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China

China ‘investigating’ missing Defense Minister Li Shangfu: reports

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Chinese Defense Minister Li Shangfu is reportedly being investigated by the ruling Chinese Communist Party after being out of the public eye since Aug. 29, according to several Western media reports.

Li is the second senior Chinese official to go missing after the recent disappearance of former Foreign Minister Qin Gang.

Reuters quoted “10 people familiar with the matter” as saying that Li is being probed for corrupt procurement of military equipment, without specifying the kind of equipment involved.

“Eight senior officials from the Chinese military’s procurement unit, which Li led from 2017 to 2022, are also under investigation,” the agency said in a report on Friday, citing two people in direct contact with the military.

The Washington Post quoted U.S. officials as saying that Li, who was last seen in public at the China-Africa Peace and Security Forum in Beijing on Aug. 29, is currently under investigation for “corruption,” and will likely be removed from his post.

An official account of Li’s last public speech from state news agency Xinhua was still available on the website of the State Council on Friday.

The Wall Street Journal also reported that Li will lose his job, while the Financial Times reported that the U.S. government believes him to be under investigation.

Li, 65, has missed meetings with Vietnamese and Singaporean defense leaders in recent weeks, Reuters said in an earlier report quoting sources with direct knowledge of the engagements.

Another disappearance

The reports came after Rahm Emanuel, the U.S. ambassador to Japan, tweeted that Li was also “a no-show” for his planned trip to Vietnam, drawing parallels with Qin Gang’s disappearance.

“President Xi’s cabinet lineup is now resembling Agatha Christie’s novel ‘And Then There Were None,’” Emanuel wrote. “First, Foreign Minister Qin Gang goes missing, then the Rocket Force commanders go missing, and now Defense Minister Li Shangfu hasn’t been seen in public for two weeks. Who’s going to win this unemployment race? China’s youth or Xi’s cabinet?”

Beijing has remained tight-lipped about the whereabouts of Qin, who was replaced as foreign minister by top Communist Party diplomat Wang Yi on July 25.

By July 31, President Xi Jinping had also replaced the commander of the country’s rocket corps — which controls the country’s nuclear missiles — amid media reports of an investigation into his predecessor and his deputies.

China’s Defense Minister Li Shangfu attends the 20th Shangri-La Dialogue summit in Singapore in June 2023. Credit: Caroline Chia/Reuters

U.S.-based former PLA Navy Lt. Col. Yao Cheng said that move was part of Xi’s bid to remove any dissenting voices from the highest echelons of military command as part of preparations for a military invasion of democratic Taiwan.

“It’s been the Rocket Force people who don’t want to go along with Xi Jinping’s plan,” Yao told Radio Free Asia at the time. “They don’t want a war — they fear war because they have a very clear idea of what their missile capabilities are.”

1982 army enlistment

Li joined the Communist Party in 1980 and enlisted in the army in 1982, serving as director of the Equipment Development Department of the Central Military Commission and other important positions in procurement. 

By 2022, he had a seat on the party’s 20th Central Committee, and was appointed defense minister in March 2023. 

Li was sanctioned by the U.S. State Department in September 2018 due to transactions with Russian arms dealers.

Chinese foreign ministry spokeswoman Mao Ning declined to comment on Li Shangfu’s whereabouts when asked about him during a regular news briefing on Monday.

“I’m not aware of the relevant information,” she told reporters.

The defense ministry didn’t immediately respond to requests for comment from Reuters, while the U.S. Embassy in Tokyo said it had no further comment for the time being, the agency reported.

‘Invisible’ factors

Political commentator Johnny Lau said that arrests of senior officials in China for “corruption” can be highly selective, and have little to do with how corrupt any of them are.

“We have seen in the past that there were a number of factors that were invisible … in the Chinese Communist Party’s ongoing anti-corruption campaign,” Lau said. “In other words, he has chosen [whom to target], and these aren’t genuine anti-corruption cases.”

“They don’t involve the state legal system until they have figured out the impact on the party [of targeting this person], using its disciplinary system,” he said.

“This way of going about it feels a lot like rule by a single individual.”

But Lau said Beijing is unlikely to put on a big show trial, as it did in the case of former Chongqing party chief Bo Xilai and his political associates.

“A lot of these things are dependent on various factors, like internal reshuffles, power struggles and internal shock-dampening,” he said.

But Lau saw the recent changes at the head of the Rocket Force as likely to lead to less military tension, rather than more.

China this week unveiled a “blueprint” for “peaceful unification” including economic incentives and sweeteners for residents of Taiwan, which has never been ruled by Beijing, to move to China’s Fujian province to live and work.

Translated by Luisetta Mudie. Edited by Malcolm Foster.

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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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