China
Domestic divisions leave blanks in US Asia policy
Author: Gorana Grgic, University of Sydney
In the flurry of analyses of Joe Biden’s early policy moves, there is a common thread that depicts the 46th president as an agent of change towards predictability in policymaking, and a much-desired course correction after the chaotic Trump years.
In undoing the political and reputational damage done by his predecessor, Biden has a hefty task of convincing both Americans and America-watchers that the United States still occupies a central role in the international system and can act as a force for good.
Much like the famous rhyme for marital success, Biden has decided to opt for ‘something old’ and surround himself with people he has had a track record working with. His foreign policy team comprises long-time practitioners and experts, many of whom were integral to the Obama administration and the Clinton cabinet.
The new administration will work to prioritise diplomacy, elevate multilateralism and incorporate values in the conduct of foreign policy. But there is also the ‘something new’ aspect of Biden’s nascent foreign policy doctrine that will differentiate it from his Democrat predecessors. Biden’s foreign policy will be more constrained by situational factors at home and abroad. Deep political divisions and multiple crises — emerging from or amplified by the COVID-19 pandemic — will limit his presidential attention and action. And as the world grows more unstable, uncooperative and illiberal, US foreign policymakers will have significantly less room to manoeuvre.
Rather than a radical departure from the Trump era, there are still elements from the previous administration that could qualify as ‘something borrowed’. While the new administration is talking up cooperation on transnational issues such as climate change, global health and arms control, it is bound to maintain the inherited competitive disposition towards China. It has made it abundantly clear that economic statecraft will remain a vital aspect of its strategy.
Yet, there is uncertainty around the policy specifics, much of which will hinge on contingency planning and bureaucratic politics. While we can only speculate as to what Chinese foreign policy will look like over the next four years, there is less room for guesswork when it comes to the key divides in Biden’s team.
First, there is the question of setting policy priorities. There are some well-founded fears that a divide over traditional and non-traditional security issues is beginning to drive a wedge through the administration. On one hand, there are those who believe the greatest threats to the United States are of primarily kinetic origin. On the other, there are those who argue the largest threats are anthropogenic.
The former argue that the United States should maximise its military and economic capabilities to compete with China. The latter maintain that climate change is the mother of all questions that can only be addressed if the world’s two largest economies work together.
Second, there is a generational divide within the top echelons of the executive branch. The President’s younger appointees generally advocate for a more assertive response to China, while the older guard are wary of a new Cold War.
Finally, the interaction of bureaucratic and domestic politics will have a decisive impact on Biden’s policy direction. The Obama years are a telling example of the long road between strategic planning and policy implementation. Obama began his first term with a dovish outreach to China, but as China appeared to grow more assertive the more hawkish response advocated by the State Department became the preferred policy. The infamous ‘pivot to Asia’ was never fully implemented because US domestic politics and partisanship got in the way of ratifying the Trans-Pacific Partnership, and attention to seeing through this agenda in Obama’s second term shifted with the reprioritisation of the Middle East and Europe.
What these variables might look like during the Biden years remains to be seen. Nonetheless it is not wildly imprudent to assert that bureaucratic rivalries will surface and affect the formulation of policies. Partisan politics and the slimmest of margins in Congress will further complicate policymaking. Key questions — such as how much competition with China is productive and the merits of Washington’s decoupling strategy — will also create domestic winners and losers who will lobby for their preferred outcome.
The early signals point towards President Biden’s willingness to confront…
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
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- Is journalist Vicky Xu preparing to return to China?
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