China
Train Spat With Japan Heats Up
A war of words grew this week between China and Japanese rolling stock manufacturers, reigniting a battle over whether Chinese state-owned firms stole high-speed rail technology and are now attempting to market it themselves overseas. After China announced late last month it had filed 21 international patent applications, a key step in making trains available for purchase overseas, major Japanese firms, including Kawasaki Heavy Industries Ltd., threatened to sue if China attempted to obtain patents for technology previously developed in Japan. The dispute has spilled into politics, too, with Japanese Foreign Minister Takeaki Matsumoto telling his Chinese counterpart during meetings last week Japan was “closely monitoring” the situation, according to Kyodo, a Japanese news agency. China responded indignantly to the threats, flexing its muscle as both an important market for high-speed rail development as well as a country whose state-owned firms have been more aggressive in pursuing deals overseas, often undercutting their competitors on price. A spokesman for the Chinese Railways Ministry told the state-run Xinhua news agency in remarks published Thursday that technology being used in China’s high-speed rail system, which is slated to grow to 16,000 kilometers by 2020, is superior to Japan’s network, known as the Shinkansen. The remarks by the ministry’s spokesman, Wang Yongping, came a week China opened its signature Beijing-Shanghai high-speed rail line, the growing network’s most celebrated corridor. “The Beijing-Shanghai high-speed railway and Japan’s Shinkansen cannot be mentioned in the same breath, as many of the technological indicators used by China’s high-speed railways are far better than those used in Japan’s Shinkansen,” Mr. Wang said, according to Xinhua . Joint ventures between China and Japanese rolling stock manufacturers extend back years. Kawasaki was among several firms that transfered technology to Chinese firms, like state-owned CSR Qingdao Sifang Co., only to see those companies soon begin competing against the Japanese giant. China, for its part, has long maintained its technology is different from Kawasaki’s and others’, arguing its trains are faster and also incorporate reduced wheel-track friction. It likens improvements in Chinese high-speed trains over Japanese trains in recent years to advances decades ago by Japanese firms over earlier European rail designs. “Our technologies may originate from foreign countries, but it doesn’t mean that what we have now all belongs to them,” said Ma Yunshuang, a deputy general manager at CSR Qingdao Sifang, according to the state-run China Daily . These battles appear poised to heat up, though, as China begins more actively looking to export its technology overseas. China’s domestic high-speed rail market has boomed in recent years, but appears to be on the cusp of a slowdown. The Railways Ministry’s debt has grown alongside public discontent over high ticket prices for super-fast trains, which are too expensive for many Chinese. Railways Minister Sheng Guangzu has pledged in recent months to focus on high-speed rail projects already under construction before beginning new projects. Meanwhile, countries including Russia, the U.K. and the U.S. are pledging to expand high-speed rail, and looking to the Chinese as a potential partner. Russia is developing a high-speed rail network ahead of the FIFA World Cup in 2018. The president of the state-run Russian Railways, Vladimir Yakunin, told Xinhua this month that Chinese companies “have good chances” at winning bids for high-speed rail development. The possibility of high-speed rail cooperation surrounded meetings in June between U.K. Prime Minister David Cameron and Chinese Premier Wen Jiabao. U.S. energy and transport giant General Electric signed an agreement last year with CSR to build high-speed rail in the U.S. It’s unclear whether Japanese firms will put their money where their mouths are and eventually elect to sue Chinese rolling stock manufacturers for intellectual property rights infringement, a case that could be both difficult to prove and could take years and millions of dollars in legal fees to resolve. Perhaps more interesting will be how foreign executives across industries view the ongoing spat, many of whom still weighing the age-old China quandary: market access versus protection of intellectual property. –Brian Spegele, follow him on Twitter @bspegele
A war of words grew this week between China and Japanese rolling stock manufacturers, reigniting a battle over whether Chinese state-owned firms stole high-speed rail technology and are now attempting to market it themselves overseas. After China announced late last month it had filed 21 international patent applications, a key step in making trains available for purchase overseas, major Japanese firms, including Kawasaki Heavy Industries Ltd., threatened to sue if China attempted to obtain patents for technology previously developed in Japan. The dispute has spilled into politics, too, with Japanese Foreign Minister Takeaki Matsumoto telling his Chinese counterpart during meetings last week Japan was “closely monitoring” the situation, according to Kyodo, a Japanese news agency. China responded indignantly to the threats, flexing its muscle as both an important market for high-speed rail development as well as a country whose state-owned firms have been more aggressive in pursuing deals overseas, often undercutting their competitors on price. A spokesman for the Chinese Railways Ministry told the state-run Xinhua news agency in remarks published Thursday that technology being used in China’s high-speed rail system, which is slated to grow to 16,000 kilometers by 2020, is superior to Japan’s network, known as the Shinkansen. The remarks by the ministry’s spokesman, Wang Yongping, came a week China opened its signature Beijing-Shanghai high-speed rail line, the growing network’s most celebrated corridor. “The Beijing-Shanghai high-speed railway and Japan’s Shinkansen cannot be mentioned in the same breath, as many of the technological indicators used by China’s high-speed railways are far better than those used in Japan’s Shinkansen,” Mr. Wang said, according to Xinhua . Joint ventures between China and Japanese rolling stock manufacturers extend back years. Kawasaki was among several firms that transfered technology to Chinese firms, like state-owned CSR Qingdao Sifang Co., only to see those companies soon begin competing against the Japanese giant. China, for its part, has long maintained its technology is different from Kawasaki’s and others’, arguing its trains are faster and also incorporate reduced wheel-track friction. It likens improvements in Chinese high-speed trains over Japanese trains in recent years to advances decades ago by Japanese firms over earlier European rail designs. “Our technologies may originate from foreign countries, but it doesn’t mean that what we have now all belongs to them,” said Ma Yunshuang, a deputy general manager at CSR Qingdao Sifang, according to the state-run China Daily . These battles appear poised to heat up, though, as China begins more actively looking to export its technology overseas. China’s domestic high-speed rail market has boomed in recent years, but appears to be on the cusp of a slowdown. The Railways Ministry’s debt has grown alongside public discontent over high ticket prices for super-fast trains, which are too expensive for many Chinese. Railways Minister Sheng Guangzu has pledged in recent months to focus on high-speed rail projects already under construction before beginning new projects. Meanwhile, countries including Russia, the U.K. and the U.S. are pledging to expand high-speed rail, and looking to the Chinese as a potential partner. Russia is developing a high-speed rail network ahead of the FIFA World Cup in 2018. The president of the state-run Russian Railways, Vladimir Yakunin, told Xinhua this month that Chinese companies “have good chances” at winning bids for high-speed rail development. The possibility of high-speed rail cooperation surrounded meetings in June between U.K. Prime Minister David Cameron and Chinese Premier Wen Jiabao. U.S. energy and transport giant General Electric signed an agreement last year with CSR to build high-speed rail in the U.S. It’s unclear whether Japanese firms will put their money where their mouths are and eventually elect to sue Chinese rolling stock manufacturers for intellectual property rights infringement, a case that could be both difficult to prove and could take years and millions of dollars in legal fees to resolve. Perhaps more interesting will be how foreign executives across industries view the ongoing spat, many of whom still weighing the age-old China quandary: market access versus protection of intellectual property. –Brian Spegele, follow him on Twitter @bspegele
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Train Spat With Japan Heats Up
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
Is journalist Vicky Xu preparing to return to China?
Chinese social media influencers have recently claimed that prominent Chinese-born Australian journalist Vicky Xu had posted a message saying she planned to return to China.
There is no evidence for this. The source did not provide evidence to support the claim, and Xu herself later confirmed to AFCL that she has no such plans.
Currently working as an analyst at the Australian Strategic Policy Institute, or ASPI, Xu has previously written for both the Australian Broadcasting Corporation, or ABC, and The New York Times.
A Chinese language netizen on X initially claimed on March 31 that the changing geopolitical relations between Sydney and Beijing had caused Xu to become an expendable asset and that she had posted a message expressing a strong desire to return to China. An illegible, blurred photo of the supposed message accompanied the post.
This claim was retweeted by a widely followed influencer on the popular Chinese social media site Weibo one day later, who additionally commented that Xu was a “traitor” who had been abandoned by Australian media.
Following the publication of an ASPI article in 2021 which exposed forced labor conditions in Xinjiang co-authored by Xu, the journalist was labeled “morally bankrupt” and “anti-China” by the Chinese state owned media outlet Global Times and subjected to an influx of threatening messages and digital abuse, eventually forcing her to temporarily close several of her social media accounts.
AFCL found that neither Xu’s active X nor LinkedIn account has any mention of her supposed return to China, and received the following response from Xu herself about the rumor:
“I can confirm that I don’t have plans to go back to China. I think if I do go back I’ll most definitely be detained or imprisoned – so the only career I’ll be having is probably going to be prison labor or something like that, which wouldn’t be ideal.”
Neither a keyword search nor reverse image search on the photo attached to the original X post turned up any text from Xu supporting the netizens’ claims.
Translated by Shen Ke. Edited by Shen Ke and Malcolm Foster.
Asia Fact Check Lab (AFCL) was established to counter disinformation in today’s complex media environment. We publish fact-checks, media-watches and in-depth reports that aim to sharpen and deepen our readers’ understanding of current affairs and public issues. If you like our content, you can also follow us on Facebook, Instagram and X.
Read the rest of this article here >>> Is journalist Vicky Xu preparing to return to China?
- Q1 2024 Brief on Transfer Pricing in Asia
- New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
- Is journalist Vicky Xu preparing to return to China?
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- China Unveils Plan to Upgrade Industrial Equipment
- China deepens engagement with new Indonesian president as top diplomat visits Jakarta
