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China

Xi demands respect at the US–China virtual summit

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US President Joe Biden, with Secretary of State Antony Blinken and Treasury Secretary Janet Yellen, speaks virtually with Chinese leader Xi Jinping from the White House in Washington 15 November 2021 (Photo: Jonathan Ernst/Reuters)

Author: Olivia Cheung, SOAS University of London

On 15 November 2021, Chinese President Xi Jinping and US President Joe Biden held their first virtual meeting. According to the White House’s readout, Biden told Xi that the two countries should establish ‘common sense guardrails to ensure that US–China competition does not veer into conflict and to keep lines of communication open’. Judging from the press release published by Xinhua, the Chinese state news agency, which is over six times the length of the White House’s readout, the precondition for any ‘common sense guardrails’ appears to be that Washington must treat China with ‘respect’.

Treating China with respect is the first of the three principles that Xi mentioned to Biden during their meeting. The other two were peaceful coexistence and win-win cooperation. This means that China not only wants the United States to not criticise or subvert its one-party system. It wants the United States to go a step further: to recognise, in words and in deeds, that China’s one-party system is morally on par with, if not superior to, a liberal democratic form of government.

That would mean Beijing wants Washington to accept that if there are elements of the rules-based international order that the Chinese leadership deems incompatible with its domestic political system, it is legitimate for China to diverge from them. For example, the rules-based international order defines human rights as inalienable individual rights; but China’s political system subordinates human rights to an absolute interpretation of national sovereignty and state (implying regime) security. There is little scope for Xi to respond to the criticisms against the Chinese government’s human rights performance with the sort of changes that Washington would like to see. China under Xi has become more adept at using international platforms, especially those in which it has the upper hand, like the Shanghai Cooperation Organization and the South-South Human Rights Forum, to show that its state-centric notion of human rights already enjoys widespread acceptance.

In another telling example of what putting China’s domestic political system above the rules-based international order looks like, Biden complained to Xi that China’s trade and economic practices are unfair to US workers and industries. The unfairness Biden alluded to originates in China’s top-heavy, party-led and state-centric economic system that makes use of national industrial policies, including massive subsidies and preferential policies, to groom state-owned enterprises and domestic private companies as globally competitive ‘national champions’. This distorts the playing field for foreign companies in China, and, as Chinese companies increasingly expand their global footprints, for companies outside China too.

But in Xi’s view, China’s top-heavy economic system is a part of its political system, where the Chinese Communist Party ‘superintends the whole situation and coordinates all sides’, mobilising resources from state and private sectors alike to achieve the strategic national goal of making China strong. This implies, in Xi’s view, that respecting China’s political system requires the United States to respect that China should not be held to account to the rules and norms of a free market economy, even if it is discriminatory toward non-Chinese companies.

Xi’s requirement for Biden to exercise self-restraint in relation to Taiwan should also be read in light of his expectation that the United States should treat China with respect. Xi told Biden that the way China pursues its core interests is utterly ‘defensive’. By implication, this includes China’s repeated military intimidation over Taiwan, which China sees as a part of its ‘sacred territory’.

The Xinhua press release states that Biden supports the ‘one China’ policy and opposes Taiwan’s independence. But it conspicuously leaves out any reference to the relevant statement, directed at China’s intimidation over Taiwan, in the White House’s readout: ‘the US opposes unilateral efforts to change the status quo or undermine peace and stability across the Taiwan Strait’. In lieu of it, the Xinhua release states that Xi warned Biden to ‘handle the relevant issues’ surrounding China’s sovereignty with ‘prudence’. This conveys Xi’s expectation of Biden to distance the United States from Taiwan diplomatically and militarily.

Besides respecting what China deems as its domestic affairs, Xi made it clear that…

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Lingang New Area in Shanghai Introduces Whitelists for Data Export to Enhance Cross-Border Data Flows

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The Lingang New Area in Shanghai has introduced trial general data lists to simplify data export procedures for companies in automotive, biopharmaceuticals, and mutual funds sectors. This aims to reduce regulatory burdens and facilitate cross-border data flows, following efforts to improve business environment for foreign companies.


The Lingang New Area in Shanghai has introduced trial general data lists aimed at simplifying data export procedures for companies in the automotive, biopharmaceuticals, and mutual fund sectors. These lists outline specific scenarios where businesses can export data out of China with reduced regulatory burdens, bypassing more stringent compliance requirements.

The Lingang New Area of the Shanghai Pilot Free Trade Zone (FTZ) has released the first batch of trial lists of general data for three sectors, facilitating cross-border data flows for companies operating in the area. This announcement closely follows the release of the Tianjin FTZ’s Negative List, which similarly seeks to facilitate cross-border data flows for companies operating in the FTZ by specifying the types of data that are restricted from being exported without certain approval procedures.

The first batch of general data lists has been provided for the fields of intelligent connected vehicles, biopharmaceuticals, and mutual funds, three sectors with a significant presence in the Lingang New Area. The general data lists are scenario-based, meaning they outline various situations in which data export is required and freely permitted. These include scenarios, such as multinational production and manufacturing of intelligent connected vehicles, medical clinical trials and R&D, and information sharing for fund market research.

The general data lists will be implemented for a trial period of one year from their date of implementation, May 16, 2024.

In January 2024, the Lingang New Area announced a new system for data management and export in the area, which included the release of two data catalogs, one for “important” data and one for “general” data. This new system will help facilitate cross-border data transfer (CBDT) for key sectors in the area by delineating the types of data that are restricted or subject to additional compliance measures to be exported (through the important data lists) and data that can be more easily exported (through the general data lists).

In March, the area released the Measures for the Classification and Graded Management of Data Cross-border Flow in the China (Shanghai) Pilot Free Trade Zone Lingang Special Area (Trial) (the “Lingang CBDT Management Measures”), which outlined the rules and requirements for this new system, including how companies can use the general data lists.

These developments follow many months of efforts by the central Chinese government as well as local authorities to improve the business environment for foreign companies in particular, a core part of which has been resolving headaches surrounding data export.

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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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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