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China

Beijing’s self-sabotage in the South China Sea

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Activists stage a protest outside the Chinese Consulate, guarded by Philippine police, on the fifth anniversary of an international arbitral court ruling invalidating Beijing's historical claims over the waters of the South China Sea, in Makati City, Philippines, 12 July, 2021 (Photo: Reuters/Eloisa Lopez).

Author: Gregory Poling, CSIS

The situation in the South China Sea continues to deteriorate — military tensions are rising, Southeast Asian states are losing space to exercise their rights, fisheries are sliding closer to collapse and China is undermining its goal of regional and global leadership. Facing regular coercion, China’s neighbours are growing increasingly disillusioned about its long-term intentions and, alongside international partners, are strengthening their objections to Beijing’s claims.

China significantly increased its coast guard patrols and military exercises in disputed waters from 2020, and dangerous harassment of Southeast Asian oil and gas operations by Chinese law enforcement and retaliatory seabed surveys became the new normal. Then in January 2021, Beijing passed a law strengthening the China Coast Guard’s (CCG) authority to enforce maritime claims, by force if necessary. The law may be ambiguous, but its tough language and vast scope raised anxieties.

In March, the Philippines reported more than 220 Chinese maritime militia vessels gathered at Whitsun Reef in the disputed Union Banks. The Philippine Coast Guard conducted several patrols to the reef and the government released photos and video of the militia flotilla. Vietnam soon did the same. The embarrassment and diplomatic tension got Beijing’s attention and it temporarily dispersed the fleet to other nearby reefs. But the militia boats returnedand by October their numbers were approaching 200.

The oil and gas standoffs that have been routine since 2019 also continue. In June 2021, CCG vessels began patrolling around Malaysian drilling operations in the Kasawari gas field off Sarawak, targeting offshore supply vessels. Chinese military planes simultaneously patrolled near Malaysian air space, prompting Kuala Lumpur to scramble jets and issue a diplomatic protest. In September, China seemed to retaliate against a drilling operation by conducting a seabed survey on Malaysia’s continental shelf.

In July, China and Indonesia got into their first real spat over hydrocarbons when an Indonesian-licensed rig began drilling two appraisal wells in the country’s Tuna block at the southern edge of the South China Sea. CCG vessels patrolled around the rig for the next four months. China also deployed a survey ship with a CCG escort to conduct a seabed survey of Indonesia’s continental shelf — carefully tracing the edge of China’s ‘nine-dash line’ — as Indonesian Navy vessels shadowed it.

A dangerous incident took place in November when China turned high-pressure water cannons on a civilian ship resupplying Philippine troops on Second Thomas Shoal. The outcry from Manila — and US and European officials — was swift. China didn’t interfere with a second resupply attempt a week later. This occurred just as candidates for the 2022 Philippine presidential elections were being finalised. Predictably, most hurriedly promised a tough stance on China.

This steady stream of bad behaviour is galvanising the region. For the first time since 2016, most Southeast Asian claimants and a chorus of international partners agree that China’s behaviour is destabilising and are voicing those concerns. They are also increasingly open to greater cooperation to strengthen their positions and push back.

This shift is most evident in the Philippines.

In July, Philippine President Rodrigo Duterte decided to cease abrogating the US–Philippines Visiting Forces Agreement. Both countries subsequently agreed to develop a ‘bilateral maritime framework’ and resume construction projects under the long-stalled 2014 Enhanced Defense Cooperation Agreement (EDCA) which allows the US to access and upgrade select Philippine military bases. In November, they held their first Bilateral Strategic Dialogue in two years and announced plans to develop bilateral defence guidelines and conclude a General Security of Military Information Agreement. The Philippines has also stepped up patrols in the South China Sea and intends to deploy Coast Guard vessels to Thitu Island in the Spratlys.

The most important question for the South China Sea in 2022 is whether the turnaround in Philippine foreign policy will continue after the mid-year presidential transition. The US and Philippine defence establishments will try to lock in the recent alliance gains, with the United States already rapidly dispersing construction funds for the EDCA sites. Further high-level visits are likely as Washington seeks to prove that it is serious about forging a more robust and…

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China

Revealing the Encouraged Industries of Hainan in 2024: Unlocking Opportunities

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The 2024 Hainan Encouraged Catalogue, issued by the NDRC, MOF, and STA, aims to boost industries in the Hainan Free Trade Port. It prioritizes sectors like tourism, modern services, and high technologies, offering incentives for foreign investment and market access expansion since 2020. The Catalogue includes 176 entries across 14 categories, with 33 new additions focusing on cultural tourism, new energy, medicine and health, aviation, aerospace, and environmental protection.


The National Development and Reform Commission (NDRC), in collaboration with the Ministry of Finance (MOF) and the State Taxation Administration (STA), has issued the Catalogue of Industries Encouraged to Develop in Hainan Free Trade Port (2024 Version), hereinafter referred to as the “2024 Hainan Encouraged Catalogue.” The updated Catalogue took effect on March 1, 2024, replacing the previous 2020 Edition.

Beyond the industries already addressed in existing national catalogues, the new entries in the 2024 Hainan Encouraged Catalogue are based on practical implementation experiences and the specific needs within Hainan, prioritizing sectors such as tourism, modern services, and high technologies.

The Hainan FTP has been providing incentives to draw investors to invest and establish businesses in the region, especially foreign investment. Alongside a phased approach to opening the capital account and facilitating free capital movement, Hainan has significantly expanded market access for foreign enterprises since 2020, particularly in sectors such as telecommunications, tourism, and education.

The Hainan Encouraged Catalogue comprises two main sections:

Similar to the approach adopted by the western regions, foreign-invested enterprises (FIEs) should always implement their production or operations in accordance with the Catalogue of Encouraged Industries for Foreign Investment.

On top of the industries already addressed in existing national catalogues, the 2024 Hainan Encouraged Catalogue encompasses 14 distinct categories and a total of 176 entries especially encouraged in the region, including 33 new additions compared to the 2020 Edition. These new entries predominantly span cultural tourism, new energy, medicine and health, aviation and aerospace, and ecological and environmental protection, among others.

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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Key Guidelines for Companies in Compliance Audits for Personal Information Protection Standards

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China’s standards authority has released draft standards for personal information protection compliance audits, potentially making them mandatory for companies in 2023. The audits will require companies to undergo annual or biennial checks based on the number of people’s information they handle. The draft standards outline the audit process and requirements, seeking public feedback until September 11, 2024.


China’s standards authority has released draft standards for conducting personal information protection compliance audits. Regular compliance audits to ensure compliance with personal information protection regulations may become a requirement for companies in China under draft measures released in 2023. We explain the audit processes and requirements proposed in the draft standards.

The Standardization Administration of China (SAC) has released a set of draft standards for conducting personal information (PI) protection compliance audits. Under draft measures released by the Cyberspace Administration of China (CAC) in August 2023, companies that process the PI of people in China are required to undergo regular compliance audits.

Specifically, companies that process the PI of over one million people must undergo a compliance audit at least once a year, while companies that process the PI of under one million people must carry out an audit at least once every two years. 

While the draft measures stipulate the obligations of the auditing body and the audit scope, the draft standards outline the specific audit process, including evidence management and permissions of the audit organization, as well as the professional and ethical requirements of auditors. 

The Secretariat of the National Cybersecurity Standardization Technical Committee is soliciting public feedback on the draft standards until September 11, 2024. Public comment on the draft measures released in August last year closed on September 2, 2023, but no updated document has yet been released. 

The draft standards outline five stages of the PI protection compliance audit: audit preparation, implementation, reporting, problem rectification, and archiving management. 

Auditors are required to accurately document identified security issues in the audit working papers, ensuring that the records are comprehensive, clear, and conclusive, reflecting the audit plan and its execution, as well as all relevant findings and recommendations. 

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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A Comprehensive Guide to China’s Expanded 144-Hour Visa-Free Transit Policy at 37 Ports

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China has expanded its 144-hour visa-free transit policy, allowing travelers from 54 countries to visit certain areas without a visa. Zhengzhou in Henan Province and eight cities in Yunnan Province are now included. The policy aims to promote people-to-people exchange and requires travelers to meet specific requirements.


China has expanded the 144-hour visa-free transit policy, which allows people from certain countries to enjoy six days of travel to select areas of the country without applying for a visa beforehand, to cover 54 countries and 37 ports. Zhengzhou in Henan Province and eight more cities in Yunnan Province can benefit from this policy as of July 15, 2024. Amid China’s continuous efforts to promote people-to-people exchange, we explain who is eligible for the 144-hour visa-free transit and where in China you can travel on this special entry permit.

The National Immigration Administration (NIA) has expanded China’s 144-hour visa-free transit policy to 37 ports as of July 15, 2024. Zhengzhou aviation port in Henan now offers this policy, with the stay limited to the administrative region of Henan Province. The stay range of Yunnan Province’s policy has been expanded from Kunming to eight other cities (prefecture-level) including Lijiang, Yuxi, Pu’er, Chuxiong, Dali, Xishuangbanna, Honghe, and Wenshan. Additionally, Zhengzhou Xinzheng International Airport, Lijiang Sanyi International Airport, and Mohan Railway Port have been added as ports applicable to the 144-hour visa-free transit policy.

In this article, we explain how this 144-hour visa-free transit policy works and summarize some frequently asked questions.  

Under the 144-hour visa-free transit policy, foreign travelers can enjoy a six-day stay in certain Chinese cities without a visa, provided they come from 54 eligible countries, enter and exit China from eligible ports, stay within the allowed cities and regions, as well as satisfy other requirements.  

To obtain this visa exemption, the foreign national must have a valid passport from one of the 54 countries, which are: 

As per the requirements of China’s National Immigration Authority (NIA), people applying for 144-hour visa-free transit must have: 

You may also be required to answer some questions at immigration control upon arrival.  

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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