China
Iran turns to China and India in the face of US sanctions
Author: Mohammad Soltaninejad, University of Tehran
In the face of the United States withdrawing from the Iran nuclear deal and adopting a ‘maximum pressure’ policy against Iran, Tehran is turning to China and India to circumvent US sanctions. In response, the United States is trying to deny Iran’s access to Chinese and Indian resources to pressure Iran into returning to the negotiation table.
Both China and India have long had the potential to become strategic partners to Iran, but efforts to establish such partnerships were undermined by the United States. Yet the idea of strategic partnerships remains alive due to the geopolitical and geo-economic factors that link China and India to the Persian Gulf, Afghanistan and Central Asia. A review of the dynamics of Tehran’s relations with Beijing and New Delhi suggests various avenues of cooperation in the face of US policies against Iran.
Beijing is showing a hesitant willingness to continue working with Tehran. China continued to import Iranian oil despite US sanctions and news leaked about negotiations over China’s prospective investment of US$280 billion in Iran’s oil and gas industry. Replacing the dollar with the renminbi as a transactions currency has facilitated China–Iran trade and financial cooperation.
To cope with the US policy of containment, China relies on Iran to diversify its energy supply. The majority of China’s oil imports currently pass through the Strait of Malacca, which is controlled by US allies in Southeast Asia. China can overcome this strategic predicament if Iran’s gas flow is connected to the Gwadar Port pipelines in Pakistan. This explains China’s readiness to invest in the development of the southeastern Iranian port of Chabahar from which Beijing can also access Afghanistan, Central Asia and Russia.
Iran also wants India’s support to counter US pressures. India preceded China in establishing constructive strategic ties with Iran. During the 2000s, Iran–India relations experienced unprecedented progress that led to India’s pledging to invest in Iran. Back then, Iran was trying to counterbalance the United States after it included Iran, with Iraq and North Korea, in the ‘axis of evil’.
The US invasion of Iraq after Afghanistan alarmed Iran further and pushed it to strengthen ties with second-tier powers, including India. India found developing ties with Iran beneficial. The International North-South Transport Corridor could connect India to Central Asia and Russia, and Iran could increase India’s influence in the Arabian Sea. Strategic and economic reasons to establish a partnership between Iran and India still persist. India has strategic interests in developing ties with Iran and is the greatest investor in Chabahar’s development.
In theory, India–Iran cooperation should be easier than that of China–Iran. Washington is more tolerant of India’s deepening relations with Iran as its interests in the Indian Ocean, the Arabian Sea and the Persian Gulf are best served if India and Iran work together.
With US troops leaving Afghanistan, India can protect US interests by fighting terrorism and strengthening the central government in Kabul. This would be difficult to achieve unless India has easy access to Afghanistan. Given the rivalry between India and Pakistan, Iran remains the best route that connects India to Afghanistan. This explains the United States’ decision to waive sanctions on India’s investment in Chabahar.
But in practice, India is showing reluctance to work with Iran after the United States’ withdrawal from the nuclear deal. India stopped purchasing Iranian oil in May 2019 and reduced the budget allocated to the development of Chabahar. Financial arrangements to facilitate trade between Iran and India are in flux, meaning that importing Indian medicine, food and other commodities will become more difficult for Iran. The major problem was that the suppliers of the equipment that Chabahar needs were not willing to make deliveries because they feared adverse impacts on their business with the United States.
Tehran is convinced that India cannot be the partner it needs to counter US sanctions. India owes its rising power status, in part, to its increasingly close relationship with the United States. No matter how valuable Iran is for India, New Delhi would not endanger its relations with Washington for the sake of preserving its friendship with Tehran.
Although Iranians are well aware that Beijing would not sacrifice its relations with the United States for its partnership with…
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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