Issue 45

Shanghai Weekly Bulletin

No. 3, May 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. China Allows Visa-free Entry of Foreign Tourist Groups via Cruise Ships 

【Keywords: Cruise Ship; Foreign Tourist Group; Visa-free】

The National Immigration Administration (NIA) released on May 15, 2024 the Announcement on the Full Implementation of a Visa-free Entry Policy for Foreign Tourist Groups Arriving by Cruise Ships. Starting from the release date of the document, foreign tourist groups, comprising two or more individuals, arriving by cruise ships and organized and received by China's domestic travel agencies, can enter China without a visa via any of the cruise ports in 13 Chinese cities including Beijing. The tourists can stay in China for up to 15 days. The tourist groups must travel together on the same cruise ship to the next port until the ship leaves China, and their activities are limited to the coastal provinces (autonomous regions and municipalities directly under the central government) and Beijing. 

Source: NIA

 

2. China Releases Provisions on Tackling Unfair Competition in the Internet Sector

【Keywords: Internet; Anti-unfair Competition】

The State Administration for Market Regulation (SAMR) recently released the Interim Provisions on Tackling Unfair Competition in the Internet Sector, which will take effect on September 1, 2024. The document consists of 43 articles in five chapters, including general provisions, unfair competition behaviors in the Internet sector, supervision and inspection, legal liability and supplementary provisions.   

Source: SAMR

 

3. CSRC Issues New Rules on Program Trading

【Keyword: Program Trading】

The China Securities Regulatory Commission (CSRC) recently released the Rules on Program Trading in the Stock Market (for Trial Implementation), to be effective on October 8, 2024. The rules consist of 32 articles in seven chapters, including general provisions, reporting management, trading monitoring and risk management, information system management, special provisions on high-frequency trading, supervision and administration, and supplementary provisions. 

Source: CSRC

 

【Shanghai】 

1. Shanghai Unveils Measures for the Cultivation of High-capacity Entities

【Keyword: High-capacity Entities】

Shanghai Municipal Development and Reform Commission and other four municipal departments in the city recently issued the Several Measures on Accelerating the Introduction and Cultivation of High-capacity Entities to Build a Vibrant Industrial Ecosystem. In addition to clarifying the scope of application and safeguard measures, the document also introduces 13 measures in three aspects, including enhancing the quality and efficiency of the attraction work, improving the cultivation systems, and creating a full-scenario ecosystem for the development of high-capacity entities.

Source: Shanghai Municipal Development and Reform Commission

 

2. Shanghai Financial Court Releases Typical Cases about Investor Protection

【Keyword: Investor Protection】

Shanghai Financial Court issued on May 15, 2024 five typical cases about investor protection. The cases involve issues such as information disclosure of listed companies, legal obligations of futures intermediaries, liquidation and compensation liability on asset management products, protection of old-age investors, and electronic arbitration clauses on online platforms.

Source: Shanghai Financial Court

 

3. Lingang Special Area Issues China's First Lists for Cross-border Data Transfer

【Keyword: Cross-border Data Flow】

At a press conference held on May 17, the Administration of the Lingang Special Area of China (Shanghai) Pilot Free Trade Zone released China's first batch of general data lists for cross-border data transfer scenarios and their supporting operation guidelines. The lists cover intelligent connected vehicles (ICVs), public funds, and biomedicine, involving 11 application scenarios including cross-country manufacturing of ICVs, drug clinical trials and R&D, and sharing of fund market research information. 

Source: International Services Shanghai

 

One Week in Shanghai

 

【Latest News】 

1. Shanghai's Cyberspace Affairs Office Releases Enterprise-involved Infringement Information Processing Service Package 1.0

【Keywords: Enterprise-involved; Infringement Information】

The Office of the Cyberspace Affairs Commission of the CPC Shanghai Municipal Committee recently released the 2024 Enterprise-involved Infringement Information Processing Service Package 1.0. Through reporting guidelines, process diagrams and case analysis, the document aims to guide local enterprises on how to submit clues via multiple channels, so as to further improve the efficiency of reporting and acceptance of enterprise-involved infringement information.

Source: Cyberspace Administration of Shanghai

 

2. "Shanghai Summer" International Consumption Season to Open in July 

【Keyword: Shanghai Summer】

After the May 5 Shopping Festival, the Shanghai Municipal Commission of Commerce will launch the "Shanghai Summer" International Consumption Season, a new brand for the city's summer consumption promotion activities. The season will run from the first weekend in July to the second weekend in October, featuring over 60 high-quality concerts, music festivals, art performances, major art exhibitions, and major sports events.

Source: Shanghai Municipal Commission of Commerce

 

【Forum & Exhibition】

1. 28th CBE Shanghai to Kick off 

【Keyword: Beauty】

The 28th China Beauty Expo – Shanghai (28th CBE Shanghai) will be held on May 22-24 at the Shanghai New International Expo Center. The expo will join hands with more than 3,200 exhibitors from over 40 countries and regions, including Spain, France and Japan, to showcase new beauty products and beauty tech achievements of more than 10,000 beauty brands.

Source: Pudong Release

 

【Culture & Art】

1. Lacquer Art Exhibition Opens in Shanghai

【Keyword: Lacquer Art】

"A Century of Lacquer Art - the Practical Craftsmanship of Contemporary Art", a lacquer art exhibition, recently kicked off at the Sinan Time Zone Art Gallery. It is open to the public free of charge. The exhibition is curated by art tech company VITART to present four lacquer painting artists from the same family: Wang Qingshuang, Wang Xianmin, Wang Xianzhi and Wang Junwei. The exhibition will last until May 26.

Source: Shanghai Huangpo

 

2. Shanghai-style Qipao Collection on Exhibition in Brussels

【Keywords: Qipao; Shanghai Culture】

The "Elegance and Style: Qipao and Shanghai Culture" exhibition, an exhibition on a collection of traditional Chinese dress, opened on May 13, 2024 at the China Cultural Center in Brussels. Based on the urban development of Shanghai, the exhibition presents more than 30 exquisite Qipao dress, old photos, advertising paintings and other historical images and films to show the inheritance and the innovation-driven development of the intangible cultural heritage that combines traditional Chinese craftsmanship and Western tailoring methods represented by Shanghai-style Qipao dress. The exhibition aims to illustrate the beauty of Qipao dress, and demonstrate the vitality and charm of Shanghai. The exhibition remains open to the public from May 14 to September 5, 2024. 

Source: Shanghai Tourism

 

【Corporate Activities】

1. Hilton Group to Open Two Hotels at Shanghai International Tourism and Resorts Zone

【Keyword: Hilton】

Hilton Group announced on May 14, 2024 that it had reached an agreement with Shanghai Shendi (Group) Co., Ltd. to introduce its flagship brand Hilton Hotels & Resorts and lifestyle brand Canopy by Hilton to the Shanghai International Tourism and Resorts Zone. The new Hilton hotel will have 350 guestrooms, three restaurants and a lobby bar, while the Canopy by Hilton hotel will offer about 100 rooms and provide pleasant and dynamic accommodation experience to guests.  

Source: Pudong Release

 

2. GE Healthcare Plans RMB380 Million in Additional Investment in Pudong

【Keyword: GE】

GE Healthcare announced on May 15, 2024 that it has signed a letter of intent for investment cooperation with the Pudong Science Technology and Economy Commission. GE Healthcare plans to invest RMB380 million to introduce new products and build new production lines, upgrade green factory, and explore intelligent manufacturing and digital transition.

Source: Pudong Release

 

3. Roche Pharmaceuticals Steps up Investment in China 

【Keyword: Roche】

The 30th anniversary celebration of Roche Pharmaceuticals China was held at Roche Park in Zhangjiang, Shanghai on May 16, 2024. Roche announced that it will further deliver on its long-term commitment to the Chinese market, with measures including continuing to strengthen the end-to-end pharmaceutical value chain that covers early R&D, drug development, production, open cooperation and commercial operations, accelerating the launch of innovative drugs from China, and continuing to upgrade the local production layout and investment.

Source: Pudong Release

 

Q&A

Q1: Officials of the National Immigration Administration (NIA) answered reporters' questions at a press conference on the full implementation of a visa-free entry policy for foreign tour groups traveling to China on cruise ships. When the policy was released, the NIA said it would launch supporting policies to support development of the cruise industry. Please give detailed introduction to these measures.

A1: In order to ensure smooth implementation of the cruise visa-free policy and fully unleash the policy dividends, we have figured out seven supporting measures to facilitate the entry and exit of international cruise ships and serve high-quality development of the cruise industry. In terms of facilitating customs clearance for international cruise ships: Firstly, we would introduce on-board inspection for large cruise ships. According to the ship schedule and the number of passengers at the visiting port, the immigration inspection agency will send staff to handle the immigration procedures in advance for cruise passengers at the visiting port, and apply the customs clearance authentication code so that passengers can disembark as soon as they arrive at the port. Secondly, we would optimize border inspection procedures for cruise passengers. The border inspection agency would not require foreign cruise passengers to leave fingerprint biometric information for foreign passengers; passengers entering and exiting China by cruise ship on the same voyage are exempted from stamping entry and exit clearance stamps and filling in foreign entry papers. Thirdly, we would simplify the entry and exit procedures for international cruise ship crews. Based on the application of the ship operator, the border inspection agency can simplify the entry and exit procedures for crew members who arrive with the cruise ship and do not land, and they are exempted from submitting entry and exit documents; for foreign crew members who need to return to the ship after disembarking and landing, we can arrange centralized issuance of electronic temporary entry permits, so that passengers can quickly land and return to the ship. In terms of helping to improve the quality and efficiency of cruise operation services: First, we would support international cruise ship maintenance and shipbuilding companies to enhance their competitiveness. During the maintenance period, the border inspection agency provides 24-hour service for ship crews to board and disembark and for ships to dock. For Chinese technical support personnel who work at a cruise ship and do not leave the ship during the onboard period, the border inspection agency can handle the exit formalities for them based on their valid entry and exit documents, name lists and exit certificates, and we do not have to examine their visa papers. Second, we plan to promote the construction of a comprehensive international cruise supply service system. For personnel and ships engaged in supporting services such as international cruise ship supply, maintenance, testing, inspection and operation, the border inspection agency can issue a general permit for personnel to board and disembark foreign ships at all coastal ports across China, further facilitating cross-region activities of related enterprises and reducing their operating costs. In terms of promoting the exploration and development of new models of cruise tourism: First, we plan to expand the pilot scope of Chinese-owned flag-of-convenience cruise maritime routes. On the basis of piloting Chinese-owned flag-of-convenience cruise routes in Haikou and Sanya, this policy will be replicated at qualified cruise ports. The border inspection agency provides convenience for relevant tour groups and tourists to apply for boarding documents, further improving the efficiency of boarding and disembarking of tourists. The second is to support international cruise ships to carry out "static tours" while berthing in the port. Upon the application of the cruise company, when the international cruise ship is docking at the port, the border inspection agency can allow Chinese and foreign tourists to board the cruise ship with valid ID documents to enrich the international cruise tourism and help create a new bright spot of international cruise tourism.

Source: NIA

 

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]

 

Q13: Optimization of Company Exit System - Capital Reduction (I)

Targeted Capital Reductions

Article 224 of the New Company Law establishes the principle of capital reduction in equal proportions, as well as exceptions otherwise agreed upon by the company's shareholders or the articles of association, providing an institutional basis for the feasibility of targeted capital reductions.

Targeted capital reductions are common in minority equity investment projects. Investors often require that the company should repurchase the equity they hold under certain circumstances, so that investors can exit the company. In Sino-foreign joint venture projects, arrangements for targeted capital reduction are relatively rare. Shareholders' call option and put option are stipulated under specific circumstances. However, in the future, foreign-invested companies may explore the applicable conditions for targeted capital reductions in shareholders' agreements, providing a feasible path for shareholders to exit the company through capital reduction.