Issue 52

Shanghai Weekly Bulletin

No.2, 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. China Issues Document to Implement the Registered Capital Management System

【Keyword: Company Law; Registered Capital】

China's State Council released on July 1, 2024 the Regulations on Implmenting the Registered Capital Management System of the Company Law of the People's Republic of China, with immediate effect. The regulations clarify arrangements during the transitional period of adjusting the time limit for shareholders to pay in their subscribed capital at existing companies, make stipulations on the handling of abnormal activities in a company's capital contributions, and improve the regulatory measures.

Source: Xinhuanet

 

2. China Unveils Tax Policies for Temporary Entry for Repairs in Shanghai FTZ

【Keywords: Temporary Entry Repairs; Tax Policies】

The Ministry of Finance (MOF), along with other four Chinese authorities, issued on June 27, 2024 the Circular on Tax Policies for Pilot Temporary Entry for Repairs in the China (Shanghai) Pilot Free Trade Zone. The circular states that within the customs special supervision areas of the Shanghai FTZ (including the Lingang Special Area), bonded treatment will be applied to goods temporarily allowed to enter the pilot areas from abroad for repairs from the effective date of the circular, and these goods, when re-exported, will be exempt from customs duties, import value-added tax, and consumption tax.

Source : International Services Shanghai

 

【Shanghai】 

1. Shanghai Revises Rules to Solidify Its Status as an International Financial Center

【Keyword: International Financial Center】

The Standing Committee of Shanghai Municipal People's Congress released on July 4, 2024 the Regulations on Promoting the Building of Shanghai into an International Financial Center (Draft Revision) to seek public opinions until July 18, 2024. The regulations, which consist of 64 articles in eight chapters, stress improving the financial system, consolidating the foundation for the high-quality development of the financial sector, deepening financial reform and opening-up, enhancing the role of the city in global resource allocation, and improving the quality and efficiency of financial services in serving the real economy, with the focus on technology finance, green finance, inclusive finance, pension finance and digital finance.

Source: Shanghai Municipal People's Congress

 

2. Shanghai Issues Document to Deepen EIA and Pollutant Emission Permit System Reform

【Keywords: Environmental Impact Assessment; Pollutant Emission】

The Implementation Opinions of the Shanghai Municipal People's Government on Deepening the Reform of the Environmental Impact Assessment (EIA) and Pollutant Emission Permit System were recently issued. The document outlines 20 reform measures in seven aspects, in an effort to systematically promote the reform of the entire process of ecological environment zoning control, planning environmental assessment, project environmental assessment, and pollutant emission permit, and establish a closed-loop management system of access system and law enforcement & supervision system.

Source: Shanghai Municipal People's Government

 

3. Shanghai Allows Foreign Arbitration Institutions to Establish Business Offices 

【Keyword: Foreign Arbitration Institutions】

Shanghai Municipal Bureau of Justice recently issued the Administrative Measures for the Establishment of Business Offices by Foreign Arbitration Institutions in Shanghai, which will come into effect on August 1, 2024. The document states that non-profit arbitration institutions that meet the prescribed conditions and are legally established in foreign countries, the Hong Kong Special Administrative Region, the Macau Special Administrative Region, and the Taiwan region, as well as arbitration and dispute resolution institutions established by international organizations in which China has joined, are eligible to apply for the registration and establishment of business offices in Shanghai to carry out foreign-related arbitration activities.

Source: International Services Shanghai

 

 

One Week in Shanghai

【Latest News】 

1. Shanghai Declaration on Global AI Governance Issued 

【Keyword: AI】

The 2024 World AI Conference and High-level Meeting on Global AI Governance opened in Shanghai on July 4. The conference was themed "Governing AI for Good and for All". At the opening ceremony, Shanghai released the Shanghai Declaration on Global AI Governance. 

Source: International Services Shanghai

 

2. China's First Data Asset Trading Market Begins Trial Operation

【Keywords: Data Asset; Trading Market】

Shanghai Data Exchange recently announced that it will launch China's first data asset trading market to accelerate the development and utilization of innovative data elements. At present, a sound data asset trading system, which consists of one set of specifications and five sets of guidelines, has been initially developed with DCB (Data Capital Bridge) as the basic framework, "Digital Easy Loan" and "Digital Asset Communication" as the basic carriers, to support the efficient and well-regulated operation of the data asset trading market.

Source: Pudong Release

 

【Culture & Art】

1. First "Shanghai Summer" International Consumption Season Kicks off 

【Keyword: Shanghai Summer】

The first "Shanghai Summer" International Consumption Season kicked off on July 6, and will last until the second weekend of October. This year's consumption season plans to launch a total of 100 business travel, culture, sports and exhibition activities, including 7 flagship activities with strong international appeal and 58 integrated events of business travel, culture, sports and exhibition.

Source: International Services Shanghai

 

2. Exhibition of Fine Cultural Relics of Han Dynasty's Royal Family Opens 

【Keyword: Exhibition of Cultural Relics】

The Exhibition of Fine Cultural Relics of Han Dynasty's Royal Family recently opened at the Minhang Museum, and will last until August 25, 2024. The exhibition is divided into two sections. The first section focuses on the lives of the kings of Zhongshan, showing the majesty of the princes of the Han Dynasty from their clothing, food and utensils; the second section tries to explain the spiritual world of the people at that time, using jade as a medium to convey the upper class's pursuit of immortality and eternity.

Source: Minhang Museum

 

3. Exhibition of the Rites of the Zhou Opens at China Maritime Museum

【Keyword: Rites of the Zhou】

An exhibition of the rites of the Zhou opened on July 8 at China Maritime Museum. The exhibition will present a variety of cultural relics unearthed from some significant archaeological discoveries, such as the Zhou Tomb at Shigushan, the Hoard at Yangjiacun Village in Meixian County, the No.1 Hoard at Zhuangbai Village, the Yuguo Tomb and the No.1 Hoard at Dongjiacun Village. About 95% of the items are valuable and precious cultural relics. The exhibition will last until October 8, 2024. 

Source: China Maritime Museum

 

【Corporate Activities】

1. Reckitt to Establish R&D Center in Minhang District, Shanghai 

【Keyword: Reckitt】

Reckitt, the world's consumer goods giant and one of top 500 companies, announced that it will build a global R&D center in Minhang District, Shanghai. Formally known as the global center of excellence, it will be the group's ninth R&D facility to offer global consumers more innovative products. 

Source: International Services Shanghai

 

2. 20 FIEs in Pudong Lead Formulation and Revision of 34 National Standards 

【Keywords: Foreign-invested Enterprises; National Standards】

Since 2023, 20 foreign-invested enterprises (FIEs) in Pudong have led the formulation or revision of 34 national standards, promoting the openness and integration of related standards, strengthening international exchanges and cooperation, and advancing technological progress and industry development.

Source: Pudong Release

 

Q&A

Q1: Leaders of Shanghai Municipal Commission of Commerce answered questions at a press conference introducing the overall arrangements for the "Shanghai Summer" International Consumption Season - During the "Shanghai Summer" International Consumption Season, what service measures will be introduced to ensure the consumption experience of domestic and foreign tourists?

A1: During the "Shanghai Summer" International Consumption Season, in order to attract more tourists to Shanghai for vacation and tourism, improve their satisfaction during their trips in Shanghai, and create a welcoming and comfortable consumer service environment, we plan to introduce service measures in six aspects:

1. In terms of communication services, China Mobile and China Telecom have set up service points in Pudong and Hongqiao airport terminals to provide customer consultation and telecom card activation services, so that inbound tourists can enjoy convenient and efficient communication services in Shanghai.

2. In terms of luggage storage, Shanghai has launched a bilingual guide to luggage storage in key business districts. Currently, there are 395 locations across the city that can provide luggage storage services, and the number is expected to reach 500 by the end of July. Shanghai Commercial Association has formulated the Guidelines for Service Specifications of Luggage Storage in the Commercial Sector in Shanghai. At the same time, the first batch of 14 "International Friendly Shopping Malls" have been certified to provide bilingual services, luggage storage and other services for tourists.

3. In terms of payment convenience, the Shanghai Municipal Commission of Commerce is working with the Shanghai Head Office of the People's Bank of China to ensure full coverage of foreign card acceptance at important business districts, restaurants, supermarkets, convenience stores, and exhibition venues in Shanghai, and guided key merchants to prepare small value bank notes. By the end of September 2024, there should be 70,000 POS machines supporting foreign card payments and 500,000 change purses. The Shanghai Head Office of the People's Bank of China and the Foreign Affairs Office of Shanghai Municipal People's Government jointly produced a series of videos on payment service guide for foreigners coming to Shanghai. In addition, the Bank of China has released the 2024 version of the Shopping Guide for Departure Tax Refund Stores.

4. In terms of travel and accommodation, online travel platform Ctrip has planned special tourism products, launched a dedicated page "Summer in Shanghai" on its official website, and integrated resources from airlines, hotels, businesses, and attractions to launch one-stop tourism service products. China Eastern Airlines, Spring Airlines, Juneyao Airlines, and Cathay Pacific have launched a series of "air tickets +" products, and carried out preferential consumption activities. Hotels such as Jinjiang, Marriott, Accor, and Atour focus on cultural and tourism exchanges, sports events, art festivals, and launch special promotions or discount packages.

5. In terms of activity inquiry, in order to ensure that tourists do not miss any wonder that shanghai offers, the "Shanghai Summer" smart activity schedule has been officially launched. Tourists can search "I GO Shanghai" through the "WeChat Mini Program" and select "Consumption Promotion Activity Schedule" to check wonderful activities. To make it easier for Chinese and foreign tourists to check activity information, we have developed three smart functions - smart itinerary arrangement, smart information service and smart AI Q&A, with bilingual voice consultation services in Mandarin and English.

6. In terms of transportation, with the strong support of the Municipal Transportation Commission, Qiangsheng 62580000 Customer Operation Center launched a 7*24-hour English taxi hotline service, formed an English-only service team, and added English welcome messages and corresponding shortcut buttons. Its brand service team, Qiangsheng's "Anxin Touring Fleet", also provides transportation support for reservations and convenience for foreign tourists.

Source: Shanghai Release

 

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(2)

In practice, foreign-invested enterprises often need to transfer relevant personal information abroad for the purpose of business management and human resources management, for example:

· Corporate business management: A foreign-invested enterprise often has many business connections with overseas entities. In the process of operation and management, it is inevitable that a small amount of personal information such as business contacts, supplier and partner information has to be transferred out of the country.

· Human resources management: After setting up a base in China, overseas investors often have a need for global unified management of the employees they recruit. In particular, employee information related to matters such as staff benefits and welfare items, assessing the promotion of employees, and investigating some employees who violate discipline often needs to be transmitted overseas (such as headquarters) for global coordination.

· Global deployment of IT systems: Before investing in China, foreign companies often have already deployed centralized servers and management systems overseas to manage global business information and human resources information; therefore, a large number of foreign-invested enterprises need to transfer a considerable amount of domestic information overseas due to the global deployment of their IT systems. For some companies, due to the design of the IT structure, it may take a very long time or require extremely high costs to set up a complete set of separate servers and systems in China.

Before the new regulations are enacted, the absence of any exemption clauses meant that a considerable number of foreign-invested enterprises were required to fulfill cross-border data compliance reporting obligations. In particular, for a considerable number of foreign-invested enterprises that transmit very little data (some even only the personal information of a few or a dozen employees), the fulfillment of such obligations has become a heavy burden. Based on the above reasons, the promulgation of the "Regulations on Promoting and Regulating Cross-border Data Flows" can be regarded as "major good news" for foreign-invested enterprises, especially for those in certain industries, which have been exempted from the reporting obligation.