China Regulatory Brief: China-Germany Trade Deals, Coal Import Tariffs, Guangdong Wage Guidelines
China and Germany Sign Deals Worth US$18.1 Billion
On October 10, Chinese Premier Li Keqiang and German Chancellor Angela Merkel signed deals worth approximately US$18.1 billion during Li’s visit to Germany. The deals cover cooperation in areas including the agriculture, automotive, telecom, healthcare and education sectors. Li requested that Germany help to relax the EU’s high-tech export restrictions to China and continue expanding bilateral trade and investment. He further stated that the two countries should continue working together on feasibility studies concerning the proposed China-EU Free Trade Zone. The two sides also signed guidelines covering 110 cooperative agreements over the next five to 10 years, the largest of its kind among such agreements between China and other countries.
Shanghai FTZ Incentives to be Implemented in Heilongjiang
The Heilongjiang Customs recently announced that four special administrative measures as implemented in the Shanghai Free Trade Zone (FTZ) will soon be replicated in Heilongjiang, including:
- Implementation of a unified filing list and reduction of declaration items to 30 from the original 39;
- Permission for enterprises to import goods separately and jointly declare taxes imposed all goods at once;
- Simplification of the documents attached to an entry/exit filing list such as contracts, invoices and bills of loading; and
- Establishment of a bonded exhibition/trading platform for registered enterprises.
The measures have already been implemented in some of the province’s special administrative zones.
China Raises Import Tariff for Coal
On October 8, the State Council released the “Circular on Adjusting Import Tariffs for Coal (Shui Wei Hui  No.27),” which decided to raise the import tariffs on coal in a bid to boost the Chinese domestic coal market. According to the Circular, import tariffs of between three and six percent will be levied on imported coal starting on October 15. However, Indonesia will be exempt from the tariffs based on the FTA (free trade agreement) signed between China and ASEAN (the Association of Southeast Asian Nations). China, the world’s top coal producer and consumer, had previously abolished import tariffs on coal in 2007. In 2013, the country’s growth in coal imports hit a record of 13.4 percent with 327.1 million tons imported.
U.K. Issues RMB-Denominated Bonds
On October 9, the British Treasury announced that the U.K. will become the first Western country to issue RMB-denominated bonds, with the Bank of China, HSBC and Standard Chartered appointed as underwriters. George Osborne, the Chancellor of the Exchequer, announced that the U.K. aims at attracting more investment and cementing Britain’s position as a center of global finance. The move is also expected to expand the offshore RMB market and strengthen financial cooperation between the two countries. Currently, Britain only holds reserves in the U.S. dollar, euro, Japanese yen and Canadian dollar.
Guangdong Releases Wage Increase Guidelines for 2014
The Guangdong Human Resources and Social Security Department recently released the province’s official “guidelines on wage increases” for 2014, which stipulates a maximum suggested wage increase of 14 percent and a minimum suggested wage increase of three percent. Further, the Guangdong government also released specific guidelines on wage increases for several industries such as manufacturing, construction and finance. As of October 9, twenty-one provinces have released their official guidelines with an average suggested wage increase of 12.4 percent, comparatively lower than last year’s rates for most provinces.
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