China aims to increase its imports of services

China plans to increase its service-sector imports over the next five years in a bid to satisfy ever-increasing domestic demand and contribute more to global trade, according to a government report issued.China's total services imports are expected to reach $2.5 trillion over the next five years, according to the report.That would account for more than 10 percent of the world's total services imports, according to the report, released during the ongoing China International Import Expo in Shanghai.The move is part of China's long-term goal, announced by President Xi Jinping at the opening ceremony of the expo, to allow total services imports to exceed $10 trillion within the next 15 years.Xian Guoyi, head of the Ministry of Commerce's services trade department, said China's services imports have improved the lives of Chinese people, facilitated domestic industrial transformation and upgrading, and brought new opportunities for global trade growth.China will deepen the opening-up of its services sector, boost high-quality services imports and build platforms to facilitate these goals, Xian said at a news conference.Trade in services refers to the sales and delivery of intangible products such as insurance, transportation, tourism, telecommunications and advertising.China has been the biggest contributor to the global growth of services imports, the report said. In the past five years, its imported services have contributed 25.8 percent to the growth of services imports worldwide.In the first three quarters, China's services imports amounted to 2.61 trillion yuan ($377.4 billion), an increase of 8.9 percent year-on-year. The ministry attributed the expansion of trade in services to stable domestic economic growth, a set of opening-up measures and policy support for the sector.Wei Jianguo, vice-president of the China Center for International Economic Exchanges, said: "Increased imports can influence certain industries at first. But ultimately, homegrown companies will be motivated to deepen structural reforms, reduce administrative costs and speed up innovation. ... The whole industrial chain will be upgraded."Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, said the government's further opening-up will help effectively allocate resources and improve the business environment.Source: China Daily

Shanghai's trade role is key

Financial center will take 'bold, creative steps' to aid investmentChina will capitalize on the role of Shanghai and surrounding areas in opening up, President Xi Jinping said at the opening ceremony of the China International Import Expo in the city on Monday.The China (Shanghai) Pilot Free Trade Zone will be expanded, Xi said, adding that the country will encourage and support "bold and creative steps" by the municipality to advance investment and trade liberalization so that more of its successful practices can be replicated in other parts of China.The zone is the first of its kind in the country, covering an area of 120 square kilometers.Shanghai will also receive support in cementing its position as an international financial center and science and innovation hub, and the government will steadily improve the fundamental institutions of its capital market, Xi said.A new trading platform for science and technology innovation companies will be launched in Shanghai, as well as an experimental registration-based system for initial public offerings, he added."We will support integrated development of the Yangtze River Delta region," Xi said. "We'll make it a national strategy and implement our new development philosophy in earnest."The president said the region's further integration is part of the national blueprint to improve the country's reform and opening-up, together with the Belt and Road Initiative, coordinated development of the Beijing-Tianjin-Hebei region and the development of the Yangtze River Economic Belt and Guangdong-Hong Kong-Macao Greater Bay Area.Denis Depoux, China CEO of global consultancy Roland Berger, said the integration of the Yangtze River Delta as a national strategy will be a game-changer for Shanghai. It will have a positive effect on its economy, he said."This, combined with further expansion of the free trade zone and piloting an innovation-based stock market, will create new opportunities on the infrastructure side, and also establish Shanghai as a technology hub," he said.Pan Jianjun, spokesman of the Shanghai-based Bright Food (Group), said the company is encouraged by the government's decision to set up new areas in the Shanghai Free Trade Zone."The move will help Bright Food better reach out to the vast overseas market and facilitate outbound financing and investment to bring in more quality imported goods and meet the demand for high-quality goods of Chinese consumers," Pan said.Some foreign enterprises, including Volvo Car Group, said that they have made the right decision to establish their Asia-Pacific headquarters in Shanghai."This move proposed by President Xi will further facilitate the development of Volvo in China and the Asia-Pacific region and in its global development," said Michel Zhao, vice-president of Corporate Communications for Volvo Car Asia Pacific.Source：China Daily

The global ranking of China's business environment raised to 46th

The World Bank released the "2019 Business Environment Report", which raised the global ranking of China's business environment to 46th, a significant increase of 32. According to the "The Office of the Spokesperson of the Ministry of Foreign Affairs", Lu said that the World Bank's evaluation is fair and objective. China welcomes more foreign companies to come to China to develop and share development opportunities.Lu said that the World Bank has determined in the report that the number of reforms implemented by the Chinese government in the past year to improve the business environment for SMEs has reached a record. World Bank officials said that China is making great progress in optimizing the business environment, reflecting the Chinese government's high regard for  private enterprises and fostering innovation.This year marks the 40th anniversary of China's reform and opening up. China will continue to push forward a new round of reform and opening up, and constantly improve the investment environment, making China to become a preferred place for foreign investment. China welcomes more foreign companies to come to China to develop and share opportunities for China's development.

China mulls bigger moves to cut taxes, fees

The Chinese government is expected to step up tax and fee reductions for enterprises as part of efforts to bring down the burden on the real economy, according to China Securities Journal.Finance Minister Liu Kun has said enterprises' cost is expected to drop by more than 1.3 trillion yuan ($188 billion) this year, adding that more large-scale and effective policies are in the pipeline.Planned measures include simplifying tax brackets of value-added tax (VAT) and lowering social insurance premiums, said the paper.VAT and enterprise income tax, two major parts of the country's taxation system, should be the focus of tax reduction measures, said Liu Shangxi, head of the Chinese Academy of Fiscal Sciences."The current three VAT brackets could be merged into two and the change should take place as soon as possible," Liu said, adding that the 16-percent rate, the highest bracket followed by 10 percent and 6 percent, should be lowered.Liu suggested China lower the rates of enterprise income tax. "The current general rate is 25 percent, with 20 percent for small companies and 15 percent for high-tech firms, which means there is room for further reduction. The tax policy should also be more standard, fair, and transparent."Apart from cutting taxes, the requirement rate of social insurance premiums is also expected to be cut down to relieve burdens on businesses.Jia Kang, the chief economist of the China Academy of New Supply-side Economics, advised putting China's social insurance premium from different regions into the same "pool" so as to improve capital's mutual aid functions and lower the baseline of endowments in social insurance.China unveiled a string of policies to reduce taxes and fees at the beginning of this year.In September, China saw the slowest growth year-on-year of both fiscal revenue and tax revenue since 2018, with VAT growth down 1.2 percent year-on-year, data from the Ministry of Finance showed.The room for further tax reductions comes from three aspects -- unnecessary fiscal expenditures, imperfect government spending structure, and relatively weak tax collection, Liu said. "If measures are implemented on the three aspects simultaneously, tax reduction will not increase deficit or debts."Source : China Daily

The five points showed that China is improving the Business Environment

In recent years, the local government units in China have been vigorously improving the business environment. According to the World Bank's Business Environment Report for 2018, China ranked 78th in the global business environment assessment, and its score increased by 0.4 from the previous year. From 2013 to 2017, the rank of China has been increased by 18 from the World Bank's Business Environment Report, which is closely related to the efforts to improve the business environment in recent years. To a large extent, the business environment is the attraction of investment. This attraction is divided into two levels: the first is the traditional type, such as the low labor costs, the government grants tax incentives, and the perfect infrastructure; the second level is that the incentives are not obvious, but there are more opportunities in the region. The degree of legalization is higher, and the rule of law environment is more reassuring for companies. China is shifting from the first level to the second level, so that the release the investment attraction with stronger, more stable, more sustainable and predictable.Then, as we all know, the transformation is a process that needs to be done. Each transformation will bring a period of relative instability, and both the country and enterprises need some time to accept this transformation. To a certain extent, this is why some people think that the current Chinese business sentiment are dropping. In fact, it is not that China's business environment has deteriorated, but China is working hard to create a more favorable business environment for enterprises. However, the process of climbing a mountain is bound to be difficult, but the scenery on the top of the mountain is always more beautiful.For these, what efforts has be made by China?I. Simplify approval and further optimize the business environmentThis year, China has simplified the administrative approval process for setting up enterprises on the large extent, further reducing the administrative approval of market access, improving the effectiveness of government services, and shortening the time to start a business.II. Increase the protection of property rightsIn order to protect the healthy development of enterprises in China, in recent years, the Chinese government has continuously promoted the revision of the Patent Law, introduced punitive damages measures, and increased the punishment for various types of violations. The relevant data reports also show the effectiveness of China's Intellectual Property Protection. (Social satisfaction with intellectual property protection has increased from 63 in 2012 to 76 in 2017.)III. Establish a Business Evaluation MechanismChina is planning to establish the “Business Evaluation Mechanism” to objectively evaluate the true state of the business environment at each stage of China, as well as the degree of progress in the improvement process, as well as improvements that need to be strengthened.IV. The development of the free trade zoneNow, the number of China's Free Trade Zones has increased to 12. In addition to the existing 11 Free Trade Zones(Shanghai, Tianjin, Guangdong, Fujian, Shaanxi, Shanxi, Zhejiang, Henan, Liaoning, Sichuan, Hubei), Hainan Free Trade Zone has been announced in this month. The China (Hainan) Pilot Free Trade Zone, approved by the State Council, will cover the whole island of Hainan. The government plans to make the zone an international tourism and shopping center, as well as offer services and support for development of the Belt and Road Initiative and other national strategies.And issued the "China (Hainan) Free Trade Pilot Area Overall Plan." This "Plan" shows that it will speed up the construction of a new open economy system and greatly relax the access to foreign capital. The Free Trade Zone will deepen the opening up of modern agriculture, high-tech industries, and modern service industries, and increase openness in key areas such as seed industry, medical care, education, tourism, telecommunications, Internet, culture, finance, aviation, marine economy, and new energy vehicle manufacturing.V. The negative list of foreign investment accessChina has revised the "Special Management Measures for Foreign Investment Access (Negative List) (2018 Edition)", and officially implemented it on July 28 this year. In this list, China has increased its openness to the industry, it introduced open measures in 22 areas, and the number of restrictions has been reduced to 48(means it reduced by nearly a quarter), and introduced open measures in 22 areas. Moreover, the Negative List of foreign investment in the 2018 edition draws on the style and form of the Negative List of the Pilot Free Trade Zone, and is independent from the Foreign Investment Industrial Guidance Catalogue and published separately. According to the "National Economic Industry Classification", it is listed the major foreign capital restrictions such as equity ratio and executive requirements.As mentioned above, China is actively creating the more favorable business environment for enterprises that invest in China.

Hong Kong-Zhuhai-Macao Bridge, set to energize Bay Area

The 55-kilometer Hong Kong-Zhuhai-Macao Bridge, scheduled to open for traffic on Wednesday, will provide a crucial boost to the development of the Guangdong-Hong Kong-Macao Greater Bay Area, analysts said.As the first road link to span the Pearl River Estuary, the bridge and tunnel will energize the regional economy and integrate cities from both sides of the estuary into one dynamic community.The Bay Area, in the Pearl River Delta, encompasses nine cities in Guangdong province plus the two special administrative regions of Hong Kong and Macao.Last year, the total GDP of those 11 cities reached 11.7 trillion yuan ($1.69 trillion). That means 5 percent of the nation's population contributed over 14 percent of country's GDP in 2017.Like the San Francisco Bay Area in the United States, the strategy behind the development of the Bay Area in China was to merge the 11 cities into a world-class city cluster, able to compete on a global scale."The HZMB is one of the most important elements of the development of the Bay Area," said Jason Ni Mengcheng, an assistant professor in the Department of Architecture and Civil Engineering at City University of Hong Kong. Ni specializes in research into large transportation infrastructure.The bridge, he said, will redistribute resources in the Bay Area and generate a significant impact on regional development.Noting that the HZMB will be open 24 hours a day, Ni said the structure, for the first time, will provide an unstoppable transportation channel between east and west across the Pearl River Estuary.Although ferry services run throughout the day, their frequency is reduced substantially after midnight, Ni said. Thus, the operation of the HZMB will significantly increase the flow of people and goods across the estuary.Ni also noted that the bridge will encourage more Hong Kong people to visit Macao. This will promote communication and exchanges of professional services between the two SARs. He predicted it will help diversify Macao's economy, which is heavily reliant on tourism and the gaming industry.Construction of the HZMB, the world's longest sea-spanning structure, began at the end of 2009.Once operational, the bridge will cut the travel time between Hong Kong and Zhuhai or Macao from four hours by car to less than 60 minutes.Antony Leung Kam-chung, Hong Kong's former financial secretary from 2001 to 2003, participated in the SAR government's initiative to build a bridge connector prior to 2003.A study of the Pearl River Delta at that time showed that foreign and Hong Kong investors would be most attracted to locales within three hours of Hong Kong, Leung said.Development still lags in places like Zhuhai and Jiangmen, which are farther away, on the western side of the delta, he continued.Once the bridge opens, and with the Guangzhou-Shenzhen-Hong Kong Express Rail Link now operational, he predicted more investment will flow westward as far as the Guangxi Zhuang autonomous region.Lin Ming, chief engineer of the bridge's island and tunnel project, said the HZMB will create more urban areas in the Bay Area, given that urbanization is stimulated in coastal regions."The delta in Guangdong is a perfect site for metropolises," Lin said. "Sustainable development in the delta requires more transportation infrastructure－the more, the better."The HZMB also will serve as an example for future cross-border cooperation under the "one country, two systems" principle. The project was a cross-border effort, shared by the governments of Guangdong, Hong Kong and Macao.Su Yi, head of the Working Group on Cross-boundary Policy Research for bridge operator HZMB Authority, said the cooperation and coordination among the three governments opened a door for institutions under different political systems and cultures to conduct more exchanges.It has laid a foundation for the three administrations to have more cooperation in the future development of the Bay Area, he said.Better communication within the Bay Area will start with the easier flow of capital trading and the innovation of policies, Su said. But ultimately, it's about the connection between people from different backgrounds, he said.Gavan Ord, manager of business and investment policy for CPA Australia, a global accounting body, said that it helps change people's mindsets in terms of business activities with Macao, Zhuhai and other cities on the western coast of the estuary."With the opening of the HZMB, you feel that you are closer to the other side of the ocean, and it helps integrate separate communities into one," Ord said.Source: China Daily