Economy & Trade

Bilateral Investment Treaties: What They Are and Why They Matter

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The United States and China—the world’s two largest economies—agreed at the 2013 Strategic and Economic Dialogue to restart negotiations on a bilateral investment treaty (BIT). But what are bilateral investment treaties (BIT)? Why do we need them? Who benefits from them? And how will the United States benefit from a BIT with China? Here’s what you need to know.

What is a BIT?

A BIT is an agreement between two countries that sets up “rules of the road” for foreign investment in each other’s countries. BITs give US investors better access to foreign markets—and on fairer terms. The United States currently has BITs with 42 countries.

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Scotland’s Lack of Foreign Investment Infrastructure With China

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Op-Ed Commentary: Chris Devonshire-Ellis

As September 18th, the date on which Scotland will undergo a referendum on whether to remain part of the United Kingdom, draws ever closer, debate has been raging throughout the UK as to the economic viability of such a split. However, research conducted by Dezan Shira & Associates on foreign investment between Scotland and China has revealed a paucity of related statistics, suggesting that the country is not mature enough in its institutions to go it alone when looking to attract FDI. The northern country has little available data on investments with China, one of the largest recipients of FDI in the world.

Searches conducted online revealed no immediate data made publicly available on the extent of Scottish investment into China, and little on Chinese investment into Scotland. While it is likely that these figures are collated and recorded as part of the overall data pool for the United Kingdom, Scottish institutions themselves appear to have been remarkably lax in seeking to attract FDI from what has become the world’s second largest economy. Continue reading…

Golden Years: The Coming Investment Boom in China’s Elderly Care Industry

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By Rainy Yao

SHANGHAI — Today, there are more than 200 million senior citizens in China. Fifty percent of them are “empty-nesters” living alone in rural areas, and more than 30 million are disabled. Meanwhile, the number of beds in nursing homes throughout the country was only 3.9 million in 2012. It is estimated that by 2050, the elderly population will total 400 million, accounting for one-third of the country’s total population. As a result, nursing homes are poised at the frontier of emerging investment opportunities in China.

Alberto Vettoretti of Dezan Shira & Associates comments, “I believe that in several years, the health care sector and its related industries (from hospitals to elderly care centers, and from ambulance services to post-injury rehabilitation treatments) will be one of the largest business sectors of the Chinese economy – possibly even larger in size than property. While property investment dictated the last 10 years of whopping development in the Chinese economy, perhaps in the next 10-15 years, health care will take up the helm, or certainly be one of the top 3 drivers of China’s economy.” Continue reading…

China Regulatory Brief: Tax Exemptions on New Energy Vehicles and Cross-Border Services

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Catalog of Purchase Tax Exemptions on New Energy Vehicles Released

China’s Ministry of Industry and Information Technology (MIIT) recently released the “Catalog of Vehicle Purchase Tax Exemptions on New Energy Vehicles (First Batch)”. The Catalog covers two kinds of locally-produced and imported electric cars, namely new energy vehicles and plug-in hybrids vehicles. Seventeen types of passenger vehicles, 75 types of coaches and five types of special vehicles are included in the category of new energy vehicles; while six types of passenger vehicles and ten types of coaches are included under plug-in hybrids vehicles. Starting on September 1, 2014, China cancelled the 10 percent vehicle purchase tax on new energy vehicles (i.e. electrical vehicles) in a bid to boost related demand and address pollution problems. The complete Catalog can be found here. Continue reading…

Xi’s Visit to India & Sri Lanka Promises Infrastructure, Shipping & Tourism

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Op-Ed: Chris Devonshire-Ellis

India is in the spotlight following the decision to cancel the Pakistan leg of Chinese President Xi Jinping’s South Asia tour to India and Sri Lanka. In an unusual move, China postponed Xi’s visit to Pakistan, one of China’s closest allies, due to political uncertainty in Islamabad. This puts on hold the development of proposed trade corridors between Xinjiang and Pakistan—part of a long-term Chinese strategic plan to combat restlessness in the region by creating wealth through trade—and refocuses the trip largely on Chinese ties with India.

Xi will now visit Sri Lanka first, the small island nation that has already had much of its infrastructure improved by Chinese investment. As Indian worker demographics are ensuring that a large percentage of future global manufacturing will move to India, China needs to secure huge amounts of high-capacity Indian production to keep its own population supplied with affordable and inexpensive daily products. India is the only country with the workforce and proximity to China to be able to provide this; however, security and other concerns between the two nations have not always made cooperation easy. Continue reading…

Asia’s Emerging Manufacturing Hot Spots: China Outbound

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Our Latest Round-Up of Business News Affecting China-Based Businesses Investing in Asia

In this edition of China Outbound, we review the key factors fueling several Asian countries’ development as ideal locations for manufacturing operations in the coming years. With growing FDI into the ASEAN bloc, the region is poised to absorb China’s exodus of low-end manufacturing, with Vietnam harnessing several competitive advantages to feature prominently among the bloc’s manufacturing destinations. India, too, finds itself with several competitive advantages to help develop its status as a manufacturing juggernaut in the region.

To stay up-to-date with the latest trends across China and Asia, subscribe to our complimentary weekly Newsletter concerning legal, tax, investment and regulatory updates throughout Asia. Continue reading…

Wuxi: The Birthplace of China’s Modern Industry

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One of the birthplaces of modern industry in China and cultural center of the south Yangtze, Wuxi is known as “the pearl of Lake Tai.” Historically, the city has been famous as an important rice and silk market in South China since the Ming Dynasty. In this article, Rainy Yao from Dezan Shira & Associates takes a look at how today this city is transforming itself from a textile manufacturing center into a high-tech industrial hub. Continue reading…

Neither Down nor Out: The Diverging Competitiveness of Manufacturing in China

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By Johanna Grusch

SHENZHEN – When China’s manufacturing growth slowed down to less than aggregate economic growth in 2013, concerns were raised that the world’s manufacturing powerhouse was losing its competitiveness. It was assumed that other low-cost emerging economies in the region, such as Vietnam and Indonesia, would lure away investors with existing operations in China, where rapidly rising labor costs were becoming a pressing concern, especially for labor-intensive manufacturing such as in textiles, leather and jewelry. In contrast to this, however, the data on China’s manufacturing output growth in 2014 reveals that China is outperforming not only Western economies but also its regional competitors. According to both Reuters and the United Nations Industrial Development Organization (UNIDO), China’s manufacturing industry grew at its fastest pace in more than two years in July 2014, indicating the re-strengthening of China’s economy and its manufacturing industry in particular. Continue reading…

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