China
The Hong Kong crisis
Author: Editorial Board, ANU
Street protests that have gripped Hong Kong for over four months are becoming more violent. Some protestors have begun attacking police and police are firing live rounds at protestors. Last week a protestor was shot and a policeman stabbed in the neck. As tensions mount between the public and police, Hong Kong’s authorities are under increasing pressure to find a solution. If they fail, Beijing has threatened to intervene — a move that could bring to an end what remains of the ‘one country, two systems’ model that has preserved Hong Kong’s autonomy since the former British colony’s return to Chinese sovereignty in 1997.
The street protests began in June in response to an extradition bill proposed by Hong Kong’s executive. Under the terms of the bill, Beijing could request the extradition of Hong Kong residents accused of a crime in the People’s Republic of China. The extradition bill was widely seen as an attack on Hong Kong’s autonomy and freedom because it would enable China’s authoritarian government to get their hands not only on wanted felons, but theoretically on anyone who displeased it, including dissidents. It was also seen as confirmation that Hong Kong’s government cared more about its political masters in Beijing than the citizens of Hong Kong.
With Beijing’s backing, Hong Kong Chief Executive Carrie Lam at first stood firm, but eventually relented as protests swelled to hundreds of thousands of people and it became clear that opposition to the bill was widespread and deeply felt. Ms Lam agreed to shelve the bill. But the protest movement raged on, demanding that the bill be completely withdrawn, and that an independent inquiry be held into police responses to the protests. In July protesters stormed parliament. Ms Lam ultimately agreed to withdraw the extradition bill, but the gesture appeared to come too late to quell the protests, which soon gave voice to other grievances and demands.
As Tim Summers notes in one of two lead articles this week, Hong Kong’s protest movement ‘has ventured far beyond the original catalyst, the government’s extradition bill,’ to reflect ‘deep dislocations in Hong Kong’ including ‘identity politics and socio-economic problems’ that have been simmering since the territory’s return to Chinese sovereignty two decades ago. Summers notes protesters’ demands for universal suffrage and political reform (Hong Kong’s convoluted electoral system ensures that only Beijing-backed candidates can be selected as chief executive), but is sceptical about the prospects for such reform given that Beijing’s approval would be needed. Summers argues that politicians should instead turn their attention to ‘daily gripes’ about education, healthcare, public transport and housing affordability.
In her annual policy address to the Legislative Council (LegCo) on 16 October, Ms Lam attempted to do just that. In the address, which is similar to the State of the Union address delivered annually by the US President to Congress, Ms Lam sought to focus on economic grievances, proposing to reclaim more land and to build more public housing. But Ms Lam was heckled by councillors before she got to the podium. Someone played a recording of protestors’ screams as they were hit with tear gas by police. Outside, protesters gathered to demand her resignation. The reception was so hostile that, after two failed attempts to speak directly to councillors, Ms Lam was forced to retreat to a secure location to give her address via video.
Before it was delivered, the address was widely seen as a critical test for Ms Lam and her ability to manage the upswell of discontent. What happens next is unclear. More concessions are unlikely. The police have been given new powers and, since 4 October, protestors are prohibited from wearing masks which, along with umbrellas, had become a potent symbol of the protest movement.
In our other lead article this week, Ben Hillman writes that public opinion on the Chinese Mainland is strongly in favour of direct intervention in Hong Kong — something Beijing has threatened if Hong Kong’s political and business elite are unable to find a solution to the protests which are now in their 20th week. Hillman says that China’s state-run media have portrayed the protests as a pro-Hong Kong independence movement led by ‘criminals and terrorists’ and supported by ‘foreign black hands’. Hillman says that one-sided media coverage has left the mainstream Chinese public unaware of Hong Kongers’…
China
New Publication: A Guide for Foreign Investors on Navigating China’s New Company Law
The sixth revision of China’s Company Law is the most extensive amendment in history, impacting foreign invested enterprises with stricter rules on capital injection and corporate governance. Most FIEs must align with the New Company Law by July 1, 2024, with a deadline of December 31, 2024 for adjustments. Contact Dezan Shira & Associates for assistance.
The sixth revision of China’s Company Law represents the most extensive amendment in its history. From stricter capital injection rules to enhanced corporate governance, the changes introduced in the New Company Law have far-reaching implications for businesses, including foreign invested enterprises (FIEs) operating in or entering the China market.
Since January 1, 2020, the Company Law has governed both wholly foreign-owned enterprises (WFOEs) and joint ventures (JVs), following the enactment of the Foreign Investment Law (FIL). Most FIEs must align with the provisions of the New Company Law from July 1, 2024, while those established before January 1, 2020 have bit more time for adjustments due to the five-year grace period provided by the FIL. The final deadline for their alignment is December 31, 2024.
In this publication, we guide foreign investors through the implications of the New Company Law for existing and new FIEs and relevant stakeholders. We begin with an overview of the revision’s background and objectives, followed by a summary of key changes. Our in-depth analysis, from a foreign stakeholder perspective, illuminates the practical implications. Lastly, we explore tax impacts alongside the revisions, demonstrating how the New Company Law may shape future business transactions and arrangements.
If you or your company require assistance with Company Law adjustments in China, please do not hesitate to contact Dezan Shira & Associates. For more information, feel free to reach us via email at china@dezshira.com.
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
Lingang New Area in Shanghai Opens First Cross-Border Data Service Center to Streamline Data Export Process
The Lingang New Area in Shanghai has launched China’s first Cross-Border Data Service Center to facilitate data export for companies in Shanghai. The center will help with applications, data catalogs, and management, aiming to provide legal and safe cross-border data transfer mechanisms.
The Lingang New Area in Shanghai’s Pilot Free Trade Zone has launched a new cross-border data service center to provide administrative and consulting services to companies in Shanghai that need to export data out of China. The service center will help facilitate data export by accepting applications from companies for data export projects and is tasked with formulating and implementing data catalogs to facilitate data export in the area. The Shanghai cross-border data service center will provide services to companies across the whole city.
The Lingang New Area in the Shanghai Pilot Free Trade Zone has launched China’s first Cross-Border Data Service Center (the “service center”). The service center, which is jointly operated by the Cybersecurity Administration of China (CAC) and the local government, aims to further facilitate legal, safe, and convenient cross-border data transfer (CBDT) mechanisms for companies.
The service center will not only serve companies in the Lingang New Area but is also open to companies across Shanghai, and will act as an administrative service center specializing in CBDT.
In January 2024, the local government showcased a set of trial measures for the “classified and hierarchical” management of CBDT in the Lingang New Area. The measures, which have not yet been released to the public, seek to facilitate CBDT from the area by dividing data for cross-border transfer into three different risk categories: core, important, and general data.
The local government also pledged to release two data catalogs: a “general data” catalog, which will include types of data that can be transferred freely out of the Lingang New Area, and an “important data” catalog, which will be subject to restrictions. According to Zong Liang, an evaluation expert at the service center, the first draft of the general data catalog has been completed and is being submitted to the relevant superior departments for review.
In March 2024, the CAC released the final version of a set of regulations significantly facilitating CBDT for companies in the country. The new regulations increase the limits on the volume of PI that a company can handle before it is required to undergo additional compliance procedures, provide exemptions from the compliance procedures, and clarify the handling of important data.
Also in March, China released a new set of technical standards stipulating the rules for classifying three different types of data – core, important, and general data. Importantly, the standards provide guidelines for regulators and companies to identify what is considered “important” data. This means they will act as a reference for companies and regulators when assessing the types of data that can be exported, including FTZs such as the Lingang New Area.
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
A Concise Guide to the Verification Letter of Invitation Requirement in the China Visa Process
The application procedures for business visas to China have been simplified, with most foreigners now able to apply for an M/F visa using only an invitation letter from a Chinese company. Some countries are eligible for visa-free entry. However, a Verification Letter of Invitation may still be needed in certain cases. Consult the local Chinese embassy for confirmation.
In light of recent developments, the application procedures for business visas to China have undergone substantial simplification. Most foreigners can now apply for an M/F visa using only the invitation letter issued by a Chinese company. Additionally, citizens of certain countries are eligible to enter China without a visa and stay for up to 144 hours or even 15 days.
However, it’s important to note that some applicants may still need to apply for a “Verification Letter of Invitation (邀请核实单)” when applying for an M/F visa to China. In this article, we will introduce what a Verification Letter of Invitation is, who needs to apply for it, and the potential risks.
It’s important to note that in most cases, the invitation letter provided by the inviting unit (whether a public entity or a company) is sufficient for M/F visa applications. The Verification Letter for Invitation is only required when the Chinese embassies or consulates in certain countries specifically ask for the document.
Meanwhile, it is also essential to note that obtaining a Verification Letter for Invitation does not guarantee visa approval. The final decision on granting a visa rests with the Chinese embassy abroad, based on the specific circumstances of the applicant.
Based on current information, foreign applicants in Sri Lanka and most Middle East countries – such as Turkey, Iran, Afghanistan, Syria, Pakistan, and so on – need to submit a Verification Letter for Invitation when they apply for a visa to China.
That said, a Verification Letter for Invitation might not be required in a few Middle East countries, such as Saudi Arabia. Therefore, we suggest that foreign applicants consult with their the local Chinese embassy or consulate to confirm in advance.
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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- Lingang New Area in Shanghai Opens First Cross-Border Data Service Center to Streamline Data Export Process
- A Concise Guide to the Verification Letter of Invitation Requirement in the China Visa Process
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