China
The rights and wrongs of US overflights in the South China Sea
Author: Sourabh Gupta, Samuels International
Over the past six years, unilateral and escalatory actions by claimants to territories in the South China Sea have exacerbated tensions in the region.
China has not been the precipitator of the tensions in these waters — whether it be in initiating resource exploration activities in disputed areas, introducing military vessels to enforce jurisdictional claims, or conducting land reclamation work in the adjoining waters. In each instance, other claimants were the first to roil the waters.
But China’s response to actions by other claimants has been heavy-handed, disproportionate to the provocation at hand and, at times, designed to destabilise an already-delicate situation. That said, none of the actions by claimants, China included, has violated international law — even if some of the actions have operated in grey areas where definitive rules are lacking (such as in respect of the status of maritime historic rights). The same cannot be said about recently-publicised actions by the US Navy in these contested waters.
On 20 May, a US Navy P-8 Poseidon surveillance aircraft directly flew over a Chinese administered artificial island constructed atop a Spratly’s feature (the Fiery Cross Reef) in the South China Sea. The American crew insisting that it was flying through international airspace. The overflight was provocative, dangerous and inconsistent with international law. Worse, the most senior US diplomat for the East and Southeast Asia region appears not to grasp this, insisting that the flight was ‘entirely appropriate’.
International law on artificial islands, installations and structures is very clear. The UN Convention on the Law of the Sea reads: ‘In the exclusive economic zone, the coastal state shall have the exclusive right to construct artificial islands, installations and structures; the coastal state shall have exclusive jurisdiction over such islands; [it] may, where necessary, establish reasonable safety zones around such islands … [so long as these zones do] not exceed 500 metres around them, measured from each point of their outer edge; [all vessels] must respect these safety zones’.
China is legally entitled to reclaim and construct artificial islands and installations in the sea areas adjacent to the land features that it administers within the Spratlys chain. There is no rule in international law that bars a coastal state from undertaking this kind of reclamation at sea.
And, so long as the feature resides within the 200-nautical-mile exclusive economic zone (or median line thereof) of an ‘island’ administered by China in the Spratlys, Beijing is entitled to reclaim and build atop that land feature — even if it is submerged at high-tide. Three of Beijing’s seven administered features in the Spratlys protrude above sea level at high-tide and could comport to the technical definition of an ‘island’. If Itu Aba/Taiping Island — an ‘island’ that is administered by Taiwan — is considered to be Chinese territory as per the ‘One China’ policy, then every China-administered feature in the Spratlys chain is encompassed within this exclusive economic zone area up to the median line.
China also has the right to exercise exclusive jurisdiction over the waters and airspace above the artificial island, out to perimeter of 500 metres from its outer edges. Establishing such a safety zone has nothing to do with unilateral enforcement of a military exclusion zone or an air defence identification zone (ADIZ) as some have claimed.
It follows that the US Navy by directly flying over the artificial island has violated Beijing’s rights. Admittedly, the US is not a party to the Law of the Sea Treaty and hence is not bound by its strictures. By the same token, the US’ customary navigation and overflight freedoms do not override the prescriptive treaty-based rights that accrue to Beijing in the airspace and adjoining waters of its artificial islands, installations and structures.
The flights are not just legally untenable and dangerously escalatory; they also have implications beyond the immediate legal infringement. Specifically, they are also a standing invitation to the Chinese to send surveillance flights through the airspace directly above the disputed Senkaku/Diaoyu islands. In November 2013, Beijing declared an ADIZ in the East China Sea, which controversially included the airspace over these disputed islands. China has until now refrained from conducting non-commercial flights through this airspace. But it would be within its rights as a claimant to take such provocative and unwise action. It is extremely unwise for Washington to lay the groundwork for such behaviour through its own errant actions in the South China Sea. To rein in its Spratlys overflights would be the sensible course.
The driver of America’s actions in the Spratlys is a growing and pervasive mind-set within the Beltway that insists that the US must ‘do something … anything’ to demonstrate active resolve in the face of regional anxiety over China’s use of military and paramilitary force to allegedly change the status quo.
If that is indeed a sensible strategic objective, US (and other claimants’) naval vessels and aircraft could operationally assert their navigational and overflight freedoms beyond the 500-metre safety zone of China’s artificial islands that are built atop low-tide elevations. Such features are not entitled to a territorial sea. Common sense would dictate that as a precaution the overflights should be kept some distance away from the 500-metre zone.
But no party in the South China Sea should engage in non-commercial passage through the airspace above an artificial island, installation or structures that they do not administer or are obliged to protect. For the United States to do so would be to violate international law; for other claimants to do so would be to engage in dangerously provocative actions.
High seas navigational and overflight freedoms in the waters adjoining the disputed land features in the South China Sea have not been violated, despite a rhetorical tendency to inflate the threat to these freedoms. The exercise of these freedoms, especially by non-claimants, should not interfere with the sovereign rights and jurisdiction of those who are claimant parties in these waters.
Sourabh Gupta is a Senior Research Associate at Samuels International Associates, Inc., Washington, D.C.
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The rights and wrongs of US overflights in the South China Sea
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.
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- 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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