10 New Laws Starting January 1 That May Affect Your Business in China

Posted by Written by Giulia Interesse Reading Time: 9 minutes

Multiple new laws and regulations that affect doing business in China came into force on January 1, 2023. Foreign investors and businesses engaging in food and beverage, import and export, new energy vehicles, sports, and financial activities should pay special attention.  


On January 1, 2023, many new laws and regulations that may affect your business and everyday life came into effect. In this article, we list 10 such laws, regulations, or national standards, and briefly explain why they matter. 

1. Catalogue of Encouraged Industries for Foreign Investment (2022 Version)

  • Promulgation Authorities: National Development and Reform Commission, Ministry of Commerce
  • Release Date: October 28, 2022
  • Effective Date: January 1, 2023
  • Doc Number: No. 52

On October 28, 2022, the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM) released the Catalogue of Encouraged Industries for Foreign Investment (2022 Version) (hereafter the “2022 FI Encouraged Catalogue”), which came into force on January 1, 2023.

Why does it matter?

As with the previous version, the 2022 FI Encouraged Catalogue includes two sub-catalogues, one covering the entire country (the “national catalogue”), and one referring to the central, western, and northeastern regions (the “regional catalogue”). The catalogue lists the industries where foreign direct investment (FDI) is encouraged and that benefit from favorable policies in China.

The newly released 2022 FI Encouraged Catalogue contains a total of 1,474 items (519 in the national catalogue and 955 in the regional catalogue), an increase of 19 percent from 1,235 items (480 in the national catalogue and 755 in the regional catalogue) in the 2020 version. These align with China’s plans to attract foreign investment into high-tech manufacturing and production-oriented service industries, as well as advanced industries in the central, western, and northeastern regions. Opportunities also exist in industries linked to green development, healthcare, elder care, sports, vocational education, and rural revitalization. More details can be found in our article here.

2. 2023 Tariff Adjustment Plan

  • Promulgation Authorities: Tariff Committee of the State Council
  • Release Date: 29 December, 2022
  • Effective Date: January 1, 2023
  • Doc Number: Tax Commission Announcement [2022] No.11

On December 29, 2022, the Customs Tariff Commission of the State Council released the Announcement of the Customs Tariff Commission of the State Council on Adjusting the Tariffs in 2023 (hereafter the “2023 Tariff Adjustment Plan”) to adjust the import and export tariffs of selected goods from January 1, 2023.

Why does it matter?

Individuals and businesses engaging in import-export activities can consult this plan to know how much they will need to pay in tariffs in the new year.

According to the new plan, 1,020 commodities will be subject to provisional import tariff rates that are lower than the tariffs of the most favored (MFN) country, including anti-COVID medications. On the other hand, some commodities’ import and export tariffs will be increased to support the growth of domestic industry and address shifts in supply and demand.

China will begin implementing the eighth stage of the MFN duty rate reduction on 62 items related to information technology (IT) on July 1, 2023, significantly reducing China’s total tariff level. Additionally, in 2023 the country will introduce a few new taxes to support industrial development as well as scientific and technological advancement. In order to support and assist the least developed nations that have established diplomatic ties with China and completed the document exchange, favorable tariff rates will continue to be applied to these nations.

For a closer look at the changes introduced in the 2023 Tariff Adjustment Plan, see our dedicated article.

3. Measures for Data Security Management in the Field of Industry and Information Technology (Trial Implementation)

  • Promulgation Authorities: Ministry of Industry and Information Technology
  • Release Date: December 13, 2022
  • Effective Date: January 1, 2023
  • Doc Number: [2022] No. 166

On December 13, 2022, the Ministry of Industry and Information Technology (MIIT) released the final version of the Measures for Data Security Management in the Field of Industry and Information Technology (Trial Implementation) (hereafter the “Trial Measures”).

Why does it matter?

With the release of the new Measures, the Chinese government has created a new guideline that clarifies how businesses should manage sensitive industrial and telecommunications data in line with the requirements of the Data Security Law. The Trial Measures divide data into three categories and demand that businesses use various levels of security precautions while gathering, processing, transmitting, and discarding data.

All businesses in the industrial, telecom, and radio communications sectors are subject to the Trial Measures, particularly those with telecom business licenses and those offering software and IT services.

More details on the Trial Measures and their implications are included in our dedicated article.

4. Exemption of Vehicle Purchase Tax on New Energy Vehicles

  • Promulgation Authorities: Ministry of Finance, the State Taxation Administration, and the MIIT
  • Release Date: September 18, 2022
  • Effective Date: [applies to the start of vehicles purchasing] January 1, 2023
  • Doc Number: Announcement [2022] No. 27

On September 26, 2022, the Ministry of Finance (MOF), the State Taxation Administration (STA), and the MIIT jointly released the Announcement on Continuing Tax Exemptions on Purchases of New Energy Vehicles (Announcement). As per the Announcement, purchases of new energy vehicles (NEVs) that occur between January 1, 2023, and December 31, 2023, will continue to be exempted from vehicle purchase tax. Note that only NEVs included in the List of NEV Models Exempted from Purchase Tax (List), updated to its 58th batch, are eligible for tax exemption.

Why does it matter?

China has long been vying to be a global leader in the NEV market. The latest subsidy extension is proof that the government is willing to provide support for the industry and expand this critical market. This move could stabilize market expectations and further boost NEV consumption, as well as the stable development of the overall industry.

5. Interim Measures for the List-based Management of High-end and Urgently Needed Talents Eligible for the Preferential Individual Income Tax Policy in the Hainan Free Trade Port

  • Promulgation Authorities: Hainan Provincial People’s Government
  • Release Date: September 15, 2022
  • Effective Date: January 1, 2023
  • Doc Number: Qiong Fu [2022] No. 31

On September 18, 2022, the People’s Government of Hainan Province released the Interim Measures for the List-based Management of High-end and Urgently Needed Talents Eligible for the Preferential Individual Income Tax (IIT) Policy in the Hainan Free Trade Port (FTP), which came into effect on January 1, 2023. The Measure made further clarifications on the conditions for accessing individual income tax (IIT) incentives in Hainan.

Why does it matter?

The program proposed by the Hainan FTP is specifically designed for foreign high-end talent and talent that are in short supply and is applicable to investors and business owners in selected sectors.

According to the Measures, to qualify for the IIT incentives in Hainan, the applicants generally need to meet the following conditions:

  • Condition I: They must reside in the Hainan FTP for at least 183 days in a tax year; and
  • Condition II: They must be talent recognized by the talent management departments in Hainan or receive an income of over RMB 300,000 (US$43,434) in the Hainan FTP within a tax year.

Special personnel in aviation, shipping, offshore oil and gas exploration, and other industries who have resided in Hainan FTP for less than 183 days in a tax year due to the nature of their occupation can enjoy the preferential IIT policies by satisfying some extra conditions in addition to condition II, after applying to the tax authorities within the stipulated period and passing a review. The extra conditions include:

  • Having contributed to the basic pension insurance for employees in the Hainan FTP for a period of at least six months (including the month of December of the current year) consecutively within a tax year (except for people who are exempted from social insurance contributions based on the social security agreement signed between the home country and China); and
  • Having entered into a labor contract (or another similar labor agreement) with a term of one year or more with a company or organization registered and operating substantively in the Hainan FTP.

6. Law on the Protection of Women’s Rights and Interests (Revision 2022)

  • Promulgation Authorities: National People’s Congress
  • Release Date: October 30, 2022
  • Effective Date: January 1, 2023
  • Doc Number: Presidential Decree No.122

On October 30, 2022, China’s National People’s Congress (NPC) passed the revised Law on the Protection of Women’s Rights and Interests (hereafter the “Women’s Protection Law”). The amended Women’s Protection Law, which took effect on January 1, 2023, added nearly 30 new provisions to enhance women’s protection in areas ranging from gender equality in recruitment and contract negotiation, employer’s obligations in preventing sexual harassment, as well as relief measures for women should their rights and interests being breached.

Why does it matter?

The revised Women’s Protection Law includes several articles which involve the rights and interests of female employees and are thus relevant to all businesses in China. The new provisions aim to eliminate gender discrimination in the hiring process and incorporate gender discrimination in the workplace into the scope of labor security supervision. We advise employers to double-check whether their recruitment process presents any of the listed behaviors and if so, to make corresponding compliance adjustments. In comparison with the previous versions, the new Women’s Protection Law is a big step toward protecting women employees’ birth rights and addressing gender equality in performance reviews and promotions.

While Chinese law specifically forbids sexual harassment in the workplace, the revised law further defines sexual harassment in the form of verbal remarks, written language, images, physical behavior, or other actions that are against the will of women. Accordingly, employers in China are advised to clearly define the types of behaviors that are inappropriate and establish a strict anti-harassment code and culture in their workplaces.

In addition, the new Women’s Protection Law also provides stronger protection for women’s privacy and personal data.

7. Provisions of the Supreme People’s Court on Several Issues Relating to the Jurisdiction over Foreign-related Civil and Commercial Cases

  • Promulgation Authorities: Supreme People’s Court
  • Release Date: November 14, 2022
  • Effective Date: January 1, 2023
  • Doc Number: Fa Shi [2022] No.18

The Chinese Supreme People’s Court (SPC) issued the Provisions of the Supreme People’s Court on Several Issues Relating to the Jurisdiction over Foreign-related Civil and Commercial Cases (hereinafter the “Provisions”), effective on January 1, 2023.

Why does it matter?

The Provisions aim to defend the rights of parties involved in litigations, both domestically and internationally, making the process more convenient, and enhancing the standards and effectiveness of trials for international civil and commercial disputes. Among other points, they also promote some rules to establish compatibility between different regulations that are in place, especially when dealing with foreign-related cases.

There has been an observed uptick in the number of these foreign-related disputes in recent years and especially since the outbreak of the COVID-19 pandemic. Good knowledge of these Provisions may be beneficial for individuals and businesses who are likely to be involved in such cases.

8. General Financial Accounting System

  • Promulgation Authorities: Ministry of Finance
  • Release Date: November 18, 2022
  • Effective Date: January 1, 2023
  • Doc Number: Treasury [2022] No.41

To deepen the reform of the budget management system and government accounting, China’s MOF released a new General Financial Accounting System in November 2022. The document includes eight chapters and 66 articles and came into effect on January 1, 2023.

Why does it matter?

The new system improves the financial management function of general accounting on an accrual basis while consolidating the budget management function of general accounting with a cash basis as its foundation, allowing for a more thorough and accurate reflection of the government’s financial standing.

The accounting industry will benefit from these new arrangements in (at least) four ways: by advancing the unification of the government accounting standard system, by adjusting to the requirements of the reform of consolidated financial reports for the government, by meeting the needs of integrated budget management, and by further classifying asset and liability accounts.

To learn more about accounting in China, kindly refer to our Quick Guide to Accounting and Audit in China 2023 (1st Edition), the latest publication from China Briefing and Dezan Shira & Associates, available for download through the Asia Briefing Publication Store.

9. Agricultural Product Quality and Safety Law of the People’s Republic of China (Revision 2022)

  • Promulgation Authorities: Standing Committee of the National People’s Congress
  • Release Date: September 2, 2022
  • Effective Date: January 1, 2023
  • Doc Number: Presidential Decree No.120

The Agricultural Product Quality and Safety Law of the People’s Republic of China (hereafter the “Agricultural Product Quality and Safety Law”) was revised at the 36th Session of the Standing Committee of the Thirteenth NPC on September 2, 2022. It includes a total of eight chapters and 81 articles.

Why does it matter?

The new Agricultural Product Quality and Safety Law is relevant for various businesses in this industry, such as those operating in the food and beverage sector.

To ensure the quality and safety of agricultural goods throughout the process from production to consumption, the new Agricultural Product Quality and Safety Law reinforces the obligations of local governments and business owners. The law states that when food companies buy agricultural goods as food components, they must verify certificates and qualifications. It also specifies the obligations of online platform operators that sell such products, and of people involved in supply chain logistics.

More safety standards will be implemented in accordance with the new provisions, including those for the scientific use of chemical products, such as fertilizers and pesticides. For example, to minimize secondary contamination of the products, safety criteria will be also implemented for their storage and transportation.

10. Physical Culture and Sports Law of the People’s Republic of China (Revision 2022)

  • Promulgation Authorities: Standing Committee of the National People’s Congress
  • Release Date: June 24, 2022
  • Effective Date: January 1, 2023
  • Doc Number: Presidential Decree No. 114

The Physical Culture and Sports Law of the People’s Republic of China (hereafter the “Physical Culture and Sports Law”) was adopted upon revision at the 35th Session of the Standing Committee of the Thirteenth NPC of the People’s Republic of China on June 24, 2022. It contains a total of twelve chapters and 122 articles.

Why does it matter?

The new amendments to the Physical Culture and Sports Law add some useful information about the need for schools to offer compulsory physical education (PE) classes and add directions on how to resolve arbitration disputes that may arise, for example, between athletes and organizations. It symbolizes the government’s commitment to the promotion of people’s well-being, as well as the fitness industry. Therefore, businesses and athletes operating in the sector may find the changes useful.

The 14th Five Year Plan for Sports Development, which spans the period between 2021 to 2025, demonstrates the government’s ambitions for athletic development by aiming to transform China into a global sports force. These objectives apply to the general populace as well as professional athletes since Beijing is increasingly promoting fitness to solve pressing social and health concerns.


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