China
Why China cares about the label of democracy
Author: Xunchao Zhang, University of Wisconsin-Madison
If you access any Chinese state media or pro-state social media published in late 2021, you will be bombarded with attacks on US President Joe Biden’s ‘Summit for Democracy’ and relentless insistence that China is the world’s largest democracy. Beyond the fear of geopolitical containment, it is puzzling why China cared about Biden’s democracy summit.
It is not initially clear why China would insist on being a democracy when claiming democratic status risks falling into a rhetorical trap.
While most Western media dismisses China’s claim to democracy as simply a cynical propaganda ploy, some ‘democratisation optimists’ in the West have suggested that China’s reaction to Biden’s summit shows China’s commitment to some vague notion of eventual democratisation. These observations miss the point. China’s reaction to the summit — clinging onto the concept of democracy — largely reflects a lack of a conceptual alternative, geopolitical fear and some genuine domestic perception that the country is democratic.
The most important problem facing China is a lack of alternative concepts to legitimise the state. Although contemporary China is the heir to a socialist revolution, beyond nostalgic leftist circles, orthodox Marxism cannot capture the public imagination as an alternative to liberal democracy.
Granted, there is growing intellectual interest in critiques of democracy such as meritocracy and the Schmittian notion of self-justifying authoritarian state power. Eric Li is perhaps the most eloquent critic of democracy in China offering universal critiques of liberal democracy, such as institutional vulnerability to being captured by elites and the tendency to be gridlocked in unhealthy partisanship and identity politics. Beyond critiques, there are also alternative visions being offered, such as by Daniel Bell who often characterises China as an examination-based meritocracy rather than electoral democracy.
Yet, so far, none of the alternative concepts of legitimisation have gained official endorsement. You will not find meritocracy or citation of Carl Schmitt in the plethora of documents produced by China Communist Party plenums. These alternative concepts are rare sights even in the less rigid Chinese media propaganda targeting foreign audiences.
There are also geopolitical concerns. Embracing any legitimisation concept other than democracy by China, even one that is not explicitly anti-democratic, may unite the Western world in a democratic alliance against China. There are anti-democratic leaders and anti-democratic movements all over the world, usually referred to as ‘populists’, who do not have a systematic anti-democratic ideology. Most of these populists also take up anti-China foreign policy positions. Some even treat China as a scapegoat for their domestic grievances. There is little chance for anti-democratic solidarity between China and the international populist right.
It is advantageous for Beijing to cling to the democratic label to avoid contributing to the formation of a united Western democratic coalition against China. Plenty of people in China genuinely believe their country is democratic. One historical reason behind this is the presence of so-called ‘people-oriented (minben)’ thought in traditional Chinese political culture, which emphasises governance ‘for the people’, rather than government ‘by the people’. Mencius outlined the classic Confucian ideal of state–society relations, under which ‘the people come first, the state comes second, [and] the ruler comes last’.
Yet a state that works for the benefit of the people is not necessarily democratic. People-oriented governance often means a paternalistic but responsive form of authoritarianism. Elites and the public in China often use performance metrics, rather than procedural and institutional criteria, to measure how legitimate or ‘democratic’ the state is. These performance metrics include economic growth and also Beijing’s ability to avenge China’s century of humiliation and reclaim China’s great power status.
The primacy of performance metrics over procedural ones is also reflected in survey data. Pollsters repeatedly find that a majority of Chinese respondents consider China a democracy. It would be self-deceiving for Western observers to dismiss these survey results as a simple reflection of public quiescence under state pressure. A more nuanced interpretation is that ‘democracy’ is simply what the public calls a state…
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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