China
Biden needs balance and engagement in Asia with China
Author: Editorial Board, ANU
Responsible adults are back in the White House. President Joe Biden sent a clear message in his inauguration that his priority is to heal a divided United States of America. He went on to immediately sign a series of executive orders including one that has the United States rejoin the Paris climate agreement.
So begins the hard yards of repairing America’s international standing and undoing the damage from four years of Donald Trump’s America First agenda. The United States didn’t just vacate global leadership for four years but was itself a source of uncertainty and instability. The domestic sources of America First persist with inequality and division magnified by failure to manage the response to the COVID-19 pandemic.
Whether Mr Biden and his administration can reclaim global leadership while attending to America’s great domestic fractures is still a question.
The biggest challenge on the international stage will be managing the China relationship. The United States has never faced a big power rival like China that already has a larger economy by some measures and is deeply integrated into the global economy.
China policy under President Trump — to be tough on China, frame it as a strategic rival and start to decouple the economies — had a large measure of bipartisan support. Secretary of State-designate Antony Blinken emphasised continuity on China policy in his senate confirmation hearings. But there will be differences. Where a Biden administration will differ most is on how it engages allies and partners in its strategy.
The Biden administration is starting to reveal its thinking on China and Asia policy. Kurt Campbell, Mr Biden’s ‘Asia tsar’ and the architect of President Obama’s Asia pivot (later rebranded the Asia rebalance), has outlined a strategy of working with allies to curb China’s assertive behaviour and restore balance and legitimacy to the Asian order. This is a welcome departure from the Trump administration that undermined alliances.
Mr Campbell’s strategy reveals two important gaps that are difficult to address yet. How will the United States engage China directly, and how will the coalition of allies and partners work with both the United States and China?
Any engagement between China and the United States involves spillovers for the rest of the world. Mr Trump’s transactional, bilateral, divide and conquer approach to foreign policy led to the phase one trade deal with China that eschewed multilateral trade rules and norms. The deal involved significant negative spillovers for the rest of the world as it diverted Chinese trade away from others like Australia towards US goods and gave special access to US companies in China that unilateral US sanctions had cut out for competitors from other countries.
The United States will need to find a way to engage China to pursue its global interests — from climate change to global economic governance — that avoids damage to the rest of the world. The global community needs to push China and the United States towards settlements in multilateral settings.
Mr Campbell suggests using an alliance of democracies or coalitions of the willing to counter Chinese assertiveness and curb Chinese behaviour. He will find many willing partners. But if those coalitions do not include engagement with China on win-win or positive sum issues like trade and investment, the willing partners will be fewer.
Few countries will have much appetite for being forced into a choice between China and the United States, a strategy that Mr Trump’s secretary of state Mike Pompeo pursued overtly. China is much too important to many countries around the world for their economic and political security. It will become more important as a source of recovery from the pandemic and to East Asia in particular after the conclusion of the Regional Comprehensive Economic Partnership (RCEP) agreement.
Mr Biden’s advisors are already finding the balance a challenge, letting it be known they are unhappy with the European Union for concluding an investment deal with China before the Biden administration was in place. National Security Advisor Jake Sullivan tweeted: ‘The Biden-Harris administration would welcome early consultations with our European partners on our common concerns about China’s economic practices’.
Asia tsar Campbell went further in his Foreign Affairs article suggesting that Europe is out of step with the Indo-Pacific approach because ‘distant European leaders are inevitably less concerned about China’s…
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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