Author: Guy Burton, Brussels School of Governance
In March 2023, Iran and Saudi Arabia agreed to re-establish diplomatic relations, with China playing a role as the host of the talks. This generated considerable discussion among policymakers and the scholarly community. Some believed this indicated a new change in China’s approach to the Middle East, which has primarily focused on commercial relations.
But the assumption that China is about to take on a more prominent and active role as a conflict mediator in the Gulf region is overstated. Although Beijing hosted the talks that led to the agreement, much of the substantive work had been done earlier, primarily by Iraq and Oman. China’s late involvement was also enabled because the United States does not have relations with Iran, making it difficult for the United States to broker a deal.
China’s participation was like its earlier efforts at regional conflict management. Between 2004–07 it tried to bridge the gap between the international community and the Sudanese regime during the Darfur crisis. Beijing then did something similar in 2013–15 between the West and Iran over the Iranian nuclear program, culminating in the Joint Comprehensive Plan of Action. In both cases, Chinese involvement was helped by a pre-established framework of dialogue and the willingness of each side to involve Beijing.
Discussion since the Saudi–Iran agreement has moved on to how China might guarantee relations between the two rivals. This makes too much of the agreement, which was limited to restarting diplomatic ties. Even if China had the will, it lacks the capacity to impose itself on the two signatories, not least because several grievances persist between them. They include Iran’s creeping nuclear militarisation and their contrary stances over the civil war in Yemen — though there are signs that the two sides may be starting to find some common ground.
Even if China cannot ensure future stability, there are sufficient incentives from within the region that might make this possible. Iran and Saudi Arabia had good reasons to reach an agreement with each other. On the Saudi side, there is a sense that Washington has become less reliable. At the same time, Riyadh realises that diversifying relations is no bad thing — Saudi Arabia’s commercial ties have grown substantially with China over the past two decades. Between 2005 to 2022, Chinese investments in Saudi Arabia totalled US$12.78 billion compared to US$4.72 billion in Iran.
Meanwhile, Iran is struggling economically. Between 2012 and 2021 its GDP almost halved, from US$644 billion to US$360 billion, exacerbated by sanctions. It also faced widespread protests against the killing of Mahsa Amini in police custody in 2022, prompting it to crack down on protestors. Compared to the Saudis, Iran has fewer available alternatives. Although it signed an investment contract with China two years ago, there has been little sign that it has led to any substantial increase in resources. Having China host diplomatic talks with the Saudis may have been Iran’s way of staying in Beijing’s line of sight.
The agreement from both sides to involve China will potentially reduce part of the Gulf rivalry while also indicating that China may be becoming aware that its growing economic profile brings with it political implications. China has long sought to avoid becoming entangled in regional tensions and conflicts. But that is proving harder than it seems. Following the Gulf Cooperation Council (GCC) summit with China in December 2022, a joint declaration reiterated the GCC’s long-standing support for the United Arab Emirates’ claims over the Tunb and Abu Musa islands. Tehran also claims these islands and summoned the Chinese ambassador post-announcement.
The Chinese now appear more attentive towards tensions in the Gulf. On the eve of his visit to the Gulf in 2021, then foreign minister Wang Yi published China’s Five-Point Plan. It referred to the need for collective and regionally generated security in the Gulf. Wang pointed to the need for a ‘trust mechanism’ along with ‘safety for oil facilities and shipping lanes’.
While it is notable that China was involved in the final stages of the reestablishment of diplomatic relations between Saudi Arabia and Iran, it is important not to exaggerate either the nature of the agreement nor China’s role in the region. Other regional conflicts, like those in Syria, Israel–Palestine, Libya or Yemen are likely to remain beyond Chinese intervention.
So long as conflicting…
Balancing China’s labour migration through education
The 2020 Chinese census showed a 69.7% increase in domestic migrant numbers, leading to concerns about regional economic disparities and the impact of skilled labor migration on underdeveloped regions.
Yongjie Xiong, a scholar at the Central University of Finance and Economics, discusses the findings of the 2020 Chinese census, which revealed a 69.7% increase in domestic migrant numbers compared to 2010 data. This significant influx of people has sparked debates about the Chinese government’s approach to managing large-scale labor migration.
The shifting landscape of China’s migrant worker demographics reflects changes in employment sectors and educational attainment. Notably, a higher percentage of newer generations of migrant workers are involved in the manufacturing sector, indicating a shift away from sectors like construction. Additionally, the newer cohort of migrants is better educated, which has implications for labor dynamics in urban environments.
These changes in labor demographics could exacerbate regional economic disparities and impact technological developments in various regions. The depletion of skilled labor in underdeveloped areas could hinder growth and affect the technological decisions of firms, ultimately widening the economic gap between cities.
As regions grapple with the challenges and opportunities presented by labor mobility, examining the impact of these changes on the economy and society is crucial for informing future policy decisions.
Annual Confirmation for China IIT Special Additional Deductions to Commence on December 1st
Starting December 1, 2023, the confirmation process for annual individual income tax (IIT) special additional deductions begins in China. All individuals, including expatriates, should determine eligibility and confirm the information before the end of the month to avoid difficulties in tax savings.
Starting on December 1, 2023, the confirmation process for annual individual income tax (IIT) special additional deductions begins. All individuals, including expatriates working in China, are advised to determine their eligibility for relevant special additional deductions. If eligible, individuals should promptly confirm the special additional deduction information through designated channels before the end of the month. Failing to confirm the IIT special additional deduction information may result in unnecessary difficulties in tax savings for the following year.
In 2019, China introduced special additional deductions for specific expenditures. According to the amended IIT Law, the taxable income amount of a resident individual in China shall be the balance after deducting the standard deduction (RMB 60,000 per year), as well as special deductions (social insurance and housing fund contributions), special additional deductions, and other deductions determined pursuant to the law, from the income amount of each tax year.
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 email@example.com.
China’s top diplomat visits Vietnam ahead of likely Xi trip
Chinese Foreign Minister Wang Yi is expected in Vietnam Friday, paving the way for a possible visit by President Xi Jinping this month.
Wang will co-chair the 15th session of the Vietnam-China Bilateral Cooperation Steering Committee, an annual event, with Vietnam’s Deputy Prime Minister Tran Luu Quang.
Vietnam’s Ministry of Foreign Affairs says the Chinese foreign minister will have talks with his Vietnamese counterpart Bui Thanh Son and greet Communist Party General Secretary Nguyen Phu Trong and President Vo Van Thuong.
Xi – who is also the Chinese Communist Party General Secretary – was originally expected to visit Hanoi in October or November for talks with his counterpart Trong, who was in Beijing last year. Instead, Xi traveled to San Francisco for November’s APEC summit and a meeting with U.S. President Joe Biden. His Vietnam visit is now expected to take place from Dec. 14-16.
Since Trong’s 2022 China trip Vietnam has elevated its relations with the U.S. to a “comprehensive strategic partnership,” putting it on a par with China, along with India, Russia and South Korea. This week Vietnam also conferred its top partnership ranking on Japan during a visit to Tokyo by its president Vo Van Thuong.
Improved relations with Vietnam are likely to help the U.S. and Japan diversify supply chains and reduce their reliance on a politically and economically turbulent China. That in turn seems to have prompted Beijing to seek even stronger ties with Hanoi.
Carl Thayer, a Vietnam analyst and emeritus professor at the Australian Defense Force Academy in Canberra, said when Xi visits Hanoi he will likely want to discuss the same issues with Trong that U.S. President Joe Biden raised with the Vietnamese leader during their September meeting:
“[I]mproving the efficiency and stability of bilateral supply chains, creating better conditions for Chinese businesses to invest and operate in Vietnam, enhancing cooperation in e-commerce and the digital economy, increased science and technology joint research, education and training exchanges, … green development and climate change response, public health cooperation, protection of water resources along the Lancang-Mekong River, cross-border tourism and cultural exchanges, and coordination on international issues.”
China is Vietnam’s largest trading partner with bilateral trade rising 5.5% last year to US$175.5 billion, according to Vietnam’s Ministry of Industry and Trade.
China’s Commerce Minister Wang Wentao also visited Vietnam this week pledging to deepen trading ties and open the Chinese market to more agricultural imports.
Despite an improving trade relationship, Vietnam and China have clashed frequently over territorial claims in the South China Sea. Hoang Viet, an expert on the issue, told Radio Free Asia that Beijing is likely to tone down its rhetoric, in order to avoid souring top level relations.
“In anticipation of Xi Jinping’s visit to Vietnam, China may exercise maximum restraint to create a more moderate atmosphere,” he said.
Despite their differences in the South China Sea, China and Vietnam have been holding joint patrols between their navies and coast guards in the Gulf of Tonkin in November and December.
Beijing and Hanoi said the patrols aimed “to carry forward the traditional friendship and deepen mutual trust between the two countries, as well as further promote mutual understanding between the two militaries.”
Edited by Elaine Chan and Taejun Kang.
RFA Vietnamese contributed to this story.
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