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China

Busting US-China Trade Deficit Myths

Public opinion in the United States has turned against free trade. Donald Trump’s election win was tied to an aggressive campaign promising to address trade imbalances, with a particular focus on Chinese trade practices

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East West Bank CEO Dominic Ng sets things straight on trade figures that he calls outdated.

Public opinion in the United States has turned against free trade. Donald Trump’s election win was tied to an aggressive campaign promising to address trade imbalances, with a particular focus on Chinese trade practices.

On the campaign trail, Trump remarked that “China is responsible for nearly half of our entire trade deficit. They break the rules in every way imaginable.”

Without doubt, there are problems in the U.S.-China trade relationship. However, the current officially reported U.S.-China trade numbers are grossly inaccurate. They are based on outdated methods of data collection and calculation that were agreed to in the aftermath of World War II, and they have not been properly updated to reflect today’s global economy.

It is concerning that world leaders are primarily relying on these misleading trade figures to make major decisions that have the potential to damage economies and create ill will among nations that heavily depend on each other for their prosperity.

Businessman signing or writing a document in front Industrial Container Cargo freight ship

“It is concerning that world leaders are primarily relying on these misleading trade figures to make major decisions.” Dominic Ng

Traditional trade data are outdated and tell a distorted story

Let me explain why the trade data our leaders are using is problematic. Statistics traditionally used to measure trade flows do not fully reflect the globalization of production chains.

Currently, statistical agencies pin the entire trade value of a product to the last place it was exported from, even though the parts in the product come from many other countries. This method of data collection is based on the International Monetary Fund’s Balance of Payments Manual, which was first released in 1948, and never appropriately overhauled to reflect the new complexities of global value chains.

In the case of China, this means that commonly cited trade figures are distorted by the fact that China has become a final assembly point for many goods that contain a significant number of parts from other nations.

The classic example is the Apple iPhone

Apple takes care of design, development, marketing, and software creation for its phones in the U.S. High-value components of the iPhone come from different countries: Among the myriad iPhone 6 parts, displays are manufactured in South Korea, Japan, and elsewhere; processors come from the United States; touch ID sensors are made in Taiwan; and barometric pressure sensors come from Germany. 

(This is the first editorial of a three-part series on the misunderstandings of the U.S.-China trade relationship.)

Source : Busting US-China Trade Deficit Myths

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Canberra ties the knot with Washington

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Canberra ties the knot with Washington

Abstract

Australia has shifted its strategy towards favoring the United States over China due to increasing fear of Chinese power and the competitive Indo-Pacific environment.

The ‘riding two horses’ strategy adopted by Canberra over the past 25 years has shifted in favor of the US alliance to counter China’s growing power. Previous prime ministers sought to balance relations between China and the US, with Kevin Rudd aiming for ‘true friendship’ with China while also promising military intervention if needed. Tony Abbott’s approach was driven by ‘fear and greed’, and John Howard acknowledged the benefits of a relationship with both countries.

However, Prime Minister Anthony Albanese has expressed a desire to strengthen the US alliance and cooperate with China while also engaging in Australia’s national interest. This shift is evident in actions such as sending a warship through the Taiwan Strait and introducing legislation to facilitate the AUKUS security partnership.

The Indo-Pacific environment has become more competitive, leading Australia to prioritize fear over greed in its alignment. As China’s GDP continues to rise and may overtake the US by 2030, Canberra’s strategy is likely to continue favoring alignment with Washington due to the lack of a viable alternative for addressing its fear of China’s power.

Read the complete article on East Asia Forum

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2024 China IIT Reconciliation: Appointment Through IIT App Opens on February 21st

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Annual IIT reconciliation for 2023 must be done from March 1 to June 30, 2024. Final tax settlement appointments must be made after February 21, 2024. The process involves checking and reporting on IIT paid and deducted in 2023 to calculate refundable or supplementary tax.


Annual IIT reconciliation for the year 2023 is required to be made during the period from March 1 to June 30, 2024. For those who need to make the final tax settlement between March 1 to March 20, they need to make an appointment after February 21, 2024.

On February 1, 2024, the State Taxation Administration (STA) issued the Announcement on Matters Relating to the Final Settlement of Individual Income Tax on Consolidated Income for the Year 2023 (the Announcement), clarifying matters related to the annual individual income tax (IIT) reconciliation for the year 2023.

Annual IIT reconciliation, or annual IIT settlement, is a process applied to individual taxpayers on their comprehensive income (an individual’s combined income of wages and salaries, remuneration from labor services, author’s remuneration, and royalties), to make sure their IIT paid in the previous tax year is accurate.

During the process, individual taxpayers will need to recheck their IIT paid and deducted in the tax year, calculate the refundable or supplementary tax payable, report to the tax authorities, and make the tax settlement.

In this article, we introduce key issues related to the annual IIT reconciliation in 2024 and the key changes as compared to previous years.

After the end of the year 2023, a resident individual is required to consolidate his/her four types of comprehensive income, namely wages and salaries, remuneration for personal services, author’s remuneration, and royalties obtained from January 1 to December 31, 2023, to compute the final tax payable amount. The taxpayer needs to deduct the prepaid tax amount in 2023 to obtain the tax refundable or the tax to be made up amount. Further, the taxpayer is required to declare to tax authorities for a tax refund or tax to be made up.

Tax Refundable or Tax to Be Made Up = [(Annual Comprehensive Income – RMB 60,000- Special Deductions – Special Additional Deductions – Other Deductions Determined Pursuant to the Law – Qualified Public Welfare And Charitable Donations) × Applicable Tax Rate – Quick Deduction] – Prepaid Tax Amount

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.

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The Year of the Dragon brings record-breaking travel and consumption during the 2024 Chinese Spring Festival

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The Chinese New Year holiday saw a remarkable recovery in the tourist industry, with travel numbers and revenues exceeding 2023 and pre-pandemic levels. The Ministry of Culture and Tourism reported unprecedented growth, showcasing the industry’s resilience despite the COVID-19 pandemic.


The tourist industry registered significant growth during this year’s Chinese New Year (CNY) holidays, the first to be completely unaffected by the COVID-19 pandemic.

According to the latest figure released by the Ministry of Culture and Tourism, both travel numbers and tourism-related revenues reached unprecedented levels, surpassing figures registered during the 2023 Chinese New Year while also surpassing pre-COVID-19 levels.

Rebound in domestic and international travels

According to the data released by the Ministry of Culture and Tourism on Sunday, domestic tourism registered a remarkable performance during this year’s eight-day celebration.

The data reveals a significant surge in domestic trips, totaling 474 million trips made across the country from February 10 to February 18, marking a notable increase of 34.4 percent compared to the same period in 2023. This figure attracted special attention as it was a 19 percent rise compared with that in 2019.

The surge in travel within the country was facilitated by traditional transportation models, such as railways, civil aircraft, and waterways. Additionally, this year there has been also an increase in travelers embarking on independent road trips, partially due to the current rise in popularity of electric cars in China. This trend was further encouraged by the government’s efforts to stimulate the purchase of these vehicles as a way to boost domestic consumption. To cater to this trend, provinces ensured the temporary deployment of additional recharging stations in service areas, ensuring a seamless travel experience for travelers.

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.

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