Extra tax slapped on ‘super cars’ in China
Red carpet for Chinese investors
THE Cambodia-China Business Forum drew hundreds of Chinese investors to Phnom Penh yesterday to discuss opportunities to take a stake in Cambodia’s rapidly developing economy.
The high-profile investment conference, held under the tagline “Cambodia: The Kingdom of Opportunity Along The ‘One Belt, One Road”, saw representatives of more than 200 Chinese companies gather at a hotel conference centre on the outskirts of the capital. The fullday event was jointly organised by Cambodian conglomerate LYP Group, owned by CPP Senator Ly Yong Phat, and China Minsheng Investment Group (CMIG), China’s largest private investment group.
The gathering, which comes just a month after Chinese President Xi Jinping’s visit, explored investment opportunities for Chinese companies in Cambodia’s fast-growing economy, reviewed case studies of previous Chinese FDI, and ended with a number of investment deals signed.
The biggest of these was a $1.5 billion deal between LYP Group and property developer SRE Group, a Hong Kong-listed subsidiary of CMIG, to develop the Cambodia-China Friendship City on 550 hectares north of the capital.
Seng Nhak, director of LYP Group, said the development would include an international five-star hotel, a television broadcasting studio, a sports stadium, an 18-hole golf course and other entertainment facilities.
“We are now working on this project,” he said.
“What’s most important for us is to cooperate with CMIG to establish an extraordinary international city that will be useful for people to live sustainably here.”
In his opening address, Prime Minister Hun Sen welcomed Chinese investors attending the conference and highlighted the depth of Chinese investment in Cambodia.
“In the last five years, China represented the biggest source of foreign investments in Cambodia, with an investment capital of $4.9 billion, of which some $560 million has been invested in our special economic zones,” he said.
In Channy, president of Acle- da Bank, said the conference reflected the continued growth of bilateral relations, which has seen significant Chinese investment into major Cambodian economic and development projects.
“The size of Chinese investment in Cambodia is huge – it’s number one in terms of size,” he said.
“The main draw for this investment is the confidence of Chinese investors in Cambodia’s economic growth and political stability.”
Representatives of Chinese companies attending the forum expressed optimism in Cambodia’s economic development, and hinted at more investment to come.
Chen Yi Qin, chief operating officer of Zhejiang Provincial Energy Group, said strong historic ties between China and Cambodia had given Chinese companies confidence in their investment here. Moreover, Cambodia’s rapid economic growth in recent years was creating fresh business opportunities for his company.
“The energy industry in Cambodia has great potential for market growth in the near future,” he said. “In every industry you need energy.”
Zhang Nan, deputy general manager of Sinosteel Corporation, a state-owned mining and metals trading firm, said the company was planning to expand its presence in the Kingdom.
“We expect to sign an agreement next year for an industrial park,” she said.
“Under our leadership as a central state-owned enterprise in China, there will be a lot of related enterprises and factories flocking over to Cambodia.”
Wrapping up yesterday’s forum, LYP Group signed a memorandum of understanding (MoU) with 14 Chinese banks to fund investments of Cambodian industries and the ‘One Belt One Road’ project. Company representatives declined to discuss the details of the agreement. CHINA has imposed an extra 10 percent tax on ultra high-end cars costing over 1.3 million yuan ($190,000) such as Lamborghinis and Ferraris, the government said, the latest step in a wide crackdown on conspicuous luxury consumption.
Under President Xi Jinping the Communist Party has overseen a sprawling campaign against graft and encouraged thrift among the country’s political and economic elites, targeting showy displays of wealth.
The new tax took effect yesterday and was intended to “guide rational consumption” and promote energy-efficient vehicles, the Finance Ministry said in a statement late on Wednesday.
“The tax increase is a display of the government’s attitude of advocating frugality,” said Cui Dongshu, secretary-general of the Passenger Car Association, according to Bloomberg News.
China already taxes imported vehicles at a high rate, slapping a 25 percent tax on all foreign cars shipped to China.
Massive growth
The duties – and increased competition from cheaper domestic marques – have driven overall car imports down two years in a row, with 850,000 vehicles imported in the first 10 months of the year, down 6.4 percent from 2015, according to customs statistics.
But ultra high-end brands such as Ferrari have done well, with the Italian sports-car maker seeing a 26 percent surge in its second-quarter sales this year, with 160 units delivered.
The extra charge will likely hit Ferrari and brands such as Aston-Martin, Rolls-Royce, and Lamborghini, as well as topend models of Mercedes and BMW.
Luxury carmakers have seen massive growth in China, the world’s largest auto market, despite the anti-corruption campaign.
They have also become potent symbols of the lavish lifestyles of the nouveaux riches during a time of surging wealth inequality.
Elite families often hire fleets of pricey cars for wedding processions, and wealthy secondgeneration heirs film themselves racing ultra-luxur y sports cars in cities at night.
A notorious 2012 Ferrari crash that killed the son of a high-level official disrupted a once-in-a-decade party leadership change and precipitated his father’s downfall.