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China

China–India border crisis reaches new heights

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An Indian Army convoy moves along a highway leading to Ladakh, at Gagangeer in Kashmir's Ganderbal district 18 June 2020 (Reuters/Danish Ismail/File Photo).

Authors: Harsh V Pant and Kartik Bommakanti, ORF

The latest crisis to engulf China and India erupted over their disputed border in early May 2020, when India discovered the presence of a large number Chinese forces in its claimed territory. It became quickly evident that China had occupied several areas on India’s side of the Line of Actual Control (LAC) in western Ladakh, as well as a portion of territory in the Indian state of Sikkim.

The ongoing China–India border crisis has its roots in history. India inherited unsettled borders from the British when it gained independence in 1947. Due to the absence of a clearly delineated boundary, there were several bloody clashes between Chinese and Indian forces in the 1950s and 1960s, including a full-scale war in 1962. Another bloody clash in 1967 claimed hundreds of casualties, albeit on a lower scale and intensity than in 1962.

The last time fatalities occurred on the Indian side was in 1975 at Tulung La along the LAC, although it is unclear whether it was the result of an accident or an ambush. Another crisis erupted in 1986 when China’s People’s Liberation Army (PLA) occupied territory at Somdurong Chu, leading to a massive Indian counter-mobilisation. Although this crisis did not result in bloodshed, the face-off lasted seven years before culminating in the 1993 Maintenance of Peace and Tranquillity Agreement and Chinese forces withdrawing from the area. A 1996 agreement on confidence-building measures sought to prevent further tensions.

Despite these mechanisms, a violent clash occurred between the Indian and Chinese armies on 15 July 2020, causing the deaths of 20 Indian soldiers and an unspecified number of PLA casualties.

The territorial claims made by each side defy easy resolution, and both Beijing and New Delhi have mobilised large forces across the entire stretch of the LAC — notwithstanding limited de-escalation in the Galwan Valley, Hot Springs, and Gogra in Ladakh. Though the central sector of the LAC adjacent to the Indian state of Sikkim was previously stable, the Chinese are believed to have made a two-kilometre incursion in an area known as Naku La. It is not evident that the PLA has yet vacated this area.

China is also escalating the situation by laying claim to territory under Bhutan’s control. Beijing is claiming Sakteng Wildlife Sanctuary in eastern Bhutan — close to the Indian state of Arunachal Pradesh that Beijing also claims. China appears to be attempting to drive a stronger bargain in negotiations with India through these expansive claims.

There are several potential pathways to a resolution, but none may have sufficient traction. The first would be New Delhi accepting China’s change of the status quo as a forcible eviction of the PLA might prove well-nigh impossible. These small territorial grabs are primarily tactical on China’s side, targeting minor areas where the chances of success are greatest. But for India, conceding to China’s territorial seizures would only legitimise Beijing’s ill-begotten gains and leave India a diminished power within the region and the wider Indo-Pacific. Its credibility would suffer and New Delhi would run the risk of being tested by its smaller neighbours.

A second pathway is more protracted. Both sides could remain mobilised as happened at Somdurong Chu. Even in such cases, precedents exist for a diplomatic resolution. Both Beijing and New Delhi might see wisdom in adhering to the foundational agreements concluded in 1993 and 1996 — and more limited agreements concluded in 2005, 2012 and 2013 that provide protocols for managing differences along the LAC. But the context of the resolution at Somdurong Chu was vastly different to the situation today. China was a much weaker power, and Deng Xiaoping and Jiang Zemin were more cautious than current Chinese President Xi Jinping.

A third pathway towards resolution is by way of military means. New Delhi could decide to escalate symmetrically by confining a military response to the areas where China entered Indian-claimed territory. This option is likely to be costly and a failure — and more importantly, it does not prevent China from escalating things further. India would also find it difficult to escalate the confrontation to new areas as Chinese forces will now be far more alert. In either case, political will and a readiness to run risks would be essential for the Indian government get a public buy-in.

India and China could also settle for a compromise that involves China withdrawing from specific ridges along the Pangong Tso…

Read the rest of this article on East Asia Forum

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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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