May 2021 / China

The Customs Tariff Commission of the State Council released the fourth announcement for 2021 on April 28. Starting from May 1, 2021 tariff rates for some iron & steel products will be adjusted.

The import duty for pig iron, crude steel, recycled iron and steel materials will be provisionally set at zero; export tariff rates on ferrosilicon, ferrochrome and high-purity pig iron should be increased to 25%, 20% and 15%, respectively.

On the same day the Ministry of Finance and the State Taxation Administration released a separate announcement, saying that export rebate tax for 146 steel products will be scrapped from May 1, 2021. The policy will be implemented from the date of export indicated on the customs declaration document.

The Ministry of Finance and the State Taxation Administration released on April 28, 2021 the Announcement about Clarifying Policies on the Refund of Term-End Excess Input Value-Added Tax Credits in Advanced Manufacturing Industries.

According to the announcement, from April 1, 2021 taxpayers in the advanced manufacturing industries that meet five conditions will be eligible to apply for refund of term-end excess input value-added tax credits.

The scope of taxpayers in the advanced manufacturing industries will be expanded compared to what was stipulated in the No.84 document for 2019. Companies engaged in the production and sale of medicine, chemical fiber, railroad, ship, aerospace & aviation and other transport equipment, electric & mechanical devices as well as instruments & meters are included into the taxpayers in the advanced manufacturing industries.

The Ministry of Finance, the General Administration of Customs and the State Taxation Administration recently issued the Circular about Tax Policies for Seed Imports in the 14th Five-year Plan Period. According to the circular, China will not impose value-added tax on seed imports included in the List of Imported Seeds Eligible for Value-added Tax Exemptions.

The List was jointly compiled by the Ministry of Agriculture and Rural Affairs, the Ministry of Finance, the General Administration of Customs, the State Taxation Administration and the National Forestry and Grassland Administration, and will be adjusted from time to time according to the development conditions of the agricultural and forestry industries.

The Ministry of Finance released on May 12, 2021 the Announcement about Corporate Income Tax Exemptions for Companies Producing and Assembling Special Products for Injured and Disabled Persons.

From January 1, 2021 to December 31, 2023, resident companies will not have to pay corporate income tax if they meet five conditions. These conditions include that they produce and assemble special products for injured and disabled, and the products are listed in the Catalogue of Special Products for Injured and Disabled Persons in China; they are mainly engaged in the production or sale of these products, and sales revenue of the products (Excluding export revenue) accounts for at least 60% of total revenue. Eligible companies shall make applications to enjoy the preferential tax policies, and keep relevant documents for future examination.

China will relax rules for foreign investment, increasing its market appeal to global investors and signaling its determination to deepen opening up.

The country's Ministry of Commerce (MOC) has made public its plan for formulating regulations and laws in 2021, putting on agenda the revision of the guideline on foreign strategic investment in Chinese listed firms.

The revision seeks to "ease restrictions on foreign strategic investment, and introduce innovative supervision approaches for the sector," the MOC said in a recent online statement.

The move came as the guideline, which was issued 15 years ago, cannot satisfy the current demand of foreign investment attraction given the country's rapid development over the years.

Wang Jian, a professor at the University of International Business and Economics, said the revision was a signal to the world, indicating that China will continue its reform and opening-up policy, gradually loosen restrictions on foreign investment in listed firms, and foster a more enabling investment environment.

As the market is waiting for the upgraded guideline, a draft revision unveiled last June offered a glimpse of the upcoming rules.

The June draft lowered asset requirements for investments. It stipulated that foreign investors should either own at least 50 million U.S. dollars or manage no less than 300 million dollars of assets for market entry, compared with the current thresholds set at 100 million dollars and 500 million dollars, respectively.

It also reduced the lock-up period for foreign shareholders' stocks from three years to 12 months and removed shareholding limits of foreign strategic investment through listed firms' targeted placements.

Commenting on the lowered bar for foreign investment, Wang said it meant that apart from productive investment, China also welcomes foreign strategic investment in listed firms with open arms.

"The changes showed that China is gradually opening its equity market to the world, which is also conducive to the sound and healthy development of its stock market," Wang noted.

Opening up has been frequently brought up by China's policymakers over the years of its rapid economic growth. Despite a virus-induced economic slowdown across the world, the country's opening-up momentum remains unabated.

China has taken several major steps to open its door wider since last year: implementing the Foreign Investment Law, trimming the negative list for foreign investment and easing foreign access to the financial market.

In the country's new development blueprint, the 14th Five-Year Plan, it reiterates the commitment to promoting reform and opening up while pursuing high-quality development.

With a 4-percent growth in foreign direct investment (FDI) inflows last year, China stood out as the largest recipient of FDI in the world, according to a report from the United Nations Conference on Trade and Development.

In the first four months of 2021, FDI into the Chinese mainland, in actual use, surged by 38.6 percent year on year, MOC data showed.

 (Source: Xinhuanet)

China has taken a global lead in the development of 5G, with a total of 819,000 5G base stations built so far, accounting for over 70 percent of the world's total, a government official said here Wednesday.

Liu Liehong, vice minister of industry and information technology, released the figures at the ongoing China International Big Data Industry Expo 2021 in Guiyang, capital of southwest China's Guizhou Province.

The number of 5G terminal connections in China has exceeded 310 million, accounting for more than 80 percent of the world's total, according to Liu.

During the 13th Five-Year Plan period (2016-2020), China built the world's largest optical-fiber and 4G network, with over 99 percent of the villages across the country connected to both technologies.

The three-day big-data industry expo, showcasing cutting-edge scientific and technological innovations and achievements, kicked off on Wednesday. It has attracted 225 enterprises from home and abroad, according to the organizing committee.

Source: Xinhuanet

China's commerce ministry on Thursday said it would guide the regional headquarters of multinationals to gather on the southern island province of Hainan to push the construction of the Hainan free trade port (FTP).

"Existing opening-up measures on fostering investment will be well implemented. Regional headquarters of multinational companies will also be guided to the Hainan FTP," Gao Feng, a spokesperson with the Ministry of Commerce, told a press conference.

Notable progress has been made since the country released a master plan last June to build the island into a globally influential and high-level free trade port by the middle of the century.

According to Gao, China has rolled out 28 policies and measures to liberalize and facilitate trade in goods and services at the Hainan FTP. It has also unveiled 22 special measures to widen market access in sectors, including finance, culture, and medical care.

Earlier this month, Hainan held the first China International Consumer Products Expo. It was the first-ever expo by China to focus on quality consumer goods at the national level, with 2,628 brands of 1,505 enterprises from home and abroad participating in the exhibitions.

Looking ahead, Chinese authorities will further optimize the regulatory policy environment for imports and exports of goods in specific regions of the Hainan FTP and formulate a negative list for cross-border trade in services in Hainan, Gao said.