China
China’s Central Bank, Aircraft-Carrier Style
If there’s any question where China’s first aircraft carrier stands in the eyes of officialdom, China’s central bank has answered it.
If there’s any question where China’s first aircraft carrier stands in the eyes of officialdom, China’s central bank has answered it.
China’s economy during the past 30 years has changed from a centrally planned system that was largely closed to international trade to a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy.
One demographic consequence of the “one child” policy is that China is now one of the most rapidly aging countries in the world.
The People’s Republic of China is the world’s second largest economy after the United States by both nominal GDP ($5 trillion in 2009) and by purchasing power parity ($8.77 trillion in 2009).
The restructuring of the economy and resulting efficiency gains have contributed to a more than tenfold increase in GDP since 1978.
Its mineral resources are probably among the richest in the world but are only partially developed.
A report by UBS in 2009 concluded that China has experienced total factor productivity growth of 4 per cent per year since 1990, one of the fastest improvements in world economic history.
Over the years, large subsidies were built into the price structure, and these subsidies grew substantially in the late 1970s and 1980s.
On top of this, foreign direct investment (FDI) this year was set to “surpass $100 billion”, compared to $90 billion last year, ministry officials predicted.
In 2009, global ODI volume reached $1.1 trillion, and China contributed about 5.1 percent of the total.
It also aims to sell more than 15 million of the most fuel-efficient vehicles in the world each year by then.
China’s challenge in the early 21st century will be to balance its highly centralized political system with an increasingly decentralized economic system.
Even with these improvements, agriculture accounts for only 20% of the nation’s gross national product.
China is the world’s largest producer of rice and wheat and a major producer of sweet potatoes, sorghum, millet, barley, peanuts, corn, soybeans, and potatoes.
Hogs and poultry are widely raised in China, furnishing important export staples, such as hog bristles and egg products.
There are also extensive iron-ore deposits; the largest mines are at Anshan and Benxi, in Liaoning province.
China is among the world’s four top producers of antimony, magnesium, tin, tungsten, and zinc, and ranks second (after the United States) in the production of salt, sixth in gold, and eighth in lead ore.
Major industrial products are textiles, chemicals, fertilizers, machinery (especially for agriculture), processed foods, iron and steel, building materials, plastics, toys, and electronics.
There are railroads to North Korea, Russia, Mongolia, and Vietnam, and road connections to Pakistan, India, Nepal, and Myanmar.
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China’s Central Bank, Aircraft-Carrier Style
China
Expansion of Preferential Income Tax and Corporate Income Tax Policies in Shenzhen’s Qianhai Cooperation Zone
The Shenzhen Municipal Tax Bureau, Shenzhen Municipal Finance Bureau, and State Tax Administration have expanded tax incentives in the Qianhai Cooperation Zone. Hong Kong residents working there will be exempt from paying excess individual income tax and companies will have a reduced corporate tax rate.
The Shenzhen Municipal Tax Bureau, Shenzhen Municipal Finance Bureau, and State Tax Administration have issued two notices broadening tax incentives for individuals and companies in the Qianhai Cooperation Zone.
The Shenzhen Municipal Tax Bureau, Shenzhen Municipal Finance Bureau, and State Tax Administration have released two notices expanding a preferential individual income tax (IIT) and corporate income tax (CIT) policy for companies and individuals working in the Qianhai Shenzhen-Hong Kong Modern Service Industry Economic Cooperation Zone (“Qianhai Cooperation Zone”).
Under the expanded policies, Hong Kong residents working in the Qianhai Cooperation Zone, a development zone located in Shenzhen, will be exempted from paying the portion of IIT exceeding their salary tax burden in Hong Kong. In addition, a 15 percent CIT rate, reduced from the standard 25 percent rate, has been expanded to more areas of the zone.
Hong Kong applies a progressive salary tax rate ranging from 2 to 17 percent. Meanwhile, China’s IIT rate ranges from 3 to 45 percent. This means many Hong Kong residents would enjoy a lower IIT rate if they remained in Hong Kong, potentially disincentivizing the flow of talent to the Qianhai Cooperation Zone. This policy therefore ensures Hong Kong residents will not have to pay more IIT if they choose to work in the Qianhai Cooperation Zone rather than Hong Kong.
High-end and in-demand foreign talent in the Qianhai Cooperation Zone are already able to enjoy a preferential IIT policy that allows them to reclaim the portion of IIT paid in excess of 15 percent in the form of subsidies.
The income covered includes comprehensive income derived from Qianhai (including wages, salaries, labor remuneration, royalties, and franchise fees), operating income, and talent subsidy income certified by the local government.
The Hong Kong residents eligible for this policy can enjoy this preferential policy when settling their annual IIT in Qianhai.
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’s First Negative List for Cross-Border Data Transfer Released by Tianjin Free Trade Zone
The Tianjin Free Trade Zone in China has released a Negative List outlining data that requires a security review by China’s cybersecurity bureau before being transferred out of the country. This list clarifies compliance requirements for companies operating in certain industries within the free trade zone.
The Tianjin Free Trade Zone has released China’s first data Negative List outlining the types of data that must undergo a security review by China’s cybersecurity bureau to be transferred out of China. While the Negative List maintains previously set thresholds for the volume of data that companies can handle before triggering data export compliance procedures, it also clarifies compliance requirements for companies in the free trade zone operating in certain industries.
The Tianjin Pilot Free Trade Zone (Tianjin FTZ) has released a new Negative List of data that will be subject to certain compliance requirements to be exported.
The China (Tianjin) Pilot Free Trade Zone Data Export Management List (Negative List) (2024 Edition), released by the Tianjin FTZ Management Committee and the Tianjin Municipal Commerce Bureau on May 8, 2024, is the first CBDT Negative List released in China. Ostensibly, data that is not included in the Negative List can be freely transferred out of China, which would significantly ease compliance requirements for companies based in the Tianjin FTZ.
Under China’s Personal Information Protection Law (PIPL) and subsequent regulations, companies that wish to export a certain amount or types of personal information and data outside of China are required to undergo one of three compliance requirements. These are 1) a security assessment carried out by the Cybersecurity Administration of China (CAC), 2) signing a Standard Contract with the overseas recipient of the data, or 3) receiving data export security certification by a third-party agency.
Due to the relatively low threshold for the volume and type of data that can trigger these compliance measures, these regulations significantly increase compliance burdens and hinder normal operations for companies, in particular foreign companies and multinational corporations (MNCs).
In an effort to improve the business environment for foreign companies in China, the CAC has released the Regulations to Promote and Standardize Cross-Border Data Flows (the CBDT Regulations). Among many other measures to facilitate data export, such as the increased data volume thresholds for triggering compliance procedures, these new regulations allow China’s FTZs to implement their own data governance rules, including formulating their own data Negative Lists.
The Tianjin FTZ is the first FTZ in China to release such a Negative List, and it is likely to be followed by more in the near future.
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
Lingang New Area in Shanghai Introduces Whitelists for Data Export to Enhance Cross-Border Data Flows
The Lingang New Area in Shanghai has introduced trial general data lists to simplify data export procedures for companies in automotive, biopharmaceuticals, and mutual funds sectors. This aims to reduce regulatory burdens and facilitate cross-border data flows, following efforts to improve business environment for foreign companies.
The Lingang New Area in Shanghai has introduced trial general data lists aimed at simplifying data export procedures for companies in the automotive, biopharmaceuticals, and mutual fund sectors. These lists outline specific scenarios where businesses can export data out of China with reduced regulatory burdens, bypassing more stringent compliance requirements.
The Lingang New Area of the Shanghai Pilot Free Trade Zone (FTZ) has released the first batch of trial lists of general data for three sectors, facilitating cross-border data flows for companies operating in the area. This announcement closely follows the release of the Tianjin FTZ’s Negative List, which similarly seeks to facilitate cross-border data flows for companies operating in the FTZ by specifying the types of data that are restricted from being exported without certain approval procedures.
The first batch of general data lists has been provided for the fields of intelligent connected vehicles, biopharmaceuticals, and mutual funds, three sectors with a significant presence in the Lingang New Area. The general data lists are scenario-based, meaning they outline various situations in which data export is required and freely permitted. These include scenarios, such as multinational production and manufacturing of intelligent connected vehicles, medical clinical trials and R&D, and information sharing for fund market research.
The general data lists will be implemented for a trial period of one year from their date of implementation, May 16, 2024.
In January 2024, the Lingang New Area announced a new system for data management and export in the area, which included the release of two data catalogs, one for “important” data and one for “general” data. This new system will help facilitate cross-border data transfer (CBDT) for key sectors in the area by delineating the types of data that are restricted or subject to additional compliance measures to be exported (through the important data lists) and data that can be more easily exported (through the general data lists).
In March, the area released the Measures for the Classification and Graded Management of Data Cross-border Flow in the China (Shanghai) Pilot Free Trade Zone Lingang Special Area (Trial) (the “Lingang CBDT Management Measures”), which outlined the rules and requirements for this new system, including how companies can use the general data lists.
These developments follow many months of efforts by the central Chinese government as well as local authorities to improve the business environment for foreign companies in particular, a core part of which has been resolving headaches surrounding data export.
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.
- Expansion of Preferential Income Tax and Corporate Income Tax Policies in Shenzhen’s Qianhai Cooperation Zone
- China’s First Negative List for Cross-Border Data Transfer Released by Tianjin Free Trade Zone
- Lingang New Area in Shanghai Introduces Whitelists for Data Export to Enhance Cross-Border Data Flows
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- Foreign Tourist Groups on Cruise Ships Fully Permitted Visa-Free Entry in China
- China’s New Tariff Law: Streamlining and Standardizing Current Tariff Regulations
