China
Japan needs to navigate a pathway between the United States and China
Author: Editorial Board, ANU
Japan’s Fast Retailing CEO Tadashi Yanai, who runs the Uniqlo clothing chain, declared that his company wouldn’t be choosing between the United States and China in an interview with financial daily Nikkei Asia last week. ‘Japan can’t survive without being an open country’, Yanai said. Japanese companies caught between the United States and China ‘need to acknowledge that Japan has nothing. Japan has no choice but to make money in markets across the world’.
Yanai’s decision to make no comment on whether the company uses cotton from Xinjiang is emblematic of his approach to geopolitical affairs. ‘I want to be neutral between the United States and China’, he said. ‘The US approach is to force companies to show their allegiance. I wanted to show that I won’t play that game’.
When it comes to the economic crunch point, what’s good for Uniqlo is probably also good for Japan. But the Japanese government is yet to define a pathway through US–China rivalry and political assertiveness that might make Yanai’s posture a viable national strategy.
The Japanese prosperity that has come with globalisation and technological advancement has fundamentally changed the regional and global balance of power. The rise of China as the world’s second largest and soon to be largest economy poses a major challenge to the established global order.
The whole region is navigating these tricky changes, but Japan is in the cockpit.
The pressures on global markets and political and multilateral institutions and systems are unprecedented. China’s political system amplifies the uncertainty the region faces about how tensions with Beijing can be dealt with. Political and military power has followed China’s economic power, and the country is no longer hiding its strength and biding its time.
China is Japan’s and Asia’s largest trading and economic partner; Japan is the largest source of foreign direct investment for China. It is reasonable for China to have its power reflected in international efforts to shape global rules and for it to want to secure its interests in its immediate neighbourhood.
But the tip towards political coercion is a tip too far. China’s assertiveness in international dealings and its use of coercion, particularly in its immediate regional neighbourhood — earlier against Japan and recently more blatantly against Australia — have aggravated uncertainties about the nature of its rise. There is a growing attenuation of trust between China and other powers.
The United States’ responses to the rise of China have varied, grappling for a balance between engagement, competition and containment. In recent years, fears of the consequences of China’s challenge to US economic power have led to a trade war, technological decoupling and strategic competition and pressure on US allies and partners to make choices that favour the United States whatever the cost.
Although the rise of Japan in the 1980s was also met with a similarly confrontational American response, Japan was under the American security umbrella and had a political system that was a little less unfamiliar. The rise of protectionism in the United States, driven by an uneven recovery from the global financial crisis in 2008 and politically exploitable domestic socioeconomic disparities, has added to these pressures.
The pressure on US allies to decouple their trade and technology from China has grown. The multilateralism that helps to restrain and shape great power settlements and is essential to Japan’s prosperity and security, is harder to sustain.
At a time when strategic innovation is much needed to define a pathway through, Japanese political leadership is entangled in established ways of thinking from the past.
In our lead article this week, Ben Ascione observes that ‘unless [Japanese Prime Minister Fumio] Kishida can assert his control over the LDP after the July 2022 upper house election and build more than lukewarm public support he will find it difficult to exercise the levers of the prime minister’s office to strike a new policy course’.
‘Japanese democracy is at its weakest point in the post-war era’, Ascione laments, and there is no cut-through, hard-edged political debate about domestic or pressing foreign policy issues. Though he hails from a fine liberal tradition in Japanese conservative politics (the Kochikai faction which boasts former prime ministers Hayato Ikeda, Masayoshi Ohira, Zenko Suzuki and Kiichi Miyazawa) Kishida appears bound to the nationalist conservative…
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
- China’s Golden Rooster Film Festival Kicks Off in Xiamen – Thailand Business News
- Italy and China New DTA Set to Take Effect in 2025: Important Changes and Implications
- China’s New Home Prices Stabilize After 17-Month Decline Following Support Measures
- U.S. national debt is its Achilles’ heel, but China sees it as an opportunity
- Business Update: Southern Sun Reports Earnings Growth; China Stimulates Property Market – News24
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