China
US–China rivalry needs more clarity and less polarity
Author: John Wright, US Air Force
A daily barrage of US–China military alarms fill inboxes and news feeds. While many of these reports genuinely attempt to understand this rivalry, more often than not they create fear, confusion and uncertainty. It is important to brush past this overwhelming ‘fog of more’ and get back to basics.
To understand the US–China military rivalry it is important to grasp its main cause — conflict stemming from two competing grand strategies. China wishes to assert its own brand of leadership and reclaim its regional hegemonic crown. The United States prefers no regional hegemons at all, and especially not one that does not share common values and respect for the current rules-based order.
These grand strategies are integral parts of both states’ efforts to survive. They are not ‘worldviews’, ‘ideologies’ or ‘wish lists’. They are measurable, tangible goals that come with advantageous security consequences for one state at the expense of others. Each strategy is mutually exclusive, and neither state stands a realistic chance of convincing the other to change.
Strategy is simply the finding of ways to achieve objectives — within the realm of the possible — in the endless search for a better peace. But strategy is constrained by statecraft, the specific actions a country can take to implement strategy, and this is immensely complicated. Military posturing is a tool of statecraft as much as it is a component of strategy, but its intricacy means that strategy often takes a back seat to statecraft and its ‘tyranny of the now’.
China and the United States must both contend with statecraft from remarkably similar positions. US foreign policy and military posture is synthesised by an often contradictory multitude of bureaucrats and specialists who all see foreign policy in a particular light. Similarly in China, rank-conscious individuals compete for their leaders’ attention in guiding foreign policy and military posture. Beijing’s ability to centrally marshal its military posture and foreign policy is often oversold due to the opaqueness of its government.
Both states are constrained by the same things — using the right resources and executing a coordinated response to events. For instance, when China sent a five-vessel flotilla through the Bering Strait in 2015, it calculated the move would poke the United States in the eye as a territorial violation. After US authorities declared the voyage ‘not threatening’ and watched it pass unopposed in a manner consistent with international law of the sea, China was clearly flummoxed.
In December 2016, a then president-elect Donald Trump tweeted his disapproval of the Chinese theft of a US Navy underwater drone without first discussing options with the rest of the administration, which generated additional frustration.
Believe it or not, these blunders are good news for the US–China military rivalry. Statecraft’s pace naturally slows down decision-making, providing more time to defuse situations before they become crises.
US–China watchers should not concern themselves with how many aircraft China launches towards Japanese airspace, or how many vessels the United States sails through the Taiwan Strait. Instead, they should be concerned with developments that lead down the road of miscalculation. For instance, when one side mistakenly believes going to war outweighs the benefits of not going to war.
Miscalculation begins with misunderstanding. The urgency behind military posture decisions are often perplexing. One need look no further than the irritated response from China following the US deployment of a Terminal High Altitude Air Defense system in South Korea in 2017. This was a time of tense military standoff between the United States and North Korea, demonstrating how well-meaning military deployments can be misunderstood through a different lens.
There is a danger if misunderstandings begin to affect military credibility — the belief a rival will actually carry out a threat. No deterrence can happen in a situation where neither rival believes the other will actually follow through. In a world where the United States and China blame each other for their problems, this is a real threat.
To manage the military rivalry, both states should seek a balanced force posture which lowers the risk of military encounters. The United States will seek to reprioritise its preferred instruments of national power away from military and economic, and toward more diplomatic and information-based power. The Biden…
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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