News & Editorial
By Yang Sheng
Yang Sheng argues that the upcoming visit by Zhang Dejiang shows that Beijing has great interest in HK’s well-being and critics of it are just scaremongering.
Chairman of the Standing Committee of the National People’s Congress (NPCSC) Zhang Dejiang will visit Hong Kong in the middle of next week to attend a Belt and Road forum. He will meet with the SAR’s political, business and community leaders.
A State leader visiting a city in the country to see how things are going there and to show the central government’s concern for the local population is normal. But to the opposition camp and the media it has become an opportunity to create controversy and drive a wedge between Hong Kong and the mainland.
It is not unusual for the opposition to focus on something minor and blow it out of proportion. That has happened with many cross-boundary issues. This time, however, what they are focusing is not an issue at all.
Opposition lawmakers and Apple Daily have been accusing Beijing of downgrading the SAR’s status by stating that the nature of Zhang’s visit is an “inspection”. The newspaper said this is the first time this term has been used to describe a State leader’s visit to the SAR. Nothing can be further from the truth than this.
In November 2011, when the then vice-premier of the State Council, Li Keqiang, paid a visit to Hong Kong, news reports by Xinhua News Agency used the word “inspection” to describe Li’s trip. What was also not mentioned among Apple Daily’s recent allegations is the newspaper made the same accusation at that time — that the term “inspection” sounded degrading to the SAR. It did its best to provoke and scare Hong Kong people. But no other media overreacted like Apple Daily or echoed their assertion then, nor was the public influenced by the newspaper’s groundless charge.
One can see from this earlier incident that what the opposition is doing today is nothing but an old trick and that they are apparently desperate.
Hong Kong is a special administrative region of China, established under the Basic Law, and the NPCSC is the supreme State organ that produced and interprets the constitutional document. One wonders why it is an issue for Zhang, the NPCSC chairman, to come to Hong Kong for an inspection tour. His visit can only be constitutional and logical.
Since China resumed the exercise of sovereignty over Hong Kong in 1997, some people have mistakenly thought that “Two Systems” is above “One Country”. Describing Zhang’s visit as “inspection” as well as the recent rearrangement of the seating plan for the meeting of the Chief Executive with President Xi Jinping in Beijing both serve to put “One Country, Two Systems” in the right perspective.
While the opposition claims that calling Zhang’s visit an “inspection” is inappropriate and downgrading, it is interesting to know that they have called upon the United Kingdom to send delegations to Hong Kong to “inspect” the implementation of “One Country, Two Systems”. Their logic seems to be that it is inappropriate to have our State leaders come to inspect the SAR, but appropriate to have foreign political delegations to do so.
It is also interesting to note that Apply Daily never accuses US President Barack Obama or British Prime Minister David Cameron of intervening in local affairs when they go “inspecting” different parts of their country. Obviously the newspaper is determined to tarnish the image of Beijing in the eyes of Hong Kong people and undermine their relationship with the central government. The public should beware of such tactics and stop believing what they say.
Zhang’s visit is an embodiment of the central government’s support and care for the SAR and its people. The idea is to foster Hong Kong’s social harmony and help various sectors to take advantage of the many opportunities presented by the Belt and Road Initiative and the country’s 13th Five-Year Plan (2016-20). Hong Kong people must not miss this great opportunity. Most importantly, they must not let their attention be diverted by ploys by the opposition and their media.
In a move that has been widely seen as a gesture demonstrating the central government’s readiness to hear the views of different sectors in the Hong Kong SAR on local affairs, four legislators representing the major political parties in the opposition camp have been invited to a short meeting with State leader Zhang Dejiang next Wednesday — the second day of his three-day inspection trip to the city.
To the surprise of many residents, some of those invited have demonstrated their reluctance to attend the meeting. It is recalled that opposition legislators have repeatedly asked for direct dialogue with central government officials when discussion on election reform for the proposed implementation of universal suffrage in the SAR was at its height.
After the election reform proposal fell through last year, many members of the opposition camp have remained agitated and become cynical about almost everything in the SAR. A meeting with Zhang Dejiang, who chairs the National People’s Congress Standing Committee and oversees Hong Kong affairs, is no doubt a great opportunity, by any measure, for them to present their views on local issues to the central government. After all, what better channels or opportunities — other than directly conversing with the top central government official in charge of Hong Kong affairs — can they think of for that purpose?
Granted, there might not be enough time for every attendee to present his or her points during the proposed meeting; a short meeting understandably can hardly achieve something significant or settle any major issue. But, to paraphrase Chief Secretary for Administration Carrie Lam Cheng Yuet-ngor’s words, any kind of meeting or communication is likely to produce some positive results. If the meeting proceeds favorably, it could herald a series of similar meetings between central government officials and representatives of the opposition camp in the future.
Members of the opposition camp have been advocating all kinds of ideas or political pursuits in the name of the public good. But how can they convince the public that they are really working for the overall interests of Hong Kong society rather than their personal or narrow party interests when they shut the door to communication with the central government, a major stakeholder in Hong Kong’s affairs? And how can they convince citizens they can achieve anything which could affect the future development of the SAR without the blessing of the central government, which after all has a great stake in the success of Hong Kong, over which it has constitutional rights and responsibility.
Safeguard the rule of Law Spirit
Causeway Bay 銅鑼灣區
Mong Kok 旺角區
Bus Stop 巴士路線暫停
To take the situation as a whole into consideration
From student strikes until today in various districts of Hong Kong has for some time been occupied by demonstrators, the aspirations and the demands of the protesters and had been fully expressed. Due to the Admiralty, Causeway Bay and Mong Kok were prolonged occupation by protesters, the main roads blocked at the protest zones, the daily life inconvenience caused to the public, work, school, and business environment are subjected to varying degrees of impact, and retail, hotels, transportation, tourism was severely affected industries. Affected operators, simmering grievances of the residents and the businesses of the protest zones, different views are also emerging society was torn apart, the economic losses, which is not a blessing to Hong Kong people.
Under the Lion Rock Spirit
Hong Kong's present economic success is obvious, which depends on the hard work of several generations of people, watch each other, gritty and perseverance on, "Under the Lion Rock" spirit. In any society, human beings will always exist between grievances, misunderstandings, and pointing to each other is unavoidable, it takes the whole community to act as the main consideration.
Any mass movement initially proceed from idealism and considered, but often changes arising from prolonged time. Violence in Mong Kok, a few days ago, is undoubtedly a dangerous signal. Eight heads of institutions, religious communities, intellectual people have called for the protesters in the demonstration area left the safe and orderly evacuation. Of the occupation movement and Mr Tung Chee-Hwa, Vice Chairman of the National Committee of the CPPCC issued a statement of the appeal to students and young friends pointed out that students are the future of Hong Kong, who will be Hong Kong's Chief Executive, believe that they are not only the ideals and commitment but also have the courage and intelligence. He appealed to them to be bold and intelligent, not only actively get to know different opinions peacefully, to seek consensus, and together with the people of Hong Kong do our best efforts to building Hong Kong's future. He noted that the "occupation action of students and young people, your demands for democracy, we have clearly heard. Your commitment to the ideals, we understand. "He advised that:" Hong Kong is a pluralistic society. You throw it all away, participating in occupation operations, the pursuit of democracy, made a lot of sacrifices. But the cornerstone of democracy, is the rule of law, abide by the law. And pluralistic civil society dialogue, communication is the way to solve the disagreement.
Democracy and the rule of law
Democracy and the rule of law has always been the cornerstone of Hong Kong's long-term prosperity and stability, source of foreign investors ' confidence in investing in Hong Kong. Therefore, for the overall interest of Hong Kong, the people of Hong Kong should consciously adhere to the cornerstone of Hong Kong, and mutual tolerance. Protesters have now fully expressed their aspirations and views should also be taken into account also affected people’s feelings and anger, so protesters should be evacuated as soon as possible the "occupied areas", so that Hong Kong people’s lives back to normal.
The Reduction to the number of Items in the China (Shanghai) Pilot Free Trade Zone ‘Negative List’ is welcomed by European Industry
The European Union Chamber of Commerce in China welcomes the government’s reduction of the scope of Negative List for the China (Shanghai) Pilot Free Trade Zone (CSPFTZ) that was announced in the evening of 30th June. The announcement serves to reduce the number of items for which foreign investment is still restricted from 190 to 139. This represents a reduction of approximately 27% to the scope of the Negative List. Although the extent of the cuts is slightly lower than the European business community in China had been hoping for and some previous official press statements had forecasted, it is still a substantial decrease and an encouraging step in the right direction.
This is the first reduction to the Negative List following its release nine months ago. Since then, the Decision of the Third Plenum has been promulgated. The Decision clearly shows that there is consensus among China’s leaders that deep and broad reforms are required nationwide. The CPSFTZ, as such, has from the start been positioned as a testing ground for these reforms and for further opening up to foreign industry. Some of the items that have been removed from the Negative List are in important sectors. The revised list offers foreign enterprises greater freedom to participate in inter alia the real-estate sector by allowing firms to invest in construction, and certain manufacturing sectors such as pharmaceutical drugs, auto components and textiles. European investment into these areas could serve to bring strong benefit to China’s continued economic and societal development.
Stefan Sack, Vice President of the European Chamber and Chairman of its Shanghai Chapter, said, “In a recent survey conducted by the European Chamber, over half of European companies viewed the inauguration of the CSPFTZ as a major step towards the opening-up of the Chinese market and the creation of a level playing field for foreign business. The reduction to the scope of the Negative List re-establishes European companies’ confidence in China’s commitment to the CSPFTZ. There is, however, still great room for further eliminating many of the remaining barriers to foreign investment in the zone that would bring benefit both for European business and for China. European Chamber members hope that additional amendments will be taken in a timely and transparent manner, and that these further rounds will involve consultation with international stakeholders.”
Mr Sack added, “In addition to further reducing the scope of the Negative List, what is more important is that the Shanghai authorities now also work with China’s central-level authorities to coordinate a speedy nationwide rollout of the Negative List approach and to ensure that those
Source: The European Union Chamber of Commerce in China
FATCA, China and the World
By Paul Cochrane in Beirut
A US-enacted law that is to go into force in July appears set to have a major impact on the global financial sector as well as potentially usher in a new era of tax sharing initiatives. China, so far, is standing on the sidelines of the Foreign Account Tax Compliance Act (FATCA), but it will be dragged into the regulation's net one way or another.
According to some commentators, the Act will have an adverse effects on the US economy – the dumping of Treasury Bonds (TBs), the weakening of the dollar, lower foreign direct investment (FDI) – and will be a contributing factor in hastening indebted America's decline as a financial superpower.
So what is this new law that has such global reach, yet few outside of financial circles are aware of, that is slated to go live on 1 July? Enacted in 2010, FATCA is aimed at curbing tax evasion by American citizens with accounts above $50,000. Under the law foreign financial institutions (FFIs) around the world will have to screen all their account holders to verify whether clients are US citizens or not. Such an extra territorial law puts the onus on FFIs to act, essentially, as unpaid agents of the US' Internal Revenue System (IRS), or face a 30 percent withholding tax on US account holders. Further motivation to comply is the possibility of being cut-off from the US financial system and not being able to deal with FATCA compliant institutions.
“The withholding of 30 percent is the big stick the US is using to try and force any recalcitrant banks or countries to sign up to FATCA. That is a hefty fine, and it is going to make FFIs reconsider doing business with US, but can they really leave the US market? The bet is that no one will and if so, will only cause a small ripple, but we'll just have to see it how plays out,” said Andrew Salzman, Senior Associate at law firm Dezan Shira & Associates, which has offices throughout China and South East Asia.
Given such an ultimatum, FFIs – primarily banks – are getting ready to report by 1 July to central banks or directly to the IRS, depending on what governments have decided – a Model 1 intergovernmental agreement (IGA) whereby the FFI reports directly to their central bank/regulator, which then reports to the IRS, or the FFIs report directly to the IRS themselves, known as Model 2, which only seven jurisdictions have opted for, including Hong Kong.
The uptake of FATCA can be best described as lacklustre in the first years since being enacted. Britain was the first to sign up, in 2012, followed by Denmark, Switzerland and Japan; by the end of 2013, only 13 jurisdictions had signed IGAs. As a result, along with the complexities of wading through 500 pages of legislation, later expanded by a further 500 pages – that was not translated from the English – the FATCA go-live date was delayed multiple times and the US Treasury went on a global offensive to get more countries on-board.
Only this year as the go-live date looms have more countries signed up to FATCA, bringing the total to 34 countries with Model 1 and Model 2 IGAs, while 36 countries have, in the words of the IRS, “reached agreements in substance” to comply – that means that while no IGA has been ratified, the US will treat such jurisdictions as being compliant. Nonetheless, as of June, 123 countries (out of a total of 193 jurisdictions the US recognises worldwide) including China and Russia, have not signed an IGA or reached an agreement in substance. Furthermore, while some 77,000 FFIs have signed up, an estimated 200,000 FFIs have not.
The lack of agreements is raising question marks about how effective the law will be once in force. “I don't know how they will be able to go live on 1 July with so few IGAs signed. I am not saying they should delay again, but is the market ready? Where's Russia? China?” said Camille Barkho, Chief Compliance Officer at the Lebanon and Gulf Bank in Beirut.
The reluctance to sign IGAs has not been, in most cases, due to overtly political reasons but more so to do with issues of sovereignty and the regulatory changes required for FFIs to report to a foreign jurisdiction. Under Chinese banking and tax laws for instance institutions are not allowed to comply with a law such as FATCA. In other jurisdictions privacy laws have had to be overhauled, and in some cases, even changes to the constitution required.
The costs attached to being compliant with FATCA is another factor, with FFIs having to spend anywhere from $25,000, at smaller institutions, up to $1 million for large banks. Indeed, in the IRS’ 2013 Annual Report to Congress, it notes that the Congressional Joint Committee on Taxation estimates that while FATCA “will generate additional tax revenue of approximately $8.7 billion over the next 10 years,” private sector implementation costs could “equal or exceed” the amount FATCA may raise.
Jurisdictions have also taken issue with the law being unilaterally imposed by the US, as have investors. “I am on the record as saying that this is the most arrogant legislation ever penned, as the US is effectively trying to regulate other banks and jurisdictions. It only has teeth as the US is at the centre of the global financial system,” said Simon Black, founder of Sovereignman.com, one of the most popular asset protection websites in the world.
The issue is that while global tax sharing agreements are being mulled, FATCA is essentially a one-way street, of FFIs providing information to the US but getting nothing in return. The US has indicated it is willing to be reciprocal, but whether Washington can in fact do this is a legal gray area. “Are these IGAs even legal? They are not mentioned in the law, they are not passed by Congress, or going through the proper treaty method. And can the US Treasury bind US institutions to be reciprocal when no one has said where the information will come from?” said Salzman.
The threat of the withholding tax and not being able to do business with FATCA-compliant FFIs has spurred countries to sign up to FATCA this year as well as for FFIs to optionally report directly to the IRS. Even Syria, which is under US and EU sanctions, is requiring its banks to be compliant.
But certain jurisdictions clearly will not be playing ball. Iran, which is under the heaviest financial sanctions in modern history, and international pariah North Korea are obvious cases. It is Russia that has taken the strongest stance against FATCA, but only following the Ukraine face-off between Moscow and the West. Within weeks of sanctions being imposed on Russia, Moscow came out to say that Russian banks complying with FATCA would be subject to penalties from the domestic regulator. Indeed, Deputy Finance Minister Alexei Moiseyev told the press in May that Russia will not become “tax agents for the Americans, that will not happen under any circumstances.”
As for China, while Beijing has not signed up, Hong Kong has (Model 2, “in substance”), with commentators speculating it is to see how FATCA plays out in the SAR, and so that FFIs in China do at least have a door to the US market and correspondent banks. A further factor was to retain Hong Kong's financial hub status. “I think a big issue was that Singapore signed up, and there is rivalry between the two as Eastern Asia financial centres. If Hong Kong had not signed US business would use Singapore instead and Hong Kong would get squeezed,” said Salzman.
Beijing has made it clear that while it supports tax sharing initiatives - and is reportedly mulling its own form of FATCA – it wants this done multilaterally not unilaterally. As Liu Xiangmin, deputy director general of legal affairs at the People’s Bank of China, told the press in 2013, “I agree that countering tax evasion is an important policy bill but an uncoordinated extraterritorial measure such as FATCA is unlikely to generate broadly accepted solutions with full consideration of the effects on global financial systems and the conflicts involved...A more co-ordinated multilateral approach should eventually replace the unilateral approach of FATCA.”
While China will not face the issues of some banking centres that have a lot of US citizens on their books, Chinese FFIs will encounter issues dealing with the US and other counterparts as they will not be FATCA compliant. According to the Association of Certified Financial Crime Specialists, only 210 institutions from China and 513 from Russia have registered – compared to 14,835 FFIs in the Cayman Islands and 4,000 in Switzerland.
“Signing the FATCA agreement provides almost all downside and no upside, quid bono FATCA, and China doesn't benefit. Beijing realises that. So they may wait, which is tantamount to financial warfare if China holds out as after July all FFIs will have to gang up on China as not compliant. Would it force the Chinese to sell treasury bills and so on? This is a possibility,” said Black.
The unknown unknowns
This is the unknown factor about what will happen when FATCA goes live. Will there be a slump in business transactions as some 200,000 recalcitrant FFIs will not be able to deal with compliant FFIs? “What happens July 1? There is no line in the sand. There are huge direct costs (of implementing FATCA). As for indirect costs, there will be a loss of business, and it will close the doors on swathes of customers for years or even decades to come,” said Black.
Analysts expect a two-tier financial system to possibly develop: compliant and non-compliant FFIs, with institutions effectively policing one another for compliance. Non-compliant FFIs will clearly deal with one another; compliant FFIs will not, or charge an extra fee.
“Let's assume small and medium sized FIs are not ready, this could have a cascading effect on larger ones, creating a ripple effect,” said Ranjith Kumar, Director at Keypoint, a financial services consulting firm in Bahrain. “But what I believe may happen is that the cost attached to not participating may result in a higher cost of service for financial services, or costs for maintaining the relationship with an FFI. It is unlikely that an FFI will totally stop dealing with them, although there will be a lot of pressure to participate. Some FFIs not critical (to a compliant FFI) for business may be asked to stop doing business.”
A further factor is what may happen with US Treasuries, with overseas institutions holding $5.9 trillion, or 48.5 percent of TBs, more than double the amount held in January 2008, according to the US Federal Reserve.
“What happens when we start shorting payments on our TBs by 30 percent? A sovereign holder is not subject to withholding, but for a private institution, what if the interest payment is done through SWIFT to a commercial bank that has not signed an IGA? Treasury will take the interest,” said Jim Jatras, Manager of RepealFATCA.com, which is lobbying against the law in Washington. “This is the kind of thing that could promote dumping TBs, and affect interest rates and the dollar as a global currency, which are issues nobody has thought out.”
FATCA has arguably already had an effect on US Treasury bills. In March, Russia sold $26 billion, or 20 percent, of its holdings in Treasuries. To offset the sale of TBs by Moscow, Belgium stepped in, becoming the third largest foreign holder of treasuries, although it is not clear if it was Brussels acting independently or through coercion.
“Russia is selling off treasuries – why? Two things came together at once, one FATCA and the other the new advance in Ukraine, as the Russians couldn't anticipate the US response, so sold TBs to be insulated from sanctions,” said Jim Rickards, a veteran Wall Street investor and author of current New York Times bestseller The Death of Money. “Look at the enormous surge in buying TBs through Belgium, it could be (clearinghouse) Euroclear or a third party, or the European Central Bank (ECB) using dollar proceeds from Fed Swaps. Or is it holders in places like the Cayman Islands moving accounts to Belgium to avoid FATCA? It is a good question, and I speculate that FATCA has something to do with it. Russia is dumping, China is not, but they are not buying more and Belgium is, so put all together and we are shuffling deck chairs around on the Titanic.”
It would be ironic if FATCA backfires on the US, as a primary motivation for the Act, and the OECD and G20 mulling multilateral legislation, is that governments are scrambling for tax revenues following the 2008 bailouts of banks due to the financial crisis. Indeed, governments are in debt to the tune of $100 trillion worldwide, with that figure having surged 30 percent since the 2008, according to Bloomberg. What is clear is that FATCA's go live date is bad timing, given the Russia-West standoff, Russia and China strengthening financial ties, and fears in the market of another financial crisis.
“I think we are heading for another financial collapse, and the next one will be bigger than central banks can keep a lid on. Central banks could barely subdue the last crisis and used trillions of dollars to do that, but at this point there's not much left to deal with another crisis, which would be bigger. The only clean balance sheet is the International Monetary Fund's, so it would have to bail out the EU and US,” said Rickards.
Whether another financial crisis is on the cards requires a crystal ball, albeit the fundamentals are pointing in that direction. In any case, there seems to be a global rebalancing in financial power, as the West is in debt and the Asian markets are in much better fiscal health.
“I think we are rapidly seeing more signs of Asian banks becoming increasingly powerful and developing their own financial infrastructure, and places like Hong Kong, Singapore and Shanghai will become more powerful financial centres and the US a secondary system,” said Black. “This creates the conditions for rebalancing as capital goes where it is treated best, and the West goes out of its way to treat savers as poorly as possible. If all the savings are in Asia, and debt and consumption in West, where will power reside?”
Beijing has not made its official position on FATCA crystal clear, other than in not signing an IGA. What is clear is that Beijing is in favour of a multilateral approach to tax sharing initiatives. Furthermore, in January, Beijing introduced new legislation that requires wealthy Chinese citizens to declare their overseas assets – the “Foreign Asset Reporting Requirements” (FARRs). It is similar to the US forerunner of FATCA, Foreign Bank Account Reports (FBAR) – which has a lower reporting threshold of $10,000 – in that the FARR has no requirements for FFIs to file on Chinese account-holders.
The US providing information on Chinese account holders would be of clear benefit to Beijing for tax enforcement purposes, but the US is highly unlikely to do so, even if China signed an IGA. As noted earlier, the legality of reciprocity is a gray area and has essentially been used as a fig leaf by the IRS to coerce jurisdictions into signing up. Additionally, reciprocity on the US side could lead to the loss of significant funds that are parked in US banks, especially in tax havens, which is a reason why US financial institutions are opposed to multilateral tax sharing initiatives (see below).
For China to comply with FATCA, domestic regulations will need to be changed – such as bankruptcy protection rules - which will be onerous and with minimal benefit to the state or Chinese financial institutions. A further factor is that FATCA could affect Beijing's financial dealings with countries under US sanctions, such as Iran and Sudan, with which China has significant trade relations, especially for hydrocarbons, while US dollar transactions for these countries are often transferred via China.
China is in a position to help derail FATCA altogether by not complying. In Beijing not doing so, it would set a strong precedent that could be followed by other countries pulling out, especially if they had minimal business with the US. Indicative is that few of the countries in China's immediate sphere of influence in Western Asia have signed up with the US – Thailand, Malaysia, Cambodia, Vietnam, Myanmar and Laos, as well as US allies the Philippines and Taiwan. Neither has Macau.
However, a financial war is not necessarily in either sides interest, but in the case of FATCA, it was initiated on the US side, and how Washington will respond to China being recalcitrant is not overly clear.
In any case, China has time to see how effective global FATCA-compliance will be before having to make a firm decision either way, as the IRS has deemed 2014 and 2015 a period of transition, with jurisdictions that have to adapt domestic laws to comply with FATCA not to be issued penalties for delays.
Tax Haven Hypocrisy
Overall the roll out and implementation of FATCA has not been well handled by the US. The IRS has implied that it will only gradually enforce FATCA, and will provide FFIs with a degree of flexibility in the first year and a half, with for instance the onerous requirement for banks to sift through all their clients to check for US citizen indicia part of the second phase.
While FATCA is expected to generate $800 million a year for the IRS in tax revenues, commentators suggest the US should look closer to home. “The US is the number one tax haven in the world, yet goes around and terrorizes all these places (through FATCA); the biggest culprit in this charade is the US. If they want to solve the problem, why not make the tax code more attractive?” said Black. “And the funny thing is that most of the money sitting offshore is from the big companies, the Fortune 500, and offshore is permissible under the US tax code.”
Indeed, there is a degree of hypocrisy by the US on clamping down on US tax evaders globally, and requiring FFIs to do so, while still letting it happen within the US and for anyone globally to do so on US territory, such as in Delaware, the top tax haven on the planet. This is preventing the US from being reciprocal when it comes to tax sharing with other countries and, moreover, undermines initiatives for a global move to tackle tax evasion.
“Delaware is highly protected by political lobbies in the US. A huge number of Fortune 500 companies use Delaware, and that is why it will be so hard to push through reciprocity in Congress,” said John Christensen, director of the Tax Justice Network in London. “Perhaps some of the most extraordinary discussions I've had have been in (the state of) Wyoming, where service companies and trust companies seem to compete with one another on being devastatingly secret and illegal. It is real Wild West territory and beyond the federal government. In terms of scale it is not like Delaware but tends to be attracting low life activities, not the Fortune 500, so a bottom feeder.”
To Christensen, FATCA is a good move, and if handled right will push forward initiatives at the G20 and OECD for greater tax sharing initiatives. Indeed, the days of tax havens are limited it seems, although the loopholes need to be stopped. “There is definitely a movement by the OECD for a global tax system and the impediment has been tax havens, Swiss banks and so on, but one by one those dissenters have been knocked out,” said Rickards.
China is for such a global tax sharing initiative, as the People’s Bank of China has stated, while at the 18th Party Congress there was agreement for giving priority to greater political transparency and the rule of law.
For a global tax initiative to work, major economies need to be on-board and especially emerging economies, which have more often than not been the victims of capital flight and tax evasion by the political and economic elites. Done well, a global tax initiative would circumvent concerns about sovereignty, which Christensen regards as “a great rhetorical device.”
“My view is that any country that is unable to tax its own citizens as they are using offshore accounts and tax havens have long since lost sovereignty in tax matters, and need tax measures, including FATCA. For me the sovereignty argument is bogus,” he said.
Some analysts have suggested that FATCA should be delayed to take into account G20 and OECD initiatives. “If FATCA was delayed a final time and its launch coincides with OECD tax initiatives it would make sense, as a tax exchange system would be more powerful and global. I bet China would join, and no one would say this is just from the USA, it would be a worldwide trend to be ethical,” said Barkho.
As for the impact of FATCA on the global financial system, the US markets and non-compliant institutions, as well as on future tax sharing initiatives, we will have to wait and see. “There are certainly some people opposed to FATCA and want it to fail – US overreach, impact on the dollar, and predicting doom and gloom. With this being so open-ended and not knowing how it will go, people choose their own narrative,” said Salzman.
Vietnam – Japan upgrade ties to extensive strategic partnership
在推行「高鐵外交」的同時，中國正展開「新絲綢之路外交」。去年九月，中國國家主席習近平在訪問中亞四國期間，提出共同建設「絲綢之路經濟帶」的構想，同年九月，中國總理李克強在參觀中國 – 東盟博覽會展館時也首次提出「要鋪就面向東盟的海上絲綢之路」。值得注意的是，中共十八屆三中全會審議通過的《中共中央關於全面深化改革若干重大問題的決定》以及去年十二月舉行的中央經濟工作會議，都明確提出要推進「絲綢之路經濟帶」和「海上絲綢之路」的建設。
值得一提的是，今年緬甸是東盟輪值主席國，該國在地區性議題以及地區性的合作與發展都會起着一定的重要作用。此外，今年上半年，東盟將會在緬甸商討「東盟 – 香港自由貿易協議」，若達成協議，將會進一步促進和擴闊香港與東盟成員國的經貿關係，創造更多商機。
Look Before You Leap
一、有關協商的內容和頻次。1. 第七條。職工一方可以就多項或者某項內容與企業進行集體協商，簽訂集體合同；2. 第八條。工資集體協商一般情況下一年進行一次，集體協商雙方可以就下列多項或者某項內容進行協商：1). 工資分配制度、工資標準；2). 工資支付辦法、支付時間；3). 年度工資總額和職工平均工資水準；4). 工資調整幅度和調整辦法；5). 津貼、補貼標準及獎金等分配辦法；6). 試用期、病事假期的工資待遇；7). 工資集體合同的起止時間、變更、解除職工工資集體合同的程式；8). 工資集體合同的終止條件；9). 工資集體合同的違約責任；10). 雙方認為應當協商的其他有關工資事項；3. 第十條。有下列情形之一的，職工一方和企業均可以提出工資調整的協商要求：1). 本企業勞動生產率和經濟效益變動的；2). 本地區城鎮居民消費價格指數持續較大變動的；3). 當地人民政府發佈的工資指導線變動的。