BRIEFING ON NEW ENTRY AND EXIT LAW

July 17th 2013

New Entry and Exit Law of People Republic of China July 2013

Introduction

Since 1985 the Law on the Administration of the Entry and Exit of Aliens and its implementation Rules had been regulating the entry and stay of foreigners in China and the parallel Law on the Administration of the Exit and Entry of Citizens, had been governing the exit and entry of Chinese citizens.

On June 30, 2012, the Standing Committee of the National People's Congress passed an "unified" exit and entry law to regulate the exit and entry of both Chinese citizens and foreigners, the Law on the Administration of Exit and Entry [

- Zhnghu rnmn gnghgu

chjng rjng gunl f ] (hereinafter Exit and Entry Law). The new law took effect immediately on July 1, 2013 and Public Security Bureaus all over mainland China have immediately started to apply it for regulating their visa procedures.

To be taken into account is that while the law is already effective, the draft regulations that actually implement the law, the Regulation of the Peoples Republic of China on the Administration of Foreign Nationals Entry and Exit (

) is still in the composition stage,

with just a frame of the legislation released earlier this year to take comments. Its possible that there will be significant change to that, so theres still a lot of uncertainty about the shape of the new legal regime.

AsecorpChina has analyzed the content of regulation by gathering information from different sources and interviewing some officers involved in the procedure. Here following we describe the clearest scenario possible for a complex reality as China bureaucracy can be.

1.

Main aspects of the new law

According to Article 16 of the new law, visas for China are divided into four categories; diplomatic visas, courtesy visas, service visas, and ordinary visas. Under the new Entry and Exit law, the number of types of ordinary visas will increase from eight to twelve. Main changes from the new law are applied to the number of issuable visas, passing from 8 to 12 different types.

New Entry and Exit Law of People Republic of China July 2013

New visas introduced by new Exit and Entry Law: M Visa- Issued for business/commercial visits R Visa- Issued for highly skilled foreign professional stays and visits Q Visa- Issued for family reunions and foreigners visiting Chinese citizen (Q1) & permanent residents (Q2) S Visa- Issued for private visits such as divorce, inheritance, adoption, marriage, or medical services

New Entry and Exit Law of People Republic of China July 2013

Comparison between old visa system and new visa system

Old Description System D Visa Resident visa, issued to permanent residents

New Description System D Visa Z1 Visa Z2 Visa X1 Visa X2 Visa Resident visa, issued to permanent residents Issued to foreign workers working over 90 days Issued to foreign workers working no longer than 90 days For long-term study For short-term study Non-business visa, issued to people for purposes of non-business F Visa (scientific, educational, cultural, health, sports) exchanges and visits New business visa, issued to persons coming for business and trade M Visa activities Will generally remain the same, and a group L visa will be added for L Visa relatives, or for other private purposes tourists traveling in groups G Visa Transit visa

Employment/work visa, issued to foreign workers and their Z visa accompanying family members

Student visa, issued to students and others coming to China for X Visa training or internship for a period of six months or more

Business visa, issued to people invited to give lectures or for oficial visits; for purposes of business, scientific, technological, or cultural F Visa exchanges; or for short-term studies or internships lasting less than six months

Tourist visa, issued to people entering China for tourism, to visit L Visa

G Visa

Transit visa

New Entry and Exit Law of People Republic of China July 2013

Crew visa, issued to crew members performing duties on board an Issued to crew members performing duties on board a foreign aircraft, C Visa international aircraft or train, and their accompanying family members J1 Visa J Visa Journalist visa, issued to foreign journalists J2 Visa Issued to resident foreign journalists Issued to foreign journalists for shortterm stays C Visa train, bus, or ship, or to family members of ship crews

Family reunion visa, issued to family members [children] of Chinese Q1 Visa citizens or permanent residents, including children left in China to be taken care of by Chinese relatives Issued to foreigners visiting Chinese citizens and permanent residents for Q2 Visa a short term

Issued to foreign professionals who are highly skilled or whose skill is R1 Visa urgently needed by China, and who will be residing in China Issued to the R-1 types of foreign professionals staying in China for a R2 Visa short term Issued to foreigners coming to China for private activities. including S Visa marriage, inheritance, and adoption, or for medical services

New Entry and Exit Law of People Republic of China July 2013

The M visa will be the new business visa and will be issued to foreigners visiting China for business or trade purposes. The F visa (the business visa under the pre July 1st system) will become a non-business visa and will be issued to foreigners visiting China for non-commercial visits (scientific, educational, cultural, health or sports). With regard to the residence visa (Z visa) - up to now, no further indications about the new or additional requirements to obtain the working permit important requirement to get a permanent resident visa have been communicated. The article 29 of the new law extends the time for the administration to conduct examination and make decision to 15 days (double as before). This makes us foresee that the control will be tight and more information will be possibly required.

AsecorpChina, after contacting with the Chinese Immigration Bureau, has been redirected to the local Labor Bureaus to obtain further information. Resuming what authorities have communicated, the issuing time of new visas will be longer on average and more attention will be paid on specific aspects of candidates, such as their educational levels. Except for that, there is no clear circular or specific requirement to clarify which can be the causes for a foreign people to be denied its working permit. If we base our interpretation on the law, we find some answer in the Article 42: The competent department of human resources and social security and the competent department in charge of foreign experts affairs under the State Council shall, in conjunction with relevant departments under the State Council, formulate and regularly adjust the guiding catalogue for foreigners working in China based on the needs for economic and social development as well as the supply and demand of human resources. AsecorpChina tried to collect some information about this catalogue but contacted authorities seem still having no idea about it and its purpose.

As per article 36, decisions made by the exit/entry administration of public security organ on rejecting applications for visa extension or reissuance, or on not issuing foreigners stay or residence permits or not extending the duration of residence shall be final.

Employing Foreign students and Internship

The competent department of education under the State Council shall, in conjunction with relevant departments under the State Council, establish an administrative system for foreign students working to support their study in China and set forth regulations on the scope of jobs and the limit of work time for such foreign students (Article 42, second paragraph). Foreign entities that employ foreign students should declare it to competent authorities.

Foreign students internship can be assimilated to this regulation provided that they do not receive any salary. If so they can make the internship with a student visa but the internship program should be as

New Entry and Exit Law of People Republic of China July 2013

part of the evaluation requirements of the hosting school. Internship agreement should be supported by a three party agreement between University, Receiving Company and Student. Requirement for the company depend on each University policy.

It is not clear how students willing to do overseas internship abroad independently should apply. Taking the former regulation for reference, the company should probably apply for an M visa and declare that the person is temporary in internship training in the company without receiving a salary. Requirements about documents to be presented will be specified at the time of application.

Foreigners that came to China for studying Chinese or short terms studies will probably get X2 visa. This may cause that the government can require the company to apply for a formal working visa for them to be legally working.

Higher fines

In accordance with different interpretations, the new law came about as a result of the Chinese governments sentiment that border entry and residency laws needed to be modernized, stressing that the government will reinforce its administration of foreigners who have entered, stayed and worked in China illegally (the media calls it The Three Illegal).

In case authorities find subjects breaking the new Exit and Entry law these will be the following main sanctions:

1000RMB up to 10000RMB + 5 to 15 days People who Exit or Enter China illegally in any way detention in case of severe cases 2000RMB up to 20000RMB + 10 to 15 day detention in severe cases 5000RMB up to 10000RMB + illegal gains confiscated 10000RMB up to 50000RMB + illegal gains people in charge in entities, directly responsible confiscated will punished according to the two previous points People concerned fail to go through registration Up to 2000 RMB formalities 10000RMB/employee up to If employer has contracted foreign staff illegally 100000RMB/employee 5000RMB up to 20000RMB + 5 to 15 days If foreign employees illegally working in China People assisting others exiting or entering China illegally in any way People issuing written invitations or other application materials to foreigners, violating Law Entities engaging in the two preceding points,

New Entry and Exit Law of People Republic of China July 2013

detention in severe cases 50RMB/day, up to 10000RMB + 5 to 15 days Per each day overstaying detention in severe cases
Source: Internal analysis from the Law

As per article 62, Repatriated persons shall not be allowed to enter China for one to five years, calculating from the date of repatriation.

2.

Background and what to expect

The new law starts declaiming in its Article 1 that one of the purpose of this same law is to promote foreign exchange and opening to the outside world. Despite the impetus, the new Exit-Entry Administration Law might be seen by some foreign organizations and their expatriate employees as yet another blow to their confidence in China as an international center.

This feeling can be further alimented by reading the Article 44 of the law which declares: On the basis of the need for maintaining national security and public security, public security organs and national security organs may impose restrictions on foreigners and foreign institutions from establishing places of residence or work in certain areas; and may order that established places of residence or work be relocated within a prescribed time limit. Whether this will be really applied or not and how, cannot be forecasted at present. What is certain is that controls on foreign entry, exit and residence will become tighter.

Among the reasons of new visa rules breakdown there might be a rising unemployment concern in the slowing Chinese economy. Premier Li Keqiang, in one interview reported in Financial Times in May, warned that the country faces an unprecedented challenge in finding jobs for a record number of university graduates. All these graduates make up a demographic considered potentially threatening to stability if they become disaffected in large numbers. Thus, he said, it is an important task to find them jobs.

Of the nearly 7m students who graduate in July most of them have not yet found jobs and the employment rate for those people is lower than in the past, according to state media reports. By the last month, just 28 per cent of graduating students in Beijing had been hired while the rate was 29 per cent in Shanghai and 47 per cent in southern Guangdong Province. Official urban unemployment rate in China was just 4.1 per cent by the end of March but the figure is regarded as deeply unreliable because it does not capture many demographic groups such as fresh graduates.

Tightening the rules up for foreigners trying to obtain business visas (type M) and employment visas (type Z) will limit the recent waves of western workers arriving to China looking for new opportunities,

New Entry and Exit Law of People Republic of China July 2013

as western countries are undergoing an economical crisis. The new Exit and Entry law might be then a useful tool to make room for these new university graduates flooding the job market that on their side will support the domestic consumption. At the same time it can be expected that the War for Skilled Chinese Talent can become even fiercer in the short terms until the market is ready to supply qualified local talents.

Foreign Talent Attraction

The only serious and sustainable way forward for China is to improve its technological know-how to become a leading country in the developed countries panorama and the new Standing Committee of the National People's Congress has fully understood it, as the recently approved law shows. The aim is to restructure the economy while maintaining a stable growth, an indicator that has been falling recently, showing a structural slow down.

To reach this goal, big investments in scientific and technology parks are on the way, in order to attract foreign organizations with a strong vocation for Research & Development. Economic restructuring is focusing on a stable growth driven by domestic consumption, an adequate employment and low inflation, without massive stimulus programs sponsored by the government.

This target is to be reached by all the available means. The new Exit and Entry law is expected to largely contribute to it by allowing especially highly specialized foreigners to work in China and open the labor market for the less specialized positions to Chinese professionals and fresh graduates.

Under the new system, the R visa will be used to attract foreign talent: R1 will be the long term visa, allowing a stay of up to five years and will include a residency permit. R2 visa will serve highly skilled specialists for stays less than 180 days.

While it is a bit unclear as to what constitutes this type of talent, the visa will be issued to high-ranked and in-demand professional talent. It is an incentive to bring in highly-skilled, specialized workers. Foreign talent will be eligible for visas valid for up to five years (R1), coming with residence rights. This could be interpreted as a strong signal to the world: China is now making his best efforts to switch its economy based on low-price manufacturing to an economy based on top quality and technologically advanced products.

China should rely more on a structural transformation and technology upgrade, allowing the market to play a full role, focusing on innovation and improving people's livelihoods in an attempt to sustain stable

New Entry and Exit Law of People Republic of China July 2013

and healthy economic growth in the long term. The new Entry and Exit law seems to be just one the first step among the many ones to take.

Chinas development and economic goals have changed significantly since the old regime was put into place, thus it seems appropriate that the government is also changing the immigration laws to attract the right type of foreigner for the new China, and keep out those who are undesirable. Several attempts have been done since 2009 with Job Fairs all over China, Incentive measures and Massive recruitment program (ex: Thousand Foreign Experts Initiative; Recruitment Program of Foreign Experts in 2012). The individual must qualify as defined by the government.

high-end talent and shortage talent, which will be

As a clue, we can refer to the 12 Five Year Plan key industries: Technologies (information, electronic, bio, agriculture, energy, energy-saving, green, water, automotive, etc.), healthcare (hospitals, pharmaceuticals, medical devices), environmental protection and pollution control, new materials, advanced manufacturing, education, consumer products/ services (food, household goods, entertainment, sports).

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Bibliography Exit and Entry Administration Law of the Peoples Republic of China. - Order of the President of the Peoples Republic of China. No. 57 http://www.mps.gov.cn/n16/n84147/n84196/3837042.html Martinez Domnguez J., China: Novedades legislativas en materia de inmigracin ICEX June 2013 Entry-Exit Inspection and Quarantine Bureau of Shanghai and Jiaxing State Administration of Foreign Expert Affairs of the P.R.C. http://www. safea.gov.cn/english/index.shtml

http://www.ft.com/intl/cms/s/0/481dd63e-bd66-11e2-a735-00144feab7de.html http://www.cityweekend.com.cn/guangzhou/articles/blogs-guangzhou/guangzhou-news/breakdownchinas-new-visa-rules1/ http://www.loc.gov/lawweb/servlet/lloc_news?disp3_l205403596_text http://www.beijingesc.com/news/122-2013-july-1st-china-visa-policy-and-regulation-changes.html https://www.gov.uk/government/world-location-news/chinese-government-announce-newimmigration-laws http://www.rplawyers.com/1289 http://www.hoganlovells.com/files/Publication/84fbbc49-0ae7-46c8-bc7a1efef103bcd4/Presentation/PublicationAttachment/705198aa-b006-42dc-80b520d8f42eaa0a/Hogan_Lovells_Alert_-_China_s_New_Exit_Entry_Law_Targets_Illegal_Foreigners.pdf

http://www.chinalawforexpats.com/2013/07/01/what-you-need-to-know-about-chinas-new-visa-laweffective-today/

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