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China Briefing is a monthly magazine and daily news service about doing business in China. We cover topics relating to the Chinese economy, the market in China, foreign direct investment and Chinese law and tax. It is written in-house by the foreign investment professionals at Dezan Shira & Associates




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Oil & Petroleum

China’s Demand for Resources Brings Brazil Closer

By Vivian Ni

Jun. 3 – China and Brazil, two countries 17,000 kilometers apart separated by the vast Pacific Ocean and see great political and cultural differences, are witnessing an increasingly closer relationship due to China’s growing hunger for the South American country’s natural resources.

With most of its nationals not even familiar with the largest economy in Latin America, China’s role in Brazil’s economic development is becoming increasingly important. It just surpassed the United States as Brazil’s largest trading partner in 2009, accounting for 12.5 percent of the country’s annual exports, while the volume of exports from Brazil to China expanded by 18 times between 2000 and 2009. Continue reading

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The China Alternative – Kazakhstan

The China Alternative is our series on other manufacturing destinations in Asia that are now starting to compete with China in terms of labor costs, infrastructure and operational capacity. In this issue we look at Kazakhstan.

By Jane Shi

May 20 – Kazakhstan lies to the west of China, bordering Xinjiang Province. In 1991, Kazakhstan became the last Soviet-occupied nation to declare independence and like many former Soviet strongholds still retains a very authoritative political and economic nature. Government incumbents often enjoy a predictable edge in decision-making and re-elections; take for example the recent snap presidential election in which Mursultan Nazarrbayev was re-elected to office for another term with 95 percent of votes, making it the beginning of his fourth term and eleventh year in office. Continue reading

Posted in Business, Economy and Politics, FDI and Foreign Trade, Featured, Markets, Oil & Petroleum, The China Alternative | Leave a comment

China’s Energy Strategy and the Role of Gov’t Oil in Africa

By Shelly Zhao

May 3 – In a follow up to last month’s article “The Geopolitics of China-African Oil,” this article looks at the players in foreign policy on oil and, in particular, the role of Chinese national oil companies (NOCs), as well as potential opportunities for foreign businesses. Some of the main questions addressed are: Who are the main players in China’s African oil strategy? Are the NOCs really arms of the state? What opportunities exist for foreign companies in Africa?

China’s energy strategy
China’s diversification strategy is key for energy security and seeks to be comprehensive and maneuverable. In terms of oil, it is particularly significant in the short- and medium-term. There appear to be a few main areas of China’s energy strategy that take into account short-term as well as long-term considerations: Continue reading

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The Geopolitics of China-African Oil

By Shelly Zhao

Apr. 13 – Since the mid-1950s and 1980s, China has expanded its relations with Africa as part of its broader strategy of developing friendly relations with the “Third World.” In recent years, China has achieved deeper ties with many African countries, and the issue of Chinese energy security and geopolitics in Africa has received more attention. This article offers an overview of the Sino-African oil relationship to provide a foundation for future analyses.

China’s growing energy needs
China’s pursuit of energy resources has generated great interest in the last decade, and energy concerns are indeed a vital national security interest for China in order to sustain both economic growth and economic development. According to the International Energy Agency (IEA), as of July 2010, China surpassed the United States as the world’s largest energy consumer. Continue reading

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China Introduces Consumption Tax Exemption for Biodiesel Production

Jan. 18 – China recently announced that pure biodiesel can be exempted from consumption tax collection. The new regulation hopes to infuse more energy to China’s underdeveloped biodiesel market.

China’s State Administration of Taxation and the Ministry of Finance co-issued the “Circular on Exempting Pure Biodiesel Oil Made from Waste Animal and Vegetable Oil from Consumption Tax Collection” on December 17. The circular announces that beginning from January 1, 2009, the government will not levy consumption tax on pure biodiesel oil that that meets the following criteria: Continue reading

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China’s Diesel Shortage: Lack of Oil or Lack of Competition?

Nov. 26 – Accusations of a domestic oil production monopoly that might have caused the ongoing diesel shortage appeared in China’s major media after the National Development and Reform Commission (NDRC) imposed penalties for diesel overcharge cases involving six oil suppliers, three of which are subsidiaries of Chinese oil magnates Sinopec and CNPC.

The diesel shortage, which started in October, has seriously influenced various aspects of Chinese society: long lines of trucks waiting to refuel have caused serious traffic jams, 145 city buses in Guyuan, Ningxia Province had to stop running, even a funeral home in Chongqing lacked a sufficient diesel supply to meet the demands of cremation. Continue reading

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China Plans to Alter Resource Tax Structure

May 24 – China plans to alter the tax structure on the profits made off energy products according to a work conference last Thursday in Xinjiang.

The new structure, which will first be tested in a pilot program in the province, will consider resource prices as a factor when levying taxes, compared to the current structure which is based on the actual output. Initial predictions suggest that the tax rate is likely to be 3 percent to 5 percent for resource products. Continue reading

Posted in Finance, Tax and Accounting, Legal and Regulatory, Oil & Petroleum, West China | 1 Comment

Sinopec to Purchase Angolan Oil Assets for US$2.46 Billion

Mar. 30 – The China Petroleum and Chemical Corp., or Sinopec, announced its first overseas asset acquisition on Monday, agreeing to acquire deep-water oil assets in Angola through the purchase of a 55 percent stake in Sonangol Sinopec International Ltd for US$2.46 billion.

As Asia’s largest oil refiner, Sinopec is actively seeking overseas investments in oil and gas resources to meet China’s increasing energy demands. The deal is Sinopec’s first overseas asset acquisition, aiming to “further expand Sinopec’s upstream business, and Sinopec will have access to overseas oil and natural gas markets,” according to chairman of the board Su Shulin. Continue reading

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Dezan Shira & Associates provide a range of services for companies looking to undertake foreign direct investment into Asia, These include corporate establishment, accounting, tax, payroll, audit and due diligence. To learn more about the firm, please contact one of our specialists at china@dezshira.com, download our corporate brochure or visit at us www.dezshira.com


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