On January 29, 2016, the State Administration of Taxation, the Ministry of Finance and the Ministry of Science and Technology jointly issued the Revised Measure for Certification of High and New Technology Enterprise (Guo Ke Fa Huo  No. 32) (the “Revised Measure”). The Revised Measure is an amendment to the Measure for Certification of High and New Technology Enterprise issued in 2008 (the “Old Measure”). The Revised Measure reduces certain qualification thresholds for High and New Technology Enterprise (“HNTE”) and expands the ambit of “high and new technology” in an effort to support the development of small and medium size high tech companies and encourage the innovation of new technologies in light of the changing environment. In addition, the Revised Measure introduces a number of new requirements to strengthen the supervision and administration of HNTE incentive. As a background information, the existing corporate income tax rate in China is 25%, company certified as HNTE is entitled to a reduced corporate income tax rate of 15%. Continue Reading
Since 2010, China’s State Administration for Industry and Commerce (SAIC) and the State Council Legislative Affairs Office (SCLAO) have been revising China’s Anti-Unfair Competition Law of 1993 (AUCL). This February the SCLAO released a draft revision of the AUCL for public comment. In general, the AUCL is broad, covering unfair trade practices that relate to intellectual property rights, anti-corruption and antitrust. Click here for the unofficial translation of the draft revision of the AUCL. Various organizations such as the American Chamber of Commerce, Beijing and American Bar Association will be submitting comments on behalf of companies and law firms, as well as other interested parties. Continue Reading
On February 25, 2016, The State Counsel Legislative Affairs Office (“SCLAO”) released a draft amendment (“Draft Amendment”) of the PRC Anti-Unfair Competition Law (“AUCL”) for comment by industry and other stakeholders. Article 5 of the 1993 AUCL provides the basis for claims against Business Operators for unfair trade practices involving the misuse and misappropriation of trade dress, enterprise names, and other commercial signs. The Draft Amendment of the AUCL contains some interesting and encouraging language, but could benefit from additional clarification and fine tuning. Industry has until March 25, 2016 to submit comments on the Draft Amendment to the AUCL, and numerous industry organizations have been collecting comments for submission to SCLAO over the last few weeks. Here are some highlights of proposed changes to Article 5, and some of the open issues that will hopefully be addressed before a final version of the revised AUCL sees the light of day. Continue Reading
On August 26, 2015, the Trademark Office of The State Administration For Industry & Commerce of the People’s Republic of China (“TMO”) issued revised guidelines entitled Applications for Recordal of Licenses of Registered Trademarks, Recordal of Licensor/Licensee Name Change, Recordal of Early Termination of Trademark Licenses and Recordal of Withdrawal of Trademark Licenses (“2015 Guidelines”). The 2015 Guidelines are a slightly revised version of guidelines issued in 2014 that were intended to bring the license recordal regime in line with the 2014 Trademark Law and its Implementing Regulations. The TMO has not indicated whether the 1997 Measures for the Filing of Recordals of Trademark License Contracts (“1997 Recordal Measures”) will remain in effect after the establishment of new recordal procedures and the issuance of the 2015 Guidelines, but it is clear that a number of provisions of those earlier measures have been rendered moot under the new regime. Continue Reading
China Premier Li Keqiang presided over a State Council executive meeting on February 14, 2016 in which it was decided that China would commence a new pilot program (the “Pilot Program”) in ten cities and provinces along with five new districts to provide more flexible rules to boost service trade. On February 22, 2016, the State Council issued the Official Reply of the State Council on Approving the Commencement of Service Trade Pilot Program (Guohan  No. 40) (国务院关于同意开展服务贸易创新发展试点的批复) which disclosed more details about this Pilot Program. Continue Reading
On May 13, 2015, the highest judicial institution in China, the Supreme People’s Court, issued the Detailed Rules of Implementation of the Provisions of the Supreme People’s Court on Case Guidance Work (“《最高人民法院关于案例指导工作的规定》实施细则”) (“Detailed Rules”). This judicial interpretation marks a significant step in improving the Case Guidance System (案例指导制度) in China’s judiciary. In the past five years, ten sets of cases totaling fifty-two cases (see Appendix) have been released by the Supreme People’s Court. The so-called Case Guidance System was formally established on November 26, 2010, with the issuance of the Provisions of the Supreme People’s Court on Case Guidance Work (“最高人民法院关于案例指导工作的规定”). Continue Reading
June 10, 2015 marked the day that the Chinese government released a new draft law for public comment. China’s increased awareness of the long lasting effects of pollution on the country’s land, water, and people is reflected in the 2015 Environmental Protection Tax Law. The law represents a joint effort between the Ministry of Finance, the State Administration of Taxation, and the Ministry of Environmental Protection “to protect and improve the environment, to encourage energy conservation and emissions reduction by the society, and to promote the construction of ecological civilization.”  However, the underlying motives seem to be: 1) to restructure the current enforcement of fines for pollution and 2) to push for a change in the behavior and operation of businesses.
The China Securities Regulatory Commission (CSRC) has revised the rules on margin trading and short selling in response to the current conditions surrounding China’s stock market. The new rules were released to the public on June 12, 2015 as a draft document for public comment. These new rules have the potential to ease investor concerns over the volatility of the market as well as bring about more favorable returns when closing out investor contracts. Since the announcement of the new rules, the markets here in China have fluctuated in response with a 13% decline across the Shanghai Composite Index during the week following June 12th’s market peak. The new rules address the contract length for margin trading and would allow for an extension of contract terms beyond the current fixed period of six months. Additionally, the new rules will ease barriers to enter the market and work with securities brokerages in China.
The Chinese e-commerce industry is rapidly expanding, and the nation is the world’s second largest online retail market. The business-to-consumer industry in particular is expected to see record growth in the next few years. Until recently, the e-commerce market was not specifically regulated. The Chinese government, however, has begun to implement regulations to boost the e-commerce industry for a more consumption-driven economy, including regulations to protect consumers and to more tightly regulate online sellers. For example, the Law on the Protection of Consumer Rights and Interests was revised in March of 2014 to grant consumers a right to return goods within seven days after purchase without giving a reason, to require online sellers to register their names and addresses, and to require sellers to authenticate and verify their websites. The government has also been active in fighting against online sales of counterfeit products. And, most recently, China announced it will allow full foreign ownership of some e-commerce businesses to increase competition and development.
On May 4, 2015, the National Development and Reform Commission (“NDRC”) and seven agencies including the National Health and Family Planning Commission and the Ministry of Human Resources and Social Security jointly published Opinions on Promoting Drug Price Reform (the “Opinions”). The NDRC also issued a Notice on Strengthening Monitoring of Drug Prices (“Notice”) and a press release on the same day. Continue Reading