The People’s Republic of China is located in Eastern Asia bordered by Russia to the North, the East China Sea, Korea, and Japan to the East, India and the Middle East to the West, and Vietnam and South-East Asia in the South. It is slightly smaller than the US and covers an area of 9,596,960 sq. kilometers. China’s total population is about 1.34 billion, making it the most populated country in the world, and is growing at about 0.46% with 47% living in urban areas. The capital of China is Beijing which has a population of about 13 million. Other major cities include Shanghai (16 mil), Guangzhou (11 mil), Shenzhen (8.5 mil), and Tianjin (8.2 mil). China is a communist state with the primary language being Mandarin and the local currency being the Chinese Yuan.
China has gone through major economic reforms in the past 30 years in order to compete better on a global scale. These reforms have allowed for a rapidly growing Chinese economy which is now the second-largest in the world based on GDP (Purchasing Power Parity). Its main trade partners are the US, Japan, Hong Kong, South Korea, Taiwan and Germany. Its primary imports are electrical and other machinery, oil and mineral fuels, and optical and medical equipment. Exports consist of electrical and other machinery including data processing equipment, along with apparel, textiles, iron and steel. China’s GDP (Purchasing Power Parity) is $12.61 trillion and is growing at a real rate of 7.8% with an inflation rate of 2.6%. China ranked 91 out of 185 countries in the World Bank Group’s Ease of Doing Business Ranking mostly due to government regulations on business.
Disclosure laws: Franchising Laws Overview
- The franchisor must provide the prospective franchisee with a disclosure document at least 30 days before executing the franchise agreement.
- The franchisor must have had two company-owned units (in China or elsewhere) for at least one year
- The franchise agreement must provide for a “cooling-off” period
- Minimum term of 3 years
- Franchisors must register with the Chinese government agencies (MOFCOM at the central government level) within 15 days after signing the first franchise agreement.
Click the links below for articles with more information on Franchising in China
Doing Business in China (2012)
Franchising Laws - China (2011)
China: 2010 and Beyond (2010)
Franchising in China (2007)
* CPI Score is published by Transparency International and relates to the perceptions of the degree of corruption as seen by business people and country analysts and ranges between 100 (highly clean) and 0 (highly corrupt).
**Ease of Doing Business Ranking is determined by the World Bank Group and is ranked out of a possible 185 countries. www.doingbusiness.org
***Unemployment is 4% officially in urban areas, but including migrants may be as high as 9%; substantial unemployment and underemployment in rural areas.
Most recent statistics have been taken from the CIA World Factbook unless noted otherwise.
International Franchising Opportunities
After you have finished researching the international markets, learning international expansion strategies and best practices, and understanding the basics of international franchising law, IFA provides numerous opportunities for franchising internationally.