China legal update: SPC released Opinions on providing Judicial Services and Guarantees in Hainan

China legal update: SPC released Opinions on providing Judicial Services and Guarantees in Hainan

I. Legal News Review

SPC released Opinions on providing Judicial Services and Guarantees in Hainan

On the 9 of August, the Supreme People’s Court (“SPC”) released the Opinions on Providing Judicial Services and Guarantees for Fully Deepened Reform and Opening-up in Hainan (the “Opinions”). It will enter into force on the 10th of august.

These Opinions are the consequence of an announcement, made in April, that the island would become a free trade zone and develop a free trade port, with Chinese characteristics..

The document put forwards 22 measures in seven aspects. It supports the creation of a local Intellectual Property Court and an international Intellectual Property exchange on the island.

Regarding to dispute resolution the Opinions state that, where subjects of civil and commercial cases arising within pilot free trade zones or free trade ports agree that any disputes arising shall be submitted to an extraterritorial arbitration institution for arbitration, it is improper to identify such agreement invalid in that no foreign factors are involved. Moreover, it also stipulates that where a cross-border e-commerce platform operator enters into an arbitration agreement comprised of standard clauses with a consumer and fails to take reasonable actions to have the consumer note these standard clauses, the people’s court shall uphold the request of the customer for identifying the invalidity of such arbitration agreement.


GAC Introduces Adjustments on the Regulation of Processing Trade

On august 13th 2018, The General Administration of Customs (“GAC”) published the Announcement on Matters Concerning the Regulation of Processing Trade (the “Announcement”), which entered into force at the same date.

This document clarifies some of the provisions in the Measures of the Customs of the People’s Republic of China for the Supervision and Administration of Processing Trade Goods, which were adopted in 2004 and amended afterwards.

Among the provisions clarified by the Announcement, we find articles 2, 6, 9, 21, 22, 25, 27, 31 and 40.

Regarding to article 2, enterprises should go through the customs formalities for bonded components and materials, for domestic, transfer or returning of finished products within the validity period of the manual of processing trade.

Article 6 provides for eight cases where pledge procedures shall not be processed, such as if the pledge affects the normal processing of trade goods. It also details the documents to be provided by the company applying for the pledge of processed goods.

The Announcement further states that, to change the storage place or have more storage places, the processing trade enterprise shall obtain an approval from the competent custom house. Processing trade goods shall not be stored across the jurisdiction of different customs offices, except for business needs of outward processing.


II. Hot Topic

Is Google about to make a comeback in China?

On the 1st of August 2018, The Intercept, an investigative newspaper, revealed that Google was planning to launch a censored version of its search engine – a project named “Dragonfly” – in order to meet with the Chinese regulations1.

As pointed out some commentators on the web, it is not the first time that such rumors spread about the American firm’s return. Since it left the country in 2010, for ethical reasons, a possible comeback has regularly made the headlines2.

Since Google left China, the Chinese internet market has grown tremendously, from around 300 million users in 2008 to more than 750 million today. This is more than the USA and the European Union combined and the Chinese market still has an important growth potential, as only a little more than half of the population uses internet. At the same time, China has developed national champions and companies like Baidu or Tencent filed the gap left by the American giant3.

According to the documents leaked, Google’s return would take the form of an Android application. Today around 80% of China’s mobile users have the Google mobile operating system on their phone.

In December 2017, the World Internet Conference was organized by the Chinese State in Wuzhen. Google’s CEO, Sundar Pichai, showed up, which was interpreted as a move towards Chinese authorities. Around the same time, a research and development center for artificial intelligence was opened by Google in Beijing, China has been investing huge sums of money in driverless cars and robotic in the last years, aiming to become a global leader in these industries4. Then, in June, Google announced a strategic partnership with JingDong (, as part of it USD500 million will be invested into the Chinese company. The two firms plan to develop a range of online shopping solutions in regions outside China. In the meantime, the American enterprise has also launched two apps, now available in China (Google Translate and Files Go).

Another company from the Silicon Valley made the headlines end of July, Facebook had set up a subsidiary in China. The business filing, however, was withdrawn shortly afterwards.


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