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China

China’s strong-arming won’t work in Marcos’ Philippines

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East Asia Forum

The recent US–Philippines Balikatan military exercise was a response to China’s increased aggression in the South China Sea. China had been targeting both Filipino military personnel and small-scale fisherfolk in the Philippines’ exclusive economic zone. China’s provocations had become indiscriminate and bolder, making it difficult to ignore the situation. The 38th Balikatan exercise in April 2023 was the biggest in the three-decade history of their joint combat drills. However, it received a swift warning from Beijing who called for the cessation of such activities, stating that they could aggravate tension in the area.

The United States and the Philippines conducted the third 2+2 Ministerial Dialogue on 11 April 2023 in Washington, where they issued clear-cut statements about the South China Sea conflict. The joint statement condemned China’s illegal activities and called for compliance with the 2016 Permanent Court of Arbitration decision, which rejected Beijing’s claims on territory and maritime rights based on its ‘nine-dash line’. The statement also reiterated the importance of maintaining peace and stability in the Taiwan Strait.

Under President Ferdinand Marcos Jr, the Philippines has turned its back on the China appeasement strategy that was present under his predecessor. Former president Rodrigo Duterte moved the Philippines closer to China, which gave ample space for them to construct a mutually beneficial relationship. However, Beijing continued to conduct aggressive actions in the Philippines’ exclusive economic zone, highlighting a clear mismatch between their words and actions. As a dominant state, China has assumed that vulnerable states would allow for its aggressive actions. However, the Philippines, like many ASEAN countries, is a post-colonial state that is sensitive to the superpowers’ raw ambition to dominate and bend them against their will.

The Philippines’ ability to defend itself against China is limited, which is why it has forged closer ties with the United States. The Philippines is also crucial to US interests as a treaty ally, making it important to maintain peace and stability in the region.

Authors: Jenny Balboa, Tokyo University of Foreign Studies and Hosei University, and Shinji Takenaka, Japan Center for Economic Research

Despite careful words from Philippine officials, the latest US–Philippines Balikatan military exercise was a response to China’s increasing assertiveness in the South China Sea. China’s provocations had become indiscriminate — targeting both uniformed Filipino personnel and small-scale fisherfolk in the Philippines’ exclusive economic zone. China’s aggressive actions had become bolder, making it more difficult to turn a blind eye to the situation.

The 38th Balikatan exercise in April 2023 was the biggest in the three-decade history of their joint combat drills. The exercise did not sit well with Beijing, which immediately released a warning that such activities can aggravate tension in the area. The Chinese ambassador to the Philippines issued an upfront reproach to the Philippine government about China’s displeasure of such ‘provocative’ activities.

The United States and the Philippines promptly conducted the third 2+2 Ministerial Dialogue on 11 April 2023 in Washington. Top US–Philippines foreign affairs and defence officials issued clear-cut statements about the South China Sea conflict. The joint statement condemned China’s illegal activities and called for compliance with the 2016 Permanent Court of Arbitration decision, which rejected Beijing’s claims on territory and maritime rights based on its ‘nine-dash line’. The statement also reiterated the importance of maintaining peace and stability in the Taiwan Strait.

Under President Ferdinand Marcos Jr, the Philippines seems to have turned its back on the China appeasement strategy that characterised the foreign policy of his predecessor. Former president Rodrigo Duterte moved the Philippines closer to China by downplaying the Arbitral Tribunal award favouring the Philippines. In retrospect, Duterte provided China with ample space to construct a closer and mutually beneficial relationship with the Philippines.

Yet Beijing continued to conduct aggressive actions in the Philippines’ exclusive economic zone targeting the Philippine military and fisherfolk who are more disadvantaged. There was a clear mismatch between Beijing’s words and actions. It did not help that China reneged on many of its economic commitments to Manila. Beijing failed to fulfil its pledged investment in several big-ticket infrastructure projects.

As a dominant state that wields considerable influence in the economy and security of many countries, China seems to have assumed that vulnerable states, such as the Philippines, would tolerate its belligerent actions. China had lost sight that the Philippines — like many ASEAN countries — is a post-colonial state, sensitive to the raw ambition of superpowers to dominate and bend them against their will. Beijing overlooked the determination of many domestic actors in these countries to defend their national interest.

The country’s territorial integrity is now under threat from a hegemonic China. Given the Philippine military’s inability to defend the country against a preponderant China, the Philippines moved closer to the United States, which provides the training and capacity to protect its territory.

The Philippines’ is also vital to US interests because it is a treaty ally that…

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A Timeline of EU-China Relations Post-2024 European Elections

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EU-China relations are crucial in global business, with geopolitical shifts and technological competition shaping the dynamic. The recent EU Parliament elections have brought a political realignment, leading to a more assertive stance towards China. Strategic discussions and new working groups aim to navigate the evolving relationship.


EU-China relations play a crucial role in the global business landscape. The current circumstances, marked by geopolitical shifts, economic interdependence, and technological competition, contribute to the volatility and frequent adjustments in this relationship. In this timeline, we aim to capture key milestones and developments that shape EU-China ties.

The European Parliament elections, held between June 6 and June 9, 2024, have ushered in a new era for EU-China relations. The election results revealed a significant shift in the political landscape, with centrist parties losing ground to far-right groups like the Identity and Democracy (ID) and the European Conservatives and Reformists (ECR). This political realignment is poised to influence the EU’s approach to China, introducing more varied and potentially conflicting perspectives on policy.

Traditionally, the EU has maintained a cautious stance toward China, epitomized by the 2019 publication of the EU-China Strategic Outlook, which framed the relationship as one of “partnership, competition, and systemic rivalry.” This tripartite approach was later reiterated in the European Council’s Conclusion on China. However, the narrative toward China has taken a decisive turn with European Commission President Ursula von der Leyen’s speech delivered on March 30, 2023. This speech marked a shift towards a more assertive stance, further strengthened by the release of the European Economic Security Strategy in June of the same year.

In the aftermath of the 2024 elections, the increased fragmentation within the EU Parliament suggests a more complex and uncertain path to forming a cohesive strategy toward China. This uncertainty poses challenges for European companies conducting business with China, as well as Chinese and global businesses operating in Europe, who must now navigate a more unpredictable regulatory environment.

Amid these developments, the Chinese government is keenly observing the evolving dynamics within the EU. China aims to cultivate allies within the European bloc, and this intent was evident during President Xi Jinping’s recent European tour, which included official visits to France, Serbia, and Hungary. During his visit, President Xi reiterated the EU’s significance as China’s major trading partner.

As the new EU Parliament begins its work, strategic discussions have been underway to address key issues, including the EU’s technological and strategic autonomy. To manage different views and promote collaboration on shared interests with China, new cross-regional working groups have been established. These groups are focusing on sectors such as agriculture, aviation, artificial intelligence, energy, and finance, aiming to enhance resilience and foster dialogue.

In this article, we present a timeline of EU-China relations following the EU Parliament elections, reflecting the complexities and opportunities presented by this new chapter in bilateral relations.

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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Economic Update: Consumption and Trade in China See Strong Recovery Despite Decrease in Industrial Output by May 2024

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Industrial output growth in China has slowed, with robust performance in some manufacturing sectors but an increase in consumption driven by services, retail sales, and imports. Despite a slowdown, equipment manufacturing has been crucial in stabilizing overall industrial growth. Certain high-tech and electronic equipment manufacturing sectors have shown strong performance, while the automobile manufacturing sector has decelerated due to falling domestic demand.


The data indicates a slowdown in industrial output growth, despite some manufacturing sectors still showing robust performance. In contrast, consumption is on the rise, driven by growth in services, retail sales, and imports. The uptick in these areas suggests a strengthening of domestic demand, spurred by a stabilizing global economic situation and the boost from the Labor Day Holiday at the beginning of May.

China’s foreign trade also continued to show marked improvement, reflecting the country’s strong export capabilities and increasing imports.

Year-on-year growth in China’s industrial sector slowed in May from the previous month but remained relatively strong. Total industrial value-added output grew by 5.6 percent year-on-year in May, a month-on-month increase of 0.3 percent but a deceleration from 6.7 percent year-on-year growth recorded in April. Value-added output of the manufacturing industry grew 6 percent year-on-year, a deceleration from the 7.5 percent year-on-year in April.

According to NBS spokesperson Liu Aihua, equipment manufacturing played a crucial role in stabilizing overall industrial growth. The sector’s added value increased by 7.5 percent from the previous year, contributing 2.6 percentage points to the growth of all industries above the designated size and accounting for 45.7 percent of the total growth. Within this sector:

Certain high-tech and electronic equipment manufacturing sectors exhibited particularly strong performance:

However, the automobile manufacturing sector decelerated significantly from a 16.3 percent year-on-year jump in April to 7.6 percent year-on-year growth in May, possibly due to falling domestic demand.

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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Outlook for China’s Wine Market: Current Trends and Opportunities

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China’s wine market faces challenges like declining consumption and imports, but remains resilient. Adapting to consumer preferences, focusing on quality and sustainability, and using digital platforms for sales are key strategies. Despite setbacks, the market is promising for foreign producers.


Despite challenges such as declining consumption and import figures, China’s wine market remains resilient and promising. Strategic adaptation to evolving consumer preferences, emphasis on quality and sustainability, and leveraging digital platforms for sales are pivotal strategies for success in this dynamic and competitive landscape.

In recent years, China’s wine market has faced significant challenges marked by declines in key metrics such as consumption, imports, and domestic production. These difficulties were further compounded by the disruptions brought about by the COVID-19 pandemic. Despite these setbacks, the market retains its allure, presenting opportunities for foreign wine producers and exporters who are willing to adapt and strategically engage.

As consumer preferences evolve and government policies increasingly emphasize quality and sustainability, understanding these complexities becomes crucial for stakeholders navigating China’s evolving wine landscape. By staying attuned to shifting trends and regulatory developments, stakeholders can position themselves effectively to capitalize on the market’s enduring potential.

The wine sector in China has experienced dramatic shifts over the last two decades, initially reflecting rapid growth and then gradually declining. In the early 2000s, China emerged as a lucrative market for global wineries seeking expansion due to soaring wine imports driven by rising consumer wealth and the perception of wine as a symbol of sophistication. However, per capita consumption peaked around 2012, and imports have since plateaued, with recent years showing significant market contraction. The COVID-19 pandemic exacerbated these challenges, particularly affecting wine sales due to its association with social gatherings, which were restricted during lockdowns.

Following this trend, in 2023, China saw a significant decline in wine consumption, with a 24.7 percent decrease compared to 2022. According to the International Organization of Vine and Wine (OIV), China’s wine consumption has been falling since 2018, averaging a loss of 2 million hectoliters annually.

Nevertheless, China remains the ninth-largest wine-consuming nation worldwide.

Looking forward to 2024, China’s wine market is poised for dynamic activity, delineated primarily by consumption settings: at-home and out-of-home. According to Statista, revenue from wine sales in supermarkets and convenience stores (at-home) is forecast to reach US$9.7 billion. In contrast, revenue generated from wine consumed in restaurants and bars (out-of-home) is expected to be substantially higher, totaling US$17.2 billion. This projects the total revenue from the wine market to reach US$26.8 billion by the end of 2024.

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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