot. Successful brands have leaned into localisation, embedding themselves in Chinese culture while retaining their British essence. For example, Diageo, the parent company of Johnny Walker, has seen double-digit growth in China by creating limited-edition whiskies, such as the Forbidden City Blue Label, tailored for Chinese festivals like Lunar New Year. Such initiatives resonate with consumers who value cultural relevance alongside quality.

Social media and key opinion leaders (KOLs) play a pivotal role in shaping perceptions. China’s digital landscape, dominated by platforms like WeChat, Douyin, and Xiaohongshu, is a battleground for brand visibility. UK brands like Jo Malone have capitalised on this by partnering with popular KOLs and creating immersive campaigns, such as the Paddington Bear-inspired Orange Marmalade fragrance promotion, which combined social media engagement with offline installations like a Shanghai subway takeover. These efforts bridge the gap between heritage and modernity, appealing to younger consumers who are both socially savvy and culturally conscious.

British brands represent heritage and quality but they must tell compelling stories that also resonate emotionally

Economic challenges add another layer of complexity. Recent reports indicate a slowdown in China’s luxury market, with companies like LVMH and Burberry reporting sales declines in 2024. Amid economic uncertainty, Chinese consumers are reining in spending, making it imperative for UK brands to differentiate themselves. Heritage alone is not enough; brands must tell compelling stories that resonate emotionally. Jaguar Land Rover, for instance, has transformed its image in China by creating culturally immersive experiences, such as the Range Rover House in Chengdu, which blends shopping with traditional tea culture. This approach not only showcases British craftsmanship but also aligns with local values, fostering a deeper connection with consumers.

Compliance and market entry strategies also influence perceptions. Kristina Koehler-Coluccia of Woodburn Accountants and Advisors emphasises that issues like intellectual property protection and contract enforcement remain critical for UK brands entering China. Partnering with local distributors who understand the market is essential to avoid price wars and ensure brand consistency. Waitrose, for example, has navigated regulatory challenges to offer products like shortbread and whisky, which align with Chinese consumers’ interest in British goods. By maintaining its heritage while adapting to local tastes, such as promoting afternoon tea experiences, Waitrose reinforces its premium image.

The demographic diversity of Chinese consumers further shapes perceptions. Younger consumers, particularly those in first- and second-tier cities, are more willing to pay premiums for high-quality imported products, associating them with a leisurely lifestyle. In contrast, older consumers may prioritise price over quality, though this is shifting as affluence grows. Ethnic minorities, as noted in a 2025 study, show less enthusiasm for China-Chic products compared to Han Chinese, suggesting that UK brands may need tailored strategies for different consumer segments. This diversity underscores the need for UK brands to view China not as a monolith but as a multifaceted market requiring nuanced approaches.

Looking ahead, UK brands must balance heritage with innovation. The success of companies like Wedgwood, which has opened 29 stores in China by leveraging its British craftsmanship through live-streaming campaigns, demonstrates the power of speed and cultural sensitivity. Similarly, Fortnum & Mason has connected with Chinese consumers by emphasising lifestyle experiences and sustainability, aligning with shifting consumer values. These examples illustrate that while the “Made in Britain” label remains a powerful asset, it must be paired with storytelling that resonates with China’s dynamic consumer base.

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Why is the childfree parent sector in China booming? https://focus.cbbc.org/why-is-the-childfree-parent-sector-in-china-booming/ Fri, 04 Jul 2025 08:48:38 +0000 https://focus.cbbc.org/?p=16332 China’s growing childfree parent sector is redefining consumer behaviour, driven by economic pressures, cultural shifts and a focus on personal freedom The decision to remain childfree in China is a relatively new phenomenon, rooted in a blend of economic, social and cultural factors. Historically, large families were a cornerstone of Chinese society, supported by Confucian values that emphasised familial duty and lineage. However, rapid urbanisation, rising living costs and changing…

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China’s growing childfree parent sector is redefining consumer behaviour, driven by economic pressures, cultural shifts and a focus on personal freedom

The decision to remain childfree in China is a relatively new phenomenon, rooted in a blend of economic, social and cultural factors. Historically, large families were a cornerstone of Chinese society, supported by Confucian values that emphasised familial duty and lineage. However, rapid urbanisation, rising living costs and changing attitudes among younger generations have challenged these traditions. According to a 2024 report by the China Population and Development Research Centre, the fertility rate in China dropped to 1.1 children per woman, one of the lowest globally, reflecting a growing preference for childfree lifestyles among urban millennials and Gen Z. This shift is particularly pronounced in tier-one cities like Shanghai and Beijing, where economic pressures and career demands often take precedence over starting a family.

One of the most significant trends within the childfree parent sector is the prioritisation of personal freedom and self-fulfilment. Young Chinese professionals, particularly those born in the 1980s and 1990s, are increasingly valuing experiences over traditional milestones like parenthood. A 2025 survey by Totem, published in partnership with Campaign Asia, found that 62% of Chinese consumers aged 25-35 cited financial independence and personal growth as their top life goals, with only 18% prioritising parenthood. This focus on self-fulfilment has fuelled demand for premium experiences, such as travel, dining and wellness, as childfree individuals redirect disposable income towards personal enrichment. For British brands, this presents an opportunity to market luxury goods and services that align with these aspirations, from high-end travel packages to artisanal food and beverage offerings.

Economic pragmatism is another driving force behind the childfree movement. The soaring cost of raising a child in China, estimated at £60,000 per child until the age of 18, according to a 2024 report by the South China Morning Post, has deterred many from parenthood. Coupled with stagnating wages and a competitive job market, many young Chinese see childfree living as a way to maintain financial stability. This economic reality has given rise to the “DINK” (Double Income, No Kids) lifestyle, where couples leverage their dual incomes to invest in high-quality products and experiences. Luxury brands, in particular, are capitalising on this trend. Chinese consumers are holding onto their cash but are willing to spend on luxury when confidence returns, with the spring/summer 2025 season expected to see new product launches at more accessible price points. British heritage brands like Burberry or Jaguar Land Rover, which combine prestige with emotional storytelling, are well-positioned to appeal to this demographic by emphasising quality and exclusivity.

The childfree parent sector is also driving innovation in China’s health and wellness industry, a market projected to reach £50 billion by 2025. Childfree individuals, particularly Gen Z and millennials, are increasingly investing in self-care, from fitness subscriptions to mental health services. Holland & Barrett’s 2025 China Chat event highlighted how young Chinese consumers are leading global trends in wellness, with a focus on premium supplements and organic products. This aligns with a broader cultural shift towards preventative health, as childfree consumers have the time and resources to prioritise their physical and mental well-being. British brands with a heritage in health and wellness, such as The Body Shop, can tap into this demand by offering products that resonate with the values of sustainability and self-care that these consumers hold dear.

Technology is another arena where the childfree parent sector is making its mark. With fewer familial obligations, these consumers are early adopters of digital innovations, from smart home devices to AI-driven fitness apps. China’s pet industry, often a proxy for the childfree sector, is expected to reach £113.9 billion by 2025, driven by young, tech-savvy consumers investing in pet tech like smart feeders and cameras. This tech enthusiasm extends to other areas, such as virtual influencers and the metaverse, which are gaining traction as childfree consumers seek novel digital experiences. British tech firms, particularly those specialising in software-as-a-service (SaaS) solutions, could find a receptive market by offering tailored digital tools that enhance lifestyle convenience.

Social media plays a pivotal role in shaping the childfree parent sector’s identity and consumption habits. Platforms like Douyin and RED are not just marketing channels but cultural hubs where childfree consumers connect and share their lifestyles. A 2025 CBBC report on China’s consumer market emphasised the rise of “swarms”, spontaneous gatherings driven by online buzz, where childfree individuals seek community and excitement through pop-up events and brand activations. British brands can leverage this trend by creating immersive, shareable experiences, such as pop-up tea ceremonies or fashion showcases that blend British heritage with local relevance. “Success in China requires staying true to brand heritage while adapting to local consumer behaviours,” said Kristina Koehler-Coluccia, Head of Business Advisory at Woodburn Accountants and Advisors.

Despite the opportunities, entering the childfree parent sector comes with challenges. Intellectual property protection and regulatory compliance remain critical, particularly in sectors like food and beverage or wellness, where stringent standards apply. CBBC’s Ran Guo advises brands to partner with exclusive distributors to avoid price wars and build long-term trust. Moreover, understanding China’s regional diversity is essential; treating China as a continent, not a country, allows brands to tailor strategies to specific consumer subcultures. For British brands, this means balancing their heritage with local emotional resonance, whether through storytelling that highlights craftsmanship or collaborations with Chinese influencers who amplify brand authenticity.

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What Are China’s New Facial Recognition Regulations? https://focus.cbbc.org/what-are-chinas-new-facial-recognition-regulations/ Fri, 27 Jun 2025 07:53:00 +0000 https://focus.cbbc.org/?p=16318 China’s latest rules on facial recognition technology introduce mandatory registration for companies handling significant volumes of personal data, alongside a practical guide to compliance In an era where facial recognition technology is increasingly embedded in daily life, from unlocking smartphones to streamlining payments, China has introduced robust regulations to ensure its responsible use. On March 21, 2025, the Cyberspace Administration of China (CAC) and the Ministry of Public Security (MPS)…

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China’s latest rules on facial recognition technology introduce mandatory registration for companies handling significant volumes of personal data, alongside a practical guide to compliance

In an era where facial recognition technology is increasingly embedded in daily life, from unlocking smartphones to streamlining payments, China has introduced robust regulations to ensure its responsible use. On March 21, 2025, the Cyberspace Administration of China (CAC) and the Ministry of Public Security (MPS) released the Security Management Measures for the Application of Facial Recognition Technology, effective from June 1, 2025. These measures, supplemented by a clarifying notice from the CAC on March 30, 2025, mandate registration for companies processing facial data of over 100,000 individuals and provide a clear framework for compliance. For British businesses operating in or entering the Chinese market, understanding and adhering to these rules is essential to safeguard operations and protect personal data.

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The New Regulatory Landscape

China’s facial recognition regulations are part of a broader effort to strengthen data protection under the Personal Information Protection Law (PIPL), enacted in 2021. The Security Management Measures aim to balance innovation with the protection of individual privacy, addressing concerns about the misuse of sensitive biometric data. The rules apply to any organisation, domestic or foreign, processing facial recognition data in China, with a particular focus on those handling large datasets. According to the CAC, companies storing facial data of more than 100,000 individuals must register with their provincial-level cyberspace administration within 30 working days of reaching this threshold.

Recognising the compliance burden, the CAC introduced a grace period for companies that hit this threshold before June 1, 2025, allowing them until July 14, 2025, to complete registration. This transitional measure reflects China’s pragmatic approach to implementation, ensuring businesses have time to adapt without immediate disruption. Additionally, the CAC issued detailed ‘Instructions for Filling in the Facial Recognition Technology Application Filing System (First Edition)’, accessible via the Personal Information Protection Business System or the National Cyberspace Administration Government Affairs Hall on the CAC’s website. These guidelines outline the registration process, required documentation, and compliance expectations, making it easier for companies to navigate the system.

Why Compliance Matters

Facial recognition technology is widely used in China across sectors like retail, finance and security, but its rapid adoption has raised concerns about privacy and data security. China’s facial recognition market is projected to reach £7.2 billion by 2027, driven by applications in smart cities and public safety. However, high-profile cases, such as the 2021 fine imposed on a Hangzhou zoo for collecting facial data without consent, underscore the risks of non-compliance. The zoo was ordered to delete the data and issue a public apology, highlighting China’s growing emphasis on enforcement.

For British businesses, compliance is not just about avoiding penalties; it’s about building trust in a market where data protection is increasingly scrutinised. Robust cybersecurity measures, including compliance with data laws, are critical for protecting investments in China. Failure to register or properly handle facial data could result in fines, operational restrictions, or reputational damage, particularly for companies in sectors like technology, retail, or hospitality that rely on facial recognition for customer engagement.

How to Register: A Step-by-Step Guide

The registration process is designed to be straightforward, with all steps completed online via the Personal Information Protection Business System. Companies must first create an account on the platform before uploading the required documents, which include:

  • A Basic Information Form of Personal Information Processor, detailing the company’s operations and data processing activities.
  • A Facial Recognition Technology Application Record Form, outlining the scope and purpose of facial data use.
  • A Personal Information Protection Impact Assessment (PIPIA), assessing the legality, necessity, and risks of data processing.
  • Scanned copies of the Unified Social Credit Code Certificate, legal representative’s ID, agent’s ID, Power of Attorney, and Letter of Commitment, all stamped with the company’s official seal.

The CAC reviews submissions within 15 working days, updating the application status to “Filing Completed,” “Returned for Improvement,” or “Review Failed.” If supplementary materials are required, companies have 10 working days to provide them, or the process is terminated. The CBBC advises seeking professional support, such as from its Information Systems team, to ensure compliance with China’s data laws and to localise global systems effectively.

Conducting a Personal Information Protection Impact Assessment (PIPIA)

A cornerstone of the new regulations is the requirement to conduct a PIPIA, as mandated by the PIPL. This assessment evaluates the legality, legitimacy, and necessity of facial data processing, alongside the potential impact on individual rights and the effectiveness of protective measures. The Filing Instructions provide a tailored template for facial recognition, requiring companies to disclose technical specifications, data collection and storage methods, standard operating procedures, and the ethical basis for data use. For example, companies must clarify whether facial data is used for automated decision-making, such as targeted advertising, and detail the infrastructure and technology providers involved.

The PIPIA process encourages transparency and accountability, aligning with international best practices. The PIPIA requirement has driven companies to adopt more robust data governance frameworks, enhancing trust among consumers and regulators alike.

Easing the Transition

The CAC’s notice reflects a pragmatic approach to regulation, balancing enforcement with flexibility. The grace period for pre-June 2025 data processors and the detailed Filing Instructions demonstrate China’s commitment to supporting businesses during this transition. For British companies, this is an opportunity to align with China’s evolving data protection regime while leveraging tools like the CBBC’s Business Guides, which offer insights into regulatory compliance and market navigation.

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How to Protect Intellectual Property in China https://focus.cbbc.org/how-to-protect-intellectual-property-in-china/ Thu, 26 Jun 2025 08:48:25 +0000 https://focus.cbbc.org/?p=16313 As China continues to solidify its position as a global economic powerhouse, protecting intellectual property (IP) in the country remains a critical concern for British businesses seeking to enter or expand in this dynamic market. With rapid advancements in legislation, enforcement mechanisms, and technological tools, China’s IP landscape has evolved significantly in recent years. However, challenges persist, particularly for foreign companies navigating its unique legal and cultural environment Understanding China’s…

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As China continues to solidify its position as a global economic powerhouse, protecting intellectual property (IP) in the country remains a critical concern for British businesses seeking to enter or expand in this dynamic market. With rapid advancements in legislation, enforcement mechanisms, and technological tools, China’s IP landscape has evolved significantly in recent years. However, challenges persist, particularly for foreign companies navigating its unique legal and cultural environment

Understanding China’s IP Framework

China’s IP system has undergone transformative reforms since joining the World Trade Organisation (WTO) in 2001, aligning more closely with international standards such as the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Key milestones include the establishment of the first Trademark Law in 1982, the Patent Law in 1984, and the Copyright Law in 1990, all of which have been amended multiple times to enhance protection and enforcement. The China National Intellectual Property Administration (CNIPA) oversees patents, trademarks, and geographical indications, while the National Copyright Administration of China (NCAC) manages copyright matters.

In 2021, China introduced the “Outline for Building a Strong Intellectual Property Nation 2021-2035,” a 15-year plan aimed at strengthening IP protection, improving market value, and boosting brand competitiveness. By 2026, the outline targets a 13% contribution from patent-intensive industries to GDP and an increase in high-value patents per 10,000 people to 12. Recent data highlights China’s progress: in 2022, the country recorded 4.21 million valid patents (up 17.1% year-on-year) and 42.67 million valid trademarks (up 14.6%), underscoring its commitment to fostering innovation.

Despite these advancements, foreign businesses must remain vigilant. China’s first-to-file system for trademarks and patents means that the first entity to register IP rights typically secures them, even if they are not the original creator. This system, combined with historical issues like bad-faith registrations, necessitates proactive strategies to protect IP effectively.

Key Steps to Protect Your IP in China

1. Register Your IP Early

China operates a first-to-file system, making early registration critical to securing IP rights. Trademarks, patents, and copyrights must be registered with the CNIPA or NCAC, as IP protection in other countries does not automatically extend to China. For trademarks, consider registering in both English and Chinese (including transliterations) to prevent bad-faith registrations, where third parties register similar marks to extort foreign companies. The CBBC advises seeking professional assistance due to the complexities of the Chinese IP system, particularly for trademarks, which require a comprehensive understanding of local regulations.

Patents in China include invention patents (20 years), utility models (10 years), and design patents (15 years). Design patents, crucial for creative industries, protect the aesthetic aspects of products but must be registered before public disclosure to maintain eligibility. Copyrights are automatically protected under the Berne Convention, but voluntary registration with the NCAC provides presumptive evidence of ownership, simplifying enforcement. For creative sectors like architecture, design, and media, registering copyrights and design patents is strongly recommended to safeguard against infringement.

2. Use Contracts and Agreements

Contracts are a vital tool for protecting IP internally and externally. Non-Disclosure, Non-Use, Non-Circumvention (NNN) agreements, tailored to Chinese law, are more effective than standard Non-Disclosure Agreements (NDAs) in preventing suppliers, partners or employees from misusing IP. These agreements should be bilingual (Chinese and English) and governed by Chinese law to ensure enforceability. Including IP protection clauses in contracts with employees, clients, and partners further strengthens safeguards.

For creative businesses, contracts can delineate ownership and usage rights for collaborative projects. Clear agreements are key in industries like film and design, where IP disputes can arise from ambiguous partnerships.

3. Leverage Trade Secrets Protection

Trade secrets, encompassing confidential business information like manufacturing processes or client lists, are protected under China’s Anti-Unfair Competition Law, amended in 2019 to enhance safeguards. To qualify as a trade secret, information must be non-public, commercially valuable, and subject to confidentiality measures. Businesses should implement internal controls, such as limiting employee access to sensitive data, providing IP training, and incorporating security into facility design. Monitoring for potential leaks at trade shows or online platforms is also essential.

4. Monitor and Enforce IP Rights

Proactive monitoring is crucial to detect and address IP infringements promptly. Businesses should regularly check trademark and patent databases, industry publications, and e-commerce platforms for unauthorised use. The CBBC’s partnerships with platforms like Alibaba and Tencent facilitate dialogue and enforcement, helping British companies tackle online infringement.

Enforcement options in China include administrative action, civil litigation, criminal enforcement, and customs seizures. Administrative actions, handled by local authorities, are effective for straightforward trademark or counterfeiting cases. Civil litigation, increasingly successful for foreign firms, offers the potential for damages and public deterrence. Specialised IP courts in cities like Beijing, Shanghai, and Guangzhou, established since 2014, have improved judicial expertise and consistency.

5. Utilise Technological Tools

China’s adoption of technology to enhance IP protection is noteworthy. In 2024, the Copyright AI Intelligent Review Tool was introduced to streamline the assessment of copyright infringement cases, particularly for images. By automating analysis, the tool reduces human error and accelerates rulings, empowering creators to combat infringement effectively. Businesses should stay informed about such innovations, as they may expand to cover broader IP categories in the future.

6. Collaborate with Strategic Partners

The CBBC’s network of strategic partners, including the Alibaba Anti-Counterfeiting Alliance (AACA) and the Quality Brands Protection Committee (QBPC), provides valuable support for UK businesses. These partnerships facilitate collaboration with Chinese authorities and platforms, enhancing IP protection and enforcement. Engaging with CBBC’s IP team can also provide access to tailored advice and professional networks.

Addressing Challenges

Despite progress, challenges remain. Bad-faith trademark registrations continue to hinder foreign companies, requiring costly legal action to cancel or invalidate. The perception that “you cannot do anything if someone copies you” in China is outdated but persists among some businesses, underscoring the need for education. Additionally, cultural differences and varying levels of public awareness about IP rights can complicate enforcement.

Businesses, particularly in creative sectors, may hesitate to enter China due to infringement fears. However, by leveraging China’s robust IP system and taking proactive steps, these risks can be mitigated. Success stories, such as eOne’s recognition of Peppa Pig as a well-known trademark, demonstrate that persistence and strategic litigation can yield positive outcomes.

Looking Ahead

China’s IP environment is poised for further improvement, driven by domestic innovation and international pressure. The 2024 Patent Law amendments, introducing patent term extensions for pharmaceuticals and reinforcing good-faith principles, reflect China’s commitment to a stronger IP regime. By 2025, over 2,000 IP support agencies nationwide are expected to assist businesses, processing 71,000 applications annually.

For British businesses, protecting IP in China requires a proactive, multi-faceted approach: early registration, robust contracts, vigilant monitoring, and strategic partnerships. By staying informed and leveraging resources like the CBBC, companies can navigate China’s IP landscape with confidence, fostering innovation and growth in one of the world’s most dynamic markets.

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