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POLITICS & LAW

By Matthew Walsh / Oct 21, 2020 11:17 AM / Politics & Law

Photo: VCG

Photo: VCG

In recent years, China’s wholehearted embrace of facial recognition has led to the technology being deployed everywhere from residential compounds and schools to subway stations and supermarkets.

However, research has shown that large swaths of the general public are less than enamored with the technology, fearing that their facial data may be leaked or digitally altered to resemble someone else, a practice known as “deepfaking.”

Last week, China’s top lawmakers considered a draft data protection law that aims to regulate who can use facial recognition in public places, which data they can collect and use, and who is responsible if the information gets leaked.

But legislators and experts alike have criticized the proposals as too vague and open to abuse, potentially increasing the risks to ordinary citizens.

The discussion embodies China’s complex relationship with the spread of surveillance technologies, in which the Asian nation is seen as a world leader.

Read the full story here

Contact reporter Matthew Walsh (matthewwalsh@caixin.com)


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POLITICS & LAW

By Xu Chenggang / Oct 15, 2020 12:51 PM / Politics & Law

Photo: VCG

Photo: VCG

In a joint paper written by Xu Chenggang, a professor at Cheung Kong Graduate School of Business, set out important developments in China’s approach to property rights, and in particular how they pertain to data protection.

The paper comes as China’s most senior lawmakers deliberate a draft data protection law that could fine people and organizations that breach data protection rights as much as 50 million yuan ($7.42 million).

Xu points out that the concept of property rights was first systematically discussed by John Locke. He put forward the concept of human rights under the name of property rights as Locke believed that human rights are the right for a person to own himself, property, and everything that belongs to him. Therefore, human rights and property rights cannot be separated, constituting the most basic and inalienable rights of individuals. This basic concept was then built on by philosopher and economist Friedrich Hayek.

This concept has now become the internationally recognized basis of human rights and property rights. But property rights still face many practical obstacles in social and economic fields. How China overcomes these obstacles is key to the future of data protection and people’s lives both off and online which is why the new law is so important.

The NPC Standing Committee will deliberate the draft law as part of a slate of proposals that include lowering China’s minimum age of criminal responsibility and potential new laws on biosecurity and export controls.

Read the full opinion piece by Xu Chenggang here

Contact editor Marcus Ryder (marcusryder@caixin.com)


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By Matthew Walsh / Oct 14, 2020 01:03 PM / Politics & Law

A boy who stabbed his mother to death after she beat him for smoking in the house. Another who killed both his parents with a hammer during a domestic dispute. A third who inexplicably murdered a 10-year-old girl living in the same housing complex.

The three cases, which occurred in China in 2018 and 2019, grabbed public attention not just for their brutality, but also because the perpetrators — all children under the age of 14 — were too young to be held criminally liable for the killings.

But that might be about to change. At a legislative session in Beijing this week, top lawmakers will consider a draft amendment that would lower the minimum age of criminal responsibility to 12 years old from 14 for certain “egregious” acts of murder or intentional injury.

The amendment is part of a raft of proposed tweaks to China’s Criminal Law to be discussed by the Standing Committee of the National People’s Congress, the country’s legislature.

But the draft amendment is controversial. While proponents say it would bring down juvenile delinquency rates, some legal practitioners and scholars have claimed it would criminalize youngsters before they reach maturity and may not have a significant impact on crime.

Click here to read the full story on Caixin Global.

Contact reporter Matthew Walsh (matthewwalsh@caixin.com)


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By Liu Denghui, Di Ning, Tang Hanyu, Wang Yiran and Han Wei / Sep 21, 2020 02:35 PM / Politics & Law

China has set in motion plans to restructure the country’s medical insurance system in a move that could directly affect more than 300 million urban residents.

The restructuring initiative marks the first revision of the 22-year-old program covering urban employees, and includes changes discussed for more than a decade that will alter how billions of yuan of contributions will be managed and spent.

China’s National Healthcare Security Administration, a sub-ministry-level government agency managing China’s public health insurance programs, published a draft plan Aug. 26 to reshuffle the urban employee basic medical insurance system — one of the key pillars of the country’s state-backed social safety net.

Exact details of key elements remain to be settled and there is still no final implementation date.

Read full story here

Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com).


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By Ingrid Luan / Sep 04, 2020 12:31 PM / Politics & Law

Shenzhen will become China’s first city to legally empower non-governmental organizations (NGOs) to file lawsuits for environmental violations.

The high-tech manufacturing hub will enact an environmental regulation (link in Chinese) on Oct. 1, which will allow NGOs, public prosecutors and government departments to sue illegal polluters and force them to cease ongoing environmental destruction.

The Standing Committee of the Shenzhen Municipal People’s Congress, the city’s top decision-making body announced the news on Monday. The regulation will also lower the costs of lawsuits brought by NGOs and set up a public welfare fund to help cover these costs.

In doing so, Shenzhen will be at the forefront of China’s national legislation on such lawsuits, known as environmental public interest litigations (EPILs), according to the website of Shenzhen’s government (link in Chinese).

Previously, few NGOs in Shenzhen have filed environmental lawsuits, due to prohibitive costs, difficulties in collecting evidence and accusations of collusion between local government and companies.

Contact editor Joshua Dummer (joshuadummer@caixin.com)

Read full story: Shenzhen Gives Green Light for Legal Action to Stop Environmental Destruction


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By Yang Ge / Sep 01, 2020 06:02 PM / Politics & Law

A potential new spanner has been thrown into TikTok’s clock as the popular video sharing app counts down to the highly anticipated sale of its U.S. assets.

TikTok has been under constant assault for much of this year by U.S. lawmakers who say its owner, ByteDance, could be forced to give over its pool of data on millions of U.S. users to Beijing due to its status as a Chinese company beholden to the government. ByteDance has argued TikTok is based offshore and therefore not subject to Chinese law.

But U.S. president Donald Trump wasn’t buying that argument, and last month ordered ByteDance to sell the app’s U.S. operations within 90 days. ByteDance was making plans to do just that, with most reports pointing to a two-way bidding competition between a partnership of software giant Microsoft and retail giant Walmart on one side, and a bid led by rival software maker Oracle on the other.

But a new update to China’s technology export restrictions posted last Friday could now mean the pending sale may require Chinese government approval. According to the update, software of the type that makes TikTok tick must now get a government nod before export.

ByteDance says it has been studying the addition to the export restriction list. Meantime, Cui Fan, a professor at the University of International Business and Economics, has told the official Xinhua news agency that for TikTok to continue operating smoothly after a sale, ByteDance will need to either license or sell its core algorithm services to the buyer. That would constitute an export of technical services, which would require government approval.

To read the full article, click here.

Contact reporter Yang Ge (geyang@caixin.com)


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By Zhang Yuzhe and Guo Yingzhe / Jun 12, 2020 12:57 PM / Politics & Law

Photo: VCG

Photo: VCG

China’s central bank vowed to crack down on payment services providers who channel funds for illegal cross-border gambling, and also to fix existing loopholes in the scandal-ridden industry.

Cutting off the channels that provide funds for illegal gambling is a crucial task in preventing and defusing major financial risks and is a national security issue, Fan Yifei, a deputy governor of the People’s Bank of China (PBOC), said at a meeting with several central government departments and major stakeholders in the payment industry, according to a PBOC statement (link in Chinese) on Thursday.

The statement follows moves to tighten regulatory oversight of payment services providers in recent years, including in areas like how they work with illegal businesses and the embezzling of clients’ funds. In April, the PBOC Beijing branch imposed a record-high penalty on Allscore Payment Service, a Beijing-based payment company, for its involvement in illegal gambling.

At the meeting, Fan pledged to hold those companies that serve clients involved in illegal activities accountable and urged industry players to strengthen client identification, reporting of large and suspicious dealings, and identification of people withdrawing funds from accounts.

Read the full story on Caixin Global later today.

Contact reporter Guo Yingzhe (yingzheguo@caixin.com)

Related: Central Bank Imposes Another Record Penalty on Payment Provider


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/ Apr 17, 2020 10:41 AM / Politics & Law

Photo: IC

Photo: IC

(Bloomberg) — With autonomous-vehicle companies parked by Covid-19, Pony.ai has teamed up with Los Angeles-based e-commerce site Yamibuy to deliver packages and groceries in the city of Irvine. Yamibuy specializes in Asian foods and home goods. The partnership is meant to help meet the surge in delivery demand, as consumers across the U.S. and around the world have been forced to stay at home.

Pony.ai, a Fremont, California-based startup, will deploy its fleet of 10 modified Hyundai Kona battery-electric cars with a safety driver in every one. The contactless and autonomous deliveries will go directly to customers’ doorsteps, with Yamibuy automatically assigning orders from its platform to Pony.ai vehicles in Irvine. Packages then will be collected from a local distribution center, driven to a customer’s address and left on the doorstep by the safety driver — or a customer can choose to collect a package from the trunk of the car.

The delivery service, which launched today, is expected to run until midsummer. Under rules from the California Department of Motor Vehicles, autonomous-driving companies are allowed to test delivery vehicles on public roads, so long as they hold the correct permit and the vehicles weigh less than 10,001 pounds.

“We quickly converted our existing robotaxi fleet to repurpose them for goods delivery,” said Pony.ai Chief Executive Officer James Peng. “I am thrilled that we are able to help the local community by delivering much-needed food and packages to the doorsteps of residents.”

Autonomous-vehicle startups across the Bay Area and the rest of California have suspended testing of their self-driving technology on public California roads in the face of the coronavirus pandemic. That list includes General Motors-backed Cruise, Alphabet-owned Waymo and San-Francisco based Zoox.

While Pony.ai has largely focused on autonomous ride-hailing, the partnership with Yamibuy addresses part of what’s seen as a growing need, in a post-pandemic world, for safe, contactless ways of getting goods to consumers. In early April, SoftBank-backed Nuro was granted a California DMV permit to test low-speed delivery vehicles without a safety driver. The permit allows Nuro to make deliveries for local businesses. Waymo also has a driverless testing permit.

Pony.ai hopes, in time, to generate revenue from the partnership with Yamibuy. The company is in talks with the DMV over whether it will be allowed to be compensated for delivery under state rules, which prohibit delivery fees without a commercial use permit.

“Under a permit for testing with a driver, AV companies cannot receive compensation for transporting goods,” the California DMV said in an emailed statement. The issue of fares for autonomous ride-hailing in California has been a source of contention between the industry and regulators, as the industry is eager to prove the commercial viability of AVs.

Prior to the pandemic, Pony.ai was running an autonomous ride-hailing pilot in Irvine, sanctioned by the California Public Utilities Commission, as well as providing rides to city employees in Fremont, traveling between city government buildings. The startup deepened its relationship with Toyota Motor Corp. in February when the Japanese automaker invested $400 million in Pony.ai, taking its valuation to more than $3 billion.

Pony.ai’s operations in China slowed down because of Covid-19 earlier this year, but it resumed robotaxi pilots in Nansha, Guangzhou province, and in Beijing by Feb. 17, as government restrictions eased. The company has since implemented new sanitation protocols for its China vehicles, requiring cleaning after each ride. Pony.ai said it hopes to restart the California pilots once it’s safe and it has permission to do so.

“It is this focus on versatility of our technology that enabled us to contribute to society during this unprecedented time,” CEO Peng said.

Related: China’s Pony.ai Among First to Launch Passenger-Carrying Robotaxi Service

Contact editor Yang Ge (geyang@caixin.com)

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By Dave Yin / Mar 04, 2020 07:39 PM / Politics & Law

Photo: VCG

Photo: VCG

China’s most comprehensive internet regulations to date include a list of prominent locations on websites where content deemed politically acceptable should go and information deemed ideologically undesirable — but not illegal — must not.

The content placements include highly visible locations on a website or app such as homepages of websites and e-commerce platforms, pop-ups, featured pages and social media posts, lists of popular search queries, popular recommendations and page rankings. They also apply to online games and even software skins.

According to the new rules (link in Chinese) these spots should be used for “encouraged” content, including promotional material about government-ordained “core socialist values,” Communist Party policy decisions, China’s economic and social development, and content that showcases the “worthy accomplishments and fervent lives” of the people, increases the global influence of Chinese culture, dispels public concerns, or “eulogizes truth, goodness and beauty.”

Content excluded from eye-catching locations includes stories featuring exaggerated headlines or scandals, “improper” comments about natural or manmade disasters, as well as content that is sexually titillating, instigates discrimination between different groups of people, is vulgar or in “poor taste,” or may lead minors to develop “unhealthy” habits.

“Online content creators should take steps to be on guard against and resist … such harmful information,” the regulations say.

The list of curbed content is separate from information that is outright illegal. Banned content includes posts that violate national security and interests, disrupt racial unity, defame national martyrs, promote or incite extremism, spread rumors, or disrupt economic and social order, the regulations say.

Online platforms have been told they should carry out stricter real-time content management, flesh out user registration and account management techniques, audit comment sections, and quell rumors and internet-based crimes. In addition, companies are required to write annual reports on their content management efforts and discuss the state of “social commentary.”

The new rules, first published by internet watchdog Cyberspace Administration of China in December, came into effect Sunday. Its implementation comes as AO3, a major U.S.-based fiction platform hosting a vast collection of homoerotic literature created by Chinese writers, was blocked in mainland China.

Contact reporter Dave Yin (davidyin@caixin.com) and editor Matthew Walsh (matthewwalsh@caixin.com)

Related: China Handled 12 Million Reports of ‘Illegal and Harmful’ Data in December


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By Dave Yin / Jan 07, 2020 04:25 AM / Politics & Law

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picture

China is making major revisions to its antitrust law for the first time in more than 11 years to give it more teeth while reining in the dominance of the country’s internet goliaths.

A draft revision of China’s Anti-Monopoly Law, released last week by the State Administration for Market Regulation, expands on criteria used to judge a company’s control of a market and mentions internet companies for the first time. 

The draft mandates considering the effect businesses have on the web as a whole, their economies of scale, the “lock-in” effects of their products or services, and their ability to handle and process data, among other things.

The proposal marks a dramatic shift from the current version of the law, implemented in 2008, prior to the boom of China's internet sector. As of 2018, the country had seven of the top 30 companies by global internet market capitalization including Alibaba Group, Tencent and Meituan Dianping, according to the Internet Trends 2019 report by investment fund Bond Capital.

The draft revision also increases the potential financial punishments for lawbreakers by as much as a hundred-fold.

As before, those engaging in monopolistic behavior will have their proceeds confiscated and will be fined between 1% and 10% of revenue for the previous fiscal year. However, for those that have yet to implement their plans or had zero revenue in the previous fiscal year, the draft law raises maximum penalties from 500,000 yuan to 50 million yuan (from $71,713 to $7.2 million). Industry associations caught violating the law can be fined 5 million yuan, up from 500,000 yuan.

The law also mandates that the government set up and implement inspection measures to “help ensure standardization of administrative practices and prevent policies and measures that eliminate or hinder competition,” the draft law says.

Regulators are seeking comment until the end of the month.

Chinese authorities in recent months have moved to shake up the hegemony of China’s internet giants, especially in fintech. 

In September, the People’s Bank of China issued a plan to standardize and promote interoperability of payments via quick response code, or QR code, China’s main means of digital transactions. The goal is to cut down on exclusivity and allow smaller players to join a field dominated by Alibaba’s Alipay and Tencent’s WeChat Pay.

In December, the central bank also approved U.S. payment giant PayPal Holdings Inc.’s acquisition of a Chinese online payment provider, bringing in a third major rival in digital payments.

Contact reporter Dave Yin (davidyin@caixin.com)

Related: It’s Open Sesame for PayPal in China After Gopay Deal Closes

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By Bloomberg / Dec 30, 2019 03:13 PM / Politics & Law

The Chinese scientist who created the world’s first genetically altered babies has been sentenced to three years in prison and a lifelong ban from working in reproductive technology, state media reported on Monday.

He Jiankui, a Shenzhen researcher who drew widespread condemnation when he revealed his experiment last year, will also have to pay a 3 million yuan ($430,000) fine, said a report from Xinhua News Agency, citing the verdict of a court in the southern Chinese city.

Two others who assisted him were also sentenced. Zhang Renli, a researcher at the Guangdong Provincial People’s Hospital, received a prison term of two years and Qin Jinzhou, a researcher at the Shenzhen Luohu Hospital Group, received a term of 18 months, suspended for two years.

The Xinhua report said that in He’s experiment, for which he recruited couples with HIV who did not want to pass the disease to their offspring, two women became pregnant and three gene-edited babies were born. The trial proceedings were not made public to protect the identities of the children and their parents, said Xinhua.

Related: He Jiankui Used AIDS Network to Recruit 200 Couples for Gene-Editing Experiment


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By Matthew Walsh / Dec 19, 2019 01:02 PM / Politics & Law

Photo: VCG

Photo: VCG

China’s government has named and shamed some of the country’s biggest internet firms whose apps continue to violate user privacy, as the industry regulator nears the end of an official crackdown on the illegal collection of personal information.

Software operated by the likes of internet giants Tencent and smartphone-maker Xiaomi appear on the list of 41 rogue apps published in a Thursday circular by the country’s Ministry of Industry and Information Technology. The apps’ violations range from illicitly collecting and using personal data to demanding unnecessary permissions from users and hindering account cancellation.

Tencent’s popular instant-messaging service and web portal QQ, which had 807 million monthly active accounts last year, was blasted for continuing to force users to give up their location data, require them to give a host of authorizations before granting access to the app, and stymie account cancellations. In addition, QQ’s reading app, QQ Yuedu, was found to have secretly collected personal data and shared it with third parties.

The list also singled out a finance app operated by smartphone giant Xiaomi that still makes account cancellations trickier than necessary.

Caixin Global has contacted both Tencent and Xiaomi for comment.

Other apps to receive a rap across the knuckles include digital media platform Sina Sports, news provider Sohu News, and news and data platform 36Kr. A number of logistics, livestreaming, and lifestyle apps also appeared on the list.Since the campaign was launched in November, more than 8,000 apps had rectified their behavior, the ministry said in the circular, urging the companies concerned to straighten themselves out by Dec. 31 or be “dealt with” according to the law.

Contact reporter Matthew Walsh (matthewwalsh@caixin.com)

Related: China Starts Crackdown on Apps’ Violations of User Privacy

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By Timmy Shen / Dec 09, 2019 02:41 PM / Politics & Law

Photo: VCG

Photo: VCG

Last week, a local court in the eastern Chinese city of Hangzhou formally opened what is thought to be the country’s first job discrimination case against a transgender person invoking a 2018 legal mechanism for resolving disputes over equal employment rights.

The plaintiff, a transgender woman known by the pseudonym Ma, is suing her former company, an online cosplay-platform operator, on the grounds that employers cannot discriminate against their staff on the basis of their “personalities,” a term that includes lifestyle, physical appearance, and reputation, among others.

Ma claims that she received unpaid leave from the unnamed company late last year to undergo gender reassignment surgery in Thailand. She claims that on returning to her job as a production assistant, her employer began citing her “health condition” as grounds for being “unsuitable” for work with clients. The company fired her in February, citing “serious violations” of its attendance rules.

Ma argues that the firm did not inform her of the attendance issue and that her gender was the real reason for her dismissal. Under China’s employment law, it is illegal for companies to discriminate against employees based on gender.

Xiang Zhenhua, the company’s legal advisor, told Caixin that the public had misinterpreted a regular employment tribunal as a case of gender-based discrimination. “Putting that label on this case is actually the biggest injustice here,” he said.

Read the full story on Caixin Global later today.

Contact reporter Timmy Shen (hongmingshen@caixin.com, Twitter: @timmyhmshen)

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By Guo Yingzhe and Wu Xiaomeng / Dec 05, 2019 02:26 PM / Politics & Law

Photo: VCG

Photo: VCG

A former graft buster is under investigation for what is thought to be corruption charges. China’s top anti-corruption agency announced Wednesday that Wang Limin, a deputy head of the financial research institute at government-backed think tank the Chinese Academy of Social Sciences, is under an investigation for alleged “serious violations of (Communist Party) discipline and law.” The statement did not specify what the suspected violations were, but this type of statement commonly refers to corruption. Wang used to be an inspector at the anti-graft agency. He later worked as an official for several local governments, and as a senior executive for state-owned reinsurance or investment companies. 

Read the full story on Caixin Global later today.

Contact reporter Guo Yingzhe (yingzheguo@caixin.com)

Related: Update: Executive of China’s Largest Bank Accused of Taking Enormous Amount of Bribes


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By Matthew Walsh / Dec 03, 2019 11:53 AM / Politics & Law

Photo: VCG

Photo: VCG

China will soon release an “unreliable entity list,” the business news arm of the country’s nationalist tabloid Global Times said in a tweet early Tuesday morning, citing an unnamed source.

The list will include American companies, the tweet said, adding that China has sped up the move due to the expected passage of a U.S. government bill that encourages President Donald Trump to take a harder line on condemning suspected rights abuses in China’s Muslim-majority western region of Xinjiang. The U.S. bill “will harm Chinese firms’ interests,” the tweet said.

China has consistently denied all allegations of rights abuses in Xinjiang.

The “unreliable entity list” is suspected to take inspiration from Washington’s own Entity List, which is drawn up by the U.S. Department of Commerce and records a group of businesses, research institutions, governments, and individuals that must obtain special licenses to export goods to the country. At its root, the Entity List sanctions companies that Washington deems a threat to national security.

A number of high-profile Chinese tech companies, including telecoms giant Huawei and surveillance firm Hikvision, have been added to the U.S. Entity List this year.

Beijing-based Global Times is a Chinese- and English-language tabloid run under the purview of the Communist Party-controlled People’s Daily newspaper group. It is known both for its stridently nationalistic tone in its domestic reporting and for its well-connected and outspoken editor Hu Xijin, who frequently spars with critics of the Chinese government on Western social media.

Contact reporter Matthew Walsh (matthewwalsh@caixin.com)

Related: U.S. Extends Limited Huawei Licenses for a Further 90 Days

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By Matthew Walsh / Dec 02, 2019 04:38 PM / Politics & Law

Photo: VCG

Photo: VCG

The Yangtze delta, one of China’s most economically advanced regions led by the financial hub of Shanghai, could soon become a major engine in the country’s high-tech ambitions. That’s the picture emerging from a newly published central government plan to further develop a grab-bag of high-tech industries in the region.

While low on specifics, the document, co-published by the Central Committee of the Chinese Communist Party and the State Council, the country’s cabinet, is chock full of the latest high-tech buzzwords. It outlines a blueprint to transform the area into a research and development hub for big data, cloud computing, blockchain, internet of things, artificial intelligence, and satellite navigation technologies, especially smart vehicles and self-driving cars. 

Basic infrastructure, including 80% 5G coverage, will be completed by 2025, according to the document.

The area specified in the plan comprises Shanghai as well as cities in the three eastern provinces of Jiangsu, Zhejiang, and Anhui. In 2016, the State Council agreed in principle to require the region to build “a group of world-class cities with global influence” by 2030.

Sunday’s announcement came as the Shanghai municipal government said it will beef up support for its tech industry by encouraging financial institutions to extend credit lines to local firms in the hope they will eventually list on the city’s Nasdaq-like tech board.

Contact reporter Matthew Walsh (matthewwalsh@caixin.com)

Related: Shanghai Lets Tech Firms Apply for Loans by Pledging Patent Rights

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By Ding Yi / Dec 02, 2019 12:46 PM / Politics & Law

Photo: VCG

Photo: VCG

Shanghai is ramping up efforts to enhance its tech sector.

The Chinese financial hub rolled out a new policy allowing cash-strapped small- and midsized tech companies to get financing by pledging their intellectual property rights, state news agency Xinhua reported Sunday. The news comes just days after the release of a city-wide circular which should help improve such firms accessing bigger credit lines from large financial institutions.

The new policy is backed by the Shanghai Intellectual Property Administration, the Shanghai branch of the People’s Bank of China, and 10 other banks. It permits the city’s promising tech firms to submit their patent rights, trademark rights, and copyrights for a government assessment and mark them as collateral when applying for loans.

Lenders will establish new funding and rate-pricing mechanisms, simplify credit approval processes, and draw up rules for risk management, credit review, and due diligence, Xinhua said.

The new policy also aims to increase the number of loans granted to industrial parks housing patent owners and small tech businesses, Xinhua added.

The policy is seen as a renewed effort by Shanghai authorities to create a fair and transparent financial system for money-hungry local tech firms. Last week, the Shanghai Municipal Commission of Economy and Informatization issued a circular encouraging financial institutions to extend credit lines to the city’s tech companies considering IPOs as part of a broader policy to help them float on Shanghai’s new Nasdaq-like high-tech STAR Board.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Shanghai Sets Out New Rules For Financial Services to Help Local Tech Firms

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By Bloomberg / Dec 02, 2019 10:49 AM / Politics & Law

Photo: VCG

Photo: VCG

(Bloomberg) — Guidelines that require Chinese telecom carriers to use facial recognition technology on buyers of SIM cards kicked in on Sunday as the country cracks down on fraud.

Companies should use artificial intelligence or other measures on buyers to ensure they match the identification provided to purchase the SIM cards, according to a notice issued in September by the Ministry of Industry and Information. Telcos must also ensure that the SIM cards aren’t resold, and that they are bought from legitimate businesses.

The measures are aimed at safeguarding citizens from scammers, and as part of anti-terrorism and cybersecurity efforts, the ministry said.

Related: Government Asks SenseTime to Lead Plans for National Facial-Recognition Standards

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By Dave Yin / Nov 30, 2019 02:36 AM / Politics & Law

Photo: VCG

Photo: VCG

China is set to implement its first major revamp of drug industry regulations in 18 years, incorporating new types of industry players, tweaking rules for imports and foreign businesses, moving to anticipate the growing need for health care and making room for innovation.

The updated Pharmaceutical Administration Law, issued Aug. 26 by the Standing Committee of the National People’s Congress (NPC), goes into effect Dec. 1. The revision is part of a major overhaul of China’s health-care system and a strategic biopharma industry plagued with fake or low-quality products, accounting irregularities and high prices.

New players

The updated law at its core features the national implementation of a four-year old pilot program regulating a broad new category of entities, domestic and foreign.

The new “Marketing Authorization Holders (MAH)” category encompasses drug developers, manufacturers and sellers that have applied for and obtained drug licenses or registrations and bring drugs to market. These entities are responsible for ensuring a drug’s quality during its entire life cycle, including clinical trials, manufacturing, market research, post-sales monitoring, risk management and more.

The law stipulates that MAHs should have independent internal quality inspection staff, audit external contracted manufacturers and make annual reports to drug regulators. Foreign MAHs should have the legal representatives of their China-based entities fulfill their obligations but still bear joint responsibility.

The law also tweaks language pertaining to imports.

Medication being sold for the first time in China and specially designated biological and pharmaceutical products must be inspected, not just pass in the event of an inspection, before they can be imported or sold in China, though the final clause removes a previous discussion of “inspection fees.”

Importing and manufacturing drugs without approval documents now constitute a crime, with newly added penalties including fines, revoking of licenses and jail time.

Getting with the times

In several firsts, the law formally encourages innovation while addressing industry developments that previously lacked legal clarity.

For one, the NPC is requiring the regulator’s drug approval process to be streamlined and setting a 60-workday deadline for the National Medical Products Administration to approve applications for clinical trials. The law now also mandates oversight from independent ethics committees and informed consent from trial participants, following widespread concern over Chinese scientists performing DNA editing on humans to treat diseases.

The final draft also for the first time clears online sales of prescription drugs, barring vaccines, blood products, narcotics, medications for mental disorders, drugs with high toxicity for clinical use, radioactive treatments and those with special designations. Previous drafts of the revision explicitly banned such sales of prescription drugs.

While the move signals a new direction for the industry, it ups the onus on online platforms, requiring them to monitor their MAHs, report to regulators, and curb law violations by denying service if necessary.

Anticipating challenges

The revision also adds a section on a drug reserves system, with stockpiles to be set up at regional and central levels to deal with a disaster or epidemic. The policy is similar to the national pork reserves the government unveiled in September amid the ongoing African swine fever crisis.

The new law expands the State Council’s power to control drug supply. Whereas the existing 2015 amendment allows restrictions on exports of drugs with shortages, the new language says that when necessary, the State Council can adopt “organized manufacturing,” price interventions, expand imports and other measures.

The NPC is requiring the national drug regulator to set up a unified drug tracking system, which MAHs and drug manufacturers are expected to implement, according to the new law.

The drug tracking system echoes an announcement earlier this month that China will launch a system for tracing vaccines in an attempt to curb counterfeits.

Contact reporter Dave Yin (davidyin@caixin.com)

Related: Drugmakers Slash Prices to Get on Coveted China List

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By Ding Yi / Nov 28, 2019 11:56 AM / Politics & Law

Photo: VCG

Photo: VCG

The Chinese government has appointed artificial intelligence (AI) firm SenseTime to lead a working group in charge of drawing up national standards for the facial recognition industry, SenseTime said in a statement published Wednesday on its WeChat public account.

The group will work to standardize the research and development of facial recognition products and ensure it is applied safely and consistently, SenseTime said.

The working group, which also includes Tencent, Xiaomi, and Ant Financial, is overseen by the National Information Technology Standardization Technical Committee (NITS), which is in turn affiliated with the Ministry of Industry and Information Technology. It will also promote the further formulation of facial recognition standards at an international level, the statement said.

Caixin was unable to contact NITS for comment.

Facial recognition technology is used in a wide range of sectors in China, from surveillance to electronic payments and tourism. But it has also sparked controversy due to its alleged role in identity theft and data leakage.

In a recent high-profile pushback against facial recognition technology, a university professor in eastern China sued a wildlife park for allegedly storing his personal data without asking for consent, thereby violating consumer rights laws.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Riled Professor Sues Zoo for Scanning His Face Without Permission

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