Monday, March 30, 2009

Bulldozing history

Out of the darkness a hazy grey midday’s light crept into the lift as it made its way up the outside of the swish Hyatt on the Bund. This swanky hotel sits in an area of Shanghai – the North Bund – that is only now receiving the full attention of property developers. The scene from the ascending lift was all too depressingly familiar. Scars – 50 feet deep – were all that remained of huge plots of land where once had been characterful close knot sixty-year-old dwellings. The odd island of yore remained surrounded by blue fences, cranes and construction noise and mud.
In Shanghai the local government has protected many of the large old buildings while totally bowing to the avarice of property developers when it comes to old style accommodation. The city is a mess right now as it hurtles towards hosting the World Expo next year. Once locals have had time to look around after the dust settles, they might just regret the out and out pursuit of new dizzying skyscrapers. New office blocks I am reliably informed are only 35% taken up at the moment. This rash of overbuilding has also hit the sprawling hotels with occupancy rates at leading five star establishments now hovering dangerously low around 30%. Some day, someone will learn: less is more.

Sunday, March 29, 2009

The Wofe

Setting up on the mainland as a small independent concern is no easy task, harder still if you happen to choose a second tier city such as my new home, Dalian.
About a year ago I set up a bank account in France. I remember walking away from the place, my wrist aching thanks to the incredible number of times I was asked to sign pieces of paper – something like 50 in all.
All this though was merely good practice for the bureaucratic assault that is China. In Hong Kong we take for granted just how simply everything works. Setting up a mobile phone service, for instance. Five minutes and away you go. Trundle down to China Mobile on the other hand and prepare for a good hour’s hanging around.
Rent was admittedly quite straightforward – and wonderfully cheap.
Which then brought around the issue of company registration. This is a minefield. But it was a battle I had to win to ensure decent visa status. I was aiming to set up a WOFE (Wholly Owned Foreign Enterprise, pronounced woofee) rather than a representative office in the knowledge that come another Beijing immigration crackdown as witnessed in the run up to the Olympics I would be safe.
However, being a penny pincher I simply refused to splash out exorbitant reams of renminbi on the myriad company registration firms, who charge an arm and a leg essentially to fill in forms and sit in long queues. No way. I’d do this myself.
I located the right office in the centre of town for the initial batch of forms. A pile of dense Chinese documents was presented to me from the austere grey surroundings of the tax bureau. A friend helped me fill them in. Signature count: around eight. I handed them in a few days later. A burly bloke with acne scars and a gruff demeanor took one look at them, mumbled something about filling in one line incorrectly and plonked the papers back on my lap. He returned to his tea while I sought out a new batch of forms. I found out that any firm registered in Dalian has to be monikered with the opening word Dalian (eg Dalian Acme Co). This was proving difficult and my near non-existent Mandarin was stretched. I relented after a while and sought help.
A friend up here who is a bit of a government fixer said she’d help out for 5,000RMB – under the half the normal third party charge. Plenty more signatures scrawled and we had successfully crossed the first hurdle.
Before proceeding to the Foreign Commerce Bureau – another giant, dull edifice this time on the outskirts of town, we had to have a contract with an accountant and office rent secured. Odd, I thought. Jumping the gun a bit to lay down cash for office space when you are not guaranteed a company. But, now into the swing of things, and not at all surprised by the diktats of Chinese bureaucracy these two parts of the jigsaw came together quickly.
Round two of the signature express – this time for the Foreign Commerce Bureau – saw our next batch of papers rejected thanks to Gordon Brown. Since I had started the registration process, I had slapped down 10,000 pounds as my registered capital for the firm (you need to show 100,000 RMB or equivalent as a minimum). Months down the track and London was being referred to as Reykjavik-on-Thames, the pound was worth a pittance and I needed to up my stakes.
This then done, we were presented with a gold and red embossed certificate of approval. Though looking the part, this document only serves as a certificate of approval … of the application. We were about half way down the track.
The process then moved to the municipal government for their approval.
Sitting in queues in government offices has been very good to catch up on my reading.
As I write this I have been embroiled in this messy process for nearly five months. I am now just about complete. Days spent in tax bureaus, chop making holes in the wall, foreign currency centres and then the Bank of China and finally I am up and running.
It has by no means been easy but in the long run this will all prove worthwhile. It has proved to be the biggest bureaucratic test of my life and a handy insight into the sprawling apparatus of local government.