Shanghai releases action plan for high-quality development of characteristic industrial parks (Issue 22)
Issue 22
Shanghai Weekly Bulletin
No. 1, December 2023
Shanghai Weekly Bulletin is an information service presented by the Foreign Affairs Office of Shanghai Municipal People's Government in collaboration with Wolters Kluwer to foreign-funded enterprises, foreign-related institutions as well as people from overseas living in Shanghai. Covering major national and Shanghai foreign-related news, event information, policy QA and interpretations in the past week, it keeps you up-to-date with the latest foreign-related policies and developments in Shanghai.
Laws and Regulations
【National】
1. SPC Issues Interpretation (II) on Law of the People's Republic of China on Application of Law to Foreign-related Civil Relations
【Keyword:Foreign-related Civil Relations】
The Supreme People's Court (SPC) released on December 1, 2023 the Interpretation (II) of the Supreme People's Court on Certain Issues Concerning Law of the People's Republic of China on Application of Law to Foreign-related Civil Relations (II). Consisting of 13 articles, the judicial document systematically tackles the problems that have long hindered the ascertainment of foreign law by clarifying responsibilities, diversifying ways of ascertainment, and unifying procedures and standards. The document is scheduled to take effect on January 1, 2024.
Source: SPC
2. NFRA Revises the Measures for Country Risk Management in Banking Financial Institutions
【Keyword:Financial Institutions; Country Risk Management】
The National Financial Regulatory Administration (NFRA) recently released the revised Measures for Country Risk Management in Banking Financial Institutions. The revised document has 43 articles in five chapters. To prevent repeated provision of reserves for country risk exposures allowed under the previous Guideline for Country Risk Management in Banking Financial Institutions, the revised document has put reserves for country risk exposures under the item of owner's equity and makes it an integral part of the general reserves to deal with unexpected loss.
Source: NFRA
【Shanghai】
1. Shanghai Releases Action Plan for High-quality Development of Characteristic Industrial Parks
【Keyword:Characteristic Industrial Parks】
The General Office of the Shanghai Municipal People's Government recently issued the Action Plan for High-quality Development of Shanghai's Characteristic Industrial Parks (2024-2026). According to the Plan, Shanghai aims to build about 60 characteristic industrial parks by 2026, which will gather about 5,500 high-tech companies and specialized and sophisticated small and medium-sized enterprises that produce novel and unique products, and have more than 360 national- and municipal-level innovative RD institutions. The gross industrial output of enterprises above designated size in these parks is expected to exceed 1 trillion yuan.
Source: Shanghai Municipal People's Government
2. Shanghai Issues Measures to Strengthen Credit Management of Public Resource Trading
【Keyword:Public Resources; On-site Trading Credit】
Shanghai Municipal Development and Reform Commission recently issued the Measures of Shanghai on Credit Score Management of Public Resource On-site Trading (for Trial Implementation). With 21 articles in five chapters, the Measures aim to deepen the reform of &"one-network trading&" of public resources, strengthen credit management of public resource trading, and regulate credit scoring for on-site public resource trading. The Measures will take effect on January 1, 2024 and remain effective until December 31, 2025.
Source: Shanghai Municipal People's Government
3. Shanghai Consults Public on Several Sets of Regulations
【Keyword:International Trade Center; Green Transformation; Science and Technology】
The Standing Committee of Shanghai Municipal People's Congress released on November 24, 2023 the Shanghai Municipal Regulations on the Advancement of Science and Technology (Draft Revisions) and the Shanghai Municipal Regulations on Promoting the Development of the International Trade Center (Draft Revisions) to solicit public opinions until December 8, 2023. The lawmaker also released on November 27, 2023 the Shanghai Municipal Regulations on Promoting Green Transformation of the Development Model (Exposure Draft) for public comment until December 11, 2023.
Source: Shanghai Municipal People's Congress
4. Shanghai Releases Guidelines to Strengthen Cultivation of High-skilled Talent in the New Era
【Keyword:High-skilled Talent】
Shanghai Municipal Human Resources and Social Security Bureau and other 22 authorities in Shanghai recently released the Guidelines on Strengthening the Cultivation of High-skilled Talentin the New Era. The document elaborates on 22 issues from seven aspects, including overall requirements, increasing efforts in cultivating high-skilled talent, improving the skill-oriented talent management system, deepening reform of the evaluation mechanism for skilled talent, enhancing the incentive mechanism for commendation and selection of high-skilled talent, strengthening skilled talent services and exchanges, and introducing safeguard measures.
Source: Shanghai Municipal Bureau of Human Resources and Social Security
5. Shanghai Issues Operating Guidelines for the Registration of Contracts for Enterprises' Investment in Basic Research
【Keyword:Contracts for Basic Research】
Shanghai Municipal Commission of Science and Technology and Shanghai Municipal Tax Service jointly released on November 29, 2023 the Operating Guidelines of Shanghai for the Registration of Contracts for Enterprises' Investment in Basic Research (for Trial Implementation). The document has 12 articles and is applicable to enterprises' funding of non-profit sci-tech RD institutions and universities, as well as government-run natural science funds for basic research.
Source: Shanghai Municipal Commission of Science and Technology
6. Shanghai High Court Releases the Third Batch of Reference Cases in 2023
【Keyword:Reference Cases】
After discussions and decision-making at the 14th meeting of its Judicial Committee, the Shanghai High People's Court released the third batch of reference cases in 2023. Most of the seven cases involve new rules of the Civil Code over inheritance, reputation disputes, sales contract disputes and a lawsuit involving objections to execution by outsiders.
Source: Shanghai High People's Court
One Week in Shangh
One Week in Shanghai
【Government Activities】
1. 50 Expats Honored with Shanghai Magnolia Silver Award
【Keyword:Shanghai Magnolia Silver Award】
The 2023 Presentation Ceremony of Shanghai Magnolia Silver Award was held in Shanghai on December 3, and 50 outstanding expatriates from 15 countries are honored with the accolade. This year's 50 winners come from fields of commerce, finance, technology, shipping, education, health care and culture. In different positions, they have helped Shanghai deepen the building of the &"five centers&", strengthen the &"four functions&", promote high-standard reform and opening up, and made outstanding contributions to the city's high-quality development.
Source:Shanghai Release
【Forum Exhibition】
1. 2023 Shanghai International Friendship Cities Cooperation Forum Held in Shanghai
【Keyword:Shanghai International Friendship Cities Cooperation Forum】
On the afternoon of December 1, representatives from 13 friendship cities gathered in Shanghai to participate in the 2023 Shanghai International Friendship Cities Cooperation Forum, which is themed on &"Deepening Friendship Cities Cooperation and Promoting High-quality Development&". At the forum, Chinese and foreign guests discussed and exchanged ideas on &"smart city development and deepening friendship cities cooperation&" and &"economic and trade cooperation and high-quality development of friendship cities&", and shared their views on smart cities, innovation-driven development, and economic and trade cooperation to help Shanghai and its friendship cities develop high-quality relations.
2. 2023 Pudong International Talent Hub Forum to Open Soon
【Keyword:Pudong International Talent Hub Forum】
The 2023 Pudong International Talent Hub Forum will open on December 6 under the theme &"Leadership, Momentum and Advancement&". The forum will invite famous experts and scholars, scientists, entrepreneurs, as well as innovative and entrepreneurial talent to discuss trends of innovative talent development from multiple dimensions and help talent achieve leapfrog growth, pursue dreams and accomplish career success on the world-class stage in Pudong.
【Culture Art】
1. Blossoms - Jin Yucheng's Painting Exhibition Lands in Shanghai
【Keyword:Jin Yucheng】
A painting exhibition of Jin Yucheng, a famous contemporary Chinese writer and winner of the 9th Mao Dun Literature Prize, recently opened at Shanghai Dongyi Art Museum. The exhibition selected 12 series and about 200 original paintings created by Jin Yucheng in the past decade. The exhibition will last until January 28, 2024.
Source: Shanghai Tourism
2. Shanghai Center of Chinese Operas Unveils Performance Preview for December
【Keyword:Chinese Opera】
Shanghai Center of Chinese Operas recently unveiled its performance preview for December. In the month, the Center will stage a series of traditional opera shows, including Beijing Opera, Kunqu Opera, Shanghai Opera, Shaoxing Opera and Huai Opera.
Source: Shanghai Center of Chinese Operas
【Corporate Activities】
1. Infineon Builds & "Digital and Low-carbon&" Modern Intelligent Warehousing in Pudong
【Keyword:Infineon】
Infineon held a signing ceremony of the Memorandum of Cooperation on its customized project on November 28, 2023. According to the agreement, Shanghai Pudong Modern Industrial Development Co., Ltd. will customize high-quality properties for Infineon China's logistics center project. With the construction of the project, Infineon China's logistics center will be further upgraded to a &"digital and low-carbon&" modern intelligent warehousing.
Source: Pudong Release
2. Sika Group Renews Property Lease Agreement
【Keyword:Sika】
Sika BFM China, a subsidiary of Sika Group, recently held a ceremony to renew property lease agreement on its Shanghai headquarters office. Sika Group stated that its subsidiary has decided to stay in the Shanghai Shibei High-tech Park after ten years of operations, given the strong support from Jing'an District People's Government and the superior business climate of the Shibei High-tech Park.
Source: Shanghai Jing'an
Q&A
Q1: An official of the National Financial Regulatory Administration (NFRA) answered reporter's questions on the Measures for Country Risk Management in Banking Financial Institutions - What is the background and main content of the revision to the Guidelines?
A: Country risk management is one of the core principles of effective banking supervision of the Basel Committee and an important part of financial stability assessment. Since the release and implementation of the Guidelines 13 years ago, it has played a positive role in guiding banking institutions to build country risk management systems and improve country risk management capabilities. However, with the revision of the accounting standards system and the development of banks' cross-border business practices, the Guidelines have made some changes in the measurement caliber of country risk exposure, division of country risk management responsibilities, country risk transfer standards, identification of country risk levels, and it is necessary to further improve the provisions on the accrual of specific risk reserves and other aspects.
In light of the above situation, the NFRA has revised the Guidelines. Major revisions are listed as follows: First, in accordance with relevant requirements for normative document management, the Guidelines have been adjusted to Measures, and the document name has been changed to the Measures for Country Risk Management in Banking Financial Institutions. The second is to clarify the measurement caliber of country risk exposures in accordance with the principle of comprehensive risk coverage. The third is to address the issue of repeated provisions, including country risk provisions under owners' equity as a component of general provisions. The fourth is to improve the management of country risk reserves, include loan commitments and financial guarantees in the scope of provisions, and moderately reduce the provision ratio. The fifth is to revise the restrictive requirements related to division of country risk management responsibilities of banking institutions and country risk transfer.
Source: NFRA
Expert Perspective
Should cross-border employment arrangements be governed by Chinese law or foreign law? - A brief analysis of the application of domestic laws in foreign-related employment relationships
By: Luo Ai, Tang Xiaojing (King Wood Mallesons)
[Continuing with the Last Issue]
The nature of foreign-related employment relationships: Is it a labor relationship or a labor-service relationship?
According to the Article 8 of the Law of the People's Republic of China on Choice of Laws for Foreign-related Civil Relations, lex fori shall apply to the determination on the nature of foreign-related civil relations. As to whether the foreign-related employment relationship constitutes a labor relationship regulated by Chinese labor laws, according to the Circular of the Ministry of Labor and Social Security on Matters Concerning the Establishment of Labor Relations (Circular No. 12), as stated in the first paragraph of Article 1, when both the employer and employee have the subject qualifications, that is, the employer has the qualification as the employment entity, and the employee is a legally employed working-age worker, and a labor relationship can be established between the two parties.
According to the first paragraph of Article 2 of the Labor Law of the People's Republic of China and the first paragraph of Article 2 of the Labor Contract Law of the People's Republic of China, China's labor laws apply to the employment practices of domestic employers. From this, it can be concluded that China's labor laws do not apply to overseas employers, the employment relationship between an overseas employer and its employees is generally not regarded as a labor relationship in China.
According to Article 5 of the Provisions on the Administration of the Employment of Foreigners in China and Article 33 of the Interpretation of the Supreme People's Court of Issues Concerning the Application of Law in the Trial of Labor Dispute Cases (I), foreigners who obtain a Foreigner Work Permit can be legally employed in China and are qualified workers and are protected by Chinese labor laws. On the contrary, the labor relationship between foreigners who have not obtained a work permit and their employers will not be recognized.
In short, if the legal relationship between the two parties meets the requirements stipulated in the second and third paragraphs of Article 1 of Circular No. 12, and if one party is an overseas organization or a foreigner who has not obtained a work permit, the labor relationship will not be established, Chinese labor laws will not apply, and the labor dispute will not be handled by the labor dispute arbitration agency. However, in the sense of the Applicable Laws or Conflict of Laws, whether the labor relationship is a &"labor contract relationship&" and whether an unqualified employee or an employee recruited by an unqualified employer is a &"laborer&" protected by mandatory provisions? There are different views in practice.