Issue 55

Shanghai Weekly Bulletin

No.5, 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 Facilitate Accommodation for Foreign Travelers

【Keywords: Foreign Travelers; Accommodation】

China's Ministry of Commerce (MOFCOM) and other six government departments recently released the Circular on Several Measures to Facilitate Accommodation for Foreign Travelers to Serve High-standard Opening-up. Local departments and online booking platforms should not restrict accommodation operators from receiving foreign guests based on qualification requirements, and online booking platforms and accommodation operators are prohibited from illegally advertising that they do not accept foreign guests, according to the circular. 

Source: MOFCOM

2. Chinese Authorities Clarify Tax Policies for Enterprise M&A and Reorganization

【Keywords: M&A and Reorganization】

The Ministry of Finance (MOF) and the State Taxation Administration released on July 24, 2024 the Guidelines on Major Preferential Tax Policies for Enterprise Merger, Acquisition (M&A) and Reorganization. The document combs through existing effective preferential tax policies and tax collection and administration documents that support enterprises in conducting M&A and reorganization, with a compilation of the specific policies and documents attached. It aims to provide taxpayers with a concise and easy-to-use operational guide.

Source: MOF

【Shanghai】

1. Shanghai Aims to Attract More Foreign Investment with Better Environment

【Keyword: Foreign Investment】

Shanghai Municipal Commission of Commerce and other three government departments in the city recently issued the Action Plan on Further Improving the Environment to Attract More Foreign Investment, which took effect on July 11, 2024. The document proposes 15 measures in aspects including improving the quality of foreign capital utilization, facilitating foreign investment operations, refining foreign investment services, and improving methods for the promotion of foreign investment.

Source: International Services Shanghai

2. Action Plan for Integrated Development of Yangtze River Delta Issued

【Keywords: Yangtze River Delta; Integrated Development】

The Yangtze River Delta Regional Cooperation Office recently issued the Three-Year Action Plan for the Integrated Development of the Yangtze River Delta Region (2024-2026). The action plan proposes 165 key tasks in nine aspects, including strengthening cross-regional collaboration in scientific and technological innovation, jointly building world-class industrial clusters, moving faster to improve the systems and mechanisms for the integrated development, and accelerating the enhancement of regional market integration level.

Source: Shanghai Release

One Week in Shanghai

【Latest News】

1. Shanghai Releases City Promotional Video 

【Keywords:China International Import Expo; City Promotional Video】

With 100 days to go before the 7th China International Import Expo, the Information Office of Shanghai Municipality and Shanghai Media Group jointly released a 90-second promotional video "Shanghai LINK FUTURE".

Source: Shanghai Daily

2. RCEP Enterprise Service Consultation Center (Hongqiao) Launches Online Platform

【Keywords: RCEP】

The RCEP Enterprise Service Consultation Center in Shanghai's Hongqiao International Central Business District recently launched its online platform. The new platform includes a cross-border supply chain planning module that provides enterprises with a one-stop service for strategic planning on tariffs, supply chains, and cross-border compliance. The platform also features a dedicated service section for overseas operations and the Yangtze River Delta service section, combined with offline support. It aims at providing enterprises with more comprehensive and accurate services and helping them expand market presence.

Source: Shanghai Hongqiao

【Competitive Event】

1. Shanghai to Host 48th WorldSkills Competition in 2026

【Keywords: WorldSkills Competition】

The WorldSkills Organization announced that the 48th WorldSkills Competition will be held in Shanghai from September 22 to 27, 2026. Known as the "World Skills Olympics", the WorldSkills Competition is the world's largest, most prestigious, and highest-level international vocational skills competition.

Source: International Services Shanghai

2. 2024 Shanghai High Value Patent Operation Competition Launched

【Keywords: High Value Patent Operation Competition】

The 2024 Shanghai High Value Patent Operation Competition was launched on July 22, with registration open till September 15. To accelerate patent commercialization, the organizing committee of the competition will work with multiple institutions to empower participating teams with full-course operational services such as patent promotion, matchmaking operations, and tech financing.

Source: Shanghai Technology Exchange

3. Rolex Shanghai Masters 2024 to Kick off

【Keywords: Rolex Shanghai Masters】

As one of the seven benchmark events of the first "Shanghai Summer" International Consumption Season, the Rolex Shanghai Masters 2024 will be held at the Qizhong Tennis Center of Juss Sports from September 30 to October 13. Several of the world's top 100 players will participate in the tournament. 

Source: International Services Shanghai

【Culture & Art】

1. Shanghai Book Fair 2024 Is Coming

【Keywords:  Shanghai Book Fair】

The Shanghai Book Fair 2024 and "Book-scented China" Shanghai Week will be held at the Shanghai Exhibition Center from August 14 to 20. During the fair, a number of events will be held including new book launches, lectures by famous authors and author signings. The fair will also feature the Shanghai International Literature Week, the Theme Publishing Summit Forum, the Shanghai Book Fair Reading Festival, the National Exhibition of Digital Publishing, the First National Knowledge Blogger Conference, the 20th Shanghai Book Fair Retrospective, "Seven Days and Seven Classes of Chinese Classics" and other exciting activities.

Source: International Services Shanghai

2. Interactive Tech-Art Exhibition to Open at Shanghai Powerlong Museum

【Keywords: Dreamscape】

Dreamscape: an Interactive Tech-Art Exhibition will be held at the Shanghai Powerlong Museum from August 3 to October 20, 2024. The exhibition includes two main exhibition areas, seven themed experience spaces, and 57 core script element settings. With a unique "scenario-based" interactive experience, it invites the audience to enter a multiverse full of miracles and fantasies.

Source: Powerlong Museum

【Corporate Activities】

1. Shanghai Recognizes New Regional Headquarters of MNCs and R&D Centers 

【Keywords: MNCs; R&D Centers】

Shanghai recently held the ceremony to award certificates to the 39th batch of regional headquarters of multinational corporations (MNCs) and R&D centers, which include 30 regional headquarters and 15 foreign-funded R&D centers. As of the end of June 2024, Shanghai had a total of 985 certified regional headquarters and 575 certified foreign-funded R&D centers, maintaining its position as the top place in the Chinese mainland for MNCs to set up regional headquarters.

Source: International Services Shanghai

2. Lindt Opens New Packaging and Logistics Center in Yangshan Bonded Zone

【Keywords: Lindt】

Lindt, an internationally renowned chocolate brand, recently launched its packaging and logistics center in the Yangshan Special Comprehensive Bonded Zone. The center will serve as Lindt’s regional hub for packaging and logistics distribution in the Asia-Pacific region, supplying products to 15 countries and regions, including China, Singapore, Malaysia and Thailand. With the new facility, the freshness of Lindt chocolates reaching consumers in the Asia-Pacific region is expected to improve by over four months compared with exiting shipping methods.  

Source: Shanghai Lingang

【Training】

1. CCPIT Shanghai to Provide Training on the Upgraded Origin Certification System 

【Keywords: Upgraded Origin Certification System】

In order to help enterprises master the upgraded origin certification system as soon as possible, the Shanghai Council for the Promotion of International Trade (CCPIT Shanghai) is scheduled to hold a special training on the system on July 31, 2024. The training will be conducted online and cover enterprise information management, product pre-examination management, application for certificate of origin, preferential tariff inquiry and other operational practices.

Source: Shanghai Council for the Promotion of International Trade

Q&A

1: A head of Shanghai Municipal Commission of Commerce answered questions at a press conference to mark 100 days before the opening of the 7th China International Import Expo (CIIE) - CIIE has become a large platform for high-standard opening up. What achievements have been made by Shanghai in amplifying the spillover effect of the CIIE and promoting high-quality development?

Focusing on the functional positioning of "exhibits turning into commodities and exhibitors turning into investors", Shanghai continues to amplify the spillover effect. It is mainly reflected in two aspects.

On one hand, good products displayed at the CIIE have quickly been made available throughout the domestic market. First, the driving effect of "Silk Road e-commerce" is becoming more prominent. The building of the "Silk Road e-commerce" cooperation pilot zone has been in the full swing, and consumption activities such as the Shanghai Online New Year Goods Festival and the Silk Road E-commerce Festival have been held to promote the transformation of CIIE exhibits into e-commerce products. Shanghai has also promoted online and offline coordination and built the "Silk Road E-commerce" National Pavilions. In April, the Pakistan National Pavilion opened in Waigaoqiao, becoming the preferred platform for Pakistani exhibitors to get access to the Chinese market. Since the beginning of this year, three new "Silk Road E-commerce" National Pavilions have opened, bringing the total to 26. Second, the year-round exhibition and trading platform has a significant effect in boosting sales. Hongqiao Pinhui's transaction volume was RMB 17 billion last year, and it has opened 23 branch centers in Suzhou, Shaoxing and other cities. Greenland Global Commodity Trade Port has opened 63 national pavilions and 13 branch ports, bringing more than 5,000 CIIE products to the domestic market. The CIIE Bazaar City Arena on East Nanjing Road is displaying and selling CIIE products from more than 20 countries and regions, and it has become a popular place for global tourists to learn about CIIE new products and buy certain countries' products. Third, the first-release and first-exhibition effect has been significant. During the six CIIEs, Shanghai has introduced a total of 5,840 first stores, including more than 80 first stores in Asia or even globally. Not long ago, the world's first photon counting CT, which debuted at the sixth CIIE, was officially put into operation in Shanghai Ruijin Hospital.

On the other hand, we will help improve exhibitors’ experience from a "sense of gain" in the six-day exhibitions to the "satisfaction" of the business environment for 365 days. First, we will continue to optimize the business environment to attract foreign investment. Shanghai has fully aligned itself with international high-standard economic and trade rules, deepened high-level and all-round institutional opening-up, implemented the Global Partnership Program for Promoting Foreign Investment, polished the brand of "Invest Shanghai", held government-enterprise communication roundtable meetings at both municipal and district levels, and held policy briefings for foreign exhibitors at the CIIE to have better understandings of our policies. In the first half of this year, 3,007 foreign-invested enterprises were established in Shanghai, an increase of 18.3% year-on-year. We recognized 29 regional headquarters of multinational companies and 14 foreign-invested R&D centers, with a total of 985 and 575 respectively. CIIE exhibitors are starting to invest in Shanghai or expand production. Lego, which has participated in the CIIE for six consecutive years, has begun to build the first phase of its theme park resort project. Straumann, an exhibitor at the fourth CIIE, has launched the first phase of its high-end implant industrialization project, which is expected to begin full production in 2025. Second, friendly business environment allows international exhibitors to experience the richness of Shanghai's urban life. In the first half of this year, more than 70,000 POS terminals in Shanghai have supported foreign card payments, an increase of 1.1 times compared to the end of last year, providing great payment convenience for exhibitors at the CIIE. Not long ago, one of the benchmark activities of the "Shanghai Summer" International Consumption Season, "On Top of the Pyramid: The Civilization of Ancient Egypt", kicked off at the Shanghai Museum. The exhibition will last for one year, and domestic and foreign exhibitors are welcome to visit the exhibition during the CIIE. In addition, there will be exciting sports events and cultural performances, which will allow exhibitors to experience the colorful and vibrant charm of Shanghai.

We will make all-out efforts to provide service support for the seventh CIIE, further amplify the spillover effect of the CIIE, and allow more exhibitors and visitors to share the Chinese opportunities brought by the Chinese modernization.

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 

(3) Strict scrutiny on the outbound transfer of sensitive personal information

According to Article 8 of the Regulation on Promoting and Regulating Cross-border Data Flows, in addition to scenarios for the outbound transfer of personal information that are completely exempted by the above provisions, foreign-invested enterprises that are involved in the cross-border transfer of sensitive personal information and the number of cross-border data transfers from the start of the year is less than 10,000 people shall file a standard contract for the outbound transfer of personal information; if the number of outbound data transfers is more than 10,000 people, a security assessment shall be conducted.

In certain industries, companies must process (or are more likely to be involved in processing) sensitive personal information. For example, medical and genetic companies often collect customers' health and physiological information; financial industry often gathers customers' financial information, and even their biometric information used to identify and verify user identity; the automotive industry, mobility and smart connected car companies may keep record of sensitive personal information such as user locations. When making decisions on foreign investment projects in the above industries, special attention should be paid to cross-border transfer of sensitive personal information.

Even from the perspective of transmitting and managing sensitive personal information, the new regulation has lowered some requirements. Article 4 of the Measures for Security Assessment on Outbound Data Transfer stipulates that if the cumulative cross-border transfer of sensitive personal information reaches 10,000 people since the start of the previous year, a security assessment shall be conducted. The new regulation changes the starting point to the start of this year, and cumulative outbound transfer of sensitive personal information should be more than 10,000 people to warrant a security assessment. In comparison, in terms of time dimension, regulatory requirements have been significantly lowered.

It is noteworthy that some companies may initiate and carry out processing of sensitive personal information before it is transferred abroad, such as adopting local storage, avoiding cross-border transmission, and anonymizing it as much as possible.

In addition, before the promulgation of the Regulation on Promoting and Regulating Cross-border Data Flows, the "Appendix H: General Data Classification Reference" provided in the Data Security Technology - Data Classification and Grading Rules also lowered the data classification standards for de-labeled sensitive personal information. Therefore, foreign-invested enterprises may consider taking more technical measures to turn sensitive personal information into general personal information under certain circumstances, so as to avoid triggering the personal information export declaration mechanism due to the transfer of a large amount of sensitive personal information.