China
Hong Kong’s future now lies with China
Author: Tim Summers, Chatham House
The past year and a half has transformed Hong Kong. Following prolonged, intense and often violent protest in 2019, COVID-19 drove activists off the streets in early 2020. This year’s passage of the National Security Law (NSL) by China’s National People’s Congress marked a new political phase. Opposition figures were put on the back foot and the central authorities in Beijing became more engaged in the city’s politics.
A year that began with a major protest march and the burning of HSBC Bank’s lion statues ended with opposition politicians fleeing into exile or facing prison sentences. What exactly has changed in Hong Kong and what are the implications? Two structural shifts stand out.
First, the balance of power within and over Hong Kong. The political momentum gathered by the protest movement weakened the city’s political institutions and from late 2019 Beijing began to fill this vacuum. It supported more restrictive policing of protests, appointed new officials to implement Hong Kong policy and widened its influence on the shaping of the policy environment within which the Hong Kong government operates.
Key to this strategy was the NSL. The boundaries of the crimes it outlaws — secession, subversion, terrorism and collaboration with foreign forces to undermine national security — will only become clear as more cases work their way through the judicial system. But claims that the law criminalises dissent look too simplistic.
Still, before the NSL was enacted it was already clear that Hong Kong’s government would be more assertive in using existing legislation to bring charges against opposition politicians. One consequence is the December imprisonment of political activist Joshua Wong and others on charges — to which they pleaded guilty — of organising an illegal siege of police headquarters in 2019.
Authorities pushed ahead with disqualifications of legislators from the Legislative Council (LegCo) who had been judged not to meet the requirements of conducting politics within the scope of Hong Kong’s Basic Law. The decision by the remaining 15 opposition legislators to resign in sympathy leaves only establishment camp figures to debate legislation.
This offers some space for the government to push forward its agenda in a way not possible since the current dysfunctional LegCo began its term in 2016. But much of the population remains critical of both the Hong Kong and central governments. Elections next autumn — postponed because of the pandemic — will likely show that Hong Kong’s politics remain polarised. Still, the balance of power has shifted in Beijing’s favour.
The second major change is in Hong Kong’s external relationships. Since the announcement of the NSL, Western governments have shifted their positions from concern about developments to strong opposition to the new legislation and to Beijing’s approach to Hong Kong.
Hong Kong’s separate trading status is no longer recognised by the United States and there are some calls for the United Kingdom to follow suit. A number of Western governments have withdrawn from Hong Kong extradition agreements and the United Kingdom announced a ‘pathway to citizenship’ for up to three million holders of British National (Overseas) (BNO) passports. This policy could transform some UK cities as much as it changes Hong Kong.
For all the insistence that the 1984 Sino-British Joint Declaration remains valid, a number of these measures (including the BNO scheme) are inconsistent with what was agreed. Some lobbying in the United Kingdom for foreign non-permanent judges to stand down from Hong Kong’s Court of Final Appeal targets another key feature of the handover settlement. Beijing has long said that the Joint Declaration had already done its job and now it looks like it is losing relevance on both sides.
How will all of this play out? Hong Kong’s political contestation will remain fierce through 2021. All the protagonists strongly believe they have right on their side, with both the Joint Declaration and China’s constitution held aloft to prove debating points. Beijing seems unmoved in the face of international and local pressure. It has geography, history and sovereignty on its side, plus Hong Kong’s economic reliance on mainland China. China’s leaders are willing to stay the course to shape Hong Kong according to their understanding of ‘one country, two systems’.
Political pressure in London is strong, boosted by the Hong Kong activists who chose to go into
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
- China Unveils Plan to Upgrade Industrial Equipment
