East China

New Issue of Asia Briefing: An Introduction to Development Zones Across Asia

May 10 – The new issue of Asia Briefing Magazine, titled An Introduction to Development Zones Across Asia, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the months of May and June.

The use of development zones in their different guises has been an effective model essentially brought to prominence by China over the past 25 years to help both foreign investors and domestic companies meet in a relationship that provides tax advantages to both. Development zones typically permit the foreign investor to bring component parts into a country for assembly without having to pay import duties. Investors may then add in locally-sourced components, assemble the final product, and warehouse it all duty free before then having the option of exporting the finished product (collecting some VAT rebates on the locally sourced portion) or entering the domestic market with a product assembled at local labor costs. Continue reading →

Posted in Business, Central China, East China, FDI and Foreign Trade, Featured, Manufacturing, Northeast China, Shipping & Logistics, South China, West China | Leave a comment

Shanghai to Create China’s First Free Trade Zone

Jan. 29 – Shanghai’s acting mayor, Yang Xiong, has stated that the city wishes to create Mainland China’s first free trade zone in a three-year development project that will link and upgrade the city’s existing bonded facilities in Pudong.

The plan has apparently already been approved by the central government and was introduced at the Shanghai People’s Congress on Sunday. The zone will incorporate the Yangshan Deep Water Port, Pudong Airport and the Waigaiqiao Port in a trial run expected to be implemented from late this year. Plans to extend this further could be approved by 2017. Continue reading →

Posted in East China, FDI and Foreign Trade | Leave a comment

Jiangsu Releases Circular on Collective Acceptance of Taxpayers under VAT Reform

Nov. 14 – Jiangsu’s Provincial Office of the State Administration of Taxation (SAT) released the “Circular on the Collective Acceptance of Taxpayers in the Pilot Collection of Value-Added Tax (VAT) in Lieu of Business Tax (suguoshuifa [2012] No. 161, hereinafter referred to as the ‘Circular’)” on November 7, aiming to promote the smooth implementation of the VAT pilot collection in the province and effectively reduce the burdens of taxpayers. Continue reading →

Posted in East China, Finance, Tax and Accounting, Regulatory Update | Leave a comment

Jiangsu Province Releases Announcement on Transitional Tax Policies

Oct. 23 – Jiangsu’s Provincial Office of the State Administration of Taxation (SAT) released the “Announcement on Operation Details of the Transitional Preferential Policies in the Pilot Collection of Value-Added Tax (VAT) in Lieu of Business Tax in Transportation and Certain Areas of Modern Service Industries (Announcement [2012] No. 8, hereinafter referred to as the ‘Announcement’)” on October 15, which is retroactively effective from August 1, 2012. Key information taken from the Announcement can be found below. Continue reading →

Posted in East China, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update | Leave a comment

Jiangsu Province Issues Guidance on General Taxpayer Recognition

Aug. 27 – Jiangsu’s Provincial Office of the State Administration of Taxation recently released an announcement clarifying issues regarding general taxpayer recognition under the value-added tax (VAT) pilot program in Jiangsu Province. The “Announcement on the Relevant Matters Concerning the Recognition of General VAT Taxpayers under the Business Tax to Value-Added Tax Pilot Conversion in Jiangsu Province (Announcement [2012] No.2, hereinafter referred to as ‘Announcement’)” was released on August 22, 2012, and is effective as of August 1, 2012. Continue reading →

Posted in East China, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update | Leave a comment

Shanghai Issues Guidelines on Wage Increases for 2012

May 30 – In order to adjust to the economic development, rising CPI levels and changing dynamics of the current domestic job market, the Shanghai government issued the “Notice on the 2012 Guideline of Wage Increase for Shanghai Enterprises (hurenshezongfa [2012] No. 31)” on May 21, specifying the government’s suggested 2012 wage increases for enterprises in Shanghai. Continue reading →

Posted in Business, East China, Legal and Regulatory, Regulatory Update | Tagged China HR, China Labor Costs, China Regulatory, China Wage Overheads, Shanghai | Leave a comment

Shanghai Issues Trial Procedures for Consolidated CIT Payments by Headquarters

Mar. 23 – Shanghai’s state and local tax bureaus have issued the “Trial Procedures on the Filing of the Allocation Proportion of Consolidated CIT Payments by Headquarters in Shanghai (huguoshuisuo [2010] No. 10)” (“Trial Procedures”) on March 10, 2012. The Trial Procedures apply to headquarters in Shanghai that operate trans-regionally and pay CIT on a consolidated basis. It provides for the materials that these headquarters should submit for the filing of branches’ allocation proportion of CIT.

The Trial Procedures have been issued based on the “Interim Measures for the Administration of the Collection of Consolidated Payment of Corporate Income Tax (CIT) in Trans-Regional Operations (guoshuifa [2008] No.28)” (“Interim Measures”) issued by the State Administration of Taxation on March 10, 2008. Continue reading →

Posted in East China, Finance, Tax and Accounting, Legal and Regulatory, Regulatory Update | Tagged China Corporate Income Tax, China Headquarters, China Tax, Shanghai | Leave a comment

China’s Headquarters Economy: A New Path towards Industrial Upgradation

By Vivian Ni

Mar. 15 – China, the world’s largest production base, is no longer satisfied with lying at the lower levels of global supply chains and holding just the manufacturing arms of MNCs. Instead, the country has begun offering a warmer welcome to foreign-invested enterprises (FIEs) that actually bring their “brains.” Foreign-invested headquarters (HQs) functioning in the realm of management, investment as well as research and development (R&D) are burgeoning in China’s major cities, and have impacted significantly on both city functions and human resource movements.

China’s headquarters economy
An HQ economy is defined as being sufficiently resource-rich to attract a cluster of corporate HQs. Not only does it improve the operational efficiency of FIEs by gathering the most knowledge-intensive segments of corporate value chains in “center cities,” it also brings desirable economic benefits to its surrounding areas by optimizing resource distributions among different regions and industrial chains. Continue reading →