China
Iran on the go with the SCO
Author: Jingdong Yuan, University of Sydney
At its most recent meeting in Tajikistan this September, the Shanghai Cooperation Organisation (SCO) started a formal process to grant Iran full membership. This will be the second time the organisation expands after accepting India and Pakistan in 2017 — now extending its reach from Central and South Asia to the greater Middle East.
Iran’s inclusion in the SCO has important implications for what is largely a Central Asian organisation, even if Iran is the main beneficiary. At a time of international isolation, Tehran hopes that its membership will open up opportunities to expand political, economic and cultural ties with countries across the region. With two SCO members on the United Nations Security Council, Iran hopes it will get a more sympathetic hearing on issues such as sanctions relief.
Still, the significance of Iranian membership is, at least for now, more symbolic than substantive. What Iran brings to the SCO really depends on the organisation’s goals, structure and capacities.
The SCO was established in 2001 with limited albeit critical goals for its members — to combat the so-called ‘three evils’ of extremism, terrorism and separatism. At the time these posed serious threats to China, Russia and the Central Asian republics. The organisation has since expanded its mandate to include modest economic cooperation and energy development, but most importantly the preservation of member states’ political systems and advocacy for a new type of international relations that is largely read as opposition to US hegemony and unilateralism.
Beijing has in the past two decades greatly extended its reach and influence throughout Central Asia, maritime South Asia, and increasingly the Middle East. The SCO has helped China secure important energy supplies through Eurasia, while the Belt and Road Initiative has expanded China’s geoeconomic and geopolitical agendas, directly challenging the US position in the region.
The SCO is now a symbolically institutionalised organisation with annual high-level meetings. But its substantive structure remains mediocre to non-existent — as are its agendas, which tend to be rather diverse and unfocussed, with differences between member states impeding its transformation into a truly consequential organisation.
Perhaps that was the intent of the founding members. The symbolic state of the SCO means they are yet to cede any sovereignty beyond coordinating efforts to fight the ‘three evils’. Apart from the skeleton secretariat, the only other concrete entity under the SCO is the RATS — the Regional Anti-Terrorist Structure. The biannual joint anti-terrorism exercises, which typically feature Russian and increasingly Chinese participants, are the most high-profile activity of the organisation.
Given its interest in self-preservation, modest economic objectives and limited state capacity, Iran’s membership will hardly add to the SCO’s strength. Embracing a major player in the Middle East mainly symbolises the organisation’s geographic reach and continued relevance as an advocate of principles such as common development and cooperative security.
It remains to be seen whether the organisation will redefine its agenda to play a more prominent role in the future security and economic issues that connect South Asia, Central Asia and the Middle East — three regions of geopolitical and geoeconomic importance. These include energy development, the stability of Afghanistan, and infrastructural connectivity linking Eurasia, South Asia and the Middle East.
Although its membership boasts 40 per cent of the world’s population and 20 per cent of its GDP, the SCO is only as strong and proactive as its core members, Russia, China, and to some extent, India, want it to be. Translating the organisation’s potential into concrete policy and deeper collaboration depends on the extent to which domestic and member state interests converge, as well as external pressures and opportunities.
The SCO’s ability to actively build a regional economic and security architecture will probably remain limited, selective and gradual. Indeed, the prospect of the SCO consolidating into a NATO or Quad-like organisation remains distant if not impossible — an outcome likely affected by the evolution of future US–Russia and US–China relations. This is understandable given the diversity of Central Asia, South Asia and the Middle East, as well as the significant resources needed to tackle regional issues.
A potentially big role for the SCO…
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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