China
Drawing the curtain on China–Israel cooperation?
Authors: Carice Witte and Dale Aluf, SIGNAL
As the longest-serving prime minister in Israeli history, Benjamin Netanyahu has had a profound influence on China–Israel relations. Diplomatic relations between the two countries are the widest-reaching since normalisation in 1992, with China having emerged as Israel’s second-largest trading partner.
But China’s swift ascent to global economic and military might has led to a growing unease among Israel’s Western allies, especially the United States. Has Netanyahu’s administration done enough to adapt to the rapidly shifting realities?
After China emerged as the world’s second-largest economy in 2010, it identified advanced technology as a national priority in its 12th Five Year Plan and began looking to the ‘Start-up Nation’ for innovative solutions to its domestic challenges. Netanyahu had just launched Israel’s pivot to Asia to diversify its economy beyond the United States and Europe.
Israel’s embassy and the four consulates in China were all instructed to promote business ties with Beijing. Israel saw China as a ‘good news story’, promising a stream of investment money. China identified Israel as a key source of innovation after a 2012 visit to Israel by the Central Party School’s International Institute of Strategic Studies.
Hundreds of millions of dollars subsequently flowed from China into innovative tech companies and R&D centres in Israel. Toga Networks became an R&D centre for Chinese telecommunications giant Huawei. Now Alibaba, ChemChina, Kung-Chi, Legend, Lenovo and Xiaomi have all set up shop in Israel. Many of these investments and acquisitions have been in firms focussed on cloud computing, artificial intelligence, semiconductors and communications networks — areas that have great strategic and economic importance.
The Netanyahu government also looked to China for Israel’s infrastructure needs, especially in cases when US companies were invited to compete for tenders and refused. This is what occurred when Israel sought foreign companies to operate the newly privatised section of Haifa Port in 2015.
China’s expanding footprint in Israel began to alarm officials in 2014, when the former head of Israel’s intelligence agency, Efraim Halevy, criticised Israeli dairy corporation Tnuva’s acquisition by Chinese state-owned enterprise, Bright Food, arguing that food security is a vital national interest and should not be in the hands of foreign governments.
Israel has not been entirely naive regarding the risks associated with foreign entities investing in critical sectors. While serving as Commissioner of Capital Markets, Dorit Salinger blocked multiple attempts by Chinese companies to acquire Israeli insurers Phoenix and Clal. Yet, outside the financial realm, Israel continued to welcome Chinese capital with no indication that there was a need for scrutiny.
After all, Israel and China cut defence ties in the early 2000s, when Washington compelled Israel to cancel a series of defence contracts with Beijing. From 2004 onward, so long as cooperation remained strictly in the civilian realm, all was deemed kosher.
The geopolitical landscape began to change in 2017 when Jerusalem’s most important ally labelled China a strategic rival. The United States has since raised concerns about Chinese companies conducting espionage and views China’s infrastructure development projects and acquisition of advanced technologies as a threat to its global primacy.
The United States imposed export restrictions on Chinese multinationals wishing to acquire US tech and launched a pressure campaign on its allies to curb ties with China. At a maritime conference held at Haifa University in 2018, members of the US think tank community lambasted their Israeli counterparts over approving the 2015 Haifa port deal with the Shanghai International Port Group.
Meanwhile, the Netanyahu government continued awarding tenders to Chinese companies for infrastructure projects and cultivating Chinese investment into its high-tech industries. Facing mounting US pressure, Israel still sought to maintain trade and investment relations with China.
The US-China trade war has, in some ways, brought Israel and China closer together. Israel’s semiconductor industry saw exports to China increase by 80 per cent in 2018. As the United States closed the door to Chinese tech companies, they began looking to Silicon Wadi. As China–Israel technology cooperation continued unabated, Washington ramped up pressure on Israel regarding Chinese infrastructure projects, as it ‘puts the capacity…
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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