Issue Two 2009
Following China’s accession to the World Trade Organisation (WTO) in 2001, the country’s prominence in global trade has continued to grow. Despite the global downturn, China’s total foreign trade reached $2.55 trillion in 2008, according to the General Administration of Customs. Companies transacting in foreign currency are particularly exposed to the risks presented by exchange rate fluctuations and this became a particular consideration for companies operating in China in 2005, when the renminbi was unpegged from the US dollar. In this issue’s China Focus article, we look into the different types of FX risk that companies face and consider what they can do to manage their exposures.
It has been reported that around 6.5m graduates will flood the Chinese employment market this year alone. While the government has said it is looking to create 9m jobs to satisfy demand, employers and managers will increasingly be looking beyond qualifications when assessing a candidate’s suitability for a post or promotion. In our Treasury Practice article, we assess the importance of soft skills, which are those qualities that say something about your character, your motivations and the way you address others. We consider what role these skills play in the business environment.
Meanwhile, in Question Answered, we hear about the Implementation Regulations for Special Tax Adjustments (‘STA rules’) released by the State Administration of Taxation in January 2009. The STA rules cover transfer pricing procedures as well as other requirements relating to thin capitalisation, general anti-avoidance laws and cost sharing agreements. Our expert contributor focuses on the implications of the rules for MNCs operating in China.
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