China
Containing China through the South Korea–US alliance
Author: Anthony V Rinna, Sino–NK
Washington appears to be using the South Korea–US alliance to advance its goal of containing China as part of the ‘free and open Indo-Pacific’ strategy. But US attempts to marshal South Korea in strategic competition with Beijing will ultimately run the risk of alienating its partner, even as both Washington and Seoul insist that the alliance remains ‘ironclad’.
This move comes at a time when the South Korea–US alliance is experiencing a level of strain unseen for nearly 20 years. The strain is coming from the White House’s exorbitant financial demands for the maintenance of United States Forces Korea as well as US pressure on South Korea not to withdraw from the GSOMIA intelligence-sharing pact with Japan.
The official purpose of the South Korea–US defence partnership has for decades been to deter a conventional attack on South Korea from North Korea, while pragmatically also preventing South Korea from undertaking the forceful unification of the Korean Peninsula under Seoul’s authority.
Yet in recent times the rise of China has given a new sense of purpose to the South Korea–US alliance. Recent polls from both the Chicago Council on Global Affairs and the Seoul-based Asan Institute indicate that support for the alliance remains strong — in part because the publics of both South Korea and the United States view it as a tool to counter China.
Proposals have also emerged aimed at modifying the alliance to have South Korea participate in contingencies involving the United States outside the Korean Peninsula, such as in the South China Sea. There is an interest in expanding the scope of the alliance from South Korea’s historically limited and ad hoc support of American military undertakings in other regions of the world to a more permanent role.
But South Korea will face the brunt of any deliberate repurposing of the alliance to position the United States against China. A rough parallel to this can be seen in the evolution of NATO’s purpose after the Cold War.
US policymakers in the 1990s believed that NATO expansion was best for European security, even as it went against promises Washington had previously made to Moscow. Russia’s aggressive actions against Georgia and Ukraine — and a looming threat in other neighbouring states — have been a direct response to an otherwise unprovoked geopolitical encirclement of Russia by the West.
The question policymakers in Seoul need to be asking is whether or not the maintenance of the current security arrangement with the United States is worth the risk of being entangled in Washington’s profound scepticism toward China’s rise. Likewise, Washington must consider the possibility of alienating South Korea by asking Seoul to extend the mandate of their alliance to a wider scope of balancing against China.
Conventional wisdom predicts that South Korea will eventually have to choose outright political alignment with either China or the United States. Still, South Korea is showing a propensity for taking its own stance when it comes to relations with China outside the framework of great power tensions.
Following the breakdown of China–South Korea relations in 2015–2016 due to the controversy over the US deployment of the Terminal High Altitude Area Defense (THAAD) missile defence system, South Korean President Moon Jae-in embarked on a ‘reset’ of relations with Beijing. This reset helped smooth the way for the 2019 China–South Korea strategic dialogue — the first such discussion between China and South Korea since 2014.
A military hotline between Beijing and Seoul that was opened in 2015 was also put to good use in October 2019 when the Chinese air force notified South Korea that its aircraft were approaching South Korea’s Air Defense Identification Zone.
While China’s retaliatory economic measures against South Korea in 2017 did not reverse Seoul’s decision to deploy THAAD, they did show that the United States will not necessarily come to the aid of an ally bearing the brunt of economic warfare. It seems this was the reason behind South Korea’s decision to issue the so-called ‘three noes’ to China regarding Seoul’s alignment with the United States — no additional THAAD deployment, no participation in US missile defence and no US-Japan-ROK trilateral military alliance.
Likewise, despite a shared threat from North Korea to Seoul, Tokyo and Washington, South Korea has placed what it considers to be its own national interest ahead of security multilateralism. South Korea’s decision to…
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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