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Greater China Updates – June 2021

  • Relevant FDI cases for 2021
  • China keeps relaxing restrictions on FDI
  • Reminder about the tax filing deadlines for 2021
  • China is expanding the use of its digital currency
  • China is changing the rules for food exporters
  • New updates on traveling restrictions to Hong Kong

FOREIGN DIRECT INVESTMENT

Relevant FDI cases for 2021 

Since the beginning of the year, despite the economic impact of COVID-19, foreign companies see China as one of the top destinations for investment. 

A major FDI case is the chemical production site that involved a USD 10 billion investment in Guangdong. Another is a power chips company that is investing in a plant in Jiangxi. A sign of China’s opening policies is Allianz, a German insurer that has now obtained approval to set up an insurance asset management company as a Foreign-Invested Enterprise, the first one in all China fully funded by foreign capital. Samsung is building a multi-layer ceramics capacitors plant in Tianjin. Global Logistics Properties established a fund of 4.5 billion RMB for modern logistic assets in Shanghai. The Ministry of Commerce said China would keep reviewing the negative list to attract more investment, guarantee speeding up processes in implementation, protect the rights of foreign investors, and improve transparency and convenience.

 

China keeps relaxing restrictions on FDI

The Ministry of Commerce has publicized its plans to ease the restrictions for foreign direct investment, serving as an official announcement and a sign for its long-term plan to be the number one recipient of investment.  The Foreign Investment Law and the opening of the stock market also depict its relaxation on FDI restrictions. According to the Ministry of Commerce, foreign direct investment into China has incurred a 38.6% year-on-year surge.

Over the years, China has highly invested in world-class airports and high-speed railways, transforming itself into a strategic marketplace to compete with the largest urban areas such as San Francisco, New York, and Tokyo. For example, the Fortune 500 company Proctor & Gamble has invested USD 100 million and plans to launch an intelligent technology innovation center in Guangzhou.


FINANCE & TAXATION

Reminders about the 2021 Tax Filing deadlines

As we finish the first half of the year, it is important to keep notes of the deadlines to file the monthly taxes in Mainland China. It is mandatory to make a tax declaration on the 15th of every month. However, there are times when deadlines fall on public holidays. For these specific scenarios, the government provided a calendar with adjusted due dates as follows:

  • MayDeadline on the 18th of June (Dragon Boat Festival Holiday). 
  • June: Deadline on the 15th of July.
  • July:  Deadline on the 15th of August.
  • August: Deadline on the 15th of September.
  • September: Deadline on the 26th of October (National Week Holiday).
  • October: Deadline on the 15th of November.
  • November: Deadline on the 15th of December.
  • December: Deadline on the 15th of January of 2022.

Keeping these deadlines in mind will help you avoid penalties and ensure proper company compliance.

 

China expands the use of its digital currency

To reduce their dependency on foreign currency and expand their international presence, the Chinese government authorities launched the digital yuan, also known as E-Yuan, widely known through the term ‘Digital Currency Electronic Payment’ (DCEP). Commencing trials in a few cities last year in April, the program has expanded to major cities, and it’s even contemplated being used for the 2022 Winter Olympics in Beijing.

Local stores and platforms accepting the digital yuan are rapidly expanding, with other banking institutions joining the initiative. It is expected that the trial finishes by the end of 2023 to evaluate the overall implementation, flaws, security threats and see what other technological advances can be implemented. 

 

TRADE & CUSTOMS

China considers changing the rules for food exporters

PRC has recently published two revised decrees that would enforce substantial requirements for foreign companies that export food and beverages to China.

The two decrees are:

  • Decree 248 on food facility registration: All the foreign companies related to the food export industry, including producers, processors, as well as storage facilities, to be registered with the General Administration of Customs of China (GACC) to export products to China.  
  • Decree 249 on food importation: The GACC will launch new enforcement instruments to suspend and/or prohibit food products from being imported into China if the companies violate applicable Chinese laws and regulations.

Both decrees are scheduled to be enforced on 1 January 2022.

 

TRAVELING RESTRICTIONS IN HONG KONG

According to the information provided by the government of Hong Kong, compulsory quarantine has been shortened for fully vaccinated residents. In addition, people arriving in Hong Kong who have not stayed in places listed in Group A1 or Group A2 (classified as extremely high risk or very high risk) will be allowed a shortened quarantine period of 7 days if they meet the 3 conditions below: 

  • Be fully vaccinated with a vaccination record, 
  • Obtain a negative nucleic acid test result during the test-and-hold period upon arrival,  
  • Possess positive result proof of a recognized serology antibody test conducted within the past three months. 

They must also take two nucleic acid tests during quarantine, followed by seven-day self-monitoring and compulsory testing on the 12th, 16th, and 19th days of arrival in Hong Kong. 

For more information, please click on the following link: https://bit.ly/3wTZA2j.

Written by the Latin Department, CW CPA

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