China
China’s geostrategic conception of the developing world
Author: Joshua Eisenman, University of Notre Dame
Not since the Mao era has the developing world played a larger role in China’s geostrategy. Over the last decade, China’s leaders have come to believe they can reshape the world to conform with their interests. China is employing economic tools like policy lending and ‘memorandum-of-understanding diplomacy’ to achieve political ends, and stepping up party-to-party outreach and educational activities to deepen relations, improve the image of the country and its political system, and enhance policy coordination.
China’s foreign policy practice differentiates the relative status of bilateral relationships based on the characteristics of partner states — specifically major powers, states on China’s periphery, developing countries and, since the 18th Party Congress in 2012, multilateral international forums. The boundaries between these categories are often ambiguous, and many states traverse two or more of them.
Major powers are large, economically developed states, including the United States, Japan, Russia, Germany, Britain, or the European Union as a whole. Peripheral states include both developing states and major powers in East Asia, Central Asia, South Asia, Russia and Southeast Asia. Former president Hu Jintao declared, ‘Major powers are the key, surrounding (peripheral) areas are the first priority, developing countries are the foundation and multilateral forums are the important stage’.
Under Xi Jinping’s leadership, relations with major powers, especially the United States, remain Beijing’s top priority. But developing states are assuming a larger role in China’s thinking in both political and economic affairs.
In 2013, Xi launched his signature policy, the Belt and Road Initiative (BRI) — an ambitious strategy to reshape the world by loaning over a trillion US dollars to developing states for infrastructure development. The BRI has now expanded to include nearly every aspect of China’s foreign policy toward the developing world. This assertiveness marks a rapid and dramatic departure from more than two decades of adherence to Deng Xiaoping’s admonition that China should ‘keep a low profile’.
Over the last two decades, strategists in China adopted a more nuanced view of the developing world, differentiating ‘major developing states’ or ‘newly emerging powers’ from ‘other’ developing states. While there is no definitive list of major developing states, they appear to include a handful of large, rapidly developing and politically influential states such as the developing members of the G20 — Argentina, Brazil, Mexico, South Africa, India, Indonesia, Saudi Arabia, Turkey, Iran and Thailand.
Part of the developing world falls within China’s ‘periphery’, which constitutes a strategically important geographic belt around China. Previously, the periphery was limited to Northeast Asia, Southeast Asia, South Asia and Central Asia. But under the Xi administration the ‘greater periphery’ expanded in accordance with Beijing’s growing power and influence to include West Asia, the South Pacific and, by some definitions, East Africa.
China’s evolving strategy toward the developing world has mirrored China’s sense of its own identity and place in the world. Beijing now portrays itself as both a developing state and as a major power. Its policies intend to accentuate common interests and promote the emergence of a more ‘democratic’, ‘multipolar’ international order. The claim that China is the largest developing country identifies it with other developing states and insulates Beijing from taking the lead on international issues such as the Syria refugee crisis and climate change.
China is united with developing states on numerous political–economic issues such as environmental priorities and trade-offs, trade policy, technology standards, and the form and function of international institutions. But despite efforts to portray itself as rooted in solidarity with the developing world, the drivers of its policies are primarily domestic, with regime survival as Beijing’s foremost objective.
Domestic priorities are evident in its diplomacy, party-to-party relations, defence of sovereignty norms in international politics, and its near single-minded emphasis on economic development. Improved living standards remain integral to achieving the ‘China Dream,’ which includes achieving a ‘moderately well-off society’ by 2021.
The developing world is also important for Beijing’s efforts to defend…
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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- Is journalist Vicky Xu preparing to return to China?
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