China has become the 77th jurisdiction to sign a multilateral pact that paves the way for countries to exchange data automatically in the hunt for tax-evaders. However, Sara George (pictured) believes that full Chinese compliance is unlikely.

The country has signed a Multilateral Competent Authority Agreement, which allows it to activate automatic exchange of financial account information in tax matters and start exchanges with other countries in 2018, according to information from the Organisation for Economic Co-operation and Development.  

This followed on from a meeting of the Group of 20 industrialised nations at a Summit in Australia on 15-16 November where they endorsed a standard for automatically exchanging financial account data in tax matters.
Also, the OECD and the Chinese government have renewed an agreement, first signed in 2013, for a further three years until 31 December 2018. This memorandum of understanding builds on co-operation between China and the Paris-based organisation over issues such as stamping out base erosion and profit shifting.

Sara George, a litigation lawyer at the City law firm of Stephenson Harwood, commented at a recent conference in the City of London: "We are told that 56 jurisdictions have committed to automatic exchanges by 2017 (with additional 40 by 2018) but one of those is the People’s Republic of China. My guess is that it probably will not comply. I think we shall only see exchanges of information when it is politically advantageous at the time. From my experience of trying to get any international co-operation involving China in regulatory investigations, I would suspect that the Chinese very much regard other countries’ administrations as potentially hostile. The Chinese authorities regard the handing-over of internal materials held on computer systems to foreign governments as potentially treasonous. I think that it would require a dramatic change in attitude on the part of the Chinese Government before automatic exchange will happen regularly. It is far more likely that it will be done on an ad hoc basis as and when it is politically convenient, but at least the rules and the technology are there."