China
Clarifying US commitments to Taiwan
Authors: Samuel Hui and Wang Kai-Chun, Taipei
On 7 July White House Asia tsar Kurt Campbell stated ‘we support a strong unofficial relationship with Taiwan; we do not support Taiwan independence’, drawing an even clearer line on the US position regarding Taiwan. This came after he affirmed in June that the Biden administration is confident in the current framework that governs relations between mainland China, Taiwan and the United States.
At the event in June, Campbell said that the administration ‘still believes the frameworks that have been developed over the last several decades between the United States, Taiwan, and China give us the best framework forward’. He further noted that the administration ‘has [already] emphasised the downsides of adjusting that framework’.
Avril Haines, the US Director of National Intelligence, also viewed Taiwan’s move towards de jure independence as a potential challenge. She argued that ‘already Taiwan is hardening, to some extent, toward independence as they’re watching, essentially, what happened in Hong Kong’. Haines said that such developments would ‘solidify Chinese perceptions that the US is bent on constraining China’s rise if Washington moves towards strategic clarity’.
The concerns described by Haines resonate with critics of US strategic clarity. There are fears that an ‘unconditional promise of US support’ will embolden pro-independence factions in Taiwan, many of whom want to unilaterally change the status quo. Independence fundamentalists are often dismissive of the threat posed by China and overly confident in US support. So the adoption of strategic clarity may limit Washington’s choices in the event of emboldened Taiwanese actions relating to China.
Strategic clarity in the form of unconditional support for Taiwan could tempt radicals towards de jure independence, risking full scale confrontation between the United States and China. Beijing could use the situation to rally the Chinese population against both Taipei and Washington under the banner of Chinese nationalism and increase risks of Chinese challenges to the regional status quo. For Washington, strategic clarity would forces it to be reactive — leaving US policymakers guessing where and when a confrontation might occur in the Taiwan Strait.
Aside from affirming the benefits of maintaining ambiguity, Campbell noted the fact that the United States is entering uncharted territories regarding a ‘new complex coexisting paradigm’ with China where competition and cooperation go hand in hand. Despite Biden’s characterisation of US–China relations as a battle between democracy and autocracy, high-level dialogues have continued.
Former US secretary of state John Kerry still made his trip to China, and Biden still virtually met Chinese President Xi Jinping at the recent US-led climate conference. To foster stability in this unprecedented ‘frenemy’ relationship, Washington figured some existing conflicts, like Afghanistan, must be settled, and some controversies, like Taiwan, should be stabilised.
From a Taiwanese perspective, it’s easy to interpret Washington’s China policy shifts as signs of support for Taiwan. Biden has maintained a tough stance on China, and Biden officials describe relations with Taiwan as ‘rock-solid’. But high ranking officials from China and the United States have started to communicate more frequently than during the Trump era.
On the one hand, Washington’s competitive posture against China has resulted in more hardline statements. But on the other hand, increasing Chinese aggression and the deteriorating power balance between Taiwan and China in the context of a shrinking US military budget also requires US leadership to restore interactions with Beijing and minimise miscommunications.
As the US–China relationship remains unpredictable, Washington’s attention will increasingly turn to Taiwan. But such focus does not necessarily imply unconditional support for Taipei. Such attention might instead be a way of compensating for a lack of confidence in US military deterrence without significantly provoking the Chinese, a policy which calls for a more cautious approach to the island deemed ‘the most dangerous place on earth’.
US support might be another part of managing the tilting power balance between Beijing and Washington — not as a political gesture or blind pass for Taiwanese actions. Washington supports Taiwan insofar as failing to do so threatens US interests — not just because it is a proud democratic…
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
- New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
- Is journalist Vicky Xu preparing to return to China?
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