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 Q&A 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. Top Legislature Consults Public on the Draft Amendment (XII) to the Criminal Law

[Key Words: Criminal Law, Amendment]

The Amendment (XII) to the Criminal Law of the People’s Republic of China (Draft), which was released on the website of the National People’s Congress (NPC) on July 26, 2023, is open for public comment until August 24, 2023. The draft has a total of eight articles, including seven revising and supplementing the Criminal Law. It mainly refines the stipulations regarding the crime of offering bribes and corruption by individuals from private enterprises.

Source:NPC

http://www.npc.gov.cn/flcaw/userIndex.html?lid=ff80818188c8b06b0189903f85c802a3

2. SAFE Eases Restriction on the Scale of ODI Upfront Expenses

[key word: Cross-border Trade and Investment]

The State Administration of Foreign Exchange (SAFE) released on July 24, 2023 the Circular on Further Deepening Reform to Promote Cross-border Trade and Investment Facilitation (Exposure Draft) for public comment until August 2, 2023, with a view to promoting three policies with ten items.

Source: SAFE

http://www.safe.gov.cn/safe/2023/0724/22972.html

3. China Optimizes Financing Support for Private Investment Projects

[Key word: Private Investment]

The National Development and Reform Commission (NDRC) released on July 14, 2023 the Circular on Further Strengthening Efforts to Promote Private Investment and Mobilize the Enthusiasm of Private Investors, which laid out 17 requirements in four aspects. It encourages private capitals to invest in a number of selected segments from such key industries as transportation, water conservancy, clean energy, new infrastructure, advanced manufacturing and modern protected agriculture to promote the high-quality development.

Source: NDRC

https://www.ndrc.gov.cn/xxgk/zcfb/tz/202307/t20230724_1358620.html

■ SHANGHAI

1. Shanghai Issues Action Plan to Build International Shipping Center

[Key word: Shipping]

Shanghai Municipal People's Government recently issued the Action Plan to Enhance the Level of Shanghai's Shipping Service Industry and Support the Construction of International Shipping Center. The plan sets the development goal to establish an advanced modern shipping service system by 2035. This system will lead in global shipping service innovation and development, deeply integrate into the international shipping governance system, and possess the capability of allocating global shipping resources, so that Shanghai can become an international shipping center. 

Source:Shanghai Municipal People’s Government

https://www.shanghai.gov.cn/nw12344/20230721/85cde799f0d4499e803f648c0ab14b5f.html

2. Shanghai to Unveil 20-article Rules to Promote Data Circulation Transactions in Pudong New Area

[Key word: Data Circulation]

The General Office of the Standing Committee of Shanghai Municipal People's Congress released on July 26, 2023 the Several Provisions of Shanghai Municipality on Promoting Data Circulation Transactions in the Pudong New Area (Draft), which is open for public comment until August 9, 2023. With 20 articles, the document clarifies the general requirements for the promotion of data circulation transactions, explores refinement of the data property rights separation mechanism, defines the scope of entities that can be data property owners, and establishes a series of rules for data circulation transactions.

Source：Shanghai Municipal People's Congress

3. Shanghai Issues Implementation Plan for Cultivating High-quality Incubators
[Key word: Incubator]

The General Office of Shanghai Municipal People’s Government recently issued the Implementation Plan for Cultivating High-quality Incubators. The Plan proposes to stick to international cooperation and guide high-quality incubators with global perspective and international ideas to integrate international high-end resources. It aims to expand the global network of innovation cooperation, establish a cross-border collaborative incubation service system that conforms to international rules and upholds Chinese characteristics, and achieve a two-way integration of "exploring foreign markets" and "introducing foreign players to the domestic market".

Source: Shanghai Municipal People’s Government

https://www.shanghai.gov.cn/nw12344/20230721/46e4bbb192874f84867015fe38ef8a10.html

4. Pudong Releases Two Rules to Promote Development of the Financial Leasing Industry and Standardized Innovation
[Key words: Financial Leasing, Standardized Innovation]

Two regulations applicable in Pudong New Area were passed on July 25, 2023 at the fourth session of the Standing Committee of the Sixteenth Shanghai Municipal People's Congress. The regulations respectively focus on the development of the financial leasing industry and the promotion of standardized innovation. The Several Provisions of Shanghai Municipality on Promoting the Development of Financial Leasing in Pudong New Area consist of 19 articles in three aspects: Grasping the characteristics of financial leasing business and leveraging its role in providing financial services to the real economy; Addressing the challenges and difficulties in the development of financial leasing, and optimizing institutional rules for the industry's growth; Paying attention to the key areas of financial leasing development and providing institutional support for the industry's healthy and standardized development. The Several Provisions on Innovative Development of Standardization consist of 20 articles. It proposes to join hands with enterprises to draft joint standards, make standards more digital, market-oriented and international, and enhance innovation capacity of standardization. It also adapts to the requirements of standardization and innovation development and strengthens basic support for standardization and innovation development.

Source:Pudong Release

5. Pudong Plans to Build International Legal Service Center

[Key word: Legal Service]

Shanghai Municipal Bureau of Justice and the People's Government of Pudong New Area jointly released on July 26, 2023 the Implementation Plan for Serving the Construction of Pudong Socialism Modernization Leading Area and Building the Core Carrier Area of the International Legal Service Center (Draft). The plan proposes 16 measures in six areas and is open for public opinions until August 25, 2023.

Source:Pudong Release

6. Shanghai Moves to Optimize Business Environment and Promote Stable Growth and Better Structure of Foreign Trade

[Key words: Business Environment, Foreign Trade]

Shanghai Customs released on July 21, 2023 the Measures for Optimizing Business Environment and Promoting Stable Growth and Better Structure of Foreign Trade. The document includes 29 measures in six aspects, including promoting high-standard institutional opening-up, facilitating the smooth flow of import and export commodities, assisting foreign trade enterprises in exploring foreign markets, supporting key industries and new forms of business to seek high-quality development, deepening the development of Shanghai into an international trade and shipping center, and continuously enhancing trade facilitation.

Source:Shanghai Customs 12360 Hotline

One week in Shanghai

■ Official Activities

1. Shanghai Presents Promotional Video in Nine languages as a Letter of Invitation with 100-day Countdown to the China International Import Expo

[Key word: China International Import Expo]

July 27 marks the 100-day countdown to the sixth China International Import Expo. On this occasion, the Information Office of Shanghai Municipal People’s Government released the city’s image video - SHANGHAI LET’S MEET - in nine languages (Chinese, English, French, Spanish, Arabic, Russian, German, Japanese and Korean) to offer a sincere invitation to the world.

Source: Shanghai Release

2. 2023 Policy Briefing on Improving Business Environment for Cross-border Trade to Be Launched Soon

[Key words: Cross-border Trade, Policy Briefing]

To help enterprises make better understanding and application of the latest reform measures on improving cross-border trade business environment in Shanghai, the Shanghai Municipal Commission of Commerce plans to hold a policy briefing in collaboration with Shanghai Customs, Shanghai Municipal Transportation Commission, Shanghai International Port Group, and Shanghai E&P International, to provide detailed explanations of the reform measures.

Time: 14:00-16:30, August 3, 2023 

Source: Shanghai Foreign Investment Association

■ Corporate Activities

1. Schneider Electric Makes Further Upgrade on the World’s Largest Manufacturing Base of Air Circuit Breakers
[Key word: Schneider, Zero-carbon Factory]

Following the completion of the Phase I and Phase II projects, Schneider Electric has recently completed its Phase III Project of the new digital and automated "zero-carbon factory" - Shanghai Schneider Electric Distribution Equipment Co., Ltd. With the commissioning of the 6,500-square-meter new plant, its production capacity is expected to increase by 30%.

Source: Shanghai Foreign Investment Association

■ Social Activities

1. China International Import Expo Cultural Relics and Artifacts Exhibition Opens 

[Key word: Import Expo]

The second "Sea Breeze from Afar - China International Import Expo Cultural Relics and Artifacts Exhibition" opened at the Being Art Museum in Pudong on July 26, 2023. The exhibits are a selection of cultural relics and artifacts that were part of the duty-free imports and sales during the fourth and fifth China International Import Expos. Compared to the first edition, the second exhibition has a longer duration, features more exquisite exhibits, and includes a greater number of items.

Source:Pudong Release

2. 2023 Shanghai Book Fair to Kick off Soon 

[Key words: Book, Exhibition] 

The 2023 Shanghai Book Fair will be held at the Shanghai Exhibition Center from August 16 to August 22. The main entrance hall of the venue will feature theme sculptures and peripheral exhibition areas. There will be a total of 8 book sales areas at the main venue. Additionally, the organizers will coordinate high-quality resources throughout the city to launch "one area, one specialty" distinctive sub-venues, with a focus on setting up reading sub-venues at public libraries and bookstores. This aims to establish a three-dimensional book fair that integrates the main venue and sub-venues, and synchronizes online and offline activities.

Source:Shanghai Municipal Commission of Commerce 

Policy Q&A

Q: Can you give some detailed explanations about the new policies of promoting private investment? - Answers to reporter’s questions related to the Circular on Further Strengthening Efforts to Promote Private Investment and Mobilize the Enthusiasm of Private Investors

A: In terms of project promotion, the Circular introduces the concept of "Three Lists and One Platform”. It proposes that local governments should compile three types of project lists, namely major national projects and projects aimed at addressing deficiencies in key areas, key industrial and supply chain projects, and projects that are entirely funded by users under a franchise agreement. Additionally, they are required to establish a unified platform for promoting these projects to private capitals. This platform will serve as a centralized channel for presenting project information to the private sector through project promotion events and other means. The goal is to help private investors gain a better understanding of these projects and actively participate in their implementation. Furthermore, the policy document aims to facilitate the realization of these projects by providing policy interpretations, facilitating business connections, and ensuring the necessary conditions are met to support project implementation.

In terms of the guarantee of factors, the Circular introduces the concept of "One Repository, One Mechanism." It suggests the establishment of a national repository for key private investment projects. Development and reform departments will be responsible for selecting eligible private investment projects and providing information about them to relevant financial institutions and related authorities. This initiative aims to coordinate and strengthen the financing and resource support for these key private investment projects. At the same time, we would leverage the recently established investment and loan linkage mechanism between the NDRC and seven financial institutions. This mechanism aims to facilitate the sharing of information related to the preliminary procedures and fund arrangements for private investment projects. By doing so, we aim to optimize the financing support to private investment projects. 

In terms of problem resolution, the Circular seeks to establish a communication channel that combines online and offline methods. It proposes to create a platform for reporting and resolving issues related to private investment. A dedicated webpage will be set up to collect complaints related to private investment. Besides, a group of private enterprises will be designated for regular contact, and in-depth surveys will be conducted to gather information on issues faced by private entrepreneurs, such as using penalties to replace administrative inspections, imposing hidden market access barriers, and introducing unfair treatment in bidding and tendering processes. By collecting these problems, the authorities will expedite efforts to address these difficulties. This approach will allow related authorities to collect, discuss and resolve problems.

In terms of work performance assessment, the Circular emphasizes the importance of supervision, motivation and coordinated progress. It proposes to establish a mechanism to evaluate the efforts in promoting private investment. This mechanism involves conducting monthly review of the progress and effectiveness of relevant work, quarterly update on the status, and an annual assessment of the overall performance. By implementing this regular evaluation and reporting system, responsibilities will be clearly assigned at different levels, ensuring that all involved parties are held accountable for their respective roles. At the same time, the NDRC is preparing to establish a special fund for promoting and guiding private investment. The goal is to enhance the overall environment for private investment and fully mobilize the enthusiasm of local governments in promoting private investment.

 Source: NDRC

Expert Perspective

Q: Which activities will be defined as “outbound transfer of personal information”?

By Lucy Luo (Global Law Office)

A: “Outbound transfer of personal information” includes the following circumstances: 

(1) Personal information processors transfer and store the personal information collected and generated during domestic operations to overseas locations;

(2) Personal information collected and generated by personal information processors is stored within the country, while overseas institutions, organizations, or individuals can inquire, access, download and export it;

(3) Other activities of outbound transfer of personal information stipulated by the Cyberspace Administration of China. 

In practice, it is common for domestic companies to directly provide their employees' personal information to affiliated companies overseas or for domestic companies to use human resource management systems running on servers located abroad. These scenarios involve outbound transfer of personal information.