China
Smarter strategies for sharing South Asia’s rivers
Author: Ashok Swain, Uppsala University
South Asia is facing severe water scarcity. As the region’s population grows and its economies develop, a lack of sustainable water development strategy is leading to increasingly acute water shortages.
The region is home to nearly 2 billion people, almost half of which depend on the large river systems shared among countries. There are two major international river systems in the region: the Indus and Ganges-Brahmaputra. While the Indus basin is shared by Afghanistan, China, India and Pakistan, the Ganges-Brahmaputra is shared by Bangladesh, Bhutan, China, India and Nepal.
But no regional organisations manage these precious water resources. Instead, water is shared according to bilateral agreements. Notable are the 1960 Indus Treaty between India and Pakistan, the 1996 Ganges Treaty between India and Bangladesh and the 1996 Mahakali Treaty between India and Nepal. India and Bhutan also have a series of hydropower generation agreements.
None of these agreements are comprehensive in scope or nature. The Indus Treaty is primarily a river sharing agreement, while the Ganges Treaty is a water-sharing agreement. The Mahakali Treaty — which is yet to be implemented — is a benefit-sharing agreement.
The South Asian region is water-rich but with huge seasonal variations. In the absence of mutually beneficial, comprehensive agreements to store and develop water resources, there is always a fear that upper riparian countries will unilaterally exploit the rivers for their own benefit. This may have far-reaching effects on downstream countries.
Since 2016, in spite of the 1960 agreement, India has repeatedly threatened to divert water from the Indus away from Pakistan. In the Ganges basin, India has also been diverting water away from Bangladesh since 1975, though that diversion is presently regulated under the 1996 Agreement. India has also made proposals to divert water from the Brahmaputra inland, instead of allowing water to flow into Bangladesh.
After becoming the prime minister of India in 2014, Narendra Modi revived old plans to link 30 of the country’s major rivers and divert the Ganges-Brahmaputra. This grand plan intends to provide water to India’s arid provinces — but it is causing anxiety among the country’s smaller neighbours. Some rivers have already been connected, but the proposal requires the construction of large dams in India, Nepal and Bhutan in order to go ahead, as they share the Ganges-Brahmaputra. This will require India to enter into agreements with these countries.
Linking major rivers of the region could create more regional water disputes instead of resolving the existing ones. In South Asia, failure to find negotiated settlements over water in the past has contributed to the rise of tensions between states. Only in the case of the 1960 Indus Treaty did India and Pakistan accept mediation by the World Bank. In all other water disputes, India has strictly adhered to the practice of bilateral negotiation. Though this approach has strengthened India’s position as a regional power, it has kept the past disagreements alive and limited wider plans to develop the region’s water resources.
The growing threat of climate change and its impact on water demand and supply in the region means South Asian countries can no longer continue with the old bilateral approach — particularly given China’s growing interest in harnessing river resources. In the last decade, China has built two hydropower dams on the Indus and Brahmaputra, and two more dams are presently under construction. All these developments have further increased the dynamics of water conflict, as well as the need for India to cooperate over the region’s scarce shared water resources.
China’s water projects upstream have threatened India’s position as the dominant riparian in these two basins. This has prompted India to explore collaborating with Bangladesh, Bhutan and Nepal in the Ganges-Brahmaputra basin, and to seek support for dam-building in the Afghan part of the Indus basin.
Riparian countries in South Asia should work towards establishing lower basin-based water management institutions — as the lower basin countries in the Mekong basin have been doing since the 1990s. Cooperation among lower riparian countries is needed not only to address increasing water scarcity in the dry-seasons and devastating floods in the monsoon periods, but also to effectively protect their water supply from China. Unilateral actions by South Asian countries, particularly India, to protect…
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.
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.
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- New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
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