Issue 23
Shanghai Weekly Bulletin
No. 2,December 2023
Shanghai Weekly Bulletin is an information service presented by the Foreign Affairs Office of Shanghai Municipal People’s Government in collaboration with Wolters Kluwer to foreign-funded enterprises, foreign-related institutions as well as people from overseas living in Shanghai. Covering major national and Shanghai foreign-related news, event information, policy Q&A and interpretations in the past week, it keeps you up-to-date with the latest foreign-related policies and developments in Shanghai.
Laws and Regulations
【National】
1. China Unveils Measures to Advance Institutional Opening-up of Shanghai FTZ
【keywords:Shanghai Pilot Free Trade Zone】
The State Council recently released the General Plan on Advancing the High-level Institutional Opening-up of the China (Shanghai) Pilot Free Trade Zone (FTZ) in Alignment with High-standard International Economic and Trade Rules. The Plan proposes 80 measures in seven aspects, including expanding opening-up of the service trade, strengthening goods trade liberalization and facilitation, implementing high-standard digital trade rules as a priority, enhancing intellectual property rights protection, advancing reforms in government procurement, promoting reforms of the “behind-the-border” management systems, and stepping up effort in the building of a risk prevention system.
Source: Website of the Chinese Government
https://www.gov.cn/zhengce/content/202312/content_6918913.htm
2. China to Reduce Visa Fees on a Temporary Basis
【keywords:Visa Fees】
The Department of Consular Affairs of the Ministry of Foreign Affairs (MFA) released on December 8, 2023 the Circular on Temporarily Reducing the Visa Fees Charged by Embassies/Consulates of the People’s Republic of China, saying that as temporary measures to facilitate personal exchange between China and foreign countries, the visa fees will be reduced by 25 percent of the current rates from December 11, 2023 to December 31, 2024.
Source:Consular Express
3. SPC Issues Judicial Interpretation on the Application of the General Rules in Contracts Book of the Civil Code
【keywords:Civil Code; Contracts Book】
The Supreme People’s Court (SPC) released on December 4, 2023 the Interpretation of the Supreme People’s Court on Certain Issues Concerning the Application of the General Rules in Contracts Book of the Civil Code of the People’s Republic of China, which took effect on December 5, 2023. The Interpretation contains 69 articles in nine parts, including General Provisions, Conclusion of Contracts, Effect of Contracts, Performance of Contracts, Preservation of Contracts, Modification and Assignment of Contracts, Termination of Rights and Obligations Under a Contract, Default Liability, and Supplementary Provisions.
Source: SPC
https://www.court.gov.cn/fabu/xiangqing/419382.html
【Shanghai】
1. Shanghai to Build Zhangjiang High-tech Zone into World-leading Sci-tech Park
【keywords:Zhangjiang High-tech Zone; World-leading Sci-tech Park】
The General Office of Shanghai Municipal People's Government recently issued the Several Opinions on Promoting Reform, Innovation and Development of Zhangjiang High-tech Zone to Build a World-leading Sci-tech Park. In addition to clarifying the overall requirements and safeguard measures, the document puts forward 15 measures in three aspects, including developing a collaborative and efficient management system and mechanism, building a high-quality park with unique characteristics, and creating a vibrant innovation ecosystem.
Source: Shanghai Municipal People’s Government
https://www.shanghai.gov.cn/nw12344/20231201/a1c657c7fcc847dbbf4640195f681256.html
2. Shanghai Releases Guiding Catalogue to Drive Rapid Growth of Service Trade
【keywords:Service Trade】
Shanghai Municipal Commission of Commerce and other ten departments recently issued the Guiding Catalogue for Promoting Service Trade in Shanghai (2023 Version). The Catalogue outlines the objectives and priorities for driving growth of service trade in transportation, tourism, telecommunications, computer and information, engineering contracting and construction, professional service, culture, medical and healthcare, sports, service outsourcing, digital and other areas, as well as for the development of service trade demonstration bases.
Source: Shanghai Municipal Commission of Commerce
https://sww.sh.gov.cn/zxxxgk/20231201/847d6619b83e47fcb1d691003ca23cb2.html
3. Shanghai Releases Guidelines for the Development of Featured Industrial Parks
【keywords:Featured Industrial Parks】
Shanghai Municipal Commission of Economy and Informatization issued on November 29, 2023 the Guidelines for the Development of Featured Industrial Parks in Shanghai. With 23 articles in five chapters, the document specifies the recognition mechanism, daily management rules, and comprehensive evaluation of featured industrial parks to implement the strategy of building the parks into a core carrier for cultivating new industrial momentum and reflecting the city’s competitiveness.
Source: Shanghai Municipal Commission of Economy and Informatization
https://www.sheitc.sh.gov.cn/sjxwxgwj/20231205/905abed7d6474e89bf1436305950616e.html
One Week in Shanghai
【Recent Development】
1. KCAB Approved to Set up Business Office in Shanghai
【keywords:First; Foreign Arbitration Institution】
Shanghai Municipal Justice Bureau made a decision on December 1, 2023 to approve the registration of the Shanghai Center of the Korean Commercial Arbitration Board (KCAB). The Bureau will report the registration to the Ministry of Justice for filing and coding before issuing the Registration Certificate for Business Office of Overseas Arbitration Institutions. KCAB’s Shanghai Center will be the first business office established by a foreign arbitration institution in Shanghai after the WIPO Arbitration and Mediation Shanghai Service, the first business office set up by an international organization’s arbitral institution in the city.
Source:Shanghai Municipal Justice Bureau
【Culture & Art】
1. Research Exhibition of the Beijing, Tianjin and Shanghai Painting Schools Opens in Shanghai
【keywords:Painting Exhibition】
A heavyweight painting exhibition “Starlights in the History - A Research Exhibition of the Beijing, Tianjin and Shanghai Painting Schools” has opened at the China Art Museum on December 8, 2023. The exhibition brings together nearly 90 masterpieces by art masters such as Zhao Zhiqian, Ren Bonian, Wu Changshuo, Chen Shizeng, Qi Baishi, Chen Banding, Huang Binhong, Lin Fengmian, Zhang Daqian, Pu Ru, Xu Beihong, Pan Tianshou and so on. Their works presented the development history, theoretical achievements and styles of Chinese paintings in Shanghai, Beijing and Tianjin in the 20th century, and witnessed the transition of Chinese painting art from tradition to modernization. This is also the first time in Shanghai to systematically present the Beijing-Tianjin School of Painting and the Shanghai School of Painting.
Source:Shanghai Tourism
2. Exhibition of Winners of Red Dot Award: Design Concept 2023 Opens in Shanghai
【keywords:Red Dot Design Concept Award】
The “Jump Beyond Realms - Exhibition of Winners of Red Dot Award: Design Concept 2023” kicked off at the Shanghai World Expo Exhibition & Convention Center on December 10, 2023 and will last until February 16, 2024. As the world's first exhibition of new award-winning works in 2023, this exhibition brings together new works and classic works in the history of the Red Dot Design Concept Award. There are more than 250 pieces in total, making it a large-scale design feast.
Source:Shanghai World Expo Exhibition & Convention Center
【Corporate Activities】
1. SMS to Build Regional Headquarters in Minhang District
【keywords:SMS】
SMS Engineering (China) Co., Ltd. held a signing ceremony with Zhuanqiao Town on December 6, 2023. SMS Group will designate SMS Engineering (China) Co., Ltd. to apply for its regional headquarters, and it will expand into a regional headquarters enterprise in China, offering multiple functions like investment and financing, R&D center, regional management, localized manufacturing of core equipment and advanced technical services.
Source: Minhang Today
Q&A
Q1. Shanghai leaders answered reporters’ questions at a regular briefing held by the State Council Information Office on promoting the Shanghai Pilot Free Trade Zone’s (FTZ) comprehensive alignment with international high-standard economic and trade rules and policies - What are the foundations and policy advantages for Shanghai FTZ’s comprehensive alignment with high-standard economic and trade rules and its ability to undertake the task of "testing the system for the country"?
A1: Firstly, Shanghai FTZ has accumulated favorable conditions for pilot implementation. Over the past ten years, Shanghai has focused on making breakthroughs in four core areas: investment management, trade facilitation, financial innovation, and transformation of government function, and it has basically established an institutional system that is consistent with international economic and trade rules. For example, in terms of investment management, Shanghai released China's first negative list for foreign investment access and introduced the first foreign investment registration management system; in terms of trade facilitation, we built China's first "single window" for international trade, building a high-standard Yangshan Special Comprehensive Bonded Zone; among the 302 free trade pilot zone system innovations replicated and promoted at the national level, 145 were originated from Shanghai or were piloted simultaneously.
Secondly, the centralized implementation of national strategies has created broad space for the next step of reform and opening up. Since 2013, Shanghai has successively implemented national strategies including the Shanghai FTZ, Lin-gang Special Area, Yangtze River Delta Integration, China International Import Expo, Hongqiao International Open Hub, as well as China’s pilot zone for “Silk Road E-commerce” cooperation launched not long ago. Shanghai has always adhered to the implementation of major national strategic tasks as the top priority of our work, expanding high-level institutional opening-up, improving the efficiency of cross-border flow of factors, and creating first-class business environment, so as to expand high-level opening-up, accelerate the construction of new development patterns and advance Chinese-style modernization.
Thirdly, diversified integration of application scenarios has given birth to the vitality of openness. Shanghai's export-oriented economy is very distinctive. So far, Shanghai has 75,000 foreign-funded enterprises, a total of 946 regional headquarters of multinational companies and 557 foreign-funded R&D centers. Shanghai Port has been the world’s busiest port in terms of container throughput for 13 consecutive years. Shanghai's import and export trade volume has ranked first among global cities for many years. In particular, in recent years, new technologies such as artificial intelligence, big data, and blockchain have been rapidly applied in credit loans, green trade and trade authenticity review, providing a more convenient, intelligent and international experience.
Source: State Council Information Office
http://www.scio.gov.cn/live/2023/33038/tw/
Expert Perspective
Should cross-border employment arrangements be governed by Chinese law or foreign law? - A brief analysis of the application of domestic laws in foreign-related employment relationships
By: Luo Ai, Tang Xiaojing (King & Wood Mallesons)
[Continuing from the Last Issue]
The application of law in addressing disputes related to foreign employment: Choose the law of the place of work or choose a law by agreement?
According to Article 43 of the Law of the People’s Republic of China on Application of Law to Foreign-related Civil Relations (the Law on Application of Law), labor contracts shall in principle be governed by the law of the place of work. First of all, this article should be a “special provision” that is superior to the “general provision” in Article 41 of the Law on Application of Law. In other words, the parties to the labor contract cannot choose the applicable law based on the agreement in Article 41, but should apply the law of the place of work, that is: if the place of work is within China, Chinese law shall apply; if the place of work is outside the country, foreign laws shall apply. (2012) Judgment No. 414 of the Foshan Intermediate People’s Court is an example of the ruling.
Secondly, as to whether the "labor contract" referred to in the Law on Application of Law is limited to a labor contract in the strict sense that matches the labor relationship, or whether it is an employment contract in the usual sense (including labor contracts and labor service contracts). There are different understandings and viewpoints in judicial practice regarding foreign employment disputes.
Some judgments hold that Article 43 of the Law on Application of Law applies to employment relationships in a broad sense. Even if there is no labor relationship between the employer and the employee (for example, the employer is an overseas organization, or the employee is a foreigner who has not obtained a work permit), the law of the place of work should be applied in accordance with Article 43 of the Law on Application of Law; at the same time, if the place of work is within the country, Chinese labor laws will not apply, but the Civil Code will apply.
Some judgments hold that Article 43 of the Law on Application of Law only applies to labor relations. If no labor relationship is established between the employer and the employee, Article 41 of the Law on Application of Law shall apply. The parties to the labor contract may choose to apply a law; if no law is chosen or no agreement can be reached, "the law most closely related to the contract" may be applied, and the law most closely related to the contract is often determined to be the law of the place where the contract is performed, that is, the law of the place of work. (2020) Guangdong 20th Civil Final Judgment No. 1058 is an example in this regard.