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China

Iran on the go with the SCO

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Iranian President Ebrahim Raisi delivers a speech during the Shanghai Cooperation Organisation (SCO) summit in Dushanbe, Tajikistan, 17 September, 2021 (Photo: Reuters/Didor Sadulloev).

Author: Jingdong Yuan, University of Sydney

At its most recent meeting in Tajikistan this September, the Shanghai Cooperation Organisation (SCO) started a formal process to grant Iran full membership. This will be the second time the organisation expands after accepting India and Pakistan in 2017 — now extending its reach from Central and South Asia to the greater Middle East.

Iran’s inclusion in the SCO has important implications for what is largely a Central Asian organisation, even if Iran is the main beneficiary. At a time of international isolation, Tehran hopes that its membership will open up opportunities to expand political, economic and cultural ties with countries across the region. With two SCO members on the United Nations Security Council, Iran hopes it will get a more sympathetic hearing on issues such as sanctions relief.

Still, the significance of Iranian membership is, at least for now, more symbolic than substantive. What Iran brings to the SCO really depends on the organisation’s goals, structure and capacities.

The SCO was established in 2001 with limited albeit critical goals for its members — to combat the so-called ‘three evils’ of extremism, terrorism and separatism. At the time these posed serious threats to China, Russia and the Central Asian republics. The organisation has since expanded its mandate to include modest economic cooperation and energy development, but most importantly the preservation of member states’ political systems and advocacy for a new type of international relations that is largely read as opposition to US hegemony and unilateralism.

Beijing has in the past two decades greatly extended its reach and influence throughout Central Asia, maritime South Asia, and increasingly the Middle East. The SCO has helped China secure important energy supplies through Eurasia, while the Belt and Road Initiative has expanded China’s geoeconomic and geopolitical agendas, directly challenging the US position in the region.

The SCO is now a symbolically institutionalised organisation with annual high-level meetings. But its substantive structure remains mediocre to non-existent — as are its agendas, which tend to be rather diverse and unfocussed, with differences between member states impeding its transformation into a truly consequential organisation.

Perhaps that was the intent of the founding members. The symbolic state of the SCO means they are yet to cede any sovereignty beyond coordinating efforts to fight the ‘three evils’. Apart from the skeleton secretariat, the only other concrete entity under the SCO is the RATS — the Regional Anti-Terrorist Structure. The biannual joint anti-terrorism exercises, which typically feature Russian and increasingly Chinese participants, are the most high-profile activity of the organisation.

Given its interest in self-preservation, modest economic objectives and limited state capacity, Iran’s membership will hardly add to the SCO’s strength. Embracing a major player in the Middle East mainly symbolises the organisation’s geographic reach and continued relevance as an advocate of principles such as common development and cooperative security.

It remains to be seen whether the organisation will redefine its agenda to play a more prominent role in the future security and economic issues that connect South Asia, Central Asia and the Middle East — three regions of geopolitical and geoeconomic importance. These include energy development, the stability of Afghanistan, and infrastructural connectivity linking Eurasia, South Asia and the Middle East.

Although its membership boasts 40 per cent of the world’s population and 20 per cent of its GDP, the SCO is only as strong and proactive as its core members, Russia, China, and to some extent, India, want it to be. Translating the organisation’s potential into concrete policy and deeper collaboration depends on the extent to which domestic and member state interests converge, as well as external pressures and opportunities.

The SCO’s ability to actively build a regional economic and security architecture will probably remain limited, selective and gradual. Indeed, the prospect of the SCO consolidating into a NATO or Quad-like organisation remains distant if not impossible — an outcome likely affected by the evolution of future US–Russia and US–China relations. This is understandable given the diversity of Central Asia, South Asia and the Middle East, as well as the significant resources needed to tackle regional issues.

A potentially big role for the SCO…

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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