China
Chinese illicit influence scandals in Thailand
Author: Greg Raymond, ANU
Two scandals converged in November 2022 in Thailand, forming a perfect storm that threatens the government party Phalang Pracharat’s already shaky prospects at the upcoming 2023 national election. The scandals have also illuminated a growing problem that has remained largely out of Thai news headlines in recent years — the nexus between Chinese capital, crime and Thai politicians.
The government was forced to back down on a proposal that intended to increase foreign investment by lifting Thailand’s longstanding prohibition on foreigners owning land. A united front opposed to the measure, including fellow Phalang Pracharat member Pareena Kraikupt, deployed one of the most potent rhetorical weapons in Thailand’s political arsenal — that of khai chat or selling out the nation.
Thai police also announced they had conducted raids in Bangkok and arrested a Chinese national who was using fake Thai identity cards and in possession of cash, luxury cars and property titles. This converged precisely with an objection that opponents of the land sale reform measure had raised —that relaxed laws could increase the flow of Chinese ‘grey money’ (thun chin sithao) into Thailand. ‘Grey money’ refers to proceeds from criminal enterprises — including drugs and gambling — laundered through purchases of real estate.
The Thai police stated in a subsequent briefing that money from the Golden Triangle drug trade, which has increased in recent years, was financing the Chinese crime bosses’ acquisition of Thai passports, identities and land. Other former and serving politicians have come forward with their knowledge of the activities of Chinese Triad gangs in Thailand. Most disturbing are allegations, floated by many, that these gangs are not afraid of either the police or the law because Thai laws are implemented weakly and without transparency. This is because the gangs are backed by Thai politicians and officials.
Signs of Chinese capital and influence corroding the integrity of Thailand’s political processes have been present for some time and were flagged as early as the 1990s.
A 1992 Thai Ministry of Foreign Affairs document warned that the Chinese side could ‘exploit close (personal) relationships with Thai elites and high-ranking officials in the Thai capital’ and obtain insights from Sino-Thais in private enterprise.
In 2020, the Thai Department of Special Investigation revealed a large criminal network involving foreign Chinese nationals that obtained Thai identity cards registered to non-existent individuals and used them to establish Thai-registered companies. The network of 104 companies, which was ostensibly involved in legitimate businesses such as real estate, was moving hundreds of millions of dollars suspiciously, suggesting money laundering or tax avoidance.
One of the individuals named in the investigation, Mr Wang Hongbin, carried multiple passports and was well-connected with both the overseas Chinese business community and Thai politicians, including former prime minister Chavalit Yongchaiyudh.
In 2013, Wang, with then-speaker of the House of Representatives Somsak Kiatsuranont, created a fake position in parliament called the ‘Director of Chinese Affairs Department to the President of National Assembly of Thailand’. A corresponding letterhead — with the Thai parliament’s crest combining Chinese and Thai script — was also created. The fictitious department invited dozens of Chinese provincial officials to visit Thailand. Wang has been able to remain active in Thailand, despite being under criminal investigation, suggesting patronage from within the Thai establishment.
Thai reluctance to grapple with this problem stems from multiple sources.
As many as a third of Bangkok’s population have some Chinese heritage stemming from waves of Chinese migration over the late 19th and early 20th centuries. Chinese diasporas have suffered much discrimination and Chinese–Thai people may be concerned about this issue stoking animosity.
There is a reluctance to criticise or scrutinise China given the royal princess Sirindhorn’s much-publicised love of China and her extensive travels there. The powerful Chinese–Thai businesses that control much of the Thai economy, such as the Charoen Pokphand Group, are close to China. The CEO of Charoen Pokphand Group Dhanin Chearavanont goes by the name Xie Guomin in China and is president of the China Federation of Overseas Chinese Businessmen — a United Front Work Group affiliate.
Some political parties are…
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.
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 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
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