Chinese New Year celebrations unfortunately are being overshadowed this year by virus fears, but let’s not let fear get in the way of embracing the start of the Year of the Rat on January 25 and what it stands for. The rat is the first of the 12 animal cycles, so it represents renewal and new beginnings. This seems very appropriate for the start of a new decade. 2020 is the Year of the Metal Rat so it is a year for strength and determination regarding goals and aspirations on the way to prosperity and luck for almost all the Chinese Zodiac signs.
Also, with the new year beginning China remains a focal point for many and certainly for NeuGroup.
- On February 26, we have a pilot meeting planned in Shenzhen for our Asia Tech20 Treasurers’ Peer Group to bring together Asia-based tech companies in the same way that we have in the US with its sister group. This effort is being supported by our Tech20 members at Alibaba and TSMC and our sponsor partners at MUFG.
- On April 15, GM will be hosting our AsiaCFO Peer Group for MNC regional and greater China CFOs in Shanghai.
On the agenda for both meetings will be how to navigate the latest turn in the US-China trade war, following the Phase I agreement. Tracking the “western” sentiment of Chinese consumers toward brands and companies will also be a discussion topic and no doubt health risks will be a topic, too.
Our last meeting of AsiaCFO, sponsored by Deutsche Bank, had a session on the impact of Chinese income tax changes on western companies and expatriate employees by KPMG that garnered great interest.
- “The most significant reform of China’s individual income tax (IIT) laws in 38 years has numerous implications for foreign workers and the multinational corporations that employ them… CFOs—who are responsible for income reporting—need to proactively dig into the details of the changes with tax advisors and coordinate closely with human resources departments to develop retention policies that address the potentially negative financial effects the new rules may have for some employees. These include changes in the treatment of annual bonuses and equity incentives—although not all details have been announced.”
Also fascinating was a session led by the consulting firm Sinolytics on the corporate impact of China’s social credit system:
- The system covers virtually all aspects of a company’s business in China. A multinational is subject to approximately 30 different regulatory ratings—many industry-specific— and compliance records, most of which have already been implemented.
- Each rating is computed based on a set of rating requirements. In total, an MNC can expect to be rated against approximately 300 such requirements.
- Some requirements create strategic challenges for companies, including those relating to the behavior of business partners such as suppliers and service providers. This burdens companies with the responsibility of monitoring their partners’ trustworthiness.
- The corporate SCS uses real-time monitoring and processing systems to collect and interpret big data, which allows immediate detection of compliance and determines a company’s social credit score.
Contact us to learn about how NeuGroup can connect you for knowledge exchange and with insight distilled from these exchanges to help you make the most of the opportunity to succeed in the Year of the Rat.