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The Chinese Government
Government structure Taxation
State-owned enterprises
Subsidies and supports
Government intervention
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Government of China
All power within the government is divided among severalbodies/branch:
political: Communist Party of China
executive: State Council legislative: National Peoples Congress
judicial: Supreme Peoples Court/Procuratorate/
military: Peoples Liberation Army via the CentralMilitary Commission
The primary organs of state power are the National People'sCongress, the President, and the State Council
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Central and local government
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Taxation
Taxes provide the most important
revenue source for the government
Tax is a key economic player of
macro-economic regulation, and greatly
affects China's economic and social
developmentAfter the tax system reform in 1994
and the fine-tuning of it in subsequent
years, China has preliminarily built up
a tax system adaptable to the socialistmarket economy
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Taxation system
State administration of taxation
Local tax bureaus
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Chinese Enterprises Face
Heavy Tax Burden
According to a 2013 report from ChinasMinistry of Finance
Taking various taxes, government funds,
administrative fees, and social security
payments into account, the combinedtax rate for Chinese enterprises has
amounted to around 40%,surpassing
the average level of OECD member
countries
Experts remarked that social security
payments contributed the largest part to
enterprises tax burden, especially for
labor-intensive companies
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China's Superior Economic
Model
Thursday, December 1, 2011
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State-owned
Enterprises
(SOEs)
State-owned Assets Supervision and Administration Commission
Fortune500: http://www.fortunechina.com/fortune500/c/2013-07/08/content_164367.htm
Read the article: State-Owned Enterprises 2013
Author: Gao Xu, from the World Bank
http://www.fortunechina.com/fortune500/c/2013-07/08/content_164367.htmhttp://www.fortunechina.com/fortune500/c/2013-07/08/content_164367.htmhttp://www.fortunechina.com/fortune500/c/2013-07/08/content_164367.htmhttp://www.fortunechina.com/fortune500/c/2013-07/08/content_164367.htm7/29/2019 2.2 Chinese Goverment and Regulations (1)
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However, they have undergone a
dramatic transformation over the
past decade. While their share of
economic output has declined, their
influence has not. In fact, in severalof Chinas most strategic sectors,
state-run firms are sharpening their
management skills and transforming
their operations so they can compete
globally
The Changing Role of
Chinas SOEs
The dominance of the giant SOEs has been
associated with high prices and low efficiency
in many industries
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The state advances as the private
sector retreats Barack Obama has limited ability to shape US economic
policy as a result of the separation of powers.
Not so their Chinese counterparts, who, thanks to the
overarching role of the Communist Party in both government
and business, enjoy almost unrivalled influence over the
countrys direction
More than 1900 of the 2047 listed firms in the countrys two
stock exchanges are majority-owned by the government.
~ from http://www.icis.com/blogs/asian-chemical-connections/2012/11/tackling-the-soes/
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Subsidies in China
Government subsidies in China rose
approximately 23 percent to 13.83
billion dollars in 2012 .
They include cash for research and
development, and environmental
reform, both of which are also heavilysubsidized in the United States.
But policymakers from other countries regard many Chinese
government policies as giving Chinese companies unfaircompetitive advantages. These advantages include a currency
that many analysts believe is under-valued, cheap land sales,
loan rebates, tax breaks, cash hand outs, and subsidies.
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Government and
Trade ProtectionUS Abandons Free Trade with Huawei
By Global Times, 2013-5-15
Huawei's businesses can be found all over the world and
has been locked in intense competition in different
countries. When competitions involve local companies,
governments may show a bias. However, most of them
will exercise restraint in doing so because such actions
violate the rules of free trade.
The US is the largest economy in the world. It was the
strongest promoter of the principle of free trade last
century. However, the US has caused the most trouble in
preventing Huawei from entering its domestic market.
It's not because Huawei's products are not advancedenough, but because the US government eliminates the
possibility of competition between Huawei and its US
peers using the excuse that Huawei may threaten US
information security. Chinese companies have just about
heard every excuse when being kicked out of a market
for security reasons.
Read more at http://www.globaltimes.cn/content/781627.shtml#.UidGsj-d9Io
Cisco Systems and other US tech
companies urged Congress into
investigating Chinese companies Huawei
and ZTE for security concernsPoliticians
are concerned the tech giants will usetheir systems to help expand the Chinese
government's spying networks into the US.
Earlier this week, the US Intelligence
Committee said the duo shouldn't be
allowed to operate in the U.S.
But the only proof of those claims are heldsecret in classified reports.
Trade Protectionism is the economic
policy of restraining trade between states
through methods such as tariffs on
imported goods, restrictive quotas, and a
variety of other government regulations.
This policy contrasts with free trade,
where government barriers to trade arekept to a minimum.
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Government Subsidies to Consumers
A government-funded project aims
to expand sales of household
electric appliances in the countrys
vast rural areas at prices 13 percent
lower than those in cities.
200712
2009
2013
20
6020129
2.756600
201212
2.987204
TCL
Sending Home Appliances
to the Countryside
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Government Subsidies to Consumers
The government allocated morethan 6 billion yuan to subsidise
consumer purchases of fuel-saving
cars in 2012
China waives sales taxes on electric
and fuel cell cars (a total of 49models) made domestically
A rebate of up to 60,000 yuan by the central
government is offered to buyers of battery-
powered cars
Shanghai municipal government is offering an
extra subsidy of up to 40,000 yuan and a free
license plate.
Beijing unveils policies for electric vehicles in
2013: a subsidy of up to 120,000 yuan and the
option to obtain license plates without
participating in the citys plate lotterySo there are regional disparities
Subsidies for fuel-saving cars
This battery electric vehicle cost him 140,000yuan, including a tax and insurance. Normally,
such a car costs 200,000 to 300,000 yuan.
G t
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Government
intervention It is regulatory actions taken by a government in order to
affect or interfere with decisions made by individuals, groups,or organizations regarding social and economic matters.
The government announced detailed plans on deepening
economic reform on May 6, 2013 , fulfilling its pledge to cut
government interventions that hinder a more robust growth It has canceled or delegated power to lower levels concerning
133 items that were previously subject to central government
administrative approval
It is reasonable for the government to step
in when the market does not work.
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17
The Most Expensive Cigarettes
: RMB850/pack: RMB270/pack
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Price cap regulation
200816800/1000/
Prices of imported tabacco:http://www.cu-market.com.cn/hgjj/2010-8-2/1634462.html
i l i d l l i
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price cap regulation and legal issues
caused
200816800/1000/
Prices of imported tabacco:http://www.cu-market.com.cn/hgjj/2010-8-2/1634462.html
P i l ti d l l i
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Price cap regulation and legal issues
caused
2010730
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200020093006806
7001400
20062006
200653200615%308200716%358200722%4392009
13%499
2010
753850
89989
20013881600
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China bans luxury
advertising in Beijing
Beijing has moved to ban billboards promoting a luxurious
lifestyle over concerns that the endless advertisements arereminding people of the wealth gap.
Read more: http://www.telegraph.co.uk/news/worldnews/asia/china/8398097/China-bans-luxury-advertising-in-Beijing.html
http://www.telegraph.co.uk/news/worldnews/asia/china/8398097/China-bans-luxury-advertising-in-Beijing.htmlhttp://www.telegraph.co.uk/news/worldnews/asia/china/8398097/China-bans-luxury-advertising-in-Beijing.htmlhttp://www.telegraph.co.uk/news/worldnews/asia/china/8398097/China-bans-luxury-advertising-in-Beijing.htmlhttp://www.telegraph.co.uk/news/worldnews/asia/china/8398097/China-bans-luxury-advertising-in-Beijing.htmlhttp://www.telegraph.co.uk/news/worldnews/asia/china/8398097/China-bans-luxury-advertising-in-Beijing.htmlhttp://www.telegraph.co.uk/news/worldnews/asia/china/8398097/China-bans-luxury-advertising-in-Beijing.htmlhttp://www.telegraph.co.uk/news/worldnews/asia/china/8398097/China-bans-luxury-advertising-in-Beijing.htmlhttp://www.telegraph.co.uk/news/worldnews/asia/china/8398097/China-bans-luxury-advertising-in-Beijing.htmlhttp://www.telegraph.co.uk/news/worldnews/asia/china/8398097/China-bans-luxury-advertising-in-Beijing.htmlhttp://www.telegraph.co.uk/news/worldnews/asia/china/8398097/China-bans-luxury-advertising-in-Beijing.htmlhttp://www.telegraph.co.uk/news/worldnews/asia/china/8398097/China-bans-luxury-advertising-in-Beijing.htmlhttp://www.telegraph.co.uk/news/worldnews/asia/china/8398097/China-bans-luxury-advertising-in-Beijing.html7/29/2019 2.2 Chinese Goverment and Regulations (1)
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gifts
in anti-corruption push Chinese radio and television stations have
banned advertisements for expensive giftssuch as watches, rare stamps and gold coins,as part of a push by the government to crackdown on extravagance and waste.
Read more: http://www.reuters.com/article/2013/02/06/us-china-tv-corruption-idUSBRE91505N20130206
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China is banning officials from using public funds to buy
mooncakes, pastries offered as gifts during the Mid-Autumn
Festival, as part of President Xi Jinping's fight against corruption
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Regional ProtectionismTypical methods ofprotectionism are
import tariffs, quotas, subsidies or
tax cuts
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