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China

New Bohai Bay Leak Looks to be Less Severe

Associated Press/Xinhua An oil rig at the Jinzhou 9-3 Oilfield off the coast of Jinzhou, in a photo released by the state-run Xinhua News Agency. A fresh oil leak in China’s Bohai Bay appears to be far less severe than a series of recent mishaps in the northern waters that sparked a national outrage and knocked one of the nation’s largest offshore production bases out of action. In the latest incident, owner-operator China National Offshore Oil Ltd.’s Cnooc Ltd. unit said Friday it has taken 1,600 barrels per day of production offline to deal with the spill and surface sheens. The company didn’t estimate when the production might resume. Cnooc said its initial estimate of the Jinzhou 9-3 West oil spill — caused when a working vessel dragged an anchor across an undersea pipeline and ruptured it — was 0.38 cubic meters, or just over two barrels. That’s a far cry from a series of leaks in recent months at a separate Bohai Bay production base, which 51% owned by Cnooc and 49% by Houston-based ConocoPhillips, operator of the field. More than 3,300 barrels of oil was spilled during multiple incidents over the summer at a site called Peng Lai, sparking harsh public and government criticism of the U.S. company’s performance and prompting authorities to order the production to be shuttered in early September. China’s State Oceanic Administration said it scrambled aircraft and boats Friday night after the latest spill but also suggested in a statement (in Chinese) that the incident was minor and Cnooc’s response was adequate. The spill news was getting relatively little attention in China’s media. At least one official of the Oceanic administration, which manages China’s offshore activity, has described the spills around Peng Lai as China’s worst offshore accident. The agency continues to feature news about the incident prominently on its website. The incidents grabbed headlines for weeks in China, as well as senior leadership attention. In daily reports , Conoco has chronicled its efforts to deal with the aftermath of the accidents in the hopes of eventually returning to production, saying it is working under the active supervision of its partner Cnooc. Conoco, which has taken initial steps to pay compensation ,  says its ongoing efforts include reducing undersea pressure around Peng Lai that it says caused oil to seep out and to look for ways to seal sources of the leaking. It is also revising its overall development plan. –James T. Areddy; Follow him on Twitter @jamestareddy

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Associated Press/Xinhua
An oil rig at the Jinzhou 9-3 Oilfield off the coast of Jinzhou, in a photo released by the state-run Xinhua News Agency.

A fresh oil leak in China’s Bohai Bay appears to be far less severe than a series of recent mishaps in the northern waters that sparked a national outrage and knocked one of the nation’s largest offshore production bases out of action.

In the latest incident, owner-operator China National Offshore Oil Ltd.’s Cnooc Ltd. unit said Friday it has taken 1,600 barrels per day of production offline to deal with the spill and surface sheens. The company didn’t estimate when the production might resume.

Cnooc said its initial estimate of the Jinzhou 9-3 West oil spill — caused when a working vessel dragged an anchor across an undersea pipeline and ruptured it — was 0.38 cubic meters, or just over two barrels.

That’s a far cry from a series of leaks in recent months at a separate Bohai Bay production base, which 51% owned by Cnooc and 49% by Houston-based ConocoPhillips, operator of the field. More than 3,300 barrels of oil was spilled during multiple incidents over the summer at a site called Peng Lai, sparking harsh public and government criticism of the U.S. company’s performance and prompting authorities to order the production to be shuttered in early September.

China’s State Oceanic Administration said it scrambled aircraft and boats Friday night after the latest spill but also suggested in a statement (in Chinese) that the incident was minor and Cnooc’s response was adequate. The spill news was getting relatively little attention in China’s media.

At least one official of the Oceanic administration, which manages China’s offshore activity, has described the spills around Peng Lai as China’s worst offshore accident. The agency continues to feature news about the incident prominently on its website. The incidents grabbed headlines for weeks in China, as well as senior leadership attention.

In daily reports, Conoco has chronicled its efforts to deal with the aftermath of the accidents in the hopes of eventually returning to production, saying it is working under the active supervision of its partner Cnooc.

Conoco, which has taken initial steps to pay compensation,  says its ongoing efforts include reducing undersea pressure around Peng Lai that it says caused oil to seep out and to look for ways to seal sources of the leaking.

It is also revising its overall development plan.

–James T. Areddy; Follow him on Twitter @jamestareddy

Measured on a purchasing power parity (PPP) basis that adjusts for price differences, China in 2009 stood as the second-largest economy in the world after the US, although in per capita terms the country is still lower middle-income.

The Chinese government seeks to add energy production capacity from sources other than coal and oil, and is focusing on nuclear and other alternative energy development.

The country’s per capita income was at $6,567 (IMF, 98th) in 2009.

Nevertheless, key bottlenecks continue to constrain growth.

China is the world’s largest producer of rice and is among the principal sources of wheat, corn (maize), tobacco, soybeans, peanuts (groundnuts), and cotton.

China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories.

By the early 1990s these subsidies began to be eliminated, in large part due to China’s admission into the World Trade Organization (WTO) in 2001, which carried with it requirements for further economic liberalization and deregulation.

Both forums will start on Tuesday.

“The growth rate (for ODI) in the next few years will be much higher than previous years,” Shen said, without elaborating.

China is expected to have 200 million cars on the road by 2020, increasing pressure on energy security and the environment, government officials said yesterday.

China’s challenge in the early 21st century will be to balance its highly centralized political system with an increasingly decentralized economic system.

Agriculture is by far the leading occupation, involving over 50% of the population, although extensive rough, high terrain and large arid areas – especially in the west and north – limit cultivation to only about 10% of the land surface.

China is the world’s largest producer of rice and wheat and a major producer of sweet potatoes, sorghum, millet, barley, peanuts, corn, soybeans, and potatoes.

Livestock raising on a large scale is confined to the border regions and provinces in the north and west; it is mainly of the nomadic pastoral type.

China is one of the world’s major mineral-producing countries.

China’s leading export minerals are tungsten, antimony, tin, magnesium, molybdenum, mercury, manganese, barite, and salt.

Major industrial products are textiles, chemicals, fertilizers, machinery (especially for agriculture), processed foods, iron and steel, building materials, plastics, toys, and electronics.

Since the 1980s China has undertaken a major highway construction program.

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New Bohai Bay Leak Looks to be Less Severe

China

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The New Company Law brings substantial changes with implications for new and existing foreign invested enterprises and stakeholders. Foreign investors must assess if adjustments to existing structures

Despite recent economic challenges, many organizations’ China operations provide unparalleled access to one of the world’s largest and most competitive global supply chains. Over the past 30 years, a significant number of foreign invested enterprises (FIEs) have been established in China. As of the end of 2022, the number of FIEs operating in China had exceeded 1.12 million.

Compared to their domestic counterparts, FIEs demonstrate greater caution regarding legal revisions and are diligent in making swift adjustments. This stems not only from the closer scrutiny FIEs face from regulatory authorities but also from their commitment to compliance and maintaining a competitive edge.

Clearly, there has been a shift in China’s corporate regulations—from merely encouraging an increase in the number of companies to focusing on attracting mature enterprises and higher-quality investments. While the transition from a broad approach to a more refined one may cause short-term challenges, it ultimately benefits the company’s long-term development. By returning to the original intent of setting registered capital, it not only protects the interests of creditors but also shields shareholders from the operational risks of the company.

In China’s foreign investment landscape, while most FIEs exercise commercial prudence in determining registered capital—factoring in capital expenditures, operational costs, and setting aside surplus funds—some opt for higher registered capital levels to avoid future capital increase procedures. This typically involves lengthy document signing and registration changes, lasting 1-2 months.

Joint ventures (JVs) often impose stricter payment deadlines for registered capital in their articles of association to ensure both parties’ simultaneous contributions align with operational needs. Conversely, wholly foreign-owned enterprises (WFOEs) tend to favor flexibility in payment deadlines, often allowing full payment before the company’s operational period expires.

Given these circumstances, despite the generally stronger capital adequacy among foreign companies compared to domestic entities, many FIEs could be affected by the new capital contribution rules.

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.

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China

Foreign Tourist Groups on Cruise Ships Fully Permitted Visa-Free Entry in China

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China will allow visa-free entry for foreign tourist groups arriving by cruise ship at 13 ports along the coast, starting May 15, 2024. Visitors must stay with the same ship and in permitted areas for up to 15 days. This policy aims to boost tourism and facilitate high-quality development in the cruise industry.


China’s immigration agency announced that it will grant a visa-free policy for foreign tourist groups to enter China by cruise at all cruise ports along the coast of China, starting May 15, 2024. The tourist group must remain with the same cruise ship until its next port of call and stay within permitted areas for no more than 15 days.

Effective May 15, 2024, the National Immigration Administration (NIA) has officially implemented a visa-free policy for foreign tourist groups entering China via cruise ships. This progressive move aims to enhance personnel exchanges and foster cooperation between China and other nations, furthering the country’s commitment to high-level openness.

Under this policy, foreign tourist groups, comprising two or more individuals, who travel by cruise ship and are organized by Chinese domestic travel agencies, can now enjoy visa-free entry as a cohesive group at cruise ports in 13 cities along the Chinese coast.

The tourist group must remain with the same cruise ship until its next port of call and stay within China for no more than 15 days. The eligible areas for this policy are coastal provinces (autonomous regions and municipalities) and Beijing.

Furthermore, to support cruise tourism development, seven additional cruise ports—Dalian, Lianyungang, Wenzhou, Zhoushan, Guangzhou, Shenzhen, and Beihai—have been included as applicable ports for visa-free transit.

The recent implementation of the visa-free policy for foreign tourist groups entering China via cruise ships is poised to have several significant effects. The policy will provide crucial support for the cruise economy and the overall cruise industry. By facilitating smoother travel for foreign tourist groups, it acts as a catalyst for high-quality development in this sector.

Additionally, under this policy, international cruise companies can strategically plan their global routes by designating Chinese port cities, such as Shanghai, Xiamen, and Shenzhen, as docking destinations. This move is expected to attract more cruise ships to Chinese ports, ultimately bringing in a larger number of international visitors to the Chinese market.

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.

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China

China’s New Tariff Law: Streamlining and Standardizing Current Tariff Regulations

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China’s new Tariff Law consolidates import and export duties, clarifies rules for imposing counter-tariffs, and sets a December 1, 2024 effective date. It codifies existing practices on cross-border e-commerce and rules on the origin of goods into law, impacting trade relations.


China’s new Tariff Law consolidates rules on import and export duties that were previously implemented via several legal documents and makes important clarifications and additions to prior regulations. Among other changes, it stipulates provisions for the Chinese government to impose counter-tariffs on imported goods, codifying these powers into law for the first time. We outline all the notable updates to the China Tariff Law and discuss the implications for the country’ current trade relations. 

On April 26, 2024, the National People’s Congress (NPC), China’s legislature, adopted the Tariff Law of the People’s Republic of China (the “Tariff Law”) after several rounds of revisions.

The new Tariff Law will replace the Import and Export Tariff Regulations of the People’s Republic of China, which fall under the purview of the State Council, and adopts many of its provisions.

Previously, Chinese law had not stipulated legislative powers to implement countervailing tariffs, although China was nonetheless able to impose counter-tariffs on trade partners through other means.

China’s new Tariff Law comes into effect on December 1, 2024.

China’s Tariff Law elevates several existing provisions and practices to the level of law. For instance, Article 3 of the Tariff Law clarifies the obligations of cross-border e-commerce platforms for tariff withholding and implementing consolidated taxation.

The Tariff Law also solidifies the rules and regulations on the origin of goods, stipulating that the application of tariff rates shall comply with the corresponding rules of origin. Although this has been previously implemented in practice, it is the first time this has been codified into law.

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.

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