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China

Strained ties with Russia boost prospects for Central Asian integration

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Russian Prime Minister Mikhail Mishustin shows the way to Kazakh President Kassym-Jomart Tokayev during a meeting in Moscow, Russia, 28 November 2022 (Photo: Reuters/Sputnik/Alexander Astafyev)

Author: Gennady Rudkevich, Alexandria

Russia’s invasion of Ukraine, and China’s modest response to it, has placed the governments of Central Asia in an unenviable position — aware that Russia does not fully respect their sovereignty and has no qualms about using force, while recognising that no one would provide sufficient assistance if they became a target of Russian aggression.

Though highly reliant on Russia, Central Asian governments have good reason to seek other allies. Russia’s invasion of Ukraine violated numerous treaties and used greater force in pursuit of greater ambitions than Russia’s 2008 war against Georgia. It also relied on rationales — discrimination against ethnic Russians, hyper-nationalist politicians and allegedly weak historical claims to statehood — that could easily be applied to several countries in Central Asia. Some of these arguments have been used against Kazakhstan by Russian politicians since the 1990s, including frequently in 2022.

Central Asia is suffering the economic consequences of Russia’s invasion of Ukraine. Western-led sanctions noticeably impacted remittances from workers based in Russia. Russia’s response to those sanctions — including a ban on grain exports — also negatively impacted the Central Asian economy.

These actions led to backlash from Central Asian leaders, including public rebukes of Putin’s justification for war, refusals to support Russia in Ukraine-related UN votes, attempts to prevent their citizens from joining the Russian military and the provision of refuge for Russians fleeing conscription. Even Tajik President Rahmon — who is highly dependent on Russian goodwill — criticised Russia for not showing the region respect.

Russia’s war provides an opening for other great powers to take a more active role in Central Asian affairs. The United States is not a realistic option given that greater US influence over Central Asia is unacceptable to Moscow, which holds an effective veto over outside involvement in the region through its political and economic influence.

In any case, the United States would find it difficult to displace Russia and China for a combination of geographic, economic and political reasons, even if it had the motivation to get more involved in a region that is less important to US interests since its withdrawal from Afghanistan. The most the United States can do is to call for more dialogue as Central Asian regimes’ pursuing anything more substantial would risk retaliation from Russia.

The more obvious option would be China. Central Asian elites have a broadly positive view of China. Under President Xi Jinping, China has sought to expand its influence — with Central Asia a natural target. It has voiced support for Central Asian sovereignty through its role in the Shanghai Cooperation Organisation. China also has far more resources at its disposal than potential rivals. Yet China has so far failed to capitalise on this opportunity. Part of the reason might have been the preparation for the 20th Communist Party Congress, where success was seen as vital for Xi’s consolidation of power.

There are other reasons to doubt China’s ability to step into the void left by Russia. One is public ambivalence toward China. As China took a more active economic role in Central Asia, its favourability sharply decreased. A large part has to do with rising debt levels, with most of that debt owed to China. Using similar debts to take control of vital infrastructure in other developing countries has not helped China in that regard.

China’s ambiguity towards the war in Ukraine — being unwilling to condemn Russia’s behaviour while voicing concerns in private — demonstrated that China cannot be counted on to take a clear position in any dispute with Russia. As China positions itself as a great power, it can no longer rely on simply making statements, especially when made in private. This will not affect China’s extensive economic links to Central Asia — there isn’t a real alternative — but it will push Central Asian rulers to look for other security options.

The most realistic alternative is eschewing reliance on outside great powers and instead pushing for greater regional integration, which has seen positive developments. Kyrgyzstan and Uzbekistan resolved a major water dispute in November 2022. Ties between longtime rivals Uzbekistan and Kazakhstan have been improving since Shavkat Mirziyoyev became President of Uzbekistan. Kazakh President Kassym-Jomart Tokayev refuses to support Russia’s war,…

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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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