China
National People’s Congress: Not Just a Rubber Stamp Session
The annual plenary session of National People’s Congress opens Saturday with nearly 3,000 delegates assembling in the Great Hall of the People to hear Premier Wen Jiabao deliver his annual “Report on the Work of the Government.” Much of the NPC’s real lawmaking work is done by the body’s far smaller Standing Committee, which meets regularly throughout the year. This month’s session, which lasts 10 days, is largely ceremonial, but the various work reports expected to be released provide insight into where China’s economy is heading. Among the issues China watchers should look out for: – The annual GDP growth target . Typically, the premier gives one in his work report. Since 2005, it has been “around 8%” percent—even though the economy has consistently grown much faster, which has rendered the target largely meaningless. This year, however, there’s a possibility he might offer a slightly lower number. Already, Mr. Wen has said they’ll lower a separate GDP growth target, the average figure for the 12th Five Year Plan, covering 2011 to 2015, to 7% from 7.5% and he might deliver a similar target for 2012. While that shouldn’t be seen as an actual forecast—most economists expect China to grow at least 9% this year—it would be symbolic. Beijing has said it wants to transform China’s economy, shifting away from a reliance on exports and investment to a more balanced, consumer-driven model. The decrease in Mr. Wen’s five-year GDP target, a Goldman Sachs report said this week, represents a desire to improve the “quality and efficiency of economic growth.” -The 12th Five-Year Plan. China’s economic road map through 2015, expected to be released on Saturday, will require formal approval by the NPC. The China Law Blog provides a useful outline of some of the major issues and potential solutions NPC-watchers can expect to see. Among them: domestic consumption, fostering education and training among the workforce, developing a modern trade structure in which service industries can grow and improving the country’s social safety net. -“Improving People’s Livelihood.” This looks to be the catchphrase for the NPC this year. Morgan Stanley discussed the idea in a report released Thursday and said the theme would underscore government efforts to transform China’s economy from one reliant on exports to one driven by the consumers. It predicted the five-year plan would include measures to quell “rising social discontents on inflation, property prices, and social security, including increasing the direct subsidies to poor families, strengthening construction of social housing, and broadening and improving the coverage of social safety net.” The phrase reflects a shift in attitudes among the country’s leadership, once bent on economic growth at all costs, who have grown to increasingly recognize the dangers of a rich-poor wealth gap. -Outside Voices. Much of the legislation to be considered by the NPC has already been carefully vetted by smaller state committees as well as various sections of the Communist Party, and is highly unlikely to be disputed in the NPC itself. But groups and individuals outside the governing elite sometimes use the gathering of the NPC, and the widespread public focus on politics, as an opportunity to push their own ideas about reform. Last year, for example, 13 newspapers acted in coordination to publish an editorial calling for reform of China’s hukou household registration system . The editorial was quickly removed from several of the newspapers’ websites but still managed to stimulate significant discussion online. With China’s security apparatus on high alert and a number of activists detained in the wake of this month’s online calls for a “Jasmine Revolution,” it seems unlikely anyone might try to follow suit this year, but China’s most scripted political show frequently manages to produce at least a few unscripted developments. –Brian Spegele. Follow him on Twitter @bspegele . –Brian Spegele
The annual plenary session of National People’s Congress opens Saturday with nearly 3,000 delegates assembling in the Great Hall of the People to hear Premier Wen Jiabao deliver his annual “Report on the Work of the Government.” Much of the NPC’s real lawmaking work is done by the body’s far smaller Standing Committee, which meets regularly throughout the year. This month’s session, which lasts 10 days, is largely ceremonial, but the various work reports expected to be released provide insight into where China’s economy is heading. Among the issues China watchers should look out for: – The annual GDP growth target . Typically, the premier gives one in his work report. Since 2005, it has been “around 8%” percent—even though the economy has consistently grown much faster, which has rendered the target largely meaningless. This year, however, there’s a possibility he might offer a slightly lower number. Already, Mr. Wen has said they’ll lower a separate GDP growth target, the average figure for the 12th Five Year Plan, covering 2011 to 2015, to 7% from 7.5% and he might deliver a similar target for 2012. While that shouldn’t be seen as an actual forecast—most economists expect China to grow at least 9% this year—it would be symbolic. Beijing has said it wants to transform China’s economy, shifting away from a reliance on exports and investment to a more balanced, consumer-driven model. The decrease in Mr. Wen’s five-year GDP target, a Goldman Sachs report said this week, represents a desire to improve the “quality and efficiency of economic growth.” -The 12th Five-Year Plan. China’s economic road map through 2015, expected to be released on Saturday, will require formal approval by the NPC. The China Law Blog provides a useful outline of some of the major issues and potential solutions NPC-watchers can expect to see. Among them: domestic consumption, fostering education and training among the workforce, developing a modern trade structure in which service industries can grow and improving the country’s social safety net. -“Improving People’s Livelihood.” This looks to be the catchphrase for the NPC this year. Morgan Stanley discussed the idea in a report released Thursday and said the theme would underscore government efforts to transform China’s economy from one reliant on exports to one driven by the consumers. It predicted the five-year plan would include measures to quell “rising social discontents on inflation, property prices, and social security, including increasing the direct subsidies to poor families, strengthening construction of social housing, and broadening and improving the coverage of social safety net.” The phrase reflects a shift in attitudes among the country’s leadership, once bent on economic growth at all costs, who have grown to increasingly recognize the dangers of a rich-poor wealth gap. -Outside Voices. Much of the legislation to be considered by the NPC has already been carefully vetted by smaller state committees as well as various sections of the Communist Party, and is highly unlikely to be disputed in the NPC itself. But groups and individuals outside the governing elite sometimes use the gathering of the NPC, and the widespread public focus on politics, as an opportunity to push their own ideas about reform. Last year, for example, 13 newspapers acted in coordination to publish an editorial calling for reform of China’s hukou household registration system . The editorial was quickly removed from several of the newspapers’ websites but still managed to stimulate significant discussion online. With China’s security apparatus on high alert and a number of activists detained in the wake of this month’s online calls for a “Jasmine Revolution,” it seems unlikely anyone might try to follow suit this year, but China’s most scripted political show frequently manages to produce at least a few unscripted developments. –Brian Spegele. Follow him on Twitter @bspegele . –Brian Spegele
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National People’s Congress: Not Just a Rubber Stamp Session
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.
China
New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
China has been the world’s largest manufacturer for 14 years, producing one-third of global manufacturing output. In the Emerging Asia Manufacturing Index 2024, China ranks highest among eight emerging countries in the region. Challenges for these countries include global demand disparities affecting industrial output and export orders.
Known as the “World’s Factory”, China has held the title of the world’s largest manufacturer for 14 consecutive years, starting from 2010. Its factories churn out approximately one-third of the global manufacturing output, a testament to its industrial might and capacity.
China’s dominant role as the world’s sole manufacturing power is reaffirmed in Dezan Shira & Associates’ Emerging Asia Manufacturing Index 2024 report (“EAMI 2024”), in which China secures the top spot among eight emerging countries in the Asia-Pacific region. The other seven economies are India, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, and Bangladesh.
The EAMI 2024 aims to assess the potential of these eight economies, navigate the risks, and pinpoint specific factors affecting the manufacturing landscape.
In this article, we delve into the key findings of the EAMI 2024 report and navigate China’s advantages and disadvantages in the manufacturing sector, placing them within the Asia-Pacific comparative context.
Emerging Asia countries face various challenges, especially in the current phase of increased volatility, uncertainty, complexity, and ambiguity (VUCA). One notable challenge is the impact of global demand disparities on the manufacturing sector, affecting industrial output and export orders.
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 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?
- Guide for Foreign Residents: Obtaining a Certificate of No Criminal Record in China
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