Connect with us
//pagead2.googlesyndication.com/pagead/js/adsbygoogle.js (adsbygoogle = window.adsbygoogle || []).push({});

China

What is exactly the China model ?

But what exactly is the China model and does it pose a threat to the Western model of liberal democracy and free markets?

Published

on

The US–China trade war has brought to the boil a simmering strategic rivalry between Washington and Beijing that some have begun to describe as a new Cold War.

The Cold War analogy is something of a stretch given the interdependence of the Chinese and American economies — an interdependence sometimes referred to as ‘Chimerica’. The US–China relationship and rivalry today is very different from that of the United States and the USSR during the Cold War when the two superpowers conducted trade and investment in different spheres of influence, and presided over radically different systems for organising the means of production and markets.

Even though China and the United States are today nowhere near as ideologically divided as the United States and the USSR, a powerful narrative has emerged that the American-led model of free markets and liberal democracy is being challenged by a new Chinese model of development.

The idea of a China model has gained traction on the back of decades of strong economic growth, and in the wake of Beijing’s success in steering the country through the Great Recession of 2008–09. Interest in a China model of development has also been boosted by the crises and instability confronting Western democracies, as well as the apparent failure of liberal democracy to deliver economic benefits and stability to many newly democratic countries in Asia and other parts of the world.

China’s success and its growing clout has prompted Western strategists to worry that Beijing will use its economic strength and influence to promote the Chinese model of development as an alternative to liberal democracy. Those anxieties are amplified by Chinese President Xi Jinping’s muscular approach to foreign affairs and grand ambitions to extend trade and investment across Eurasia under the auspices of the Belt and Road Initiative.

What exactly is the China model

But what exactly is the China model and does it pose a threat to the Western model of liberal democracy and free markets?

Within China, advocates for a China model point to a strong developmental state, gradual institutional reform, selective and cautious borrowing of foreign ideas, and a trial-and-error approach to policy making and reform.

Western observers tend to highlight the heavy hand of the state in the economy (state capitalism) alongside the suppression of dissent and rejection of political liberalisation.

Although the Chinese Communist Party’s (CCP) successes are the envy of many political elites in Southeast Asia and elsewhere, there is little evidence that Beijing is actively promoting its governance model as part of its expanding influence in the region.

Certainly, Beijing is willing to engage less critically with illiberal regimes, and this runs counter to the interests of Western powers seeking to use aid and economic influence to promote liberal democratic reforms. But Beijing is not promoting one-party systems where multi-party democracies already exist. If anything, China’s appeal to regional leaders from Naypyidaw to Jakarta lies in Beijing’s ability, at least up until now, to marry political control and stability with rapid economic growth and reform.

In our lead essay this week, William Overholt argues that the China model doesn’t really exist. Even though China’s leaders and some Chinese commentators present China’s model as unique, Overholt suggests China’s approach differs little from the East Asian development model pursued by Japan, South Korea, Taiwan and Singapore in the past.

The spectacular growth of the Asian ‘tigers’ was also overseen by a single or dominant political party. And as in China, this growth was achieved ‘through gradual marketisation, gradual opening to foreign trade and investment, and vigorous import of industrial and regulatory best practice from successful Western economies’.

Overholt highlights another important point of similarity between China and the East Asian tiger economies — they all share a fear of social collapse that stems from the traumas of war and massive disruption, which has inspired leaders to ‘[suppress] normal public reaction against severely stressful social change’.

Overholt reminds us too that China since Deng had begun moving in a similar direction to the Asian tigers, stepping back from tight political control to allow for gradual marketisation and increased social and economic freedoms. Since Xi came to power, the so-called China model has begun to diverge from that of its predecessors. Even though China’s ambitious national economic…

Author: Editorial Board, ANU

Read the rest of this article on East Asia Forum

Continue Reading

China

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

Published

on

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.

Continue Reading

China

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

Published

on

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

Continue Reading

China

Foreigners in China: 2024 Living and Working Guidelines

Published

on

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.

Continue Reading