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China

Policy pragmatism key to Macau’s COVID-19 success

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People wearing masks walk in front of Casino Lisboa, before its temporary closing following the coronavirus outbreak, in Macau, China, 4 February 2020 (Photo: Reuters/Tyrone Siu).

Author: Ricardo C S Siu, University of Macau

Macau’s economy has long been facing a dilemma between dramatic economic performance built on its casino and tourism sectors and a lack of variety in its industrial composition. Business activities related to gaming generated 50.5 per cent of the economy’s total industrial output in 2018. Tourism-related businesses such as hotels, retail, restaurants and entertainment accounted for another 12 to 15 per cent. But these sectors are among the most vulnerable to COVID-19’s economic impact.

The Macau government’s control and suspension of visitor flows with the outside world — especially from mainland China and Hong Kong, which accounted for 89.5 per cent of visitor arrivals in 2019 — led to a meltdown of the city’s tourism. Gross gaming revenue fell by 60 and 95.5 per cent in the first and second quarters this year, respectively. Macau’s real GDP contracted an unprecedented 48.7 and 67.8 per cent over the two periods.

Macau’s government introduced a series of uneasy but pragmatic measures to insulate the tiny yet densely populated city from COVID-19 transmission originating from large volumes of tourism. The measures included a suspension of tourists visiting the city and an agreement with casino operators to temporarily shut down business for 15 days in February.

Macau’s government also required residents to follow social distancing protocols, compulsory mask wearing in public areas and mandated a 14-day quarantine rule in designated facilities for anyone with legitimate reasons to enter. The city’s tourism sector has held still for over half the year.

Thanks to the government’s substantial fiscal power — a reserve of some MOP 580 billion (US$72 billion) had been recorded at the end of 2019 — gathered through pre-COVID-19 gaming tax revenue, a suite of policies were introduced simultaneously to alleviate the economic shock. Casino operators also chipped in funding to safeguard local employment. Over MOP 50 billion (US$6.22 billion) of government spending was directed to various social welfare and business subsidy programs. This cushioned the economic blow to businesses at the height of the initial impact.

Macau successfully demonstrated that it is one of the world’s safest cities. To date, it has recorded only 44 imported and two local cases of COVID-19, and zero deaths. Although policies created some difficulties for businesses, it set up a robust framework with commitments from the local and neighbouring communities to float the casino, tourism and related sectors in a COVID-19 world.

After the Chinese government’s rigorous pandemic measures were imposed, it became apparent that COVID-19 was largely under control on the mainland from May. Still, uncertainties around asymptomatic COVID-19 cases meant that the government held back on a return to larger physical gatherings and tourist flows between Macau and the mainland.

Travel was initially opened only between Macau and neighbouring mainland city Zhuhai. The travel bubble was then extended to include Guangdong province — typically accounting for over 40 per cent of Macao’s total visitor arrivals — from the end of August.

But to minimise the possibility of a return of COVID-19, domestic tourists are subject to an electronic health code mutual recognition system between Macau and Guangdong. Under this system, each visitor must obtain a certificate, valid for seven days, indicating negative COVID-19 status and present it upon entry into Macau. Evidently, social safety is front of mind for Macau’s public as a prerequisite for reopening to tourism even domestically. With this policy approach pre-COVID-19 domestic tourism levels may take months or even over a year to return.

Considering that Macau’s non-gaming local tourism-related sectors heavily rely on tourist spending, newly designed government-subsidised domestic tourism packages are being promoted. These new packages emphasise Macau’s unique historical and cultural resources to market the city as a tourism destination. But the local government is still being careful with a stepped strategy in its restrictions with mainland China and the world.

Although it is adopting a gradual and cautious approach to re-float Macau’s tourism industry, there is a trade-off between the economic costs and social benefits of sustained pared-down economic activity. While there may be calls for fewer restrictions and a swifter return of tourists, releasing the fiscal burden of the government and reducing the losses of local firms, the…

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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.

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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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