China
Changes to China’s ‘Indigenous Innovation’ Policy: Don’t Get Too Excited
Stanley Lubman, a long-time specialist on Chinese law, teaches at the University of California, Berkeley, School of Law and is the author of “Bird in a Cage: Legal Reform in China After Mao,” (Stanford University Press, 1999). China has announced a significant retreat from a policy initiated in a 2006 report on “indigenous innovation” that established “guidelines” intended to reduce dependence on foreign technology. Subsequent government actions at first seemed to threaten to exclude foreign companies from selling intellectual property developed outside of China to government agencies, to the alarm of foreign governments and technology companies. But while government policy on procurement has receded from the original position and “indigenous innovation” has been “delinked” from government procurement requirements, implementation of this shift is problematic because acceptance and commitment by sub-central (provincial and municipal) governments are needed to make it meaningful. Given the evolution of policy in China, that implementation deserves to be watched closely. Indigenous innovation was first clearly linked to government procurement in 2009. The policy was to be carried out via a national catalogue of industrial products that were targeted as most desirable to develop in order to raise the nation’s technological level. It required that to qualify as “indigenous innovation,” a product had to be produced by an enterprise that owned the intellectual property in China, had a trademark owned by a Chinese company, was registered in China and embodied a high degree of innovation. Foreign sellers objected vigorously, in part out of fears that foreign-invested enterprises (FIEs) would be excluded. In January 2010, the Ministry of Science and Technology issued a notice that modified the policy. It provided that to be eligible for accreditation, applicants must be manufacturing enterprises that are legal persons in China (including registered foreign-invested enterprises) and their products must comply with national laws, regulations and ”technology” policies. In addition, applicants must own the IP rights, and have the exclusive right to use the trademark for the product in China. The notice also stated that the product must be “advanced” according to criteria expressed only very generally, and must be “reliable” in quality. The policy was modified in April 2010 replacing the demand that applicants own IP rights with a requirement that they merely have a license to use the IP. Then, in January 2011, President Hu Jintao, during a visit to Washington, promised to “delink” indigenous innovation from government procurement. Mr. Hu appeared to have made good on his pledge last month when the Ministry of Finance announced that it would revoke three laws linking procurement with “indigenous innovation.” In a recent report on China’s innovation policy for the East-West Center ( pdf ), economist Dieter Ernst wrote that the modifications to the policy were undertaken “possibly in response” to foreign complaints and reflected “greater pragmatism in the implementation of China’s innovation policies.” Although this is a welcome reversal, it does not by its terms extend to sub-central agencies. Whether provincial and municipal governments will fall into line by allowing foreign competition rather than favoring local companies remains to be seen. The European Union Chamber of Commerce in China recently issued a report on European business experience in competing for public contracts in China ( pdf ) stating that “ although [the delinking of indigenous innovation from national procurement] was a “major positive development, the international business community remains concerned that discriminatory policies might continue to be enforced locally in spite of national commitments to the contrary.” While it appears that a national catalogue will not be issued after all, a considerable number of provincial and municipal level governments have already released their own indigenous innovation product catalogues. A survey by the US-China Business Council found 61 such sub-central catalogs had been issued by November of last year. The council identified an additional 13 this past February. Although it says it hasn’t reviewed all of the catalogues, the council found that the local lists it had studied “appeared to discriminate against foreign invested enterprises products by including only a handful of FIE products.” The Shanghai catalogue, for example, listed only two indigenous innovation products from FIEs out of a total of 523. Of 42 products listed in the Beijing catalogue, only one came from an FIE. On Nanjing’s list, there were none. Similarly, the EU Chamber report refers to a “fragmentation of the Chinese government procurement market” because “sub-central authorities develop their own procedures, procurement catalogues and unwritten procedures.” Another discouraging note on “fragmentation” comes from Ken Wasch, president of the Software and Information Industry association, who noted in testimony before the U.S. China Economic and Security Review Commission in May ( pdf ) that the Ministry of Science and Technology and the Ministry of Finance claim that “they lack jurisdiction over local catalogues.” In April, The Wall Street Journal reported complaints from U.S. companies that local governments had not seemed to have adjusted their policies to conform to national policy. Foreign impatience can be expected to grow if, as seems likely, the “delinking” of sub-central government procurement from indigenous innovation is slow. As this column has reported in a variety of contexts and as any foreign business with experience in China must know, local government failures to implement national policy are common. It is useful to recall that although China is theoretically a unitary state, in practice national laws and policies are often poorly and tardily implemented. Doing away with provincial catalogues will not prevent provincial governments from keeping the procurement process opaque and from using the lack of transparency to favor local firms. Indigenous innovation is not the only issue that confronts foreign companies as they deal with China’s drive to develop advanced technology domestically rather than importing it. Related emphases are seen in the setting of technical standards “favoring domestic industries at the expense of internationally accepted foreign standards and technologies,” as the U.S. International Trade Commission has shown in a recent report ( pdf ). As China pursues the upgrading of its economy, there will be more debate over policies on technology development. The very tentativeness with which indigenous innovation has been pursued may be a hopeful sign that continued dialogue may bring about adjustments of measures that are deemed protectionist.
Stanley Lubman, a long-time specialist on Chinese law, teaches at the University of California, Berkeley, School of Law and is the author of “Bird in a Cage: Legal Reform in China After Mao,” (Stanford University Press, 1999). China has announced a significant retreat from a policy initiated in a 2006 report on “indigenous innovation” that established “guidelines” intended to reduce dependence on foreign technology. Subsequent government actions at first seemed to threaten to exclude foreign companies from selling intellectual property developed outside of China to government agencies, to the alarm of foreign governments and technology companies. But while government policy on procurement has receded from the original position and “indigenous innovation” has been “delinked” from government procurement requirements, implementation of this shift is problematic because acceptance and commitment by sub-central (provincial and municipal) governments are needed to make it meaningful. Given the evolution of policy in China, that implementation deserves to be watched closely. Indigenous innovation was first clearly linked to government procurement in 2009. The policy was to be carried out via a national catalogue of industrial products that were targeted as most desirable to develop in order to raise the nation’s technological level. It required that to qualify as “indigenous innovation,” a product had to be produced by an enterprise that owned the intellectual property in China, had a trademark owned by a Chinese company, was registered in China and embodied a high degree of innovation. Foreign sellers objected vigorously, in part out of fears that foreign-invested enterprises (FIEs) would be excluded. In January 2010, the Ministry of Science and Technology issued a notice that modified the policy. It provided that to be eligible for accreditation, applicants must be manufacturing enterprises that are legal persons in China (including registered foreign-invested enterprises) and their products must comply with national laws, regulations and ”technology” policies. In addition, applicants must own the IP rights, and have the exclusive right to use the trademark for the product in China. The notice also stated that the product must be “advanced” according to criteria expressed only very generally, and must be “reliable” in quality. The policy was modified in April 2010 replacing the demand that applicants own IP rights with a requirement that they merely have a license to use the IP. Then, in January 2011, President Hu Jintao, during a visit to Washington, promised to “delink” indigenous innovation from government procurement. Mr. Hu appeared to have made good on his pledge last month when the Ministry of Finance announced that it would revoke three laws linking procurement with “indigenous innovation.” In a recent report on China’s innovation policy for the East-West Center ( pdf ), economist Dieter Ernst wrote that the modifications to the policy were undertaken “possibly in response” to foreign complaints and reflected “greater pragmatism in the implementation of China’s innovation policies.” Although this is a welcome reversal, it does not by its terms extend to sub-central agencies. Whether provincial and municipal governments will fall into line by allowing foreign competition rather than favoring local companies remains to be seen. The European Union Chamber of Commerce in China recently issued a report on European business experience in competing for public contracts in China ( pdf ) stating that “ although [the delinking of indigenous innovation from national procurement] was a “major positive development, the international business community remains concerned that discriminatory policies might continue to be enforced locally in spite of national commitments to the contrary.” While it appears that a national catalogue will not be issued after all, a considerable number of provincial and municipal level governments have already released their own indigenous innovation product catalogues. A survey by the US-China Business Council found 61 such sub-central catalogs had been issued by November of last year. The council identified an additional 13 this past February. Although it says it hasn’t reviewed all of the catalogues, the council found that the local lists it had studied “appeared to discriminate against foreign invested enterprises products by including only a handful of FIE products.” The Shanghai catalogue, for example, listed only two indigenous innovation products from FIEs out of a total of 523. Of 42 products listed in the Beijing catalogue, only one came from an FIE. On Nanjing’s list, there were none. Similarly, the EU Chamber report refers to a “fragmentation of the Chinese government procurement market” because “sub-central authorities develop their own procedures, procurement catalogues and unwritten procedures.” Another discouraging note on “fragmentation” comes from Ken Wasch, president of the Software and Information Industry association, who noted in testimony before the U.S. China Economic and Security Review Commission in May ( pdf ) that the Ministry of Science and Technology and the Ministry of Finance claim that “they lack jurisdiction over local catalogues.” In April, The Wall Street Journal reported complaints from U.S. companies that local governments had not seemed to have adjusted their policies to conform to national policy. Foreign impatience can be expected to grow if, as seems likely, the “delinking” of sub-central government procurement from indigenous innovation is slow. As this column has reported in a variety of contexts and as any foreign business with experience in China must know, local government failures to implement national policy are common. It is useful to recall that although China is theoretically a unitary state, in practice national laws and policies are often poorly and tardily implemented. Doing away with provincial catalogues will not prevent provincial governments from keeping the procurement process opaque and from using the lack of transparency to favor local firms. Indigenous innovation is not the only issue that confronts foreign companies as they deal with China’s drive to develop advanced technology domestically rather than importing it. Related emphases are seen in the setting of technical standards “favoring domestic industries at the expense of internationally accepted foreign standards and technologies,” as the U.S. International Trade Commission has shown in a recent report ( pdf ). As China pursues the upgrading of its economy, there will be more debate over policies on technology development. The very tentativeness with which indigenous innovation has been pursued may be a hopeful sign that continued dialogue may bring about adjustments of measures that are deemed protectionist.
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Changes to China’s ‘Indigenous Innovation’ Policy: Don’t Get Too Excited
China
New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
China has been the world’s largest manufacturer for 14 years, producing one-third of global manufacturing output. In the Emerging Asia Manufacturing Index 2024, China ranks highest among eight emerging countries in the region. Challenges for these countries include global demand disparities affecting industrial output and export orders.
Known as the “World’s Factory”, China has held the title of the world’s largest manufacturer for 14 consecutive years, starting from 2010. Its factories churn out approximately one-third of the global manufacturing output, a testament to its industrial might and capacity.
China’s dominant role as the world’s sole manufacturing power is reaffirmed in Dezan Shira & Associates’ Emerging Asia Manufacturing Index 2024 report (“EAMI 2024”), in which China secures the top spot among eight emerging countries in the Asia-Pacific region. The other seven economies are India, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, and Bangladesh.
The EAMI 2024 aims to assess the potential of these eight economies, navigate the risks, and pinpoint specific factors affecting the manufacturing landscape.
In this article, we delve into the key findings of the EAMI 2024 report and navigate China’s advantages and disadvantages in the manufacturing sector, placing them within the Asia-Pacific comparative context.
Emerging Asia countries face various challenges, especially in the current phase of increased volatility, uncertainty, complexity, and ambiguity (VUCA). One notable challenge is the impact of global demand disparities on the manufacturing sector, affecting industrial output and export orders.
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
China
Is journalist Vicky Xu preparing to return to China?
Chinese social media influencers have recently claimed that prominent Chinese-born Australian journalist Vicky Xu had posted a message saying she planned to return to China.
There is no evidence for this. The source did not provide evidence to support the claim, and Xu herself later confirmed to AFCL that she has no such plans.
Currently working as an analyst at the Australian Strategic Policy Institute, or ASPI, Xu has previously written for both the Australian Broadcasting Corporation, or ABC, and The New York Times.
A Chinese language netizen on X initially claimed on March 31 that the changing geopolitical relations between Sydney and Beijing had caused Xu to become an expendable asset and that she had posted a message expressing a strong desire to return to China. An illegible, blurred photo of the supposed message accompanied the post.
This claim was retweeted by a widely followed influencer on the popular Chinese social media site Weibo one day later, who additionally commented that Xu was a “traitor” who had been abandoned by Australian media.
Following the publication of an ASPI article in 2021 which exposed forced labor conditions in Xinjiang co-authored by Xu, the journalist was labeled “morally bankrupt” and “anti-China” by the Chinese state owned media outlet Global Times and subjected to an influx of threatening messages and digital abuse, eventually forcing her to temporarily close several of her social media accounts.
AFCL found that neither Xu’s active X nor LinkedIn account has any mention of her supposed return to China, and received the following response from Xu herself about the rumor:
“I can confirm that I don’t have plans to go back to China. I think if I do go back I’ll most definitely be detained or imprisoned – so the only career I’ll be having is probably going to be prison labor or something like that, which wouldn’t be ideal.”
Neither a keyword search nor reverse image search on the photo attached to the original X post turned up any text from Xu supporting the netizens’ claims.
Translated by Shen Ke. Edited by Shen Ke and Malcolm Foster.
Asia Fact Check Lab (AFCL) was established to counter disinformation in today’s complex media environment. We publish fact-checks, media-watches and in-depth reports that aim to sharpen and deepen our readers’ understanding of current affairs and public issues. If you like our content, you can also follow us on Facebook, Instagram and X.
Read the rest of this article here >>> Is journalist Vicky Xu preparing to return to China?
China
Guide for Foreign Residents: Obtaining a Certificate of No Criminal Record in China
Foreign residents in China can request a criminal record check from their local security bureau. This certificate may be required for visa applications or job opportunities. Requirements and procedures vary by city. In Shanghai, foreigners must have lived there for 180 days with a valid visa to obtain the certificate.
Foreign residents living in China can request a criminal record check from the local security bureau in the city in which they have lived for at least 180 days. Certificates of no criminal record may be required for people leaving China, or those who are starting a new position in China and applying for a new visa or residence permit. Taking Shanghai as an example, we outline the requirements for obtaining a China criminal record check.
Securing a Certificate of No Criminal Record, often referred to as a criminal record or criminal background check, is a crucial step for various employment opportunities, as well as visa applications and residency permits in China. Nevertheless, navigating the process can be a daunting task due to bureaucratic procedures and language barriers.
In this article, we use Shanghai as an example to explore the essential information and steps required to successfully obtain a no-criminal record check. Requirements and procedures may differ in other cities and counties in China.
Note that foreigners who are not currently living in China and need a criminal record check to apply for a Chinese visa must obtain the certificate from their country of residence or nationality, and have it notarized by a Chinese embassy or consulate in that country.
Foreigners who have a valid residence permit and have lived in Shanghai for at least 180 days can request a criminal record check in the city. This means that the applicant will also need to currently have a work, study, or other form of visa or stay permit that allows them to live in China long-term.
If a foreigner has lived in another part of China and is planning to or has recently moved to Shanghai, they will need to request a criminal record check in the place where they previously spent at least 180 days.
There are two steps to obtaining a criminal record certificate in Shanghai: requesting the criminal record check from the Public Security Bureau (PSB) and getting the resulting Certificate of No Criminal Record notarized by an authorized notary agency.
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
- New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
- Is journalist Vicky Xu preparing to return to China?
- Guide for Foreign Residents: Obtaining a Certificate of No Criminal Record in China
- China Unveils Plan to Upgrade Industrial Equipment
- China deepens engagement with new Indonesian president as top diplomat visits Jakarta
- New Publication: A Guide for Foreign Investors on Navigating China’s New Company Law
