Issue 68

Shanghai Weekly Bulletin

No.1, November 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.

Catalogue

【National】

・China Expands Visa-free Policy to Another Nine Countries

・China Issues Document to Promote Institutional Opening-up Measures in FTZs

・China Revises Rules for Foreign Strategic Investment in Listed Companies

・China Issues Regulations for Customs Taxation on Imports and Exports

【Shanghai】

・Shanghai Issues Guidelines for Handling Matters Related to the Negative List

・Shanghai Introduces Measures to Support Financing for SMEs

・Huangpu Issues Policy Document for Equity Investment by MNCs

【Latest News】

・E-port Visa Pilot Program Expands to Entire Pudong New Area

・China's First Standards for Humanoid Robots and Embodied AI Unveiled

・Handbook International Services Shanghai Available in Spanish and Korean

【Culture & Art】

・11th West Bund Art & Design to Be Held

・Fabulous Original Musicals to Be Staged in Shanghai

・Chinese Original Musical The Legend of 1900 to Be Premiered

【Corporate Activities】

・IFF Establishes Innovation Center in Hongqiao Linkong Business Park

・Officials with the Ministry of Commerce (MOFCOM) answered press questions at a special press conference on the replication and promotion of institutional opening-up measures of Pilot free trade zones in alignment with international high standards. According to the Circular on the Replication and Promotion of Institutional Opening-up Measures of Pilot Free Trade Zones in More Regions in Alignment with International High Standards, pilot FTZs have carried out a number of pioneering and trailblazing institutional innovations. Can you give us a detailed introduction to the achievements, experiences and typical cases?

 

・MIIT's No. 107 Document Brings New Opportunities to FIEs in China

Laws and Regulations

【National】

1. China Expands Visa-free Policy to Another Nine Countries

【Keyword: Visa-free Entry】

To further facilitate people-to-people exchanges with foreign countries, China has decided to apply visa-free policy to more countries. From November 8, 2024 to December 31, 2025, the visa-free policy will be implemented on a trial basis for citizens holding ordinary passports from Slovakia, Norway, Finland, Denmark, Iceland, Andorra, Monaco, Liechtenstein and Republic of Korea. Ordinary passport holders from these nine countries will be exempt from visas to enter China and can stay for no more than 15 days for business, tourism, family visits and transit purposes. Those who do not meet the visa exemption requirements still need to apply for a visa to China before entering the country.

Source: Website of the Chinese Government

 

2. China Issues Document to Promote Institutional Opening-up Measures in FTZs

【Keyword: Pilot FTZs】

The State Council recently issued the Circular on the Replication and Scaling up of Institutional Opening-up Measures of Pilot Free Trade Zones in More Regions in Alignment with International High Standards, calling for actively aligning with high-standard international economic and trade rules, expanding institutional opening-up with regard to rules, regulations, management and standards, and building institutional systems and regulatory models in alignment with high-standard international economic and trade rules on a large-scale. The document puts forward 30 pilot measures, including 17 to be scaled up in all FTZs, and 13 across the country.

Source: Website of the Chinese Government

 

3. China Revises Rules for Foreign Strategic Investment in Listed Companies

【Keywords: Foreign Investment; Listed Companies】

The Ministry of Commerce (MOFCOM), together with other five government departments, released on November 1, 2024 the revised Rules for Foreign Strategic Investment in Listed Companies, which ease requirements for foreign investment in listed companies, including allowing foreign individuals to invest strategically in listed companies, lowering the asset threshold for foreign investors, adding tender offer as an approved investment method, allowing foreign investors intending to invest through private placement or tender offer to use shares of non-listed overseas companies as consideration shares for acquisition payment, and appropriately lowering the requirements for the shareholding ratio and the lock-up period. The rules will take effect on December 2, 2024.

Source: MOFCOM

 

4. China Issues Regulations for Customs Taxation on Imports and Exports

【Keywords: Imports and Exports; Taxation】

The Regulations of the People's Republic of China for Customs Taxation on Imports and Exports were released on October 28, 2024. According to the regulations, the tariff rates for imports and exports shall be determined in accordance with the provisions of the Tariff Law of the People's Republic of China on the most-favored-nation (MFN) rates, contractual tariff rates, preferential tariff rates, normal tariff rates, export tariff rates, tariff quota (TRQ) rates, or provisional tariff rates. The regulations will take effect on December 1, 2024.

Source: General Administration of Customs

 

【Shanghai】

1. Shanghai Issues Guidelines for Handling Matters Related to the Negative List

【Keywords: Foreign Investment Access; Negative List】

Shanghai Municipal Development and Reform Commission, together with Shanghai Municipal Commission of Commerce and other departments of the city, recently prepared the Guidelines for Handling Matters Related to the Administration of the Negative List for Foreign Investment Access. The document removes two restrictions on foreign investment access, including that Chinese entities are required to hold a controlling interest in the printing of publications, and that foreign investment is prohibited in the application of certain processing techniques – such as steaming, frying, roasting and calcination of Chinese herbal slices – and in the production of confidential formulations for traditional Chinese patent medicines.

Source: International Services Shanghai

 

2. Shanghai Introduces Measures to Support Financing for SMEs

【Keywords: SMEs; Financing】

The General Office of Shanghai Municipal People's Government issued on October 28, 2024 the Several Measures on Strengthening Financing Support for Small and Medium-sized Enterprises (SMEs) in the City. The document proposes measures such as extending loan renewal policies to cover all SMEs, which means companies can get loans even if they have trouble to pay the principal, giving full play to the guiding role of the central bank's policy tools, and establishing a coordination mechanism to support financing for micro and small businesses.

Source: International Services Shanghai

 

3. Huangpu Issues Policy Document for Equity Investment by MNCs

【Keywords: MNCs; Equity Investment】

The Implementation Opinions on Promoting High-quality Development of Equity Investment by Multinational Corporations (MNCs) in Huangpu District (for Trial Implementation) were issued on October 25, 2024. The document encourages MNCs to conduct equity investment directly or through the Qualified Foreign Limited Partner (QFLP) program, by establishing equity investment institutions or holding registered fund shares.

Source: People's Government of Huangpu District, Shanghai

 

One Week in Shanghai

【Latest News】

1. E-port Visa Pilot Program Expands to Entire Pudong New Area

【Keyword: E-port Visa】

The e-port visa pilot program has been expanded to the entire Pudong New Area from the Lingang Special Area of China (Shanghai) Pilot Free Trade Zone. Foreigners who are invited to Shanghai by enterprises in Pudong New Area and meet the requirements for applying for port visas can apply for F (visit), M (trade), R (talent), Z (work) and S2 (private affairs) e-port visas and enter the country through ports of entry in Shanghai.

Source: International Services Shanghai

 

2. China's First Standards for Humanoid Robots and Embodied AI Unveiled

【Keywords: Humanoid Robot; Embodied AI】

The National and Local Co-built Humanoid Robotics Innovation Center, together with leading companies and institutions in the industry, released the first batch of standards for humanoid robots and embodied AI in the "Model Magic Community", a hub in Pudong that aims at attracting and supporting AI companies specializing in large models. The standards include the Guidelines for the Classification and Grading of Humanoid Robots and the Guidelines for the Grading of Development Stages of Embodied AI.

Source: Pudong Release

 

3. Handbook International Services Shanghai Available in Spanish and Korean

【Keyword: International Services Shanghai】

The Foreign Affairs Office of the Shanghai Municipal People's Government released on October 30, 2024 the handbook International Services Shanghai in Spanish (https: //spanish.shanghai.gov.cn/sp-shanghai/e-book.html) and in Korean (https: //korean.shanghai.gov.cn/ko-shanghai/e-book.html).

Source: Foreign Affairs Office of the Shanghai Municipal People's Government

 

【Culture & Art】

1.11th West Bund Art & Design to Be Held

【Keyword: West Bund Art & Design】

The 11th West Bund Art & Design will take place at the West Bund on November 8-10, 2024. A total of 121 galleries from 23 countries and regions and 49 cities, along with art institutions and partners, will present high-quality works of art to the global art market.

Source: West Bund Art & Design

 

2. Fabulous Original Musicals to Be Staged in Shanghai

【Keyword: Musicals】

A slew of original musicals is going to be staged in Shanghai. The original musical SIX, which is coming to Shanghai for the first time, is sold out every time when tickets are made available. Two German musicals will meet the audience in Shanghai for the first time in the form of staged concert, and Cats and Notre Dame de Paris will also be staged in Shanghai after the New Year's Day.

Source: Shanghai Tourism

 

3. Chinese Original Musical The Legend of 1900 to Be Premiered

【Keyword: The Legend of 1900】

From November 26 to December 15, the Chinese original musical "The Legend of 1900" will kick off its national premiere at the Shanghai Grand Theater. The musical is based on the novel of the same name by Italian novelist Alessandro Baricco, telling the legendary story of the piano genius "1900" who drifted on the sea all his life and never set foot on land.

Source: Shanghai Huangpu

 

【Corporate Activities】

1. IFF Establishes Innovation Center in Hongqiao Linkong Business Park

【 Keyword: IFF】

International Flavors & Fragrances Inc. (IFF), a global leader in food, beverages, biosciences and scents, recently inaugurated its Shanghai Creative Center in the Hongqiao Linkong Business Park. The facility spans 16,000 square meters and is IFF's largest R&D center in Asia. The new center will further consolidate IFF's position at the forefront of fragrances, flavors, functional ingredients, and biosciences.

Source: Shanghai Changning

 

Q&A

1: Officials with the Ministry of Commerce (MOFCOM) answered press questions at a special press conference on the replication and promotion of institutional opening-up measures of Pilot free trade zones in alignment with international high standards. According to the Circular on the Replication and Promotion of Institutional Opening-up Measures of Pilot Free Trade Zones in More Regions in Alignment with International High Standards, pilot FTZs have carried out a number of pioneering and trailblazing institutional innovations. Can you give us a detailed introduction to the achievements, experiences and typical cases?

A:After the issuance in June 2023 of the Several Measures on Piloting the Integration of International High Standards at Qualified Pilot Free Trade Zones and Free Trade Ports to Promote Institutional Opening-up, the MOFCOM has established a cross-departmental and cross-regional working mechanism to push for the implementation of the initiative. Relevant departments issued opinions, detailed rules and guidelines. The six pilot regions also formulated detailed plans and carried out differentiated explorations based on their actual conditions to jointly ensure that the pilot was fully implemented, achieved practical results, and benefited business entities. The following is an introduction to the achievements and experiences from four aspects.

Firstly, we have carried out a number of "first-time and first-trial" system innovations. We are the first to relax rules on the import of 62 remanufactured products, such as reciprocating piston engines. The first order in China has been placed in Shanghai, reducing cost by 40% for the buyer. We are the first to implement the system of extension upon application for advance ruling, effectively improving the predictability of trade. We are the first to give up the compulsory product certification for information technology equipment, allowing the use of self-declaration as a guarantee that imported products comply with electromagnetic compatibility standards. The first certificate in China has been issued and has taken effect.

Secondly, we have launched a number of "market connection" measures. To support overseas professionals to provide services in China, the six pilot regions have issued lists of overseas professional qualifications recognition and expanded the scope of recognition. To facilitate foreign personnel to work and live in China, we would issue visas of up to two years to foreign executives planning to set up companies in the pilot areas and their accompanying family members. The accompanying spouses and family members of experts at foreign-funded enterprises will be allowed to enjoy the same stay and residence period as the experts. In accordance with the principle of consistency between internal and external affairs, applications for new financial services from foreign-funded financial institutions will be approved, and decisions on relevant service applications submitted by overseas financial institutions will be made within 120 days.

Thirdly, we plan to introduce some "cost reduction and efficiency improvement" policies to benefit enterprises. For goods that are imported into China for exhibition or display purposes, customs duties and import-related taxes will not be imposed for the time being. Specific words are allowed to be marked on the labels of imported wines, and more than 100 batches of wines with descriptive words like "collection" and "classic" have been imported. For certain imported air express goods, customs clearance can be completed within six hours, and for general goods, customs clearance can be completed within 48 hours, and customs clearance efficiency has been continuously improved.

Fourthly, we will present a couple of "efficient and transparent" management practices. Typical cases of online consumer rights protection will be released to explore how to address consumer risks that may exist in new business formats and models. When announcing the results of single-source government procurement projects, we would explain the reasons for adopting this approach to further enhance transparency. We support enterprises to align with international standards and guidelines and establish a voluntary mechanism to improve environmental performance. We would promote the pilot program of publishing arbitration awards, and provide and disclose arbitration awards of labor and personnel disputes to related parties.

Source: MOFCOM

 

Expert Perspective

MIIT's No. 107 Document Brings New Opportunities to FIEs in China

By: Chen Jihong, Sun Ruxi (Zhong Lun Law Firm)

[Continuing from the Last Issue]

II. Application Process and Conditions for Opening Value-added Telecommunications Services

The opening of China's telecommunications business to foreign investors is basically based on China's commitments to the WTO. At the same time, further opening-up is carried out on a small scale through mechanisms such as the Agreement on Trade in Services under the Closer Economic Partnership Arrangement Between the Chinese Mainland and Hong Kong/Macao (CEPA) and the Special Administrative Measures for Foreign Investment Access in Free Trade Zones (Negative List). As of the end of June 2023, there were 151,481 licensed companies engaged in value-added telecommunications business in China, and 32,509 were cross-regional enterprises licensed by the Ministry of Industry and Information Technology, and 1,448 are controlled by foreign investors, accounting for 4.45% of the total number of business operators. More than 80 foreign-invested enterprises have obtained licenses (pilot approval) in the Shanghai Free Trade Zone and the Hainan Free Trade Port.

However, except for CEPA and Hainan Free Trade Port, key value-added telecommunications services such as IDC, cloud services (IRCS), and CDN have not been opened to foreign investment. The Circular of the Ministry of Industry and Information Technology on the Pilot Program of Expanding the Opening-up of Value-added Telecommunications Services has brought new opportunities for foreign companies to carry out related telecommunications business in China.

(1) Businesses permissible under the circular

* The circular does not lift foreign equity ratio restrictions on all ICP businesses. The following businesses are not within the scope of opening-up:

Information search and query services (such as search engines like Baidu, Bing, and Google);

Information community platform services (such as social media platforms like Weibo and Douban);

Instant messaging services (such as chat software like WeChat, Feishu, and QQ);

Information publishing platforms and delivery services involving Internet news information, online publishing, online audio-visual programs, and Internet cultural business operations (such as online news platforms, online video and music platforms, online game platforms, etc.)

[To be continued]