China
Sino–US rivalry bedevils global COVID-19 cooperation
Author: Editorial Board, ANU
At the start of the year Donald Trump was poised to run for re-election in November on the back of a strong economy and jobs. Since then COVID-19 has crippled the US economy. The unemployment rate is expected to exceed 20 per cent, rivalling the worst period of the Great Depression. At the same time, America’s lack of accessible healthcare and epidemic preparedness has resulted in a mortality rate much higher than in other countries. Americans are losing jobs by the millions and dying by the tens of thousands.
Trump’s re-election campaign team wants to direct the blame for his country’s woes at China and cast him as a leader who saved the United States from even worse China-afflicted pain. Trump and his team have pushed a far-fetched story about the virus originating in a Wuhan lab. Administration officials including Vice President Mike Pence refer to the coronavirus as the ‘Chinese virus’. Trump has recently upped the ante, calling it the ‘Plague from China’ and saying that ‘100 trade deals wouldn’t make up for [the damage that has been done]’. The following day, on Fox News, Trump suggested that ‘we could cut off the whole relationship’.
Beijing has reacted with haste in seeking to control the coronavirus narrative. While admitting to early mistakes (blaming them on local officials), China’s leaders have sought to burnish their government’s credentials in leading an effective response to COVID-19, resulting in a lower infection and mortality rate than many richer countries, including the United States. When Trump lashed out at the World Health Organization (WHO) for incompetence and being ‘too close’ to China, subsequently halted US financial contributions, China stepped in with an additional US$30 million. Beijing has also provided aid to assist other countries, including the United States, respond to the virus.
Beijing has taken the opportunity to push its credentials as a responsible global citizen, in the process overreaching in its effort to control the narrative. It has mobilised ‘wolf warrior’ diplomats to pressure foreign governments into praising Beijing’s coronavirus response. China’s state media has attacked senior US officials by name, including US Secretary of State Mike Pompeo, and threatened sanctions against US politicians associated with anti-China litigation related to COVID-19. And, in one jaw-dropping moment, a spokesman for China’s Ministry of Foreign Affairs suggested that the virus originated not in China but was instead brought there by the US military.
As US–China relations deteriorate and the WHO becomes a football for the two countries’ rivalry, the potential for global coordination on COVID-19 is undermined. As Suisheng Zhao points out in the first of our feature essays this week, US–China rivalry prevented the United Nations Security Council (UNSC) from formulating a response. In the past, Zhao notes, the UNSC helped establish the Global Fund for AIDS, Tuberculosis, and Malaria. It also passed a resolution in 2014 declaring the Ebola epidemic in West Africa a ‘threat to international peace and security’, leading to the creation of the UN Mission for Ebola Emergency Response — the first UN mission to address a public health crisis.
In another feature essay this week Jia Qingguo worries that the current diplomatic standoff between Beijing and Washington is likely to continue for the foreseeable future. He sees no end to Trump’s anti-China stance in the year of his re-election campaign (Trump boasted on Fox News he could save America US$500 billion by cutting off the relationship with China) and no way that Beijing will back down from its equally muscular response. Even intervention by the two great helmsmen seems unlikely. Trump spoke of his ‘very good relationship’ with Xi Jinping, but said ‘right now I just don’t want to speak to him’.
The extent of the economic fallout from COVID-19 and souring US–China relations is difficult to gauge. In the third of our feature essays this week, Justin Yifu Lin examines China’s options for responding to the economic challenges, optimistic that China can still achieve GDP growth of 3-4 per cent in 2020 despite IMF forecasts that global growth will change by a similar amount in the opposite direction. Lin observes that COVID-19 has imposed both demand and supply-side economic destruction. He advocates investment in infrastructure to create jobs, but also calls for support of household consumption in the form of vouchers and cash transfers to…
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.
- China Implements New Policies to Boost Foreign Investment in Science and Technology Companies
- Q1 2024 Brief on Transfer Pricing in Asia
- New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
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