China
China’s youth face dismal job prospects
Xu Ke, 21, comes from a long line of university lecturers.
Yet his peers and people a few years older than him are all struggling with a major crisis in their lives: growing competition for a dwindling number of jobs as youth unemployment tops 20%, driven by a huge downturn in manufacturing and foreign investment.
“There aren’t many jobs, and the competition for the jobs there are is too strong,” said Xu, who is currently studying at a university in Minnesota. “Everyone is willing to do any job.”
“With everyone willing to do anything, wages are [kept] low, and benefits are poor,” Xu told Radio Free Asia in a recent interview.
Before the pandemic, most of his peers would once have expected to study for a teaching or liberal arts degree, before going on to land jobs as elementary and secondary school teachers.
But those days are long gone, Xu said, adding that the 20.4% unemployment rate among people aged 16-24 reported by the National Bureau of Statistics for April was likely only the tip of the iceberg.
“I would guess that the proportion of young people who can’t find a job at all is likely to be between 40 and 50%,” he said.
“After all, not everyone [with parents who work in the government] system can even get into senior high school, and not everyone in senior high school can get into college,” he said. He cited a government quota introduced in 2021 requiring 50% of junior high school students to take up places in technical and vocational schools, rather than senior high school.
Before the policy was introduced, around 60% of junior high-schoolers would have gone on to senior high, where they would then be eligible to take the grueling “Gaokao” university entrance exam.
Shut out
Some of Xu’s friends have now effectively been barred from a university education, and from the white collar jobs that education prepares them for.
Shut out of the system that raised them, they are forced to look for blue-collar jobs instead.
“Wages [in blue-collar jobs] are very low, and there is a lot of strenuous physical labor,” he said. “Some people can’t do it, or they can’t find [even blue-collar] jobs, so they basically spend their time waiting to get old.”
For 30-year-old Shan Wentao, it’s a familiar scenario.
Born into a working-class family in the eastern province of Anhui, Shan says even his peers can’t find work in the current economic environment, with dwindling opportunities in manufacturing and sharp falls in foreign investment.
“I tried to get a shift on a construction site, but there are more people [available to work] in the industry now, and the wages are getting lower and lower, while the work is pretty backbreaking,” he said.
One of Shan’s friends did land some construction work, but only lasted a few months due to health problems and non-payment of wages.
Yet for young working class people, “lying flat” – essentially doing nothing while living at home – is less of an option than it is for their counterparts with higher-level qualifications, as many are already married, and can’t live back home with mom and dad.
“There’s nothing to be done about it,” he said. “I get the impression they don’t want to do these jobs, but what else can they do?”
‘Revitalizing the rural economy’
A woman who gave only the surname Chen said she has a 17-year-old relative who is despondent about life after she graduates from vocational school.
“She says the teaching in the technical school is so bad that she isn’t learning anything, and that she’ll earn very little after she graduates,” Chen said. “She says it’s easier just to lie flat.”
“She doesn’t want to do manual work, because it’s too tiring, but her family doesn’t have the resources to send her to study overseas,” she said. “She is desperate, and confused about the future.”
National Bureau of Statistics spokesperson Fu Linghui told a news conference on May 16 that “the relevant departments are proactively introducing policies to provide targeted assistance” to help young people into work.
But media reports pointed to a rising number of college graduates in recent years, coupled with residual unemployment from previous years.
President Xi Jinping has called on young people to be less picky about the jobs they’ll accept, as well as lauding those who return to rural areas to “revitalize the rural economy.”
But his exhortations have fallen on deaf ears as the middle class cash out of the Chinese economy and join the “run” movement, seeking a new life overseas, often via political asylum in the United States.
“During the Mao era, the Chinese government promoted the relocation of educated urban youths to the countryside, through a combination of heavy political propaganda and various kinds of political pressure,” U.S.-based economist He Qinglian wrote in a recent commentary for RFA Mandarin.
But while more than 12 million have done so in recent years, the numbers don’t amount to much when taken alongside the hundreds of millions of rural residents who continue to move into China’s cities to find work.
“Of course the Chinese government knows very well that it won’t be able to get rural youths who have experienced the simplicity of urban life to pick up their hoes and bend themselves double over the land again,” He wrote, citing the rise of “Taobao villages” as people run online shops from rural locations.
She cited government balance-of-payments data as showing a 43% decline in foreign direct investment in China in 2022, compared with the previous year.
“Foreign-invested companies are gradually withdrawing from the Chinese market, which is a big blow to employment rates,” she said, adding that youth unemployment rates would be higher still if the government didn’t remove people returning to rural hometowns from the figures.
Translated by Luisetta Mudie. Edited by Malcolm Foster.
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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
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