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China

Japan walks on a tightrope with its China policy

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United States President Joe Biden and The Prime Minister of Japan Yoshihide Suga walk on the Colonnade prior to their joint news conference at the White House, Washington, District of Columbia, United States 16 Apr 2021 (Photo: Reuters/Doug Mills).

Author: Rumi Aoyama, Waseda University

Over the past decade, Japan has actively promoted cooperation among Quad countries under the ‘Free and Open Indo-Pacific’ framework to counter China’s rising influence. It has also played a leading role in promoting high-quality trade rules through concluding the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the Japan–EU Economic Partnership Agreement and the Regional Comprehensive Economic Partnership. Importantly, Japan has maintained a delicate balance to ensure security tensions do not hold back economic cooperation.

Prime Minister Yoshihide Suga’s visit to the United States in April demonstrated the success of Japan’s balanced diplomacy. Both countries sent strong messages of common values and unified action, addressing ‘the importance of peace and stability’ across the Taiwan Strait. They also highlighted ‘serious concerns’ over human rights violations in Hong Kong and Xinjiang and emphasised their resolve for the security and openness of 5G networks.

The joint statement also reflected Suga’s intention to promote a peaceful resolution and avoid provoking China blindly, in addition to a firm approach to contingency planning regarding the Taiwan Strait.

The success of Japan’s China policy so far depends largely on two factors: Japan’s prudence in not overly provoking China and China’s tolerance of Japan’s hedging policy. After Suga’s trip, stable relations with China may no longer be a given, as Japan will have to develop concrete policies later in 2021 regarding its commitment to the US economic and security strategy in Asia.

Japan’s economic security policies are already in motion. Tokyo has introduced regulations to phase out Huawei and ZTE products in equipment procurement by government agencies and implemented subsidies to shift manufacturing out of China. Japan and the United States agreed to invest US$4.5 billion in the joint development of 6G telecommunications, with the aim of commercialising it in the 2030s, as well as cooperate in the supply chain for semiconductors and other strategically important products. The Suga administration is also taking a leadership role in facilitating a supply chain between India, Australia and Japan that does not rely on China.

But security cooperation can be much more complicated. Based on Japan’s current security legislation, if an emergency occurs in the Taiwan Strait, Japan’s Self-Defense Forces can provide logistic support or exercise a limited right of collective self-defence before Japanese territory is invaded. Akira Amari, a key figure behind the second Abe administration in charge of economic and trade policy, called for readiness to cooperate with the United States in exercising its right to collective self-defence.

While the Japanese government is still considering possible scenarios, these discussions may spur further debate on the role of Japan as a ‘shield’ and the United States as a ‘spear’ in US–Japan security relations. The possibility of deploying land-based conventional intermediate-range missiles in Japan to complement the US Pacific Deterrence Initiative raises concerns about it being drawn more deeply into tensions between the United States and China.

Japan’s economy is increasingly dependent on China, which is now Japan’s largest export destination, replacing the United States. In fiscal year 2020, China accounted for 22.9 per cent of Japan’s total exports, exceeding 20 per cent for the first time. But with 74 per cent of respondents in a poll conducted by The Nikkei in favour of Japan’s intervention in the Taiwan Strait, the Japanese government is more likely to expand its role in deterring China.

China is now adopting a wait-and-see approach. On the one hand, China is sensitive about cooperation among Quad nations and harshly denounced it as an ‘Asian NATO’. For China, Japan’s commitment to Taiwan and the deployment of missiles are alarming and unacceptable. Chinese Foreign Minister Wang Yi warned as much to Japanese Foreign Minister Toshimitsu Motegi over the phone.

On the other hand, with the hope of driving a wedge between Japan and the United States, China is still refraining from launching a national propaganda campaign against Japan. Most importantly, Japan has a pivotal position in China’s strategy of confrontation with the United States. Just as the United States is pursuing a targeted decoupling strategy, China is determined to establish a self-centred supply chain in Asia and among Belt and Road Initiative…

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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