Issue 36

Shanghai Weekly Bulletin

No. 3, March 2024

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. PBC Issues Guide to Payment Services in China 

【Keywords: Foreign Nationals in China; Payment】

 

The People's Bank of China (PBC) released on March 14, 2024 the Guide to Payment Services in China. Available in both Chinese and English, the Guide introduces a variety of payment methods accessible to foreign nationals in China, including mobile payment, bank card, cash, bank account, and E-CNY. It also provides clear instructions on how to use them. 

 

Source: PBC, Chinese Version

http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/5273993/index.html

http://www.pbc.gov.cn/en/3688110/3688172/5188125/5274061/index.html

 

2. China Issues Guidelines on Major Tax and Fee Relief Policies to Support Scientific and Technological Innovation

【Keywords: Scientific and Technological Innovation; Tax and Fee Relief Policies】

 

The Ministry of Finance (MOF) recently released the Guidelines on Major Tax and Fee Relief Policies to Support Scientific and Technological Innovation. The document classifies the policies according to the categories of scientific and technological innovation activities, covering venture capital investment, research and experimental development, industrialization of scientific and technological achievements, development of key industries, and the entire industry chain. It also details the type of each relief policy, as well as the taxes involved, the specific relief measures, entities eligible for the relief, application requirements, timing and methods, required materials, and policy basis. 

 

Source: Ministry of Finance

https://szs.mof.gov.cn/zhengcefabu/202403/t20240312_3930418.htm

 

【Shanghai】

1. Shanghai Issues Document to Promote Expansion and High-quality Development of Service Consumption 

【Keyword: Service Consumption】

 

Shanghai Municipal People's Government recently issued the Action Plan of Shanghai on Promoting the Expansion and High-quality Development of Service Consumption. The document outlines 37 measures in 12 aspects, including enriching the connotation of cultural and tourism service consumption, driving service consumption through sports, promoting high-quality development of health service consumption, expanding the supply of high-quality elderly care services, building an information service consumption ecosystem, and strengthening product innovation to facilitate financial service consumption. 

 

Source: Shanghai Municipal People's Government

https://www.shanghai.gov.cn/nw12344/20240308/8da5d6a81d2140fcabba57c90e4690f5.html

 

2. Shanghai Issues Plan to Upgrade Foreign-funded R&D Centers

【Keyword: Foreign-funded R&D Centers】

Shanghai Municipal People's Government recently issued the Plan for Upgrading Foreign-funded R&D Centers in Shanghai. With a total of nine articles, the plan clarifies that Shanghai will support foreign-funded R&D centers in increasing R&D investment and strengthening open innovation. The city will also optimize the procedures for customs clearance and supervision of materials for scientific research, support cross-border flow of R&D data, and increase financial support for foreign-funded R&D centers to carry out scientific and technological innovation.

 

Source: Shanghai Municipal People's Government

https://www.shanghai.gov.cn/nw12344/20240312/8496fe67c56f4dc4b60ee5dc7810d698.html

 

3. Shanghai Introduces Measures to Create First-class Business Environment in the Field of Drug Supervision

【Keyword: Drug Supervision】

Shanghai Municipal Medical Products Administration released on March 12, 2024 the Measures for Shanghai Medical Products Administration to Develop First-class Business Environment in the Field of Drug Supervision. The policy document proposes 17 measures in three aspects, including improving service capacity, deepening benchmark reform, and optimizing regulatory regime, in an effort to support scientific and technological innovation, help enterprises reduce costs and increase efficiency, solve prominent problems, and create first-class business environment in the field of drug supervision to increase corporate satisfaction and spur development vitality.

 

Source:Shanghai Municipal Medical Products Administration

 

4. Shanghai Proposes 22 Reform Items to Create World-class IP Business Environment 

【Keyword: Intellectual Property】

 

Shanghai Municipal Intellectual Property Administration recently issued the Action Plan on Adhering to Benchmark Reform to Create World-class Business Environment for the Development of Intellectual Property. The plan lists 22 reform items in seven areas, including increasing the IP-related institutional arrangements, exploring IP data governance, improving the effectiveness of IP protection, promoting IP conversion and application, optimizing IP-related public services, strengthening IP supervision, and improving the IP development environment. 

 

Source:Shanghai Municipal Intellectual Property Administration

 

 

One Week in Shanghai

【Competitive Event】

1. Shanghai to Host Olympic Qualifier Series in May

【Keywords: Olympic; Qualifier】

The Olympic Qualifier Series Shanghai will take place at the Huangpu Riverside on May 16-19. An estimated total of 464 top athletes of freestyle BMX, skateboarding, break dancing and rock climbing will demonstrate their superb skills in a vibrant city park and compete for the qualifications for the Paris Olympics.

 

Source:Shanghai Huangpu

 

【Culture & Art】

1. Shanghai Spring International Music Festival to Open Soon 

【Keyword: Shanghai Spring】

 

The 39th Shanghai Spring International Music Festival will be held from March 22 to April 14, 2024. Under the theme of "Praise for the New Era", the music festival will stage 66 performances, including 57 music events and nine dance performances. In addition, 10 special theme activities and wonderful performances will be held.

 

Source:Shanghai Release

 

2. AW 2024 Shanghai Fashion Week to Kick off 

【Keyword: Shanghai Fashion Week】

The Autumn/Winter (AW) 2024 Shanghai Fashion Week is set to kick off in Shanghai on March 25. It aims to create conditions for various participating entities to explore in-depth integration and help brands identify their own positions and spur new vitality. Focusing on hot topics such as "new Chinese style, new environmental protection, and new sports", the week will develop new forms of business, build new scenarios, drive market recovery, and promote the formation of an innovation-led industrial development model.

 

Source:Shanghai Municipal Commission of Commerce

 

【Corporate Activities】

1. Honeywell and CNP Carry out Strategic Cooperation to Promote Digital Transformation

【Keyword: Honeywell】

 

Honeywell recently signed a memorandum of strategic cooperation with Nanfang Pump Industry (CNP). The two parties will jointly build a lighthouse factory for the pump industry and create a paradigm for digital and intelligent transformation and upgrading. They will work together to explore application of innovative technologies such as the Internet of Things, big data, and artificial intelligence in the field of intelligent manufacturing, and explore the "road to intelligent manufacturing" and the "road to green energy conservation and environmental protection" in China's pump industry.

 

Source: Pudong Release

 

 

Q&A

Q1: Leaders of the Shanghai Municipal Commission of Commerce answered reporters’ questions at a press conference explaining the Action Plan of Shanghai on Promoting the Expansion and High-quality Development of Service Consumption - how to implement the plan in the next stage, and what supporting measures or activities will be introduced?

 

A1: In order to enforce the plan, we will stick to the overall goal of "making Shanghai a gathering place of brand resources, a source of model innovation and a vane of consumer trends, and building Shanghai into a benchmark city of service consumption", and create diversified and high-quality scenarios to promote the expansion and high-quality development of service consumption. Special activities and policies will be introduced to guide market entities to apply new technologies and promote the integration of scenarios and business models, enrich the supply of service consumption and enhance consumer experience. We will draft "1+1+1" supporting policies and plan related activities, and develop a number of service consumption innovation leading areas, characteristic cluster areas and successful cases of integrated innovation.

The first "1" is to cultivate a number of innovation leading projects. There are three types of such projects. The first is service consumption innovation leading areas. Full support will be given to areas with concentrated service consumption projects, outstanding business model innovations, obvious cross-sector integration of scenarios, and robust support policy and guidance, to push them to continue to play a leading role. The second is characteristic gathering areas for service consumption. Commercial streets and shopping malls with outstanding innovations in service consumption formats and obvious cross-sector integration of scenarios, which can meet consumers' comprehensive or professional service consumption needs, have strong radiation or industry influence, have distinctive characteristics and have a certain scale, will be designated as characteristic gathering areas for service consumption. Government agencies will increase publicity and promotion efforts for these areas. The third are cases of integrated innovation of service consumption. For innovation cases about cross-sector integration of service consumption scenarios in two or more different fields and are highly market-leading, demonstrative and sustainable, we will designate them as cases of integrated innovation of service consumption to promote market entities to enrich the supply of service consumption.

The second "1" is to create a series of iconic brand activities. On the basis of the "May 5 Shopping Festival" and summer hot spots, we plan to hold the "2024 Shanghai City Experience '+' Year" event, targeting "cultural tourism + health", "information + sports", "finance + elderly care", "transportation + catering" and "exhibition + cultural tourism" and other service consumption scenarios in different fields. By building a platform of communications for enterprises offering different service consumption experiences, we will promote the integrated development of service consumption, and carry out distinctive, iconic and comprehensive brand activities to promote service consumption. We will give strong support to various theme activities, and strengthen publicity efforts to advertise service consumption innovation leading areas, characteristic cluster areas, and cases of integrated innovation of service consumption.

The third "1" is to introduce special financial support policies. For successful cases of integrated innovation of service consumption launched by market entities with obvious social benefits and outstanding innovation practices, we would invite experts to evaluate their market leadership, exemplary nature, integration and sustainability, gauge their contributions to the growth of service consumption, and select a number of such cases to offer financial subsidies. 

 

Source: Information Office of Shanghai Municipal People's Government

https://www.shio.gov.cn/TrueCMS//shxwbgs/2024n_3y_wdsl/content/cd6e61de-6740-480b-8bb6-4d8614970d60.htm

 

 

Expert Perspective

Several Issues to Be Watched and Addressed by Foreign Businesses under New Company Law

By: He Kan, Chen Leyi, Gao Fangjiao, Liu Zijing, Yang Yanhua (Junhe Law Firm)

 

[Continuing from the Last Issue]

Q4: Is it necessary to set up an audit committee?According to the new Company Law, a limited liability company may set up an audit committee composed of board directors in accordance with the company's articles of association to exercise the powers of the supervisory board. The new Company Law has no specific provisions on the audit committee's discussion methods and voting procedures. In the absence of supporting mechanisms and insufficient practical experience, since the audit committee is subordinate to the board of directors, how to internally coordinate the executive functions of the board of directors and the supervisory functions of the audit committee will be a sticking point in practice. Without sophisticated system design, the loopholes of the existing supervisory board system may remain unplugged. Nonetheless, we understand that audit committee, like the supervisory board system, aims to resolve the agency costs arising from the misalignment of interests between directors and senior executives (jointly acting as one party) and shareholders. Such issues are more prominent in listed companies or private companies with many small shareholders. Foreign-funded companies are usually sole proprietorship or joint ventures established with minority shareholders. In such companies, directors are often nominated by shareholders and serve as representatives of the shareholders. In commercial contexts and business practices, there is no conflict of interest between shareholders and their nominated directors (Although from the perspective of law, directors are responsible to the company and not to the shareholders who nominated them). In fact, according to our observations, in the common governance structure of foreign-funded companies, the board of directors supervises and guides senior executives on the day-to-day operations by retaining the decision-making power on specific major matters of the company and the power to appoint managers and other senior managerial staff.