China
Hong Kong’s crisis drags on
Author: Editorial Board, ANU
It’s been over six months since peaceful protests started in Hong Kong in response to a proposed extradition treaty with China. The situation continues to deteriorate as episodes of violence spiral out of control.
The protests and the response from authorities have brought the city to its knees. There has been violence, death, mass arrest and misinformation. The economy is contracting with the recession deeper than expected, hotels half empty, universities under siege, retail seriously hurt and transport routinely disrupted. But the pro-democracy opposition won a sweeping victory in the city’s district elections at the end of November, highlighting public support for the protest movement.
The protest movement is leaderless — by design — and the initial demand to withdraw the extradition bill has been met. The other four demands, including amnesty for the arrested protestors and universal suffrage, will be harder for the administration to meet. The reform hurdles for universal suffrage are high and in fact it was the opposition legislators that vetoed change in 2014.
Kerry Brown sums up the situation in Hong Kong in this week’s lead essay explaining that it’s ‘as though a whole generation had become wedded to protest at whatever the cost and the administration which was meant to supply security had ran out of ideas’. As the protests and response from authorities escalated, ‘even the political overlords in Beijing sometimes seemed at a loss for what to do’.
Beijing has avoided direct intervention, which would provoke significant international backlash. It is unlikely to back down to the protestors but intervening would invite a mess in Hong Kong and have huge international consequences. Beijing can afford to wait it out with the military force on show across the border.
How long can the fragile situation continue? As Brown explains, ‘2019 resolved nothing. It has just postponed things until 2020’. The longer the crisis continues, the more damage to Hong Kong.
At stake is the welfare of the people of Hong Kong and the importance the city carries for prosperity and security in East Asia. Hong Kong has a unique and strategic importance as a gateway into the mainland for the West, with its familiar institutions. And for China, beyond the issue of sovereignty, Hong Kong is where companies and policymakers can learn governance and finance at the technological frontier — lessons that can be used to power the mainland economy.
What makes Hong Kong special for China and the rest of the world is diminished the longer the crisis continues.
In November the US Congress passed an act committing to support freedom and democracy in Hong Kong, further complicating the great power rivalry and strategic competition between China and the United States. Large-scale protest movements and their responses have crippled major cities in 2019 but none involve the stakes of the two global superpowers quite like Hong Kong.
The United States has involved itself in the Hong Kong issue but what can other governments do? There’s plenty to lose in getting involved in the lose-lose crisis. Tim Summers wrote back in October that other countries need to understand the full range of views across the Hong Kong community, not just those who lobby Washington, London and Canberra. It means ‘giving some support to the Hong Kong government and encouraging it to find the right balance between interests in Hong Kong and those in Beijing’. Most importantly of all, ‘this wave of violence must come to an end’, else ‘Hong Kong’s society may never recover’.
Beijing wants the protests and disruption to stop. The protestors want their demands met. There will have to be a middle ground where both sides save face and a process is put in place that can rebuild society.
Hong Kong and China will operate as ‘one country, two systems’ until 2047 when the 50 year agreement with the British that is enshrined in Hong Kong’s constitution lapses. What happens after that is not clear and there is a lot that will change in the meantime. In the 22 years since the British handover of Hong Kong to China, much has changed, especially in China.
In 2047 China will be a different country. Its economy will be the largest in the world. But whether it has achieved its dream of becoming prosperous and high income will most likely depend on whether it is able to reform its economy and its political institutions. The success of these reforms will also shape Hong Kongers’ attitudes about relations with the…
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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