Issue 62

Shanghai Weekly Bulletin

No.3, September 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 for High-quality Development of Insurance Sector

【Keywords: Insurance Sectort】

The State Council issued on September 8, 2024 the Guidelines on Enhancing the Regulation and Mitigating Risks to Promote the High-quality Development of the Insurance Sector. The document stresses efforts to strengthen the regulation of insurance market access, tighten the continuous supervision of insurance institutions, and crack down on illegal activities in the insurance sector. It also instructs to effectively prevent and resolve risks in the sector in an orderly manner, improve the sector's ability to serve people's wellbeing and the real economy, deepen reforms and opening-up of the sector, enhance the sector's capacity for sustainable development, and step up policy coordination for the sector's high-quality development. 

Source:Website of the Chinese Government

2. China to Allow Wholly Foreign-owned Hospitals in Pilot Areas

【Keywords: Wholly Foreign-owned; Hospital】

The Ministry of Commerce (MOFCOM), the National Health Commission (NHC), and the National Medical Products Administration (NMPA) recently released the Circular on Expanding Pilot Programs for Opening up the Medical Sector, which states that China plans to allow the establishment of wholly foreign-owned hospitals in nine cities and regions including Shanghai, with the conditions, requirements and procedures subject to further notice. The circular also clarifies that foreign-invested enterprises are allowed to carry out the development and application of technologies relating to human stem cells and gene diagnosis and treatment in the pilot free trade zones in Beijing, Shanghai, and Guangzhou, as well as in the Hainan Free Trade Port, for the registration, launch and production of relevant products.  

Source:MOFCOM

【Shanghai】

1.  Shanghai Drives the Development of Hongqiao Legal Services District 

【Keyword:Hongqiao; Legal Services District】

Shanghai Municipal Bureau of Justice and the Administration of Shanghai Hongqiao International Central Business District (CBD) recently released the Action Plan on Accelerating the Development of Shanghai Hongqiao International Central Legal Services District (2024-2026). By the end of 2026, the Hongqiao International Central Legal Services District will have been built into a platform that matches the functional positioning of the Hongqiao International CBD, efficiently allocates legal service resources in the city, and provides high-quality legal services in the Yangtze River Delta, and even in the whole country and the world, said the plan. 

Source:  Shanghai Municipal Bureau of Justice

2. Shanghai Enhances Policy Support for Financial Development in Lingang

【Keywords: Lingang; Finance】

The Office of the Financial Commission of CPC Shanghai Municipal Committee, together with the Administration of Lingang Special Area and other financial regulators in Shanghai, recently released the Action Plan on Boosting the High-standard Opening-up and High-quality Development of the Financial Sector in Lingang Special Area of China (Shanghai) Pilot Free Trade Zone, which introduces 50 specific measures in five aspects, including innovating the financial system, bolstering the two-way financial opening-up, serving the real economy, improving the business environment, and refining the guarantee measures. 

Source:Shanghai Municipal Financial Regulatory Bureau

3. Shanghai Issues Document to Further Support NEV Trade-ins 

【Keywords: Vehicle; Trade-in】

Shanghai recently released the Circular on Implementing the Decision of Promoting Trade-ins of Consumer Goods to Further Support Trade-ins of New Energy Vehicles (NEV) in Shanghai, which clarifies that starting from the release date of the circular and until December 31, 2024, individual users who meet the relevant requirements may apply for special license plate quotas for NEV.

Source:Shanghai Municipal People's Government

One Week in Shanghai

【Latest News】 

1. Shanghai Launches 10-Billion-Yuan Fund for Future Industries

【Keywords:Future Industries; Fund】

At the opening ceremony of the 2024 Pujiang Innovation Forum on September 7, Shanghai announced the inception of a 10-billion-yuan fund for future industries. The fund aims to bolster the confidence of early tech investors and push for the translation of innovative tech achievements into new quality productive forces. 

Source:International Services Shanghai

2. L+SNOW Indoor Skiing Theme Resort Opens in Shanghai 

【Keywords:  L+SNOW Indoor Skiing Theme Resort】

The Shanghai L+SNOW Indoor Skiing Theme Resort officially opened on September 6, 2024. It has been certified by the Guinness World Records as the world's largest indoor ski facility and has become a new landmark of cultural tourism in Shanghai. 

Source:International Services Shanghai 

【Forum & Exhibition】 

1. 4th Shanghai Talent+ Global Innovation & Entrepreneurship Summit to Open 

【Keywords: Global Innovation & Entrepreneurship Summit】

The 4th Shanghai Talent+ Global Innovation and Entrepreneurship Summit will be held on September 20, 2024. The summit will be highlighted by three brand activities of "Event Month", "Summit Day" and "Entrepreneurship Week". Focusing on four themes including “gather, spark, connect and embrace”, it features five series of talent events, namely gathering talents, innovation and entrepreneurship, competitions, cutting-edge technology sharing, and talent policy briefings, in an effort to create an annual innovation & entrepreneurship gala with global influence.

Source:International Services Shanghai 

【Competitive Event】

1. 2024 Shanghai International Innovation & Entrepreneurship Competition Opens

【Keywords: Startup in Shanghai】

The 2024 "Startup in Shanghai" International Innovation & Entrepreneurship Competition, organized by the Shanghai Municipal Commission of Science and Technology, is about to open for registration. The competition consists of two categories: professional competition for high-quality industrial development, and special competition for future industries. In the preliminary stage, semi-finals and finals, monetary awards and policy support will be granted.

Source:Shanghai Municipal Commission of Science and Technology

【Culture & Art】

1. "Rodin: The Inheritance of Modern Sculpture" to Open in Late September

【Keywords: Rodin】

France's Musée Rodin, or the Rodin Art and Culture Development Center of Pudong New Area in English, is scheduled to open at the former site of the 2010 World Expo's French Pavilion. In celebration of the new center, an exhibition Rodin: The Inheritance of Modern Sculpture will debut on September 28, bringing together 106 works of sculpture, painting, ceramics, and video & image. All exhibits are authentic, including national treasures from the Rodin Museum in France.

Source:Pudong Release

2. 2024 Shanghai Jinshan City Beach Fireworks Festival to Be Held

【Keywords: Jinshan City Beach Fireworks Festival】

The 2024 Shanghai Jinshan City Beach Fireworks Festival will be held on October 4 and 6. In addition to immersive fireworks display and Chinese cartoons, spectators can also enjoy a series of water and beach entertainment activities on the water carting circuits at the beach. 

Source: Jinshan Communication

【Corporate Activities】

1. Schneider Electric Launches Second Phase of Jinshan Laboratory Park Project

【Keywords: Schneider】

Schneider Electric launched on September 10 the second phase of its Jinshan Innovation Laboratory Park project. It is not only an important move for Schneider Electric to deepen the layout of the "China Center" and consolidate its local R&D capabilities, but also a milestone in Schneider Electric's R&D history in China. Schneider Electric's innovation and experimentation demonstration center for a new type of power system was also unveiled at the park, and will be tasked with providing technical support for the high-quality development of the new power system.

Source:International Services Shanghai

2. ZF's Asia-Pacific HQ for Passive Safety Systems Opens

【Keywords: ZF】

The ZF's Asia-Pacific Headquarters (HQ) for Passive Safety Systems, located at 4268 Bao'an Highway in Anting Town, was recently put into use. Covering a total floor area of more than 19,000 square meters and housing multiple departments such as R&D, sales, quality, project, procurement, and finance, the building aims to provide services and support for ZF's Asia Pacific and global businesses. It will also accommodate a 3,500-square-meter laboratory in the future.

Source:Shanghai Jiading

Q&A

Q1: Officials with the Ministry of Commerce (MOFCOM) answered questions at a press conference held by the State Council Information Office to introduce the Guidelines on Promoting the High-quality Development of Trade in Services with High-standard Opening-up. In recent years, China has accelerated opening-up in the service sector. The policy paper has made special arrangements for Promoting Institutional Opening-up of Trade in Services. In which aspects will institutional opening-up be promoted?

A1: We are promoting high-standard institutional opening-up. We continue to shorten the negative list for foreign investment, publish and implement the negative list for cross-border trade in services in Hainan Free Trade Port and pilot free trade zones, as well as the national negative list for cross-border trade in services, and push for relaxing market access restrictions in the service sector. We make commitments for high-standard opening-up in free trade agreements, accelerate negotiations on negative lists for trade in services and investment, and improve the level of liberalization and facilitation of trade in services.

We have built a high-quality open platform. We have been aligned to international high-standard economic and trade rules, and carried out pilot projects in five free trade zones such as Beijing and the Hainan Free Trade Port. We have promoted the comprehensive pilot demonstration of expanding opening up of the service industry, deepened innovation-driven development of trade in services, and produced a large amount of achievements in reform and opening up in the service sector.

We have adopted high standards to optimize the development environment. The State Council has issued a spate of policy documents on attracting and utilizing foreign investment, and on pushing for high-quality development of service consumption and service trade. A series of supporting policies have been introduced to create favorable business environment that upholds market principles and the rule of law and lives up to international standards.

The Opinions document proposes to promote the institutional opening-up of trade in services. The Ministry of Commerce will increase efforts in the following aspects:

First, we will improve abilities in managing the negative lists. We will fully implement the negative list for cross-border trade in services, establish and improve the negative list management system, strengthen the connection between various administrative approvals, licenses, filings and other matters and the negative list, and promptly adjust the laws, regulations and normative documents that are inconsistent with the negative list, and enhance the open supervision capabilities, risk prevention and control capabilities and rule innovation capabilities.

Second, we will give full play to the leading role of the opening-up platform. We will expand independent opening-up, explore the "top-down" and "bottom-up" pathways, give full play to the opening-up and pressure-testing roles of the free trade zones and Hainan Free Trade Port, and advance the gradual opening-up of cross-border service trade across the country. We will accelerate construction of the National Demonstration Zone for Innovation and Development of Trade in Services, and create a comprehensive reform and opening-up platform for trade in services and a highland for high-quality development. 

Third, we will strengthen rule alignment and regulatory coordination. We will implement the commitments and related rules in regional economic and trade arrangements such as the Regional Comprehensive Economic Partnership (RCEP), align with international high-standard economic and trade rules such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and deepen reforms in the domestic trade in services sector. With reference to the World Trade Organization's Reference Document on Domestic Regulation of Trade in Services, we will standardize licensing, qualifications and technical standards in the service sector, simplify licensing and approval procedures, and reduce the cost of cross-border trade in services.

Fourth, we will improve the level of standardization of trade in services. We will enforce the National Standardization Development Outline, implement the action plan for trade in services standardization, and accelerate the formulation of standards in the field of trade in services. We will carry out the internationalization of trade in services standards and encourage the adoption of international standards in eligible fields.

Source: State Council Information Office

Expert Perspective 

China FDI Review: Regulatory Updates of FDI in Modern Service

By: Zhao Yifan, Zhang Ziwei (ALLBright Law Offices)

China's modern service sector has maintained a high speed of development with a more diversified trending on many aspects. In this regard, new policies have been introduced to encourage foreign investment in emerging modern service such as in telecommunication area (e.g. IDC, CDN, ISP, VPN, etc.), facilitation of cross-border data flows, medicine and healthcare (e.g. stem cell clinical trials, foreign clinics, and gene diagnosis and treatment technologies), culture and entertainment (e.g. establishment of commercial performance venues, commercial performance intermediaries, entertainment venues, and participation of foreign art performance groups or individuals in commercial performances). This article presents you the regulatory updates over foreign direct investment in China’s modern service sector from the perspective of recent developments of Chinese laws, regulations, and free trade zone ("FTZ") policies.

I. Regulatory Framework of Foreign Investment in the Modern Service Sector

Since the implementation of the Foreign Investment Law (the "Foreign Investment Law") on 1 January 2020, the regulatory framework has become Foreign Investment Law and the Implementation Regulations for the Foreign Investment Law (the "Implementation Regulations of the Investment Law") together with the management system of "pre-establishment national treatment and a negative list approach" for foreign investment. Foreign-invested enterprises are subject to the same regulations as domestic enterprises, including the Company Law (the "Company Law") and the Partnership Enterprise Law (the "Partnership Enterprise Law"). As the five-year transition period under the Foreign Investment Law will soon expire on 1 January 2025, the previously well-known "Three Foreign Investment Laws" namely, "the Law on Wholly Foreign-Owned Enterprises", "the Law on Sino-Foreign Equity Joint Ventures", and "the Law on Sino-Foreign Cooperative Joint Ventures" will end their mission. 

Being a general approach adopted by China for its opening-up strategy, experiential pilots and FTZs apply less regulations than the nationwide laws for FDI entry in the modern service sector, including adjustments to relevant regulations and the Special Administrative Measures (Negative List) for Foreign Investment Access （2021） (the "Negative List"). The benefited sectors are finance, healthcare, tourism, and telecommunications within the modern service sector. Foreign investors are permitted to use proper forms to invest, establish institutions or engage in relevant businesses.