Companies generally agree that the IP commitments included in the Phase One agreement are a step in the right direction. Some industries are more confident than others that the commitments will improve the protection and enforcement of their IP rights in China in a tangible way. The 30-day window of time between the agreement going into effect and the release of China’s IP Action Plan provides an opportunity for industry to raise recommendations to both governments.
China Market Intelligence
Nearly three years after the Cybersecurity Law went into effect, regulatory clarity remains elusive, including around the MLPS 2.0. Most companies are taking a wait-and-see approach until key concepts are defined in more detail.
The agreement includes considerable positive developments on issues concerning financial services, agriculture, and intellectual property. China has committed to purchase $200 billion of US goods above 2017 levels. The agreement contains a dispute resolution mechanism that aims to ensure faithful implementation.
These openings will occur in China’s asset management, insurance, banking, credit rating, and futures industries. Financial liberalization will come in the form of not only expected approval of pending licenses but also acceleration of implementation of structural reforms and relaxation of regulatory requirements that are in line with China’s domestic interests.
On November 15, China’s National Development and Reform Commission (NDRC) released the Guiding Opinion to Deeply Integrate Advanced Manufacturing and Modern Service Industries, outlining a plan for updating China’s manufacturing capabilities by 2025.
This past year finally saw more specific guidance on cybersecurity reviews, critical information infrastructure (CII), cross-border data transfers, and personal information, though many of the policies remain in draft form.
The Chinese government is exploring the use of its corporate social credit system (SCS) as an intellectual property rights (IPR) enforcement tool. Under this system, placement on a new patent infringement blacklist released by China’s National Intellectual Property Administration (CNIPA) will, in turn, damage a company’s social credit rating. CNIPA is working closely with the State Administration for Market Regulation (SAMR), which will also rely on the SCS and other administrative measures...
The Ministry of Justice (MOJ) has provided USCBC with an advance copy of its draft implementing regulations for the Foreign Investment Law (FIL). The FIL was passed by the National People’s Congress in March and, along with its implementing regulations, will come into effect on January 1, 2020. In May, USCBC provided input to China’s National Development and Reform Commission on what the implementing regulations should include.
In July of last year, several arms of China's government released the first in a series of documents detailing the country’s latest national crime reduction campaign, encouraging stronger enforcement of existing laws and regulations. While several similar initiatives have occurred in the past, many US companies and risk management experts note that consistent rule-of-law type enforcement is the new normal.
On July 20, China announced 11 opening measures for its financial services industry. While they have been portrayed in the media as game-changing, very few of the openings are in sectors that US financial services companies are interested in. For those measures in sectors of interest, the reforms could lead to real openings only if China removes the underlying regulations and requirements that ultimately act as barriers to entry.