China
Russia–Japan territorial disputes, divisive as ever
Author: Tsuneo Akaha, MIIS The Russia–Japan territorial dispute over the southern Kurils/Northern Territories is heating up again. Although the Cold War has long ended, Russian President Dmitry Medvedev’s visit to Kunashiri Island on 1 November 2010 prompted Japanese Prime Minister Naoto Kan to call it ‘an unforgivable outrage.’ Japan claims that the islands of Habomai, Shikotan, Kunashiri (Kunashir in Russian), and Etorofu (Iturup) are not part of the territories it surrendered in the 1951 San Francisco Peace Treaty. The peace accord, Japan claims, did not specify to whom the renounced territories would belong, and the Soviet Union (now Russia) could not and cannot base their sovereignty claims to the islands on a treaty the USSR refused to sign. Moscow and Tokyo agreed in their joint declaration of 1956, which restored their diplomatic relations, that the Soviet Union would return the disputed islands to Japan upon conclusion of a bilateral peace treaty. Both countries ratified the joint declaration. In 1991, the Japanese were encouraged when General Secretary Mikhail Gorbachev acknowledged that there was a territorial dispute between the two countries. They even became hopeful when the first Russian president, Boris Yeltsin, agreed in 1993 that the 1956 joint declaration was still valid. Since then, Japan has continued to insist that all of the disputed islands are inherent territory of Japan and Russia’s control of the islands is illegal. Moscow’s position is essentially that Japan has no claim to the territories because it surrendered the entire Kuril chain in the San Francisco peace treaty. The victorious Soviet Union, therefore, acquired the islands as well as the southern half of Sakhalin Island (the northern half was already Soviet territory before the Second World War) as justly deserved spoils of war — as agreed in the Yalta Conference among the allied leaders. In recent years, the Russian leadership has intensified their appeal to patriotism and used the islands issue to this end. On 7 July 2010, the Russian Duma passed legislation establishing 2 September as the day to commemorate the end of the Great Patriotic War; that date in 1945 being the day when Japan signed the instrument of surrender. On 28 September, President Medvedev and Chinese President Hu Jintao issued a joint statement commemorating the 65 th anniversary of the war and pledged further strengthening of the Sino–Russian strategic alliance. This was followed by the Russian president’s visit to Kunashiri Island, as noted above, and similar visits to the disputed territories by Defense Minister Anatoly Serdyukov, other key ministers and high-ranking officials. Ironically, the Russian leaders’ visits to the disputed islands demonstrate Moscow’s commitment to develop the long-neglected economy of the Russian Far East, including the southern Kurils; an effort in which Russia regards Japan as an important partner. Japan also sees mutual benefits in closer economic ties with Russia, particularly in the energy field. Although the eventual outcome of the territorial dispute is anybody’s guess, there is no question that the level of trust between Moscow and Tokyo must improve substantially if a mutually acceptable solution is to be reached. Several essential elements of trust-building efforts can be outlined. First, it is essential to improve and expand the relationship between the two governments so as to withstand the ups and downs of diplomatic tensions. The two countries need a more comprehensive engagement, particularly in the economic and social spheres, at both national and subnational levels, especially involving communities in the Russian Far East and northern and western regions of Japan. Second, Moscow and Tokyo should advance cooperation over transnational and global challenges; for example, nuclear proliferation, terrorism, climate change, public health (like HIV/AIDS and infectious diseases), alternative energy development, space exploration and new materials development. Third, both sides should encourage creative and innovative ideas that go beyond long-held perspectives which have proven ineffective. For one, Russia might consider returning the Habomais and Shikotan to Japan upon conclusion of a peace treaty, where the two sides commit to negotiating the status of the remaining islands. While the negotiations continued, Japan should offer assistance and encourage private investment in the development of the entire Northern Territories. Both Russians and Japanese might live side-by-side, with disputes between them to be settled in an arbitration board or a court of their choice. Finally, for any compromise to withstand inevitable criticisms at home, the political leaders in Moscow and Tokyo must build their credibility not on their ability to fan nationalism among their citizens but on their ability to ensure sustainable economic development and social stability. Professor Tsuneo Akaha is Professor of International Policy Studies and Director of the Center for East Asian Studies at the Monetary Institute of International Studies, California. China and its territorial disputes: One approach does not fit all China and its territorial disputes: One approach does not fit all Japan must acknowledge ‘territorial issue’ over islands
Author: Tsuneo Akaha, MIIS
The Russia–Japan territorial dispute over the southern Kurils/Northern Territories is heating up again. Although the Cold War has long ended, Russian President Dmitry Medvedev’s visit to Kunashiri Island on 1 November 2010 prompted Japanese Prime Minister Naoto Kan to call it ‘an unforgivable outrage.’
Japan claims that the islands of Habomai, Shikotan, Kunashiri (Kunashir in Russian), and Etorofu (Iturup) are not part of the territories it surrendered in the 1951 San Francisco Peace Treaty. The peace accord, Japan claims, did not specify to whom the renounced territories would belong, and the Soviet Union (now Russia) could not and cannot base their sovereignty claims to the islands on a treaty the USSR refused to sign.
Moscow and Tokyo agreed in their joint declaration of 1956, which restored their diplomatic relations, that the Soviet Union would return the disputed islands to Japan upon conclusion of a bilateral peace treaty. Both countries ratified the joint declaration. In 1991, the Japanese were encouraged when General Secretary Mikhail Gorbachev acknowledged that there was a territorial dispute between the two countries. They even became hopeful when the first Russian president, Boris Yeltsin, agreed in 1993 that the 1956 joint declaration was still valid. Since then, Japan has continued to insist that all of the disputed islands are inherent territory of Japan and Russia’s control of the islands is illegal.
Moscow’s position is essentially that Japan has no claim to the territories because it surrendered the entire Kuril chain in the San Francisco peace treaty. The victorious Soviet Union, therefore, acquired the islands as well as the southern half of Sakhalin Island (the northern half was already Soviet territory before the Second World War) as justly deserved spoils of war — as agreed in the Yalta Conference among the allied leaders.
In recent years, the Russian leadership has intensified their appeal to patriotism and used the islands issue to this end. On 7 July 2010, the Russian Duma passed legislation establishing 2 September as the day to commemorate the end of the Great Patriotic War; that date in 1945 being the day when Japan signed the instrument of surrender. On 28 September, President Medvedev and Chinese President Hu Jintao issued a joint statement commemorating the 65th anniversary of the war and pledged further strengthening of the Sino–Russian strategic alliance. This was followed by the Russian president’s visit to Kunashiri Island, as noted above, and similar visits to the disputed territories by Defense Minister Anatoly Serdyukov, other key ministers and high-ranking officials.
Ironically, the Russian leaders’ visits to the disputed islands demonstrate Moscow’s commitment to develop the long-neglected economy of the Russian Far East, including the southern Kurils; an effort in which Russia regards Japan as an important partner. Japan also sees mutual benefits in closer economic ties with Russia, particularly in the energy field.
Although the eventual outcome of the territorial dispute is anybody’s guess, there is no question that the level of trust between Moscow and Tokyo must improve substantially if a mutually acceptable solution is to be reached. Several essential elements of trust-building efforts can be outlined.
First, it is essential to improve and expand the relationship between the two governments so as to withstand the ups and downs of diplomatic tensions. The two countries need a more comprehensive engagement, particularly in the economic and social spheres, at both national and subnational levels, especially involving communities in the Russian Far East and northern and western regions of Japan.
Second, Moscow and Tokyo should advance cooperation over transnational and global challenges; for example, nuclear proliferation, terrorism, climate change, public health (like HIV/AIDS and infectious diseases), alternative energy development, space exploration and new materials development.
Third, both sides should encourage creative and innovative ideas that go beyond long-held perspectives which have proven ineffective. For one, Russia might consider returning the Habomais and Shikotan to Japan upon conclusion of a peace treaty, where the two sides commit to negotiating the status of the remaining islands. While the negotiations continued, Japan should offer assistance and encourage private investment in the development of the entire Northern Territories. Both Russians and Japanese might live side-by-side, with disputes between them to be settled in an arbitration board or a court of their choice.
Finally, for any compromise to withstand inevitable criticisms at home, the political leaders in Moscow and Tokyo must build their credibility not on their ability to fan nationalism among their citizens but on their ability to ensure sustainable economic development and social stability.
Professor Tsuneo Akaha is Professor of International Policy Studies and Director of the Center for East Asian Studies at the Monetary Institute of International Studies, California.
- China and its territorial disputes: One approach does not fit all
- China and its territorial disputes: One approach does not fit all
- Japan must acknowledge ‘territorial issue’ over islands
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Russia–Japan territorial disputes, divisive as ever
China
China Implements New Policies to Boost Foreign Investment in Science and Technology Companies
China’s Ministry of Commerce announced new policy measures on April 19, 2023, to encourage foreign investment in the technology sector. The measures include facilitating bond issuance, improving the investment environment, and simplifying procedures for foreign institutions to access the Chinese market.
On April 19, 2023, China’s Ministry of Commerce (MOFCOM) along with nine other departments announced a new set of policy measures (hereinafter, “new measures”) aimed at encouraging foreign investment in its technology sector.
Among the new measures, China intends to facilitate the issuance of RMB bonds by eligible overseas institutions and encourage both domestic and foreign-invested tech companies to raise funds through bond issuance.
In this article, we offer an overview of the new measures and their broader significance in fostering international investment and driving innovation-driven growth, underscoring China’s efforts to instill confidence among foreign investors.
The new measures contain a total of sixteen points aimed at facilitating foreign investment in China’s technology sector and improving the overall investment environment.
Divided into four main chapters, the new measures address key aspects including:
Firstly, China aims to expedite the approval process for QFII and RQFII, ensuring efficient access to the Chinese market. Moreover, the government promises to simplify procedures, facilitating operational activities and fund management for foreign institutions.
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
China
Q1 2024 Brief on Transfer Pricing in Asia
Indonesia’s Ministry of Finance released Regulation No. 172 of 2023 on transfer pricing, consolidating various guidelines. The Directorate General of Taxes focuses on compliance, expanded arm’s length principle, and substance checks. Singapore’s Budget 2024 addresses economic challenges, operational costs, and sustainability, implementing global tax reforms like the Income Inclusion Rule and Domestic Top-up Tax.
Indonesia’s Ministry of Finance (MoF) has released Regulation No. 172 of 2023 (“PMK-172”), which prevails as a unified transfer pricing guideline. PMK-172 consolidates various transfer pricing matters that were previously covered under separate regulations, including the application of the arm’s length principle, transfer pricing documentation requirements, transfer pricing adjustments, Mutual Agreement Procedure (“MAP”), and Advance Pricing Agreements (“APA”).
The Indonesian Directorate General of Taxes (DGT) has continued to focus on compliance with the ex-ante principle, the expanded scope of transactions subject to the arm’s length principle, and the reinforcement of substance checks as part of the preliminary stage, indicating the DGT’s expectation of meticulous and well-supported transfer pricing analyses conducted by taxpayers.
In conclusion, PMK-172 reflects the Indonesian government’s commitment to addressing some of the most controversial transfer pricing issues and promoting clarity and certainty. While it brings new opportunities, it also presents challenges. Taxpayers are strongly advised to evaluate the implications of these new guidelines on their businesses in Indonesia to navigate this transformative regulatory landscape successfully.
In a significant move to bolster economic resilience and sustainability, Singapore’s Deputy Prime Minister and Minister for Finance, Mr. Lawrence Wong, unveiled the ambitious Singapore Budget 2024 on February 16, 2024. Amidst global economic fluctuations and a pressing climate crisis, the Budget strategically addresses the dual challenges of rising operational costs and the imperative for sustainable development, marking a pivotal step towards fortifying Singapore’s position as a competitive and green economy.
In anticipation of global tax reforms, Singapore’s proactive steps to implement the Income Inclusion Rule (IIR) and Domestic Top-up Tax (DTT) under the BEPS 2.0 framework demonstrate a forward-looking approach to ensure tax compliance and fairness. These measures reaffirm Singapore’s commitment to international tax standards while safeguarding its economic interests.
Transfer pricing highlights from the Singapore Budget 2024 include:
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
China
New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
China has been the world’s largest manufacturer for 14 years, producing one-third of global manufacturing output. In the Emerging Asia Manufacturing Index 2024, China ranks highest among eight emerging countries in the region. Challenges for these countries include global demand disparities affecting industrial output and export orders.
Known as the “World’s Factory”, China has held the title of the world’s largest manufacturer for 14 consecutive years, starting from 2010. Its factories churn out approximately one-third of the global manufacturing output, a testament to its industrial might and capacity.
China’s dominant role as the world’s sole manufacturing power is reaffirmed in Dezan Shira & Associates’ Emerging Asia Manufacturing Index 2024 report (“EAMI 2024”), in which China secures the top spot among eight emerging countries in the Asia-Pacific region. The other seven economies are India, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, and Bangladesh.
The EAMI 2024 aims to assess the potential of these eight economies, navigate the risks, and pinpoint specific factors affecting the manufacturing landscape.
In this article, we delve into the key findings of the EAMI 2024 report and navigate China’s advantages and disadvantages in the manufacturing sector, placing them within the Asia-Pacific comparative context.
Emerging Asia countries face various challenges, especially in the current phase of increased volatility, uncertainty, complexity, and ambiguity (VUCA). One notable challenge is the impact of global demand disparities on the manufacturing sector, affecting industrial output and export orders.
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
- China Implements New Policies to Boost Foreign Investment in Science and Technology Companies
- Q1 2024 Brief on Transfer Pricing in Asia
- New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
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