China
How the coronavirus complicates the US–Philippine alliance
Author: Charmaine Misalucha-Willoughby, De La Salle University
In February, Philippine Senator Ronald ‘Bato’ dela Rosa’s tourist visa to the United States was revoked. Dela Rosa, a key ally of President Rodrigo Duterte, was also the architect of the administration’s war on drugs when he was the chief of the Philippine National Police. This move prompted Duterte to terminate the Visiting Forces Agreement (VFA) with the United States. The revocation of Dela Rosa’s tourist visa was the proverbial straw that broke the camel’s back.
Founded on the 1951 Mutual Defense Treaty, the US–Philippine alliance now seems to lie in shreds. But this is not the first time that the alliance has had its raison d’etre challenged. In 1992, the Philippine Senate voted to close two US military bases — the Clark Air Base and the Subic Bay Naval Base. But China’s seizure of Mischief Reef in 1995, coupled with the brewing insurgency in Mindanao, underscored the need for the Philippines to develop its security capabilities.
Under the veil of uncertainty in the post-Cold War era, the VFA was ratified in 1999 and allowed US military personnel temporary access to the country. The agreement reinvigorated the alliance through cooperative measures in the areas of counterterrorism, intelligence, surveillance, reconnaissance, and humanitarian and disaster relief. The most significant changes brought about by US–Philippine cooperation were instilling civil engagement and bolstering professional norms within the Armed Forces of the Philippines.
By 2012, China’s assertive moves in the South China Sea challenged US commitments towards its treaty ally. The Scarborough Shoal incident formed the strategic backdrop for the Enhanced Defense Cooperation Arrangement in 2014. Duterte’s assumption of the presidency in 2016 was a game changer not least because of his anti-US stance and his pursuit of an ‘independent foreign policy’, which resonated strongly amidst perceptions of an overdependence on the United States.
It is no wonder that a tourist visa issue could push the alliance over the edge. While there is reason to believe that regaining balance is inevitable despite the current crisis, the story is not that simple. There are three factors that could complicate the movement back to equilibrium.
The first factor is the coronavirus pandemic and its impact on US-China relations. Initially reported in Wuhan, China, the outbreak quickly spread as millions of residents were able to leave the city before the lockdown took effect. Over 2,400,000 cases and 169,000 deaths have been reported globally and other countries have implemented lockdowns as well.
The economic costs of the pandemic are massive. The lockdowns mean travel restrictions for hundreds of millions of people. The hardest hit sectors are tourism, hospitality, entertainment and energy with a combined estimated loss of US$143 billion in China alone. Manufacturing has also been hit. This supply-chain disruption means export demand has fallen significantly, which could cause China’s annual growth rate to slow considerably. Shipping and port operations are similarly impacted.
Economic costs aside, the Chinese government has shifted the internal narrative from a ‘people’s war’ against the disease to the argument that while the virus was first discovered in China, it need not have necessarily originated there. Still, China’s ability to bring daily new cases to single digits in mid-March implies that it can be an essential player in the road to global recovery.
How China recovers from this pandemic will redefine its identity as an emerging power and its relationship with the United States.
The second factor that complicates US–Philippine alliance politics is the role of the United States in an evolving global environment. As it confronts the fact that it is now no longer the only great power and becomes more focused on domestic issues, the United States may consider letting go of some of its alliances. This is especially a risk with President Donald Trump at the helm and the 2020 elections coming up.
Another layer of complexity is how the United States can manage risks amid the uncertainty caused by the pandemic. The supply-side shocks in China are now complemented by demand-side factors at the global level. There are now over 720,000 cases in the United States with deaths at around 37,000. The US stock market has performed at its worst since the global financial crisis.
The third factor that complicates the US–Philippines alliance stems from domestic…
Business
China’s Golden Rooster Film Festival Kicks Off in Xiamen – Thailand Business News
The 2024 China Golden Rooster and Hundred Flowers Film Festival began in Xiamen on Nov 13, featuring awards, cultural projects worth 31.63 billion yuan, and fostering international film collaborations.
2024 China Golden Rooster and Hundred Flowers Film Festival Opens
The 2024 China Golden Rooster and Hundred Flowers Film Festival commenced in Xiamen, Fujian province, on November 13. This prestigious event showcases the top film awards in China and spans four days, concluding with the China Golden Rooster Awards ceremony on November 16.
The festival features various film exhibitions, including the Golden Rooster Mainland Film Section and the Golden Rooster International Film Section. These showcases aim to highlight the achievements of Chinese-language films and foster global cultural exchanges within the film industry.
On the festival’s opening day, a significant milestone was reached with the signing of 175 cultural and film projects, valued at 31.63 billion yuan ($4.36 billion). Additionally, the International Film and Television Copyright Service Platform was launched, furthering the globalization of Chinese film and television properties.
Source : China’s Golden Rooster film festival opens in Xiamen – Thailand Business News
China
Italy and China New DTA Set to Take Effect in 2025: Important Changes and Implications
Italy ratified an upgraded Double Tax Agreement (DTA) with China, effective in 2025, to reduce tax burdens, prevent evasion, and enhance investment. The DTA introduces modern provisions aligned with international standards, targeting tax avoidance and improving dispute resolution for Italian businesses.
Italy recently ratified the upgraded Double Tax Agreement (DTA), which will finally take effect in 2025. This agreement was signed in 2019 and was designed to reduce tax burdens, prevent tax evasion, and promote Italian investment in China.
On November 5, 2024, Italy’s Chamber of Deputies gave final approval to the ratification of the 2019 Double Tax Agreement (DTA) between Italy and China (hereinafter, referred to as the “new DTA”).
Set to take effect in 2025, the new DTA is aimed at eliminating double taxation on income, preventing tax evasion, and creating a more favorable environment for Italian businesses operating in China.
The ratification bill for the new DTA consists of four articles, with Article 3 detailing the financial provisions. Starting in 2025, the implementation costs of the agreement are estimated at €10.86 million (US$11.49 million) annually. These costs will be covered by a reduction in the special current expenditure fund allocated in the Italian Ministry of Economy’s 2024 budget, partially drawing from the reserve for the Italian Ministry of Foreign Affairs.
During the parliamentary debate, Deputy Foreign Minister Edmondo Cirielli emphasized the new DTA’s strategic importance, noting that the agreement redefines Italy’s economic and financial framework with China. Cirielli highlighted that the DTA not only strengthens relations with the Chinese government but also supports Italian businesses, which face increasing competition as other European countries have already established double taxation agreements with China. This ratification, therefore, is part of a broader series of diplomatic and economic engagements, leading up to a forthcoming visit by the President of the Italian Republic to China, underscoring Italy’s commitment to fostering bilateral relations and supporting its businesses in China’s complex market landscape.
The newly signed DTA between Italy and China, introduces several modernized provisions aligned with international tax frameworks. Replacing the 1986 DTA, the agreement adopts measures from the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project and the OECD Multilateral Instrument (MLI), targeting tax avoidance and improving dispute resolution.
The Principal Purpose Test (PPT) clause, inspired by BEPS, is one of the central updates in the new DTA, working to prevent treaty abuse. This clause allows tax benefits to be denied if one of the primary purposes of a transaction or arrangement was to gain a tax advantage, a move to counter tax evasion through treaty-shopping.
| This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
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Business
China’s New Home Prices Stabilize After 17-Month Decline Following Support Measures
China’s new home prices fell for the 17th month in October, declining 0.5% from September, but slowing, indicating potential market stabilization amid supportive measures. Second-hand home prices showed mixed trends.
Decline in China’s Home Prices Stabilizes
China’s new home prices continued to decline in October for the 17th consecutive month, although the drop showed signs of slowing. Recent support measures from Beijing appear to be inching the market toward stabilization, as evidenced by a lighter decline compared to earlier months.
Monthly and Yearly Comparisons
According to the latest data from the National Bureau of Statistics, new home prices across 70 mainland cities fell by 0.5% from September, marking the smallest decrease in seven months. Year-on-year, prices dropped by 6.2%, slightly worse than the September decline of 6.1%. In tier-1 cities like Beijing and Shanghai, prices decreased by 0.2%, a smaller fall than 0.5% in the previous month.
Second-Hand Home Market Trends
Second-hand home prices in tier-1 cities experienced a 0.4% increase in October, reversing a 13-month downward trend. Conversely, tier-2 cities observed a 0.4% drop in second-hand prices, while tier-3 cities faced a similar 0.5% decline. Overall, recent trends indicate a potential stabilization in China’s property market.
Source : China’s new home prices slow 17-month decline after support measures kick in
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- China’s New Home Prices Stabilize After 17-Month Decline Following Support Measures
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