Issue 59

Shanghai Weekly Bulletin

No.4,August 2024

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 Issues Document to Improve Market Access System

【Keywords: Market Access】

 

The General Office of the Central Committee of the Communist Party of China and the General Office of the State Council recently released the Guidelines on Improving the Market Access System. The document calls for improving the negative list management model, adopting market access rules scientifically, and setting market access restrictions and permissions reasonably. It also clarifies the requirements for the adjustments of market access management measures, urging to strengthen coordination of policies for domestic and foreign investment, relax entry thresholds for the service sector in an orderly manner, improve the market access environment for new forms of business and new sectors, and step up effort in easing market access in key regions on a pilot basis.

 

Source: Xinhuanet

http://www.news.cn/politics/zywj/20240821/e24942ee587c484ca9eaf2b4181e158b/c.html

 

2. SPC Issues Judicial Interpretation on Punitive Damages for Food and Drug Cases

【Keywords: Food and Drug; Punitive Damages】

 

The Supreme People's Court (SPC) released on August 21, 2024 the Interpretation of Certain Issues on the Application of Law in the Trials of Food and Drug Cases Involving Punitive Damages. The judicial document sets forth provisions on the protection of ordinary consumers' right to claim compensation, refund and return of food and drugs, responsibilities of proxy purchasers, responsibilities of small workshops, identification of defects in labels and instructions, concurrence of liability for punitive damages, liability for production and distribution of fake and inferior drugs, identification of base amount for punitive damages, addressing of malicious excessive compensation claims and repeated claims, and punishment of illegal claims. 

 

Source:SPC

https://www.court.gov.cn/fabu/xiangqing/440841.html

 

【Shanghai】

 

1. Shanghai Issues Specific Plan for Each of “FTZ-linked Innovation Zones” 

【Keyword:Pilot Free Trade Zone】

 

The Leadership Group for the Promotion of the China (Shanghai) Pilot Free Trade Zone (FTZ) recently unveiled the specific plan for each of the FTZ-linked innovation zones, which were established in districts of Huangpu, Xuhui, Hongkou, Yangpu, Baoshan, and Minhang, as well as in comprehensive bonded areas including Songjiang, Caohejing, Fengxian, Jinqiao, Qingpu, and Jiading.

 

Source: Shanghai Municipal People’s Government 

https://www.shanghai.gov.cn/nw12344/20240821/58053c277dba4397bbbc358117adcf91.html

 

2. Shanghai Consults Public on Draft Rules Governing Green Buildings

【Keywords: Green Buildings】

 

The General Office of the Standing Committee of Shanghai Municipal People's Congress announced on August 22 that it is seeking public opinions on the Shanghai Regulations on Green Buildings (Draft). The deadline for feedback is September 6. The draft rules aim to clarify the scope of application based on the need for development, strengthen the guiding role of standards and improve the level of development, enhance the responsibility of building entities in the entire construction process, improve operational management and ensure solid performance, and refine incentive measures to unleash the vitality for development.

 

Source:Shanghai Municipal People's Congress

 

3. Shanghai to Release Measures for the Promotion of Standardization in Enterprises

【Keywords: Enterprise; Standardization】

 

Shanghai Municipal Administration for Market Regulation released on August 19 the Measures for the Promotion of Standardization in Enterprises (Exposure Draft) to seek public opinions until September 18. The document consists of 22 articles, which cover the standardization work of foreign-invested enterprises, “Leaders of Enterprise Standards” program, “Shanghai Standard Cultivation” program, international promotion, digital promotion, enterprise standardization directors, gradient cultivation of standard innovative enterprises, financing and credit enhancement, etc.

 

Source:Shanghai Municipal Administration for Market Regulation

https://fw.scjgj.sh.gov.cn/shaic/ask!toOnlineFaqDetailPage.action?id=0000009a202408190001

 

One Week in Shanghai

 

【Latest News】

 

1. UK Industry Association Becomes First Foreign Party Seeking Ad Hoc Arbitration in China 

【Keywords:Foreign Party; Ad Hoc Arbitration】

 

A prominent UK industry association and a Shanghai-based shipping company in Pudong New Area have entered an ad hoc arbitration agreement, marking the first instance of a foreign party seeking ad hoc arbitration in China. 

 

Source:International Services Shanghai

https://english.shanghai.gov.cn/en-Latest-WhatsNew/20240819/47584778c5554a73a888e06c5df28c1a.html

 

2. Shanghai Issues Guide for Overseas Personnel on Applying for Accommodation Registration

【Keywords:  Overseas Personnel; Accommodation Registration】

 

The Exit-Entry Administration of Shanghai Public Security Bureau recently released the Guide for Overseas Personnel on Applying for Accommodation Registration in both Chinese and English languages. In addition to specifying the applicable rules, the Guide also answered questions such as “how can overseas personnel handle accommodation registration?”, “how do I handle accommodation registration through the ‘self-service declaration system for overseas personnel’s accommodation registration’?”, “how do I register accommodation through the ‘local public police station’?”, “when is re-registration not required?”, and “how can I obtain the Foreigner Accommodation Registration Form’ after completing the accommodation procedures?”

 

Source:Exit-Entry Administration Bureau of Shanghai Public Security Bureau

 

3. Shanghai Launches Online Archive of Business Environment Policies and Regulations

【Keywords:  Business Environment; Policies & Regulations】

 

Shanghai launched on August 22 an online archive of business environment policies and regulations, leading the country to achieve "cross-field, cross-departmental, and cross-level" collection of the laws, regulations, and policies on business environment. The archive has gathered more than 1,700 pieces of relevant laws, regulations, normative documents, and case studies.

 

Source:Shanghai Municipal Development and Reform Commission 

 

【Competitive Event】

 

1.  Tour of Shanghai New Cities Cycling Race to Kick off on September 20

【Keywords:  Tour of Shanghai New Cities Cycling Race】

 

The Tour of Shanghai New Cities cycling race is set to be held on September 20-22 in the five "new cities" in the suburban areas of Shanghai. This is the first time that Jiading, Qingpu, Songjiang, Fengxian and Nanhui will hold a major sporting event together. The race will feature 20 professional teams from countries including China, France, and the United Arab Emirates, as well as amateur riders. A cycling event will be held for cycling enthusiasts on the final day of the race.

 

Source:International Services Shanghai

https://english.shanghai.gov.cn/en-SportsEvents/20240821/0c535b6a33d14742be5e187191259317.html

 

【Culture & Art】

 

1. “The Great Art of Dunhuang” Exhibition to Open in September

【Keywords: Dunhuang Art Exhibition】

 

An exhibition of “the Great Art of Dunhuang” is due to take place at China Art Museum, Shanghai, also known as Shanghai Art Museum, from September 20 to December 20. The exhibition will bring together 168 pieces from the Dunhuang Academy. Many heavyweight national treasures will be on display in Shanghai for the first time. It will be the most comprehensive and diverse exhibition of Dunhuang cultural and artistic exhibits in Shanghai.

 

Source:Shanghai Tourism

 

2. Shanghai Launches Residential Live Show Brand "SEE YOU IN SHANGHAI!"

【Keywords: SEE YOU IN SHANGHAI】

 

Shanghai Media Group announced on August 20 the official launch of its residential live show brand "SEE YOU IN SHANGHAI!". Focusing on the three core models including long-term performance of productions, dance theater shows and immersive theater production, the brand aims to attract more audience from across the country and even the rest of the world to "come to Shanghai for a play."

 

Source:Shanghai Tourism

 

【Corporate Activities】

 

1. Freudenberg Bets on Future Industries and Accelerates Presence in China

【Keywords: Freudenberg】

 

This year marks the 175th anniversary of the Freudenberg Group and the 30th anniversary of its foray into the Chinese Mainland. A "big show" with the theme "Journey of Curiosity" was held in Shanghai a few days ago. Freudenberg Group, whose Asia headquarters is located in Pudong, revealed at the event that its investment pace in the Chinese market is becoming more and more stable, and it will continue to accelerate investment in future industries by building an innovation ecosystem and exploring forward-looking emerging technologies.

 

Source:Pudong Release

 

2. SH-INNO and Sartorius Ink Strategic Partnership Agreement

【Keywords:  Sartorius】

 

SH-INNO, an innovation platform established by Shanghai Pharma in collaboration with first-class universities and scientific research institutions, signed on August 20 a strategic cooperation agreement with Sartorius AG, which has a business history of 100 years. This marks a new stage in the in-depth cooperation between the two parties in the field of biomedicine. Their cooperation under the agreement will focus on biomedical incubation and translation, as well as bioprocess solutions.

 

Source:Pudong Release

 

Q&A

 

1: Officials with the National Immigration Administration (NIA) answered press questions at a press conference held by the State Council Information Office with the theme "Promoting High-quality Development". Since last year, China has introduced unilateral visa-free policies for many countries and adopted mutual visa-free policies with some countries. In particular, the NIA has unveiled a series of policy measures to facilitate foreigners to come to China, such as expanding the 144-hour transit visa-free policy and relaxing the conditions for visa application at ports. What results have been achieved with these measures? Will there be more measures to facilitate foreigners to come to China in the next stage?

 

A1: "China Travel" has become popular recently, fueling more people to pay attention the 144-hour transit visa exemption policy we have unveiled, as well as other policies and measures that make it easier for foreigners to visit China. Over the years, the NIA has expanded the scope of visa-free countries, and has also launched a series of policy measures to facilitate foreigners to come to China. These policies can be summarized as having provided more convenience, greater diversity, and stronger appeal for foreign businesses.

The first is that the 144-hour transit visa exemption policy makes it easier for foreigners to visit China. The transit visa exemption policy has been implemented since January 2013, and the applicable countries, ports of entry, stay periods, and areas of movement are constantly being optimized. Benefits of this policy have been further unleashed since the start of this year, and it has lured foreign tourists to visit China, and it has become the hallmark of China’s growing openness. 

The second is that the regional entry visa-free policy helps foreign tourists to "come in a variety of ways". A series of policies have been introduced, including 144-hour visa-free entry for foreign tourist groups from Hong Kong and Macau to Guangdong, 144-hour visa-free entry for tourist groups from ASEAN countries to Guilin, Guangxi, 30-day visa-free entry for people from 59 countries to Hainan, and 15-day visa-free entry for foreign cruise ship passengers to travel to coastal provinces. Recently, a 144-hour visa-free entry policy for foreign tourist groups from Hong Kong and Macau to Hainan has been introduced, benefiting more than 5.9 million foreign tourists.

The third is to innovate the port of entry (POE) visa policy to facilitate the travel of foreign business people. We have further relaxed the conditions for applying for POE visas. Foreigners who urgently need to come to China for business, trade, visits and other activities can apply for POE visas with 100 POE visa authorities in 73 cities across the country. We provide foreign businessmen and investors with a number of convenient services such as re-entry visas to ensure that they can come when they want and they can stay when they want.

These policies work together and in concert, bringing about multi-faceted benefits. The most direct change is the rapid growth in the number of foreigners coming to China. According to statistics from the NIA, from January to July this year, 17.254 million foreigners entered China, up 129.9% year-on-year. 846,000 POE visas were issued, up 182.9% year-on-year.

The most significant effect is that it has directly boosted China's inbound tourism market. Based on the average spending of foreign tourists visiting China, it is estimated that they have spent more than RMB 100 billion during their trips in China.

In the next step, we will continue to improve policy measures such as transit visa exemption, expand the scope of tourist movement, further improve the value and attractiveness of the policies, and work with relevant departments to enhance the convenience for foreigners to come to China.

 

Source: State Council Information Office

http://www.scio.gov.cn/live/2024/34479/tw/

 

Expert Perspective

 

Impact of New Cross-border Data Regulations on Domestic and Overseas Investment Projects

 

By: Fu Peng, Yu Qin, Wei Longjie (Haiwen & Partners)

 

[Continuing from the Last Issue]

 (4) Impact of the new regulations on key points of compliance scrutiny on listing data

Before the new regulations were released, as data compliance has become a hot topic in recent years, target companies often need to explain or answer inquiries during the listing stage regarding whether they involved cross-border data transmission and whether they had completed applicable reporting procedures on cross-border data compliance.

After the release of the new regulations, more companies planning to go public would have greater motivation to demonstrate that they fall under the provisions of the Regulations on Promoting and Regulating Cross-Border Data Flow and are exempt from the obligations on cross-border data compliance reporting, where the circumstances may apply. The areas of concern for listing authorities may change:

Listing regulatory authorities may examine whether the explanations made by the listed companies that claim to be exempted from cross-border data compliance reporting on their data processing activities are indeed in compliance with the exemption provisions of the Regulation on Promoting and Regulating Cross-border Data Flow. At the same time, the feasibility and role of "formal reporting" are also worthy of attention from all parties involved in investment and M&A projects. That is, after a company planning to go public has made a preliminary judgment on whether it needs to conduct standard contract filing for security assessment on the outbound transfer of personal information, it may formally consider sending an explanatory email or submitting materials or conducting interviews and consultations to the provincial-level cyberspace administration, so as to obtain a reply from the competent department confirming that the company does not need to conduct relevant reporting. Whether such "formal reporting" can obtain written/oral responses from the competent authorities and whether they will be included in the listing documents by the listed companies to prove their compliance in being exempted from the reporting work remains to be further observed and handled.

After confirming that the cross-border data compliance reporting obligations are not applicable, listing regulatory authorities may raise questions about whether the listed companies have performed other compliance obligations for cross-border transfer of personal information. The new regulations point out that when data processors provide personal information to overseas entities, they should fulfill the obligations of informing, obtaining individual consent, and conducting personal information protection impact assessments in accordance with the provisions of related laws and administrative regulations. We understand that the new regulations will not substantially weaken the attention and supervision on cross-border data transfer. However, after the applicability of more externalized administrative reporting obligations is reduced, listing regulatory authorities may pay more attention to whether the companies to be listed have properly implemented other general compliance requirements for cross-border transfer of personal information.

In summary, considering that corporate listing is one of the exit channels or important interim goals for investors or acquirers, it is recommended that investors conduct advance communication with target companies, especially those in the Pre-IPO round, to find out whether the target companies are involved in cross-border data transmission and whether administrative reporting is required. If the target company is required to make administrative reporting, it is advisable to remind the target company to prepare materials as early as possible and estimate the possible impact of such reporting process on the listing timetable; if it is believed that the target company does not need to conduct cross-border data compliance reporting, it is advisable to pay attention to the logical reasoning of successful listed companies that do not need to conduct evaluation, certification or filing work, and communicate with the target company's lawyers as soon as possible on the necessity and feasibility of conducting "formal reporting".

 [To Be Continued]