China
Will Biden’s America change course on China and trade?
Author: Charles R Hankla, Georgia State University
US President Joe Biden’s administration must figure out how to pick up the pieces of former president Donald Trump’s controversial trade policy, especially as it relates to China. Some hope (or perhaps fear) that Biden will return US policy to a reformed version of the pre-Trump days of liberal internationalism, embracing free trade and global economic leadership. Yet an integrated approach between liberal internationalism and populism is more likely.
A liberal internationalist approach would see Biden bring the United States into the Trans-Pacific Partnership — the trade agreement among 12 pacific-rim nations that Trump abandoned in 2017 and has since become the smaller Comprehensive and Progressive Agreement for Trans-Pacific Partnership. He might also restart momentum towards the Transatlantic Trade and Investment Partnership with the European Union and negotiate new trade terms with a post-Brexit United Kingdom. He could reinvigorate the World Trade Organization (WTO) negotiation process while putting its dispute settlement process on firmer ground.
Biden has signalled that he could embrace a traditional form of liberal internationalism. In 2017, he gave a defence of the liberal international order at Davos and in 2020 he published a paean to US leadership in Foreign Affairs. But Trump has broken the post-war consensus in favour of free trade. The politics of trade has changed, with trade sceptics on the left and right now stronger. This points to the possibility that Biden will continue his predecessor’s populist policies on trade, focussing on protectionism and unilateralism.
The differences between a liberal internationalist and populist policy direction in the United States are stark on China policy. A liberal internationalist Biden would adopt a traditional US approach to China’s rise. He would see China’s growing economy as an opportunity for US business and would hope to manage any threat Beijing might pose by integrating it into international institutions and laws.
Still, Biden may add strategic vision to Trump’s erratic and disorganised trade policy, and he might take a more aggressive position towards perceived unfair Chinese trade practices. For example, he might impose trade penalties for Chinese currency manipulation or violations of intellectual property rights. Biden’s administration may also see trade protection as one of many policy instruments available to punish China for non-trade related behaviours to which it objects. These might include human rights violations against the Uighurs and aggressive behaviour against Taiwan or in the South China Sea.
A recent Carnegie Endowment for International Peace report titled A Foreign Policy for the Middle Class and co-authored by Biden’s national security advisor, Jake Sullivan, may shed some light on the new administration’s plans. It lays out a vision for a more integrated approach to US foreign relations, one which is neither purely liberal internationalist nor purely populist. Biden has endorsed the report and the broad concept of building policy around the interests of regular Americans, however defined.
A ‘foreign policy for the middle class’ aims to consider how any action will affect the lives of most Americans. It intends to build a broad coalition around US foreign policy, prevent swings from internationalism to isolationism and forestall destructive overcommitments such as the war in Iraq. Yet it is unclear what this approach would mean for trade policy and the US–China relationship.
That said, if Biden puts this report and its implications at the centre of his foreign policy, we can predict five areas of change.
First, there will be a more integrated approach to foreign policy. Biden’s administration will view trade policy with China as one portion of the overall US–China relationship, giving consideration to the implications of trade policy on US prosperity broadly.
Second, there will be an open but pragmatic approach to international cooperation on trade. Biden may be more amenable than Trump to signing new trade agreements and deepening old ones. Still, he will not support such agreements simply to solidify US leadership but will prioritise the economic impact of any potential agreement on middle-class voters.
Third, there will be strong demands that any new agreements contain more labour and environmental protections. The influence of the left wing in the Democratic Party, along with the political power of the US rust belt, makes it likely that…
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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