China
Iran turns to China and India in the face of US sanctions
Author: Mohammad Soltaninejad, University of Tehran
In the face of the United States withdrawing from the Iran nuclear deal and adopting a ‘maximum pressure’ policy against Iran, Tehran is turning to China and India to circumvent US sanctions. In response, the United States is trying to deny Iran’s access to Chinese and Indian resources to pressure Iran into returning to the negotiation table.
Both China and India have long had the potential to become strategic partners to Iran, but efforts to establish such partnerships were undermined by the United States. Yet the idea of strategic partnerships remains alive due to the geopolitical and geo-economic factors that link China and India to the Persian Gulf, Afghanistan and Central Asia. A review of the dynamics of Tehran’s relations with Beijing and New Delhi suggests various avenues of cooperation in the face of US policies against Iran.
Beijing is showing a hesitant willingness to continue working with Tehran. China continued to import Iranian oil despite US sanctions and news leaked about negotiations over China’s prospective investment of US$280 billion in Iran’s oil and gas industry. Replacing the dollar with the renminbi as a transactions currency has facilitated China–Iran trade and financial cooperation.
To cope with the US policy of containment, China relies on Iran to diversify its energy supply. The majority of China’s oil imports currently pass through the Strait of Malacca, which is controlled by US allies in Southeast Asia. China can overcome this strategic predicament if Iran’s gas flow is connected to the Gwadar Port pipelines in Pakistan. This explains China’s readiness to invest in the development of the southeastern Iranian port of Chabahar from which Beijing can also access Afghanistan, Central Asia and Russia.
Iran also wants India’s support to counter US pressures. India preceded China in establishing constructive strategic ties with Iran. During the 2000s, Iran–India relations experienced unprecedented progress that led to India’s pledging to invest in Iran. Back then, Iran was trying to counterbalance the United States after it included Iran, with Iraq and North Korea, in the ‘axis of evil’.
The US invasion of Iraq after Afghanistan alarmed Iran further and pushed it to strengthen ties with second-tier powers, including India. India found developing ties with Iran beneficial. The International North-South Transport Corridor could connect India to Central Asia and Russia, and Iran could increase India’s influence in the Arabian Sea. Strategic and economic reasons to establish a partnership between Iran and India still persist. India has strategic interests in developing ties with Iran and is the greatest investor in Chabahar’s development.
In theory, India–Iran cooperation should be easier than that of China–Iran. Washington is more tolerant of India’s deepening relations with Iran as its interests in the Indian Ocean, the Arabian Sea and the Persian Gulf are best served if India and Iran work together.
With US troops leaving Afghanistan, India can protect US interests by fighting terrorism and strengthening the central government in Kabul. This would be difficult to achieve unless India has easy access to Afghanistan. Given the rivalry between India and Pakistan, Iran remains the best route that connects India to Afghanistan. This explains the United States’ decision to waive sanctions on India’s investment in Chabahar.
But in practice, India is showing reluctance to work with Iran after the United States’ withdrawal from the nuclear deal. India stopped purchasing Iranian oil in May 2019 and reduced the budget allocated to the development of Chabahar. Financial arrangements to facilitate trade between Iran and India are in flux, meaning that importing Indian medicine, food and other commodities will become more difficult for Iran. The major problem was that the suppliers of the equipment that Chabahar needs were not willing to make deliveries because they feared adverse impacts on their business with the United States.
Tehran is convinced that India cannot be the partner it needs to counter US sanctions. India owes its rising power status, in part, to its increasingly close relationship with the United States. No matter how valuable Iran is for India, New Delhi would not endanger its relations with Washington for the sake of preserving its friendship with Tehran.
Although Iranians are well aware that Beijing would not sacrifice its relations with the United States for its partnership with…
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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