Economy & Trade
Confirmation of One Year Suspension of New Policies for Cross Border E-commerce
On May 25, the Ministry of Finance (MOF) confirmed that the proposed regulatory requirements for cross border e-commerce will be granted a one year transition period. This means that before May 11, 2017, customs clearance forms will not be examined for online purchased bonded goods entering the country’s 10 pilot cities of Tianjin, Shanghai, Hangzhou, Ningbo, Zhengzhou, Guangzhou, Shenzhen, Chongqing, Fuzhou and Pingtan. In addition, initial import licensing approval, registration or filing requirements for cosmetics, infant formula milk powder, medical devices, special food (including healthcare food, formula food for special medical purpose) and other such products will be suspended. Furthermore, goods imported under the direct sale model to all regions of China will be temporarily exempt from the initial import licensing approval, registration or filing requirements.
By Dezan Shira & Associates
British payment systems firm VocaLink has formed a five year deal with China’s UnionPay, the only domestic bank card issuing company in China and one of the biggest card issuers in the world. With over 5.4 billion UnionPay bank cards currently in circulation, the deal will greatly improve Chinese bank account holders’ international connectivity, granting access to Europe and the UK’s vast ATM network.
As China’s banking system continues to liberalize and become more international, foreign investors have increasing flexibility over the management of funds. However, China’s banking system remains complex, and many restrictions apply to foreign investors. The following article lays out the steps and options foreign investors must consider when opening a Chinese bank account.
New Tariff Policy for Cross Border e-Commerce Likely to be Postponed
On May 10, Shanghai Securities News reported the possibility of adjustments to a new cross border e-commerce tariff policy brought into effect last month. The report suggests postponement of the new cross border e-commerce tax policies and restrictions imposed on foreign exporters for one year. During the expected transition period, cross border retailers could prepare for the changes brought by the new round of policy revision. This is the latest in a number of adjustments that have already been made to online import restrictions. Several ministries including the Ministry of Commerce, the General Administration of Customs, and the Ministry of Finance have conducted research on the effects of the policy on cross border e-commerce, inquiring with third-party online e-commerce platforms and working on changes to the current rules.
China’s New Regulations to Further Regulate Foreign NGO Activity in the Country
On April 28, the Standing Committee of China’s National People’s Congress passed a new law to further limit the work of foreign non-profit organizations (NGOs) and their domestic partners. The law, which will come into effect on January 1, 2017, is part of an array of measures taken by the state to control and restrict the influence of Western organizations. According to the new regulation, foreign NGOs will be required to register with the police prior to starting any operations, rather than with China’s Ministry of Civil Affairs.
The new law is estimated to affect around 7,000 foundations, social groups, think tanks, and NGOs engaging in sectors such as business, education, environment, philanthropy, and culture. Such organizations will be subject to police supervision, with groups engaging in activities of a politically sensitive nature being hit the hardest. The law also applies to organizations originating from the regions of Hong Kong, Macau, and Taiwan.
Our Latest Round-Up of Business News Affecting China-Based Businesses Investing in Asia
In this edition of China Outbound, we take a closer look at ASEAN nations’ financial integration progress, which has been on the regional agenda since the Asian financial crisis in 1997. From there, we move to a comparison between Singapore and Hong Kong as Asia’s financial hub. We highlight the promising opportunities in Vietnam’s emerging industries such as education and healthcare. Finally, we discuss the reason why India’s economic outlook remains positive despite a declining optimism towards emerging economies.
By Kerry Brown and He Jingjing
One of the challenges of trying to make sense of the ‘One Belt, One Road’ strategy (OBOR, in Chinese `yi dai yi lu’一带一路) has been to work out what the idea is trying to express in the first place, at least as it is understood within China. In March 2015, the State Council issued an action plan, in which it stated that the idea was principally aimed at encouraging:
The orderly and free flow of economic factors, highly efficient allocation of resources and deep integration of markets; encouraging the countries along the Belt and Road to achieve economic policy coordination and carry out broader and more in-depth regional cooperation of higher standards; and jointly creating an open, inclusive and balanced regional economic cooperation architecture that benefits all.
China Television Manufacture Demand Slump
A majority of China’s television manufacturers have released last year’s performance reports, which show a drop in sales. Internet electronics companies such as LeEco and Xiaomi have contributed to the decline in market demand for televisions produced by specialist manufacturers. Electronics manufacturer Konka’s 2015 financial report shows a 14.33 percent fall in its television sector, while TCL Corp, another home appliance manufacturer, did not achieve its 18 percent revenue growth goal last year. Analysts say that the industry might suffer consolidation sooner than expected.
China’s television equipment manufacturing industry generated over US$100 billion in 2015, up 9.3 percent on the previous year, compared to an annual 13.7 percent growth rate over the last five years. The industry relies heavily on exports, and due to the changing export product structure and global recession, the industry has suffered volatile export growth.
By Dezan Shira & Associates
Editor: Jake Liddle
The China General Administration of Customs (CGAC) has recently decided to make adjustments to the classification table and tax tariff list of imported goods issued in 2012. Taking effect from April 8, 2016, the policy will cancel parcel tax for cross border e-commerce and has been implemented with an aim to level competition between online platforms and traditional brick and mortar import stores.
An adjusted parcel tax scheme now only applies to goods brought back into the country for personal-use by Chinese residents with a value exceeding RMB 5,000, and for non-residents’ personal-use goods with value exceeding RMB 2,000. Goods amounting to less than these amounts are tax exempt. The tax brackets have been reduced from four levels (10 percent, 20 percent, 30 percent, and 50 percent) to three. Below is a table detailing the new scheme: