The Pacific island nation of Vanuatu opened a trade office in Hong Kong to promote itself as an offshore incorporation destination for Chinese and Hong Kong firms. “It will only take half a day for a company to register [in Vanuatu] because things can be done in this office,” said Timothy Cheung, Chief Executive of Vanuatu International Companies, an agency that represents the island’s Trade Commission. “It will cost less than HKD4,000, cheaper than the going market rate.” Cheung also pointed out that the presence of a Chinese embassy in Vanuatu would make it easier for Chinese companies to have their documents legally authenticated. The island exempts offshore companies from taxes and retains a high degree of confidentiality on company disclosures, as the country’s law protects information such as the names of directors and the status of shareholders. Any registered entity that opens a company account at an international bank offering financial services, such as capital transfer and currency exchange, is also protected from inquiries by the government bodies of other nations. Vanuatu was hoping to attract up to 6,000 offshore registered companies from China by next year. The country has registered more than 40,000 foreign enterprises, mainly from Australia and New Zealand.

China and the European Union (EU) will start negotiations on investment agreements as soon as possible, Chinese Minister of Commerce Chen Deming and EU Trade Commissioner Karel De Gucht said at a joint press conference in Beijing. In 2010, the EU invested USD6.59 billion in China, up 10.7% on 2009. The EU was the third-largest destination for Chinese investment in 2009 at USD3.35 billion. From January to June, China-EU trade grew 21.3% year-on-year to USD265.9 billion, according to the General Administration of Customs (GAC). “These are impressive figures. We can take bilateral economic relations even further by developing investment opportunities, as investment is part of the global trade picture and the global supply chain,” said De Gucht. Shifting investment to China could be a good choice for European investors to offset risks at home, said Wang Zhile, Director of the Research Center for Transnational Corporations with the Ministry of Commerce (MOFCOM). “Up to now, European investment in China has been rather limited. The EU has been investing more in other countries like Brazil, Argentina and India. So there is a lot of room for investing in China,” said De Gucht. “I welcome the important step taken by the Chinese government on cutting the links between some indigenous innovation rules and government procurement,” said De Gucht.

Despite protests by the European Union, China has announced new export quota for rare earth elements. It agreed to nearly double the quota for the second half to 15,738 tons for 26 companies, up from 7,976 tons during the same period last year. This put the full-year quota at 30,184 tons, compared with last year’s quota of 30,258 tons. China’s 2010 quota of 30,258 tons was 40% below 2009’s, but customs data showed 39,800 tons were actually exported last year, excluding smuggling. A World Trade Organization (WTO) panel ruled against Chinese export restrictions on other raw materials, such as bauxite and zinc. Officials in Brussels and Washington had hoped that ruling would encourage Beijing to ease similar controls on its rare earth exports. Karel De Gucht, EU Trade Commissioner, expressed optimism that a negotiated solution could be found after a meeting with his Chinese counterpart, Chen Deming, in Beijing. “From the general response they gave me, they indicated that they understand they cannot have a policy for exports different from that for domestic trade,” De Gucht said. While EU officials insist that all options remain on the table, Minister Chen said that he was “not worried” about a possible WTO ruling on rare earths. China’s rare earth exports fell 40% last year to 30,259 tons, according to the European Commission. The WTO ruled on July 5 that export duties China imposed on certain raw materials were inconsistent with the country’s obligations under the WTO’s accession protocol, and that limiting the export quotas out of environmental concerns was not justified. De Gucht said the EU preferred to negotiate a solution with China but the EU would not hesitate to take additional action if a negotiated solution could not be reached. China controls about 90% of the world’s rare-earths supply. It began reducing exports last year.

Shanghai is expanding a last-minute landing-visa service to foreigners who fail to get a visa from Chinese embassies but have urgent business in the city. There are 10 conditions under which foreigners can apply for a visa on arrival. Shanghai offers about 16,000 landing visas every year. The ten conditions which qualify to apply for a landing visa are:
• Invited by local organizers’ last-minute decisions to participate in trade fairs
• Invited to participate in bidding or to sign business cooperation contracts
• To supervise export shipment and import commodity inspection or to check on the completion of a contract
• Invited to work on equipment installation or to make rush repairs
• Invited by the local party to solve compensation-related problems
• Invited to provide science and technology consultations
• Foreign groups invited to the country are able to increase or change group members with the agreement from its Chinese host
• To visit patients in critical condition or to conduct a funeral
• Foreigners in transit who, because of forces outside their control (such as weather delays) are unable to leave China by their original aircraft within 24 hours or have to leave China by other means of transport
• Invited foreign guests having no time to get visas from Chinese embassies with authority letters which allow them to apply for landing visa

The Ministry of Commerce (MOFCOM) welcomed the World Trade Organization (WTO) ruling that the European Union is illegally imposing anti-dumping duties on Chinese steel fasteners such as iron and steel nuts and bolts. The WTO ruled the EU’s single duty requirements and practices are discriminatory and violated WTO rules. It said the EU isn’t calculating them fairly as it takes China as a single exporter, instead of treating the companies individually. The EU imposed anti-dumping duties of 26.5% to 85% on fasteners from China for five years in January 2009. It is China’s first victory against the European Union at the World Trade Organization in a case that could thwart further EU anti-dumping claims until there is a change in European trade law. “The ruling of the Appellate Body in this case is of great significance, which is conducive to improve competitive conditions for Chinese exporters in international markets including the EU,” China’s WTO mission said. In its ruling, the Appellate Body also said the EU had used the wrong method to calculate the amount of alleged dumping and had shown it impinged upon only 27% of EU production of such fasteners, not a high enough proportion to qualify.