China Laws and Regulations Update in July 2023

1. Provisional Rules on Generative AI Services

Promulgated by Cyberspace Administration of China, National Development and Reform

Commission of the People’s Republic of China, etc.

Promulgation date: 13 July 2023

Implementation date: 15 August 2023

Document number: CAC, NDRC, MOE, MOST, MOIIT, MOPS, NRTA Order No.15

Six government departments, including Cyberspace Administration of China recently co-issued the Temporary Rules on Generative AI Services (“Rules”) which will be brought into action from August 15th.

The Rules states that equal importance should be attached to development and security in our country, innovation and legal governance should be further integrated, effective measures should be taken to help generative AI innovation and development and generative AI should be classified in different types and regulated with tolerance and prudence. It sets out general rules on providing and using generative AI services, specific measures to help development of generative AI technology, training data processing and marking rules, generative AI service rules, requiring that generative AI service providers should take effective measures to prevent juvenile users from being addicted to generative AI services, mark AI generated content such as pictures and videos according to the Deep Synthesis Regulations for Internet Information Services and find and deal with illegal content in a prompt manner, and security evaluation, algorithm recordation, complaint and reporting systems and legal responsibilities. (Source: CAC website)

2. Rules on Registration of Ingredients of Formulated Milk Powder Products for Infants and Babies (Revised)

Promulgated by State Administration for Market Regulation

Promulgation date: 26 June 2023

Implementation date: 1 October 2023

Document number: Announcement with SAMR Order 80

The Rules consists of 52 clauses that include provisions relating to application and registration processes, labels and instructions, regulation, legal responsibilities, etc. of businesses intending to sell in and import to China formulated milk powder for infants and babies. The main contents of the Rules are 1. clarification of formula registration and check requirements; 2. improvement of labels and marks to protect consumers’ interests; 3. support for research, development and innovation and improvement of business environment. The Rules sets out onsite inspection circumstances and requirements, stresses that samples should be selected randomly from products being manufactured and inspected during the onsite inspection and sets out circumstances where indirect sub-packaging is prohibited and eight circumstances where registration applications should not be approved. It also sets out that in products with its name showing they come from an animal, all sources of milk protein, including raw milk, milk powder and whey powder should come from this animal, and further specifies what is banned from the content of a label. (Source: SAMR website)

3. Circular on Improving “We Media” Regulations

Promulgated by Cyberspace Administration of China

Promulgation date: 5 July 2023

The Circular includes requirements connected with thirteen issues, including falsification, display of licenses, permits and certification documents , marks showing information sources, etc., providing that for “we media” that generate information content in financial, educational, medical, legal and other areas, the platform should conduct strict inspection and show names of its certification documents such as service and professional licenses and permits and professional background information, with marks of the area that they belong to, on the homepage of their account. For “we media” whose licenses or permits are not certified or expired, the website platform should stop information publicity services in the related area. The Circular stresses that the website platform should identify and give strict punishment for “we media” violating rules and close, include in the platform’s black account list and report to the cyberspace administration the “we media” that create and publish rumors, make use of hot social events or publish or spread illegal or immoral information by matrix, causing serious outcomes. (Source: CAC website)

4. Private Investment Fund Regulations

Promulgated by State Council

Promulgation date: 9 July 2023

Implementation date: 1 September 2023

Document number: SC Order No.762

The Regulations consists of seven chapters and 62 clauses mainly intended to set out a. its application; b. the private fund manager’s and the trustee’s obligations; c. fund raising and investment operation rules; d. special provisions for venture capital funds; e. improvements of supervision and legal responsibility articles. The Regulations sets out national policies supporting venture capital funds to encourage and guide them to invest in developing and innovative startups and make supervision and development policies work better together, conditions that venture capital funds should meet and supervision and self-regulation rules for venture capital funds that are different from ones for other private funds. (Source: SC)

5. Circular on Further Regulating Cooperation in Periodical Business

Promulgated by National Press and Publication Administration

Promulgation date: 26 June 2023

Implementation date: 26 June 2023

Document number: GXCF[2023]13

The Circular prohibits transfer of the right to publish periodicals. Partners of a periodical business can only act as advertiser, publication agent, etc. subject to legal authorization without doing the publisher’s activities such as talking about a periodical in an interview or editing a periodical. None of entities publishing periodicals or in charge of or organizing the publication may grant their business partners the right to publish periodicals in an indirect way that they can “run a periodical in all aspects” or “create its name” or have the publisher’s official seal kept or used by their business partner. The Circular provides that the periodical publisher should be responsible for not only the final check, but also the initial and double checks of the content of the periodical and its new media and that the periodical publisher should register and manage and none of its business partners may control the periodical’s new media account and online document database account numbers and strictly prohibit staff members of the business partners from leading a periodical publisher or working with its editing division. (Source: NPPA)

6. Circular on the Work to Clear up Policies and Measures that Damages the Market Unity and Fair Competition

Promulgated by State Administration for Market Regulation

Promulgation date: 5 July 2023

Document number: GSJJXF[2023]53

The Circular is intended to clear up rules, official documents and policies connected with economic activities of business entities now in effect formulated by departments of the State Council and local governments above the county level and their departments before December 31st, 2022, especially rules and practices that block the market entry and exit, free flow of commodities and elements, the market unity or fair competition or adversely affects production and operating costs or activities. The Circular includes the following provisions. The drafter and the enforcer should classify and finish the clearup work. If the main part of a policy or measure conflicts with the market unity and fair competition requirements, the policy or measure should be abolished according to related procedures. If part of a policy or measure conflicts with the market unity and fair competition requirements, the policy or measure should be revised according to related procedures. All the documents should be cleared up as required. (Source: SAMR)

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