China
Yuan rises to record high against dollar
China’s currency has kept a seven-day gaining streak, as the monetary authorities in Beijing Tuesday set its exchange rate at a new record high against the US dollar. The People’s Bank of China set the central-parity rate at 6.6997 yuan per dollar. In aggregate, the yuan has gained nearly 2 percent since China’s central bank chucked off a peg with the greenback since June 19. U.S. President Barack Obama said at a town-hall-style meeting in Washington that it is good for the United States …
China’s currency has kept a seven-day gaining streak, as the monetary authorities in Beijing Tuesday set its exchange rate at a new record high against the US dollar.
The People’s Bank of China set the central-parity rate at 6.6997 yuan per dollar. In aggregate, the yuan has gained nearly 2 percent since China’s central bank chucked off a peg with the greenback since June 19.
U.S. President Barack Obama said at a town-hall-style meeting in Washington that it is good for the United States that China does well in its economic growth. “A strong and growing China benefits the United States, just as a strong and growing United States is good for China,” he said.
However, President Obama also took the occasion to request faster appreciation of China’s currency. “What we have said to them is you need to let your currency rise in accordance to the fact that your economy is rising, you’re getting wealthier, you’re exporting a lot, there should be an adjustment there based on market conditions,” Obama said.
“They have said yes in theory, but in fact they have not done everything that needs to be done,” Obama told the town-hall gathering.
President Obama will meet Chinese Premier Wen Jiabao when the two attend the UN General Assembly in New York this week, and it is likely that the two leaders will discuss a spate of issues, possibly including the value of their currencies.
In New York, US Secretary of State Hillary Clinton and Chinese Foreign Minister Yang Jiechi discussed currency issues at length during a meeting on the sidelines of the annual gathering of the UN General Assembly. “It was a significant part of the discussion,” State Department spokesman P. J. Crowley told reporters.
Despite rising calls at the Capitol Hill for the Obama administration to ante up pressure on China to urge for quicker pace of the yuan’s appreciation, many in the broader American business community are concerned that Beijing could retaliate, if Congress passes a bill to punish China with punitive duties on its exports.
“Yes, China’s exchange rate needs to reflect market influences and its needs to do so sooner than later,” the group of eight former officials in the Clinton and Bush administrations said in a letter to congressional leaders. “But congressional currency mandates are not the answer, and may exacerbate challenges our nation already faces in our trade relations with China, and in creating economic growth and jobs here at home,” the group said.
They include Susan Schwab and Carlos Gutierrez, who were US trade representative and Commerce Secretary under President George W Bush, and Charlene Barshefky and Mickey Kantor, who held the trade and Commerce Department slots under President Clinton.
At an event in Baltimore, current US Trade Representative Ron Kirk said it was “not a clear call” whether the Congressional bills now moving on China were consistent with WTO rules.
&$&$By People’s Daily Online&$&$
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Yuan rises to record high against dollar
China has generally implemented reforms in a gradualist or piecemeal fashion.
In 2006, China announced that by 2010 it would decrease energy intensity 20% from 2005 levels.
China is also the second largest trading nation in the world and the largest exporter and second largest importer of goods.
The PRC government’s decision to permit China to be used by multinational corporations as an export platform has made the country a major competitor to other Asian export-led economies, such as South Korea, Singapore, and Malaysia.
The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978.
Agricultural output has been vulnerable to the effects of weather, while industry has been more directly influenced by the government.
China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories.
China’s ongoing economic transformation has had a profound impact not only on China but on the world.
China now ranks as the fifth largest global investor in outbound direct investment (ODI) with a total volume of $56.5 billion, compared to a ranking of 12th in 2008, the Ministry of Commerce said on Sunday.
” Although the figure is already “quite amazing,” the volume is “not large enough” considering China’s economic growth and local companies’ expanding demand for international opportunities, Shen said.
China reiterated the nation’s goals for the next decade – increasing market share of pure-electric and plug-in electric autos, building world-competitive auto makers and parts manufacturers in the energy-efficient auto sector as well as raising fuel-efficiency to world levels.
Although China is still a developing country with a relatively low per capita income, it has experienced tremendous economic growth since the late 1970s.
Despite initial gains in farmers’ incomes in the early 1980s, taxes and fees have increasingly made farming an unprofitable occupation, and because the state owns all land farmers have at times been easily evicted when croplands are sought by developers.
In terms of cash crops, China ranks first in cotton and tobacco and is an important producer of oilseeds, silk, tea, ramie, jute, hemp, sugarcane, and sugar beets.
Due to improved technology, the fishing industry has grown considerably since the late 1970s.
Growing domestic demand beginning in the mid-1990s, however, has forced the nation to import increasing quantities of petroleum.
There are large deposits of uranium in the northwest, especially in Xinjiang; there are also mines in Jiangxi and Guangdong provs.
China also has extensive hydroelectric energy potential, notably in Yunnan, W Sichuan, and E Tibet, although hydroelectric power accounts for only 5% of the country’s total energy production.
Before 1945, heavy industry was concentrated in the northeast (Manchuria), but important centers were subsequently established in other parts of the country, notably in Shanghai and Wuhan.
China
Exploring the Revamped China Certified Emission Reduction (CCER) Program: Potential Benefits for International Businesses
Companies in China must navigate compliance, trading, and reporting within the CCER framework, impacting operations and strategic objectives. The program focuses on afforestation, solar, wind power, and mangrove creation, offering opportunities for innovation and revenue streams while ensuring transparency and accuracy. The Ministry of Ecology and Environment oversees the program.
As companies navigate the complexities of compliance, trading, and reporting within the CCER framework, they must also contend with the broader implications for their operations, finances, and strategic objectives.
This article explores the multifaceted impact of the CCER program on companies operating in China, examining both the opportunities for innovation and growth, as well as the potential risks and compliance considerations.
Initially, the CCER will focus on four sectors: afforestation, solar thermal power, offshore wind power, and mangrove vegetation creation. Companies operating within these sectors can register their accredited carbon reduction credits in the CCER system for trading purposes. These sectors were chosen due to their reliance on carbon credit sales for profitability. For instance, offshore wind power generation, as more costly than onshore alternatives, stands to benefit from additional revenue streams facilitated by CCER transactions.
Currently, primary buyers are expected to be high-emission enterprises seeking to offset their excess emissions and companies aiming to demonstrate corporate social responsibility by contributing to environmental conservation. Eventually, the program aims to allow individuals to purchase credits to offset their carbon footprints. Unlike the mandatory national ETS, the revamped CCER scheme permits any enterprise to buy carbon credits, thereby expanding the market scope.
The Ministry of Ecology and Environment (MEE) oversees the CCER program, having assumed responsibility for climate change initiatives from the National Development and Reform Commission (NDRC) in 2018. Verification agencies and project operators are mandated to ensure transparency and accuracy in disclosing project details and carbon reduction practices.
On the second day after the launch on January 23, the first transaction in China’s voluntary carbon market saw the China National Offshore Oil Corporation (CNOOC), the country’s largest offshore oil and gas producer, purchase 250,000 tons of carbon credits to offset its emissions.
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
China
China Implements New Policies to Boost Foreign Investment in Science and Technology Companies
China’s Ministry of Commerce announced new policy measures on April 19, 2023, to encourage foreign investment in the technology sector. The measures include facilitating bond issuance, improving the investment environment, and simplifying procedures for foreign institutions to access the Chinese market.
On April 19, 2023, China’s Ministry of Commerce (MOFCOM) along with nine other departments announced a new set of policy measures (hereinafter, “new measures”) aimed at encouraging foreign investment in its technology sector.
Among the new measures, China intends to facilitate the issuance of RMB bonds by eligible overseas institutions and encourage both domestic and foreign-invested tech companies to raise funds through bond issuance.
In this article, we offer an overview of the new measures and their broader significance in fostering international investment and driving innovation-driven growth, underscoring China’s efforts to instill confidence among foreign investors.
The new measures contain a total of sixteen points aimed at facilitating foreign investment in China’s technology sector and improving the overall investment environment.
Divided into four main chapters, the new measures address key aspects including:
Firstly, China aims to expedite the approval process for QFII and RQFII, ensuring efficient access to the Chinese market. Moreover, the government promises to simplify procedures, facilitating operational activities and fund management for foreign institutions.
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
China
Q1 2024 Brief on Transfer Pricing in Asia
Indonesia’s Ministry of Finance released Regulation No. 172 of 2023 on transfer pricing, consolidating various guidelines. The Directorate General of Taxes focuses on compliance, expanded arm’s length principle, and substance checks. Singapore’s Budget 2024 addresses economic challenges, operational costs, and sustainability, implementing global tax reforms like the Income Inclusion Rule and Domestic Top-up Tax.
Indonesia’s Ministry of Finance (MoF) has released Regulation No. 172 of 2023 (“PMK-172”), which prevails as a unified transfer pricing guideline. PMK-172 consolidates various transfer pricing matters that were previously covered under separate regulations, including the application of the arm’s length principle, transfer pricing documentation requirements, transfer pricing adjustments, Mutual Agreement Procedure (“MAP”), and Advance Pricing Agreements (“APA”).
The Indonesian Directorate General of Taxes (DGT) has continued to focus on compliance with the ex-ante principle, the expanded scope of transactions subject to the arm’s length principle, and the reinforcement of substance checks as part of the preliminary stage, indicating the DGT’s expectation of meticulous and well-supported transfer pricing analyses conducted by taxpayers.
In conclusion, PMK-172 reflects the Indonesian government’s commitment to addressing some of the most controversial transfer pricing issues and promoting clarity and certainty. While it brings new opportunities, it also presents challenges. Taxpayers are strongly advised to evaluate the implications of these new guidelines on their businesses in Indonesia to navigate this transformative regulatory landscape successfully.
In a significant move to bolster economic resilience and sustainability, Singapore’s Deputy Prime Minister and Minister for Finance, Mr. Lawrence Wong, unveiled the ambitious Singapore Budget 2024 on February 16, 2024. Amidst global economic fluctuations and a pressing climate crisis, the Budget strategically addresses the dual challenges of rising operational costs and the imperative for sustainable development, marking a pivotal step towards fortifying Singapore’s position as a competitive and green economy.
In anticipation of global tax reforms, Singapore’s proactive steps to implement the Income Inclusion Rule (IIR) and Domestic Top-up Tax (DTT) under the BEPS 2.0 framework demonstrate a forward-looking approach to ensure tax compliance and fairness. These measures reaffirm Singapore’s commitment to international tax standards while safeguarding its economic interests.
Transfer pricing highlights from the Singapore Budget 2024 include:
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
- Exploring the Revamped China Certified Emission Reduction (CCER) Program: Potential Benefits for International Businesses
- China Implements New Policies to Boost Foreign Investment in Science and Technology Companies
- Q1 2024 Brief on Transfer Pricing in Asia
- New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
- Is journalist Vicky Xu preparing to return to China?
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