China
Myanmar-China trade halted amid fierce fighting in Shan state
Trade across Myanmar’s shared border with China has ground to a halt amid a six-week offensive by ethnic rebels fighting junta troops in the country’s Shan state, according to merchants, causing an estimated loss of more than US$500 million in commerce.
Since the Arakan Army, the Myanmar National Democratic Alliance Army, and the Ta’ang National Liberation Army launched Operation 1027 – named after the Oct. 27 military actions that started it – as part of the “Three Brotherhood Alliance,” junta troops have been on the retreat in many areas, leading junta chief Senior Gen. Min Aung Hlaing in late November to issue a rare acknowledgement of the rebel’s successes.
After fighting began, merchants told RFA Burmese, trade ceased at Muse and Chinshwehaw – two key border towns positioned across from southwest China’s Yunnan province.
“Trade has totally stopped there – only hand couriers are seen at the border gates, carrying traditional foods,” said a merchant in Muse who, like others interviewed for this report, spoke to RFA on condition of anonymity due to security concerns.
There were no civil servants to process cross-border trade left in the trade zone, he said. “Fighting breaks out every once and a while, lasting for 10-15 minutes each time.”
Prior to the offensive, the value of bilateral trade at the two border towns was more than US$10 million per day, according to junta’s Ministry of Commerce data. So in the 50 days since the start of “Operation 1027,” that would amount to more than US$500 million in losses.
Corn, rice, cotton, machinery
There are two major border gates — Muse-Mang Wein and Kyin San Kyawt — used for bilateral trade at the two border towns, but neither is open amid the clashes. The Myanmar National Democratic Alliance Army, or MNDAA, now controls Kyin Sang Kyawt, where nearly 100 trucks were destroyed by military shelling on Nov. 23.
Myanmar exports agricultural goods to China through the Kyin San Kyawt border gate in Chinshwehaw that include corn, rice, rubber, black sesame, dried elephant foot yam, green gram and groundnuts, and imports cotton, raw plastic, machinery, chemical fertilizers and medicine.
Myanmar’s exports through the Muse-Mang Wein border gate in Muse include eel, crab, prawns, cotton, rubber, corn, peanut, groundnuts, rice, broken rice and turmeric, while imports consist mainly of fuel and machinery.
Area aid workers said at least 10 civilians, including children, have been killed in the fighting during the offensive.
A merchant at Chinshwehaw told RFA that commodities are stranded at the border gate.
“Commodities from the Chinese side were sent back as they blocked the border gate,” she said. “But Chinese goods on our side have sat stranded in the fields and warehouses. We are waiting to pay taxes.”
The costs associated with the transportation of goods have skyrocketed during the conflict, a third merchant told RFA.
“The cost of transporting goods on a 17-ton truck on the route from [Shan state’s] Mongla township to Mandalay [800 kilometers, or 500 miles to the east] was 7 million kyat (US$3,330),” he said. “In Chinshwehaw, the cost has increased by more than four fold. Fuel prices have also increased.”
Both merchants and farmers have suffered losses, and more than 1,000 common laborers have lost their jobs at the trade zones, said residents and merchants.
No end in sight
Li Kyarwen, the spokesperson of the MNDAA, said that it isn’t possible to restore bilateral trade in northern Shan state anytime soon.
“During the ‘revolutionary period,’ due to the lack of peace and security, business can’t be resumed immediately,” he said.
But merchants warned that if the border gates don’t reopen by the end of December, there will be a shortage of Chinese commodities, “and prices will surely soar.”
Attempts by RFA to contact the junta’s Ministry of Commerce for comment on the halt to border trade went unanswered.
Reports of the closed checkpoints came a week after junta Foreign Affairs Minister Than Shwe met with Shi Yugang, the deputy secretary of the Yunnan Provincial Party Committee during a visit to China, at which the two discussed border trade issues.
While the junta’s peace negotiation committee has held talks with the Three Brotherhood Alliance to end all conflict in Shan state near the border, little progress has been made and fighting continues daily.
Translated by Aung Naing. Edited by Joshua Lipes and Malcolm Foster.
Read the rest of this article here >>> Myanmar-China trade halted amid fierce fighting in Shan state
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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