China
South China Sea : Will Indonesia and Australia toe the nine-dash line?
So far Indonesia has demonstrated a cautious approach to the territorial disputes in the South China Sea.
Jakarta maintains that it is not a claimant state in these territorial disputes, nor does it have any territorial ambition in the area. But it still has interests at stake and Indonesia continues to advocate a united ASEAN front when dealing with China.
On the other hand, Indonesia has long asserted sovereign rights over its own territorial waters, particularly through its firm law enforcement when dealing with illegal fishing activities in its waters. Safeguarding territorial integrity is a specific focus of the Joko Widodo presidency. In 2016, there were three incidents where fishing vessels from China operated without permission in Indonesia’s exclusive economic zone.
Following these, Jokowi led a high-level delegation to the Natuna Islands for a meeting with ministers and security force chiefs on an Indonesian warship watched over by air force jets. Yet this did not result in any visible shift in policy.
In October 2016, following the ‘2+2’ dialogue between Indonesian and Australian foreign and defence ministers, the Indonesian defence minister said he had proposed that the two countries conduct joint patrols in the eastern part of the South China Sea to secure the waters.
Few details were provided as to the nature or location of these patrols and whether they should be joint or coordinated. News reports also blew the comments out of proportion, making the idea seem more definite than it actually was.
At the time, Australian Foreign Minister Julie Bishop appeared to confirm that Canberra was considering joint patrols. She indicated to the media that both sides would discuss ‘coordinated activities’ in the South China Sea and that this would be consistent with both countries’ right to exercise freedom of navigation.
A few days before his visit to Australia on 25 February 2017, Jokowi said such joint patrols could be carried out ‘only if there was no tension in the region’. This comment raised the question again of how serious the plan really was.
After the meeting between the two leaders in Canberra, it turned out that the issue was not raised at all during their joint press conference.
Not long after, the two countries seemed to have completely backtracked on the idea. Clarifying the comments on the sidelines of the Indian Ocean Rim Association summit in Jakarta, Bishop said Jokowi never suggested joint patrols in the South China Sea. Indonesian officials never confirmed specific plans for joint patrols either.
Yet the idea of coordinated patrols is not new for the two countries. Since 2010 the Australian Defence Force and Indonesian Armed Forces have been conducting coordinated maritime security patrols, which usually start in Kupang in eastern Indonesia and conclude in Darwin, targeting illegal activities in the two countries’ maritime zones. In 2016, the Australian Border Force and its Indonesian counterpart, Badan Keamanan Laut RI, conducted a maritime security patrol dubbed Operation Shearwater in the Timor Sea.
So joint patrols are not a controversial idea. But the most recent joint proposal happened to catch the attention of the media and wider public because of the magnitude of the South China Sea disputes and the fact that two big regional neighbours are involved.
There have also been calls for Indonesia to play a greater role in the resolution of the dispute. While this proposal may look like an answer to this call, aside from occasional rhetoric, there is very little evidence of any policy actually following through.
So it was not really a surprise that the topic did not surface during Jokowi’s visit to Australia, as trade and investment were at the top of his agenda. Bilateral security cooperation was not a matter of priority, particularly with regard to the South China Sea.
The technical and operational aspects of a joint proposal, and all the policy elements required to make it probable, make its prospects even more distant. First, there is little chance there would be a dramatic change in Indonesia’s foreign policy towards the South China Sea.
Second, Australia’s involvement in the disputes has been relatively minimal to non-existent. For example, after the international arbitration ruling at the Hague, while demanding that China accepts the finding and respect international law, the Australian government declared it was neutral in the territorial dispute and therefore would not take sides.
Third, although the two countries collaborate in maritime security activities, there is still a trust deficit in their military cooperation. It was only during Jokowi’s visit that Indonesia and Australia restored…
Author: Shafiah F Muhibat, RSIS
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China
Exploring the Revamped China Certified Emission Reduction (CCER) Program: Potential Benefits for International Businesses
Companies in China must navigate compliance, trading, and reporting within the CCER framework, impacting operations and strategic objectives. The program focuses on afforestation, solar, wind power, and mangrove creation, offering opportunities for innovation and revenue streams while ensuring transparency and accuracy. The Ministry of Ecology and Environment oversees the program.
As companies navigate the complexities of compliance, trading, and reporting within the CCER framework, they must also contend with the broader implications for their operations, finances, and strategic objectives.
This article explores the multifaceted impact of the CCER program on companies operating in China, examining both the opportunities for innovation and growth, as well as the potential risks and compliance considerations.
Initially, the CCER will focus on four sectors: afforestation, solar thermal power, offshore wind power, and mangrove vegetation creation. Companies operating within these sectors can register their accredited carbon reduction credits in the CCER system for trading purposes. These sectors were chosen due to their reliance on carbon credit sales for profitability. For instance, offshore wind power generation, as more costly than onshore alternatives, stands to benefit from additional revenue streams facilitated by CCER transactions.
Currently, primary buyers are expected to be high-emission enterprises seeking to offset their excess emissions and companies aiming to demonstrate corporate social responsibility by contributing to environmental conservation. Eventually, the program aims to allow individuals to purchase credits to offset their carbon footprints. Unlike the mandatory national ETS, the revamped CCER scheme permits any enterprise to buy carbon credits, thereby expanding the market scope.
The Ministry of Ecology and Environment (MEE) oversees the CCER program, having assumed responsibility for climate change initiatives from the National Development and Reform Commission (NDRC) in 2018. Verification agencies and project operators are mandated to ensure transparency and accuracy in disclosing project details and carbon reduction practices.
On the second day after the launch on January 23, the first transaction in China’s voluntary carbon market saw the China National Offshore Oil Corporation (CNOOC), the country’s largest offshore oil and gas producer, purchase 250,000 tons of carbon credits to offset its emissions.
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
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.
- Exploring the Revamped China Certified Emission Reduction (CCER) Program: Potential Benefits for International Businesses
- 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
- Is journalist Vicky Xu preparing to return to China?
- Guide for Foreign Residents: Obtaining a Certificate of No Criminal Record in China
