Policy Snapshots

Your bi-weekly briefing of the latest Chinese policies relevant for German companies in China.

Policy Snapshot – Recent National and Regional Policies in China (November 30, 2023)

China Launched Visa-Free Policy for Germany

The Ministry of Foreign Affairs announced that China will launch a pilot visa-free policy for 6 countries, including France, Germany, Italy, Netherlands, Spain and Malaysia. From December 1, 2023 to November 30, 2024, the policy allows German passport holders to enter China without a visa for business, sightseeing, visiting relatives and friends, and transit within 15 days.

Our take: Visa-free entry into China is highly valued by German companies and sends a positive message. In combination with further measures to open the Chinese economy, lost trust can be restored.

Announcement of visa-free policy for 6 countries

Accelerating the Establishment of the Carbon Footprint Management System for Products

The National Development and Reform Commission (NDRC) released a document on accelerating the establishment of the carbon footprint management system for products. The document sets a goal of establishing carbon footprint accounting rules and standards for around 50 key products by 2025 and expanded the number to 200 by 2030. The main tasks include the development of carbon footprint accounting rules and standards, the construction of a background database, the establishment of a product carbon labeling system, and promoting the international convergence and mutual recognition of carbon footprints.

Our take: Measuring the carbon footprint of products is important for German companies in China, e.g., for CBAM. Any clarity on the regulatory side is appreciated, as long as this is in line with international standards and implementation is feasible.

Notice on accelerating the establishment of a carbon footprint management system for products

Further Development of Beijing Demonstration Zone for Opening Up the Service Sector

The State Council passed a work plan on supporting the comprehensive development of Beijing Integrated National Demonstration Zone for Opening up the Service Sector. The work plan highlights further opening up for key service areas including telecommunications, healthcare, finance and cultural education services. The demonstration zone will explore rules and regulations for emerging industries in the service sector, improve the policy environment for public services, and improve risk prevention and control.

Our take: Beijing is seen as a national pioneer for service sector opening-up, and this move surely follows the 24 Point Policy. However, real opening up is still hard to imagine in these crucial industries.

Work Plan for Fully Advancing the Comprehensive Pilot Program for Further Opening Up the Service Sector in Beijing

Financial Support for the Development of Private Enterprises

The People's Bank of China (PBoC) has issued a document on supporting the development of the private economy. The document highlights more financial support for key areas such as scientific and technological innovation; specialized, green and low-carbon and industrial infrastructure reconstruction projects; as well as more support for private SMEs. The government will put more effort to diversify financing channels, including stocks, bonds and loans for the private economy.

Our take: This is a follow-up implementation of the central government's opinions on promoting the development and growth of the private economy.

Document on financial support for private enterprises

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Policy Snapshot – Recent National and Regional Policies in China (November 17, 2023)

Cleaning Up Unreasonable Differential Treatment Between Domestic and Foreign Enterprises

The Ministry of Commerce (MOFCOM) issued a document requesting authorities at all levels to clean up unreasonable differential treatment between domestic and foreign companies, aiming to provide a level playing field. The document addresses topics such as long waiting times for licenses or the questionable point system in public procurement. MOFCOM welcomes feedback on such issues through an online platform and via e-mail.

Our take: The document addresses unequal treatment issues in a more specific way than we have seen before, directly touching upon cases we advocated for this summer. The grey area surely remains, but the topic might get more attention with government authorities at various levels.

Cleaning up unreasonable differential treatment between domestic and foreign enterprises

Webpage for the collection and handling of problems and requests of foreign-funded enterprises

The NDRC released National Carbon Peak Pilot Establishment Plan

The National Development and Reform Commission (NDRC) has released the national carbon peak pilot establishment plan. In line with the 2030 Carbon Peak Action Plan, China decided to select 100 representative cities and parks to carry out carbon peak pilot construction. The first batch of pilot quotas is announced, and subsequent pilot construction will follow.

Our take: The CarbonPeak Pilot is another method to accelerate the progress of Peak Carbon. Such initiatives will gather best practices to be replicated nationwide.

National carbon peak pilot construction plan

Guidance on Improving the Public Service System for SMEs

The Ministry of Industry and Information Technology (MIIT) has issued Guidance on Improving the Public Service System for SMEs, which aims to enhance the qualityand scope of services provided by public service organizations to SMEs. The document also proposed the establishment of a "one-stop" service platform with effective integration of service resources by 2025.

Our take: This is another action to help SMEs and the private sector economy, specifically for access to policies, better services and resources.

Guidance on Improving the Public Service System for SMEs

Policy Snapshot – Recent National and Regional Policies in China (November 1, 2023)

Cancellation of the Health Declaration Form

The General Administration of Customs released a notice on the cancellation of the health declaration when entering and exiting China. Starting from November 1, travelers are no longer required to fill in a health declaration form. However, travelers with symptoms of infectious diseases are required to actively make a health declaration to Customs.

Our take: The very last relict of the “COVID-19 controlling measures” for China has now finally been relaxed.

Notice on the adjustment of the health declaration form

Notice on the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents Coming into Effect

China had acceded to the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents, which will enter into effect from November 7, 2023. For Chinese public documents this means that instead of getting documents legalized at a foreign Consulate in China, Chinese official documents for use in other countries (which are also part of the Hague Convention) shall be subject to application for an additional certificate (also known as the Hague Apostille) with the Chinese authorities. Here, the Ministry of Foreign Affairs and several provincial as well as some designated city level foreign affairs offices are going to provide the service for issuing the Apostille.

Our take: This step will ease bureaucratic challenges when doing business between China and Germany.

Notice on the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents becoming effective

Export Control of Graphite-Related Items

The Ministry of Commerce (MOFCOM) and the General Administration of Customs (GAC) posted temporary export control measures for graphite-related items. The export control starting from December 1 requires the exporter to apply for an export license before exporting.

Our take: Graphite is an essential component of NEV batteries, and China accounts for 60% of natural graphite production capacity.

Notice on export control of graphite-related items

Q&A on how Foreign Invested Companies can Participate in China’s Standardization Work

The State Administration for Market Regulation (SAMR) posted a Q&A summary of how foreign invested companies participate in China’s standardization work. The Q&A introduced the methods of participating in standardization work, such as providing advice during the standard-setting process, participating as a member of standardization committees, submitting national standard project proposals through the service platform, as well as contacting relevant departments to apply for participation in standard drafting and translation.

Our take: We are glad to see more explanation on the standardization process, especially on the currently available channels for participating in the standardization-setting work. However, actual engagement of foreign companies still needs to see real progress.

Q&A on how foreign invested companies participate in China’s standardization work

Action Plan on Patent Transformation andApplication

The State Council released an action plan on patent transformation and application aimed at the promotion of the industrialization of a number of high-value patents. The main focus is promoting the growth of SMEs through putting more emphasis on patents. This includes promoting patent-intensive products, strengthening the incentives for the transformation of patents in universities, emphasizing the policy orientation of high-quality patent and industrialization, and strengthening intellectual property protection for transformation and utilization.

Our take: This high-level document is another push to make use of patents’ values as an engine for industrialization. A similar mindset is taking root in for foreign companies: not only is protecting IP well in China becoming increasingly important, yet so is making good use of it in an increasingly competitive market.

Action plan on patent transformation and application

Policy Snapshot – Recent National and Regional Policies in China (Octorber 18 2023)

Online Problem Collecting Platform for Foreign-Invested Enterprises

The Ministry of Commerce (MOFCOM) revealed an online complaint collection and handling system for foreign-invested companies. Companies are able to submit questions and requests online, check the process procedure of inquiries, and obtain the contact to personnel processing their case.

Our take: This is an additional channel for foreign companies to submit questions to the government. Note: It is explicitly mentioned that the questions/requests can relate to the improvement of the business environment, not for problems coming up in the investment phase. Companies can try out and use it as an additional channel, and surely they can still raise their cases with us if need be.

Announcement on the online complaint collection and handling system for foreign-invested companies

Action Plan for Development of Computing Infrastructure

The Ministry of Industry and Information Technology (MIIT) released an action plan of computing infrastructures, formulated the main development goals to 2025. The key tasks are divided into six areas, including perfecting the arithmetic supply system, upgrading the data-carrying capacity, enhancing data storage capacity, promoting computing power industries, promoting green and low-carbon development, and enhancing the security of computing power.

Our take: Computing as a new kind of productivity is crucial for China’s digital transformation. Computing infrastructures will be a direction that China needs to focus on in the upcoming years.

Action plan on high-quality development of computing infrastructures

Guidance on Optimizing the Rule of Law Environment for the Private Economy

The Supreme People’s Court released Guidance on optimizing the rule of law environment for the private economy, aimed at strengthening the protection of the legitimate rights and interests of the private economy, with special emphasis on the protection of the personal rights of private enterprises and entrepreneurs. The document also aims to improve the mechanism for the settlement of international commercial disputes and to provide strong judicial guarantees for private enterprises' global development.

Our take: This is another document explicitly trying to strengthen the private economy.

Guidance on optimizing the rule of law environment for the private economy

Policy Snapshot – Recent National and Regional Policies in China (September 20, 2023)

Stability and Growth Plans for Ten Key Industries

From the end of July to early September 2023, the Ministry of Industry and Information Technology (MIIT) has released work plans for stabilizing growth in ten key industries, including steel, non-ferrous metals, petrochemicals, chemicals, building materials, machinery, automobiles, power equipment, light industry and electronic information manufacturing.

The plans cover both the supply and demand sides. On the one hand, investment will be expanded, domestic demand will be stimulated, and international markets will be expanded. On the other hand, the focus will be on improving the resilience of the industrial chain, supporting companies and strengthening standardization.

Our take: Recently the Chinese government has launched many development programs for these industries. These selected key industries’ total added value accounts for about 70% of the total industrial added value, which will hopefully contribute to a more robust economic recovery in China.

MIIT press conference on key industries plans

Value-Added Tax Refund for Equipment Purchased by Foreign R&D Institutions

The Ministry of Finance issued a notice stating that the full amount of Value-Added Tax (VAT) for domestically produced equipment purchased by domestic innovation institutions and foreign-funded R&D centers will be refunded. In addition to the general requirements for all applicable institutions, there are 3 more conditions for foreign-funded R&D centers to be qualified for this policy, including the number of research personnel. Measures for the determination of eligibility for tax rebates and an equipment list are attached to this notice.

Our take: This is another method where companies can potentially enjoy tax benefits. It also shows that China is more and more supporting the use of domestically produced equipment.

Refund value-added tax for equipment purchased by R&D institutions

Civil Procedure Law Amendment

The National People’s Congress passed an amendment to the Civil Procedure Law during its meeting of the Standing Committee on September 1. This time, the amendment to the Civil Procedure Law has made many changes in regard to foreign-related cases, such as expanding the jurisdiction of Chinese courts over foreign-related civil cases, amending the provisions on foreign-related service of process, adding clauses on the collection of evidence for extra-territorial investigations, and amending the basic rules on the recognition and enforcement of judgements and rulings entered into force by foreign courts.

Our take: Under the current geopolitical tension, this amendment will offer Chinese companies legal help at home and counter-sanctions tools overseas. Foreign companies are now potentially at greater risk of being taken to Chinese courts by their Chinese partners, customers and suppliers.

NPC report on the amendment of the Civil Procedure Law

Guangdong Released Measures for Promoting Consumption

Guangdong issued measures for promoting consumption, encouraging cities to adopt incentive policies that involve both companies and government, providing subsidies for consumers who purchase household appliances, including audio-visual equipment, household kitchen appliances, small appliances, etc. At the same time, Guangdong Province encourages manufacturing companies to establish sales companies adapted to local conditions. Rewards and subsidies will be given to eligible companies.

Our take: A low consumption appetite is strongly blocking China's economic recovery. This Guangdong provincial document now especially proposes to unite government and business entities to enhance consumption and promote economic growth.

Guangdong’s measures for promoting consumption

New Visa-Related Online Services for Foreigners

Starting from October 9, the National Immigration Administration's (NIA) online platform will offer eight services for foreigners in China to make visa-related appointments and inquiries easier. These services include online appointment for [visa] application and renewal, tracking visa processing progress, checking personal information, checking permanent residency information, checking passport information, searching information on visa issuing agencies, getting guidance on visa-related issues, as well as allowing Chinese people to act upon behalf of foreigners as the applicants to handle visa-related matters.

Our take: We appreciate all the recent steps to make visas for China easier, which facilitates visa applications for foreigners.

Policy Snapshot – Recent National and Regional Policies in China (September 6, 2023)

Following the release of the “24 Point Policy” in mid August, we saw movements in the taxation policy area. Across China and in the Greater Bay Area (GBA), we have advocated for IIT changes, so these improvements are overdue.

#advocacyimpact

Extension of the IIT Preferential Policies for Foreigners

The Ministry of Finance released a notice on continuing to implement the preferential income tax policies for foreigners. Under the policy, certain allowances for foreigners are exempt from Individual Income Tax (IIT), such as housing allowances and children’s education fees. The policy will be in effect until December 31, 2027. This announcement follows the recent release of the so-called "24 Point Policy", which already indicated the extension.

Our take: The extension of this policy provides companies with the ability to plan ahead, reduce costs and makes it easier for companies to hire foreign staff during a period of economic uncertainty when China's attractiveness has been declining. Furthermore, the announcement adds credibility to recent initiatives by the Chinese government to make business easier for foreign companies.

Extension of the IIT preferential policies for foreigners

Cancellation of the COVID-19 Test for Entering China

The Ministry of Foreign Affairs announced that from August 30 travelers to China will no longer be required to undergo COVID-19 testing (nucleic acid or antigen). The General Administration of Customs of China also announced that inbound travelers are not required to declare the results of COVID-19 tests when making a health declaration to the Customs.

Our take: Although in practice there was no longer checking of COVID-19 testing for several months, this is now the official announcement. But - The Health Declaration is here to stay!

Cancellation of the COVID-19 test for entering China

Announcement of customs health declaration

Notice on Value-Added Tax Policy for Equipment Purchased by R&D Institutions

The Ministry of Finance has issued a notice stating that the full amount of value-added tax for domestically produced equipment purchased by domestic innovation institutions and foreign-invested R&D centers will be refunded. The notice listed the conditions of application for the policy. Measures for the determination of eligibility for tax rebates and an equipment list were attached to this notice.

Our take: This tax policy will help companies to save money in R&D. However, the conditions of application were also not easy to fulfill.

Notice on value-added tax policy for equipment purchased by R&D institutions

Regulations on Accounting Treatment for Corporate Data Resources

The Ministry of Finance recently issued provisional regulations on accounting for corporate data resources, standardizing the implementation of accounting principles for data-related enterprises. This is to accurately reflect their business and economic value. The regulations provide clear and detailed standards for accounting treatment, disclosure requirements, as well as recognition and measurement of data resources as assets. These regulations will be implemented from January 1, 2024.

Our take: Data are assets now. While China is actively promotingthe construction of a data factor market, accounting issues related to the recognition and measurement of data resources as assets needs to be refined.

Regulations on accounting data resources

Policy Snapshot – Recent National and Regional Policies in China (August 23, 2023)

Opinions on Further Optimizing the Foreign Investment Environment

The State Council published guidelines on further optimizing the foreign investment environment and increasing the attraction of foreign investment. The document includes 24 measures that address issues of high concern for businesses and investors including national treatment of foreign enterprises, cross-border data flow (green channels), administrative protection of intellectual property rights, and support measues for foreign-invested enterprises to participate in green certificate trading.

Our take: This high-level document speaks a clear language. However, it is still the implementation from ministries and local government levels which counts.

24 points on further optimizing the foreign investment environment

The NDRC Expands Renewable Energy Certificate Scheme

The National Development and Reform Commission (NDRC) announced an expansion of the domestic renewable energy certificate scheme to include all types of renewable projects. Previously, the scheme only covered solar and onshore wind projects. Now offshore solar and wind, biomass, geothermal and newly built hydropower are all eligible. In the meantime, it allows end-users to offset carbon emissions traded on the emissions trading scheme through green energy certificates, and these are eligible for exemption from energy consumption assessments.

Our take: This is another small step for encouraging more sustainable energy consumption and generation.

Expand renewable energy certificate scheme

Shanghai Promotes Innovation and Development of Data Factor Industry

Shanghai Government has published the Action Plan for Promoting the Innovative Development of Data Factor Industry (2023-2025). The action plan sets the development goals of Shanghai's data factor industry, proposed measures such as the cultivation of the data factor market, establishment of a data factor transformation system, promotion of data opening and sharing, and development of new forms of digital business.

Our take: The data factor industry is the currently emphasized direction of development in China. Shanghai is now acting as the pioneer ofthis industry.

Shanghai Action Plan for Promoting the Innovation and Development of Data Factor Industries

The CAC issued the Code of Conduct on Enterprise-Related Infringement

The Cyberspace Administration of China (CAC) has issued the Code of Conduct for Website Platforms on the Acceptance and Disposal of Reports on Enterprise-related Network Infringement. The code requires internet platforms to promptly and specifically address reports involving companies, including reports on counterfeit information, insulting information that defames or vilifies enterprises or entrepreneurs, information that maliciously interferes with normal business operations, and confidential information that infringes on the personal privacy of entrepreneurs.

Our take: A small step to guarantee the rights of companies that face infringements of their networks.

The CAC code of conduct on enterprise-related infringement

Policy Snapshot – Recent National and Regional Policies in China (August 9, 2023)

Opinions on Promoting the Growth of the Private Economy

The State Council issued opinions on promoting the growth of the private economy with the aim of optimizing the environment of the private sector and ensuring fair competition among various ownership types in the market. The high-level guidance gives insights into key tasks including optimizing the market environment, strengthening legal protection, encouraging private enterprises to enhance innovation capabilities, cultivating entrepreneurial spirit, and creating a favorable atmosphere for private enterprises.

According to this policy, the National Development and Reform Commission (NDRC) published an implementation plan, which contains more detailed measures.

Our take: The private economy is an important part of restoring confidence in the market, and these policies only stand exemplarily for all the recent efforts in this regard.

Opinions on Promoting the Growth of the Private Economy

Implementation Measures for Promoting the Private Economy

New Measures on Boosting Consumption

The NDRC published new measures on restoring and expanding consumption, aimed at promoting consumption of higher quality, more expensive products, optimizing the supply side, accelerating the construction of consumer infrastructure and improving the consumer environment. The measures include stabilizing and expanding consumption in automobile, NEV, housing, home furnishing, catering, culture and tourism, entertainment and healthcare. The document also emphasizes the need to expand new types of consumption, including digital consumption, green consumption as well as promoting rural consumption.

In addition to these overall measures on boosting consumption, MOFCOM, NDRC and other ministries released measures to promote consumption in specific areas such as home furnishings, electronic products and automobile consumption.

Our take: Promoting consumption remains the essential part of China's economic recovery, and we have seen a lot of related policies in recent weeks. However, these measures are not regarded as groundbreaking with short-term effects, but rather as paving the way for a slower long-term improvement.

New Measures on Boosting Consumption

Extension of Preferential Tax Policies for Small Enterprises and Individual Entrepreneurs

The Ministry of Finance and the General Administration of Taxation have issued another announcement on preferential income tax policies for small enterprises and individual entrepreneurs. This new tax policy mainly functions as an extension of the current effective tax policy released in March and extended to be in effect until December 2027. The value-added tax preferential policy was also extended to 2027.

Our take: Small steps for boosting confidence of small businesses, this time as a longer-term commitment.

Preferential Tax Policies for Small Enterprises and Individual Entrepreneur

Preferential Policy of Value-Added Tax

Customs Clearance Instructions and Facilitation Measures for the 6th CIIE

The General Administration of Customs (GAC) has released the customs clearance instructions and facilitation measures for the 6th CIIE. The clearance instructions include regulations related to exhibition filing, exhibition goods approval, import declaration of goods, exhibition goods inspection, and exhibition goods retention. Facilitation measures include simplifying entry and exit procedures, setting up dedicated priority channels and providing tax payment guarantee by CIIE, among others.

Our take: The GAC is facilitating customs clearance of goods for this year’s CIIE as it usually does around this time. Companies planning to attend should be aware of the instructions.

Customs Clearance Instructions and Facilitation Measures for the 6th CIIE

Measures for Improving Services in Certificates and Licenses

The Ministry of Public Security has issued several measures on better service for high-quality development, including optimizing the management of various certificates and licenses. Foreign business visitors hurry to China can apply for a port visa entry with the usual documents, such as a company invitation letter and other supporting documents. A multiple-entry commercial visa valid for up to three years can be obtained upon entry for frequent business travelers. Foreigners applying for a residence permit can keep their passports for other use after validity verification.

Our take: This sounds like an improvement for obtaining a Chinese visa. However, it is still open to question how this will be technically implemented and how long the waiting times at the airport will be.

MPS Measures for Improving Services

Policy Snapshot – Recent National and Regional Policies in China (July 12, 2023)

Energy Efficiency for Key Industrial Sectors

The National Development and Reform Commission (NDRC) has released the 2023 version of the energy efficiency benchmark and baseline levels for key industrial sectors. It aims to guide industrial enterprises in carrying out energy-saving and carbon-reducing transformation. The notice requires local governments to develop renovation and elimination plans, as well as upgrade energy efficiency renovations to above baseline levels within the specified time frame and eliminate projects that cannot be completed by the deadline.

Our take: With this, local governments have another tool at hand to save energy, and sometimes might use it for accelerating the industrial restructuring in their areas.

Benchmark and baseline levels of energy efficiency for key industrial sectors (2023 version)

Improve the Reliability of the Manufacturing Industry

The Ministry of Industry and Information Technology (MIIT) has issued implementation opinions to enhance manufacturing reliability, aiming to improve the reliability indicators of key core products, enhancing management capabilities and educating professional talent. The opinion concentrates on key industries such as machinery, electronics and automobiles, emphasizing the need for improving management level, technological support and talent cultivation.

Our take: This policy is in line with the national level strategy of building a “Strong Nation of Quality” and should narrow the gap with international levels.

Improve the reliability of the manufacturing industry

Reform of Barriers to Fair Competition

NDRC, the State Administration for Market Regulation (SAMR), Ministry of Finance (MOF) and Ministry of Commerce (MOFCOM) jointly released a document to reform the provisional and regulatory barriers to a unified market and fair competition. The scope includes policies that affect the economic activities of enterprises, all the way from State Council departments to the local governments (above county level). It will mainly remove regulations and practices that hinder market access and exit, the free flow of goods and factors, the cost of production and operation, as well as the conduct of production and operation.

Our take: Breaking down barriers to fair competition was often proposed, but hard to realize. Hopefully the government makes this round of reforms more effective on the ground.

Joint announcement on cleaning up barriers to fair competition

Policy Snapshot – Recent National and Regional Policies in China (June 28, 2023)

Major Work Plan on Cost Reduction for Business

NDRC releases this year’s major work plan to reduce costs for market players. It provides relief measures for companies having suffered from the pandemic. The measures include tax reductions for small businesses as well as fee reductions and better financial services for businesses. Also, it promises to intensify the efforts to clean up the debts of small and medium-sized enterprises, ensuring stable prices for production factors, such as land use and raw materials prices.

Our take: It is a strong sign that relief measures are continued post-COVID. China’s sluggish economic recovery still needs time – and policy pushes.

Major work for cost reduction for business

New Initiatives to Optimize the Business Environment by the General Administration of Customs

The General Administration of Customs introduced 16 measures to optimize the business environment: To facilitate import and export logistics and to improve efficiency, to expand the facilitation of cross-border trade functions and services, to improve efficiency and strengthen services for foreign trade enterprises as well as to promote the development of foreign trade innovation. The local customs authorities will introduce detailed implementing measures.

Our take: Foreign trade is another key aspect of economic recovery, and we continuously see measures for ramping it up.

GAC’s initiatives on optimization of business environment

Opinions on NEV Charging Infrastructure

The State Council issued guiding opinions on building a high-quality charging infrastructure system by 2023, aiming to support the development of the NEV industry, to promote auto consumption and to help to achieve dual carbon goals. Key tasks include upgrading charging network layout, accelerating the construction of key areas, improving service quality, and strengthening sci-tech innovation.

Our take: Charging infrastructure is key to promoting NEV use on a larger scale in China. This is also another step for increasing the much-needed consumption.

Opinions on NEV charging infrastructure

Policy Snapshot – Recent National and Regional Policies in China (June 14, 2023)

Notice on Environmental Protection Technology Equipment

MIIT has released a notice on the application of encouraged major environmental protection technology equipment for 2023, with the aim to accelerate the research and development of advanced environmental protection equipment, promote its application, and improve the overall level and supply quality of the industry. Environmental protection equipment research and production enterprises can apply online through designated websites, and provincial authorities will review and recommend qualified technical equipment. The deadline for applications is August 21, 2023.

Our take: German companies have many advanced environmental protection technologies which potentially could be recognized as encouraged by the government.

Application on encouraged major environmental protection technology equipment for 2023

Shanghai’s Adjustment on Green Power Carbon Accounting Methods

Shanghai Municipal Bureau of Ecology and Environment announced to adjust the calculation method of carbon emissions for green energy purchased by carbon trading enterprises. For the actual quantity of electricity purchased and settled through the inter-provincial trading method on the green energy trading platform of the Beijing Power Exchange, the emission factor has been adjusted to 0 t CO2/104kWh.

Our take: Several cities have introduced policies which link electricity and carbon regulations. This is another important step to integrate the green energy markets with the carbon market.

Adjustment on green power carbon accounting methods

Promotion of the Consumption of Green Smart Home Appliance

The MOFCOM, NDRC, MIIT and SAMR have jointly issued a notice on promoting the consumption of green and intelligent household appliances in 2023. The notice proposes to organize activities to promote the consumption of green and intelligent household appliances, encourage the replacement of old appliances with new ones, promote the usage in rural areas, and improve after-sales services and recycling of household appliances.

Our take: Our just released flash survey reveals that German companies see boosting consumption as the most urgent task for the Chinese government right now. This policy is another small step in this direction but much more needs to follow.

Promotion of the consumption of green smart home appliance

Policy Snapshot – Recent National and Regional Policies in China (May 30, 2023)

NDRC Opinions on NEV Infrastructure and Market in Rural Areas

NDRC released opinions on NEV infrastructure and market in rural areas. The charging infrastructure in rural areas will be developed as soon as possible and more favorable conditions for NEV users will be provided in rural areas. To tap the market potential in rural areas, more investment and efforts will be put in the sector, such as consumption coupons and financial incentives.

Our take: Rural areas remain a large untapped market for NEVs. Boosting the infrastructure construction and giving incentives to consumers is much welcomed by the automobile industry.

Opinions on NEV infrastructure and market in rural areas

Shanghai Measures on Facilitating SMEs

Shanghai released several measures on facilitating micro-, small and medium-sized companies to get stronger and more resilient.  More efforts should be made in cultivating specialized SMEs. More credit loans and financial consulting services should be made available for more companies than before. Besides, enterprises are encouraged to accelerate their digitalization, such as through online office platforms, projects processing software and computing.

Our take: This is another regional level document which provides detailed measures to support very small companies and SMEs after the pandemic. The question remains whether the company in question is qualified, this should be checked with the local authorities.

Shanghai’s measures on facilitating SMEs

Zhejiang Measures for the Promotion of Foreign Trade

Zhejiang Province released measures on the promotion of its foreign trade. The document emphasizes trade-related manufacturing projects as a key attraction for foreign investment. More than 1,000 groups and 10,000 enterprises will be encouraged to explore the overseas markets. Measures to ensure foreign trade mainly include the support for financing, cross-border travel, as well as better services for enterprises.

Our take: Foreign trade is not back to pre-pandemic levels. Hence, foreign trade as part of China’s economy recovery after pandemic needs support.

Zhejiang Measures for the promotion of foreign trade

Policy Snapshot – Recent National and Regional Policies in China (May 16, 2023)

Guidance on Dual Carbon Standard System Construction

The Standardization Administration, NDRC, MIIT and other ministries jointly released a guidance on the construction of the dual carbon standard system. The guidance highlighted to revise no less than 1000 national and industrial standards (including foreign language version) by 2025, aiming to significantly improve the degree of consistency with international standards. A comparison between national and international standards on promoting greenhouse gas management, carbon footprint, carbon capture, utilization, and storage (CCUS), clean energy, energy conservation and other areas will be carried out.

Our take: This push for increased standardization efforts will hopefully bring more of the much-needed harmonization between Chinese and international standards in the decarbonization field.

Guidance on Dual Carbon Standard System Construction

Shanghai Measures on new Investment Incentives

Shanghai released measures on promoting investment to build a modernized industrial system. New incentive policies range from high-end industries, high-end services to functional headquarters projects among others. Integrated circuits, biomedical and artificial intelligence industries remain the key pioneer industries to attract investment. Further highlights include the industrial layout of intelligent devices, green low-carbon, digital economy, and the metaverse.

Our take: Shanghai continues to attract high-level investment with the help of subsidies. Companies need to thoroughly check what is in it for them.

Shanghai’s measures on promoting investment

Opinions on Stabilizing Foreign Trade

The State Council released opinions on stabilizing foreign trade, including expanding the foreign trade market, increasing the scale of key products, increasing support more financial and foreign exchange, promoting innovation in foreign trade, as well as optimizing the trade environment. The document also mentioned to increase effort in promoting other countries to open visa application channels for Chinese businesspeople and improve processing efficiency.

Our take: Stabilizing foreign trade is one of the major pain points of China’s economic recovery after the pandemic, and this document is another clear sign that the situation needs to be improved rather quickly.

Opinions on stabilizing foreign trade

A Joint Program for Science and Technology Innovation in the Yangtze River Delta

The technology departments of Jiangsu, Zhejiang, Shanghai and Anhui have jointly released a trial implementation plan for joint scientific research in the Yangtze River Delta. The plan focuses on innovation needs in key industries such as integrated circuits, artificial intelligence, and biomedicine, which are expected to make technology breakthroughs in 2-3 years. The plan is set to meet the needs of cross-area cooperation in innovation, promote joint investment, and integrate projects, talents, and funds.

Our take: China is searching to achieve technological breakthroughs, especially in key industries, to achieve more self-reliance. The traditionally challenging cross-provincial cooperation impedes the progress of innovation. Plans to strengthen regional cooperation, such as this one, should improve the situation.

Trial implementation plan of joint scientific research in the Yangtze River Delta

2023 Energy Work Guidance

The National Energy Administration issued the 2023 Energy Work Guidance, pointing out that the energy work in 2023 will focus on high-quality development and enhancing the resilience of the energy supply chain. The guide mentions ensuring supply and stabilizing prices as a priority, while actively promoting green and low-carbon transformation.

Our take: One of the major tasks for the Chinese government is still to ensure energy security. We currently see more emphasis here than on green transformation.

2023 Energy Work Guidance

Shanghai Measures for Attracting Foreign Investment

Shanghai released measures for attracting and utilizing foreign investment, aimed at expanding and stabilizing foreign investment and promoting high-quality development. Shanghai will conduct a pilot plan to implement opening-up measures in the telecommunication, internet, education, culture, and medical industries. More industrial policies will be released to guide investment into high-end manufacturing, modernized services, high-tech, energy conservation, and environmental protection industries. The documents also emphasized facilitation methods for better service to foreign-invested enterprises.

Our take: These are important sectors that are still on the negative list. Shanghai is at the forefront of the liberalization of market access, but it's too early to judge the effects of this pilot program.

Shanghai’s measures for foreign investment

Policy Snapshot – Recent National and Regional Policies in China (April 6, 2023)

Increase Pre-Tax Deduction of R&D Expenses

To further stimulate investment in R&D, the State Taxation Administration issued an announcement to improve the policy of pre-tax deduction of R&D expenses. From January 1, 2023, R&D expenses will be deducted at an additional 100% on a pre-tax basis. If intangible assets are created, they will be amortized before tax at 200% of the cost from January 1, 2023.

Our take: This national policy is a good step forward. German companies, however, need to thoroughly check at the local level what additional benefits are available.

Pre-tax deduction of R&D expenses

Opinions on Energy Digitalization and Intelligence

The National Energy Administration published opinions on energy digitalization and intelligence, proposed for the development needs of digital transformation of electric power, coal, oil, and gas industries. The document stressed the leading role of financial support and called for better implementation of support policies in investment, taxation, finance, insurance, and intellectual property rights.

Our take: Digitalization in the energy industry will accelerate clean and low-carbon transition of power generation and utilization of oil. This is another step towards energy security and decarbonization.

Opinions on energy digitalization and intelligence

Shanghai Measures to Promote Consumption

Shanghai released 15 measures to promote consumption. The document addressed four types of consumption, including consumption of digital, smart, and online products, services, automotive, and green consumption. The article also listed the 6 themed consumption campaigns for this year.

Our take: German companies are eagerly waiting for local governments to promote consumption. Shanghai is again emphasizing the service and the digital sectors.

Shanghai's 15 measures to promote consumption

Policy Snapshot – Recent National and Regional Policies in China (March 22, 2023)

Reform Plan of the Party and State Institutions

The CPC and the State Council released the Reform Plan of the Party and State Institutions. The major reform measures were related to the Ministry of Science and Technology, Bureau of Financial Supervision and Administration, and the National Data Bureau. The plan also covered the establishment of several CPC committees, as well as the reform of the NPC and CPPCC institutions.

Our take: From the reform plan we can see that, for the next few years, China will focus on strengthening science and technology self-reliance, preventing financial risks, and pushing forward digitalization.

Reform Plan of the Party and State Institutions

NDRC Consolidates the Achievements in COVID-19 Prevention and Control

NDRC released an announcement on the major task to consolidate the achievements in COVID-19 pandemic prevention and control. The priorities lie in the construction in emergency response, public facilities, healthcare infrastructure and medical resource distribution. The National Hygiene Campaign will also be a focus, with the goal of raising public awareness about public health.

Our take: It is a remarkable step that this task is now with the planner and not with the State Council’s so-called “prevention mechanism” anymore. Obviously, the pandemic prevention has now been integrated into the regular work of the government.

Document on consolidating achievements in COVID-19 prevention and control

National Plan on Intellectual Property Rights' Administrative Protection for 2023

China’s National Intellectual Property Administration has released a plan for 2023 aimed at strengthening the judicial and administrative protections of intellectual property rights. Priorities include improving the IPR protection system, cracking down on the infringement of IPR, and enhancing protection in key areas, such as foreign IPR and livelihood.

Our take: Intellectual property rights remain a topic of concern for German companies. It is good that foreign IPR is seen as a key issue. Also, as part of the government restructuring, we see that IPR is getting more weight.

National plan on intellectual property rights' administrative protection for 2023

Policy Snapshot – Recent National and Regional Policies in China (March 8, 2023)

Government Work Report

On March 5, Premier Li delivered his work report on behalf of the State Council at the first session of the 14th National People’s Congress. The work report provided a review of the government’s work in 2022 and the past five-year term, as well as offered recommendations for the government’s work for 2023.

Our take: Apart from being unexpectedly short, there were no major surprises in this year’s report. The report alone does not give a major confidence boost, also having a rather moderate growth goal of “around 5%.”

Two Sessions: Deciphering the work report for German companies

Government Work Report (Text Summary)

Plan for Building a Digital China

CPC and the State Council released a plan for building a “Digital China.” The plan calls for significant advancements in digital infrastructure and the system of data resources. The digital progress in the economic, political, cultural, social and ecological fields will be closely coordinated. The plan includes support for the in-depth integration of digital technology and the real economy and its application in the agriculture, manufacturing, finance, education, medical services, transportation, and energy sectors.

Our take: The effort in digitalization is now new, but this high-level document shows again the government's plans to highlight the role of companies in technological innovation.

Plan for Building a Digital China

Standard Contract Measures for Personal Information Export

CAC released the Standard Contract Measures for Personal Information Export. These measures provide guidance for entering into a contract with overseas recipients, provide a standard contact, and also require a personal information protection impact assessment prior to data export. The measures will take effect from June 1, thereafter still granting a 6-months grace period.

Our take: With a maturing digital security framework in China, companies need to pay more attention to compliance while engaging in cross border data transfer. The standard contract is a key component here.

Standard Contract Measures for Personal Information Export

Policy Snapshot – Recent National and Regional Policies in China (February 22, 2023)

Spatial Planning of Integrated Ecological Green Development of Yangtze River Delta Demonstration Area

The State Council approved the Overall Spatial Planning of Integrated Ecological Green Development of Yangtze River Delta Demonstration Area (2021-2035), which depicts the area's blueprint with development and protection pattern of land. The document also puts forward measures for regional integration and coordination in terms of ecological environment, infrastructure, public services, urban and rural landscape, etc.

Our take: The planning hints at the future development of the Yangtze River Delta, especially in terms of green development and spatial planning.

Spatial Planning of Integrated Ecological Green Development of Yangtze River Delta Demonstration Area

Supreme Court Providing Judicial Services to Promote Dual Carbon

The Supreme People's Court released Opinions on Providing Judicial Services to Promote Dual Carbon amid the current new and increasing cases involving carbon trading disputes. The document addresses improving the carbon market trading mechanism, supports authorities carrying out administrative punishments on companies’ fictitious greenhouse gas emissions data, and provides guidance on cases in this new field.

Our take: China is ramping up its regulatory framework on dual carbon covering different aspects. This is the first standard document on dual carbon issued by the Supreme Court.

Supreme Court Providing Judicial Services to Promote Dual Carbon

MIIT Started Application Process for Specialized "Litle Giant" SME Title

MIIT posted a notice on starting the application process for the fifth batch of “Little Giant” SMEs. The provincial-level departments in charge of SMEs are responsible for organizing the nomination and initial audit work, while MIIT will arrange for experts to review and check the materials reported.

Our take: SMEs with the “Little Giant” title will enjoy preferential policies. Companies should pay close attention to the application deadline.

MIIT Started Application Process for Specialized "Little Giant" SME Title

Policy Snapshot – Recent National and Regional Policies in China (February 8, 2023)

Further encouragement of foreign investment by establishing R&D centers

MOFCOM and the Ministry of Science and Technology jointly released measures to further encourage foreign investment by setting up R&D centers. Measures include the support of technology innovation with better government services, encouraging basic research, supporting cross-border R&D data flow, attracting overseas talents, as well as improving intellectual property protection.

Our take: From the central level, China is now putting more effort into encouraging foreign investment in R&D and working to facilitate respective services. Watch out for relevant local initiatives!

Measures on further encourage foreign investment in establishing R&D centers

Measures to support SMEs to stabilize growth

The Ministry of Finance and the State Taxation MIIT released measures on support SMEs - preferential policies that ended last year will be extended and refined. Market promotion will be implemented to achieve more order. The goal of cultivating SMEs is to enhance their core competitiveness.

Our take: SMEs were hit hard during the pandemic and play a strong role in the rebound of the economy.

Measures on support SMEs to stabilize growth, refine structure and strengthen capacity

Extended implementation of 3 structural monetary policy tools

The People’s Bank of China released a notice on extending the implementation of 3 structural monetary policy tools. First, the carbon reduction support tool will be extended until the end of 2024. In the meanwhile, some foreign financial institutions will be included in the scope of financial institutions for carbon emission reduction support tools. Second, the special refinancing loan for clean and efficient use of coal was extended until the end of 2023. Third, special refinancing for transport logistics was extended until the end of June 2023. SMEs in logistics will be included in the scope.

Our take: Monetary policy tools for companies to conduct green low-carbon development as well as logistic recovery.

Notice on extension of 3 structural monetary policy tools

Policy Snapshot – Recent National and Regional Policies in China (January 11, 2023)

The 10th COVID-19 Medical Treatment Protocol

China updated the medical treatment protocol to better align with the previous central policy on downgrading the COVID-19 administration level to a Class B infectious disease. Additionally, the protocol provided guidelines for treatment using Chinese medicine, and highlighted the treatment of underlying diseases in COVID-19 patients.

Our take: This adjustment is a follow-up step of the central policy, which marks that COVID-19 will be officially treated as a Class B infectious disease in medical scenarios.

The 10th COVID-19 Medical Treatment Protocol

New Travel Policy for Passengers From China to Germany

The German Embassy posted a notice on a new policy for international travelers entering Germany. Starting from January 9, travelers from China are required to present a negative report of a nuclear acid test or antigen test within 48 hours. The policy is due to the currently high infection rate in China and will be effective temporarily until April 7.

Our take: Please be aware that in some areas it might be hard to find a testing place providing English results on time.

Notice on new policy for international travelers entering Germany

Inbound Restrictions for Travelers From Hong Kong Relaxed

The Hong Kong and Macao Affair Office released a notice on optimizing travel within Greater China. Travelers entering from Hong Kong should hold valid 48-hour negative PCR test results. Travelers from Macau with no history of residence in a foreign country or other foreign regions within 7 days are not required to present a negative test.

Our take: With the relaxation of travel regulations, the Greater Bay Area will revive its vitality in business and economy.

Notice on optimizing travel between the mainland, Hong Kong and Macau