Did you know that TCT has a foreign correspondent?! Tom Owens of IKEA has been a long time TCT member and is currently on assignment (with IKEA) in Shanghai. Tom was transferred last year to China, and he has been on assignment there previously. Tom still maintains his membership at TCT and is still a member of the TCT Education Committee!

Doing Business In China

Doing business in China even for the old veterans can be a challenge. For the newcomer, the business rules and the incorporation process in the Middle Kingdom can truly be a mystery. The following is a brief introduction for foreign companies to start the process.

In China, it is not possible to incorporate a company to perform a general range of business activities. The incorporation process requires investors to specify a business scope which describes the company’s proposed business activities (such as buying, selling, distributing, providing services, importing, exporting) and the industry sectors in which it will conduct such activities. Once formulated, the proposed business scope is subject to review and approval by the Chinese authorities.

The PRC Foreign Investment Industrial Guidance Catalogue is the most important tool for determining whether activities in a proposed industry sector will be acceptable. The Industry Catalogue classifies industries into three categories: encouraged industries, restricted industries and prohibited industries. For industries such as oil and gas exploration, automobile manufacturing, and cargo shipping, a company cannot be established by a foreigner without a Chinese partner.

The business scope is one of the central points that are reviewed by the Chinese authorities as part of the incorporation process. It must be precise and correspond to the type of business the company will undertake. Establishing a business in China is normally more time-consuming than most foreigners are accustomed to. If anyone needs more detailed information, please contact me.

This article is provided by TCT Education Committee Member, Tom Owens, who in on an international assignment in Shanghai, China with IKEA, tom.owens(at)ikea.com.

It began with the Staggers Rail Act of 1980 which essentially deregulated the American railroad industry and ended most of the economic regulation that had been in place for nearly a century. Among other things, this federal legislation provided the major railroads, or Class Ones, an exit strategy for unprofitable lines which they had been forced to operate. They quickly capitalized on new-found freedoms and began to market unproductive branches to entrepreneurial short line companies, investors, operators and railroaders. The small railroad industry embarked on an unprecedented rebirth which gave rise to a dominating presence of Class II Regional and Class III Short line Railroads who continue to play a vital role in the resurgence of America’s rail renaissance.

America’s short line railroads serve as the primary feeder system for the national rail network and according to the American Short line and Regional Railroad Association (ASLRRA), Short lines pick-up and/or deliver one out of every four  railcars moving on the entire national railroad complex. They employ nearly 20,000 people, serve over 13,000 facilities and haul over 14 million carloads per year. Short lines are not only creating American jobs and fueling economic growth in rural and small town America, but they provide vital, high-profile, rail service to the largest Ports in the country and keep critical freight traffic moving safely and efficiently. These “local railroads” are restoring connections to innumerable local communities and small businesses and are gaining strength by providing customized first mile, last mile service that the larger “hook and haul” Class I’s have spun-off to focus on their Transcontinental product.

This customer-centric mentality has fostered increased opportunities for development of niche business and driven improved competition for truckload traffic. The Short line advantage for shippers is that local and regional rail carriers often connect with more than one Class I railroad, which translates into lower costs, more flexible service offerings, greater market reach and ultimately cost-competitive transportation. Again, according to the ASLRRA, there are over 550 Short line and Regional railroads which operate in 49 states and bring efficient and reliable rail service to thousands of communities which may have otherwise lost their connection to the nation’s mainline railroad system.

America’s short line railroads provide discernible fuel savings and environmentally friendly shipping as railroads consume one-third less fuel than trucks per ton mile moved. Railroads reduce congestion by taking millions of truck loads off the highway; are cost efficient and the best choice for the environment – especially when utilizing innovative locomotive technologies which significantly reduce gas/particulate emissions.

In summary, Short line and Regional railroads have ensconced themselves in the transportation industry as leaders in keeping the country’s economic engine running. Short lines have filled a critical gap left by the departure of the large freight railroads. They continue to focus on the importance of the customer and development of those areas connected to the main railroad and network, and ultimately to global markets and beyond.

This article is provided by TCT Education Committee member, Tim Flood, Operations Manager, Tacoma Rail, tim.flood (at) cityoftacoma.org