China
Philippine elections expose the politics of China policy
Author: Editorial Board, ANU
When, how, and why do domestic politics shape Southeast Asian states’ relationships with China?
This is almost a trick question — not only the diversity of Southeast Asian political systems, but the multiplicity of interests that bear upon foreign policy within individual states makes mockery of the idea of ‘domestic politics’ as a single, coherent force.
A more manageable question might be: to what extent does public opinion set the terms on which Southeast Asian governments work with China?
If only it were easy to know exactly what Southeast Asian publics think about China. And then to know what influences their thinking. In Japan or Australia where the public is regularly interrogated on these questions, public opinion is hardly unfiltered from state and other interests.
In Southeast Asia, the ISEAS-Yusof Ishak Institute’s State of Southeast Asia survey is an invaluable snapshot of elite opinion, but isn’t necessarily an accurate barometer of the ordinary citizen’s views, filtered or otherwise. While pollsters in the major electoral democracies of Indonesia and the Philippines occasionally take the temperature of voters on China, across the region polls are too infrequent, and methodologies too inconsistent, to be able to make generalisations about region-wide trends in public opinion.
As politicians disingenuously say, the only poll that matters is an election. Indeed, the best clues to how the public’s views shape the behaviour of national governments is via a close look at how China becomes an issue in election campaigns.
As Richard J Heydarian makes clear in this week’s lead article, all the ingredients for the politicisation of the China relationship are present in the Philippines’ elections coming up in May 2022. Since the election of the populist Rodrigo Duterte in 2016, ‘bilateral relations between China and the Philippines, a United States treaty ally, have undergone a tremendous transformation’. While going through the motions of amplifying public outrage over Chinese actions in the South China Sea, the Duterte administration has made soliciting Chinese investment in infrastructure and industrial development the focus.
Yet actual follow-through on projects to which Chinese lenders have pledged support has been underwhelming, and China continues to push the envelope in the South China Sea. Duterte’s critics accuse him of having cosied up to Beijing with little to show for it either on the South China Sea dispute or bringing economic transformation to the Philippines.
The criticism seems to have registered with the outgoing president. Now, ‘in his twilight months in office’, Duterte ‘has adopted a dramatically divergent tone on China’ as a majority of the contestants running to replace him distance themselves from the administration’s China policy. Only the current frontrunner Ferdinand ‘Bongbong’ Marcos Jr promises continuity with Duterte’s conciliatory approach; other candidates are promising a return to hedging, or to the pro-Western stances associated with the Philippine military establishment.
Duterte and his administration might have been defying political gravity in seeking close economic ties with Beijing while leaving the South China Sea issue unresolved, emboldened by the stratospheric approval ratings for Duterte and his brutal but popular drug war. As the country looks beyond Duterte’s ‘penal populism’, and to a more conventional president drawn from the Manila-based oligarchy, the politics of foreign policy might be reverting to the historical mean. ‘In the Philippines’ boisterous democracy’, Heydarian writes, ‘public opinion and the sentiments of the military reign supreme. Whoever succeeds Duterte will come under tremendous pressure to adopt calibrated assertiveness with respect to the South China Sea disputes, but also a measure of geopolitical pragmatism in relations with China’.
It’s a stretch to generalise from the Philippines to the rest of Southeast Asia. The Philippines is a US treaty ally, and there is ample public goodwill there towards the United States. The electoral system allows for a diverse field of presidential candidates who can win with a plurality of the vote. Elections are famously competitive, with candidates more incentivised to pander to public opinion rather than respect elite consensus on foreign policy.
More fundamentally, there are genuine and abiding differences within the political elite on how to balance the economic opportunities and security risks of China’s…
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
