Issue 79

Shanghai Weekly Bulletin

No.3, January 2025

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 Pushes for Standard Establishment in Pilot Regions for the Services Sector

【Keyword: Services Sector】

The Ministry of Commerce (MOFCOM) and the State Administration for Market Regulation (SAMR) recently issued the Guidelines on Taking Measures to Support the Establishment of Standards in National Comprehensive Pilot Demonstration Provinces and Cities for the Further Opening-up of the Services Sector and Institutional Opening-up, as well as the List of Standard Formulation, Revision and Related Work Tasks in National Comprehensive Pilot Demonstration Provinces and Cities for Expanding Opening-up of the Services Sector (First Batch). The Guidelines put forward overall requirements and relevant organizational guarantee measures for pilot provinces and cities to carry out standard establishment. The List details the division of work among the pilot provinces and cities, specifically including the formulation and revision of 104 standards and related work tasks, which will be updated from time to time.

Source: SAMR

2. China Regulates Intermediary Services for Corporate Public Offering of Stocks

【Keywords: Intermediary; Public Offering; Stock】

The State Council released on January 10, 2025 the Provisions on Regulating Intermediary Services for Corporate Public Offering of Stocks. With a total of 19 articles, the document mainly clarifies professional standards for intermediaries, principles of intermediary charging, and regulatory measures. It will come into force on February 15, 2025. 

Source: Website of the Chinese Government 

3. China Promotes Market-based Allocation and Best Use of Data Factor

【Keyword: Data Factor】

The National Development and Reform Commission (NDRC) and other five government departments recently issued the Action Plan on Improving Data Circulation Security Governance to Promote Market-based Allocation and Best Use of Data Factor. With respect to data circulation, the document highlights work of seven aspects, including clarifying security rules for enterprise data circulation, strengthening security management of public data circulation, enhancing personal data circulation protection, improving accountability definition mechanism, stepping up application of security technologies, diversifying security service supply, and preventing data abuse risks.

Source: NDRC

【Shanghai】

1. Shanghai Aims High-quality Investment Attraction

【Keyword: Investment Attraction】

The Office of Shanghai Investment Promotion Leading Group issued on January 10, 2025 the Several Measures on Promoting High-quality Investment Attraction. The document proposes 15 measures in four aspects, including stepping up investment promotion efforts in key areas, promoting innovation in investment attraction methods, improving supporting policies, and optimizing service guarantees. It aims to promote integrated development of investment attraction and services and regulate investment attraction behaviors.

Source: Shanghai Municipal Commission of Economy and Informatization

2. Shanghai Revises Measures for Recognition of Enterprises in Key Industries Eligible for Preferential Income Tax in Lin-gang Special Area

【Keywords: Lin-gang Special Area; Key Industries; Enterprise Income Tax】

Shanghai Municipal Finance Bureau and other two municipal departments recently issued the revised Administrative Measures for the Recognition of Enterprises in Key Industries Eligible for Preferential Enterprise Income Tax in the Lin-gang Special Area of the China (Shanghai) Pilot Free Trade Zone. For qualified legal entities that are engaged in related products (technologies) in key areas such as integrated circuits, artificial intelligence, biomedicine, and civil aviation, and carry out substantial production or R&D activities, their enterprise income tax will be reduced to 15 percent within five years from the date of establishment, according to the document, which took effect on January 1, 2025.

Source: Shanghai Municipal Finance Bureau

3. Shanghai Implements AEO System in Industrial Sector on a Pilot Basis

【Keywords: Industrial Sector; AEO】

Shanghai Municipal Commission of Economy and Informatization and other seven municipal departments recently issued the Scheme for Pilot Implementation of the Authorized Economic Operator (AEO) System in Shanghai's Industrial Sector. According to the document, a tiered administrative inspection system for AEOs will be piloted in the city's industrial sector in a "no application required" manner to improve inspection efficiency and reduce the burden on enterprises.

Source: Shanghai Municipal Commission of Economy and Informatization

One Week in Shanghai

【Latest News】 

1. Shanghai Releases Government Work Report 

【Keyword: Government Work Report】

The Shanghai Municipal Government Work Report was released on January 15, 2025. According to the Report, Shanghai achieved a generally stable economic and social development while making further progress in 2024, with an estimated 5 percent GDP growth. Its economic scale has passed the threshold of 5 trillion yuan. The per capita disposable income of Shanghai residents reached 88,000 yuan in 2024, marking a growth of 4.1 percent from the previous year. 

Source: International Services Shanghai

2. Shanghai Holds Chinese New Year Reception

【Keyword: Chinese New Year Reception】

Shanghai held Chinese New Year Reception on the evening of January 16. About 400 dignitaries attended the event, including officials from consular offices in Shanghai, international friendship cities, members of the International Business Leaders' Advisory Council for the Mayor of Shanghai, representatives of news agencies in Shanghai, winners of the Shanghai Magnolia Award, as well as international friends, representatives from Hong Kong and Macau, and representatives from relevant units in Shanghai.

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

3. Shanghai Holds AI-powered Innovation Conference

【Keyword: AI-powered Innovation】

Shanghai held an AI-powered innovation conference for the digital transformation of the manufacturing sector on January 10. During the conference, the first batch of ten enterprises were certified as industrial internet pioneers that lead and empower digital and intelligent transformation in key industries. They include Shanghai Waigaoqiao Shipbuilding, Advanced Micro-fabrication Equipment China (AMEC), and Shanghai Zhijing Information Technology. These companies have played a leading role in AI-powered digital transformation of key industries.

Source：International Services Shanghai

4. "Cloud Document Center" Debuts on Cross-border Service Center 

【Keyword: Cloud Document Center】

The "Lin-gang Special Area Cross-border Service Center" platform recently launched a blockchain-based new feature - "Cloud Document Center" - to improve the offshore trade stamp tax declaration process. When a company applies for stamp tax credit, related information and document review traces will be uploaded on the chain, and the policy application steps will be documented one by one. In this way, the company can achieve accurate correspondence between the contract flow and the capital flow, and address inconsistency between the contract-based tax declaration and the cross-border payment-based verification of offshore business.

Source:Shanghai Lin-gang

【Culture & Art】

1.Masterpieces of the POLA Museum of Art to Be Exhibited 

【Keyword: Impressionism】

From January 22 to April 21, Shanghai Museum will join hands with the POLA Museum of Art and Nihon Keizai Shimbun to hold the fifth exhibition of the "Dialogue with the World" series of culture and art exhibitions titled Masterpieces of the POLA Museum of Art: From Impressionism to Contemporary Art. The exhibition brings together nearly 70 classic works by 30 art masters, covering representative works of Impressionism and Post-Impressionism from Claude Monet, Pierre-Auguste Renoir, Paul Cézanne, Vincent Willem van Gogh, Paul Gauguin, Henri Matisse, Pablo Picasso and other artists. It will particularly exhibit the works of Wolfgang Tillmans, Hiroshi Sugimoto, Yayoi Kusama and other contemporary artists.

Source: Shanghai Tourism

2. Xinjiang Niya Ruins to "Resurface" in Shanghai 

【Keywords: Xinjiang; Niya Ruins】

From January 25 to July 25, "Seven Days of the Cadota" - an immersive exhibition of Niya Ruins in Xinjiang - will take place at the Alight Room Lafayette Culture Space in Shanghai. It is the world's first digital exhibition about the Niya Ruins, one of the greatest discoveries of Chinese archaeology in the 20th century. The exhibition integrates digital art, interactive drama, movie aesthetics, AR and time-traveling VR technologies, aiming to reveal the ancient Jingjue Kingdom that disappeared thousands of years ago.

Source: Shanghai Huangpu

3. Bund City Hall Opened on Appointment for the First Time 

【Keyword: Bund City Hall】

The annual theme exhibition "Shanghai Colors", co-organized by the Chinese version of the world's top art media ARTnews and the Bund City Hall Plaza, is set to be held from January 9 to February 12, adding a grand art event to Shanghai at the start of the new year. 

Source: Shanghai Huangpu

【Corporate Activities】

1.Volvo Construction Equipment's Shanghai Plant Completes Upgrade

【Keyword: Volvo】

Volvo Construction Equipment's Shanghai plant completed the construction of a new assembly workshop on January 15, 2025. It marks a milestone for Volvo Construction Equipment in pushing for business integration, innovation and upgrade, showing its determination to further develop the Chinese market and its long-term commitment to sustainable development. 

Source: Pudong Release

2. Reckitt Benckiser Announces Construction of Global R&D Center in Minhang

【Keyword: Reckitt Benckiser】

Global consumer goods company Reckitt Benckiser announced on January 16, 2025 that it has begun construction of a global R&D center in Caohejing Hi-tech Park in Hongqiao Town, Minhang District. With a total investment of more than 300 million yuan, the center will be the company's largest R&D facility in Asia. It will accelerate Reckitt Benckiser's innovation and business expansion in China when it is put into operation in 2026. 

Source: Minhang Today

Q&A

Q1: Officials with the Ministry of Commerce (MOFCOM) answered press questions when introducing their work on serving high-quality development at a press conference themed on "achievements of China's high-quality economic development" held by the State Council Information Office - The Third Plenary Session of the 20th CPC Central Committee proposed to improve the living convenience for overseas people entering China, such as residence, medical care, and payment. I would like to ask the MOFCOM, what plans do you have to further expand opening-up, and attract foreign investment? 

A1: China has taken many measures in 2024 to facilitate travel to China, such as optimizing entry and exit policies. At present, China has realized mutual visa exemption with 25 countries and introduced unilateral visa exemption policies for citizens from 38 countries. These policies have provided more convenience for foreign investors to come to China to attend conferences and exhibitions, conduct project negotiations and tech discussions. In 2025, the MOFCOM will continue to shorten the negative list for foreign investment, optimize business environment, and steadily expand institutional opening-up.

First, we will increase efforts on independent opening-up and continue to relax market access restrictions. In 2024, we pushed for zero restrictions on foreign investment access in the manufacturing sector, and eased restrictions on foreign investment in value-added telecommunications service, biotechnology, and private hospitals. In the meantime, we have issued a negative list for cross-border trade in services in the free trade pilot zones. In the negative list, we have proactively expanded opening-up of such areas as professional qualifications, finance, professional services, and culture. We believe that this will make it easier for foreigners to come to China and provide services. In the next stage, we will push for opening-up of the services sector in accordance with the arrangement of the Central Economic Work Conference, especially to expand the pilot opening-up of telecommunications, medical care and education services. In addition, we will revise the Catalogue of Industries Encouraged for Foreign Investment to enhance the attractiveness of our investment attraction policy. This is what I mean by "subtracting" the negative list through voluntary opening-up.

Second, we will continue to build the "Invest in China" brand and create first-class business environment. We have carried out the work in two aspects. In 2024, the Ministry of Commerce held 28 "Invest in China" roadshows, and the influence of the "Invest in China" brand has continued to grow. In the next phase, we will carry out more "Invest in China" roadshows this year, broaden investment channels, enhance the efficiency of investment attraction through exhibition platforms, and polish the brand image of "Invest in China". On the other hand, the MOFCOM has continued to deepen regular exchanges with foreign-invested enterprises. In 2024, we held 15 round-table meetings with foreign enterprises, and we coordinated efforts to resolve more than 300 problems for foreign enterprises. This year, we will further enhance services for foreign-invested enterprises and continue to make good use of round-table meetings to resolve their problems related to qualification licensing, standard setting, government procurement, etc.

Third, we should align with high-standard international economic and trade rules and build high-level open platforms. We will give full play to the roles of open platforms. For example, last year we released strategies to empower free trade pilot zones, promoted some successful practices of institutional opening-up, and issued targeted policies for different free trade zones, such as the plan of building a commodity resource allocation hub in the Zhejiang Free Trade Pilot Zone. We held a symposium to celebrate the 40th anniversary of the establishment of national economic and technological development zones, and offered instructions for these zones to improve opening-up efficiency. This year, we will continue to expand opening-up and attract foreign investment through high-level open platforms. We will continue to implement the free trade zone enhancement strategy, expand reform authorizations according to local conditions, promote successful experience of free trade zones, support them to align with high-standard international economic and trade rules, and step up open testing. We will also improve support policies for national economic development zones and promote construction of comprehensive pilot demonstration projects for expanding opening-up of the national service industry. In short, through these open platforms, we will enhance institutional opening-up and further attract foreign investment.

Source: State Council Information Office

Expert Perspective

A New Guide to Data Compliance of Multinational Banks and Financial Institutions: Interpretation of the Regulations on Network Data Security Management

By Zhou Liang, Zhou Jianing (Beijing Dacheng Law Firm)

In the digital age, electronic data has become one of the core assets of financial institutions. The development of foreign banks and financial institutions in the Chinese market is also highly dependent on the processing and interaction of various types of data. The Regulations on Network Data Security Management (The Regulations) has come into force on January 1, 2025. The Regulations will have a far-reaching and profound impact on the Chinese market operations of foreign banks and financial institutions.

As an administrative regulation with a higher level of effect, the Regulations have put forward new standards for the form of informing overseas entities of personal information processing rules and obtaining personal consent, enhanced protection of personal information of underage people, pointed out the security requirements of network products and services and data processing strategies in emergency situations, and anchored the direction for data compliance operations of overseas financial institutions. This article analyzes key points of the Regulations from the perspective of personal information protection, and puts forward practical suggestions for overseas financial institutions doing business in China.

I. The Regulations apply to foreign banks and financial institutions doing business in China

The Regulations affirmed its applicability to overseas entities, and overseas banks and financial institutions must comply with relevant provisions of the Regulations. Article 2 of the Regulations continue relevant provisions of the Personal Information Protection Law on offshore processing of personal information of onshore natural persons. Overseas institutions that provide products or services to onshore natural persons or analyze and evaluate the behaviors of onshore natural persons will also fall within the jurisdiction of the Regulations.

In addition, the Regulations have placed more emphasis on regulating various electronic data collected, stored, and transmitted through online network. Specifically, the Regulations apply to all types of entities that independently determine the purpose and method of data processing activities such as data collection, storage, use, processing, transmission, provision, disclosure, and deletion within the territory of China.

As network information technology is becoming more and more popular, data digitization has become a general trend. All foreign companies must comply with the Regulations when they are doing business in China and collecting data of domestic entities through the Internet. Banks and financial institutions cannot do without the Internet in their day-to-day operations. Whether it is data collection, storage, transmission or use, the data involved comes from natural persons and corporate customers, and that makes them data processors and subject to the Regulations. Therefore, foreign banks and financial institutions must comply with the Regulations when they do business in China.

[To be Continued]