China
China–India border crisis reaches new heights
Authors: Harsh V Pant and Kartik Bommakanti, ORF
The latest crisis to engulf China and India erupted over their disputed border in early May 2020, when India discovered the presence of a large number Chinese forces in its claimed territory. It became quickly evident that China had occupied several areas on India’s side of the Line of Actual Control (LAC) in western Ladakh, as well as a portion of territory in the Indian state of Sikkim.
The ongoing China–India border crisis has its roots in history. India inherited unsettled borders from the British when it gained independence in 1947. Due to the absence of a clearly delineated boundary, there were several bloody clashes between Chinese and Indian forces in the 1950s and 1960s, including a full-scale war in 1962. Another bloody clash in 1967 claimed hundreds of casualties, albeit on a lower scale and intensity than in 1962.
The last time fatalities occurred on the Indian side was in 1975 at Tulung La along the LAC, although it is unclear whether it was the result of an accident or an ambush. Another crisis erupted in 1986 when China’s People’s Liberation Army (PLA) occupied territory at Somdurong Chu, leading to a massive Indian counter-mobilisation. Although this crisis did not result in bloodshed, the face-off lasted seven years before culminating in the 1993 Maintenance of Peace and Tranquillity Agreement and Chinese forces withdrawing from the area. A 1996 agreement on confidence-building measures sought to prevent further tensions.
Despite these mechanisms, a violent clash occurred between the Indian and Chinese armies on 15 July 2020, causing the deaths of 20 Indian soldiers and an unspecified number of PLA casualties.
The territorial claims made by each side defy easy resolution, and both Beijing and New Delhi have mobilised large forces across the entire stretch of the LAC — notwithstanding limited de-escalation in the Galwan Valley, Hot Springs, and Gogra in Ladakh. Though the central sector of the LAC adjacent to the Indian state of Sikkim was previously stable, the Chinese are believed to have made a two-kilometre incursion in an area known as Naku La. It is not evident that the PLA has yet vacated this area.
China is also escalating the situation by laying claim to territory under Bhutan’s control. Beijing is claiming Sakteng Wildlife Sanctuary in eastern Bhutan — close to the Indian state of Arunachal Pradesh that Beijing also claims. China appears to be attempting to drive a stronger bargain in negotiations with India through these expansive claims.
There are several potential pathways to a resolution, but none may have sufficient traction. The first would be New Delhi accepting China’s change of the status quo as a forcible eviction of the PLA might prove well-nigh impossible. These small territorial grabs are primarily tactical on China’s side, targeting minor areas where the chances of success are greatest. But for India, conceding to China’s territorial seizures would only legitimise Beijing’s ill-begotten gains and leave India a diminished power within the region and the wider Indo-Pacific. Its credibility would suffer and New Delhi would run the risk of being tested by its smaller neighbours.
A second pathway is more protracted. Both sides could remain mobilised as happened at Somdurong Chu. Even in such cases, precedents exist for a diplomatic resolution. Both Beijing and New Delhi might see wisdom in adhering to the foundational agreements concluded in 1993 and 1996 — and more limited agreements concluded in 2005, 2012 and 2013 that provide protocols for managing differences along the LAC. But the context of the resolution at Somdurong Chu was vastly different to the situation today. China was a much weaker power, and Deng Xiaoping and Jiang Zemin were more cautious than current Chinese President Xi Jinping.
A third pathway towards resolution is by way of military means. New Delhi could decide to escalate symmetrically by confining a military response to the areas where China entered Indian-claimed territory. This option is likely to be costly and a failure — and more importantly, it does not prevent China from escalating things further. India would also find it difficult to escalate the confrontation to new areas as Chinese forces will now be far more alert. In either case, political will and a readiness to run risks would be essential for the Indian government get a public buy-in.
India and China could also settle for a compromise that involves China withdrawing from specific ridges along the Pangong Tso…
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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- Is journalist Vicky Xu preparing to return to China?
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