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China

The complexities of China–Iran strategic balancing

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China's Foreign Minister Wang Yi shakes hands with Iran's Foreign Minister Mohammad Javad Zarif during a meeting at the Diaoyutai state guest house in Beijing, China, 31 December 2019 (Photo: Reuters/Noel Celis).

Author: Sanam Vakil, Chatham House

China–Iran relations have been the subject of much speculation after a draft of a 25-year partnership agreement was leaked in July 2020. Some analysts have asserted that this deal is a result of US President Donald Trump’s maximum pressure campaign that is forcing Tehran into Beijing’s orbit to survive sanctions and weather the economic storm of COVID-19 and pushing China to abandon its long-standing policy of non-intervention in the Middle East. But the reality is more complex and reflective of the balanced outgrowth of long-standing ties rather than a significant reorientation.

The leaked draft presents a framework for greater Iranian integration into Beijing’s Belt and Road Initiative (BRI). The agreement would see China invest US$400 billion into Iran’s oil, gas, petrochemical, transportation and manufacturing industry over a 25-year period in exchange for a discount in oil sales alongside military and strategic engagement.

China’s engagement in the Middle East has grown out of President Xi Jinping’s BRI. The region has benefited from Chinese investment as a strategic gateway and global transit point. China has signed five comprehensive strategic partnerships alongside 12 strategic partnerships with regional states, including Israel, promising strengthened commercial and economic ties.

China–Iran relations were elevated to a comprehensive strategic partnership level in 2016. Iran is considered geographically and strategically essential for the BRI. Bilateral relations are also historical, dating back centuries. Ties have been further strengthened by reciprocal presidential visits in 2014, 2016 and 2018. Discussions on the partnership agreement supposedly began during President Hassan Rouhani’s 2014 visit to Beijing.

Unlike other stakeholders in the region, China’s strategy has been primarily economic — believing that economic gains will bring greater stability to the region. This approach has enabled China to avoid taking sides in regional conflicts and has allowed Beijing to benefit from the US security presence in the region.

China’s increasing influence in the region presents an opportunity for Beijing to fill a vacuum at a time when regional states that have long relied on US security are more anxious about US security commitments.

Regional states have reoriented their energy and commercial trade from West to East over the past two decades. This shift took place due to Asia’s growing energy demand. Prior to the spread of COVID-19, China imported almost half of its energy from the region. In 2016, the Middle East saw the largest inflow of Chinese foreign direct investment.

Arab Gulf states like Saudi Arabia and the United Arab Emirates, among others, have benefitted from infrastructure investments in ports, rail links and refineries. Growing synergies in terms of arms sales and the development of an indigenous defence capacity is also in the works. China’s support for Saudi Arabia’s nuclear program is another example of Beijing’s balanced approach in helping Riyadh while also supporting Tehran.

China–Iran ties still remain challenged by Iran’s role in the region, the US withdrawal from the Joint Comprehensive Plan of Action (JCPOA) and the re-imposition of US nuclear-related sanctions. China was a facilitator and signatory of the nuclear agreement and continues to support the implementation of the deal. China was also an economic beneficiary of the agreement taking advantage of numerous investment projects, including in Iran’s energy and infrastructure sectors. But the US withdrawal from the agreement in 2018 has added a US dimension to China–Iran relations.

The US maximum pressure campaign and sanctions have made Chinese investors cautious about engagement with Tehran. China has also been frustrated by Tehran’s regional activities, nuclear program and interventionist foreign policy that are seen as destabilising and deleterious to Beijing’s economic interests.

While Iran is strategically central to the BRI, it remains to be seen if new levels of commercial activity will strengthen the economic and political dimensions of the relationship. Seeking greater Chinese economic assistance in light of US sanctions, Iran has developed a ‘look East’ policy that has been championed by Supreme Leader Ali Khamenei. As part of this strategy, Tehran has hoped that China will take advantage of lucrative investment opportunities in the absence of Western competition.

China was the largest buyer of Iranian crude oil and has also…

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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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