China lookout

09.08.2006

Apart from using technology to comply with regulatory requirements, technology can also help to get around these restrictions. "Regulations in China are often very straight on paper," said Wan from JOS. "But there can be lots of variation when it comes to actual enforcement."

He noted companies have used technologies and various legal business processes to work around the regulations, like China's value-added tax (VAT), which applies to any foreign purchases that will add value to an organization's business. One example that falls into this category is the use of pre-purchased global licensing scheme in the China offices.

While some enterprises gave up applying their global licensing scheme in China and purchased locally, others chose to download the software from the Hong Kong office, which is considered within China, to avoid the VAT, said Wan.