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China

US–China rivalry needs more clarity and less polarity

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(L to R): Canada's Prime Minister Justin Trudeau, European Council President Charles Michel, U.S. President Joe Biden, Japan's Prime Minister Yoshihide Suga, Britain's Prime Minister Boris Johnson, Italy's Prime Minister Mario Draghi, France's President Emmanuel Macron, European Commission President Ursula von der Leyen and Germany's Chancellor Angela Merkel pose for a family photograph of the G7 summit in Carbis Bay, Cornwall, England on 11 June 2021 (Photo:Reuters/The Yomiuri Shimbun).

Author: John Wright, US Air Force

A daily barrage of US–China military alarms fill inboxes and news feeds. While many of these reports genuinely attempt to understand this rivalry, more often than not they create fear, confusion and uncertainty. It is important to brush past this overwhelming ‘fog of more’ and get back to basics.

To understand the US–China military rivalry it is important to grasp its main cause — conflict stemming from two competing grand strategies. China wishes to assert its own brand of leadership and reclaim its regional hegemonic crown. The United States prefers no regional hegemons at all, and especially not one that does not share common values and respect for the current rules-based order.

These grand strategies are integral parts of both states’ efforts to survive. They are not ‘worldviews’, ‘ideologies’ or ‘wish lists’. They are measurable, tangible goals that come with advantageous security consequences for one state at the expense of others. Each strategy is mutually exclusive, and neither state stands a realistic chance of convincing the other to change.

Strategy is simply the finding of ways to achieve objectives — within the realm of the possible — in the endless search for a better peace. But strategy is constrained by statecraft, the specific actions a country can take to implement strategy, and this is immensely complicated. Military posturing is a tool of statecraft as much as it is a component of strategy, but its intricacy means that strategy often takes a back seat to statecraft and its ‘tyranny of the now’.

China and the United States must both contend with statecraft from remarkably similar positions. US foreign policy and military posture is synthesised by an often contradictory multitude of bureaucrats and specialists who all see foreign policy in a particular light. Similarly in China, rank-conscious individuals compete for their leaders’ attention in guiding foreign policy and military posture. Beijing’s ability to centrally marshal its military posture and foreign policy is often oversold due to the opaqueness of its government.

Both states are constrained by the same things — using the right resources and executing a coordinated response to events. For instance, when China sent a five-vessel flotilla through the Bering Strait in 2015, it calculated the move would poke the United States in the eye as a territorial violation. After US authorities declared the voyage ‘not threatening’ and watched it pass unopposed in a manner consistent with international law of the sea, China was clearly flummoxed.

In December 2016, a then president-elect Donald Trump tweeted his disapproval of the Chinese theft of a US Navy underwater drone without first discussing options with the rest of the administration, which generated additional frustration.

Believe it or not, these blunders are good news for the US–China military rivalry. Statecraft’s pace naturally slows down decision-making, providing more time to defuse situations before they become crises.

US–China watchers should not concern themselves with how many aircraft China launches towards Japanese airspace, or how many vessels the United States sails through the Taiwan Strait. Instead, they should be concerned with developments that lead down the road of miscalculation. For instance, when one side mistakenly believes going to war outweighs the benefits of not going to war.

Miscalculation begins with misunderstanding. The urgency behind military posture decisions are often perplexing. One need look no further than the irritated response from China following the US deployment of a Terminal High Altitude Air Defense system in South Korea in 2017. This was a time of tense military standoff between the United States and North Korea, demonstrating how well-meaning military deployments can be misunderstood through a different lens.

There is a danger if misunderstandings begin to affect military credibility — the belief a rival will actually carry out a threat. No deterrence can happen in a situation where neither rival believes the other will actually follow through. In a world where the United States and China blame each other for their problems, this is a real threat.

To manage the military rivalry, both states should seek a balanced force posture which lowers the risk of military encounters. The United States will seek to reprioritise its preferred instruments of national power away from military and economic, and toward more diplomatic and information-based power. The Biden…

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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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