Issue 76

Shanghai Weekly Bulletin

No.5, 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 Adopts VAT Law 

【Keyword: VAT】

The Standing Committee of the 14th National People's Congress (NPC) adopted the Value-added Tax (VAT) Law of the People's Republic of China at its 13th session on December 25. The law, encompassing general provisions, tax rates, tax payable, tax incentives, collection management, and supplementary provisions, sets a 3 percent tax rate for simplified VAT calculations and will take effect on January 1, 2026. 

Source: Website of the NPC

2. SPC Replies on Non-retroactive Application of Paragraph 1, Article 88 of the Company Law

【Keywords: Company Law; Non-retroactive Application】

The Supreme People's Court (SPC) released on December 24, 2024 its Reply on the Non-Retroactive Application of Paragraph 1, Article 88 of the Company Law of the People's Republic of China. According to the Reply, Paragraph 1, Article 88 of the Company Law, which took effect on July 1, 2024, only applies to equity transfers occurring after that date, where the capital contribution deadline has not yet passed. For disputes over capital contribution liabilities before July 1, 2024, the people's courts shall handle them fairly and impartially in accordance with the original Company Law and other relevant laws. The Reply took effect on December 24, 2024.

Source: SPC

【Shanghai】

1. Shanghai Releases 2024 Catalogue for the Promotion of Trade in Services

【Keyword: Trade in Services】

Shanghai Municipal Commission of Commerce and other ten municipal departments recently issued the Shanghai Catalogue for the Promotion of Trade in Services (2024 Edition). The Catalogue consists of ten categories, including trade in transportation services, tourism services, telecommunications, computer and information services, engineering contracting and construction services, cultural services, etc.

Source: Shanghai Municipal Commission of Commerce

2. Shanghai Issues Measures for the Maintenance and Management of Port Infrastructures

【Keywords: Ports in Shanghai; Infrastructures】

The General Office of Shanghai Municipal People's Government recently forwarded the Measures for the Maintenance and Management of Shanghai Port Infrastructures. The document, drafted by the Municipal Transportation Commission, clarifies the division of work among competent departments at all levels, highlights the main responsibilities of maintenance units, and details maintenance plans. It also stresses the technical management of special repairs, and the needs for the sound development of the ports. The document will take effect on March 15, 2025 and remain valid until March 14, 2030.

Source:Shanghai Municipal People's Government

One Week in Shanghai

【Latest News】 

1. Number of Inbound and Outbound Visits Through Pudong International Airport Hits 30 Million 

【Keyword: Inbound and Outbound】

As of 8am on December 25, the Shanghai Airport Immigration Inspection Station of the Shanghai General Station of Immigration Inspection processed more than 30 million inbound and outbound visits at the Pudong International Airport, surpassing last year's total by 78% and leading the nation for 22 consecutive years.

Source:Shanghai Release

2. Five-year Achievements of the YRD Eco-green Integrated Demonstration Zone Released

【Keywords: Yangtze River Delta; Eco-green Integration】

Themed on "Promoting High-quality Development", Shanghai held on December 25 a press conference to introduce the achievements of the Yangtze River Delta (YRD) Eco-green Integrated Demonstration Zone in the past five years. Since its inauguration in November 2019, the demonstration zone has produced 154 institutional innovation results, 48 of which have been replicated and promoted nationwide, and a total of 180 key projects have been implemented.

Source:Shanghai Release

3.35 Enterprises Recognized as Trade-focused Headquarters in Shanghai

【Keyword: Trade Headquarters】

On December 20, Shanghai Municipal Commission of Commerce issued the the List of Trade-focused Headquarters Enterprises in 2024, recognizing 35 companies as trade-focused headquarters, including ASML (Shanghai) Mechanical and Electrical Equipment Co., Ltd., Christian Dior Commercial (Shanghai) Co., Ltd. and some other foreign companies.

Source:Shanghai Municipal Commission of Commerce

【Culture & Art】

1.2025 Shanghai Opera House Performance Season to Kick off

【Keyword: Shanghai Opera House】

The 2025 Shanghai Opera House Performance Season was officially launched on December 26, 2024. Under the theme of "Climbing New Art Horizons, Carrying Dreams and Embarking on a New Journey", the new season will bring a series of wonderful performances to the audience through multiple sections such as "Original Works", "International Cooperation", "Chinese and Foreign Classics", "Famous Troupes, Famous Stages, and Famous Artists", and "Art Education", integrating vocal music, instrumental music, dance and other art categories, and working with domestic and foreign artists to cross the boundaries of literature and art and jointly explore the infinite possibilities of 2025.

Source: Shanghai Tourism

2. Special Exhibition Titled "the Rise of Modern Shanghai Seal Carving" Opens

【Keyword: Academic Exhibition of Seal Carving】

Riding the Universe - The Rise of Modern Shanghai Seal Carving and the Academic Exhibition of Seal Carving by Lai Chusheng, Chen Julai and Ye Luyuan opened on December 27 at the first and second exhibition halls of Cheng Shifa Art Museum. It is the first special exhibition of seal carving held by Shanghai Chinese Painting Academy in recent years, presenting five chapters with a total of 264 pieces (sets) of seal carving, calligraphy and painting works and documents. The exhibition will last until April 6, 2025.

Source: Shanghai Chinese Painting Academy

3. "Shanghai: Capital of Photography 1910s - 2020s" Opens 

【Keyword: Photography Exhibition】

A special photography exhibition titled Shanghai: Capital of Photography 1910s - 2020s opened at the Shanghai Minsheng Art Museum on December 25, 2024. The exhibition brings together 268 works by 35 photographers and artists who have lived in Shanghai for a long time, as well as more than 80 pieces/groups of other related documents and exhibits. Starting from the works of photographers and artists such as Ding Song, Lang Jingshan, Tao Lengyue, and Jin Shisheng who were active in Shanghai at the beginning of the last century, the exhibition illustrates the historical changes and development of Shanghai and photography across a century.

Source: Shanghai Minsheng Art Museum

【Corporate Activities】

1. Aspect Capital Announces Its Registration as a Private Fund Manager with AMAC

【Keyword: Aspect Capital】

Aspect Capital, a leading global systematic CTA manager, announced the completion of its registration as a private fund manager with the Asset Management Association of China (AMAC) on December 13, 2024, officially obtaining its license as a private securities investment fund manager in China.

Source: Lujiazui Financial City

2. Tesla's Shanghai Megafactory Nears Completion After Seven Months of Construction

【Keyword: Tesla】

Tesla's Shanghai Megafactory is nearing completion of construction at the end of this year. Construction of the Megafactory is set to take seven months from groundbreaking to completion, which will be faster than the construction of the Giga Shanghai vehicle assembly plant. The energy storage plant is expected to go into production in the first quarter of 2025, and Megapack production would be as high as 10,000 units per year, with nearly 40 GWh of energy storage. The energy storage products will be supplied to the global market. 

Source: Shanghai Lingang

Q&A

Q1:Officials with the Shanghai Municipal People's Government answered questions at a press conference introducing achievements in the past five years during the construction of the Yangtze River Delta (YRD) Eco-green Integrated Demonstration Zone - You have just made detailed introductions about the remarkable achievements in the construction of the demonstration zone over the past five years. Could you introduce us the main areas where we will focus our efforts in the next stage?

A1:Over the past five years, the demonstration zone has carried out a number of groundbreaking tasks and produced positive results.

The current and future period is a critical stage for the demonstration zone to make a leapfrog from morphological development to functional development. In the next stage, the demonstration zone will focus on "six combinations".

First, we must adhere to the combination of institutional innovation and reform authorization to release policy effects. The Office of the Central Leading Group for Regional Coordinated Development, together with relevant state ministries and commissions, has issued two lists of reform authorization items this year, giving us more room for reform. In the next step, we will carry out the reform tasks with a higher level of strategic focus and greater efforts. We must ensure that the authorized items can be "well received and used", and produce more high-quality institutional innovation results. 

Second, we insist on combining project construction with function cultivation to achieve both functions and benefits. Major projects are important carriers for the construction and development of the demonstration zone. As a model area for ecological green functions, the Waterside Living Room is currently planning its functional layout. At the same time, we will coordinate the construction of "three areas", including Qingpu Xicen Sci-tech Innovation Center, Suzhou South Station Innovation City, and Jiashan Xiangfudang Innovation Center, and strengthen policy, fund and land support.

Third, we will adhere to the combination of ecological protection and green development to improve the quality and efficiency of development. On one hand, we will continue to strengthen the joint protection and governance of ecological environment. On the other hand, we will integrate cultural and tourism resources, connect the historical and cultural towns, and accelerate the transformation of ecological and cultural advantages into development advantages.

Fourth, we will adhere to the combination of sci-tech innovation and industrial innovation to reinforce development momentum. The demonstration zone will build a cross-provincial high-tech zone, coordinate the upgrading of traditional industries, the growth of emerging industries and the cultivation of future industries, create "innovation fields" and incubators, and accelerate the cultivation and development of new quality productive forces.

Fifth, we will adhere to the combination of co-construction and sharing and coordinated development to improve people's well-being. Based on the first five batches of public service lists, we will accelerate the improvement of the public service sharing mechanism. We will launch more social security card resident services. In the future, we will explore the joint hosting of regional sports events, cultivate distinctive sports brands, and drive integrated development of culture, sports, commerce and tourism.

Sixth, we will adhere to the combination of an effective market and an effective government and optimize the work mechanism. At this year's Demonstration Zone Developers Conference, a group of leading enterprises and professional institutions joined the "circle of friends" to build the demonstration zone, and a number of development projects have been signed or unveiled. We will continue to work with all parties to introduce more high-quality resources to the demonstration zone and gather momentum for integrated development.

Source:Information Office of Shanghai Municipal People's Government

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

(6) Verification requirements for intermediaries 

The revised document has clarified the responsibility of intermediaries to verify foreign strategic investment. According to Article 8 of the document, when foreign investors make strategic investment, foreign investors and listed companies shall hire financial advisory institutions, sponsors or law firms registered in China in compliance with the Securities Law of the People's Republic of China as consultants. Relevant intermediaries shall perform due diligence obligations and issue explicit opinions, as follows:

Intermediaries should issue reports based on the above verification requirements, express explicit professional opinions on each of the above matters, and make public disclosures. If an intermediary finds that it is not in compliance after due diligence investigation, the securities depository and clearing institution will not handle the relevant procedures, and the China Securities Regulatory Commission may impose penalties on the intermediary for any negligence in accordance with the Securities Law of the People's Republic of China and other regulations. Besides, intermediaries should also specify in the professional opinion the number of shares and shareholding ratio held by foreign investors and their persons acting in concert respectively in the listed company acquired.