China
What’s at stake in decoupling innovation?
Author: Andrew Kennedy, ANU
Some degree of ‘decoupling’ between the United States and China is already underway, but it remains unclear how far it will go and what it could mean for the world. Much of the analysis so far has focused on the potential decoupling of high-tech supply chains and product markets. Even so, decoupling could also curtail transnational connections between national innovation systems, reshaping how high-tech products and knowledge are created in the first place.
Transnational innovation linkages have become increasingly important in recent decades. Multinationals invest growing sums in global research and development (R&D) networks, scientists increasingly collaborate with colleagues overseas, and ‘brain circulation’ between countries has become entrenched. What would decoupling mean for these growing cross-border connections?
In some regards, China remains a small player in transnational innovation. Between 2000 and 2019, Chinese organisations participated in 12 per cent of all multinational R&D alliances, while US organisations participated in 62 per cent. Foreign firms have also limited their R&D activity in China due to concerns about intellectual property protection, cybersecurity policies, limited local talent and compliance with Chinese standards.
While Chinese firms’ investment in R&D abroad has increased in recent decades, much of this activity reflects the expansion of just one firm — technology giant Huawei. Chinese firms more generally remain marginal players in the innovation systems of OECD countries.
The United Kingdom is a striking example. A remarkable 53 per cent of all business R&D spending in the country came from foreign firms in 2018. Chinese firms accounted for just 2 per cent of this number. US firms accounted for 40 per cent, non-UK European firms made up 29 per cent, and Japanese firms contributed 7 per cent.
China has become a major player in other aspects of transnational innovation, however. China has clearly emerged as a key global partner in basic scientific research. China-based scientists contributed to 23 per cent of the more than 1.5 million scientific articles featuring authors from multiple countries between 2016 and 2019. They were second to only their counterparts in the United States, who contributed to 42 per cent.
China’s rise as a key partner in basic science reflects close collaboration with the United States in particular. China is now the leading source of co-authors for US-based scientists, eclipsing traditional partners like the United Kingdom and Germany. More than 12 per cent all of scientific articles published by US-based scientists from 2016 to 2019 featured a China-based co-author. China-based scientists are also key collaborators for counterparts in Australia, Canada, Japan, and the United Kingdom.
China also plays a critical role in cross-border flows of the ultimate ingredient in innovation: brainpower. The annual number of Chinese students going abroad jumped from 144,000 in 2007 to more than 700,000 in 2019. While many of these students return home after completing their studies, the circulation of Chinese brainpower has also enriched other countries. This is not only because Chinese students spend money in their host countries, but also because Chinese migrants enrich pools of human capital abroad.
In 2015–2016, there were 4.6 million migrants from China in OECD countries, 2 million of which had post-secondary educations — an increase of roughly 300,000 since 2010–2011. This growing pool of mobile human capital contains many of China’s most talented graduates, since China still struggles to bring back its best and brightest.
The United States has been the most obvious beneficiary of the circulation of Chinese brainpower. US universities attract more Chinese students than those of any other country in the world, and many of these students pursue graduate degrees in science and engineering (S&E). Students from China earned 32 per cent of all S&E doctorates awarded to foreign students in the United States between 2000 and 2017.
In addition, most of these new PhD graduates remain in the United States to work. Between 2011 and 2013, 11,000 Chinese students earned doctorates in S&E fields from US universities. As of 2017, 83 per cent of them were still in the country.
The ability of the United States to attract Chinese brainpower is also clearly evident in emerging fields like artificial intelligence (AI). A recent study of top AI researchers trained in China found that three-quarters had moved…
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
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- 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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