China
ASEAN stress-tested by big power rivalry
Author: Editorial Board, ANU
The relationships between ASEAN, China and the United States are under pressure in a world in which the global order is changing dramatically. This change threatens Asia’s shared prosperity and security. It is a product of the big shifts in the structure of global power driven by the success of that order, with the rise of China seen within the United States and elsewhere no longer as a cause for celebration but of deepening disquiet. The pressure has been intensified by the COVID-19 pandemic and its impact on big power tensions and the global economy.
ASEAN has played a central role as a fulcrum around which big power jostling in the region has been stabilised. ASEAN’s cooperation arrangements have served as an effective mechanism for engaging and managing big power interests in the region. But can ASEAN and its regional frameworks continue to remain resilient enough in dealings with the two big regional powers as they have increasingly begun to cast themselves as strategic competitors?
The rise of China as a world economic power has increased its confidence and influence in the region, including vis-a-vis ASEAN and ASEAN’s member states. Two areas in which China’s growing power directly impacts ASEAN members are on the territorial and navigation issues in the South China Sea and in responding to the large-scale financial assistance that China has offered through its Belt and Road Initiative. China’s growing power is matched with a geopolitical ambition that now encompasses a broader conception of its maritime security interests, including over large areas of the South China Sea that border on ASEAN member states.
Meanwhile, ASEAN confronts the problems that result from the radical changes in the foreign and international economic policies of the United States since Donald Trump assumed the US presidency. President Trump’s ‘America First’ policy and his administration’s rationalisation of trade protectionism in response to American job losses associated with offshoring has undermined commitment to the open multilateral trade regime. Trump’s attack on the WTO’s dispute settlement mechanism, his espousal of bilateralism and renegotiation of NAFTA in North America and KORUS with Korea, his withdrawal from the Trans-Pacific Partnership and his effectively launching all-out trade and technology war with China have rocked the foundations of the international economic system on which ASEAN relies. Mr Trump’s disrespect of its alliance relationships in the region piles on additional uncertainty in Asia about US reliability.
There are five major theatres in which these gathering economic and political forces affect ASEAN and its dealings with the major powers: in the South China Sea over territorial and freedom of navigation issues; over the Chinese Belt and Road Initiative; in the escalating trade and technology war between the United States and China; in the response to the United States’ free and open Indo-Pacific initiative (FOIP); and in consequence of the COVID-19 pandemic.
These developments present ASEAN and the heavily economically-integrated states of East Asia, who have long relied on rules-based, step-by-step diplomacy and multilateralism, with stark choices. They are choices that will put heavy internal pressure on ASEAN with its members’ variegated structure of political and security ties with the United States. They are pressures that have the potential to drive wedges among ASEAN members but also between ASEAN and its dialogue partners, in the ASEAN+6 group and the ASEAN+8 (East Asia Summit) processes and inflict unrecoverable damage upon the ASEAN-led East Asia integration enterprise. The cement of Asia’s intense economic ties with China is susceptible to corrosion by the conflicted political relations of some regional states with China and, more importantly, being jack-hammered asunder by the United States through bilateral heavying. Unless it is resisted and an alternative strategy is articulated, a US strategy bent on destroying economic interdependence with China is likely to take East Asian interdependence in its path.
ASEAN enjoys some advantages in meeting the present geopolitical challenge that it faces, as David Camroux argues in this week’s lead essay. In particular, it serves as enhancer, legitimiser, socialiser, buffer, hedger and lever of its member states’ role in regional and international affairs.
‘The hedging benefits of membership’, says Camroux, ‘provide intra-regional solidarity to international balancing…
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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