CIRC Clarifies Local Insurance Clauses and Premiums for Property Insurance Companies

Sept. 1 – China’s insurance regulator recently clarified several issues regarding local insurance clauses and premiums related to property insurance companies.

The China Insurance Regulatory Commission issued Baojiantingfa [2010] No. 61 on August 3, stipulating that all insurance companies will sort local insurance clauses and premiums, which were submitted to the local branches of the CIRC by their subsidiaries prior to April 1, 2010, and report to the CIRC for approval and registration before August 31, 2010. Read the rest of this entry »

New Issue of China Briefing: Employment Overheads in China’s Social Security System

Sept. 1 – In the September issue of China Briefing we look at China’s social security regime and the five social insurance funds that enterprises in China must contribute to: pension, medical insurance, unemployment insurance, maternity insurance, and occupational injury insurance.

We also look at the housing fund, another mandatory fund that both employers and employees contribute to. Because mandatory benefit requirements change from city to city, we compare and contrast 20 cities around China, introducing the proportions of salary that need to be contributed to social insurance in Dalian, Qingdao, Beijing, Shanghai, Hangzhou, Ningbo, Shenzhen, Guangzhou, Zhongshan, Dongguan, Shenyang, Tianjin, Chengdu, Suzhou, Xi’An, Changchun, Nanjing, Jinan, Kunming and Zhengzhou.

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Expatriates Working in China with Criminal Records

By Chris Devonshire-Ellis and Richard Hoffmann

Aug. 27 – A recurring theme over the past two years for expatriates wanting to be based in China is the subject of possessing a criminal record. These may of course be for relatively minor offenses; however China’s policy in this regard can be strict.

A standard requirement (although it is not always requested) for expatriates looking to work in China is for a “Certificate of No Criminal Record” to be provided when applying for a work permit. This is a particularly strict requirement in Shenzhen and Guangzhou, though less so in Beijing and Tianjin. Providing this certificate means having to go to your local police station in your home country and obtaining one. Different countries have different systems for providing such a document, and some smaller countries can even issue this from their embassy in Beijing. For most expatriates seeking employment in China, however, this needs to be obtained from their local police authority in their home country. Read the rest of this entry »

Guangdong Gov’t Accelerates Financial High-tech Service Industry

Aug. 26 – The Guangdong provincial government approved a plan to create a new financial services investment park last week aimed at accelerating the financial high-tech service industry in the province.

According to the plan issued on August 17, the government will build a financial services industrial park that will feature R&D centers, data processing centers, call centers, disaster recovery centers, training centers, and insurance asset management centers to support the business. Read the rest of this entry »

Pilot Program Allows Enterprises to Deposit Export Revenues Overseas

Aug. 25 – The State Administration of Foreign Exchange is now allowing certain regions to deposit export revenues overseas, with the aim of improving the efficiency of fund use by domestic enterprises.

Huifa [2010] No. 44, issued on August 19, stipulates that starting from October 1, 2010, Beijing, Guangzhou (including Shenzhen), Shandong (including Qingdao), and Jiangsu will carry out a pilot program for depositing export revenues overseas for a period of one year. Read the rest of this entry »

CBRC Releases Regulation on Financial Cooperation Business

Aug. 24 – China Banking Regulatory Commission recently released a regulation on financial cooperation business, aiming to better regulate banking credit and financial cooperation.

Yinjianfa [2010] No. 72, issued on August 10, states that the CBRC should further regulate the financing of bank credit and financial cooperative business in fund companies. Specifically, the balance of the financing business cannot exceed 30 percent of bank credit for financial cooperation. Read the rest of this entry »

China Encourages Further Use of Foreign Capital

Aug. 23 – China’s State Council has recently approved proposals aimed at further liberalizing the use of foreign capital.

Guobanhan [2010] No. 128, issued on August 18, states that China should optimize the structure of foreign capital. On one hand, China will encourage foreign investors to invest in industries such as high-end manufacturing, high-tech, modern service, new energy and energy saving fields, while strictly limiting the low level and overcapacity projects. On the other hand, multinational companies are encouraged to set up regional headquarters, R&D centers, procurement centers, financial management centers, settlement centers, cost and profit accounting centers and other functional agencies in China. Read the rest of this entry »

China’s Central Bank May Allow Further Foreign Investment in Local Markets

Aug. 20 – The People’s Bank of China issued a new circular on Tuesday allowing overseas RMB settlement banks and other institutions to enter the domestic interbank bond market in a pilot program targeting increased foreign investment.

The circular also clarifies the specific ways in which overseas institutions can engage in bond investments in the interbank bond market. The new rule is to provide an investment channel for overseas institutions that hold RMB-denominated assets, along with the expansion of China’s RMB cross-border trade settlements, according to a statement posted on the People’s Bank of China web site. Read the rest of this entry »

SAT Releases Notice on VAT Input Tax Deductions in Fund Projects

Aug. 19 – The State Administration of Taxation recently released a notice regarding several issues on VAT input tax deductions in financing fund projects, effective October 1, 2010.

Issued August 9, the notice stipulates that special VAT invoices and other deductible documents, acquired during the construction period of the projects funded by the trust capital, can be used in tax deduction in accordance with the relevant provisions of the current VAT in effect. Read the rest of this entry »

Judicial Interpretation of Foreign-Invested Enterprise Disputes Issued

Aug. 18 – China’s Supreme Court recently disseminated an opinion clarifying certain legal provisions of contracts during disputes between foreign-invested enterprises.

The “Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Disputes Involving Foreign-Invested Enterprises,” which came into effect August 16, states that if a contract concluded between the parties during the establishment or change of a foreign-invested enterprise becomes effective after being approved by the competent approval authorities, the contract will take effect from the date of approval. Read the rest of this entry »

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