JC Master Legal News Issue 875

Key Takeaways for This Issue

Want to invest in the STAR Market? How can you meet the RMB 500,000 funding threshold?

On June 13, 2019, the STAR Market officially opened after 220 days of preparation. As a key component of China’s capital market reform, the STAR Market has attracted widespread attention from all sectors. Its establishment has not only created a new financing channel for China’s high-tech enterprises with strong growth potential but has also provided domestic investors with opportunities to reap returns from these companies’ development.

China’s cities with the sharpest housing-price increases have imposed “heavy-handed” regulatory measures.

On June 20, the Xi’an Municipal Housing Administration website issued the “Notice on Further Strengthening Regulation and Management of the Housing Market” (hereinafter referred to as the “Notice”), which stipulates that, effective from the date of issuance, households relocating to Xi’an from outside the city may purchase a home only after having registered their household registration for one year or having continuously paid social insurance (or individual income tax) for 12 months. Meanwhile, non‑Xi’an residents must provide proof of having paid individual income tax or social insurance for at least five years (inclusive) in order to purchase one unit of either new‑build or secondhand housing.

Small and micro enterprises, take note! If you’re just getting started, these three tax incentives can help you.

In recent years, as the dynamism of entrepreneurship in driving employment has continued to emerge, the role of innovation and entrepreneurship in supporting high-quality employment has become increasingly evident. This vitality stems, on the one hand, from the enterprising spirit across all sectors of society, and, on the other, from the growing effectiveness of tax‑reduction and fee‑cutting policies in fostering “mass entrepreneurship and innovation.” To better leverage taxation in boosting mass entrepreneurship and widespread innovation, the State Taxation Administration released a revised edition of the “Tax Preferential Policy Guide for Mass Entrepreneurship and Innovation” during the National “Mass Entrepreneurship and Innovation” Week in June 2019. If you’re just starting out, be sure to familiarize yourself with the following three tax incentives designed specifically for small and micro enterprises in their early stages.

Breaking: The All China Lawyers Association has issued a statement: Lawyers may not provide legal services free of charge.

Recently, the All-China Lawyers Association explicitly stipulated that lawyers may not offer services free of charge or reduce their fees during the course of practice. Perhaps due to the profound impact that online legal services have had on the legal profession in recent years—far from elevating the quality of legal services, they have instead undermined the entire fee‑setting framework of the industry. Even after a decade of inflation and a sharp surge in real estate prices, lawyers’ fees have not risen but have instead declined.

Xi Jinping and Peng Liyuan paid tribute at the China–North Korea Friendship Tower.

On June 21, Xi Jinping, General Secretary of the CPC Central Committee and President of the People’s Republic of China, together with his wife, Peng Liyuan, paid tribute at the China–North Korea Friendship Tower, erected to commemorate the outstanding achievements of the heroic martyrs of the Chinese People’s Volunteer Army. They were accompanied by Kim Jong-un, Chairman of the Workers’ Party of Korea and Chairman of the State Affairs Commission, and his wife, Ri Sol-ju.

Table of Contents

Table of Contents

Finance & Capital Markets

Want to invest in the STAR Market? How can you meet the RMB 500,000 funding threshold?

Promoting High-Quality Development: The Capital Market Bears a Heavy Responsibility

The Shanghai Stock Exchange has launched on-site supervision of sponsor activities for IPOs on the STAR Market.

Consumption will serve as a stabilizing anchor for China’s healthy economic growth.

SSE Investor Education | Key Takeaways on New Share Issuances on the STAR Market

Corporate & Commercial

Apple has also spoken out, opposing…

China’s cities with the sharpest housing-price increases have imposed “heavy-handed” regulatory measures.

How does Weibao, a subsidiary of Tencent Holdings, operate when a single person purchases 15 insurance policies?

Amid a tone of stability, gain insight into the industry’s emerging shifts—join the Boao 21st Century Real Estate Forum as we explore the future together.

Unleashing the Power of the Market: A Major White Paper on Urban Renewal Released

Taxation

Small and micro enterprises, take note! If you’re just getting started, these three tax incentives can help you.

Tax and fee reductions help enterprises achieve “smart manufacturing upgrades.”

In the first year of institutional reform: “Four-in-One” initiatives help reduce burdens on taxpayers and tax authorities.

How is the provisional tax payment period determined for enterprises that are classified as small and low-profit enterprises during the year?

The tax authorities have resolved the issue of tax burdens “increasing rather than decreasing.”

Litigation & Arbitration

Reminder: After retirement, in addition to your pension, there are five other payments you can receive.

Death penalty! First-instance verdict delivered in the case of “killing a prison guard and stabbing a judge”

Judicial appraisal services have yielded new achievements in the economic and social development of the Yangtze River Economic Belt.

A large number of “Putian-style” hospitals have been designated as criminal gangs, and medical fraud has been identified as a key priority in the campaign to eradicate organized crime and evil forces.

Breaking: The All China Lawyers Association has issued a statement: Lawyers may not provide legal services free of charge.

Other

Xi Jinping and Peng Liyuan paid tribute at the China–North Korea Friendship Tower.

Finance & Capital Markets

Want to invest in the STAR Market? How can you meet the RMB 500,000 funding threshold?

On June 13, 2019, the STAR Market officially opened after 220 days of preparation. As a key component of China’s capital market reform, the STAR Market has attracted widespread attention from all sectors. Its establishment has not only created a new financing channel for China’s high-tech enterprises with strong growth potential but has also provided domestic investors with opportunities to reap returns from these companies’ development.

Because investing in the STAR Market entails certain eligibility thresholds, investors who do not meet these requirements can only participate through public mutual funds, which has led to exceptionally strong demand for the two batches of STAR‑Market‑themed funds that have already been launched. On the afternoon of June 13, the third batch of such funds was swiftly approved, with seven fund companies—including Bosera Fund—receiving regulatory clearance for their STAR‑Market‑focused products. Like the second batch, all seven newly approved funds are strategic‑allotment funds operating under a three-year lock-up period.

Public mutual funds provide a superior channel for individual investors.

In recent weeks, numerous fund companies have been vigorously preparing science-and‑technology innovation–themed funds. Since the first batch of such funds went on sale at the end of April, second- and third‑batch offerings have followed in quick succession. According to data from Galaxy Securities’ Fund Research Center, as of June 6, the China Securities Regulatory Commission had approved a total of 99 funds related to the STAR Market that have not yet been launched, with 12 already issued, bringing the overall count to 111.

The first batch of science-and‑technology‑focused funds went on sale on April 29, with a maximum fundraising cap of RMB 1 billion, yet subscription amounts far exceeded the offering size. According to statistics, the six sci‑tech funds collectively raised over RMB 90 billion on that day, with China Asset Management’s Science and Technology Innovation Hybrid Fund leading the pack at RMB 24.5 billion. With an allocation ratio of around 4%, this fund may set a new record for the lowest-ever allocation ratio in the market.

Among the first batch of seven science-and‑technology innovation‑themed funds, six are open‑ended, with only one being a closed‑end fund. Subsequently, both the second and third batches of such funds are hybrid funds structured as “science‑and‑technology innovation‑themed, three-year closed‑end, flexibly allocated,” which are eligible to participate in strategic allocations of STAR Market stocks.

According to reports, strategic placement is short for “targeted allocation to strategic investors,” referring to a mechanism whereby, during the issuance of new shares, a certain priority subscription quota is reserved for strategic investors. The proportions allocated through offline and online channels are determined after deducting this portion. In return for their preferential access to new‑share allocations, these strategic investors are required to commit to holding the shares for at least 12 months. Industry insiders note that strategic‑placement funds offer advantages such as priority allocation, substantial share awards, long‑term holding, and limited availability, providing individual investors with a streamlined pathway to participate in strategic placements on the STAR Market. This means that, compared with conventional IPO subscriptions, strategic placements confer both a higher probability of securing new shares and larger allocation sizes.

Moreover, science and technology–driven enterprises are typically in the early, technology‑centric stages of development, characterized by significant investment uncertainty. With strategic investors subject to lock-up periods of no less than 12 months, such investments place high demands on investors’ capabilities. Public mutual funds, by contrast, possess specialized expertise in assessing the investment value and risks of STAR Market companies. Consequently, closed‑end strategic allocation funds represent a preferable vehicle for individual investors seeking exposure to the STAR Market.

Science and technology innovation-themed funds will bring in long-term capital.

The steady development of the stock market hinges on the infusion of long-term capital. Historically, China’s A-share market has been dominated by retail investors, with a low share of institutional investors and high turnover rates—factors that have hindered its sustainable growth. Industry insiders note that science-and‑technology‑innovation‑focused funds are poised to address this imbalance, providing a stable, long-term source of funding for companies listed on the STAR Market.

Under the relevant regulations of the STAR Market, the issuance rules favor institutional investors. After deducting strategic allocations, the initial offline offering portion is set at no less than 70% to 80% of the total public offering size, while the proportion allocated to online subscriptions has been significantly reduced, with the maximum clawback ratio lowered to 10%. Consequently, the final offline allocation share will fall between 60% and 80%, representing a substantial increase compared with current offline allocation levels. Moreover, at least 50% of the offline allocation is reserved for public mutual funds, social security funds, pension funds, corporate annuity funds, and insurance capital. In addition, only qualified professional institutional investors are eligible to participate in the offline allocation, excluding individual investors and ordinary corporate entities. Under these rules, public mutual funds are afforded a greater assurance of favorable allocation ratios relative to other institutions.

To encourage long-term capital to enter the market, the Shanghai Stock Exchange has also introduced a series of measures. On June 8, the Self‑Regulatory Committee for Public Offerings on the STAR Market issued a set of recommendations: STAR‑market‑focused closed‑end funds and closed‑end strategic placement funds would be required to meet a minimum investment threshold of RMB 10 million, while other offline investors and the accounts they manage would need to hold securities with a market value of no less than RMB 60 million. In addition, it is proposed that 10% of accounts among six categories of medium- and long-term investors be selected via a lottery; the managers of winning accounts would commit to locking up the allocated shares for a period of six months from the date the issuer’s stock is listed.

Science and technology-themed public funds should lead the way in value investing.

The STAR Market’s tilt toward long-term capital also, to a certain extent, means that the practice—frequently seen in A‑shares—of speculating on small‑cap and underperforming stocks for short‑term gains will be nipped in the bud.

The STAR Market serves as a “testing ground” for China’s capital market reforms. Centered on the registration-based IPO system, it allows high-tech companies that have yet to turn a profit to list and raise capital, thereby shifting investors’ focus from offices’ static profitability and short-term valuations to their long-term growth prospects.

Industry insiders bluntly point out that growth investing is, in essence, a form of value investing, primarily focused on identifying securities with rapid future earnings growth, swiftly appreciating intrinsic value, and substantial dynamic investment appeal—precisely the kind of opportunities the STAR Market offers.

According to a research report by Galaxy Securities, public mutual funds are the primary participants in the STAR Market and its largest institutional investors. Currently, the RMB 100 billion raised by six strategic‑allocation funds will serve as a key source of capital for strategic allocations on the STAR Market, constituting the market’s most significant pricing force in its early stages. In addition, preliminary estimates suggest that existing actively managed equity‑oriented funds could deploy approximately RMB 100 billion to participate in the STAR Market.

As the most significant participants in the STAR Market, public mutual funds bear a critical responsibility in championing value investing. Industry insiders note that the STAR Market features substantial innovations in its trading regime, with considerable valuation disparities among issuers. For the first five trading days following an IPO, there are no daily price limits, which can lead to pronounced short-term volatility. These factors underscore the need for fund managers to place greater emphasis on the fundamental quality of listed companies, refocusing investment on the core of their business operations and adopting a longer-term perspective to assess investment value—avoiding blind herd behavior and serving as stabilizers and anchors in the market. Given the high proportion of technology‑driven enterprises on the STAR Market, whose investment cycles are lengthy and fraught with uncertainty, public mutual funds must prioritize disciplined, long‑term investing.

Promoting High-Quality Development: The Capital Market Bears a Heavy Responsibility

On June 19, the first stock listed on the STAR Market of the Shanghai Stock Exchange made its official debut. According to information disclosed that day on the exchange’s official website, Suzhou Huaxing Yuanchuang Technology Co., Ltd., whose stock is abbreviated as “Huaxing Yuanchuang,” will begin its bookbuilding process on June 21 and launch both online and offline subscription on June 27.

With the release of the IPO prospectus for the first stock on the STAR Market, along with the listing and issuance schedule and the preliminary price‑inquiry announcement, the STAR Market is drawing ever closer to the day when its inaugural batch of companies will ring the opening bell. Just one week earlier, on June 13, the STAR Market was officially launched at the Shanghai Stock Exchange, marking the debut of an entirely new segment in China’s capital market.

The launch of the STAR Market marks another historic milestone in the development of China’s capital market, serving as a microcosm of how the capital market supports the real economy, underpins economic transformation, and drives high-quality growth.

The STAR Market is the “breakthrough” of reform.

On November 5, 2018, President Xi Jinping announced, during his address at the opening ceremony of the first China International Import Expo, that a Science and Technology Innovation Board would be established on the Shanghai Stock Exchange and a pilot registration-based system would be implemented, in order to support the development of Shanghai as an international financial center and a hub for scientific and technological innovation.

From that moment on, the “STAR Market” became the most closely watched buzzword in China’s capital market and the top priority of capital market reform and development. Since then, a series of related institutional rules have been rolled out in rapid succession, heralding the emergence of an entirely new market segment in China’s capital market.

“The establishment of the STAR Market at the Shanghai Stock Exchange underscores China’s unwavering commitment to reform and opening-up and to economic transformation, reflects confidence in incremental reforms across a multi-tiered capital market, and represents a major policy initiative to implement the innovation-driven and science-and‑technology‑strong nation strategies, promote high-quality development, and support the building of Shanghai as an international financial center and a hub for scientific and technological innovation,” industry insiders commented. They added that the launch of the STAR Market effectively reafoffices that technological innovation will remain the overarching theme of future socio‑economic development, which is bound to bring profound changes to the ecosystem of China’s capital markets.

At present, the international landscape is highly complex, and China’s economy is at a critical juncture of structural transformation. Against this backdrop, the launch of the STAR Market has been met with high expectations from all quarters.

“The primary purpose of establishing the STAR Market is to enhance the capital market’s inclusiveness toward the real economy, better serving enterprises that possess core technologies, lead their industries, and enjoy strong growth prospects and a solid reputation, while further refining the capital‑formation mechanisms that support innovation through reform,” said Yi Huiman, Chairman of the China Securities Regulatory Commission, at a press conference held by the State Council Information Office. He added that the launch of the STAR Market is a concrete step in deepening capital‑market reform. This initiative goes beyond simply creating a new board; more importantly, it adheres to the principles of market‑orientation and rule of law, driving institutional innovation across all stages—issuance, listing, trading, information disclosure, and delisting—and establishing a robust stock‑issuance and listing regime centered on information disclosure, thereby generating replicable and scalable best practices.

Indeed, the establishment of the STAR Market and the pilot implementation of the registration-based IPO system represent a crucial breakthrough in the comprehensive deepening of capital market reform, entrusted with two major missions: supporting the growth and development of science and technology enterprises and serving as a testing ground for reform.

“Establishing the STAR Market and piloting the registration-based IPO system plays a crucial role in attracting high-quality companies to go public, providing investors with superior investment opportunities, and enhancing the market’s long-term appeal,” said Pan Xiangdong, Chief Economist at New Era Securities. He added that if the registration system operates smoothly and yields replicable, scalable best practices, it could be extended to other market segments, thereby refining the capital market framework and boosting economic efficiency.

The multi-tiered market system is steadily being improved.

The launch of the STAR Market represents a key initiative in the incremental reform of the capital market and marks a milestone in the ongoing process of refining China’s multi-tiered capital market system.

More than 30 years ago, in the early days of reform and opening-up, some enterprises in Beijing, Shanghai, Shenzhen, and other cities undertook pioneering experiments in shareholding‑system reforms, including issuing shares and listing them for trading, thus marking the beginning of the stock market’s reform and development. Subsequently, the Shanghai Stock Exchange and the Shenzhen Stock Exchange were established one after another, signaling that China’s stock market had officially taken center stage in the broader process of reform and opening-up.

Following the establishment of the stock and bond markets, China’s multi-tiered capital market system has entered a phase of gradual improvement. In terms of equity financing, after the main boards of the Shanghai and Shenzhen stock exchanges, the SME Board, the ChiNext, the New Third Board, regional equity markets, and the private equity market have been successively launched and continuously refined.

“As the most dynamic component of the economy and a platform for efficient resource allocation, the development of a multi-tiered capital market helps optimize China’s financing structure, increase the share of direct financing, enhance the efficiency of financial resource allocation, and further deepen supply-side structural reform in the financial sector,” industry insiders noted. To successfully undertake and fulfill these strategic tasks, a stable and healthy capital market is essential, and further efforts are needed to promote the development and refinement of a multi-tiered market system.

In fact, after decades of development, China’s multi-tiered capital market has achieved remarkable accomplishments amid the reform and opening-up process, playing a pivotal role in driving economic growth.

Data show that as of the end of April 2019, there were 3,627 domestically listed companies, with a combined market capitalization of approximately RMB 60 trillion—both figures ranking among the highest worldwide. Listed companies span all 90 major sectors of the national economy and account for more than 70% of China’s top 500 enterprises. In addition, China’s New Third Board and regional equity markets host a large number of listed entities, making them an integral part of the country’s multi-tiered capital market.

Notably, just as the STAR Market was launched, the Shenzhen Stock Exchange’s SME Board celebrated its 15th anniversary, while the ChiNext Board is poised to mark its 10th anniversary.

Judging from the development of the SME Board, we can gain further insight into the growth and maturation of China’s capital market. Over the past 15 years, the number of listed companies on the SME Board has expanded from the initial eight to nearly 932, with their combined market capitalization approaching 20% of the total market capitalization of the Shenzhen and Shanghai stock exchanges, while their earnings have maintained a double-digit compound growth rate. As of May 17, 2019, the 932 companies on the SME Board had raised a cumulative RMB 610.9 billion through IPOs and an additional RMB 1.6 trillion through equity refinancing.

A “booster” for high-quality development

From the perspective of fostering industrial upgrading and driving economic transformation, the refinement of a multi-tiered capital market system has broadened equity‑financing channels for enterprises of all types, supported the development of emerging industries, and powerfully advanced high‑quality economic growth.

Statistics show that, since 2016, more than three-quarters of newly listed companies and those undergoing IPO review have been recognized as national-level high-tech enterprises. It can be said that China’s multi-tiered capital market is becoming a crucial pillar for economic transformation and upgrading, as well as for shifting growth drivers.

The capital market serves as an economic “barometer.” It plays a pivotal role in driving high-quality economic development, a fact that is vividly reflected in the growth of listed companies.

“Listed companies should take the lead in all respects and effectively leverage the ‘lead‑goose effect.’ In the course of China’s high‑quality economic development, they have served as a ‘converter.’” Yi Huiman recently stated that the capital market has played an irreplaceable role in optimizing the capital‑formation mechanism, improving the property‑rights system, and stimulating innovation. In 2018, a number of innovative, fast‑growing enterprises capitalized on the capital market to achieve rapid growth. Data show that, as of the end of April, China had 1,425 listed companies in strategic emerging industries, accounting for 39% of all listed offices.

Indeed, whether it is the main board market, which has been in operation for nearly 30 years, or the SME board, the ChiNext board, and the newly launched STAR Market, all have already demonstrated—and will continue to demonstrate—strong momentum in serving the real economy, particularly in driving high-quality development.

According to statistics, as of April 30, 2019, among the 932 listed companies on the SME Board, 715 were recognized as high-tech enterprises at or above the provincial level, and 375 belonged to strategic emerging industries, accounting for 77% and 40%, respectively. Specifically, 192 companies had projects under the National Torch Program, 184 were involved in National Key R&D Programs, 69 received support from the National Innovation Fund, and 68 were designated as national pilot enterprises for innovation.

From the ChiNext perspective, strategic emerging industries account for over 70% of the sector. Among the companies, 34.57% are undertaking projects under the National Torch Program, 11.26% are involved in the National 863 Program, 23.31% have received support from the National Innovation Fund, and they collectively hold 26,000 core patent‑related technologies tied to their principal products.

From a market‑positioning perspective, the STAR Market is designed to address the forefront of global science and technology, serve the main battlefields of the economy, and meet the nation’s major strategic needs. It prioritizes supporting growth‑stage enterprises that align with national strategies, possess critical core technologies, and demonstrate outstanding capabilities in scientific and technological innovation, while also accommodating companies in new models and business formats that enjoy broad market recognition. This positioning ensures that the STAR Market will play a pivotal “accelerator” role in advancing the innovation‑driven development strategy.

Industry insiders note that a new round of scientific and technological revolution and industrial transformation is well underway, while China’s economy has entered a critical phase of transitioning from old to new growth drivers. Whoever can seize the “key link” of scientific and technological innovation will be able to take the lead in achieving high-quality development. The establishment of the STAR Market and the pilot implementation of the registration-based IPO system are intended to further enrich China’s multi-tiered capital market framework, enhance the equity‑financing efficiency of science and technology enterprises, and support the country’s pursuit of high‑quality economic growth.

The Shanghai Stock Exchange has launched on-site supervision of sponsor activities for IPOs on the STAR Market.

To ensure that sponsoring institutions exercise due diligence and earnestly fulfill their responsibilities for scrutinizing and vetting sponsored projects, and to enhance the quality of information disclosure in public offerings on the STAR Market, the Shanghai Stock Exchange recently launched on-site supervisory inspections of sponsorship activities for STAR Market IPOs. The first round of inspections covers two sponsoring institutions, with the Exchange dispatching personnel to the respective locations of these offices.

This on-site supervisory review was conducted after two rounds of audit inquiries had already been issued to the two applicant companies. During the preliminary inquiry phase, the issuers and sponsoring institutions provided insufficiently clear disclosures regarding key matters such as their business models, core technologies, and the advanced nature of those technologies; they also failed to adequately justify the commercial rationale behind transactions with major customers, ensure consistency between contract payment amounts and the scope of services rendered, or align revenue recognition timing with industry peers. Furthermore, the evidence supporting the sponsoring institutions’ opinions was found to be inadequate. The on-site supervision will, through document review, evidence verification, and interviews with relevant personnel, focus on assessing the issues identified in the sponsoring institutions’ oversight of information disclosure for the relevant filing projects, verifying whether adequate checks and balances were in place, and requiring them to provide appropriate explanations or conduct supplementary due diligence. At the same time, it will examine the implementation of the sponsoring institutions’ due diligence obligations, compliance with internal procedures, and the overall quality of their sponsorship work.

The Shanghai Stock Exchange conducts its review of issuance and listing primarily through a question-and-answer process, urging issuers and sponsoring institutions to enhance the quality and completeness of their information disclosure. In addition, on-site supervision of sponsoring institutions serves as a complementary measure to the inquiry-based review under the pilot registration system, driven by practical considerations such as strengthening and solidifying the gatekeeping responsibilities of sponsoring institutions and improving the quality and efficiency of the issuance and listing review process.

The “Implementation Opinions on Establishing the STAR Market at the Shanghai Stock Exchange and Piloting the Registration-Based System,” along with related supporting rules, explicitly stipulate that, during the review process under the pilot registration system, intermediary institutions must fully exercise their role in verification and oversight. As the primary intermediary, sponsoring institutions are required to act with honesty and integrity, exercise due diligence, gain a thorough understanding of the issuer’s operations and risks, and conduct comprehensive checks and verifications of the issuer’s application documents and information disclosure materials. Since the STAR Market began accepting applications on March 18, 35 sponsoring institutions have filed for 127 companies. Despite tight timelines and heavy workloads, most sponsoring institutions have conscientiously fulfilled their duties in accordance with applicable business rules and professional standards. However, some have exhibited shortcomings, such as inadequate due diligence, substandard preparation of offering prospectuses and other documents, and insufficient responses to inquiry requests—issues that directly undermine the quality of issuers’ information disclosure and compromise the efficiency and effectiveness of the review process.

Conducting on-site supervision of sponsoring institutions is an initiative by the Shanghai Stock Exchange aimed at better fulfilling its review responsibilities and more effectively exercising its review functions, in line with the principles underlying the establishment of the STAR Market and the pilot registration system. From the perspective of its objectives and approach, this on-site supervision will be tailored to the specific circumstances of the review inquiry process, remain problem‑oriented, and focus primarily on the sponsoring institutions—distinct from the routine, comprehensive on-site inspections typically conducted on issuers. The current on-site supervision is expected to be completed within approximately two weeks; this period will be counted toward the SSE’s review inquiry timeframe but will not be included in the issuer’s response time. At the same time, the on-site supervision will not impede the progress of the review procedure, nor will it necessitate a suspension of the review. Any issues identified during the on-site supervision will be addressed in accordance with applicable regulations and will be factored into the evaluation of the sponsoring institution’s professional performance.

Consumption will serve as a stabilizing anchor for China’s healthy economic growth.

“The scale of China’s consumption growth is expanding, its structure is upgrading, and its contribution to overall growth is increasing. This trend is very evident and will serve as a key stabilizing force for the country’s steady and healthy economic development going forward,” said Fu Linghui, spokesperson for the National Bureau of Statistics, at a press conference held by the State Council Information Office on June 14.

To foster a robust domestic market and continuously unlock the potential of domestic demand, this year’s Government Work Report calls for steady growth in consumption. Both the May macroeconomic data and a series of recent policy measures indicate that consumption’s role in driving the economy has strengthened further, with substantial growth potential, making it a key stabilizing force for the economy’s steady and healthy expansion going forward.

Market sales growth accelerated in May.

Data show that in May, total retail sales of consumer goods (hereinafter referred to as “total retail sales”) amounted to RMB 3.2956 trillion, up 8.6% year on year, with the growth rate accelerating by 1.4 percentage points compared with the previous month. From January to May, total retail sales reached RMB 16.1332 trillion, up 8.1% year on year, with the growth rate picking up by 0.1 percentage point from January to April.

According to Zhang Min, a statistician with the Department of Trade and Foreign Economic Relations of the National Bureau of Statistics, driven by factors including the extension of the May Day holiday, the shift of holidays, and a rebound in growth rates for certain key commodities, both the nominal and real year-on-year growth rates of total retail sales of consumer goods accelerated in May compared with the previous month, with the consumer goods market generally showing a steady upward trend.

Liu Xuezhi, a senior researcher at the Bank of Communications Financial Research Center, told a reporter from the Financial Times that in May, consumption returned to its normal growth range. Excluding price effects, total retail sales of consumer goods rose 6.4% year on year, with the growth rate accelerating by 1.3 percentage points compared with the previous month.

Notably, the rebound in the automotive consumer market in May stood out as a major bright spot. “In terms of absolute growth, the year-on-year increase in auto sales in May rose by 4.2 percentage points from the previous month to 2.1%, marking the first positive year-on-year growth since May 2018 and boosting the year-on-year growth of retail sales of commodities at enterprises above the designated size by 1.2 percentage points,” said Lu Zhengwei, Chief Economist at Industrial Bank. He added that the early implementation of China VI emission standards accelerated the clearance of China V‑compliant vehicles, thereby stimulating auto consumption.

In May, consumption accelerated, partly due to holiday-related factors. According to comprehensive estimates by the China Tourism Academy, during the 2019 May Day holiday, domestic tourist arrivals nationwide exceeded 190 million, up 13.7% on a comparable basis, while tourism revenue surpassed RMB 110 billion, an increase of 16.1% year over year. Additionally, box office receipts for films released during the May Day period exceeded RMB 1.5 billion, maintaining robust growth.

Better unleash the potential for consumption growth.

In Fu Linghui’s view, four key factors are driving an acceleration in the growth rate of total retail sales: first, both daily necessities and essential living goods are posting growth rates exceeding 10%; second, the growth of upgrade‑oriented products such as cosmetics and telecommunications equipment continues to pick up; third, from January to May, online retail sales of physical goods rose by 21.7%, outpacing overall retail sales growth by more than 10 percentage points; and fourth, automobile sales have turned positive, increasing by 2.1%.

“In fact, the changes in consumption growth are underpinned by significant socio-economic factors,” said Fu Linghui. He noted that the share of final consumption expenditure in GDP has risen for eight consecutive years, driven by rising household incomes, upgrading consumption patterns, improvements in social security, and evolving consumer habits.

Specifically, in the first quarter, the per capita disposable income of national residents grew by 6.8% year on year in real terms, up 0.3 percentage points from the full-year figure last year. In recent years, consumption of services has continued to expand, with rapid growth in spending on tourism, education, health, and culture, leaving substantial room for further development in service‑related consumption. By 2018, universal health insurance had been essentially achieved, pension benefits have risen annually, and reimbursement rates under major‑illness insurance have steadily increased, alleviating households’ concerns about future expenses. Meanwhile, online shopping has boomed in recent years, providing a strong boost to consumption in rural and remote areas. New consumption models such as online education and telemedicine are expanding at a rapid pace, while the maturation of emerging electronic payment methods—like QR‑code payments and NFC—has enhanced convenience and further fueled consumption growth.

Fu Linghui also acknowledged that, at present, China’s consumer supply still lags behind the pace of upgrading consumer demand, resulting in a mismatch. Moving forward, greater investment will be needed to better unlock the potential for consumption growth.

A flurry of new policies to boost consumption has been rolled out.

Since the beginning of this year, a series of new policies to boost consumption have been rolled out in quick succession. For instance, at the start of the year, a relevant official from the Ministry of Commerce stated that measures would be taken across five key areas—enhancing urban consumption, stimulating rural consumption, expanding service‑sector consumption, innovating distribution channels, and improving the consumer environment—to promote steady growth in the consumer market.

In addition, at the end of January, the National Development and Reform Commission and nine other departments jointly issued the “Implementation Plan for Further Optimizing Supply, Promoting Steady Consumption Growth, and Fostering a Robust Domestic Market (2019),” which stipulates that, where conditions permit, local authorities may provide appropriate subsidies to consumers purchasing new‑generation green, smart home appliances that feature long industrial chains, high multiplier effects, and significant synergies in energy conservation and emissions reduction. Subsequently, across the country, a new wave of consumption‑stimulating policies was launched.

“Traditional drivers of consumption growth have weakened significantly. In response, both first-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen, as well as central and western regions like Sichuan, Jiangxi, and Gansu, are rolling out a wide array of measures to boost consumer spending,” said Liu Xuezhi. He added that, judging from this round of policies aimed at stimulating consumption, the focus is on upgrading consumption—through initiatives such as upgrading pedestrian streets, fostering the leisure economy, and exploring new pathways and platforms for growth. Looking at the consumption‑stimulating policies implemented in major core cities and regional hub cities, a clear hallmark is the effort to develop international consumption centers.

To promote the renewal and upgrading of automobiles, home appliances, and consumer electronics, and to encourage the circular use of used products, the National Development and Reform Commission and two other departments jointly issued in early June the “Implementation Plan for Promoting the Renewal and Upgrading of Key Consumer Goods and Facilitating Resource Circulation (2019–2020).” In this regard, on June 17, NDRC spokesperson Meng Wei stated that advancing industrial product upgrades primarily involves guiding enterprises to strengthen R&D investment, carry out technological renovations, and proactively pursue transformation and upgrading, thereby continuously enhancing their capacity to ensure a steady supply of new products and meeting the multi‑tiered consumption needs of urban and rural residents with a diversified range of offerings. Meanwhile, efforts to optimize the consumption environment will focus on two key areas: first, providing guidance to local authorities to remove institutional and systemic barriers that constrain consumption; and second, creating a more favorable consumer climate. As for streamlining the recycling and reuse chain, the emphasis will be on addressing the bottlenecks, pain points, and challenges currently encountered along the entire process—from the collection of end‑of‑life vehicles, home appliances, and consumer electronics, through their circulation and dismantling, to their final disposal—so as to ensure a smoother overall consumption cycle and encourage consumers to replace older products, thereby driving an upgrade in consumption.

In addition to favorable policies from the central government down to local authorities, Liu Xuezhi argues that boosting consumption also requires addressing household debt. Only by curbing the rapid rise in household leverage and easing debt burdens can the potential for consumption growth be unlocked. “The key lies in managing the housing market—preventing further resource allocation to real estate and reducing its financialization.”

Looking ahead, Wang Jingwen, a macro analyst at the China Minsheng Bank Research Institute, told a Financial Times reporter that, with tax and fee cuts gradually taking effect and a new round of measures to boost consumption being rolled out, consumer spending is expected to remain steady in June.

“The contribution of consumption to economic growth is expected to rise further, with final consumption expenditure projected to account for more than 75% of GDP growth in the second quarter. As the economy undergoes structural transformation and consumption‑stimulating policies take effect, consumer spending has the potential to grow steadily in the second half of the year, potentially achieving growth of over 8% this year,” said Liu Xuezhi.

SSE Investor Education | Key Takeaways on New Share Issuances on the STAR Market

1. Compared with the Shanghai Stock Exchange’s Main Board, what differentiated arrangements are in place for the underwriting of new share offerings on the STAR Market?

The capital market is an investment marketplace. To fully leverage its functions of price discovery and its critical roles in resource allocation, asset pricing, and risk mitigation, the STAR Market has adopted a market‑based issuance and underwriting mechanism, whereby the offering price, size, and pace of new share issuances are determined primarily through market‑driven processes. This represents a significant departure from the current main board of the Shanghai Stock Exchange.

2. Can individual investors participate in the pricing of new shares issued on the STAR Market?

The pricing, size, and pace of new share offerings on the STAR Market are officely market‑oriented, with institutional investors playing a central role in the bookbuilding, pricing, and allocation processes. Given that the STAR Market imposes higher requirements on investors’ experience and risk tolerance—unlike the Shanghai Stock Exchange’s main board—the STAR Market has abolished the direct pricing method for new issues and adopted a fully market‑based bookbuilding and pricing approach. For initial public offerings, eligible participants are limited to seven categories of professional institutional investors, including securities offices and fund management companies; individual investors are therefore unable to directly participate in the pricing process.

3. In the pricing stage of STAR Market stock offerings, what key risks should investors be mindful of?

Given that STAR Market companies typically exhibit characteristics such as cutting-edge technology, uncertain prospects, significant earnings volatility, and high risk, there are relatively few comparable peers in the market. As a result, traditional valuation methods may be less applicable, making it more challenging to determine an appropriate offering price. Consequently, STAR Market stocks may face the risk of price volatility after listing.

Furthermore, following the completion of the preliminary bookbuilding phase, if a STAR Market issuer anticipates that its post‑issuance total market capitalization will fail to meet the market capitalization and financial‑metric listing criteria explicitly selected in its prospectus, the offering will be suspended in accordance with applicable regulations.

4. To ensure the rational pricing of new share offerings, what institutional arrangements has the STAR Market put in place?

The relevant institutional arrangements mainly encompass the following aspects:

First, senior executives and core employees are encouraged to participate in strategic allocations by establishing dedicated asset management plans. Such arrangements are relatively common in initial public offerings in mature markets such as Hong Kong and the United States. This mechanism helps convey a positive signal to the market, prompting issuers to balance pricing considerations with the investment interests of senior executives and core employees, thereby ensuring more prudent pricing.

Second, a “co‑investment mechanism” has been introduced for the relevant subsidiaries of sponsoring institutions. This strengthens capital constraints on sponsoring institutions, reinforces their accountability in fulfilling their duties, and ensures that new‑issue pricing strikes an appropriate balance between the interests of issuers and investors, thereby achieving fair and reasonable pricing.

Third, a minimum holding period is mandated. Following the allocation of shares, executive officers and core employees of the issuer are required to hold their allocated shares in a dedicated asset management plan for no less than 12 months, while the sponsor institution’s affiliated subsidiary must hold its allocated shares for no less than 24 months. At the same time, strategic investors are permitted to lend their allotted shares, in accordance with applicable regulations, to China Securities Finance Corporation, thereby increasing secondary-market supply and moderating price volatility.

Fourth, the use of an over-allotment option (also known as the “greenshoe” mechanism) is permitted. During the initial public offering of STAR Market stocks, issuers and lead underwriters may exercise the over‑allotment option, thereby removing the previous cap that capped the number of shares offered in an IPO at 400 million or more, thus helping to stabilize the stock price following the listing of new STAR Market issues.

5. Which investors are eligible to participate in the offline subscription of STAR Market stocks?

In accordance with the Measures for the Registration of Initial Public Offerings on the STAR Market (Trial) and the Implementation Measures for the Issuance and Underwriting of STAR Market Stocks of the Shanghai Stock Exchange (hereinafter referred to as the “Implementation Measures”), investors participating in the offline subscription of STAR Market stocks are those who take part in the offline bookbuilding process and submit valid bids—namely, professional institutional investors such as securities offices, fund management companies, trust companies, financial companies, insurance companies, qualified foreign institutional investors, and private fund managers that engage in the pricing process during an initial public offering.

6. Can individual investors participate in the online subscription of new shares on the STAR Market?

Individual investors who meet the following conditions may participate in the online subscription for STAR Market stock offerings:

First, the investor must meet the suitability requirements for the STAR Market and have already obtained trading access to STAR Market stocks.

Second, applicants must meet the requirement regarding the market value of shares held: individual investors participating in the subscription of new shares on the STAR Market must hold a total market value of no less than RMB 10,000 (inclusive) in non‑restricted A‑shares and non‑restricted depositary receipts listed on the Shanghai Stock Exchange.

7. What special provisions apply to the offline allocation ratio and the proportion of shares reallocated from the offline to the online offering in STAR Market stocks?

The online issuance ratio and the allocation ratio of shares from the offline offering to the online offering for STAR Market stocks differ from those currently applied on the Shanghai Stock Exchange’s main board. Investors should fully familiarize themselves with and pay close attention to the relevant rules during the subscription process.

Specifically, to strengthen constraints on the pricing behavior of offline institutional investors and encourage all types of investors to participate rationally, on the one hand, the regulations explicitly require institutional investors participating in the bookbuilding process to also take part in the offline offering, while increasing the proportion of shares allocated through the offline channel.

On the other hand, the magnitude of the allocation adjustment from the offline offering to the online offering has been reduced, such that the post‑allocation offline share will account for no less than 60%; at the same time, to ensure a minimum subscription ratio for individual and other online investors, the post‑allocation offline share will not exceed 80%.

8. How is the market value of shares held by individual investors calculated when they participate in new share offerings on the STAR Market?

To calculate the market value of shares held by individual investors, the “Detailed Rules for Online Issuance of Shares in Initial Public Offerings on the Shanghai Market (Revised in 2018)” (hereinafter referred to as the “Detailed Rules”) shall be applied. The calculation shall be made on a per‑investor basis, using the average daily market value of holdings over the 20 trading days preceding T‑2 day (where T day is the online subscription date specified in the issuance announcement; the same applies hereinafter). If an investor holds multiple securities accounts, the market values of those accounts shall be combined; however, non‑qualified, dormant, or cancelled securities accounts shall not be included in the calculation.

9. How is the online investor’s subscription quota calculated based on the market value of holdings?

To enhance the inclusiveness of online IPO subscriptions on the STAR Market, the Implementation Measures stipulate that online investors’ subscription entitlements are determined based on their market capitalization: for every RMB 5,000 of market value (or RMB 10,000 in the Shanghai Stock Exchange’s Main Board), one subscription unit is allocated; any amount below RMB 5,000 is not counted toward the subscription quota. Furthermore, each subscription unit corresponds to 500 shares (1,000 shares on the Shanghai Stock Exchange’s Main Board), and the number of shares subscribed must be a multiple of 500, with the maximum subscription quantity capped at one‑thousandth of the initial online offering size and not exceeding 99.9995 million shares; any excess will render the order invalid.

10. Can online investors use multiple securities accounts to participate in the online subscription of STAR Market stocks?

In accordance with the provisions of the Measures for Implementation and the Detailed Rules for Implementation, during the subscription period, online investors shall place orders to subscribe at the issue price by submitting buy orders in the same manner as for purchasing stocks. Once submitted, such orders may not be withdrawn. Furthermore, each investor may use only one securities account to participate in the online subscription for publicly issued shares. If the same investor uses multiple securities accounts to subscribe for the same new share on the STAR Market, or if the same securities account is used repeatedly to subscribe for the same new share on the STAR Market, only the investor’s first subscription shall be deemed valid; all subsequent subscriptions shall be invalid.

11. When online investors participate in the subscription of new shares on the STAR Market, are they required to remit the subscription funds at the time of placing their order?

In accordance with the Measures for the Administration of Securities Issuance and Underwriting, as well as the SSE’s Implementation Measures and Detailed Rules, online investors are not required to remit subscription funds when placing online orders to subscribe to new shares on the STAR Market. Following successful allocation in the new‑share offering, investors must fulfill their fund‑settlement obligations based on the allotment results, ensuring that their funding accounts hold sufficient funds for the new‑share subscription by the end of day T+2.

If an investor’s subscription funds are insufficient, the shortfall shall be deemed a waiver of the subscription, and the investor shall bear all consequences and related legal liabilities arising therefrom. If an investor, within any consecutive 12-month period, is allocated shares on three occasions but fails to remit the full subscription amount on each occasion, such investor shall be prohibited from participating in online subscriptions for new shares, depositary receipts, convertible corporate bonds, and exchangeable corporate bonds for a period of six months (calculated as 180 calendar days, inclusive of the day following the most recent declaration of waiver) from the day following the settlement participant’s last submission of the waiver.

Commercial & Corporate

Apple has also spoken out, opposing…

Apple has urged the Trump administration not to impose additional tariffs of up to 25% on more imports from China, arguing that such a move would diminish its contribution to the U.S. economy.

On June 17, Apple wrote to U.S. Trade Representative Robert Lighthizer, stating that the proposed tariff list covers all of the company’s major products, from iPhones and Mac computers to AirPods, as well as parts and batteries used to repair products made in the United States. The U.S. list also includes Apple’s device accessories, such as displays and keyboards.

Apple, headquartered in Cupertino, California, stated that tariffs would also undermine the company’s global competitiveness. Chinese offices that compete with Apple worldwide have no significant presence in the United States and therefore would not be affected by the proposed tariffs. Apple added that other non-U.S. competitors would likewise remain unaffected, creating an unfavorable competitive landscape for the company.

“We urge you not to impose these tariffs,” Apple wrote in the letter.

As of June 25, hundreds of U.S. companies and trade groups have participated in a seven-day public hearing, primarily opposing the imposition of tariffs on businesses and consumers. Following the rebuttal period, which ends on July 2, the United States may proceed with additional tariff hikes.

Apple states that it is one of the largest job creators in the United States, responsible for more than 2 million jobs. The company also notes that it is the nation’s largest corporate taxpayer. Apple has pledged to make a direct contribution of over $350 billion to the U.S. economy within five years and says it is on track to meet this goal.

The United States and China have stated that their top leaders will meet in Japan next week, seeking to restart trade negotiations after a month-long stalemate.

China’s cities with the sharpest housing-price increases have imposed “heavy-handed” regulatory measures.

After housing prices rose for six consecutive months, Xi’an has raised the threshold for purchase restrictions and expanded their scope.

On June 20, the Xi’an Municipal Housing Administration website issued the “Notice on Further Strengthening Regulation and Management of the Housing Market” (hereinafter referred to as the “Notice”), which stipulates that, effective from the date of issuance, households relocating to Xi’an from outside the city may purchase a home only after having registered their household registration for one year or having continuously paid social insurance (or individual income tax) for 12 months. Meanwhile, non‑Xi’an residents must provide proof of having paid individual income tax or social insurance for at least five years (inclusive) in order to purchase one unit of either new‑build or secondhand housing.

Since the introduction of home‑purchase restrictions in 2017, Xi’an has expanded the scope of these measures from six districts to seven, encompassing Xincheng, Beilin, Lianhu, Yanta, Weiyang, and Bapqiao. Within the restricted areas, both Xi’an‑registered and non‑Xi’an‑registered households are permitted to purchase only one additional residential property. The policy also mandates a suspension of housing sales to enterprises, public institutions, and other organizations throughout all citywide restricted zones.

In the nationwide statistics on new-home prices in 70 cities for May, released by the National Bureau of Statistics on June 18, Xi’an once again led the pack with a year-on-year increase of 24.4%, marking its sixth consecutive month at the top. Its month-on-month rise of 2.0% also ranked first.

Yan Yuejin, Research Director at the E-House Institute Think Tank, believes that a key reason behind Xi’an’s recent real estate control measures is that, in the national ranking of housing price indices for 70 cities, Xi’an has topped the list for six consecutive months in terms of month-on-month growth in new‑home prices. As a city experiencing excessively rapid price increases, Xi’an urgently needs to stabilize its housing market. “The policy was introduced at a very timely moment, in line with expectations, and will help further bolster stability in Xi’an’s real estate market,” he said.

Under the latest policy, homebuyers who have newly registered their household in Xi’an are subject to purchase restrictions. Yan Yuejin believes this measure is intended to prevent speculative real‑estate activity driven by household registration. At its core, the policy continues to ease household‑registration requirements while cracking down on those who exploit residency status for property speculation. Previously, major cities such as Beijing and Shanghai imposed a five‑year social‑insurance requirement for out‑of‑town buyers; Xi’an’s move to tighten these restrictions to the same five‑year threshold represents a notably stringent stance. Moreover, Lintong District in Xi’an, home to the Terracotta Army of Emperor Qin Shi Huang, has seen significant development in recent years—most notably, the construction of a metro line. Property projects along the metro corridor have indeed attracted speculative interest, so imposing controls on Lintong reflects Xi’an’s broader commitment to stabilizing housing prices.

According to the E-House Research Institute’s residential inventory report for 100 cities, in May 2019, Xi’an’s inventory of newly built commercial residential properties declined by 10% year-on-year, making it one of the cities experiencing a rapid drop in inventory. The sales-to‑inventory ratio for new commercial housing stood at 11.9, with an inventory digestion period of less than 12 months.

Zhang Dawei, chief analyst at Centaline Property, believes that, in line with the principles of real‑estate regulation, any rise in housing prices in Xi’an will inevitably prompt a tightening of controls; thus, the introduction of new regulatory measures on June 20 was hardly surprising. It is also possible that other cities where both new‑home and secondhand‑home prices have risen markedly will follow suit with similar policies. Moreover, some cities that have recently seen frenzied demand at property launches may further strengthen their regulatory measures, suggesting that local governments are likely to roll out another wave of intensive real‑estate policies.

How does Weibao, a subsidiary of Tencent Holdings, operate when a single person purchases 15 insurance policies?

The “Yaoshenbao” basic plan, priced at just RMB 1 per month, covers all 12 high‑cost specialty cancer drugs currently excluded from the national medical insurance catalog, providing users with two years of guaranteed access to these medications and related services following a cancer diagnosis. Instead of reimbursement, claims are settled directly through drug dispensing.

Under the “Micro‑Travel” service, passengers who purchase flight delay insurance can access information about their upcoming flights directly within WeChat. If a flight is delayed, they will receive the corresponding compensation without needing to initiate any additional claims procedures.

These products, each with its own standout features in claims processing, coverage terms, and customer service, are offered by WeSure (hereinafter referred to as “WeSure”). On the WeChat Pay app’s nine‑grid interface, under the Insurance Services section, you can find a range of insurance options tailored to different needs—such as “Wei Yi Bao,” a medical‑health insurance that provides deposit‑advance services; “Xiao Qin Bao,” a term life insurance policy that allows you to designate beneficiaries to help prevent disputes; and “Wei Che Xian,” which enables one‑click renewal.

In November 2017, after obtaining a license to operate insurance agency services, Weimin Insurance Agency Co., Ltd. announced the official launch of its Weibao brand. This insurance agency, which is controlled by Tencent, leverages mini-programs to offer a range of internet-based insurance products on the WeChat and QQ platforms.

This new insurance brand, branded with Tencent’s seal and benefiting from a 1-billion‑user traffic dividend, has, after one year on the market, amassed nearly 27 million monthly active users on its mini‑program. On average, each user holds 3.5 policies, with some individuals holding as many as 15.

With favorable winds at their back, many believe Weibao’s rapid growth has been built on the shoulders of giants. Yet a vast traffic pool is a double-edged sword: while it brings abundant opportunities, it also demands exponentially higher standards—especially in the insurance sector, where high professional expertise and strong service orientation are paramount. How, then, is Weibao positioning itself to navigate this landscape?

One step more than payment

Tencent has long been active in the insurance sector, holding stakes in companies such as ZhongAn Online, Yingjie China Life, Hetai Life, and the mutual‑aid insurers Shuidi Huzhu and QingSongChou. Weibao, meanwhile, is Tencent’s first insurance platform to achieve a controlling stake.

Weibao holds a license to conduct insurance agency business. Following the conventional logic, leveraging its traffic advantage to build an open‑platform insurance marketplace is a natural move. By contrast, Weibao positions itself as a “carefully curated, customized” platform.

Liu Jiaming, Executive Director and CEO of Weibao, explained that for each insurance category, Weibao selects two to three top‑tier products and undertakes reverse customization: collaborating with insurers to enhance service offerings and coverage while simplifying the complex terms typically found in traditional policies. This approach gives rise to “new products” on the Weibao platform. From design to launch, each product undergoes an average of six to eight iterations and is refined over 1.5 to two months, ensuring it is scenario‑driven, easy to understand, and highly cost‑effective.

Take the recently launched “Yaoshenbao” as an example: this commercial health insurance product combines coverage with oncology‑related medical services and specialty drug benefits, going beyond mere reimbursement. “There are plenty of medical and critical‑illness insurance products on the market, but for cancer patients, the difficulty of accessing medication is a pressing challenge that coexists with the high cost of treatment,” Liu Jiaming told 21CBR. The original design intent of “Yaoshenbao” was to integrate the pharmaceutical supply chain and address the shortage of available medications.

In practice, “Yaoshenbao” offers two flexible medication‑supply options tailored to each user’s circumstances. For in‑hospital medications, users can submit a claim for reimbursement after the fact; for out‑of‑hospital drugs, the plan partners with the healthcare payment service provider MagiHealth, leveraging its network of more than 700 DTP pharmacies nationwide—pharmacies that can dispense specialty medications directly to patients—to provide pharmacy‑direct payment and either allow users to pick up their prescriptions themselves or arrange home delivery. “We aim to add an extra layer of coverage on top of the most basic social security safety net, achieving ‘Social Security + 1,’ and even ‘Commercial Insurance + 1,’” said Liu Jiaming.

Within just one week of its launch, “Yaoshenbao” has become Weibao’s most popular product, according to Liu Jiaming. He noted that its policy‑conversion rate is the highest among all Weibao offerings—four times that of “Weiyibao”—with an average of 1.37 policies per user and a median insured age of 33.

If commercial insurance is a means of payment, Liu Jiaming hopes that Weibao’s products will go a step further than mere “payment.” “Access to medical care requires not only financial resources but also the ability to secure medical and pharmaceutical services. That’s why, in our Weibao Medical Insurance product, we offer deposit‑advance services for hospitalization and a green‑channel service, ensuring that a specialist outpatient appointment is scheduled within five business days, and that patients can be swiftly admitted to a ward and undergo surgery with a specialist within ten business days. Meanwhile, the drug‑supply guarantee under Yao Shen Bao represents our second attempt in this area.”

Inclusive insurance

Pony Ma, Chairman of the Board and CEO of Tencent, has stated: “Weibao is a key component of Tencent’s ‘Internet Plus Finance’ ecosystem, and we look forward to it becoming a platform for close collaboration within the insurance industry.”

It articulates the two roles that Weibao assumes: serving as an industry connector for the insurance sector and as an enabler of internet‑driven innovation.

Behind each of Weibao’s products lies its role as an integrator that connects upstream and downstream players across the industry chain. The development and design of these products involve partnerships with numerous insurers, including PICC, Ping An Insurance, CPIC, Taikang Online, MetLife, Dadi Insurance, and AXA Tianping. On the distribution front, peer-to-peer platforms such as QingSongBao and QingSongChou have become Weibao’s strategic partners.

Further services have integrated providers across various industries: for example, Yaoshenbao has partnered with MagiHealth to streamline the pharmaceutical supply chain. WeChat users can receive flight information directly within the app thanks to its integration with Hanglv Zongheng. And after purchasing car insurance, policyholders can access a range of vehicle‑related services through Weibao.

In addition, leveraging Tencent’s big data capabilities and social‑media strengths, Weibao has integrated more internet‑centric features into its risk management, product design, and marketing efforts.

Liu Jiaming explained: “Over the past year, we have partnered with Tencent to leverage big data for foundational risk control. Tencent’s extensive user base across diverse scenarios enables us to jointly develop and deploy risk‑management models. By analyzing insurers’ historical data, we’ve identified 60% of cases that involve fraud or fraudulent claims, allowing us to implement robust anti‑fraud measures at the front end.”

On the user side, in addition to leveraging big data for precision marketing, Weibao is also capitalizing on WeChat’s diverse features across various scenarios, striving to make insurance more engaging and accessible.

For example, WeChat Pay has made monthly premium payments more convenient, and its micro‑payments feature has reduced the upfront cost of purchasing insurance, encouraging users to try insurance products. Among the various benefits offered through WeChat Pay’s payment collection services, the top three most popular perks include claiming free inpatient medical coverage from Weibao. Online claims can be settled directly into the user’s WeChat Wallet. Additionally, users can share insurance products with friends via the WeChat mini‑program; according to Weibao data, when users receive a recommendation for a medical insurance policy from a friend, their purchase rate increases by 2.5 times.

In terms of marketing, the “Fitness Incentive” program, integrated with WeChat Sports, awards users a health‑related bonus for walking more than 8,000 steps each day. Since its launch, the initiative has attracted over one million participants, who have collectively earned nearly RMB 8 million in incentives and accumulated a total of 3.5 trillion steps.

At present, Weibao has launched four major product lines: auto insurance, health insurance, life insurance, and travel insurance. “Insurance is not only a serious matter but also an enjoyable one, and we aim to make it more accessible to all. Our top priority is to deliver high‑quality products and experiences, while integrating with more of Tencent’s ecosystems to develop unique insurance offerings,” said Liu Jiaming.

Amid a tone of stability, gain insight into the industry’s emerging shifts—join the Boao 21st Century Real Estate Forum as we explore the future together.

As 2019 draws to a close, the real estate market has maintained the steady trajectory it began last year, characterized by declining sales, stable prices, and robust investment growth. In this new industry cycle, property developers face not only the challenge of expansion but also the imperative of risk mitigation. Where will the real estate sector head in 2019? And under the overarching theme of “stability,” what fresh developments can we expect? These are questions that call for collective reflection across the entire industry. From July 26 to 29, the 19th Annual Conference of the Boao 21st Century Real Estate Forum invites you to Sanya to explore the future together.

On the long journey ahead, slowing down is not only a way to cope with inevitable fatigue but also a means of building up strength for what lies ahead. By the same token, this holds true for China’s economic development—and likewise for the real estate sector within the broader macroeconomic context.

After decades of rapid, breakneck growth, China’s economy has entered a phase of structural transformation and recalibration. Accordingly, the real estate sector has bid farewell to its “golden age” and is gradually shifting from an incremental‑growth market to a stock‑based one. According to data released by the Chinese Academy of Social Sciences, nearly 20% of Chinese households own two or more homes, with per capita floor space standing at 50 square meters, indicating that the housing market has approached its peak.

For a long time, we have regarded the real estate sector as a stabilizing anchor for economic development. But as we reach this juncture, having bid farewell to the heady, “golden-age” phase of rapid expansion, can real estate sustain growth? This is a question that both regulators and the industry must confront together.

In 2018, the real estate sector endured a highly volatile year: prices and transaction volumes surged in the first half, only to slump sharply in the second half. Even in the first few months of 2019, market fluctuations remained the norm. At the same time, it is evident that regulators have been steadily tightening real estate policies to ensure the industry’s healthy and stable development, while continuously seeking long-term mechanisms to foster a steady and sustainable property market.

In fact, since the Ministry of Housing and Urban–Rural Development put forward the “three‑stability” policy—stabilizing land prices, housing prices, and market expectations—at the National Conference on Housing and Urban–Rural Development late last year, the overarching tone of real estate policy has been officely set on stability. At the beginning of this year, both local government work reports presented at the two‑session meetings across the country and the subsequent national government work report underscored this principle, elevating the goal of ensuring the stable development of the real estate market to an unprecedented level.

Against the backdrop of a global economic slowdown and escalating U.S.-China trade tensions, coupled with tightening regulatory oversight, market sentiment toward the housing market in 2019 has generally been pessimistic. However, at present, the real estate sector’s performance has proven far less bleak than anticipated, with property investment even outpacing market expectations. According to the latest data released by the National Bureau of Statistics on June 14, cumulative real estate development investment from January to May totaled RMB 4.6075 trillion, up 11.2% year on year. This growth rate represents a 1.7 percentage-point acceleration compared with the full-year figure for 2018, though it was 0.7 percentage points lower than the January–April pace.

Why is real estate investment so robust at present? According to an analysis by the Evergrande Research Institute, leading indicators suggest that the peak in land acquisitions in 2018 has now entered the stages of project commencement and construction, thereby bolstering investment. From both the physical‑output and price perspectives, accelerated construction activity has significantly boosted real investment, while the price factor’s upward pull on investment has weakened somewhat. In terms of cost structure, faster construction combined with stabilizing unit construction‑and‑installation costs has driven a sharper increase in such expenditures, even as the growth rate of land‑related spending remains relatively strong. At the same time, the institute notes that the turning point for real estate investment has arrived, projecting that cumulative monthly investment growth will decline by 0.6 to 0.8 percentage points going forward, with full‑year investment growth expected to range between 7% and 8%.

It is difficult to accurately quantify the specific indicators of the real estate market, and forecasts serve only as a rough guide; however, given the clear mandates of prudent regulatory policies, the overall direction of the real estate sector remains discernible.

Moreover, we should clearly recognize that the real estate sector has already stepped out of its comfort zone and will face greater uncertainty going forward. In this new industry cycle, property developers are confronted not only with growth challenges but also with the imperative of risk mitigation. Even so, this does not alter the real estate industry’s pivotal role as a stabilizing anchor.

We believe that, as one of the most important engines of China’s economic growth since the beginning of the 21st century, the real estate sector, in tandem with China’s economic transformation and structural shift, is poised to enter a new stage of development: expanding its scope for growth, pursuing high-quality, balanced growth, and charting a path toward stable, sustainable development.

With the midpoint of 2019 just around the corner, a review of the past six months reveals that China’s real estate market has maintained the steady trajectory it has followed since last year, exhibiting new trends such as declining sales, stable prices, and robust investment growth. So, where will the real estate sector head in the second half of the year? And under the overarching policy tone of “stability,” what new developments can we expect to see in the industry? These are questions that call for collective discussion across the entire sector.

In July 2019, in Sanya, Hainan, the Boao 21st Century Real Estate Forum invites you to explore the future together.

Unleashing the Power of the Market: A Major White Paper on Urban Renewal Released

On June 19, 2019, the “International Forum on Urban Renewal in the Guangdong–Hong Kong–Macao Greater Bay Area” was grandly held in Shenzhen. A distinguished gathering of domestic and international experts and scholars in the field of urban renewal convened to explore innovative approaches and future trends in bay‑area urban regeneration from a global development perspective. During the event, Ms. Huang Yu, CEO of CIH Holdings and Executive Deputy Dean of the China Index Academy, unveiled the “White Paper on Excellence in Urban Renewal.” This comprehensive publication was jointly developed by the China Index Academy and Excellence Group, with the latter contributing exemplary case studies and its deep, long‑term expertise in urban renewal.

Urban renewal has become a key driver of China’s new‑type urbanization, shouldering the significant responsibility of improving people’s livelihoods and aligning with the national strategy for high‑quality urban development. In particular, urban renewal in the Guangdong–Hong Kong–Macao Greater Bay Area will accelerate regional integration and offer important lessons for urban renewal nationwide. With its high level of urbanization and rapid economic growth, the Greater Bay Area faces a more pronounced mismatch between internal urban functions and the pace of external economic development than other regions. Urban renewal thus represents the optimal pathway for the Bay Area to achieve coordinated planning, upgrade industries, and strengthen its economy: first, by fostering integrated planning and advancing regional integration; second, by promoting intensive land use and bolstering shared economic resilience; and third, by spurring industrial upgrading and facilitating synergistic industrial development. As China’s highest‑tier urban agglomeration, the Greater Bay Area is poised to evolve into a world‑class metropolitan region. Raising the overall standard of urban renewal in the Bay Area will further enhance the quality of regional urbanization and support the country’s pursuit of high‑level, new‑type urbanization.

It is against this broader backdrop that the China Index Academy, through in-depth research into domestic and international theories on urban renewal and by drawing on the practical experience and models of market players in Shenzhen—the forefront of urban renewal in the Guangdong–Hong Kong–Macao Greater Bay Area—has systematically compiled its findings into a specialized research report. The aim is to provide valuable insights for the industry’s development and to help all stakeholders in urban renewal more clearly define their future directions and roles. As another major contribution from the China Index Academy in the field of urban‑renewal research, this white paper presents the following key contents:

First, the report identifies urban renewal as an effective pathway to address the internal imbalances in urbanization and provides a clear definition of its core concepts. At present, China’s urbanization faces significant internal disparities; urban renewal is thus tasked with resolving metropolitan challenges and fulfilling the historic mission of empowering modern cities by fostering coordinated planning, promoting intensive land use, driving industrial upgrading, stimulating production and consumption, enhancing residential quality, addressing infrastructure gaps, advancing low‑carbon and ecological development, and building distinctive urban identities. Furthermore, after systematically reviewing existing scholarly and industry‑wide insights both domestically and internationally, the white paper offers a precise delineation of the essence of urban renewal, clarifying key elements such as the actors involved, the methods employed, and the objectives pursued.

Second, a systematic review has identified and summarized the “six major challenges” of urban renewal. At this stage, urban renewal projects commonly grapple with six key pain points: long project cycles, large-scale undertakings, complex administrative procedures, difficult relocation and demolition, stringent technical requirements, and challenging operational management. As the underlying philosophy of urban renewal becomes increasingly forward‑looking, its scope more comprehensive, efficiency demands higher, and capital‑intensive pressures mount, the capabilities of implementing entities must become correspondingly more multidisciplinary. This calls for close collaboration between government and enterprises, leveraging complementary strengths to overcome obstacles and achieve breakthroughs.

Third, we validate the effectiveness of market‑driven operations and public–enterprise collaborative renewal through case studies. How does this renewal model—characterized by market‑oriented mechanisms and public–enterprise coordination—successfully address the challenges it faces? In Shenzhen, where marketization is most advanced, we selected three renewal projects managed by Excellence Group as our research subjects. The analysis reveals that a collaborative, efficient, and mutually beneficial market‑based approach has successfully balanced diverse objectives, including the public interest, industrial upgrading, resident satisfaction, and corporate development.

Fourth, we should help cities establish “standards for identifying outstanding urban renewal service providers.” With public interests effectively realized and projects subject to robust oversight, the market will play an even more pivotal role in urban renewal, fostering collaboration between government and enterprises and sustaining momentum for urban transformation. Under this trend, leading urban renewal operators will assume greater responsibility for securing funding and executing projects. Consequently, ensuring the successful implementation of urban renewal hinges on identifying market‑driven offices that are both committed to long-term renewal and possess exceptional capabilities, thereby strengthening public–private cooperation. We contend that top-tier urban renewal operators must cultivate a robust competency framework across six key domains: strategic planning and positioning, policy analysis, demolition and relocation management, design and construction, investment promotion and operations, and financial sustainability. Moreover, they should develop a coherent value system—encompassing organizational strength, cultural resilience, and brand reputation—that underpins their approach to urban renewal, guides ethical conduct, and builds public trust. By forging an urban renewal capability framework that combines tangible hard power with intangible soft power, these operators can collectively address both certainties and uncertainties throughout the renewal process. Only then can the advantages of market‑based urban renewal be fully leveraged, enabling efficient, high‑quality upgrades to urban functions and breakthroughs in industrial transformation.

At present, urban renewal in China is advancing rapidly, driven by policy support, capital investment, and growing demand. Looking ahead, as the scope for renewal continues to expand, both local governments and urban‑renewal service providers will encounter significant opportunities. In light of this, we aim to leverage the “White Paper on Excellence in Urban Renewal” to document, through text and data, the cutting edge of China’s urban‑renewal landscape, distill time‑tested theoretical frameworks and exemplary corporate practices, and ensure that successful models achieve broader impact while further enhancing residents’ satisfaction.

Taxation TAXATATION

Small and micro enterprises, take note! If you’re just getting started, these three tax incentives can help you.

In recent years, as the dynamism of entrepreneurship in driving employment has continued to emerge, the role of innovation and entrepreneurship in supporting high-quality employment has become increasingly evident. This vitality stems, on the one hand, from the enterprising spirit across all sectors of society, and, on the other, from the growing effectiveness of tax‑reduction and fee‑cutting policies in fostering “mass entrepreneurship and innovation.” To better leverage taxation in boosting mass entrepreneurship and widespread innovation, the State Taxation Administration released a revised edition of the “Tax Preferential Policy Guide for Mass Entrepreneurship and Innovation” during the National “Mass Entrepreneurship and Innovation” Week in June 2019. If you’re just starting out, be sure to familiarize yourself with the following three tax incentives designed specifically for small and micro enterprises in their early stages.

Small-scale VAT taxpayers whose sales do not exceed the threshold are exempt from VAT.

[Eligible Subject]

Small-scale VAT taxpayer

[Offer Details]

From January 1, 2019, to December 31, 2021, value-added tax is exempted for small-scale VAT taxpayers whose monthly sales do not exceed RMB 100,000 (or, for those with a quarterly tax period, whose quarterly sales do not exceed RMB 300,000, inclusive of these amounts; the same applies hereinafter).

[Eligibility Requirements]

1. This preferential policy applies to small-scale VAT taxpayers, including enterprises and non‑enterprise entities, individual business households, and other individuals.

2. For small-scale taxpayers, if the aggregate monthly sales amount from taxable VAT‑subject sales exceeds RMB 100,000, but after deducting the sales revenue from real estate transactions in the current period, the remaining amount does not exceed RMB 100,000 (or, for taxpayers with a quarterly tax period, the quarterly sales amount does not exceed RMB 300,000), then the sales revenue derived from goods, labor services, services, and intangible assets is exempt from VAT.

[Policy Basis]

1. Article 1 of the “Notice of the Ministry of Finance and the State Taxation Administration on Implementing the Universal Tax Relief Policy for Small and Micro Enterprises” (Cai Shui [2019] No. 13)

2. “Announcement of the State Taxation Administration on Relevant Administration and Collection Issues Concerning the Policy of Exempting Small-Scale Taxpayers from Value-Added Tax” (State Taxation Administration Announcement No. 4 of 2019)

2. Small and low-profit enterprises are exempted from or receive reductions in corporate income tax.

[Eligible Subject]

Small and micro-profit enterprises

[Offer Details]

From January 1, 2019, to December 31, 2021, for small and low-profit enterprises, the portion of annual taxable income not exceeding RMB 1 million shall be taxed at a reduced rate of 25% when calculating taxable income, with corporate income tax payable at a rate of 20%; for the portion of annual taxable income exceeding RMB 1 million but not exceeding RMB 3 million, it shall be taxed at a reduced rate of 50% when calculating taxable income, with corporate income tax payable at a rate of 20%.

[Eligibility Requirements]

Small and micro-profit enterprises are those engaged in industries that are neither restricted nor prohibited by the state, and that simultaneously meet all three of the following criteria: an annual taxable income not exceeding RMB 3 million, a number of employees not exceeding 300, and total assets not exceeding RMB 50 million.

The number of employees includes both the workforce with formal employment contracts and the workers employed through labor dispatch agencies. The indicators for the number of employees and total assets shall be determined based on the annual quarterly average of the enterprise. The specific calculation formulas are as follows:

Quarterly average = (Beginning-of-quarter value + End-of-quarter value) ÷ 2

Annual quarterly average = Sum of the quarterly averages for the year ÷ 4

For entities that commence business operations or cease business activities during the year, the relevant indicators shall be determined based on their actual period of operation as a single tax year.

[Policy Basis]

1. Article 28, Paragraph 1 of the Enterprise Income Tax Law of the People’s Republic of China

2. Article 92 of the Implementing Regulations of the Enterprise Income Tax Law of the People’s Republic of China

3. Article 2 of the “Notice of the Ministry of Finance and the State Taxation Administration on Implementing Universal Tax Relief Policies for Small and Micro Enterprises” (Cai Shui [2019] No. 13)

4. “Announcement of the State Taxation Administration on Issues Concerning the Implementation of the Universal Income Tax Relief Policy for Small and Low-Profit Enterprises” (State Taxation Administration Announcement No. 2 of 2019)

3. VAT small-scale taxpayers are exempted from or receive reductions on resource tax and five other taxes, as well as two fees.

[Eligible Subject]

Small-scale VAT taxpayer

[Offer Details]

From January 1, 2019, to December 31, 2021, the people’s governments of provinces, autonomous regions, and municipalities directly under the central government, in accordance with local conditions and macroeconomic regulation needs, may reduce by up to 50% the tax rates for resource tax, urban maintenance and construction tax, property tax, urban land use tax, stamp duty (excluding stamp duty on securities transactions), cultivated land occupation tax, as well as the education surcharge and local education surcharge, applicable to small-scale value-added taxpayers.

Small-scale VAT taxpayers who have already legally benefited from preferential policies on resource tax, urban maintenance and construction tax, property tax, urban land use tax, stamp tax, farmland occupation tax, education surcharge, local education surcharge, and other related taxes may cumulatively enjoy this additional preferential policy.

[Eligibility Requirements]

Small-scale VAT taxpayers are entitled to tax incentives within the tax rate range determined by the people’s governments of each province, autonomous region, and municipality directly under the central government, based on local conditions and macroeconomic regulation needs.

[Policy Basis]

1. Articles 3 and 4 of the “Notice of the Ministry of Finance and the State Taxation Administration on Implementing Universal Tax Relief Measures for Small and Micro Enterprises” (Cai Shui [2019] No. 13)

2. “Announcement of the State Taxation Administration on Issues Related to the Administration of Local Taxes and Relevant Surcharges Reduction Policies for Small-Scale VAT Payers” (State Taxation Administration Announcement No. 5 of 2019)

Tax and fee reductions help enterprises achieve “smart manufacturing upgrades.”

Since the beginning of this year, the state has introduced a series of tax and fee reduction policies to provide robust support for business development. Riding on the momentum of these measures, many manufacturing offices have begun exploring new models and pathways for transformation and upgrading, accelerating their move toward intelligent manufacturing and injecting fresh impetus into high-quality economic growth.

Liaoning: Boosting Confidence, Adding Momentum—Tax Cuts and Fee Reductions Spark a “Chemical Reaction”

“Tax and fee reductions” cut taxes and fees, while boosting economic vitality. The RMB 2 trillion “tax and fee reduction” package, coupled with continuously strengthened tax‑incentive policies, has injected endogenous momentum into the real economy’s transformation and development. This has not only delivered tangible benefits to large and medium‑sized enterprises but also brought concrete financial gains to small and micro businesses, leaving them with a strong sense of fulfillment.

“For our company, when it comes to technological or mass‑production bottlenecks, we can allocate substantial human resources and R&D funding to tackle these challenges head‑on.” Shenyang Jingrui CNC Machine Tool Co., Ltd. is a high‑tech enterprise specializing in the research, development, and production of CNC machine tools. In the company’s R&D laboratory, Chairman Rong Zhijun is planning to increase investment in new product development, buoyed by the financial benefits brought by a series of tax incentives, such as the additional deduction for R&D expenses. “We reinvest the tax savings and cost reductions into expanding our facilities and advancing product R&D, thereby consolidating our R&D achievements. This allows us to bring our innovations to market, turning them into productive capacity and capital, and ultimately creating greater value.”

The increased rate of additional tax deductions for R&D expenses, the reduction in the VAT rate, and the implementation of a new round of larger‑scale tax and fee cuts have delivered a substantial benefit to high‑tech enterprises like Shenyang Jingrui CNC Machine Tool. To illustrate just how significant this boost is, Rong Zhijun ran some numbers: “This year, our company will see cost reductions of approximately RMB 1.2 million. Compared with the previous situation, that translates into an additional roughly 20% in R&D investment. As a result, we expect our sales revenue to exceed RMB 70 million this year, and our profits will increase substantially as well.”

Value-added tax is an indirect tax that can be passed on to consumers. With the VAT rate reduced from 16% to 13%, consumers’ purchasing costs have also declined. This effect has been particularly pronounced for high‑priced commodities and jewelry; as more people buy these items, businesses naturally benefit.

Qu Guogang, general manager of Liaoning Zhongjin Ouya Jewelry Group, said: “For us, the three-percentage-point reduction in the VAT rate is truly significant. We will pass these tax savings on to consumers at the retail level, benefiting a broad customer base and enabling them to purchase more affordable, better‑priced products.”

At present, Shenyang City has explicitly implemented a 50% maximum reduction in the levies of resource tax, urban construction and maintenance tax, property tax, urban land use tax, stamp duty (excluding securities transaction stamp duty), farmland occupation tax, education surcharge, and local education surcharge for small and micro enterprises—collectively referred to as the “six taxes and two fees.” As of the end of the May tax collection period, 143,500 VAT‑small‑scale taxpayers across the city benefited from this preferential policy, with total tax and fee reductions amounting to RMB 161 million.

Jiangsu: Tax and fee cuts give a boost to the manufacturing cluster in southern Jiangsu.

The Southern Jiangsu region is the birthplace of China’s modern national industry and one of the world’s leading industrial clusters, characterized by a high concentration of manufacturing factors, a well‑structured economy, close inter‑office collaboration, resource efficiency, and distinct competitive advantages. Since the beginning of this year, larger‑scale tax and fee reduction policies have been progressively implemented in Southern Jiangsu, further stimulating and unleashing market vitality. In recent days, tax authorities have conducted surveys of numerous manufacturing enterprises in the region to assess how these expanded measures are being put into practice.

Riding the “spring breeze” of tax and fee reductions, the cities of southern Jiangsu within the Yangtze River Delta metropolitan area are actively exploring new models and pathways for the transformation and upgrading of their manufacturing sectors in the context of the new normal, steadily advancing from “Made in Southern Jiangsu” to “Smart Manufacturing in Southern Jiangsu.”

Step into the “Innovation Robot Museum” created by Ecovacs Robotics Co., Ltd., where the world-renowned robotic performer “Sanbao” greets visitors in multiple languages, and a variety of robots in their respective pavilions showcase how digital technology is making life more convenient.

Before becoming “Ecovacs,” it was a vacuum‑cleaner OEM based in Wuzhong District, Suzhou. From traditional vacuum‑cleaner manufacturing to the development of robotic floor‑cleaning devices, then to a full lineup of household robots, and finally to a strategy of robotization, digitalization, and global expansion, Ecovacs has steadily risen through the ranks to achieve remarkable growth.

A finance executive at the company stated: “This large-scale tax and fee reduction policy underscores the government’s unwavering commitment to supporting technological innovation and the real economy, giving us greater courage and confidence to expand and grow.” According to available information, in 2018 alone, the Ecovacs Group invested RMB 205 million in R&D, accounting for 3.6% of its sales revenue. As a leading enterprise with independent pricing authority, the recent adjustment to the value-added tax rate will deliver another round of benefits to Ecovacs; this tax‑reform dividend, amounting to tens of millions of yuan, will provide substantial funding for the company’s independent research and development efforts.

Even traditional high‑energy‑consumption enterprises are embracing a green transformation amid this round of tax and fee reductions. Nanjing Steam Turbine & Electric Machinery (Group) Co., Ltd. is gradually shifting from coal‑fired and thermal power generation to cleaner, more efficient energy sources such as natural gas.

“During this critical period of corporate transformation, the various tax and fee reduction measures introduced by the state have undoubtedly provided us with substantial support and encouragement,” said Shen Qun, the company’s head. This year, the reduction in the value-added tax rate and the new policy on the “six taxes and two fees” have delivered tangible tax benefits, enabling the company to increase investment in R&D for core components and in environmentally friendly equipment. “At present, the proportion of coal consumed in our production of steam turbine units continues to decline.”

Wuxi Weifu High-Tech Group Co., Ltd., also undergoing an industry‑wide transformation, is a leading domestic enterprise specializing in core components for the automotive (powertrain) sector. According to Zhao Wei, Engineering Department Manager of the company’s Automotive Components Division, the office is currently navigating the painful transition period of rapidly phasing out legacy products while new‑product development has yet to yield results. The imbalance between declining revenues and rising expenses has placed considerable pressure on the company.

Zhao Wei stated that, at this critical juncture, the state’s intensive rollout of tax and fee reduction policies has come as a much‑needed relief. This round of VAT reform is expected to deliver tax reductions and exemptions totaling RMB 30.2 million for enterprises over the course of the year. Meanwhile, the company is ramping up R&D investment, strategically positioning itself in new‑energy vehicle drive technologies, and bolstering its capabilities in hydrogen fuel cell and intelligent connected vehicle technologies.

Zhejiang: Tax and fee reductions bolster enterprises’ confidence in independent R&D.

Recently, the Ministry of Industry and Information Technology officially released the first national list of “Specialized, Refined, Distinctive, and Innovative ‘Little Giant’” enterprises. This list includes a number of domestic companies that demonstrate strong economic performance, robust innovation capabilities, and high levels of specialized R&D. Among them is a brand from Quzhou—Zhejiang Tianji Instrument Transformer Co., Ltd.

From an unassuming school‑run factory to one of China’s largest manufacturers of instrument transformers, Zhejiang Tianji has spent three decades meticulously refining this small yet critical component. By focusing relentlessly on a specialized niche and boldly investing in R&D and technological upgrades, the company has unlocked the secret to its success as a “little giant.”

According to Zhu Shunfeng, General Manager of Zhejiang Tianji Instrument Transformer Co., Ltd., the company allocates more than 4% of its annual sales revenue to R&D, even during financially challenging years. “Technological innovation is our core competitive advantage,” Zhu Shunfeng stated. “Research and development is a virtuous cycle: the more we invest, the greater the returns.”

What are the benefits? Zhu Jiangming, head of finance at Zhejiang Tianji, opened the financial statements and ran some numbers on the spot: As a nationally prioritized high-tech enterprise, Tianji qualifies for a reduced corporate income tax rate of 15%, resulting in a tax reduction of RMB 4 million; research and development expenses incurred in developing new technologies, products, and processes are eligible for an additional 75% deduction, yielding another RMB 2.8875 million in tax savings; and wages paid to employees with disabilities are fully deductible, generating an additional RMB 900,000 in tax relief. On the corporate income tax front alone, Tianji realized tax reductions totaling RMB 7.8 million in 2018. When factoring in the impact of VAT reductions, social security contributions, and other tax‑and‑fee‑cutting measures, Zhejiang Tianji’s overall tax burden was eased by more than RMB 17 million.

“Favorable tax policies create a stable funding environment and shape more long-term R&D and innovation strategies,” said Zhu Shunfeng. Just before the New Year, Zhejiang Tianji invested over 50 million yuan to launch the “Zhejiang Tianji Intelligent Factory Based on Industrial Big Data and the Internet” project, aiming to complete the construction of an intelligent factory within three years and strive to become a major industry leader in the manufacturing sector at an early date.

Like Zhejiang Tianji, Zhejiang Hechuan Technology Co., Ltd., located in the Longyou County Economic Development Zone of Quzhou City, has also benefited from tax incentives on its path of innovation. Since its founding in 2011, Hechuan Technology has, in just eight years, established a comprehensive intellectual property management system, securing more than 70 independently developed IP rights. It ranks among the leading domestic brands and operates a nationwide network of 200 distributors and over 2,600 end‑user customers.

“As a flagship of technology‑intensive enterprises, Hechuan Technology finds that scientific research and innovation are its core driving force,” said Fang Zhizhong, an official at the Longyou County Tax Bureau, praising the company’s path of innovation. “Under the latest policy on additional tax deductions for R&D expenses of high‑tech enterprises, Hechuan Technology was able to reduce its corporate income tax by a substantial 11.4156 million yuan in 2018 alone. This sizable tax relief has been reinvested in the company’s R&D efforts, helping technology‑driven offices embark on a virtuous cycle.”

In the first year of institutional reform: “Four-in-One” initiatives help reduce burdens on taxpayers and tax authorities.

On June 15, 2018, provincial-level new tax authorities were officially established and unveiled in a centralized, unified ceremony. Over the past year since their launch, in response to emerging trends—such as the steady increase in the number of taxpayers, particularly individuals, and the growing diversification, cross-regional expansion, and internationalization of business operations—the tax authorities have continuously streamlined the functions of tax institutions and optimized resource allocation, thereby enhancing the efficiency of tax collection and administration.

Guangdong: Joining Forces to Reduce the Burden on Taxpayers and Administrators

— 893 items of reporting materials have been eliminated, and 555 tax‑related (fee‑related) services across seven categories now require “at most one visit.”

— 477 tax-related services can be handled entirely online, and 1,134 tax‑related (fee‑related) transactions can be processed through the electronic tax bureau.

— Starting April 23, 2019, the “one‑stop, no‑in‑person‑visit” pilot for tax‑related services was launched in the Hengqin New Area. Since its implementation, 110,500 such transactions have been processed through the Electronic Tax Bureau and the V‑Tax platform, with a 100% online completion rate for real‑name authentication procedures involving foreign individuals.

— Starting May 1, 2019, small-scale taxpayers have been able to file their returns with a single click; in that month, nearly 3,000 such taxpayers filed and paid their taxes through the electronic tax bureau. Beginning this June, the one-click filing feature has been extended to all VAT taxpayers across all filing channels.

A series of data points vividly illustrates the Guangdong Provincial Tax Service Bureau of the State Taxation Administration’s “integrated and streamlined” approach to tax collection and administration: by consolidating and optimizing the administrative resources of the former national and local tax authorities, it has made it easier and less burdensome for taxpayers and payers to handle tax and fee-related matters.

The large number of VAT return forms and their relatively complex filling rules pose certain challenges for taxpayers, leading to errors and omissions in completing the relevant fields. “In response to taxpayers’ filing needs, we have launched a one-click filing feature that automatically retrieves invoice data, generates reports, and provides automated monitoring of preferential‑policy filings for all VAT taxpayers, thereby reducing the burden of form completion and enhancing the quality of tax returns,” said Zhang Gang, an official with the Goods and Services Tax Division of the Guangdong Provincial Tax Service Bureau.

A paper authored by PwC China’s Tax Team highlights that the merger of the national and local tax authorities has brought comprehensive benefits and conveniences. Following the consolidation, the one-stop tax administration system has further streamlined tax‑filing procedures and reduced processing time. Taxpayers no longer need to visit both the national and local tax agencies separately or submit duplicate tax documents; many tax‑related matters, including deregistration, can now be completed with a single visit.

“Now we only have to deal with a single tax inspection bureau, making it much easier to submit documents and reconcile data—no more running between different departments or providing explanations,” said Ms. Chen, an accountant at a property management company in Qingyuan City.

The merger of tax authorities, while streamlining operations and delivering relief, is also increasingly demonstrating the professionalizing benefits of this structural reform.

At the end of July 2018, following the issuance of the Guangdong Provincial Tax Service’s Provisional Regulations on the “Three Determinations” for provincial tax authorities, newly established divisions—including the Tax and Economic Analysis Division, the Tax Big Data and Risk Management Bureau, and the Taxpayer Service Center (Tax Publicity Center)—made their debut and promptly commenced operations.

According to Yuan Hongbing, Director of the Tax and Economic Analysis Division of the Guangdong Provincial Tax Service Bureau, following the institutional reform, the Tax and Economic Analysis Division has established a coordinated mechanism for tax‑economic analysis—characterized by complementary strengths and collaborative synergy—with another newly created unit under the provincial tax bureau, the Big Data and Risk Management Bureau, as well as with the Revenue Planning and Accounting Division, the Information Center, and other departments. This mechanism transforms raw data into a diverse array of analytical outputs, thereby further unlocking the value of tax data as a decision‑making reference for economic and social development.

“This is the first agency in the tax system to seamlessly integrate IT‑industry terminology into its name. ‘Big data’ does not merely refer to the sheer volume of data; it also encompasses information technologies such as cloud computing. The establishment of the Big Data and Risk Management Bureau underscores our commitment to leveraging digital tools for tax‑risk prevention and control,” said Zhang Xiaoming, Director of the Big Data and Risk Management Bureau of the Guangdong Provincial Tax Service. He added that the essence of risk management lies in using effective governance to bring enterprises’ production and operational conditions—within the scope of tax compliance—closer to reality. Only by strengthening the risk‑prevention and control framework can the tax authorities further streamline administration, delegate power, enhance taxpayers’ sense of gain, and foster a fairer, higher‑quality business environment.

Shandong: Going All Out to Serve Taxpayers

“In the past, we had to go through two different doors to get one thing done; now, we can handle everything in a single visit. This shift is what we care about most and what we need most. Over the past year, we have truly felt the tax authorities’ progress and dedication in providing taxpayer services,” said Yang Jinjun, Chairman of Shandong Gongda Information Technology Co., Ltd.

Following the merger of tax authorities, taxpayers’ primary concern is tax‑administration efficiency. Ensuring that every transaction is processed in the shortest possible time and that every query receives an immediate response is a critical priority for the newly restructured tax agency.

Wang Xianling, Party Secretary and Director of the Shandong Provincial Tax Service Bureau of the State Taxation Administration, stated that, in order to effectively enhance taxpayer services following the institutional merger, the bureau has leveraged its ample post-reform taxpayer service resources to optimize and upgrade its service measures. It has launched a range of mechanisms, including direct access to tax services with streamlined procedures, staggered appointment‑based filing, and rapid responses to tax‑related requests. In particular, after the intensive rollout this year of tax‑reduction and fee‑cut policies—such as the six special additional deductions for individual income tax, universal tax incentives for small and micro enterprises, and the deepening of VAT reform—the bureau consolidated its existing taxpayer service resources, established multiple expert advisory teams, provided “one‑on‑one” personalized policy guidance to key enterprises, and upgraded its outreach and training formats by launching online courses, thereby inaugurating a new hybrid model of on‑site plus online publicity and support.

On May 31, the first session of the Shandong Provincial Tax Service Bureau’s online live-streaming series on tax and fee reduction publicity and guidance officially commenced. On the day of the launch, more than 40,000 viewers tuned in.

“Online live streaming is extremely practical. Our tax‑filing staff can participate in real time, watch the broadcast from the office, or access on‑demand recordings at any time. If they encounter any questions or challenges, they can also interact with tax officials online,” said Zhao Xiaotao, a finance professional at Shandong Yongsheng Rubber Group Co., Ltd., praising the tax authorities’ newly launched online live‑streaming initiative.

Meanwhile, the Shandong Provincial Tax Service has integrated and upgraded its information technology resources. Since the institutional merger, it swiftly completed the consolidation of the Shandong Provincial Electronic Tax Bureau and has since carried out nine major system upgrades, implementing 19 policy‑related functional adjustments. On April 1 this year, the bureau officially launched the consolidated version of the Golden Tax Project Phase III tax administration system, achieving the optimization, integration, and unification of two separate Phase III systems. By merging two databases into one, consolidating two taxpayer accounts into a single account, and streamlining two sets of procedures into a single workflow, the reform fundamentally resolved the issue of taxpayers having to interact with a single tax authority while navigating two distinct systems, thereby significantly enhancing tax‑administration efficiency.

The optimization and upgrading of service measures have delivered tangible satisfaction and a sense of gain to taxpayers and payers. In March this year, the Shandong Provincial Government released the province-wide business environment assessment report, in which the tax authorities scored 98.99 points on the “tax compliance” indicator—9.31 points higher than the provincial average—and ranked first among the six indicators evaluated. In the 2018 National Taxpayer Satisfaction Survey, Shandong Province’s overall score placed it third among all provincial-level entities.

How is the provisional tax payment period determined for enterprises that are classified as small and low-profit enterprises during the year?

Q: If an enterprise is determined to be a small, low-profit enterprise mid-year, how is its provisional tax payment period determined?

Answer: To advance tax‑administration facilitation reforms, starting in April 2016, small and low‑profit enterprises have been required to make quarterly estimated corporate income tax payments. Accordingly, if an enterprise that previously paid corporate income tax on a monthly basis is determined, during the April, July, or October filing periods—mid‑year—to qualify as a small and low‑profit enterprise, its tax payment schedule will, beginning with the next filing period, be uniformly adjusted to quarterly estimated payments. At the same time, to avoid frequent changes to the tax payment schedule within a single year, the State Taxation Administration’s Announcement No. 2 of 2019, “Announcement on Issues Concerning the Implementation of the Universal Corporate Income Tax Relief Policy for Small and Low‑Profit Enterprises,” stipulates that once the payment schedule has been changed to quarterly, no further adjustments will be permitted for the remainder of that year.

The tax authorities have resolved the issue of tax burdens “increasing rather than decreasing.”

Tax authorities across the country have adopted a problem‑oriented approach, conducting case‑by‑case analysis and guidance for enterprises experiencing increased tax burdens, helping them better adapt to tax and fee reduction policies and gradually shift their tax burden from rising to falling.

This VAT reform has introduced a series of supporting measures, including an additional tax credit for taxpayers in the production and lifestyle services sectors and the one-time full deduction of input VAT on real estate, which likewise represent significant tax‑reduction initiatives.

The June tax filing and payment period for value-added tax, individual income tax, and other taxes and fees concluded smoothly on June 19. An official from the State Taxation Administration stated that, with the comprehensive implementation of a series of tax‑reduction and fee‑cutting measures—including the deepening reform of the value‑added tax, universal tax relief policies for small and micro enterprises, and the individual income tax reform—taxpayers and payers have experienced a marked increase in their sense of gain.

Meanwhile, influenced by factors such as taxpayers’ industry sectors, business conditions, and the quality of their tax filings, some enterprises have experienced a rise in their tax burden rather than a reduction. According to reports, tax authorities across the country have adopted a problem‑oriented approach, conducting case‑by‑case analysis and providing targeted guidance to enterprises whose tax burdens have increased, helping them better adapt to tax‑cut and fee‑reduction policies and gradually shift from higher to lower tax burdens.

It has eased the burden and further boosted vitality.

“This round of unprecedented tax and fee cuts is a major boon for our company. First, it will boost consumer spending and invigorate the market; second, it will ease the burden on businesses and facilitate their transformation and upgrading. In particular, reducing the current 16% value-added tax rate to 13% is especially significant for the manufacturing sector,” said Gao Dekang, Chairman of the Board of Bosideng, to reporters.

Based on sales figures from the same period in 2018, the tax and fee reduction policies implemented in 2019 are expected to cut Bosideng’s tax burden by more than RMB 70 million. “In recent years, a series of supportive measures, including tax and fee reductions, have given our company the confidence to navigate both domestic and international market conditions. In 2018, both our domestic down‑coat sales and our export business reached record highs,” said Gao Dekang.

Small and micro enterprises have also benefited. “The state has raised the monthly sales threshold for VAT exemption for small and micro businesses to RMB 100,000, and our company has thus transitioned from a ‘taxpayer’ to an ‘exempt taxpayer.’ Previously, our store had to pay RMB 1,800 in VAT each month; now we don’t have to pay a single cent,” said Zhang Huanping, head of Hebei Guantao County Dongshi Trading Co., Ltd.

Since the beginning of this year, China has implemented larger‑scale tax cuts and more substantial fee reductions. A series of recent statistical data underscore the effectiveness of these reforms:

Tax revenue growth has slowed markedly, with cumulative tax revenue for the first five months rising 2.2%, well below the pace of the same period last year. In the first month following the deepening of VAT reform, net tax reductions totaled RMB 111.3 billion, with the manufacturing sector benefiting most, accounting for RMB 47.6 billion in net cuts. Over the first four months, various tax incentives supporting “mass entrepreneurship and innovation” resulted in total tax reductions exceeding RMB 390 billion, up 56.8% year on year.

“The tax and fee reduction policies have directly lowered corporate costs. In 2019, we will seize the opportunities presented by these policies and channel the resulting savings into initiatives such as brand building and smart manufacturing,” said Zhu Gaofeng, Chief Financial Officer of Bosideng.

Like Bosideng, many enterprises have alleviated their cost burdens through tax and fee reduction policies, further boosting their transformation and upgrading.

Yongxing Special Stainless Steel Co., Ltd. is a publicly listed manufacturing company based in Huzhou, Zhejiang, specializing in the production and R&D of specialty steels. This year, the VAT rate for the manufacturing sector was reduced from 16% to 13%, which is expected to generate tax relief exceeding RMB 20 million. “These funds will be allocated to the company’s next phase of production and R&D, enabling us to develop new technologies and processes through technological upgrades and product‑mix adjustments, thereby establishing a world‑class manufacturing base for stainless steel bars and wire products,” said Deng Qianwen, the company’s CFO.

Li Wanfu, Director of the Tax Science Research Institute of the State Taxation Administration, stated that a series of tax and fee reduction policies have effectively eased the burden on enterprises, boosted market vitality, stabilized expectations, and strengthened confidence, thereby injecting new momentum into China’s economic development.

From “increasing instead of decreasing” to “turning from increase to decrease”

As the centerpiece of this year’s broader tax and fee reduction package, the deepened VAT reform has, since its implementation on April 1, enabled the vast majority of enterprises to achieve tax reductions. However, a small number of companies have experienced temporary increases in their tax burden due to factors such as unfamiliarity with the policies or errors in completing their tax returns.

It is reported that tax authorities across the country, guided by the needs of taxpayers and payers, have established and refined a regular mechanism for monitoring policy implementation and assessing its effectiveness. Using filing data as a starting point, they identify enterprises experiencing an increase in their tax burden and, when suspected errors are detected in the submitted data, promptly contact the taxpayers to correct and address them.

“We hadn’t even noticed the error when the tax authorities reached out to verify and correct it, nearly causing us to miss out on the benefits of tax and fee reductions,” said Zhang Liping, the financial director of Yunnan Lancang Yuanda Timber Processing Factory.

It turned out that, during a comprehensive analysis of tax return data, the tax authorities determined that the company qualified for the VAT rate reduction policy, which allows the rate to be lowered from 16% to 13%. However, instead of decreasing, the company’s tax burden actually increased in April. Upon verification, it was found that the enterprise had made a calculation error when filing its returns, resulting in no reduction in its tax liability even after the new rate was applied. Having identified the root cause of the issue, the tax authorities promptly conducted on-site, targeted guidance for the company. “After recalculating, the company’s actual VAT payable for April is RMB 71,365, meaning it should have paid RMB 21,612 less,” said Zhang Liping.

Jiangsu Xinning Supply Chain Management Co., Ltd. is another company that has benefited from tax‑cut incentives made possible by the tax authorities’ big‑data analytics. Founded in 2004, this private enterprise has a parent company—Xinning Modern Logistics Co., Ltd.—which is among the first batch of logistics offices in Suzhou to be listed on the ChiNext board and serves as a leading player in the region’s logistics sector.

In April, affected by the reduction in the tax rate, the company’s taxable amount was RMB 10,300, and its effective tax burden increased rather than decreased compared with the period before the VAT reform. Following on-site guidance from the Kunshan tax authorities, it was determined that the company incurred substantial travel expenses in its business operations. Moreover, due to deficiencies in the design of its expense reimbursement procedures, passenger transport invoices for domestic business trips were not promptly credited, thereby driving up the company’s VAT burden.

Under the new VAT reform policy, taxpayers may deduct the input tax incurred on domestic passenger transport services from their output tax. Tax officials promptly provided detailed guidance to the company on the relevant policies governing the deduction of passenger transport expenses and the associated filing procedures. “In April, our company’s domestic passenger transport costs totaling RMB 25,300 were fully deductible before tax, resulting in a reduction of RMB 2,300 in VAT payable and a tangible decrease in our effective tax burden,” said Zhang Feifei, Chief Financial Officer of Xinning Modern Logistics Co., Ltd.

Activate supporting policies to achieve tax reductions.

In addition to the “major measure” of reducing tax rates, this VAT reform has also introduced complementary policies—such as an additional deduction for taxpayers in the production and lifestyle services sectors and the one-time full credit of input VAT on real estate—which likewise represent significant tax‑reduction measures.

It has been learned that some taxpayers failed to apply for these policies promptly, resulting in increased tax burdens. Tax authorities across the country have promptly provided tailored guidance to each taxpayer who has not yet benefited from the VAT‑related supporting measures, ensuring that tax and fee reduction policies are effectively implemented.

The additional deduction policy allows taxpayers in the production and lifestyle services sectors to increase their current deductible input VAT by 10% and apply it to reduce their tax liability. This measure was introduced as part of the reform, given that the 6% tax rate applicable to these sectors remains unchanged; it is an important step taken by the state to ensure that their tax burden decreases rather than increases.

Chongqing Weimeng E‑Commerce Co., Ltd. is an enterprise providing e‑commerce services. Due to the reduction of the input tax rate on purchased goods from 16% to 13%, while the output tax rate remained unchanged, the company’s tax liability increased by RMB 1,173 in its May filing.

“Tax officials promptly visited our company to provide guidance and identified the cause of the increased tax burden: we had simply forgotten to report the additional deduction amount when filing. In June, in accordance with the policy that allows for a 10% additional deduction, our company was able to reduce its taxable liability by more than 4,000 yuan. After applying this deduction to this month’s tax liability of 1,798.5 yuan, not only did we owe no VAT for June, but the remaining balance of over 2,000 yuan can be carried forward and applied against future tax liabilities,” said Xu Jimin, the company’s finance manager.

Following the conclusion of the first filing period under the VAT reform, the Yixing Municipal Tax Service Bureau in Jiangsu Province, through comparative analysis of enterprise filing data, identified that Xiangye Chemical Co., Ltd. of Yixing City had an outstanding uncredited input tax amount of RMB 9,454.54 corresponding to the April reporting period, which had not been fully offset in the May filing.

Staff at the Yixing Municipal Tax Service promptly communicated with the enterprise’s finance personnel and provided further guidance. Due to a misinterpretation of the relevant policy, the enterprise had failed to timely offset the input VAT on this fixed asset. Subsequently, the enterprise filed an amended return, resulting in a reduction rather than an increase in its tax burden.

In addition, VAT invoices serve as the foundation for taxpayers’ day-to-day tax compliance and are pivotal to realizing VAT reductions and exemptions. Tax authorities have identified the common challenges faced by enterprises experiencing a “rise‑then‑fall” pattern in their VAT liabilities, providing guidance to ensure proper invoice issuance and enabling compliant tax relief, thereby allowing businesses to fully benefit from tax and fee cuts.

An official from the State Taxation Administration stated that the national tax system will take the “Remain True to Our Original Aspiration and Keep Our Mission Officely in Mind” thematic education campaign as an opportunity to uphold a problem-oriented approach, advance tax and fee reductions and other related work with utmost diligence, meticulous attention to detail, and steady progress, thereby ensuring that taxpayers and payers experience tangible benefits and that economic development of higher quality is better served.

LITIGATION & ARBITRATION

Reminder: After retirement, in addition to your pension, there are five other payments you can receive.

According to data from the National Bureau of Statistics, at the end of 2018, the working-age population aged 16 to 59 numbered 897.29 million, accounting for 64.3% of the total population; the population aged 60 and above totaled 249.49 million, representing 17.9% of the total, of which those aged 65 and above numbered 166.58 million, or 11.9% of the total.

China’s population is aging rapidly, and by 2050, the elderly population is projected to reach 480 million.

The desire to have support in old age is a noble one, but it absolutely depends on a reliable source of income. Besides pensions, are there other options? Let’s take a look together.

Pensions are also referred to as retirement benefits or old-age insurance benefits. When a worker reaches the statutory retirement age and has accumulated at least 15 years of contributions, they are entitled to receive a monthly pension. Currently, the old-age insurance system comprises two main components: the basic old-age insurance for urban employees and the basic old-age insurance for rural and non-working‑age residents.

Enterprise annuities refer to a supplementary pension scheme voluntarily established by enterprises and their employees, on the basis of their lawful participation in the basic old-age insurance system.

The costs of an enterprise annuity are jointly borne by the employer and the employee, with the employer’s contribution not exceeding 8% of the enterprise’s total employee wages from the previous year. The combined contributions of the employer and the employee shall not exceed 12% of the enterprise’s total employee wages for the preceding year. The specific allocation of these costs shall be determined through consultation between the employer and the employees.

Upon reaching the nationally prescribed retirement age, employees may withdraw their enterprise annuity benefits from their individual account on a monthly basis or in installments until the entire balance has been exhausted. Alternatively, they may elect to use the funds in their individual enterprise annuity account to make a lump-sum purchase of commercial pension insurance products, receiving benefits in accordance with the terms of the insurance contract and enjoying the corresponding inheritance rights.

Many of you may be wondering: your employer doesn’t offer an enterprise annuity. That’s right—exactly!

To put it simply: enterprise annuities are not mandatory. They are supplementary pension plans established by companies with strong financial resources, which choose to offer them to their employees under the government‑mandated policies and conditions. If a company is unwilling to do so, there’s nothing that can be done.

Occupational pensions refer to a supplementary pension scheme established by government agencies and public institutions, along with their employees, on the basis of their participation in the basic pension insurance system for government agencies and public institutions.

The required contributions shall be borne jointly by the employer and the individual. The employer shall contribute 8% of its total payroll, while the individual shall contribute 4% of their own contributory salary, with the employer withholding these amounts on their behalf.

Upon meeting the nationally prescribed retirement conditions and completing the statutory retirement procedures, the employee may choose to receive their occupational pension benefits on a monthly basis. Alternatively, the full amount may be used in a lump sum to purchase commercial pension insurance products, with benefits paid according to the terms of the insurance contract and subject to applicable inheritance rights. Alternatively, the employee may opt for monthly occupational pension payments calculated based on the number of months used to determine the benefit at the time of retirement, payable until the balance is exhausted, with any remaining balance in the individual occupational pension account also eligible for inheritance. Once an option is selected, it cannot be changed.

The Regulations on the Administration of Housing Provident Fund stipulate that upon retirement or leaving active service, employees may withdraw the balance in their housing provident fund account and have their account closed.

If you haven’t made any withdrawals since you started working, you must have quite a bit of money by now, right?

Individual savings‑based pension insurance. This type of pension insurance, administered by social insurance institutions, is governed by specific regulations formulated by the competent social insurance authorities. Employees contribute to their individual savings‑based pension accounts in accordance with prescribed rates, based on their own wage income. Contributions are credited to personal pension accounts opened by local social insurance agencies at designated banks and accrue interest at a rate no lower than, or higher than, the prevailing deposit interest rate for urban and rural residents, thereby encouraging and incentivizing employees to participate in this form of pension insurance. The interest earned is also credited to the individual account, and both principal and interest remain the exclusive property of the employee.

Upon reaching the statutory retirement age and obtaining approval for retirement, employees may receive their savings‑based pension benefits either as a lump sum or in installments, payable directly to the individual. When an employee moves across regions, the savings‑based pension funds held in their personal account shall be transferred accordingly.

In other words, these are the commercial annuity insurance products currently offered by major life insurance companies.

Since it’s a commercial product, it falls under the category of investment. Before making a purchase, be sure to carefully assess and calculate everything. After all, investments carry risks, so it’s crucial to ensure that your retirement savings remain safe and secure.

Death penalty! First-instance verdict delivered in the case of “killing a prison guard and stabbing a judge”

On June 20, 2019, the Third Intermediate People’s Court of Chongqing Municipality delivered a first-instance verdict against the defendant Zeng Chuan, who had killed a prison guard and stabbed a judge. The defendant was found guilty of intentional homicide and sentenced to death, with deprivation of political rights for life; he was also convicted of intentional injury and sentenced to two years’ imprisonment. Considering all charges together, the court decided to impose the death penalty, with deprivation of political rights for life.

The Chongqing No. 3 Intermediate People’s Court found the following facts: On August 15, 2017, the defendant Zeng Chuan was sentenced by the NanChuan District People’s Court of Chongqing to one year and nine months’ imprisonment for the crime of provoking trouble. On October 13 of the same year, the Chongqing No. 3 Intermediate People’s Court dismissed his appeal and upheld the original verdict. After being released upon completion of his sentence on November 11, 2018, Zeng Chuan repeatedly attempted to locate the police officers, prosecutors, and judges who had handled his original case. At approximately 11:30 a.m. on November 22, 2018, Zeng Chuan left his home carrying a single-edged dagger with a blade approximately 15 cm long and 4 cm wide, walked to the entrance of the NanChuan District People’s Court, and then lingered nearby. At around 12:17 p.m., Judge Tian of the NanChuan District People’s Court, having finished work, was walking eastward along the sidewalk of NanDaJie in Xicheng Subdistrict, NanChuan District. At approximately 12:19 p.m., Zeng Chuan spotted Judge Tian about 100 meters from the court on NanDaJie; after approaching him and conofficeing his identity through conversation, he used the dagger he was carrying to inflict three stab wounds to Judge Tian’s legs before fleeing the scene. While driving past the area, prison officers Liu Yan (the victim, aged 30), Song, and Gong from the NanChuan Prison of Chongqing heard cries for help, saw Judge Tian lying on the ground, and observed Zeng Chuan running away with a bag. Assuming a robbery had occurred, they immediately pursued Zeng Chuan by car in order to arrest him.

Pursuing the suspect to the Nanchuan Xidajie Branch of the Bank of China, Song, Liu Yan, and Gong successively got out of the vehicle and ran after Zeng Chuan. At approximately 12:21 p.m., as they reached the sidewalk outside Bo’ai Hospital in Nanchuan, Liu Yan, who was running ahead, moved in to apprehend Zeng Chuan. In resisting arrest, Zeng Chuan brandished a single-edged dagger he was carrying and stabbed Liu Yan twice—once in the chest and once in the abdomen—before fleeing the scene. Song and Gong then drove Liu Yan to a hospital for treatment. The following day, at around 4:00 p.m., the victim, Liu Yan, died despite efforts to save him. Forensic examination determined that Tian’s injuries constituted minor injury (Level II); Liu Yan died from stab wounds to the chest and abdomen inflicted by a single-edged sharp instrument, which resulted in transection of the superior mesenteric artery and vein and rupture of the inferior vena cava, leading to hemorrhagic shock and respiratory–circulatory failure.

At approximately 3:00 p.m. on November 22, 2018, during a police encirclement operation, Zeng Chuan resisted arrest with a knife. After warnings proved ineffective, officers fired a shot, wounding him; Zeng Chuan then used the knife to slash his own neck. Following his apprehension, police transported him to a hospital for treatment. On December 15, 2018, the public security authorities arrested Zeng Chuan and brought him into custody, as his condition had stabilized.

The Chongqing No. 3 Intermediate People’s Court further found that the defendant, Zeng Chuan, was sentenced on November 21, 2002, to eight years’ imprisonment for robbery; on January 21, 2003, he was again sentenced to six years’ imprisonment for robbery (a previously uncharged offense), which was merged with the original eight-year term, resulting in a total sentence of thirteen years and six months; he was released upon completion of his sentence on December 27, 2013. For drug use, he was subjected to administrative detention for 15 days on two occasions—November 12, 2014, and January 30, 2015—and on February 10, 2015, he was placed under compulsory isolation for drug rehabilitation for a period of two years. Furthermore, for the crime of provoking trouble, he was sentenced on August 15, 2017, to one year and nine months’ imprisonment and was released upon completion of his sentence on November 11, 2018.

The Chongqing No. 3 Intermediate People’s Court found that the defendant, Zeng Chuan, stabbed Tian in the leg with a knife, causing minor injury (Level II), and inflicted fatal stab wounds to Liu Yan’s chest and abdomen, resulting in Liu Yan’s death. His conduct thus constitutes, respectively, the crime of intentional injury and the crime of intentional homicide, with extremely grave consequences. The charges and facts alleged by the public prosecution are substantiated. Zeng Chuan has committed multiple offenses and, in accordance with the law, shall be punished for each offense cumulatively. Having previously been sentenced to fixed-term imprisonment or a more severe penalty for an intentional crime, and having re‑committed, within five years after completion of his sentence, another offense punishable by fixed-term imprisonment or a more severe penalty, he is a recidivist and, pursuant to law, must be subject to a heavier punishment. Zeng Chuan has repeatedly been convicted for violent crimes such as robbery and provoking trouble; despite undergoing several periods of rehabilitation, he has persistently failed to reform. Only a little over ten days after his release from prison, he again committed a crime, demonstrating a very high degree of personal dangerousness. With the deliberate intent to retaliate, Zeng Chuan used a knife to injure Judge Tian, who was performing his official duties in accordance with the law—his actions constitute a challenge to the authority of the law and a blatant disregard for its dignity. In order to resist arrest, Zeng Chuan wielded a highly lethal single-edged dagger to fatally stab Prison Officer Liu Yan, who was acting bravely in the line of duty, thereby causing an exceptionally adverse social impact. The locations where Zeng Chuan intentionally injured Judge Tian and intentionally killed Officer Liu Yan were sidewalks alongside two major thoroughfares in Nanchuan District, at noon—a time of heavy pedestrian and vehicular traffic—and during the police encirclement, he brandished a knife to resist arrest, seriously disrupting public order. Faced with evidence, Zeng Chuan denied any deliberate intent to retaliate against Judge Tian, disavowed any subjective intent to kill Officer Liu Yan, and offered no compensation whatsoever for the harm suffered by the victims and their relatives, neither admitting guilt nor expressing remorse.

In summary, the defendant Zeng Chuan’s criminal conduct has resulted in extremely grave harm, the circumstances of the offense are exceptionally heinous, his subjective malice is profound, and he poses a significant danger to society; accordingly, he should be severely punished in accordance with the law, and the above-mentioned sentence is hereby imposed.

Judicial appraisal services have yielded new achievements in the economic and social development of the Yangtze River Economic Belt.

Judicial appraisal services for the Yangtze River Economic Belt have yielded new achievements in economic and social development, and the rotating symposium on coordinated judicial appraisal development within the Yangtze River Economic Belt was held in Chongqing.

On June 20, the rotating meeting on the coordinated development of forensic expertise within the Yangtze River Economic Belt was held in Chongqing. The meeting reviewed progress in the collaborative development of forensic services and their role in supporting the economic and social development of the Yangtze River Economic Belt. Representatives from the judicial departments (bureaus) of 11 provinces and municipalities—including Shanghai, Jiangxi, Hubei, Hunan, and Chongqing—presented reports on their respective efforts to advance coordinated forensic‑expertise development, implement division‑of‑labor plans, and provide support for the region’s economic and social growth. The meeting also deliberated ten documents, including the “Development Plan for Forensic Expertise on Environmental Damage in the Yangtze River Economic Belt,” the “Measures for Joint Law‑Enforcement Inspections of Forensic Expertise in the Yangtze River Economic Belt,” the “Rules of Procedure for the Joint Meeting of Secretaries‑General of Provincial Forensic‑Expertise Associations in the Yangtze River Economic Belt,” and the “Implementation Plan for Cross‑Examination of Environmental‑Damage Forensic Expertise among the 11 Provinces and Municipalities of the Yangtze River Economic Belt.” In addition, participants discussed initiatives to establish four major categories of forensic‑expertise specialist committees, training lecturer teams, and continuing‑education bases across the 11 provinces and municipalities.

The delegates also conducted an on-site visit to the Chongqing Municipal Environmental Damage Forensic Science Center, surveyed the operational status of environmental damage forensic institutions, and examined issues related to promoting the sound development of the environmental damage forensic sector within the Yangtze River Economic Belt.

According to reports, since the establishment of the Yangtze River Economic Belt Judicial Appraisal Collaborative Development Working Group in 2018, the judicial appraisal sector across the 11 provinces and municipalities in the region has made significant progress in reform and development, with notable contributions to the economic and social development of the Yangtze River Economic Belt. Statistics show that the 11 provinces and municipalities together operate 42 environmental damage forensic appraisal institutions and employ 923 appraisers; there are also 1,637 general forensic appraisal institutions and 12,353 appraisers. In 2018, these entities handled a total of 1.16 million forensic appraisal cases, accounting for 50% of the national caseload.

Relevant officials from the Public Legal Services Administration of the Ministry of Justice and the Chongqing Municipal Bureau of Justice, along with representatives responsible for judicial appraisal management from the justice departments (bureaus) of the 11 provinces and municipalities in the Yangtze River Economic Belt, attended the meeting.

A large number of “Putian-style” hospitals have been designated as criminal gangs, and medical fraud has been identified as a key priority in the campaign to eradicate organized crime and evil forces.

The harshest penalties for medical fraud have been introduced.

According to the Xiamen Daily, on May 15, the Xiamen Municipal Public Security Bureau held a press conference to announce the arrest of a criminal syndicate engaged in extortion and fraud within the medical sector.

According to reports, in August 2018, Xiamen police received a tip-off from the Xiamen Municipal Administration for Market Regulation alleging that staff at a private hospital in Huli District had coerced patients into adding additional surgical procedures, suspected of extortion. Specifically, after patients sought medical treatment, the hospital staff would induce them to undergo minor surgeries such as circumcision for phimosis and, during the procedures, claim to have discovered new conditions, thereby pressuring patients—through threats and subtle forms of psychological coercion—to accept additional surgeries and incur extra costs. The case was classified as the first organized crime group in the medical sector dismantled in Xiamen.

In December 2018, after four months of intensive investigation, Xiamen police successfully dismantled a criminal syndicate led by suspects Chen Moutang (male, 42, from Putian, Fujian) and Zhuo Mourong (male, 30, from Putian, Fujian), arresting 20 suspects and seizing funds totaling several hundred thousand yuan.

On May 14, Shenzhen also held a press conference, at which it was announced that, following Longhua District’s successful investigation into the city’s first case of coercive trading involving “Putian‑affiliated” medical institutions, the city launched a special campaign to crack down on medical fraud and other illegal and criminal activities. Under the law, six medical entities implicated in organized wrongdoing—including Hui’ai Clinic, Huaguang Gate Outpatient Department, Zhen’ai Gynecology Clinic, Baoji Clinic, Tonggeng Clinic, Pengshen Clinic, and Shanshui Medical Investment Company—were investigated and prosecuted, resulting in the criminal detention of 106 individuals and the arrest of 56.

In recent years, with the rise of privately run healthcare institutions, a range of medical frauds—such as deliberate overcharging during procedures, fabricating diagnoses, exaggerating patients’ conditions or treatment outcomes, and employing “medical brokers” to deceive, mislead, or coerce patients into undergoing medical care—has come under scrutiny. Notably, “medical brokers” have also been included in the recently circulated industry‑wide “campaign to eliminate organized crime and evil forces” list.

Although some still worry that directly classifying medical fraud as organized crime may be overly aggressive, analysts believe that, in the context of policies aimed at fostering the development of private hospitals, this measure nonetheless carries positive significance by helping to thoroughly cleanse the healthcare market and promote a comprehensive improvement in industry standards.

Crackdown on organized crime and evil forces—medical malpractices have become a key focus.

According to reports, in 2018, after a joint inspection team from Xiamen’s Health Commission and the Market Supervision Administration uncovered leads related to the aforementioned case, the matter was referred to the police in August of that year. The investigation revealed that none of the physicians at the hospital involved held specialized qualifications, and some did not even possess valid licenses to practice.

According to a report by the Straits Herald, since July 2017, the hospital has not only encouraged patients to undergo minor procedures such as circumcision for phimosis after they sought medical care, but also, during these surgeries, allegedly coerced them into adding additional procedures and incurring extra costs under the pretext of discovering new conditions, employing threats and subtle forms of psychological pressure. Local police investigations revealed that members of this criminal syndicate engaged in a division of labor and coordinated their activities, systematically extorting and defrauding victims of substantial sums—totaling several hundred thousand yuan.

According to police, by falsely claiming to have detected other conditions during surgery and resorting to threats and subtle forms of coercion, surgeons often compel patients to undergo additional procedures. As a result, a procedure that should cost only a few hundred yuan is frequently marked up to 5,000 yuan—or even more than 10,000 yuan.

Specifically, they install medical equipment of substandard technical performance and use online platforms to disseminate promotional messages, luring patients to seek treatment. Once patients are under their care, they persuade them to undergo minor procedures such as circumcision for phimosis, then, under the pretext of identifying new conditions, they coerce patients into additional surgeries through threats and subtle forms of psychological pressure. Far from providing genuine medical care, they exploit illness as a cover to prey on patients—this behavior truly qualifies as “malicious.”

In March this year, in order to crack down on and rectify medical fraud, false advertising, arbitrary fee-charging, insurance fraud, and other malpractices in the healthcare sector; to purify the industry environment; to promote the standardized and orderly development of the medical field; and to effectively safeguard the health rights and interests of the public, the National Health Commission, in collaboration with the Cyberspace Administration of China, the National Development and Reform Commission, the Ministry of Public Security, the State Administration for Market Regulation, the National Healthcare Security Administration, the State Administration of Traditional Chinese Medicine, and the National Medical Products Administration, launched a year-long special campaign to address these irregularities. At the same time, the “Plan for the Special Campaign to Rectify Medical Malpractices” (hereinafter referred to as the “Plan”) was issued.

Last year, the Supreme People’s Court and the Supreme People’s Procuratorate issued the “Guiding Opinions on Several Issues Concerning the Handling of Criminal Cases Involving Evil Forces,” in which Article 14 explicitly stipulates that repeatedly engaging in illegal and criminal activities within a specific area or industry through violence, threats, or other means shall be deemed to constitute “evil forces.” Article 15 further clarifies the characteristics of criminal groups associated with evil forces, including having “three or more organizational members” and “jointly and intentionally committing three or more” wrongful acts. In anti‑evil‑force campaigns conducted by health commissions across many regions, practices such as publishing unlawful medical advertisements and disseminating false information—thereby inducing consumers to spend money or undergo excessive medical treatments—are all designated as key targets for crackdown.

Provinces including Guangdong, Hubei, Shandong, and Shaanxi have also designated the aforementioned behaviors as key targets in the health sector’s campaign to combat organized crime and evil forces.

Multi‑location crackdown — a number of “Putian‑style” hospitals have already been investigated and penalized.

As can be seen, riding on the momentum of the campaign to eradicate organized crime and corruption and the drive to address irregularities in the healthcare sector, a number of “Putian‑style” medical institutions have already been investigated and penalized.

Just prior to Xiamen police’s announcement of the “first organized crime gang in the medical sector,” Shenzhen had likewise released the results of a citywide special campaign targeting medical fraud and other illegal and criminal activities.

According to the report, since the launch of the campaign, the Shenzhen Municipal Health Commission has identified and referred 165 leads involving organized crime, evil forces, and public disorder; conducted 15,765 inspections of medical institutions at all levels and of various types; initiated investigations into 1,391 cases; imposed fines and confiscations totaling RMB 22.548 million; closed down or ordered rectification of 3 hospitals and 350 outpatient departments (clinics); and, in accordance with the law, prosecuted six medical cases linked to evil forces, including Hui’ai Outpatient Department, Huaguang Gate Outpatient Department, Zhen’ai Gynecology Outpatient Department, Baoji Outpatient Department, Tonggeng Outpatient Department, Pengshen Outpatient Department, and Shanshui Medical Investment Company. A total of 106 individuals were placed under criminal detention, and 56 were arrested.

The most significant case involved a notorious organized crime group engaged in coercive trading, uncovered in March 2018 at the Shenzhen Hui’ai Outpatient Clinic in Longhua District—a medical institution affiliated with the “Putian faction.” One victim, unable to pay the full medical bill, was detained in the second-floor observation room and ultimately escaped by jumping from the building, subsequently filing a police report. This incident marked the beginning of Shenzhen’s health‑care system’s subsequent campaign to eradicate organized crime and evil forces.

As an important component of China’s healthcare market, private hospitals have experienced rapid growth in recent years, bolstered by supportive policies. According to publicly released data from the National Health Commission, the number of private hospitals has exceeded 21,000, while the number of clinics stands at approximately 230,000.

For various reasons, the sector suffers from fragmentation, dispersion, and disorder, with rampant issues such as false or exaggerated advertising and the exploitation of medical intermediaries. These problems not only harm patients’ interests but also, to a significant extent, make it even more difficult for private healthcare providers to thrive.

As can be seen, the National Health Commission has recently issued a document outlining guiding principles for launching pilot programs to promote the development of clinics, streamlining the licensing procedures for establishing private clinics and allowing them to connect with the basic medical insurance system.

Earlier, on February 19, the National Development and Reform Commission and 17 other departments jointly issued the “Action Plan to Intensify Efforts to Address Weaknesses, Strengthen Shortcomings, and Enhance Quality in Public Services across the Social Sector, thereby Fostering a Robust Domestic Market,” which also includes measures to accelerate the development of privately-run healthcare.

Analysts point out that private medical institutions and clinics will play a crucial role in China’s future healthcare system, which in turn necessitates an overall improvement in their quality. Accordingly, as relevant officials have emphasized, oversight of private hospitals must be strengthened; on this basis, a large number of medical facilities engaging in overtreatment, coercive practices, or even fraudulent medical services will be weeded out.

It is important to clarify that, in some medical practices, although fraudulent elements are present, the primary activity remains healthcare; such cases may be characterized as “healthcare leveraging fraudulent methods.” However, when a hospital is part of a fraud ring that recruits individuals—some even lacking professional qualifications—and makes fraud its core business while using healthcare merely as a façade or a means to an end, this should be classified as “fraud leveraging medical means.” The nature of these two situations is clearly distinct.

To put it plainly, all instances of “forced price hikes during surgery” should be brought under medical oversight and subject to regulatory constraints. As for those cases involving organized criminal activity, they must be addressed with utmost rigor in accordance with the law and established regulations, from the standpoint of eradicating evil. While we must guard against the overreach of “crackdowns on organized crime,” there is no room for hesitation when it comes to meting out severe punishment to criminal gangs that exploit patients through such abusive practices.

Breaking: The All China Lawyers Association has issued a statement: Lawyers may not provide legal services free of charge.

As everyone knows, there’s no such thing as a free lunch; yet in reality, many people flock to free legal services.

How did we get to this point? Some people are driven by a desire to grab small bargains; others assume that lawyers merely offer empty words and a simple gesture. But most, I believe, stem from an inability to reconcile the idea of legal services with the notion of valuing them purely in monetary terms.

Recently, the All-China Lawyers Association explicitly stipulated that lawyers may not offer services free of charge or reduce their fees during the course of practice. Perhaps due to the profound impact that online legal services have had on the legal profession in recent years—far from elevating the quality of legal services, they have instead undermined the entire fee‑setting framework of the industry. Even after a decade of inflation and a sharp surge in real estate prices, lawyers’ fees have not risen but have instead declined.

From large‑scale legal services for pre‑IPO companies and fund‑related matters to more modest matters such as traffic accident litigation and family law disputes, the office’s expertise spans every facet of legal practice. As the national regulatory body for law offices and lawyers across China, the All China Lawyers Association has now issued these rules—a significant step in addressing the current chaos surrounding online marketing practices.

Let’s take a look at how it is stipulated.

Rules on the Promotion of Legal Practice by Lawyers of the All-China Lawyers Association (Trial)

(Adopted at the 12th Executive Council Meeting of the 9th National Lawyers Association on January 6, 2018)

Article 10: When conducting business promotion, lawyers and law offices shall not engage in any of the following acts:

(1) False, misleading, or exaggerated advertising;

(2) Inconsistent with the registered information;

(3) Explicitly or implicitly indicating a special relationship with judicial organs, government agencies, social organizations, intermediary institutions, or their staff members;

(4) Disparaging other law offices or lawyers; or engaging in comparative advertising with other law offices or other lawyers;

(5) Commitment to the outcome of the case;

(6) Making statements regarding the success rate, amount of compensation, or value of the subject matter that may create unreasonable expectations among the public regarding lawyers or law offices;

(7) Explicitly or implicitly offering kickbacks or other benefits;

(8) No fees shall be charged, or fees shall be reduced (except in legal aid cases);

(9) Customer information disclosed without the customer’s consent;

(10) Texts, designs, images, and audiovisual materials that are inconsistent with the legal profession;

(11) Using one’s position as an officer of the Bar Association in activities that are not related to the performance of official duties.

(12) Using terms such as “China,” “Chinese,” “National,” or the names of foreign countries, or, without authorization, using the names of international organizations, state organs, government bodies, or industry associations;

(13) Other prohibited content as stipulated by laws, regulations, rules, and industry standards.

Article 11: The following methods of disseminating business promotion information are prohibited:

(1) Producing and disseminating business promotion information by employing artistic exaggeration;

(2) Posting or distributing business promotion materials in public places;

(3) Conducting business promotion targeting an indefinite group of persons through telephone calls, letters, text messages, emails, and other means;

(4) Publishing business promotion information in the form of billboards, mobile advertisements, electronic information displays, and other such media in the vicinity of courts, procuratorates, detention centers, public security organs, prisons, arbitration commissions, and similar venues;

(5) Other methods of business promotion that undermine the professional image of the legal profession and the overall interests of the legal sector.

Article 13: Where lawyers, law offices, and third-party entities such as internet platforms or mass media collaborate on business promotion, they shall comply with these Rules, regardless of whether such third parties charge the lawyers or law offices any fees.

Lawyers and law offices shall require third-party media outlets to clearly disclose to their audiences the information specified in Articles 6 and 7 of these Rules.

Lawyers and law offices shall not engage in business promotion in cooperation with third parties by means such as paying case referral fees or sharing attorney fee revenues.

Article 17: With respect to violations of these Rules, the Bar Association shall order the lawyer and the law office to make corrections within a specified time limit and may, in accordance with the “Disciplinary Rules for Violations by Members of the All-China Lawyers Association,” impose disciplinary measures.

Legal services are a profession for lawyers, and a lawyer may simultaneously handle the legal matters of multiple clients.

But the matter or dispute that has befallen you will likely last only a brief moment in the grand scheme of things. If you could handle it yourself or mediate it successfully, you wouldn’t need to hire a lawyer.

In other words, your situation has reached a point where you absolutely must consult a lawyer, and it is a very complicated matter.

Since it’s a problem even you find hard to solve, it’s only fair that professionals be compensated for their expertise in helping you overcome it.

If, on the one hand, you need a lawyer’s assistance to resolve your own issues, yet on the other hand you fail to recognize the value of that assistance and refuse to compensate the lawyer for their efforts, then I can only say: “There’s no such thing as a free lunch.” In the end, you will inevitably pay the price for your selfishness—in some other form.

Other

Xi Jinping and Peng Liyuan paid tribute at the China–North Korea Friendship Tower.

On June 21, Xi Jinping, General Secretary of the CPC Central Committee and President of the People’s Republic of China, together with his wife, Peng Liyuan, paid tribute at the China–North Korea Friendship Tower, erected to commemorate the outstanding achievements of the heroic martyrs of the Chinese People’s Volunteer Army. They were accompanied by Kim Jong-un, Chairman of the Workers’ Party of Korea and Chairman of the State Affairs Commission, and his wife, Ri Sol-ju.

At 10:00 a.m. local time, Xi Jinping and Peng Liyuan arrived at the China–North Korea Friendship Tower, located at the foot of Munsu Hill in downtown Pyongyang, where Kim Jong-un and Ri Sol-ju greeted them upon their arrival. In a solemn and dignified atmosphere, the Korean People’s Army’s three‑service honor guard stood at attention, and the military band played the national anthems of China and North Korea. Following the anthems, the honor guards carried flower baskets to the pedestal at the base of the tower. Xi Jinping slowly ascended the steps and carefully adjusted the ribbon on the basket. The red ribbon bore the inscription: “The martyrs of the Chinese People’s Volunteers shall live forever.” All present observed a moment of silence in memory of the fallen heroes. After the silence, Xi Jinping and Kim Jong-un watched the honor guard’s parade.

Accompanied by Kim Jong-un and his wife, Xi Jinping and his wife carefully circled the tower, examining the reliefs that depict the Chinese People’s Volunteer Army’s deployment to Korea and the bonds of friendship between the peoples of China and North Korea. Subsequently, accompanied by Kim Jong-un and his wife, they entered the Memorial Hall of the China–North Korea Friendship Tower. Inside the hall, Xi Jinping meticulously reviewed the original roster of volunteer martyrs and viewed the epic mural. With deep reverence for the outstanding sons and daughters of the motherland who heroically gave their lives in the cause of China–North Korea friendship, he inscribed in the guestbook: “Remember the martyrs; foster friendship across generations.”

Xi Jinping stated, “Today, with the utmost reverence, I have come to pay my respects at the China–North Korea Friendship Tower. In the roster of volunteer army martyrs and in the monumental paintings displayed in the memorial hall, we find the names and images of such heroic figures as Huang Jiguang, Qiu Shaoyun, Yang Gensi, and Luo Shengjiao—names well known to the Chinese people. Their heroic deeds are familiar to every man, woman, and child in China. Today, as we gather here to honor the China–North Korea Friendship Tower, our purposes are threefold: first, to commemorate the fallen heroes and revisit the glorious history of our elder revolutionary leaders who fought side by side; second, to encourage future generations to cherish and carry forward the time-honored friendship between China and North Korea; and third, to send a clear message to the world, demonstrating the unwavering resolve of both countries to safeguard peace. We must ensure that the friendship between China and North Korea is passed down from generation to generation, consolidate and advance the socialist cause in both countries, better benefit the peoples of the two nations, and promote regional peace, stability, and prosperity.”

Kim Jong-un stated that the Korea–China Friendship Tower stands as a monumental symbol of the time-honored friendship between the two countries. The Workers’ Party of Korea, the government, and the people of the DPRK will forever cherish the heroic sacrifices made by the Chinese People’s Volunteer Army in defending Korea against aggression, and in the new era they will continue to uphold and further develop Korea–China friendship, strengthen bilateral cooperation, and advance relations between the two countries to achieve new and even greater accomplishments.

Ding Xuexiang, Yang Jiechi, Wang Yi, He Lifeng, and others attended the aforementioned events. On the DPRK side, those who took part in the visit included Choe Ryong-hae, Pak Pong-ju, Ri Su-yong, Ri Yong-ho, Kim Nong-o, and Kim Yo-jong, among others.

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