have a - Jeni Carmichael
Transcription
have a - Jeni Carmichael
中國 China By Jeni Carmichael 1 Introduction The purpose of this report is to give details about china that you should know when doing business with them. Knowing the chinese culture and business ettiqutte will not only help you do business with the country but it will aslo help you decide if China is the best place to source knit products. Using these guidelines, should allow a smooth transaction between the american and chinese companies. through examination of china, trade agreements, labor laws, sourcing guidelines, culture traits and business ettiqutte, it should be clear that there are not only risks but many benefits in doing business with china. Through economic exploration, doing business with china will open possibilities of high quality goods at low prices. 2 Table of Contents COUNTRY OVERVIEW- Page 4 Socio-Economic Political Climate- Page 5 Labor Laws- Page 10 State of the Textile and Apparel Industry- Page 12 Textile and Apparel Associations- Page 13 Trade Agreements- Page 14 Laws of the U.S- Page 19 Business Etiquette-Page 20 Type of Culture- Page 21 Negotiation and strategies- Page 21 Relationship Building- Page 22 Social and Cultural elements Page 23 Dining- Page 29 Global sourcing overview- Page 31 Sourcing guidelines- Page 32 Potential Manufacturers- Page 36 Costing- Page 39 Import Classification- Page 40 Logistics and importation- Page 41 Freight- Page 42 Standards, Regulations and Laws- Page 46 China import and Export Documentation- Page 49 Conclusion- Page 55 Appendix- Page 56 Country traits- Page 57 Art- Page 63 Dining and Cuis Monuments and Sight Seeing- Page 65 Dining and Cuisine- Page 82 Fiscal Policies-Page 84 Economy- Page 85 Geography-Page 87 Tech Pack-Page 88 Work Cited- Page 95 3 Business overview 4 Socio-economic-political climate Social Climate: The Chinese President, Xi Jinping, is chasing after the Chinese dream. This ranges from the rights to education to a clean environment, to individual happiness which all leads to a middle class. China wants to be a rich, strong and prosperous nation, however the majority of citizens must have entered the middle class. For this to happen the annual general income must be three times the average GDP and higher. The annual income must be of U.S$ 18,000. Once they achieve this income they will be at the living standard similar to a lower class in the U.S. Majority of this group will be urban residents with a stable and high-income job, and those who have at least a high school education. They will have money to spend on food, clothing and housing while having some disposable income, which will be used for consumption. China has about 250 million people that can be classified as middle class, which is only about 18.5% of the total population. Although this status has begun to take shape it remains low in relative proportion. With higher income and consumption levels, China will be guaranteed domestic demand. The middle class is a treasury of human capital and provides a sense of security with more favorable conditions. The middle class is the cornerstone of social stability. They own property and have some social status and their social development will build political democracy. Political: The more then 80 million-member communist party of China continues to dominate government. This central party control is tightest in central government offices and in urban economic, industrial and cultural settings. The party’s highest body is the Party Congress, which meets at least once every 5 years. President: Xi Jinping Vice President: Li Keqiang State Council: Wen Jiabao Chairmen of the NPS: Wu Bangguo Chairmen of the Central Military commission: Xi Jinping The primary organs of state power are the National people’s Congress, the president and the State council. At the National People’s Congress Conference this past month, Xi Jinping was elected to be the president of the People’s Republic of China. At the same time, Peng Liyuan Xi’s wife became China’s first lady. This lady has become a symbol of a more confident China. 5 Peng has been making headlines this week. She has been a celebrity on Chinese television since the 1980s. It is rare to have a first lady who looks like a model and who is ranked as a major general. She is also known for her championing social causes. Last year the World Heath Organization named her as “goodwill ambassador” in the fight against tuberculosis and HIV/AIDS. All of this went on while her husband, the president, met with Russia president. China’s history is littered with tales of women who were allowed to become too close to the center power. She is the real first lady. China re-launched their market base in 1992 and since has been transforming globally and domestically. The rebalancing of the economy towards consumption could lead to an unstable economy. Despite China’s phenomenal growth, their overall level of development remains below median. China has been facing debt since 2009 when the banks unleashed a surge of loans to power the economy during the global financial crisis. Beijing has spent over three years trying to manage these problems by raising mortgage down payments and barring people from purchasing second homes. China’s banks are feeding unwanted assests into the country’s “shadow banking system” which reflects just a portion of the actual credit risk lurking in the financial system. We are unsure of how many more risky loans have been shifted. Although Chinese authorities are aware of what they’re going through, China’s growth model needs to change. If the expected growth falls from over 10 to 6 percent the needed Source: ibtimes.co.uk rate of investment will collapse. A big jump in credit has swelled because of real estate and other investments failing. China’s government is in trouble with an annual growth rate of below eight percent. The Chinese Communist Party said they would supply growth in return for political quiescence. The end of high growth would imply that this social contract is in trouble. 6 Economic Climate China has always been referred to as a nation that only made knock-off products. This involves laborers who work long hours and receive little pay and very lowend manufacturing. It is now becoming more difficult to find shoes or textile products that are made in China. They are now made in Vietnam, Pakistan or India. China’s labor cost is rising in the areas where most of China’s exporting companies are located. The laborers’ wages have gone up at 12 percent each year from 2002 to 2009. Some believe that higher wages in China will benefit the other countries because they can provide cheaper labor compared to China. With a population of 1.3 billion people, a richer China is in the future. In 2012, the National Bureau of statistics in China suggested that over 50 percent of China’s growth during the first three quarters of 2011 was fueled by consumption, rather then investment. The significance of a more confident China is not just about new space ships or the outgoing first lady. Their economic performances are outstanding and the Chinese people are becoming more open to the rest of the world. A more confident China will bring the rest of the world more opportunities to explore and learn about its culture and politics. China operates as a market economy which means that there goods are produced through free markets. They have emerged to the lead exporter in the world with the second largest economy. Although China is currently booming and the world is excited about their growth, the Chinese government has two reasons for the possible decline of the economy. China has fallen in the middle-income trap, which aborts industrialization and occurs when the economy begins to catch up with advanced economies. This happened in Japan and South Korea not too long ago. Here are the two reasons they believe this. “First, the potential for infrastructure investment has “contracted conspicuously”, with its share in fixed asset investment down from 30 per cent to 20 per cent over the past decade. Second, returns on assets have fallen and overcapacity has soared. The “incremental capital output ratio” - a measure of the growth generated by a given level of investment - reached 4.6 in 2011, the highest since 1992.” (Wolf) China is getting less growth from its investment. Another reason it may fall is because urbanization is still rising but at a decelerating rate. Beijing has made it clear that it’s more then willing to accept short-term costs of a growth sacrifice to keep its development strategy on track. It is the world’s second largest economy and is transforming from and exports and investment led economic growth to consumption-driven growth. Foreign industrial companies are rethinking their China strategies, the Wall Street Journal Reports. China’s economy has grown 7.8 percent in 2012 from a year earlier. This is rather slow in comparison to previous years. Their GDP declined from more then 50 percent to 46 percent last year. (Zhang) As the investment-led economy slows in China, foreign companies are finding it hard to make profits off of big projects. China is expected to surpass Japan as the world’s largest luxury goods market and by 2016 to overtake the U.S to become the world’s largest retail market, according to the Economist Intelligence Unit. 7 8 Source: Strangeloopnetworks.com 9 Labor Laws The Chinese Labor Law covers workers’ rights, labor contracts, collective contracts, hiring and firing, wages and salaries, working hours and overtime, rest and vacations, labor disputes, trade unions, labor administration and social insurance. It sets the legal requirements for labor contracts for all aspects of Labor. It also sets labor standards including the eight-hour workday and forty-hour workweek. Many factories cannot meet these standards. Although there are many laws, there are a few that are more important than the rest. According to Article 12 of the PRC Labor Law, Laborers should not be discriminated against regardless of their age, ethnic community, sex or beliefs. This law provides that an employer cannot discriminate, especially not against women unless the type of work is unsuitable for women. The written policy of the government encourages employment of disabled persons, minorities and military personnel. According to Article 15, No employing units shall be allowed to recruit juveniles under the age of 16. This law prohibits employment of persons under the age of 16 years. Under age works between the ages of 16 and 18 cannot work underground in mining or with harmful substances. The employer must arrange regular medical examinations of under-age workers. According to Articles 36 and 38, The Chinese must follow the law that provides a five day, forty hour work-week unless extended hours are arranged prior to consultation with a trade union and employees. Under this condition, overtime pay is provided. According to Article 51, the employment unit shall pay wages to laborers who observe statutory holidays, take leaves during periods of marriage or funeral and participate in social activities. 11 days of official national holiday cannot be deducted in calculation of daily wage rates. According to Article 52, the employing unit must perfect the system for occupational safety and health. They must take specific measures to guard against workplace accidents. They must provide goggles, work clothes, head coverings and any other items to protect them. When workers are exposed to hazardous substances, the employer is required to provide regular medical examinations at company expense. A worker has the right to refuse to engage in any task they consider unsafe. According to Article 73, laborers shall, in accordance with the law, enjoy social insurance benefits under the following circumstances, Retirement, Illness or Injury, Disability caused by work-related injury, unemployment and Child-bearing. The social insurance that laborers are entitled must be paid timely and in full. China has over 795.5 million people working in the labor force. Labor has been broken into three sectors of employment; Agricultural, industry and services. Agricultural jobs are 36.7%, industry is 28.7% and service is 34.6%. China has many natural resources which aid to the economy. They are the top country for use of coal and coal is used to run most of the electrical power in the country. 10 Source: Secretasiancomic.com 11 State of the Textile & Apparel industry 12 China’s garment industry is one of the industries in China that has the most international competition and the fastest growing. There are more then 100,000 garment manufacturers that employ over 10 million people. In 2012, China made altogether 43.6 billion pieces of garments with export value 1.5 billion. Since China’s reform, the garment industry has achieved significant development because of the fast growth in the national economy and domestic demands. They are making progress within their structure, technology, brand development, quality control and exploration in the international markets. The garment industry is mainly located in Pearl River Delta and southeast coastal areas. With years of experience in production management, this industry secures its front ranking in the world market. The garment industry in China is undergoing a new wave of upgrading changing their growth patterns and deepening collaboration and innovation within the industrial network. China must find its new position in the global economy, create a new competitive edge in international cooperation and competition and continue to innovate. The garment industry is primarily located in five provinces; Shandong, Jiangsu, Zhejiang, Fujian and Guandong. Most of them are located near a river for east export process. One of the industrial towns along the Pearl River Delta is called Xintang which is considered the Famous China town of Denim and Garments. They have over 3,900 textile and garment operations. China’s textile and apparel industry is preparing for new government demands to introduce sustainable production in the sector warning that companies failing to comply will close. China’s textile business, which has been criticized by environmentalists over pollution, waste and carbon emissions, is working hard to achieve the plan’s Circular Economy goals. They want to promote water conservation, energy efficiency, new bio-based fibers, and producing recycled fibers. China generates around 20 million tons of wasted fabrics annually. If just 60% of these were recycled, 4.7 million tons of naturals fibers and 9.4 million tons of chemical fibers would be saved. The textile industry energy consumption should drop 20% by 2015 and 30% in water consumption. Chinese currently recycle very little, wasting many fibers such as wool, silk and cotton. It will take a significant investment to move forward with the Circular Economy plan. Luthai has invested about 2.3 million dollars to install technology and equipment designed to conserve power as well as water, reduce carbon and enable waste heat recovery. Chinese textile and garment companies need to be more innovative in design. The country is facing competition from Asian neighbors with lower labor costs such as India and Cambodia. The old Chinese business model focused on manufacturing and ignored design and brand building, but that no longer works. China saw its slowest growth in the garment industry in 2012. Their sales volume only increased by 2% year to year and their profits have also been dropping. The Chinese garment saw weak international demand with the price gap between domestic and foreign cotton, and rising costs. They believe that they will face a better environment in 2013 with new technology and designs being introduced. Textile and Apparel Associations China National Textile and Apparel Council CNTEX is the leading provider of marketing services in Chinese Textile and Apparel Industry. They provide overall marketing plans for international enterprises entering the Chinese textile and apparel market. It was set up by the Chinese National textile council in 1997. It has become the most influential media and resource center of China apparel industry. The major objectives of CNTEX are to enable the Chinese national policy of reform, implement regulations and policies, to promote the production of textile products and the continuous growth of domestic and international trade in the developing economy. They also want to enhance economic strength of its members, expand influence of CNTEX throughout society and protect legal rights of its members. It is lead by the president and the CEO is Mr. Qian Jin. It offers its members commercial partnerships service, which is truly customized to the needs of the international company. The CNGA, China National Garment Association, was founded in 1991 as a nationwide organization of China’s garment industry. With an aim for fostering a sustainable garment industry, it provides services related to the industry. It has over 1,200 members, which include China’s outstanding original garment brands. It provides services for tens of thousands of enterprises and plays an active role in terms of technology development. It is comprised of 8 departments as well as eight committees in eight subsectors. Some of the major activities of China National Garment Association include China International Clothing & Accessories Fair, China National garment Association Awards, China Fashion Forum, China National Apparel Conference, and Joint Convention of China Apparel Distributors and Retailers among others. The China National Textile and Apparel Council is a national non-profit organization of all textile related industries. It is formed on a volunteer basis to set guidelines and rules overlooking the performance of the industry. In 1997 the CNTA worked with the Textile information center to provide necessary information in the textile industr in hopes to promote production and growth of the industry. The responsible supply Chain Association is another organization that is comprised of buyers and other organizations voluntarily to promote social compliance and socail responsibility within the industry. They created a code of conduct and help the Chinese companies train their employees on the regulatons. Sourced: Qingdaotex.com 13 Trade Agreements and Laws Chinese government deems Free Trade Agreements to further open up to the outside of domestic reforms. They do this as an effective approach to integrate into global economy and strengthen economic cooperation with other economies. Currently China has 14 Free Trade Agreement partners that comprises of 21 economies, among which 8 agreements have been already signed. (China’s Free Trade Agreements) China-ASEAN FTA In November 2001, ASEAN and China agreed to launch negotiations for a FTA. They wanted to strengthen and enhance their economic, trade, and investment co-operation between the two countries. They continue to liberalize and promote trade in goods and services as well as create transparency. They want to explore new areas and facilitate the more effective economic integration. This agreement was signed in July 2004 and entered force in July 2007. Under this agreement, services in the region will enjoy improved market access. This FTA has opened major opportunities fro ASEAN and Chinese exporters and will further strengthen the trade links between the two parties. The 6 ASEAN countries and China will eliminate tariffs on 90% of their products. There are now sectors where companies can get preferential access to the Chinese market, which includes chemicals, electronics, and food and beverage. This provides cheaper inputs for businesses on a range of products. China-Pakistan FTA They began their negotiations on free trade in April 2005. The two countries reached the FTA in November 2006. The agreement took effect in July 2007. The China-Pakistan FTA entered into force on Oct. 10th, 2009. Under this FTA, the People’s Republic of China and the Islamic Republic of Pakistan eliminated tariffs on all export products in 2 phases. It also covers foreign direct investment, including investment promotion, expropriation, compensation for damages and losses and dispute settlement. Both parties shall eliminate the tariffs of no less than 90% of products, both in terms of tariff lines and trade volumes. 14 China-New Zealand FTA The China-New Zealand Free Trade Agreement entered into force on October 1st 2008. The negotiation process took over three years. This is a treaty between the two countries that enlightens and facilitates trade in goods and services, improves the business environment and promotes cooperation between the two countries. New Zealand and China have entered into an agreement that mutually benefits them both. By freeing the trade in goods, they have removed the tariffs on 96% of the goods and services. Their agreement contains rules to determine which products qualify for tariff cuts. They have reduced barriers to trade in services, which will help New Zealand to conduct business in China. Some of the services that it covers are tourism, education, construction and transport. In order to improve the business environment and open up new opportunities they offer measure relating to customs procedures, sanitary procedures, technical barriers, and intellectual property. They have also entered into a binding Environment Cooperation Agreement that will enhance communication and cooperation on these issues and help raise work standards as well and improve environmental protection in both countries. China-Chile FTA In November of 2005, Chinese president Hu Jintao and former Chilean President Ricardo Lagos witnessed the singing of the China-Chile Free Trade Agreement. This agreement extends zero duty treatment by phase to cover 97% of products in ten-year time. The two countries will further strengthen such areas as economy, culture, education, science, technology and environmental protection. They both commit to strengthening their bond and cooperation. They share the belief that this agreement will provide mutual benefits to each party and contribute expansion of world trade. They are building their respective rights and obligations under the World Trade Organization. They are committed to providing welfare with each of their countries. The point of this FTA is to encourage expansion and diversification, eliminate barriers to trade in, promote conditions of fair competition in the free trade area and establish a framework for further bilateral, regional, and multilateral cooperation. 15 China-Peru FTA On April 28, 2009, the Chinese and Peruvian Governments signed a free trade agreement. IN the presence of Chinese Vice President, Xi Jinping and Peruvian Vice President Luis Giampietri Rojas, they established their first comprehensive FTA that China has signed with a Latin American country. It is now a landmark in their bilateral relations. This will strengthen their friendship and deepen economic and trade cooperation. It demonstrates the commitment of the two parties by opening up and fighting protectionism.The primary items that China exports to Peru are mechanical and electronic products, new technology, textiles and garments. Chinas imports from Peru are mainly fish, flour, and mineral products. China has faced long unfavorable balance of trade with Peru. China-Singapore FTA The China-Singapore FTA was signed after eight rounds of negotiations held over 2 years. The negotiations concluded on September 3rd, 2008. It was signed between the Singapore Minister for Trade and Industry, Lim Hng Kiang and PRC minister for Commerce Chen Deming. This is the first comprehensive bilateral FTA that China has singed with another Asian country. It covers trades in goods, services, and rules of origin, trade remedies, sanitary measures, and customs procedures among others. This CSFTA enhances Singapore companies’ access to the Chinese market, and will boost their bilateral trade and investment relations. Building on Trade in Goods will provide for accelerated tariff concessions that will enhance the competitiveness of Singapore goods into China. It will provide preferential coverage for about 95% of Singapore’s exports to China. More than 85% of Singapore’s exports to China will be at zero-tariff starting in 2009. Both Countries have agreed to simplify their customs to allow good trade. They have agreed to strengthen their competitive position in the Chinese market. The products must be wholly obtained; if they are not wholly obtained or produced in the territory then the products are eligible under regional value content and product specific rules. 16 China-Costa Rica FTA Costa Rica is China’s second largest trading partner in Central America while China is the second largest trading partner of Costa Rica as well. The bilateral trade between these two countries is growing rapidly. In November 2008, Chinese President Hu Jinatao announced the launch of their FTA. The trade barriers on multiple Chinese products were lifted. Over 90% of goods between China and Costa Rica will enjoy zero tariffs on a stage-by-stage basis. For China, this covers products from textile industry, light industry, machinery, electronics, vegetables and fruits. For Costa Rica, this covers Jam, fish powder, frozen orange juice, construction, beef, pork, and many others. The negotiations last over a year but it showed a lot of determination in strengthening cooperation and joining efforts for mutual benefits. Mainland and Hong Kong closer economic and partnership Arrangement Mainland China and Hong Kong created an economic partnership arrangement to promote their prosperity and development of the Mainland. They did this to strengthen trade and investment cooperation by reducing or eliminating tariff and non-tariff barriers. They also are working on elimination of substantially all discriminatory measures. They want to achieve reciprocity and mutual benefits with each other’s advantages. Hong Kong will continue to apply zero tariffs to all imported goods of Mainland origin. No later then January 1st 2006 did the Mainland apply the zero tariffs to the import of goods of Hong Kong. 17 Mainland and Macau The Mainland and Macau closer economic partnership arrangement (CEPA) was signed on October 17, 2003. It aims to strengthen economic and trade cooperation between Mainland China and Macau Region. This provides a mechanism to extend its scope of liberalization. The two parties have signed eight supplements to the text of CEPA. This covers three areas: trade in goods; trade in services and trade and investment facilitation. Goods exported to the Mainland must fulfill the rules of origin in order to enjoy the zero tariff treatment. Goods that are wholly produced in Macao can be claimed as Macao origin. For goods that are not wholly obtained in Macao, a lot of information must be looked at in order for it to be qualified as “made in Macao.” There are 48 different service sectors that are qualified for the preferential treatment as “Macao Service Suppliers.” Some of these services include, Medical and dental, Advertising, Accounting, Public Utility, Printing, Environmental, Social, Banking, Distribution, and Market Research. Macao service suppliers have an earlier access to the Mainland Market. The Mainland and Macao will pursue trade and investment facilitation through great transparency standards. They will promote co-operation in areas such as customs clearance, electronic business, industrial co-operation and protection of intellectual property rights. Laws of the U.S that affect the importation of Knitwear: The regulations for importing textiles include consumer product safety commission requirements for flammability. The apparel must have labels specifying content and instructions for care. All textiles must have labels inicating the country of origin and be packaged such a way that country of origin is discernable to the purchaser. The country of origin must be determined for mix products which can be very complicated. 18 Laws of the U.S that affect the importation of knit cotton sweaers: United States IMPORT REQUIREMENTS An individual may make his own customs clearance of goods imported for personal use or business. The U.S. Customs Service does not require an importer to have a license or permit. Other agencies may require a permit, license, or other certification, depending on the commodity. All merchandise coming into the United States must clear customs and is subject to a customs duty unless specifically exempted from this duty by law. Clearance involves a number of steps--entry, inspection, appraisal, classification, liquidation. Customs duties are, generally, an ad valorem rate (a percentage) which is applied to the dutiable value of the imported goods. Some articles, however, are dutiable at a specific rate of duty (so much per piece, liter, kilo, etc.); others at a compound rate of duty (combination of both ad valorem and specific rates). The dutiable value of merchandise is determined by Customs. Several appraisal methods are used to arrive at this value. Generally, the transaction value of the merchandise serves as the basis of appraisement. Transaction value is the price the buyer actually pays the seller for the goods being imported. The Harmonized Tariff Schedule of the United States (HTSUS), issued by the International Trade Commission, prescribes the rates of duty and classification of merchandise by type of product; e.g., animal and vegetable products, textile fibers and textile products. The tariff schedule provides several rates of duty for each item: “general” rates for most-favored nations; “special” rates for special trade programs (free, or lower than the rates currently accorded most-favored nations); and “column 2” rates for imports not eligible for either general or special rates. Processing fees may also apply. 19 Business overview 20 Business Etiqutte: Culture: China is a masculine society and its dimensions indicate that the society is driven by competition, achievement and success. This value system starts in schools and continues throughout life. Many Chinese will sacrifice family and leisure time for work. The migrated farmer workers leave their families and move to faraway places to obtain better work and pay in the cities. Chinese students care very highely about their exam scores because this is main criteria to achieve success. Negotiation Styles & Strategies: Once you have met your colleagues and are ready to negotiate, remember that only senior members of the negotiating team will speak. These business negotiations will occur at a very slow pace and you must be prepared for the agenda to jump off point for other discussions. Chinese are non-confrontational and will not directly say no. Chinese negotiations help the Chinese determine if relationships can develop to a stage where it is comfortable to do business. Under no circumstances should you lose your temper or it will damage your relationship. Also, do not use high-pressure tactics, because decisions are unlikely to be made during the meeting you attend. Your starting price should leave room for negotiation because the Chinese are clever negotiators. When meeting someone for business in China, appointments are necessary and, if possible should be scheduled at least a month in advance. If you don not have a contact within the company, you must use an intermediary to arrange a formal introduction. Once this introduction has been made you can provide information about your company, and what you want to accomplish at the meeting to the other company. You should always arrive to your meetings on time or slightly early because Chinese view punctuality as a virtue. (Kwintessential) Arriving late is considered an insult and could negatively affect your relationship. Send an agenda before the meeting so your Chinese colleagues have the chance to meet with experts prior to the meeting. Also if you have a translator discusses the agenda with them as well prior to submitting it. Each Chinese participant will take an opportunity to share his or her knowledge for long lengths of time without really saying much of anything that actually contributes to the meeting. Be patient and listen because they could be transmitting a message that can assist you. Meetings require patience and if mobile phones ring, allow it because the Chinese people don’t turn off their mobile phones. Guests are generally escorted to their seats, which descend in order of rank. The senior people sit opposite the other senior people. It is really important that you bring your own interpreter, especially if you plan to discuss legal or technical concepts. All of your written material should be available in both languages and simplifies. Make sure the translations are correct and can’t be misinterpreted. Visual aids are useful in large meetings and should only be done with black type on white background. Colors in china all have special meetings and your color choice could work against you. Presentations should be detailed and focus on long-term benefits. 21 Relationship Building: The Chinese don’t like doing business with companies they don’t know, so getting to know them through an intermediary is crucial. This person should formally introduce and vouch for your company. Before arriving in China, send materials written in Chinese that describe your company beginning with history and everything about your product and services. Business relationships are built formally after they get to know you. Be very patient it takes a lot of time. The Chinese see foreigners as representatives of their company rather than as individuals. China runs on a ranking system so it is important to keep the rank differences in mind. Make sure you understand their rank so that you don’t treat them informally. The Chinese prefer face-toface meetings rather then video or telephone. Meals and social events are no the place for business. There is a difference between socializing and business in China and they don’t mix the two. What to wear: Business attire is always conservative and unpretentious. Men should wear dark color; conservative business suits while women should wear conservative business suits or dresses with high necklines. Women should also wear flat shoes with very low heels. All bright colors should be avoided because colors have meaning. Meeting Etiquette: China is a collective society so they prefer to do business in a group setting. An intermediary can help with this proces of introductions. Chinese don’t like doing business with people that they do not know so relationships are important. Greetings are formal and the oldest person always gets greeted first. Chinese people use the handshake as the most common form of greeting and they will often look at the ground when greeting someone. Always address the person by their title and their surname. If they want you on a first name basis they will advise you when to use it. They have a terrific sense of humor and can laugh at themselves most readily if they are comfortable. Be ready to laugh. Once the connection is made, materials that inform them about your company should be translated into Chinese. Arriving early is customary in China. Arriving late is disrespectful and shows a lack of commitment to both parties. When entering a meeting area you will be directed to a specific seat. This allows members to sit opposite one another surrounded by other team members. Chinese will always answer their phones during meetings. 22 source: china-consult.com.au Business card Business cards are exchanged only after the initial introduction. In China, business cards are highly respected as a step forward in a relationshio. The card represents the person so never write on it or put it in the back pocket. Always use your personal title on your card as well as gold writing because it symbolizes wealth. Gold is an auspicious color. Your business card should be simple and include your title. Hold the card with both hands when offering it with the Chinese side facing the recipient. Gestures When entering the place of business it is not uncommon to be greeted by a round of applause and you should always applaud back. During a presentation you should not use hand gestures because it is seen as distracting. To summon the attention of another person, the palm of your hand should face down while waving your fingers towards yourself. Pointing with an index finger is rude and reserved for animals. Avoid winking and whistling. If you want to express something posotive, give a thumbs up sign or raise your pinky. Chinese strive for harmony and rely on facial expression, tone of voice and posture to tell them how someone feels. Frowning while someone is speaking is a sign of disagreement. It is considered disrespectful to stare into another person’s eyes so you should avoid eye contact to give them privacy. They like close personal space and are very patient. source: asiaqualityfocus.com 23 Colors Black-color for young boys- flowing, dormant, conserving, immortality, stability, knowledge, trust, adaptability, power, career Blue- Conserving, healing, relaxing, exploration, trust, calmness, immortality Brown-Industrious, grounded Gold-Completeness, wealth, metal, God, Consciousness Green-Growing, generating, sprouting, striving, refreshing, balancing, calming, healing, self assurance, foundation, benevolence, health, harmony, sensitivity, patience Grey- Dull, Indefinite, hence income Orange-Indicating change, adaptability, strengthens concentration Pink- Love Purple- Spiritual awareness, physical and mental healing, abundance, red purple brings luck and fame, North star Red- bridal color, expansive, blooming, dynamic, enthusiastic, reaching upwards, good luck, celebration, happiness, joy, long life, money recognition Silver, metal (income, wealth) romance, trust White- mourning, contracting, withering, righteousness, pureness, confidence, intuition, death, spirits, ghosts Yellow- nourishing, supporting, stabilizing, ripening, grounded, solid, warmth Today, yellow is still reserved for royalty. Clothing and objects that are yellow resemble a higher social status and yellow is reserved for the emperor himself. Red is still used for happiness and joy. After the Ming Dynasty, only the Emperor’s close relatives could have homes with red walls and yellow roof tiles. Blue-green is a symbol of spring when everything is filled with vitality. White is a symbol for the unknown purity, the color white is used for mourning, death and ghosts. Black is used as the symbol of winter and westerly skies that beholds the heavens. 24 Number Meanings: 0-Simply means nothing 1-Individual, Aggressor, “The Yang which is the other balance of Yin” 2-Stability or Balance means union or receptive. The Yang 3-Means talking and understanding—Communication 4-Creation, death 5-Action or Restlessness 6-Fluidity Responsibility, Reaction 7-Mind Consciousness and thoughts 8-Sacrafice, Work Hard, power and infinite, no beginning, no ending, continuous 9-Highest level of Change 10- Being born again or Rebirth Numerology is a system of traditions, culture and beliefs. The relationship of numbers and living things is like relationship of astrology. Even numbers are preferred but not the number four. Four is the most dreaded number-it means death. For odd numbers, seven implies anger and abandon, it is both an unlucky and lucky number. Nine is the luckiest number because it means eternity. Thirteen is also an unlucky number to Chinese people so they don’t usually have a thirteenth or fourteenth floor in any buildings. They usually begin a new business on the 8th day. Number 8 is lucky for business as it brings unending money. On Valentines day the number of flowers given to someone has a meaning. One flower means you are my love, two means we are together, three means “I Love You.” The Olympics in Beijing kicked off in August 8, 2008 at 8 pm, 8 minutes and 8 seconds after 8 pm. A Chinese man offered to sell his license plate number –A88888 for $164,000. source: rupj.net 25 Gift Giving In China, gift giving takes place at Chinese New Year, Weddings, Birth and more recently Birthdays. The Chinese like food and a nice food basket. Never give scissors, knives, or other cutting utensils as they indicate the severing of the relationship. No one can give clocks, handkerchiefs or straw sandals as they are associated with funerals and death. Never give flowers because they are associated with funerals. Do not wrap gifts in white, blue or black paper. Because four is an unlucky number, never give anything in groups of four. Gifts are always given with two hands. Gifts may be refused three times before they are accepted. Joke Telling Avoid telling Western-style jokes, because jokes sometimes do not translate across cultures and can cause confusion or hurt feelings. Social EventsAt a formal banquet, be prepared to give a short, friendly speech. When you are invited for dinner, it is polite to sample every dish served. Your host may serve some food for you and it is nice to reciprocate if you feel comfortable doing so. Always leave something on your plate at the end of the meal or your host might think that you are still hungry. Good topics: Chinese scenery, landmarks, weather, climate, travels, all About CHINA Topics to Avoid: Politics, Taiwan, Don’t praise the Japanese or Shanghai Business Entertaining: Chinese business entertainment most often involves banquets or some kind of dining in a restaurant or hotel. However, they do not talk business at meals. They also often invite business partners to watch Karaoke TV and get massages after dinner. 26 Superstitions: (1) If one hits another person with a broom, the hitter will get bad luck and he will ruin his life. (2) The Chinese believe that one should keep a well-shaven face. If one wears a moustache it should be well-trimmed. If one violates this norm it will give bad luck. (3) Another Chinese superstition is that if a dog howls for a few hours in late night, it means someone died somewhere. (4) It is another superstitious belief of the Chinese that if one has a dream of teeth or snow, it indicates that his parents are dead. (5) If a baby cries for no reason, the Chinese believe that there are ghosts around and the child is disturbed by the ghosts. (6) Another superstition of the Chinese is that building a house facing the North would bring in ruin to the family. (7) It is a superstition among the Chinese that if one marries a person who is either three or six years older or younger is bad and it will bring bad luck to the couples. (8) The Chinese believe that clipping toe-nails or finger-nails at night would bring ghosts to that place. (9) Another popular Chinese superstition is that if one points at the moon with one’s finger it will make one’s ear tips fall off. (10) Another popular belief of the Chinese is that if one encages and keeps a turtle as a pet, it will ruin his business and fortune. for it will slow a person’s business down. (11) This is another popular superstition in China. The Chinese believe that the number 8 is a lucky number because the pronunciation of the number ‘eight’ and the pronunciation of the word for ‘prosperity’ in Chinese are similar. Hence, the number 8 has much value in the social life in China. So if a house number or the registration number of a car has the 8 as a number, people think it is a lucky sign. Often people pay big sum to win a number with 8 for their car. 27 (12) In another popular Chinese superstition, the number 4 is considered as unlucky. Hence this number is unacceptable for vehicles and houses. It is so because the number 4 in Chinese has the pronunciation similar to the word for the word ‘death’. There are no number 4’s in the elevator. (13) The Chinese believe that the numbers 8, 18, 13 and 168 are lucky. Hence those who are on a gambling or business trip prefer these rooms. Ass these numbers are in great demand, often disputes and fights arise over the choice over these numbers. (14) In another popular Chinese superstition, the Chinese do not sweep during the New Years because if one does so he will sweep away all the good fortune. Hence the sweeping on the New Year is to be done the day previous. (15) As part of another popular superstition of the Chinese people, eating noodle will not be easy in China. This is because the popular belief is that an uncut noodle in soup will increase longevity. If the noodle is cut it will cut the longevity. Some times people may chock if the noodle is too long. 28 source:travelblog.org Dining Etiquette The Chinese prefer to entertain in public places rather than in their homes. When you are invited to their house, consider it a great honor. If you must turn down, it is considered polite to explain the conflict in your schedule. Always arrive on time and remove your shoes before entering the house. Bring a small gift to the hostess and eat well to show that you are enjoying the food. Table MannersYou should learn to use chopsticks, but it is not mandatory. Wait to be told where to sit because the guest of honor will be given a seat facing the door. The host begins to eat first and you should always try everything that is offered to you. Always be observant of other people’s needs. The chopsticks should be returned to the chopstick reast after every few bites or when talking or drinking. Never put bones in your bowl, place them on the table or in a special bowl. Hold the rice bowl close to your mouth while eating so you don’t drop any. Do not be offended if a Chinese person makes a slurping or belching sound, it means that they are enjoying their food. You are allowed to finish all of the food in your bowl. Tipping EtiquetteTipping is becoming common, especially with the young workers. Most older workers still consider it an insult. Leaving a few coins is usually sufficient. Alcoholic Manners: If you are a wimpy drinker, then never ask for even a sip of alcohol. There are rules for drinking alcohol. The Chinese say, “the more you drink the deeper your friendship is,” but never mention it when you are drinking with others. It is very common for many people to propose a toast together, but you should not propose the toast to many at a time unless you are a leader. When proposing a toast, if you are going to clink glasses, it is generous for the words “I will finish mine, you at will.” If no special guest is present you should clink glasses in clockwise order. Always keep a full glass or else people will fill it up and make you drink it all. Appropriate Conversation subjectsSome of the good topics for discussion in China include the difference between China and the West, and the advances the Chinese have made. They will be sure to ask questions about your age, marital status, salary, and the price of personal items. Your answers do not need to be detailed and avoiding answering will invite suspicion. Avoid mentioning Taiwan and do not criticize Chinese leadership because they will take it very personal. You should refer to the country as the “People’s Republic of China” or simply China. When Chinese avoid a negative response, they say “We will do some research and discuss it later.” At this time, pay close attention to facial expressions, gestures and overall body language. In conversation, what has not been said can be as important or more important than what has been said. Refrain from loud boisterous speech and actions. Laughing loudly is not polite or suitable in China when you meet someone. Try not to be too talkative, and be sure to take an interest in what your host has to say. 29 source: inc.com Rules: 1.Dress as Formal as your host 2. Bring bi-lingual business cards 3. Let your host seat you 4. let them order the food 5. Don’t talk business unless your host does 6. Chopsticks are not mandatory 7. Bring a gift 8.Toast Modestly 9.Don’t get drunk 10. Agree to be walked to the restroom 11. Chinese love to fight over the bill 12. If your host says “I’m the only one you can trust in China,” head for the door. 30 Global Sourcing Overview 31 Knitfit Co. Sourcing Guidelines I. Compliance with Laws Manufacturers and suppliers who produce goods for Knitfit Co. shall operate in full compliance with the laws of their respective countries and with all other appropriate rules and regulations. A. The factory operates in full compliance with all applicable laws, rules and regulations including those related to labor, worker health and safety and then environment. B. The factory allows Knitfit Co. to access its facilities and all relevant records, whether or not notice is provided in advance. II. Environment Factories shall comply with all applicable environmental laws and regulations. Factories are strongly encouraged to meet the standards outlined in Knitfit Co.’s statement of environmental principles attached as a law. A. The factory has an environmental management system. B. The factory has an environmental emergency plan that includes notifying the local community authorities incase of an emergency. C. The factory stores hazardous and combustible materials in secure ventilated areas. III. Employment Standards The company’s employment standards set forth the company’s guiding principles that factories must conduct business in a lawful, ethical and responsible manner. Child Labor A. Factories shall employ only workers who meet the applicable minimum legal age requirement or are at least 15 years of age. 1. Every worker employed by the factory is at least 15 years of age and meets the applicable minimum age 2. The factory complies with all applicable child labor laws, including those related to hiring, wages, hours worked, overtime and working conditions. 3. The factory encourages and allows eligible workers to also attend classes and participate in work study programs 4. The factory maintains official documentation for every worker 32 Wages and benefits A. Factories shall pay wages and overtime premiums in compliance with all applicable laws. Workers shall be paid at least the legal minimum wage. 1. Workers are paid at least the minimum legal wage or the local industry standard. 2. The factory pays overtime and any incentive rates that meet all legal requirements 3. The factory provides paid annual leave and holidays required by law that meet the local industry standards 4. For each pay period, the factory provides workers an understandable wage statement which includes days worked, hours of overtime, and bonuses Working Hours A. Factories shall set working hours in compliance with all applicable laws. While it is understood that overtime is required in garment production. 1. The factory complies with all applicable laws, regulations and industry standards on working hours. 2. Workers may refuse overtime without any threat of penalty, or punishment 3. Workers shall have at least one day off in seven. Forced Labor A. Factories shall not use any prison, indentured or forced labor. 1. The factory does not use involuntary labor of any kind, including prison labor, debt bondage or forced labor by governments. Health and Safety A. Factories shall comply with all applicable laws and regulations regarding working conditions and shall provide workers with a safe and healthy environment. 1. The factory complies with all applicable laws regarding working conditions 2. Work surface lighting in production areas, such as sewing, knitting, pressing and cutting 3. Factory is ventilated 4. There are sufficient clearly marked exits 5. Aisles, exits and stairwells are kept clear at all times of work in process 6. Doors and other exits are kept accessible and unlocked during all working hours for orderly evacuations 7. Fire extinguishers are appropriate to the types of possible fires in certain areas 8. Fire alarms are on each floor with emergency lights 9. Evacuation frills are conducted annually 10. Machinery is equipped with operational safety devices and serviced on a regular basis 11. The factory provides potable water for all workers 12. The factory places at least one well-stocked first aid kit on every factory floor 13. The factory maintains cleanliness throughout working hours 33 Nondiscrimination A. Factories shall employ workers on the basis of their ability to do the job, not the basis of their personal characteristics or beliefs. 1. The factory hires, employs, promotes, terminates and provides access to training workers without regard to race, color, gender, nationality, religion, age, maternity, marital status, social origin, sexual orientation, disability, membership in workers’ organizations including unions. 2. The factory pays workers wages and provides benefits without regard to race, color, gender, nationality, religion, age, maternity, marital status, social origin, sexual orientation, disability, membership in workers’ organizations including unions. Human Treatment A. Factories shall treat workers with respect and dignity. Factories shall not use corporal punishment or any other form of physical harm. 1. The factory does not engage in or permit physical acts to punish workers 2. The factory does not engage in or permit psychological or any other form of violence, harassment, or verbal abuse. Collective Bargaining A. Workers are free to join associations of their own choosing. Factories shall not interfere with workers who wish to lawfully and peacefully associate, organize or bargain collectively. 1. Workers are free to choose whether or not to lawfully organize and join associations 2. The factory does not threaten, penalize or restrict with workers lawful efforts to join associations Environmental Standards A. Must adhere to applicable local, national and international laws and regulations regarding the protection and preservation of the environment Subcontracting A. Must not subcontract any portion of the manufacturing process without prior written approval from Knitgit Co. Monitoring and Compliance A. The right to conduct announced and unannounced inspections of all manufacturing facilities 1. requirements in this code are understood and implemented at every level and must maintain all documentation necessary to demonstrate compliance with Knitfit Code of Vendor Conduct. 34 Certification Under the code of Conduct, Knitfit Co.’s Suppliers certify that they will conduct business sin compliance with the law, including, among other things, without child labor, without forced labor, without corporal punishment, without discrimination, and in compliance with wage, safety, environment and hour regulations. Verification Knitfit Co maintains long- standing business relationships with suppliers who have been vetted through an internal screening process. It shall be the responsibility of licensees to ensure their compliance with the code. Audits The company uses qualified, accredited, third party, social compliance auditing firm to conduct risk assessments and to audit manufacturing vendors which meet certain risk-related criteria. Audits inspections can be announced or unannounced. Internal Accountability Standards When non-conformance with the Code of Conduct is identified, Knitifit Co. works with the supplier to identify the cause and develop an action plan to assure future compliance. 35 Manufacturing and Production Potential Manufacturers: 1. Suzhou Hengrun Import & Export Corp., Ltd [email protected] www.hengrunchina.com Suzhou was founded in 2000. The former company specialized in textiles and was established in 1978. It was ranked 25th in the import and export turnover of the year 2005. They mainly handle import and export of piece goods, garments, wool/cotton knitwear and home textiles. It has obtained comprehensive sales outlet in the world and now owns it’s own brand A-CCO. The Corp branches in Hong Kong, Japan, Shanghai, and Nanjining. They currently possess four factories that produce knitwear, woven wear, silk wear and a garment designing and sample-making center. The Corp has received awards in quality Management Authentication and holds an excellent reputation. 2.*Turbo Knit Factory Ltd. www.blgroupintl.com Customers: Dillards, LLBean, Victoria Secret, Abercrombie and Fitch, Nordstrom, White/ Black House KBL is the premier Global supplier of Sweaters in the World. They have facilities in Hong, Mexico, and China. Their technology offers 1500 of the most advanced machinery. Some of their customers include Abercrombie & Fitch, Victorias Secret, L.L Bean, Dillards, Bebe, and Nordstrom. They produce Ladies 100% cotton knits. 3.Dragon Crowd Garment Inc. Customers: Volcom, White wave Inc.DC shoes, Quicksilver www.dragon-crowd.com In 1976, Dragon Crowd Group became a supplier for SCHIESSER and their high quality garments. They became a licensee in 1996. Dragon Crowd is always in pursuit of attaining excellence to provide the finest quality products and services. They specialize in manufacturing all kinds of knitted apparels for ladies. They manufacture products for Tommy Hilfiger and Bjorn Borg. 36 4. South Asia Knitting Fty, LTD Customers: Sears, The Gap Inc. Banana Republic www.southasiagroup.com [email protected] South Asia Textile has successfully established a world-renowned brand in knitwear-manufacturing. When the company was founded in 1963 its primary focus was on the production of high quality knitwear. They have seen steady growth over the years. Since 1980 Chairman Lu Sin has contributed to build over 150 school-buildings. He has also donated more than HK$6 million, supporting education business in China. The company has contributed 100,000 pieces of knitwear to people living in remote countryside. Lu Sin donated the first Chang Ding High School. 5.Huzhou Worldbest Tianchang Imp. & Ex Customers: Adrianna Papell Evenings Llc Michael [email protected] [email protected] www.wbtc-textile.com 6. Shanghai Horizon Garment CO., Ltd. Customers: Pickering International www.horizoneco.com Shanghai Horizon Garment Co., Ltd is China’s leader in porividing organic and eco-fiber textiles and apparel. They have been in production for over 9 years. They offer a full range of knitted and woven textiles. They have a lot of apparel experience. They are the premiere supplier of hemp, soybean and bamboo clothing from China. They offer a minimum of 600 pieces per style. 7.Beijing Jinsanhuan Textile Import & Export Co., Ltd Customers: J.Crew, Frownes Bros Co inc. Email: [email protected] 8.Zengcheng Zhilishun Enterprise Ltd. Customers: Fashion Options Inc., Mary Fong Chb, Oxford Collections Zengcheng has specialized in manufacturing and export sweater since 1986.All of their product exports sell in North American, Europe, and Asia. They are located in the economic district with a 5 floor workshop. They have quality controlled standards. They are located conveniently for traffic advantages 37 9. Ningbo Shenzhou Knitting Co., Ltd Customers: Uniqlo, Dicks Sporting goods, Fast Retailing Usa Inc. www.ishenzhou.com They continuously take “Human Paramount, Client imperatorial value point and devote themselves to become the global knitwear manufacturer with the strongest competition. They constantly work to provide consumers with the new fibers. They concentrate on great service and high-quality goods. 10. Kunshan Genrita Textile Co., ltd. www.genrita.com.cn Kunshan is a quick-developing factory with strong socail conscience and great ambition. They are dedicated to developing and producing high-class sport wear and Eco-friendly garments. They provide excellant service and living or their employees. Our factory is located in Kunshan City, Jiangsu Province. It takes only 30 minutes’ drive from Shanghai Downtown to our factory. rThere system includes sale, QC, shipping and designing. They periodically train theirteam members so that they can keep pace with the rapid-changing business environment. They always believe that customers’ success is also our success, so we they willing to hear voices from customers and markets and do everything to support customers’ business. 11. Ningbo Mengdi Imp. Exp.Co. Ltd. Customers: Eddie Bauer [email protected] Ningbo is an enterprise of knitted garments.They specialize in sports wear for men and women, leisure wear, pajamas and children garments. It is located right next to next to Shanghai and neighbors Beilun Port of Ningbo. I has convenience and advantages of ocean shipping and direct access towards oceans. It was established in 1995. In 2002, their company invested to build a Dyeing and Knitting company. They seek negotations with clients, process control of proudct and order fullfilment. Enterprise Spirit: Base upon customers, keep first class in mind and self exceeding. Quality Policy: Quality is eternal and earnest is its guarantee. Company Statement: Keep developing new products by advanced technologies, put out first-class products of best quality, retain enterprise vitality by highest efficiency and realize our commitments to customers by focusing on them. General Operation Policy: Regard exploitation & development as the target, customer’s satisfaction as the principle and entire participation as footstone. Market Scope: Center on customer service, innovative ability as the radius. The stronger innovative ability we have, and the broader market scope we get. 12. Jiangsu Jing Meng Knitting Co., Ltd. Customers: Chicos, Urban Outfitters, Macys, Polo, Ann Taylor www.jmknit.com/ [email protected] 38 Knitfit Co. COST SHEET Company name: Knitfit Co Address: Portland, Oregan 97034 Group Name: Comfort Knit Classification:Women's knitwear Season: F/W 2014 Garment Label: White Fabric Content: 100% Organic Cotton Colorway: ivory, blush, grey, Carolina Blue Phone: 616-822-8407 Email: [email protected] Material Style # 6673 $/Yard Quantity $4.09 $/Unit Thread 3 Labels Hangtag Quantity 0.00126 0.05 0.03 Packing Quantity 0.045 $/Unit Cartons Tape Labels $Total Quantity 0.04545 $Total 30 3.03 Total Packing Cost: Patternmaking Grading Marking Cutting Sewing Washing Prepacks* Admin $0.108 $0.152 $0.030 1.01 0.04545 1.22 0.01 Labor $Total $0.260 $/Unit Re-Usable Bag Total Packaging Cost: $5.494 86 3.03 1.01 Total Component Cost: Packaging $Total 1.3433 $5.494 Total Material Cost: Components Size range: XS, S, M, L, XL 0.040666667 0.0303 0.06 0.131 .059 per minute Cost $Total 1% 1% 1% 10% 10 minutes $0.006 $0.006 $0.006 $0.059 $0.590 $0.059 $0.50 Total Labor Cost: $1.167 Other size/quantity Box (23"X10"X6") Freight Container 17580 Duty 19.70% Insurance Broker Total Shipping: Grand Total per Garment: Cost $2,625.00 $7.27 $325.00 $250 per entry $1.61 $8.81 $Total $0.149 $1.43 $0.02 $0.01 39 Cost and Pricing: Cost to Produce: $8.81 Price to sell” $50.00 Markup: $41.19 Wholesale Price: $31.50 Import Classification HTS code: Apparel HTS SUbheading 61-62 Tariff Rate Range (%) 19.7% Preferential Treatment: Tariff rate quotas allow for imports of cotton and wool in limited quantities at reduced duties, ranging from 1% to 9%. China has placed quantitative restrictions on the amount of these commodities that can enter at a low “in quota” tariff rate. Any imports over that quantity are charged a prohibitively high duty. Most imported and domestic goods are subject to a VAT, which is applied on the c.i.f plus duty value. Also a consumption tax of 2-3% is applied on the c.i.f value. hinese standard FZ/T 01053 – 2007 “Textiles – Identification of Fiber Content” stipulates the label requirements of fiber content of textiles, marking principles, marking method, tolerance and judgment of consistency of identification, and provides examples of fiber content representation. Labeling - China The labels on textile products should be in the Chinese characters and include the following mandatory data: name and address of the manufacturer name of the product (in accordance with Chinese standard) size (in accordance with standard GB 1335) product composition: name and composition of the various raw materials used cleaning instructions (compulsory use of symbols defined by GB/T 8685-2008 -- SGS information sheets are available in English and in Chinese.) storage conditions and other recommendations: compulsory for delicate products ‘best before’ date (only for products that are perishable) Nº of standard quality classification (if required by Chinese standard) 40 The labels also have to respect the following presentation, according to the product: printing or direct weaving in the fabric label sewn, or affixed or hanged to the product printing or pasted to the packaging in the documents accompanying the product Logistics and Importation: 1.Manufacture/Wholesaler/Supplier Manufacturers are paid for the cost of their goods as well as its packaging. Export documentations are also prepared by the manufacturer. Shipping terms like Delivered Duty Paid (DDP) and cost, insurance & Freight (CIF) are beneficial compared to Freight on Board. The supplier takes care of the inbound risks and have the delivered products paid off. 2.Road Haulage Company The road haulage company is responsible for collecting from suppliers and delivering these to the docks/airport. 3.Sea Freight Company The supplier will have to negotiate a rate with the sea freight company to have the goods transported. If less than a container load is necessary, then you only have to contact a freight forwarder. The sea freight company is responsible for verifying the goods and documentation as well as loading them into the vessels. Usually, costs range between $1500 and $4500 which depends on the volume of the shipment. Freight associated charges are computed per kilo on the volume weight of your goods and small lightweight consignments are issued with less charges. In your country, goods are unloaded and if all documentation is in order Customs clears good. You can pay off any duty and tariffs required. Payment options: 1.Cash 2.Deferred payment-only available to importers who are holders of a deferred account. 3.Broker deferred-available on the request of an agent who holds a broker deferred account. Transportation to warehouse: You need to arrange collection from docks/airport with a freight company. Warehouse Storage: Warehouse will charge to receive the product (cost of labor involved in handling the goods), plus there is long-term storage costs. If you use a broker and/or a freight forwarder you will need to budget for another couple hundred dollars. It is possible to negotiate the cost of all stages of this process and shipping around can save a lot of money. 41 FREIGHT Sea Hog Global Shipping & Logistics This is the largest impor tlogistics company in China. It was established in 1997 and has 9 branch offices in coastal China. They mainly import Machines & Production line, chemicals, wood and grocery. They offer customs Brokerage, Commodity inspection, China customs Duty, China import Tax, China Import Tariff, and China customs Declaration. They provide door to door service and offer weekly departures to and from their destinations. They also offer international air freight to hundreds of destinations worldwide. They can handle any sized aircraft in China shipment. BGI Worldwide Logistics: BGI provides dependable freight forwarding services to China via ocean and air. They have over 700 customs and branch offices in China. They also track and trace shipments, have door to door delivery, customs clearance and competitive prices. Domestically they offer trucking and rail as well. http://www.bgiworldwide.com/freight-ltl-ftl-trucking/ China Shipping Group-Guanghzhou Get Shipping Co.-Shanghai COSCO Shipping Line China-Guangdong ASB Logistics co.-Shanghai China Shipping Container Liner Guanghzhou Co. China Shipping Container Lines-Shanghai source: mos.com 42 Source: Infastructureusa.com 43 Domestic Air Freight source: centreforaviation.com International air freight source: centreforaviation.com 44 The shipping route for my Knitfit Co products from China to Portland: Pacific Northwest Service (PNW) from Shanghai to Seattle. It is going to take 18 days. Cost: $3,327.60 With insurance. Without insurance cost: $3,294.65 Once in Seattle a truck will pick up the container and drive it 178 miles. It will take 3 hours. Cost: 337.65 with customs cost: $479.96 45 Standards, Regulations and Laws China Compulsory Certification (CCC) System (CCC) System Overview CCC Mark Product Scope: English (HS codes) CCC Mark Product Scope: 2011 in Chinese CCC Exemption Guidance When do products qualify for exemption? Flowchart: the exemption process Required materials for exemption application CCC Mark FAQ Updated AQSIQ CCC Mark Regulations July 2009 in Chinese (Chinese Government Site) China RoHS China RoHS Regulations and Helpful Links China RoHS: Overview and Best Practices (recorded webinar) China RoHS: related presentations China RoHS Webinar Questions and Answers Packaging Standards China Packaging Machinery Standardization Textile Import Documentation/Procedures (China) Import Licenses--Details of commodities subject to import licensing are published annually by the MOFCOM in the Catalogue of Goods Subject to Import Licence Administration and the Catalogue of Goods Subject to Automatic Import Licensing Administration. Licences are not transferable. No fees, charges, deposits or advance payments are required for the issuance of licences. Import Restrictions (China) The “Catalogue of Commodities Which are Restricted or Prohibited from Importing for Use in the Processing Trade” identifies the following “prohibited commodities”: used garments; used publications with licentious content; radioactive or harmful industrial waste; junk cars, used automobiles or components; seeds, seedlings, fertilizers, feed, additives, or antibiotics used in the cultivation or breeding of any export commodity. The catalogue lists seven general types of “restricted commodities”: raw materials for plastics, polyester sections, raw materials for chemical fibers, cotton, cotton yarn, cotton cloth, and some steel products. 46 Textile and apparel products put up for sale in China are subject to certain quality and safety requirements, identified as mandatory national (GB) standards, as well as various and professional standards. Professional standards (also called industry standards) apply when no national GB standard exists. Professional standards are sector-specific technical or quality requirements. The code “FZ” is used for textile sector standards and the code “QB” for light industry, which includes leather, fur and feather products. Voluntary standards are indicated with “/T” added after the codes. Textile and apparel products put up for sale in China must comply with GB 18401-2010 “National General Safety Technical Code for Textile Products”. GB 18401 contains the principal requirements, test methods, and test rules for textile products in China’s market. Mandatory tests under GB 18401 include: • formaldehyde content • pH value • color fastness to water, perspiration (acid & alkaline), rubbing • color fastness to saliva on baby products • determination of odor • azo dyes Textile and apparel products put up for sale in China must be labeled, as required by GB 5296.4 “Instruction for Use of Products of Consumer Interest – Instructions for Use of Textiles and Apparel”. According to GB 5296.4, the following information must be included, with the first three items provided on a permanent label. Product specification and size designation – size designation for apparel in accordance with GB/T 1335.1 - 1335.3. Fiber content/component and content of material used – in accordance with FZ/T 01053 Care Instruction/Washing methods - symbols specified in standard GB/T 8685, and certain words to explaining graphic symbols Name and address of the manufacturer – or in the case of imports, the registered name and address in China of the agent or importer or dealer and the country of origin Product Name - according to the national or industrial standards whenever possible Product standard code - relevant national, industry or enterprise standards for which the product was tested Product quality classification - based on requirements of relevant product standard Product quality certificate - Product quality certificate for each product (selling unit) manufactured in the domestic market Chinese standard FZ/T 01053 – 2007 “Textiles – Identification of Fiber Content” stipulates the label requirements of fiber content of textiles, marking principles, marking method, tolerance and judgment of consistency of identification, and provides examples of fiber content representation. Chinese standard GB 20400-2006 “Leather and Fur – Limit of Harmful Matter” is a mandatory standard for leather and fur apparel and home furnishing products. Industrial use products are excluded. GB 20400 includes mandatory tests on formaldehyde content and azo dyes. 47 Labeling - China The labels on textile products should be in the Chinese characters and include the following mandatory data: -name and address of the manufacturer -name of the product (in accordance with Chinese standard) -size (in accordance with standard GB 1335) -product composition: name and composition of the various raw materials used -cleaning instructions (compulsory use of symbols defined by GB/T 8685-2008 -- SGS -information sheets are available in English and in Chinese.) -storage conditions and other recommendations: compulsory for delicate products ‘best before’ date (only for products that are perishable) -Nº of standard -quality classification (if required by Chinese standard) The labels also have to respect the following presentation, according to the product: -printing or direct weaving in the fabric -label sewn, or affixed or hanged to the product -printing or pasted to the packaging -in the documents accompanying the product -Information including the model, type, and specifications of the product, product composition and cleaning instructions must be affixed in a permanent label. For fabrics, the label can be either hanged, printed, or woven. It is also important to note that in many instances the Chinese importer will affix the label after importation. 48 China Import and Export Documents Shipping documents bill of lading commercial invoice packing list air waybill consular invoice customs invoice weight memo Documents related with China Customs customs declaration form (in Chinese) Documents issued by Entry-exit Inspection And Quarantine Of The People’s Republic Of China inspection certificate (in Chinese) certificate for raw silk classification and conditioned weight certificate of analysis fumigation/disinfection certificate phytosanitary certificate animal health certificate veterinary (health) certificate health certificate sanitary certificate inspection certificate of quantity and weight quality certificate Certificate of Origin certificate of origin for imports of agricultural products into the european economic community certircate of authenticity fresh’emperor’table grapes certircate of authenticity tobacco certificate of origin(textile products) certificate of origin form f for china- chile fta (Form F) certificate of hong kong origin china-singappre free trade area preferential tariff certificate of origin form for the Free Trade Agreement between the Government of the People’S Republic of China and the Government of New Zealand certificate of origin china-pakistan fta (Form P) certificate of origin asia-pacific trade agreement (Form B) asean-china free trade area preferential tariff certificate of origin (Form E) form a certificate of origin Export Permit, Quote or License export licence for dual-use items and technologies of PRC permit/certificate for import/export & re-export (convention on international trade in endangered species of wild fauna and flora) clearance notification for environmental management on import/export of toxic chemicals temporary textiles export licence of the people’s republic of china Insurance Documents Insurance Policy Insurance Policy Application Form 49 Required Documents A. Bill of Lading (Ocean freight Bill of Lading) - the main maritime document. It identifies the shipper, consignee, name and quantity of the goods. B.1. For transportation of commercial cargo - Commercial Invoice. It contains more complete information about the cargo, including price, quantity, name of the goods. B.2. To send a private personal belongings need a Packing List. It contains a list of items and their approximate cost. Note: Some companies also require commercial invoices for transportation of personal belongings. To accept and confirm all documents U.S. Customs, all commercial invoices and packing lists must be in English, they contain the following information: Freight cost in U.S. dollars (exchange rate on the day of shipment; Full name and address of shipper, commercial goods - the ID number of the company; Full name and address of consignee; Detailed specification of the goods; Quantity of cargo; Weight of the load; Place of origin of goods (country of manufacture). Additional documents, depending on commodity and country of origin: D. Packing List (Packing List) - with the full description: quantity, weight, packaging material (for example: wooden pallets, boxes, crates, pallets, etc.) E. Certificate handling (Fumigation Certificate) - certification, indicating that the goods and packaging materials were processed after being loaded into the container and the cargo is safe from infection. F. Special Documents - depending on commodity and country of origin. Visa Quota Visa/Quota Certificate of Origin North American Free Trade Agreement Certificate of Origin (N.A.F.T.A.) Packing Declaration Dangerous Goods Declaration – hazardous materials Fish and Wildlife Declaration Consular Legalized documents F.D.A. U.S.D.A. Anti-Dumping 50 Banking Documents Product Name Examination of Documents Product Description The Examination of Documents here means the combined service provided by BOC London, including examination of documents and sending of the document for payment to the issuing bank. Product Functions The product is for the needs of exporters for settlement and collection of payments under L/Cs. Product Features 1. The product is for the needs of exporters for settlement and collection of payments under L/Cs; 2. Low risks. The issuing bank’s bank credit substitutes the commercial credit of importers and provides a conditional payment undertaking for exporters; 3. High initiative. So long as the document quality is ensured, the unconditional payment undertaking will be granted by the issuing bank, while the document quality is under the full control of exporters; 4. Passing on costs. Banking fees related to issuance of the L/C may be borne by importers, which is advantageous for exporters. Eligible Applicants 1. Exporters who are not familiar or confident with the credit standing of importers, thus requiring additional commitment from the bank of importers; 2. Exporters need to apply for packing loan from a local bank to finance the goods to be exported. Application Requirements 1. The applicant shall be approved and registered in accordance with the law, and hold a business license that has passed the annual inspection or other valid certificates which fully prove its legal operation and scope of business; 2. The applicant shall have the qualification to engage in import and export trade. Application Procedures 1. The exporter (beneficiary) presents export documents to Bank of China after the preparation and shipment of the goods under the L/C terms; 2. After examining the documents, Bank of China mails the documents to the foreign issuing bank or the nominated bank to claim reimbursement; 3. The foreign issuing bank presents the received documents to the applicant under the L/C; 4. The foreign issuing bank makes due payment to Bank of China and Bank of China will pay the exporter. 51 52 53 54 Conclusion: After looking at all of the variables of sourcing to China, it is very clear that both risks and benefits are present. The state of the Chinese economy is currently increasing which means that the increasing costs of goods is also increasing. As of now, China is still a lead manufacturer in the apparel world with low enough prices. The state of the apparel industry is strengthening due to the growing economy. This is allowing the funding for manufacturers to increase which creates better facilities for workers which in the end creates better products. This will lead to improved labor laws to regulate any practices that might not align with the sourcing guidelines. As of now there is no trade agreement between the United States and China. If they create an agreement this will eliminate the duty rate. This will not affect textiles as much but establishing that relationship with China will overall make trading easier. The costs of materials are continuing to rise and a trade agreement will eliminate some of the costs. With the better facilities, manufacturers are able to meet their sourcing guidelines. Many of the manufacturers overseas are working on becoming more sustainable so that people want to work with them. Along with the risks in production comes the risk of natural disasters and political issues that may impact production. We have heard about many earthquakes, tsunamis, and flooding in the past few years. These issues can cause a lot of damage that may halt production for quite some time. I am aware that Korea, one of China’s bordering countires is threatening the United States. They have tried to drag China into it with them which would put China and the U.S relationship at risk. With 14 other bordering countries, political issues occur frequently. Overall, I think China will continue to grow and their relationship with the U.S will strengthen which will lead to good business. China’s costs of goods may be rising but other countries cost is probably rising as well. Chinese people negotiate at a very slow pace so you must be patient and build a relationship with them. The better the relationship, the easier it will be to do business. 55 Appendix 56 Country Traits: A. Social: China possesses unique characteristics that allow citizens to live in harmony. Chinese people have a lot of patience. On the streets they often stand and block oncoming traffic and people. This is acceptable behavior. There is a lot of competition for seats, access to doors and people standing when they should be seated. However, they do not show unpleasantness or concern. Chinese are fundamentally unaware and extremely tolerant. B. Population: There are 1.3 million people in China. The population in China makes up 19.48% of the world population. Age Structure: O-14 years: 17.4% (male 125,528,983/female 107,668,285) 15-24 years: 16.1% (male 113,504,233/female 102,285,206) 25-54 years: 46.5% (male 319,710,444/female 305,378,723) 55-64 years: 10.9% (male 74,447,204/female 72,451,831) 55+ years: 9.1% (male 58,677,903/ female 63,587,111) Source: Indexmundi.com 57 Ethnic Groups: The Han Chinese make up 91.9% of China’s population. They dominate China culturally and politically. China has 55 recognized minority groups that total to about 8% of the nations population. Here are some of the more popular ones: • Bai Minority • Naxi Minority • Dai Minority • Miao Minority • Dong Minority • Zhuang Minority • Yao Minority • Uygur Minority • Hui Minority • Tibetan Minority • Tujia Minority • Kazak Minority • Hani Minority • Manchu Minority • Mongolian Minority • Qiang Minority • Shui Minority • Yi Minority 58 source: ninglundecember.wordpress.com Religion: China is a multi-religion country and always has been. It is well known for Confucianism, which is the indigenous religion and the soul of the Chinese culture. 85% of Chinese people have religious beliefs and the other 15% are atheists. Buddhism: Buddhism was brought to China 2,000 years ago and was widely accepted by most Chinese people especially in the Han and Tibetan groups. Buddhism is not just a religion it is also a culture that influences art, literature and ideology. Buddhism is not the most important religion in the country. 31% of people who do not believe in this religion have participated in some Buddhist activities. Han Buddhism has 8,400 temples and 50 thousand monks in the mainland. Tibetan Buddhism has 3,000 temples and 120 thousand monks and Southern Buddhism has 8,000 monks and 1,600 temples. Confucianism: Confucianism is not a real religion it is just an ethical system. It obtained its position during the Han Dynasty and became the ideology of the society. It is based on four books and five classics that hold the traditions and principles of Confucianism. Confucianism has worldwide influence and is found in countries such the U.S and UK. There are Confucius temples. Taoism: Taoism has over 1,800 years of history and originated during the Eastern Han Dynasty. There are about 300 Taoist Temples that are scattered throughout China, in which 30,000 Taoists lived in. There are 5 Taoist schools in the country today. Taoism influenced local cultures deeply when it came to literature and medicine. Islam was introduced into China in the 7th century in Tang Dynasty. Now Muslims live everywhere but the highest concentrations are Ningxia Hui Autonomous Region, Xinjiang Uygur, Gansu province and even Qinghai Province. Two of the famous Islamic Relics are the Great Mosque, Xian and Dongguan Mosque, Xining. Christianity and Catholicism: Both of these religions were introduced to China in Tang Dynasty. After 1840, they swept the country but were suspended in 1949. Now about 15 million Chinese people are Catholics and 20 million Christians are in Mainland. 59 Languages: Chinese is comprised of seven main dialects, Mandarin, Cantonese, Hakka, Wu, Min, Xiang, and Gan. Mandarin is the official national language of Mainland China and is considered the common language. (China Language) The second most common language in china is Cantonese and is often heard in Hong Kong and overseas Chinese communities. These languages are termed dialects from sociological and political points of view. (China Language) Six of the seven main dialects are in the southeast of Chinese, south of the Yangtze River. “Han Chinese represents about 92 percent of the total Chinese variant of Mandarin as their native tongue. The common language is used as a second language in government, media and education communication. All varieties of Chinese belong to the Sino-Tibetan family of languages. Different tones distinguish words that are pronounced identically. Despite the diversity of speech in China, they do share a common script making written communication possible between the different dialects. Government: The People’s Republic Of China Type: Single Party state, Communist State, Socialist State Capital: Beijing President: Xi Jinping Vice President: Li Keqiang State Council: Wen Jiabao Chairmen of the NPS: Wu Bangguo Chairmen of the Central Military commission: Xi Jinping The primary organs of state power are the National people’s Congress, the president and the State council. Currency: Renminbi GDP: 7.318 Trillion source: romanoprodi.it 60 Education: China education is the largest education system in the world. In 2013 there were 9.15 million students taking the China’s National Higher Education Entrance Examination. Investment in education accounts for about 4% of total Gross Domestic Profit in China. In 1986, the government passed a compulsory education law, making nine years of education mandatory for all Chinese children and about 99.7 percent of the population has achieved this basic education. International students have enrolled in over 690 higher education institutions throughout the country. China has a long history of providing education to international students studying in high school or universities in China. History of Education: Many Chinese scholars believe that the history of the Chinese education system can be traced back as far as the 16th century B.C. The teachings of Confucianism were based on The Four Books. This includes The Great Learning, The Doctrine, of the Mean, Confucian Analects and The Works of Mencius. Confucianism is probably the biggest influence in education of China. During the Han Dynasty a form of public education was established. This made education available to not only upper class families but also any common man. “In Confucianism, a gentleman considers what is right, when the peasant considers what will pay. A gentleman trusts in justice and the peasant trusts in favor. A gentleman looks within for guidance and the peasant looks unto others. A gentleman is easy to serve, and hard to please. The peasant is hard to serve, and easy to please. A gentleman in Confucianism often emphasizes the different behaviors between the gentleman and the peasant.” Studying Confucianism itself was limited to few people in ancient China and most of them were from upper class families. In Ancient Chinese culture, there was no need for common people to know why. During the Han dynasty the Civil service exam was set up and Confucianism was one of the main subjects. “To enrich your family, there is no need to buy good land: Books hold a thousand measures of grain.” The civil service exam system from Han dynasty, although as been changed throughout history, was used all the way up to the Qing dynasty. In 1985, the Central committee of the Chinese communist Party decided to reform the educational structure. This laid down the principle that local governments should be responsible for basic education. This was an incentive for local governments because it was on a firm legal basis. In the past 60 years China basic education has gained tremendous achievements. “In 2010, there were 138,209 kindergartens with an enrollment of 15,468,596 young children. In 2010, there were altogether 280,184 primary schools with an enrollment of 17,388,465 students.” Today this nine-year education system has been universalized. 61 Pre-School education: Pre-school education is an important component of education cause in China. In urban areas, pre-school education is mainly ages 1 to 3 years, which is sometimes full time and sometimes part-time. In rural areas, pre-school education is mainly nursery classes and seasonal kindergartens. The pre-school education has developed rapidly. It is a way of combining childcare with teaching so that children develop both physically, morally, intellectually and aesthetically in a harmonious way. “Kindergartens constitute systematic, purposeful and multi-faceted process of education conductive to lively, invigorating and sound development of children. “To enhance the management and guidance in these schools, the state has contrived a series of regulations and rules concerning the qualification of teachers and their performance. Primary and Secondary Education: In China, primary and secondary education takes 12 years to complete. It is divided into primary, junior secondary and senior secondary stages. This is a lot like the American education system, elementary, middle-school/Junior High, and High School. The school year for primary and secondary school is also divided into two semesters. The school year of primary school comprises 38 weeks of teaching and an additional week in reserve. There are 13 weeks fro holidays and vacations. The school year for junior secondary schools comprises of 39 weeks, a week for reserve and 12 weeks for holidays and vacations. The school year for senior secondary schools comprises of 40 weeks of teaching, 2 weeks in reserve and 10 weeks for holidays. They go to school 5 days a week. The current curriculum of senior secondary consists of two parts. They study subject courses and activities. Like American schools, they offer obligatory classes and electives. Throughout compulsory education, students are required to take end-of-term examinations and tests. In primary schools, the Chinese language and mathematics are required examinations while other classes are considered check-ups. After Education is important in the development of primary and secondary students. “Under the cooperative administration of departments in charge of education, culture, physics, worker’s union, the communist Youth League, Committee for Women and Children’s work and science and technology, after school education is conducted by joint efforts of the concerning central departments. Children may take part in these activities organized for them. “After the founding of the People’s Republic of China in 1949, the government began to pay great attention to the preparation and production of school textbooks and other teaching materials.” Four conservative sets of syllabuses of subjects were formulated as well as 8 sets of textbooks. China is a vast country and because of its significant regional areas, the economy and social development is very different, this makes it necessary to have multiple sets of textbooks at different levels to meet the needs of each area. In addition, many reference and manuals for teachers, booklets, atlas, charts, slides and audio/visual materials have been produced to supplement the textbooks. 62 ART Calligraphy and Painting-Calligraphy is one of the oldest and most basic forms of art. Built from this brush came painting, which developed a distinctive style that differs from western painting. It is more efficient in terms of brushstrokes and appears more abstract. Landscapes are a very popular theme as well as figurative. Chinese calligraphy, poetry and painting are closely related with their simplicity. They all seek inspiration from isolated mountain areas. Sculpture and Carving- The Chinese are master craftsman and produced fine sculptures in bronze. They created ceremonial vessels used by the nobility for ancestor worship and tombs in the Han Empire. They would create beautiful bronze objects inlaid with silver and gold and ornamented with abstract designs. Stone was one of the favorite mediums for sculpture and iron replaced bronze eventually. http://haveblog` source: yalebooks.wordpress source: yalebooks.wordpress 63 Architecture- the most significant characteristics of Chinese architecture are in the timber framework. The paintings and carvings added into the architecture make it more beautiful and attractive. The architecture is mainly wooden posts, beams, lintels and joists to make up the frame. Walls serve as a separation of rooms without bearing the weight of the whole house, which is unique in China. Colored glaze roofs, appliqué designed windows with beautiful flower patterns on wooden pillars reflect the handicraft and rich imagination of the designers. Many buildings contain cultural connotations. Opera and Theatre- Theatre was used for means of education and moral instruction, as well as for entertainment. It taught history, cultural values and justice. It is a popular form of entertainment but is also seen at birthday parties, holidays, festivals and during harvest time. Theatrical actors begin studying at a professional, private training school when they are eight or nine years old. They would be apprenticed to a master and would live in their masters home under contract agreement signed by their parents. Early in their training they would be split into one of 4 roles; Shan or male roles, Dan or female roles, Jin or painted face roles, and Chou or Clown roles. Each character will have face paint in a very unique pattern. Opera makeup has a very rich meaning. A character with mostly red makeup is considered brave and loyal where black symbolizes boldness and impartiality. Yellows denotes ambition while pink stand for sophistication. Characters with blue faces are fierce and far seeing while green shows impulsive behavior. An Actor with a small section of makeup on the face is a clown. Chinese opera has many strong female roles although for most of its history there were no females to play them. A woman who paraded herself on stage would be considered a prostitute. Men would play female roles. Source: arts.cultural-China.com 64 Monuments and Sight Seeing The Great Wall of China is one of the greatest wonders of the world. It winds up and down across deserts, grassland, mountains and plateaus for 5,500 miles. It is more then 2000 years olf and is one of the most appealing attractions all around the world because of its architectural grandeur and historical significance. The Forbidden City in Beijing lyes at the city center. It was the imperial palace for 24 emperors during the Ming and Qing dynasties. The palace for the heavenly emperor on earth was called the purple palace. It is said that the purple star lies in the center of heaven. It was forbidden to enter without special permission of the emperor, hence its name “The purple Forbidden City.” Qin Terracotta Army was discovered in 1974 by some workers digging a weel outside the side of Xi’an,China. One fo the diggers found a life size clay soldier poised for battle. They found thousands of these clay soldiers each with a unique facial expression and positioned according to rank. They have further discovered swords, srrow tips and weapons in pristine condition. The Temple of Heaven is located in the Chogwen District, Beijing. This was originally the place where emperors of the Ming and Qing Dysnasties held the Heaven Worship Ceremony. It is China’s largest and most representative exisiting masterpiece’s among China’s ancient buildings. It was first built in 1420 but was enlarged and rebuilt later. It is now open to the public as a park ans shows ancient philosophy, istory, and religion. 65 Yangtze River winds about 3,964 miles and is the largest in China and third largest river in the world. It originated from the Tanggula Range in Qinghai Province in western China. It acts as the largest water system in China and is historically, economically, and culturally important to the country. Yellow River is known as the mother river by all Chinese people. It is about 3,395 miles long and is the second largest river in China. It begins in the Kunlun Mountains and runs through nine provinces. There are more then 30 branches and countless streams feeding it through its course. This is the cradle of Chinese civilization and is a spirtual home for these people. The waters of the river and its spirit nurture the whole nation. Mount Everest lies on the China and Nepal border. It is 29,029 feet tall and has seven summits. Giant panda’s live in only remote, mountainous regions in central China. They may climb as high as 13,000 feet. A typical animal eats half of the day. There are only about 1,000 giant pandas left in the wild and seeing one in China is very lucky. 66 Sightseeing 67 THE GREAT WALL OF CHINA source: shedexpedition.com 68 THE FORBIDDEN CITY-BEIJING source: famouswonders.com 69 QIN TERRACOTTA ARMY 70 source: globalmountainsummit.org 71 TEMPLE OF HEAVEN-BEIJING 72 source: beijinglocaltours.com/ 73 YANGTZE RIVER 74 Source: paradisechina.blogspot.com/ 75 YELLOW RIVER 76 source: tripwow.tripadvisor.com 77 MOUNT EVEREST 78 source: globaltraveltorusim.blogspot.com 79 GIANT PANDA 80 source: naturescrusaders.wordpress. 81 Dining and Cuisine Chinese cuisine is very diverse with different recipes from ech dynasty. The geography, climate, costumes and products have led to the evolution of what are called the ‘Four Flavors’ and ‘Eight Cuisines’. In each cuisine chefs use something as simple as a melon to create new flavors and dishes. Cuisine in China is a harmonious integration of color, redolence, taste, shape and fineness. Cusine can be made for many different occasions including luxury court feasts, holy sacrifical rites, wedding ceremonies as well as simple daily meals and snacks. Chinese believe in Medicinal food prolonging life and promoting energy. The Chinese eat everything with four legs, and everything that flies. They do not support the eating of protected species or cruelty to animals. China can be divided into many geographical areas which have many distinct styles of cooking. Most of their ingredients is based on natural agricultural products of the region. China’s southern cuisine uses more rice and is more spicy. The minority culture of Inner Mongolia is pastoral so they eat a lot of dairy products as well as lamb and beef. Taiwan is isolated from China has developed its own mixed cusine including seafood. Sichuan Cusines is the most widely served cusine in China. It is filled with hot and spicy flavor and includes poultry, pork, beef, fish, vegtables, and tofu. They do a lot of baking, sauteing, and steaming. They often use a thick gravy. Cantonese is the most popular in Chinese restaurants around the world. The dishes are characterized by their tender sweet taste. The most widely used sauces in this cuisine are hoisin, oyster, plum and sweet and sour sauce. They use a lot of onions, sugar, salt, soy beans, rice, wine, corn starch, vinegar, sesame oil and garlic. Some of their traditional dishes are Chinese steamed eggs, deep fried dishes, shahe Noodles and chicken. Xiang dishes stems from the Hunan Province. It is known for its richness, creaminess and moistness combined with the use of chili. It is a very fragrant with crunchy vegtables. They do a lot of sauteing, stir-frying, steaming and smoking. athey use tea seed oil, spicy oil and Chinese red pepper. Lu Cuisine is the native cooking of East China. It dates back to the Qin Dynasty. Seafood is the most notable ingredient of Lu and includes scallops, prawns, clams, sea cucumbers, and squid all locally. They also use a lot of potatoes, tomatoes, cabbages, mushrooms, onions, garlics and eggplants. There are over thirty cooking techniques applied in Lu Cuisine. Hui Cuisine is from North China’s Anhui province. Anhui is abundant in uncultivated fields, mountains and forests which provide a lot of rich local ingredients. They produce, stone frog, mushroom, bayberry, tea leaves, bamboo shoots and dates. Hui is very particular about controlling cooking time and temperature. Heat is applied according to the quality. 82 Zhejiang cuisine originated from South China’s Zhejiang Province. It is famous for its mellow, yet not greasy taste. It cosists of three major style, Hangzhou style, Ningbo style and Shaoxing style. It requires expertise in cooking techniques. They make a lot of seafood and freshwater fish. Su cuisine has a fresh taste with mdoerate saltiness and sweetness which is thick without being greasy. They place an emphasis on soup. Su cuisine is composed of six styles. They have fine cutting techniques and feature freshness, fragrance, crispiness and tenderness. Min cuisine originates from China’s Fujian province. Their abundant resources come from the mountain and sea. They place a lot of attention on utilizing soup. Salty seasonings include shrimp sauce, shrimp oil and soy sauce. There techniques include pan-frying, deep-frying, boiling, baking, stewing, mixing, sautéing with wine, stewing in gravy, grilling, cooking with red rice wine, simmering, stir-frying, smoking, braising and salting. source: Chinahighlights.com 83 Fiscal Policies: China’s economy has entered the year on a “relatively stronger footing” than last year, as recent data point to a rebound in activity and suggest that real gross domestic product growth “will likely measure comfortably in the 7.5%-8.5% range” in 2013, Moody’s said in a paper about the country’s outlook. “The recovery is supported by policy easing and credit extension, particularly by the non-banking sectors,” Moody’s said. The People’s Bank of China (PBOC) cut rates twice and reserve requirement ratios for banks 3 times last year, complementing these policy actions with “a big step-up in open-market operations,” according to the rating agency. “Recent developments suggest that fiscal policy has also become more expansionary,” it said, citing a slowdown in the growth of revenues to the state budget to 12.8% in 2012 from 25% in 2011, overtaken by 15.1% growth in expenditure. In the previous two years, revenue grew faster than expenditure. Moody’s estimates that China’s budget deficit was 1.5% of GDP last year, higher than 2011’s 1.1%. China’s rebound is also supported by the recent stabilization in global economic conditions, it said. Export growth increased to 9.4% in the fourth quarter from the third quarter’s 4.4% growth; but for 2012 as a whole, exports increased by just 7.9%, less than half 2011’s 20% growth. “Our view is that China’s potential, real GDP growth may range between 7% and 8% annually over the next 5 years through 2017, with the advancement of financial market reforms and sound regulations,” Moody’s said. SHADOW BANKING ON THE RISE Growth in domestic bank loans picked up to 15.6% last year, compared with 2011’s 14.3% increase. Domestic credit to GDP is around 150%, lower than the eurozone’s 174.5%, Taiwan’s 171% and Japan’s 240%. 84 Economy: China currently has a very strange mix of socialist, capitalist, and communist ideas for their economy. http://news.xinhuanet.com/english/china/2013-03/05/c_132207942.htm Fiscal Policies: GDP:During the five year period, the central government’s fiscal revenue totaled nearly 21.9 trillion yuan, or $3.5 trillion. In the meantime, central fiscal expenditure totaled around 24.9 trillion yuan. Industries: There has been increased spending on education, medical care, green industry and transport. More than two thirds of the spending has gone to public-welfare related areas. Export: In addition, the central government has sought to implement structural tax cuts. China has piloted its Value Added Tax reform in 9 provinces and cities, cutting 40 billion yuan in taxes for more than a million businesses in 2012. Experts say the measures have helped develop the services sector and upgrade China’s economic structure. Structural Reform: China will maintain a proactive fiscal policy and a prudent monetary policy in 2013, as well as expand the economy by 7.5 percent, Premier Wen Jiabao said while delivering his last government work report at the parliament’s annual session Tuesday. The Chinese government has maintained the policies since 2011, as well as vowed to maintain their continuity and stability and make them more forward-looking, targeted and flexible. Source:ibtimes.com 85 Money: Renminbi The renminbi is the official currency of China. Renminbi is legal tender in mainland China, but not in Hong Kong, Taiwan, or Macau. Renminbi is sometimes accepted in Hong Kong and Macau, and are easily exchanged in the two territories. $1 US Dollar = 6.22 Yuan Yuan= basic unit for currency source: enlight.ru 86 Geography: Location: Southeast Asia along the coastline of the Pacific Ocean. It is the world’s third largest country. Area: 9.6 million square Kilometers, and its shaped on the map is like rooster. Physical Features: Plateaus, basins, foothills and mountains occupy 2/3 of the land. The highest PLateau is 4,000 meters. It is divided into 4 regions, the North, South, Northwest and the Qinghai-Tibetan areas. Climate: North- -20C to -40C with snow. Summer can get to 100 degrees and rainy. South: Summers are 38C, winters are January through March and it is not as cold as the North. Central: Long humid summers with high temperatures. Winters drop below freezing. Source: Sites.google.com 87 Knitfit Co. Block Knit Design Sheet Company name: Knitfit Co Address: Portland, Oregan 97034 Phone: 616-822-8407 Email: [email protected] Date Created: 4/2/2013 88 Date Modified: Style # 6673 Garment Information: Group Name: Comfort Knit Classification:Women's knitwear Season: F/W 2014 Garment Label: White Colorway: ivory, blush, Stone, Carolina Blue Description: Block Knit Date Released: Knitfit Co. Block Knit Illustration Sheet Company name: Knitfit Co Address: Portland, Oregan 97034 Phone: 616-822-8407 Email: [email protected] Style # 6673 Group Name: Comfort Knit Classification:Women's knitwear Season: F/W 2014 Garment Label: White Fabric Content: 100% Organic Cotton Colorway: ivory, blush, grey, Carolina Blue Fabric Information 100% Organic Cotton, Shishi Haobao Textile Co., Ltd. Model #DB76 Style # Width Size Ranges See fabric XS, S, M, L, Sheets XL, Sample size: M Delivery Date Comments TBD Date Created: 4/2/2013 Date Modified: Date Released: 89 Knitfit Co. Block Knite Size Sheet Style #: 6673 Care Instructions Machine wash cold with like colors. Do not bleach. Tumble dry on low or hang dry. 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Block Knit Component Sheet Company name: Knitfit Co Address: Portland, Oregan 97034 Phone: 616-822-8407 Email: [email protected] Item-VendorCode-Origin Content Anecot Organic-A&E China 100% Orangic Cotton Date Created: 4/2/2013 Style # 6673 Group Name: Comfort Knit Classification:Women's knitwear Season: F/W 2014 Garment Label: White Fabric Content: 100% Organic Cotton Colorway: ivory, blush, stone, Carolina Blue Size-Quantity-Unit of Measure Location Color Comments Ivory #0112 tex size 35-5000-Spool- All seams and Pink #3727 Blue #7812 hems as needed per garment Grey #8629 Date Modified: Date Released: 91 Knitfit Co .Block Knit Fabric Sheet Company name: Knitfit Co Address: Portland, Oregan 97034 92 Style # 6673 Phone: 616-822-8407 Email: [email protected] Group Name: Comfort Knit Classification:Women's knitwear Season: F/W 2014 Garment Label: White Fabric Content: 100% Organic Cotton Colorway: ivory, blush, stone, Carolina Blue Sketch: Swatch: Fabric Information 100% Organic Cotton, Shishi Haobao Textile Co., Ltd. Model #DB76 Style # WidthSize RangesDelivery Date Comments #DB76 XS, S, M, L, TBD XL, Sample 67" 140gsm size: M Date Created: 4/2/2013 Date Modified: Date Released: Knitfit Co . Block Knit Label/Packakging Sheet Style #:6673 Company name: Knitfit Co Address: Portland, Oregan 97034 Phone: 616-822-8407 Email: [email protected] Item-VendorCode-Origin Designer label, XHFJ Econimic & Trade co, China Size tab, XHFJ Econimic & Trade co, China Care Label XHFJ Econimic & Trade co, China, A81 Content Group Name: Comfort Knit Classification:Women's knitwear Season: F/W 2014 Garment Label: White Fabric Content: 100% Organic Cotton Colorway: ivory, blush, stone, Carolina Blue Size-QuantityLocation Color Unit of Comments Measure 100% cotton 1X1-square-1 per garment Center Backbetween seems White Print/Make to fill order 100% cotton 1X1-square-1 per garment Center Back Neck, under designer label White Print/Make to fill order 100% cotton In between Rectangle, front and back .75X3- 1 per seams-5 garment inches from bottom hem White See techsheet print to fill order Bar Code tag Transparent Vy Pphuong paper Co. Ltd, China Hangtag,XHFJ Econimic & Paper Trade co, China, W103 1 per garment Attach to hangtag by dennison gun 2 Color Order by size range, color, and style # 1.5X3-1 per garment hang by denison gun Gray with white writing print to fill order grey Fill order Re-usable 1 per non-woven bags, Xiamen garment fabric,laminat Probtain 30(W)x42(H) ed-20121101 Nonewoven x12(G)cm CO, A0087 Date Created: 4/2/2013 Date Modified:Date Released: 93 Knitfit Co. Date Created: 4/2/2013 94 Block knit Label Placement Sheet Date Modified: Style # 6673 Date Released: Work Cited Drezner, Daniel W. “Will China’s financial sector go boom? What about China’s govern ment?.” Foreign Policy. N.p., 9 Apr. Web. 25 Apr. 2013. <http://drezner.foreignpolicy. com/posts/2013/04/09/will_chinas_financial_sector_go_boom_will_chinas_gov ernment>. Hu, Fred. “Building Middle Class is Key to the Chinese Dream.” Caixin Online. N.p., 8 Apr. 2013. Web. 25 Apr. 2013. <http://english.caixin.com/2013-04-08/100511050.html>. 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