China
The U.S. Politics of Dealing With China
Next week is bash-China week in Washington. Some politicians are taking up two-by-fours; others are trying to dance around the issue. On Monday, the Senate is going to take up new legislation backed by Democrats Charles Schumer of New York and Sherrod Brown of Ohio, Republican Lindsey Graham of South Carolina and a host of other lawmakers, which would penalize China for keeping its currency undervalued. In Washington political lingo that’s been called “currency manipulation,” although the new legislation dials that rhetoric down a notch by using a more technocratic term — “currency misalignment.” Still, the idea is to whack China rhetorically and, possibly, with trade sanctions if it doesn’t let its currency rise more quickly. Republican presidential candidate Mitt Romney has been quick to adopt a squeeze-China policy. His economic plan has a section labeled “confronting China,” which includes labeling the country a currency manipulator — using the old-style language — imposing unilateral sanctions, and ordering the U.S. government not to buy Chinese goods and services. In an early September Republican presidential debate, former U.S. Ambassador to China Jon Huntsman, tried to slap down Mr. Romney over his currency proposal, telling him, “now is not the time in a recession to enter a trade war.” But in a television interview on Fox with Greta Van Susteren earlier this week, Mr. Huntsman changed course a bit. While still warning of a trade war, he said he’d sign the Schumer bill if he were president. Why? “You need to keep pressure on China,” he said. “We need all the tools and leverage that we can muster,” Mr. Huntsman continued. “So the fact that it’s moving through Congress I think will put the Chinese certainly on notice.” Mr. Huntsman’s press spokesman said his boss wasn’t being inconsistent. In the debate, he was reacting to Mr. Romney’s full set of proposals, the spokesman said. In the interview, Mr. Huntsman was responding to one piece of legislation. For its part, the Obama administration continues to dance around the issue. On Friday it dispatched Undersecretary of Treasury Lael Brainard to China ostensibly to press the currency issue, as well as to discuss the agenda for a series of meetings of the Group of 20 nations. But the White House hasn’t either endorsed or rejected the currency bill. In the past, Treasury Secretary Timothy Geithner has said that Congressional pressure on China helps generally, but he has declined to designate China as a currency violator — a determination that the Treasury must make twice a year. Mr. Geithner fears doing so would backfire. –Bob Davis
Next week is bash-China week in Washington. Some politicians are taking up two-by-fours; others are trying to dance around the issue. On Monday, the Senate is going to take up new legislation backed by Democrats Charles Schumer of New York and Sherrod Brown of Ohio, Republican Lindsey Graham of South Carolina and a host of other lawmakers, which would penalize China for keeping its currency undervalued. In Washington political lingo that’s been called “currency manipulation,” although the new legislation dials that rhetoric down a notch by using a more technocratic term — “currency misalignment.” Still, the idea is to whack China rhetorically and, possibly, with trade sanctions if it doesn’t let its currency rise more quickly. Republican presidential candidate Mitt Romney has been quick to adopt a squeeze-China policy. His economic plan has a section labeled “confronting China,” which includes labeling the country a currency manipulator — using the old-style language — imposing unilateral sanctions, and ordering the U.S. government not to buy Chinese goods and services. In an early September Republican presidential debate, former U.S. Ambassador to China Jon Huntsman, tried to slap down Mr. Romney over his currency proposal, telling him, “now is not the time in a recession to enter a trade war.” But in a television interview on Fox with Greta Van Susteren earlier this week, Mr. Huntsman changed course a bit. While still warning of a trade war, he said he’d sign the Schumer bill if he were president. Why? “You need to keep pressure on China,” he said. “We need all the tools and leverage that we can muster,” Mr. Huntsman continued. “So the fact that it’s moving through Congress I think will put the Chinese certainly on notice.” Mr. Huntsman’s press spokesman said his boss wasn’t being inconsistent. In the debate, he was reacting to Mr. Romney’s full set of proposals, the spokesman said. In the interview, Mr. Huntsman was responding to one piece of legislation. For its part, the Obama administration continues to dance around the issue. On Friday it dispatched Undersecretary of Treasury Lael Brainard to China ostensibly to press the currency issue, as well as to discuss the agenda for a series of meetings of the Group of 20 nations. But the White House hasn’t either endorsed or rejected the currency bill. In the past, Treasury Secretary Timothy Geithner has said that Congressional pressure on China helps generally, but he has declined to designate China as a currency violator — a determination that the Treasury must make twice a year. Mr. Geithner fears doing so would backfire. –Bob Davis
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The U.S. Politics of Dealing With China
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?
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- 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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