Shanghai Weekly Bulletin

lssue 5,August 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 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. China Amends PRC Regulations on International Ocean Shipping

【Keyword：Regulations on International Ocean Shipping】

 

 

The Decision of the State Council on Amending and Repealing Some Administrative Laws and Regulations was recently released. The Decision, which takes immediate effect, amends some provisions in 14 administrative laws and regulations including the Regulations of the People's Republic of China on International Ocean Shipping.

 

Source: website of the Chinese Government 

https://www.gov.cn/zhengce/content/202308/content_6899248.htm

 

 

2. China to Extend IIT-related Policies for Expat Individuals 

【Keyword：Intellectual Property Rights; Talent】

 

 

The Ministry of Finance (MOF) and the State Taxation Administration (STA) have jointly released the Announcement on Extending the Individual Income Tax Policies on Allowances and Subsidies for Expatriate Individuals, which clarifies that expatriate individuals who are residents in China may opt to claim the additional itemized individual income tax deductions or enjoy existing preferential policies of tax exemption for allowances related to housing subsidies, language training fees, and children's education fees in accordance with the applicable rules until December 31, 2027. Once an option is made, it may not be changed within a tax year.

 

Source: STA

https://www.chinatax.gov.cn/chinatax/n363/c5211240/content.html

 

 

3. China Extends Favorable Individual Income Tax Policies on Investment Income from Stock Connect Programs and Mutual Fund Recognition 

【Keyword：Funds; Individual Income Tax】

 

 

Three ministries including the Ministry of Finance released on August 21, 2023 the Announcement on Extending the Implementation of Individual Income Tax Policies Related to the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect Programs and the Mutual Recognition of Funds Between the Mainland and Hong Kong. According to the Announcement, mainland individual investors will continue to be exempted from individual income tax until December 31, 2027 for their investment income on trading stocks under the Shanghai-Hong Kong and Shenzhen-Hong Kong Stock Connect Programs and trading funds under the mutual fund recognition mechanism.

 

Source: MOF

http://szs.mof.gov.cn/zhengcefabu/202308/t20230822_3903476.htm

 

 

4. China Issues Guidelines to Promote High-quality Development of Business Credit System

【Keyword：Business Credit System】

 

 

Three ministries including the Ministry of Commerce (MOFCOM) recently released the Guidelines on Promoting High-quality Development of the Business Credit System. The general goal is to have credit information, credit products, and credit services widely applied in business activities by 2025, with the scale and quality of credit transactions continuously increasing, thereby fostering the growth and expansion of the business credit-based economy.

 

Source: MOFCOM

 

5. China Issues Interim Provisions on Accounting Treatment of Enterprise Data Resources

【Keyword：Enterprise Data Resources; Accounting Treatment】

 

 

The Ministry of Finance (MOF) recently issued the Interim Provisions on Accounting Treatment of Enterprise Data Resources, which will be implemented from January 1, 2024. The provisions specify the scope of application, principles for accounting treatment of data resources, as well as requirements for presentation and disclosure.

 

Source: MOF

http://kjs.mof.gov.cn/zhengcefabu/202308/t20230821_3903354.htm

 

 

【Shanghai】

 

1. Special Plan on Comprehensive Transportation for the Yangtze River Delta Integrated Green Development Demonstration Zone Released

【Keyword：Yangtze River Delta Integrated Development; Special Plan on Transportation】

 

 

Shanghai Municipal Transportation Commission, together with Jiangsu Provincial Department of Transport and Zhejiang Provincial Department of Transport, jointly issued the Special Plan on Comprehensive Transportation for the Yangtze River Delta Integrated Green Development Demonstration Zone (2021-2035). The Plan focuses on the following four areas: establishing a new pattern of coordinated transportation space, upgrading the smooth transportation experience, creating new showpieces of green and intelligent transportation, and innovating new models of collaborative transportation governance.

 

Source: Shanghai Municipal Transportation Commission

https://jtw.sh.gov.cn/zxzfxx/20230822/f1520933ae6d41e3974a2359faab4973.html

 

2. Shanghai Financial Court Releases Typical Cases and Innovative Mechanisms on Its Fifth Anniversary 

【Keyword：Shanghai Financial Court; Typical Cases】

 

 

Since its establishment five years ago, Shanghai Financial Court has consistently focused on the creation of financial judicial rules. It has ruled on 14 cases that were filed for the first time in the country, as well as 36 nationally or municipal-level significant typical cases including the Top Ten Cases for promoting the rule of law in the new era, and established more than 30 replicable and scalable innovative mechanisms. The Court recently released 20 selected cases and 20 innovative mechanisms.

 

Source: Shanghai Financial Court

 

 

One Week in Shanghai

 

【Official Activities】

 

1. 23rd China International Industry Fair to Be Held in September 

【Keyword：International Industry Fair】

 

 

The 23rd China International Industry Fair will be held at the National Exhibition and Convention Center (Shanghai) on September 19-23. Under the theme of “Digital Economy & Industrial Decarbonization”, the fair will set up nine exhibition zones with a total exhibition area of 300,000 square meters, and 2,600 companies from 27 countries and regions will participate in the exhibition. More than 55,000 visitors and 150 visiting groups have already scheduled their attendance, both setting a new record.

 

Source:Shanghai Municipal Commission of Economy and Informatization

 

 

【Corporate Activities】

 

1. Zeiss China Settles in Postdoctoral Innovation Practice Base, Pudong New Area

【Keyword：Zeiss; Postdoctoral Innovation Practice Base】

 

 

Zeiss China has recently settled in the Postdoctoral Innovation Practice Base, Pudong New Area, poised to create a more robust platform for scientific research and talent incubation. This move represents an important initiative by Zeiss to support the development and cultivation of high-level talents. It also signifies a new chapter in cooperation between Zeiss and the Pudong New Area into realms of broader and deeper collaborative endeavors. 

 

Source:China (Shanghai) Pilot Free Trade Zone

 

 

【Social Activities】

 

1. Nine Original Music Dramas to Be Staged in Shanghai

【Keyword：Music Drama】

 

 

Nine original music dramas, including “Love Never Dies”, “Titanic”, and “The Past Five Years”, will be staged at theaters in Shanghai from September 2023. 

 

Source: Shanghai Release 

 

2. Shining Shanghai 2023 Jing’an International Light and Shadow Festival to Kick off 

【Keyword：International Light and Shadow Festival】

 

 

The annual outdoor cultural and tourism brand event, "Shining Shanghai" 2023 Jing'an International Light and Shadow Festival, will be officially launched. As a highlight of the Shanghai Tourism Festival, the Light and Shadow Festival will be themed on "Illuminating the City, Empowering Urban Renewal". It will open to the public from September 26 to October 6.

 

Source:Shanghai Tourism

 

 

【Training】

 

1. “Pujiang Light” Series Training for the Restructuring and Listing of 100 SMEs (41st Session)

【Keyword：SMEs; Listing】

 

 

In order to accelerate the construction of a modern industrial system, enhance the leading roles of high-end industries, incubate and nurture more high-quality technology-oriented enterprises, provide targeted services for corporate listings, and facilitate excellent enterprises to get access to the STAR Market and other major capital markets, the Shanghai Investment Promotion Service Center plans to organize the "Pujiang Light" Series Training for the Restructuring and Listing of 100 Small and Medium-sized Enterprises (SMEs) (41st session).

 

Time: September 13-15, 2023

 

Source:Shanghai Municipal Commission of Economy and Informatization

 

 

 

Q&A

 

Q1: Officials from Shanghai Municipal Development and Reform Commission take questions from reporters regarding the Guidelines on Supporting China (Shanghai) Pilot Free Trade Zone Lin-gang Special Area in Deepening and Expanding Special Economic Functions to Pioneer in High-quality Development --- Shanghai is making all-out efforts to create the best business environment. As a special economic functional area, has there been any progress of Lin-gang Special Area in advancing innovative institutional development on business environment? Are there any new cases that can serve as references?

 

A: During this year's conference on optimizing business environment in Shanghai, it was emphasized to strongly support Lin-gang Special Area in advancing innovation-driven institutional development on business environment. In recent years, Lin-gang Special Area has attracted a considerable number of outstanding enterprises, largely thanks to its sound business climate. We have primarily focused on three key areas of work:

 

The first is to stick to market principles. In recent years, we have been deepening reform of the business system in Lin-gang Special Area, streamlining business-related operational permits, strengthening fair competition review, and creating a more relaxed business environment for business operators.

 

Currently, Lin-gang Special Area has achieved several pioneering initiatives: it is the first to implement the market entity registration confirmation system, reducing the time limit on market access registration approval to less than two hours; it is the first to launch reforms in the commitment system for enterprise investment projects, reducing 70% of time on initial preparations for trustworthy enterprises; it is also the first to initiate a pilot program to strengthen competition policies and introduce new mechanisms for fair competition review.

 

In this round of supportive policies, we will introduce architect responsibility system for projects in Lin-gang Special Area. We will pilot the commitment system for informing key requirements of project planning permits, and phase out the review of construction drawings. In the next step, we will explore more comprehensive reform measures in Lin-gang Special Area, such as market entity access approval, market entity registration, and exit mechanism.

 

The second is to advance the rule of law. The rule of law is the best business environment. In March 2022, the Regulations on the Lin-gang Special Area of the China (Shanghai) Pilot Free Trade Zone took effect, solidifying the institutional innovations of Lin-gang Special Area into law. At present, Lin-gang is participating in the formulation of local laws and regulations such as intelligent connected vehicles and water protection of Dishui Lake. In this round of supportive policies, we will consider innovative legislation on hydrogen energy, and support Lin-gang Special Area to accelerate the development of hydrogen energy industry.

 

In the next step, we will continue to make full use of the laws and regulations of the Pudong New Area to support the development of Lin-gang Special Area, and increase the supply of high-quality systems for various market entities.

 

The third is to uphold the “internationalization” standards. Lin-gang Special Area consistently adheres to the highest international standards as a benchmark and promotes the construction of a business-friendly environment. At present, Lin-gang has established a customs supervision system for import and export, significantly reducing the customs clearance time for goods to two hours. It has formed a service system centered around project perspectives, providing "one-stop" services for land acquisition and project initiation as well as for project completion and production commencement, making the "Lin-gang speed" a new norm similar to "Tesla speed". Additionally, a localized risk monitoring mechanism for "capital freedom" and "financial security" has been established, and a high-level foreign exchange management reform pilot has been created to facilitate cross-border trade and investment.

 

In the next step, we will benchmark the latest requirements of the World Bank's Business Environment Assessment. We will focus on the entire lifecycle of enterprises, with a particular emphasis on carrying out more vigorous reforms and policy explorations in areas such as acquiring business premises, municipal infrastructure construction, labor hiring, accessing financial services, and promoting market competition.

 

Optimizing business environment is a comprehensive endeavor that requires consistent efforts over the long term. We aim to create a market-oriented, rule-of-law-based, and internationally recognized business environment. Through bold innovative practices, we will provide a "Lin-gang example" to help optimize overall business environment in the city. This will offer stronger support for Lin-gang Special Area's deeper development as a special economic functional zone.

 

Source: Shanghai Release

 

 

Expert Perspective

 

The Establishment of Legislative Framework on Data Security – Analysis of the Key Points of the Data Security Law of the People's Republic of China

By Liu Xinyu, Wu Haoli (Zhong Lun Law Firm)

[Continuing from the last issue]

 

The fourth point is to establish a sound management system on data transactions

 

As a crucial strategic asset in the digital era, data holds significant commercial value. Article 19 of the Data Security Law specifies the requirements for establishing a sound management system on data transactions, reflecting the nation's support for legitimate data transactions. This support is likely to facilitate data exploration and utilization, expedite data flow, and maximize the commercial value of data to the greatest extent possible.

 

In the meantime, Article 33 of the law sets forth management requirements for intermediary service providers of data transactions. It mandates that these institutions should require data providers to explain the source of data, verify the identities of transaction parties, and retain records of verification and transactions. In practice, data transactions take place on data exchanges or proprietary data trading platforms. Due to the lack of direct regulatory provisions for intermediary service institutions, their abilities in data protection could vary a lot, leading to relatively unregulated data trading practices. Article 33 of the law reflects the government's determination to regulate intermediary service institutions and promote the lawful and compliant development of data transactions.