China
Chinese aid strategy hinders goals on North Korea
Author: Andrei Lankov, Kookmin University
The 2018–2021 period can be seen as an important turning point in Korean history. In the space of a few years, the US–China confrontation has changed everything in Northeast Asia — and this change is likely to last for a long time. The ‘new Cold War’, as this confrontation is sometimes known, has not altered China’s strategic goals in Northeast Asia. But China is now willing to invest much more to achieve them.
What are these goals?
First, China needs a stable Korean peninsula. China does not want to deal with a Syria-style mess nearby — especially one involving large stockpiles of nuclear weapons and other weapons of mass destruction.
Second, China wants Korea to remain divided. Currently, Korean unification is synonymous with the absorption of the destitute North by the rich South. For China, this would amount to a democratic and fiercely nationalistic state emerging on its border. This new state would most likely be an ally of the United States, with potential for US troops to be stationed on its soil unless withdrawal were part of a grand settlement.
China’s third goal is the denuclearisation of the Korean peninsula. The North Korean nuclear program undermines the non-proliferation regime, which gives massive advantages to the ‘nuclear five’, including China.
The first and second goals, while not the same, both involve maintaining the status quo. This is especially pronounced as China enters a long-term confrontation with the United States.
The first Cold War lasted for four decades. Nobody knows how long the ‘second Cold War’ will continue. There may be ups and downs, periods of detente and of crisis. But no signs of a solution or lasting compromise are in sight.
Until a few years ago, China was remarkably ambivalent about the future of North Korea. As recently as late 2017, Chinese diplomats not only supported the ultra-tough US sanctions on North Korea in the United Nations, but also pressed Russia, their junior ally, to vote in favour of these sanctions.
These are positions of the past. While China does not violate the United Nations Security Council (UNSC) sanctions blatantly, it is willing to turn a blind eye to small-scale violations, use all available loopholes to support North Korea and sometimes ship forbidden items to the state — if the chances of being caught are low.
Even now, when North Korea, wary of the impact of COVID–19, has cut itself off from the outside world, Chinese aid keeps coming quietly. While the provisions of food aid are not in violation of UNSC resolutions, shipments of fuel are. Reports that North Korea is working hard to build disinfection and quarantine centres to process Chinese aid suggest much larger volumes are expected.
Despite its dislike of North Korea’s nuclear program and generally critical attitude to the Kim Jong-un regime, China has no choice but to keep North Korea afloat. North Korea’s stability is a paramount concern to Beijing and this is likely to remain the case in the foreseeable future.
From the international community’s point of view, this is both good and bad.
The Chinese decision to keep North Korea afloat means that the North Korean government can rely on ‘dole payments’ from China. These welfare cheques will not bring industrial growth to North Korea but will ensure against a major outbreak of famine. As long as the North Korean people receive enough to survive and officials are reasonably rewarded for loyal service, North Korea is likely to remain stable.
Chinese aid also means that Pyongyang has fewer reasons to worry about its outdated and inefficient economic system. The first years of Kim Jong-un’s rule were marked by quiet but radical economic reforms which largely emulated what China did in the 1980s, albeit without any attempts at political openness. Since 2018 these reforms have been increasingly obstructed and rolled back. More economic freedom can be dangerous for domestic stability as it allows North Koreans to be less dependent on the government.
Improvements in the China–North Korea relationship have tempered North Korea’s penchant for nuclear warnings. Unlike his predecessors, US President Joe Biden was not welcomed into office by North Korean nuclear tests and intercontinental ballistic missile launches. China’s unhappiness about North Korean provocations, which attract unnecessary attention to the region and justify the US military presence there, has persuaded North Korea to keep quiet.
North Korean society will be even more closed and…
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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