Research & Analysis

On December 21, 2017, authorities clarified the criteria for withholding tax (WHT) deferral treatment on dividends for foreign investment in encouraged sectors in China. The Notice Regarding the Provisional Deferral Treatment for Withholding Tax on Distributed Profits used for Direct Re-investment by Foreign Investors (Caishui [2017] No.88, or Circular 88) subsequently came into effect on January 1, 2018. Released by the Ministry of Finance (MOF), State Administration of Taxation (SAT), National Development and Reform Commission (NDRC), and Ministry of Commerce (MOFCOMMOC), the WHT deferral treatment should be welcomed by foreign investors. The treatment aims to encourage long-term foreign investment in China.

Coworking and incubator spaces have expanded quickly throughout major cities as China’s entrepreneurial drive accelerates. While government had been slow to regulate coworking spaces–the use of such addresses for business registration has floundered in ambiguous territory–industry observers contend that the government is now working on a regulatory framework for the coworking industry and its tenants.

Recently, the city of Wuhan announced that they will be opening a police station run solely by artificial intelligence (AI) – no employees need apply. Although the station would be limited to vehicle and driver related administrative work, the government anticipates increasing AI use in many other areas of governance. Automated government offices like these are just one way that new technologies are being integrated into the Chinese society. It also represents a larger trend in the Chinese economy: the growth of the digital economy.