China
The renewable energy transition is coming to Asia
Author: Tim Buckley, Institute of Energy Economics and Financial Analysis
The COVID-19 pandemic has changed the world. It is a truly global threat, ignoring national borders and domestic politics. But this pandemic highlights the need for a global response to a second key global threat: climate change. It is now more important than ever to listen to the advice of experts before it’s too late.
Despite the current global economic shutdown, the global energy transition is well underway. This transition is being driven by renewable energy technology that disrupts incumbent industry business models, much like the rise of the mobile phone and the internet.
The technology disruption is fundamentally reshaping the global energy landscape. A key impetus is the dramatic, ongoing deflation in the cost of solar energy and battery storage. Both have seen costs drop 80 to 90 per cent over the last decade and the Institute for Energy Economics and Financial Analysis (IEEFA) expects both to halve again in the coming decade. Renewables are now a cheap source of energy generation, beating the costs of new imported coal.
Such a global market transformation has significant implications for energy security.
India, for example, imported some US$250 billion worth of fossil fuels in 2019, both a massive economic drain and a major energy security risk. Leveraging renewable energy resources — wind, solar and hydro — allows for domestic diversification away from imports and helps reduce energy security risks. India is targeting 450 gigawatts of renewables by 2030.
China has been the world’s largest investor in renewable energy in the last decade. The IEEFA expects Chinese renewables to reach grid parity with coal-fired power nationally in 2020 as capacity expansions drive economies of scale and continuing deflation.
While South and Southeast Asia have been renewables laggards, Asia is nevertheless on the cusp of a dramatic pivot. Recent developments across India, China, Japan, South Korea, Vietnam and Taiwan highlight the potential for change.
Back in 2016–17, India’s then Energy Minister Piyush Goyal accelerated the use of online reverse auction tenders for the supply of renewable energy for a term of 25 years with zero indexation, backed by bankable central government contracts.
The result was staggering.
In one year, the price of tariffs dropped by 50 per cent to below Rs 3 per kilowatt-hour (US$40 per megawatt hour). This price was 30 per cent below the cost of existing domestic thermal generation and 50 per cent below new imported thermal power. Since then, India has taken advantage of global investor interest to invest US$10 billion annually in renewable infrastructure.
In the last decade, India has scrapped plans to build 600 gigawatts of new coal-fired power plants, including 46 gigawatts in 2019 alone. Stranded asset losses in the Indian thermal power sector have reached US$60 billion.
This promise of low-cost, domestic, zero-emissions renewable energy is yet to be realised in Southeast Asia. But this will change dramatically, with finance playing a key role.
In the first half of the last decade, global financial giants provided the bulk of debt and equity capital for investment in new coal-fired power plants across Asia. But the global investor push to align with the Paris Agreement has seen coal jettisoned as the most carbon-intensive fuel source and the one easiest to replace. As of today, 129 globally significant financial institutions have formal coal divestment or exclusion policies.
But coal financing is not totally out of fashion yet. In the last five years, government-owned export credit agencies (ECA) of just three countries — China, Japan and South Korea — funded the majority of the world’s new coal-fired power plants.
In 2016–17, China was ‘Going Global’. An IEEFA report in January 2019 revealed Chinese financial institutions had committed US$36 billion for over one-quarter of the 399 gigawatts of coal plants currently under development outside China. Most of the power projects span Asia, from Pakistan to Bangladesh to Vietnam.
But with the energy disruption accelerating globally, the US–China trade war and COVID-19 have massively impacted coal financing.
One analysis demonstrates this dramatic change when looking at China’s commitment to its Belt and Road Initiative. China’s outbound ECA finance for power generation dropped by two-thirds in 2018 from a peak of US$18 billion in 2017 and then dropped again in 2019 to a decade low of just US$2 billion.
Japan has been pivoting away…
Business
China’s Golden Rooster Film Festival Kicks Off in Xiamen – Thailand Business News
The 2024 China Golden Rooster and Hundred Flowers Film Festival began in Xiamen on Nov 13, featuring awards, cultural projects worth 31.63 billion yuan, and fostering international film collaborations.
2024 China Golden Rooster and Hundred Flowers Film Festival Opens
The 2024 China Golden Rooster and Hundred Flowers Film Festival commenced in Xiamen, Fujian province, on November 13. This prestigious event showcases the top film awards in China and spans four days, concluding with the China Golden Rooster Awards ceremony on November 16.
The festival features various film exhibitions, including the Golden Rooster Mainland Film Section and the Golden Rooster International Film Section. These showcases aim to highlight the achievements of Chinese-language films and foster global cultural exchanges within the film industry.
On the festival’s opening day, a significant milestone was reached with the signing of 175 cultural and film projects, valued at 31.63 billion yuan ($4.36 billion). Additionally, the International Film and Television Copyright Service Platform was launched, furthering the globalization of Chinese film and television properties.
Source : China’s Golden Rooster film festival opens in Xiamen – Thailand Business News
China
Italy and China New DTA Set to Take Effect in 2025: Important Changes and Implications
Italy ratified an upgraded Double Tax Agreement (DTA) with China, effective in 2025, to reduce tax burdens, prevent evasion, and enhance investment. The DTA introduces modern provisions aligned with international standards, targeting tax avoidance and improving dispute resolution for Italian businesses.
Italy recently ratified the upgraded Double Tax Agreement (DTA), which will finally take effect in 2025. This agreement was signed in 2019 and was designed to reduce tax burdens, prevent tax evasion, and promote Italian investment in China.
On November 5, 2024, Italy’s Chamber of Deputies gave final approval to the ratification of the 2019 Double Tax Agreement (DTA) between Italy and China (hereinafter, referred to as the “new DTA”).
Set to take effect in 2025, the new DTA is aimed at eliminating double taxation on income, preventing tax evasion, and creating a more favorable environment for Italian businesses operating in China.
The ratification bill for the new DTA consists of four articles, with Article 3 detailing the financial provisions. Starting in 2025, the implementation costs of the agreement are estimated at €10.86 million (US$11.49 million) annually. These costs will be covered by a reduction in the special current expenditure fund allocated in the Italian Ministry of Economy’s 2024 budget, partially drawing from the reserve for the Italian Ministry of Foreign Affairs.
During the parliamentary debate, Deputy Foreign Minister Edmondo Cirielli emphasized the new DTA’s strategic importance, noting that the agreement redefines Italy’s economic and financial framework with China. Cirielli highlighted that the DTA not only strengthens relations with the Chinese government but also supports Italian businesses, which face increasing competition as other European countries have already established double taxation agreements with China. This ratification, therefore, is part of a broader series of diplomatic and economic engagements, leading up to a forthcoming visit by the President of the Italian Republic to China, underscoring Italy’s commitment to fostering bilateral relations and supporting its businesses in China’s complex market landscape.
The newly signed DTA between Italy and China, introduces several modernized provisions aligned with international tax frameworks. Replacing the 1986 DTA, the agreement adopts measures from the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project and the OECD Multilateral Instrument (MLI), targeting tax avoidance and improving dispute resolution.
The Principal Purpose Test (PPT) clause, inspired by BEPS, is one of the central updates in the new DTA, working to prevent treaty abuse. This clause allows tax benefits to be denied if one of the primary purposes of a transaction or arrangement was to gain a tax advantage, a move to counter tax evasion through treaty-shopping.
| This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
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Business
China’s New Home Prices Stabilize After 17-Month Decline Following Support Measures
China’s new home prices fell for the 17th month in October, declining 0.5% from September, but slowing, indicating potential market stabilization amid supportive measures. Second-hand home prices showed mixed trends.
Decline in China’s Home Prices Stabilizes
China’s new home prices continued to decline in October for the 17th consecutive month, although the drop showed signs of slowing. Recent support measures from Beijing appear to be inching the market toward stabilization, as evidenced by a lighter decline compared to earlier months.
Monthly and Yearly Comparisons
According to the latest data from the National Bureau of Statistics, new home prices across 70 mainland cities fell by 0.5% from September, marking the smallest decrease in seven months. Year-on-year, prices dropped by 6.2%, slightly worse than the September decline of 6.1%. In tier-1 cities like Beijing and Shanghai, prices decreased by 0.2%, a smaller fall than 0.5% in the previous month.
Second-Hand Home Market Trends
Second-hand home prices in tier-1 cities experienced a 0.4% increase in October, reversing a 13-month downward trend. Conversely, tier-2 cities observed a 0.4% drop in second-hand prices, while tier-3 cities faced a similar 0.5% decline. Overall, recent trends indicate a potential stabilization in China’s property market.
Source : China’s new home prices slow 17-month decline after support measures kick in
- China’s Golden Rooster Film Festival Kicks Off in Xiamen – Thailand Business News
- Italy and China New DTA Set to Take Effect in 2025: Important Changes and Implications
- China’s New Home Prices Stabilize After 17-Month Decline Following Support Measures
- U.S. national debt is its Achilles’ heel, but China sees it as an opportunity
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