China
Laying down the law in the South China Sea
Author: Donald R Rothwell, ANU
Australia’s 23 July statement to the UN Secretary-General in formal response to a series of diplomatic exchanges between Malaysia, China and other states is the clearest to date on legal issues associated with China’s South China Sea maritime claims. Diplomatically the statement is unremarkable, legally though, it makes Australia’s position on some key issues very clear.
The statement was made through the Secretary-General to the Commission on the Limits of the Continental Shelf (CLCS). Since the Commission began reviewing continental shelf submissions in 2001 there have been many such diplomatic exchanges. They have become a normal part of the process through which states formally assert diplomatic and legal positions arising from CLCS submissions under the 1982 UN Convention on the Law of the Sea (UNCLOS). Those positions can relate to both territorial and maritime disputes, and interpretations of UNCLOS.
That the CLCS is a scientific and technical body without legal competence has become irrelevant to these exchanges becoming a forum in which political and legal positions are asserted. One of the most significant diplomatic exchanges was sparked by the 2009 joint Malaysian and Vietnamese CLCS submission resulting in a Chinese note verbale with an accompanying map showing China’s nine-dash line. But it is Malaysia’s December 2019 CLCS submission addressing its continental shelf claim in the northern part of the South China Sea that resulted in the most recent flurry of 11 diplomatic exchanges.
China, Indonesia, the Philippines, Vietnam and the United States, in addition to Australia, have now all responded. While Australia’s statement is technically a response to the Malaysian CLCS submission, it directly addresses five Chinese notes from December 2019, and March, April and June 2020.
Australia’s statement is principally framed upon a legal interpretation of UNCLOS, with particular reference to the 2016 South China Sea arbitral award between the Philippines and China, and China’s subsequent practice and behaviour. In that respect the statement focusses on China’s regional maritime claims and only marginally addresses territorial issues. Still, Australia makes two points in that regard.
First, Australia rejects China’s assertion in its 17 April 2020 note that its sovereignty claims over the Paracel and Spratly Islands are ‘widely recognised by the international community’. Australia is making clear that it does not recognise the claims of China or any other states to these islands and that they remain a matter of dispute. In this respect, there has been no change to Australia’s longstanding position on the disputed status of the islands.
Second, Australia also makes clear that China’s position that it exercises sovereignty over low-tide elevations is a matter of ‘strong concern’ as claims to such features are incompatible with international law because they do not form the land territory of a state.
Of greater significance is Australia’s position with respect to China’s maritime claims. Consistent with the South China Sea arbitration award, Australia rejects China’s ‘historic rights’ argument as inconsistent with UNCLOS. Australia also makes clear its position with respect to China’s attempt to draw either UNCLOS Article 7 or Article 47 baselines around its claimed South China Sea islands.
Here the Australian position is consistent with UNCLOS, which limits the drawing of Article 7 straight baselines to instances where a coastline is deeply indented, cut into or where there are offshore fringing islands. Likewise, any attempt by China to draw Article 47 archipelagic baselines is also challenged by Australia on the grounds that China is not an archipelagic state as defined in Article 46.
As a result, Australia rejects China’s attempts to claim a range of maritime entitlements such as an exclusive economic zone or continental shelf from these baselines. Australia also rejects equivalent Chinese maritime claims from submerged maritime features or low-tide elevations that have been artificially transformed by land building and associated activities. While Article 60 of UNCLOS does provide for the building of artificial islands, such features do not generate any distinctive maritime entitlement akin to a naturally formed island as recognised under Article 121.
Australia’s statement has sought to reinforce some of the fundamentals of UNCLOS which both Australia and China are parties to. The interpretations Australia has put forward…
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?
