China
Hun Manet: Cambodia’s rising son
Author: Charles Dunst, CSIS
Three out of four Cambodians have never known life without Hun Sen. The Prime Minister, currently the longest serving one in the world, came into power during the Vietnamese occupation of Cambodia in 1985. Some 75 per cent of Cambodians were born after that.
But Hun Sen is only 70 or 71 years old and appears to be in reasonably good health. There is no reason to think that he will disappear from the scene any time soon.
There are, however, some indications that he is planning to hand control of Cambodia to his eldest son, Hun Manet, the 44 year old general and commander of the Royal Cambodian Army. This handoff could occur sooner than expected — perhaps following the July 2023 elections in which Hun Sen will almost surely further cement his and the Cambodian People’s Party’s (CPP) grip on power.
Any handoff to Hun Manet will be carefully managed, with Hun Sen likely to remain CPP President. Either way, US and allied officials would be wise to begin considering how this transition will play out, as well as what Cambodia with Hun Manet — and eventually without Hun Sen — will look like.
And while there is no guarantee that Hun Manet’s ascension will go smoothly given Cambodian youth displeasure with his father’s governance, the Hun clan is currently riding a high: people credit Hun Sen for effectively managing the COVID-19 crisis, engineering two successful meetings with US President Joe Biden and maintaining a positive economic trajectory.
The chance that Hun Sen’s handover to Hun Manet will prompt significant public outrage in the short term is thus somewhat low. There will certainly be displeasure in Phnom Penh, where the country’s democratic-minded elite are based. But close to 80 per cent of Cambodians are subsistence farmers more concerned with the provision of public goods than the concept of democracy.
The pliability of Cambodia’s majority could enable a smoother transition to Hun Manet. Yet the princeling remains likely to face some opposition from CPP elites who want power for themselves or their children. When Hun Sen said in December 2022 that Hun Manet would succeed him, leaders like Interior Minister Sar Kheng and Defence Minister Tea Banh hesitated to offer their endorsements.
Hun Sen may have promised CPP leaders that their children would receive plum posts in the next generation of Hun clan leadership. The government has already replaced former agriculture minister Veng Sakhon with Dith Tina, the son of Supreme Court justice and Hun Sen backer Dith Munty.
More generational promotions seem likely after the Hun clan and the CPP sweep to victory in July 2023. These moves could perhaps quell some internal party challenges to Hun Manet, although not all officials will be satisfied. Hun Sen himself may also struggle to step away from the only post he has known for nearly four decades.
Still, some foreign officials are already beginning to hedge their bets by building ties with Hun Manet: the commanders of the Australian and New Zealand armies met with him in October 2022.
But if it is relatively clear that Hun Manet will eventually rule Cambodia, it is unclear how he will do so. There is a long-held notion that Hun Manet — who attended the US Military Academy at West Point, New York University and the United Kingdom’s University of Bristol — will be more friendly to the West and its partners than his father. While that might be somewhat true, it is hard to imagine that Hun Manet will fully reorientate Cambodia in the way the West might like, particularly if Hun Sen remains influential behind the scenes.
The fact remains that if Hun Manet comes to power, he will have done so in a nondemocratic way. This makes it difficult for any US administration to rebuild ties with Phnom Penh, given long-running congressional frustration with the Hun clan. It will be difficult for Hun Manet to extend an olive branch to Washington and its allies, particularly if human rights violations and Chinese developments at the Ream naval base continue.
In the long term, though, Western policymakers will likely find Hun Manet a preferable partner to his father. Hun Manet has no personal or historical disdain for the United States, suggesting a greater potential for partnership than there has been with Hun Sen.
But because Hun Manet lacks the charisma and political legitimacy of his father, he will likely focus on issues that could garner him popular support — like economic development and the provision of public goods. That focus will probably lead…
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
