China
Sino–US rivalry bedevils global COVID-19 cooperation
Author: Editorial Board, ANU
At the start of the year Donald Trump was poised to run for re-election in November on the back of a strong economy and jobs. Since then COVID-19 has crippled the US economy. The unemployment rate is expected to exceed 20 per cent, rivalling the worst period of the Great Depression. At the same time, America’s lack of accessible healthcare and epidemic preparedness has resulted in a mortality rate much higher than in other countries. Americans are losing jobs by the millions and dying by the tens of thousands.
Trump’s re-election campaign team wants to direct the blame for his country’s woes at China and cast him as a leader who saved the United States from even worse China-afflicted pain. Trump and his team have pushed a far-fetched story about the virus originating in a Wuhan lab. Administration officials including Vice President Mike Pence refer to the coronavirus as the ‘Chinese virus’. Trump has recently upped the ante, calling it the ‘Plague from China’ and saying that ‘100 trade deals wouldn’t make up for [the damage that has been done]’. The following day, on Fox News, Trump suggested that ‘we could cut off the whole relationship’.
Beijing has reacted with haste in seeking to control the coronavirus narrative. While admitting to early mistakes (blaming them on local officials), China’s leaders have sought to burnish their government’s credentials in leading an effective response to COVID-19, resulting in a lower infection and mortality rate than many richer countries, including the United States. When Trump lashed out at the World Health Organization (WHO) for incompetence and being ‘too close’ to China, subsequently halted US financial contributions, China stepped in with an additional US$30 million. Beijing has also provided aid to assist other countries, including the United States, respond to the virus.
Beijing has taken the opportunity to push its credentials as a responsible global citizen, in the process overreaching in its effort to control the narrative. It has mobilised ‘wolf warrior’ diplomats to pressure foreign governments into praising Beijing’s coronavirus response. China’s state media has attacked senior US officials by name, including US Secretary of State Mike Pompeo, and threatened sanctions against US politicians associated with anti-China litigation related to COVID-19. And, in one jaw-dropping moment, a spokesman for China’s Ministry of Foreign Affairs suggested that the virus originated not in China but was instead brought there by the US military.
As US–China relations deteriorate and the WHO becomes a football for the two countries’ rivalry, the potential for global coordination on COVID-19 is undermined. As Suisheng Zhao points out in the first of our feature essays this week, US–China rivalry prevented the United Nations Security Council (UNSC) from formulating a response. In the past, Zhao notes, the UNSC helped establish the Global Fund for AIDS, Tuberculosis, and Malaria. It also passed a resolution in 2014 declaring the Ebola epidemic in West Africa a ‘threat to international peace and security’, leading to the creation of the UN Mission for Ebola Emergency Response — the first UN mission to address a public health crisis.
In another feature essay this week Jia Qingguo worries that the current diplomatic standoff between Beijing and Washington is likely to continue for the foreseeable future. He sees no end to Trump’s anti-China stance in the year of his re-election campaign (Trump boasted on Fox News he could save America US$500 billion by cutting off the relationship with China) and no way that Beijing will back down from its equally muscular response. Even intervention by the two great helmsmen seems unlikely. Trump spoke of his ‘very good relationship’ with Xi Jinping, but said ‘right now I just don’t want to speak to him’.
The extent of the economic fallout from COVID-19 and souring US–China relations is difficult to gauge. In the third of our feature essays this week, Justin Yifu Lin examines China’s options for responding to the economic challenges, optimistic that China can still achieve GDP growth of 3-4 per cent in 2020 despite IMF forecasts that global growth will change by a similar amount in the opposite direction. Lin observes that COVID-19 has imposed both demand and supply-side economic destruction. He advocates investment in infrastructure to create jobs, but also calls for support of household consumption in the form of vouchers and cash transfers 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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