JC Master Legal News Issue 887

Key Takeaways for This Issue

The State Council has issued the “Guiding Opinions on Strengthening and Standardizing Mid‑Term and Post‑Event Supervision.”

The Opinions state that we must adhere to Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, continue to deepen the “delegation, regulation, and service” reform, uphold the principle of combining deregulation with effective oversight, shift more administrative resources from ex‑ante approval to strengthened mid‑ and post‑event supervision, and accelerate the establishment of a regulatory system characterized by clear powers and responsibilities, fairness and impartiality, openness and transparency, and simplicity and efficiency. This will foster a collaborative regulatory framework in which market self‑discipline, government oversight, and social supervision reinforce one another, ensuring that regulation delivers fairness, enhances efficiency, and stimulates vitality, thereby boosting the competitiveness of market entities and overall market efficiency, and promoting sustained, sound economic and social development. The Opinions set forth policy measures across five key areas.

Leveraging independently developed innovative technologies, Wantai Biological has partnered with GSK to develop a next-generation HPV vaccine.

Yangshengtang Xiamen Wantai Biologics (Innovax), representing the Yangshengtang Group and Professor Xia Ningshao’s team at Xiamen University, has signed a global cooperation agreement with GSK, the world’s leading vaccine manufacturer. Under the agreement, the two parties will jointly develop a next-generation human papillomavirus (HPV) vaccine, leveraging Innovax’s innovative antigen technology—originating from Xiamen University—and GSK’s adjuvant system.

The China Banking and Insurance Regulatory Commission has issued the Measures for the Administration of Related-Party Transactions of Insurance Companies.

To thoroughly implement the guiding principles on financial work articulated by the CPC Central Committee and the State Council at the Central Economic Work Conference and the National Financial Work Conference, further strengthen oversight of related-party transactions by insurance companies, resolutely crack down on illicit practices such as the transfer of benefits through unauthorized related-party dealings, and effectively safeguard against financial risks, the China Banking and Insurance Regulatory Commission recently issued the Measures for the Administration of Related-Party Transactions of Insurance Companies.

The Supreme People’s Court has released typical cases from maritime trials nationwide.

Recently, the Supreme People’s Court released the 2018 list of typical cases in maritime adjudication nationwide.
The ten typical cases released this time encompass a wide range of case types, highlight salient issues of legal application, and demonstrate a clear societal exemplary effect.

The General Office of the State Council has issued the “Opinions on Stabilizing Hog Production and Promoting Transformation and Upgrading.”

Recently, the General Office of the State Council issued the “Opinions on Stabilizing Hog Production and Promoting Transformation and Upgrading.” The document stipulates that the people’s governments of all provinces, autonomous regions, and municipalities directly under the central government shall assume overall responsibility for stabilizing hog production and ensuring market supply in their respective jurisdictions, with the principal official serving as the primary person accountable. All localities and relevant departments are required to intensify their efforts and ensure effective implementation in accordance with their respective duties and responsibilities. By the end of this year, each province, autonomous region, and municipality is to submit a report to the State Council on the progress of implementing these measures.

Table of Contents

Table of Contents

Finance & Capital Markets

The State Council has issued the “Guiding Opinions on Strengthening and Standardizing Mid‑Term and Post‑Event Supervision.”

Policy Support Boosts the Hydrogen Energy Industry; Institutions Pinpoint 15 Concept Stocks

Despite selling off assets, Budweiser still struggles to ease its funding crunch; after a two-month hiatus, it has resumed plans to list its subsidiary in Hong Kong.

Securities offices post stellar results, with multiple investor groups rushing to pile into the sector.

Jiangsu Province has issued the “Provisional Measures for the Administration of Provincial-Level State-Owned Financial Capital.”

Corporate & Commercial

Leveraging independently developed innovative technologies, Wantai Biological has partnered with GSK to develop a next-generation HPV vaccine.

Taking advantage of the Belt and Road Initiative, Baishishan plans to build a factory in Serbia.

Great Wall Motor Announces Equity Incentive Plan, Granting Awards to Nearly 2,000 Recipients

Unilumin Technology welcomes a new strategic investor, marking a significant step forward in its global strategy through a powerful partnership.

Medisys is dedicated to providing integrated, comprehensive preclinical R&D services in the pharmaceutical field.

Taxation

The China Banking and Insurance Regulatory Commission has issued the Measures for the Administration of Related-Party Transactions of Insurance Companies.

The Customs Tariff Commission of the State Council has released the first batch of the initial exclusion list for goods subject to additional tariffs imposed on the United States.

A responsible official from the relevant department of the China Banking and Insurance Regulatory Commission answered questions from reporters regarding the Measures for the Administration of Related-Party Transactions of Insurance Companies.

The State Council Executive Meeting called for closely addressing public concerns and further ensuring basic living standards, among other measures.

Chengde Municipal Finance Bureau, Hebei Province: Deepening the “Delegation, Regulation, and Service” Reform to Enhance the Quality and Efficiency of Government Procurement

Litigation & Arbitration

Supreme People’s Court: Reply to the Proposal on Abolishing Jurisdictional Restrictions for Grassroots Legal Service Workers

The Supreme People’s Court has released typical cases from maritime trials nationwide.

The Shanghai Higher People’s Court and the municipal planning authority have signed an agreement to refine the comprehensive mechanism for addressing difficulties in enforcement, fully enabling online processing of the entire real estate inquiry and control procedure.

Shandong is vigorously advancing local legislation in the field of judicial administration.

“Live Now”: A Multi-Media Broadcast Focuses on Chongqing

Other

The General Office of the State Council has issued the “Opinions on Stabilizing Hog Production and Promoting Transformation and Upgrading.”

Finance & Capital Markets

The State Council has issued the “Guiding Opinions on Strengthening and Standardizing Mid‑Term and Post‑Event Supervision.”

On September 12, the State Council issued the “Guiding Opinions on Strengthening and Standardizing Mid‑Term and Post‑Event Supervision” (hereinafter referred to as the “Opinions”).

The Opinions state that we must adhere to Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, continue to deepen the “delegation, regulation, and service” reform, uphold the principle of combining deregulation with effective oversight, shift more administrative resources from ex‑ante approval to strengthened mid‑ and post‑event supervision, and accelerate the establishment of a regulatory system characterized by clear powers and responsibilities, fairness and impartiality, openness and transparency, and simplicity and efficiency. This will foster a collaborative regulatory framework in which market self‑discipline, government oversight, and social supervision reinforce one another, ensuring that regulation delivers fairness, enhances efficiency, and stimulates vitality, thereby boosting the competitiveness of market entities and overall market efficiency, and promoting sustained, sound economic and social development. The Opinions set forth policy measures across five key areas.

First, we must strengthen regulatory accountability. In strict accordance with laws and regulations and the responsibilities and matters of oversight as defined in the “Three Determinations” framework, we will regulate market entities in compliance with the law, ensuring full coverage and eliminating regulatory blind spots and gaps. We will clarify the division of regulatory powers: each department should play its role in rule‑making, standard setting, and overall coordination, guiding its respective system to carry out ongoing and post‑event supervision; meanwhile, local governments should focus their primary efforts on enhancing impartial regulation.

Second, we will improve regulatory rules and standards. We will develop nationwide, unified, concise, and easy-to-implement regulatory rules and standards for each sector and make them publicly available. We will strengthen the standards‑based system, accelerate the establishment and refinement of national and industry standards across all sectors, clearly define the management, technical, safety, and product standards that market entities are required to comply with, and ensure that regulation is carried out strictly in accordance with these standards.

Third, we will innovate and improve regulatory approaches. In principle, all routine administrative inspections involving enterprises shall be conducted through the “double-random, one-public” mechanism. For specific priority areas that directly affect public safety and the health and lives of the people, comprehensive, targeted regulation shall be implemented in accordance with laws and regulations. We will deepen the implementation of “Internet Plus Regulation” to enhance the precision and intelligence of oversight. We will promote credit-based tiered and categorized regulation, imposing lawful restrictions on untrustworthy entities in areas such as market access and project approvals. For emerging industries, we will adopt a regulatory approach that is both inclusive and prudent.

Fourth, we will establish a coordinated regulatory framework. We will strengthen intergovernmental coordination in regulation and put in place sound mechanisms for cross‑departmental and cross‑regional enforcement collaboration and response. We will reinforce the responsibilities of market entities, urging them to enhance self‑supervision and fulfill their legal obligations in areas such as workplace safety and quality management. We will encourage industry associations and chambers of commerce to develop and implement robust codes of conduct, self‑regulatory covenants, and professional ethical standards, thereby elevating the level of industry self‑governance. Finally, we will leverage social oversight by ensuring smooth channels for public participation and scrutiny.

Fifth, enhance the standardization and transparency of regulatory oversight. Standardize administrative inspections and penalties involving enterprises, reduce redundant or unnecessary inspection items, and prohibit linking fines and confiscated proceeds to the interests of administrative law enforcement agencies. Strictly implement systems for publicizing administrative enforcement, recording the entire enforcement process, and conducting legal reviews of major enforcement decisions. Improve mechanisms for exculpating due diligence and holding accountable those who fail to perform their duties.

The Opinions require all regions and departments to earnestly ensure the implementation of their responsibilities, allocate regulatory resources in a scientifically sound manner, encourage grassroots-level experimentation and innovation, strengthen legal safeguards and enhance regulatory capacity-building, and effectively uphold a fair competitive order.

Policy Support Boosts the Hydrogen Energy Industry; Institutions Pinpoint 15 Concept Stocks

Recently, policies have continued to strengthen support for the hydrogen energy sector. On September 9, the Guizhou Liupanshui Hydrogen Energy Industry Symposium and Cooperation‑Matching Conference was held in Guiyang, where the “Liupanshui City Hydrogen Energy Industry Development Plan (2019–2030)” was officially unveiled. Liupanshui has become the first city or prefecture in Guizhou Province to release a hydrogen energy development plan. In the second half of 2019, construction will begin on the province’s first liquid hydrogen plant, addressing current challenges in hydrogen production, storage, and transportation, while leading and advancing hydrogen‑energy technology and seizing the initiative in the industry’s development. In addition, Jiangsu Province has issued the “Jiangsu Province Hydrogen Fuel Cell Vehicle Industry Development Action Plan” (hereinafter referred to as the “Plan”), providing support for the hydrogen energy sector.

In response, analysts note that China is currently rolling out hydrogen‑refueling station planning and deployment across various regions, with energy companies actively investing in their construction—such as co‑locating hydrogen stations with oil facilities. However, construction costs remain high at this stage, and economic viability will hinge on the scale‑economy effects driven by growing downstream demand. Meanwhile, investment opportunities in the secondary market are largely thematic. Regions where the hydrogen‑energy sector is relatively concentrated and where fuel‑cell technology and fuel‑cell vehicle demonstration projects are sizable are likely to become priority areas for hydrogen‑refueling station development. Under this momentum, the construction and operation of hydrogen stations, along with related ancillary equipment, stand to benefit first, presenting a favorable window for investors to position themselves in relevant concept stocks.

In the secondary market, on September 11, the hydrogen energy sector delivered a strong intraday performance, rising 0.8% overall, with 46 constituent stocks posting gains—accounting for nearly 60% of the group.

In terms of capital flows, on September 11, a total of 43 concept stocks within the sector attracted strong interest from mainstream investors, drawing in combined inflows of RMB 1.001 billion. Regarding institutional ratings, among these 43 favored stocks, 15 have received favorable ratings—such as “Buy” or “Add”—from institutions over the past 30 days.

Despite selling off assets, Budweiser still struggles to ease its funding crunch; after a two-month hiatus, it has resumed plans to list its subsidiary in Hong Kong.

Recently, Anheuser-Busch InBev announced that its Asia-Pacific subsidiary, Budweiser APAC, has resumed its application to list on the Hong Kong Stock Exchange. The company stated that the decision to proceed with the listing depends on a variety of factors and current market conditions.

Starting July 5, Budweiser Asia Pacific has officially launched its IPO, with the subscription period running until July 11. Based on the upper limit of the offer price, the IPO could raise up to HK$76.447 billion.

On July 12, Anheuser-Busch InBev issued an announcement stating that the company would no longer proceed with the previously announced plan to list its Asia-Pacific subsidiary on the Hong Kong Stock Exchange.

Regarding the reasons for terminating the listing, Anheuser-Busch InBev stated in its announcement that, due to several factors—including the current market conditions—the company has decided not to proceed with the transaction. The company will closely monitor market developments to enhance shareholder value, optimize its operations, and drive long-term growth.

However, just two months later, Budweiser Asia Pacific once again resumed its plans to go public.

Notably, shortly after its failed IPO in July, Anheuser-Busch InBev announced on its official website that it had agreed to sell its Australian operations to Japan’s Asahi Group Holdings for US$11.3 billion—equivalent to RMB 77.7 billion—with the transaction expected to close in the first quarter of 2020.

In the filing, Anheuser-Busch InBev stated that the vast majority of the proceeds from the sale will be used to repay its debt, thereby further deleveraging its balance sheet, strengthening its market position to capitalize on growth opportunities, and creating additional value for shareholders.

However, Anheuser-Busch InBev will be unable to address the company’s high debt levels by selling the aforementioned assets.

In recent years, Anheuser-Busch InBev has pursued a series of acquisitions worldwide, leaving the company heavily indebted. Its largest deal came in 2016, when it acquired SABMiller—the industry’s second-largest player—for $105.5 billion, thereby cementing Anheuser-Busch InBev’s position as the global leader in the beer sector.

However, this acquisition has also kept Budweiser’s debt-to-equity ratio persistently high.

As of December 31, 2018, Anheuser-Busch InBev’s leverage ratio had risen from 320% in 2015 to 360%, with net debt reaching US$102.84 billion.

Previously, in its IPO prospectus, Budweiser APAC stated that the net proceeds from this global offering would be entirely used to repay loans owed by Anheuser-Busch InBev’s subsidiaries.

Two months ago, when Budweiser APAC’s IPO attempt fell through, some market observers noted that the company had relied on going public to ease its liquidity pressures—but they did not anticipate a relaunch so soon.

Relevant sources indicate that, first, Budweiser APAC’s own financial metrics are unlikely to pose any issues. Second, the earlier suspension may have been due to lower valuations driven by market conditions. Finally, if the pause was solely attributable to market factors, and given the current favorable indicators, resuming trading should not be a problem.

Securities offices post stellar results, with multiple investor groups rushing to pile into the sector.

 On September 11, the three major A-share indices opened higher before trending lower amid volatility. Near midday, the securities sector regained momentum, helping to narrow the declines. At the close, the sector as a whole rose 0.7%, ranking among the top gainers; 35 constituent stocks advanced, accounting for more than 70% of the total.

On the individual stock front, Ji’ai Technology hit the daily upper limit on September 11, while Huaxin Shares (4.94%), Hualin Securities (4.48%), Haitong Securities (3.64%), Jinlong Shares (3.38%), Jingwei Textile Machinery (3.02%), Dongwu Securities (2.14%), and Everbright Securities (2.07%) all posted gains of more than 2%.

Strong market performance is underpinned by robust institutional buying. On September 11, the sector as a whole saw net inflows totaling RMB 2.261 billion. Among them, individual stocks such as Haitong Securities, CITIC Securities, Hualin Securities, Dongwu Securities, and Huaxin Shares each attracted over RMB 100 million in institutional funds on the day. Additionally, Guohai Securities (RMB 97.5759 million), Everbright Securities (RMB 83.8691 million), GTJA (RMB 83.2352 million), First Capital (RMB 83.0368 million), Huatai Securities (RMB 76.7937 million), GF Securities (RMB 76.7160 million), Pacific Securities (RMB 75.6991 million), Orient Securities (RMB 69.0695 million), Jinlong Shares (RMB 53.9648 million), and SW China Securities (RMB 51.9085 million) all recorded net large-order inflows exceeding RMB 50 million.

In fact, the securities sector has received a major catalyst, serving as a key driver behind its recent strong rally. On September 10, the State Administration of Foreign Exchange announced the removal of investment quota limits for Qualified Foreign Institutional Investors (QFII) and Renminbi Qualified Foreign Institutional Investors (RQFII), along with the elimination of restrictions on the countries and regions eligible for RQFII pilot programs. Furthermore, also on September 10, the China Securities Regulatory Commission convened a symposium in Beijing to comprehensively deepen capital market reform. The meeting outlined 12 priority tasks for advancing such reforms in the current period and over the coming years, including fully leveraging the STAR Market as a testing ground; vigorously enhancing the quality of listed companies; addressing shortcomings in the multi-tiered capital market system; pushing ahead with reforms of the ChiNext Board and accelerating the restructuring of the New Third Board; selecting several regional equity markets to conduct pilot programs for institutional and business innovations; encouraging greater inflows of medium- and long-term capital into the market; and substantially raising the costs of illegal activities such as fraudulent issuance, false disclosure by listed companies, and the provision of falsified certification documents by intermediary institutions.

In this regard, analysts generally believe that the State Administration of Foreign Exchange’s decision to “unfreeze” foreign capital will once again deliver a substantial boost to the capital markets. A‑shares could see an influx of trillions of yuan in additional funds, while the long-term rise in the share of foreign investors will gradually improve the investor composition of A‑shares, increasing the proportion of long-term and institutional investors and fostering the market’s mature, stable development. Meanwhile, securities offices that lead in institutional and international business will also benefit; investors may want to keep an eye on buying opportunities at lower prices among industry‑leading brokerage houses.

In addition to market capital’s preference for brokerage stocks, margin traders have also shown strong interest in this sector recently, drawing attention. According to data from Tonghuashun, since the beginning of September through September 10, 32 brokerage stocks have been favored by margin investors, with total net margin purchases amounting to RMB 2.951 billion. Among them, CITIC Securities Investment (RMB 524.1968 million), Great Wall Securities (RMB 285.0542 million), Nanjing Securities (RMB 275.3755 million), Guosheng Financial Holdings (RMB 198.7166 million), Zhejiang Commercial Securities (RMB 173.3092 million), Harbin Investment Co., Ltd. (RMB 168.3545 million), Huaxi Securities (RMB 141.5771 million), First Capital (RMB 110.3726 million), Guosen Securities (RMB 107.0831 million), Huaxin Shares (RMB 102.2114 million), and China National Investment Corporation (RMB 102.1429 million) each recorded cumulative net margin purchases exceeding RMB 100 million during this period.

In addition, long-term investors—particularly insurance capital—have been proactively positioning themselves in brokerage stocks. As of the end of the second quarter this year, eight brokerage stocks—Shenwan Hongyuan, Changjiang Securities, GF Securities, Dongwu Securities, Haitou Shares, Northeast Securities, Ji’ai Technology, and China Oil Capital—were held by insurance investors, and these same stocks have recently attracted varying degrees of interest from margin traders.

The securities‑industry sector has delivered exceptionally strong results, providing robust support for its impressive rally. Statistics show that among 47 brokerage offices, 45 reported year‑on‑year growth in net profit attributable to parent company shareholders in the first half of 2019, accounting for more than 90% of the sample. Notably, 19 companies saw year‑on‑year increases exceeding 100%, with Dongwu Securities (2,758.33%), Lvtting Investment (1,091.68%), Haitou Shares (542.35%), Yuexiu Financial Holding (520.49%), Pacific Securities (439.65%), Shanxi Securities (288.31%), Guohai Securities (280.65%), Founder Securities (270.89%), Jinlong Shares (262.00%), Guosheng Financial Holding (260.31%), and Hongta Securities (251.92%) all posting year‑on‑year gains of at least twofold.

Regarding the investment rationale for the sector going forward, CICC notes that the recent relaxation of the aggregate QFII/RQFII quota will have only a limited short-term impact but should, over the long term, contribute to positive changes in the structure of A-share investors. Further opening up and reform of the capital markets are likely to boost market sentiment, benefiting the brokerage sector. At present, major brokerages are trading at historically low valuations. Our stock-picking framework is as follows: first, focus on large-cap brokers with undervalued valuations undergoing a valuation recovery—specifically Haitong Securities and Guotai Junan; second, target leading offices that stand to gain significantly from ongoing capital-market reforms and from their relatively high exposure to internationalization and institutional‑oriented business lines.

Dongwu Securities also stated that, as favorable policies continue to be implemented, the securities sector will benefit significantly from both the improved risk appetite driven by enhanced market liquidity and the dividends of capital market reforms.

Jiangsu Province has issued the “Provisional Measures for the Administration of Provincial-Level State-Owned Financial Capital.”

On September 11, 2019, in order to standardize the management of provincial-level state-owned financial capital, ensure its effective oversight and prudent utilization, promote the sustained and sound operations of provincial state-owned financial institutions, and better support and safeguard the province’s high-quality development, the Provincial Department of Finance, in accordance with the spirit of documents including the “Guiding Opinions of the CPC Central Committee and the State Council on Improving the Management of State-Owned Financial Capital” (Document No. 25 [2018] of the CPC Central Committee), the “Implementation Opinions of the CPC Jiangsu Provincial Committee and the Jiangsu Provincial People’s Government on Improving the Management of State-Owned Financial Capital” (Document No. 11 [2019] of the CPC Jiangsu Provincial Committee), and the “Financial Enterprise Financial Regulations” (Ministry of Finance Order No. 42), and taking into account the actual conditions of provincial-level state-owned financial capital management, formulated, with the approval of the provincial government, the “Measures for the Administration of Provincial-Level State-Owned Financial Capital of Jiangsu Province (Trial).”

Attachment: Measures for the Administration of Provincial-Level State-Owned Financial Capital in Jiangsu Province (Trial)

Chapter I General Provisions

Article 1: In order to standardize the management of provincial-level state-owned financial capital, ensure its effective oversight and prudent utilization, promote the sustained and sound operations of provincial-level state-owned financial institutions, and better serve and safeguard the province’s high-quality development, this Measures is formulated in accordance with the spirit of documents including the “Guiding Opinions of the CPC Central Committee and the State Council on Improving the Management of State-Owned Financial Capital” (Document No. 25 [2018] of the CPC Central Committee), the “Implementation Opinions of the CPC Jiangsu Provincial Committee and the Jiangsu Provincial People’s Government on Improving the Management of State-Owned Financial Capital” (Document No. 11 [2019] of the CPC Jiangsu Provincial Committee), and the “Financial Enterprise Financial Regulations” (Ministry of Finance Order No. 42), while taking into account the actual conditions of provincial-level state-owned financial capital management.

Article 2 This Measures shall apply primarily to provincial-level state-owned financial institutions directly administered by the Provincial Department of Finance.

Article 3: The management of provincial-level state-owned financial capital shall adhere to the principles of serving the overall national interest, centralized and unified administration, clear delineation of powers and responsibilities, and prudent and orderly implementation. It shall safeguard the property rights of corporate legal persons, grant provincial-level state-owned financial institutions operational autonomy, and assign them responsibility for managing state capital. Furthermore, it shall establish a decision-making, execution, and oversight mechanism for state-owned financial institutions that ensures equal distribution of powers and responsibilities, coordinated operations, and effective checks and balances.

Article 4. The Provincial Department of Finance shall establish a list of powers and responsibilities, with a focus on strengthening the management of provincial-level state-owned financial institutions, in order to achieve the goal of enhancing state‑owned asset management by prioritizing capital‑based oversight.

Article 5: Provincial-level state-owned financial institutions shall, in accordance with the principle of “unified regulation and tiered management,” uniformly implement the laws, regulations, and policy frameworks governing state-owned financial capital and be incorporated into the national monitoring and statistical system for state-owned financial assets.

Chapter 2: Basic Management

Article 6: Provincial state-owned financial institutions shall promptly submit to the Provincial Department of Finance reports on the possession, use, and changes in state capital; carry out, in accordance with applicable regulations, registration procedures for the possession, transfer, and cancellation of state capital property rights; and obtain the Certificate of Registration of State Capital Property Rights for Financial Enterprises issued by the Provincial Department of Finance.

Article 7: When provincial-level state-owned financial institutions undergo restructuring or reorganization, transfer of property rights or assets, or determine the value of non-monetary assets, they shall engage a qualified asset appraisal agency to conduct an asset appraisal and submit the appraisal results to the Provincial Department of Finance for approval or filing.

Article 8: The transfer of state-owned assets by provincial-level state-owned financial institutions shall, in principle, be conducted through securities trading systems or qualified property rights trading institutions. Where the transfer involves equity interests in first-tier subsidiaries, or where such transfers concern state-owned equity in key industries or significant lower-tier companies, the relevant asset transfer matters shall be submitted to the Provincial Department of Finance for approval.

Article 9: The Provincial Department of Finance, in accordance with the specific circumstances of capital contributions and the ownership relationships involved, shall directly collect or supervise the collection of state‑owned capital income that provincial state‑owned financial institutions are required to remit. Such income shall be primarily used to optimize the strategic allocation of provincial state‑owned financial capital and to enhance the core competitiveness of provincial state‑owned financial institutions.

Article 10: Provincial state-owned financial institutions shall strengthen the management of state capital to ensure its preservation and appreciation. The Provincial Department of Finance shall, in accordance with laws and regulations, verify the results of state capital preservation and appreciation for provincial state-owned financial institutions and provide feedback on these results to the respective institutions.

Article 11: Provincial state-owned financial institutions and their significant first-tier holding subsidiaries that establish an enterprise annuity scheme shall, if they have already undergone shareholding reform, submit the scheme to the Provincial Department of Finance for record after completing the relevant corporate governance procedures; if they have not yet undergone shareholding reform, they shall submit the scheme to the Provincial Department of Finance for review. Other subsidiaries establishing an enterprise annuity scheme shall follow their own internal management procedures. The operation of the enterprise annuity scheme shall be reported to the Provincial Department of Finance by the end of April each year, and any suspension or termination of the scheme shall be promptly reported.

Article 12: Provincial state-owned financial institutions shall, in accordance with laws and regulations, formulate implementation measures for the management of performance‑related allowances and business expenditures of group (holding) company executives and subsidiaries at all levels, and submit these measures to the Provincial Department of Finance for record. The Provincial Department of Finance, in conjunction with relevant departments, shall provide guidance and oversight over the performance‑related allowances and business expenditures of executives of provincial state‑owned financial institutions.

Article 13: Provincial-level state-owned financial institutions shall strictly implement the statistical monitoring and reporting system for state-owned financial capital, comprehensively disclosing information on the total amount, allocation, structure, disposal, and returns of such capital, and reporting on matters including the reform of state-owned financial institutions, asset management, risk control, and the remuneration of senior management.

Chapter 3: Management of Material Matters

Article 14: Where provincial state-owned financial institutions are involved in matters of significant importance, they shall submit a report to the Provincial Department of Finance in advance. The Provincial Department of Finance shall, in accordance with laws and regulations, review and provide its opinions; for particularly significant matters, it shall seek approval from the Provincial People’s Government.

Major matters involving first-tier subsidiaries of provincial-level state-owned financial institutions shall be submitted to the Provincial Department of Finance for review in advance.

The aforementioned material matters include, but are not limited to, corporate restructuring, reorganization, listing, and changes in equity interests; amendments to the articles of association; significant investment or financing activities; major asset disposals; substantial overseas investments; strategic development plans; and annual financial budgetary or final‑account proposals. For material matters involving listed companies, the relevant regulations on information disclosure shall be strictly complied with.

Article 15: The Provincial Department of Finance shall, in accordance with laws and regulations, appoint equity directors and external directors to provincial-level state-owned financial institutions, and shall regularly organize training and guidance and conduct performance assessments. Provincial-level state-owned financial institutions shall provide the necessary working support to facilitate the fulfillment of duties by equity directors and external directors. Such equity directors and external directors shall, in compliance with the requirements of the Provincial Department of Finance, express their opinions and exercise their powers.

Article 16: Provincial state-owned financial institutions shall, at least ten working days prior to the convening of shareholders’ (general) meetings and board meetings, submit the meeting agenda and relevant materials to the Provincial Department of Finance.

Article 17: Provincial state-owned financial institutions shall fully implement the decision-making system for major decisions, important personnel appointments and removals, major project arrangements, and large-scale fund operations (collectively referred to as “Three Major Matters and One Large Amount”), and shall submit the specific implementation measures for this system to the Provincial Department of Finance and other relevant departments for review and approval in accordance with applicable regulations.

Article 18: The Provincial Department of Finance shall refine and improve the performance appraisal system for business operations, annually set performance targets for provincial-level state-owned financial institutions, and conduct performance assessments to comprehensively reflect their asset management efficiency and social contributions.

Article 19: The Provincial Department of Finance shall refine and improve the remuneration management system for the heads of provincial-level state-owned financial institutions, review their remuneration, and submit it for approval in accordance with prescribed procedures. At the end of each fiscal year, provincial-level state-owned financial institutions shall, in compliance with relevant regulations, formulate a remuneration settlement plan for their own executives, implement it after completing the requisite decision-making procedures, and promptly report the settlement results to the Provincial Department of Finance for record‑keeping.

Article 20: The Provincial Department of Finance shall, in accordance with laws and regulations, formulate a management system for the total payroll of provincial state-owned financial institutions, and file and approve their total payroll budget plans. Provincial state-owned financial institutions shall strictly implement the filed or approved total payroll budget plans and ensure that responsibility for budget execution is assigned at each level. At the end of each fiscal year, such institutions shall, in accordance with applicable provisions, prepare a settlement plan for their total payroll, implement the requisite decision-making procedures, and promptly submit the settlement results to the Provincial Department of Finance for record‑keeping.

Article 21: The Provincial Department of Finance shall, in accordance with national policies and regulations, formulate measures for the administration of employee stock ownership in provincial-level state-owned financial institutions. Such institutions shall implement employee stock ownership plans in compliance with laws and regulations, effectively aligning the interests and risks of the enterprise and its employees, strengthening internal incentives, and improving corporate governance.

Chapter 4 Financial Management

Article 22: Provincial state-owned financial institutions shall, in accordance with laws and regulations, strengthen financial management, prepare financial accounting reports, and, as required, submit to the Provincial Department of Finance, within seven working days after the end of each quarter and within four months after the end of the year, both hard copies and electronic data of their quarterly financial briefs and annual final accounts. The annual financial final accounts report must be audited by a qualified accounting office.

Article 23: In accordance with applicable laws, regulations, and supervisory requirements, provincial-level state-owned financial institutions required to set aside provisions shall make such provisions promptly and in full, and shall submit to the Provincial Department of Finance, within one month after the end of each quarter, a report on the status of provision allocations, together with category‑specific information on changes in provision balances, non‑performing assets, and the coverage ratio of allowances for non‑performing loans.

Article 24: Provincial state-owned financial institutions shall, in accordance with laws and regulations, strengthen the management of write‑off of non‑performing loans, formulate and refine their own implementation measures for such write‑offs, establish and improve relevant management systems concerning the identification and accountability for non‑performing loans as well as the pursuit of liability for write‑offs, and submit to the Provincial Department of Finance, by the end of April each year, a report on the previous year’s non‑performing loan write‑offs together with a special audit report.

Article 25: Provincial state-owned financial institutions shall, in accordance with laws and regulations, strengthen the management of bulk transfers of non‑performing assets, establish and improve their internal systems for managing such transfers, and, within one month after the completion of each batch of non‑performing asset transfers, report to the Provincial Department of Finance the transfer plan and the outcomes of the disposal. Furthermore, by the end of April each year, they shall submit to the Provincial Department of Finance a report on the status of bulk transfers of non‑performing assets for the preceding year.

Article 26: Provincial state-owned financial institutions shall, in accordance with laws and regulations, strengthen the management of loan relief and reduction measures; formulate and refine their own implementation rules and operational procedures for such measures; and, after completing internal decision-making procedures, submit these to the Provincial Department of Finance for record‑keeping. They shall strictly adhere to the principle of tiered authorization based on the amount of relief or reduction; where the relief or reduction on a single loan reaches the prescribed threshold, the relevant plan must be submitted to the Provincial Department of Finance for review. Following the issuance of the department’s review opinion and approval by the provincial government, the measure may be implemented. By the end of April each year, provincial state-owned financial institutions shall report to the Provincial Department of Finance on the previous year’s loan relief and reduction activities, the status of accountability, and the results of any special audits.

Chapter Five: Supervision and Inspection

Article 27: The Provincial Department of Finance shall, in accordance with laws and regulations, conduct regular or ad hoc inspections and oversight of provincial-level state-owned financial institutions, with a particular focus on examining and assessing the implementation of systems governing the management of state-owned financial capital and financial management.

Article 28: The Provincial Department of Finance shall promote coordinated collaboration among the provincial-level state‑owned financial capital investor oversight, internal oversight, oversight by dispatched directors, and such supervisory mechanisms as financial regulation, auditing, disciplinary inspection and supervision, inspection tours, and public oversight. It shall strengthen information sharing, establish collaborative mechanisms, and forge a unified supervisory force.

Article 29: The results of preserving and increasing the value of state-owned capital, the performance appraisal outcomes, and the status of fulfilling duties related to state-owned capital and financial management of provincial-level state-owned financial institutions shall serve as important bases for determining matters such as the enterprise’s total wage bill and the remuneration of its principal officers. Meanwhile, the Provincial Department of Finance shall forward these materials to relevant departments as crucial references for the appointment, removal, rewards, and disciplinary actions of responsible personnel.

Article 30: The Provincial Department of Finance shall, in accordance with laws and regulations, issue reminders to and urge rectification by provincial-level state-owned financial institutions that violate provisions on the management of state‑owned financial capital and financial management; where violations of discipline are suspected, such cases shall be referred to the competent authorities for investigation; where criminal or unlawful conduct is suspected, such cases shall be referred to the judicial organs for handling.

Chapter VI Supplementary Provisions

Article 31: Provincial state‑owned financial capital managed by the Provincial Department of Finance on a trust basis shall be administered by the entrusted management institution in accordance with the laws, regulations, and policy frameworks governing state‑owned financial capital, and by reference to these Measures, except for matters expressly designated by the State and the Province as being directly managed by the fiscal authorities. With respect to particularly significant matters arising in the course of entrusted management, the entrusted management institution shall, prior to taking action, submit them to the Provincial Department of Finance for review and the formulation of recommendations, after which they shall be submitted to the Provincial People’s Government for approval.

Article 32: The Provincial Department of Finance shall, in accordance with relevant national and provincial laws, regulations, policies, and systems, as well as the requirements of these Measures, formulate implementing rules for the management of state-owned financial capital at the provincial level, taking into account actual conditions.

Article 33: The financial departments of each prefecture-level city and county (city) may, in accordance with these Measures and other relevant provisions and taking into account local conditions, formulate specific implementation measures for the management of state-owned financial capital within their respective jurisdictions.

Article 34 This Measures shall come into force on September 30, 2019. In the event of any inconsistency between this Measures and previously issued provisions, this Measures shall prevail.

Commercial & Corporate

Leveraging independently developed innovative technologies, Wantai Biological has partnered with GSK to develop a next-generation HPV vaccine.

On September 6, YANGSHENGTANG’s Xiamen Wantai Biologics (Innovax), representing the YANGSHENGTANG Group and Professor Xia Ningshao’s team from Xiamen University, signed a global cooperation agreement with GSK, the world’s leading vaccine manufacturer. The two parties announced that they will jointly develop a next-generation human papillomavirus (HPV) vaccine, leveraging Innovax’s innovative antigen technology derived from Xiamen University and GSK’s adjuvant system.

According to reports, this marks the first time China’s vaccine industry has leveraged its proprietary technologies to collaborate closely with world‑leading vaccine manufacturers, jointly developing a blockbuster vaccine and bringing it to global commercialization. This milestone underscores that Chinese vaccine companies have attained an industry‑leading position in the research and development of critical core technologies, and it also represents a landmark initiative in advancing win‑win cooperation between the Chinese and European pharmaceutical sectors.

Under the terms of the agreement, Wantai Biological will leverage its proprietary E. coli‑based technology platform to produce antigens that meet international standards. These antigens will be combined with GSK’s AS04 adjuvant to develop a new HPV vaccine. Xiamen Wantai will also obtain exclusive distribution rights for this novel vaccine in China and select other countries. GSK stated that this collaboration with Wantai will help accelerate the development of its next‑generation cervical cancer vaccine.

Zhong Shanshan, Chairman and Founder of Yangshengtang Group—the parent company of Wantai Biological—stated: “I am delighted to establish a collaboration with an international pharmaceutical leader like GSK. This is a tailor-made partnership in which we leverage our near‑perfect HPV protein particle platform, combined with GSK’s world‑class adjuvant technology, to design the next‑generation cervical cancer vaccine. Both parties will work toward our shared objectives, ultimately delivering enhanced health solutions for women worldwide. Since its inception, Yangshengtang has been committed to providing products and services that advance human health, and we look forward to seeing this jointly developed next‑generation HPV vaccine drive further breakthroughs in science.”

Jointly developing the next-generation HPV vaccine

Professor Zhang Jun of the School of Life Sciences at Xiamen University explained that current cervical cancer vaccines still require ongoing improvements. For instance, the vaccination regimen consists of three doses, and a shorter schedule is not feasible. Moreover, approximately 10% of cervical cancers remain unpreventable by existing vaccines; therefore, even after vaccination, regular screening remains essential as women age.

Zhang Jun believes that the collaboration between GSK and Wantai Biological will combine cutting-edge HPV vaccine antigen‑production technology with state-of-the-art vaccine adjuvant technology, potentially further enhancing the vaccine’s immunogenicity and broadening the spectrum of protective antibodies. This could, on the one hand, make it possible to reduce the number of doses required, and on the other, help prevent infections caused by a wider range of HPV types associated with cervical cancer, as well as cervical cancer itself.

According to reports, the National Engineering Research Center for Diagnostic Reagents and Vaccines against Infectious Diseases at Xiamen University, in collaboration with Wantai Biological of Yangshengtang, has jointly developed a unique Escherichia coli–expressed virus-like particle vaccine technology platform that boasts complete independent intellectual property rights. In 2017, this groundbreaking achievement was awarded the Qiu Shi Outstanding Scientific and Technological Achievement Collective Prize and was hailed as opening up a new pathway for the industrialization of genetic engineering vaccines.

 Under the agreement signed by both parties, Wantai Biological will build a vaccine production line in Haicang, Xiamen, compliant with the standards of China, the United States, the European Union, and the WHO. The multi‑type HPV vaccine antigens produced at this facility will be supplied to GSK, which will combine these antigens with its proprietary AS04 adjuvant to develop a new HPV vaccine and commercialize it globally, including in Europe and North America. This collaboration does not preclude Wantai Biological from developing its own HPV vaccine. In addition, Wantai Biological will obtain exclusive distribution rights for the new vaccine in China and certain other countries.

 Roger Connor, Chairman of GSK’s Vaccine Business, stated: “I am delighted to partner with Wantai Biological to address this critical public health need. At present, HPV‑related cancers remain a leading cause of mortality among women worldwide. This collaboration aims to leverage GSK’s proprietary adjuvant system, AS04, together with the antigen technology developed by Wantai Biological, to create a next‑generation HPV vaccine.”

Seize the global cervical cancer vaccine market

According to a report by the World Health Organization, cervical cancer is one of the most common gynecological malignancies and ranks as the second most frequently diagnosed cancer among women aged 15 to 44 worldwide.

In May 2019, the World Health Assembly convened in Geneva, where member states adopted a strategic goal to eliminate cervical cancer. Subsequently, an expert panel meeting on human papillomavirus (HPV) highlighted that one of the major obstacles to achieving this goal is the insufficient supply of HPV vaccines.

At present, only two companies—the U.S.-based Merck & Co. and the U.K.-based GlaxoSmithKline (GSK)—have approved cervical cancer vaccines on the market. According to estimates, in China alone, approximately 356 million people currently require HPV vaccination.

Since 2002, Wantai Biological has collaborated with the research team led by Professor Xia Ningshao at Xiamen University to develop an HPV vaccine with fully independent intellectual property rights. After 15 years of research and development, and following a large-scale Phase III clinical trial involving 7,372 women, Wantai Biological’s first cervical cancer vaccine, Xinuokang, officially submitted its marketing application in November 2017 and is expected to receive approval for market launch this year.

 Wantai Biological stated that the company has positioned itself in the more promising third-generation cervical cancer vaccine.

 It is worth noting that this collaboration also marks another successful outcome of the close, integrated industry–university–research partnership between Yangshengtang Wantai Biologics and Xiamen University, which has spanned two decades, further reinforcing the virtuous cycle of “university–enterprise cooperation and shared growth.”

 Under nearly 20 years of funding from Yangshengtang, Professor Xia Ningshao’s team has achieved several world firsts.

 Under the cooperation agreement previously signed between Wantai Biological and Xiamen University, Xiamen University has granted Wantai Biological exclusive rights to commercially develop this technology and to engage in collaborative development with third parties. In addition to receiving a substantial share of patent licensing fees, Xiamen University will also receive a portion of the proceeds from the global commercialization of each vaccine, as compensation for technology transfer.

Taking advantage of the Belt and Road Initiative, Baishishan plans to build a factory in Serbia.

 Under the Belt and Road Initiative, an increasing number of Chinese enterprises are expanding overseas and cultivating deep roots in countries along the Belt and Road. At the same time, many Chinese brands closely tied to everyday life have leveraged the policy momentum of the Belt and Road to extend their brands and businesses into the Balkan region and even further into other European countries. Baishuishan is one of the many companies that have chosen to invest in Europe.

It is understood that Baishuishan has not only sponsored Serbia’s national volleyball and men’s basketball teams but has also placed the establishment of a water source in Serbia on its agenda. The brand has launched a series of investment initiatives in Serbia and has reaped significant rewards recently: Serbia’s men’s basketball team has notched successive victories at the FIBA World Cup, while the women’s team clinched the European Championship yesterday, overcoming formidable rivals such as Italy, Poland, and host nation Turkey.

In response, an industry insider noted, “Given the intense physical demands athletes face, timely hydration and replenishment of trace minerals on the field are crucial. Most water brands today offer either purified water or natural water. The former is so pure that it serves only to quench thirst, while the latter contains far fewer minerals than true mineral water. By contrast, Baishuishan boasts a genuine lineage as a naturally sourced mineral water from ancient rock formations—its spring water is both rare and rich in scientifically balanced minerals, making it an ideal match for athletic performance. This is precisely why Baishuishan has been invited to partner with numerous international sporting events. Moreover, as these events are broadcast, the brand consistently appears alongside the athletes; with its distinctive flat‑shoulder design, Baishuishan enjoys an inherent advantage in visual appeal.”

In fact, the global brand influence of Baisuishan is growing steadily. Despite the aggressive expansion of overseas water brands in the Chinese market, Baisuishan has set its sights squarely on international markets: it has exported its products to more than a dozen countries and regions, including the United States, Canada, Singapore, Australia, Hong Kong, and Macao, and has become the first beverage brand in the industry to establish a source‑water site abroad.

According to industry insiders, Baishuishan, guided by the principle of sourcing high-quality mineral water, has already established production facilities in Italy and Fiji. Its soon-to-be‑launched plant in Serbia could become the brand’s third overseas facility. By prioritizing its brand while closely aligning its water‑sourcing strategy, Baishuishan is well positioned to provide comprehensive support to athletes, helping them on their journey to global success.

Notably, at the time, Baishuishan had provided drinking water support to the Chinese national volleyball team for ten consecutive years. By 2018, it had become a global partner of both FIBA and FIVB, embedding its deep commitment to sports into the very essence of the brand and propelling it to new heights. Today, Baishuishan’s strategic network of global water sources has bolstered its product portfolio and facilitated the promotion of its international brands. In just a few short years, thanks to its premium natural mineral water—distinct from purified, distilled, or ordinary spring water—Baishuishan has made significant strides in the sports arena, establishing itself not only as the “aristocrat of waters” but also as a standard‑issue choice for top‑tier sporting events.

Recently, Baishuishan has once again aligned itself with the Belt and Road cooperation between China and Serbia, extending its heartfelt support to Serbian soil. By forging deep partnerships with Serbian volleyball and basketball, the brand not only elevates its stature and depth but also leverages the tenacity of Serbian athletes to expand its influence across more countries and regions. Upholding its strategy of advancing both the brand and its water source in tandem, Baishuishan is better positioned to drive the growth of its overseas markets.

Great Wall Motor Announces Equity Incentive Plan, Granting Awards to Nearly 2,000 Recipients

On September 6, Great Wall Motor issued an announcement introducing its 2019 Restricted Stock and Stock Option Incentive Plan. Under this plan, a total of 185.0913 million equity interests are proposed to be granted, representing approximately 2.028% of the company’s total shares, to nearly 2,000 eligible recipients, including directors, senior executives, and key technical and business professionals.

The launch of this plan will further help Great Wall Motor establish and refine its incentive mechanisms, attract and retain top talent, and fully motivate the company’s core leadership team.

The industry generally believes that Great Wall Motor’s latest incentive program is not merely focused on the present; its primary aim lies in the future. Only by securing top-tier talent can a company secure its long-term competitive edge. This round of incentives, which includes more than 185 million restricted shares and stock options, represents a key strategy for aligning core employees with the company’s growth objectives and achievements. By doing so, it not only ties corporate interests to those of its workforce but also fully unleashes the full potential and drive of its most critical talent.

Throughout its development, Great Wall Motor has forged a talent strategy that underpins its strong market competitiveness. To date, the Group employs over 60,000 people, with an R&D team exceeding 7,000 members—accounting for more than 10% of the total workforce, on par with leading global automakers. With the steady influx of top-tier, highly skilled professionals, Great Wall Motor has established numerous domestic R&D centers, including the Haval Technology Center, the Hydrogen Energy Technology Center, and the National Intelligent Connected Vehicle and Smart Transportation Demonstration Zone (Beijing–Hebei). It has also set up overseas R&D hubs in Japan, the United States, Germany, India, Austria, and South Korea, creating a globally integrated R&D network centered on its Baoding headquarters and spanning Europe, Asia, and North America.

Unilumin Technology welcomes a new strategic investor, marking a significant step forward in its global strategy through a powerful partnership.

 On September 11, Unilumin Technology announced that its controlling shareholder and actual controller, Lin Mingfeng, signed an agreement on September 9 of this year to transfer 45.89 million shares of the company—representing 5% of the total share capital as of September 9, 2019, excluding treasury shares—to Barco Vision Electronics Co., Ltd. (hereinafter referred to as “Barco Electronics”). The agreed-upon transfer price is RMB 9.16 per share, with a total transaction value of RMB 420 million.

Prior to this change in equity interests, Barco Electronics did not hold any shares of Unilumin Technology. Meanwhile, Lin Mingfeng collectively held 368 million shares of Unilumin Technology, representing 40.10% of the company’s total share capital as of September 9, 2019, excluding treasury shares. Unilumin Technology has explicitly stated that this equity change will not result in a shift in the company’s controlling shareholder or actual controller, nor will it have a material impact on the company’s governance structure or its ongoing operations. In turn, Lin Mingfeng indicated that, over the next 12 months, he may increase or decrease his holdings of equity interests in the listed company.

Public records show that Barco Electronics was registered in Hong Kong, China, in 2003 as a wholly owned subsidiary of Barco N.V. (“Barco Limited”). Barco Limited was founded in 1934 and listed on the Euronext Brussels exchange in 1986. Today, it operates across three major business segments—entertainment, corporate & institutional solutions, and healthcare—with a global footprint spanning the Americas, Asia-Pacific, Europe, and the Middle East. In 2018, Barco Limited reported sales of €1.029 billion and net profit attributable to parent company shareholders of €75 million. As of the end of 2018, the company employed a total of 3,664 people worldwide.

Unilumin Technology has high expectations for this transaction. The company stated that Barco NV possesses leading technological advantages in image and video processing, as well as comprehensive LED solutions. Through this strategic partnership, Unilumin anticipates rapid growth in specialized LED display markets such as control rooms, AR/VR, healthcare, and cinema. Meanwhile, Barco will leverage Unilumin’s strengths in product portfolio, smart manufacturing, and small-pitch technology to bolster its global competitiveness.

Unilumin Technology stated that this transaction represents a significant step in the company’s global strategy. Through this strategic partnership, the two parties will establish a comprehensive and in-depth collaborative relationship in the LED display sector, which will help further optimize the company’s equity structure, accelerate vertical integration within the LED display industry, and expand the company’s scale horizontally. This will strengthen its core competitiveness and promote long-term, healthy, and stable growth. Unilumin also noted that, with respect to the cinema‑screen market, Barco and the company will promptly complete the joint development and commercialization of cinema LED display solutions that meet DCI certification standards, thereby building up both technological and market readiness for a potential boom in the cinema‑display segment.

Medisys is dedicated to providing integrated, comprehensive preclinical R&D services in the pharmaceutical field.

Medisii’s initial public offering application on the STAR Market will be reviewed on September 20. Medisii is a specialized CRO provider offering comprehensive preclinical R&D services in the biopharmaceutical sector, delivering end-to-end new‑drug development solutions that comply with both domestic and international regulatory standards to pharmaceutical companies and research institutions worldwide.

The company plans to raise RMB 347 million this time, which will be allocated to projects including the establishment of a drug discovery and pharmaceutical research and regulatory‑submission platform at its Innovative Drug Research and International Regulatory‑Submission Center. To date, the company has responded to five rounds of inquiries, with compensation policies and the identification of core technical personnel emerging as key areas of focus.

Steady and robust performance growth

Medisys offers end-to-end preclinical R&D services in the biopharmaceutical field, serving as a comprehensive CRO that covers the entire new‑drug development process—from lead compound screening and optimization to submission of clinical trial applications. With years of accumulated expertise in preclinical research and extensive experience in collaborative projects, the company has mastered robust modeling techniques for approximately 300 pharmacological assay models.

Capitalizing on the favorable growth prospects of the biopharmaceutical R&D CRO market, Medisys has posted rapid revenue expansion. From 2016 to 2018 and for the first six months of 2019, the company’s operating revenues were RMB 232 million, RMB 248 million, RMB 324 million, and RMB 199 million, respectively, with a compound annual growth rate of 18.01% between 2016 and 2018. Net profits attributable to the parent company amounted to RMB 42.92 million, RMB 40.18 million, RMB 58.98 million, and RMB 28.62 million, respectively.

The company’s principal business revenue is derived from drug discovery and pharmaceutical research services, as well as preclinical research services. Specifically, drug discovery and pharmaceutical research services encompass compound synthesis and screening, API and formulation process development, and related offerings. During each reporting period, these services accounted for 55.77%, 55.33%, 55.99%, and 56.55% of the company’s main‑business revenue, with a compound annual growth rate of 18.24% from 2016 to 2018. Preclinical research services primarily include pharmacodynamic studies, pharmacokinetic studies, and toxicology assessments, posting a compound annual growth rate of 17.71% over the same period. The company’s two core business segments operate in a synergistic manner, ensuring steady overall growth.

During the reporting period, the company’s overall gross profit margins were 35.94%, 33.79%, 36.13%, and 36.60%, respectively. In 2017, the company undertook renovation and expansion of certain laboratories, resulting in an increase in fixed assets such as laboratory equipment and long-term deferred expenses, which led to a rise in fixed costs; at the same time, labor costs also increased. Consequently, the company’s overall gross profit margin declined by 2.15 percentage points compared with 2016. In 2018, the gross profit margin expanded by 2.34 percentage points versus 2017, and from January to June 2019, it rose by an additional 0.47 percentage points compared with the full year 2018. Overall, the company’s gross profit margin has remained relatively stable.

Wanlian Securities notes that, driven by the rapid overall growth of the outsourcing industry, a number of high-quality innovative‑drug outsourcing offices have gradually entered the capital markets. The A‑share market already includes leading outsourcing service companies such as WuXi AppTec, Tigermed, Zhaoyan New Drug, and Kanglong Chemical. CRO offices are poised to leverage financing platforms to expand their overseas operations and pursue M&A activities. As industry leaders strengthen their competitive edge, market concentration in the R&D outsourcing sector is expected to rise steadily. Wanlian Securities believes that the company’s overall performance continues to grow steadily. Through the implementation of this fundraising project, the company will build more comprehensive and advanced platforms for drug development, pharmaceutical research and regulatory submissions, as well as preclinical research and submission services. This will enable the company to meet the evolving R&D strategies and needs of an expanding client base, deliver higher‑complexity, higher‑value‑added pharmaceutical discovery and research services, and further solidify its one‑stop preclinical CRO service strategy.

The industry has significant growth potential.

A CRO is an organization or institution that provides specialized outsourcing services to pharmaceutical companies and other pharmaceutical R&D entities throughout the drug development process. As an external resource available to pharmaceutical offices, CROs can shorten new‑drug development timelines, reduce R&D costs, and help companies achieve high‑quality research while keeping expenditures low.

Affected by factors such as increasing challenges in target discovery, growing molecular complexity, and rising safety requirements, the R&D costs of innovative drugs have risen sharply. At the same time, the overall success rate of new‑drug development has been steadily declining. Looking at the clinical‑to‑approval pipeline, the success rates for Phase I and Phase II trials have fallen from 12% and 25%, respectively, to 4% and 12%; Phase III and post‑approval stages have also experienced varying degrees of decline. The relentless rise in R&D costs and the waning success rates of new‑drug programs are prompting pharmaceutical companies to recalibrate their development strategies and ramp up outsourcing.

The prospectus indicates that the CRO industry has experienced rapid growth in recent years. From 2015 to 2021, the global CRO market size expanded from USD 31.85 billion to USD 64.58 billion, with an estimated compound annual growth rate of 12.8%. Driven by factors such as specialized division of labor and risk-sharing, CRO penetration is expected to continue rising, further expanding the market; by 2020, CRO penetration is projected to reach 54%. In 2015, the domestic CRO market reached RMB 37.9 billion, posting an average annual compound growth rate of 29.5%. Supported by growing R&D demand and accelerated drug review and approval processes, the domestic CRO market is poised for substantial expansion over the next five years, offering significant growth potential.

It is expected that, driven by the continued enhancement of domestic CROs’ capacity to undertake global projects, the steady progress of innovative drug R&D in China, and the gradual rollout of generic drug consistency‑evaluation initiatives, the domestic CRO sector will maintain a growth rate of over 20%. By 2020, the industry’s size is projected to approach RMB 100 billion.

The prospectus indicates that, given the low success rate of new‑drug development, pharmaceutical R&D companies tend to partner with large, well‑established CROs as a prudent strategy. Looking at overseas markets, leading international CRO players have actively expanded their core capabilities into end‑to‑end, one‑stop CRO services, offering comprehensive solutions spanning from drug discovery through to commercialization. In China, the CRO sector is expected to see rising industry concentration centered around market leaders, giving rise to several sizable, technologically advanced, and highly service‑oriented integrated CRO offices. Smaller CROs lacking core competencies are likely to be phased out, while overall industry concentration will gradually increase.

After five rounds of inquiries

Currently, Medisys has undergone five rounds of inquiries in its application to list on the STAR Market, with compensation and the identification of core technical personnel among the key areas of focus.

Regarding the relatively low compensation of department heads at the vice president level at Medicxi, with some individuals earning significantly below industry benchmarks, the company stated that these vice‑presidential‑level employees joined in pursuit of greater career development opportunities and higher professional achievements, while also taking their family circumstances into account. Furthermore, the company anticipates a high likelihood of implementing equity‑based incentives for its vice presidents in the future, with expected returns; therefore, the recruitment of vice presidents is deemed reasonable.

The company stated that, taking into account its current business scale, operational performance, and other factors, it has established a compensation system aligned with its stage of development. The company aims to grow stronger and more prosperous together with its employees by offering competitive remuneration and appropriate equity‑based incentives, thereby sharing in the fruits of its sustained future growth. Under its compensation policy, the company has set out guideline ranges for salaries at each job level; specifically, employees at the department vice president level are expected to earn an average annual salary of approximately RMB 480,000.

Taxation TAXATATION

The China Banking and Insurance Regulatory Commission has issued the Measures for the Administration of Related-Party Transactions of Insurance Companies.

To thoroughly implement the guiding principles on financial work articulated by the CPC Central Committee and the State Council at the Central Economic Work Conference and the National Financial Work Conference, further strengthen oversight of related-party transactions by insurance companies, resolutely crack down on illicit practices such as the transfer of benefits through unauthorized related-party dealings, and effectively mitigate financial risks, the China Banking and Insurance Regulatory Commission recently issued the Measures for the Administration of Related-Party Transactions of Insurance Companies (hereinafter referred to as the “Measures”).

The Measures comprise seven chapters and sixty-four articles, strengthening the oversight of related-party transactions and enhancing internal control management at insurance companies in the following key areas: First, refining the criteria for identifying related parties. Drawing on international and domestic accounting standards as well as the practical realities of China’s regulatory framework for related-party transactions in the insurance sector, the Measures establish a clear and reasonable definition of related-party status. Second, formulating regulatory indicators in a scientifically sound manner. In light of recent developments in insurers’ business operations and their management characteristics, and guided by the principle of “prioritizing key matters while adopting a more flexible approach to minor ones,” the Measures set forth specific thresholds for material related-party transactions. They also further refine the regulatory ratios applicable to asset‑investment‑related transactions, establishing upper limits to contain overall risks associated with such dealings. Third, reinforcing穿透 (penetration)‑based supervision. Insurers are required, in accordance with the principle of substance over form, to track and monitor the flow of insurance funds, penetrating layer by layer down to the underlying assets. For natural persons, legal entities, or other organizations that may give rise to conflicts of interest, related parties and related-party transactions are identified through such penetration. Fourth, improving internal control and accountability mechanisms. Insurers are mandated to establish a Board‑level Related‑Party Transaction Control Committee and a Related‑Party Transaction Management Office, which will oversee both comprehensive and day‑to‑day management of related-party transactions, streamline administrative processes, and strengthen internal controls. Accountability mechanisms are reinforced, stipulating that relevant departments within the insurer and independent directors may propose disciplinary measures for violations, while regulatory authorities may order the insurer to hold responsible parties accountable. Fifth, enhancing information disclosure. The Measures assign the Board‑level Related‑Party Transaction Control Committee the overarching responsibility for managing disclosure activities, ensuring the truthfulness, accuracy, and completeness of disclosed information. At the same time, drawing on international regulatory practices, the Measures raise disclosure standards, requiring insurers to report not only the details of related-party transactions in accordance with accounting standards but also, as mandated by regulators, the overall picture of related-party transactions for the year in their annual reports. Sixth, strengthening regulatory functions. A dedicated chapter in the Measures delineates the responsibilities for managing and supervising related-party transactions, obliging shareholders, directors, supervisors, senior management, and other related parties to disclose accurately all information pertaining to their relationships, prohibiting concealment or false statements. It further clarifies that the board of directors bears ultimate responsibility for the management of related-party transactions. The China Banking and Insurance Regulatory Commission, in accordance with the law, will impose regulatory measures against violations and hold responsible parties accountable, thereby intensifying oversight of those bearing liability.

The issuance of the Measures responds to the needs of market development and further strengthens the regulatory framework for corporate governance. Going forward, the CBIRC will reinforce institutional development, address regulatory gaps, and continue to enhance oversight, thereby steadily raising insurance companies’ risk‑prevention awareness and management standards.

The Customs Tariff Commission of the State Council has released the first batch of the initial exclusion list for goods subject to additional tariffs imposed on the United States.

In accordance with the “Announcement of the Customs Tariff Commission of the State Council on the Trial Implementation of Exclusion Procedures for Goods Subject to Additional Tariffs on the United States” (Tariff Commission Announcement [2019] No. 2), and with the approval of the State Council, the Customs Tariff Commission of the State Council on the 11th published the first batch of the initial exclusion list for goods subject to additional tariffs on the United States. For this first batch of such goods, certain items have been excluded, effective September 17, 2019.

Among these, the goods listed in List I will no longer be subject to the additional tariffs imposed by China in response to the U.S. Section 301 measures, from September 17, 2019, to September 16, 2020. The additional duties already levied will be refunded; relevant importing enterprises shall, within six months from the date of publication of the exclusion list, submit applications to the customs authorities in accordance with applicable regulations.

With respect to the goods listed in List II, the additional tariffs imposed by China in response to the U.S. Section 301 measures will not be levied from September 17, 2019, to September 16, 2020; any additional duties already collected will not be refunded.

Going forward, the Customs Tariff Commission of the State Council will continue to carry out the exclusion process for U.S.-origin goods subject to additional tariffs and will issue subsequent batches of exclusion lists in due course.

A responsible official from the relevant department of the China Banking and Insurance Regulatory Commission answered questions from reporters regarding the Measures for the Administration of Related-Party Transactions of Insurance Companies.

The China Banking and Insurance Regulatory Commission recently issued the Measures for the Administration of Related-Party Transactions of Insurance Companies (hereinafter referred to as the “Measures”). A responsible official from the relevant department of the CBIRC answered questions from reporters on related issues.

I. What is the background for issuing these Measures?

Answer: In recent years, the practice of transferring benefits through illicit related-party transactions has become one of the most serious problems plaguing the insurance industry. Some insurers have established non‑financial subsidiaries or structured complex, multi‑tiered financial products to channel funds to affiliated parties, effectively turning their companies into “ATMs” and thereby creating significant risks that have drawn widespread public attention. The Interim Measures for the Administration of Related‑Party Transactions of Insurance Companies, promulgated more than a decade ago, can no longer meet the demands of risk prevention and strengthened regulatory oversight. First, the regulatory framework is incomplete, leaving regulatory gaps. For example, the previous rules did not clearly delineate insurers’ responsibilities for managing related‑party transactions involving their subsidiaries, enabling certain de facto controllers to use subsidiary entities as “funds‑transit hubs,” circumventing scrutiny of related‑party dealings and siphoning off insurance capital. Second, related‑party transactions take many forms, yet the existing regulations lack the substantive oversight and enforcement mechanisms needed to penetrate such arrangements, resulting in regulatory blind spots and making it difficult to satisfy the requirements for identifying and assessing these transactions. Third, the regulatory provisions are fragmented and fail to constitute a unified, comprehensive system, which hinders effective implementation. To strengthen the supervision of related‑party transactions, we have formulated and issued this Measures.

II. What are the principles and objectives of the CBIRC’s regulation of related-party transactions?

Answer: This Measures clarifies the principles of stringent and penetrating supervision, establishing a comprehensive review and reporting system for related-party transactions that covers all stages—before, during, and after the fact. It prioritizes key areas, focusing on larger transactions while exercising greater oversight over smaller ones, with particular attention paid to monitoring related-party transactions and large-scale fund‑use activities at institutions with inadequate corporate governance. The Measures require insurance companies to enhance their market competitiveness and to cap both the number and scale of related-party transactions, thereby achieving the regulatory objectives of strengthening the operational independence of insurers and mitigating the risk of illicit transfers of interests.

III. What is the overall structure of the Measures?

The Measures comprise seven chapters and sixty-four articles, setting forth clear provisions—based on the procedures for managing related-party transactions—regarding the identification of related parties, internal controls over such transactions, and external regulatory oversight. Chapter One, General Provisions, specifies the legal basis and overarching principles underlying the formulation of these Measures. Chapter Two, Related Parties and Related-Party Transactions, defines the criteria for identifying related parties and categorizes types of related-party transactions. Chapter Three, Calculation of Transaction Amounts and Proportionate Limits, outlines methods for computing the amounts of different types of related-party transactions and establishes proportion-based regulatory thresholds for transactions involving the use of funds. Chapter Four, Internal Controls over Related-Party Transactions, mandates that insurance companies establish a Board‑level Committee on Related‑Party Transaction Control to strengthen the management, review, approval, and risk‑control processes for such transactions, while also specifying detailed procedures for the administration and approval of material related-party transactions and standardized transaction agreements. Chapter Five, Reporting and Disclosure of Related-Party Transactions, sets forth the content, timeframes, and channels for reporting and disclosure to enhance external supervision. Chapter Six, Supervision and Management of Related-Party Transactions, prescribes measures for the management and review of related-party transactions and calls for the refinement of relevant regulatory mechanisms in accordance with the law. Chapter Seven, Supplementary Provisions, provides detailed explanations of the specialized terms used throughout the Measures.

IV. In what ways does the Measures optimize the existing system?

A: First, improve the management of related parties. The Board’s Related‑Party Transactions Control Committee is tasked with identifying and maintaining a register of related parties, regularly updating the relevant information files. Directors, supervisors, senior management, and other related parties are required to promptly report their relationships with the insurer. Moreover, insurers must, in accordance with the principle that substance prevails over form, identify any related parties whose relationships could give rise to conflicts of interest. Second, strengthen the internal control framework for related‑party transactions. In terms of governance mechanisms, insurers are required to establish both a Related‑Party Transactions Control Committee and a dedicated office at the board and operational levels, responsible respectively for overall oversight and day-to-day administration of such transactions. This enhances insurers’ proactive management responsibilities, mandating further optimization of management processes, clear assignment of accountability, and end-to-end traceability of control procedures. The initiation and approval procedures for internal accountability are also clarified, stipulating that relevant stakeholders within the insurer may propose disciplinary measures for non‑compliant related‑party transactions, while regulatory authorities may order the insurer to hold accountable those responsible. Third, reinforce external oversight of related‑party transactions. Regulatory review measures have been refined: depending on the circumstances, supervisory authorities may require insurers and their related parties to provide additional documentation or issue public inquiries. The Measures also bolster social oversight by raising disclosure standards for related‑party transactions, requiring insurers to disclose not only the details of such transactions in line with accounting standards but also, in annual reports, an overview of all related‑party activities for the year, consistent with regulatory requirements. Fourth, enhance穿透 (penetration) supervision of related‑party transactions. Insurers are required to establish a comprehensive monitoring system based on the flow of funds, effectively preventing the cross‑company, cross‑industry, and cross‑sector transmission of risks. Penetration‑determination rules have been formulated, applying the principle that substance outweighs form to identify ultimate controllers, persons acting in concert, and the ultimate beneficiaries of financial products, among others. Fifth, strengthen regulatory responsibilities. The Measures dedicate a specific chapter to clarifying management and supervisory duties, requiring shareholders, directors, supervisors, senior management, and other related parties to truthfully disclose information regarding their relationships, prohibiting concealment or false statements. The China Banking and Insurance Regulatory Commission may, in accordance with the law, impose regulatory measures on violations and hold the responsible parties accountable, thereby intensifying oversight of entities bearing responsibility.

The State Council Executive Meeting called for closely addressing public concerns and further ensuring basic living standards, among other measures.

On September 11, Premier Li Keqiang presided over an executive meeting of the State Council, calling for further measures to safeguard basic living standards in response to public concerns. The meeting decided to introduce a policy that reimburses outpatient medication costs for hypertension and diabetes under the urban and rural residents’ medical insurance scheme, thereby alleviating the financial burden on hundreds of millions of patients. It also outlined plans to deepen the integration of medical and elderly‑care services, better addressing the health and long-term care needs of older adults.

The meeting emphasized that, in accordance with the arrangements of the CPC Central Committee and the State Council, meeting the people’s aspirations for a better life and addressing their most pressing concerns should be key priorities in government work. Under the current circumstances, safeguarding and improving people’s livelihoods requires placing particular emphasis on ensuring basic living standards; only when the foundations of people’s well-being are solid can we lay a office basis for development. Employment stability must be given top priority. Continued efforts should be made to provide employment services for unemployed college graduates, support struggling enterprises in maintaining jobs and helping workers transition to new positions, and open up more channels to boost incomes for urban gig workers and rural migrant laborers. Measures to ensure stable supply and prices of pork must be swiftly implemented, unreasonable bans and restrictions on pig farming should be rectified, and adequate market supplies of meat, eggs, vegetables, natural gas, and other essentials for this winter and next spring must be secured. Poverty alleviation efforts must be deepened and advanced. The basic living needs of those affected by floods and other disasters must be guaranteed, and they must be ensured a warm winter. Social safety-net programs such as subsistence allowances and temporary relief measures should be effectively implemented, and basic pensions must be paid on time and in full. All departments are urged to go deep into the grassroots to understand the public’s expectations and demands, carefully identify and vigorously address emerging issues and pressing problems that affect people’s livelihoods. Economic growth drivers should be cultivated with a focus on people’s needs, with greater government support to mobilize social resources, and with expanded access to inclusive, high-quality services in education, healthcare, elderly care, and childcare. Resident preferences should be respected as we intensify renovation of older urban residential areas, continue advancing shantytown redevelopment, and explore ways to support the construction of major livelihood projects that deliver broad benefits and address critical shortcomings, so that the people can enjoy greater gains.

To further strengthen the prevention and control of major chronic diseases and alleviate patients’ medication burdens, the meeting decided that for the more than 300 million urban and rural residents with hypertension or diabetes who are covered by the basic medical insurance scheme, outpatient medications listed in the National Basic Medical Insurance Drug Catalog will be uniformly included in the scope of insurance reimbursement, with the reimbursement rate raised to over 50%. Where conditions permit, localities may waive the deductible; the reimbursement cap will be set independently by each region. For patients already enrolled in the outpatient management program for chronic and special diseases, existing policies will remain in effect to ensure that benefit levels are not reduced. Efforts will be made to lower prices and improve the quality of domestically produced antihypertensive and antidiabetic drugs. Centralized tendering and procurement will be accelerated, the scope of procurement expanded, and drug‑purchase costs reduced. A long‑prescription system will also be implemented, with multiple measures taken to ease the financial burden on patients. These steps will help strengthen preventive care, reduce the incidence of serious illnesses, and promote the sustainability of the medical insurance fund.

The meeting outlined measures to further advance the integrated development of medical and elderly‑care services. First, approval procedures will be streamlined: for elderly‑care institutions that establish medical facilities at or below Level II, the establishment approval and practice registration licenses will be combined into a single certificate. When medical institutions leverage existing resources to provide elderly‑care services, their construction, fire safety, and other requirements may be filed directly based on the institution’s already‑obtained qualifications. Second, by refining pricing mechanisms, abolishing unreasonable approval processes, and implementing one‑stop service windows, social entities will be encouraged to establish integrated medical‑elderly‑care facilities. Third, elderly‑care institutions will be urged to collaborate with medical, rehabilitation, and nursing facilities, with support for home‑based services and large‑scale training of personnel in elderly care and related fields. Fourth, preferential policies regarding taxes, land use, and other areas will be fully implemented for integrated medical‑elderly‑care institutions. Medical service costs covered by basic medical insurance will be reimbursed from the basic medical insurance fund. Localities that meet the necessary conditions are encouraged to expand, in accordance with regulations, the range of medical and rehabilitation services eligible for reimbursement under basic medical insurance. Fifth, medical‑elderly‑care insurance will be developed, increasing the variety of commercial insurance options available to older adults, and pilot programs for long-term care insurance will be accelerated.

Chengde Municipal Finance Bureau, Hebei Province: Deepening the “Delegation, Regulation, and Service” Reform to Enhance the Quality and Efficiency of Government Procurement

In recent years, the Finance Bureau of Chengde City, Hebei Province, has seized the opportunity presented by the “delegation, regulation, and service” reform to simultaneously strengthen standardization and enhance efficiency. It has continuously deepened reforms of the government procurement system, integrated management with service delivery, vigorously optimized the business environment, and elevated the quality of public services, thereby enabling procuring entities and suppliers to enjoy a growing sense of fulfillment and satisfaction.

First, by employing the “release” strategy, we are vigorously promoting the further unleashing of vitality.

Be bold in delegating authority, and ensure that delegation is fully effective. First, streamline the procurement process. Leveraging an integrated e‑government procurement platform, we have enabled one‑stop online processing for tasks such as filing procurement plans, registering contracts, and publishing tender documents. Procuring entities can submit electronic filings independently, while bidders can access and download tender documents free of charge online, thereby significantly boosting market dynamism. Second, clarify principal responsibilities. We have strengthened the accountability of procuring entities in five key areas—formulating procurement requirements, conducting performance acceptance, establishing internal control mechanisms, implementing policy objectives, and ensuring transparency in procurement information—thus aligning powers with responsibilities. As a result, procuring entities may, in accordance with regulations, independently prepare procurement plans, procure items outside the centralized procurement catalog below the threshold without entering into framework agreements or designating specific suppliers, and manage contract registration and payment voucher generation themselves, thereby achieving value for money in government procurement. Third, implement framework‑based supply arrangements. For general office equipment such as computers below the procurement threshold, we adopt a framework‑supply procurement model, enhancing the efficiency of acquiring small‑volume, standard office supplies.

II. Focusing on “management,” vigorously promoting further standardization of administrative practices.

Daring to enforce oversight, and doing so with strict rigor. First, strengthen budgetary constraints. Strictly enforce the principle that “no budget, no plan, no procurement,” enhance the review and preparation of government procurement budgets, reinforce both upstream and downstream management, ensure the rationality and scientific soundness of projects, tighten monitoring of implementation and scrutiny of fund disbursements, and integrate these processes into the budget performance‑evaluation framework, gradually shifting from process‑based control toward performance‑oriented management. Second, strengthen enforcement oversight. Establish and improve a credit‑based mechanism to inspect procurement activities, evaluation experts, procurement agencies, and the service or professional conduct of social agents; for those found engaging in illegal or untrustworthy behavior, issue explicit deadlines for corrective action or impose administrative penalties. Since 2018, the city has inspected 13 agency offices and reviewed 68 procurement projects totaling RMB 107.46 million, issuing time‑limited rectification notices to four agencies and imposing warning‑type administrative penalties on nine others. Third, strengthen complaint handling. Develop a robust mechanism for processing complaints, an effective response system, and internal control procedures; fully leverage the advisory role of independent, specialized legal institutions to enhance the efficiency and quality of complaint resolution. Since 2018, the city has handled a total of 35 complaint and report cases.

Third, putting “service” at the core and striving to make our services even more efficient.

We are committed to excellence in service. First, we support enterprise development by establishing a credit‑financing platform for winning bidders through tripartite collaboration among government procurement regulatory authorities, successful bidders, and banks, thereby providing financing services to supplier participants and encouraging small and medium-sized enterprises to engage in government procurement. Since 2018, we have facilitated loan applications totaling RMB 11.75 million for 12 SMEs. Second, we promote electronic procurement by pioneering an “Internet Plus” model, launching an online marketplace for government procurement transactions, and vigorously advancing e‑procurement methods such as direct e‑commerce purchases and online auctions, thus streamlining procurement procedures and enhancing efficiency. Since 2018, the online platform has processed a cumulative total of 311 transactions, with a combined value of RMB 3.163 million. Third, we strengthen our workforce by organizing training programs on government procurement policies and operational expertise, delivering systematic instruction in phases to procurement evaluation experts, suppliers, county‑level regulatory bodies, procurement agencies, and budget‑holding entities, thereby elevating the professional competence of practitioners and ensuring the smooth and effective implementation of government procurement activities.

Going forward, the Chengde Municipal Finance Bureau will continue to deepen the “delegation, regulation, and service” reform in government procurement, focusing on enhancing fiscal efficiency, standardizing oversight and management, improving service quality, and supporting enterprise development. The bureau will accelerate the establishment of a modern government procurement system, fostering procurement that is both effective and efficient, and conducted with transparency.

Litigation & Arbitration

Supreme People’s Court: Reply to the Proposal on Abolishing Jurisdictional Restrictions for Grassroots Legal Service Workers

We have received your proposal to lift the jurisdictional restrictions on grassroots legal service workers and hereby respond as follows:

Grassroots legal service institutions emerged in the 1980s. By the end of 2014, there were over 18,000 grassroots legal service offices nationwide, employing more than 68,000 grassroots legal service practitioners. Over the years, these practitioners have made significant contributions to safeguarding the legitimate rights and interests of the people and promoting economic and social development. In 2012, the Civil Procedure Law amended Article 58 on litigation representation, listing grassroots legal service practitioners alongside lawyers as eligible litigation agents and imposing strict limitations on the scope of citizen‑based representation. Accordingly, grassroots legal service practitioners may represent parties in civil proceedings in their professional capacity and under their official title; however, except in circumstances prescribed by law, they may no longer act as representatives in civil litigation in their personal capacity. Article 88 of our court’s judicial interpretation of the Civil Procedure Law clarifies the documents that grassroots legal service practitioners must submit to the people’s courts to verify their identity and qualifications when representing parties in civil litigation, but it does not specify any restrictions on the geographical jurisdiction within which such services may be provided. Grassroots legal service institutions are administered by the Ministry of Justice. Pursuant to the Ministry of Justice’s “Detailed Rules for the Operation of Township Legal Service Businesses” (Ministry of Justice Order No. 19) and the Ministry’s reply dated December 10, 2002, addressed to the Jiangsu Provincial Department of Justice (Document No. Si Fu [2002] No. 12), grassroots legal service practitioners are authorized to represent only civil, economic, and administrative litigation cases where one of the parties is located within the same jurisdiction.

According to available information, since the implementation of the Judicial Interpretation of the Civil Procedure Law, some grassroots legal service workers in certain localities have submitted requests to the Ministry of Justice, seeking an interpretation of the specific meaning of “within this jurisdiction” as used in Order No. 19. Our court has also actively engaged in communication with the Ministry of Justice. Following deliberation, on June 25, 2015, the Ministry of Justice issued the “Reply of the Ministry of Justice on the Issue of the Scope of Practice for Litigation Representation by Grassroots Legal Service Workers” (Sifa Fu [2015] No. 4), clarifying that, pursuant to Article 24, Paragraph (4) of the Detailed Rules for the Administration of Township Legal Services (Ministry of Justice Order No. 19), the term “within this jurisdiction” refers to the county-level administrative division where the grassroots legal service agency at which the legal service worker practices is located, as well as the district- or county-level administrative divisions of municipalities directly under the central government. Accordingly, based on the Ministry of Justice’s most recent reply, when reviewing materials submitted by grassroots legal service workers, people’s courts shall verify whether one of the parties is situated within the county-level administrative division or the district- or county-level administrative division of the municipality directly under the central government where the legal service worker’s practice‑location agency is located.

In the near future, our court will circulate the aforementioned reply from the Ministry of Justice, and courts nationwide will, in accordance with it, review the representation of civil litigation by grassroots legal service workers.

The Supreme People’s Court has released typical cases from maritime trials nationwide.

　In 2018, the national maritime adjudication system, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, remained officely focused on the overarching priorities of the Party and the state—namely, the Belt and Road Initiative, the coordinated development of the Beijing–Tianjin–Hebei region, the development of the Yangtze River Economic Belt, and the accelerated building of a strong maritime nation. By fully leveraging the functions and roles of maritime adjudication, it achieved new progress in advancing maritime judicial concepts for the new era, safeguarding China’s maritime rights and interests, regulating shipping order, and standardizing the application of legal norms. To highlight the exemplary and leading role of landmark cases, the Supreme People’s Court recently released its list of typical maritime adjudication cases from 2018.
The ten typical cases released this time encompass a wide range of case types, highlight salient issues of legal application, and demonstrate a clear societal exemplary effect.
First, with respect to the harmonization of judicial standards: there are issues concerning the applicable law in disputes over international multimodal transport contracts; issues regarding the right of a bank, as the holder of a bill of lading, to bring an action against the carrier for delivery of goods without surrendering the document and the scope of its claims; issues relating to the determination of insurance liability when an insured event arises from multiple causes; issues involving the establishment of maritime limitation of liability funds by vessels engaged in coastal cargo transportation and inland‑river vessels; issues concerning the application of the actual carrier regime following the repeal of the Rules on Domestic Waterway Cargo Transportation; and issues pertaining to the rules governing the application of the statute of limitations under maritime law versus those under general civil law.
Second, with regard to standardizing shipping order, there are issues concerning the determination that, in order to enhance inland navigation safety awareness, a vessel’s failure to carry crew members holding valid certificates of competency constitutes unseaworthiness and, when such unseaworthiness leads to an insurance incident, entitles the insurer to be exempted from liability under the policy terms; and there are also issues involving the regulation of the non-vessel‑operating carrier market and the safety of shipping transactions, specifically the lawful invalidation of standardized clauses in the security‑deposit liability insurance for non‑vessel‑operating carrier operators.

Third, with regard to strengthening the adjudication of new types of cases, there have been instances involving the restoration of the original state of maritime areas through a “separation of adjudication and enforcement” mechanism, in order to safeguard the national marine environment and fully leverage the functions of maritime judicial administration.

The Shanghai Higher People’s Court and the municipal planning authority have signed an agreement to refine the comprehensive mechanism for addressing difficulties in enforcement, fully enabling online processing of the entire real estate inquiry and control procedure.

To implement the “Opinions on Strengthening Comprehensive Governance and Effectively Addressing the Difficulties in Enforcement at the Source,” issued by the Central Commission for Comprehensively Promoting the Rule of Law, the Shanghai Higher People’s Court and the Shanghai Municipal Planning and Natural Resources Bureau jointly held a signing ceremony at the Shanghai Higher People’s Court on the afternoon of September 9 to launch the online registration of property‑seizure measures.

At the ceremony, the Enforcement Bureau of the Shanghai Higher People’s Court and the Shanghai Municipal Bureau for Real Property Rights Conofficeation and Registration jointly signed the “Several Opinions on Carrying Out Online Registration of Seizure of Real Estate.” With this agreement, courts at all levels throughout Shanghai can now conduct online inquiries and handle online procedures—including online seizure, renewal of seizure, and release of seizure—thereby enabling end-to-end online processing of real estate enforcement measures.

The Shanghai Higher People’s Court, in collaboration with the Shanghai Municipal Planning and Natural Resources Bureau, has jointly advanced online inquiry, seizure, renewal of seizures, and release of seizures of real estate—measures that constitute a key step in establishing an online enforcement and asset‑investigation system for Shanghai’s courts.

As outlined in the “Several Opinions,” people’s courts may, through an online processing model, transmit the relevant legal documents for seizure and electronic scans of enforcement officers’ identification via digital means, thereby initiating requests for online judicial seizure. Upon receipt of such materials, the competent natural resources rights‑conofficeation and registration authorities will provide assistance. Online seizure registration is characterized by immediacy, efficiency, and standardization; all operations conducted by the courts and registration agencies are fully traceable and auditable online. The establishment of this online inquiry and control mechanism not only helps mitigate the risk of asset transfer but also provides robust support for substantially enhancing the efficiency of enforcement proceedings in Shanghai’s courts.

This instance of real‑estate seizure, the first to be processed entirely online, marks a new milestone for “Internet Plus Real Estate Registration.” On the one hand, it ushers in a shift from the traditional offline “face-to-face” approach to a real-time online “network‑to‑network” model, significantly reducing administrative and judicial resources. On the other hand, it serves as a vivid demonstration of the ongoing reform of real‑estate registration services and the implementation of the Action Plan for Optimizing the Business Environment 2.0.

Shandong is vigorously advancing local legislation in the field of judicial administration.

With the reform and development of judicial administration, Shandong Province has made significant progress in local legislation on judicial administration. At present, the province has three specific local regulations governing judicial administrative work: the Regulations on Legal Aid of Shandong Province, the Regulations on Forensic Expertise of Shandong Province, and the Regulations on the Promotion of the Rule of Law and Public Legal Education of Shandong Province. These three local regulations clearly reflect a problem‑oriented approach to legislative work, highlight Shandong’s distinctive characteristics, and have earned widespread recognition.

To make the national regulations on legal aid more specific and better aligned with Shandong’s realities, and in particular to enable a broader segment of the population to access legal‑aid services, Shandong revised its local legislation—the Regulations on Legal Aid of Shandong Province—in 2007, expanding the scope of eligibility for legal aid. As efforts continued to advance, and with the aim of further lowering the threshold for legal aid, broadening its coverage, and benefiting more beneficiaries, the Standing Committee of the Provincial People’s Congress adopted an amendment to the Regulations on Legal Aid of Shandong Province on April 1, 2015. The principal changes eliminated restrictions on the types of matters eligible for legal aid, further lowered the criteria for determining financial hardship, and facilitated applications by the public, ensuring timely access to legal assistance.

In response to the problems of fragmented administration and chaotic order in judicial appraisal management, in 2011, through extensive coordination and vigorous efforts, the Standing Committee of the Shandong Provincial People’s Congress adopted the Regulations on Judicial Appraisal of Shandong Province. This legislation brought seven categories of appraisals—accounting, intellectual property, construction engineering, product quality, maritime, transportation, and electronic data—under unified administrative oversight by the judicial administration, in addition to the three traditional categories of forensic medicine, physical evidence, and audio‑visual materials. The move resolved longstanding issues of sectoral fragmentation and unregulated development that had plagued judicial appraisal for years, providing a legal basis and institutional safeguards for streamlining the management system, standardizing judicial appraisal activities, and protecting the legitimate rights and interests of the parties involved. The regulation achieved its goal of being introduced and approved in the same year, and was highly commended by the Ministry of Justice, which subsequently issued it nationwide for widespread implementation.

In response to existing issues—such as insufficient recognition in some localities and departments of the long-term, foundational role of legal publicity and education; inadequate planning, weak measures, and lax institutional safeguards; incomplete implementation of the “who enforces the law, who promotes legal awareness” accountability system; insufficient interdepartmental coordination and collaboration; and the failure to establish a comprehensive, concerted approach to legal publicity and education—the provincial People’s Congress Standing Committee, in 2017, adopted the Regulations on Legal Publicity and Education of Shandong Province. These regulations codified such practices as Shandong’s integration of law and morality, the “one legal advisor per village (community)” model, and the “law enters six spheres” initiative, thereby shifting the province’s legal publicity and education from being primarily driven by administrative means to being advanced through rule-of-law mechanisms. This move has institutionalized and standardized legal publicity and education, ensuring that Shandong continues to lead the nation in promoting legal awareness and governing according to law.

“Live Now”: A Multi-Media Broadcast Focuses on Chongqing

On the morning of September 11, the Public Information Office of the Supreme People’s Court, the Enforcement Bureau of the Supreme People’s Court, and the Chongqing Higher People’s Court jointly held the seventh national court “Enforcement in Progress” event—“Sharp Sword 2019: Chongqing in Action”—a full‑media live broadcast. The event was streamed live via six separate channels, combining studio segments with on‑site enforcement proceedings. More than 50 central and local media outlets, including People’s Daily, China Media Group, Xinhua News Agency, and Chongqing Television, participated in the broadcast.

The live broadcast lasted two and a half hours, attracting 19 million online viewers. Zhang Xiaochuan, Director of the Enforcement Bureau of the Chongqing Higher People’s Court, and Tang Li, Vice President of Southwest University of Political Science and Law, appeared in the studio to explain the enforcement process and highlight key achievements. Representatives from the municipal and district people’s congresses and members of the Chinese People’s Political Consultative Conference were present on site to witness the proceedings.

“Begin the operation!” At 9:00 a.m., upon the command of Xiao Tao, the chief commander of the campaign and Deputy Director of the Enforcement Bureau of the Chongqing Higher People’s Court, enforcement officers from the Yubei District People’s Court, Yuzhong District People’s Court, Jiangbei District People’s Court, Nanchuan District People’s Court, and Qianjiang District People’s Court deployed to the field to launch the operation.

At the enforcement site of the Nanchuan District People’s Court, enforcement officers deployed drones to conduct on-site inspections and take photographs, enabling them to secure evidence in advance and monitor conditions throughout the process, thereby preventing unforeseen incidents. Meanwhile, the Jiangbei District People’s Court held a centralized online judicial auction that day for 30 vehicles seized recently. During the event, the court showcased a total of 30 vehicles up for auction, with an average estimated value of approximately RMB 200,000; the highest‑valued vehicle was appraised at RMB 1.5 million. To date, four vehicles have been sold, generating total proceeds of RMB 968,000, with a premium rate of 32.6%.

According to statistics, since 2016, the three-tier court system in Chongqing has concluded 820,100 enforcement cases, with a total of RMB 140.213 billion enforced, achieving an overall case closure rate of 91.08%. Several key enforcement indicators rank among the highest nationwide.

Other

The General Office of the State Council has issued the “Opinions on Stabilizing Hog Production and Promoting Transformation and Upgrading.”

Recently, the General Office of the State Council issued the “Opinions on Stabilizing Hog Production and Promoting Transformation and Upgrading” (hereinafter referred to as the “Opinions”).

The Opinions state that, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and in accordance with the decisions and arrangements of the CPC Central Committee and the State Council, we must uphold the overarching principle of seeking progress while ensuring stability, give full play to the decisive role of the market in resource allocation, and aim to ensure basic self-sufficiency in pork. We should focus on restoring production and guaranteeing supply in the short term, while looking ahead to transform our approach and promote structural upgrading. By strengthening accountability, intensifying policy support, and bolstering scientific and technological underpinnings, we will advance the establishment of a new pattern of high-quality development in the hog industry—characterized by efficient production, resource conservation, environmental friendliness, rational spatial planning, and coordinated production–marketing linkages—so as to better meet residents’ demand for pork and foster steady and sound economic and social development.

The Opinions propose stabilizing current hog production by encouraging local authorities to tailor support measures to their specific circumstances, standardizing the designation and management of no‑raising zones, ensuring the orderly movement of breeding pigs, piglets, and hog products, continuously strengthening African swine fever prevention and control, enhancing monitoring of hog supply and demand, and improving market‑regulation mechanisms. Efforts should be accelerated to build a modern farming system, vigorously promote standardized, large‑scale operations, actively support the development of small and medium‑sized pig farms and households, advance scientific and technological progress in hog production, expedite the resource‑based utilization of farm waste, and increase support for major hog‑producing regions. Furthermore, the animal disease prevention and control system must be refined, with enhanced capacity for disease prevention and control, strengthened testing and quarantine procedures, and bolstered grassroots animal health‑prevention teams. Finally, a modern hog‑distribution system should be established, with faster upgrading of the slaughter industry, transformation of traditional hog‑transport practices, and reinforced cold‑chain logistics infrastructure.

The Opinions emphasize the need to strengthen policy and institutional safeguards. First, financial support will be enhanced: policy-based insurance for live pigs will be improved by raising coverage limits and expanding the scope of insured risks, with such insurance linked to the harmless disposal of dead pigs; local authorities are encouraged to continue piloting and scaling up price‑insurance schemes for live pigs. Innovative financial credit products will be developed, exploring the inclusion of land‑use rights, livestock housing, and large‑scale farming equipment as eligible collateral. Second, land use for pig farming will be secured: policies on agricultural facility land will be refined, the allowable size of ancillary facilities will be appropriately increased—eliminating the 15‑mu cap—and the land requirements for waste‑treatment facilities will be met. Third, legal safeguards will be reinforced: the Animal Epidemic Prevention Law and the Regulations on the Administration of Pig Slaughtering will be expedited for revision, and related laws and regulations, including the Regulations on the Administration of Veterinary Drugs, will be studied for amendment, thereby improving the legal framework governing the pig industry. Enforcement and oversight will be strengthened, with violations in pig breeding, transportation, slaughter, and harmless disposal being investigated and prosecuted in accordance with the law.

The Opinions stipulate that the people’s governments of all provinces, autonomous regions, and municipalities directly under the central government shall assume overall responsibility for stabilizing hog production and ensuring market supply in their respective jurisdictions, with the principal official serving as the primary person accountable. All localities and relevant departments are required, in accordance with their respective duties, to intensify efforts and ensure effective implementation of these measures. By the end of this year, each province, autonomous region, and municipality shall submit a report on the status of implementation to the State Council.

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