President Xi Jinping’s signature Belt and Road Initiative has often - and wrongly - been painted as an insidious instrument of Chinese expansionism. AP Photo
President Xi Jinping’s signature Belt and Road Initiative has often - and wrongly - been painted as an insidious instrument of Chinese expansionism. AP Photo
President Xi Jinping’s signature Belt and Road Initiative has often - and wrongly - been painted as an insidious instrument of Chinese expansionism. AP Photo
Bashing China has become part of what currently passes for political debate in the US, with President Donald Trump regularly accusing Joe Biden either of letting China "eat his lunch" or of surrendering American jobs to Beijing. At the same time, this is not disconnected from popular feeling: a Pew survey published a few days ago indicated that public views of China in many countries, including the US, UK, Germany, South Korea and Australia, had reached record levels of unfavourability. So it is more important than ever to see and think clearly about when and if criticism of China is backed by the facts or not.
This is why a report recently issued by the UK's leading international affairs think tank Chatham House, titled Debunking the Myth of 'Debt-trap Diplomacy', deserves to be widely read. As the authors – Lee Jones of Queen Mary University of London, and Shahar Hameiri of the University of Queensland – point out, President Xi Jinping's signature Belt and Road Initiative (BRI) has often been painted as an insidious instrument of Chinese expansionism. Rather than being a benevolent programme to increase global connectivity and to support developing countries build much-needed infrastructure, critics claim Beijing lures poorer nations into taking loans they can't possibly afford and then tries to make them client states when they can't pay up and have to beg for terms.
Trump administration officials such as former national security adviser John Bolton have said the BRI was all about “advancing Chinese global dominance”. Vice President Mike Pence alleged – falsely, as it has since proved – that China’s involvement in financing the debt-laden and unprofitable Hambantota Port in Sri Lanka was in order to establish a forward base for its navy. Secretary of State Mike Pompeo has said that countries “which have signed on to the Belt and Road projects have found Beijing's deals come not with strings attached, but with shackles".
A farmer harvests grass seeds in a field in this aerial photograph taken over a farm near Gunnedah, New South Wales, Australia, on last month. Australia’s call for a probe into the origins of the virus have further strained ties. Beijing has labeled calls for the investigation "politically motivated," warning of a potential consumer boycott of Australian products. Bloomberg
Cows walk through a field during a cattle drive at a farm in Gunnedah, New South Wales, last month. A growing number of Australia's primary producers are mulling the potential for a further tightening of restrictions on Australia's agricultural exports by China. Bloomberg
A farmer herds Black Angus cows during a cattle drive in this aerial photograph taken over a farm in Gunnedah. A growing number of Australia's primary producers are mulling the potential for a further tightening of restrictions on Australia's agricultural exports by China. Bloomberg
A student reads while sitting on a ledge at the Quadrangle of the University of Sydney, Australia May 2, 2017. International students are expected to begin returning to Australia next month despite Chinese warnings of pandemic-related racism, the Australian prime minister said on Friday, June 12, 2020. (Paul Miller/AAP Image via AP)
Office buildings and the Bank of China logo are seen amidst the easing of the coronavirus disease restrictions in the Central Business District of Sydney, Australia. Reuters
People wearing face masks to protect against the new coronavirus ride past the Australian Embassy in Beijing last week. China is advising its citizens not to visit Australia, citing racial discrimination and violence against Asians, in what appears to be Beijing's latest attempt to punish the country for advocating an investigation into the coronavirus pandemic. AP Photo
US Secretary of State Mike Pompeo, second left, alongside American and Australian officials during a news conference in Sydney. The two countries agreed to seek a probe into the outbeak of Covid-19. Bloomberg
University of Queensland student and activist Drew Pavlou, centre, takes part in a protest in support of Hong Kong, outside the Chinese consulate in Brisbane, Australia, last month. EPA
Pro democracy Hong Kong protesters gather outside the electorate office of Victorian Premier Daniel Andrews in Melbourne, Australia, last month. EPA
The Commanding Officer of HMAS Parramatta, Commander Anita Nemarich, waves at USS America in the South China Sea last month. Australia is a member of the so-called Quadrilateral Security Dialogue. Reuters
I have frequently written that these are absurd, malign and unfair mischaracterisations of the BRI. Nations are not shorn of their agency; they can choose to participate in projects or not. New roads, railways, ports and buildings are desperately needed in much of Asia and Africa; pretty much no one else is willing to come up with the cash. And as anyone who has looked at the history of the BRI will know, it is such a vague and potentially all-encompassing initiative that it could not possibly be called a masterplan of any kind.
The Chatham House report backs this view up by arguing convincingly that it is actually recipient countries that do much of the asking for support in the first place; that the BRI is primarily an economic, not a geopolitical, project; and that it is “too fragmented and poorly co-ordinated to pursue detailed strategic objectives”.
"Developing country governments are not hapless victims of a predatory Beijing," the authors write. "They – and their associated political and economic interests – determine the nature of BRI projects on their territory." This last point cannot be made often enough. The report does good work in thoroughly debunking the foundational debt-trap myth of Hambantota Port. The costly white elephant may have ended up being leased to a Chinese state-owned enterprise (SOE) for 99 years, but, as they point out, the whole sorry project was not even proposed by China, but "was overwhelmingly driven by Sri Lankan actors for their own domestic purposes". Moreover, they argue that Sri Lanka's debt trap "was facilitated by western lending and monetary policy, and not by the policies of the Chinese government".
It is on the subject of whether the BRI is a scheme to achieve global dominance that the report truly skewers the critics. For there is not just no BRI blueprint. There is no official map of BRI projects – and even unofficial ones have been banned since 2017. It is at times so hazy that when the Malaysian government reportedly asked the Chinese authorities to define which projects it considered to be under the BRI and which not in 2018, they were apparently unable to say.
I have always thought that the BRI’s elasticity and capaciousness were advantages. Why be bound by onerous definitions? But as the authors write: “If ‘strategy’ is understood to mean a specification of the goals to be achieved, combined with a set of tactics describing how to reach those goals, clear directions for specific actors, and appropriate resource commitments, then China’s BRI does not qualify.” That is a polite way of saying that there are so many actors, and so many differing projects started for very different reasons, that to think of the BRI as anything as coherent as a plan, let alone an evil one, is to misunderstand it completely.
It is better thought of as a broad umbrella under which an array of bilateral agreements, variously motivated state agency, commercial and government decisions, and current incarnations of old ideas such as China’s “Go Out” policy which encouraged SOEs to seek business abroad, all shelter. As the report notes, the BRI repackages and rebrands many existing projects and supports new ones; and a large part of its aim is to ensure that excess capacity at home finds markets outside China.
US Vice President Mike Pence has falsely alleged that China’s involvement in financing Hambantota Port in Sri Lanka was to establish a forward base for its navy. AFP
There is nothing wrong with that, and there are also real benefits to BRI-participant countries, as I've written about in these pages in the past. It's not a charity, of course, and it would be perverse for China not to expect gains from it. But casting the initiative as anything that needs to be countered – say by America's "free and open Indo-Pacific" strategy – is "seeking to curb a Chinese 'offensive' that the BRI does not really constitute", as the Chatham House report concludes.
Only a few years ago many countries around the world, including numerous US allies, were happy to work with China to form the Asian Infrastructure Investment Bank. In a time of dangerous escalation, western countries would do well to find common cause again. The BRI is just such an opportunity. For while there may be valid reasons to criticise Beijing, this initiative is not one of them. It could in fact just be a way to step back from a brink it would serve no one's interests to cross.
Sholto Byrnes is an East Asian affairs columnist for The National
Monster
Directed by: Anthony Mandler
Starring: Kelvin Harrison Jr., John David Washington
3/5
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
In addition to the Emirates and Etihad programmes, there is the Air Miles Middle East card, which offers members the ability to choose any airline, has no black-out dates and no restrictions on seat availability. Air Miles is linked up to HSBC credit cards and can also be earned through retail partners such as Spinneys, Sharaf DG and The Toy Store.
An Emirates Dubai-London round-trip ticket costs 180,000 miles on the Air Miles website. But customers earn these ‘miles’ at a much faster rate than airline miles. Adidas offers two air miles per Dh1 spent. Air Miles has partnerships with websites as well, so booking.com and agoda.com offer three miles per Dh1 spent.
“If you use your HSBC credit card when shopping at our partners, you are able to earn Air Miles twice which will mean you can get that flight reward faster and for less spend,” says Paul Lacey, the managing director for Europe, Middle East and India for Aimia, which owns and operates Air Miles Middle East.
RESULTS
5pm: Maiden | Dh80,000 | 1,600m Winner: AF Al Moreeb, Tadhg O’Shea (jockey), Ernst Oertel (trainer)
5.30pm: Handicap | Dh80,000 | 1,600m Winner: AF Makerah, Adrie de Vries, Ernst Oertel
6pm: Handicap | Dh80,000 | 2,200m Winner: Hazeme, Richard Mullen, Jean de Roualle
6.30pm: Handicap | Dh85,000 | 2,200m Winner: AF Yatroq, Brett Doyle, Ernst Oertel
7pm: Shadwell Farm for Private Owners Handicap | Dh70,000 | 2,200m Winner: Nawwaf KB, Patrick Cosgrave, Helal Al Alawi