China
China’s strong-arming won’t work in Marcos’ Philippines
The recent US–Philippines Balikatan military exercise was a response to China’s increased aggression in the South China Sea. China had been targeting both Filipino military personnel and small-scale fisherfolk in the Philippines’ exclusive economic zone. China’s provocations had become indiscriminate and bolder, making it difficult to ignore the situation. The 38th Balikatan exercise in April 2023 was the biggest in the three-decade history of their joint combat drills. However, it received a swift warning from Beijing who called for the cessation of such activities, stating that they could aggravate tension in the area.
The United States and the Philippines conducted the third 2+2 Ministerial Dialogue on 11 April 2023 in Washington, where they issued clear-cut statements about the South China Sea conflict. The joint statement condemned China’s illegal activities and called for compliance with the 2016 Permanent Court of Arbitration decision, which rejected Beijing’s claims on territory and maritime rights based on its ‘nine-dash line’. The statement also reiterated the importance of maintaining peace and stability in the Taiwan Strait.
Under President Ferdinand Marcos Jr, the Philippines has turned its back on the China appeasement strategy that was present under his predecessor. Former president Rodrigo Duterte moved the Philippines closer to China, which gave ample space for them to construct a mutually beneficial relationship. However, Beijing continued to conduct aggressive actions in the Philippines’ exclusive economic zone, highlighting a clear mismatch between their words and actions. As a dominant state, China has assumed that vulnerable states would allow for its aggressive actions. However, the Philippines, like many ASEAN countries, is a post-colonial state that is sensitive to the superpowers’ raw ambition to dominate and bend them against their will.
The Philippines’ ability to defend itself against China is limited, which is why it has forged closer ties with the United States. The Philippines is also crucial to US interests as a treaty ally, making it important to maintain peace and stability in the region.
Authors: Jenny Balboa, Tokyo University of Foreign Studies and Hosei University, and Shinji Takenaka, Japan Center for Economic Research
Despite careful words from Philippine officials, the latest US–Philippines Balikatan military exercise was a response to China’s increasing assertiveness in the South China Sea. China’s provocations had become indiscriminate — targeting both uniformed Filipino personnel and small-scale fisherfolk in the Philippines’ exclusive economic zone. China’s aggressive actions had become bolder, making it more difficult to turn a blind eye to the situation.
The 38th Balikatan exercise in April 2023 was the biggest in the three-decade history of their joint combat drills. The exercise did not sit well with Beijing, which immediately released a warning that such activities can aggravate tension in the area. The Chinese ambassador to the Philippines issued an upfront reproach to the Philippine government about China’s displeasure of such ‘provocative’ activities.
The United States and the Philippines promptly conducted the third 2+2 Ministerial Dialogue on 11 April 2023 in Washington. Top US–Philippines foreign affairs and defence officials issued clear-cut statements about the South China Sea conflict. The joint statement condemned China’s illegal activities and called for compliance with the 2016 Permanent Court of Arbitration decision, which rejected Beijing’s claims on territory and maritime rights based on its ‘nine-dash line’. The statement also reiterated the importance of maintaining peace and stability in the Taiwan Strait.
Under President Ferdinand Marcos Jr, the Philippines seems to have turned its back on the China appeasement strategy that characterised the foreign policy of his predecessor. Former president Rodrigo Duterte moved the Philippines closer to China by downplaying the Arbitral Tribunal award favouring the Philippines. In retrospect, Duterte provided China with ample space to construct a closer and mutually beneficial relationship with the Philippines.
Yet Beijing continued to conduct aggressive actions in the Philippines’ exclusive economic zone targeting the Philippine military and fisherfolk who are more disadvantaged. There was a clear mismatch between Beijing’s words and actions. It did not help that China reneged on many of its economic commitments to Manila. Beijing failed to fulfil its pledged investment in several big-ticket infrastructure projects.
As a dominant state that wields considerable influence in the economy and security of many countries, China seems to have assumed that vulnerable states, such as the Philippines, would tolerate its belligerent actions. China had lost sight that the Philippines — like many ASEAN countries — is a post-colonial state, sensitive to the raw ambition of superpowers to dominate and bend them against their will. Beijing overlooked the determination of many domestic actors in these countries to defend their national interest.
The country’s territorial integrity is now under threat from a hegemonic China. Given the Philippine military’s inability to defend the country against a preponderant China, the Philippines moved closer to the United States, which provides the training and capacity to protect its territory.
The Philippines’ is also vital to US interests because it is a treaty ally that…
China
2024 Tax Incentives for Manufacturing Companies in China
China offers various tax incentives to boost the manufacturing industry. The Ministry of Finance and State Tax Administration provide guidelines on eligibility and policies. VAT exemptions and refunds are available for companies producing specific goods or services, with a monthly refund option for deferred taxes.
China implements a wide range of preferential tax policies to encourage the development of the country’s manufacturing industry. We summarize some of the main manufacturing tax incentives in China and explain the basic eligibility requirements that companies must meet to enjoy them.
China’s Ministry of Finance (MOF) and State Tax Administration (STA) have released guidelines on the main preferential tax and fee policies available to the manufacturing industry in China. The guidelines consolidate the main preferential policies currently in force and explain the main eligibility requirements to enjoy them.
To further assist companies in identifying the preferential policies available to them, we have outlined some of the main policies currently available in the manufacturing industry, including links to further resources.
For instance, VAT is exempted for:
Companies providing the following products and services can enjoy immediate VAT refunds:
Companies in the manufacturing industry that meet the conditions for deferring tax refunds can enjoy a VAT credit refund policy. The policy allows companies to receive the accumulated deferred tax amount every month and the remaining deferred tax amount in a lump sum.
The policy is not exclusive to the manufacturing industry and is also available to companies in scientific research and technical services, utilities production and supply, software and IT services, and many more.
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
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.
- 2024 Tax Incentives for Manufacturing Companies in China
- Exploring the Revamped China Certified Emission Reduction (CCER) Program: Potential Benefits for International Businesses
- 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
- Is journalist Vicky Xu preparing to return to China?
