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Insights

CW CPA Professional Insights on China and Cross-Border Business

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China Gives Green Light to Establish Wholly Foreign-Owned Hospitals

China’s new pilot work plan, effective 29 November 2024, permits wholly foreign-owned hospitals in nine key cities, including Beijing, Shanghai, and Shenzhen. This initiative aims to enhance the healthcare sector with innovative service models, cutting-edge technologies, and improved local medical capacity. Eligible investors must demonstrate expertise in hospital management and address gaps in healthcare provision. Exclusions apply to hospitals specializing in traditional Chinese medicine, psychiatric care, or high-risk procedures. By fostering foreign participation, China seeks to meet growing healthcare demands while maintaining strict oversight of ethical and medical risks in this highly regulated industry.

Amendment to CEPA Provides Enhanced Access to Mainland Markets

The Closer Economic Partnership Arrangement (“CEPA”) amendment between mainland China and Hong Kong, effective 1 March 2025, expands market access for Hong Kong businesses. Covering trade in goods, services, investment, and economic cooperation, CEPA now includes liberalisation measures in sectors like construction, financial services, and tourism. Key updates include easing equity ownership limits and professional service restrictions. Hong Kong enterprises can also capitalize on premier legal and arbitration services for Mainland operations. While most measures apply nationwide, select pilot initiatives focus on the Greater Bay Area, highlighting enhanced integration and opportunities for Hong Kong-based companies in a growing market.

China Adjusts Export Tax Rebates for Certain Goods

On 15 November 2024, China announced significant changes to its export tax rebate policies, effective 1 December 2024. The elimination of rebates for aluminium, copper, and certain biofuels, along with a reduction in rebate rates for batteries and refined oil products, is set to impact businesses across key sectors. This shift aims to address the financial burdens faced by exporters under the current VAT framework. Companies must now evaluate how these adjustments affect their operations and develop strategies to navigate the evolving landscape. Discover how these changes could reshape the export market and what it means for your business.

Shenzhen Strengthens Support for Venture Capital Ecosystem

On 24 October 2024, the Shenzhen Municipal Committee’s Office of the Financial Committee promulgated the Action Plan for Promoting High-Quality Development of Venture Capital Investment in Shenzhen (“Action Plan”). The document was released as a consultation draft, inviting public input. The deadline for feedback submission was 31 October 2024.

Hong Kong Publishes Outcomes from Pillar Two Tax Regime Consultation

Between December 2023 and March 2024, the HKSAR Government conducted a consultation on the Global Anti-Base Erosion (“GloBE”) Rules and the Hong Kong Minimum Top-up Tax (“HKMTT”). Upon the conclusion of the consultation, Hong Kong’s Financial Services and the Treasury Bureau, in collaboration with the Inland Revenue Department, has recently published a Legislative Council (“LegCo”) Paper. The document recapitulates the input gathered from various stakeholders and presents the government’s feedback based on the findings.

New Peruvian Port to Serve as Key Gateway for Latin America-Asia Trade

The Chancay Port in Peru, a $3.6 billion project funded by China's Belt and Road Initiative, is set to transform trade between Latin America and Asia. Located 70-80 kilometers north of Lima, it can handle large ships and reduce shipping times by 10-20 days. While promising economic benefits for Peru, the project has raised concerns about China's influence in the region.
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