China becomes the No 1 shipbuilding nation
Dec-19-2017 By : fcccadmin
China’s rebounding shipbuilding industry reached the top place in the world in the past 11 months, surpassing South Korea, according to British shipbuilding and marine analysis agency Clarkson Research Services. From January to November, China’s shipbuilding order volume totaled 7.13 million compensated gross tons (CGT) from 324 vessels, followed by South Korea, which has received 5.74 CGT. It is the first time in the past seven years that China has exceeded South Korea in shipbuilding orders. The data also show that China’s shipbuilding industry secured 36.3% of the global market, 7 percentage points more than South Korea, which accounts for 29.4% of global orders.
Chinese shipyards have been performing well this year. This August, French group CMACGM ordered nine 22,000 TEU container vessels from Shanghai Waigaoqiao Shipbuilding Co and Hudong Zhonghua Shipbuilding Co. In October, China State Shipbuilding Corp, China Investment Corp and Carnival Corp, the world’s biggest cruise operator, signed an agreement to invest a total of CNY25.5 billion to build a super luxury cruise ship. It was also the first order of this kind Chinese shipbuilding companies had ever received. Dong Liwan, a shipbuilding industry researcher at Shanghai Maritime University, said with the orders for high-value-added ships continuing to go to Chinese shipyards, their South Korean competitors will definitely feel the pinch.
China’s shipbuilding industry is also becoming more intelligent and environmentally friendly. “While maintaining growth, it is realizing production mode transformation, structural adjustment and transformation, and upgrading, and reinforcing China’s shipbuilding status in the world,” Sun Licheng, President of the China Classification Society said. He added that the goal is to become a strong shipbuilding country by 2020. At the recent All China Maritime Conference and Exhibition, China State Shipbuilding Corporation has delivered the world’s first smart ship, Great Intelligence, with a loading capacity of 38,800 metric tons, the China Daily reports.
The Asian Infrastructure Investment Bank (AIIB) approves its first project in China
By : fcccadmin
The Asian Infrastructure Investment Bank (AIIB) has approved a loan worth USD250 million to the Beijing Air Quality Improvement and Coal Replacement Project, which aims to reduce the country’s coal use by about 650,000 tons annually. This will be achieved through connecting about 216,750 households in approximately 510 rural villages to the natural gas distribution network, according to a statement from the multilateral development institution. Upon completion and after reducing the emissions of burning natural gas, the project is expected to cut down annual carbon dioxide emissions by 595,700 tons, particulate matter by 3,700 tons, sulfur dioxide by 1,488 tons and nitrogen oxide by 4,442 tons.
“China’s commitment to reducing its reliance on coal will change lives and improve the environment, and that is why we are investing in a project aligned with their ambitious plan,” said Jin Liqun, President of the bank. “With our unwavering commitment to helping members meet their environmental and development goals, especially their commitments under the Paris Agreement, it is only fitting that our first investment in China will introduce sustainable infrastructure that will reduce greenhouse gas emissions and help vitalize one of the most important economic hubs in Asia,” Jin added.
The investment represents AIIB’s first corporate loan. The project, scheduled for completion in 2021, will be undertaken by the Beijing Gas Group Co. It will involve the construction of natural gas distribution networks in villages, and gas pipelines and household connections. The project is “enabling parts of rural China to transition off coal” and will have “a marked impact” on Beijing’s residents’ quality of life, DJ Pandian, Vice President and Chief Investment Officer of AIIB said, as reported by the Shanghai Daily.
Hong Kong launches biggest stock listing reform in three decades
By : fcccadmin
Hong Kong’s stock exchange has unveiled the biggest overhaul in its listing rules and procedures in three decades, in an overture to technology companies seeking to raise capital, as the city tries to catch up with New York and Shanghai in the race to be the world’s largest market for initial public offers (IPOs).
The bourse will abandon an earlier plan for a so-called Third Board for start-ups, but instead create two additional chapters in its listing regulations for biotechnology firms and companies with multiple classes of shares to raise capital, according to the Hong Kong Exchanges and Clearing, the market operator. “The market has changed substantially in 30 years, it’s time to make a change,” said Chief Executive Charles Li. “If we don’t change our listing rules, we will miss the boat.”
The overhaul closes a chapter in the debate raging since late 2014 when Alibaba Group Holding chose New York instead of Hong Kong for its USD25 billion stock offer, then the world’s largest. At issue was whether the listing regulations and procedures of Hong Kong’s stock market – dominated by financial companies, industrial firms and developers – are flexible or competitive enough for the legions of start-ups, fintech companies and tech firms to raise capital. The founders of Alibaba have special rights to appoint directors to the company’s board. That privilege contravened Hong Kong’s “one share, one vote” principle, resulting in a deadlock on the company’s listing application that ultimately drove Alibaba to take its stock offer to New York.
“We may have missed some big players, but it is not too late,” Li said in Hong Kong. “After the change in the rules, many of the Chinese companies that are seeking to list in the U.S. may also consider listing in Hong Kong.” Under the HKSE’s new rules effective in mid-2018, biotech firms need at least HKD1.5 billion in valuation at the time of their listing, but they need not have any revenue track record to raise funds in the city. Companies with multiple classes of shares must be engaged in businesses classified as new economy, with at least HKD10 billion in valuation and annual revenue of at least HKD1 billion. Businesses with valuations exceeding HKD40 billion can raise funds in Hong Kong with a lower revenue threshold, according to the new rules, the South China Morning Post reports.
Ernst & Young Alert: China expands scope of qualifying R&D expense for super deduction
By : fcccadmin
On 8 November 2017, China’s State Administration of Taxation (the SAT) released Public Notice [2017] No. 40 (PN 40) to expand the scope of qualifying research and development (R&D) expenses eligible for a super deduction and to clarify certain related issues. The super deduction means an additional 50% deduction of the actual R&D expenses.
Pursuant to PN 40, the expanded scope of qualifying R&D expenses includes the following:
• Equity incentives granted to R&D personnel
• Personnel expenses such as salaries and wages included in a payment made to contract a human resource agent that loans R&D personnel
• Employee welfare expenses, supplementary pension funds and supplementary medical insurance premiums
• R&D expense incurred for “failed” projects
PN 40 also clarifies that for outsourced R&D projects, the R&D expenses of the principal and not the subcontractor will be eligible for the super deduction.
PN 40 applies to annual corporate income tax returns for taxable years beginning in 2017. PN 40 is also applicable to any new and pending cases to which retroactive preferential tax treatment is available.
Access both online and pdf versions of all EY Global Tax Alerts. Copy into your web browser: www.ey.com/taxalerts
Financial risk, poverty and pollution – three challenges for 2018
Dec-12-2017 By : fcccadmin
The Politburo of China’s Communist Party has listed efforts to curb financial risks, eradicate poverty and fight pollution as its top economic priorities for the coming year. At a meeting of the 25-member Politburo chaired by President Xi Jinping, “warding off and addressing major risks to effectively control the macro leverage ratio” was identified as the most important task for the economy, the official news agency Xinhua reported.
The Politburo statement also highlighted the need to reform the property market as it set the tone for this month’s annual Central Economic Work Conference in Beijing, without saying when it would be held. The ruling Communist Party’s economic agenda for 2018 will be mapped out during the conference. Next year will mark the 40th anniversary of China’s reform and opening up, which kick-started the country’s economic miracle. China would open up further, the Politburo statement said, but the most pressing task was to stem financial risks, according to the report. Financial institutions would also be required to strengthen support for the real economy and “positive effects” should be achieved from risk prevention measures.
The Politburo also called on rank-and-file cadres to improve living standards and to make “solid progress” on fighting poverty and environment protection – in line with the policies outlined at the 19th Communist Party Congress in October, where the need for stronger leadership on the economic front was emphasized.
The International Monetary Fund (IMF) warned in a financial risk analysis that Beijing should put financial stability above its development goals and said monetary and fiscal policies aimed at shoring up employment and growth had led to a surge in debt loads, but the People’s Bank of China (PBOC) said it did not agree with several points made in the report and reconfirmed that China’s financial situation was stable, the South China Morning Post reports.
President Xi Jinping also called for advanced technologies to be “embedded” into the real economy to foster growth. Known as the “fourth industrial revolution,” artificial intelligence, robotics and big data may bolster the global economy by a further 14% by 2030 – the equivalent of an additional USD15.7 trillion in value, according to PwC. “China should lay out our digital master plan early and strive to take the initiative,” Xi said. “We should aim for world class, cutting-edge technologies, and nurture a group of big data companies.” China’s 2016 spending on technology research and development rose 10.6% to CNY1.57 trillion, equivalent to 2.1% of the economy’s output. The figure exceeded the average of 2.08% for the European Union.
Improving industry safety, public security and social stability were also on the Politburo’s priority list, the report said.
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