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rently, per the latest edition of the Negative List “green channels” for qualified foreign companies to
for Foreign Investment Access, the foreign share export data, and pilot a list of “general data” that can
of value-added telecom businesses cannot exceed be transferred freely across the border in Beijing,
50 percent, and basic telecom businesses must be Tianjin, and Shanghai.
controlled by the Chinese party.
China’s personal information (PI) protection rules
In addition to telecoms, the Working Plan also calls for: require companies to undergo certain procedures,
such as a security assessment, to export PI out of
• Supporting qualified foreign doctors to open China, which has added to the compliance burden
clinics in Beijing, and exploring equity incentive for foreign companies in particular.
methods for foreign employees in medical research
and development companies in the field of stem The Working Plan also calls for “carrying out data
cells and genetics; export security assessment, personal information
export standard contract filing, and personal
• Decentralizing the approval authority to information protection certification [the three
the district level for foreign investment in the mechanisms for exporting PI] to explore and form
establishment of performance, entertainment, a mechanism that can both facilitate data flow and
and internet service venues; ensure security.”
• Supporting wholly foreign-owned enterprises While the plan is not clear on exactly how
in establishing commercial vocational training Beijing might facilitate CBDT and PI protection
institutions; and procedures for companies, it indicates that
further measures will be implemented to make
• Supporting overseas insurance companies to compliance easier for companies.
directly initiate and establish insurance asset
management companies. Facilitating cross-border funding
Strengthening the digital economy and The Working Plan vows to further liberalize forex
improving the data protection regime registration procedures and facilitate cross-border
transfer of funds, building upon recent efforts to
The Working Plan outlines several tasks for the city liberalize the transfer of funds in and out of China.
to boost the development of the digital economy,
enhance its overall level of digitization, and improve In May 2023, China’s monetary authorities expanded
the digital regulatory environment. a pilot currency conversion program to Beijing.
This cash pooling program enables certain eligible
The plan also calls for increasing cooperation with MNCs to integrate multi-currency cash pools,
members of the Digital Economy Partnership significantly facilitating the cross-border utilization
Agreement (DEPA) in areas such as digital identity, of funds.
digital inclusion, cybersecurity, financial technology,
and logistics. Among other things, the plan states that In September 2023, Beijing released a draft plan
Beijing will seek to cooperate with DEPA members in to support unrestricted fund transfers related to
piloting paperless trade. legitimate foreign investments, streamlining the
inflow and outflow of capital. This signals a significant
The DEPA is a trade agreement between New relaxation of restrictions on foreign capital and is a
Zealand, Singapore, and Chile focused on the digital major reform under the capital account.
economy. China applied to join the DEPA in 2021 but
will have to make significant changes to its current The Working Plan calls for promoting “cross-border
cybersecurity and data protection regulations in financing facilitation pilot projects” and states that
order to meet the agreement’s requirements. Beijing will “deepen the pilot program of integrating
The mention of the DEPA in the Working Plan domestic and foreign currency bank settlement
suggests the government may be considering piloting account systems and continue to expand the scope
policies that align with the DEPA’s benchmarks before of participating banks”.
potentially rolling them out to more areas of China.
In addition, it states that it will expand the pilot cash
The Working Plan also mentions methods to facilitate data polling program for multinational companies, and
transactions, including cross-border data transmission. “explore and optimize quota management, and
improve the efficiency of cash pools”.
For instance, the Working Plan states that Beijing
will “develop standard contract guidelines for data Finally, the plan reiterates that all legitimate funds
transactions and issue a negative list and caution that are related to foreign investments can be
list for data transactions”. This is likely in reference freely remitted in and out of China “without delay”,
to plans to ease requirements on cross-border reiterating the requirements laid out in the draft
data transfer (CBDT), which will include establishing plan to support restricted fund transfers released
in September.
SOUTH CHINA BUSINESS JOURNAL 4
for Foreign Investment Access, the foreign share export data, and pilot a list of “general data” that can
of value-added telecom businesses cannot exceed be transferred freely across the border in Beijing,
50 percent, and basic telecom businesses must be Tianjin, and Shanghai.
controlled by the Chinese party.
China’s personal information (PI) protection rules
In addition to telecoms, the Working Plan also calls for: require companies to undergo certain procedures,
such as a security assessment, to export PI out of
• Supporting qualified foreign doctors to open China, which has added to the compliance burden
clinics in Beijing, and exploring equity incentive for foreign companies in particular.
methods for foreign employees in medical research
and development companies in the field of stem The Working Plan also calls for “carrying out data
cells and genetics; export security assessment, personal information
export standard contract filing, and personal
• Decentralizing the approval authority to information protection certification [the three
the district level for foreign investment in the mechanisms for exporting PI] to explore and form
establishment of performance, entertainment, a mechanism that can both facilitate data flow and
and internet service venues; ensure security.”
• Supporting wholly foreign-owned enterprises While the plan is not clear on exactly how
in establishing commercial vocational training Beijing might facilitate CBDT and PI protection
institutions; and procedures for companies, it indicates that
further measures will be implemented to make
• Supporting overseas insurance companies to compliance easier for companies.
directly initiate and establish insurance asset
management companies. Facilitating cross-border funding
Strengthening the digital economy and The Working Plan vows to further liberalize forex
improving the data protection regime registration procedures and facilitate cross-border
transfer of funds, building upon recent efforts to
The Working Plan outlines several tasks for the city liberalize the transfer of funds in and out of China.
to boost the development of the digital economy,
enhance its overall level of digitization, and improve In May 2023, China’s monetary authorities expanded
the digital regulatory environment. a pilot currency conversion program to Beijing.
This cash pooling program enables certain eligible
The plan also calls for increasing cooperation with MNCs to integrate multi-currency cash pools,
members of the Digital Economy Partnership significantly facilitating the cross-border utilization
Agreement (DEPA) in areas such as digital identity, of funds.
digital inclusion, cybersecurity, financial technology,
and logistics. Among other things, the plan states that In September 2023, Beijing released a draft plan
Beijing will seek to cooperate with DEPA members in to support unrestricted fund transfers related to
piloting paperless trade. legitimate foreign investments, streamlining the
inflow and outflow of capital. This signals a significant
The DEPA is a trade agreement between New relaxation of restrictions on foreign capital and is a
Zealand, Singapore, and Chile focused on the digital major reform under the capital account.
economy. China applied to join the DEPA in 2021 but
will have to make significant changes to its current The Working Plan calls for promoting “cross-border
cybersecurity and data protection regulations in financing facilitation pilot projects” and states that
order to meet the agreement’s requirements. Beijing will “deepen the pilot program of integrating
The mention of the DEPA in the Working Plan domestic and foreign currency bank settlement
suggests the government may be considering piloting account systems and continue to expand the scope
policies that align with the DEPA’s benchmarks before of participating banks”.
potentially rolling them out to more areas of China.
In addition, it states that it will expand the pilot cash
The Working Plan also mentions methods to facilitate data polling program for multinational companies, and
transactions, including cross-border data transmission. “explore and optimize quota management, and
improve the efficiency of cash pools”.
For instance, the Working Plan states that Beijing
will “develop standard contract guidelines for data Finally, the plan reiterates that all legitimate funds
transactions and issue a negative list and caution that are related to foreign investments can be
list for data transactions”. This is likely in reference freely remitted in and out of China “without delay”,
to plans to ease requirements on cross-border reiterating the requirements laid out in the draft
data transfer (CBDT), which will include establishing plan to support restricted fund transfers released
in September.
SOUTH CHINA BUSINESS JOURNAL 4
