China
Clarifying US commitments to Taiwan
Authors: Samuel Hui and Wang Kai-Chun, Taipei
On 7 July White House Asia tsar Kurt Campbell stated ‘we support a strong unofficial relationship with Taiwan; we do not support Taiwan independence’, drawing an even clearer line on the US position regarding Taiwan. This came after he affirmed in June that the Biden administration is confident in the current framework that governs relations between mainland China, Taiwan and the United States.
At the event in June, Campbell said that the administration ‘still believes the frameworks that have been developed over the last several decades between the United States, Taiwan, and China give us the best framework forward’. He further noted that the administration ‘has [already] emphasised the downsides of adjusting that framework’.
Avril Haines, the US Director of National Intelligence, also viewed Taiwan’s move towards de jure independence as a potential challenge. She argued that ‘already Taiwan is hardening, to some extent, toward independence as they’re watching, essentially, what happened in Hong Kong’. Haines said that such developments would ‘solidify Chinese perceptions that the US is bent on constraining China’s rise if Washington moves towards strategic clarity’.
The concerns described by Haines resonate with critics of US strategic clarity. There are fears that an ‘unconditional promise of US support’ will embolden pro-independence factions in Taiwan, many of whom want to unilaterally change the status quo. Independence fundamentalists are often dismissive of the threat posed by China and overly confident in US support. So the adoption of strategic clarity may limit Washington’s choices in the event of emboldened Taiwanese actions relating to China.
Strategic clarity in the form of unconditional support for Taiwan could tempt radicals towards de jure independence, risking full scale confrontation between the United States and China. Beijing could use the situation to rally the Chinese population against both Taipei and Washington under the banner of Chinese nationalism and increase risks of Chinese challenges to the regional status quo. For Washington, strategic clarity would forces it to be reactive — leaving US policymakers guessing where and when a confrontation might occur in the Taiwan Strait.
Aside from affirming the benefits of maintaining ambiguity, Campbell noted the fact that the United States is entering uncharted territories regarding a ‘new complex coexisting paradigm’ with China where competition and cooperation go hand in hand. Despite Biden’s characterisation of US–China relations as a battle between democracy and autocracy, high-level dialogues have continued.
Former US secretary of state John Kerry still made his trip to China, and Biden still virtually met Chinese President Xi Jinping at the recent US-led climate conference. To foster stability in this unprecedented ‘frenemy’ relationship, Washington figured some existing conflicts, like Afghanistan, must be settled, and some controversies, like Taiwan, should be stabilised.
From a Taiwanese perspective, it’s easy to interpret Washington’s China policy shifts as signs of support for Taiwan. Biden has maintained a tough stance on China, and Biden officials describe relations with Taiwan as ‘rock-solid’. But high ranking officials from China and the United States have started to communicate more frequently than during the Trump era.
On the one hand, Washington’s competitive posture against China has resulted in more hardline statements. But on the other hand, increasing Chinese aggression and the deteriorating power balance between Taiwan and China in the context of a shrinking US military budget also requires US leadership to restore interactions with Beijing and minimise miscommunications.
As the US–China relationship remains unpredictable, Washington’s attention will increasingly turn to Taiwan. But such focus does not necessarily imply unconditional support for Taipei. Such attention might instead be a way of compensating for a lack of confidence in US military deterrence without significantly provoking the Chinese, a policy which calls for a more cautious approach to the island deemed ‘the most dangerous place on earth’.
US support might be another part of managing the tilting power balance between Beijing and Washington — not as a political gesture or blind pass for Taiwanese actions. Washington supports Taiwan insofar as failing to do so threatens US interests — not just because it is a proud democratic…
China
China Provides Tax Incentives on Special Equipment for Green and Digital Development
China has introduced a new tax incentive for companies investing in digital and smart upgrades of special equipment to encourage environmental protection and safe production. Companies can enjoy a 10 percent deduction from their corporate income tax payable. Eligibility and requirements are outlined by the Ministry of Finance and State Tax Administration.
A new China tax incentive aims to encourage companies to invest in digital and smart upgrades of special equipment. Companies upgrading certain equipment that aids environmental protection and safe production can enjoy a deduction of the investment at a rate of 10 percent from their corporate income tax payable. We explain the requirements of the new tax incentive.
China’s Ministry of Finance (MOF) and State Tax Administration (STA) have issued a new preferential corporate income tax (CIT) incentive for companies investing in digital and intelligent transformations of certain types of equipment. To be eligible for the incentive, companies must invest in the digital and intelligent transformation of equipment related to energy and water conservation, environmental protection, and safe production.
The new tax incentive aligns with a State Council Action Plan, released in March 2024, which aims to accelerate the renewal of large-scale equipment and consumer goods, promoting high-quality development and driving investment and consumption for long-term benefits.
If the annual CIT payable is insufficient for the offset, it can be carried forward to future years for up to five years.
The CIT payable refers to the balance after multiplying the annual taxable income by the applicable tax rate and deducting the tax reductions and exemptions according to China’s CIT Law and relevant preferential policies.
Note that companies enjoying the tax incentives must use the transformed equipment themselves. If the equipment is transferred or leased within five tax years after the transformation is completed, the incentives must stop from the month the equipment is no longer in use, and the previously offset CIT must be repaid.
The “special equipment” eligible for the preferential tax treatment covers equipment purchased and used by companies listed in the Catalog of Special Equipment for Safe Production for Corporate Income Tax Incentives (2018 Edition) and the Catalog of Special Equipment for Energy Saving, Water Conservation, and Environmental Protection for Corporate Income Tax Incentives (2017 Edition).
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
Revealing the Encouraged Industries of Hainan in 2024: Unlocking Opportunities
The 2024 Hainan Encouraged Catalogue, issued by the NDRC, MOF, and STA, aims to boost industries in the Hainan Free Trade Port. It prioritizes sectors like tourism, modern services, and high technologies, offering incentives for foreign investment and market access expansion since 2020. The Catalogue includes 176 entries across 14 categories, with 33 new additions focusing on cultural tourism, new energy, medicine and health, aviation, aerospace, and environmental protection.
The National Development and Reform Commission (NDRC), in collaboration with the Ministry of Finance (MOF) and the State Taxation Administration (STA), has issued the Catalogue of Industries Encouraged to Develop in Hainan Free Trade Port (2024 Version), hereinafter referred to as the “2024 Hainan Encouraged Catalogue.” The updated Catalogue took effect on March 1, 2024, replacing the previous 2020 Edition.
Beyond the industries already addressed in existing national catalogues, the new entries in the 2024 Hainan Encouraged Catalogue are based on practical implementation experiences and the specific needs within Hainan, prioritizing sectors such as tourism, modern services, and high technologies.
The Hainan FTP has been providing incentives to draw investors to invest and establish businesses in the region, especially foreign investment. Alongside a phased approach to opening the capital account and facilitating free capital movement, Hainan has significantly expanded market access for foreign enterprises since 2020, particularly in sectors such as telecommunications, tourism, and education.
The Hainan Encouraged Catalogue comprises two main sections:
Similar to the approach adopted by the western regions, foreign-invested enterprises (FIEs) should always implement their production or operations in accordance with the Catalogue of Encouraged Industries for Foreign Investment.
On top of the industries already addressed in existing national catalogues, the 2024 Hainan Encouraged Catalogue encompasses 14 distinct categories and a total of 176 entries especially encouraged in the region, including 33 new additions compared to the 2020 Edition. These new entries predominantly span cultural tourism, new energy, medicine and health, aviation and aerospace, and ecological and environmental protection, among others.
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
Key Guidelines for Companies in Compliance Audits for Personal Information Protection Standards
China’s standards authority has released draft standards for personal information protection compliance audits, potentially making them mandatory for companies in 2023. The audits will require companies to undergo annual or biennial checks based on the number of people’s information they handle. The draft standards outline the audit process and requirements, seeking public feedback until September 11, 2024.
China’s standards authority has released draft standards for conducting personal information protection compliance audits. Regular compliance audits to ensure compliance with personal information protection regulations may become a requirement for companies in China under draft measures released in 2023. We explain the audit processes and requirements proposed in the draft standards.
The Standardization Administration of China (SAC) has released a set of draft standards for conducting personal information (PI) protection compliance audits. Under draft measures released by the Cyberspace Administration of China (CAC) in August 2023, companies that process the PI of people in China are required to undergo regular compliance audits.
Specifically, companies that process the PI of over one million people must undergo a compliance audit at least once a year, while companies that process the PI of under one million people must carry out an audit at least once every two years.
While the draft measures stipulate the obligations of the auditing body and the audit scope, the draft standards outline the specific audit process, including evidence management and permissions of the audit organization, as well as the professional and ethical requirements of auditors.
The Secretariat of the National Cybersecurity Standardization Technical Committee is soliciting public feedback on the draft standards until September 11, 2024. Public comment on the draft measures released in August last year closed on September 2, 2023, but no updated document has yet been released.
The draft standards outline five stages of the PI protection compliance audit: audit preparation, implementation, reporting, problem rectification, and archiving management.
Auditors are required to accurately document identified security issues in the audit working papers, ensuring that the records are comprehensive, clear, and conclusive, reflecting the audit plan and its execution, as well as all relevant findings and recommendations.
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 Provides Tax Incentives on Special Equipment for Green and Digital Development
- Revealing the Encouraged Industries of Hainan in 2024: Unlocking Opportunities
- Key Guidelines for Companies in Compliance Audits for Personal Information Protection Standards
- A Comprehensive Guide to China’s Expanded 144-Hour Visa-Free Transit Policy at 37 Ports
- Regulatory Changes in China Aim to Boost Service Sector Growth in Six Cities
- Adhering to Updated Registered Capital Regulations in China’s Revised Company Law
