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- China and USA send warships to the Indo-Pacific
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Taxes in China are to be equalized between expats and locals in the coming year, as Finn Mayer-Kuckuk reports. What seems like a fair solution turns out to be a major annoyance for expats in Beijing or Shanghai: If rents or language courses are no longer tax-deductible, this would definitely have an impact on the state of their wallets. And that’s not all: The changes will also have serious consequences for the respective employers in America and Europe.
E-learning in China is currently experiencing a real boom. In 2020 alone, around €6.5 billion were invested in this industry – more than in the past ten years combined. Frank Sieren shows that this is primarily about more equity between the glittering metropolises and the dusty hinterland. However, the prevailing gold-rush mood should not make people overconfident: Even in this industry, companies are not immune to setbacks.
China is one of the largest beverage markets in the world. According to the China Commercial Industrial Research Institute, this market could be worth a whopping ¥1.3 trillion ($198 billion) by 2024. Ning Wang shows how Genki from Beijing and Nongfu Spring are responding to the desire for modern beverages, especially among young Chinese.
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New tax rules enrage expats in China
Anger is rising among employees of foreign companies in China over the planned removal of tax privileges for expatriates. At the end of this year, companies will no longer be able to pay benefits such as rent and school fees tax-free. In a recent survey, the US Chamber of Commerce (AmCham) in Shanghai is already warning that companies are leaving – in a big way. Overall, Shanghai as a business location is suffering from the change: Almost 70 percent of the companies surveyed said it would now be more difficult to find highly qualified personnel to work locally.
European chamber colleagues see it similarly. “China seems to be at peace with the fact of losing more and more foreign forces,” says Jörg Wuttke, president of the EU Chamber of Commerce in Beijing. European business stakeholders wrote in a recent assessment that the previous tax regime had done much to make China an attractive place to do business. “It compensates for some of the higher costs that families face in China.”
Previously, foreign workers could deduct a whole range of expenses. These include: