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China

Japan leans forward on China–Taiwan tensions

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Japanese soldiers and US Marines train during a joint military drill between Japan Self-Defense Forces, French Army and US Marines, at the Kirishima exercise area in Ebino, Miyazaki prefecture, Japan, 15 May 2021 (Photo: Charly Triballeau/Pool via Reuters).

Author: Sheila A Smith, CFR

Today Beijing has far greater military resources to bring to bear on its relations with its neighbours and increasing pressure on Taiwan’s defences by the Chinese People’s Liberation Army (PLA) has many in Washington and Tokyo worried about Beijing’s intentions. China is now the top priority for the US–Japan alliance, as the foreign and defence secretaries and cabinet ministers of both nations made clear in their joint statement for the Japan–US Security Consultative Committee (2+2) in March 2021.

A month later, Japanese Prime Minister Yoshihide Suga and US President Joe Biden also called out China for its behaviour, raising concerns about human rights issues, maritime challenges across the region and economic coercion imposed on trading partners. Their statement suggests renewed allied concern about rising tensions there.

Japan will have no choice but to prepare to defend itself in the case of a conflict across the Taiwan Strait. Proximity to Taiwan — only a hundred or so kilometres separate Taiwan from Japan’s southernmost islands — makes the possibility of conflict there of deep interest to Japan’s Self-Defense Forces (SDF). In addition, Okinawa hosts a considerable array of US military forces, making it a likely staging area for any US assistance to Taiwan’s defences.

Japanese Deputy Prime Minister Taro Aso testified to the Diet on 5 July that a military crisis across the Taiwan Strait would threaten Japan’s survival. This was a nod to the 2015 security laws that laid the groundwork for the SDF to join with other national militaries in case of a conflict.

But the consequences of Tokyo’s decision-making on Taiwan will be grave. China remains one of Japan’s largest trading partners and the PLA regularly operate in and through Japan’s waters and airspace.

The regional military balance around Japan has been shifting in China’s favour. The clash between Beijing and Tokyo over a long-dormant sovereignty dispute over islands in the East China Sea a decade ago suggested that China was willing to use its maritime forces, both coast guard and navy, in support of its territorial claims.

Military action by China against Taiwan would provoke the United States into a military response. Many experts argue that China has little to gain from a direct attack on Taiwan. Yet, outgoing Indo-Pacific commander Admiral Philip Davidson told the US Congress that he thought the PLA would be able to launch such an attack within the next six years. A US response to Chinese aggression against Taiwan would be calibrated to the nature of that threat. Chinese pressure on Taiwan could present itself as grey-zone tactics or as cyberattacks. Both could create unprecedented challenges to Taiwan’s economic vitality and territorial integrity.

Regardless of the intensity of such a confrontation, Tokyo would be faced with difficult decisions about how Japanese and US forces would cooperate in response. Japan’s role would likely involve two distinct actions. First, Japan would be asked to provide support for US operations. Second, Japan’s Self-Defense Forces would need to consider how best to defend Japanese territory during a conflict.

Not surprisingly, opinion within Japan is divided. There are those who believe that Japan must play a role with the United States should China use force against Taiwan. Defence ministry officials clearly see a need to develop more clarity on how the alliance would respond.

Minister of Defence Nobuo Kishi’s political deputy, State Minister of Defence Yasuhide Nakayama, has repeatedly declared to the media that it is time to ‘wake up’ regarding Taiwan. The newly released 2021 Defence White Paper — which drew considerable attention for its anime-inspired samurai on the cover — clearly stated that cross-Strait tensions were an important factor in considering Japan’s security.

Political leaders, even those within the Liberal Democratic Party, are unsure of what steps to take next. Prime Minister Suga has taken a more reserved stance than his deputy. Sharing fully US and Japanese assessments of Chinese behaviour across the Taiwan Strait and in the vicinity of Japanese territory is indispensable, but care must be taken to ensure the politics of the moment take a back seat to the need for alliance readiness.

Alliance consultations will move ahead by year’s end, and Japan should be prepared to develop its options in three areas: which bases and facilities would be available to US forces in a Taiwan contingency; what priorities and principles for…

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The New Company Law brings substantial changes with implications for new and existing foreign invested enterprises and stakeholders. Foreign investors must assess if adjustments to existing structures

Despite recent economic challenges, many organizations’ China operations provide unparalleled access to one of the world’s largest and most competitive global supply chains. Over the past 30 years, a significant number of foreign invested enterprises (FIEs) have been established in China. As of the end of 2022, the number of FIEs operating in China had exceeded 1.12 million.

Compared to their domestic counterparts, FIEs demonstrate greater caution regarding legal revisions and are diligent in making swift adjustments. This stems not only from the closer scrutiny FIEs face from regulatory authorities but also from their commitment to compliance and maintaining a competitive edge.

Clearly, there has been a shift in China’s corporate regulations—from merely encouraging an increase in the number of companies to focusing on attracting mature enterprises and higher-quality investments. While the transition from a broad approach to a more refined one may cause short-term challenges, it ultimately benefits the company’s long-term development. By returning to the original intent of setting registered capital, it not only protects the interests of creditors but also shields shareholders from the operational risks of the company.

In China’s foreign investment landscape, while most FIEs exercise commercial prudence in determining registered capital—factoring in capital expenditures, operational costs, and setting aside surplus funds—some opt for higher registered capital levels to avoid future capital increase procedures. This typically involves lengthy document signing and registration changes, lasting 1-2 months.

Joint ventures (JVs) often impose stricter payment deadlines for registered capital in their articles of association to ensure both parties’ simultaneous contributions align with operational needs. Conversely, wholly foreign-owned enterprises (WFOEs) tend to favor flexibility in payment deadlines, often allowing full payment before the company’s operational period expires.

Given these circumstances, despite the generally stronger capital adequacy among foreign companies compared to domestic entities, many FIEs could be affected by the new capital contribution rules.

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.

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Foreign Tourist Groups on Cruise Ships Fully Permitted Visa-Free Entry in China

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China will allow visa-free entry for foreign tourist groups arriving by cruise ship at 13 ports along the coast, starting May 15, 2024. Visitors must stay with the same ship and in permitted areas for up to 15 days. This policy aims to boost tourism and facilitate high-quality development in the cruise industry.


China’s immigration agency announced that it will grant a visa-free policy for foreign tourist groups to enter China by cruise at all cruise ports along the coast of China, starting May 15, 2024. The tourist group must remain with the same cruise ship until its next port of call and stay within permitted areas for no more than 15 days.

Effective May 15, 2024, the National Immigration Administration (NIA) has officially implemented a visa-free policy for foreign tourist groups entering China via cruise ships. This progressive move aims to enhance personnel exchanges and foster cooperation between China and other nations, furthering the country’s commitment to high-level openness.

Under this policy, foreign tourist groups, comprising two or more individuals, who travel by cruise ship and are organized by Chinese domestic travel agencies, can now enjoy visa-free entry as a cohesive group at cruise ports in 13 cities along the Chinese coast.

The tourist group must remain with the same cruise ship until its next port of call and stay within China for no more than 15 days. The eligible areas for this policy are coastal provinces (autonomous regions and municipalities) and Beijing.

Furthermore, to support cruise tourism development, seven additional cruise ports—Dalian, Lianyungang, Wenzhou, Zhoushan, Guangzhou, Shenzhen, and Beihai—have been included as applicable ports for visa-free transit.

The recent implementation of the visa-free policy for foreign tourist groups entering China via cruise ships is poised to have several significant effects. The policy will provide crucial support for the cruise economy and the overall cruise industry. By facilitating smoother travel for foreign tourist groups, it acts as a catalyst for high-quality development in this sector.

Additionally, under this policy, international cruise companies can strategically plan their global routes by designating Chinese port cities, such as Shanghai, Xiamen, and Shenzhen, as docking destinations. This move is expected to attract more cruise ships to Chinese ports, ultimately bringing in a larger number of international visitors to the Chinese market.

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.

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China’s New Tariff Law: Streamlining and Standardizing Current Tariff Regulations

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China’s new Tariff Law consolidates import and export duties, clarifies rules for imposing counter-tariffs, and sets a December 1, 2024 effective date. It codifies existing practices on cross-border e-commerce and rules on the origin of goods into law, impacting trade relations.


China’s new Tariff Law consolidates rules on import and export duties that were previously implemented via several legal documents and makes important clarifications and additions to prior regulations. Among other changes, it stipulates provisions for the Chinese government to impose counter-tariffs on imported goods, codifying these powers into law for the first time. We outline all the notable updates to the China Tariff Law and discuss the implications for the country’ current trade relations. 

On April 26, 2024, the National People’s Congress (NPC), China’s legislature, adopted the Tariff Law of the People’s Republic of China (the “Tariff Law”) after several rounds of revisions.

The new Tariff Law will replace the Import and Export Tariff Regulations of the People’s Republic of China, which fall under the purview of the State Council, and adopts many of its provisions.

Previously, Chinese law had not stipulated legislative powers to implement countervailing tariffs, although China was nonetheless able to impose counter-tariffs on trade partners through other means.

China’s new Tariff Law comes into effect on December 1, 2024.

China’s Tariff Law elevates several existing provisions and practices to the level of law. For instance, Article 3 of the Tariff Law clarifies the obligations of cross-border e-commerce platforms for tariff withholding and implementing consolidated taxation.

The Tariff Law also solidifies the rules and regulations on the origin of goods, stipulating that the application of tariff rates shall comply with the corresponding rules of origin. Although this has been previously implemented in practice, it is the first time this has been codified into law.

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.

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