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China

Tokayev bites the reform bullet

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Kassym-Jomart Tokayev President of the Republic of Kazakhstan speaks at 77th General Assembly of the United Nations at UN Headquarters in New York on 20 September 2022 (Photo: Lev Radin/Sipa USA via Reuters).

Author: Marian Seliga, J&T Bank

In response to anti-government protests that broke out in Kazakhstan in January 2022, Kazakhstan President Kassym-Jomart Tokayev has called for reforms that might significantly change the country’s political landscape. Tokayev signed a decree on constitutional amendments on 17 September that limits presidential tenure to a single seven-year term and called for snap elections to be held on 20 November.

In September, Tokayev instructed his officials to prepare a new reform package that further ‘decentralises and distributes’ power between the government, ministries and regional heads (akimats). It envisages a mixed electoral system, simplified party registration procedures and increased regional independence. Tokayev has initiated the democratic process of expanding the powers of parliament while limiting the powers of the president.

But it would be wrong to believe that Tokayev intends to completely democratise this Central Asian country, ruled for many years by the authoritarian leader Nursultan Nazarbayev. Although Tokayev is not a typical political figure, he has been part of Kazakhstan’s establishment since the dissolution of the Soviet Union and is more typical of a Soviet cadre than a pioneer of democratisation.

It is naive to expect a man who has spent most of his professional life operating in authoritarian regimes to radically reform Kazakhstan’s political system. While he is very well educated, Tokayev represents the Kazakh elite, who prefer a reliable personality with great authority. Clan relations and respect for authority are very much rooted in this Central Asian country.

Tokayev’s calls for reform and an early election suggest that he is, first and foremost, trying to consolidate power and restore stability after the massive anti-government protests in January. The riots led to the deepest political crisis in the country and the deployment of Collective Security Treaty Organisation (CSTO) troops.

If his plan to consolidate power succeeds, it will bring an end to the biggest political crisis Kazakhstan has faced in its 30 years of independence. Shortly after the withdrawal of CSTO troops from Kazakhstan, the President promised a thorough investigation into the forces behind the January protests and a response to the major challenges that Kazakhstan faces. The investigation is ongoing, but Nazarbayev allies are losing power as Tokayev rushes to blame the old regime.

These political and economic reforms send a positive signal to foreign investors. But to fully repair Kazakhstan’s image and economic growth, Astana needs to pursue a balanced foreign policy and increase economic cooperation with the West and East.

Tokayev is expected to pursue independent foreign policy, as he is not limited by ‘patronage’ relations with Moscow like his predecessor Nazarbayev. At the 25th Saint Petersburg Economic Forum on 17 June 2022, Tokayev emphasised that Kazakhstan will not recognise the Donetsk and Lugansk People’s Republics as independent states.

Since the beginning of the Ukraine war, Russia has tried, with limited success, to push Kazakhstan into military and technological cooperation. President Tokayev has not backed Moscow’s military campaign in Ukraine and said in an interview with a Russian TV channel in June that Kazakhstan would not assist Russia in circumventing sanctions.

Kazakhstan will instead bet on closer cooperation with the United States and China. The United States is one of the largest investors in the Kazakh economy, with a direct investment inflow of about US$1.9 billion in the first quarter of 2022 — nearly twice as much as the same period in 2021.

China is also very active in Kazakhstan. It is no coincidence that Kazakhstan was the first country that Chinese President Xi Jinping, who had not left China for more than two years, visited ahead of his attendance at the Shanghai Cooperation Organisation’s summit in Samarkand.

Xi’s visit showed that China attaches great importance to strengthening relations with Kazakhstan. China has invested around US$20 billion into the Kazakh economy since 1991, reflecting its position among the top five foreign investors in Kazakhstan. Investments from China and the United States will provide a solid foundation for further economic development.

There is hope among Kazakhs that the reforms will continue after Tokayev is re-elected at the next presidential election. Tokayev is aware that providing economic security will help him consolidate power. That thinking was evident in Tokayev’s September…

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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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