John Kerry attends a meeting with Chinese Premier Li Qiang at the Great Hall of the People in Beijing. EPA
John Kerry attends a meeting with Chinese Premier Li Qiang at the Great Hall of the People in Beijing. EPA
John Kerry attends a meeting with Chinese Premier Li Qiang at the Great Hall of the People in Beijing. EPA
John Kerry attends a meeting with Chinese Premier Li Qiang at the Great Hall of the People in Beijing. EPA

US envoy John Kerry says climate co-operation could redefine ties with China


  • English
  • Arabic

China and the US could use climate co-operation to redefine their troubled relationship and lead the way in tackling global warming, Washington's climate envoy John Kerry told senior Chinese officials on Tuesday.

Mr Kerry's three-day visit to China aimed at reviving climate co-operation between the world's top greenhouse gas emitters has coincided with waves of extreme weather across the planet, including a heat dome in the western US that brought temperatures in California's Death Valley to 53°C on Sunday.

“Our hope is that this can be the beginning of a new definition of co-operation and capacity to resolve differences between us,” Mr Kerry told top diplomat Wang Yi in a meeting in the Great Hall of the People, China's cavernous legislative building.

Addressing Premier Li Qiang, Mr Kerry warned that the situation could get worse this summer, and cited reports that a weather station in China's north-western Xinjiang region had recorded an all-time high temperature of 52.2°C on Sunday.

“The predictions are much more serious than they've ever been,” Mr Kerry added after an unusual interruption by Mr Li expressing doubt about the Xinjiang temperature.

Mr Li acknowledged later in the meeting the severe climate impacts facing China and elsewhere, according to people in the room.

He urged rich countries to “take the lead” in cutting emissions and meet their commitments to provide climate financing to developing nations, the official Xinhua news agency reported.

Speaking at a conference on environmental protection, Chinese President Xi Jinping reiterated the country's “unwavering” commitments to tackling climate change, Xinhua said in a separate report on Tuesday.

“But the route, method and intensity used to achieve this goal should and must be determined by ourselves, and will never be influenced by others,” he said.

Fresh start

Mr Kerry told Mr Wang that talks could provide a fresh start for the two countries that have been mired in disputes over Taiwan and trade.

“We are very hopeful that this can be the beginning, not just of a conversation between you and me and us on the climate track, but that we can begin to change the broader relationship,” Mr Kerry told Mr Wang.

He also delivered a message from US President Joe Biden, telling Mr Wang how much Mr Biden “values his relationship” with his Chinese counterpart.

“President Biden is very committed to stability within this relationship and also to achieve efforts together that can make significant difference to the world,” Mr Kerry said.

Mr Wang referred to Mr Kerry as “my old friend”, saying they had “worked together to solve a series of problems between both sides”. Mr Kerry also referred to their work together, including on the Iran nuclear talks.

The US and Chinese delegations will pick up on Tuesday where they left off the previous day. Asked how the discussions were going, Mr Kerry said it was too early to assess.

US State Department officials said the negotiations were on two tracks, with one focused on national action on climate change and the other on Cop28 talks in Dubai later this year.

Mr Kerry's third visit to China as US climate envoy marks the formal resumption in top-level climate diplomacy between the countries. The former secretary of state is the third top US official to visit Beijing in the past month.

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

Updated: July 18, 2023, 3:37 PM