China
No dialogue between US, China defense chiefs in Singapore
A major regional security forum is underway in Singapore amid rising tensions in the South China Sea and East Asia, with in-person communication between defense chiefs from China and the United States remaining shuttered.
U.S. Defense Secretary Lloyd Austin had invited his Chinese counterpart, General Li Shangfu, to a bilateral meeting on the sidelines of the Shangri-La Dialogue in Singapore but the Chinese minister declined.
China’s decision is “unfortunate,” Austin said before arriving in the city state which has been hosting the annual event since 2002.
“You’ve heard me talk a number of times about the importance of countries with large, with significant capabilities, being able to talk to each other so you can manage crises and prevent things from spiralling out of control unnecessarily,” the U.S. defense secretary was quoted by news agencies as saying in Tokyo on Thursday.
“I would welcome any opportunity to engage with Li,” Austin said. “I think defense departments should be talking to each other on a routine basis or should have open channels for communications.”
For its part, China said that “dialogue cannot be without principles, and communication cannot be without a bottom line.”
Chinese Ministry of Defense spokesperson Tan Kefei said on Wednesday that the “current difficulties in the exchanges between the two militaries are entirely on the U.S. side.”
“On the one hand, the U.S. keeps saying that it wants to strengthen communication, but on the other hand, it ignores China’s concerns and artificially creates obstacles, seriously undermining the mutual trust between the two militaries,” Tan said.
The spokesperson did not elaborate on the obstacles but the U.S. Indo Pacific Command on Tuesday accused a Chinese J-16 fighter jet of performing an “unnecessarily aggressive” maneuver during the intercept of a U.S. Air Force RC-135 reconnaissance aircraft last week.
Beijing responded by calling it a hyped-up accusation, saying the U.S. spy plane “made an intrusion” into the Chinese army’s training zone in the South China Sea and its “aerial forces … professionally dealt with the situation in accordance with law and regulation.”
The Chinese defense minister, who took office in March, has been on the U.S. sanction list since 2018 for the purchase of SU-35 combat aircrafts and S-400 missile system-related equipment from Russia.
This could be another obstacle for an official meeting between Gen. Li and Secretary Austin.
Focal points
In 2019 the then-Minister of National Defense Wei Fenghe had his first in-person meeting with his U.S. counterpart Patrick Shanahan.
Wei also met with Lloyd Austin on the sidelines of Shangri-La Dialogue in 2022 when the forum returned after a couple years of disruption because of COVID-19.
Analysts say the absence of a U.S.-China bilateral meeting reflects the difficulties in the military-to-military relations between the two powers.
Yet “the U.S.-China competition is a focal point of the Shangri-La Dialogue, since it shapes so much of the dynamics in the region and beyond,” said Ian Chong, an associate professor of political science at the National University of Singapore (NUS).
The Global Times, a sister publication of the Chinese Communist Party’s mouthpiece People’s Daily, in an editorial on Thursday said that the ball is in the U.S. court.
“Frankly speaking, the outcome and effectiveness of the Shangri-La Dialogue largely depend on how the U.S. behaves during the conference,” it warned, accusing the U.S. of always trying “to take center stage and set the tone” for the forum.
There are still hopes that, despite the rhetoric, the two delegations from the United States and China would meet “unofficially under a low-key format”, said Hoang Thi Ha, Co-ordinator for the Regional Strategic and Political Studies Program at the ISEAS – Yusof Ishak Institute in Singapore.
Southeast Asian countries “are keen to see whether the U.S. and China would renew their communication especially via the military and defense channel,” Ha told RFA.
“It is in everybody’s interest that Washington and Beijing tone down their hostile posturing towards each other,” the analyst said.
Li Shangfu and Lloyd Austin, separately, plan to make speeches at the forum. Li will speak of China’s new security initiatives and Austin on the U.S. leadership in the Indo-Pacific.
During the three days of the Shangri-La Dialogue, 600 delegates from 49 countries will examine the complex security environment in the Asia-Pacific and the war in Ukraine.
“Other topics of discussion are the situation in Myanmar and the war in Ukraine, especially when it comes to the issue of food security,” NUS’s Ian Chong told RFA.
In his opinion, the rising tension in the Taiwan Strait will also be discussed, as “any Taiwan crisis will affect the region quite directly because of supply chains, shipping lanes, air lanes, and submarine cables going to Northeast Asia.”
“The problem, however, is that Taiwan has only a token quasi-official presence at the forum,” the analyst said, noting that China, which considers Taiwan one of its provinces, would resolutely object to any official Taiwan attendance.
“More exposure to Taiwanese experts in the Shangri-La Dialogue certainly could provide deeper insights into the situations across Taiwan Strait,” said Norah Huang, research fellow from Taiwanese think tank Prospect Foundation.
The think tank’s president, Lai I-chung, is attending the forum as a guest of the organizer, the International Institute for Strategic Studies.
The Shangri-La Dialogue, in its 20 years, is “a unique meeting where ministers debate the region’s most pressing security challenges, engage in important bilateral talks and come up with fresh approaches together,” according to IISS.
Speakers at this year’s event include the ministers of defense from Germany, Australia, the U.K., Canada, Sweden, Japan, South Korea, Singapore, the Philippines, Indonesia and Cambodia.
Two key Southeast Asian players – Malaysia and Vietnam – are keeping…
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China
China Implements New Measures to Increase Foreign Investment in A-Share Market
China’s 2024 updates to strategic investment rules simplify A-share market access for foreign investors by lowering shareholding thresholds, reducing lock-up periods, and increasing investment options, reflecting a commitment to greater market openness and participation in economic reform.
The 2024 updates to China’s strategic investment rules simplify entry for foreign investors in the A-share market by lowering shareholding thresholds, reducing lock-up periods, and expanding investment options, signaling a commitment to increased market openness and flexibility through these new measures.
China’s capital markets are undergoing a significant transformation as part of the nation’s ongoing commitment to economic reform and openness. The recent update to the Administrative Measures for Strategic Investment in Listed Companies by Foreign Investors (hereinafter, the “new measures”) reflects this commitment, targeting an increase in foreign investor participation in China’s A-share market. For nearly two decades, China’s “strategic investment” pathway provided foreign investors with access to shares in A-share listed companies, but strict requirements—such as high minimum investment thresholds and prolonged lock-up periods—made it accessible only to select large investors.
The new measures, effective December 2, 2024, relax many of these restrictions to attract a broader and more diverse range of foreign investors. Key changes include lowering the minimum shareholding threshold from 10 percent to 5 percent, reducing the asset requirements from US$100 million to US$50 million in assets, and shortening the lock-up period from three years to one. Additionally, foreign investors can now use equity from unlisted overseas companies as consideration, while new investment routes, like tender offers, enhance flexibility.
In 2005, China introduced the Strategic Investment Regime as part of its broader efforts to open up its financial markets to foreign capital while retaining a level of control over sensitive industries. This framework allowed qualified foreign investors to acquire strategic stakes in Chinese A-share listed companies, aiming to promote foreign participation in the domestic market.
However, the stringent requirements—such as high minimum investment thresholds and extended lock-up periods—restricted this pathway to a limited pool of large, multinational investors. The regime reflected China’s cautious approach at the time, seeking to balance openness with economic stability and control over critical sectors.
A decade later, in 2015, China implemented its first significant revisions to the Strategic Investment Regime. These amendments sought to make the investment process more accessible by easing certain restrictions, aiming to encourage foreign capital inflow as China continued its gradual integration into global markets.
While some requirements were relaxed, the fundamental limitations—such as high entry thresholds and complex approval processes—remained in place, meaning that access to China’s A-share market was still primarily confined to major institutional investors with substantial capital.
| This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
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China
Less is More: Rethinking Indonesia’s Tariffs on China
Rising concerns over China’s industrial overcapacity have led countries to impose higher tariffs, including Indonesia’s planned 200% tariffs on Chinese goods, risking Indonesia’s competitiveness and economic security.
Tariffs Escalate Amid Concerns of Overcapacity
Concerns regarding China’s industrial overcapacity have prompted countries to increase tariffs on Chinese goods. Indonesia, following the U.S. example, plans to impose tariffs as high as 200 percent on various Chinese imports, including textiles and ceramics. This response aims to safeguard local jobs from the influx of inexpensive Chinese products.
Economic Impact of Tariffs
These tariffs are designed as safeguards and anti-dumping measures against potential job losses in Indonesia. However, the ongoing investigations have not definitively shown that China’s practices are the root cause of these issues. The political appeal of broad tariffs might lead to unintended consequences, such as reducing the overall competitiveness of Indonesian exports and risking retaliatory measures from affected countries.
Dependency on Chinese Goods
Indonesia heavily relies on Chinese manufacturing inputs, which constituted over 26 percent of its intermediary goods imports in 2021. With competitive pricing, these inputs have enhanced Indonesia’s export capabilities, particularly to markets like the U.S., where the trade surplus increased from $8.58 billion in 2019 to $11.96 billion in 2023. Reducing trade openness may ultimately undermine the Indonesian economy’s resilience against geopolitical challenges.
China
What does China want from the next US president?
Taiwan’s President Lai Ching-te asserts sovereignty amid Chinese military threats following his National Day speech. Beijing desires reunification, while U.S. relations with Taiwan remain complex and pivotal.
During a Taiwan National Day speech on October 10, Taiwanese president Lai Ching-te said that Taipei was determined to defend Taiwan’s sovereignty against “annexation and encroachment”, and emphasised that “China has no right to represent Taiwan”.
China’s response was swift. Less than a week after Lai’s provocative speech, a record 153 Chinese war planes swarmed and surrounded Taiwan during a Chinese military exercise over 24 hours. Beijing’s intention was simple: issue Taipei a “stern warning” for what China considers a “separatist act”.
Beijing sees the island as a “sacred and inseparable part of China’s territory” that must return to the fold. The Taiwanese president sees things differently. Currently, the self-governing island has a different political system, and few Taiwanese are in favour of reunification with China.
Though Washington doesn’t have diplomatic relations with Taipei officially, it does have regular communication through back channels and a strong economic relationship. The island is a key US trading partner and is a major supplier of semiconductors which are critical to the production of computers and other technologies. It also sells arms to Taiwan, although this has reduced significantly under Joe Biden.
China has not ruled out taking Taiwan by force, and if it does, the US might come to the self-ruling island’s defence as indicated by Washington in the past.
China holds extensive military exercises around the island of Taiwan in October 2024.
But Xi will be hoping the outcome of the 2024 US presidential election might bring a leader that would have a different attitude to Taiwan as well as helping China resolve its economic storm, which has resulted in a rising number of protests. So, between an outspoken Donald Trump and a seemingly even-tempered Kamala Harris, does Beijing have a favourite? And do either of them offer Xi anything new?
Taiwan and Xi’s legitimacy
Aside from Mao Zedong, the founder of the People’s Republic of China, Xi is the only sitting Chinese head of state without term limits and whose political ideology is enshrined in the Chinese constitution.
Xi could potentially prove his place in history by resolving China’s economic crisis. However, Beijing’s increasing isolation from the west due to its support of Russia’s Ukraine conquest makes this doubly hard.
Like it or not, Xi might have to ramp up whatever agenda Beijing has for Taiwan. If he could make sufficient progress towards unification, he may be hailed as one of the greats of the Chinese Communist Party, which would consolidate his status within the party, and distract from the nation’s economic woes.
Unlike Harris, who appears to take take alliances and partnerships seriously, Trump questions the benefits of many alliances forged by the US. In fact, the few times that he spoke about Taiwan centres on how the island state has taken America’s semiconductor business, and should pay more to the US for its defence.
So, would Trump come to Taiwan’s aid if China does invade Taiwan? Given the importance of semiconductors to electronics and AI, he just might. But Trump also has a reputation as a “dealmaker-in-chief”, so he might just cut a deal with Beijing, which erodes Taiwan’s independence. And that is likely to worry Taipei.
The Russia dilemma
As Russia’s “partner of no limits”, China has been supplying Russia with technology that fuels Russia’s war machinery against Ukraine. But this has strained Sino-western relations and earned Beijing trade and import restrictions, which hampers China’s economic recovery.
China could halt its aid to Russia to avoid western scrutiny, but that is not likely. Beijing needs a strong Russia to be a viable ally in its battle against a US-led world order, and to avoid being the focus of the west if Russia falters amid its conquest in Ukraine.
While Harris backs Kyiv and sees the war as a strategic and moral issue, Trump has criticised US aid to Ukraine. He also believes that Kyiv should provide concessions to Russia to end the war that Putin started in February 2022.
A future Trump administration might strengthen Russia by withdrawing support for Ukraine and lifting sanctions against Russia. And a more robust Russia is good news for Beijing.
US economic hostility
So, at first glance, Trump and Harris’s approaches towards China are different. Trump’s return to the White House could also intensify the trade war that he started in 2018, as tariffs on Chinese goods could go to as high as 60%. This might hasten the economic decoupling between the US and China.
Harris, on the other hand, wishes to “de-risk” China. This approach seeks to maintain US global interest while engaging with the east Asian economic behemoth. In such a scenario, Beijing might prefer a Harris presidency as it leaves room for negotiation.
However, Harris has relatively little foreign policy experience, and is expected to pick up where Joe Biden left off. This means the tariffs and technological restrictions that China faced under a Biden administration could stay under her presidency.
Another factor is Tesla founder Elon Musk, who is an ardent supporter of Trump, and may take a top job within a Trump administration.
How much influence the tech multi-billionaire actually has over Trump is uncertain. However, it’s worth noting that Musk has substantial business dealings in China, and might seek to lean on Trump if the former president’s policies harms Tesla’s interests.
With many of these factors unclear at the moment, Beijing will be hoping for a US leader who is more interested in economic wins than protecting Taiwan, and one that Xi can negotiate with to warm up relations between the two countries.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
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