China
Beijing’s threats push Taiwan further out of reach
Author: Joel Atkinson, HUFS
In May 2000, former prime minister of Singapore Lee Kuan Yew set forth his views on Taiwan in an article titled ‘The Cruel Game’. After 19 years, it is worth pausing for a moment to see how his perspective holds up.
Lee began with a warning: ‘There is a point beyond which no Chinese leader can survive if Taiwan is seen to be drifting away under his watch’. Lee, who understood Beijing better than most, knew that this was about allowing for a pretence of progress as much as anything else. Taipei, he advised, had to ‘leave the door open for a future One China’ and keep the show going for everyone’s benefit, along the way maximising the carrots (and minimising the sticks) that Beijing would direct Taiwan’s way. In short, Taipei was not to reveal itself as too unruly to fit into this picture.
As Lee put it, Taiwan should negotiate with Beijing now. Either the PRC would continue to grow in power until it overwhelmed Taiwan’s resistance or it would collapse allowing Taipei to safely ignore whatever concessions it had made. Lee understood that accommodating Beijing’s preferences would be difficult: ‘The last thing any Taiwanese, even of mainlander descent, desires is to be ruled by China’. Still, Lee argues, it is better to enter into unification negotiations willingly to win the best deal possible. Simultaneously, Taipei should ‘influence China’s evolution’ ensuring that ‘they will change to fit into the world’. Otherwise, if unification came via armed takeover, ‘the eventual adjustment, whether in 20 or 50 years, [will be] that much more painful’.
Problematically for Lee, sovereign polities rarely pre-emptively surrender to avoid violence. Today, the population in Taiwan desiring unification is small — only 1.7 per cent want unification now and 8.7 per cent want it in the future.
To be fair, Lee was pessimistic that the strengthening of Taiwan’s separate identity would abate. Lee considered Taiwan’s leaders too obtuse and stubborn to reverse course, though he felt that former Taiwanese president Chen Shui-bian — who had just entered office at the time of Lee’s comments — was more pragmatic.
In Lee’s eyes, Taiwan’s fate would ultimately hinge on US intervention. And it was only a matter of time until the United States disappointed Taiwan. Lee weighed the interests of the United States and China and concluded that Beijing’s investment in Taiwan was greater than Washington’s and that this risked leaving the Taiwanese ‘crushed’.
Yet 19 years after Lee’s predictions, signs point to a growing US commitment to compete with China, defend Taiwan and offset Chinese military advances. The rhetorical support of the Trump administration and Congress and the increasing arms sales from the United States to Taiwan are current examples. Significantly, China’s regional rival Japan has also been cautiously increasing its support for Taiwan, even as it takes steps to reduce friction with China amid divided regional security interests.
Should we be surprised? History shows us that states balance against perceived threats, both by enhancing their defences and reaching out to partners. Why expect Taiwan, the United States and Japan to act differently?
The asymmetry that Lee focusses on — that Taiwan is a greater priority to Beijing than it is to Washington — is also offset by a salient asymmetry. It is less costly for the United States to confront China early with Taiwan’s support than it will be later without.
The same logic determines that China won’t receive decisive support from the rest of the region to tip the balance either. Lee raises the spectre of a ‘humiliated, bitter and xenophobic China’ emerging from a successful US defence of Taiwan. But would regional countries prefer the alternative: a triumphant China with capabilities to occupy Taiwan and chase away the United States?
Whatever the economic realities and Beijing’s touchiness dictate, the only thing worse for the region than a powerful China contained by a US coalition at the Taiwan Strait is one that is not. If forced to really make a choice, the United States, Japan and the wider region would much rather see a PRC invasion of Taiwan fail than succeed.
Looking back, Lee’s writing calls to mind a soon-to-be-retired CEO talking up the market, aware of a ticking bomb buried in the balance sheets. Now, as Warren Buffet famously put it, the tide is out and we can see who has been swimming naked.
Beijing’s threat to use force against Taiwan is credible and…
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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