CHINA Looking Back: 2023 and Gazing Into: 2024 Looking Back: 2023
2023 is a year of both recovery and challenge. Following the lifting of all COVID-19 restrictions in China, 2023 has witnessed indicators of rebound in key segments of China's economy such as growth in gross domestic product ("GDP"), consumption, services and industrial output. However, at the same time, areas such as foreign investment and private investment have lagged, indicating potential concern on the unbalanced recovery of economy. Considering this, the National Development and Reform Commission (NDRC) of China released the Notice on Further Strengthening and Effectively Promoting Private Investment and Striving to Mobilize the Enthusiasm of Private Investment (关于进一步抓好抓实促进民间投资工作努力调动民间投资积极性的通知, "Notice") in July 2023 to boost private investment. This includes 17 measures such as encouraging private capital in major national and key industry supply chain projects, providing financial and resource support to private investors, and fostering a healthy and transparent environment for private investment, etc. For foreign investment, the State Council of China released the Opinions on Further Optimizing the Foreign Investment Environment and Strengthening the Foreign Investment Attraction (关于进一步优化外商投资环境加大吸引外商投资力度的意见, "Opinions") in August 2023, which includes 24 measures for attracting foreign investments in China. The measures include (i) expanding channels for foreign investment and facilitating the foreign exchange management system; (ii) ensuring the national treatment status of foreign-invested enterprises; (iii) establishing institutions and mechanisms that are in line with international standards; (iv) strengthening the protection of foreign investment and facilitating investment operations; and (v) providing various financial and tax support. Both the Notice and the Opinions show China's determination to boost its economy, attract and utilise private and foreign investment more vigorously and effectively, and promote high-level opening up to the outside world.
At the same time, to further support the increasing development of the digital technology industry, China has continued to improve its legislation in the areas of data protection and cybersecurity with further detailed implementation and supporting rules and regulations issued in 2023. In December 2022, China's Ministry of Industry and Information Technology issued Measures for Data Security Management in the Field of Industry and Information Technology (Trial Version) (工业和信息化领域数据安全管理办法(试行), which came into effect on 1 January 2023, to provide relevant data security requirements for companies in the industry and information technology sector. In March 2023, the National Information Security Standardization Technical Committee released the draft of Certification Requirements for Cross-Border Transmission of Personal Information (信息安全技术-个人信息跨境传输认证要求(征求意见稿)) which aims to provide the standards for the third-party certification of companies engaged in the cross-border transfer of personal information. In support of the regulation of "Standard Contract Measures for Exporting Personal Information" (个人信息出境标准合同办法)'s coming into force on 1 June 2023, the Cyberspace Administration of China ("CAC") issued the Guidelines for the Filing of Standard Contracts for Exporting Personal Information (First Edition) (个人信息出境标准合同备案指南(第一版)), which is a supplementary and implementation rule to guide relevant companies to file its standard contract for the cross-border transfer of personal informaiton. Together with the improvements of China's legal regime in relation to the protection of personal information and restrictions in the cross-border transfer of personal information, China has also tried to faciliate cross-border data flows for companies based in China. On 28 September 2023, CAC released the Draft Regulation on Regulating and Facilitating Cross-Border Data Transfer (规范和促进数据跨境流动规定(征求意见稿)), which, if formally issued substantially in its present form, will likely benefit many international companies' businesses by easing the strict requirements for the export of personal information outside the Chinese mainland.
Last but not least, to respond to today's comprehensive international relations, on 28 June 2023, the 14th National People's Congress of the People's Republic of China ("PRC") passed the Foreign Relations Law (中华人民共和国对外关系法), which provides a comprehensive framework for the development of China's foreign relations and is China's first fundamental, guiding, and comprehensive law on foreign relations since the establishment of the PRC. China also issued other related laws such as the amended Counter-Espionage Law (中华人民共和国反间谍法) on 26 April 2023 and signed various memorandums of understanding with other countries to further develop its policies for international affairs (including the "One Belt One Road" initiative).
Corporations are the most important market entities. In order to further improve the modern enterprise system and further promote the sustained and healthy development of the socialist market economy in the PRC, on 29 December 2023, the Standing Committee of the PRC National People's Congress passed the amendments to the PRC Company Law, which will come into effect from 1 July 2024.
Gazing Into: 2024
In 2024, China will commemorate the 75th anniversary of the founding of the People's Republic of China ("PRC"), which coincides with the crucial implementation of the "14th Five-Year Plan (十四五规划)". During the meeting of the Political Bureau of China's Central Committee in December 2023, a comprehensive analysis and study of the economic work for 2024 took place, emphasising the importance of adhering to the general keynote of seeking progress while maintaining stability.
Following this guiding principle, in the coming years, China is committed to the ongoing improvement of relevant laws and regulations to create an enhanced market environment and attract investments, including:
-
enhancing corporate governance and capital system in the PRC Company Law;
-
ongoing revisions of the Capital Account Guideline of Foreign Exchange to enhance efficiency and clarity; and
-
strengthening and improving patent application and regulation.
In the data and cybersecurity sector, the majority of the core laws and regulations in the field were enacted from 2017 to date, and the main regulatory framework has been essentially established. Practical guidelines and norms, as well as industry-specific legislation, will become the focus of legislative work going forward. The introduction of these guidelines and norms indicates that China is moving towards a stage of regulatory stability in this sector within the country.
Additionally, online gaming companies in China may face stricter regulation and oversight, as the recently released Draft Administrative Measures for Online Games (defined below) place heavier restrictions for this industry.
Full Report
Click on the link below for the full report which provides summaries of the key legal developments related to the above areas.
Back to Top Print
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only
intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.
|
