JC Master Legal News Issue 910

Key Takeaways for This Issue

The China Securities Regulatory Commission has revised and refined the reverse‑linkage policy for venture capital funds, guiding investment toward long-term horizons, early-stage companies, small and medium-sized enterprises, and technology‑driven ventures.

Recently, the China Securities Regulatory Commission revised and issued the “Special Provisions on Share Reduction by Shareholders of Venture Capital Funds in Listed Companies” (hereinafter referred to as the “Special Provisions”). In parallel, the Shanghai Stock Exchange and the Shenzhen Stock Exchange have amended their implementing rules, which took effect on March 31.

National Equities Exchange and Quotations Company: Further Strengthen Efforts to Tightly and Thoroughly Implement Epidemic Prevention and Control Measures and Support Economic and Social Development

On the evening of March 6, the National Equities Exchange and Quotations Company announced that, based on an assessment of the effectiveness of its earlier measures, it has further strengthened support for key regions and sectors in light of actual market conditions. The company is also increasing regulatory flexibility in accordance with laws and regulations, making every effort to ensure the stable operation of the market, and diligently implementing all measures to contain the epidemic and bolster economic and social development.

Authoritative authorities provide detailed explanations on key issues related to fiscal and tax policies for epidemic prevention and control.

On March 3, the State Council Joint Prevention and Control Mechanism held a press conference in Beijing, inviting Fu Jinling, Director-General of the Social Security Department of the Ministry of Finance; Wang Jianfan, Director-General of the Tax Policy Department; Wang Daoshu, Chief Auditor of the State Taxation Administration and Director-General of the Department of Goods and Services Tax; and Cai Zili, Director-General of the Revenue Planning and Accounting Department, to provide an update on fiscal and tax policy measures supporting epidemic prevention and control as well as the resumption of work and production.

Two departments: The Regulations on the Administration of Permanent Residence for Foreigners will extensively solicit and carefully incorporate public opinions.

Recently, the Ministry of Justice and the National Immigration Administration jointly convened in Beijing a symposium to solicit public comments on the Draft Regulations of the People’s Republic of China on the Administration of Permanent Residence for Foreigners. Representatives from various enterprises and institutions, community officials, residents, and academic experts were invited to attend, where they engaged in in-depth discussions on the draft regulations and offered their views and suggestions.

Xi Jinping attended the symposium on securing a decisive victory in the battle against poverty and delivered an important speech.

On the 6th, Xi Jinping, General Secretary of the CPC Central Committee, President of the People’s Republic of China, and Chairman of the Central Military Commission, attended in Beijing a symposium on securing a decisive victory in the battle against poverty and delivered an important speech.

Table of Contents

Table of Contents

Finance & Capital Markets

The China Securities Regulatory Commission has revised and refined the reverse‑linkage policy for venture capital funds, guiding investment toward long-term horizons, early-stage companies, small and medium-sized enterprises, and technology‑driven ventures.

The China Securities Regulatory Commission has announced the findings and disciplinary actions resulting from its 2019 inspections of auditing and valuation offices.

The China Securities Regulatory Commission has reduced the contribution rates for securities companies to the Securities Investor Protection Fund for the 2019 and 2020 fiscal years.

The China Securities Regulatory Commission is soliciting public comments on the “Guiding Opinions on the Transfer of Listed Companies from the National Equities Exchange and Quotations System to Stock Exchanges.”

The China Banking and Insurance Regulatory Commission has issued the “Opinions on Accelerating the Reform of Accident Insurance.”

Corporate & Commercial

China Banking and Insurance Regulatory Commission: A temporary policy to defer principal and interest payments on loans for small, medium, and micro enterprises will be introduced in the near future.

State Post Bureau: In January, the volume of express deliveries reached 3.78 billion parcels, down 16.4% year on year.

Shenzhou Computer has filed a lawsuit against JD.com for failing to pay 300 million yuan in outstanding payments.

Has the registration of multiple new fresh‑food trademarks accelerated business expansion? Meituan responded: “We protect intellectual property.”

The fitness industry has seen offline closures give way to a surge in online live streaming.

Taxation

National Equities Exchange and Quotations Company: Further Strengthen Efforts to Tightly and Thoroughly Implement Epidemic Prevention and Control Measures and Support Economic and Social Development

Public Consultation on the Mechanism for Transferring to a Listing on the Main Board from the New Third Board

The People’s Bank of China stated that the LPR mechanism has, to the greatest extent possible, ensured that quoting banks submit genuine quotes.

The State-owned Assets Supervision and Administration Commission has issued a document to standardize the registration of state-owned equity in limited partnership enterprises.

Ministry of Commerce: Recently, the national consumer market has shown positive signs, with sales bottoming out and beginning to rebound.

Litigation & Arbitration

Two departments: The Regulations on the Administration of Permanent Residence for Foreigners will extensively solicit and carefully incorporate public opinions.

Supreme People’s Procuratorate: Has placed 45 key administrative prosecution supervision cases under special oversight and supervision.

China will promptly advance the enactment of a Biosecurity Law.

The Guangzhou Municipal Public Security Bureau issued a notice stating that the 15-year-old boy who was abducted in the “Auntie Mei” case has been found.

Guangdong’s Foshan “Mother Turns in Her Son” Case Concluded with a Verdict: Sentenced to Ten Years for Fraud Amounting to Over 700,000 Yuan

Other

Xi Jinping attended the symposium on securing a decisive victory in the battle against poverty and delivered an important speech.

Finance & Capital Markets

The China Securities Regulatory Commission has revised and refined the reverse‑linkage policy for venture capital funds, guiding investment toward long-term horizons, early-stage companies, small and medium-sized enterprises, and technology‑driven ventures.

Recently, the China Securities Regulatory Commission revised and issued the “Special Provisions on Share Reduction by Shareholders of Venture Capital Funds in Listed Companies” (hereinafter referred to as the “Special Provisions”). In parallel, the Shanghai Stock Exchange and the Shenzhen Stock Exchange have amended their implementing rules, which took effect on March 31.

In September 2016, the State Council issued the “Several Opinions on Promoting the Sustainable and Healthy Development of Venture Capital,” calling for the establishment of a mechanism that links the lock-up period following an IPO to the length of pre-IPO investment holdings in venture capital (fund) entities. To implement this policy, in March 2018, the China Securities Regulatory Commission promulgated the “Special Provisions,” explicitly setting forth the reverse‑linkage policy for venture capital funds. Since its implementation, this policy has supported market‑based exits for venture capital funds that focus on long-term and value‑oriented investments, yielding notable results.

To further improve exit channels for venture capital funds, ensure a smooth and virtuous cycle of “investment–exit–reinvestment,” foster the formation of entrepreneurial capital, and better leverage venture capital’s role in supporting the entrepreneurship and innovation of small and medium-sized enterprises and science-and‑technology‑driven offices, the CSRC has revised and refined its reverse‑linkage policy—while leveraging private equity and venture capital funds to bolster epidemic prevention and control and strengthen support for the real economy.

First, the eligibility criteria for the reverse‑linkage policy have been streamlined. It is now stipulated that a venture capital fund may qualify for the reverse‑linkage treatment as long as its investments in eligible projects meet at least one of the following three conditions: “early‑stage enterprises,” “small and medium-sized enterprises,” or “high‑tech enterprises.” In addition, the requirement at the fund level that “the aggregate share of investments in early‑stage SMEs and high‑tech enterprises must exceed 50%” has been removed.

Second, to incentivize acquirers under the block‑trade regime, the stock exchange’s implementing rules have been revised concurrently to refine the reverse‑linkage policy in the block‑trade process and to remove the lock‑up period imposed on acquiring shareholders.

Third, we will enhance preferential policies for funds that focus on long-term investment, allowing venture capital funds with investment horizons of five years or longer to sell shares without any restrictions on the proportion sold once the lock-up period has expired.

Fourth, the method for calculating the term has been appropriately adjusted: the cut-off date for the investment term has been changed from the “date of acceptance of the issuance application materials” to the “date of the issuer’s initial public offering.”

Fifth, the scope of entities eligible for the reverse‑linkage policy has been broadened to include private equity investment funds that have been duly filed with the Asset Management Association of China.

The CSRC has streamlined and optimized the reverse‑linkage policy, which will help alleviate the “exit difficulties” faced by private equity funds and venture capital funds. Private equity and venture capital funds that qualify for the reverse‑linkage regime hold only a small share of their portfolio companies’ market capitalization and are subject to phased unlocking in accordance with lock‑up requirements, so they are unlikely to significantly increase downward pressure on the market.

The China Securities Regulatory Commission has announced the findings and disciplinary actions resulting from its 2019 inspections of auditing and valuation offices.

To further optimize the professional ecosystem of auditing and valuation offices, the China Securities Regulatory Commission (CSRC) has adhered to the principle of “four respects and one concerted effort,” continuously strengthening ex post‑regulatory oversight and consistently urging these offices to exercise due diligence and fulfill their responsibilities, thereby effectively enhancing the quality of financial information in the capital market. In 2019, the CSRC organized its affiliated units to conduct comprehensive inspections of two auditing offices and one valuation office, with a total of 19 audit engagements and 10 valuation engagements subject to spot checks. Additionally, targeted inspections were carried out on 15 audit engagements and 9 valuation engagements. The CSRC also convened special inspections focusing on goodwill impairment audits and valuations, as well as internal control audits, conducting spot checks on 131 goodwill impairment audit engagements, 125 goodwill impairment valuation engagements, and 85 internal control audit engagements.

This round of inspections places particular emphasis on targeted, comprehensive reviews, focusing primarily on audit and valuation offices with large business scales or a high incidence of quality issues. Specialized inspections are directed at audit and valuation engagements that have attracted multiple lines of inquiry and exhibit concentrated professional risks, while thematic inspections target practice areas that command significant market attention and are characterized by pronounced operational risks.

I. Overview of Comprehensive and Specialized Inspections

Based on the findings of the inspections, audit and valuation offices have continuously strengthened their internal governance and quality control, striving to enhance the quality of their professional services and achieving certain results. However, several salient issues persist.

In terms of internal governance, some institutions lack integrated oversight over their branches and sub‑branches, with many even hiring personnel who are not employed by the institution to carry out securities‑related activities. Regarding quality control, certain offices have inadequate quality‑control frameworks, and their quality‑control processes are often merely formalistic; some practitioners issue a number of securities‑related reports annually that far exceed the industry average. As for independence, unauthorized trading in securities remains persistent despite repeated prohibitions: at individual institutions, dozens of employees have violated internal policies by trading clients’ stocks, while others have breached securities laws by trading shares in projects they personally oversee.

In the practice of auditing, there are frequent issues such as inadequate execution of key audit procedures and insufficient acquisition of material audit evidence. The incidence of inappropriate audit opinion types has also risen. In particular, some audit offices have failed to appropriately identify and assess fraud risks, demonstrating a lack of due professional care with respect to critical matters such as unusual fund flows and atypical bank accounts. Furthermore, substantive audit procedures—including analytical procedures, cut‑off tests, conofficeations, and physical inventory counts—have been inadequately performed for important items like revenue, costs and expenses, bank deposits, intercompany balances, and inventories. As a result, in certain engagements, auditors have been unable to detect instances of fund misappropriation or financial fraud at client entities. In addition, some audit offices have conducted their work in a perfunctory manner, failing to document necessary audit evidence; in isolated cases, auditors have even “walked away” from engagements, leading to audit conclusions that are manifestly inconsistent with the underlying facts.

In practice‑based valuation, issues with the income approach remain pronounced: the assumptions underlying key parameters such as revenue growth rates, gross margins, and discount rates are inadequately justified; certain parameters diverge significantly from historical data and industry benchmarks without reasonable explanation; and in some cases, parameter errors are evident and substantially affect the valuation outcome. With respect to the asset‑based approach, problems are concentrated in mining‑related projects, including the inappropriate reliance on mineral‑rights appraisal reports, insufficient supporting documentation, and the omission of certain mineral rights. As for the market approach, the primary concerns lie in the subjective selection of comparable transactions and comparable companies, coupled with inadequate justification for determining key parameters and adjustment factors. Furthermore, a few valuation offices have disregarded their engagement terms by issuing valuation reports in lieu of formal appraisal reports, resulting in notable deficiencies in the professional conduct of these valuation reports.

Based on the findings of comprehensive and targeted inspections, the China Securities Regulatory Commission plans, in accordance with the law, to impose administrative regulatory measures—such as issuing warning letters, ordering corrective actions, and requiring public explanations—on nine auditing offices and 30 certified public accountants, as well as on 13 valuation offices and 26 asset appraisers. Additionally, two practicing professionals who engaged in unauthorized stock trading will face similar measures, with such actions recorded in their integrity files. Furthermore, five projects suspected of violations of laws and regulations have been referred to the inspection authorities for further investigation and handling.

II. Status of Specialized Inspections

In the audit and valuation of goodwill impairment, issues are concentrated in areas such as the identification of asset groups, the selection of impairment‑testing methodologies, the determination of key assumptions, and the disclosure of information related to goodwill impairment. In particular, certain audit and valuation offices fail to maintain adequate communication and coordination with listed companies, and their working papers are inadequately documented, thereby directly undermining the effectiveness of the relevant audit and valuation processes.

In the area of internal control auditing, prominent practice issues include perfunctory audit workflows, inadequate execution of control tests, missing key audit evidence, inappropriate audit opinions, and quality‑control reviews that fail to effectively mitigate risks. These problems are most concentrated in the conduct of audit procedures and in the assessment of control deficiencies.

Based on the findings of the special inspections, the relevant securities regulatory authorities have, in accordance with the law, imposed administrative regulatory measures—such as regulatory talks, issuance of warning letters, and orders to make corrections—on the practicing offices and directly responsible persons involved in 30 goodwill impairment audit engagements, 30 goodwill impairment valuation engagements, and 20 internal control audit engagements, and have recorded these actions in their integrity files.

III. Status of Self-Inspections by the Securities Regulatory Bureau

In 2019, the securities regulatory bureaus, in light of local conditions, independently conducted inspections of 237 audit projects and 75 valuation projects. Based on the findings, they imposed administrative regulatory measures—such as regulatory talks and issuance of warning letters—on 85 audit offices and 169 individual certified public accountants, as well as on 31 valuation offices and 48 individual asset appraisers, with such actions recorded in their integrity files.

The capital market is a disclosure‑based marketplace, and financial information constitutes its most fundamental and critical input. As independent third‑party entities, auditing and valuation offices serve as gatekeepers of financial information quality in the capital market, playing an irreplaceable role in enhancing that quality. Effective March 1 this year, the revised Securities Law came into force, abolishing the prior approval requirement for auditing and valuation offices to engage in securities‑related services and replacing it with a filing‑based regulatory regime. The China Securities Regulatory Commission solemnly reminds auditing and valuation offices poised to enter the capital market to attach great importance to risks associated with securities‑related work, cultivate a sound and mature professional culture that prioritizes quality, strictly comply with applicable laws, regulations, and all supervisory requirements, strengthen internal governance, and establish robust quality‑control systems to ensure the high quality of their engagements.

Going forward, the China Securities Regulatory Commission will adopt a multi-pronged approach to strengthen ongoing and post‑event supervision. While intensifying inspection and oversight, it will proactively establish reputational‑based disciplinary mechanisms, publicly disclose integrity information on professional offices, develop a tiered evaluation system, and adhere to differentiated regulatory measures. The Commission will also urge auditing and valuation institutions to fulfill their duties and responsibilities, striving to foster a healthy professional ecosystem characterized by survival of the fittest.

The China Securities Regulatory Commission has reduced the contribution rates for securities companies to the Securities Investor Protection Fund for the 2019 and 2020 fiscal years.

To enhance the securities industry’s ability to serve the real economy and mitigate the temporary impact of the COVID‑19 pandemic on securities offices’ operations, in accordance with the Measures for the Administration of the Securities Investor Protection Fund and the Supplementary Provisions on Further Improving Matters Related to Securities Offices’ Contributions to the Securities Investor Protection Fund, the China Securities Regulatory Commission has adjusted the contribution rates for securities offices. Specifically, Class A, Class B, Class C, and Class D securities offices will contribute 0.5%, 0.6%, 0.7%, and 0.7% of their operating income, respectively, to the Securities Investor Protection Fund for the year 2019; the contribution rates for 2020 shall be applied by analogy.

In recent years, the securities industry has operated in a generally standardized manner, with adequate capital levels and enhanced compliance and risk‑control capabilities. The Securities Investor Protection Fund remains well‑capitalized, and the sector’s ability to manage risks has improved markedly. Against this backdrop, the China Securities Regulatory Commission has adjusted the contribution rates that securities offices pay into the Securities Investor Protection Fund. As a result, industry contributions are expected to decline by 8% in 2019 and by 45% in 2020, which will help strengthen the financial system’s counter‑cyclical regulatory role, reduce operating costs for securities offices, mitigate the impact of the pandemic, and better support the industry’s efforts to contribute to epidemic prevention and control while bolstering the real economy.

The China Securities Regulatory Commission is soliciting public comments on the “Guiding Opinions on the Transfer of Listed Companies from the National Equities Exchange and Quotations System to Stock Exchanges.”

Establishing a mechanism for transferring listings is an important measure taken by the China Securities Regulatory Commission to implement the decisions and arrangements of the CPC Central Committee and the State Council. It will help diversify the listing pathways available to companies listed on the National Equities Exchange and Quotation System, open up upward channels for the growth and expansion of small, medium, and micro enterprises, strengthen the organic linkages among the various tiers of the capital market, and enhance the ability of financial services to support the real economy. To this end, the CSRC has drafted the “Guiding Opinions on the Transfer Listing of Companies Listed on the National SME Share Transfer System” (hereinafter referred to as the “Guiding Opinions”) and is now soliciting public comments.

The Guiding Opinions comprise three main components. First, the basic principles: the establishment of a mechanism for transferring listings will adhere to market‑driven approaches, holistic coordination, pilot‑first implementation, and risk prevention and control. Second, the key institutional arrangements: these set out general provisions regarding the scope of eligible boards for transfer, the conditions and procedures for listing via transfer, sponsor requirements, share lock‑up periods, and other related matters. Third, the regulatory framework: it clarifies the responsibilities of relevant parties, including stock exchanges, the National Equities Exchange and Quotations Company, and intermediary institutions. With respect to any illegal or non‑compliant conduct in the transfer‑listing process, the China Securities Regulatory Commission will investigate and impose sanctions in strict accordance with laws and regulations. The Shanghai Stock Exchange, the Shenzhen Stock Exchange, the National Equities Exchange and Quotations Company, and China Securities Depository & Clearing Corporation will, in line with the Guiding Opinions, formulate or revise their respective business rules to further specify and refine the detailed institutional arrangements.

The China Securities Regulatory Commission stated that it welcomes valuable feedback from all sectors of society on the “Guiding Opinions.” Based on the results of the public consultation, the Commission will further revise the document and, after completing the requisite procedures, issue and implement it.

The China Banking and Insurance Regulatory Commission has issued the “Opinions on Accelerating the Reform of Accident Insurance.”

To comprehensively implement the decisions and arrangements of the CPC Central Committee and the State Council on financial work, support supply-side structural reform in the financial sector, establish a market-based mechanism for setting accident insurance premiums, better safeguard the legitimate rights and interests of insurance consumers, and promote high-quality development of the accident insurance market, the China Banking and Insurance Regulatory Commission recently issued the “Opinions on Accelerating the Reform of Accident Insurance” (hereinafter referred to as the “Opinions”).

The “Opinions” are divided into five sections. The first section sets out the overall requirements for the reform of accident insurance, including the guiding principles, basic principles, and key objectives. Sections two through four outline the reform tasks for 2020 and 2021, covering the advancement of market-based pricing reforms, the strengthening of regulatory oversight of market conduct, and the consolidation of the foundations for development. The fifth section specifies the relevant work requirements.

The Opinions emphasize that, over a two-year period, the chaotic state of the accident insurance market will be reversed, laying a solid foundation for building an accident insurance market characterized by a well‑regulated and orderly structure, broad service coverage, and widespread public recognition. By the end of 2020, a market‑based mechanism for setting accident insurance rates will have been essentially established, the business environment will continue to improve, and the range of available products will be significantly expanded. By the end of 2021, the market‑based rate‑setting mechanism will be substantially refined, standardization will be markedly enhanced, the market structure will be more standardized and orderly, service coverage will be broader, and public acceptance will be further strengthened.

The “Opinions” clearly outline the key tasks for accelerating reform of the accident insurance sector and, in line with respective responsibilities, assign these tasks to relevant departments within the CBIRC headquarters and its local branches. First, advance market‑based pricing reforms, which include improving the actuarial framework for accident insurance, establishing a mechanism for retrospective price adjustments, compiling accident‑insurance incidence tables, and vigorously promoting independent product innovation. Second, strengthen oversight of market conduct, encompassing targeted rectification of prominent market issues, refining regulatory frameworks for market behavior, putting in place robust information‑disclosure mechanisms, and intensifying efforts to combat insurance fraud. Third, consolidate the foundations for sustainable development, involving enhanced and improved regulatory practices, accelerated standardization, and the establishment of a long‑term collaborative mechanism to counter insurance fraud. The “Opinions” are of great significance for deepening reform of the accident‑insurance market, enhancing the sector’s capacity to support economic and social development, and bolstering the sense of gain among the general public.

To clarify regulatory guidance and send a clear signal of reform, since July 2019 the China Banking and Insurance Regulatory Commission has consecutively conducted inspections of accident insurance products offered by cash‑loan and other online lending platforms, as well as carried out rectification and cleanup efforts targeting borrower‑related accident insurance. In response to the key issues identified during these inspections and on-site investigations, the Commission has imposed measures such as regulatory talks and public reprimands on certain companies. Moving forward, the CBIRC will organize and ensure the effective implementation of the “Opinions,” guaranteeing that all reform measures are fully put into practice and that the benefits of these reforms are shared more broadly and equitably by the general public.

Commercial & Corporate

National Equities Exchange and Quotations Company: Further Strengthen Efforts to Tightly and Thoroughly Implement Epidemic Prevention and Control Measures and Support Economic and Social Development

On the evening of March 6, the National Equities Exchange and Quotations Company announced that, based on an assessment of the effectiveness of its earlier measures, it has further strengthened support for key regions and sectors in light of actual market conditions. The company is also increasing regulatory flexibility in accordance with laws and regulations, making every effort to ensure the stable operation of the market, and diligently implementing all measures to contain the epidemic and bolster economic and social development.

First, the scope of the “green channel” has been expanded. Starting February 2, the National Equities Exchange and Quotations Company (NEEQ) has implemented a “green channel” mechanism for companies in Hubei Province and those operating in the epidemic‑prevention and control sector, providing dedicated point‑of‑contact services, prioritized reviews, immediate review upon submission, and listing (or processing) upon approval. The green channel now extends to three categories of enterprises: key guaranteed‑supply offices recognized by the National Development and Reform Commission and the Ministry of Industry and Information Technology; companies whose raised funds are primarily earmarked for epidemic‑prevention and control; and enterprises located in regions severely affected by the pandemic. Regions deemed severely affected include provinces, municipalities directly under the central government, and autonomous regions with cumulative conofficeed cases exceeding one thousand, as well as Beijing, where epidemic‑control efforts are of national significance.

Second, promptly study and clarify the regulatory arrangements for annual report disclosure. In accordance with the unified deployment of the China Securities Regulatory Commission, the National Equities Exchange and Quotations Company will refine and specify the regulatory measures applicable to listed companies that, due to the impact of the epidemic, face genuine difficulties in disclosing their annual reports within the statutory deadline, as well as the related arrangements for equity distribution, tier adjustments, and other matters pertaining to the annual report audit.

Third, handle relevant business in a flexible and prudent manner. Continue to implement the relaxation of time limits for procedures such as targeted issuances, mergers and reorganizations, and agreement‑based transfers of specific shares. In addition, where entities affected by the epidemic are unable to conduct special on‑site inspections or verifications within 15 trading days as required by the “Guidelines on Ongoing Supervision by Lead Underwriters,” the lead underwriter shall promptly report to the National Equities Exchange and Quotations Company, which will, depending on the circumstances, determine whether an extension or other alternative measures may be adopted.

Fourth, we will leverage the “TouRongTong” platform to strengthen investment‑financing matchmaking. The National Equities Exchange and Quotations Company has already coordinated with key partner banks to roll out viable specialized credit products and services, establishing a green channel for loan approvals. Going forward, we will introduce dedicated anti‑epidemic information services and set up an “Anti‑Epidemic Zone” on the TouRongTong platform, helping listed companies access these specialized products to resume production and operations. We will also expand targeted matchmaking services, organize online roadshow events through TouRongTong, incorporate online corporate presentations and interactive features, and engage investment institutions to facilitate real-time, centralized online communication and due diligence between investors and issuers. In addition, we will explore and implement an integrated online platform for matching credit products, enabling listed companies to apply for small‑amount loans directly through the TouRongTong portal.

The National Equities Exchange and Quotations Company stated that, under the leadership of the China Securities Regulatory Commission, it will strengthen its sense of responsibility and ensure effective implementation of duties, maintain unwavering vigilance in its own epidemic prevention and control efforts, accelerate the rollout of reforms to the New Third Board, and continue to expand support measures to combat the pandemic, thereby making due contributions to achieving the “Six Stabilities” and the annual economic and social development goals.

Public Consultation on the Mechanism for Transferring to a Listing on the Main Board from the New Third Board

On March 6, the China Securities Regulatory Commission (CSRC) launched a public consultation on the “Guiding Opinions on the Transfer of Listed Companies from the National Equities Exchange and Quotations for Small and Medium-sized Enterprises to Stock Exchanges” (hereinafter referred to as the “Guiding Opinions”). According to the Guiding Opinions, companies seeking to transfer to a stock exchange must be listed on the Select Tier of the New Third Board and have maintained continuous listing on that tier for at least one year; they must also meet the listing requirements of the target board. Exchanges may, as necessary, impose additional requirements under the listing criteria regarding the number of shareholders, shareholding ratios, market capitalization, and liquidity.

Eligible to apply for a transfer to the STAR Market or the ChiNext Board.

The Guiding Opinions cover three main aspects: basic principles, key institutional arrangements, and regulatory frameworks.

With regard to the fundamental principles, the CSRC stated that the establishment of a mechanism for transferring listings will adhere to the principles of market orientation, holistic coordination, pilot-first implementation, and risk prevention and control.

In terms of institutional arrangements: First, the scope of the transferable board. During the pilot phase, eligible listed companies may apply to transfer to the STAR Market or the ChiNext Board. This arrangement facilitates alignment with the reforms of the STAR Market and the ChiNext Board while helping to manage risks. Second, the conditions for transferring to a listing. Companies seeking to transfer must be listed on the Select Tier of the New Third Board and have maintained continuous listing on that tier for at least one year; they must also meet the listing requirements of the target board. The exchange may, as necessary, impose additional requirements under the listing criteria regarding the number of shareholders, shareholding ratios, market capitalization, and liquidity. Third, the transfer‑to‑listing procedure. The exchange reviews and decides on transfer‑to‑listing applications in accordance with its listing rules. Fourth, listed companies applying to transfer must, in compliance with relevant regulations, engage a securities office as their sponsor. Fifth, share‑restriction arrangements. These must not only comply with applicable laws and regulations but also with the exchange’s business rules.

Regarding regulatory arrangements: First, the review process for transferring to a public listing is strictly enforced. Stock exchanges have established review mechanisms and conduct reviews in accordance with laws and regulations. Second, the transition between markets is clearly defined: the Shanghai and Shenzhen stock exchanges have put in place a review‑communication mechanism to ensure broadly consistent review standards. Third, the responsibilities of intermediary institutions—including sponsoring securities offices, accounting offices, and law offices—are officely reinforced. Fourth, the China Securities Regulatory Commission will strengthen its oversight of the exchanges’ review work. Fifth, accountability is further strengthened.

The market has a solid foundation, and enterprises have genuine demand.

Establishing a Select Tier and enabling direct transfers to the main board have been regarded by industry insiders as the cornerstone of this round of deep reforms for the New Third Board. For the multi-tiered capital market, transfer listings serve to foster connectivity and bridge the gap between different tiers. According to authoritative sources, analysis of the actual situation demonstrates that instituting a transfer‑listing mechanism is both necessary and feasible.

On the one hand, the market has a solid foundation, and enterprises have clear needs. Compared with the exchange‑listed segments, the New Third Board still lags behind in terms of liquidity, valuation levels, fundraising scale, and the ease of shareholder exits. As companies mature and grow, some listed entities will seek to transfer to an exchange‑listed market and access the services offered by those exchanges.

On the other hand, legal barriers have been removed, and policy requirements are in place. In line with the legislative principle of separating issuance from listing, the Securities Law categorizes securities issuance and securities listing as two distinct types of legal acts, explicitly stipulating that securities publicly offered to an indefinite number of investors may be traded on other nationwide securities trading venues approved by the State Council. This round of reforms to the New Third Board has introduced a system for public offerings to an indefinite number of investors, thereby laying the groundwork for companies listed on the New Third Board to implement a mechanism for transferring to other exchanges.

Meanwhile, the Select Tier has institutionalized the linkage between the New Third Board and the stock exchanges, laying both the regulatory framework and the corporate foundation for implementing the transfer listing mechanism.

There is no room for regulatory arbitrage.

Industry insiders believe that there is no arbitrage opportunity between a transfer listing and an IPO in terms of eligibility requirements. According to authoritative analysis, the key distinction between the transfer‑listing regime and the IPO regime lies in the timing of the public offering: the former conducts a public offering upon entering the Select Tier, while the latter does so at the time of listing. However, both types of offerings must satisfy the public‑offering conditions stipulated by the Securities Law and obtain approval or registration from the China Securities Regulatory Commission; likewise, both listing processes must meet the exchange’s requirements for the relevant board and undergo the exchange’s review. Consequently, no arbitrage space exists between transfer listings and IPOs under the applicable regulatory framework.

The target group for transferring to a stock exchange listing comprises selected-tier companies that have been nurtured and steadily grown on the New Third Board. The selected tier aligns with the exchange market in terms of trading rules, liquidity levels, and corporate supervision, exhibiting comparable market efficiency. Consequently, companies seeking to transfer face no institutional arbitrage opportunities before or after listing, effectively preventing cross‑market regulatory arbitrage.

“In the long run, there is no possibility of arbitrage through sector rotation,” noted Bu Naxin, a director of the China International Science and Technology Promotion Association. He pointed out that the Shanghai and Shenzhen stock exchanges and the New Third Board serve distinct purposes: the New Third Board is explicitly geared toward small and medium-sized enterprises, and since the launch of the STAR Market, it has channeled many high-quality companies to that platform. With the introduction of the Select Tier on the New Third Board, and after several years of development, the market will leverage Beijing’s strategic advantages to generate substantial incubation capacity, providing enterprises with valuable growth opportunities.

The People’s Bank of China stated that the LPR mechanism has, to the greatest extent possible, ensured that quoting banks submit genuine quotes.

According to a People’s Bank of China announcement issued on December 28, 2019, the conversion of existing floating-rate loan pricing benchmarks commenced as scheduled on March 1, 2020. In response to concerns about whether banks might deliberately raise their LPR quotes, the central bank emphasized that the LPR quotation mechanism is designed to ensure that quoting banks submit genuine rates, thereby safeguarding the fairness and reliability of the published LPR.

Some argue that using the LPR plus or minus a certain number of basis points, rather than a floating multiple, would give banks an advantage. The central bank has emphasized, however, that whether pricing is based on basis-point adjustments or a floating multiple is merely a slight difference in calculation methodology. Going forward, when the LPR changes, the impact on borrowers and banks will be symmetrical, and there will be no question of one side gaining an unfair advantage. For borrowers, if the current benchmark rate is higher than the LPR, the basis-point approach becomes more favorable as the LPR rises; conversely, when the LPR falls, the floating‑multiple method is more advantageous. If the current benchmark rate is lower than the LPR, then as the LPR increases, the floating‑multiple method is preferable; when the LPR declines, the basis-point approach is more beneficial. And if the current benchmark rate equals the LPR, the two methods make no practical difference. The implications for banks are the reverse of those described above.

Regarding whether banks might deliberately raise their LPR quotes, the People’s Bank of China emphasized that the LPR quotation mechanism is designed to ensure that quoting banks submit genuine rates, thereby safeguarding the fairness and reliability of the published LPR. The 18 LPR‑quoting banks are all leading institutions within their respective categories, distinguished by their strong influence, credibility, and pricing capabilities. Moreover, they are required to base their quotes on the lending rates they charge their most creditworthy customers, meaning that each bank’s quote is underpinned by actual transaction data. At the same time, the People’s Bank of China and the Self‑Regulatory Mechanism for Interest Rate Pricing closely monitor the quoting behavior of all participating banks, conduct regular assessments of quote quality, and implement a dynamic adjustment process—retaining high‑performing banks while weeding out those that fall short—based on these evaluations.

The State-owned Assets Supervision and Administration Commission has issued a document to standardize the registration of state-owned equity in limited partnership enterprises.

Recently, the State-owned Assets Supervision and Administration Commission of the State Council issued the Interim Provisions on the Registration of State-owned Equity in Limited Partnership Enterprises, bringing state-owned equity in such enterprises under routine registration and management.

At present, an increasing number of state-owned enterprises are establishing or investing in limited partnerships, leading to a steady expansion of state‑owned interests within these entities and heightened scrutiny of their oversight. The existing system for registering state‑owned property rights primarily applies to corporate‑type enterprises and enterprises under full public ownership, but it has yet to extend to state‑owned interests in limited partnerships. The Provisional Regulations represent the first normative document to govern the registration and management of state‑owned interests in limited partnerships.

The Provisional Regulations adhere to the principles of law-based supervision and operational feasibility, systematically regulating the registration of state-owned equity in limited partnership enterprises from four key aspects: the subjects and objects of registration, the circumstances and content of registration, the registration procedures and time limits, and the assignment of responsibilities for implementation.

The Provisional Regulations uphold the principle of unified oversight of state-owned assets, coordinating and advancing the registration of state-owned equity in limited partnership enterprises funded by both central and local state-owned enterprises. At the same time, respecting the specific circumstances of state‑asset supervision across regions, the Regulations permit local SASACs to formulate registration systems for state‑owned equity in limited partnership enterprises that are tailored to their respective regional contexts, in accordance with the requirements set forth in these Provisional Regulations.

According to reports, the interim regulations involve a large number of entities and substantial data volumes. The State-owned Assets Supervision and Administration Commission (SASAC) will establish a transitional period to organize relevant enterprises in systematically reviewing the equity interests of their invested limited partnership enterprises and to make necessary preparations for registration. Moving forward, building on the work of registering state‑owned equity interests in limited partnership enterprises, SASAC will conduct a comprehensive analysis of the scale, distribution, and changes in such equity holdings. In line with regulatory principles of ensuring no gaps, no overreach, and proper positioning, SASAC will continue to refine the state‑asset supervision system centered on capital management and fulfill its oversight responsibilities.

Ministry of Commerce: Recently, the national consumer market has shown positive signs, with sales bottoming out and beginning to rebound.

On the 5th, Wang Bin, Deputy Director-General of the Market Operations Department of the Ministry of Commerce, stated at an online press conference held by the ministry that, as the COVID‑19 epidemic situation continues to improve, the national consumer market has recently shown positive signs, with sales bottoming out and beginning to rebound.

According to monitoring by the Ministry of Commerce, in late February, the average daily sales of 1,000 key retail enterprises increased by 5.6% compared with mid-February—marking a return to positive growth after consecutive month-on-month declines since late January. Notably, automobile demand rebounded sharply, with a month-on-month increase of 14.8%, while sales of telecommunications equipment and household appliances rose by 11.7% and 11.1%, respectively, on a month-over-month basis.

Since late February, sales have rebounded for three main reasons: First, epidemic prevention and control measures have yielded positive results, easing public anxiety. Second, the resumption of business operations has accelerated, with employees gradually returning to work and production and daily life steadily regaining normalcy. Third, previously suppressed consumer demand is beginning to be gradually released. Looking ahead, as the pandemic is brought under increasingly effective control and economic and social activities continue to normalize, market sales are expected to stabilize and pick up further.

Taxation TAXATATION

Authoritative authorities provide detailed explanations on key issues related to fiscal and tax policies for epidemic prevention and control.

On March 3, the State Council Joint Prevention and Control Mechanism held a press conference in Beijing, inviting Fu Jinling, Director-General of the Social Security Department of the Ministry of Finance; Wang Jianfan, Director-General of the Tax Policy Department; Wang Daoshu, Chief Auditor of the State Taxation Administration and Director-General of the Department of Goods and Services Tax; and Cai Zili, Director-General of the Revenue Planning and Accounting Department, to provide an update on fiscal and tax policy measures supporting epidemic prevention and control as well as the resumption of work and production.

How will the fiscal system provide emergency support? Funds for epidemic prevention and control have already been allocated totaling 108.75 billion yuan.

Finance is the foundation and a vital pillar of national governance. Since the outbreak of the COVID‑19 pandemic, fiscal authorities have steadily increased funding to provide robust support for epidemic prevention and control. “As of March 2, fiscal allocations at all levels for pandemic response have totaled RMB 108.75 billion,” said Fu Jinling, Director-General of the Department of Social Security at the Ministry of Finance, at a press conference. “At present, medical expense coverage appears adequate, ensuring that the public will not face delays in receiving treatment due to financial constraints.”

From temporary work allowances for frontline medical personnel, to grassroots epidemic‑prevention funding, and to central government reserves of medical supplies—every single sum of money has been directed to the front lines of the fight against the pandemic and to critical areas of economic development, underscoring the vital role of fiscal measures in providing emergency safety nets. With regard to medical expenses for conofficeed patients, the portion borne by individuals is fully covered by public funds, ensuring the utmost protection of people’s lives; as for securing key medical supplies, the government assumes responsibility for procurement and stockpiling, thereby alleviating enterprises’ concerns about production capacity. The temporary reduction or exemption of social security contributions for businesses represents an important step in coordinating epidemic control with economic and social development.

In some regions, while ensuring the long-term sustainability of the medical insurance fund, partial reductions in employer contributions to employee medical insurance have been implemented, further easing the burden on enterprises by approximately RMB 150 billion. Hubei Province, which has served as the main battlefield in the fight against the epidemic, has allowed all enterprises to be exempted from three types of social insurance contributions for up to five months, starting in February. Strong fiscal support has provided a solid foundation for winning the battle against the epidemic and stabilizing economic and social development.

How can small and micro enterprises be relieved of their burdens? A series of tax and fee preferential policies have been rolled out in quick succession.

Small and micro enterprises and individual business households are the mainstay of employment and have been among the groups most severely affected by this pandemic.

“There are numerous tax and fee relief measures targeting small and micro enterprises and individual business households. Building on the existing policy that exempts small-scale VAT taxpayers with monthly sales below RMB 100,000, there are also policies to reduce or exempt VAT in support of resuming work and production—VAT is fully exempted in Hubei Province, while in other regions it is levied at a reduced rate of 1%. In addition, these entities can benefit from other tax preferential policies introduced by the state to support epidemic prevention and control,” said Wang Daoshu, Chief Auditor of the State Taxation Administration and Director-General of the Department of Goods and Services Tax. Meanwhile, small and micro enterprises, as well as individual business households participating in social insurance through their business units, are also eligible for temporary reductions or exemptions on three types of social insurance contributions and other related tax and fee support measures.

How can we support the resumption of work and production? By leveraging both policy support and streamlined services.

In response to the funding challenges faced by some small, medium, and micro enterprises resuming work and production, the Ministry of Finance has increased the scale of interest-subsidy funds and strengthened fiscal support for special loans to key enterprises. To further facilitate the resumption of business operations, fiscal authorities have broadly relaxed the eligibility criteria for unemployment insurance subsidies aimed at stabilizing employment during the epidemic prevention and control period, while also increasing both the amount of such subsidies and the level of vocational training subsidies.

“During the epidemic prevention and control period, small, medium, and micro enterprises that conduct offline or online training during their suspension or recovery phases will also be eligible for subsidies in accordance with relevant regulations,” said Fu Jinling.

After businesses resume work and production, how can we ensure that tax filing and payment are both secure and convenient?

According to Cai Zili, Director-General of the Revenue Planning and Accounting Department of the State Taxation Administration, the Administration has rolled out 24 measures, leveraging the electronic tax bureau to enable online processing for more than 90% of major tax-related services and increasing the proportion of invoices obtained through “non-contact” methods from 50% to 70%.

How should the tax filing issues of individual enterprises that have been severely affected by the pandemic be addressed?

“Enterprises may, in accordance with the relevant regulations, retroactively complete the procedures for extending their filing deadlines and simultaneously file their tax returns. The tax authorities will refrain from imposing late-payment penalties, issuing administrative penalties, classifying the enterprise as an abnormally operated taxpayer, or adjusting its tax credit rating,” said Wang Daoshu.

He stated that the State Taxation Administration has decided, in accordance with the law, to extend the March tax filing deadline by one week. At that time, for regions still under Level-I response measures for epidemic prevention and control, provincial tax authorities may, in compliance with applicable laws and regulations, further specify the scope and timeframe of any additional extensions.

Focusing on the “Four Capabilities,” tax authorities across the country are rigorously and meticulously implementing epidemic prevention and control measures.

Since the onset of the COVID‑19 pandemic, the national tax system has thoroughly studied and implemented the important instructions and directives of General Secretary Xi Jinping, carried out the arrangements of the CPC Central Committee and the State Council, and focused on the “four capabilities” requirements set forth by the Party Leadership Group of the State Taxation Administration. Efforts to contain the epidemic have been further intensified, with unwavering vigilance and a strong sense of responsibility. While ensuring rigorous and meticulous internal prevention and control measures, the tax authorities have also proactively fulfilled their local responsibilities in joint prevention and control, contributing their full strength to resolutely win the people’s war, all‑out war, and decisive battle against the pandemic.

Strengthen and refine every link in internal prevention and control, ensuring thorough implementation at every stage.

The Hebei Provincial Tax Service Bureau has rigorously formulated an epidemic prevention and control plan, comprehensively deployed measures at office and taxpayer service locations, and implemented protocols such as temperature screening, entry‑exit registration, environmental disinfection, and on‑duty leadership. It has also established a daily reporting system for tax filing and payment services to maintain a thorough understanding of operating hours, crowd‑control measures, the types and volumes of transactions handled, and other relevant conditions, thereby effectively strengthening epidemic prevention and control efforts.

The Henan Provincial Tax Service has strengthened prevention and control measures and enforced strict disciplinary regulations. By maintaining unwavering vigilance in ideological awareness, sustaining rigorous preventive efforts, and ensuring the thorough implementation of responsibilities, it has adopted effective measures to implement science-based epidemic prevention and control, thereby guaranteeing the meticulous execution of防疫 duties and the ideological stability of its cadre team.

The Shandong Provincial Tax Service Bureau has consistently prioritized the allocation of epidemic prevention and protective supplies to grassroots tax service halls, meticulously organizing measures such as disinfection, temperature screening of visitors, and personal protective equipment for staff. Meanwhile, the Xuecheng District Tax Service Bureau in Zaozhuang City has equipped its office building and tax service hall with an intelligent human-body temperature‑measurement system, enabling automated temperature checks for all entrants and exiters.

“With the glass barriers in place, we feel much more at ease when conducting our business,” said Ms. Li, who recently visited the tax service hall of the Guangming District Tax Bureau in Shenzhen. To prevent direct contact between taxpayers and staff, the bureau promptly installed window‑mounted glass partitions, enhancing safety protections for taxpayers, payers, and tax officials.

“Hello everyone. Today, we’ll discuss how to manage potential feelings of anxiety and panic in tax service halls during the epidemic prevention and control period.” Recently, the Liaoning Provincial Tax Service Bureau selected 15 part-time instructors from across the system—among them national Level‑II psychological counselors—to form a psychological intervention team. They have recorded a series of short online courses titled “Fighting the Epidemic Together,” providing psychological support to tax officials and their families.

We remain steadfast in our commitment. The national tax system has maintained unwavering vigilance in epidemic prevention and control, promptly refining its strategies and measures, intensifying internal prevention and control efforts, further consolidating achievements, and expanding gains, all in a concerted effort to secure a comprehensive victory in this battle.

With dedication, responsibility, and all-out effort, we will fortify the mass-based prevention and governance defense line.

In Hubei, the main battlefield of the fight against the epidemic, tax authorities have leveraged the role of grassroots Party organizations as strongholds and the exemplary leadership of Communist Party members, establishing task forces of Party members and youth volunteer teams to join local epidemic‑prevention efforts. They have stepped up as elite units, vanguard teams, and frontline fighters, ensuring that the Party flag flies high on the front lines of the response. At present, more than 17,000 Party members and cadres within Hubei’s tax system are working tirelessly on the front lines, heeding the unified command of local Party committees and governments and actively participating in community‑ and rural‑level joint prevention and control initiatives.

The tax authorities of Zhejiang Province have established a mechanism featuring “leaders on duty plus dedicated task forces.” While ensuring the orderly and effective implementation of epidemic prevention and control measures within their own departments, they have also actively participated in joint prevention and control efforts, mobilizing, encouraging, and dispatching outstanding tax officials to serve as resident enterprise liaisons, proactively coordinating with local Party committees and governments to support the resumption of work and production by businesses.

The Anhui Provincial Tax Service Bureau has proactively fulfilled its responsibilities in local joint prevention and control efforts, urging Party members to regard the implementation of preventive measures and the containment of the epidemic’s spread as powerful ways to embody the spirit of volunteerism and demonstrate their sense of responsibility and commitment, thereby actively engaging in epidemic‑prevention work. At present, more than 5,000 tax officials in Anhui are participating in tasks such as residential‑community lockdown management and public health education.

The Ningbo Municipal Tax Service Bureau has established multiple volunteer service teams, youth commando units, and Party member vanguard teams. Working alongside public security officers and health‑epidemiology personnel, these groups have formed joint prevention and control task forces that go into communities and large supermarkets to conduct outreach on epidemic‑prevention knowledge, take temperature readings, and carry out surveys and data collection.

The Party Committee of the Suzhou Industrial Park Tax Service Bureau in Jiangsu Province has issued an appeal, calling on all tax officials to step up and take responsibility by volunteering to assist the six communities within their jurisdiction in carrying out epidemic prevention and control efforts. Within half an hour, more than 70 people had signed up.

The Guangxi tax system has established 269 volunteer service teams, with 4,624 Party members and cadres deployed to communities and subdistricts to participate in joint prevention and control efforts and community assistance. Additionally, 471 first secretaries and team members stationed in villages have returned to their assigned villages and hamlets to organize and carry out epidemic prevention and control work.

State Taxation Administration: The deadline for tax filing nationwide has been extended to March 23.

On March 3, the State Taxation Administration issued the “Notice on Extending the Deadline for Filing Tax Returns in March 2020” (hereinafter referred to as the “Notice”), which, for taxpayers filing on a monthly basis, extends the tax return deadline nationwide from March 16 to March 23.

The Notice states that, in order to further support epidemic prevention and control efforts and the resumption of work and production by enterprises, and to facilitate taxpayers and withholding agents (hereinafter referred to as “taxpayers”) in handling tax filing matters, the State Taxation Administration has decided to extend the tax filing deadline for March 2020, as follows:

For taxpayers who file monthly returns, the national deadline for filing tax returns will be extended from March 16 to March 23. For regions that remain under Level-I public health emergency response as of March 23, the tax return filing deadline may be further extended; the specific scope of application and the final deadline shall be determined by the provincial tax authorities in accordance with applicable laws and regulations.

Taxpayers who, due to the impact of the epidemic, continue to face difficulties in filing their tax returns within the March 2020 filing deadline may, in accordance with the law, apply to the tax authorities for an extension of the filing deadline.

The State Council has introduced new measures to cut taxes and fees.

On March 3, Premier Li Keqiang of the State Council presided over an executive meeting of the State Council, which outlined measures to improve the coordination mechanism for the “Six Stabilities” initiative, effectively address the impact of the epidemic, and promote the steady operation of the economy and society. The meeting also adopted measures to support the logistics sector—including transportation and express delivery—by alleviating their difficulties and accelerating their recovery, and decided to increase fiscal support to local governments to strengthen their capacity to safeguard basic living standards, ensure timely wage payments, and maintain essential operations.

The meeting noted that, in accordance with the arrangements of the CPC Central Committee and the State Council, to coordinate epidemic prevention and control with economic and social development, it is imperative to intensify efforts—more precisely targeted—to ensure stable employment, financial stability, foreign trade, foreign investment, investment, and market expectations, thereby more effectively mitigating the pandemic’s impact on economic performance. It is essential to fully leverage the coordinating mechanisms for macro policies, foreign trade and foreign investment, and financial stability, promptly introduce robust and effective response measures, bolster endogenous growth drivers, and strive to keep the economy operating within an appropriate range throughout the year.

The meeting noted that accelerating the resumption of work and production in the logistics sector—including transportation and express delivery—and ensuring its stable development will not only provide strong support for epidemic prevention and control but also help keep economic circulation flowing smoothly and meet the needs of the people. To this end: First, we must guide relevant enterprises to resume operations in a targeted, tiered, and orderly manner, based on regional conditions, and abolish unreasonable approval requirements for resuming work. We should coordinate and ensure adequate supplies of protective materials such as masks needed for resuming operations. Local authorities should grant equal access and convenience to postal services and express delivery companies of all ownership types, remove barriers to last‑mile delivery in rural areas and communities, and include smart delivery facilities within the scope of urban–rural public infrastructure development. Second, we will temporarily strengthen tax and fee reductions. For a specified period, we will continue to apply the policy—expiring at the end of last year—of halving the urban land use tax on land used for bulk commodity warehousing. From March 1 to June 30, port construction fees on import and export goods will be waived; government‑set charges for cargo handling fees and port facility security fees will be reduced by 20%; and mandatory emergency response services and associated fees for non‑oil tankers will be canceled. By the end of June, fees for railway insurance, container overdue usage, and truck detention will be cut by half. Charges for certain government‑regulated airport service and support functions will also be lowered. For transportation and logistics enterprises undertaking emergency transport tasks during the epidemic, where such services are classified as government‑purchased public services, governments at all levels shall provide appropriate compensation. Third, insurance companies are encouraged to appropriately reduce or waive premiums for operating vehicles, ships, and aircraft that were grounded during the pandemic, through measures such as extending policy terms and offering premium‑offset deductions for renewals. During the period of toll‑free passage on toll roads, for operators facing difficulties in repaying principal and interest on financial debts, financial institutions should be guided to offer support such as deferred interest payments, extensions of principal repayment, or loan renewals. Concrete measures must be taken to ensure that truck drivers benefit from the toll‑free policy. Localities are encouraged to implement temporary reductions or exemptions of “share‑holding” fees and other levies to help taxi drivers weather the crisis. Finally, follow‑up policies and safeguards for toll‑free passage on toll roads should be issued promptly.

The meeting pointed out that supporting grassroots governments in ensuring basic living standards, paying salaries, and maintaining operational functions is both a fundamental requirement for safeguarding the immediate interests of the people and an essential precondition for enabling the government to fulfill its duties and implement various policies. The meeting decided on the following measures: First, temporarily increase the proportion of local fiscal revenues retained at the local level. From March 1 to the end of June, the retained‑revenue ratio for each province—already set for the current year—will be uniformly raised by 5 percentage points, generating an additional approximately RMB 110 billion in retained funds, all of which will be allocated to county‑level governments for their use. Second, accelerate the disbursement of transfer payments and guide localities to prioritize spending on epidemic prevention and control and on the “three guarantees” (ensuring basic livelihoods, wages, and operations), ensuring timely and full payment. Any regions with funding shortfalls must reduce expenditures on other items accordingly. Third, further cut general expenditures; except for those necessary for epidemic prevention and control, new expenditure‑increasing policies will be strictly controlled.

State Taxation Administration: Tax-related big data shows a marked acceleration in the resumption of work and production by enterprises.

On the 3rd, Cai Zili, Director-General of the Revenue Planning and Accounting Department of the State Taxation Administration of China, stated in Beijing that tax‑related big data—particularly data from value‑added tax invoices—offers distinct advantages in reflecting the resumption of business operations and the overall state of the economy. The latest relevant data indicate a marked acceleration in the resumption of work and production by enterprises. Tax‑related big data, especially VAT invoice data, possesses unique strengths in providing an objective, comprehensive, and timely picture of corporate resumption and economic performance. The State Taxation Administration is committed to leveraging the advantages of tax data at two levels to support epidemic prevention and control efforts and to facilitate the resumption of business activities.

First, we continuously monitor and report on the resumption of work and production by enterprises to support decision-making at all levels of government. The State Taxation Administration uses VAT invoice data to compile daily statistics on the number and value of invoicing entities nationwide since the post‑Spring Festival resumption, and conducts comparative analyses against 2019 data to track the progress of enterprises’ return to work and production.

According to VAT invoice data, during the first week of resuming work (February 10–14), the average daily number of invoicing enterprises nationwide remained lower than in the normal period of 2019. Starting in the second week (February 17–21), this figure began to rebound, increasing by 10.3 percentage points compared with the first week. By the third week (February 24–28), it rose further, up 20.2 percentage points from the second week, indicating a marked acceleration in the resumption of business operations. Meanwhile, tax authorities across the country, in light of local conditions, promptly submitted relevant analytical reports to local governments, providing decision-making support for the steady and targeted advancement of enterprise resumption.

Second, promptly conduct analyses to align enterprise production with sales and implement targeted support measures. Facilitating the resumption of work and production and ensuring smooth operations throughout the upstream and downstream supply chains are of paramount importance. Leveraging VAT invoice data, tax authorities carry out in-depth, granular analyses to provide precise assistance, helping upstream and downstream enterprises achieve effective production–sales coordination and unblock bottlenecks in the industrial chain. For example, the Jiangsu Provincial Tax Service Bureau of the State Taxation Administration has established a rapid response mechanism for identifying alternative suppliers of raw materials, enabling it to match companies facing shortages with suitable suppliers. To date, this initiative has helped 117 enterprises address urgent supply‑chain challenges.

Cai Zili stated that, going forward, the tax authorities will further leverage tax‑related big data, continue to conduct robust analyses, and better support enterprises in resuming work and production as well as economic development.

LITIGATION & ARBITRATION

Two departments: The Regulations on the Administration of Permanent Residence for Foreigners will extensively solicit and carefully incorporate public opinions.

Recently, the Ministry of Justice and the National Immigration Administration jointly convened in Beijing a symposium to solicit public comments on the Draft Regulations of the People’s Republic of China on the Administration of Permanent Residence for Foreigners. Representatives from various enterprises and institutions, community officials, residents, and academic experts were invited to attend, where they engaged in in-depth discussions on the draft regulations and offered their views and suggestions.

Participants agreed that granting permanent residency to foreigners—thereby attracting talent, professionals, and foreign capital to contribute to national development and foster economic and social progress—is a common practice among many countries in their development processes. To further standardize and improve the administration of permanent residency approvals for foreigners, meet the demands of deepening reform and opening-up and accelerating the building of a modern socialist country, and promote international exchanges, it is necessary for China to formulate regulations on the administration of permanent residency for foreigners, based on the existing system and practices.

Participants noted that since the draft Regulations were put out for public comment, they have attracted widespread attention. Some expressed concerns about whether the criteria and requirements are appropriately designed and whether a large influx of foreign nationals might crowd out domestic jobs and strain public welfare resources. Others pointed out that certain provisions are overly general and lack sufficient detail, raising fears that their implementation could create regulatory gaps and make oversight difficult. Participants recommended conducting further assessments and analyses, drawing on China’s national conditions as well as internationally proven practices, to refine and optimize the relevant institutional framework, thereby ensuring that the eligibility criteria, conditions, and procedures for applying for permanent residency are more comprehensive and rigorously structured.

An official from the Ministry of Justice stated that the Regulations are currently in the stage of soliciting public comments. In accordance with the principles of scientific, democratic, and law-based legislation, we will carefully and thoroughly examine the opinions and suggestions submitted by the public. The Regulations will not be promulgated prematurely; they will remain under review until public input has been fully incorporated and further refinements have been made.

An official from the National Immigration Administration stated that the authorities attach great importance to public concerns regarding the improvement of domestic foreigner management. While safeguarding the legitimate rights and interests of all inbound and outbound travelers in accordance with the law, they will further strengthen inspections and repatriation efforts targeting those who enter or remain in the country illegally, and rigorously investigate and prosecute related illegal and criminal activities in line with the law, thereby upholding normal entry‑exit order.

Supreme People’s Procuratorate: Has placed 45 key administrative prosecution supervision cases under special oversight and supervision.

Recently, the Supreme People’s Procuratorate has placed 45 key administrative prosecution supervision cases under supervised management in two batches, with all 11 cases in the first batch involving private enterprises. According to reports, this supervised‑management initiative is part of a nationwide special campaign launched by procuratorial organs to “strengthen administrative prosecution oversight and promote the substantive resolution of administrative disputes.” The campaign aims to address the widespread issue of “procedural stagnation” in administrative litigation—where cases fail to receive substantive adjudication and disputes remain unresolved—and to advance the modernization of the national governance system and governance capacity.

This special campaign was carried out across the national procuratorial system from October 2019 to December 2020. Its primary objectives were to strengthen administrative prosecutorial oversight, facilitate the focused resolution of a number of administrative disputes that have drawn strong public concern, and effectively enhance the people’s sense of gain; to explore effective approaches for upholding and advancing the “Fengqiao Experience” of the new era in administrative prosecution work, thereby improving the long-term mechanism for procuratorial organs’ participation in defusing administrative disputes; and to promote systematic governance of the issue of “procedural inertia” in administrative litigation cases, ensuring that administrative litigation fulfills its mandate of resolving administrative disputes.

The scope of cases covered by this initiative includes administrative litigation supervision cases currently being handled by the administrative prosecution departments, administrative appeal cases accepted by the complaint‑handling and appeal prosecution departments, and cases in which parties continue to file appeals with the procuratorial organs even after the procuratorate has issued a decision rejecting the supervisory application. The special campaign focuses on resolving administrative disputes involving: cases that seriously infringe upon the substantive rights and interests of citizens or organizations; cases that gravely harm the legitimate rights and interests of private enterprises; cases that substantially undermine national or public interests; collective cases involving multiple administrative counterparts; cases that significantly impede the proper application of the law and require ancillary review of normative documents; and other cases that pose a serious threat to social stability. The plan stipulates that, depending on the specifics of each case, local procuratorial organs may employ measures such as fact-finding and verification, public hearings, prosecutorial announcements, expert consultations, and psychological counseling, while diligently pursuing efforts to promote reconciliation through litigation, clarify the law and reason with parties, encourage settlement and compliance with judgments, and persuade applicants to withdraw their supervisory requests.

The Party Leadership Group of the Supreme People’s Procuratorate emphasized that the special campaign should be regarded as a concrete action to implement the people-centered philosophy under the leadership of the Party and to deepen the outcomes of thematic education; it should also serve as a specific measure to strengthen administrative prosecution, uphold justice for the people, and help defuse social tensions. The campaign must be carried out in parallel with guidance, standardization, and summarization, ensuring tangible results. Furthermore, the Supreme People’s Procuratorate has instructed procurators-general and deputy procurators-general at all levels to leverage their “leading‑goose effect,” taking the lead in handling major, difficult, and complex cases and personally coordinating to resolve challenges in conflict resolution.

At present, the special campaign has completed its mobilization and deployment and is now in the stage of solid implementation. The decision to place 45 cases under supervised management is intended to urge procuratorial organs at all levels to concentrate their efforts on handling a batch of high‑impact, effective cases, particularly in safeguarding and supporting the development of the non‑public sector and protecting the legitimate rights and interests of private enterprises, thereby ensuring that work to substantively resolve administrative disputes is carried out thoroughly and effectively. In addition, the Supreme People’s Procuratorate is compiling and issuing, in phases, a selection of typical, instructive, and exemplary cases concluded by procuratorial organs at various levels during the course of this special campaign, so as to provide guidance for local efforts to achieve substantive resolution of administrative disputes.

China will promptly advance the enactment of a Biosecurity Law.

At a press conference on February 2 held to brief the public on the military’s support for local efforts to combat the COVID‑19 pandemic, Ministry of National Defense spokesperson Wu Qian stated that China will promptly advance the enactment of a Biosecurity Law and accelerate the establishment of a national legal and regulatory framework and institutional safeguards for biosecurity.

Wu Qian stated that strengthening national biosecurity is a common practice among all countries, and the international community has long attached great importance to biosecurity issues. In 1992, the United Nations Conference on Environment and Development adopted Agenda 21 and the Convention on Biological Diversity, both of which explicitly addressed biosafety concerns. From the standpoint of safeguarding public health, ensuring national security, and maintaining long-term stability, China has decided to integrate biosecurity into its national security framework, systematically plan the development of a risk prevention and control and governance system for national biosecurity, and comprehensively enhance its capacity for governing biosecurity.

“The outbreak of this epidemic has further underscored the importance of biosafety,” said Wu Qian. “China will promptly advance the enactment of a biosafety law and accelerate the establishment of a national legal and regulatory framework and institutional safeguards for biosafety.”

The Guangzhou Municipal Public Security Bureau issued a notice stating that the 15-year-old boy who was abducted in the “Auntie Mei” case has been found.

At 9:30 p.m. on March 6, the Public Information Office of the Guangzhou Municipal Public Security Bureau announced that on March 4, with guidance from higher-level public security authorities and the support and cooperation of the Meizhou police, Zengcheng police, after more than a decade of tireless efforts, finally located Shen, a teenager who had been abducted in Zengcheng 15 years earlier.

On January 4, 2005, the victim, surnamed Yu, had his one-year-old son, surnamed Shen, abducted from a rented room on Jianglong Avenue in Shazhuang Street, Zengcheng. Following the incident, the Zengcheng police attached great importance to the case and established a special task force to launch an investigation. For more than a decade, the authorities remained steadfast in their efforts to apprehend the suspects and locate the abducted children. In March 2016, five suspects, including Zhang, were arrested and brought to justice. On November 2, 2019, Zengcheng police recovered two additional children who had been abducted in this case. Since December of the same year, Guangdong police have leveraged advanced smart policing technologies to progressively narrow down and pinpoint the whereabouts of the abducted child, Shen. Recently, authorities finally located the adolescent Shen in Meizhou, and his adoptive parents, who were working in Shenzhen, have also been taken into custody to assist with the investigation.

At present, the police have invited psychological experts to provide counseling to Mr. Shen and other relevant individuals. In the coming days, the Zengcheng police will, in accordance with epidemic prevention and control regulations and while ensuring public safety, arrange for family‑reunion activities.

Guangdong’s Foshan “Mother Turns in Her Son” Case Concluded with a Verdict: Sentenced to Ten Years for Fraud Amounting to Over 700,000 Yuan

On the morning of March 5, a trial was held for a mask‑fraud case prosecuted by the People’s Procuratorate of Chancheng District, Foshan City, Guangdong Province. The case has drawn widespread attention from netizens due to the defendant, Huang Mouguang, allegedly defrauding more than 700,000 yuan and his mother turning him in.

On February 1 this year, Huang Mouguang, despite having no masks in stock, posted false information online claiming “disposable masks are for sale,” thereby deceiving victims into transferring funds to purchase masks. Within just ten days, Huang Mouguang defrauded six victims of a total of RMB 704,550 and used the proceeds for online gambling.

On February 10, Huang Mouguang turned himself in to the public security authorities accompanied by his mother and truthfully confessed to the aforementioned criminal facts. On February 14, the Chancheng District People’s Procuratorate promptly established a special task force, intervened early in the investigation, and provided guidance on evidence collection.

In response to the difficulties of gathering evidence during the pandemic—given that many victims were located in different jurisdictions—the prosecuting officers recommended that the public security authorities use an online collaboration platform to request cooperation from the local public security organs where the victims resided, thereby collecting and securing evidence and significantly reducing the time required for the investigation. On February 17, the case was submitted for arrest approval; the procuratorial organ granted the arrest on the same day, and the indictment was filed with the court on the 21st.

During its review, the Chancheng District People’s Procuratorate determined that the defendant, Huang Mouguang, with the intent of illegal appropriation, used the internet to disseminate false information, thereby defrauding multiple individuals of an especially large sum of money. Accordingly, he should be held criminally liable for the crime of fraud. The statutory sentencing range for this offense is a fixed-term imprisonment of ten years or more, up to life imprisonment. Moreover, the case seriously disrupted social order during the epidemic prevention and control period, posing a significant threat to public safety; additionally, Huang Mouguang squandered the illicit proceeds on online gambling, leaving no funds available for restitution, thus warranting severe punishment under the law. On the other hand, in view of the defendant’s voluntary surrender, the procuratorate recommended a lighter sentence. The court ultimately accepted this recommendation, sentencing Huang Mouguang to ten years’ imprisonment and imposing a fine of RMB 100,000.

Other

Xi Jinping attended the symposium on securing a decisive victory in the battle against poverty and delivered an important speech.

On the 6th, Xi Jinping, General Secretary of the CPC Central Committee, President of the People’s Republic of China, and Chairman of the Central Military Commission, attended in Beijing a symposium on securing a decisive victory in the battle against poverty and delivered an important speech. He emphasized that eradicating poverty among all rural residents under the current standards by 2020 is a solemn commitment made by the CPC Central Committee to the Chinese people, which must be fulfilled as scheduled. This is a tough battle; the closer we get to the finish line, the more we must remain vigilant, avoiding any slackening, carelessness, or relaxation. Party committees and governments at all levels must stay true to their original aspiration and keep their mission officely in mind, maintain unwavering confidence, and press ahead with tenacious efforts, advancing poverty alleviation with greater determination and stronger resolve. They must resolutely overcome the impact of the COVID‑19 pandemic, secure a comprehensive victory in the fight against poverty, and successfully complete this great undertaking of profound significance for the Chinese nation and for humanity.

The symposium was held as a videoconference, with sub-venues set up in all provinces, autonomous regions, municipalities directly under the central government, and the Xinjiang Production and Construction Corps, as well as in cities (prefectures, leagues), counties (cities, districts, banners) under the jurisdiction of the 22 central and western provinces and autonomous regions. Each province, autonomous region, and municipality submitted written statements. Na Yunde, Secretary of the Nujiang Prefecture Party Committee in Yunnan; Yang Fashen, Secretary of the Hotan Prefecture Party Committee in Xinjiang; Cai Songtao, Secretary of the Lankao County Party Committee in Henan; Yang Longwen, Secretary of the Dahuа County Party Committee in Guangxi; and Liu Jianping, Secretary of the Hezhang County Party Committee in Guizhou, each delivered remarks in turn via the videoconferencing system.

After hearing the remarks of all participants, Xi Jinping delivered an important speech. He emphasized that this symposium on securing a decisive victory in the battle against poverty is the largest gathering of its kind since the 18th National Congress of the Communist Party of China. The primary objectives of the meeting are to analyze the current situation, mobilize the entire Party, the whole country, and all sectors of society, unite as one, and ensure a successful outcome in the fight against poverty—thus guaranteeing the timely completion of the poverty‑alleviation goals and tasks and the comprehensive building of a moderately prosperous society.

Xi Jinping pointed out that since the 18th National Congress of the Communist Party of China, under the strong leadership of the CPC Central Committee and through the concerted efforts of the entire Party, the whole country, and all sectors of society, China has achieved decisive progress in poverty alleviation. The goals and tasks of poverty eradication are nearing completion: the number of people living in poverty has dropped from 98.99 million at the end of 2012 to 5.51 million at the end of 2019; the incidence of poverty has fallen from 10.2% to 0.6%; and regional poverty as a whole has been essentially resolved. The incomes of impoverished populations have risen substantially, their capacity for self‑reliant poverty reduction has steadily improved, the quality of the “no worries about food and clothing” standard has markedly enhanced, and the most pressing issues related to the three basic guarantees have been largely addressed. Basic production and living conditions in impoverished areas have significantly improved, longstanding challenges—such as difficulties in transportation, access to electricity, schooling, medical care, and communications—have been broadly resolved, and compulsory education, basic healthcare, and housing security are now assured. Economic and social development in these regions has accelerated markedly, basic public services have continued to improve, governance capacity for poverty reduction has been substantially strengthened, grassroots organizations have been reinforced, and the competence of grassroots cadres has been noticeably enhanced. With the completion of this year’s poverty‑alleviation campaign, China will achieve the United Nations’ 2030 Agenda for Sustainable Development’s poverty‑reduction target a full decade ahead of schedule. No other country in the world has managed to lift so many people out of poverty in such a short period of time, a feat of profound significance for both China and the world.

Xi Jinping emphasized that we have achieved unprecedented accomplishments in the fight against poverty, demonstrating the political strengths of the leadership of the Communist Party of China and our socialist system. These achievements are the result of the collective wisdom and hard work of the entire Party and all the people of China’s ethnic groups, and they have been forged through the down-to-earth efforts of countless cadres and the general public. On behalf of the CPC Central Committee, Xi Jinping extended his sincere greetings to all comrades on the front lines of the battle against poverty.

Xi Jinping pointed out that the battle against poverty cannot be won with a single, effortless charge; we must attach great importance to the difficulties and challenges ahead. The remaining tasks in poverty alleviation are daunting, the COVID‑19 pandemic has introduced new obstacles, consolidating poverty‑alleviation gains is extremely difficult, and some impoverished populations lack sufficient endogenous motivation for development. Therefore, efforts to eradicate poverty must be strengthened. This year marks the final year of the campaign, and, compounded by the impact of the pandemic, the workload is heavier and the standards higher than ever. All regions and departments must unswervingly implement the decisions and arrangements of the CPC Central Committee to ensure that the goals and tasks of poverty alleviation are accomplished on schedule.

Xi Jinping emphasized the need to maintain focus on deeply impoverished areas, including the “Three Regions and Three Prefectures,” to implement the poverty‑alleviation plan, target key problems and weak links, and rigorously ensure policy execution in order to overcome difficulties and accomplish the task. A system of publicized supervision and oversight has been put in place for the 52 counties that have not yet shaken off poverty and the 1,113 impoverished villages; the State Council Leading Group for Poverty Alleviation and Development must exercise strict oversight with a office and resolute approach, while all provinces, autonomous regions, and municipalities should pool their efforts and fight with determination to tackle the toughest challenges. It is essential to consolidate the achievements of ensuring “no worries about food and clothing, and three basic guarantees,” and to prevent any backsliding. For particularly vulnerable populations who lack the capacity to work, social security safety nets must be strengthened to provide adequate support, ensuring that all those in need are covered.

Xi Jinping pointed out that it is essential to implement a differentiated, tiered, and targeted prevention-and-control strategy and to strive to mitigate the impact of the epidemic. In areas where the epidemic remains severe, while prioritizing epidemic control, innovative approaches can be adopted to coordinate pandemic response with poverty alleviation efforts. In regions with no outbreaks or only mild cases, efforts should be concentrated on accelerating progress in poverty eradication. Priority support must be given to impoverished workers seeking employment; when enterprises resume work and production, major projects commence, and logistics systems are developed, priority should be accorded to recruiting and employing such workers. Enterprises should be encouraged to hire more personnel from impoverished areas, particularly those from registered poor households, and the east–west poverty‑alleviation cooperation mechanism should be leveraged to provide “point-to-point” assistance, helping impoverished workers return to their jobs promptly and in an orderly manner. Tailored measures should be implemented: in areas free of the epidemic, efforts to transport and accommodate migrant workers must be stepped up. The issue of sluggish sales of poverty‑alleviation agricultural and livestock products must be effectively addressed by facilitating supply‑demand matching, launching consumption‑driven poverty‑reduction initiatives, and utilizing the internet to expand sales channels, thereby resolving the challenge of marketing agricultural goods through multiple avenues. Support should be provided to help poverty‑alleviation industries resume production, ensuring adequate supplies of agricultural inputs and other preparations for spring farming. Industry‑based assistance funds and micro‑credit policies for poverty alleviation should be fully utilized to promote the sustained development of these sectors. Work on initiating and resuming poverty‑alleviation projects must be accelerated, with all tasks related to supporting infrastructure for relocation, housing, and safe drinking water to be completed in the first half of the year. Finally, assistance must be extended to those who have fallen into or relapsed into poverty due to the epidemic, with safety-net measures and other support programs promptly put in place to ensure that their basic livelihoods remain unaffected.

Xi Jinping emphasized the need to adopt a multi-pronged approach to consolidate achievements, intensify efforts to alleviate poverty through employment, strengthen precise coordination between labor-sending and labor-receiving areas, stabilize and expand job opportunities, and support leading poverty‑alleviation enterprises and poverty‑reduction workshops in resuming operations as soon as possible to enhance their capacity to lift people out of poverty. He also called for leveraging public‑service positions to create more local and nearby employment opportunities. Furthermore, he urged stepping up industry‑based poverty alleviation, focusing on the long-term development and support of agriculture and animal husbandry, continuing to implement micro‑credit programs for poverty reduction, and strengthening follow-up assistance for relocation projects, so as to ensure that relocated households can settle down, secure stable employment, and gradually achieve prosperity.

Xi Jinping pointed out that poverty‑alleviation policies must remain stable. For counties, villages, and individuals that have been lifted out of poverty, the existing support measures should be kept broadly unchanged to ensure continued assistance. During the transition period, it is essential to strictly uphold the requirements that no one is relieved of responsibility, policy, support, or oversight upon being removed from the poverty list; major policies and measures must not be abruptly halted, and village‑stationed work teams must not be disbanded. Efforts should be accelerated to establish mechanisms for monitoring and providing targeted assistance to prevent relapse into poverty, with enhanced surveillance of households whose poverty status remains precarious, those on the margins of poverty, and those experiencing sudden drops in income or sharp increases in expenditures due to the pandemic or other factors, so that timely, tailored support can be put in place.

Xi Jinping emphasized the need to conduct rigorous assessments in carrying out the census, strictly control the criteria for poverty alleviation, and resolutely prevent “numbers‑only” or “false” poverty reduction. He called for intensified inspections and patrols, strengthened routine supervision and guidance, and the continued implementation of performance evaluations on poverty‑alleviation efforts, so as to comprehensively assess the outcomes of these initiatives across all regions and ensure that they can stand the test of history and the people.

Xi Jinping pointed out that lifting people out of poverty and removing the “poverty‑alleviation” label is not an end in itself, but rather the starting point for a new life and new endeavors. It is essential to seamlessly connect the ongoing efforts to eradicate poverty with the rural revitalization strategy, ensure a smooth transition of poverty‑reduction policies and institutional frameworks, integrate these initiatives into the broader rural revitalization agenda, and establish systems and mechanisms that address both immediate needs and long-term challenges. Overall, this approach should help stimulate the endogenous development momentum of less‑developed regions and low‑income rural populations, facilitate targeted assistance, and advance the gradual realization of common prosperity.

Xi Jinping emphasized that, as poverty alleviation enters its final stage, it is all the more important to strengthen and improve Party leadership. Party committees (leading Party groups) at all levels must fulfill their duties conscientiously and live up to their mission. The central government should continue to increase the scale of special funds for poverty alleviation, while governments at all levels must ensure adequate funding to meet the needs of this endeavor. Efforts to integrate agricultural-related fiscal resources must be intensified, oversight of poverty‑alleviation funds strengthened, and the efficiency and effectiveness of fund utilization enhanced. For areas that have already achieved stable poverty reduction, local authorities may centrally allocate special poverty‑alleviation funds to support impoverished populations in non‑poor counties and non‑poor villages. We must deepen east–west cooperation on poverty alleviation and the targeted assistance provided by central government units, helping the central and western regions mitigate the impact of the pandemic on poverty eradication. Grounded in the national strategy for regional development, we should deepen regional cooperation, promote the gradual relocation of eastern industries to the west, and foster complementary industrial linkages, personnel exchanges, mutual learning of technologies, shared values, and cross‑fertilization of work styles, so as to achieve common development.

Xi Jinping pointed out that it is essential to strengthen conduct and work style in the field of poverty alleviation, resolutely oppose formalism and bureaucratism, reduce the burden on the grassroots level, and ensure adequate support in all aspects—work, living conditions, and safety—so that grassroots poverty‑alleviation officials can devote themselves wholeheartedly to epidemic prevention and control as well as the battle against poverty. Furthermore, training for poverty‑alleviation cadres must be intensified, ensuring that all newly dispatched village‑stationed cadres and newly appointed rural officials undergo comprehensive refresher training, thereby enhancing their capacity for targeted poverty reduction and sustainable poverty eradication.

While presiding over the meeting, Wang Yang stated that General Secretary Xi Jinping’s important speech fully afofficeed the achievements made in poverty alleviation, thoroughly analyzed the challenges and circumstances facing this endeavor, and set forth clear requirements for strengthening the Party’s leadership over poverty alleviation and ensuring the high-quality completion of its goals and tasks. The speech is highly instructive and targeted, further bolstering the confidence and resolve of the entire Party and society to secure a decisive victory in the battle against poverty. All regions and departments must earnestly study and thoroughly grasp the spirit of General Secretary Xi Jinping’s important address, fully recognize the paramount importance, immense difficulty, and pressing urgency of securing a final, decisive win in poverty alleviation, align their work with the CPC Central Committee’s decisions, arrangements, and operational requirements, comprehensively review and map out this year’s tasks, overcome the impact of the COVID‑19 pandemic, adhere to a goal‑oriented, problem‑oriented, and results‑oriented approach, adopt a reverse‑schedule plan, vigorously push forward, ensure accountability at every level, transmit pressure down through all tiers, and, in light of local conditions, carry out work in a creative and innovative manner. In this way, they will ensure the timely and high‑quality completion of the poverty‑alleviation mission and deliver a satisfactory report to the Party and the people.

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