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China

Where is China headed?

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Author: Jerome A. Cohen, NYU

Forecasts of China’s future run the gamut. I do not endorse either extreme. There is no significant chance that in the foreseeable future the Communist government will follow the fate of the Soviet Union. Nor do I share the view that the People’s Republic of China is becoming so powerful that it will dominate the world.

Despite its remarkable recent achievements, China’s economic, social and political problems are many and growing. It is possible that Beijing’s performance may now have peaked. Its accumulating problems and failure to develop a political system able to adequately deal with them may soon be seen — both inside and outside the country — to constrict its further progress and the deployment of its impressive assets.

A man looks at portraits of the Chinese President Xi Jinping along with his predecessors Hu Jintao, Jiang Zemin and Deng Xiaoping. (Photo: AAP)

Many a Chinese leader must think it a cruel twist of fate that a regime that has done so much to improve the living standards of hundreds of millions of people should be so obviously frightened about its continuing viability. Yet the Chinese Communist Party can be seen as a victim of its own successes as well as its apparent failures. No country can modernise as rapidly as China without suffering the enormous consequences of immense social change.

Rather than basking in the gratitude of a contented nation, Chinese President Xi Jinping and his colleagues have revealed themselves to all the world as cats on a hot tin roof. Their pomp and propaganda at home and abroad cannot conceal their fear of overthrow or disintegration. Their attempt to limit the impact of Western values, ideas, institutions and practices — embodied in the current draft legislation to restrict foreign cooperation from international NGOs in education, civic affairs and politics — is a deeply embarrassing and shameful public confession of the fragility of their system.

Having benefited from several decades of the ‘open policy’ initiated by Deng Xiaoping, his fear-mongering successors now want to cut off the ‘ideological infiltration’ they believe threatens their ‘democratic dictatorship’. If successful, this new policy will inhibit China’s ability to respond to domestic and global demands. As my colleague Ira Belkin recently noted: ‘It’s a bad 1960s policy for a 2015 challenge’.

Because of the system’s lack of transparency, Xi knows far better than we do the vulnerabilities underlying China’s formidable achievements. Staggering pollution, massive corruption, labour unrest, unfair land transfers, growing income inequality, arbitrary bureaucracy, ethnic tensions and invidious social discriminations, increasing persecution of human rights lawyers and civil society reformers, a Party-dominated judiciary, and ever greater curbs on social gatherings, journalism, the internet and social media are fuelling discontent and resentment — which a now significantly troubled economy and an anticipated stock market crash can ignite. As Chairman Mao admonished, and the 4 June 1989 Tiananmen tragedy demonstrated, ‘a single spark can start a prairie fire’.

Yet repression offers no long-run solution and cannot last forever. In the mid-1980s, Taiwan’s then president Chiang Ching-kuo, although heir to his father Chiang Kai-shek’s Leninist party dictatorship, recognised that secure progress requires gradual political reform and launched the process that transformed Taiwan into a vibrant democracy. China needs similar enlightened leadership today.

Understandably, China’s Communist elite is far from united in how to confront its many challenges. Despite General Secretary Xi’s attempt to impose monolithic controls on the Party, the first three years of his rule have exposed major cracks in the leadership. The life sentence meted out behind closed doors in early June to China’s formerly feared national security chief, Zhou Yongkang, is only the most recent evidence of a continuing power struggle and indicates how the Party’s ‘socialist rule of law with Chinese characteristics’ operates.

The Chinese people, who have generally supported Xi’s persisting campaign to reduce official corruption, are waiting to see whether he is willing to risk further elite dissension by pursuing corrupt leaders who, unlike Zhou, have not been his political rivals. At the same time, many Chinese are hoping that Xi will moderate his repressive course and gradually lead them toward reforms that will give full play to their prodigious capacities.

Although I am generally an optimist, China’s current prospects for desirable reforms nevertheless remind me of Alexander Pope’s famous couplet: ‘Hope springs eternal in the human breast. Man never is, but always to be, blest’.

Jerome A. Cohen is a professor of law at New York University. He is co-director of its US–Asia Law Institute and adjunct senior fellow at the Council on Foreign Relations.

This essay is based on his 17 June testimony before the Subcommittee on Asia and the Pacific of the Committee on Foreign Affairs of the US House of Representatives.

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Where is China headed?

China

Trends and Future Prospects of Bilateral Direct Investment between China and Germany

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China and Germany experienced a decline in direct investment in 2023 due to global economic uncertainty and policy changes. Despite this, China remains an attractive destination for German FDI. Key industries like automotive and advanced manufacturing continue to draw investors, although FDI outflows from Germany to China decreased by 30% in the first three quarters of 2023. Despite this, the actual use of foreign capital from Germany to China increased by 21% in the same period according to MOFCOM. The Deutsche Bundesbank’s FDI data and MOFCOM’s actual use of foreign capital provide different perspectives on the investment trends between the two countries.


Direct investment between China and Germany declined in 2023, due to a range of factors from global economic uncertainty to policy changes. However, China remains an important destination for German foreign direct investment (FDI), and key industries in both countries continue to excite investors. We look at the latest direct investment data between Germany and China to analyze the latest trends and discuss key factors that could shape future business and commercial ties.

Direct investment between China and Germany has undergone profound changes over the past decade. An increasingly complex investment environment for companies in both countries has led to falling two-way FDI figures in the first three quarters of 2023, in stark contrast to positive trends seen in 2022.

At the same time, industries with high growth potential, such as automotive and advanced manufacturing, continue to attract German companies to China, and high levels of reinvested earnings suggest established firms are doubling down on their commitments in the Chinese market. In Germany, the potential for electric vehicle (EV) sales is buoying otherwise low investment among Chinese companies.

According to data from Deutsche Bundesbank, Germany’s central bank, total FDI outflows from Germany to China fell in the first three quarters of 2023, declining by 30 percent to a total of EUR 7.98 billion.

This is a marked reversal of trends from 2022, when FDI flows from Germany to China reached a record EUR 11.4 billion, up 14.7 percent year-on-year.

However, according to China’s Ministry of Commerce (MOFCOM), the actual use of foreign capital from Germany to China increased by 21 percent year-on-year in the first eight months of 2023. The Deutsche Bundesbank’s FDI data, which follows standards set by the IMF, the OECD, and the European Central Bank (ECB), includes a broader scope of transactions within its direct investment data, including, broadly, direct investment positions, direct investment income flows, and direct investment financial flows.

Meanwhile, the actual use of foreign capital recorded by MOFCOM includes contracted foreign capital that has been concluded, including the registered and working capital paid by foreign investors, as well as the transaction consideration paid for the transferred equity of domestic investors.

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

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Manila blasts China’s ‘unprovoked aggression’ in latest South China Sea incident

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China’s coast guard on Saturday fired a water cannon at a Philippine supply boat in disputed waters in the South China Sea, causing “significant damages to the vessel” and injuring its crew, the Philippine coast guard said.

Manila was attempting to resupply troops stationed on a ship at the Second Thomas Shoal, known locally as Ayungin Shoal, when the Chinese coast guard and maritime militia “harassed, blocked, deployed water cannons, and executed dangerous maneuvers against the routine RoRe (rotation and resupply) mission,” said the Philippine National Task Force for the West Philippine Sea.

The West Philippine Sea is the part of the South China Sea that Manila claims as its jurisdiction.

The Chinese coast guard also set up “a floating barrier” to block access to shoal where Manila ran aground an old warship, BRP Sierra Madre, to serve as a military outpost.

The Philippine task force condemned China’s “unprovoked aggression, coercion, and dangerous maneuvers.”

Philippines’ RoRe missions have been regularly blocked by China’s coast guard, but this is the first time a barrier was set up near the shoal. 

The Philippine coast guard nevertheless claimed that the mission on Saturday was accomplished.

Potential consequences

The Second Thomas Shoal lies within the country’s exclusive economic zone where Manila holds sovereign rights. 

China, however, claims historic rights over most of the South China Sea, including the Spratly archipelago, which the shoal forms a part of.

A Chinese foreign ministry’s spokesperson on Saturday said the Philippine supply vessel “intruded” into the waters near the shoal, called Ren’ai Jiao in Chinese, “without permission from the Chinese government.”

“China coast guard took necessary measures at sea in accordance with law to safeguard China’s rights, firmly obstructed the Philippines’ vessels, and foiled the Philippines’ attempt,” the ministry said.

“If the Philippines insists on going its own way, China will continue to adopt resolute measures,” the spokesperson said, warning that Manila “should be prepared to bear all potential consequences.”

Chinese Maritime Militia vessels near the Second Thomas Shoal in the South China Sea, March 5, 2024. (Adrian Portugal/Reuters)

U.S. Ambassador to the Philippines MaryKay Carlson wrote on social media platform X that her country “stands with the Philippines” against China’s maneuvers.

Beijing’s “interference with the Philippines’ freedom of navigation violates international law and threatens a free and open Indo-Pacific,” she wrote.

Australian Ambassador to the Philippines Hae Kyong Yu also said that Canberra shares the Philippines’ “serious concerns about dangerous conduct by China’s vessels adjacent to Second Thomas Shoal.” 

“This is part of a pattern of deeply concerning behavior,” Yu wrote on X.

Edited by Jim Snyder.

Read the rest of this article here >>> Manila blasts China’s ‘unprovoked aggression’ in latest South China Sea incident

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Foreigners in China: 2024 Living and Working Guidelines

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China’s Ministry of Commerce released updated guidelines for foreign businesspersons living and working in China in 2024. The guidelines cover accommodations, visas, work permits, and emergency protocols. It also outlines responsibilities regarding social security premiums and individual income tax obligations. prompt registration for temporary accommodation is required upon arrival.


The updated 2024 guidelines for foreign businesspersons living and working in China, released by the country’s Ministry of Commerce, outline essential procedures and considerations covering accommodations, visas, work permits, and emergency protocols.

On January 25, 2024, China’s Ministry of Commerce (MOFCOM) released the latest version of the Guidelines for Foreign Businessmen to Live and Work in China (hereinafter referred to as the “guidelines”).

The document is divided into four main sections, labeled as:

Furthermore, the guidelines elucidate the regulatory framework governing foreign businessperson’s responsibilities concerning social security premiums and individual income tax obligations.

This article provides a comprehensive overview of the guidelines, delving into their significance and implications for foreign businesspersons in China.

Upon arrival in China, prompt registration for temporary accommodation is required.

If staying in a hotel, registration can be facilitated by the hotel staff upon presentation of a valid passport or international travel documents.

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

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