CX Daily: To Help Local Governments, China Has Another Trick Up Its Sleeve
As tax cuts bite, central government extends extra help to localities
China’s central planners extended a policy allocating more tax revenue to local governments in an effort to ease their financial burden.
The government is extending a 2016 initiative that allocates provincial-level governments around 50% of the country’s VAT revenue — its biggest tax source — the State Council said in an official document Wednesday. Prior to 2016, localities were allocated only around 25% of VAT revenue, with the central government taking the rest.
The policy, which was to expire this year, was part of a nationwide reform that replaced business tax with VAT in an attempt to curb tax evasion and prevent companies from being taxed twice. Business tax at the time was the primary source of local government tax revenue.
FINANCE & ECONOMICS
The Statistics Law was last revised in June 2009 and the changes implemented from January 2010. Photo: IC Photo
In fight against fake data, China turns to more punishments, credit system
Data manipulation and fabrication are stipulated as a “dereliction of duty” in a draft of China's first revision to its statistics law in a decade, posted on the website of the National Bureau of Statistics Tuesday and open for public comment until Nov. 9.
Proposed are new accountability mechanisms starting at county-level government to prevent and punish anyone caught falsifying data, including senior officials in charge. Big data, cloud and AI will be encouraged, according to the draft. A credit rating system is also being put forward that will apply not only to government officials but also companies and organizations that contribute information to the NBS.
Bank of China leads way for Libor successor in Asia bonds
One of China’s biggest lenders is marketing a new dollar note linked to a Libor replacement as borrowers across the globe move away from the scandal-ridden pricing benchmark.
Bank of China Ltd.’s Macao Branch is expected to price a floating-rate note tied to the Secured Overnight Financing Rate (SOFR) Wednesday, according to a person familiar with the matter. Once priced, this would be the first foreign-currency bond from a Chinese issuer linked to SOFR, based on data compiled by Bloomberg.
Iamgold sale stalls as Chinese bidders’ talks fail
The sale of Iamgold Corp. stalled after the mid-tier Canadian gold miner failed to reach an agreement with several Chinese suitors, people with knowledge of the matter said.
Chinese gold producers including China National Gold Group Corp., Shandong Gold Mining Co. and Zijin Mining Group Co. had all shown interest in Iamgold, said the people, who asked not to be identified as the information is private. But discussions stumbled over price as well as concerns related to ongoing Sino-Canada political tensions, the people said.
In depth /
Tycoon’s death adds to mounting controversy facing UCF Holdings
The belated release of the death certificate of Zhang Zhenxin, the founder of the debt-ridden Chinese financial giant UCF Holdings Group Ltd., sparked speculation in China that the shadowy tycoon might have faked his death. But regardless, the company's debt isn’t going anywhere.
It’s unclear exactly how deep UCF's debt pit goes, though we learned from regulatory sources that the conglomerate might owe more than 70 billion yuan ($9.8 billion). This, from ventures in now-heavily curtailed P2P lending, embezzlement at affiliates and exceptional government oversight, and you have one company unlike any other.
Check out our deep dive.
Coming up /
Fri, Oct. 11: President Xi Jinping will attend the second informal meeting between Chinese and Indian leaders in India and pay a state visit to Nepal from Oct. 11 to 13.
Sun, Oct. 13: The GACC will release import and export data for September.
Tues, Oct. 15: The NBS will release September's CPI and PPI.
The China Social Enterprise and Investment Forum 2019 (CSEIF 2019) will take place in Chengdu. Caixin Global is a co-organizer of the awards.
Fri, October 18: The NBS will release several September reports, on industrial production operation, investment in fixed assets, investment in real estate development, total retail sales of consumer goods and energy production.
Quick hits /
Mainland visitors to Hong Kong fall to lowest in 9 years
Hainan businessman probed in connection with disgraced official
Opinion: U.S.-China trade conflict is overrated
BUSINESS & TECH
U.S. blacklist /
New Chinese entries on U.S. Blacklist say impact is manageable
Shares of Chinese surveillance-camera maker Hangzhou Hikvision Digital Technology Co. Ltd. plunged 4.33% Thursday though it said Wednesday that it expects U.S. sanctions to have a “limited and short-term” impact on its business performance.
For Hikvision, the impacts will decrease over time as the company has found alternatives to most of the U.S. components and stockpiled those it can't replace immediately, according to company executives. Zhejiang Dahua Technology Co. Ltd., another surveillance-camera maker blacklisted by the U.S. Monday, also said the hit from the ban would be manageable as it has been prepared for a possible supply chain disruption.
Blizzard boycott /
Gaming giant Blizzard gets frosty response to Hong Kong gamer ban
The firestorm engulfing gaming giant Blizzard Entertainment is intensifying as players and staff speak out against the U.S. video game-maker’s suspension of a high-profile professional gamer who expressed sympathies for protesters rallying for the last four months in Hong Kong.
A small group of staff at Activision Blizzard’s campus in Irvine, California, reportedly walked off the job Tuesday in protest of the ban of Chung Ng Wai, also known as “Blitzchung,” according to the Daily Beast. A number of gamers also took to social media to say they were cancelling their Blizzard subscriptions, while the hashtag #BoycottBlizzard started trending on Twitter. Blizzard did not responded to our request for comment at the time of publication.
Apple pulls Hong Kong police tracker from App Store in latest about-face
Apple removed HKmap.live, a mapping program used by Hong Kong protestors to show locations of police activity, from its App Store Thursday after it was criticized by an official Chinese newspaper, marking the second time it has flip-flopped on its decision to host the app.
Apple said Thursday it had verified with the Hong Kong Cyber Security and Technology Crime Bureau, a body affiliated with the territory’s police force, that the app had been used “to target and ambush police (and) threaten public safety,” an assessment the developers said they disagreed with. Apple initially rejected the app’s request to register with the App Store on Sept. 26, but reversed that decision Monday.
Electric cars /
Nio mini-comeback continues with strong Q3 deliveries
Chinese Tesla-wannabe Nio reported a strong third-quarter increase in deliveries as it stages a mini-revival after a disastrous second-quarter earnings report.
The automaker delivered a better-than-expected 4,799 vehicles in the three months ended Sept. 30, a 35.1% increase on the previous quarter, according to a Tuesday statement on its official website. Deliveries consisted of 4,196 units of its all-electric SUV, the ES6, and 603 units of the ES8 model. The company shipped 2,019 units in September alone, including 1,726 ES6s and 293 ES8s, according to the statement.
Quick hits /
NBA preps for exhibition games that were supposed to build goodwill
Patriotic movies break ‘Golden Week’ box office records
China’s 5G service preorders hit 10 million
Fitbit, Tile look to shift production out of China amid tariff strife
Alibaba, JD.com stop selling e-cigarettes to U.S. buyers
China drafts rule to ban price discrimination in tourism services
Online real estate marketplace Fangdd files for $150 million U.S. IPO
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