October 2020 / China

October 9 2020

China’s tax, fee cuts top 1.8 trillion yuan

China's top tax authority said the country's tax and fee cuts totaled 1.88 trillion yuan (about 276.06 billion U.S. dollars) in the first eight months of the year.

Of the total, the preferential tax and fee measures unveiled in 2020 to support economic development and COVID-19 containment saved 1.17 trillion yuan, according to the State Taxation Administration.

The remaining 706.2 billion yuan of taxes and fees were reduced as a result of the implementation of large-scale tax and fee cuts rolled out last year.

These policies have boosted market vitality and achieved notable results, said Cai Zili, an official with the administration.

In the period, around 92 percent of over 50 million small taxpayers in the country were exempted from value-added tax, while for the remaining 8 percent, the value-added tax rate was lowered from 3 percent to 1 percent, Cai said, adding that the tax was exempted in Hubei, a province that was hard hit by COVID-19.

In July and August, the number of new market entities handling tax-related business increased by 15.9 percent and 21.2 percent year on year, respectively, surging from the 7.1-percent growth in the second quarter, said Cai.

Meanwhile, the measures reduced the labor costs of enterprises and ensured the stability of employment, he said.

Besides, the purchase of high-tech equipment and services by 330,000 enterprises that enjoy preferential tax policies on research and development rose 24 percent in the first eight months.

Since the outbreak of the epidemic, China has unveiled a slew of new tax and fee relief measures to alleviate the burdens on market entities.

Taxation services are also improving, as corporate taxpayers can currently handle more than 90 percent of tax-related business online, according to the administration.

Source: http://www.chinatax.gov.cn/eng/c101269/c5157194/content.html 

October 22 2020

China’s live-streaming e-commerce sector to top 1 trillion yuan in 2020

The penetration rate of live-streaming sessions in the e-commerce market just hit 4.1 percent last year, according to the report jointly issued by international accounting company KPMG and Alibaba’s research arm Ali-Research, indicating rapid growth in the live-streaming e-commerce sector.

Data from China’s Ministry of Commerce shows that there were over 10 million e-commerce related live-streaming sessions in China, attracting more than 50 billion views and helping sell 20 million products in the first half of the year. That equates to an average of more than 50,000 such sessions and over 260 million views per day.

Merchants are the leading players in e-commerce live-streaming activities, said the report. According to statistics from Alibaba’s live-streaming unit Taobao Live, 90 percent of live-streaming sessions and 70 percent of its transaction volume came from merchants’ live-streaming activities on the platform. During this year’s mid-year online shopping spree, nine of the top 15 live-streaming sessions, with a transaction volume of more than 100 million yuan, were owned by brands and merchants.

On the first day of the shopping spree, the transaction volume of more than 37,000 Chinese brands soared by at least 100 percent year on year, said the report.

For brands and merchants, live-streaming marketing is not only a matter of expediency, as it softens the blow brought by COVID-19, but is also a regular operation strategy.

Over 70 percent of surveyed brands said they boosted sales of products through live-streaming campaigns, while more than 60 percent held that the good reputation enjoyed by their products and services attracted consumers to their live-streaming sessions.

The increasing number of brands looking for live-streaming campaigns have given rise to agencies known as multi-channel networks (MCNs). Taobao’s data reveals that there are 200 MCNs on the platform, compared with none in June 2019.

The live-streaming e-commerce sector has also created jobs in China. According to a study from Renmin University of China, Taobao Live has created more than 1.73 million job opportunities related to live-streaming operations.

Live-streaming marketing will become a new basic requirement for the e-commerce sector, and new infrastructure, including 5G, will make live-streaming application scenarios more diversified, Kang noted, expecting accelerated training of live-streaming talents as well as more professional live-streaming e-commerce.

Source: http://en.people.cn/n3/2020/1022/c90000-9772128.html

October 1 2020

China to build Shenzhen into global innovation-oriented city

China will turn the Shenzhen Special Economic Zone (SEZ) in southern Guangdong Province into a global innovation-oriented city, a Chinese official said Sunday.

China intends to shape Shenzhen into a modern, global innovation-oriented city and an influential hub of innovation, startups and creativity, Xu Nanping, Vice Minister of Science and Technology, told a press conference.

It is a new target ahead of Shenzhen, which has been a Chinese pioneer in innovation and is listed among the country's first batch of innovation-oriented cities.

"Taking innovation as the primary driving force is part of the valuable experience of Shenzhen. Over the past four decades, scientific and technological innovation is a key factor marking Shenzhen's evolution into an international metropolis," said Xu.

This year marks the 40th anniversary of the establishment of the SEZ. Over the past four decades, Shenzhen has developed as a trailblazer from a small town into a hub of innovation, entrepreneurship and creativity with international recognition.

In 2019, its GDP reached nearly 2.7 trillion yuan (about 400 billion U.S. dollars), growing at an annual average of 20.7 percent.

Out of this, the added value from innovation and high technology industry amounted to 920 billion yuan, representing more than 34 percent of the city's GDP and highlighting its role as Shenzhen's first pillar industry and key growth sphere.

That very year, Shenzhen injected up to 132.8 billion yuan into research and development, representing 4.9 percent of the GDP, pushing the city to the forefront, nationally and globally.

In 2019, the city saw 17,500 international patent applications via the Patent Cooperation Treaty (PCT), amounting to about one third of the country's total.

China recently announced a plan to implement pilot reforms in Shenzhen to develop the city as a showcase of socialism with Chinese characteristics in the next five years.

According to a long-term plan released last year, by the mid-21st century, Shenzhen will become one of the top cosmopolitan cities in the world and a global pacesetter with outstanding competitiveness, innovation potential and influence.

The Ministry of Science and Technology (MOST) will turn the goal of "making Shenzhen a global innovation-oriented city" into its main task. It will also make the city play a leading role in China's high-tech advancement, sustainable development and independent innovation, Xu said.

"Eyeing new targets, the MOST will support Shenzhen in building a batch of innovation platforms, which underscores a favorable environment, top resources and high-end talents," Xu said.

Source: http://english.mofcom.gov.cn/article/policyrelease/questions/202009/20200903002580.shtml 

October 18 2020

NPC Standing Committee Adopts Amendment to Patent Law

A revision to the Patent Law was adopted on October 17, 2020 at the 22nd session of the Standing Committee of the 13th National People's Congress. The amendment has introduced a punitive compensation system. In cases of deliberate patent infringement and under serious circumstances, the court can award a compensation of one to five times of the patent holder's losses, economic benefits to the infringing party, or patent licensing fee. The upper limit of statutory compensation has been raised to five million yuan, and the lower limit is increased to thirty thousand yuan.
October 18 2020

NPC Standing Committee Adopts Law on Export Control

The Law on Export Control for the People's Republic of China was adopted on October 17, 2020 at the 22nd session of the Standing Committee of the 13th  National People's Congress, and will come into effect from December 1, 2020. China may take countermeasures against any country or region that abuses export-control measures and poses a threat to China's national security and interests, according to the law. The law has also made detailed provisions about export control list, temporary control and full control, export qualifications and export licensing mechanism, as well as end users and end use management.
October 20 2020

Shanghai Launches Free Trade Accounts and Supports Development of Offshore Trade Business

The People's Bank of China's Shanghai Head Office and Shanghai Municipal Commission of Commerce issued on October 19, 2020 the Circular about Launching Free Trade Accounts and Supporting Shanghai to Develop Offshore Trade Business.

The PBOC's Shanghai Head Office will instruct commercial banks in the city to provide international trade settlement, trade financing and other cross-border financial services. If companies are on a list of eligible offshore trade business operators, the upstream and downstream business activities under the same contract should be settled under the same free trade account, and must not be handled between a free trade account and a non-free trade account.