China Amends Laws– What Foreign Investors Need to Know
The government has taken further steps to reduce bureaucracy in China by amending 14 and abolishing six sets of regulations. The bureaucratic changes aim to cut red tape for enterprises in a wide range of industries. This push forms part of China’s long-term reform efforts to reduce regulatory hurdles and boost market activity. The amended regulations cover industries, such as telecommunications, healthcare, transport, customs, and internet access services, among others. We provide an overview of the changes most pertinent to foreign investors in China.
中国政府进一步采取措施修改14条法规和废除6部法规来减少官僚主义。官僚主义的改变旨在为各行各业的企业减少繁文缛节。这种推动是中国长期改革努力的一部分，旨在减少监管障碍，促进市场活动。修订后的法规涵盖了电信、医疗保健、运输、海关、互联网接入服务等行业。我们提供了一个与在中国的外国投资者最相关的变化的概述。On April 7, 2022, the State Council issued an order to amend 14 and abolish six sets of administrative regulations across a wide range of industries in order to further cut red tape for companies and help stimulate market activity. The changes will take effect from May 1, 2022.
2022年4月7日，国务院发布命令，修改14条，废止6部行政法规，进一步减少企业的繁文缛节，促进市场活动。这些变化将从2022年5月1日起生效。The order forms a part of China’s reform push to “separate operation permits and business licenses”, which reviews existing laws and regulations to: 1) reduce bureaucratic procedures for businesses by abolishing approval requirements, 2) optimize market access services, and 3) base certain approval procedures on “informed commitment” rather than inspections, among other measures.
该决定是中国“经营许可证和营业执照分开”改革努力的一部分。“经营许可证和营业执照分开”对现行法律法规进行了审查，旨在: 1)废除审批要求，减少企业的官僚程序; 2)优化市场准入服务; 3)将某些审批程序建立在“知情承诺”而非检查等措施的基础上。The affected regulations cover foreign investment in the telecommunications industry, medical institutions, customs inspection, transport, internet access services, and many more.
受影响的法规涉及电信行业、医疗机构、海关检查、运输、互联网接入服务等许多领域的外国投资。Below we provide an overview of the legal changes that may benefit foreign investors in China.
下面我们概述一下可能有利于在华外国投资者的法律变化。
Amended and abolished laws
修改和废除法律
The amended laws cover the following fields:
经修订的法例涵盖以下范畴:Foreign investment in the telecom industry
电信业的外商投资
Medical institutions
医疗机构
Inspection of import and export commodities
进出口商品检验
Public security services
公共安全服务
Road transportation
道路运输
Pesticides
农药
Customs statistics
海关统计数字
Customs administrative penalties
海关行政处罚
Customs inspection
海关检查
Internet access services
互联网接入服务
Public security for the hospitality industry
公共安全为款待业服务
Quality assurance
质量保证
Maternal and infant healthcare
母婴保健
Radioactive medicine
放射性医学Meanwhile, the six abolished laws are:
与此同时，被废除的六项法律是:Interim Provisions of the State Council on General Aviation Administration
国务院通用航空管理暂行规定
Regulations on Quality Responsibility for Industrial Products
工业产品质量责任条例
Rules for the Implementation of Water Freight Transport Contracts
水运货运合同实施细则
Rules for the Implementation of Railway Freight Transport Contracts
铁路货运合同实施规则
Interim Regulations on the Board of Supervisors of State-owned Enterprises
国有企业监事会暂行条例(美国中西部及东部各州)
Regulations on Letters and Calls (regulations on submitting petitions to the government)
信访条例(政府信访条例)Relaxed requirements for foreign-invested telecommunications enterprises
放宽对外商投资电信企业的要求
By far the most significant development for foreign investors is the amendments made to the Provisions on the Administration of Foreign-Invested Telecommunications Enterprises (the ‘provisions’). Under these provisions, China imposes several restrictions on foreign investment in the telecommunications industry, including caps on foreign ownership and significant reliance on the Chinese partner to handle bureaucratic procedures.
对外国投资者来说，迄今为止最重要的发展是对《外商投资电信企业管理规定》(《规定》)的修改。根据这些规定，中国对外资在电信行业的投资施加了一些限制，包括对外资所有权设置上限，以及严重依赖中方合作伙伴处理官僚程序。Notably, the telecommunications industry is included on the Negative List for Foreign Investment Access, which lists the industries that are restricted from foreign investment.
值得注意的是，电信行业被列入了“外商投资准入负面清单”，该清单列出了限制外商投资的行业。Although the caps on foreign share ratios remain in place, the provisions have been significantly stripped down, with several articles deleted entirely, streamlining registration procedures and easing restrictions on foreign-invested telecommunications enterprises (FITEs).
虽然对外国股份比率的上限仍然存在，但规定已大幅削减，有几项条款被完全删除，简化了登记程序，并放宽了对外商投资电信企业的限制。Below we outline some of the most significant amendments made to the provisions.
下面我们概述一些最重要的修改条款。A possible caveat to foreign share ratio restrictions has been added. The provision stipulating the foreign share ratio of telecommunications companies (a maximum of 49 percent for those operating basic telecommunications services and a maximum of 50 percent for those operating value-added telecommunications services) has added the caveat of “unless otherwise stipulated by the state”. This indicates that in certain circumstances, FITEs will be permitted to have a higher foreign share ratio, however, it is not clear what those circumstances may be.
The requirements for establishing an FITE have been slightly loosened. Previously, companies had to prove that the main foreign investor in a telecom company had prior “good performance and operating experience in basic telecommunications business”. This requirement has now been removed for investment in FITEs operating in value-added telecom services.
成立外商投资企业的要求已略有放宽。以前，公司必须证明电信公司的主要外国投资者之前“在基础电信业务方面有良好的表现和运营经验”。这一要求现在已经被取消，用于投资运营增值电信服务的外资电信企业。The registration procedure for FITEs has been simplified. Previously, in order to set up an FITE, the Chinese partner in the joint venture was required to handle several procedures in the registration process, including applying to the local telecoms management agency to establish an FITE operating in value-added telecom services. This requirement has now been removed. Provisions requiring the Chinese partner to apply for an Approval Certificate for Foreign-Invested Enterprises and submit the said certificate, along with other documents, to the relevant authorities to obtain an operating license, have also been removed.
The provision requiring FITEs to obtain approval for investment projects has been removed.
The procedures for obtaining a telecom business license have been simplified. FITEs will now be able to apply for a telecom business license from the relevant authorities directly, without the need for the Chinese partner to do so on their behalf. The documents required to apply for a business license have also been changed, so the company now just needs to provide an investor fact sheet rather than a project application report (in addition to the other required documents, which are unchanged). The FITE also no longer needs to provide proof of good performance and operational experience in value-added telecommunications services to apply for the business license. The investor fact sheet must include the following information:
the name and basic information of the investor
the proportion of each party’s capital contribution the foreign investor’s control of the foreign-invested telecommunications enterprise
外商投资者对外商投资电信企业的控制权各方出资的比例
This is less demanding than the project application report, which required the investors to disclose information, such as the total investment in the FITE, registered capital, and the duration of the joint venture, among other details.
这比项目申请报告要求投资者披露的信息要少，如在外商投资企业的总投资、注册资本、合资企业的期限等细节。Relaxed requirements for medical institutions
放宽对医疗机构的规定The State Council order makes changes to Regulations on the Administration of Medical Institutions (the “Regulations”), simplifying bureaucratic procedures for establishing and making changes to medical institutions.
国务院令修改了《医疗机构管理条例》(《条例》) ，简化了医疗机构设置和变更的官僚程序。The main change to the regulations is an amendment to the wording to enable some medical institutions to be exempt from obtaining an “approval letter for the establishment of the medical institution”. The regulations have been changed to require only some medical institutions – those stipulated by the State Council – to obtain this certificate. This refers to amended requirements released in 2020 that exempted some medical institutions, mostly domestic institutes that provide non-core medical services, from obtaining the license. Many of the below changes reflect this overarching amendment.
对条例的主要修改是修改措辞，使一些医疗机构免于获得”设立医疗机构的批准书”。条例已经改变，只要求一些医疗机构——国务院规定的那些——获得该证书。这是指2020年发布的修订要求，免除了一些医疗机构，主要是提供非核心医疗服务的国内机构，获得许可证。以下许多变化反映了这一总体修正案。Exemption for some medical institutions to obtain approval certificate. A caveat has been added to the article requiring individuals or companies setting up medical institutions to apply for an “approval letter for the establishment of the medical institution” from the local health department. The added clause states that companies or individuals must apply for the certificate in accordance with the State Council regulations on which companies or individuals should obtain approval.
Exemption for clinics to obtain a practicing license. Clinics only need to file with the local county-level health department before they can operate, and do not need to obtain a “medical institute practicing license”.
豁免诊所取得执业执照。诊所在开业前只需向当地县级卫生部门提出申请，无需获得“医疗机构执业许可证”。Simplified registration procedure to practice medicine for institutes exempt from obtaining approval letter. For medical institutions that do not require an approval letter, the registration to practice medicine can be handled by the local health administrative department, rather than higher-up departments.
Clarifications for obtaining consent for medical procedures. The new version of the regulation states that medical personnel need to clearly explain the diagnosis and treatment of patients, something which was not included in the previous version. Moreover, the latest amendment removes the requirement to obtain consent from a patient through a “signed agreement” from the patient’s family or contact person in order to undergo surgery or other special treatment or medical procedure. Instead, it states that medical personnel must clearly explain the risks associated with the treatment or procedure and then obtain “clear consent” from the patient. The new version also requires the medical personnel to advise the patient on the possible risks associated with the procedure.
关于获得医疗程序同意的澄清。新版本的条例规定，医务人员需要清楚地解释病人的诊断和治疗，这是以前版本没有包括的内容。此外，最新修正案取消了通过病人家属或联系人”签署协议”征得病人同意进行手术或其他特殊治疗或医疗程序的要求。相反，它规定医务人员必须清楚地解释与治疗或程序相关的风险，然后获得患者的“明确同意”。新版本还要求医务人员就手术可能带来的风险向患者提供建议。Minor amendments to regulations in other fields
其他领域法规的小修改Some minor changes have been made to other laws governing a range of fields, which may be significant for companies seeking to set up in the related fields. Below we outline some of these amendments.
对管辖一系列领域的其他法律作了一些微小的修改，这可能对寻求在相关领域设立公司的公司具有重要意义。下面我们概述其中的一些修正案。Imports and exports inspection
进出口检验Changes to the Regulations for the Implementation of the Import and Export Commodity Inspection Law of the People’s Republic of China reduce requirements for the establishment of customs inspections agencies, and certain punishments have been abolished.
修改《中华人民共和国进出口商品检验法实施条例》 ，降低了设立海关检验机构的要求，取消了一定的处罚。Simplified requirements for the establishment of customs inspection agencies. A clause stipulating certain conditions and registration requirements for the establishment of inspection agencies engaged in the inspection and appraisal of import and export commodities within China has been removed.
Abolished fines and punishments for certain violations. An article dealing with punishments for import-export inspection agencies who violate certain regulations has been amended to remove a fine of up to RMB 100,000 (US$15,665) for agencies that “operate outside of their business scope”. The clause stating that in serious situations, inspection agencies can have their inspection and appraisal qualification certificate revoked by customs has also been removed.
Internet access services
互联网接入服务The Regulations on the Administration of Business Sites for Internet Access Services, which regulates internet access service sites, such as internet cafes and computer lounges, have been changed to ease cybersecurity review requirements for companies to receive approval to begin operations.
《互联网接入服务业务场所管理条例》对网吧、电脑休息室等互联网接入服务场所进行了管理，以放宽对公司开业审批的网络安全审查要求。Now, rather than having to undergo a cybersecurity inspection by the public security bureau (PSB) before getting approval to begin operations, companies only need to make a promise to the PSB that it will meet certain cybersecurity requirements, and then sign a letter of commitment after receiving approval from the PSB.
现在，公司不必在获准开始运营前接受公安局的网络安全检查，只需向公安局承诺将满足某些网络安全要求，然后在获得公安局批准后签署一份承诺书。However, a new article has also been added (Article 32), which requires the PSB to conduct a spot cybersecurity inspection of the premises within the first 20 days of the company starting operations. If in the process of this inspection, the company is found to have reneged on the promised cybersecurity responsibilities, it can be liable for a fine of up to RMB 15,000 (US$2,350) and in serious circumstances be ordered to close or have its license revoked.
然而，还增加了一项新条款(第32条) ，要求公安局在公司开始运营后的头20天内对厂房进行现场网络安全检查。如果在检查过程中发现该公司违反承诺的网络安全责任，可处以最高15000元人民币(2350美元)的罚款，情节严重的，责令关闭或吊销其执照。Pesticides
农药Amendments to the Pesticide Management Regulations relax requirements for the registration of new pesticides. In order to register a new pesticide for sale, the pesticide needs to undergo a “registration test”. A previous requirement for this registration test to be submitted to the agricultural department of the State Council. However, this requirement has now been removed, and applicants are only required to submit the test to the local agricultural department instead.
《除害剂管理规例》的修订放宽了新除害剂注册的规定。新除害剂如欲登记出售，必须进行「登记测试」。此前，这种注册测试必须提交给国务院农业部门。然而，这一要求现在已经被取消，申请人只需向当地农业部门提交测试。Radioactive drugs
放射性药物The Measures for the Administration of Radioactive Drugs have been amended to streamline procedures for establishing a radioactive drug production and operation enterprise. Previously, companies were required to seek approval from the relevant department of the State Council in order to receive a “Radioactive Drug Manufacturing Enterprise License”. Now, the measures have been amended to allow companies to seek approval from the local department in their jurisdiction instead. The review and approval of the company’s establishment will also be handled by local authorities instead of the central government.
修订《放射性药品管理办法》 ，简化设立放射性药品生产经营企业的程序。此前，企业要获得《放射性药品生产企业许可证》 ，必须经国务院有关部门批准。现在，这些措施已经被修改，允许公司寻求当地部门的批准，而不是他们的管辖范围。对公司成立的审查和批准也将由地方当局而不是中央政府来处理。How effective will the amendments be for boosting market activity?
这些修正案对于促进市场活动有多大的作用？It will be difficult to see the effects of the amendments to the regulations in the short term, especially as companies grapple with more imminent issues, such as the ongoing supply chain issues, COVID-19 restrictions, and high commodity prices, to name a few.
短期内很难看到这些法规修正案的效果，特别是当企业正在努力解决更紧迫的问题时，比如持续存在的供应链问题、新冠病毒疾病限制以及高昂的商品价格等等。However, though some of the amendments may be small, they may have a significant impact on players in the various sectors affected in the longer term, especially in the possible recovery period after the current COVID-19 restrictions are lifted and operations return to normal.
然而，尽管其中一些修订可能规模较小，但从长远来看，它们可能对受影响的各个部门的参与者产生重大影响，特别是在目前的新冠病毒疾病限制解除和业务恢复正常后可能的恢复期内。For instance, the amendments to the regulations on foreign investment in China’s telecom industry will allow for more streamlined procedures for foreign investors to enter an industry that has been relatively difficult to operate in the past, even if some restrictions still remain. The changes to the requirements for medical institutions may also help cultivate more companies in the medical services industry, in particular those providing non-core medical services.
例如，对中国电信行业外商投资规定的修订，将允许外国投资者进入一个过去相对难以经营的行业，尽管仍然存在一些限制，但程序将更加简化。对医疗机构要求的改变也可能有助于在医疗服务行业培养更多的公司，尤其是那些提供非核心医疗服务的公司。It is also possible we will see further reductions in bureaucratic requirements in the future, as the government continues to review regulations as part of the reform to separate operation permits and business licenses.
未来我们还可能看到官僚主义要求的进一步减少，因为政府将继续审查规章制度，作为将经营许可证和营业执照分开的改革的一部分。
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