China
China’s renewable energy boom powers global job surge, report says
The global energy sector is witnessing a surge in job opportunities fueled by clean technologies, with China contributing over half of this growth, a Paris-based energy watchdog said, while warning that skill shortages are emerging as an increasing concern.
Energy-related jobs reached a total of 67 million in 2022 worldwide, marking a growth of 3.5 million compared to levels before the COVID-19 pandemic, the International Energy Agency (IEA) said in its latest “World Energy Employment” report released on Wednesday.
From 2019 to 2022, employment growth was primarily driven by five sectors, with solar PV employing the most at 4 million jobs, while electric vehicles and batteries experienced the fastest growth – over a million jobs since 2019.
The IEA report comes as another report, “State of Climate Action 2023,” said this week that the world was off track in 41 of 42 critical measurements to reach the 2030 climate target, with only electric vehicle passenger car sales on the right path.
Six indicators, including phasing out public financing for fossil fuels, were heading in the wrong direction entirely, according to the report by the World Resources Institute, and others.
China boasts the world’s largest energy workforce, the IEA said in its report, with over 19 million employees – or 28% of the global workforce – in 2022. Its clean energy sector constitutes about 60% of the nation’s total energy workforce, a ten percentage-point increase since 2019.
The world’s top carbon emitter witnessed a significant growth of 2 million jobs in the clean energy sector and a notable decline of 600,000 jobs in fossil fuel-related industries, primarily within the coal sector, between 2019 and 2022, the IEA said.
China’s clean energy manufacturing industries support about 3 million employees, representing 80% of the global workforce in manufacturing solar photovoltaic panels and electric vehicle batteries.
In 2022, global solar PV manufacturing capacity expanded by nearly 40%, with most of this growth happening in China.
Meanwhile, global wind power generation and hydropower employment surpassed 1.5 and 2 million respectively. The majority of the jobs are in Asia, especially China.
Asia leads the global race in renewables
Another report released on Thursday said renewable energy investment in Asia is growing at 23%, primarily due to China, amounting to US$345 billion allocated to wind, solar, and clean vehicles by the end of 2022.
The Asian region now contributes a substantial 52.5% to global energy capacity in 2022, attributed mainly to the significant efforts of China, India, and Vietnam, according to the analysis by Zero Carbon Analytics, an international energy research organization.
However, on a global scale, Asia is also responsible for 51% of worldwide greenhouse gas emissions, primarily due to India and China’s extensive coal-powered energy infrastructure.
“China is racing ahead in the shift to clean energy, this is no small feat for the world’s largest emitter of greenhouse gasses,” said Li Shuo, incoming director for China climate hub at the Asia Society Policy Institute.
Meanwhile, energy think tank Ember said Thursday that Vietnam drove ASEAN’s 43% per annum solar and wind generation growth from 2015 to 2022.
In 2022, growth slowed to just 15%, highlighting the need for more robust policies to sustain energy transition, said the report “Beyond Tripling: Keeping ASEAN’s solar and wind momentum,” published Thursday by the London-based energy research organization.
Vietnam accounted for 69% of ASEAN’s solar and wind generation by 2022. It was the main driver of the region’s growth and its recent slowdown was due to a new tariff scheme.
ASEAN’s solar capacity reached 26.6 gigawatts (GW) in 2022, while its wind capacity reached 6.8 GW. However, these figures represent less than 1% of the region’s enormous solar and wind potential, which exceeds 30,000 GW and 1,300 GW, respectively.
ASEAN projections indicate that in 2040, solar energy is expected to add 45 GW of capacity, while wind capacity will reach approximately 9 GW. This combined capacity will account for 15% of ASEAN’s electricity generation by 2040.
Skilled labor shortages could impede expansion
A survey of 160 global energy firms by the IEA showed a problem of labor shortages, especially for skilled workers in the energy sector, due to a higher demand for jobs than the number of people with the necessary qualifications, particularly affecting vocational workers and STEM (science, technology, engineering and mathematical) professionals.
Meanwhile, the IEA also said Chinese factories are facing challenges in finding suitable candidates to fill positions due to a shrinking working population and a preference among new entrants in the workforce for white-collar roles rather than trades or factory jobs.
Around 30% of all energy manufacturing positions in 2022 were located in China. By 2025, the country could potentially encounter a shortage of approximately 30 million workers for manufacturing jobs, according to a Chinese government estimate.
“The unprecedented acceleration that we have seen in clean energy transitions is creating millions of new job opportunities all over the world – but these are not being filled quickly enough,” said the IEA’s executive director, Fatih Birol.
More than a third of global energy workers hold high-skilled positions, in contrast to about 27% in the broader economy.
The IEA said fossil fuel companies are retraining employees for low-emissions roles to retain talent, but this may not work universally, especially in the coal sector with declining employment due to mechanization, highlighting the need for policymakers to prioritize a people-centered, equitable transition and invest in job training for the ongoing shift towards clean energy.
Edited by Mike Firn and Elaine Chan.
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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.
China
New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
China has been the world’s largest manufacturer for 14 years, producing one-third of global manufacturing output. In the Emerging Asia Manufacturing Index 2024, China ranks highest among eight emerging countries in the region. Challenges for these countries include global demand disparities affecting industrial output and export orders.
Known as the “World’s Factory”, China has held the title of the world’s largest manufacturer for 14 consecutive years, starting from 2010. Its factories churn out approximately one-third of the global manufacturing output, a testament to its industrial might and capacity.
China’s dominant role as the world’s sole manufacturing power is reaffirmed in Dezan Shira & Associates’ Emerging Asia Manufacturing Index 2024 report (“EAMI 2024”), in which China secures the top spot among eight emerging countries in the Asia-Pacific region. The other seven economies are India, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, and Bangladesh.
The EAMI 2024 aims to assess the potential of these eight economies, navigate the risks, and pinpoint specific factors affecting the manufacturing landscape.
In this article, we delve into the key findings of the EAMI 2024 report and navigate China’s advantages and disadvantages in the manufacturing sector, placing them within the Asia-Pacific comparative context.
Emerging Asia countries face various challenges, especially in the current phase of increased volatility, uncertainty, complexity, and ambiguity (VUCA). One notable challenge is the impact of global demand disparities on the manufacturing sector, affecting industrial output and export orders.
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 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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