Issue 73

Shanghai Weekly Bulletin

No.2, December 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 Rules for the Levy of Duties, VAT and Consumption Tax on Inbound Articles

【Keywords: Inbound Articles; Tax】

The Customs Tariff Commission of the State Council recently issued the Measures for the Levy of Duties, Value-added Tax (VAT) and Consumption Tax on Inbound Articles. According to the document, personal belongings obtained overseas and carried by Chinese residents with a total value of no greater than 5,000 yuan, as well as personal belongings carried by non-Chinese residents and intended to remain in the Chinese territory with a total value of no greater than 2,000 yuan, are entitled to a tax-free customs clearance. The document took effect on December 1, 2024.

Source: Website of the Chinese Government

2. China Issues Document to Expand the Opening-up in the Healthcare Sector

【Keyword: Wholly Foreign-owned Hospitals】

The National Health Commission (NHC) and other three governmental departments recently issued the Action Plan for Expanding the Opening-up in the Field of Wholly Foreign-owned Hospitals on a Pilot Basis. The document specifies the requirements for the establishment of wholly foreign-owned hospitals, and calls for localities to ensure the implementation.

Source: NHC

3. China Issues Document for the High-quality Development of Wholesale and Retail

【Keyword: Wholesale and Retail Sector】

The Ministry of Commerce (MOFCOM) and other eight governmental departments recently issued the Action Plan on Improving the Modern Commercial Distribution System to Promote the High-Quality Development of the Wholesale and Retail Sector. The document calls for efforts to strengthen the application of new technologies such as the Internet of Things, big data, and artificial intelligence, improve the urban and rural distribution networks, and promote innovation and transformation. It also proposes to optimize the distribution mode, integrate the domestic and international markets, enhance the digital, intelligent and green development, and build a modern commercial distribution network.

Source: MOFCOM

【Shanghai】

1. Yangtze River Delta Issues Document for Further Decline in Logistics Costs

【Keywords: Yangtze River Delta; Logistics】

The Yangtze River Delta Regional Cooperation Office and the development and reform commissions of Shanghai, Jiangsu, Zhejiang and Anhui have jointly issued the Action Plan on Improving the Quality, Efficiency and Reducing Costs of Logistics in the Yangtze River Delta Region. The document outlines 37 measures in seven aspects, including promoting the interconnection of regional logistics infrastructure, coordinating regional logistics and transport modes, making breakthroughs in scientific and technological innovation for regional logistics, and integrating the development of industrial and supply chains.

Source: Shanghai Municipal Development and Reform Commission

2. Shanghai's Legislature Adopts China’s First Local Rules for Commercial Mediation

【Keyword: Commercial Mediation】

The Provisions of Shanghai on Promoting Commercial Mediation in Pudong New Area, which were recently unveiled, clarify that a foreign commercial mediation organization that has been registered at the judicial administrative department in Shanghai and has been filed with the judicial administrative department under the State Council can now set up operations in the Lin-gang Special Area of the China (Shanghai) Pilot Free Trade Zone and provide foreign-related commercial mediation services with respect to international disputes provided that it was legally incorporated abroad and has been existing for more than five years, that it conducts commercial mediation business substantially and enjoys a high international reputation, and that the heads of its business entities have never been given criminal penalties for intentional crimes. The document took effect on December 1, 2024.

Source: International Services Shanghai

3. Shanghai Introduces China's First Local Rules to Regulate Bonded Maintenance

【Keyword: Bonded Maintenance】

The Provisions of Shanghai on Promoting the Development of Bonded Maintenance in Pudong New Area were recently unveiled. According to the document, a qualified enterprise within special customs supervision areas may conduct bonded maintenance of products covered by the Catalog of Products for Maintenance and Repair in Comprehensive Bonded Zones, or beyond the Catalog if it conducts bonded maintenance of self-produced products for domestic sales within their own group and returns the repaired products to China. The document will take effect on January 1, 2025.

Source: International Services Shanghai

4. Pudong Issues Document for the Development of International Economic Organizations

【Keyword: International Economic Entities】

The Provisions for Promoting the Development of International Economic Organizations in Pudong New Area were recently unveiled. The document stresses the need to create an environment conducive to the clustering of international economic entities, supporting the entities in holding international conferences, trainings and other activities. The document will take effect on January 1, 2025 and remain valid until December 31, 2029.

Source: People’s Government of Pudong New Area

One Week in Shanghai

【Latest News】

1. "Shanghai, My City" Short Video Showcase Kicks off

【Keyword: Short Video】

The "Shanghai, My City" short video exhibition was launched on December 5, 2024. Over the past nine months, expats living in Shanghai have submitted their works, using their cameras to record the wonderful moments of their work, study and life in Shanghai. Some 40 excellent short videos were selected from more than 200 submissions for the showcase.

Source: Foreign Affairs Office of Shanghai Municipal People’s Government

2. Service Platform for Enterprises in Hongqiao International CBD Launched

【Keyword: Hongqiao International CBD】

A new service platform tailored to enterprises in the Shanghai Hongqiao International Central Business District (CBD) was launched on the Government Online-Offline Shanghai, a one-stop government service portal. It covers several sections focusing on services, policies, functionalities, and government-business interaction. It aims to provide enterprises with government services, cross-regional services, and an introduction of the CBD’s positions.

Source: International Services Shanghai

【Forum & Exhibition】

1. 21st Shanghai International Intellectual Property Forum Opens

【Keyword: Shanghai International Intellectual Property Forum】

The 21st Shanghai International Intellectual Property Forum under the theme of "Intellectual Property Empowers the Development of New Quality Productive Forces" opened on December 4, 2024. Chinese and foreign guests exchanged views on topics such as "Intellectual Property Services Bolster New Quality Productive Forces", "High-value Patent Operation and the Development of New Quality Productive Forces", "Strengthen Legal Protection of Intellectual Property to Serve the Development of New Quality Productive Forces", and "Promote the Development of New Quality Productive Forces with Open Licensing".

Source: Shanghai Release

2. 2024 Innovation Conference Opens in Shanghai

【Keyword: Innovation Conference】

The 2024 Innovation Conference, co-organized by China Media Group and Shanghai Municipal People's Government, was held in Shanghai on December 5 under the theme of "Innovation Drives the Future of New Quality Productive Forces". Experts and scholars from well-known universities and research institutions, as well as executives of tech companies and financial institutions discussed the prospects of industries such as AI and biomedicine, and contributed wisdom about how to accelerate the development of new quality productive forces.

Source: CCTV News

【Competitive Event】

1. 2024 WDSF DanceSport GrandSlam Latin & Standard to Be Held in Shanghai

【Keyword: 2024 WDSF Grand Slam Final】

The 2024 WDSF DanceSport GrandSlam Latin & Standard and the 10th China Sports Dance Elite Competition will be held at the Luwan Sports Center on December 14-15. The GrandSlam Final will unite the world’s top 12 Standard and Latin couples for a dazzling display of dance mastery.

Source: Shanghai Huangpu

【Culture & Art】

1. Shanghai Museum East Opens on Full Capacity

【Keyword: Shanghai Museum East】

The Shanghai Museum East recently opened on full capacity. The museum, which took more than seven years to build, has a total building area of nearly 120,000 square meters and 20 exhibition halls and interactive experience spaces. It exhibits more than 15,000 cultural relics. The new museum is expected to receive more than six million visitors annually.

Source: Shanghai Release

2. Special Exhibition Titled William Morris & British Arts and Crafts Movement to Open

【Keyword: William Morris】

A special exhibition titled An Encounter with Beauty — William Morris & British Arts and Crafts Movement will be open to the public free of charge from December 13, 2024 until April 6, 2025. The exhibition features 123 pieces (sets) of treasures from the V&A Museum that are closely related to the British Arts and Crafts Movement. From graphic patterns to textiles, from interior furniture decorations to architectural exteriors, to exquisite book designs, the entire series showcases William Morris' design philosophy of "creating beautiful and practical objects for the public."

Source: World Expo Museum

【Corporate Activities】

1. Nippon Paint Settles China Headquarters and New Building Materials Packaging Base in Pudong

【Keyword: Nippon Paint】

The groundbreaking ceremony for Nippon Paint's China Headquarters and New Building Materials Packaging Base was recently held in Pudong New Area, Shanghai. The new headquarters will assume more management functions for Nippon Paint's China and Asia-Pacific operations. Together with Nippon Paint's Asia-Pacific R&D and Innovation Center, they will play a strong headquarters role, oversee Nippon Paint's overall operations in China, and become a high-capacity regional headquarters in the Asia-Pacific region.

Source: Pudong Release

Q&A

1: Officials with the Shanghai Municipal Government answered questions at a press conference on the theme of "Promoting High-quality Development" — How can Shanghai play a leading role and empower the integrated development of the Yangtze River Delta through the construction of the "five centers"?

A：From the perspective of building an international economic center, in the first three quarters of this year, Shanghai's GDP rose 4.7% year on year to RMB 3.43 trillion. Fund of Funds (FOFs) for three leading industries and a future industry fund with a total scale of RMB 100 billion have been put into operation. In the latest 2024 GaWC global city rankings, Shanghai is in the sixth place. From the perspective of building an international financial center, the total amount of financial market transactions exceeded RMB 2,633 trillion in the first three quarters of this year, and the added value of the financial sector accounted for 19.2% of GDP. Shanghai is home to 15 national financial factor markets such as securities, futures, and precious metals. In the 36th Global Financial Center Index Report (GFCI 36), Shanghai remained in the top ten worldwide. From the perspective of building an international trade center, in the first three quarters of this year, the total cargo trade value of Shanghai Port reached RMB 8.1 trillion, accounting for 25.2% of the country. Shanghai has added 47 new regional headquarters of multinational corporations, and the cumulative number of certified regional headquarters of multinational corporations has exceeded 1,000. From the perspective of building an international shipping center, the container throughput of Shanghai Port has reached 39.1 million TEUs in the first three quarters of this year, an increase of 8% year-on-year. Total container throughput is expected to top 50 million TEUs for the whole year. The flight volume, passenger throughput, and cargo and mail throughput of Shanghai's two airports have all returned to the levels of 2019. In the Xinhua-Baltic Shipping Center Index, Shanghai ranked third in the world for four consecutive years. From the perspective of building an international tech innovation center, Shanghai has gathered more than 80 national research platforms and more than 24,000 high-tech enterprises. The total number of valid invention patents has reached 241,400, a year-on-year increase of 19.5%. The number of high-value invention patents per 10,000 people has reached 50.2, an increase of 22.7%. In the 2024 Global Innovation Index (GII) ranking of the top 100 global sci-tech clusters, the Shanghai-Suzhou cluster ranks fifth in the world.

Accelerating the construction of Shanghai's "five centers" and strengthening the "four functions" of global resource allocation, sci-tech innovation, high-end industry leadership and open hub requires strong support from the Yangtze River Delta and will in return further empower the integrated development of the Yangtze River Delta. In the next stage, Shanghai will leverage its advantages as a concentrated carrier of national strategies and work closely with Jiangsu, Zhejiang and Anhui to advance integrated development of the Yangtze River Delta.

First, we will further enhance our service capabilities and spearhead regional development. By adopting a comprehensive planning for the region and promoting coordinated progress, we will focus on breakthroughs in key areas and leverage these successes to drive overall improvement. We will continue to enhance our city's capacity and core competitiveness, capitalize on the advantages of our factor markets and functional platforms in Shanghai, introduce more innovative reforms and leading opening-up measures, and drive higher-quality integrated development in the Yangtze River Delta region.

Second, we will further build a strategic link between domestic and international dual circulation. We will strive to expand the coverage of the Hongqiao International Open Hub, amplify the spillover effect of the China International Import Expo, push for higher-level opening up of the Lingang Special Area, accelerate construction of the Oriental International Business Cooperation Zone, speed up construction of the international sea and air hub, and build a modern transport system.

Third, we will play leading, demonstrative and coordinated roles. In critical and strategic areas, we will lead to make breakthroughs in key technologies, deepen interdisciplinary basic research and integration, and promote the open competition mechanism to select the best candidates to undertake key research projects. We will cultivate and upgrade industrial clusters of integrated circuits, new energy vehicles, biomedicine and other advanced manufacturing sectors, and advance the construction of an integrated regional market.

Source: Shanghai Release

Expert Perspective

A Brief Comment on the Revisions to the Measures for the Administration of Strategic Investment Made by Foreign Investors in Listed Companies

By Guo Kejun, Wei Haitao, Miao Yuqian, Ding Wei (Zhong Lun Law Firm)

[Continuing from the Last Issue]

I Highlights of the Revised Measures

(3) Ease Restrictions on Cross-border Stock Swap Transactions

When foreign investors make strategic investment in Chinese listed companies through private placement or tender offer, in addition to the means of cash payment to the listed companies and shareholders accepting the tender offer, they can also pay with equities of overseas companies, including: (1) Foreign investors can use their equities in an overseas company to subscribe for newly issued shares of a Chinese listed company; (2) An overseas company issues new shares to Chinese shareholders of a listed company in exchange for their equities in the company; (3) Foreign investors use their equities in an overseas company to acquire old shares held by Chinese shareholders of a listed company; (4) An overseas company issues new shares to subscribe for newly issued shares of a Chinese listed company. These methods are collectively referred to as "cross-border equity swaps".

In order to attract foreign investors to make strategic investment in listed companies by using a combination of cash, equity and other methods, the revised regulation allows for cross-border share swaps using the equity of non-listed foreign companies in strategic investments implemented by private placements and tender offers. It should be noted that if the strategic investment is implemented by share transfer agreement, the overseas company should still be a listed company.

[To be Continued]