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China

Vietnam ropes in stakeholders to China territorial dispute

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Author: P. K. Ghosh, Observer Research Foundation

Vietnam’s recent granting of seven oil blocks in the South China Sea for exploration by India is part of a plan to internationalise Hanoi’s territorial dispute with China. Hanoi hopes to create more stakeholders who can withstand hegemonistic Chinese ambitions in the area.

As well as India, Vietnam is targeting Russia to invest in oil and gas blocks. Here, Russian President Vladimir Putin shakes hands with Vietnamese Prime Minister Nguyen Tan Dung in Hanoi on 12 November 2013. Putin said that Russia and Vietnam will cooperate in offshore oil exploration and deepen military ties. (Photo: AAP)

It is well known that the Indian government has made heavy investments in energy exploration in the South China Sea. Awarded through the global bidding process, India earlier had three blocks in the Vietnamese region in which about US$360 million was invested through the state-run ONGC Videsh Ltd (OVL).

OVL has been prospecting for oil in Vietnam’s exclusive economic zone in blocks 127 and 128 (Phu Kanh Basin) in territories under dispute. It withdrew from block 127 which proved unviable and dry, while block 128 was bogged down by layers of hard rock and unfavourable geological conditions which made it difficult to penetrate.

Despite these issues, India decided not to withdraw from block 128 for geo-strategic reasons, including a request from the Vietnamese to stay on for another two years. In the meantime Indian operations of extracting natural gas in block 6.1 since 2003 in the region, which is not under dispute, continues from where it got two billion cubic metres of gas in 2011–12 for its 45 per cent participating interest.

While the Chinese had not objected to Vietnam allotting the lucrative block 6.1 to India in Nam Con Son Basin, it objected to India taking up exploration in blocks 127 and 128. Chinese objections have included demarches, pressure on companies not to sell equipment to India and the alleged harassment of an Indian warship, INS Airavat, which had transited through the disputed portion of the South China Sea.

Following talks between Prime Minister Manmohan Singh and General Secretary Nguyen Phu Trong during the Vietnamese leader’s recent high-profile visit to India, eight agreements were signed. There was also an MoU signed, in which the seven oil blocks in the South China Sea were offered to India — including three on an exclusive basis — as well as joint prospecting in some Central Asian countries with which both Hanoi and New Delhi have good political ties.

The blocks have been offered on a nomination basis whereby India’s OVL would not have to go through a bidding round of offering the best production sharing contracts. Instead a direct proposal for production sharing would be negotiated under Vietnam’s petroleum laws.

Aside from India, Hanoi is also targeting Russia and Japan to counter pressure from China as their presence would serve as a deterrent. (Hanoi recently roped in Russia to invest in oil and gas blocks.)

Hanoi’s move could make China uneasy as Chinese foreign policy, especially towards the South China Sea and the East China Sea, has undergone a major shift in the last few years. This change in course has ensured that Deng Xiaoping’s ‘24-character strategy’, which acted as a guideline for foreign and security policy, and China’s phase of ‘biding time’, has evolved into a more forceful assertion of sovereignty claims.

The new Chinese leadership under Xi Jinping — which is keen to establish its authority in the national politics and thus shy away from being called ‘weak or too generous’ — has upped the ante and signalled an uncompromising stand by regarding the South China Sea as a matter of ‘core interests’.

It is not difficult to imagine that the Chinese will be uncomfortable with the current scenario. China is against any ‘outside power’ being involved in the South China Sea, though its own forces are regularly operating in the Indian Ocean region. Vietnam on its part well knows that it makes strategic sense to internationalise the scenario and put into place as many international stakeholders as possible.

The only countries that can probably withstand the pressures from and against China are being wooed by Vietnam. They in turn may like to prop up Vietnam as a bulwark against the increasingly hegemonistic attitude of the Chinese. The United States, Russia and India are the countries that fit well into the Vietnamese game plan.

Dr P. K. Ghosh is a Senior Fellow at the Delhi-based Observer Research Foundation and a former Co-Chair of the CSCAP International Study Group on Maritime Security.

This article was first published here as RSIS Commentary No. 228/2013.

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Vietnam ropes in stakeholders to China territorial dispute

China

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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