Markets

India Poised to Be China’s New Engine for Growth

Regional demographics mean China must cozy up to India or face consequences

Op-Ed Commentary: Chris Devonshire-Ellis

May 17 – Quite possibly the most senseless foreign policy position China has taken over the years has been its stance towards Japan. With diplomacy concentrating on World War II issues that most of the world has now moved on from, sovereignty disputes over close to worthless islands, and a rise of Chinese nationalism fueled by state propaganda, China has succeeded in alienating what remains one of the world’s largest economic powers, as well as a major historic foreign investor in China and a close regional neighbor. While Japanese investment will remain in China, the fallout from the Chinese government-fueled drop off in Japanese sales to China has made the Japanese business community now feel unwelcome in the country. Consequently, future Japanese investment is looking for more sustainable, and friendly, investment relations across the rest of Asia. Continue reading →

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Report: RMB to be a Globally Traded Currency by 2015

May 3 – In a special report, John McCormick, the Chairman of the RBS Group, has suggested that the RMB will be a globally traded currency by 2015. Noting that the use of China’s RMB internationally is rapidly increasing despite China’s slowing economy, he states that now is the time for the new leadership to push the RMB as a major international currency.

“Financial crises in the U.S. and Europe mean the world needs a new, more stable global reserve currency, and trade in RMB is growing rapidly. In the FX market, for example, our figures show that volumes are now worth around US$5-6 billion daily – double what they were a year ago,” said McCormick.

McCormick further suggests that the Chinese authorities are also pushing to make the RMB internationalized by 2015. Continue reading →

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ASEAN Briefing Website Launched

ASEAN is set to become China’s top trade partner by 2015

Apr. 17 – Dezan Shira & Associates, one of Asia’s premier professional services firms, has just launched a brand new website: ASEAN Briefing. ASEAN, a 10 country trade bloc that includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam, is strategically highly important for China as the bloc in its own right has a free trade agreement with China, and China also individually has double tax agreements with many of the ASEAN members states. Continue reading →

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New Issue of China Briefing: M&A Regulations in China

Apr. 1 – The new issue of China Briefing Magazine, titled M&A Regulations in China, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the month of April.

Here we return to a popular subject – China’s M&A regulatory framework. With the global economy slowly coming out of recession, and Chinese businesses wanting to expand both domestically and overseas (issues driven by state policy), we expect to see a gradual upswing in the number of M&A deals being conducted with Chinese companies in the forthcoming months.

However, the subject of M&As in China is far from simple, and many important aspects tend to get glossed over. In actuality, there are many issues to be aware of, such as how to stay in compliance with the offshore equity transfer requirements set forth in Circular 698, and how to structure a transaction so as to minimize your tax obligations. These matters should be fully understood by foreign investors when targeting domestic companies. Continue reading →

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China’s Import and Export Licensing Framework

By Yao Lu, Eunice Ku and Shirley Zhang

Mar. 19 – As China continues to grow and expand, this development is creating increased efficiencies and improved infrastructure benefiting the supply side, as well as higher wealth and disposable income levels for individuals across the country, representing a potential boon for those targeting the demand side. This is translating into exciting opportunities for international business both selling to, and sourcing from, the Chinese market.

In 2012, China’s foreign trade totaled US$3.87 trillion, among which exports reached US$2.05 trillion and imports amounted to US$1.82 trillion; surpassing the United States as the world’s largest trading nation. The China-U.S. trade surplus stood at US$219 billion, while China’s surplus with the EU stood at US$122 billion. Continue reading →

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U.S. Foreign Account Tax Compliance Act in Full Swing

By Yao Lu, Sondre Solstad and Chet Scheltema

Mar. 7 – The Foreign Account Tax Compliance Act (also known as FATCA), was enacted in 2010 by the U.S. Congress to target non-compliance by U.S. taxpayers using foreign accounts. It requires foreign financial institutions (FFIs) to report to the Internal Revenue Service (IRS) information about financial accounts held by U.S. taxpayers worth more than US$50,000, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.

The most notable feature of FATCA is that it allows a 30 percent withholding tax on the gross amounts of “withholdable payments” made to FFIs and non-financial foreign entities (NFFEs), unless such organizations satisfy certain FATCA requirements. Continue reading →

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New Issue of Asia Briefing: Expanding Your China Business to India and Vietnam

Mar. 5 – The second issue of our new issue Asia Briefing Magazine, titled Expanding Your China Business to India and Vietnam, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the months of March and April.

As operational costs in China continue to rise, an increasing number of companies are looking at either relocating or moving part of their China-based facilities to lower cost markets elsewhere in emerging Asia. This makes sense since China itself is trying to move away from an export-driven economy and into a consumption-driven growth model.

Meanwhile, countries such as Vietnam are actively courting these export businesses through tax incentives and preferential policies similar to those that helped China get to where it is today. India, too, with its abundant, young and inexpensive workforce, coupled with a massive consumer market, is looking strikingly similar to China 20 years back. Continue reading →

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China – The Competing Asia Round Up

Complimentary magazine downloads for foreign investors in Asia

Jun. 8 – Dezan Shira & Associates has been operational in China since 1992 and are somewhat unique as they are one of the only privately-invested consulting practices that have truly developed from China into the rest of Asia. To go with that, the practice also produces a number of additional business titles, magazines and books, which along with China Briefing, provide foreign investors with snap shots of opportunities and development in other emerging Asian markets. Here is a selection of our most recent work. Continue reading →