By Mark Preen
In 1978, China launched a policy of “reform and opening-up”, which catalyzed the economic development of modern day China. Leading the way in the implementation of this policy was South China’s Pearl River Delta (PRD) region.
Today, the PRD is one of China’s most open and dynamic regions. The PRD is known as “The Factory of the World” and in 2016 the combined GDP of the 11 cities in the region was RMB 9.35 trillion (US$1.38 trillion). This accounted for 12 percent of China’s economy that year, even though the region only accounts for five percent of the country’s population. If the region were a country, it would be the fifth largest economy in Asia.
Despite its success, the Chinese government will not allow the PRD to rest on its laurels. As the region faces increasing competition from countries such as India and Vietnam for low-cost manufacturing, the PRD must become even more open and innovative by taking a leading role in China’s next stage of economic development.
By Dezan Shira & Associates
China has announced that it will establish Belt and Road Courts to handle disputes arising from projects carried out under the Belt and Road Initiative (BRI), to which many countries have signed up. The courts, which are to be based in Beijing, Xi’an, and Shenzhen, have been established under the authority of the Supreme People’s Court of China.
The Xi’an court will manage commercial disputes for the Silk Road Economic Belt, which connects China, Central Asia, the Middle East, and Europe. The Shenzhen court will manage commercial cases for the Maritime Silk Road, which connects China, Southeast Asia, Africa, and Europe. Media reports state that Beijing will seek to promote the courts to resolve disputes that emerge in the BRI. Observers noted that the courts appear similar to the International Commercial Court in Singapore and the International Finance Centre Courts in Dubai.
UK Prime Minister Theresa May wrapped up her China visit on Friday, concluding the three-day trip with the announcement of a series of trade agreements.
May announced deals with China worth over £9.3 billion (US$13.26 billion), which the government claims will create more than 2,500 jobs in the UK. The Chinese government also agreed to end its ban on UK beef, while allowing increased market access for dairy producers and certain UK financial service firms.
Our weekly round up of other news affecting foreign investors throughout Asia:
IP Considerations in Singapore’s Healthcare and Medical Technologies Sector
Underpinned by both rising disposable income and progressively aging population, Singapore offers various business opportunities in healthcare and medical technologies sectors. South-East Asia IPR SME Helpdesk highlights the pre-market IP issues that companies need to consider.
The Companies (Amendment) Act, 2017 – Key Changes for Corporate Governance in India
India’s upper house of parliament passed the Companies Act (Amendment) Bill, 2016 in December 2017, after it was approved by the lower house last July. Upon securing the President’s assent, the Act came into effect on January 4, this year.
By Ramya Bodupalli and Alexander Chipman Koty
The #MeToo movement has exposed sexual harassment and inappropriate behavior around the world, and China is no exception. In China, university campuses have been the focal point of the movement, with students publicly accusing several high-profile university professors of sexual harassment.
Sexual harassment in China, however, is not limited to university campuses. According to one report by Hong Kong’s City University, 80 percent of Chinese women experience sexual harassment at some point in their working lives.
The #MeToo movement has begun to expose the prevalence of sexual harassment in workplaces and other institutions. Given the pervasiveness of sexual harassment in the Chinese workplace – as well as the lack of state support for victims – businesses are finding it crucial to develop formal processes to handle such issues, while those with existing mechanisms are reevaluating and strengthening their systems.
By Paul Dwyer, Director, Head of International Tax and Transfer Pricing
On December 29, 2017, the Inland Revenue (Amendment) (No. 7) Bill 2017 (Profits Tax Bill) was gazetted in Hong Kong, thereby introducing a two-tiered profits tax rate regime to the city.
The key objectives of the Profits Tax Bill are to maintain a competitive taxation system to promote economic development, while maintaining a simple and low tax regime.
The introduction of the two-tiered profits tax regime will reduce the overall tax burden on enterprises, especially for small and medium enterprises, and boost Hong Kong’s status as a preferred investment jurisdiction in Asia.
British Prime Minister Theresa May will visit Beijing this week to hold trade talks with British and Chinese business leaders about bilateral relations, trade, and the potential for participation in the Belt and Road Initiative. These actions take on additional significance as the UK negotiates its way out of its EU membership and needs to establish new trade routes under its own steam, and without the support of Brussels. It should be noted, however, that China-EU free trade talks have been stalled after years of discussions – leaving Britain the first among western European members to discuss a deal directly. This adds a higher level of ambition and potential to the upcoming China-UK bilateral discussions.
However, the UK is not entirely well organized at the business end of discussions. The long standing British Chamber of Commerce in China, which is supported by businesspeople and run for their benefit, boasts a couple of thousand members in China alone, and provided a concise voice for British business interests in China for decades. Curiously, it has been defanged. Problems began when a decision was made a decade or so ago to cease production of a British Chamber White Paper on UK-China trade relations. The official reason given was that as part of the EU, the European Chamber of Commerce in China would produce a White Paper on EU interests, including those of the UK, instead. In actual fact, the decision was taken to protect the interests of the British financial services industry, who could hide criticism of China behind an EU paper rather than be visible (and potentially singled out for punishment) in a British one. I was heavily against that decision at the time and made my views known that I considered it a selfish move that ran right over all other non-financial British business interests. Now, as we deal with Brexit, the UK will not be providing its opinions via the EU White Paper any longer, but also does not have one of its own either. We gave away a direct voice and connectivity link without really thinking things through.
Top economic advisor pledges market opening
Liu He, a member of China’s politburo and one of President Xi Jinping’s top economic advisors, has pledged that China will accelerate economic reforms in 2018.
Speaking at the World Economic Forum in Davos, Liu stated that “some measures will exceed the expectations of the international community,” and noted that the reforms will celebrate the 40th anniversary of China’s reform and opening up policy.