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23rd January 2025
 
THE HOT STORY
Why foreign law firms are leaving China
The Economist reports on the exodus of foreign, and particularly American, law firms from China. According to analytics company Leopard Solutions, 35 of the top-tier US firms that maintained operations in Beijing and/or Shanghai at the end of 2023 had, one year later, reduced their presence or left entirely. While business has undoubtedly been drying up as the Chinese economy cools, other developments may also be affecting foreign firms' thinking - for example, China's increasingly strict rules on data privacy and the transfer of information abroad. “People are not crazy to worry that they could end up in big trouble,” observes one foreign lawyer.
TAX
Hong Kong eyes tax hike for top earners
Hong Kong's government is considering raising taxes on high earners for the second consecutive year to address budget shortfalls. Officials have discussed increasing the 16% tax rate on individuals earning HK$5m or more and potentially lowering the income threshold for the highest tax bracket. Financial Secretary Paul Chan emphasized the need for balance, saying, “It is crucial to maintain Hong Kong's competitive advantage of a simple and low tax system.” The city is facing a revised deficit estimate of nearly HK$100bn, prompting discussions on austerity measures. Despite the proposed increases, Hong Kong's tax rates remain competitive compared to other global financial centres. The budget announcement is scheduled for February 26.
LEGAL
Major brands ditch Fuji TV over scandal
Dozens of major Japanese companies have withdrawn their commercials from Fuji Television following allegations of a cover-up related to a sex scandal involving Masahiro Nakai, a former member of the popular band SMAP. The scandal emerged after a report by Shukan Bunshun revealed a ¥90m ($580,000) settlement between Nakai and a woman over an alleged sexual assault at a 2023 dinner party. Despite Nakai's denial of violence, the fallout led to significant ad pullouts, with over 50 companies, including Nissan and Toyota, ceasing their advertisements. Fuji TV President Koichi Minato acknowledged the company's failure to disclose the issue earlier, saying, "We will investigate the case," while facing criticism for a lack of transparency. The incident highlights ongoing issues within Japan's entertainment industry, which has been grappling with numerous sexual assault allegations.
Deployment of Filipino workers to Kuwait may be banned
The Philippine government's Department of Migrant Workers (DMW) may implement a ban on deploying workers from the country to Kuwait, citing the recent deaths of two Filipino workers in the Middle Eastern nation. Migrant Workers Secretary Hans Cacdac stated that “We are evaluating whether suspending deployment will help. At the same time, we must also consider the opportunities for those with safe and stable jobs.” Additional measures are also being considered to ensure the safety of the hundreds of thousands of Filipino workers currently employed in Kuwait.

 
MSN
WORKFORCE
China's population crisis deepens
China's population has declined for the third consecutive year, falling by 1.39m to 1.408bn, as reported by the National Bureau of Statistics (NBS). The demographic change, which began in the 1980s, has worsened since 2022 when deaths outnumbered births for the first time in over six decades. The NBS highlighted that “the adverse effects brought by the external environment are increasing,” contributing to insufficient domestic demand and economic challenges. Despite efforts by Beijing to boost the birth rate, including subsidies and social pressure on single women, the trend remains downward.
HEALTH & WELLBEING
Trump announces US withdrawal from World Health Organization
President Donald Trump is withdrawing the US from the World Health Organization. He has long been critical of the United Nations’ health agency and believes the US pays too much money to the organisation compared to other countries. The text of Monday’s executive order cites the “organisation’s mishandling of the COVID-19 pandemic that arose out of Wuhan, China, and other global health crises, its failure to adopt urgently needed reforms, and its inability to demonstrate independence from the inappropriate political influence of WHO member states,” as reasons for withdrawal. “That’s a big one,” Trump told an aide as he began to sign the executive order.

 
CNN
RISK
Climate crisis could halve growth, actuaries claim
The Institute and Faculty of Actuaries (IFoA) has released a report warning that global economic growth could decline by 50% between 2070 and 2090 due to the severe impacts of climate change. Sandy Trust, the report's lead author, said: “There is no realistic plan in place to avoid this scenario.” The report, titled Planetary Solvency – finding our balance with nature, criticises current economic theories that overlook the risks posed by nature degradation. It highlights that without urgent action to decarbonise and restore ecosystems, the world faces catastrophic consequences, including potential state failures and mass migration.
INTERNATIONAL
Trump orders federal workers to return to the office five days a week
President Donald Trump has ordered federal workers to return to the office five days a week. The mandate would compel large numbers of white-collar government employees to forfeit remote working arrangements, in a reversal of the trend that began as a response to the COVID-19 pandemic. In a statement posted to the White House website, Trump ordered all heads of departments and agencies to "take all necessary steps to terminate remote work arrangements and require employees to return to work in-person at their respective duty stations on a full-time basis, provided that the department and agency heads shall make exemptions they deem necessary." Having more federal employees work from the office has long been a focus for Republicans. "Service backlogs and delays, unanswered phone calls and emails, and no-show appointments are harming the health, lives, and aspirations of Americans," wrote Iowa Senator Joni Ernst in a report released late last year.
Teen workers in UK take legal action against McDonald's
Over 700 teenagers in the UK are suing McDonald's, alleging harassment and discrimination in the workplace. Thomas Beale, head of the bullying & harassment team at Bolt Burdon Kemp, condemned the fast-food giant for its "abhorrent abuse of power," and highlighted the lack of action taken despite previous claims of sexual harassment. Young employees reported being bullied, subjected to homophobic comments, and even solicited for sexual favours by managers. The law firm Leigh Day is representing the claimants, and urges all current staff under 20 to join the legal action as they could be entitled to bring claims just for having been exposed to a culture of inappropriate conduct. McDonald's has said it is committed to ensuring a safe workplace but faces increasing scrutiny following the enactment of the Worker Protection Act.
Commerzbank employees are worried about job cuts report
Reports that Germany's Commerzbank is considering cutting thousands of jobs as it contends with an unwanted advance from Italy's UniCredit have unsettled staff, a senior trade union official has said. Frederik Werning, a Verdi trade union official and a member of the supervisory board at Germany's second-largest lender, said rumoured redundancies reported in the Financial Times on Saturday, citing two sources familiar with the matter, had caused "uncertainty among employees." The union's "absolute priority" was to "consistently represent and defend employees," Werning said.
OTHER
China's retailers launch measures to drive Spring Festival sales
With China's consumers increasingly prioritising value for money, retailers and local governments are rolling out attractive discounts and subsidy plans for the Spring Festival shopping season. Aldi has introduced around 300 low-priced special goods in Shanghai, with over 200 items priced below 100 yuan. Online retailers like Tmall and Pinduoduo are offering significant government subsidies on home appliances, with discounts reaching up to 40%. Local governments are also issuing consumption coupons to stimulate spending, with Ningbo's government announcing 200m yuan in coupons to boost consumption during the Spring Festival.
 


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