China
Great power competition has shifted in the United States’ favour
Author: Ryan Hass, Brookings Institution
At the start of 2022, China’s economy appeared strong, Beijing seemed to have contained the spread of COVID-19, Sino–Russian relations were deepening and there was growing talk of autocracies stealing the march on democracies across the world. China’s leaders were proclaiming that ‘time and momentum’ were on China’s side in its great power competition with the United States.
Meanwhile, the United States was mired in partisan paralysis, with President Joe Biden’s ‘Build Back Better’ agenda seemingly stuck. Washington was reeling from the reputational damage of the United States’ chaotic withdrawal from Afghanistan. Within Asia, talk was growing louder of China dominating the 21st century.
A year later, the script reads differently. China’s economy has turned sluggish, pulled down by expanding state intervention in the economy, waves of COVID-related lockdowns, a property sector slowdown and softening international demand for Chinese exports. Beijing’s messy exit from its zero-COVID policy has exacerbated domestic stressors. Even as China remains the largest trading partner for most of the world, its economic lustre has dimmed amid declining economic growth.
China’s international image in most of the developed world has also suffered. Part of this owes to China’s rhetorical support for Russia amid Moscow’s barbarism in Ukraine. China’s plummeting image is also attributable to its hardening authoritarianism at home, its nationalistic ‘wolf warrior’ diplomacy and its growing military activity along its periphery, including in the waters and airspace around Taiwan.
By comparison, Biden’s political position has strengthened. At home, the Biden administration secured passage of the bipartisan Infrastructure Investment and Jobs Act, the CHIPS and Science Act and the Inflation Reduction Act, which together add up to over US$1 trillion in government spending. Though elements of these investments favouring domestic manufacturing have generated friction with US trading partners, they represent a generational investment in US innovation. Technology companies such as Taiwan Semiconductor Manufacturing Company, Samsung, Micron, SK Hynix, Intel and IBM announced investments in semiconductor production in the United States exceeding US$100 billion.
The United States also strengthened its position abroad. Transatlantic unity deepened under the stress of the joint response to Russia’s invasion of Ukraine. Coordination strengthened in other purpose-driven groupings, such as the Quad and AUKUS. The G7 bolstered its relevance as its members acted with greater cohesion on global challenges, including financing Indonesia and Vietnam’s clean energy transitions. US–ASEAN ties were elevated to a comprehensive strategic partnership. The United States’ relationships with Pacific Island countries also advanced, including through the release of the White House’s Pacific Partnership Strategy.
Looking ahead, several potential flashpoints will require careful management in 2023, including North Korea’s nuclear program, China–India border flareups and rising tensions in the Taiwan Strait. A key question will be whether the United States’ progress and China’s relative setbacks over the past year create conditions conducive for Washington and Beijing to lower the temperature of bilateral relations.
Biden will face domestic political pressure to maintain an unyielding posture on China. China’s President Xi Jinping, similarly, is unlikely to relent on issues that are aggravating tensions. Still, from a strategic standpoint, the United States’ global partners would welcome efforts by Washington to cool tensions, even if they do not yield reciprocal actions from Beijing.
US officials are receiving consistent demands from foreign counterparts to responsibly manage competition with China. Many countries around the world are more focussed on addressing proximate challenges, such as rising sea levels and mounting debt, than they are on great power competition. They want to see the United States galvanise global efforts to tackle common challenges rather than grow fixated on tit-for-tat games with China.
The Biden administration entered office believing it needed to invest at home and deepen relations with partners to put the United States in a ‘situation of strength’ to deal directly with China. Now that it has made historic investments in US innovation and strengthened bonds with global partners, a key question is whether the Biden…
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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