China
How will Duterte’s successor deal with China?
Author: Richard Javad Heydarian, Manila
Over the past five years, bilateral relations between China and the Philippines, a United States treaty ally, have undergone a tremendous transformation. In the words of a top Chinese diplomat, what we have witnessed, especially under Philippine President Rodrigo Duterte, is a ‘golden age’ in bilateral relations.
But in his twilight months in office ahead of the May 2022 presidential elections, the Filipino president — who is constitutionally confined to a single six-year term in office — has adopted a dramatically divergent tone on China.
During the recent China-ASEAN Summit, Duterte abhorred purported harassment of Philippine resupply missions in the South China Sea by Chinese vessels. Amid the latest flare up in maritime tensions over the Second Thomas Shoal, Duterte openly warned, ‘this does not speak well of the relations between our nations and our partnership’ and called on the Philippines to utilise legal tools to maintain peace in the South China Sea.
The abrupt shift in Duterte’s tone may appear to be driven by contingent elements, namely public pressure at home amid the standoff over the disputed shoal. It’s clear that Duterte and his successor will come under growing pressure from the public and the defence establishment to take a more robust stance on China.
Following weeks of rollercoaster political manoeuvres, the line-up of Duterte’s potential successors is now effectively finalised. By all indications, neither presidential daughter Sara Duterte or long-time presidential aide Senator Christopher ‘Bong’ Go will be in the contention for the presidency this time. That has left Ferdinand ‘Bongbong’ Marcos Jr as the clear frontrunner in the 2022 presidential elections.
Bongbong Marcos is the only popular candidate to have openly backed continuity in Philippine foreign policy towards China by emphasising the futility of confrontation and the value of robust economic cooperation with the Asian powerhouse.
His father, the late dictator Ferdinand Marcos, was one of the first leaders among top US allies in Asia to open communication channels and formalise bilateral relations with Maoist China in the mid-1970s. Anticipating warm ties under a Marcos Jr presidency, Chinese Ambassador to the Philippines Huang Xilian has openly fawned over the current frontrunner.
Philippine Vice President Maria Leonor ‘Leni’ Robredo, the de-facto leader of the opposition, who has mostly ranked second in key surveys, has indicated a more radical departure from Duterte’s policy. She is emphasising robust defence relations with traditional Western allies and promoting the 2016 arbitral tribunal award at The Hague, which Beijing has rejected, as the ultimate basis for management of disputes with China in the South China Sea. As for boxer-turned-politician Emmanuel ‘Manny’ Pacquiao, the former Duterte ally has also adopted a far tougher stance on China and even gone so far as accusing Duterte of soft-pedalling on maritime disputes.
But to best understand the likely direction of Philippine policy, one should look at the position of more ‘centrist’ candidates, who are consciously tweaking their foreign policy messaging based on public opinion and the sentiments of the defence establishment.
Manila Mayor Francisco ‘Isko’ Moreno, who is placed third in most surveys, has advocated for a ‘middle course’ on practically every major issue, including the South China Sea disputes. In recent months, he has both emphasised the value of engagement with China and strengthening the Philippines’ defensive capabilities.
Moreno has backed potential joint energy exploration agreements in the South China Sea to de-escalate tensions and foster a cooperative relationship with China. At the same time, he has supported revitalised military ties with Washington, while warning of a swift and decisive response against any Chinese harassment of Filipino fishermen and vessels in the disputed areas.
The wisdom behind the foreign policy posturing of top centrist candidates such as Moreno, who is trying to win supporters from across the political spectrum, is based on the ebbs and flows of broader public opinion. The United States enjoys high favourability ratings among Filipinos, often among the highest in the world, while China has historically suffered from very low trust ratings.
According to the Social Weather Stations polling agency, China’s net trust rating among Filipinos was only positive in nine out of 53 surveys conducted between 1994 and 2020. In 2020,…
China
Exploring the Revamped China Certified Emission Reduction (CCER) Program: Potential Benefits for International Businesses
Companies in China must navigate compliance, trading, and reporting within the CCER framework, impacting operations and strategic objectives. The program focuses on afforestation, solar, wind power, and mangrove creation, offering opportunities for innovation and revenue streams while ensuring transparency and accuracy. The Ministry of Ecology and Environment oversees the program.
As companies navigate the complexities of compliance, trading, and reporting within the CCER framework, they must also contend with the broader implications for their operations, finances, and strategic objectives.
This article explores the multifaceted impact of the CCER program on companies operating in China, examining both the opportunities for innovation and growth, as well as the potential risks and compliance considerations.
Initially, the CCER will focus on four sectors: afforestation, solar thermal power, offshore wind power, and mangrove vegetation creation. Companies operating within these sectors can register their accredited carbon reduction credits in the CCER system for trading purposes. These sectors were chosen due to their reliance on carbon credit sales for profitability. For instance, offshore wind power generation, as more costly than onshore alternatives, stands to benefit from additional revenue streams facilitated by CCER transactions.
Currently, primary buyers are expected to be high-emission enterprises seeking to offset their excess emissions and companies aiming to demonstrate corporate social responsibility by contributing to environmental conservation. Eventually, the program aims to allow individuals to purchase credits to offset their carbon footprints. Unlike the mandatory national ETS, the revamped CCER scheme permits any enterprise to buy carbon credits, thereby expanding the market scope.
The Ministry of Ecology and Environment (MEE) oversees the CCER program, having assumed responsibility for climate change initiatives from the National Development and Reform Commission (NDRC) in 2018. Verification agencies and project operators are mandated to ensure transparency and accuracy in disclosing project details and carbon reduction practices.
On the second day after the launch on January 23, the first transaction in China’s voluntary carbon market saw the China National Offshore Oil Corporation (CNOOC), the country’s largest offshore oil and gas producer, purchase 250,000 tons of carbon credits to offset its emissions.
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
China Implements New Policies to Boost Foreign Investment in Science and Technology Companies
China’s Ministry of Commerce announced new policy measures on April 19, 2023, to encourage foreign investment in the technology sector. The measures include facilitating bond issuance, improving the investment environment, and simplifying procedures for foreign institutions to access the Chinese market.
On April 19, 2023, China’s Ministry of Commerce (MOFCOM) along with nine other departments announced a new set of policy measures (hereinafter, “new measures”) aimed at encouraging foreign investment in its technology sector.
Among the new measures, China intends to facilitate the issuance of RMB bonds by eligible overseas institutions and encourage both domestic and foreign-invested tech companies to raise funds through bond issuance.
In this article, we offer an overview of the new measures and their broader significance in fostering international investment and driving innovation-driven growth, underscoring China’s efforts to instill confidence among foreign investors.
The new measures contain a total of sixteen points aimed at facilitating foreign investment in China’s technology sector and improving the overall investment environment.
Divided into four main chapters, the new measures address key aspects including:
Firstly, China aims to expedite the approval process for QFII and RQFII, ensuring efficient access to the Chinese market. Moreover, the government promises to simplify procedures, facilitating operational activities and fund management for foreign institutions.
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
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.
- Exploring the Revamped China Certified Emission Reduction (CCER) Program: Potential Benefits for International Businesses
- China Implements New Policies to Boost Foreign Investment in Science and Technology Companies
- 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?
- Guide for Foreign Residents: Obtaining a Certificate of No Criminal Record in China
