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 Issues PRC Regulation on Consular Protection and Assistance

The Regulation of the People's Republic of China on Consular Protection and Assistance, which has been adopted at the ninth executive meeting of the State Council held on June 29, 2023, was released on July 13, 2023. The Regulation will come into force on September 1, 2023. With 27 articles, the Regulation applies to consular protection and assistance, as well as related guidance and coordination, security, support and safeguarding. According to the Regulation.

Source: Website of the Chinese Government

https://www.gov.cn/zhengce/content/202307/content_6891760.htm

2. China Unveils Interim Measures for the Administration of Generative Artificial Intelligence (GAI) Services

The Cyberspace Administration of China ("CAC") and other six departments jointly released on July 13, 2023 the Interim Measures for the Administration of Generative Artificial Intelligence (GAI) services, which will come into force on August 15, 2023. The Measures have 24 articles in five chapters, which include general provisions, development and governance of Generative Artificial Intelligence (GAI) services technology, service rules, supervision, inspection and legal responsibilities, and supplementary provisions. Compared with the exposure draft, it has adjusted some statements and added three articles, focusing more on the creation of a regulatory framework on the premise of supporting the development of Generative Artificial Intelligence (GAI) services in all aspects.

Source: CAC

http://www.cac.gov.cn/2023-07/13/c_1690898327029107.htm

3. State Council Promotes the Replication of the Seventh Batch of Pilot Reform Experience of Free Trade Zones

The Chinese government released on July 10, 2023 the Circular on Properly Replicating and Promoting the Seventh Batch of Pilot Reform Experience of Free Trade Zones. The Circular clearly states that the seventh batch of pilot reform experience will be replicated and promoted nationwide in 22 reform tasks in five areas, namely investment and trade facilitation, government management innovation, financial openness and innovation, high-quality industrial development, and intellectual property rights protection.
Source: Website of the Chinese Government

https://www.gov.cn/zhengce/content/202307/content_6890912.htm

4. SAMR Unveils Measures for the Administration of Food Business Licensing and Filing

The State Administration for Market Regulation ("SAMR") released on July 12, 2023 the Measures for the Administration of Food Business Licensing and Filing, which will come into force on December 1, 2023. Consisting of 66 articles in nine chapters, the Measures have a special chapter to clarify the specific requirements for the filing of sales of only pre-packaged food to further simplify the food business licensing process and reduce the time limit for license handling, while adjusting some circumstances under license management into one of reporting.
Source: SAMR

https://www.samr.gov.cn/zw/zfxxgk/fdzdgknr/fgs/art/2023/art_91a91c26ae464a2f898952d5b84f62c6.html

■ SHANGHAI

1. Shanghai Issues Measures to Enhance Comprehensive Service Capabilities in Support of Enterprises’ High Level Go Global Initiatives 

Shanghai released on July 12, 2023  the Measures of Shanghai to Enhance Comprehensive Service Capabilities in  Support of Enterprises‘ High Level Go Global Initiatives . The Circular sets forth three main tasks, including further enhancing the cross-border service capabilities of the professional service industry, further improving the functionality and role of public service platforms, and further optimizing the business environment for foreign investment and cooperation.
Source: Shanghai Municipal People's Government

https://www.shanghai.gov.cn/nw12344/20230712/f9b54bae7a9342cc9da6e80ced700c17.html

2. Shanghai Issues Action Plan to Further Improve Quality of Products, Projects and Services
The Shanghai Municipal Administration for Market Regulation and other 17 departments jointly issued on July 12, 2023 the Action Plan for Further Improving the Quality of Products, Projects, and Services in Shanghai (2023-2025). The plan sets forth a number of goals to be achieved by 2025, including better alignment between quality supply and demand, further improvement in the qualification rate of agricultural and food products, significant enhancement in the capability of providing high-quality consumer goods, steady progress towards the middle and high-end quality of industrial products, and continuous improvement in the quality and functionality of construction projects. Besides, there will be accelerated specialization and high-value chain extension in producer services, while accessibility, convenience, and satisfaction levels of lifestyle services and public services will be comprehensively improved.
Source: Shanghai Municipal Administration for Market Regulation

https://scjgj.sh.gov.cn/910/20230712/2c984a728944606c018948ad867d1d51.html

3. Shanghai Amends Its Regulations on the Safety Management of Hazardous Chemicals
Shanghai Municipal People's Government published on July 12, 2023 the Decision of the Shanghai Municipal People's Government on Amending the Regulations of Shanghai Municipality on the Safety Management of Hazardous Chemicals (Shanghai Government Order No. 5). The amended regulations have been made public and came into effect on June 15, 2023.
Source: Shanghai Municipal People's Government

https://www.shanghai.gov.cn/nw12344/20230712/619997039d0e4d4088268b78e7e8fcf9.html

4. Shanghai Releases Action Plan to Promote High-quality Development of International Cruise Economy
Shanghai Municipal People's Government released on July 12, 2023 the Circular of the General Office of the Shanghai Municipal People's Government on the Issuance of the Action Plan for Promoting High-quality Development of International Cruise Economy in Shanghai (2023-2025). The Action Plan sets clear goals for the year 2025, aiming to establish a Shanghai model for cruise economy development, characterized by a combination of "hub port + headquarters port + manufacturing port". It further aims to consolidate the status of Shanghai as a comprehensive hub port for the Asia-Pacific region, enhance the driving effect of the headquarters-based cruise economy, and establish a preliminary industrial system of cruise manufacturing and supporting.
Source: Shanghai Municipal People's Government

https://www.shanghai.gov.cn/nw12344/20230712/913fd1bd8d4049c1bffb18358f53679e.html

5. Shanghai Pudong New Area Releases Three-year Action Plan for Industrial Digitalization

The Science and Economic Commission of Shanghai Pudong New Area released on July 8, 2023 the Three-year Action Plan (2023-2025) for Industrial Digitalization in the Pudong New Area. The Plan states its main goals for the period until 2025. It focuses on six core industries in Pudong New Area, as well as finance, shipping, commerce, trade and agriculture. The plan aims to cultivate 30 "industry digital chain leaders" enterprises, establish 10 influential digital public service platforms and industry-specific professional service platforms, construct 100 smart factories, gather 100 influential digital service providers, drive and empower the digital transformation of 1,000 enterprises, achieve a comprehensive leapfrog in the digital transformation of industries in Pudong, and promote the development of the digital economy. The plan targets to build a leading domestic hub that deeply integrates advanced information technologies with various industries.
Source: Science and Economic Commission of Shanghai Pudong New Area

https://www.pudong.gov.cn/019010004/20230708/762580.html

One week in Shanghai

■ GOVERNMENT ACTIVITIES

1. Global Investment Cooperation Conference 2023 Held in Lin'gang Special Area

2023 Lin'gang Global Investment and Cooperation Conference was held at the Lingang Center on the morning of July 10, 2023. As one of a series of events in the Lin’gang Special Area Open Development Week, the conference focused on the theme of "Open Lingang, Lingang of the World", emphasizing two key aspects of "openness" and "development". It showcased the industrial development potential and charm of Lin’gang Special Area to the outside world, and expanded investment and cooperation in Lin’gang Special Area through touting its advantages.

Source: Shanghai Lingang

2. Increase Efforts in Attracting Investment and Accelerate the Layout and Development of New Growth Areas

The Global Perspectives on New Energy Development Summit Forum, jointly hosted by Shanghai Hongqiao International CBD, Minhang District Government, and PGO Green Energy Ecological Cooperation Organization, was held on the afternoon of July 11, 2023. The forum focused on in-depth discussions about the current status and future trends of the new energy industry. It aimed to attract more new energy enterprises to settle in Hongqiao. During the event, the Hongqiao Photovoltaic Industry Alliance was established, aiming to gather leading companies in the photovoltaic industry to jointly address the industry's concerns and challenges and promote high-quality development of the new energy industry.

Source: Shanghai Municipal Commission of Economy and Informatization

https://sheitc.sh.gov.cn/zxxx/20230712/ece03b0182274237949f870ceba5cbe4.html

3. "Invest Shanghai, Share the Future" Overseas Roadshow Held in London

The "Invest Shanghai, Share the Future" Overseas Roadshow Series event was held in London on the afternoon of July 11, 2023. The event aims to promote Shanghai by engaging with the local community and showcasing the opportunities, potential, and charm of the city to the global audience. It hopes to send a strong invitation to global businesses and talents and demonstrate Shanghai's unwavering commitment to expanding openness and welcoming them to develop business or career in the city. The London event, as the second stop of the roadshow and the first in Europe, attracted about 200 representatives from British and Chinese companies. It has received extensive attention and enthusiastic responses from domestic and international businesses and media.

Source: Shanghai Municipal Commission of Commerce

■ CORPORATE ACTIVITIES

1. Shanghai Aohua Endoscopy's Production Base Commences Construction in Minhang
A ceremony was recently held in Xinzhuang Industrial Zone for the concentrated construction commencement of large industrial projects in 2023. Among them, Shanghai Aohua Endoscopy Co., Ltd. will invest nearly RMB400 million to build an endoscope production base. The project covers an area of 18 mu and will expand the company's endoscope manufacturing capacity. The project will enable the company to seize development opportunities in the domestic medical endoscope industry and expand its market share in the flexible endoscope market.

Source: Minhang Today

2. "Invest Shanghai, Global Journey" Yields Positive Results, Shanghai Investment Promotion Center Welcomes New Friend from Italy

Mr. Matteo Marconi, CEO of A.C.&E., and Ms. Valeria Vergalli, Managing Director of A.C.&E.'s China operations, paid a visit to Shanghai Investment Promotion Service Center on July 12, 2023. Shanghai is the gateway for A.C.&E. to set foothold in China, and CEO Matteo Marconi expressed his belief that Shanghai is an ideal location to expand their business in China. At present, A.C.&E. is seeking partners in Shanghai.

Source: Invest Shanghai

■ SOCIAL ACTIVITIES

1. 2023 ChinaJoy to Open Soon

The 20th ChinaJoy will be held from July 28 to 31 at the Shanghai New International Expo Center. This year marks the 20th anniversary of ChinaJoy, and the exhibition will be upgraded and refreshed.

Source: Shanghai Yangpu

2. Shanghai Astronomy Museum's Summer Astronomy Carnival Kicks off

Shanghai Astronomy Museum's Summer Astronomy Carnival started on June 21 and will continue until August 31. The event includes activities such as astronomy education seminars, stargazing meditation concerts, astronomy enthusiasts' salons, exhibitions, and photography competitions.

Source: Shanghai Lingang

Policy Q&A

Q1: Which conditions must be satisfied for a company to be certified as a high-tech enterprise?

A: According to Article 11 of the Administrative Measures for the Recognition of High-Tech Enterprises issued by the Ministry of Science and Technology, the Ministry of Finance, and the State Taxation Administration, a company has to meet all of the following conditions to be certified as a high-tech enterprise:

(1) It has been registered for at least one year;
(2) It has obtained ownership of intellectual property rights that play a core supportive role in the technology of its main products (services) through independent research and development, licensing, donation, mergers and acquisitions, and other means;
(3) The technologies that play a core supportive role in the main products (services) of the enterprise fall within the scope defined by the Nationally Supported Key High-tech Fields;
(4) The proportion of personnel engaged in research and related technological innovation activities within the enterprise is no less than 10% of the total workforce;
(5) The total amount of R&D expenses as a percentage of total sales revenue incurred in the past three fiscal years (for those with an actual operating period of less than three years, the calculation should be based on the actual operating time) should meet the following requirements:

1. The percentage shall be no less than 5% if the total sales revenue is no more than RMB50 million in the latest year;
2. The percentage shall be no less than 4% if the total sales revenue is more than RMB50 million but no more than RMB200 million in the latest year;
3. The percentage shall be no less than 3% if the total sales revenue is more than RMB200 million in the latest year.
Besides, R&D spending incurred in the territory of China shall be no less than 60% of its total R&D expenses；
(6) The proportion of revenue from high-tech products (services) in the past year shall be no less than 60% of the total revenue during the same period;
(7) The enterprise should meet corresponding requirements in terms of innovation capabilities;
(8) No significant safety incidents, major quality incidents, or serious environmental violations have been reported in the year prior to the enterprise's application for high-tech enterprise qualification.

Source: Pudong Corporate Policies Online

Q2: What kind of tax rate incentives can high-tech enterprises enjoy for corporate income tax?

A: According to the second clause of Article 28 of the Enterprise Income Tax Law of the People's Republic of China, "For high-tech enterprises that are in need of key support from the state, corporate income tax shall be levied at a reduced rate of 15%."

According to Article 1 of the Circular of the Ministry of Finance and the State Taxation Administration on the Application of Tax Rates and Tax Credit for Overseas Income of High-tech Enterprises, "High-tech enterprises that are recognized based on indicators such as the total R&D expenses, total revenue, total sales revenue and revenue from high-tech products (services) can enjoy preferential policies for corporate income tax on income derived from overseas. That is, the income derived from overseas can be subject to corporate income tax at a preferential rate of 15%. When calculating the limit for overseas tax credit, the total taxable amount can be calculated at a preferential tax rate of 15%."

Source: Pudong Corporate Policies Online

Expert Perspective

What are the conditions for foreigners to work in China?

By Du Fengjun (Shandong Jointide Law Firm)
According to Article 7 of the Administrative Regulations on Employment of Foreigners in China (Revised in 2017), foreigners must meet the following conditions to be eligible to work in China:

1. Being at least 18 years old and in good health;
2. Possessing the necessary professional skills and relevant work experience required for the intended job;
3. Having no criminal record;
4. Having a specific employing unit or employer;
5. Holding a valid passport or any other international travel document that can substitute for a passport.
Additionally, the first paragraph of the mentioned article only specifies the minimum age requirement of 18 years old for foreigners working in China, and does not provide an upper age limit. Foreigners working in China should comply with Chinese laws. According to Article 21 of the Implementation Regulations of the Labor Contract Law of the People's Republic of China, "When a worker reaches the statutory retirement age, the labor contract shall be terminated." In a civil ruling issued by the Intermediate People's Court in Haikou, Hainan Province, it was determined that when a worker reaches the age of 60 - the statutory retirement age - the labor relationship with the employing unit shall terminate, and their employment relationship should be considered a labor service relationship.