China
Exposing the fragility of EU–China relations
Author: Tim Rühlig, Swedish Institute of International Affairs
2020 was supposed to be an important year for EU–China relations as the European Union’s China policy is undergoing a deep transformation. Four summits had been planned this year. The first two were cancelled and a mid-September leaders’ meeting in Leipzig risks suffering the same fate. It also seems unlikely that the two sides will conclude an EU–China Comprehensive Agreement on Investment in 2020 after seven years of negotiations.
COVID-19 is shrinking Beijing’s limited willingness to give in to European demands on unfair trade practices and more ambitious measures to curb climate change. This only adds to growing discomfort in the European Union over at least three developments shaping the relationship since 2016.
First, the perception among European policymakers and the traditionally optimistic European business community of China as an unfair competitor has increased significantly. Second, European assessments of political developments in China are increasingly negative regularly concluding that China under President Xi Jinping is turning even more authoritarian and nationalist. Beijing’s handling of demands for political reform in Xinjiang and Hong Kong only fuel European perceptions of a systemic difference between China and the European Union. Third, many EU officials worry that Chinese diplomacy is undermining European unity.
China’s targeted diplomacy highlights fractures in European China policy. While bilateral meetings never irritated Brussels, the 16+1 format, later known as the 17+1 format after Greece joined in 2019, includes China plus 17 central and central-eastern European countries, including 12 EU member states. Critics suggest that some government officials — such as those in Hungary and Greece — refused to criticise China, despite most EU member states advocating for a strong common position. Italy’s signing of a Belt and Road Initiative Memorandum of Understanding is yet another significant example of an EU country breaking ranks with European foreign policy unity. Recent criticism that the European External Action Service watered down a report on Chinese disinformation during the COVID-19 crisis is not convincing. Only days later, however, marking 45 years of diplomatic relations, EU Ambassador Nicolas Chapuis accepted to censor a passage in a remarkably friendly-toned op-ed published in China Daily co-authored by all EU ambassadors to China.
In 2019 the European Union adopted a new EU–China strategic outlook, describing China not only as a ‘partner’ but also an ‘economic competitor’ and ‘systemic rival’. The new European Commission characterises itself as a ‘geopolitical’ one. What appears to most observers an empty phrase might turn out to be a substantial EU policy shift on China. The new European Commission seems to be willing to adopt a ‘whole-of-Commission’ approach to EU–China relations. It now internally coordinates strategic objectives more closely to better leverage European power to achieve its core interests. But this new geopolitical turn is in its very early stages and there is no consensus over its priorities.
At the same time, Europe lacks unity and very different challenges now shape its relations with China. Widespread hope among central-eastern, eastern and southern European countries for major Chinese investments, after disappointment over EU solidarity in the global financial and the Euro crises that led Eurosceptics to gain influence, was followed by disenchantment. China’s foreign direct investment — once seen as an opportunity to gain more independent from the EU — was mostly directed towards high-technology industries in the continent’s north and west. At this point in time, a similar dynamic could occur in the COVID-19 crisis: the early successes of China’s mask diplomacy seem to have evaporated and the COVID-19 crisis may damage China’s reputation in the long term.
Growing rivalry between the United States and China is leaving its imprint in Europe. Poland and the Baltic states aim to maintain strong transatlantic partnerships because they perceive NATO and the United States as crucial security guarantors. But other EU member states, including Germany and France, are adopting a more critical approach towards US China policy.
The future of EU–China relations will largely be determined by four factors, of which China has influence over only one.
First, much will depend on whether or not EU member states — particularly the Eurogroup…
China
2024 Tax Incentives for Manufacturing Companies in China
China offers various tax incentives to boost the manufacturing industry. The Ministry of Finance and State Tax Administration provide guidelines on eligibility and policies. VAT exemptions and refunds are available for companies producing specific goods or services, with a monthly refund option for deferred taxes.
China implements a wide range of preferential tax policies to encourage the development of the country’s manufacturing industry. We summarize some of the main manufacturing tax incentives in China and explain the basic eligibility requirements that companies must meet to enjoy them.
China’s Ministry of Finance (MOF) and State Tax Administration (STA) have released guidelines on the main preferential tax and fee policies available to the manufacturing industry in China. The guidelines consolidate the main preferential policies currently in force and explain the main eligibility requirements to enjoy them.
To further assist companies in identifying the preferential policies available to them, we have outlined some of the main policies currently available in the manufacturing industry, including links to further resources.
For instance, VAT is exempted for:
Companies providing the following products and services can enjoy immediate VAT refunds:
Companies in the manufacturing industry that meet the conditions for deferring tax refunds can enjoy a VAT credit refund policy. The policy allows companies to receive the accumulated deferred tax amount every month and the remaining deferred tax amount in a lump sum.
The policy is not exclusive to the manufacturing industry and is also available to companies in scientific research and technical services, utilities production and supply, software and IT services, and many more.
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
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.
- 2024 Tax Incentives for Manufacturing Companies in China
- 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?
