China
Nepal–China ties tighten, but who gains?
Author: Anil Sigdel, Nepal Matters for America
After upwards of 80 international trips, Chinese President Xi Jinping finally visited his South Asian neighbour, Nepal. The primary motive behind Xi’s visit was not China’s Belt and Road Initiative (BRI), but rather the US’s Indo-Pacific strategy. Despite the United States’ efforts, Nepal is hesitant to endorse the Indo-Pacific strategy. Meanwhile, Nepal signed a memorandum of understanding with China to cooperate on the BRI in 2017, but not a single BRI project has taken off in Nepal.
At the time of signing on to the BRI, Nepal’s ruling Communist Party seemed either unaware or deliberately downplayed the geopolitical implications of subscribing to China’s initiative that has gone on to challenge the US-led global order. Indeed, a year later, Nepal’s Foreign Minister Pradeep Gyawali was invited to Washington where Secretary of State Mike Pompeo offered Nepal a ‘central role’ in the US Indo-Pacific strategy. This was the first Nepal–US state visit of that level in 17 years.
In Nepal, the US Indo-Pacific strategy was immediately perceived as a strategy to use Nepal to contain China. For Nepal’s part, its long-standing endorsement of the ‘One China policy’, especially regarding Tibet, works as the foundation of a healthy relationship. Time and again, Nepal has come under pressure to provide a safe passage for Tibetan refugees to India — a long-standing US policy priority in Nepal. In this regard, the US Indo-Pacific policy has only amplified traditional concerns.
The Indo-Pacific strategy was not welcomed in Nepal for two additional reasons.
First, the ‘Indo’ part of the strategy that refers to India’s role in Asia is at odds with Nepal’s strong desire to reduce its dependence on India. Perhaps the strongest reason why there is support for China in Nepal, including among politicians, bureaucrats and members of the press, is Nepal’s experience with India.
Endorsing the US strategy would risk Nepal shooting itself in the foot by indirectly supporting Indian dominance in South Asia. It also feeds into Nepal’s fear that acquiescing to such pressures may destabilise the country. To be sure, India’s vision of the region differs from the US Indo-Pacific version and India–US relations are multilayered. Yet, India’s vision ensures that it remains the pre-eminent player in South Asia.
Second, while the United States and other liberal democracies and organisations have pursued the promotion of democracy and human rights in the international community, some of their policies, particularly on ethnic politics and secularism, have caused misunderstandings. Most Nepalese believe that external pressures in these areas have undermined Nepal’s identity and compromised its economic growth and development.
Meanwhile, building upon their long-standing friendly ties, China has cautiously extended its arms to Nepal in order to gain goodwill. China offered financial aid to Nepal’s security bodies to enhance cooperation and has cemented party-to-party relations by increasing interactions, visits and financial aid for development projects.
Nepal–US diplomacy appears to be under stress despite the United States being a major partner of Nepal’s communist government. Nepal’s government has yet to officially accept a US$500 million grant from the US Millennium Challenge Corporation (MCC) that has already been signed by both countries but was later tied to the Indo-Pacific strategy. Moreover, per the MCC conditions, for the agreement to enter into force, Nepal must obtain Indian consent on operational and financial details in order to fund a cross-border transmission line between Nepal and India. This only reinforces Nepal’s apprehension towards the US Indo-Pacific strategy.
Some argue that the main issue is that radical constituents of Nepal’s ruling party blocked the parliament from moving forward with endorsing the MCC grant. Despite Nepal’s policy of ‘amity with all and enmity with none’, experts in Kathmandu are concerned that the country is becoming too politically correct when it comes to China and that there is a lack of critical observation.
By building upon long-standing ties with the Nepali army and maintaining several diplomatic advantages over China, the United States remains in the game.
President Xi’s visit to Nepal comes as the country’s conditions are in China’s favour. Nepal’s current government is stable and, therefore, has a better chance of implementing agreements. Xi’s visit has also been taken by…
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.
- New Publication: A Guide for Foreign Investors on Navigating China’s New Company Law
- 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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