March 2021 / China

The General Administration of Customs released on March 4, 2021 the Customs Measures for the Implementation of the "Zero Tariff" Policy on Imports of Self-use Production Equipment at Hainan Free Trade Port (Trial), with a view to implementing the said measures. The Measures were implemented from the release date.

According to the Measures, self-use production equipment eligible for the "zero tariff" shall be subject to the management system of "one firm, one account". Eligible firms should register with the customs in accordance with the relevant rules before declaring for the first time the "zero-tariff” and shall complete the enterprise account information in the designated platform. Self-use production equipment imported with "zero tariff" shall be used by firms in the free trade zone that meet the prescribed conditions for their own use, and shall be subject to customs supervision by law for a period of three years.

The Ministry of Finance, the General Administration of Customs and the State Taxation Administration released on March 4, 2021 the Circular about "Zero Tariff" Policy for Importing Self-use Production Equipment into Hainan Free Trade Port, with immediate effect.

According to the circular, before the entire island is sealed off, companies registered at Hainan Free Trade Port will not have to pay tariff, import value-added tax and consumption tax for importing self-use production equipment, unless tax exemptions are outlawed or the equipment is not permitted to be imported into China, or the equipment is on the list of a negative list. The list includes self-use production equipment imported by companies in 11 industries, and it will be adjusted from time to time based on actual needs and regulatory conditions.

China Banking and Insurance Regulatory Commission released on March 19, 2021 the Decision about Revising the Detailed Rules for the Implementation of the Regulation of the People's Republic of China on the Administration of Foreign-Funded Insurance Companies. The revisions have further clarified the market access standards for foreign insurance groups and foreign insurance companies backed by foreign financial institutions.

There are three prominent revisions. The first is to specify market access conditions for foreign insurance groups and foreign financial institutions; the second is to optimize shareholder change and access requirements; the third is to maintain consistency and scrap restrictions on foreign shareholding in foreign-funded insurance companies. Foreign insurance groups can hold up to 100% stake at foreign-funded insurance companies.

In order to continue to reduce burden on taxpayers, the State Taxation Administration recently updated the Tax Return Form of the People's Republic of China for the Monthly (Quarterly) Prepayment of Enterprise Income Tax (Type A).

The new form has reduced the number of annexed sheets and optimized the columns. A large majority of corporate taxpayers have to fill only one form of tax return to complete tax declaration, so that they can reduce workload in dealing with tax affairs.

Resident enterprises that make tax prepayment on a monthly basis will begin to use the new form from March 2021; resident enterprises that make tax prepayment on a quarterly basis will begin to use the new form from the first quarter of 2021.

China is promoting the digitalization of foreign trade by holding its first cross-border e-commerce trade fair in Fuzhou, East China's Fujian province.

The trade fair aims to address the bottlenecks and pain points in cross-border trade due to the COVID-19 pandemic.

The fair consists of four exhibition areas, including cross-border e-commerce comprehensive platform, cross-border e-commerce service providers, cross-border e-commerce suppliers and cross-border e-commerce brand publicity.

About 2,363 companies participated in the fair, covering 33 cross-border e-commerce platforms around the world, People's Daily reported.

Statistics indicate the intended transaction amount reached more than $3.5 billion during the 3 days of the exhibition.

Source: China Daily

China's digital yuan pilots and tests are making steady progress, according to a researcher under the People's Bank of China, the country's central bank.

During a summit at the China Development Forum 2021, Mu Changchun, head of the central bank's digital currency research institute, dismissed concerns of user privacy infringement, saying the digital currency has the highest level of privacy protection among existing payment tools.

China's digital yuan, although still in its pilot phase, will include more people in the rapidly developing digital era, making daily life easier and digital payments more secure.

The digital currency will be issued by the country's central bank and legally backed by the government as an alternative to paper money.

China will steadily advance the research and development of digital currencies and actively participate in the formulation of international rules and technical standards on data security, digital currencies and data tax, according to the outline of the country's 14th five-year plan for national economic and social development and the long-range objectives through the year 2035

Other countries including Canada and Japan have also been gearing up preparations for digital currencies.

"The use of cash will be reduced by at least 40 percent in the coming decade," predicted Zhu Min, chairman of the National Institute of Financial Research at Tsinghua University, as central bank-backed digital currencies will become more common globally.

China will be able to completely fulfill its obligations under the Regional Comprehensive Economic Partnership when the agreement enters into force, a Ministry of Commerce official said on Monday.

All 15 members of the RCEP are planning to ratify the agreement before the end of 2021 and push for it to take effect on Jan 1, said Yu Benlin, director-general of the Ministry of Commerce's Department of International Trade and Economic Affairs.

China has completed the approval process and became the first country to ratify the agreement, he said, adding that Thailand has also ratified the agreement.

All member parties will convene intensive meetings to report on the progress of their respective approval processes this year, he said.

The ministry and related departments have conducted work involving the 701 binding obligations of the Chinese side related to the RCEP. Through the efforts of various government branches such as the National Development and Reform Commission and the General Administration of Customs, China's preparations for the implementation of 613 items have been completed, accounting for 87 percent of all obligations, he said.

The official said preparation for other items can also be concluded before the implementation of the agreement.

The RCEP, which includes China, Japan, South Korea, Australia, New Zealand and the 10 members of the Association of Southeast Asian Nations, represents the world's largest free trade agreement. It covers a third of the global population and 30 percent of the world's GDP, according to Commerce Ministry data.

After China and its partners signed the RCEP agreement late last year, the deal will come into force if at least nine members enact it, including at least six members of ASEAN, and at least three countries out of the other five non-ASEAN members, Yu added.

Once the RCEP takes effect, countries will immediately reduce tariffs in accordance with the agreement, fulfill their commitment to open investment in the service sector, and implement the rules in all areas of the pact, said Jiang Feng, director-general of the Department of Duty Collection at the GAC.

As China and its partners signed the RCEP agreement and it plans to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, Michael Lai, general manager of China operations at AstraZeneca, the British multinational pharmaceutical company, said these moves will pave the way for the company to ship more products manufactured from its plants in Jiangsu province to other Asia-Pacific markets.

"Benefiting from the RCEP, we can make full use of the resources from the same economic region for production. It will be easier for the drugs to obtain the original qualification of the contracting countries, and finally enjoy more preferential tariff rates and trade treatment," he said.

The implementation of the RCEP rules can stabilize and optimize value chains in the Asia-Pacific region between participating countries, in particular developing nations, said Wei Xiaoquan, a researcher specializing in regional economic development at the University of International Business and Economics in Beijing.

China and New Zealand signed an upgraded protocol of their bilateral free trade agreement in January to improve the level of market opening based on the RCEP pact.

The GAC said on Monday that China's imports of New Zealand goods that get tariff reduction and exemption maintained an average annual growth rate of 23.1 percent since 2009.

In addition, following the implementation of the China-New Zealand Free Trade Agreement in October 2008, duties totaling 28.39 billion yuan ($4.36 billion) were exempted from China's imports of New Zealand goods.

Source: China Daily