China
Nepal–China ties tighten, but who gains?
Author: Anil Sigdel, Nepal Matters for America
After upwards of 80 international trips, Chinese President Xi Jinping finally visited his South Asian neighbour, Nepal. The primary motive behind Xi’s visit was not China’s Belt and Road Initiative (BRI), but rather the US’s Indo-Pacific strategy. Despite the United States’ efforts, Nepal is hesitant to endorse the Indo-Pacific strategy. Meanwhile, Nepal signed a memorandum of understanding with China to cooperate on the BRI in 2017, but not a single BRI project has taken off in Nepal.
At the time of signing on to the BRI, Nepal’s ruling Communist Party seemed either unaware or deliberately downplayed the geopolitical implications of subscribing to China’s initiative that has gone on to challenge the US-led global order. Indeed, a year later, Nepal’s Foreign Minister Pradeep Gyawali was invited to Washington where Secretary of State Mike Pompeo offered Nepal a ‘central role’ in the US Indo-Pacific strategy. This was the first Nepal–US state visit of that level in 17 years.
In Nepal, the US Indo-Pacific strategy was immediately perceived as a strategy to use Nepal to contain China. For Nepal’s part, its long-standing endorsement of the ‘One China policy’, especially regarding Tibet, works as the foundation of a healthy relationship. Time and again, Nepal has come under pressure to provide a safe passage for Tibetan refugees to India — a long-standing US policy priority in Nepal. In this regard, the US Indo-Pacific policy has only amplified traditional concerns.
The Indo-Pacific strategy was not welcomed in Nepal for two additional reasons.
First, the ‘Indo’ part of the strategy that refers to India’s role in Asia is at odds with Nepal’s strong desire to reduce its dependence on India. Perhaps the strongest reason why there is support for China in Nepal, including among politicians, bureaucrats and members of the press, is Nepal’s experience with India.
Endorsing the US strategy would risk Nepal shooting itself in the foot by indirectly supporting Indian dominance in South Asia. It also feeds into Nepal’s fear that acquiescing to such pressures may destabilise the country. To be sure, India’s vision of the region differs from the US Indo-Pacific version and India–US relations are multilayered. Yet, India’s vision ensures that it remains the pre-eminent player in South Asia.
Second, while the United States and other liberal democracies and organisations have pursued the promotion of democracy and human rights in the international community, some of their policies, particularly on ethnic politics and secularism, have caused misunderstandings. Most Nepalese believe that external pressures in these areas have undermined Nepal’s identity and compromised its economic growth and development.
Meanwhile, building upon their long-standing friendly ties, China has cautiously extended its arms to Nepal in order to gain goodwill. China offered financial aid to Nepal’s security bodies to enhance cooperation and has cemented party-to-party relations by increasing interactions, visits and financial aid for development projects.
Nepal–US diplomacy appears to be under stress despite the United States being a major partner of Nepal’s communist government. Nepal’s government has yet to officially accept a US$500 million grant from the US Millennium Challenge Corporation (MCC) that has already been signed by both countries but was later tied to the Indo-Pacific strategy. Moreover, per the MCC conditions, for the agreement to enter into force, Nepal must obtain Indian consent on operational and financial details in order to fund a cross-border transmission line between Nepal and India. This only reinforces Nepal’s apprehension towards the US Indo-Pacific strategy.
Some argue that the main issue is that radical constituents of Nepal’s ruling party blocked the parliament from moving forward with endorsing the MCC grant. Despite Nepal’s policy of ‘amity with all and enmity with none’, experts in Kathmandu are concerned that the country is becoming too politically correct when it comes to China and that there is a lack of critical observation.
By building upon long-standing ties with the Nepali army and maintaining several diplomatic advantages over China, the United States remains in the game.
President Xi’s visit to Nepal comes as the country’s conditions are in China’s favour. Nepal’s current government is stable and, therefore, has a better chance of implementing agreements. Xi’s visit has also been taken by…
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?
- 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
- China Unveils Plan to Upgrade Industrial Equipment
- China deepens engagement with new Indonesian president as top diplomat visits Jakarta
