China
China orders AI chatbots to stick to ruling Communist Party line
China has issued a set of draft regulations that will require chatbots using artificial intelligence and developed by its tech giants to stick to the ruling Communist Party line, amid comments that the move will likely be the death of further innovation in the sector.
“The content generated by generative artificial intelligence should reflect the core values of socialism,” the country’s Cyberspace Administration said in draft rules issued for public feedback and comment on April 11.
“[It] must not contain subversion of state power, overthrow of the socialist system, incitement to split the country, undermine national unity [or] promote terrorism [and] extremism,” it said, using phrases typically used to target public dissent and criticism of the government.
“Content that may disrupt economic and social order” is also banned, according to the draft rules, which the government wants to see implemented by the end of the year.
The rules come as Chinese tech firms rush to launch homegrown AI chatbots, amid reports that regulators have warned major tech companies not to offer the Microsoft-backed artificial intelligence bot ChatGPT to the public.
They reflect official concerns around any technology that can produce content without the prior approval of government censors.
‘Corrupt regime’
In 2017, Tencent took down its chatbot Baby Q after it referred to the government as a “corrupt regime,” claimed it had no love for the Communist Party and said it dreamed of emigrating to the United States, amid reports that its programmers had been hauled in for questioning by police.
Nonetheless, the rules also claim that the government supports “independent innovation, popularization and application” in technologies like artificial intelligence algorithms and frameworks.
However, organizations and individuals using AI products to provide services will be held responsible for their output, it warns.
Social media comments said the rules would likely sound the death knell for AI innovation in the sector, which has already seen a demo version of Baidu’s homegrown chatbot Ernie launched with only a preselected set of questions allowed at the press conference in mid-March.
“This subversive AI is hereby sentenced to death. Sentence to be carried out immediately,” quipped Twitter user @Meta_epoch, while @TTL0001 wondered if the bot would need to fill out an application for Communist Party membership.
According to user @linglingfa, the rules mean that this style of AI “will definitely be banned in China now.”
“AI that has to encompass sensitive words is basically dead in the water,” agreed user @hunterpig586, in a reference to the list of politically sensitive terms currently banned from China’s internet.
“The AI should also study the 20 Principles, support the Two Establishes, consciously uphold the Two Maintains and achieve the Four Self-confidences!” quipped Twitter user @Alexajinyu in a sarcastic reference to key elements of supreme leader Xi Jinping’s personal ideology.
“This is ridiculous — why don’t they just give up altogether, really,” added @luhaha777, while @Kev1nLee214 added: “It’s clear that [AI chatbots] are destined to become a tool for ideological output … as their input material is ideological in the first place.”
And user @swift_pink1231 wondered: “What will they do when AI evolves further and is able to block them out?”
Killing innovation
Australia-based computer scientist Zhang Xiaogang said the censorship of chatbots would likely kill innovation in the sector.
“A dictatorial regime will always try to control everything, but this is a ridiculous approach,” Zhang said. “Restricting such things is tantamount to restricting AI itself, which will cause China’s AI to fall behind the rest of the world.”
“All China will be able to do then is steal other people’s technology,” he said.
Social media influencer Great Firewall Frog, who uses the Twitter account @GFWFrog, said the first priority of Chinese development is to curb and suppress innovation.
“The first priority of AI research teams is … to comply with the relevant laws and regulations,” he said. “In China in the new era under Xi Jinping, the Communist Party spends most of its AI research efforts trying to find and filter out content that it deems insulting to China, and to maintain the stability of the regime.”
“The Communist Party’s AI can only become even more focused on the ruling party,” he said, adding sarcastically: “If it’s not careful, it could get accused of picking quarrels and stirring up trouble, or incitement to subvert state power.”
Veteran economist Li Hengqing said the new rules show that the ruling party will have to keep tightening controls on public speech if it is to stay in power in the long term.
“The important thing is the content, the so-called ideology,” Li said. “Ideology is China’s current weakness.”
Media commentator Wang Jian said Beijing only has a use for innovation if it helps maintain the party’s grip on power. “The Chinese Communist Party’s core value is to stay in power,” he said. “To do this, it has two tools at its disposal: the gun and the pen, and the pen is where ideology comes in.”
“The Communist Party would prefer not to allow an industry to develop if it could threaten its ideological controls,” he said.
Translated by Luisetta Mudie. Edited by Malcolm Foster.
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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.
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.
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- 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
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