Many listed companies in China have recently received notices that they must pay back taxes from several years ago. Some back taxes date as far back as 30 years and amount to hundreds of millions or even billions of yuan. Private enterprises have gone silent after hearing this news, with some announcing that they will cease operations. Last week, seven large companies in Guangdong went bankrupt, including some that had been operating for 30 years.

A recent announcement that companies need to pay back taxes over a 30-year period has caused unease among many enterprises in China and has drawn public attention. On June 13th, VV Drink Co. announced that it had received a notice from China’s tax bureau requiring the company’s former subsidiary to pay over 85 million yuan in unpaid consumption taxes dating from 1994 to 2009. Other companies like Shanghai Shunho New Materials Technology Co., Peking University Healthcare Corp., ChinaLin Securities Co., and LianTronics followed with similar tax repayment announcements, with BoHui Chemical Technology Co. ordered to pay 500 million yuan (US$ 69 million) and consequently issuing a production halt notice.

A lawyer commented that retroactively taxing companies on the past 30 years presumes guilt and violates administrative law principles. He stated that China’s economic downturn has severely reduced government fiscal revenue, leaving tax collection as their only income source, but that pursuing more taxes will only force more private enterprises out of business and increase unemployment.

The report notes examples of companies in Guangdong being taxed retroactively for 20-25 years. A banker noted that, despite local government salary cuts, governments are still in need of more tax revenue due to strained finances. Concerns were raised that taxing private enterprises so heavily could threaten livelihoods.

Source: Radio Free Asia, June 18, 2024
https://www.rfa.org/mandarin/yataibaodao/jingmao/ql2-06182024033604.html

China has a South–North Water Transfer Project to channel fresh water from the Yangtze River in southern China to the more arid and industrialized north, with Beijing as one of the destinations for water transfer. Xinhua reported that by June 12, the project has transferred 10 billion cubic meters of water to Beijing since December 2014 when the first phase of the project started operation.

According to Xinhua, the “southern water” piped in from the Yangtze has met the water quality requirement and directly benefited over 16 million people. It has become the main water supply source for Beijing. However, despite the “southern water” supplying Beijing, the megacity continues to face a severe water shortage.

Source: Xinhua, June 12, 2024
http://www.news.cn/politics/20240612/8bbcbe099a2c44b991261c19d9d1b2fa/c.html

As college graduates in China are having a hard time landing jobs, People’s Daily published an article suggesting that graduates “reset their career perceptions.”

The article acknowledged that college graduates are facing “employment difficulties.” However, certain small cities and rural areas and certain industries have “recruitment difficulties” and “labor shortages” — according to People’s Daily, the “job paradox” is due to graduates’ (possibly unrealistic) preferences for jobs with internet platform enterprises, technology companies, modern service industries, or government jobs. Among the 2024 job-seeking graduates, 62 percent want to work in state-owned enterprises or government agencies, the article reported.

The article’s proposed solution to the difficulties facing graduates is to “mobilize the government, universities, and companies to change students’ job perspective.” The government should increase its promotional efforts and actively guide college graduates to adopt new career perspectives; universities should actively develop new career concept training and labor education courses, strengthen school-enterprise connections, take companys’ order to train students with specific, targeted skills; companies should expand career development opportunities and enhance their attractiveness; families should create a diligent and progressive atmosphere for their children’s healthy growth and future career development; and university graduates should be independent and face the reality.

{Editor’s Notes: China produces around 10 million college graduates each year, and there are just not enough white-collar jobs to employ all of them. On the other hand, manufacturers face shortage of labors. Jobs in manufacturing, however, are not only low paid (many have been filled by migrant workers, i.e. rural peasants who have migrated to cities) but also lack in job security (as many employers in the manufacturing sector face the pressure of a tough economy and the squeeze from the State-Owned Enterprises (SOE’s) that the government wants to expand).}

Sources: People’s Daily, June 14, 2024
http://theory.people.com.cn/n1/2024/0614/c40531-40256286.html