China
The geopolitical contours of a post-COVID-19 world
Author: Deepanshu Mohan, OP Jindal Global University
While the impact of the COVID-19 pandemic on the global economy is more dramatic than any other shock in recent history, the consequences of the virus for the geopolitical order could be even more consequential. A radical shift in the global political economy may be imminent in the post-COVID-19 world.
This shift is conditional on two factors. The first factor is the relative degree of economic recovery seen in nations affected by the pandemic. The second factor is the very different domestic political scenarios that now exist in many affected nations.
Before the pandemic, populism — and its coercive authoritarian tendencies which see the nation-state strengthen in a backlash against the multilateral-globalist order — was on the rise. The outbreak of the pandemic has provided an opportunity for most states to either increase or retract multilateral cooperation.
As the crisis unfolds, critical multilateral arrangements like the G20 are not presenting a unified front. The United States and China have also faced criticism for displaying weak global leadership.
The United States under President Donald Trump is showcasing an inability to lead efforts to fight the virus, let alone offer necessary aid to other countries. Instead, the United States has threatened to undertake protectionist measures to restrict exports of essential medical equipment to neighbours like Canada. Trump is also halting US contributions to the World Health Organization (WHO).
China, on the other hand, has utilised the opportunity to push its state-propaganda internationally, while emerging as a ‘costly’ global supplier of medical equipment. Despite providing for the increased short-term demand for medical supplies, China has continued to receive severe criticism for its information censorship.
In a post-COVID-19 world, many developed nations may consider disentangling direct trade relations with China and decoupling supply chains to restrict the flow of goods and services into and from China.
We are also witnessing signs of authoritarian leaders deepening their control over citizens and redefining sovereign command. China is already commanding greater authoritarian control over its citizens under President Xi Jinping. Despite the United Kingdom witnessing a surge in COVID-19 related deaths, Prime Minister Boris Johnson has in fact seen a rise in his UK approval ratings.
In the United States, Trump is using the crisis to draw more national attention to his upcoming election bid, projecting himself as a ‘wartime president’ and continuing to pursue xenophobic identity politics.
The pandemic has also eroded the credibility of organisations like the WHO. Steps taken by the organisation to exclude Taiwan from emergency meetings and praise of China’s response to the virus make the WHO look like ‘a mouthpiece for Beijing’.
As Yuval Noah Harrari argued in a recent column, the choices people and governments make today will redefine the world. Both sovereigns and their citizens need to be wary of the long-term ramifications of their choices.
One key pattern being observed in most affected countries is how the fight against coronavirus has fostered support for strong leaders.
For example, the nationalist government in Hungary passed a law in late March granting sweeping emergency powers to Prime Minister Viktor Orban. The law grants Orban almost absolute discretionary authority by sidelining all parliamentary process. He now has the power to rule by decree indefinitely.
This politico-economic shift is not new. During the 1930s — after the Great Depression — economic deprivation and rising unemployment rates fuelled the rise of authoritarian leadership across the world.
As Barry Eichengreen explains, ‘There was [in the 1930s] economic nationalism all over in the form of trade wars … there was Oswald Mosley’s antisemitism … there was the harassment and deportation of Mexican Americans, including even hospital patients, by the Los Angeles welfare department and US Department of Labor’.
These events gave rise to the New Deal and the 1942 Beveridge Report in the United States, which transformed the existing social, economic and political order.
The post-Great Depression financial world saw more banking regulations and the collapse of the international gold standard monetary system, which lead to the establishment of a new Bretton Woods order.
While parallel insinuations might be appealing, the post-COVID-19 political machinery might witness a shift towards the adoption…
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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