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China

US–China competition after RCEP

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US President Joe Biden holds a semiconductor chip as he speaks prior to signing an executive order, aimed at addressing a global semiconductor chip shortage, in the State Dining Room at the White House in Washington, United States, 24 February, 2021 (Photo: REUTERS/Jonathan Ernst/File Photo).

Author: Yuhan Zhang, UC Berkeley

In November 2020, 15 countries signed the Regional Comprehensive Economic Partnership (RCEP) amid a backdrop of deglobalisation and trade protectionism. While RCEP demonstrates the success of ASEAN’s middle-power diplomacy and promotes regional trade and economic development, it also serves China’s national interests and will make the region’s largest economy more powerful economically and politically.

China is estimated to see the largest export benefits from RCEP of US$244–248 billion by 2030, followed by Japan (US$128–135 billion) and South Korea (US$63–64 billion). This means that the increase in Chinese exports will account for nearly 50 per cent of the total export growth of all RCEP members. Although these benefits may not offset the total losses of a persisting US–China trade war, they help soften the blow to China and reduce export reliance on the United States.

RCEP also strengthens the division of labour across regional supply chains and help upgrade China’s industrial structure. Low labour costs in ASEAN countries have seen Chinese trade surpluses with ASEAN shrink since 2015, indicating an emerging supply chain relocation from China to Southeast Asia. China’s tariff-elimination commitments under RCEP further accelerates this process. China’s imports of labour-intensive goods from ASEAN countries are set to grow significantly. The inflows of these goods might increase competition with Chinese firms and generate adjustment costs that could drive them towards capital and technology-intensive manufacturing and production.

RCEP will help bring inflows of foreign investment into China. Liberalisation under RCEP includes reductions in behind-the-border barriers such as discriminatory treatment against foreign investment. The Chinese government has also promised to reduce limitations on market access and further open up a number of service and non-service sectors to multinational corporations (MNC).

Many MNCs have been wary of China’s intellectual property rights (IPR) infringements. RCEP is expected to have positive effects on IPR protection in China. RCEP’s IP chapter does have its limitations, and the majority of the provisions have already been implemented in China, but articles 11.15, 11.17 and 11.62 help the Chinese government take stricter measures. There will be stronger measures to protect digital rights management information, increase the use of non-infringing computer software and destroy pirated goods and counterfeit materials. Foreign MNCs may be more attracted to committing resources to the country, including bringing international financing and technologies. They will enhance local Chinese production, engineering and design capabilities.

China will benefit tremendously from RCEP geopolitically. First, China’s involvement in RCEP reassures neighbouring countries. Engaging actively in Asian multilateralism signals its commitment to preserving peace and promoting regional growth. Participation in RCEP demonstrates that China is willing to further open its market and be bound by common regional rules. This helps allay geopolitical suspicion among neighbours.

Second, China’s political power in the region will strengthen. RCEP reinforces economic interdependence between China and other participating countries. This will further push the region into China’s economic and political orbit, and enable Beijing to exert influence on regulations and standards within the bloc.

China seeks to conclude a trilateral free trade agreement (FTA) with South Korea and Japan to strengthen economic connectedness and build political trust. RCEP could play a catalytic role in the negotiation process, boosting the determination of China, Japan and South Korea to make a political decision. Chinese President Xi Jinping promised to speed up negotiations for the trilateral FTA in November 2020. It is expected that leaders will meet to discuss later this year.

Following the signing of RCEP, competition between the United States and China could intensify. China’s participation in RCEP further leverages its economic and political clout and impel the United States to respond in the effort to vie for geopolitical primacy in the region. The United States may be expected to maintain its trade tariffs on Chinese goods, accelerate technological decoupling with China and adopt additional strategies to advance its own industries and technologies. No matter what path the United States ultimately takes, China will continue to ramp up cooperation with countries…

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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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