Issue 53

Shanghai Weekly Bulletin

No.3, July 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. SPC Issues Cases on Ascertainment and Application of Extraterritorial Laws

【Keyword: Extraterritorial Laws】

The Supreme People's Court (SPC) recently released the first batch of five typical cases on the ascertainment and application of extraterritorial laws. The cases involve corporate capital contributions, sales contract, security contract, multimodal transport contract, and project supervision contract. They concern laws of the United States, the United Kingdom, Mexico, Tajikistan, the Hong Kong Special Administrative Region and other countries and regions.   

Source: SPC

 

【Shanghai】

1. Shanghai Vows to Accelerate the Development of the Grand Neobay

【Keyword: Grand Neobay】

Shanghai Municipal People's Government recently released the Policy Measures for Accelerating the Development of the "Grand Neobay" Innovation-driven Function Area, which took effect on July 11, 2024 and will remain effective until July 10, 2029. The document introduces 20 measures in five aspects, including strengthening the high-quality basic research and research of cutting-edge technologies, promoting the application of scientific and technological advances, stimulating corporate innovation, providing more support for innovation activities, and fostering a favorable environment for scientific and technological innovation.  

Source: International Service Shanghai

 

2. Shanghai Municipal Bureau of Justice Vows to Improve Business Environment

【Keyword: Law-based Business Environment】

Shanghai Municipal Bureau of Justice recently issued the Certain Measures to Improve the Law-based Business Environment. To further improve the law-based business environment, the document proposes 18 measures in four aspects, including improving institutional supply and systems for business environment, strengthening administrative supervision and law enforcement to support the healthy development of business entities, elevating the level of legal services to ensure the sustainable and stable development of business entities, and meeting the multi-level need for the rule of law to assist business entities in operating in compliance with laws and regulations.

Source: Shanghai Municipal Bureau of Justice

 

3. Pudong Introduces Measures to Support AI Talent Development

【Keyword: AI Talent】

Pudong New Area recently released ten measures to support the development of AI talent. The measures include "carrying out the Global Talent Partnership Plan (GTP) - AI Special Program", "providing talent attraction services through the Pudong International Talent Hub", "offering recruitment services via the Global Top Universities Talent Express", "enhancing the support mechanism for talent settlement", and "facilitating talent visas and permanent residence".

Source: Pudong Release

 

 

One Week in Shanghai

【Latest News】

1. 5th Meeting of the Singapore-Shanghai Comprehensive Cooperation Council Held

【Keywords: Singapore; Cooperation Council】

The 5th Meeting of the Singapore-Shanghai Comprehensive Cooperation Council was held in Shanghai on July 9, so was a signing ceremony for cooperation projects between the two sides. Relevant departments, institutions, and enterprises from both Shanghai and Singapore signed 15 Memorandums of Understanding covering areas such as the "Belt and Road" Initiative, financial cooperation, scientific and technological innovation, digital economy, urban governance, and people-to-people exchanges.

Source: International Services Shanghai

 

2. Complaint & Consultation About Foreign Investment Goes Online 

【Keywords: Foreign Investment; Complaint & Consultation about Foreign Investment】

To enhance the coordination of foreign investment promotion in the city, Shanghai Municipal Commission of Commerce recently launched the feature of Complaint & Consultation About Foreign Investment on the website of Invest Shanghai (www.investsh.org.cn). With the feature, foreign-invested enterprises can submit questions online. A question would be generally replied within seven working days, with a notification being sent via SMS for enterprises' review once the reply is made.

Source: Shanghai Foreign Investment Association

 

3. Public Consultation Service Center for FIEs in Lingang Special Area Put into Use

【Keywords: Foreign Investment; Consultation Service】

The Public Consultation Service Center for Foreign-invested Enterprises (FIEs) in Lingang Special Area was recently put into use. It will provide services to enterprises in need through various forms, such as online, offline and focused topic sessions. Additionally, an online policy and information exchange platform will regularly push answers to hot issues of concern to enterprises.

Source: Shanghai Foreign Investment Association

 

4. Guide to Shanghai's Departure Tax Refund Released

【Keyword: Departure Tax Rebate】

Following the opening of "Shanghai Summer" International Consumption Season on July 6, Shanghai Municipal Commission of Commerce released the Guide to Shanghai's Departure Tax Refund to provide information about the conditions and procedures for departure tax refund applications, customs, refund websites, and participating merchants.

Source: Shanghai Municipal Commission of Commerce

 

【Competitive Event】 

1. 2024 Shanghai Masters Kicks off

【Keyword: Snooker】

The 2024 Shanghai Masters snooker tournament officially kicked off on July 15. In the newly renovated Shanghai Stadium, top world masters and brilliant stars from China are set to dazzle the city with peak-level competition and exceptional visual enjoyment.

Source: International Services Shanghai

 

【Forum & Exhibition】

1. SSE STAR Market Fifth Anniversary Summit 2024 to Be Held

【Keywords: Shanghai Stock Exchange STAR Market】

The Shanghai Stock Exchange (SSE) STAR Market Fifth Anniversary Summit 2024 will be held on July 26. On the theme "Innovation Drives, Quality Leads the Future", the summit will comprehensively review the glorious journey of the SSE STAR Market and China’s scientific and technological innovation over the past five years, deeply analyzing new trends and opportunities in policy direction, strategic planning, scientific and technological innovation, and industrial upgrading.

Source: Invest Shanghaiplanning

 

【Culture & Art】

1. Shanghai Oriental Art Center Unveils 2024/25 AW Season

【Keyword: Beyond Boundaries】

Shanghai Oriental Art Center recently unveiled its 2024/25 Autumn/Winter (AW) Season. On the theme "Beyond Boundaries", the season will feature 92 performances of 52 stage productions, with international programs accounting for nearly 70 percent. 

Source: Shanghai Oriental Art Center

 

【Training】

1. 2024 Reform Policy Briefing on Cross-border Trade Business Environment to Be Held

【Keyword: Cross-border Trade]】

To help enterprises better understand and apply the city's 2024 reform measures for cross-border trade business environment, Shanghai Municipal Commission of Commerce, in conjunction with Shanghai Customs, Shanghai Municipal Commission of Transport, Shanghai Municipal Administration for Market Regulation, SIPG, and E&P International, will hold a reform policy briefing on July 18 to explain this year's reform measures in detail.

Source: Shanghai Foreign Investment Association

 

Q&A

1. The relevant officer of the Shanghai Head Office of the People's Bank of China answered questions at the third quarter press conference of 2024. The Office has launched a series of innovative measures to improve payment convenience. Could you elaborate? How do these measures help address bottlenecks and difficulties?

A: Under the thoughtful guidance of the People's Bank of China and the strong support of the Shanghai Municipal People's Government, the Shanghai Head Office has been sticking to innovative development and introduced seven measures in conjunction with relevant departments, effectively solving payment problems in important scenarios and producing a demonstration effect across the country, giving full play to Shanghai's leading role in improving payment convenience. These measures are the result of everyone's collective efforts under the strong leadership of the Municipal Party Committee and Municipal Government and with the strong support of relevant commissions, offices and bureaus of the Municipal Government.

First, the municipal government introduced a POS machine subsidy policy. In order to reduce promotion costs, Shanghai Municipal People's Government announced a 50% subsidy on POS machine on September 30, 2023, and the policy was extended in 2024, which effectively encouraged merchants and acquiring institutions to accept foreign card transactions, thereby rapidly increasing the coverage of foreign card acceptance.

Second, we introduced the layered identity verification mechanism to facilitate overseas tourists to bind their bank cards with Chinese payment apps. With the approval of the People's Bank of China, the Shanghai Head Office instructed Alipay to launch a layered identity verification mechanism with solid risk controls in place. Foreigners can use their overseas mobile phone numbers and bank card numbers to enjoy the convenience of mobile payment. The single transaction limit was increased from US$1,000 to US$5,000, and the annual cumulative transaction limit was lifted from US$10,000 to US$50,000. The facilitative measure has prompted foreigners to bind their bank cards with Chinese payment apps, and they can also use mobile payment when they travel to other Chinese cities. 

The third is to enable cash withdrawal of small denominations at self-service cash machines. In order to increase the effective cash supply, Shanghai Head Office has carried out upgrade of self-service cash machines in airports, core business districts, star-rated hotels, and tourist attractions to support the withdrawal of small denominations of RMB100 and RMB10 at the same time, and coupled with cash exchange service provided by banks, it provides convenience for the elderly and foreign visitors to get small money.

Fourth, a pilot program has been launched for licensed institutions to handle foreign currency exchange business. Shanghai Head Office has guided Shanghai Ctrip Financial Information Services Co., Ltd. to study feasibility of the pilot program, and increase the number of foreign currency exchange points. At present, the State Administration of Foreign Exchange has approved the company to conduct the pilot program in Shanghai, and the company has been authorized to set up five foreign currency exchange agencies at hotels.

Fifth, we plan to build an airport comprehensive service center. Shanghai Head Office plans to work with the Foreign Affairs Office of the Shanghai Municipal Government to build an airport comprehensive service center, which will provide one-stop comprehensive services such as payment, cultural travel, communications, and transportation, so that foreign visitors to Shanghai can enjoy various convenient services as soon as they arrive at the airport. The proposal has received strong support from the Shanghai Municipal Government, and has been rapidly promoted and implemented by the Foreign Affairs Office in conjunction with the Shanghai Head Office, the Municipal Culture and Tourism Bureau, the Municipal Communications Administration, the Municipal Transportation Commission, the Municipal State-owned Assets Supervision and Administration Commission, as well as the Airport Group. The one-stop comprehensive service center for foreigners at Pudong International Airport T2 Terminal was completed and put into operation on June 29, which is widely welcomed by foreigners coming to Shanghai and has set a benchmark for the whole country. Pudong International Airport T1 Terminal and Hongqiao International Airport T1 Terminal will also build a one-stop comprehensive service center.

Sixth, we pushed out text messages on cash laws through telecommunications operators. Shanghai Head Office has worked together with the Municipal Communications Administration and four telecom operators - China Mobile, China Unicom, China Telecom, and China Radio and Television - to send 40 million text messages that it would take actions against refusal to accept cash. These messages have basically achieved full coverage of publicity to all types of business entities and all residents in the city, enhanced the public's awareness of law, and created a favorable environment for cash use.

Seventh, the Shanghai Head Office and the Foreign Affairs Office have joined hands to produce five-episode English videos about payment services guide for foreigners. These videos explain how to use foreign currency exchange, cash payment, foreign card payment and mobile payment, making it easier for foreigners to understand the ways to obtain and operate various payment services. These series of videos were aired on major domestic and international media platforms, and were played at subway and bus stops, airport halls and other transportation hubs starting from May 30. They will also be played on China Eastern's international flights to Shanghai.

Source: Shanghai Head Office of the People's Bank of China

 

 

Expert Perspective

Impact of New Cross-border Data Regulations on Domestic and Overseas Investment Projects

By: Fu Peng, Yu Qin, Wei Longjie (Haiwen & Partners)

[Continuing from the Last Issue]

II Impact of the new regulations on foreign direct investment projects 

(1) It is more convenient to transfer personal information out of China after foreign investment projects are implemented (III)

1. One of the main scenarios for foreign-invested enterprises to transfer personal information overseas is human resources management, and there is a chance to be exempted from the obligation for data declaration. 

According to Article 5, Paragraph 2 of the Regulations on Promoting and Regulating Cross-border Data Flows, if a foreign-invested enterprise "implements cross-border human resources management in accordance with labor rules and regulations formulated in accordance with the law and collective contracts, and it is indeed necessary to provide employees’ personal information overseas", it can be exempted from the obligation to report cross-border data compliance.

However, it should be noted that the exemption prerequisite is that foreign companies should "implementing cross-border human resources management in accordance with labor rules and regulations formulated in accordance with the law and collective contracts." Therefore, foreign companies should formulate labor rules and regulations or sign collective contracts in accordance with relevant laws and regulations, in order to meet the exemption conditions stipulated in the regulations. 

2. Data volume threshold for fulfilling cross-border data compliance reporting obligations has been significantly increased

From the perspective of the amount of personal information to be transferred, the new regulation has significantly raised the threshold for fulfilling the obligation of cross-border data compliance reporting. For cross-border transfers that do not involve sensitive personal information, the new regulations have raised the threshold for filing a standard contract for outbound transfer of personal information to more than 100,000 people from January 1 of the year, and exempted foreign-invested enterprises that transfer less than 100,000 people from the obligation to file a standard contract for outbound transfer of personal information. At the same time, if the number of personal information cross-border transfers of foreign-invested enterprises exceeds one million people from January 1 of the year, the obligation of data transfer security assessment will be triggered.

Compared with previous rules, the new regulations have significantly raised the threshold. From a practical operation perspective, except for foreign-invested enterprises that serve a large number of individuals and may have to transfer a large amount of personal information outbound due to special reasons such as technology, services, and industry (such as enterprises in the automotive industry), the annual outbound transfer of personal information generally does not exceed 100,000 people, and it is even rare to transfer personal information of more than one million people outbound. Therefore, for the vast majority of foreign-invested enterprises, the triggering thresholds have greatly reduced the application obligations for outbound transfer of data.

In view of this, during the demonstration of foreign investment projects, foreign investors only need to roughly estimate how many people's personal information may have to be transferred outbound, and it is relatively easy to evaluate the compliance cost. Based on the above-mentioned industry exemptions and data volume thresholds, it's hard for foreign-invested enterprises to reach the threshold for filing standard contracts for outbound transfer of personal information or applying for assessment of data outbound transfer security.

3. Foreign-invested enterprises in certain industries are not required to fulfill data declaration obligation

From an industry perspective, some industries naturally do not need to fulfill the cross-border data compliance reporting obligations in accordance with Article 38 of the Personal Information Protection Law.

For example, Article 5, Paragraph 1 of the Regulation on Promoting and Regulating Cross-border Data Flows stipulates that, on the premise that the subject of personal information is a party to the contract, if a foreign-invested enterprise is involved in business scenarios such as "cross-border shopping, cross-border express delivery, cross-border remittances, cross-border payments, cross-border account opening, air ticket and hotel reservations, visa processing, and examination services", they do not need to fulfill the obligation to report cross-border data compliance in accordance with Article 38 of the Personal Information Protection Law.

In practice, these exceptions cover some industries with a "rigid need" for cross-border data transfer. For example, if an overseas examination institution sets up a branch in China and holds an examination, the examination results and testers' personal information must be transmitted overseas, otherwise there is no way to evaluate, score, and announce the examination results for specific individuals. For example, a considerable number of cross-border payment companies and cross-border e-commerce companies, because domestic users demand cross-border payments and cross-border shopping, their personal information must be transmitted abroad for clearing and settlement or express delivery, otherwise the contractual purpose of domestic users cannot be achieved. These industries can apply the exceptions stipulated in the new regulations, and curtail their data reporting obligations.