China will waive capital-gains taxes for foreign stock investors using the Shanghai-Hong Kong bourse link, clarifying its rules before the program’s debut on Monday provides unprecedented access to Chinese shares.
Institutions already investing in Chinese markets through the so-called “QFII” and “RQFII” programs will also get a “temporary” tax waiver starting on Monday, the Chinese Ministry of Finance said in a statement yesterday, without giving a timeframe for the exemption.
Chinese individuals who buy Hong Kong equities through the link get a three-year exemption, while mainland companies using the connect are to be charged tax.
International money managers have been seeking to resolve confusion over the tax policy before the bourse link gives them a new route to access China’s US$4.2 trillion stock market.
Yesterday’s announcement still left some uncertainty over the tax rules, as it did not spell out how long the exemption for foreign investors will last, according to Z-Ben Advisors, a fund research firm.
Z-Ben called it a “partial, but not wholly satisfying, solution to the CGT [capital gains tax] problem” in a report today.
While the nation’s laws had suggested foreign equity investors were subject to a capital gains tax, the Chinese government has never collected it, PricewaterhouseCoopers said.
Confusion over the policy since China’s quota system for a limited number of foreign institutions began more than a decade ago has led to a mishmash of compliance, with some setting aside cash for the liability and others anticipating it will not be implemented, HSBC Jintrust Fund Management said.
Shanghai and Hong Kong stock exchanges agreed in April to allow a net 23.5 billion yuan (US$3.8 billion) of daily cross-border purchases, opening up the Chinese market further to foreigners, while giving wealthy Chinese investors a route to buy Hong Kong stocks.
For traders based in China, the nation’s personal-income laws stipulate a 20 percent tax, though authorities have exempted them from the levy since 1994 to promote development of the stock market.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day