China
China ‘investigating’ missing Defense Minister Li Shangfu: reports
Chinese Defense Minister Li Shangfu is reportedly being investigated by the ruling Chinese Communist Party after being out of the public eye since Aug. 29, according to several Western media reports.
Li is the second senior Chinese official to go missing after the recent disappearance of former Foreign Minister Qin Gang.
Reuters quoted “10 people familiar with the matter” as saying that Li is being probed for corrupt procurement of military equipment, without specifying the kind of equipment involved.
“Eight senior officials from the Chinese military’s procurement unit, which Li led from 2017 to 2022, are also under investigation,” the agency said in a report on Friday, citing two people in direct contact with the military.
The Washington Post quoted U.S. officials as saying that Li, who was last seen in public at the China-Africa Peace and Security Forum in Beijing on Aug. 29, is currently under investigation for “corruption,” and will likely be removed from his post.
An official account of Li’s last public speech from state news agency Xinhua was still available on the website of the State Council on Friday.
The Wall Street Journal also reported that Li will lose his job, while the Financial Times reported that the U.S. government believes him to be under investigation.
Li, 65, has missed meetings with Vietnamese and Singaporean defense leaders in recent weeks, Reuters said in an earlier report quoting sources with direct knowledge of the engagements.
Another disappearance
The reports came after Rahm Emanuel, the U.S. ambassador to Japan, tweeted that Li was also “a no-show” for his planned trip to Vietnam, drawing parallels with Qin Gang’s disappearance.
“President Xi’s cabinet lineup is now resembling Agatha Christie’s novel ‘And Then There Were None,’” Emanuel wrote. “First, Foreign Minister Qin Gang goes missing, then the Rocket Force commanders go missing, and now Defense Minister Li Shangfu hasn’t been seen in public for two weeks. Who’s going to win this unemployment race? China’s youth or Xi’s cabinet?”
Beijing has remained tight-lipped about the whereabouts of Qin, who was replaced as foreign minister by top Communist Party diplomat Wang Yi on July 25.
By July 31, President Xi Jinping had also replaced the commander of the country’s rocket corps — which controls the country’s nuclear missiles — amid media reports of an investigation into his predecessor and his deputies.
U.S.-based former PLA Navy Lt. Col. Yao Cheng said that move was part of Xi’s bid to remove any dissenting voices from the highest echelons of military command as part of preparations for a military invasion of democratic Taiwan.
“It’s been the Rocket Force people who don’t want to go along with Xi Jinping’s plan,” Yao told Radio Free Asia at the time. “They don’t want a war — they fear war because they have a very clear idea of what their missile capabilities are.”
1982 army enlistment
Li joined the Communist Party in 1980 and enlisted in the army in 1982, serving as director of the Equipment Development Department of the Central Military Commission and other important positions in procurement.
By 2022, he had a seat on the party’s 20th Central Committee, and was appointed defense minister in March 2023.
Li was sanctioned by the U.S. State Department in September 2018 due to transactions with Russian arms dealers.
Chinese foreign ministry spokeswoman Mao Ning declined to comment on Li Shangfu’s whereabouts when asked about him during a regular news briefing on Monday.
“I’m not aware of the relevant information,” she told reporters.
The defense ministry didn’t immediately respond to requests for comment from Reuters, while the U.S. Embassy in Tokyo said it had no further comment for the time being, the agency reported.
‘Invisible’ factors
Political commentator Johnny Lau said that arrests of senior officials in China for “corruption” can be highly selective, and have little to do with how corrupt any of them are.
“We have seen in the past that there were a number of factors that were invisible … in the Chinese Communist Party’s ongoing anti-corruption campaign,” Lau said. “In other words, he has chosen [whom to target], and these aren’t genuine anti-corruption cases.”
“They don’t involve the state legal system until they have figured out the impact on the party [of targeting this person], using its disciplinary system,” he said.
“This way of going about it feels a lot like rule by a single individual.”
But Lau said Beijing is unlikely to put on a big show trial, as it did in the case of former Chongqing party chief Bo Xilai and his political associates.
“A lot of these things are dependent on various factors, like internal reshuffles, power struggles and internal shock-dampening,” he said.
But Lau saw the recent changes at the head of the Rocket Force as likely to lead to less military tension, rather than more.
China this week unveiled a “blueprint” for “peaceful unification” including economic incentives and sweeteners for residents of Taiwan, which has never been ruled by Beijing, to move to China’s Fujian province to live and work.
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
- 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
