JC Master Legal News Issue 900

Key Takeaways for This Issue

The China Securities Regulatory Commission has issued the “Several Provisions on the Pilot Program for the Domestic Listing of Subsidiaries Spun Off by Listed Companies.”

To deepen supply-side structural reform in the financial sector, fully leverage the functions of the capital market, and invigorate market dynamism, the China Securities Regulatory Commission has issued the “Several Provisions on the Pilot Program for the Domestic Listing of Subsidiaries Spun Off by Listed Companies” (hereinafter referred to as the “Several Provisions”), which shall take effect from the date of its promulgation.

The “China 5G Economy Report 2020” has been officially released.

On December 13, the “China 5G Economy Symposium” was held at the China International Economic Exchange Center in Beijing. Hosted by Guojing Consulting Co., Ltd., the forum brought together approximately 100 guests from government agencies, 5G‑related enterprises, relevant universities and research institutes, as well as the media.

The tax authorities will introduce measures to streamline the annual individual income tax settlement and finalization process.

To implement the decisions and arrangements of the State Council Executive Meeting on the rational and orderly establishment of an annual individual income tax final settlement and clearance system, the State Taxation Administration, in collaboration with the Ministry of Finance, recently convened a consultation meeting to solicit opinions on matters related to the final settlement and clearance.

The Supreme People’s Court has issued a judicial interpretation on the adjudication of administrative agreement cases.

On December 10, the Supreme People’s Court held a press conference to release the “Provisions of the Supreme People’s Court on Several Issues Concerning the Adjudication of Administrative Agreement Cases” (hereinafter referred to as the “Administrative Agreement Interpretation”).

Wang Yi on China’s diplomacy in 2019: Officely safeguarding the country’s core interests and making due contributions to domestic development and stability, as well as to the great cause of national reunification.

On the 13th, State Councilor and Foreign Minister Wang Yi attended the opening ceremony of the 2019 Symposium on the International Situation and China’s Diplomacy and delivered a speech, stating that Chinese diplomacy officely safeguards the country’s core interests and makes due contributions to domestic development and stability as well as to the great cause of national reunification.

Table of Contents

Table of Contents

Finance & Capital Markets

The China Securities Regulatory Commission has issued the “Several Provisions on the Pilot Program for the Domestic Listing of Subsidiaries Spun Off by Listed Companies.”

The China Securities Regulatory Commission has issued the “Guidance on Manager-of-Managers (MOM) Products for Securities and Futures Operating Institutions (Trial).”

The Shanghai Stock Exchange has received approval to launch trading in CSI 300 ETF options.

The number of science and technology innovation-themed funds has expanded to 19.

Next year, key priorities for capital market reform have been outlined, with the registration-based IPO system for the ChiNext board emerging as a standout initiative.

Corporate & Commercial

The “China 5G Economy Report 2020” has been officially released.

Shenzhen has conofficeed the cancellation of its policy allowing commercial apartments to be rented but not sold.

The European Green Deal aims to achieve carbon neutrality by 2050, leading the way globally.

State Grid’s mixed-ownership reform is accelerating: social capital is being brought in through the property rights market.

A world first: BIM technology has been fully applied to all four electrical systems in high-speed railway construction.

Taxation

The tax authorities will introduce measures to streamline the annual individual income tax settlement and finalization process.

Announcement of the State Taxation Administration on the Issuance of the “Provisions on Electronic Service of Tax Documents (Trial)”

Interpretation of the “Announcement of the State Taxation Administration on the Issuance of the Provisional Regulations on Electronic Service of Tax Documents”

The Second Meeting of the Sixth Council of the China International Taxation Research Association and its 2019 Annual Conference were held in Beijing.

The State Taxation Administration has issued a reminder that the policy on individual income tax special additional deductions remains unchanged and no conofficeation is required.

Litigation & Arbitration

The Supreme People’s Court has issued a judicial interpretation on the adjudication of administrative agreement cases.

The Fourth Plenary Session of the 19th CPC Central Committee called for “implementing the constitutional interpretation procedures and mechanisms,” making the first formal constitutional interpretation case highly anticipated.

Measures for the Administration of Credit Information of Market Entities in Water Conservancy Construction Have Been Issued.

Minutes of the Meeting of the Tianjin Higher People’s Court on the Adjudication of Labor and Personnel Dispute Cases

Starting January 6 next year, Qingdao will implement a waste-sorting system, with individuals facing fines of up to 200 yuan for violations.

Other

The commemorative stone marking the 20th anniversary of Macao’s return to the motherland was unveiled in Zhuhai.

Finance & Capital Markets

The China Securities Regulatory Commission has issued the “Several Provisions on the Pilot Program for the Domestic Listing of Subsidiaries Spun Off by Listed Companies.”

To deepen supply-side structural reform in the financial sector, fully leverage the functions of the capital market, and invigorate market dynamism, the China Securities Regulatory Commission has issued the “Several Provisions on the Pilot Program for the Domestic Listing of Subsidiaries Spun Off by Listed Companies” (hereinafter referred to as the “Several Provisions”), which shall take effect from the date of its promulgation.

In accordance with the relevant legislative procedures, on August 23, 2019, the China Securities Regulatory Commission (CSRC) publicly solicited comments on the “Several Provisions,” drawing widespread attention from the market. Overall, stakeholders expressed support for the introduction of pilot rules governing spin-offs. During the consultation period, the CSRC received a total of 164 comments and suggestions, primarily focusing on such issues as the “net profit” threshold for listed companies, whether businesses or assets receiving raised funds may be spun off, and the shareholding ratios of directors and senior executives. The CSRC carefully reviewed and analyzed these submissions, adopted reasonable and feasible proposals, and accordingly revised and refined the rules.

The “Several Provisions” primarily clarify the following: First, they set forth clear criteria for spin-offs. To ensure that a listed company retains an independent listing status after a spin-off, it must demonstrate a certain level of profitability and adhere to sound corporate governance practices; moreover, both the parent company and the spun‑off subsidiary must comply with the CSRC’s and stock exchanges’ fundamental independence requirements. Second, they standardize the spin-off process. Listed companies are required to disclose relevant information in a timely manner and obtain approval from both the board of directors and the shareholders’ meeting; any subsequent public offering or restructuring leading to the subsidiary’s listing must follow the procedures applicable to an initial public offering or a restructured listing. Third, they strengthen the responsibilities of intermediary institutions. Listed companies must engage independent financial advisors, law offices, accounting offices, and other intermediaries to provide opinions on the compliance of the spin-off; furthermore, the independent financial advisor is obligated to conduct ongoing supervision of the spun‑off listed company.

Going forward, the China Securities Regulatory Commission will, in accordance with the law, support spin-offs that align with listed companies’ actual development needs and help enhance their quality. At the same time, it will strengthen end-to-end oversight of such spin-off activities, rigorously cracking down on market irregularities—including “deceptive” spin-offs, sham spin-offs, and speculative hype around spin-off concepts—as well as illegal and non-compliant practices such as insider trading and market manipulation.

The China Securities Regulatory Commission has issued the “Guidance on Manager-of-Managers (MOM) Products for Securities and Futures Operating Institutions (Trial).”

Recently, the China Securities Regulatory Commission issued the “Guidance on Manager-of-Managers (MOM) Products for Securities and Futures Operating Institutions (Trial)” (hereinafter referred to as the “Guidance”), which shall take effect from the date of its promulgation.

To attract medium- and long-term capital into the capital market, standardize the operation of manager-of-managers (MOM) products, and safeguard the legitimate rights and interests of investors, the China Securities Regulatory Commission has drafted the “Guidance on Manager-of-Managers (MOM) Products for Securities and Fund Management Institutions (Draft for Public Comment)” and solicited public input from February 22 to March 11, 2019. During this period, a total of 54 comments were received from various stakeholders. Based on the feedback, the majority of stakeholders expressed general support for the rules, noting that the timely introduction of MOM products would help fully leverage the professional investment expertise of diverse asset management institutions and meet the diversified asset allocation needs of investors, particularly those with medium- and long-term capital commitments. At the same time, relevant parties submitted specific suggestions for revision. After careful review and analysis, all reasonable comments and recommendations were incorporated, and the name of the rule was accordingly adjusted.

The Guidelines make the following key arrangements: First, they clarify the product definition and operational model: MOM products must simultaneously meet two criteria: (1) a portion or all of the assets are entrusted to two or more qualified investment advisers for the provision of investment advisory services; and (2) the assets are divided into two or more asset units, each of which maintains a separate securities and futures account. Second, they delineate the responsibilities of the participating parties: the manager fulfills its statutory fiduciary duties as a fund manager, while the investment advisers provide investment advice and other services in accordance with the law. Third, both the manager and the investment advisers must possess the requisite competencies. Fourth, they standardize the product’s investment operations by requiring the manager to establish and完善 a robust management system for investment advisers and to strengthen information disclosure. Fifth, they enhance measures to prevent conflicts of interest and manage risks, mandating that the manager and investment advisers reinforce controls over related-party transactions, fair trading, and non‑public information.

Going forward, the China Securities Regulatory Commission will, in accordance with the Guidelines and relevant laws and regulations, strengthen oversight of MOM products, foster their sound development, promptly review and refine its regulatory framework, and continuously enhance the institutional support for innovative financial products.

The Shanghai Stock Exchange has received approval to launch trading in CSI 300 ETF options.

With the approval of the China Securities Regulatory Commission, the Shanghai Stock Exchange will commence trading on December 23, 2019, CSI 300 ETF options contracts (underlying asset: Huatai-PineBridge CSI 300 ETF, ticker symbol 510300), thereby better meeting investors’ risk management needs.

On February 9, 2015, China’s first exchange‑traded options product—the SSE 50 ETF option—was officially listed and began trading, marking the first-ever exchange‑listed equity option in the country. Over the past five years, the SSE 50 ETF option has operated smoothly, with reasonable pricing, effective risk‑control measures, and rational investor participation. Trading volume and open interest have grown steadily, market functions have gradually emerged, and the product has provided investors with a new risk‑management tool, earning broad market recognition and becoming an important component of China’s financial markets. This expansion of the options pilot program, which now includes the SSE CSI 300 ETF option, signals that China’s equity options market has entered a new phase of multi‑underlying‑asset operation, further enriching investors’ risk‑management toolkit.

At present, under the guidance of the China Securities Regulatory Commission, the Shanghai Stock Exchange has completed all preparatory work to ensure the smooth launch and stable operation of the CSI 300 ETF options contracts.

The number of science and technology innovation-themed funds has expanded to 19.

Recently, Penghua Science and Technology Innovation Themed 3-Year Closed-End Flexible Allocation Fund, managed by Penghua Fund, began trading on the Shanghai Stock Exchange, marking another expansion of public‑offering science‑and‑technology innovation funds, which now total 19. Industry insiders note that investment in the science‑and‑technology sector has become increasingly rational and will continue to support the transformation and upgrading of the real economy. The newly listed Penghua Science and Technology Innovation 3-Year Fund was established in June this year; its portfolio is primarily composed of corporate bonds, with bonds accounting for 79.33% of its holdings. As of December 11, its return over the period stood at 7.16%. According to statistics, among the 19 science‑and‑technology innovation funds currently available in the public‑fund market, Southern Science and Technology Innovation Hybrid A leads in cumulative returns, with a gain of 40.19%. Compared with the nearly 140% surge seen in new shares on the STAR Market’s inaugural trading day, the fervor for speculative “hype” around science‑and‑technology investments is waning.

Taking the medical AI sector—highly favored by investors—as an example, Li Jingjue, CEO of Ande Medical Intelligence for Greater China, told reporters, “While investment in the medical AI industry appears to be cooling down, from another perspective it is becoming more rational. Investors are no longer chasing speculative narratives but are instead focusing on the practical implementation of use cases, giving companies the opportunity to concentrate on product development and market expansion.”

Experts expect science-and‑technology‑focused funds to maintain strong momentum, leveraging capital to support the real economy’s transition toward technological innovation. According to Guo Libo, Dean of the China Venture Capital Research Institute, niche sectors where “bottleneck” technologies are poised for breakthroughs will remain key areas of focus going forward, including next‑generation information technology, biopharmaceuticals, and high‑end equipment.

Next year, key priorities for capital market reform have been outlined, with the registration-based IPO system for the ChiNext board emerging as a standout initiative.

　The Central Economic Work Conference was held in Beijing from December 10 to 12. In the section on “deepening economic system reform,” one of next year’s key priorities, the conference explicitly stated that it would accelerate financial‑system reform, improve the foundational institutions of the capital market, enhance the quality of listed companies, refine exit mechanisms, and steadily advance reforms of the ChiNext and the New Third Board. This signals that the main tasks for capital‑market reform next year are now coming into focus. A more challenging economic environment, more favorable policy conditions, and clearer reform priorities will together set the stage for a new phase of deep capital‑market reform next year, energizing the capital market as it enters its thirtieth year.

In recent years, the Central Economic Work Conference has increasingly elaborated and refined its statements on the capital market. For instance, at the 2017 conference, the emphasis was succinct: “Promote the sound development of a multi-tiered capital market to better serve the real economy.” The 2018 conference went further, articulating both overarching strategic vision and concrete objectives: “The capital market plays a pivotal role in the overall functioning of the financial system; we must deepen reform to build a capital market that is standardized, transparent, open, dynamic, and resilient, enhance the quality of listed companies, improve trading mechanisms, channel more medium- and long-term funds into the market, and swiftly implement the establishment of the STAR Market on the Shanghai Stock Exchange along with the pilot registration-based IPO system.” In 2019, the conference distilled these priorities into five specific tasks: improving the capital market’s foundational institutional framework, elevating the quality of listed companies, refining exit mechanisms, and steadily advancing reforms of the ChiNext and the New Third Board.

Looking ahead to next year’s priorities in capital market reform, the registration‑based system for the ChiNext board stands out as a major highlight. This not only marks the first stage of scaling up and replicating the pilot experience of the STAR Market’s registration system, but also represents a crucial step in refining the multi‑tiered capital market framework, working alongside this year’s newly launched reforms of the New Third Board to broaden and deepen the capital market’s support for the real economy. Furthermore, in strengthening the capital market’s foundational institutions, extending the STAR Market’s best practices is an integral part of using incremental reforms to drive changes in existing systems; reforms in areas such as issuance, underwriting, refinancing, and trading could draw on the STAR Market’s lessons. With regard to enhancing the quality of listed companies, the China Securities Regulatory Commission has already issued a corresponding action plan, making this a key focus of regulatory efforts over the next two to three years—covering measures to raise the cost of violations, improve corporate governance, and enforce stricter oversight. As for perfecting the exit mechanism, the capital market is entering an era of diversified and normalized delistings. Building on this year’s record‑breaking wave of delistings, next year is expected to maintain the same intensity and expand the range of channels available for退市.

Looking at the economic environment facing capital market reform and development next year, while challenges are mounting, opportunities remain abundant. From a fundamental perspective, China’s economy continues to maintain a stable and improving trajectory with long-term growth prospects, and greater emphasis is being placed on promoting high-quality development and accelerating the enhancement of enterprises’ technological innovation capabilities. The country’s financial system remains broadly sound and well-equipped to manage various risks. On the liquidity front, the continued implementation of an active fiscal policy and a prudent monetary policy will ensure reasonably ample liquidity, which will help strike a balance between investment and financing in the capital markets. From a policy standpoint, on the one hand, we must prioritize stability, refine contingency plans, and officely safeguard against systemic risks; on the other hand, reforms will place greater emphasis on systemic thinking and a holistic approach, focusing on removing institutional and structural barriers to development and unlocking dormant growth potential.

Next year marks the 30th anniversary of China’s capital market. As the capital market embarks on a deep‑seated reform process guided by the principle of “launching one measure only after another has matured,” an array of additional reform initiatives will pool robust momentum, accelerate the realization of reform dividends, and propel the further development of the capital market.

Commercial & Corporate

The “China 5G Economy Report 2020” has been officially released.

On December 13, the “China 5G Economy Symposium” was held at the China Center for International Economic and Technical Exchanges in Beijing. Hosted by Guojing Consulting Co., Ltd., the forum brought together approximately 100 guests from government agencies, 5G‑related enterprises, universities, research institutes, and the media. Zhang Xiaoqiang, Executive Vice Chairman of the China Center for International Economic and Technical Exchanges, stated: “5G represents the primary direction of development for the next generation of information and communication technologies and serves as a new driving force for achieving high‑quality economic growth in China. The China Center for International Economic and Technical Exchanges calls on businesses and the scientific community, both at home and abroad, to advance international exchanges and cooperation in the 5G industry and related technologies with an even more open mindset, thereby better leveraging complementary strengths and achieving mutual benefit and win‑win outcomes. This will ensure the continuous enhancement of 5G capabilities and enable the 5G sector and its associated industries to further promote economic and social development across countries, bring tangible benefits to their peoples, and play a vital role in advancing sustainable and healthy global development.”

He Guili, Vice President of the China Academy of Information and Communications Technology, stated that since the official commercial launch of 5G, the technology has enjoyed strong momentum, with its economic value and application prospects garnering widespread attention across society. The Academy will collaborate with all stakeholders in the industry to strengthen innovation-driven cooperation, jointly address key common challenges in areas such as standards, network infrastructure, and security, and explore new business forms and models that are replicable and scalable for industrial applications, thereby providing robust support for the development of the 5G sector.

As a key participating enterprise, Meng Pu, Chairman of Qualcomm China, stated: “As an important enabler and industry partner, Qualcomm places great emphasis on the economic value and social benefits brought by technology. 5G will serve as the core engine driving China’s next phase of high-quality development. We are closely monitoring how 5G, during its commercial deployment, can generate economic value across various sectors and contribute to societal well-being. It is a great honor for us to collaborate with two think tanks to present today a Chinese‑language version of the ‘5G Economic Report 2020,’ helping industries accelerate and enhance innovation on the path to 5G.”

The forum released the “China 5G Economy Report 2020” (hereinafter referred to as the “Report”). A joint research team comprising experts from the China Center for International Economic and Exchange, Guojing Consulting Co., Ltd., and the China Academy of Information and Communications Technology conducted a five-month study. The team carried out interviews with numerous enterprises and research institutions, including Qualcomm, ZTE, China Telecom, Alibaba Cloud, Jincheng Medical, SinovoTech, Shenzhen Cong Intelligent, and China Huaneng Group, and based on these findings, undertook an in-depth analysis. The Report identifies and summarizes a “5G Pioneer Industry Identifier,” selecting five leading sectors, offers a comprehensive examination of these industries from five distinct perspectives, puts forward policy recommendations to advance 5G‑related industries, and draws five key insights from the 5G economy.

Zhang Jin, a researcher with the Industrial Planning Department of the China Center for International Economic and Technical Exchanges, presented the report’s key findings on behalf of the research team at the forum. The report highlights that China’s 5G industry enjoys several competitive advantages: the Chinese government’s proactive support, consumers’ openness to new technologies, China’s status as the world’s largest 5G market, the launch of industrial‑fund investments, and the international competitiveness of the 5G value chain. At the same time, the commercial rollout of 5G faces certain challenges, including the need to strengthen coordination between telecom‑technology providers and related industries, emerging difficulties in 5G network deployment and operator operations, limited visibility among both individual consumers and enterprise users regarding the long‑term benefits and returns of 5G, an urgent demand for cultivating high‑caliber, multidisciplinary 5G talent, and the imperative for policy frameworks to align with the needs of 5G innovation. Industries best positioned to take the lead are identified as “pioneer sectors.” Drawing on five key criteria—profitability, level of digitalization, rigid demand for 5G, consolidation of existing leadership positions, and aspirations to challenge incumbent market leaders—the research team has pinpointed five such sectors: mobile terminals, the broader entertainment industry, the industrial internet, healthcare, and the automotive sector. To unlock value, 5G‑enabled services must deliver tangible improvements and meet specific industry needs; only then can technology providers and network operators realize meaningful returns. This requires robust policy support and guidance. The study places particular emphasis on business models and policy recommendations for 5G‑related industries, which constitute its central focus and highlight. In the 5G era, operators confront formidable challenges, including substantial capital requirements, weak willingness among end‑users to pay, and the need to revise pipeline‑centric thinking and organizational structures. Network deployment will proceed gradually, with 4G and 5G coexisting over the next decade; by 2025, 5G penetration is projected to reach 48%. Operators must transform their business models, with B2B2X emerging as a key revenue opportunity. Achieving sustainable revenue growth hinges on three strategic options, each requiring four core capabilities. Regarding the rollout of 5G applications and networks, the report recommends prioritizing enhanced‑service use cases, adopting a “point‑to‑area” approach, and advancing 5G‑related applications in tandem with infrastructure deployment and pilot projects. Policy reforms should accelerate network expansion, establish industry standards, foster industrial development, and address societal challenges. The study distills five key insights: profitability, shared growth, gamification, holistic coordination, and global integration. Commercializing 5G will require concerted efforts from all stakeholders to build an innovative ecosystem that drives 5G‑based economic development and supports high‑quality growth in the new era.

Shenzhen has conofficeed the cancellation of its policy allowing commercial apartments to be rented but not sold.

On December 12, the Shenzhen Housing and Construction Bureau conofficeed that the city has rescinded last year’s policy mandating that commercial apartments be leased only, not sold. On December 11, a document stamped with the official seal of the Shenzhen Housing and Construction Bureau—dated November 21—circulated online. The document stated that the bureau recently proposed abolishing the “lease‑only, no sale” provision for commercial apartments under the 2018 “Shenzhen Four Measures.” It further noted that at a special meeting on stabilizing real estate growth chaired by Mayor Xu Gui on October 31, authorities had already given preliminary approval to lift this restriction.

According to the Shenzhen Housing and Construction Bureau, the decision to rescind the regulation requiring business‑type apartments to be “rented only, not sold” stems from the following: the policy had dampened the dynamism of certain urban renewal projects; in the long term, it would help boost the supply of market‑oriented housing, while in the short term it weighed on sales of saleable business‑type apartments. It is understood that the removal of this “rent‑only, no‑sale” restriction has been in effect since November.

On July 31, 2018, Shenzhen issued the “Notice on Further Strengthening Real Estate Regulation and Promoting the Stable and Healthy Development of the Real Estate Market,” imposing sales restrictions on commercial apartments. The notice stipulates that all commercial apartments developed on newly supplied land—whether through tendering, auction, listing, urban renewal, or land‑return projects—may only be leased, not sold, and their intended use may not be altered. The total holding period for corporate owners must align with the land‑use term, and the maximum lease term for external rentals shall, in principle, not exceed ten years. Furthermore, effective from the date of issuance, individuals, enterprises, public institutions, social organizations, and other legal entities are prohibited from transferring any newly purchased commercial apartments within five years from the date of obtaining the real estate ownership registration certificate.

Wang Feng, director of the Shenzhen Real Estate Research Center, stated that abolishing the “rent-only, no-sale” policy for commercial apartments will have a negligible impact on Shenzhen’s housing market. In fact, this move represents an adjustment to urban planning and development policies—a supply-side reform aimed at reshaping the structure of real estate supply—and should not be misinterpreted as a relaxation of Shenzhen’s property‑market controls. The previous restriction on selling these units was imposed because commercial apartments had been subject to significant speculative activity. Since July 31 last year, very few new commercial‑apartment projects have acquired land, and even if they do enter the market, it typically takes around three years for them to reach the sales stage. Consequently, this policy has only a minimal effect on the current housing market.

Yan Yuejin, Research Director at the E-House Institute Think Tank, pointed out that Shenzhen introduced the “Shenzhen Four Measures” last year, stipulating that commercial apartment projects developed by various developers would be leased only and not sold. This policy was closely tied to the sudden tightening of Shenzhen’s real estate regulations at the time and effectively curbed speculative demand. However, with some new developments in the market—such as factors that have dampened sales of these types of projects in the short term—it has become necessary to make appropriate adjustments.

The Shenzhen Municipal Housing and Urban–Rural Development Bureau emphasized that the city continues to rigorously enforce its policies—introduced since 2016—on purchase restrictions, mortgage limits, sales restrictions, and price controls. Efforts to “stabilize land prices, housing prices, and market expectations” are steadily advancing. In addition, work on establishing a long-term mechanism for real estate development is being accelerated. Going forward, Shenzhen will deepen reforms of its housing system, vigorously develop the rental housing market, and comprehensively leverage tools such as land, finance, taxation, and legislation to continuously refine real estate regulation measures, further curb speculative activities, and promote the stable and sound development of the real estate market.

The European Green Deal aims to achieve carbon neutrality by 2050, leading the way globally.

On December 11, at the European Union headquarters in Brussels, the capital of Belgium, European Commission President Ursula von der Leyen unveiled the “European Green Deal” at a press conference. On the same day, the European Commission announced in Brussels a new climate‑change policy package, the “European Green Deal,” which aims to make Europe the first region in the world to achieve “carbon neutrality” by 2050—meaning net carbon dioxide emissions will be reduced to zero.

State Grid’s mixed-ownership reform is accelerating: social capital is being brought in through the property rights market.

Recently, the “Open Capital, Shared Cooperation—State Grid Corporation of China’s Special Promotion Event for Attracting Social Capital” was held at the Shanghai United Property Exchange. State Grid Corporation of China showcased 12 key mixed‑ownership reform projects in a centralized presentation. The event aimed to leverage the property rights capital market to attract high‑quality social capital, further deepen the company’s mixed‑ownership reform, and foster integrated development and mutually beneficial outcomes between state‑owned capital and various forms of social capital. The 12 priority projects featured in this promotion include: the Baihetan–Zhejiang ±800 kV UHV DC Transmission Project; State Grid Xinjiang Comprehensive Energy Service Co., Ltd.; the Shanxi Hunyuan Pumped Storage Hydropower Station project under State Grid New Source Holdings Co., Ltd.; Pinggao Group Intelligent Power Technology Co., Ltd.; Guangzhou Pinggao High‑Voltage Switchgear Maintenance Co., Ltd.; State Grid Electric Vehicle Service Co., Ltd.; State Grid Sijie Shenwang Location Services (Beijing) Co., Ltd.; State Grid General Aviation Co., Ltd.; Yingda JC Master Property Insurance Co., Ltd.; Yingda JC Master Life Insurance Co., Ltd.; Guozhong Kangjian Group Co., Ltd.; and the mixed‑ownership reform project of Guoneng Biomass Power Generation Group Co., Ltd.

According to analysts, these projects span a wide range of sectors, including ultra-high-voltage transmission, energy storage, high-end equipment manufacturing, finance, general aviation, and health‑care and elderly‑care services. The State Grid’s presentation drew participation from 158 organizations—comprising other central state-owned enterprise groups, private enterprises, investment institutions, and professional service offices—and attracted more than 260 delegates, generating considerable attention.

According to reports, in recent years, State Grid Corporation of China has earnestly implemented the decisions and arrangements of the CPC Central Committee and the State Council on state‑owned enterprise reform, regarding strengthened capital operations and the advancement of mixed‑ownership reform as key avenues for deepening open cooperation, improving corporate governance, enhancing value‑creation capabilities, and boosting the efficiency of state‑capital allocation. To date, the company’s mixed‑ownership reform has achieved significant breakthroughs across multiple sectors: the Beijing Electricity Trading Center has introduced social investors through public listing; within its operating area, State Grid has identified 138 new distribution‑project developers eligible for private‑sector participation; the Qinghai–Henan ultra‑high‑voltage direct‑current transmission project has secured prospective investors and signed cooperation agreements; and the company’s electric‑vehicle service subsidiary has formed a joint venture with Evergrande Group to establish a smart energy services company, among other initiatives.

This initiative has established an efficient communication platform between State Grid Corporation of China and social capital, enabling state‑owned and private investors to leverage their respective strengths. By fostering complementary advantages, mutual reinforcement, and integrated development across different forms of ownership, it will support the high‑quality growth of State Grid Corporation of China and accelerate its transformation into a world‑class energy‑internet enterprise.

A world first: BIM technology has been fully applied to all four electrical systems in high-speed railway construction.

　In December, a series of newly built high-speed rail lines were opened one after another, bringing China’s total high-speed rail network to 35,000 kilometers—by far the longest in the world. “China’s high-speed rail construction is steadily advancing toward greater intelligence and digitalization. On December 1, the Zhengzhou–Wanzhou High-Speed Railway’s Zhengzhou–Xiangyang section became the first to employ Building Information Modeling (BIM) technology across all four major systems,” said an expert from the Engineering Management Center of China State Railway Group (formerly known as the Ministry of Railways, hereafter referred to as China Railway Group). This marks a world-first in high-speed rail construction.

The “Four Electrics”—namely, power supply, electrification, signaling, and communications—serve as the high-speed railway’s power source and central nervous system, interconnected by countless substations and signal towers along the line.

The central “brain” of high-speed rail has long been lagging behind.

In 2015, as China’s high-speed rail construction continued to expand, China State Railway Group proposed advancing informatization and intelligentization. With technologies in areas such as EMU operations, civil engineering, and station buildings already relatively mature, these sectors successively accelerated their adoption of information‑based smart solutions. “As the power and ‘brain’ of high-speed rail, the intelligent construction of the four electrical systems has long lagged behind, relying primarily on two-dimensional design drawings. The introduction of BIM technology has become urgently necessary,” said Liu Bingrui, deputy chief engineer of the Third Company of China Railway Electrification Bureau. Building Information Modeling (BIM) is a cutting-edge tool in architecture, engineering, and civil engineering, originating in Europe and North America more than twenty years ago. At its core, BIM creates a virtual three-dimensional model of a construction project and, through digital technologies, provides a comprehensive database of project information that accurately reflects real‑world conditions. “Because BIM originated in the construction industry, its software commands are tailored to civil works and related ancillary projects, offering ready‑made models for slabs, beams, columns, and roofs, making modeling highly convenient,” Liu explained. However, for linear infrastructure, BIM modeling has been virtually nonexistent. High-speed rail’s four electrical systems represent a quintessential example of linear infrastructure, and for China’s high-speed rail network to achieve intelligent and information‑driven development, the construction of these systems must keep pace. In 2016, with support from China State Railway Group, China Railway Electrification Bureau launched a major research initiative titled “Research on the Application of BIM Technology in Standardized Design and Construction of Traction Substations,” led by Liu Bingrui and his BIM task force.

Over three years, more than 2,600 BIM family library files were created.

A high-speed railway stretching over a thousand kilometers requires, on average, a substation every 50 kilometers and a base station, pad-mounted transformer, or relay station every 3 kilometers, providing traction power and communication signals for the trains. “Within each substation, the array of components—ranging from foundation fabrication and metal‑structure assembly to equipment installation, grounding systems, and cable laying—is vast and intricate, with quantities often numbering in the tens of thousands,” says Liu Bingrui. These components differ significantly from those used in conventional building construction; therefore, achieving intelligent, information‑driven management of the railway’s four‑electric systems can only be accomplished through iterative software development during implementation. “The primary challenge in modeling is data acquisition and the creation of an extensive component library,” Liu adds. To generate digital models that evolve in tandem with project progress for every individual component, his team works around the clock on-site, meticulously refining each model through repeated iterations—comparing options, coordinating among stakeholders, conducting virtual reviews, and incorporating field feedback—ultimately settling on a final design. For instance, developing just one feeder‑line model required five distinct versions, with the entire process—from initial concept discussions to final approval—spanning five months and covering the early stages of construction. Yet even this single feeder‑line model accounts for only about 5% of the total BIM workload for the entire substation. “The self‑developed component libraries are divided into categories such as power‑system families, substation families, rail‑transit power‑supply families, and telecommunications, signaling, and catenary families. We have also established specialized libraries for metro mechanical, electrical, and plumbing systems. According to incomplete statistics, we now maintain roughly 2,600 family files—and that number continues to grow,” Liu notes. Over more than three years, having applied these methods across multiple ongoing projects—including the Rilan High-Speed Railway, the Changgan High-Speed Railway, and the Zhengzhou Metro—the practical approaches for deploying BIM technology in standardized traction‑substation design and construction have steadily matured.

Addressing the shortcomings in the development of “Digital Zhengwan”

On December 19, 2018, the research project “Application of BIM Technology in Standardizing Traction Substation Design and Construction” passed expert review. The reviewers concluded that the project’s key technologies had successfully achieved the goal of “introducing BIM to enable visualized communication in traction substations,” completing comprehensive BIM models for power substation disciplines and a standardized family library, and developing a BIM application methodology tailored to electrified railway construction—technologies that are world‑leading. On March 30 this year, the first substation built using the technologies developed under this project was completed on the southern section of the Rilan High-Speed Railway. Subsequently, BIM technology was extensively deployed across the four‑electrical systems of the Zhengwan High-Speed Railway. Cable terminations, mesh fences, anti‑static flooring, aluminum alloy cable trays—so many pieces of equipment within the substation create an overwhelming array of options. “In the past, installation relied on 2D drawings, requiring technicians to provide extensive pre‑job training, with rework being commonplace,” recalls Zhang Sixin, chief engineer of the line‑construction division at the Nanyang South Substation of the Zhengwan High-Speed Railway. During construction, every installation detail was assigned a QR code; frontline workers simply scanned it with their smartphones and followed the corresponding three‑dimensional visualizations, making the process straightforward and efficient. All modifications were incorporated during the BIM modeling phase, enabling on‑site installation to be completed in one go—reducing construction costs while ensuring precision and facilitating the digitalization and standardization of subsequent operations and maintenance. The outcomes of the “Application of BIM Technology in Standardizing Traction Substation Design and Construction” project have addressed critical gaps in the development of the “Digital Zhengwan (High-Speed Railway)” initiative, setting a benchmark for future railway four‑electrical system projects.

Taxation TAXATATION

The tax authorities will introduce measures to streamline the annual individual income tax settlement and finalization process.

To implement the decisions and arrangements of the State Council Executive Meeting on establishing, in a rational and orderly manner, an annual individual income tax final settlement and clearance system, the State Taxation Administration, in collaboration with the Ministry of Finance, recently convened a consultation meeting on related matters, inviting representatives from taxpayers, withholding agents, tax‑related intermediary agencies, academic experts, and the media.

According to responsible officials from relevant departments of the State Taxation Administration, the Administration has drafted an announcement on matters related to the 2019 individual income tax comprehensive income final settlement and clearance, clearly defining the scope of taxpayers required to file for the 2019 settlement and detailing the timing, methods, channels, procedures, as well as the various convenient services provided by the tax authorities.

It is reported that the announcement will soon be made public to solicit comments from the general public, with due consideration given to the views and suggestions of taxpayers, withholding agents, and all sectors of society. The State Taxation Administration will refine the content of the announcement based on these inputs, further enhancing the scientific rigor and convenience of the annual tax reconciliation and settlement system, ensuring that taxpayers fully benefit from policy incentives and genuinely experience a greater sense of gain.

Announcement of the State Taxation Administration on the Issuance of the “Provisions on Electronic Service of Tax Documents (Trial)”

Regulations on the Electronic Service of Tax Documents (Trial)

Article 1: In order to further facilitate taxpayers’ tax administration, safeguard their legitimate rights and interests, enhance the efficiency of tax collection and administration, and reduce the burdens on both tax authorities and taxpayers, these Provisions are hereby formulated in accordance with the Tax Collection and Administration Law of the People’s Republic of China and its implementing rules, as well as relevant regulations on national e‑government, and taking into account the practical realities of serving tax documents.

Article 2: For the purposes of these Regulations, “electronic service” refers to the delivery by the tax authority, through the Electronic Tax Bureau and other designated systems (hereinafter referred to as “designated systems”), of tax documents in electronic format to taxpayers and withholding agents (hereinafter referred to as “the recipients”).

Article 3. With the consent of the recipient, the tax authority may deliver tax documents by electronic means.

Electronic service has the same legal effect as other methods of service. The recipient may, on this basis, handle tax-related matters and exercise rights and fulfill obligations.

Article 4: Where the addressee consents to electronic service, a “Conofficeation of Electronic Service of Tax Documents” shall be executed. The Conofficeation of Electronic Service of Tax Documents shall specify the scope of documents subject to electronic service, its legal effect, the channels used, and any other matters requiring clarification.

The recipient may log in to a designated system to electronically sign the “Conofficeation of Electronic Service of Tax Documents,” or visit the tax authority’s service hall to sign a paper‑based version, which the tax authority will promptly enter into the relevant system.

Article 5: Where the tax authority serves tax documents by electronic means, the date on which the electronic version of the tax document is received by the addressee in the designated system shall be deemed the date of service, and the designated system shall automatically record the service.

Article 6: After the tax authority serves an electronic version of a tax document to the addressee, it shall send reminder notifications via telephone, text message, or other means. Such reminder services shall not affect the legal validity of the electronic document’s service.

The addressee promptly logs into the designated system to review the electronic version of the tax document.

Article 7: Where the addressee requires a paper‑based tax document, they may either print it themselves through a designated system or obtain it by printing it at the tax authority’s service hall.

Article 8: The provisions of these Regulations shall not, for the time being, apply to tax handling decision letters, tax administrative penalty decision letters (excluding those issued under the simplified procedure), decisions on tax preservation measures, decisions on tax compulsory enforcement, decisions to prohibit exit from the country, as well as other tax documents used in the course of tax inspections and tax administrative reconsideration proceedings.

Article 9: These Provisions shall come into force on April 1, 2020.

Interpretation of the “Announcement of the State Taxation Administration on the Issuance of the Provisional Regulations on Electronic Service of Tax Documents”

In accordance with the Law of the People’s Republic of China on the Administration of Tax Collection and its Implementing Rules, as well as relevant regulations governing national e‑government initiatives, the State Taxation Administration has issued the “Announcement on the Promulgation of the Provisional Regulations on Electronic Service of Tax Documents” (hereinafter referred to as the “Announcement”). The following is an interpretation thereof:

I. What is electronic service?

Electronic service refers to the delivery by tax authorities, through designated systems such as the Electronic Tax Bureau (hereinafter referred to as the “Designated System”), of tax documents in electronic format to taxpayers and withholding agents (hereinafter referred to as the “addressees”).

II. Why is electronic service prescribed?

The service of tax documents is a crucial component of ensuring that tax authorities administer in accordance with the law and safeguard taxpayers’ legitimate rights and interests. For a long time, tax authorities have attached great importance to the delivery of tax documents, continuously refining relevant systems and standardizing related procedures. However, with economic and social development and advances in technology, traditional methods of document delivery no longer adequately facilitate taxpayers’ tax‑related transactions. For example, when taxpayers handle tax matters online that involve tax documents, they are still required either for the tax authority to serve the documents or for the taxpayer to collect paper copies in person, thereby undermining their online tax‑filing experience. Moreover, conventional delivery methods are often time‑consuming, making it difficult for taxpayers to promptly access the content of the documents and thus to timely exercise their rights or fulfill their obligations.

To further facilitate taxpayers’ tax compliance, better safeguard their legitimate rights and interests, enhance the efficiency of tax collection and administration, and reduce the burdens on both tax authorities and taxpayers, the State Taxation Administration, after soliciting taxpayer feedback and summarizing pilot experiences from certain regions, has, following thorough research and deliberation, issued this Announcement to clarify the relevant provisions on the electronic service of tax documents.

III. What are the main contents of the Announcement?

The Notice sets forth five key provisions regarding the electronic service of tax documents: First, it clarifies the legal effect of service, stipulating that electronic service carries the same legal force as other methods of service and outlining its impact on the rights and obligations of the recipient. Second, in accordance with the principle of voluntariness, it provides that electronic service is contingent upon the recipient’s consent; when a recipient consents to electronic service, they must sign an “Electronic Service Conofficeation for Tax Documents,” and the tax authority offers multiple online and offline channels for such signing. Third, it defines the delivery process, specifying that the tax authority delivers tax documents in electronic format through a designated system. Fourth, it standardizes the service procedure, setting forth criteria for completion of service, automatic system logging, and information‑reminder services. Fifth, it limits the scope of documents subject to electronic service.

IV. What is the legal effect of electronic service?

Article 3 of the Notice expressly stipulates that electronic service carries the same legal effect as other methods of service. This is manifested in two respects:

First, with respect to the recipient, the recipient may rely on electronically formatted tax documents served by the tax authority to handle tax-related matters and to exercise rights and fulfill obligations. For example, when a recipient uses the Electronic Tax Bureau to apply for “Approval of the Maximum Invoice Limit for Special Value-Added Tax Invoices (VAT Tax Control System),” the documents issued by the tax authority may include the Notice of Supplementary Materials for Tax Administrative Licensing, the Notice of Acceptance of Tax Administrative Licensing Application, and the Decision on Granting Tax Administrative License, among others. Pursuant to this Announcement, the tax authority serves these electronically formatted tax documents through the Electronic Tax Bureau, and such documents have the same legal effect as those served by other means. The recipient may use these documents to conduct tax-related procedures, and the tax authority is bound by them; if the recipient disagrees with the content of the document, they may, in accordance with the law, file for tax administrative reconsideration or bring an administrative lawsuit.

Second, for tax authorities, with the consent of the recipient, tax documents may be served by electronic means. However, the mere signing of a “Conofficeation of Electronic Service of Tax Documents” by the recipient does not preclude the tax authority from using other methods of service. When serving specific tax documents, the tax authority may make a case-by-case determination based on the recipient’s circumstances; for example, if the recipient is currently conducting tax-related matters at the tax authority, the authority may choose to deliver the document directly to the recipient in person, rather than being required to resort to electronic service.

V. How does the Announcement reflect the principle of taxpayer voluntariness?

To fully respect the recipient’s wishes, Article 4 of the Notice stipulates that the tax authority shall effect electronic service only with the recipient’s consent. Whether the recipient consents is determined by whether they have signed the “Conofficeation of Electronic Service of Tax Documents.” Specifically: if the recipient has signed the “Conofficeation of Electronic Service of Tax Documents,” it indicates their consent to receive documents electronically, and the tax authority may proceed with electronic service; if the recipient declines to sign the “Conofficeation of Service of Tax Documents,” the tax authority shall serve the tax documents by other means.

VI. How should the recipient sign the “Conofficeation of Electronic Service of Tax Documents”?

To facilitate the process for the recipient, Article 4 of the Notice provides for two methods—online and offline: First, online signing—when the recipient logs into a designated system, an electronic version of the “Conofficeation of Electronic Service of Tax Documents” will automatically pop up; the recipient may simply conoffice as prompted by the system. Second, offline signing—tax authorities at their tax service halls will provide a paper‑based “Conofficeation of Electronic Service of Tax Documents,” which the recipient may sign and affix a seal to; the tax authority will then enter this information into the relevant system.

VII. How do tax authorities conduct electronic service?

In accordance with the Civil Procedure Law of the People’s Republic of China and other relevant provisions, Article 5 of the Notice stipulates that, for electronic service by tax authorities, the date on which the electronic version of the tax document is delivered to the recipient’s designated system shall be deemed the date of service, and the designated system shall automatically record the service status.

To enable taxpayers to promptly access electronically delivered tax documents, Article 6 of the Announcement stipulates that, following electronic service, the tax authorities shall notify the recipient by telephone, text message, or other means; the specific methods shall be determined by local tax authorities based on their respective information‑technology infrastructure and other relevant conditions. At the same time, Article 6 also sets forth a requirement for the recipient: the recipient must promptly log in to the designated system to review the electronic tax documents.

VIII. Which documents are not subject to electronic service?

Article 8 of the Notice clarifies which tax documents are not subject to electronic service, specifically: first, with respect to document types, documents such as the Tax Handling Decision, the Tax Administrative Penalty Decision (excluding penalties imposed under the simplified procedure), the Decision on Tax Preservation Measures, the Decision on Tax Compulsory Enforcement, and the Decision to Prohibit Exit are currently not eligible for electronic service; second, with respect to enforcement procedures, tax documents used in tax audits, tax administrative reconsideration, and other related processes are likewise not subject to electronic service.

9. When does the Announcement take effect?

This Announcement shall take effect as of April 1, 2020.

The Second Meeting of the Sixth Council of the China International Taxation Research Association and its 2019 Annual Conference were held in Beijing.

On December 11, the Second Meeting of the Sixth Council of the China International Tax Research Association and its 2019 Annual Conference were held in Beijing. Sun Ruibiao, Member of the Party Committee and Deputy Director-General of the State Taxation Administration, attended the meeting and delivered a speech. He noted that since 2019, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the China International Tax Research Association has implemented the various directives of the Party Committee of the State Taxation Administration and played an increasingly important role in advancing the development of a new type of international tax think tank with Chinese characteristics in the new era. Mr. Sun urged the Association to further strengthen political integrity, work style, discipline, and personnel development, and to more proactively serve the overall work of the Party and the country as well as the central tasks of tax administration. He emphasized the need to focus closely on modernizing China’s governance system and governance capacity and on promoting high-quality tax modernization in the new era, thereby enhancing the Association’s role as a bridge and link in connecting with the public, pooling public wisdom, serving tax administration, disseminating tax knowledge, and engaging in international exchanges. Furthermore, he called for bold reforms, the adoption of innovative research approaches, and the full mobilization of all sectors to actively support and participate in international tax research, with a particular emphasis on addressing cutting-edge issues at the intersection of international tax theory and practice. The Association should also intensify exchanges and cooperation, establish robust core platforms for research, distinctive platforms for external communication, and comprehensive information‑and‑data service platforms, so as to amplify China’s voice on the international stage. Finally, it must strengthen institutionalized, scientific, and standardized management, building the Association into a cohesive, dedicated, and highly efficient working collective.

Zhang Zhiyong, President of the China International Taxation Research Association, delivered a work report on behalf of the sixth council. He stated that the Association will fully leverage its platform, make effective use of both internal and external resources, strive for higher‑level development, and transition into a new‑type think tank.

Wang Li, advisor to the China International Taxation Research Association, attended the meeting. Representatives from relevant departments and bureaus of the State Taxation Administration, international taxation research associations across all provinces, autonomous regions, and municipalities directly under the central government, as well as from selected research institutes, universities, and enterprises, participated in the annual conference.

The State Taxation Administration has issued a reminder that the policy on individual income tax special additional deductions remains unchanged and no conofficeation is required.

At present, the conofficeation and updating of individual income tax special additional deduction information are underway. What should taxpayers keep in mind during this process? Recently, a responsible official from the State Taxation Administration addressed several frequently asked questions. If your special additional deduction information and details about your employer have remained unchanged since 2019, you do not need to reconoffice this information for 2020.

If you have already claimed eligible special additional deductions for 2019, you can log in to the Individual Income Tax App or the relevant section of the tax authority’s official website, select the “Use Previous Data to Automatically Generate 2020 Special Additional Deduction Conofficeation Information” feature, and click “One-Click Conofficeation” to complete the process. If your information has not changed, even if you do not perform the above steps, the system will continue to process the deductions automatically based on the details you previously submitted next year. If you did not claim any eligible special additional deductions this year but plan to do so next year, you can download the Individual Income Tax App or log in to the tax authority’s official website to submit your information.

Many people wonder: if they’ve already submitted their special additional deduction information this year, why do they need to reconoffice and update it again in December? In fact, the special additional deduction information filed this year is based on this year’s circumstances and is intended to enable taxpayers to benefit from the relevant policies. If those circumstances change, taxpayers must promptly update the information accordingly. By reviewing their special additional deduction details in December, taxpayers can assess whether these details will remain unchanged next year; if changes are anticipated, they should make timely adjustments and corrections. To streamline the process and effectively reduce the administrative burden, tax authorities have pre-filled the relevant information—taxpayers simply need to verify and amend it through mobile apps, websites, or other channels.

If you fail to promptly update your information on special additional deductions, it may affect your ability to continue benefiting from the policy next year. For example, if a taxpayer’s employer changes but the information is not updated, the new employer will be unable to access the taxpayer’s relevant details and process the deduction accordingly. Similarly, if a taxpayer’s eligibility for a special additional deduction changes but no corresponding adjustments are made, and they continue to claim the deduction under the original conditions next year, this could also impact their tax credit rating.

If, in 2019, your employer processed your special additional deductions by submitting information through an electronic template, how should you proceed to update the relevant details for next year’s eligibility? According to the official, to help taxpayers access the policy more conveniently and accurately, it is recommended to download the Individual Income Tax App or log in to the tax authority’s official website to modify your 2020 special additional deduction information. The information previously submitted has already been pre-filled and can be viewed through these channels. Alternatively, you may print out the special additional deduction information from the earlier electronic template, make any necessary changes, sign it, and submit it to your employer, who can then process your 2020 special additional deductions accordingly.

Professor Fan Yong of the Central University of Finance and Economics stated that if there have been no changes to the information on individual income tax special additional deductions or to the employer, there is no need to reconoffice such information for 2020. The State Taxation Administration has formulated policies to facilitate the enjoyment of these special additional deductions, thereby maximizing convenience for taxpayers and enabling them to easily benefit from the reforms to the individual income tax system.

Litigation & Arbitration

The Supreme People’s Court has issued a judicial interpretation on the adjudication of administrative agreement cases.

Provisions of the Supreme People’s Court on Several Issues Concerning the Adjudication of Administrative Agreement Cases

(Adopted at the 1781st Meeting of the Judicial Committee of the Supreme People’s Court on November 12, 2019; effective January 1, 2020)

In order to adjudicate administrative agreement cases in a lawful, impartial, and timely manner, these Provisions are formulated in accordance with the provisions of the Administrative Litigation Law of the People’s Republic of China and other relevant laws, and in light of the actual practice of administrative adjudication.

Article 1. Agreements entered into by administrative organs, through consultation with citizens, legal persons, or other organizations, for the purpose of achieving administrative management or public service objectives and containing rights and obligations under administrative law, shall be deemed administrative agreements as stipulated in Item 11 of Paragraph 1 of Article 12 of the Administrative Litigation Law.

Article 2 Where citizens, legal persons, or other organizations bring an administrative lawsuit concerning any of the following administrative agreements, the people’s courts shall accept the case in accordance with the law:

(1) Government concession agreements;

(2) Compensation agreements for the expropriation or requisition of land, houses, and other properties;

(3) Agreements for the transfer of mining rights and other usage rights to state-owned natural resources;

(4) Agreements concerning the leasing, sale, and other transactions of government‑invested affordable housing;

(5) Government–social capital cooperation agreements that comply with the provisions of Article 1 of these Regulations;

(6) Other administrative agreements.

Article 3. Actions brought on the basis of the following agreements concluded by administrative organs shall not fall within the scope of acceptance of administrative litigation by the people’s courts:

(1) Agreements concluded between administrative organs on grounds such as official assistance;

(2) Labor and personnel agreements concluded between administrative organs and their staff members.

Article 4. Where a dispute arises concerning the conclusion, performance, modification, or termination of an administrative agreement, and a citizen, legal person, or other organization brings an administrative lawsuit as the plaintiff against an administrative agency as the defendant, the people’s court shall accept the case in accordance with the law.

Where a dispute arises from an administrative agreement entered into by an organization entrusted by an administrative agency, the entrusting administrative agency shall be the defendant.

Article 5: Where citizens, legal persons, or other organizations that have a legitimate interest in an administrative agreement bring an administrative lawsuit, the people’s court shall accept the case in accordance with the law.

(1) Citizens, legal persons, or other organizations that participate in competitive procedures such as tendering, auction, or public listing, and who contend that an administrative agency should, in accordance with the law, enter into an administrative agreement with them but the agency refuses to do so, or who believe that an administrative agreement entered into by the agency with another party has infringed upon their legitimate rights and interests;

(2) The usufructuary of real estate such as land or buildings, or the tenant of public housing, who believes that the compensation agreement for expropriation or requisition has infringed upon their lawful rights and interests;

(3) Other citizens, legal persons, or other organizations that consider that the conclusion, performance, amendment, or termination of an administrative agreement has infringed upon their lawful rights and interests.

Article 6: After a people’s court has accepted an administrative agreement case, if the defendant files a counterclaim concerning the conclusion, performance, amendment, or termination of the agreement, the people’s court shall not grant such counterclaim.

Article 7: Where the parties have, by written agreement, chosen the people’s court having jurisdiction over a location that has a substantial connection to the dispute—such as the defendant’s domicile, the plaintiff’s domicile, the place of performance of the contract, the place where the contract was concluded, or the location of the subject matter—the people’s court shall apply such agreement, except where it contravenes provisions on hierarchical jurisdiction or exclusive jurisdiction.

Article 8: Where a citizen, legal person, or other organization brings a civil action before the people’s court, and the final legal document, on the ground that the agreement at issue is an administrative agreement, either refuses to accept the case for filing or dismisses the lawsuit, if the party concerned subsequently files an administrative action, the people’s court shall accept the case in accordance with the law.

Article 9 In administrative agreement cases, the “specific claims” referred to in Article 49, Paragraph 3 of the Administrative Litigation Law means:

(1) Requesting a judgment to revoke the administrative act by which an administrative agency has amended or terminated an administrative agreement, or to declare such administrative act unlawful;

(2) Request a judgment ordering the administrative agency to perform its obligations in accordance with the law or as stipulated in the administrative agreement;

(3) Request a judgment conofficeing the validity of the administrative agreement;

(4) Request a judgment ordering the administrative agency to enter into an administrative agreement in accordance with the law or as agreed.

(5) Requesting a judgment to annul or terminate the administrative agreement;

(6) Request a judgment ordering the administrative agency to pay compensation or provide restitution;

(7) Other claims relating to the conclusion, performance, modification, or termination of administrative agreements.

Article 10. The defendant bears the burden of proof with respect to the legality of its acts, including exercising statutory powers, following statutory procedures, fulfilling corresponding statutory duties, and entering into, performing, amending, or terminating administrative agreements.

Where the plaintiff seeks to rescind or terminate an administrative agreement, the burden of proof regarding the grounds for such rescission or termination shall rest with the plaintiff.

In the event of a dispute over the performance of an administrative agreement, the party obligated to perform shall bear the burden of proof.

Article 11. When hearing administrative agreement cases, the people’s courts shall conduct a legality review of the defendant’s actions in concluding, performing, amending, or terminating the administrative agreement, examining whether such actions were undertaken within the scope of statutory authority, whether there was an abuse of power, whether the applicable laws and regulations were correctly applied, whether statutory procedures were observed, whether the actions were manifestly inappropriate, and whether the corresponding statutory duties were fulfilled.

Where the plaintiff contends that the defendant has failed to perform the administrative agreement in accordance with the law or as agreed, the people’s court shall, in response to the plaintiff’s claims, examine whether the defendant bears the corresponding obligation and whether it has fulfilled such obligation.

Article 12: Where an administrative agreement falls under any of the circumstances of serious and manifest illegality as stipulated in Article 75 of the Administrative Litigation Law, the people’s court shall declare the administrative agreement invalid.

People’s courts may apply civil law provisions to declare administrative agreements invalid.

If the grounds for invalidity of an administrative agreement are eliminated before the conclusion of the first-instance court debate, the people’s court may conoffice the validity of the administrative agreement.

Article 13: Where an administrative agreement is stipulated by laws or administrative regulations to become effective only upon approval by another authority or after completion of other prescribed procedures, and such approval has not been obtained before the conclusion of the first-instance court debate, the people’s court shall determine that the agreement has not come into effect.

Where an administrative agreement stipulates that the defendant is obligated to perform approval procedures and the like, but the defendant fails to do so, and the plaintiff seeks compensation from the defendant, the people’s court shall uphold such claim.

Article 14: Where the plaintiff alleges that an administrative agreement was entered into under duress, fraud, a material misrepresentation, or manifest unfairness, and seeks its annulment, the people’s court, upon review, may, if it finds that the circumstances meet the statutory grounds for annulment, render a judgment annulling the agreement in accordance with the law.

Article 15: Upon the invalidity, revocation, or determination that an administrative agreement has no legal effect, the people’s court shall order the return of any property obtained by the parties pursuant to such agreement; if return is impossible, the court shall render a judgment for monetary compensation equivalent to the value of the property.

Where an administrative agreement is declared invalid or revoked due to the defendant’s fault, the court may concurrently order the defendant to take remedial measures; if the plaintiff has suffered losses as a result, the people’s court shall render a judgment requiring the defendant to provide compensation.

Article 16: In the course of performing an administrative agreement, circumstances may arise that seriously harm national interests or the public interest. If, after the defendant has taken an administrative act to amend or terminate the agreement, the plaintiff seeks to have such act revoked, and the people’s court, upon review, finds that the act is lawful, it shall dismiss the plaintiff’s claim; if the act has caused damage to the plaintiff, the court shall order the defendant to provide compensation.

Where the administrative act by which the defendant alters or terminates an administrative agreement falls under the circumstances set forth in Article 70 of the Administrative Litigation Law, the people’s court shall render a judgment revoking the act or partially revoking it, and may order the defendant to re‑issue the administrative act.

If the administrative act by which the defendant modifies or terminates an administrative agreement is unlawful, the people’s court may, in accordance with Article 78 of the Administrative Litigation Law, render a judgment ordering the defendant to continue performing the agreement and to take remedial measures; if the plaintiff has suffered losses as a result, the court shall also order the defendant to compensate for such losses.

Article 17: Where the plaintiff seeks to rescind an administrative agreement, and the people’s court finds that the conditions for rescission—whether agreed upon or prescribed by law—are met and that such rescission will not prejudice the national interest, the public interest, or the legitimate rights and interests of others, the court may render a judgment ordering the rescission of the agreement.

Article 18: Where a party exercises the right of defense based on performance in accordance with the provisions of civil law, the people’s court shall uphold such exercise.

Article 19: If the defendant fails to perform, or fails to perform in accordance with the terms of, an administrative agreement as required by law, the people’s court may, pursuant to Article 78 of the Administrative Litigation Law and in light of the plaintiff’s claims, order the defendant to continue performance and specify the particular content thereof. If the defendant is unable to perform, or if continued performance would be devoid of practical effect, the people’s court may order the defendant to take appropriate remedial measures; and if such failure has caused damage to the plaintiff, the court shall order the defendant to compensate for that damage.

If the plaintiff seeks compensation pursuant to the agreed-upon liquidated damages clause or the earnest money clause, the people’s court shall uphold such claim.

Article 20: If the defendant explicitly states, or demonstrates through its conduct, that it will not perform the administrative agreement, and the plaintiff files a lawsuit with the people’s court prior to the expiration of the performance period requesting the defendant to bear liability for breach of contract, the people’s court shall grant such relief.

Article 21: Where the defendant or another administrative agency, in exercising its administrative powers in accordance with the law to safeguard national interests or public interests, causes the plaintiff to be unable to perform its obligations, results in a significant increase in performance costs, or inflicts losses, and the plaintiff seeks a judgment ordering the defendant to provide compensation, the people’s court shall grant such relief.

Article 22: If the plaintiff brings a claim before the people’s court seeking to hold the defendant liable for breach of contract, and the people’s court, upon review, finds that the administrative agreement is invalid, it shall clarify this point to the plaintiff and, in accordance with the plaintiff’s amended claims, render a judgment conofficeing the invalidity of the administrative agreement. If the invalidity of the administrative agreement is attributable to the defendant’s conduct, the people’s court may, in accordance with the law, order the defendant to bear liability for damages. If, after such clarification, the plaintiff refuses to amend its claims, the people’s court may dismiss the plaintiff’s claim.

Article 23. In hearing administrative agreement cases, the people’s courts may conduct mediation in accordance with the law.

When conducting mediation, the people’s courts shall adhere to the principles of voluntariness and legality and may not infringe upon national interests, public interests, or the legitimate rights and interests of others.

Article 24: If a citizen, legal person, or other organization fails to perform its obligations as stipulated in an administrative agreement and, after being urged to do so, still fails to comply, the administrative agency may issue a written decision requiring it to fulfill the agreement. Upon receipt of such a written decision, if the citizen, legal person, or other organization neither applies for administrative reconsideration nor files an administrative lawsuit within the statutory time limit and continues to fail to perform, and provided that the content of the agreement is enforceable, the administrative agency may apply to the people’s court for compulsory enforcement.

Where laws and administrative regulations confer upon administrative organs the authority to supervise the performance of administrative agreements, and where a citizen, legal person, or other organization fails to perform its obligations as agreed and, after being duly notified, still fails to do so, the administrative organ may, in accordance with the law, issue a decision on the matter. If, upon receipt of such a decision, the citizen, legal person, or other organization neither files for administrative reconsideration nor brings an administrative lawsuit within the statutory time limit, and continues to fail to comply, and if the agreement is enforceable, the administrative organ may apply to the people’s court for compulsory enforcement.

Article 25: Where a citizen, legal person, or other organization brings an action against an administrative agency for failing to perform an administrative agreement in accordance with the law or for failing to perform it as agreed, the statute of limitations shall be determined by reference to the provisions of civil law. Where such an action is brought against an administrative agency concerning administrative acts such as the amendment or termination of an administrative agreement, the time limit for filing the suit shall be governed by the Administrative Litigation Law and its judicial interpretations.

Article 26: Where an administrative agreement contains an arbitration clause, the people’s court shall declare such clause invalid, unless otherwise provided by law, administrative regulations, or international treaties to which the People’s Republic of China is a party.

Article 27. When hearing administrative agreement cases, the people’s courts shall apply the provisions of the Administrative Litigation Law; where the Administrative Litigation Law is silent, the provisions of the Civil Procedure Law shall apply by analogy.

When hearing administrative agreement cases, the people’s courts may, by analogy, apply the relevant provisions of civil law governing civil contracts.

Article 28: With respect to administrative agreements concluded after May 1, 2015, in the event of a dispute, the Administrative Litigation Law and these Provisions shall apply.

For administrative agreements entered into prior to May 1, 2015, in the event of a dispute, the laws, administrative regulations, and judicial interpretations in force at that time shall apply.

Article 29 This Regulation shall come into force on January 1, 2020. In the event of any inconsistency between this Regulation and any judicial interpretations previously issued by the Supreme People’s Court, this Regulation shall prevail.

The Fourth Plenary Session of the 19th CPC Central Committee called for “implementing the constitutional interpretation procedures and mechanisms,” making the first formal constitutional interpretation case highly anticipated.

The Decision adopted at the Fourth Plenary Session of the 19th CPC Central Committee calls for improving the institutional mechanisms that ensure the full implementation of the Constitution. It emphasizes strengthening constitutional implementation and oversight, implementing procedures for interpreting the Constitution, and advancing constitutional review.

Without constitutional interpretation, there can be no review of constitutionality. Conducting constitutional interpretation is a crucial component of the institutional mechanisms designed to ensure the full implementation of the Constitution, and it is an indispensable step and an unavoidable procedure in the process of reviewing constitutionality. “It can be said that every instance of constitutional‑compliance review necessarily entails the study of issues related to the Constitution, as well as an understanding and accurate application of its relevant provisions,” noted Liang Ying, Director of the Legislative Filing and Review Division of the Legislative Affairs Commission of the Standing Committee of the National People’s Congress. He emphasized that initiating a review of constitutionality inevitably requires a thorough comprehension, interpretation, and application of the Constitution’s spirit, principles, and provisions. Advancing the work of constitutional‑compliance review, therefore, places specific demands on the formal initiation of the constitutional interpretation procedure.

Recently, the Legislative Affairs Commission of the Standing Committee of the National People’s Congress convened a national conference on filing and review in Changsha, Hunan Province. This was also the first nationwide meeting on filing and review held since the Fourth Plenary Session of the 19th CPC Central Committee. During the conference, issues related to constitutional interpretation drew widespread attention.

The formal constitutional interpretation procedure has not yet been initiated.

Interpreting the Constitution is a major theoretical and practical issue. The Constitution explicitly vests the power of constitutional interpretation in the Standing Committee of the National People’s Congress. However, to date, constitutional interpretation has not been genuinely applied in China. Historically, in 1983, the Standing Committee of the National People’s Congress issued a decision concerning the exercise by national security organs of the investigative, detention, pre‑trial interrogation, and arrest‑execution powers previously vested in public security organs. The decision stated: “The national security organs established by the First Session of the Sixth National People’s Congress shall undertake the investigation of espionage and agent‑related cases formerly under the jurisdiction of the public security organs; they retain the character of state public security organs and may therefore exercise the investigative, detention, pre‑trial interrogation, and arrest‑execution powers prescribed by the Constitution and laws for public security organs.” This was regarded as a quasi‑constitutional interpretation, rather than a genuine constitutional interpretation.

On March 15 this year, the Second Session of the 13th National People’s Congress adopted the Foreign Investment Law by vote. A few days later, the Constitutional Division of the Legislative Affairs Commission of the Standing Committee of the National People’s Congress published an article titled “The Evolution of China’s Foreign Investment Legislation in Accordance with the Provisions of Article 18 of the Constitution.” The article stated: “Article 18 of the 1982 Constitution was the first to enshrine in the country’s fundamental law that the state permits foreign investors to invest in China, explicitly stipulating that the state protects the legitimate rights and interests of foreign investors. This provision not only provides constitutional safeguards for foreign investment in China but also establishes a fundamental legal framework for legislation related to foreign economic affairs.”

“This provision was formulated in light of the circumstances prevailing at the time, taking into account four key aspects: the policy orientation of foreign investment, the forms of foreign investment, the scope of Chinese investors, and the scope of foreign investors. Throughout all previous amendments to the current Constitution, this article has remained unchanged. On this basis, the state’s policies on the utilization of foreign capital have been continuously adjusted, and the relevant laws and regulations have been steadily refined, leading to a gradual, expansionary evolution in both the substance and scope of this constitutional provision.” This official interpretation has been regarded within the legal community as an analysis of the constitutional text conducted through the method of constitutional interpretation.

What, then, constitutes constitutional interpretation in the truest sense? “This encompasses both formal, legislative‑style interpretations—presented as constitutional interpretation cases and rendered in a procedural manner—as well as interpretive clarifications of constitutional provisions reached through the review process, reflecting a nuanced understanding and grasp of those provisions,” Liang Ying explained. For instance, when major institutional or policy adjustments are at stake, and initiating a constitutional amendment proves difficult while broad consensus is urgently needed, the Standing Committee of the National People’s Congress must, on the basis of thorough research, promptly issue an authoritative interpretation of the relevant constitutional provisions. Such interpretations provide constitutional legitimacy for major reform decisions and deployments, thereby meeting the demands of reform and development in the new era. “This is an important means of implementing the Constitution in accordance with the rule of law, and it also represents a common practice in many other countries.”

Liang Ying also emphasized that research on constitutional interpretation must be officely grounded in China’s national conditions, strictly adhere to the text of the Chinese Constitution, and be closely integrated with the country’s practice of the rule of law, so as to consider how to interpret, elucidate, and implement the Constitution in a proactive, prudent, lawful, and effective manner.

Constitutional interpretation and constitutional review are inseparable.

Constitutional interpretation plays a crucial role in the effective implementation of the Constitution. With the advent of the era of constitutional review, such interpretation has become even more indispensable. “In countries with a mature rule of law, the introduction of any major social policy must ultimately undergo constitutional review; only when relevant value judgments and scientific findings are accepted and translated into constitutional interpretations and rationales do they acquire legal authority and binding force. If we aspire to build China into a country under the rule of law, we must cultivate the habit of grounding our arguments in the law and of addressing issues within the framework of legal norms,” says Zhang Xiang, a professor at the Law School of Renmin University of China. “The Constitution is the fundamental law of a nation, the very foundation of the state, and it establishes the country’s basic institutions. This means that, for an extended period, a single Constitution must guide all aspects of public life. Consequently, constitutional stability must be preserved. Yet social realities are constantly evolving. How, then, can we maintain constitutional stability while also adapting to the changing dynamics of social life? This is precisely where constitutional interpretation becomes essential. Only by interpreting the Constitution in response to the demands of the times can its provisions and spirit be truly integrated into everyday social practice, ensuring that the blueprint is carried through to the end,” Zhang Xiang adds.

Which provisions exhibit a high degree of practical necessity for constitutional interpretation?

So, which constitutional provision is likely to be the first to undergo constitutional interpretation? “Determining the timing for constitutional interpretation depends not only on the inherent characteristics and scope of application of the relevant provision, but also on the CPC Central Committee’s current priorities and key tasks.” Overall, Zheng Lei, an associate professor at the Guanghua Law School of Zhejiang University, believes that two constitutional provisions currently lend themselves particularly well to such interpretation.

First is the provision on the basic economic system. Article 6, Paragraph 2 of the Constitution stipulates: “In the primary stage of socialism, the state upholds the basic economic system in which public ownership is the mainstay and diverse forms of ownership develop together, and the distribution system in which distribution according to work is the mainstay and multiple modes of distribution coexist.” “The Constitution sets forth our country’s basic economic system in an open-ended manner and provides an explicit enumeration; meanwhile, the other components within this open‑ended framework remain subject to evolution and development in the course of constitutional implementation.” In this regard, Zheng Lei points out that the Fourth Plenary Session of the 19th CPC Central Committee summarized and enumerated three constituent elements of the implementation and further development of the basic economic system: “public ownership as the mainstay, with diverse forms of ownership developing together”; “distribution according to work as the mainstay, with multiple modes of distribution coexisting”; and “the socialist market economy.” “This not only reflects the openness of the constitutional provisions on the basic economic system but also enriches the explicit enumeration, thereby providing substantive content for constitutional interpretation,” Zheng Lei stated.

Second, the provision on personal liberty. Article 37, paragraph 1 of the Constitution stipulates: “The personal freedom of citizens of the People’s Republic of China shall be inviolable.” Zheng Lei argues that, given its connection to the system of compulsory education through re‑education, this provision also presents a realistic possibility for constitutional interpretation. In December 2018, the Report of the Legislative Affairs Commission of the Standing Committee of the National People’s Congress on the Work of Filing and Review in 2018 noted: “In recent years, the application of compulsory education measures has declined year by year, with a marked reduction in the number of persons subjected to such measures; in some localities, implementation has already been discontinued. Following research and deliberation, all relevant parties have reached a consensus on abolishing the system of compulsory education, and the time is now ripe to initiate the process of its abolition.” Accordingly, the report recommends that the competent authorities submit, at an appropriate juncture, a relevant legislative proposal to abolish the system of compulsory education. “The debate over the retention or abolition of the compulsory education system—and the attention it has attracted—has focused squarely on the right to personal liberty enshrined in Article 37 of the Constitution, thereby creating a pressing practical need to interpret that provision.” Zheng Lei suggests that, in conjunction with the ongoing discussion on the fate of the compulsory education system, Article 37 could be interpreted to clarify that coercive measures and penalties restricting personal liberty may only be established by law, while any such measures or penalties involving prolonged restrictions on personal liberty must be subject to judicial proceedings.

Zhang Xiang predicts that Article 25 of the Constitution, which states, “The State shall implement family planning to ensure that population growth is in line with economic and social development plans,” and Article 49, paragraph 2, which provides, “Both spouses have the obligation to practice family planning,” may become the first provisions to trigger a constitutional interpretation.

“At present, the state’s relevant family‑planning policies have been adjusted; however, neither of these constitutional provisions poses an obstacle to such adjustments, and Article 25 in fact leaves ample room for policy reform. The national task set forth in that article is merely ‘to ensure that population growth is aligned with economic and social development plans.’ Within this framework, the specific policies and measures adopted for family planning can vary considerably: as long as they can be shown to serve this objective, options include promoting contraception to curb population growth, refraining from intervening in fertility to allow natural population increase, or even encouraging childbirth through incentives for having more children. Accordingly, these two constitutional provisions afford substantial scope for interpretation,” said Zhang Xiang.

Measures for the Administration of Credit Information of Market Entities in Water Conservancy Construction Have Been Issued.

The Ministry of Water Resources recently issued the Measures for the Administration of Credit Information of Market Entities in Water Conservancy Construction (hereinafter referred to as the “Measures”).

The Measures stipulate that records of misconduct by market entities in the water conservancy construction sector shall be managed through a quantitative scoring system, with the resulting scores serving as an important basis for designating entities on the “Key Monitoring List” and the “Blacklist,” as well as for credit evaluation within the water conservancy industry. For market entities listed on the “Blacklist,” the following punitive measures shall be imposed during the public disclosure period: With respect to other market entities in the water conservancy construction sector, recommendations shall be made, in accordance with the relevant provisions of the Joint Punishment Memorandum, to legally restrict their access to applicable qualifications; legal restrictions shall also be imposed on the approval of preliminary design documents for water conservancy infrastructure projects, the approval of soil and water conservation plans for production and construction projects, the approval of hydrological activities conducted in China by foreign organizations or individuals, and the approval of the establishment or adjustment of national basic hydrological stations, among other related administrative permits; participation in production, business operations, and tendering activities in the water conservancy construction market, as well as in government procurement activities conducted by water administration authorities at all levels, shall likewise be restricted in accordance with the law; furthermore, during the public disclosure period, the joint punitive measures set forth in the Joint Punishment Memorandum shall be implemented against market entities listed on the “Blacklist.”

Minutes of the Meeting of the Tianjin Higher People’s Court on the Adjudication of Labor and Personnel Dispute Cases

In order to safeguard, in accordance with the law, the legitimate rights and interests of both workers and employers and to appropriately resolve difficult issues arising in arbitration and litigation of labor and personnel dispute cases, and pursuant to the Labor Law of the People’s Republic of China, the Labor Contract Law of the People’s Republic of China, the Mediation and Arbitration Law of the People’s Republic of China (hereinafter referred to as the “Mediation and Arbitration Law”), and other relevant provisions, and taking into account the actual conditions of this municipality, the Tianjin Higher People’s Court and the Tianjin Municipal Human Resources and Social Security Bureau have conducted an in-depth discussion on ten pressing issues in the adjudication of labor and personnel dispute cases. They have also extensively solicited opinions from courts throughout the city and from the labor and personnel dispute arbitration committees at both the municipal and district levels. The minutes are hereby set forth as follows:

I. Preservation Issues in the Arbitration Phase

1. Acceptance and Transfer of Property Preservation Proceedings

(1) In collective dispute cases involving ten or more persons (including cases that meet the criteria for filing as collective cases but have been bifurcated), if the employer is on the verge of bankruptcy, the legal representative has absconded, or the employer has transferred or concealed its assets, the employee may, in accordance with the law, apply to the People’s Court for property preservation through the Labor and Personnel Dispute Arbitration Commission. In such circumstances, the employee is not required to provide security.

(2) In cases involving wage recovery claims brought by rural migrant workers, applications for arbitration‑related property preservation should generally not be subject to a security requirement. If the migrant workers do not file such an application but there is a risk that the employer may transfer or conceal assets, thereby rendering the arbitral award unenforceable or difficult to enforce, the people’s court may, on its own initiative, take preservation measures.

Where an arbitration party meeting the aforementioned circumstances applies for property preservation, the Labor and Personnel Dispute Arbitration Commission shall, after conducting an inquiry and clarifying the associated risks, promptly forward to the People’s Court the case acceptance notice, the application for preservation, the record of the inquiry, and other relevant documents. Upon receipt of such materials, the People’s Court shall review them in accordance with the law and render a ruling without undue delay. Following the adoption of preservation measures, the People’s Court shall promptly notify the Labor and Personnel Dispute Arbitration Commission.

The fees for applying for property preservation shall be governed by the Measures for the Payment of Litigation Costs.

II. The Coordination and Admissibility of Arbitration and Litigation

2. The issue of accepting for enforcement the arbitration mediation agreement

The mediation statement prepared by the Labor and Personnel Dispute Arbitration Commission in accordance with Article 42 of the Mediation and Arbitration Law shall be signed by the arbitrators and sealed with the official seal of the Labor and Personnel Dispute Arbitration Commission, and shall become legally effective upon being acknowledged and signed by both parties.

Where a party applies to the people’s court for compulsory enforcement, the people’s court shall accept the application.

3. Issues Regarding the Cancellation of an Employer and Parties’ Application for Arbitration

Where a dispute arises between a worker and an employer that has been deregistered, it shall be handled as follows, depending on the specific circumstances:

(1) After an employer has been deregistered, if a party applies for arbitration, the Labor and Personnel Dispute Arbitration Commission shall issue a notice of non-acceptance. If the party subsequently files a lawsuit with the People’s Court, the People’s Court shall accept the case.

(2) After an arbitration case has been filed, if the employer is deregistered, the Labor and Personnel Dispute Arbitration Commission shall, in accordance with the law, terminate the proceedings and notify the parties in writing. If the parties bring a lawsuit before the People’s Court, the People’s Court shall accept the case.

Upon acceptance of the case by the people’s court, if a party applies to add an investor, the sponsoring entity, or the liquidation committee as a defendant, such application shall be granted.

4. The issue of the arbitration statute of limitations in actions to conoffice the employment relationship

Pursuant to Article 2 and Paragraph 1 of Article 27 of the Mediation and Arbitration Law, the statute of limitations for a worker’s application for arbitration to conoffice the employment relationship is one year, commencing from the date on which the worker knew or ought to have known that his or her rights had been infringed.

5. The issue of disputes arising between workers who have reached the statutory retirement age but have not yet received pension benefits or retirement pay and their employers.

Where a worker has reached the statutory retirement age but has not yet received old-age insurance benefits or a retirement pension (except where the worker has continuously worked for the same employer beyond the retirement age), and brings a dispute with the employer before an arbitration tribunal, if the Labor and Personnel Dispute Arbitration Commission determines that the matter falls outside the scope of its jurisdiction, it shall issue a notice of non-acceptance to the worker.

If a worker brings a lawsuit before the people’s court regarding such a dispute, the people’s court shall accept the case.

6. After the Labor and Personnel Dispute Arbitration Commission issues a notice of non-acceptance, if the parties file a lawsuit with the People’s Court, then withdraw the suit only to refile it, is it necessary to comply with the mandatory arbitration procedure?

If the Labor and Personnel Dispute Arbitration Commission has, in accordance with the law, decided not to accept a case, and the party subsequently withdraws the lawsuit after filing it with the People’s Court, then, should the party bring another lawsuit concerning the same dispute, the People’s Court shall inform the party that it must first apply for arbitration with the Labor and Personnel Dispute Arbitration Commission.

After the mandatory arbitration procedure has been completed, if a party files a lawsuit challenging the arbitration award, the people’s court shall accept the case.

III. The Issue of Harmonizing the Standards for Applying Laws in Arbitration and Litigation

7. Whether transportation allowances (vehicle‑reform subsidies), communication allowances, meal allowances, and similar benefits provided or paid by the employer to the employee should be classified as wages or as welfare expenses.

Where an employer has implemented a monetary‑remuneration reform, transportation allowances (vehicle‑reform subsidies), communication allowances, meal allowances, and other similar benefits paid to employees on a monthly basis in accordance with prescribed standards shall be included in the composition of the employee’s wages.

8. Where an employee is suffering from an illness or a non‑work‑related injury and, upon expiration of the prescribed medical leave, continues to take sick leave, the following circumstances shall be distinguished in handling the matter:

(1) Where an employer, in accordance with Article 40 of the Labor Contract Law of the People’s Republic of China, terminates a labor contract by giving the employee written notice thirty days in advance or by paying the employee an additional month’s wages, and the employee claims economic compensation, such claim shall be upheld.

(2) If an employer notifies an employee to undergo a medical assessment of work capacity (for return to work), and the employee fails to cooperate, or, even after such assessment deems the employee fit to return to work, still does not promptly resume employment, the employer’s claim to terminate the labor contract in accordance with its internal rules and regulations without paying economic compensation shall be upheld.

9. Where an employee is placed on standby due to reasons attributable to the employer, the issue of wages during the standby period.

Where an employer’s fault results in a worker being placed on standby, the worker’s claim for wages and benefits during the standby period shall be upheld. The standard for such wages and benefits shall be calculated based on the worker’s average monthly wage over the twelve months preceding the commencement of the standby period, excluding overtime pay.

In accordance with Article 27 of the Regulations on Wage Payment of Tianjin Municipality, if an employer suspends work or production for reasons not attributable to the employee and such suspension does not exceed one wage payment cycle, the employer shall pay the employee wages at the rate stipulated in the labor contract. If the suspension exceeds one wage payment cycle and the employer has not assigned any work to the employee, the issue of standby wages may be resolved through mutual negotiation; provided the parties reach a consensus, the agreed-upon arrangement shall prevail.

10. The Issue of Determining Employment Relationships Involving Foreign Nationals

Where a foreign national enters into a labor contract with an employer within China without having legally obtained the requisite employment permit, no employment relationship shall be deemed to exist between such foreign national and the employer.

During the term of a labor contract, if a foreign national’s employment permit expires without being renewed, the remaining period shall be deemed to constitute a lack of employment authorization, and no labor relationship with the employing entity shall be recognized.

If the actual employer differs from that recorded on the employment permit, it shall be deemed that no lawful employment authorization has been obtained.

Foreign nationals who have legally obtained a Foreigner’s Permanent Residence Permit, in accordance with Article 4 of the “Notice on Issuing the Measures for the Relevant Benefits Enjoyed by Foreigners with Permanent Residence in China” (Ministry of Human Resources and Social Security Document No. [2012] 53), are exempt from obtaining a foreign‑employment permit when taking up employment in China. Where such individuals establish an employment relationship with an employer within China, their relationship shall be deemed to constitute an employment relationship.

Starting January 6 next year, Qingdao will implement a waste-sorting system, with individuals facing fines of up to 200 yuan for violations.

The highly anticipated “Qingdao Municipal Measures for the Management of Domestic Waste Sorting” was officially promulgated on December 11. Under these measures, Qingdao will implement a scheduled and designated‑location system for sorting and disposing of domestic waste, as well as a responsibility‑based management system for waste sorting. If the person responsible for managing domestic waste identifies improper sorting, they must require the waste generator to sort it correctly before disposal; if the generator fails to comply, the responsible party may refuse acceptance. Entities that fail to sort their waste in accordance with these provisions will be subject to fines ranging from RMB 5,000 to RMB 50,000, while individuals will face fines of up to RMB 200. The measures will take effect on January 6 next year.

The Measures stipulate that municipal solid waste in Qingdao is categorized into recyclables, hazardous waste, kitchen waste (wet waste), and other waste (dry waste). Recyclables refer to waste suitable for recycling; hazardous waste refers to waste that poses a direct or potential hazard to human health or the natural environment; kitchen waste (wet waste) includes catering waste generated by food‑service establishments and collective canteens, household kitchen waste, and perishable waste such as agricultural and sideline product residues from farmers’ markets; and other waste (dry waste) comprises all municipal solid waste not falling under the aforementioned categories.

Under these Measures, Qingdao City implements a scheduled and designated‑location system for the separate disposal of domestic waste. Entities and individuals that generate domestic waste shall dispose of it in accordance with the prescribed times and locations, sorting it as required. The adoption of information‑based and intelligent management systems for waste collection points and containers is encouraged. In areas where conditions permit, measures such as door‑to‑door collection and centralized disposal of domestic waste are also promoted, with the aim of gradually reducing the number of waste collection points and containers.

The Measures stipulate that Qingdao City shall implement a system of designated persons responsible for household waste sorting. The persons responsible for urban appearance and environmental hygiene serve as the responsible parties for household waste sorting within their respective areas of responsibility, and are tasked with overseeing waste-sorting activities in those areas.

The responsible party for the classified management of rural domestic waste shall be determined in accordance with the following provisions: In rural residential areas where property management is implemented, the property service enterprise shall be the responsible party; where no property management is in place, the village (or residents’) committee shall be the responsible party; for public areas or public venues within the village (or community) such as roads, parks, and public green spaces, the village (or residents’) committee or the management entity it has entrusted shall be the responsible party; for office premises of enterprises, institutions, social organizations, and other entities within the village (or community), the respective entity shall be the responsible party; and for farmers’ markets, commercial stores, catering services, and similar establishments within the village (or community), the operator or the managing entity shall be the responsible party.

The person responsible for household waste sorting management shall, in accordance with the regulations, install, clean, and maintain waste‑sorting collection containers, facilities, or designated collection points; specify the times and methods for disposing of different categories of household waste; conduct publicity and provide guidance on proper waste‑sorting practices; promptly stop any acts that undermine waste‑sorting efforts; and submit the relevant data on waste‑sorting disposal as required.

If the person responsible for managing domestic waste discovers that waste has been deposited in violation of the sorting requirements, they shall require the depositor to sort it before disposal; if the depositor fails to comply with the sorting requirements, the responsible party may refuse to accept the waste.

The Measures stipulate that mixed collection of separately sorted domestic waste is prohibited. Mixed transportation of separately collected domestic waste is also prohibited. Recyclables shall be transported to designated facilities for sorting, dismantling, and recycling. Hazardous waste shall be transported, in accordance with applicable laws and regulations, to qualified disposal facilities for harmless treatment. Kitchen waste (wet waste) and other waste (dry waste) shall be transported to designated facilities for disposal.

The Measures likewise stipulate the legal liabilities applicable at each stage of domestic waste sorting. Specifically, those who fail to sort and dispose of domestic waste in accordance with the provisions of these Measures shall be ordered to make corrections; entities shall be subject to a fine of no less than RMB 5,000 and no more than RMB 50,000, while individuals shall be fined no more than RMB 200. Anyone who mixes hazardous waste with other categories of domestic waste shall be subject to enhanced penalties as prescribed in the preceding paragraph.

If the person responsible for household waste sorting and management fails to install collection containers, facilities, or sorting collection points as required, they shall be ordered to make corrections and fined between RMB 5,000 and RMB 50,000. Units engaged in the collection, transportation, or disposal of household waste that violate these regulations may be subject to a maximum fine of RMB 100,000.

The Measures also stipulate that the government is encouraged to adopt mechanisms such as purchasing services to engage social entities in providing guidance, collection, transportation, and disposal services for domestic waste sorting. Furthermore, the establishment of public participation platforms is encouraged, with measures such as point‑based rewards and civility‑based evaluations employed to motivate the public to voluntarily engage in waste sorting.

Other

Wang Yi on China’s diplomacy in 2019: Officely safeguarding the country’s core interests and making due contributions to domestic development and stability, as well as to the great cause of national reunification.

On the 13th, State Councilor and Foreign Minister Wang Yi attended the opening ceremony of the 2019 Symposium on the International Situation and China’s Diplomacy and delivered a speech, stating that Chinese diplomacy officely safeguards the country’s core interests and makes due contributions to domestic development and stability as well as to the great cause of national reunification.

Wang Yi stated that we officely uphold the principle of “One Country, Two Systems,” support the Hong Kong Special Administrative Region government in swiftly putting an end to violence and chaos and restoring order, resolutely combat external forces that meddle in Hong Kong affairs and interfere in China’s internal affairs, and officely sever the sinister hands seeking to instigate a “color revolution” in Hong Kong.

Wang Yi stated that we have forcefully countered the smear campaigns launched by anti-China forces on the Xinjiang issue, and over the past year have invited more than a thousand diplomats, media representatives, and scholars from around the world to visit Xinjiang in person and gain first-hand insight into the truth. In response to certain Western countries’ provocations at venues such as the UN Human Rights Council and the Third Committee of the UN General Assembly, we have set the record straight and upheld justice, with China’s principled stance earning overwhelming support from the international community.

Wang Yi stated that, following the establishment of diplomatic relations with Dominica, Burkina Faso, and El Salvador, as well as the resumption of relations with Burkina Faso last year, China has this year established diplomatic ties with the Solomon Islands and restored relations with Kiribati, bringing the total number of countries with which China maintains diplomatic relations to 180. As a result, the consensus on the “One China” principle has been further consolidated in the international community.

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