Policy Snapshots

Navigating China's ever-evolving regulatory landscape can be challenging, which is why we provide valuable insights that help contextualize policy changes. The Policy Snapshot is a bi-weekly briefing on the latest Chinese policies for German companies in China. The Policy Snapshot is shared on the WeChat Channels of the German Chamber and can also be accessed on this site. As a member of the German Chamber, you can also benefit from our more comprehensive report, the Policy Barometer, which is delivered straight to your inbox.

Policy Snapshot – Recent National and Regional Policies in China (June 26, 2024)

EnterprisesEmission Reduction Plans for Four Industries

The National Development and Reform Commission released detailed emission reduction plans for high-polluting industries, including iron and steel, oil refining, ammonia, as well as cement industries. These action plans set quantitative emission reduction targets for each industry and outline the major tasks.

Our take: These plans are steps derived from the recently released 2024-2025 Energy Conservation and Carbon Reduction Action Plan for energy efficiency and carbon reduction. We expect more similar documents to be released later for other industries.

Emission Reduction Plans for Four Industries

The Regulations on Fair Competition Review

The State Council released the Regulations on Fair Competition Review, which aim to prevent unfair competition and create a fair business environment by reviewing central or local government policies to ensure they do not discriminate against companies or impede competition. The scope of the review covers laws, administrative regulations, local regulations, and specific policy measures related to economic activities. The regulations will take effect on August 1 this year.

Fair competition is essential for the development of companiesin China and for the Chinese economy as a whole. We welcome such steps toensure policies do not harm fair competition.

Regulations on Fair Competition Review

Further Support for High-Quality Development of Sophisticated SMEs

The Ministry of Industry and Information Technology has issued a document on further supporting the development of sophisticated SMEs, supporting the so-called "Little Giants" for a new momentum, for new technologies and new products, as well as to strengthen the supporting capacity of the industrial chain. From 2024 to 2026, "Little Giants" will be supported in 3 batches through financial incentives and subsidies. Provincial level authorities will issue their own specific implementation plans.

Our take: With this, the Chinese government has re-emphasized the need to help high-tech SMEs with financial incentives and subsidies.

Further Supporting the High-quality Development of Sophisticated SMEs

Dr. Constanze Wang

Head of Government Affairs & Advocacy

+86-21-3858 5010

Write an e-mail

Archive

Policy Snapshot – Recent National and Regional Policies in China (June 12, 2024)

Implementation Plan for Establishing a Carbon Footprint Management System

The Ministry of Ecology and Environment released an implementation plan for establishing a carbon footprint management system. The plan aims to establish a basic system by 2027 with about 100 carbon footprint accounting rules and standards for key products. The plan also emphasizes the need to make positive progress in the international alignment of carbon footprint rules.

Our take: Companies are increasingly seen as important actors in the decarbonization journey, as this carbon footprint system clearly shows.

Implementation Plan for Establishing a Carbon Footprint Management System

Action Plan for Building Social Credit System 2024-2025

The National Development and Reform Commission released an action plan for building the social credit system and laid out a major framework for the next two years. The document addresses the rule of law and standardization of the social credit system by introducing the Social Credit Construction Law and an overall planning document on improving the social credit system. Main tasks include credit infrastructure building, credit information sharing, and the enhancement of credit supervision capabilities.

Our take: The social credit system has been in the pipeline for years. Aligning all local databases (technically) seemingly proved more challenging than expected.

Action Plan for Building Social Credit System 2024-2025

Beijing Foreign Investment Regulations

The Beijing People's Congress adopted the Beijing Foreign Investment Regulation, aiming to create a more open, transparent, and predictable market environment for foreign investment. The regulations address many key issues of concern for foreign companies in Beijing, including policy formulation, government procurement, cross-border data transfer, intellectual property rights protection, talent introduction, and communication mechanisms between the government and companies.

Our take: Attracting more foreign investment is still key, and optimizing the business environment is seen as a means to achieve it.

Beijing Foreign Investment Regulations

Policy Snapshot – Recent National and Regional Policies in China (May 29, 2024)

Guidance to Enhance the Supply Chain Management of Manufacturing Enterprises

The MIIT issued a Guidance to Enhance the Supply Chain Management of Manufacturing Enterprises to guide manufacturing companies to establish high-end, intelligent and green supply chains. The document not only requires manufacturing companies to formulate supply chain improvement programs in accordance with the above key directions, but also requires associations, service providers and platform companies to actively support them. It also formulates a practical reference index for manufacturing companies' supply chain management level.

Our take: Maintaining the security of the supply chains is regarded as an important aspect of economic security. It is a timely step to guide companies to build capacity accordingly.

Guidance to Enhance the Supply Chain Management of Manufacturing Enterprises

Notice on the Cost Reduction Work Plan for 2024

The NDRC released the Priority Work Plan of Cost Reduction in 2024 to reduce companies’ costs. The document emphasizes the implementation of pre-tax deduction for R&D expenses and tax relief for the transformation of sci-tech achievements and proposes the reduction of import tariffs on advanced technological equipment and resource goods. It also mentioned the reduction of other costs through for example strengthening the protection of intellectual property rights, standardizing the tender and government procurement system, and settling outstanding debts.

Our take: Cost pressure has strongly increased for companies in China, especially last year. This document is a response to that.

Notice on the Cost Reduction Work for 2024

The Implementation Plan for the Construction of Intellectual Property Protection System

The National Intellectual Property Administration issued the Implementation Plan for the Construction of the Intellectual Property Protection System, which set the goal of realizing the modernization of the intellectual property protection system and protection capacity by 2035. The document aims to provide a guideline of an intellectual property protection system with full coverage of intellectual property rights as a whole.

Our take: Intellectual Property protection is still a headache for foreign companies. This is a step forward for an overall improvement of IP protection which is essential in this innovation productivity-oriented era.

Implementation Plan for the Construction of the Intellectual Property Protection System

Policy Snapshot – Recent National and Regional Policies in China (May 15, 2024)

Implementing Rules for the Automobile Trade-in Subsidy

The Ministry of Commerce released the implementing rules for automobile trade-in subsidy with more practical measures. Private consumers who scrap their cars that were registered before April 30, 2018 and whose cars meet the National III or lower emissions standards may receive a one-time subsidy of CNY 10,000 or CNY 7,000, if they purchase new energy cars. The document also provides guidance on the grant application process as well as management requirements.

Our take: This document is seen as a detailed implementation of the central action plan on the trade-in of consumer goods. However, the amount of subsidies does not seem attractive enough to significantly develop the used car market.

Implementing Rules for Automobile Trade-in Subsidy

Tianjin Free Trade Zone Negative List for Outbound Data Transfer

The Tianjin Commission of Commerce released the China (Tianjin) Pilot Free Trade Zone Data Exit Management List (Negative List). The list specifies the circumstances under which companies are required to conduct a data exit security assessment, sign a standard personal information exit contract, or submit a personal information protection certification and have it approved, in order to transfer data abroad. The list contains a total of 46 items in 13 categories. The transfer of data by companies that are not on the negative list are exempted from these formalities.

Our take: After the idea was put forward by the central government, this is the first negative list for conducting cross border data transfer in the Free Trade Zone (FTZ). Tianjin’s document is expected to serve as a pioneer, followed by other FTZ releasing similar ones.

Tianjin FTZ Negative List for Data Outbound Transfer

Opinions on Improving the Institutional Mechanisms to Promote Bidding and Tendering Market

The State Council issued the Opinions on Improving the Institutional Mechanisms to Promote the Standardization and Healthy Development of the Bidding and Tendering Market. The document aims to promote a highly efficient, standardized, fair and open bidding and tendering market. It proposes policy initiatives such as optimizing the rules of the bidding system, optimizing the process of determining the winning bidder, and strengthening supervision and management. The document also mentions promoting green bidding and procurement as well as supporting the participation of SMEs.

Our take: The bidding and tendering market is another focus of the Chinese government recently. We're still looking forward to seeing foreign companies treated more equally, especially in this crucial area.

Opinions on Improving of Institutional Mechanisms to Promote the Bidding and Tendering Market

Policy Snapshot – Recent National and Regional Policies in China (April 18, 2024)

Rules for Fair Competition Review in the Field of Tendering and Bidding

The NDRC released the final Rules for Fair Competition Review in the Field of Tendering and Bidding. The document stipulates the review and assessment of whether the policies and measures to be formulated in the field of bidding and tendering exclude or restrict fair competition. The document contains 22 articles including review standards and review mechanisms.

Our take: A step forward towards a fairer competition environment for German companies in tendering and bidding, which is strongly needed for German companies. The Chamber previously sent comments on the draft regulations which were in part considered in the final draft. #AdvocacyImpact

Rules for Fair Competition Review in the Field of Tendering and Bidding

Implementation Plan for the Renewal of Equipment in the Industrial Sector

The Ministry of Industry and Information Technology released an implementation plan for the renewal of equipment in the industrial sector. The document highlights “high-end, intelligent, green and safe” as the key directions. The replacement will be driven by energy saving and carbon reduction and other related standards. The document sets the target that by 2027 the scale of investment in equipment in the industrial sector will increase by more than 25% compared with 2023.

Our take: This is one of the “N”s of the 1+N framework of Large-Scale Equipment Replacement action focusing on the industrial sector. It is becoming more and more obvious that the equipment renewal is strongly intertwined with China’s green transformation.

Implementation Plan for the Renewal of Equipment in the Industrial Sector

Strengthening Financial Support for Green and Low-Carbon Development

The People’s Bank of China released opinions on further strengthening financial support for green and low-carbon development. The document put forward several initiatives including optimizing the green financial standard system, establishing a categorized information disclosure system, and promoting the development of green finance products and markets. The document specifically emphasizes the encouragement of foreign institutions to issue green panda bonds and invest in domestic green bonds.

Our take: Green finance is an important way to help achieve China’s dual carbon goals. More opening up of the financial sector would also be helpful here.

Opinions on Further Strengthening Financial Support for Green and Low-carbon Development

Policy Snapshot – Recent National and Regional Policies in China (April 3, 2024)

New Regulations on Cross-Border Data Transfer

The CAC released the new Regulations on Promoting and Standardizing Cross-Border Data Transfer, after a call for comments last September. The document includes some relaxed measures for the transfer of personal data. For important data, it details that all data that has not been classified or publicly released as important data by authorities will not be regarded as important data.

Our take:

The document was only a first—albeit tangible—step toward facilitating cross-border data transfer. As a next step, we have to wait for the actual negative list for Free Trade Zones and the important data catalogs from the authorities.

On Monday, March 25, a more detailed analysis of the update on Cross-border Data Transfer Regulations was sent to our members’ mailboxes.

New Regulations on Promoting and Standardizing Cross-Border Data Transfer

Guidance on Energy Work in 2024

The National Energy Administration released the Guidance on Energy Work in 2024. The document highlights the priority of ensuring national energy security, while promoting the green and low-carbon transformation of energy. It specifies that the share of installed power generators from non-fossil sources should increase to about 55%, and the share of wind and solar power generation should amount to more than 17%.

Our take:

This new document again shows that balancing energy supply with energy efficiency (through new technologies, e.g., in energy storage) is the direction and way forward in the energy field. Progress in this area is absolutely necessary for China’s decarbonization goals and for satisfying the paramount need for (green) energy. However, significant structural barriers still hinder progress in this field.

Guidance on Energy Work in 2024

Policy Snapshot – Recent National and Regional Policies in China (March 21, 2024)

Action Plan for Further Attracting Foreign Investment

The State Council released a new 24-point policy to further attract foreign investment, aimed at boosting foreign investors' confidence in China. The document details plans to expand market access, particularly in banking, insurance, and the stock market, and strengthen policy support for foreign investment via an expansion of the Encouraged Catalogue for Foreign Investment. The document reiterates optimizing the fair competition environment and cleaning up unequal treatment. For cross-border data transfer, it now mentions the white list approach, which was introduced in the Free Trade Zones. In an attempt to better align with international trade and investment rules, intellectual property protection and accession into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Digital Economy Partnership Agreement (DEPA) are highlighted.

Our take:

This is another high-level document to attract foreign investment. This action plan can be seen as an update to the 24-point policy from last August, including the moves from recent months and a few more detailed measures. Compared to the 24-point policy, it is framed more as a call for action.

Action Plan for High-Level Opening up and Greater Efforts to Attract Foreign Investment

Action Plan to Promote Large-Scale Replacement of Equipment and Consumer Goods

The State Council issued an Action Plan to promote large-scale replacement of equipment and consumer goods, aiming to boost both investment and consumption. The main points include: Increasing policy support, promoting high-end, intelligent, and green development, and setting new, high-level standards to guide companies to meet the new requirements. The measures will be applied to equipment in key industries, construction and infrastructure, transportation, old agricultural machinery, education, culture, tourism, and medical care, as well as consumer goods such as automobiles and home appliances.

Our take:

Promoting large-scale equipment replacement is China's main method of boosting consumption this year. German companies can look out for potential subsidies for machinery renewals and opportunities in public procurement.

Action Plan to Promote Large-Scale Replacement of Equipment and Consumer Goods

Policy Snapshot – Recent National and Regional Policies in China (March 7, 2024)

Government Work Report 2024

In the Government Work Report delivered on March 5, the main tone of the policy approach in 2024 will be stability and a long-term innovation development approach. The report sets the growth target at “around 5%” and plans a more proactive fiscal policy.

Our take: Many German companies didn’t feel much of last year’s 5.2% growth. With a similar target for 2024, the potential economic development in China is not very promising. The “high-quality development” pursuit provides both opportunities and challenges. More in yesterday’s WeChat post.

State Council Government Work Report

German Chamber’s Analysis of the Government Work Report

Guidance Catalogue for Green and Low Carbon Transformation Industries (2024 Edition)

NDRC has issued the Guidance Catalogue for Green and Low-Carbon Transition Industries (2024 Edition), aiming to generate and build up new drivers of growth for green development. The document puts forward the industries that need to be supported and cultivated in green and low-carbon transformation. Local government and departments are encouraged to introduce more measures that provide incentives and support for production, distribution, and consumption in listed industries.

Our take: During this revision, the NDRC changed the title of the document from the Green Industry Guidance Catalogue to the Green and Low Carbon Transformation Industries Catalogue, emphasizing the need to integrate green industries in implementing China's dual-carbon goals.

Guidance Catalogue for Green and Low Carbon Transformation Industries (2024 Edition)

Implementation Plan for the Enhancement of Data Security Capabilities in the Industrial Sector

The MIIT issued the Implementation Plan for the Enhancement of Data Security Capabilities in the Industrial Sector (2024-2026), aiming at the gradual establishment of a data security guarantee system in the industrial field by the end of 2026. The Implementation Plan focuses on enhancing the capabilities of industrial enterprises in data protection, data security supervision, as well as supportive capacity, including data security technology, products, services, and talents.

Our take: While data should also be used as an economic resource, China emphasizes data security in this document, in this case, to avoid risks such as data breaches and ransom attacks.

Implementation Plan for the Enhancement of Data Security Capabilities in the Industrial Sector(2024-2026)

Opinions on Further Optimizing Payment Servicesand Enhancing Payment Convenience

The People's Bank of China (PBoC) drafted the Opinions on Further Optimizing Payment Services and Enhancing Payment Convenience, which was considered and adopted by the State Council executive meeting on February 23. Focusing on the pain points in access to payment services for the elderly and foreigners, the document puts forward initiatives such as promoting the acceptance of foreign bank cards, improving the bank card acceptance environment, improving the environment for cash usage, optimizing foreign currency exchange and cash services, and promoting the internationalization of mobile payment.

Our Take: We have recently seen many policies targeting the facilitation of foreigners’ lives in China. These can also be considered the low-hanging fruits of the 24Points.

Press Conference Introducing the Opinions on Further Optimizing Payment Services and Enhancing Payment Convenience

The Launch of the People's Court Case Database

The Supreme People's Court opened a People's Court Case to the public, which contains authoritative cases as reference and demonstrative value for similar cases. The Database aims to review authoritative cases with reference and demonstrative value for deciding similar cases, summarizing various difficult and complex issues of legal application, and providing judges with guidelines for case deciding.

Our Take: We appreciate that the database is open again and hope it will remain so, for the sake of judicial transparency.

People's Court Case Database

Policy Snapshot – Recent National and Regional Policies in China (February 22, 2024)

Support for New Energy Vehicles Trade

The Ministry of Commerce (MOFCOM) has recently released opinions to support the healthy development of trade and cooperation for New Energy Vehicles (NEVs). The document proposes to enhance the ability of NEV companies and their supply chain partners to improve their international operation capabilities through measures such as promoting the establishment of overseas R&D centers, improving the compliance capability of overseas operations, and strengthening cooperation with overseas companies. Meanwhile, export procedures for NEVs and batteries will be optimized. The government will also provide support in terms of financial loans, trade promotion and optimization of the business environment.

Our take: Given the weakening of global trade, the sluggishness of China's trade and the overcapacity issues, strengthen NEV companies and their activities abroad is a logical step. This step will surely be closely watched by EU regulators.

Opinions on Supporting the Healthy Development of Trade and Cooperation in New Energy Vehicles

Tianjin Pilot Free Trade Zone Enterprise Data Categorization and Classification Standard Specification

Tianjin issued the Standard Specification for Enterprise Data Categorization and Classification in China (Tianjin) Pilot Free Trade Zone (FTZ). The specification applies to the data generated, collected, stored, transmitted and processed by companies in production and operation in the Tianjin FTZ. The data is divided into 13 major categories and 40 subcategories. The document describes a definition for 3 levels of data (core, important, and general data), and the data classification method.

Our take: Companies have been waiting for a long time for more clarification on important data. As this is the first standard specification for data classification among the pilot FTZs, it will be an important pilot and a signal for more policies to come for other FTZs.

China (Tianjin) Pilot Free Trade Zone Enterprise Data Categorization and Classification Standard Specification

Shanghai's New Measures on Optimizing the Business Environment

Shanghai released new measures on optimizing the business environment, which emphasizes a market-oriented, rule of law-based and internationalized business environment. The measures aimed at establishing a business environment with trade and investment facilitation, administration efficiency, standardization of government services, and a sound rule of law system. Shanghai will improve its International Services Portal and release foreign-related policies in multiple languages. A standardization collaboration platform for foreign-invested enterprises in Shanghai will be established to improve public participation and transparency in the formulation of standards.

Our take: Shanghai has been regularly updating its measures to optimize the business environment. This time, establishing a standardization cooperation platform for foreign-invested enterprises is worth observing to see if it indeed helps foreign companies to participate in standard setting on an equal basis.

Shanghai’s Action Plan for Continuously Creating an Internationally First-Class Business Environment

Zhejiang Measures on Expanding Effective Investment

Zhejiang Provincial Development and Reform Commission released measures to increase effective investment in 2024. The document mentioned the aim of keeping investment fundamentals stable and optimizing structures of investment of higher quality with a targeted 6% growth rate in 2024. The document also called for Zhejiang to seize the foreign investment access restriction lifting policy opportunity in manufacturing, as well as to expand the opening up of the services sector to strengthen the attraction of major foreign investment projects.

Our Take: Here, the Zhejiang document echoes an earlier speech by the central leadership, which mentions the lifting of investment restrictions in manufacturing. Since applying for licenses in the sector often include hidden obstacles, we are curious what that will mean in practice.

Notice on Policies for Expanding Effective Investment in Zhejiang Province in 2024

Policy Snapshot – Recent National and Regional Policies in China (January 25, 2024)

Five Measures to Facilitate Entries of Foreigners to China

The National Immigration Administration introduced five measures to facilitate foreigners’ visits to China. The measures including a relaxation of port visa application requirements, 24-hour direct transit without undergoing border check procedures at nine major airports, easier application for a visa extension or reissue; multiple-entry visas, if needed, for foreigners already in China; and minimization of the types of the materials required for visa applications.

Our take: This is another step to attract foreigners to come to China. These measures alone are not enough, however, to re-establish trust.

Five Measures to Facilitate Entries of Foreigners

Opinions on Promoting the Construction of a Beautiful China

The State Council issued Opinions on Promoting the Construction of a Beautiful China, pointing out that China's development has entered a stage of high-quality development with a focus on accelerating green development and decarbonization. The document put forward work tasks in green transformation, pollution prevention, ecological stability and security. Quantitative targets were proposed in various aspects such as air quality, water quality, and transportation.

Our take: After the focus has been on (trying to) getting the economy back on track in 2023, we might see stronger focus on the environment in 2024. More inspections in environmental protection and stricter regulatory implementation can be expected in the future.

Opinions on Promoting the Construction of a Beautiful China

Opinions on Developing the Silver-Hair Economy and Enhancing the Well-Being of the Elderly

To actively address population ageing, the State Council released Opinions on Developing the Silver-Hair Economy and Enhancing the Well-Being of the Elderly to guide the development of relevant industries. The document emphasizes the development of livelihood businesses including catering, home assistances and community services. It also proposes to expand the supply of appropriate products to meet the diversified needs of the market.

Our take: This is the first policy document at the national level titled "Silver Economy". In the current aging social environment, related industries are now being emphasized, including not limited to as a measure to ramp up consumption via this cohort.

Opinions on Developing the Silver-Hair Economy and Enhancing the Well-being of the Elderly

Implementation Plan of Pudong Comprehensive Pilot Reform 2023-2027

The State Council released the Implementation Plan of Pudong Comprehensive Pilot Reform 2023-2027. The plan gives the district more autonomy in key areas and steps in opening and reform. According to the document, Pudong will explore the mechanism for convergence between the negative list for foreign investment with the general negative list for market access. Measures also include promoting mutual recognition of Chinese and foreign standards as well as encouraging foreign-invested enterprises to participate in domestic standard-setting.

Our Take: Pudong New Area has long been a pioneer in opening up. To make less difference between lists dedicated to foreign investment and national ones is a good step.

Implementation Plan of Pudong Comprehensive Pilot Reform 2023-2027

Policy Snapshot – Recent National and Regional Policies in China (January 10, 2024)

Catalogues of Technologies Prohibited and Restricted for Export

The Ministry of Commerce (MOFCOM) released the Catalogues of Technologies Prohibited and Restricted for Export of the PRC. Mining engineering technology, photovoltaic silicon wafer preparation technology, CRISPR gene editing technology and synthetic biology technology, which were proposed in the draft for comments, have not been added in the final version.

Our take: China is facing the dilemma of using a ban on technology exports to protect against high-tech leakage, which in turn could hurt its own exporting companies. Interestingly, the controversial photovoltaic technology was not added to the list this time.

Catalogues of Technologies Prohibited and Restricted for Export

New Three-Year Data Action Plan

The National Data Administration released the "Three-Year Action Plan Data Factor ×" (2024-2026). The plan aims to better develop the digital economy, with data as a key element. The plan focuses on 12 industries, such as industrial manufacturing, modern agriculture, commerce and trade, transportation, financial services and low carbon development.

Our take: The “×” here is the multiplication sign, which means that the data not only serves as a factor of production, but also is expected to cause a multiplier effect in China’s future economic development.

Three-Year Action Plan Data Factor × (2024-2026)

The Guidance Catalogue for Industrial Structure Adjustment - 2024 version

The NDRC released the 2024 version of the Guidance Catalogue for Industrial Structure Adjustment. The orientation of the new revision includes: promoting high-end, intelligent, and green manufacturing industries, enhancing the core competitiveness of manufacturing industries, accelerating the transformation and upgrading of traditional industries, accelerating high-level scientific and technological self-reliance and self-improvement, and promoting the deep integration of the modern service industry with the advanced manufacturing industry and modern agriculture.

Our take: The industry catalogue serves as a direction for China's major industry development in the future. This will also outline priority industries for public and private investment.

Guidance Catalogue for Industrial Structure Adjustment

Implementation Rule of the Patent Law

The State Council released the amendment of the implementation rule of the Patent Law. The amendments focus on five major aspects, including: facilitating patent applications, improving the quality and efficiency of patent examination, strengthening the administrative protection of patents, promoting the transformation and utilization of patents, and strengthening alignment with international rules.

Our Take: This is a further step in facilitating the patent application process. In particular, it provides patent holders with patent term extensions due to approval delays.

Implementation Rule of the Patent Law

Policies to Facilitate Cross-Border Trade and Investment

The State Administration of Foreign Exchange (SAFE) released measures to facilitate cross-border trade and investment. These measures aim to improve the foreign exchange management system and services, simplifying the handling of relevant business procedures and making business-to-business foreign exchange easier.

Our Take: This is another step towards attracting and stabilizing foreign investment.

Policies to Facilitate Cross-Border Trade and Investment