JC Master Legal News Issue 961

Key Takeaways for This Issue
The China Securities Regulatory Commission has issued the “Organizational Rules of the Administrative Penalty Committee.”
On March 12, the China Securities Regulatory Commission (CSRC) stated that, in order to better adapt to the new landscape of capital market enforcement and further standardize the operations of the CSRC’s Administrative Penalty Committee, it will rigorously crack down on illegal and non-compliant activities in the capital market in accordance with the law, thereby effectively safeguarding market order. The CSRC has revised the “Measures for the Composition of the Administrative Penalty Committee” (CSRC Announcement [2008] No. 6), changing its title to the “Organizational Rules of the Administrative Penalty Committee,” and has now promulgated the revised document.
The National Development and Reform Commission and several other ministries have joined forces to improve the business environment in the tendering and bidding sector.
Recently, 11 government departments, including the National Development and Reform Commission, the Ministry of Housing and Urban–Rural Development, the Ministry of Commerce, the Ministry of Transport, the Ministry of Industry and Information Technology, and the Ministry of Agriculture and Rural Affairs, jointly issued the “Notice on Establishing and Improving a Long-Term Mechanism for Optimizing the Business Environment in the Field of Tendering and Bidding.” The notice outlines specific work arrangements aimed at further deepening targeted rectification efforts to improve the business environment in the tendering and bidding sector, effectively safeguarding fair competition, and fostering a sound market order.
The State Taxation Administration plans to issue the first batch of a nationwide, unified list of tax-related matters subject to “no penalty for first-time violations.”
The State Taxation Administration plans to issue, by the end of March, the first batch of a nationwide, unified list of tax-related matters subject to the “no penalty for first-time violations” policy, covering tax registration, document submission, tax returns, invoice issuance, and other areas. If a taxpayer commits, for the first time, any of the offenses listed on this roster and the circumstances are minor, and the taxpayer either voluntarily rectifies the violation before it is detected by the tax authorities or does so within the deadline set by the tax authorities, no administrative penalty shall be imposed in accordance with the law.
Opinions of the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, and the Ministry of Justice on Further Strengthening Efforts to Punish the Crime of Fictitious Litigation
Recently, the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, and the Ministry of Justice jointly issued the “Opinions on Further Strengthening Efforts to Punish the Crime of Fictitious Litigation,” which sets out specific provisions for establishing and improving mechanisms for coordinated cooperation and procedural coordination in addressing such crimes, and for further enhancing efforts to combat them. The Opinions shall take effect as of March 10, 2021.

Table of Contents
Table of Contents
Finance & Capital Markets
The China Securities Regulatory Commission has issued the “Organizational Rules of the Administrative Penalty Committee.”
The Shenzhen Stock Exchange has launched technology innovation bonds and carbon-neutral special-purpose bonds.
The Foreign Exchange Trading Center has launched the Bond Connect FX Risk Management Information Service.
China–Central and Eastern European Capital Markets Cooperation Takes Another Step Forward: The Shanghai Stock Exchange and the Budapest Stock Exchange Sign a Memorandum of Understanding on Cooperation.

Corporate & Commercial
The National Development and Reform Commission and several other ministries have joined forces to improve the business environment in the tendering and bidding sector.
Qiu Lin’s Delisting After a Century: Losses of 5.2 Billion Yuan Over Three Years
With performance targets unmet, equity incentives for 1,015 China Unicom employees have been canceled.
FaDaDa has closed its Series D funding round, raising RMB 900 million, with Tencent leading the investment.

Taxation
The State Taxation Administration plans to issue the first batch of a nationwide, unified list of tax-related matters subject to “no penalty for first-time violations.”
Tax incentives for scientific and technological innovation continue to deliver benefits, with tax reductions supporting such innovation totaling RMB 2.54 trillion over the past five years.
Tax incentives are helping the Western Development Initiative advance to a deeper level.
Announcement of the Tianjin Municipal Tax Service of the State Taxation Administration on Matters Relating to the Collection and Administration of Individual Income Tax

Litigation & Arbitration
Opinions of the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, and the Ministry of Justice on Further Strengthening Efforts to Punish the Crime of Fictitious Litigation
The Supreme People’s Procuratorate has launched a pilot program to enable lawyers to access case files online.
Violent debt collection has been criminalized; the first verdict in a case involving the crime of “illegally collecting debts” has been handed down.
The Beijing No. 2 Intermediate People’s Court has issued its first element-based judgment.

Other

Finance & Capital Markets
The China Securities Regulatory Commission has issued the “Organizational Rules of the Administrative Penalty Committee.”
On March 12, the China Securities Regulatory Commission (CSRC) stated that, in order to better adapt to the new landscape of capital market enforcement and to align with the relevant requirements of the newly revised Administrative Penalty Law, and to further standardize the operations of the CSRC’s Administrative Penalty Committee, it has revised the Measures for the Composition of the Administrative Penalty Committee (CSRC Announcement [2008] No. 6). Following public consultation on July 3, 2020, and subsequent refinements based on the feedback received, the document has been renamed the Organizational Rules of the Administrative Penalty Committee (hereinafter referred to as the “Organizational Rules”) and is hereby promulgated and put into effect.
The main revisions to the “Rules on Organization” are as follows: First, the basic principle of the administrative head responsibility system has been clarified. This revision explicitly stipulates that the administrative penalty‑handling system must adhere to this fundamental principle, defines the duties of the Administrative Penalty Committee—namely, to provide expert opinions on cases received in accordance with regulations and to conduct legal review of administrative penalty decisions—and clarifies the relationship between case‑review opinions and the issuance of administrative penalty decisions. It also establishes a case‑review mechanism under the leadership of the chairperson, featuring a “lead reviewer–collegial deliberation” process.
Second, the duties and role of part-time adjudication committee members have been clarified. This revision further specifies the system for part-time adjudication committee members: part-time members and full-time members are subject to the same eligibility requirements and perform the same duties, both being appointed by the China Securities Regulatory Commission; at the same time, provisions regarding the term of office have been explicitly set forth.
Third, the mechanism for conducting on-site adjudications has been clarified. In recent years, in order to strengthen the close coordination between administrative penalties and the exchange’s frontline regulatory functions, the Administrative Penalty Committee has explored and established a mechanism for on-site adjudications. This mechanism has played a positive role in enhancing the efficiency of administrative penalty proceedings and facilitating parties’ exercise of their rights to present defenses, and has been proven in practice to possess significant institutional advantages. It should therefore be upheld and continuously refined in practice; this revision has accordingly added relevant provisions governing the on-site adjudication mechanism.
Fourth, the procedures for adjudicating cases have been standardized. This revision clarifies that “ordinary cases shall be presided over by a single commissioner and deliberated by two commissioners; in special circumstances, additional commissioners may be appointed to participate in the deliberation. For cases where the facts of violation are clear and the legal basis is well established, a simplified procedure may be applied, with a single commissioner conducting the hearing.” At the same time, it sets out the circumstances under which the simplified procedure may be converted to the ordinary procedure. By applying different adjudication procedures according to the specific circumstances of each case, this approach both safeguards the lawful rights and interests of the parties involved and ensures the rational allocation of adjudicative resources, thereby enhancing enforcement efficiency.
Fifth, the duties of the Administrative Penalty Committee, its Chairperson, Vice‑Chairpersons, and members have been refined. To further optimize the “separation of investigation and adjudication” system, the Committee’s responsibilities have been expanded to include, among other things, “pre‑consultation on major cases referred by the investigative authorities.” The Chairperson’s duties have been augmented to encompass “convening meetings and, in consultation with the CSRC’s Chief Counsel, reviewing significant, difficult, or complex cases,” while the responsibility for “determining whether a case should be subject to additional investigation by the investigative authorities or returned” has been delegated to the Vice‑Chairpersons. Additionally, it has been clarified that the Vice‑Chairpersons are responsible for the day-to-day administration of the Administrative Penalty Committee, and the members’ duties have been supplemented to include “participating in the formulation of rules and standards for case adjudication.” By refining the responsibilities of all relevant parties, accountability can be further clarified, workflows streamlined, and enforcement efficiency enhanced.
The CSRC stated that, going forward, it will continue to uphold the principle of “establishing sound systems, non-interference, and zero tolerance,” further standardize the operations of the Administrative Penalty Committee, rigorously crack down on illegal and non-compliant activities in the capital market in accordance with the law, and effectively safeguard the order of the capital market.

The Shenzhen Stock Exchange has launched technology innovation bonds and carbon-neutral special-purpose bonds.
On March 10, the Shenzhen Stock Exchange announced that it has progressively launched innovative bond products, including technology‑innovation bonds and carbon‑neutral special bonds, to support the development of science and technology enterprises, strengthen strategic underpinnings for technological advancement, and accelerate efforts to build China into a global leader in science and technology. These initiatives also aim to facilitate enterprises’ low‑carbon transformation, contribute to achieving peak carbon emissions and carbon neutrality, and promote the optimization and upgrading of industrial and energy structures. This represents a key measure by the Shenzhen Stock Exchange to steadfastly implement the new development philosophy, earnestly carry out the national innovation‑driven development strategy, and expedite bond‑product innovation in the fields of scientific and technological research and green development, thereby helping to ensure a strong start to the 14th Five‑Year Plan.
Innovation and green development are key components of the new development philosophy. The Fifth Plenary Session of the 19th CPC Central Committee laid out major strategic plans for China’s economic and social development during the 14th Five-Year Plan period, with the new stage of development, the new development philosophy, and the new development paradigm serving as a consistent and overarching theme. The Central Economic Work Conference also identified “strengthening China’s strategic scientific and technological capabilities” and “advancing carbon peaking and carbon neutrality efforts” as two of the eight priority tasks for 2021. In line with the requirements set forth by the China Securities Regulatory Commission, the Shenzhen Stock Exchange has actively leveraged the functions and product strengths of its bond market to explore the issuance of science-and‑technology innovation bonds and special-purpose carbon‑neutral bonds.
It is reported that, under the bond policy framework for innovation and entrepreneurship companies, science and technology innovation bonds further emphasize the leading role of technological advancement, with proceeds earmarked for projects aligned with national strategies and designed to support scientific and technological innovation in critical core areas. Recently, the Shenzhen Stock Exchange’s first science and technology innovation bond was successfully issued. Shenzhen Innovation Investment Group Co., Ltd. raised RMB 1.5 billion through this bond, with the funds intended to be deployed—via direct equity investments or by establishing and increasing capital in venture capital funds—to acquire equity stakes in early-stage, start-up, and growth‑stage innovative enterprises. The initiative will prioritize high‑quality development in key sectors such as advanced equipment manufacturing, biotechnology, new materials, new energy, and information technology.
As a sub‑category of green bonds, carbon‑neutral special bonds raise capital primarily for low‑carbon and emissions‑reduction projects, including clean energy, clean transportation, and green buildings. Recently, the Shenzhen Stock Exchange successfully issued its first batch of carbon‑neutral special bonds that comprehensively cover key priority sectors, totaling RMB 2.5 billion. Specifically, Shenzhen Metro Group Co., Ltd. will use the proceeds to finance urban electrified rail transit projects; Guangxi Guangtou Energy Group Co., Ltd. will allocate the funds to support the Fangchenggang Nuclear Power Project in Guangxi; and Zhuhai Huafa Group Co., Ltd. will invest in the green building and emissions‑reduction initiatives for Phase II of the Zhuhai International Convention and Exhibition Center.
Since 2016, the Shenzhen Stock Exchange has fully implemented the new development philosophy of innovation, coordination, green development, openness, and shared benefits. Under the corporate bond framework, it has successively launched various types of special-purpose bonds, and through the public issuance of pilot program notices, Q&A documents, and business guidelines, it has standardized admission criteria and information disclosure requirements, thereby delivering targeted support across multiple dimensions of economic and social development, including technological innovation, green growth, opening-up, and poverty alleviation and relief. For specialized bond products, the Exchange has adopted a “dedicated reviewer system” and a “green channel” to enhance review and service efficiency. By the end of 2020, the total issuance value of 11 categories of fixed-income products—such as dual‑innovation bonds and green bonds—that serve national strategies exceeded RMB 310 billion, further strengthening the capital market’s capacity to support the real economy.
In its 2021 Government Work Report, while outlining the key priorities for the year, the report once again emphasized “promoting the deep integration of scientific and technological innovation with the real economy” and “solidly advancing all tasks related to peaking carbon emissions and achieving carbon neutrality.” The Shenzhen Stock Exchange stated that, going forward, under the unified leadership of the China Securities Regulatory Commission, it will consciously align itself with the new stage of development, steadfastly implement the new development philosophy, and proactively integrate into the new development paradigm. Seizing the significant historical opportunities presented by the construction of the “Dual Zones,” the Exchange will take the vigorous effort to build a high-quality innovation capital center and a world-class stock exchange as an opportunity to officely prioritize support for scientific and technological innovation, promote the establishment of a green financial services system, refine and improve the institutional frameworks for science-and‑technology innovation bonds and carbon‑neutral special bonds, and fully leverage the capital market’s positive role in driving economic and social innovation and green development, thereby helping to ensure a strong start and steady progress during the 14th Five-Year Plan period.

The Foreign Exchange Trading Center has launched the Bond Connect FX Risk Management Information Service.
On March 11, the China Foreign Exchange Trade System issued an announcement stating that, effective March 12, it will launch the Bond Connect Foreign Exchange Risk Management Information Service. This service is designed to facilitate Hong Kong Clearing in providing foreign‑currency conversion and foreign‑exchange risk‑management services to overseas institutional investors participating in the Northbound Trading Link of Bond Connect.
From the perspective of service offerings, Hong Kong clearing banks, with the authorization of Bond Connect investors, may use the trading center’s foreign‑exchange trading system to access information on investors’ fund remittances, foreign‑exchange risk hedging, and bond investment activities under the Bond Connect framework. This includes calculated RMB‑FX exposure, outstanding bond holdings, RMB‑denominated fund conversions, and details of bond purchases and sales.

The full text of the announcement is as follows:
Announcement on the Launch of the Bond Connect Foreign Exchange Risk Management Information Service
To implement the China Foreign Exchange Trade System Announcement [2020] No. 45 and to facilitate Hong Kong Clearing Limited in providing foreign‑exchange settlement and foreign‑exchange risk‑management services to overseas institutional investors under the Bond Connect Northbound Channel (hereinafter referred to as “Bond Connect Investors”), the China Foreign Exchange Trade System (hereinafter referred to as the “Trading Center”) will launch the Bond Connect Foreign‑Exchange Risk‑Management Information Service effective March 12, 2021.
I. Scope of Services
Hong Kong clearing banks, with the authorization of Bond Connect investors, may use the Trading Center’s foreign‑exchange trading system to access information on investors’ fund remittances, foreign‑exchange risk hedging, and bond investments under the Bond Connect framework. This includes calculated RMB‑foreign‑exchange exposure, outstanding bond holdings, RMB‑denominated fund conversions, and details of bond purchases and sales.
II. Application Process
1. Hong Kong clearing banks may apply to the trading center for Bond Connect foreign‑exchange risk‑management information services and undertake that the information obtained through such services will be used solely for authenticity verification and monitoring purposes.
2. When Bond Connect investors file with the Trading Center, pursuant to Notice No. 45 [2020] of the China Foreign Exchange Trade System, the selected Hong Kong clearing bank, they may, as required by their business needs, authorize the Trading Center to provide foreign‑exchange risk‑management information services to the designated Hong Kong clearing bank. If a Bond Connect investor seeks to amend the scope of such authorization, they must resubmit the relevant authorization documents.
3. The trading center shall grant the Hong Kong clearing house applying for the service access to the relevant information services that have been authorized by Bond Connect investors.
III. Contact Information
Relevant application forms can be downloaded from the China Money Network or obtained through the following contact information:
Business inquiries: 86-21-38585304, 23165015
Business Application: 4009787878*1*2*1
Contact email: fx_mkt@chinamoney.com.cn

China Foreign Exchange Trade System
March 11, 2021

China–Central and Eastern European Capital Markets Cooperation Takes Another Step Forward: The Shanghai Stock Exchange and the Budapest Stock Exchange Sign a Memorandum of Understanding on Cooperation.
On the 10th, the Shanghai Stock Exchange announced that on the 9th, it had signed a memorandum of understanding on cooperation with the Belgrade Stock Exchange of Serbia (hereinafter referred to as the Belgrade Stock Exchange) via video link.
Cai Jianchun, General Manager of the Shanghai Stock Exchange, and Siniša Krneta, Chief Executive Officer of the Belgrade Stock Exchange, signed a memorandum of understanding on cooperation on behalf of their respective exchanges. The two parties will engage in practical collaboration in areas such as information sharing, joint research, personnel exchanges, and product development.
The Shanghai Stock Exchange stated that Serbia is the first Central and Eastern European country to establish a comprehensive strategic partnership with China and a proactive participant in the Belt and Road Initiative in Europe. Over the years, China and Serbia have enjoyed a deep and enduring friendship. In recent years, with the support of both governments, cooperation between the two countries has flourished across various sectors, and new opportunities have emerged in capital market collaboration. The signing of this Memorandum of Understanding on Cooperation not only ushers in a new chapter for future exchanges and collaboration between the two stock exchanges but also sets a commendable example of solidarity and joint efforts between the two countries’ capital markets during the pandemic.
According to reports, the Belgrade Stock Exchange, located in Belgrade, the capital of Serbia, is one of Europe’s oldest exchanges and Serbia’s sole securities exchange. It is a full member of the Eurasian Stock Exchanges Association and an associate member of the Federation of European Stock Exchanges. Currently, the exchange lists and trades equities and bonds; its equity market is divided into three segments—Standard Market, Advanced Market, and the SME Board—and it also operates a multilateral trading facility for equities and bonds.
The SSE stated that, to date, it has signed 64 memoranda of understanding with 53 overseas institutions and, under these frameworks, has engaged in various forms of cooperation, including personnel exchanges, information sharing, joint organization of international forums, and promotional activities. Moving forward, the SSE will continue to advance the opening-up of China’s capital market in accordance with the unified deployment of the China Securities Regulatory Commission, steadily improve the capital market’s foundational institutional framework, continually expand the range of securities investment products, and deepen its internationalization strategy to facilitate cross-border investment by domestic and foreign investors, thereby promoting mutually beneficial economic and financial cooperation among countries.

Commercial & Corporate
The National Development and Reform Commission and several other ministries have joined forces to improve the business environment in the bidding and tendering sector.
Recently, 11 government departments, including the National Development and Reform Commission, the Ministry of Housing and Urban–Rural Development, the Ministry of Commerce, the Ministry of Transport, the Ministry of Industry and Information Technology, and the Ministry of Agriculture and Rural Affairs, jointly issued the “Notice on Establishing and Improving a Long-Term Mechanism for Optimizing the Business Environment in the Field of Tendering and Bidding.” The notice outlines specific work arrangements aimed at further deepening targeted rectification efforts to improve the business environment in the tendering and bidding sector, effectively safeguarding fair competition, and fostering a sound market order.
The Notice clarifies that administrative supervisory authorities for tendering and bidding at all levels shall, in the course of ongoing and post‑tender oversight of projects required by law to undergo tendering, fully implement the “double random, one public” inspection model. They are to closely monitor key stages and mechanisms—including tender notices, tender documents, qualification reviews, bid opening, evaluation, and award decisions, responses to objections, written reports on tendering activities, and tender agents—and rigorously crack down on illegal and non‑compliant conduct. At the same time, they shall strictly standardize the formulation of local tendering and bidding regulations and intensify efforts to review and consolidate such rules.
I. Standardizing the Formulation of Bidding and Tendering Rules
Since 2019, the National Development and Reform Commission and other relevant departments have launched a special campaign nationwide to improve the business environment in the field of engineering project bidding.
According to a responsible official from the National Development and Reform Commission, the targeted rectification campaign has effectively addressed a large number of pressing issues that had drawn strong complaints from market entities involved in tendering and bidding. Nevertheless, weak links persist in the business environment of this sector. Specifically, these challenges manifest as follows: the sheer volume of local regulations and policy documents on tendering and bidding is excessive, with rules that are complex and inconsistent, thereby increasing compliance costs for market players; practices such as local protectionism, discrimination based on ownership, the arbitrary imposition of review and filing requirements and procedural hurdles, and unlawful interference with the autonomy of market entities continue to occur, often remaining particularly pronounced at the city and county levels; and administrative oversight of tendering and bidding places undue emphasis on ex‑ante approval and filing while neglecting mid‑ and post‑event supervision, resulting in insufficient proactiveness and comprehensiveness in regulation. Moreover, regulatory responsibilities remain unclear in certain industries and sectors, leading to inadequate deterrence of illegal and non‑compliant conduct.
To this end, the Notice places its top priority on rigorously standardizing the formulation of local rules and regulations governing tendering and bidding, thereby addressing the governance and development of the business environment in this sector at its very source.
The Notice stipulates that when local authorities formulate rules and regulations on tendering and bidding, they must strictly comply with the requirements of the Regulations on Optimizing the Business Environment, conduct thorough reviews of fair competition and legality, solicit extensive input from market entities and industry associations and chambers of commerce, and publicly seek public comments for a period of no less than 30 days. Without a legal basis, statutory authorization, or a decision or order issued by the State Council, normative documents may not impair the legitimate rights and interests of market entities or impose additional obligations on them; nor may they establish conditions for market entry or exit, prescribe requirements for submitting certificates or proofs, or interfere with the normal production and business activities of market entities.
Prior to the promulgation of new institutional rules, a thorough assessment of their necessity shall be conducted. Where existing documents can address or, upon amendment, resolve the relevant issues, no new documents shall be issued. Furthermore, all previously issued documents must be comprehensively reviewed; where multiple provisions govern the same matter, appropriate measures—such as consolidation, coordination, substitution, or repeal—shall be taken based on the specific circumstances. When local authorities formulate rules governing tendering and public resource transactions, they shall establish a mechanism for soliciting the views of the leading department responsible for guiding and coordinating tendering activities at the same level and of the competent authority at the next higher level, thereby ensuring compliance with higher‑level laws and maintaining the uniformity of the institutional framework.
II. Urge the establishment of a responsibility list
Recently, across the country, various cases arising in the field of tendering and bidding during 2020, along with their outcomes, have been disclosed one after another. Among the typical cases of disciplinary and legal violations in the tendering and bidding sector publicized in Dalian City, Liaoning Province, Liu, a former member of the Party Committee and deputy director of the Dalian Supply and Marketing Cooperative Union, improperly approved a project in which both the design and construction were entrusted to the same company. The winning contractor then carried out the work by substituting inferior materials for superior ones and using old components as new, thereby causing substantial losses to state property. Liu was expelled from the Communist Party and dismissed from public office, and the case, involving suspected criminal offenses, has been referred to the procuratorial authorities for lawful handling.
The Notice calls for the full implementation of the “double-random, one-public” regulatory model, requiring that sampling targets, proportions, and frequencies be determined in a reasonable manner and publicly announced before execution. For areas prone to frequent issues and entities with prior violations, enhanced oversight may be exercised through increased inspection frequency or targeted special inspections. Where conditions for “double-random” inspections are genuinely not met, a “single-random” approach may be adopted on an interim basis, consistent with the underlying principles of the “double-random” model. The results of random inspections shall be promptly made public via the websites of relevant administrative supervisory authorities, subject to public scrutiny, and simultaneously aggregated into the local public resources trading platform, the tendering and bidding public service platform, and the credit information sharing platform.
　III. Regular Collection of Opinions and Suggestions
The Notice also specifically calls for the establishment of a regular mechanism for collecting leads on business‑environment issues and soliciting public suggestions. It sets out in detail the specific procedures for this mechanism: at the national level, it will expedite the launch of an online platform to gather leads on business‑environment concerns in the field of tendering and procurement, conducting ongoing outreach to identify practices—such as hidden market barriers—that undermine the business climate. This initiative will serve as an additional channel of social oversight, complementing formal objections and complaints, and provide guidance to local governments and relevant departments in strengthening ex‑ante, in‑process, and post‑event regulatory oversight.
At the same time, a four-tier referral and oversight mechanism has been established at the national, provincial, municipal, and county levels to ensure that valid leads are promptly investigated, non-compliant documents are promptly revised or repealed, and unlawful acts are promptly investigated, addressed, and rectified. In response to salient issues identified in practice, the lead‑collection platform periodically publishes and updates a “Negative Conduct List” for the business environment in the tendering and bidding sector, thereby clarifying regulatory priorities and serving as a warning against illegal behavior.
To better implement and enforce central policies, the Notice also stipulates that efforts to review and consolidate local tendering and bidding regulations must be intensified, with particular emphasis on the city and county levels—where problems are most acute. Except for a small number of documents that merely adjust internal government procedures, all remaining tendering and bidding regulatory documents at the municipal level shall be subject to overall quantity control and linked to reductions; this approach aims to prevent the situation where regulations are cleared only to be re‑issued shortly thereafter. Furthermore, no district or county may retain such documents or issue new ones.
Meanwhile, the leading departments responsible for guiding and coordinating tendering and bidding at the provincial level, together with the relevant administrative supervisory authorities, shall compile a comprehensive list of local regulations, rules, and normative documents on tendering and bidding that have been retained following review and consolidation at both the provincial and municipal levels. By the end of November 2021, they shall publish the full list and the full text (or web links) on the provincial public resource trading platform, the tendering and bidding public service platform, and a dedicated section on the website of the provincial administrative supervisory authority, and ensure that this information is kept up to date to facilitate access by market entities. Any provisions not included in the published list shall, without exception, not be used as a basis for administrative oversight.

Qiu Lin’s Delisting After a Century: Losses of 5.2 Billion Yuan Over Three Years
On March 11, *ST Qiulin received the Shanghai Stock Exchange’s “Decision on the Termination of Listing of Shares of Harbin Qiulin Group Co., Ltd.” Pursuant to relevant regulations, the Shanghai Stock Exchange has decided to terminate the listing of the company’s shares.
According to the announcement, due to negative net assets for two consecutive years—2018 and 2019—and the issuance of “non-standard” audit opinions on its financial reports for both years, *ST Qiulin was suspended from trading as of March 18, 2020. In 2020, the company again reported negative net profit and negative net assets, and its financial statements once more received a “non-standard” audit opinion. Following review by the SSE Listing Committee, the Shanghai Stock Exchange has decided to terminate the listing of the company’s shares. *ST Qiulin will enter a 30-trading-day delisting reorganization period starting March 19, and within five trading days after the conclusion of that period, the SSE will delist the company’s shares. This also means that Qiulin Group, which has weathered 121 years of ups and downs and served as an important “city landmark” for Harbin, is set to exit the A-share market.
In fact, signs of Qiulin’s delisting had been evident well in advance. As early as February 23, when *ST Qiulin released its 2020 financial results, the report already highlighted that the company recorded revenue of RMB 144 million, down 57.01% year over year; net loss attributable to shareholders of the listed company amounted to RMB 582 million, a 9.6% year‑on‑year deterioration; basic earnings per share stood at –RMB 0.94, and book value per share was –RMB 3.58. Notably, revenue from the company’s retail business fell 88.89% year over year, while revenue from its food‑processing segment declined 13.49% compared with the prior year. It is worth noting that Dixin Accounting Office issued an audit report expressing a disclaimer of opinion on the company’s 2020 financial statements. Following the official release of its 2020 annual report, *ST Qiulin had already crossed the threshold triggering delisting, making its termination from the exchange all but certain—only a formal notice from the exchange conofficeing the suspension of trading remained pending. Now, the exchange has decided to terminate the listing of *ST Qiulin shares, marking the end of a 25‑year journey on the Shanghai Stock Exchange since its official debut on March 25, 1996. After more than two decades of ups and downs in the capital markets, this “century‑old” enterprise is poised to bid farewell to the A‑share market.
According to available information, Harbin Qiulin Group Co., Ltd. is a time-honored, well-known enterprise with a long history. Its predecessor, Qiulin Trading Office, was founded in 1900 and was China’s first department store. The company’s signature products—such as rye bread, red sausage, and kvass—have earned nationwide acclaim, and the company was listed on the A-share market in 1996.
After its IPO, Qiulin Group spent eight years trading on the A-share market under the “ST” designation. In 2010, Yihe Gold became the controlling shareholder, and in 2011 the company reported a net profit attributable to shareholders of RMB 234 million—the highest since its listing—marking the year it finally shed the ST label. In 2015, Qiulin Group completed the acquisition of 100% equity in Shenzhen Jinjulai for RMB 1.358 billion, after which the gold and jewelry business became the company’s core line of business. By then, Qiulin was no longer the “Qiulin” that Harbin residents once knew. In 2018, Qiulin Group posted a massive loss of over RMB 4.1 billion in net profit attributable to parent company, and its financial statements received an adverse opinion, citing issues such as inaccurate inventory figures and uncollectible accounts receivable within the gold‑related business units. That year, the group set aside RMB 3.695 billion for bad‑debt losses—equivalent, at the prevailing gold price, to roughly 10 tonnes of gold.
Behind the disappearance of billions in gold assets, both Li Ya and Li Jianxin, the chairman and vice-chairman respectively responsible for the gold‑related business segment, have gone missing. Given that the company’s controlled subsidiaries—Jinjulei, Qiulin Jewelry, and Qiulin Colorful Gems—are severely insolvent and have been out of operation for nearly two years, the board of directors has approved the company’s filing with the court, as a creditor, to initiate bankruptcy liquidation proceedings against these subsidiaries. However, the Shenzhen Public Security Bureau is currently investigating economic crimes allegedly involving these companies, so the company has not yet submitted a petition to the court for bankruptcy liquidation. Meanwhile, the operational standstill at the various entities under the Gold Business Unit continues to weigh on the group, with Qiulin Group reporting a net profit attributable to shareholders of RMB 531 million in 2019, followed by a loss of RMB 582 million in 2020. At present, the company’s core businesses are traditional department stores and food products.
In 2020, the Shanghai Stock Exchange issued a public reprimand to Li Ya, then Chairman of Qiulin Group, and Li Jianxin, then Vice Chairman, and publicly determined that both Li Ya and Li Jianxin were ineligible to serve as directors, supervisors, or senior management personnel of listed companies for a period of ten years. Subsequently, Qiulin Group removed Li Ya and Li Jianxin from all their positions. As of now, Li Ya and Li Jianxin remain out of contact.
Moreover, while the company has consistently disclosed Ping Guijie as its actual controller, he had previously denied this designation. Prior to the incident in which the then-chairman and the then-deputy chairman went missing, the company received no information from either the controlling shareholder or the actual controller indicating any irregularities in their status as such. Subsequently, the company engaged Beijing Dacheng Law Office to conduct an investigation; to date, no conclusive findings have been reached.
The delisting of *ST Qiulin has also affected investors. On May 25, 2019, *ST Qiulin announced that it was under investigation by the China Securities Regulatory Commission for suspected violations of information disclosure laws and regulations; meanwhile, some investors have sought legal assistance. According to its 2020 annual report, *ST Qiulin had more than 30,000 shareholders. Regarding rights‑protection lawsuits filed by investors who suffered losses due to alleged false statements by the listed company, analysts note that even after a company is delisted, shareholders may still bring claims against the company through litigation. A company’s delisting does not absolve its corporate legal person of civil liability for damages. Whether listed or unlisted, a company must bear responsibility for its debts with all of its assets, not merely its net worth.

With performance targets unmet, equity incentives for 1,015 China Unicom employees have been canceled.
According to the latest filings disclosed by China Unicom’s A‑share stock, 1,015 incentive recipients were unable to have their restricted shares fully unlocked due to failing to meet individual performance targets. Consequently, China Unicom will repurchase and cancel a portion of the restricted shares under its first‑phase equity incentive plan at the grant price, involving RMB 77.92 million in repurchase funds and 20,460,075 shares—equivalent to 0.07% of the company’s total share capital prior to this repurchase and cancellation. Concurrent with the revocation of equity incentives for more than a thousand employees, China Unicom has also launched a new round of equity incentive plans, with a maximum funding commitment of RMB 2.5 billion.
China Unicom explained that, as of March 11, 2021, in accordance with the initial grant plan for restricted shares, 1,015 eligible participants were assigned to performance‑based vesting tiers B, C, D, or E. Consequently, the actual number of shares vested for each of these participants was 75%, 50%, 25%, or 0% of their respective target vesting amounts for the current period. The company has repurchased and cancelled a total of 14,819,275 restricted shares held by these participants that did not meet the vesting conditions. In addition, China Unicom stated that 79 participants have been excluded from the incentive program due to resignation or dismissal, while 17 others have been excluded because of retirement. For these participants, the company has repurchased and cancelled 4.421 million and 121,980 restricted shares, respectively, that had been granted but remained subject to vesting restrictions.
Under the previous equity incentive plan of China Unicom, if the vesting conditions are not met in any given year of the vesting period, the corresponding shares shall be repurchased and cancelled by the company at the grant price. If an incentive recipient voluntarily resigns during the term of the employment contract, or if they no longer qualify for the incentive due to reasons such as inability to perform their job duties, negligence, or violations of laws or regulations, any restricted shares that have not yet satisfied the vesting conditions shall be repurchased and cancelled by the company at the grant price.
In March 2018, as a pilot for state-owned enterprise reform, China Unicom granted 802 million restricted shares to 7,849 mid-level managers, core management personnel, and specialized professionals at an exercise price of RMB 3.79 per share. Following a 24-month lock-up period, the shares were unlocked in three tranches over three years, with annual vesting rates of 40%, 30%, and 30%, respectively, subject to performance‑based vesting criteria. As of the end of last year, China Unicom had a total workforce of 242,100 employees.
China Unicom also announced its 2020 results: for the full year, the company reported main business revenue of RMB 275.8 billion, up 4.3% year over year—outpacing the industry average of 3.6%. Net profit attributable to the parent company reached RMB 5.5 billion, a year-on-year increase of 10.8%, marking double-digit growth in profitability. Since the launch of China Unicom’s mixed-ownership reform, its financial performance has improved significantly.
In addition to China Unicom, China Telecom recently announced its latest equity‑incentive plan. According to the plan’s provisions, on March 10, 2021—the “Grant Date”—the Board of Directors approved the grant, as of that date, of stock appreciation rights representing approximately 2.41162 billion shares to a total of 8,239 core key personnel (excluding executive directors, non‑executive directors, independent directors, supervisors, and senior management). The number of the Company’s H shares underlying these rights corresponds to roughly 2.98% of the total issued share capital as of the Grant Date.
In mid-last year, China Mobile also launched several employee incentive programs, including the grant of approximately 306 million stock options to 9,914 managerial executives and core talent. Given its workforce of 460,000, the beneficiaries of this initiative accounted for roughly 2.2% of the total headcount.
“In response to the phenomenon of relatively low compensation and insufficient incentives for senior management, equity‑based incentive plans can better motivate executives, reduce agency costs, and improve corporate governance,” China Mobile stated at the time, adding that the measure was intended to establish a sound medium- to long-term incentive mechanism based on shared benefits and shared risks.
At a critical stage of 5G network deployment, telecom operators have unanimously launched equity‑based incentive programs for their core managerial and technical personnel. Underlying this trend is the issuance, in November 2019, of policies to further enhance equity‑incentive practices at centrally administered state‑owned enterprises listed on the stock market, enabling more such companies to leverage equity‑based incentives to boost the motivation and performance of their key employees.
“In this way, workers and managers become shareholders, gaining not only economic rights but also the rights of shareholders, thereby securing a dual source of income,” said Li Jin, a researcher at the Center for Large‑Enterprise Innovation and Governance at Cheung Kong Graduate School of Business and an expert on state‑owned enterprise policy. He previously told relevant media that when telecom operators implement employee equity‑based incentive plans, they are, in effect, reforming their compensation systems—providing an effective long‑term incentive mechanism for central SOEs to retain core talent and align employees’ interests more closely with the company’s development.
For years, internet companies and private enterprises alike have used various forms of equity‑based incentives to create numerous wealth‑creation success stories, allowing nearly all employees—or at least the core talent—of many offices to share in the fruits of the company’s growth. Receiving equity awards is often the most coveted perk for employees; however, even those who do secure such incentives may still have them revoked if their performance or contributions fall short of expectations.
To retain talent and boost employee motivation, telecom operators have recently implemented equity‑based incentive programs. Even as their appeal to top talent has waned, state‑owned enterprises are seeking to invigorate their workforce and generate greater momentum through a variety of measures. However, compared with the hundreds of thousands of employees typically involved, these “stimulants” may still fall short in scale and impact. Industry insiders believe that operator‑level equity incentives will need to demonstrate even greater sincerity.

FaDaDa has closed its Series D funding round, raising RMB 900 million, with Tencent leading the investment.
On March 11, Fadaida, a leading domestic electronic signature service provider, announced the completion of its Series D funding round, raising RMB 900 million. This round was led by Tencent, with participation from Zhongwei Capital and Grand Capital. Notably, Tencent also served as one of the lead investors in Fadaida’s Series C financing. To date, each of Fadaida’s funding rounds has been followed by follow-on investments and increased stakes from existing shareholders, underscoring the capital market’s sustained confidence in the company’s business growth.
Huang Xiang, founder and CEO of FaDaDa, stated: “FaDaDa focuses on electronic signature applications and end-to-end services for electronic document signing, integrating law with cutting-edge technology to drive product innovation, continuously creating value for our customers and users, and further expanding a broader ecosystem of partnerships to work with allies in scaling the adoption of electronic signatures across various industries.”
With the introduction of the 14th Five-Year Plan in 2020, the development of the digital economy and the advancement of both the digitalization of industries and the industrial application of digital technologies were clearly defined, positioning the digital economy as a new driving force for high-quality domestic economic growth. As one of the foundational enablers of the digital economy, electronic signatures—boasting convenience, security, and regulatory compliance—have entered a golden period of rapid expansion. Just last year, numerous national authorities, including the State Council, the China Banking and Insurance Regulatory Commission, the Ministry of Finance, the Ministry of Public Security, and the Ministry of Human Resources and Social Security, successively issued policy signals, explicitly calling for the vigorous promotion of electronic signature applications across diverse scenarios spanning government services, finance, real estate, human resources, transportation, and other sectors, paving the way for explosive growth in this field.
The COVID‑19 pandemic has undoubtedly boosted market awareness of and willingness to adopt electronic signatures. Take LawData as an example: during the early stages of the outbreak in 2020, the platform’s average daily user registrations were eight times higher than in the same period of previous years, with peaks reaching up to twenty times the usual level. At the same time, LawData responded swiftly to market needs by partnering with Tencent to launch lightweight e‑signature mini‑apps on WeCom and QiDian, enabling businesses to sign contracts conveniently online amid the pandemic. In the real estate sector, LawData integrated its e‑signature solution into developers’ online property‑sales platforms, allowing customers to purchase homes without leaving their homes and helping major developers repeatedly set new sales records during the crisis. In the public‑administration space, LawData supported the market supervision administrations of six provinces, including Hubei, in rapidly deploying e‑signature applications, thereby achieving fully online processing of administrative services. For its outstanding contributions and remarkable performance during the pandemic, LawData was awarded the “Business Application Innovation Award” at the People’s Battle Against the Epidemic Content Technology Competition, organized under the guidance of People’s Daily Online.
According to IDC’s “China Electronic Signing Software Market Forecast Report, 2020–2024,” driven by rising market awareness, supportive government policies, and growing demand for cloud services in China following the pandemic, the Chinese electronic signing (electronic signature) software market is experiencing rapid growth.
Faced with surging market demand, FaDaDa remains steadfastly customer‑centric and continues to ramp up investment in product R&D. Since its inception, the company has relentlessly refined its electronic signature products and service experience, offering flexible, versatile solutions: from a convenient, all‑in‑one SaaS platform to open APIs tailored for enterprise IT and business systems, as well as hybrid cloud offerings that enable localized contract storage and more robust enterprise workflow management. The team’s commitment to legal tech innovation never wavers: it was among the first to launch blockchain‑based electronic contracts, bolstering security and trust; developed an advanced intelligent contract management system to comprehensively enhance corporate legal efficiency; and pioneered integrations with online arbitration bodies, internet courts, notary offices, and forensic appraisal centers, delivering end‑to‑end legal tech solutions for online dispute resolution—including real‑time evidence preservation and swift adjudication of disputes. Today, FaDaDa’s electronic contracts have been recognized in actual court rulings across nearly 130 courts nationwide, making it the electronic signature provider with the largest number of verifiable judicial precedents in the industry.
In 2019, FaDaDa acquired Shandong Yunhai Security Certification Service Co., Ltd. (Yunhai CA) in its entirety, becoming the only internet-based electronic signature company in the industry to wholly own a CA license. This move further strengthened the security and underlying capabilities of its signature services while enhancing service continuity.
Currently, more than 3,000 renowned domestic and international enterprises and institutions—including Tencent, Microsoft (China), SAP, Ctrip, Meituan, iQIYI, China Resources Land, Jianfa Group, Haier, Foxconn, XCMG Group, BOE, Shanying International, China Southern Airlines, NIO, Times China, Decathlon, Chow Tai Fook, Muyuan Group, Qilu Pharmaceutical, Jinan Energy Group, Taikang BiBo, and South China Normal University—have chosen to use FaDaDa to achieve digital transformation across their business operations and compliance processes. According to IDC’s first-ever report on China’s electronic signature market, “China Electronic Signature Software Market Share Report, 2019,” FaDaDa secured the top position in China’s electronic signature market in 2019 with a 26.6% market share.
Adhering to an open‑and‑collaborative approach, FaDaDa is among the earliest electronic signature providers in China to build a robust ecosystem. In addition to Tencent, FaDaDa has established system‑level ecosystem partnerships with major domestic and international enterprise service platforms, including Microsoft (China), SAP, Kingdee, Glodon, Mingyuan Cloud, Chiyuan Interconnect, Youzan, and others, thereby enhancing its product integration capabilities. Taking its collaboration with Mingyuan Cloud, a digital service provider for the real estate ecosystem, as an example, the two parties have jointly launched 3,200 real estate projects, with the cumulative use of electronic signatures exceeding one million.
According to reports, the domestic electronic signature sector has garnered significant attention in recent years. On the one hand, domestic market demand has risen markedly; on the other, U.S.-based e‑signature giant DocuSign has enjoyed robust growth since its 2018 IPO, with a current market capitalization exceeding $35 billion, further boosting interest in the Chinese market. This round of substantial financing by FaDaDa underscores the emerging landscape in which the leading players have largely solidified their positions, and FaDaDa’s competitive edge is poised to continue delivering strong results.

Taxation TAXATATION
The State Taxation Administration plans to issue the first batch of a nationwide, unified list of tax-related matters subject to “no penalty for first-time violations.”
Recently, the State Taxation Administration launched the 2021 “Doing Practical Things for Taxpayers and Payers and Spring Breeze Action for Convenient Tax Services,” introducing 10 categories of 30 specific measures totaling 100 concrete actions. These measures are designed to address taxpayers’ and payers’ concerns, further expand “non-contact” tax filing and payment services, optimize tax enforcement practices, and roll out a nationwide unified list of tax-related matters subject to “no penalty for first-time violations.” This marks the eighth consecutive year that the State Taxation Administration has carried out this initiative.
I. Launching 100 measures to benefit the public and address taxpayers’ and payers’ concerns.
Ren Rongfa, Deputy Director of the State Taxation Administration, stated that this year’s “Spring Breeze Action” measures are all closely aligned with the implementation of the decisions and arrangements of the CPC Central Committee and the State Council, adopting the perspective of taxpayers and payers to address their challenges. Starting from the areas of greatest concern and need for taxpayers and payers, the initiative has introduced three sets of nine measures—soliciting public opinion, ensuring rapid responses, and enhancing evaluation—such as establishing a taxpayer‑experience‑tester mechanism for releasing tax and fee service products. Focusing on the preferential policies most valued by taxpayers and payers, it has rolled out three sets of eight measures—streamlining procedures, ensuring effective implementation, and strengthening analysis. Moreover, emphasizing the most tangible aspects of the tax‑filing experience, it has launched six sets of 25 measures—improving invoice management, simplifying reporting, reducing documentation requirements, expanding online services, expediting tax refunds, and streamlining deregistration—such as promoting the notification‑and‑commitment system for tax‑related certifications. In addition, special campaigns like the “Spring Rain Nurtures Seedlings” program for small and micro enterprises have been launched, addressing taxpayers’ and payers’ “personalized” needs through five sets of 25 measures—assisting vulnerable groups, optimizing individual income tax final settlement, supporting the development of small and micro businesses, serving large enterprises, and fostering balanced regional development.
In the area of law enforcement, starting with the implementation of flexible enforcement by tax authorities, three sets of six measures have been introduced—namely, “no penalty for first-time violations,” the promotion of flexible enforcement, and strengthened protection of rights and interests. To ensure strict adherence to standardized enforcement procedures, two sets of six measures have been rolled out, including the unification of enforcement standards and the application of proportionate enforcement practices, such as expanding the scope of “double-random, one-public” regulatory inspections. Furthermore, to facilitate the coordinated sharing of enforcement‑related information and broaden the range of data exempt from manual entry, one set of four measures has been implemented to enhance information‑sharing.
In terms of cross-departmental collaboration, one initiative—“collaborative governance”—has been innovatively introduced, comprising five specific measures, such as promoting the “one‑stop joint processing” of social security contribution services. Meanwhile, to foster mutual benefit and win‑win outcomes and to advance both domestic and international dual circulation, four sets of measures—totaling eight initiatives—have been formulated, covering areas such as refining guidelines, facilitating exchanges, alleviating burdens, and streamlining procedures.
Focusing on fostering tax compliance through incentives for good faith and sanctions for non‑compliance, two sets of four measures have been introduced—optimizing mechanisms and deepening applications. For example, the tax credit repair mechanism has been further implemented.
II. Deeply promote the “no penalty for first-time violations” system and standardize tax administrative enforcement practices.
According to Rao Lixin, Chief Auditor of the State Taxation Administration, the Administration has studied and decided to further extend the “no penalty for first-time violations” system across the national tax system. It plans to issue, by the end of March, a first batch of nationwide, standardized lists of tax-related matters covered by this policy—covering areas such as tax registration, submission of documentation, tax returns, and invoice issuance. Under this framework, if a taxpayer commits for the first time any of the offenses listed in these catalogs, with circumstances deemed minor, and either voluntarily rectifies the issue before it is detected by the tax authorities or complies within the deadline set by the authorities, no administrative penalty will be imposed in accordance with the law.
Innovate administrative law enforcement methods by effectively employing non‑coercive approaches such as persuasion and education, as well as advisory reminders, ensuring that enforcement is both office and empathetic. Promote online processing of simplified penalties, providing taxpayers and payers with convenient access through digital channels for cases where the facts are clear and there is no dispute.
Establish a mechanism for reviewing the rights and interests implications of tax‑related normative documents, conducting such reviews prior to their official promulgation; implement the State Council’s “two prohibitions” regarding the collection of social security contributions; and strengthen analysis, monitoring, and oversight of the implementation of tax and fee preferential policies and measures, as well as address issues of unauthorized levying of excessive taxes and fees.
Promote the establishment of a unified discretionary standard for tax administrative penalties within the region. In June last year, the tax authorities of the three provinces and two municipalities in the Yangtze River Delta harmonized discretionary standards for administrative penalties related to 19 types of tax violations involving tax returns and invoices. This year, the State Taxation Administration will, in conjunction with the coordinated development of the Beijing–Tianjin–Hebei region and the construction of the Chengdu–Chongqing Twin-City Economic Circle, further explore and advance the implementation of a unified regional discretionary standard for tax administrative penalties.
III. Expanding Contactless Tax Filing and Payment: Smart Services, Convenient Handling, and an Enhanced User Experience
Since the outbreak of the pandemic, tax authorities have actively promoted “non-contact” tax filing and payment services, promptly issuing a list of 185 such services, which has been widely welcomed by taxpayers and payers.
This year, the tax authorities have continued to expand the scope of “non-contact” tax filing and payment services, adding 29 new items on top of the existing offerings. The total now stands at 214, covering more than 90% of taxpayer‑related tax administration matters, with 203 of these available entirely online. In a third‑party survey of taxpayer and payer satisfaction, non‑contact tax services achieved a satisfaction rate of 97.3%. According to the latest data from the State Taxation Administration, as of the end of January 2021, the number of corporate users of the national electronic tax bureau had risen to 65.26 million, accounting for 92.62% of all taxpayers. Meanwhile, the national online filing rate has remained consistently above 99%, making the electronic tax bureau the primary channel for routine tax filing and payment, while foot traffic at physical tax service halls has declined significantly.
Integrate taxpayer service hotlines. In accordance with the State Council’s directives, local 12366 taxpayer service hotlines will be consolidated into the respective 12345 hotline as sub-centers, retaining the original numbers and call‑center staff to provide “7×24-hour” intelligent advisory services; expand online channels for tax filing and payment. By the end of July this year, we aim to enable virtually all enterprise‑related fee‑related matters to be handled online, and by year‑end, to make most enterprise tax and fee matters available online while allowing individuals to manage their tax and fee obligations via mobile devices; introduce online assistance for tax administration. Implement remote support and a combination of inquiry and processing to address issues—such as information system malfunctions or operational challenges—that taxpayers and payers encounter during transaction procedures; promote diversified tax and fee payment methods, including third‑party payments. Facilitate convenient tax and fee payments through mobile platforms, launch pilot programs for online “one‑stop” processing of social security administration and payment services, and enhance the overall user experience; streamline tax and fee‑related procedures. Fully implement combined filing for property‑related taxes, further reducing the average processing time for normal export tax refunds nationwide by more than 10%; shorten the standard processing timeframe for VAT general taxpayers’ tax deregistration to 10 working days, and reduce the standard processing timeframe for VAT small‑scale taxpayers and other taxpayers’ tax deregistration to 5 working days; enable instant deregistration of corporate branch offices and allow pre‑deregistration “zero‑declaration” batch processing for accounts in abnormal status, thereby further improving the tax and fee‑related experience of taxpayers and payers.

Tax incentives for scientific and technological innovation continue to deliver benefits, with tax reductions supporting such innovation totaling RMB 2.54 trillion over the past five years.
On the 11th, the State Taxation Administration disclosed that during the 13th Five-Year Plan period, China’s tax policies to encourage scientific and technological innovation resulted in cumulative tax reductions totaling RMB 2.54 trillion. During the Two Sessions, numerous favorable policies were directly aimed at fostering scientific and technological innovation. For example, in 2021, central government spending on basic research increased by 10.6%; plans for advancing the “Science and Technology Innovation 2030—Major Projects” were further refined; and leading enterprises were encouraged to establish innovation consortia, among other measures.
Among these measures, tax‑support policies—being universally applicable—have drawn the greatest attention from market entities and the public. The Government Work Report explicitly states that the policy of allowing a 75% additional deduction for enterprise R&D expenses will be extended, with the additional deduction rate for manufacturing offices raised to 100%. This means that, assuming an enterprise’s R&D expenditures amount to RMB 1 million, under the previous policy it could be deducted at RMB 1.75 million before tax; now, it can be deducted at RMB 2 million. Such a level of support is unprecedented.
Zhao Lianwei, Deputy Director-General of the Revenue Planning and Accounting Department of the State Taxation Administration, stated: “The additional deduction for R&D expenses allows enterprises to deduct, when calculating their taxable income, a certain percentage on top of the actual amount incurred. This policy aims to encourage companies to increase their R&D investment by offering favorable tax incentives, thereby bolstering their innovation drive and vitality. It also helps strengthen enterprises’ role as the main actors in innovation and promotes the concentration of various innovation factors within the corporate sector.”
Tax incentive policies have been steadily “drip‑irrigating” technological innovation, yielding sustained results. According to data released by the State Taxation Administration on the 11th, during the 13th Five-Year Plan period, China’s tax measures to encourage scientific and technological innovation cumulatively reduced taxes by 2.54 trillion yuan. Which sectors have benefited most? Manufacturing and high‑tech services rank at the top. The data show that these three major sectors—manufacturing, information transmission and information technology services, and scientific research and technical services—account for nearly 90 percent of the total tax reductions; in particular, the integrated circuit and software industries have seen tax relief exceeding 100 billion yuan since 2019.
The intensity of the additional tax deduction for R&D expenses has continued to increase, effectively boosting corporate R&D investment and innovation vitality. A telling figure is that national spending on research and experimental development (R&D) rose from 1.42 trillion yuan in 2015 to 2.44 trillion yuan in 2020, posting double-digit annual growth on average. China has now become the world’s second-largest investor in R&D.

Tax incentives are helping the Western Development Initiative advance to a deeper level.
Effective March 1, with the approval of the State Council, the National Development and Reform Commission has officially promulgated the “Catalogue of Encouraged Industries in the Western Region (2020 Edition)” (hereinafter referred to as the “Catalogue”). The Catalogue defines the scope of industries eligible for the corporate income tax preferential policies under the Western Development Strategy and serves as a key criterion for determining whether an enterprise can benefit from these measures. Enterprises located in the western region whose principal business activities fall within the industries listed in the Catalogue are entitled to a reduced corporate income tax rate of 15%.
According to reports, the new edition of the Catalog represents the first revision since 2014. Compared with the 2014 version, the number of encouraged‑industry entries for the 12 provinces, autonomous regions, and municipalities has increased from 377 in 2014 to 535 in 2020, with each jurisdiction seeing a rise in its list of encouraged industries. Notably, Tibet has seen the largest increase, expanding from 13 to 41 entries.
Notably, more than 70% of the newly added items fall under the manufacturing sector and are concentrated in areas such as innovation, green development, openness, and coordination. Chongqing, Sichuan, Shaanxi, and other regions have introduced entries related to 5G, the Internet of Things, artificial intelligence, blockchain, and similar technologies. Meanwhile, Guizhou, Yunnan, and other localities have emphasized restructuring and optimizing traditional energy‑resource industries such as aluminum, coal, and nonferrous metals. In addition, Guangxi, Yunnan, and other areas have expanded their industrial portfolios to include cross‑border trade and international logistics, while Shaanxi, Sichuan, and other regions have added entries for automobile and auto‑parts manufacturing.
“This both reflects the industrial development orientation of the western region and takes into account the diverse characteristics of its various sub‑regions,” said Li Ping, deputy director of the Tax Science Research Institute of the State Taxation Administration, in an interview. He noted that the revised catalog embodies the requirements of “high‑quality development,” integrating scientific rigor, advanced sophistication, and distinctive features, while aligning with the developmental stages of the western region, emphasizing industrial tiering and charting the course for a new phase of large‑scale development in the west.
The Catalogue of Industries Encouraged in the Western Region serves as a comprehensive investment guide and an industry benchmark for the region, and it also constitutes a key criterion for determining whether enterprises located in the western region are eligible for preferential tax rates.
At this new starting point, the industrial catalog serving as a key leverage point has been adjusted to ensure that tax incentives for the Western Development Initiative are more targeted and effective, thereby better supporting the overall national strategy. In terms of industries, the list of encouraged sectors has been expanded and refined; on the corporate side, the threshold for eligibility—where a company’s core business accounts for at least 70% of its total operations—has been lowered to 60%, signaling a relaxation of the criteria for accessing preferential treatment.
As one of the policy instruments for the Western Development Strategy, tax incentives have provided the western region with a steady and sustained impetus for growth over the years. According to the State Taxation Administration, a corporate income tax rate of 15% has been applied to eligible enterprises in the western region since 2002. Between 2001 and 2010, new enterprises in sectors such as transportation and power in the western region benefited from preferential policies, including a “two-year exemption followed by a three-year half-rate” regime. Public data show that from 2011 to 2018, approximately 250,000 enterprise instances in the western region took advantage of corporate income tax concessions under the Western Development Program, resulting in cumulative tax reductions and exemptions totaling roughly RMB 502.5 billion.
The state has consistently maintained tax‑reduction policies to encourage industrial development in the western region. The preferential corporate income tax rate of 15% is highly attractive for industrial clustering, helping to bolster the competitiveness of encouraged industries in the west and fostering new drivers of regional economic growth. As we embark on a new stage of development, tax incentives will continue to support high‑quality growth in the western region. The latest round of the Western Development Strategy can further diversify these incentives—for example, by offering individual income tax breaks to high‑caliber and scarce talent who take root in the west—thereby creating a comprehensive policy package that propels the Western Development Initiative to deeper levels of progress.

Announcement of the Tianjin Municipal Tax Service of the State Taxation Administration on Matters Relating to the Collection and Administration of Individual Income Tax
Notice No. 1 of 2021 of the Tianjin Municipal Tax Service, State Taxation Administration
In accordance with the Individual Income Tax Law of the People’s Republic of China and its Implementing Regulations, the Tax Collection and Administration Law of the People’s Republic of China and its Detailed Rules for Implementation, as well as other relevant tax laws and regulations, the following matters concerning the administration of individual income tax collection in Tianjin are hereby announced:
I. Matters Concerning the Temporary Advance Withholding of Individual Income Tax on Invoices Issued to Natural Persons
(1) For individual taxpayers who temporarily engage in production or business activities within the city and obtain VAT invoices on their behalf, a provisional personal income tax shall be levied at a rate of 1.5% of the invoice amount (excluding VAT).
(2) At year‑end, when taxpayers file their annual individual income tax settlement and final tax payment in accordance with the “Announcement of the State Taxation Administration on Relevant Issues Concerning Self‑Declaration of Individual Income Tax” (No. 62, 2018), the individual income tax withheld in advance pursuant to paragraph (1) of Article 1 of this Announcement may be deducted during the settlement and final tax payment process.
(3) Where invoices are issued on behalf of individuals for their comprehensive income—such as labor compensation, manuscript fees, and royalty income—no individual income tax shall be levied at the invoice‑issuing stage. The individual income tax shall be withheld and remitted in advance (or withheld and paid on behalf of the taxpayer) by the withholding agent in accordance with the “Administrative Measures for Withholding and Filing of Individual Income Tax (Trial)” (Announcement No. 61 of 2018 issued by the State Taxation Administration), and a full‑amount, all‑employee withholding and filing shall be completed. When issuing the invoice, the entity acting as the invoice issuer shall uniformly indicate in the invoice remarks section: “Individual income tax has been withheld and remitted in advance (or withheld and paid on behalf of the taxpayer) by the payer in accordance with the law.”
(4) For natural persons engaging in the sale or rental of real estate and acting as agents for invoice issuance, the original policy shall continue to apply.
II. Matters Concerning the Administration of Individual Income Tax for Personnel Engaged in Construction and Installation Projects Undertaken Across Provinces and in Other Localities
With respect to the wages and salaries earned by management, technical, and other personnel dispatched by general contractors and subcontractors engaged in construction and installation projects across provincial boundaries to work on out-of-province projects, as well as the wages and salaries of engineering personnel employed by construction units operating in other provinces, the personal income tax shall be withheld and remitted by the general contractor, subcontractor, labor dispatch agency, or construction unit, and a detailed, full‑amount, individual‑by‑individual declaration shall be filed with the competent tax authority at the location where the project is carried out.
This announcement shall take effect as of April 1, 2021. The “Notice of the Tianjin Municipal Local Taxation Bureau on Strengthening the Administration of Individual Income Tax Collection for Construction and Installation Enterprises from Outside Tianjin” (No. 4 of 2012, as amended by Announcement No. 1 of 2018 of the Tianjin Municipal Tax Service of the State Taxation Administration) is hereby repealed simultaneously.
This is hereby announced.
Tianjin Municipal Tax Service, State Taxation Administration
March 1, 2021
Litigation & Arbitration
Supreme People’s Court, Supreme People’s Procuratorate, Ministry of Public Security, Ministry of Justice
Opinions on Further Strengthening Efforts to Punish the Crime of Fictitious Litigation
Fa Fa [2021] No. 10
Chapter 1 General Provisions
Article 1: In order to further strengthen efforts to punish the crime of false litigation, safeguard judicial fairness and authority, protect the legitimate rights and interests of natural persons, legal persons, and non‑legal person organizations, and promote the building of social integrity, these Opinions are formulated in accordance with the Criminal Law of the People’s Republic of China, the Criminal Procedure Law of the People’s Republic of China, the Civil Procedure Law of the People’s Republic of China, the Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases of False Litigation, and other relevant provisions, taking into account actual working conditions.
Article 2. For the purposes of these Opinions, “false litigation crime” refers to conduct in which an individual, either alone or in malicious collusion with others, employs means such as fabricating evidence or making false statements to concoct the basic facts of a civil case and fabricate a civil dispute, thereby filing a civil action with the people’s court, thus disrupting the judicial order or seriously infringing upon the legitimate rights and interests of others, and which, in accordance with the law, shall be subject to criminal punishment.
Article 3. The people’s courts, the people’s procuratorates, the public security organs, and the judicial administrative organs shall, in accordance with their respective statutory duties, assume responsibility, cooperate closely, and strengthen communication and coordination. When, in the course of performing their duties, they discover circumstances that may constitute the crime of false litigation, they shall promptly notify one another of the relevant facts and jointly prevent and punish such crimes.
Chapter 2: Identification and Detection of the Crime of Fictitious Litigation
Article 4: Where the conduct of fabricating facts as stipulated in Paragraphs 1 and 2 of Article 1 of the Interpretation by the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases of False Litigation is committed, and any of the following circumstances exists, such conduct shall be deemed to constitute “filing a civil action based on fabricated facts” as prescribed in Paragraph 1 of Article 307‑1 of the Criminal Law:
(1) Where a civil action has been filed;
(2) Applications to the People’s Court for a declaration of missing person or death, for recognition of a citizen’s incapacity or limited capacity for civil conduct, for determination that property has no owner, for conofficeation of a mediation agreement, for enforcement of security interests in property, for a payment order, and for public notice and summons proceedings;
(3) During civil proceedings, where an independent claim is added, a counterclaim is filed, or a third party with an independent right of claim submits a claim related to the present case;
(4) Those who file claims during the course of bankruptcy proceedings;
(5) Where a third party applies for a civil retrial;
(6) Applying to the People’s Court for enforcement of an arbitration award or a notarized debt instrument;
(7) Where a third party raises an objection to the subject matter of enforcement during civil enforcement proceedings, or where a creditor applies to participate in the distribution of the enforced property during such proceedings;
(8) Fabricating the basic facts of a civil case and concocting a civil dispute by other means, and then filing a civil action.
Article 5: With respect to the following types of civil cases that are prone to false litigation, the people’s courts and the people’s procuratorates shall give them particular attention in the course of performing their duties:
(1) Cases involving disputes over private lending;
(2) Cases involving debt-for-property settlements that are subject to housing purchase restrictions or vehicle allocation quota controls;
(3) Property dispute cases in which one of the parties to a divorce action is the defendant;
(4) Property dispute cases in which the defendant is a natural person, legal person, or unincorporated organization that has already become insolvent or has been designated as the party subject to enforcement;
(5) Divorce, property division upon family separation, inheritance, and housing sales contract disputes in which the natural persons involved are residents within the demolition‑relocation area;
(6) Cases involving corporate division, merger, and enterprise bankruptcy disputes;
(7) Labor dispute cases;
(8) Cases involving the determination of well-known trademarks;
(9) Other civil cases requiring particular attention.
Article 6: Where any party to a civil litigation falls under any of the following circumstances, the people’s courts and the people’s procuratorates shall, in the course of performing their duties, conduct strict review in accordance with the law and promptly identify and detect the crime of false litigation:
(1) The facts and grounds upon which the plaintiff bases the lawsuit are implausible, and there is a possibility of evidence fabrication or false statements.
(2) Where the amount in controversy sought by the plaintiff for judicial protection is grossly disproportionate to the plaintiff’s own financial circumstances;
(3) In cases that may affect the interests of third parties, where the parties involved have close familial ties or share common interests, such as through affiliated enterprises;
(4) Where there is no substantial dispute over civil rights and interests, nor any substantive adversarial litigation between the parties;
(5) Where one party explicitly acknowledges a fact alleged by the other party that is adverse to it, and such acknowledgment is inconsistent with common sense;
(6) Where the evidence is insufficient to establish the facts of the case, but both parties voluntarily and promptly reach a mediation agreement and request the people’s court to issue a mediation statement;
(7) Where the parties voluntarily satisfy a debt by way of property whose value is manifestly disproportionate to the amount of the debt;
(8) Other unusual circumstances exist during the course of civil litigation.
Article 7: Where civil litigation agents, witnesses, expert witnesses, or other participants in litigation fall under any of the following circumstances, the people’s courts and the people’s procuratorates shall, in the course of performing their duties, conduct strict review in accordance with the law and promptly identify and detect the crime of false litigation:
(1) Where a litigation agent unlawfully accepts property or other benefits from the opposing party or a third party, and colludes maliciously with such party or third party to infringe upon the lawful rights and interests of the client;
(2) Intentionally submitting false evidence, or instructing or inducing others to fabricate or alter evidence, submit false evidence, or conceal or destroy evidence;
(3) Engaging in other improper means to interfere with the normal conduct of civil litigation proceedings.
Chapter 3: Referral of Leads and Investigation and Handling of Cases
Article 8 The sources of leads regarding the crime of false litigation discovered by the people’s courts, the people’s procuratorates, and the public security organs include:
(1) Reports, complaints, denunciations, and applications for legal supervision submitted by parties to civil proceedings, litigation agents, other participants in the proceedings, interested parties, and other natural persons, legal persons, and non‑legal‑person organizations;
(2) Where the victim has evidence demonstrating that the defendant’s conduct of filing a false lawsuit has infringed upon the victim’s lawful rights and interests, such conduct should be subject to criminal liability in accordance with the law; moreover, where the victim can also provide evidence of having previously filed a complaint, but the public security organ or the people’s procuratorate has declined to pursue the defendant’s criminal liability, the victim may bring a private criminal prosecution before the people’s court.
(3) Actively discovered by the people’s courts, people’s procuratorates, public security organs, and judicial administrative organs in the course of performing their duties;
(4) Case leads referred by relevant state organs;
(5) Other sources of leads.
Article 9: Criminal cases involving fraudulent litigation shall fall under the jurisdiction of the people’s court at the place where the relevant civil case involving fraudulent litigation was filed or at the place where the civil case is being enforced. Where circumstances as set forth in paragraph 4 of Article 307‑1 of the Criminal Law apply, the higher-level people’s court may designate a lower-level people’s court to transfer the case to another people’s court for trial.
The court that has accepted the relevant false civil litigation case referred to in the preceding paragraph includes the courts of first instance, second instance, and retrial for that civil case.
The jurisdictional level for criminal cases involving fraudulent litigation is determined in accordance with the provisions of the Criminal Procedure Law.
Article 10. When the people’s courts or the people’s procuratorates transfer to the public security organs cases suspected of the crime of false litigation, they shall attach the following materials:
(1) The Case Transfer Letter shall specify the name of the people’s court or people’s procuratorate transferring the case, the names of the parties to the civil case and the cause of action, the stage of the civil proceedings, the case-handling officer, and the contact telephone number. The Case Transfer Letter shall be accompanied by a list of transferred materials and an acknowledgment receipt; after being approved by the head of the people’s court or people’s procuratorate, it shall bear the official seal of that court or procuratorate.
(2) A statement detailing the referral of leads, setting forth the source of the case, the parties’ information, the facts alleged to constitute the crime of false litigation, the legal basis, and other relevant matters, together with supporting evidence.
(3) Litigation materials pertaining to civil cases, including the complaint, answer, court transcripts, investigation records, and interview transcripts, among others.
People’s Courts and People’s Procuratorates shall designate specialized functional departments to handle the referral of cases involving suspected false litigation crimes.
When a people’s court refers a case suspected of the crime of false litigation to the public security organ, it shall simultaneously notify the people’s procuratorate at the same level of the relevant circumstances.
Article 11. When the people’s courts or the people’s procuratorates determine that the conduct of parties to civil litigation and other participants in the proceedings is suspected of constituting the crime of false litigation, such determination shall, in addition to the statements and testimonies of the parties, other participants, or third parties, generally be corroborated by material evidence, documentary evidence, or the testimony of other witnesses.
Article 12: When the people’s courts or the people’s procuratorates transfer materials pertaining to cases suspected of the crime of false litigation to the public security organs, the receiving public security organ shall issue a receipt for the acceptance of the case or sign the receipt attached to the case‑transfer letter.
Upon receipt of the relevant materials, the public security organs shall take the following measures:
(1) If the case materials submitted are deemed incomplete, the receiving court or procuratorate shall, within three days of receipt of such materials, notify the transferring people’s court or people’s procuratorate to rectify and supplement them within three days. It shall not refuse to accept the transferred case on the ground that the materials are incomplete.
(2) If it is determined that a criminal fact exists and criminal liability should be pursued, a decision on whether to institute a case shall be made within thirty days from the date of receipt of the relevant materials, and the people’s court or people’s procuratorate that transferred the case shall be notified.
(3) If it is determined that a criminal fact exists but the case does not fall within this organ’s jurisdiction, it shall, upon immediate approval by the head of a public security organ at or above the county level, be transferred to the competent authority for handling within twenty-four hours, and the people’s court or people’s procuratorate to which it is being transferred shall be notified. Where urgent measures must be taken, such measures shall be implemented first, followed by the completion of formalities and the transfer to the competent authority.
(4) Where it is determined that no criminal facts exist, or where the circumstances of the crime are clearly minor and do not warrant criminal prosecution, or where other circumstances exist under the law that preclude criminal liability, the case shall, upon approval by the head of a public security organ at or above the county level, be refused acceptance for investigation. The reasons therefor shall be stated, a Notice of Non-Acceptance of Case shall be prepared and served within three days on the people’s court or the people’s procuratorate that referred the case, and the relevant materials shall be returned.
Article 13. The People’s Procuratorate shall, in accordance with the law, exercise oversight over the criminal case filing by public security organs.
If the people’s court disagrees with the public security organ’s decision not to file a case, it may recommend that the people’s procuratorate exercise oversight over the filing of the case.
Chapter 4: Procedural Coordination
Article 14. When a people’s court refers to the public security organs a case suspected of constituting the crime of false litigation, and the civil case must be based on the outcome of the related criminal proceedings, the court shall, in accordance with Article 150, Paragraph 1, Item 5 of the Civil Procedure Law, issue an order to suspend the civil proceedings. If the outcome of the criminal proceedings does not affect the normal conduct of the civil proceedings, the civil case shall continue to be heard.
Article 15: Where a criminal judgment finds that the conduct of a party in a civil action constitutes the crime of false litigation, and the relevant civil case is still under trial or in the course of enforcement, the people’s court that rendered the criminal judgment shall promptly notify in writing the people’s court handling the civil case.
People’s courts shall, where there is a conflict between civil judgments, rulings, or mediation agreements that have already taken legal effect and the criminal judgment in a case involving false litigation, promptly initiate, in accordance with the law, the trial supervision procedure to rectify such conflicts.
Article 16: Where a public security organ, in accordance with the law, independently initiates a criminal case and conducts an investigation into false litigation, it shall, within three days of filing the case, forward copies of the decision to institute proceedings and other relevant legal documents and materials to the people’s court that is currently hearing, enforcing, or has rendered a final judgment in the related civil case, together with an explanation of the reasons for filing. At the same time, it shall notify the people’s procuratorate at the same level as the people’s court handling the civil case. The people’s court that is currently hearing, enforcing, or has rendered a final judgment in the related civil case shall, in accordance with the law, review the matter, take appropriate measures pursuant to the relevant provisions, and, within thirty days from the date of receipt of the materials, submit its written opinion on the disposition to the public security organ.
During the handling of criminal cases, if public security organs discover that a suspect is also suspected of committing the crime of filing a false lawsuit, they may handle both matters jointly. Where arrest of the suspect is required, the public security organ investigating the case shall submit a request to the people’s procuratorate at the same level for review and approval; where public prosecution is to be instituted, the investigating public security organ shall transfer the case to the people’s procuratorate at the same level for review and decision.
Article 17 Where a competent public security organ receives a report, accusation, or tip-off from parties to civil litigation, their legal representatives, other participants in the proceedings, interested parties, or other natural persons, legal persons, or non‑legal person organizations, or where, in the course of performing its duties, it discovers evidence suggesting the commission of the crime of false litigation, it may conduct an investigation and verification. With the approval of the head of a public security organ at or above the county level, the public security organ may, in accordance with relevant provisions, make copies of electronic case files or inspect, duplicate, or excerpt civil litigation case files held by the people’s courts, and the people’s courts shall cooperate.
During the handling of criminal cases, if the public security organs discover that a suspect is also suspected of committing the crime of filing a false lawsuit, the provisions of the preceding paragraph shall apply.
Article 18: If the People’s Procuratorate discovers that a judgment, ruling, or mediation statement that has already attained legal effect was obtained by the parties to a civil lawsuit through fraudulent litigation, it shall, in accordance with Article 208, Paragraphs 1 and 2 of the Civil Procedure Law and other relevant laws and judicial interpretations, submit a prosecutorial recommendation for retrial or file a protest to the People’s Court.
Article 19. With respect to civil cases in which the People’s Procuratorate has submitted a recommendation for retrial or filed a protest pursuant to Article 18 of these Opinions, the People’s Courts shall handle such cases in accordance with the provisions of the Civil Procedure Law and other relevant laws and judicial interpretations. Where a retrial is ordered under the trial supervision procedure and execution is required to be suspended, the court shall issue an order suspending the execution of the original judgment, ruling, or mediation agreement.
Article 20: During the handling of civil litigation supervision cases, if the People’s Procuratorate discovers evidence suggesting the commission of a crime of false litigation, it may investigate and verify relevant circumstances with the parties to the civil litigation or third parties. If any relevant entity or individual, without justifiable reason, refuses to cooperate with such investigation and verification or obstructs civil litigation, the People’s Procuratorate may recommend that the competent people’s court impose sanctions in accordance with Article 111, Paragraph 1, Item 5, and other relevant provisions of the Civil Procedure Law.
When the People’s Procuratorate, in civil litigation supervision cases involving suspected false litigation, reviews the civil litigation case files of the People’s Court in accordance with relevant provisions, the People’s Court shall cooperate. If the needs of the case can be met through methods such as copying electronic files, reviewing, duplicating, or excerpting, the court may refrain from retrieving the physical case files.
If the People’s Procuratorate finds that a civil litigation supervision case involves suspected false litigation, it may solicit the opinions of the original adjudicating personnel of the People’s Court.
Article 21: In civil cases where there are grounds to suspect the existence of a fraudulent litigation, the people’s court may, on its own initiative, conduct investigations and collect evidence.
If the facts admitted by the parties are inconsistent with the facts ascertained through official investigation by the people’s courts or the people’s procuratorates and subsequently conofficeed upon trial, the people’s court shall not recognize such facts.
Chapter 5 Accountability
Article 22: With respect to civil litigants and other participants in litigation who intentionally fabricate or engage in fraudulent litigation, the people’s courts shall intensify the application of coercive measures, such as fines and detention, for acts that obstruct civil proceedings.
Before referring the relevant case materials to the public security organs, the people’s courts may, in accordance with the provisions of the Civil Procedure Law, impose fines or detention on parties to civil proceedings and other participants in the litigation who engage in fraudulent litigation.
Where a defendant in a criminal case involving a false lawsuit has been sentenced to a fine, fixed-term imprisonment, or criminal detention, any fines or administrative detention already imposed by the people’s court in accordance with the provisions of the Civil Procedure Law shall, in accordance with law, be offset against the corresponding fine or term of imprisonment.
Article 23 The People’s Procuratorate may recommend that the People’s Court, in accordance with the provisions of the Civil Procedure Law, impose compulsory measures such as fines or detention on civil litigants and other participants in litigation who intentionally fabricate or take part in false litigation.
Article 24: Judicial personnel who, by abusing their official authority, engage in fraudulent litigation shall be dealt with strictly in accordance with laws and regulations; if their conduct constitutes a crime, they shall be held criminally liable in accordance with the law and subject to stringent penalties.
Article 25: Judicial administrative organs and relevant industry associations shall strengthen the education and management of lawyers, grassroots legal service workers, forensic experts, notaries, and arbitrators. If any of the aforementioned persons is found to have engaged in fraudulent litigation by abusing their official positions, they shall be subject to administrative penalties or disciplinary measures in accordance with applicable regulations; if their conduct constitutes a crime, it shall be referred to the judicial authorities for prosecution in accordance with the law. Lawyers, grassroots legal service workers, forensic experts, notaries, and arbitrators who engage in fraudulent litigation by abusing their official positions shall be held strictly accountable under the law in accordance with relevant provisions.
During the course of handling cases, the people’s courts, people’s procuratorates, and public security organs, upon discovering that lawyers, grassroots legal service workers, forensic experts, notaries, or arbitrators have, by virtue of their official positions, engaged in fraudulent litigation—where such conduct does not yet constitute a criminal offense—may issue written recommendations to the judicial administrative authorities, the relevant industry associations, or the institutions where the aforementioned persons are employed. The judicial administrative authorities, the relevant industry associations, or the institutions concerned shall, within three months from the date of receipt of the written recommendation, render a decision on the matter and provide a written response to the people’s court, people’s procuratorate, or public security organ that made the recommendation.
Chapter 6: Cooperation Mechanisms
Article 26. The people’s courts, the people’s procuratorates, the public security organs, and the judicial administrative organs shall explore the establishment of an information-sharing mechanism and a data‑interoperability platform for civil judgments, rulings, mediation agreements, and other adjudicative documents, comprehensively leveraging information technology to identify leads related to fraudulent litigation and associated criminal offenses, and progressively achieve information and data sharing on cases involving such fraudulent litigation and related crimes.
Article 27: People’s Courts, People’s Procuratorates, public security organs, and judicial administrative organs shall, in accordance with the requirements of the “who enforces the law, who promotes legal awareness” responsibility system, enhance society’s awareness of preventing fraudulent litigation and related criminal activities and deter such offenses by regularly conducting legal publicity, publicly releasing typical cases of false litigation, and carrying out cautionary education.
Chapter VII Supplementary Provisions
Article 28. The higher people’s courts, people’s procuratorates, public security organs, and judicial administrative organs of each province, autonomous region, and directly administered municipality may, in accordance with the actual conditions of their respective regions, formulate implementing rules.
Article 29: These Opinions shall come into force as of March 10, 2021.
Supreme People’s Court Supreme People’s Procuratorate
Ministry of Public Security Ministry of Justice
March 4, 2021

The Supreme People’s Procuratorate has launched a pilot program to enable lawyers to access case files online.
On March 9, the Supreme People’s Procuratorate held a launch ceremony for the pilot program on online access to case files by lawyers, outlined the plan for the pilot, and inaugurated an online case‑file‑access system for lawyers, thereby shifting the practice of lawyer access from “on-site review” to “online review” and upgrading the “at most one visit” principle to “no visits required.”
The online case-file review system for lawyers is hosted on the “12309 China Procuratorate Website” and offers key functionalities such as online identity verification, case-file review applications, review processing, information notifications, and file downloads. When seeking online access to case files, lawyers should log in to the “12309 China Procuratorate Website,” use the “China Lawyers Identity Verification Platform” WeChat mini‑program to complete identity verification, submit the required supporting documents, and then submit an application for online review.
Upon approval by the prosecutors, the electronic case file will be promptly made available to the lawyer via the internet, and a notification SMS will be simultaneously sent to the lawyer, providing details such as the download key and document password for the electronic file, thereby ensuring that the lawyer has timely access to all information throughout the online review process.
In the past, lawyers were required to visit the procuratorate handling a case in person to review, excerpt, and copy case files, obtaining such materials through on-site access. In recent years, after making an online appointment in advance, lawyers can go to the procuratorial organ and obtain materials on CD‑ROM, significantly reducing delays and the need for photocopying. Since last year, owing to the COVID‑19 pandemic, lawyers have faced substantial difficulties when seeking to review case files in other localities. In response, some local procuratorial organs have launched remote case‑file‑review services, accumulating valuable experience in safeguarding lawyers’ professional rights during the period of regularized epidemic prevention and control. On this basis, the Supreme People’s Procuratorate has strengthened coordination with the Ministry of Justice, leveraging the China Lawyers Identity Verification System to conduct online identity verification and developing an Internet‑based case‑file‑review system that enables lawyers to access case materials via the internet.
Compared with the previous practice of lawyers reviewing case files in person, online access to case files has upgraded the “at most one visit” requirement to “no visits required,” leveraging information technology to maximize the protection of lawyers’ legitimate rights and professional privileges.
This time, the Supreme People’s Procuratorate has organized pilot programs in Shanghai, Anhui, and Chongqing to further accumulate experience and refine the relevant mechanisms. Following the full nationwide rollout of Procuratorial Business Application System 2.0, it is planned to implement the system across all procuratorial organs nationwide in the second half of this year.
The Supreme People’s Procuratorate has instructed the case management departments of procuratorial organs in pilot areas to rigorously conduct review procedures and, for eligible lawyer applications, to complete the electronic case file transmission within the prescribed three-day timeframe. The procuratorial technical departments are required to ensure robust operational support to maintain the system’s stable functioning. At the same time, confidentiality requirements must be strictly enforced to safeguard the data security of electronic case files.

Violent debt collection has been criminalized; the first verdict in a case involving the crime of “illegally collecting debts” has been handed down.
Since the Eleventh Amendment to the Criminal Law officially came into effect on March 1, numerous localities—including Zhejiang, Guangdong, Ningxia, and Guizhou—have seen a surge in the first-ever prosecutions under the crime of collecting illegal debts. Notably, the People’s Court of Duanzhou District in Zhaoqing City, Guangdong Province (hereinafter referred to as the “Duanzhou Court”) has handed down the province’s first verdict convicting someone of this offense.
On March 5, the Duanzhou District People’s Court delivered a public verdict in a case involving the crime of collecting illegal debts. The defendants, including Li and three others, were each sentenced to fixed-term imprisonment ranging from six months to one year and eight months, and were also fined.
According to the live stream of the court proceedings at the Duanzhou District People’s Court, on March 2, four defendants, including Li, appeared in court to stand trial on charges of provoking trouble. On March 4, the Duanzhou District People’s Court conducted a retrial to determine whether the case should be subject to the provisions of the Eleventh Amendment to the Criminal Law concerning the crime of collecting illegal debts.
According to Article 293‑1, newly added in the Eleventh Amendment to the Criminal Law: Where any of the following circumstances exists—collecting illegal debts arising from usury or similar practices—and the circumstances are serious, the offender shall be sentenced to fixed-term imprisonment of no more than three years, criminal detention, or public surveillance, and shall also be fined or punished by a fine alone: (1) employing violence or coercion; (2) restricting another person’s personal freedom or unlawfully entering another person’s residence; (3) intimidating, stalking, or harassing others. On February 26, the “Supplementary Provisions (VII) of the Supreme People’s Court and the Supreme People’s Procuratorate on the Determination of Crimes under the Criminal Law of the People’s Republic of China” explicitly designated Article 293‑1 with the corresponding offense name “Crime of Collecting Illegal Debts,” thereby officially enshrining this offense in the Criminal Law.
Ge Xuemei, deputy chief judge of the Criminal Trial Division of the Duanzhou District People’s Court, stated that the four defendants, in seeking to collect illegal debts arising from usurious lending, repeatedly resorted to intimidation and harassment—such as painting large characters with paint and jamming door locks—which meets the defining characteristics of the crime of collecting illegal debts. Accordingly, this case is governed by the provisions of the Eleventh Amendment to the Criminal Law of the People’s Republic of China, which came into effect on March 1 of this year, and the four defendants should be punished for the crime of collecting illegal debts.
The court found that, between 2017 and 2018, the defendants Li and Qiu repeatedly intimidated and coerced victims into repaying debts arising from usurious lending. From 2019 to 2020, defendant Li, seeking to amass ill-gotten gains, further recruited and employed defendants Nong and Huang to engage in illegal lending activities, carrying out repeated acts of intimidation and other unlawful means in Zhaoqing to compel others to repay their debts, thereby inflicting psychological distress on the victims, disrupting public order, and causing a notably adverse social impact.
Following trial, the Duanzhou People’s Court, in accordance with the relevant provisions of the Criminal Law of the People’s Republic of China, found that Li and others had all committed the crime of collecting illegal debts and accordingly rendered the aforementioned judgment.
Commenting on the case in which the authorities initially filed charges under the crime of provoking trouble but ultimately reclassified the offense as illegal debt collection, Zeng Jie, a senior partner at Guangqiang Law Office, told a reporter from Caixin that, in many prosecuted cases, police or prosecutors had previously charged defendants with offenses such as provoking trouble or unlawful intrusion into a residence. This suggests that even prior to the Eleventh Amendment to the Criminal Law, certain practices involving the collection of illegal debts could already have constituted criminal conduct. However, following the establishment of the crime of illegal debt collection in the Eleventh Amendment, the maximum penalty for this offense is three years’ imprisonment, whereas the first sentencing bracket for provoking trouble carries a maximum of five years. Accordingly, applying the principle of “applying the older law when it is more favorable,” the court reclassified the offense under the new charge.
“In future cases of illegal debt collection, the specific patterns of conduct will be assessed with greater precision. If, in addition to collecting unlawful debts, there are other criminal acts—such as infringing on citizens’ personal information—multiple offenses may be punished cumulatively. However, when there is overlap in the conduct, the heavier offense typically prevails,” said Zeng Jie.
Notably, with the introduction of the new offense of “illegally collecting debts,” the first such case within each jurisdiction has emerged across the country. On the very day that the Eleventh Amendment to the Criminal Law officially took effect—March 1—the People’s Procuratorate of Pingyang County, Wenzhou City, Zhejiang Province (hereinafter referred to as the “Pingyang Procuratorate”) concluded its handling of the first-ever case involving the illegal collection of debts.
According to the Pingyang People’s Procuratorate, Wang, a debt collector working for an online lending platform, colluded with others to repeatedly make threatening phone calls and harass victims in order to collect illegal debts. Given the severity of his conduct, under the Eleventh Amendment to the Criminal Law of the People’s Republic of China, which took effect on March 1, 2021, his actions constitute the crime of collecting illegal debts. However, considering that Wang was a minor at the time of the offense, played a secondary role in the joint crime, and demonstrated mitigating circumstances such as voluntary confession, restitution of illicit gains, and first-time offending, and further noting that he is a student, the procuratorial organ, after conducting educational guidance and probationary review, lawfully decided on March 1, 2021, not to prosecute him.
According to reports, the People’s Procuratorate of Litong District in Wuzhong City, Ningxia, and the People’s Procuratorate of Renhuai City, Zunyi, Guizhou, respectively filed the first cases under the Criminal Law Amendment (XI) charging the crime of collecting illegal debts on March 3 and March 4.
In previous judicial practice, the collection of illegal debts was often accompanied by stalking, assault, deprivation of personal liberty, and destruction of property—acts that could constitute offenses such as intentional injury, unlawful detention, or provoking trouble. However, criminal liability was typically imposed only when such collection activities resulted in serious consequences. Moreover, regulating these conduct under the charge of “provoking trouble” has long been highly controversial in practice. This amendment now classifies the use of “violent” or “soft‑violent” methods to collect illegal debts as the crime of collecting illegal debts, thereby filling a legislative gap in efforts to curb usury and safeguard financial order.
The Beijing No. 2 Intermediate People’s Court has issued its first element-based judgment.
Recently, the Beijing No. 2 Intermediate People’s Court issued a summary judgment in a case in which an employer sought to set aside an arbitration award on labor disputes. This marks the first such summary judgment issued by an intermediate people’s court in Beijing.
Unlike traditional arbitral awards, which separately set out the claims, defenses, findings of fact, and the tribunal’s reasoning, this summary‑style award concisely lists the parties’ details, the arbitral institution, the case number, the date of filing the arbitration application, the date of the arbitral award, the relief sought, the facts found by the tribunal, the outcome of the arbitration, the grounds and reasons for seeking annulment, as well as the tribunal’s views, the operative part of the award, and the allocation of costs. The document is brief and easy to read at a glance. It strengthens the reasoning and appends relevant statutory provisions at the end, ensuring logical consistency, completeness, and thorough argumentation, thereby helping the parties identify key issues and clarify their positions, so that they can understand the decision clearly and comprehensibly, while balancing efficiency with effectiveness.
In recent years, the people’s courts have actively advanced reforms to streamline case processing, striving to achieve “swift adjudication of simple cases” and “thorough adjudication of complex cases,” thereby meeting the public’s evolving expectations and demands for justice. In handling certain straightforward cases, traditional narrative-style judgments can no longer adequately address the public’s growing need for rapid dispute resolution. To this end, the Second Intermediate People’s Court, based on thorough research, has adopted a working approach of “leading by example, piloting first, and advancing step by step.” Using its summary‑judgment team as a pilot, it has selected applications to set aside labor‑dispute arbitration awards as an entry point, appropriately simplifying the drafting of judgments for summary, small‑value, and uncontested cases—“slimming down” them in a targeted manner—and exploring and experimenting with a reform toward element‑based judgment forms.
Background link: What is an element-based judicial document?
An element‑based civil judgment is a type of judicial document in which, for cases that can be summarized by fixed elements, the sections traditionally set forth separately—namely, the parties’ arguments and defenses, the facts ascertained by the court, and the court’s reasoning—are instead consolidated. Instead, the document focuses on specific disputed elements, presenting the parties’ arguments and evidence, along with the court’s findings and the legal grounds supporting its conclusions.

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