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| LSC Newsletter Feb n Mar 2009 Issue |
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Welcome to LSC CHINA's e-newsletter. The purpose of this e-newsletter is to update you on China regulatory and market knowledge, as part of LCS CHINA's value-added services. If you want to unsubscribe the e-newsletter, please e-mail us news@lsccpa.com.cn. Your request will be honored within 10 working days. |
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| China Revises Restricted and Prohibited Categories under Processing Trade |
The Ministry of Commerce (MOFCOM) and General Administration of Customs have jointly issued Announcement Nos. 121 and 122 [2008], revising the scope of the restricted and prohibited categories under processing trade with effect from 1 February 2009.
With purpose of maintaining steady growth of China's foreign trade, a total of 1,730 products including textiles, plastic products, wooden products and metal products have been removed from the restricted category’ which accounts for 77% of the total in the restricted category. Meanwhile, 27 products including copper, nickel and aluminum are also removed from the prohibited category.
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| China & Switzerland to Deepen Strategic Partnership and Cooperation |
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China and Switzerland decided to jointly start a feasibility study on creating a bilateral free trade zone in the second half of 2009, with aims to deepen their comprehensive strategic partnership and cooperation amid the global financial crisis.
The feasibility study on the free trade zone is part of the measures that both sides agreed to take in face of the economic downturn worldwide.
In addition, China and Switzerland plan to boost their financial cooperation, expand trade and investment, and promote reform of the international financial system. China and Switzerland also plan to boost cooperation in sectors including technology, energy and environmental protection.
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| China Issues Revised Catalogue of Technologies Prohibited and Restricted from Export |
The China’s State Council or cabinet, issued a decree signed by Premier Wen Jiabao in Beijing abolishing three tax and fee regulations.
The provisional regulation governing urban real estate tax, promulgated in 1951, is abolished as of 1 January 2009.
From 1 January 2009, foreign-invested companies, wholly foreign-funded companies and organizations and foreign nationals shall pay real estate tax under the interim regulations of the People's Republic of China on real estate tax.
The Yangtze River maintenance fee collection regulation promulgated in 1987 is abolished as of 1 January 2009. Meanwhile, the inland river maintenance fee collection regulation promulgated in 1992 is also abolished as of 1 January 2009.
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| China Raises VAT Rebate Rates for Certain Machinery and Electrical Exports |
The Ministry of Finance and State Administration of Taxation have jointly issued a circular announcing on the increase of VAT rebate rates for the export of certain machinery and electrical products with high technology contents and high value-added starting effect from 1 January 2009. The rebate rate hikes will involve 553 export items. Among these, the rebate rates for motorcycle and sewing machine will rise from 11% and 13% to 14%.
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| Auto Exports Growth Slows |
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With impact from the financial crisis, shrinking demand at home and abroad drive China's import and export of motor vehicles down. The growth of China's autos and auto part exports halved to 21 per cent in 2008 compared to 2007.
According to the China Association of Automobile Manufacturers, autos, auto parts and components worth USD49.73 billion in 2008. This is 21.6 per cent more year-on-year, but the growth rate more than halved from the 45 per cent recorded in 2007. Car exports totaled 680,700 in 2008 and it was 11.1 per cent compared to 2007. |
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| China Raises Textile Tax Rebate Rate |
China’s State Council has announced that it will increase the tax rebate rate for textile and garment exports, from 14 to 15 per cent; and it is the third such rebate rise since August 2008.
The aim is to reduce exporters' costs and to support the textile industry. The effective date of the new rebate rate has not been specified yet.
The Chinese Customs reported that the growth of 2008 textile and garment exports was down 10.7 per cent compared to 2007. The Ministry of Commerce outlined the fall on “the appreciation of the Yuan, industry liquidity shortage and production material costs surge.”
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| About LSC CHINA Group |
LSC CHINA Group (“LSC”) has been established in China since 1997 with offices in Shanghai, Suzhou and Chengdu. LSC is a Singapore based CPA and multi-disciplinary group providing independent professional “ONE-Shop” services including Company Formation, Accounting & Tax Filing, Tax Planning, and Audit & Assurances. For more information, please visit www.lsccpa.com.cn. |
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