JC Master Legal News Issue 976

Key Takeaways for This Issue
The China Securities Regulatory Commission’s “Two Excellences and One Pioneer” Commendation Ceremony and Advanced Deeds Report Meeting was held in Beijing.
As the centenary of the Communist Party of China approaches, the Party Committee of the China Securities Regulatory Commission convened a commendation conference for “Two Excellences and One Pioneer” and a report meeting on exemplary deeds, honoring 86 outstanding Communist Party members, 55 outstanding Party affairs workers, and 70 advanced primary-level Party organizations across the system. The event called on all Party members and cadres throughout the system to carry forward the glorious traditions, keep their original aspirations and mission officely in mind, and, with an even more vigorous spirit of striving and a commitment to hard work and practical action, strive to usher in a new phase of high-quality development in the capital market and in the Party building within the regulatory system.
Notice on Properly Carrying Out the Disclosure of 2021 Semi-Annual Reports by Listed Companies
In accordance with the Measures for the Supervision and Administration of Non‑Listed Public Companies, the Measures for the Administration of Information Disclosure by Non‑Listed Public Companies, Guideline No. 14 on the Content and Format of Information Disclosure for Companies Listed on the Select Tier—Interim Report, Guideline No. 15 on the Content and Format of Information Disclosure for Companies Listed on the Innovation Tier—Interim Report, Guideline No. 16 on the Content and Format of Information Disclosure for Companies Listed on the Basic Tier—Interim Report, the Rules on Information Disclosure for Companies Listed on the National Equities Exchange and Quotations System, and other relevant provisions, ensure that the disclosure of the 2021 interim reports by listed companies is carried out appropriately.
Supplementary Announcement of the State Taxation Administration and the State Administration of Foreign Exchange on Matters Relating to Tax Filing for Foreign Payments in Respect of Services Trade and Other Items
In order to thoroughly implement the “Opinions on Further Deepening Tax Collection and Administration Reform” issued by the General Office of the CPC Central Committee and the General Office of the State Council, to advance the “delegation, regulation, and service” reform, to foster a market‑oriented, law‑based, and internationally competitive business environment, to promote the liberalization and facilitation of trade and investment, and to deliver tangible benefits to the public, a supplementary announcement is hereby issued with respect to the “Announcement of the State Taxation Administration and the State Administration of Foreign Exchange on Issues Concerning Tax Filing for Outward Payments Related to Trade in Services and Other Items” (originally promulgated as Announcement No. 40 of 2013 by the State Taxation Administration and the State Administration of Foreign Exchange, and subsequently amended by Announcement No. 31 of 2018 by the State Taxation Administration).
The Ministry of Finance has issued the Measures for the Performance Management of Special Bonds.
To implement the decisions and arrangements of the CPC Central Committee and the State Council, strengthen performance management of funds allocated to local government special bond projects, enhance the efficiency of special bond fund utilization, and effectively mitigate risks associated with government debt, the Ministry of Finance has formulated the Measures for the Performance Management of Funds Allocated to Local Government Special Bond Projects.

Finance & Capital Markets

The China Securities Regulatory Commission’s “Two Excellences and One Pioneer” Commendation Ceremony and Advanced Deeds Report Meeting was held in Beijing.
As the centenary of the Communist Party of China approaches, the Party Committee of the China Securities Regulatory Commission convened a commendation conference for “Two Outstanding and One Pioneer” recipients and a symposium on exemplary deeds. The event honored 86 outstanding Communist Party members, 55 outstanding Party affairs workers, and 70 advanced primary-level Party organizations across the system, calling on all Party members and cadres to carry forward the Party’s glorious traditions, keep their original aspirations and mission officely in mind, and, with an even more vigorous spirit of striving and a commitment to hard work and practical action, strive to usher in a new phase of high-quality development in the capital market and in the Party building within the regulatory system. Yi Huiman, Secretary of the Party Committee and Chairman of the CSRC, attended the meeting and delivered a speech; Comrade Yan Qingmin presided over the session; Comrade Zhao Zhengping announced the decisions on awards; and Comrades Li Chao, Fang Xinghai, and Fan Dazhi participated. Relevant officials from the Central Guidance Group No. 24 for Party History Study and Education were also present to provide guidance. Seven representatives of outstanding Party members and advanced collectives presented reports on their exemplary achievements.
The meeting noted that holding the “Two Excellences and One Pioneer” commendation ceremony and the report session on exemplary deeds is both an important arrangement to celebrate the 100th anniversary of the founding of the Communist Party of China and a key component of in-depth study and education on Party history. Over the past century, our Party has united and led the people in blazing a great path, accomplishing remarkable achievements, forging a great spirit, and accumulating invaluable experience, thereby creating world‑renowned miracles in the history of the Chinese nation’s development and in the progress of human society. Looking back on the Party’s glorious journey over the past hundred years, we are all the more deeply aware of how hard-won the red regime, New China, and socialism with Chinese characteristics truly are.
The meeting noted that the capital market is a microcosm of China’s great achievements in reform and opening-up. In particular, over the past few years, under the strong leadership of the CPC Central Committee and the State Council, the CSRC system has responded with composure to multiple challenges, including the COVID‑19 pandemic and complex domestic and international developments. It has coordinated efforts to contain the epidemic, deepen reforms, guard against risks, and support economic and social development, while comprehensively strengthening Party building. As a result, the capital market has undergone profound structural changes, and both its market environment and investor expectations have improved across the board.
The meeting emphasized that this noble cause has nurtured outstanding individuals and fostered a lofty spirit. Every significant stage and pivotal step in the reform and development of the capital market, as well as each major breakthrough achieved, has been made possible by the arduous efforts of those who build and participate in the capital market, and it embodies the wisdom and strength of Party organizations at all levels within the system, along with the broad ranks of Party members and cadres. The 211 collectives and individuals recognized at the meeting as “Two Excellences and One Pioneer” are exemplary representatives; their stories of dedication and struggle are worthy of study by every Party member and cadre throughout the entire system.
The meeting called for all Party members and cadres within the CSRC system to take the in-depth study and education on Party history as an opportunity, rally even more closely around the CPC Central Committee with Comrade Xi Jinping at its core, and, tempered by the lessons of a century of Party history, uphold their original aspirations and keep their mission officely in mind. Drawing inspiration from exemplary role models, they should forge a powerful momentum for progress, continuously strengthen the “Four Consciousnesses,” officely uphold the “Four Confidences,” and resolutely safeguard the “Two Upholds.” On the new journey of advancing high-quality development of the capital market, they must press ahead with unrelenting effort and make fresh contributions to the comprehensive building of a modern socialist country.
First, we must elevate our political stance and cultivate an unwavering commitment to absolute loyalty. We must place political development at the forefront, keep the nation’s paramount interests at heart, uphold the people-centered position, and continuously enhance our political discernment, political comprehension, and political execution. We must resolutely implement the decisions and arrangements of the CPC Central Committee, better serve national strategies, and safeguard the legitimate rights and interests of the broad investor base.
Second, we must take proactive action and cultivate a spirit of responsibility and commitment. We should consistently maintain the mindset of “taking the exam,” strengthen our sense of duty to shoulder responsibilities, galvanize the motivation to assume them voluntarily, and hone our capabilities to deliver. In the course of reforming and developing the capital market, we must dare to confront challenges head-on and tackle tough issues with resolve.
Third, we must remain down-to-earth and cultivate a fine work style characterized by earnest effort and practical action. We will continue to advance the transformation of our work style, taking “doing concrete things for the people” as an important benchmark for assessing the effectiveness of Party history study and education, and strive to resolve a number of pressing, difficult, and long‑awaited issues that are of great concern to the public and urgently require resolution.
Fourth, we must study diligently and think critically, honing solid and refined professional skills. We should always maintain a sense of urgency and vigilance about our own shortcomings, hold our profession in high regard, integrate theory with practice, strengthen our macro‑level thinking and systems‑oriented mindset, and strive to enhance our ability to manage complex situations, thereby becoming true experts in regulatory work.
Fifth, we must be strict with ourselves and uphold integrity and incorruptibility. We should always hold the people, the organization, and the law and discipline in awe; officely cultivate a sense of public responsibility; exercise power with integrity and impartiality; and consistently maintain the advanced nature and purity of Communist Party members.
Officials from the Discipline Inspection and Supervision Group of the Central Commission for Discipline Inspection and the National Supervisory Commission stationed at the China Securities Regulatory Commission, heads of key departments within the Commission, and principal leaders of Party committees of system‑wide units based in Beijing, along with representatives of collectives and individuals honored under the “Two Excellences and One Pioneer” initiative and speakers presenting exemplary deeds, attended the meeting in person. Meanwhile, cadres at or above the deputy bureau level within the Commission’s headquarters, as well as Party members and cadres from all units across the system, participated via video link.

The Shanghai Stock Exchange has lowered the fee standards for fund transaction handling fees and trading unit usage fees.
Recently, the Shanghai Stock Exchange issued the “Notice on Reducing the Fee Standards for Fund Transaction Handling Charges and Trading Unit Usage Fees.” Effective July 19, 2021, the fund transaction handling charge will be reduced from a bilateral rate of 0.0045% of the transaction amount to 0.004% of the transaction amount. The handling fee for block trades of funds will also be adjusted downward in line with the revised rate, with the same reduction ratio—namely, 50% of the standard handling fee for auction‑based trading, charged to both the buyer and the seller. Meanwhile, the trading unit usage fee will be lowered from the previous annual rate of RMB 50,000 per trading unit to RMB 45,000 per trading unit.
Relevant officials at the Shanghai Stock Exchange stated that the latest reduction in fund transaction handling fees and trading unit usage fees is a concrete manifestation of the exchange’s ongoing efforts to implement the CPC Central Committee and the State Council’s policies on tax and fee reductions, continuously refine its fee structure, effectively lower market costs, and enhance the sense of gain among market participants. Building on substantial prior cuts or exemptions in listing, bond, and fund‑related fees over the past few years, the SSE, in light of actual market conditions, further suspended the collection of initial listing fees for all newly listed companies as of early June this year and reduced listing fees for issuers with a total share capital of 800 million shares or less.
Going forward, the Shanghai Stock Exchange will, under the unified guidance of the China Securities Regulatory Commission, effectively implement all tax and fee reduction policies, continuously enhance the precision and effectiveness of these measures, and steadily improve the quality and efficiency of its services. It will strive to ensure that the tangible financial benefits of these reductions truly benefit enterprises and the public, thereby actively fostering the sound development of the market.
Making the Most of Red Resources to Uphold Our Original Aspirations and Mission—The Shenzhen Stock Exchange’s “Red Securities Exhibition” Online Platform Has Launched a Trial Run
To mark the 100th anniversary of the founding of the Communist Party of China, the “Red Securities Exhibition,” guided by the China Securities Regulatory Commission and organized by the Shenzhen Stock Exchange, has launched its online trial run today. Building on the exhibition’s earlier offline presentation, the show leverages internet platforms and multimedia technologies to offer a comprehensive retrospective of the early development of securities under the leadership of our Party. It vividly portrays the arduous journey from 1921 to 1949—when, in the process of establishing revolutionary regimes, the Party creatively employed securities instruments such as cooperative shares and base‑area government bonds to raise funds, stimulate economic growth, unite the people, and support the revolution. This initiative represents a concrete effort by the Shenzhen Stock Exchange to thoroughly study and implement the spirit of General Secretary Xi Jinping’s important speeches on Party history education, earnestly carry out the deployment requirements of the CPC Central Committee’s Party Leadership Group for the CSRC, make effective use of red resources, innovate approaches to Party history learning, and create a high‑quality project for Party history education. It is also an important measure to uphold the Party’s original aspiration and mission, carry forward the red lineage, inherit the red gene, strengthen cultural development in the capital market, and advance the implementation of capital market reform tasks.
The exhibition is divided into four sections—covering the period of the Great Revolution, the Land Revolution, the War of Resistance Against Japanese Aggression, and the Liberation War—centered on representative events at key historical junctures. It showcases our Party’s remarkable practice of integrating the fundamental principles of Marxism with the realities of the Chinese revolution, filling a gap in China for systematic, thematic exhibitions in this field. The online gallery is designed around the Shenzhen Stock Exchange’s emblem—the “Flint Starfire” motif—and employs 3D modeling, complemented by panoramic experiences, physical‑object displays, illustrated narratives, and video presentations. It offers a comprehensive exploration of nearly 30 historical events and more than 170 tangible exhibits. A specially curated dual‑mode experience—“automated guided tour plus self‑guided exploration”—provides visitors with an immersive, on‑site feel, a pioneering approach among domestic online galleries of its kind. The automated guided tour lasts approximately 15 minutes and distills the exhibition’s core content. With its detailed content, rich array of exhibits, and a minimalist yet dignified aesthetic, the exhibition meets diverse educational and learning needs, serving as a vivid teaching resource for studying Party history.
History is the best textbook, and red resources represent the Communist Party of China’s most precious spiritual heritage. Taking the online exhibition “Red Securities” as an opportunity, the Shenzhen Stock Exchange will continue to study and implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, draw inspiration from the profound power of this thought, and draw strength to move forward, while strengthening its sense of responsibility and commitment. By constantly drawing wisdom and refining character from the Party’s historical experience and practical achievements, the Exchange will strive to gain clarity through history, build confidence through study, cultivate virtue, and put what it learns into practice. In doing so, it will rally spiritual strength to vigorously build a high‑quality innovation‑driven capital center and a world‑class stock exchange, forge broad consensus for comprehensively deepening capital market reform, and tirelessly work toward the goals of building a modern socialist country and realizing the Chinese Dream of national rejuvenation.

Commercial & Corporate
Notice on Properly Carrying Out the Disclosure of 2021 Semi-Annual Reports by Listed Companies
To all listed companies, sponsoring securities offices and underwriting institutions, and accounting offices:
To ensure the proper disclosure of listed companies’ 2021 interim reports, in accordance with the Measures for the Supervision and Administration of Non‑Listed Public Companies, the Measures for the Information Disclosure of Non‑Listed Public Companies, the Guidelines on the Content and Format of Information Disclosure for Non‑Listed Public Companies No. 14—Interim Reports of Companies Listed on the Select Tier, No. 15—Interim Reports of Companies Listed on the Innovation Tier, No. 16—Interim Reports of Companies Listed on the Basic Tier, the Rules on Information Disclosure of Companies Listed on the National Equities Exchange and Quotations System, and other relevant provisions, the following matters are hereby notified:
I. Promptly complete the appointment process for the semi-annual report.
Listed companies shall, in advance, coordinate with their lead underwriter and sponsor to conoffice the disclosure schedule, and the lead underwriter and sponsor shall submit a unified appointment request through the business support platform. Listed companies must disclose in accordance with the scheduled date and minimize any changes. If a change to the disclosure schedule is necessary, the company shall submit a request to the lead underwriter and sponsor at least five trading days in advance, providing a clear rationale and specifying the revised disclosure date. In cases where special circumstances prevent submission of such a request at least five trading days prior, the company shall promptly notify the lead underwriter and sponsor and issue an announcement disclosing the change to the scheduled half-yearly report disclosure date.
Our company will open the semi‑annual report appointment system at 9:00 a.m. on July 1, 2021. Companies listed before June 30, 2021, must complete their appointment for the disclosure date of the semi‑annual report by July 9, 2021. Companies listed between July 1 and August 31, 2021, shall make timely appointments for the disclosure date of their semi‑annual reports in accordance with their listing progress. Based on the disclosure‑appointment schedules submitted by sponsoring securities offices and underwriting institutions, our company will prepare a timetable for the scheduled disclosure of semi‑annual reports and publish it on the National Equities Exchange and Quotations Company website (www.neeq.com.cn).
II. Diligently prepare and submit the semi-annual report.
(1) Listed Company
1. Disclosure Arrangements
The financial statements in a listed company’s semi‑annual report may be unaudited, unless otherwise provided by the China Securities Regulatory Commission (hereinafter referred to as “CSRC”) and the National Equities Exchange and Quotations Company. If an audit is required, it shall be conducted by an accounting office that complies with the provisions of the Securities Law, and the audit report must be signed and sealed by at least two certified public accountants of that office. When disclosing its semi‑annual report, a listed company shall also disclose a special self‑inspection report prepared by the board of directors on the use of raised funds.
2. Preparation of the Semi-Annual Report
To implement the requirements for differentiated information disclosure, our company has developed separate templates for the content and format of semi‑annual reports, tailored to seven categories of financial institutions listed on different market tiers: general corporations, commercial banks, securities offices, insurance companies, futures companies, private equity management offices, micro‑loan companies, and financing guarantee companies (see Attachments 2–11). Listed companies shall prepare their semi‑annual reports in accordance with the template corresponding to the market tier and industry applicable on the date of disclosure.
For a listed company that is not itself registered as a private fund manager but whose subsidiaries within the consolidated financial statement scope are registered as such, the listed company shall provide a dedicated disclosure of its subsidiaries’ private fund business in Section III, “Accounting Data and Business Performance,” with the specific content and format following the “Special Information Disclosure” section of the semi‑annual report template for private fund managers.
3. Disclosure Time
Listed companies shall complete the disclosure of their semi‑annual reports by August 31, 2021. Companies listed between July 1 and August 31, 2021, shall disclose their semi‑annual reports in accordance with the aforementioned requirements. Companies listed after August 31, 2021, are not required to disclose a semi‑annual report. The timing of a listed company’s semi‑annual report disclosure shall be no later than that of its parent company and its consolidated subsidiaries within the scope of the consolidated financial statements.
If a listed company also has securities listed on an overseas stock exchange, and the requirements of that overseas market for the preparation and disclosure of semi‑annual reports differ from those of the China Securities Regulatory Commission and the National Equities Exchange and Quotations Company, the company shall adhere to the principle of adopting the more stringent rather than the less stringent standard, and shall disclose the semi‑annual report in both Chinese and the foreign language. The semi‑annual report shall be prepared in Chinese. If a foreign-language version is also provided, the company shall ensure that the contents of the two versions are consistent. In the event of any inconsistency between the two versions, the Chinese text shall prevail.
4. Handling of Matters Related to Failure to Disclose on Schedule
In accordance with the Provisions on the Termination of Stock Listing for Companies Listed on the National Equities Exchange and Quotations System, if a listed company fails to disclose its semi‑annual report within the statutory time limit, or if the disclosed semi‑annual report has not been approved by the board of directors, or if more than half of the directors are unable to fully guarantee the truthfulness, accuracy, and completeness of the company’s disclosed semi‑annual report (hereinafter referred to as “mandatory delisting circumstances for semi‑annual reports”), and such failure or non‑compliance persists as of August 31, 2021, our company will impose a trading suspension on the company’s shares on the first trading day of September 2021; if the disclosure or rectification is still not completed by October 29, 2021, our company will terminate the listing of the company’s shares.
Companies that fall under the circumstances triggering mandatory delisting pursuant to the semi‑annual report and have still failed to disclose or remedy such circumstances by August 31, 2021, shall, in accordance with Articles 17 and 18 of the Detailed Rules for the Termination of Listing of Stocks of Companies Listed on the National Equities Exchange and Quotations System, issue a risk‑warning announcement on the first trading day of September 2021 indicating that their stocks may be delisted. Thereafter, they shall issue such an announcement every ten trading days until the relevant circumstances are resolved or the Company makes a decision to terminate the listing of its shares.
For listed companies that fall under the circumstances triggering mandatory delisting upon submission of their semi‑annual reports and, without justifiable reasons, fail to disclose or rectify such matters by August 31, 2021, our company will impose disciplinary sanctions and self‑regulatory measures on the companies concerned and the relevant responsible parties, and will record these actions in the Securities and Futures Market Integrity Archive Database.
Effective from 17:00 on August 13, 2021, our company will no longer accept applications for delisting submitted by listed companies that are subject to mandatory delisting due to failure to disclose their semi‑annual reports. For companies that had already filed a delisting application prior to 17:00 on August 13, if they subsequently withdraw their delisting application or receive a notice from our company rejecting the delisting request, and if, as of August 31, they remain in a state of mandatory delisting for failing to disclose their semi‑annual reports, our company will impose disciplinary sanctions and self‑regulatory measures against the listed company and any relevant responsible parties, and such actions will be recorded in the Securities and Futures Market Integrity Database. Furthermore, if, by October 29, the company has still not disclosed the required information or rectified the issue, our company will terminate the listing of its shares.
5. Confidentiality Requirements
Prior to the disclosure of the semi-annual report, directors, supervisors, senior management, sponsoring securities offices, underwriting institutions, accounting offices, and other relevant parties of listed companies are all subject to a duty of confidentiality and may not disclose the contents of the semi-annual report to any third party in any form.
Where certain information cannot be disclosed due to special circumstances such as state secrets or commercial secrets, the listed company may refrain from disclosure; however, it shall provide a detailed explanation in its semi-annual report of the reasons for non‑compliance with the disclosure requirements. If the China Securities Regulatory Commission or the National Equities Exchange and Quotations Company deems disclosure necessary, the listed company shall disclose such information.
6. Regulatory Requirements for Financial Information Disclosure
Listed companies shall establish sound financial systems, strictly comply with enterprise accounting standards, and standardize the disclosure of financial information. They shall not manipulate their financial condition or operating results, nor shall they prepare or disclose false financial statements.
7. Implementation of the New Leasing Standard
In accordance with the relevant requirements of “Accounting Standard for Business Enterprises No. 21—Leases,” as revised and issued by the Ministry of Finance in 2018, listed companies are required to adopt the new leasing standard effective January 1, 2021.
(II) Lead Broker and Sponsor Institution
The sponsoring securities office and the sponsor shall guide and urge the listed companies under their supervision to fulfill their information disclosure obligations in a standardized manner. During the period for disclosing semi-annual reports, they shall assign dedicated personnel to form an examination team and carry out the following tasks:
1. Prior Review
The sponsoring securities office and the sponsor shall assign supervisory personnel who meet the requirements set forth in Article 35 of the “Guidelines for Ongoing Supervision by Sponsoring Securities Offices of the National Equities Exchange and Quotations System,” and, in accordance with the “Key Review Points for Listed Companies’ Semi-Annual Reports for 2021” (see Attachment 1, hereinafter referred to as the “Review Points Table”), conduct a pre‑submission review of the listed company’s semi‑annual report. Upon uploading the semi‑annual report, the sponsoring securities office and the sponsor shall simultaneously submit the “Review Points Table.”
When reviewing a listed company’s semi‑annual report, the sponsoring securities office and the sponsor institution shall pay particular attention to the company’s financial compliance, the legality and compliance of related‑party transactions, whether the custody and use of raised funds are in accordance with applicable regulations, the presence of operational risks, and any material violations or illegal activities, such as misappropriation of funds or unauthorized external guarantees. If the sponsoring securities office or the sponsor institution identifies false records, misleading statements, or material omissions in information that the listed company intends to disclose or has already disclosed, it shall require the company to make corrections or provide supplementary disclosures. Should the listed company refuse to make such corrections or supplements, the sponsoring securities office and the sponsor institution shall issue a risk‑disclosure announcement within two trading days and report the matter to our authority.
2. Non-standard Audit Opinions
If a listed company’s semi‑annual report has been audited by an accounting office, the sponsoring securities office and the sponsor, upon receipt of the materials submitted by the listed company regarding any non‑standard audit opinion, shall disclose such materials concurrently with the semi‑annual report. If the matters covered by the non‑standard audit opinion constitute violations of the Enterprise Accounting Standards and relevant regulations on information disclosure, the sponsoring securities office and the sponsor shall urge the listed company to rectify the relevant issues.
3. Handling of cases where timely disclosure is not possible, etc.
If a listed company is subject to, or may be subject to, mandatory delisting due to its semi-annual report, the sponsoring securities office and the sponsor shall immediately report the matter to the National Equities Exchange and Quotations Company, issue a risk‑disclosure announcement, and suspend processing applications from the listed company’s controlling shareholders and actual controllers to lift share‑sale restrictions.
During the period for disclosing semi‑annual reports, sponsoring securities offices and underwriting institutions shall exercise due diligence, urge listed companies to disclose their semi‑annual reports within the prescribed time limit, and review the disclosed reports. Our company will assess the professional quality of these sponsoring securities offices and underwriting institutions based on their supervisory efforts during the disclosure period.
Hereby notified.

Didi Chuxing Removed from App Stores: Severely Violated Laws and Regulations in Collecting Personal Information; Protecting Personal Data Has Become the New Norm
Just five days after its U.S. stock market debut, Didi has already faced a series of challenges. On July 4, the Cyberspace Administration of China (CAC) issued a notice stating that the “Didi Chuxing” app had engaged in serious illegal and non-compliant practices in collecting and using personal information. Relying on relevant provisions of the Cybersecurity Law of the People’s Republic of China, the CAC ordered app stores to remove the “Didi Chuxing” app from their platforms. In recent years, safeguarding personal privacy has been a key priority for the CAC and other regulatory authorities, which have repeatedly singled out online platforms for violations in the collection and use of personal data—Didi being one of them.
Didi has removed its services from app stores for rectification.
　“Based on reports and after verification through testing, the ‘Didi Chuxing’ app was found to have serious violations of laws and regulations in its collection and use of personal information. In accordance with relevant provisions of the Cybersecurity Law of the People’s Republic of China, the Cyberspace Administration of China has notified app stores to remove the ‘Didi Chuxing’ app from their platforms, and has required Didi Chuxing Technology Co., Ltd. to strictly comply with legal requirements, refer to relevant national standards, and earnestly rectify the identified issues, thereby effectively safeguarding the personal information security of the vast majority of users.” On the evening of July 4, the Cyberspace Administration of China issued a notice regarding the removal of the ‘Didi Chuxing’ app.
In response, a Didi spokesperson told a Beijing Business Today reporter: “Didi is officely implementing the relevant requirements of the competent national authorities. We suspended new user registrations on July 3, and the Didi Chuxing app will be removed from app stores and undergo rectification in strict accordance with the authorities’ directives. Users who have already downloaded the ‘Didi Chuxing’ app can continue to use it as normal, and both passenger trips and driver order assignments will remain unaffected. We sincerely appreciate the guidance of the regulatory authorities in helping Didi identify and address potential risks. We will carry out thorough rectification, continuously enhance our risk‑prevention awareness and technical capabilities, safeguard user privacy and data security, mitigate cybersecurity risks, and consistently provide users with safe and convenient services.”
Today, Didi is facing a challenging period. On July 2, the Cyberspace Administration of China issued an announcement regarding Didi. The agency stated that, in order to safeguard national data security, uphold national security, and protect the public interest, it has conducted a cybersecurity review of “Didi Chuxing” in accordance with the National Security Law of the People’s Republic of China and the Cybersecurity Law of the People’s Republic of China, as well as the Measures for Cybersecurity Review. To facilitate the review process and prevent risks from escalating, Didi Chuxing suspended new user registrations during the review period.
On the same day, a Didi spokesperson responded to reporters: “Didi will fully cooperate with the cybersecurity review. During the review period, under the supervision and guidance of the relevant authorities, we will comprehensively assess and address cybersecurity risks and continue to enhance our cybersecurity framework and technical capabilities.”
Protecting personal information has become the norm.
This series of cybersecurity reviews and app‑removal orders all took place after Didi’s IPO. On the evening of June 30, Beijing time, Didi listed on the New York Stock Exchange, with its opening price up 28.6% from the offering price. As of press time, Didi’s share price stood at $15.50, giving it a market capitalization of $74.4 billion.
In China, Didi is widely recognized as the leader in the mobile transportation sector. According to its prospectus, Didi’s revenues for 2018–2020 were RMB 135.3 billion, RMB 154.8 billion, and RMB 141.7 billion, respectively. In the first quarter of 2021, revenue reached RMB 42.2 billion. In terms of order volume and transaction value, over the 12 months ending March 31, 2021, Didi recorded an average daily global order volume of 41 million and a total platform‑wide transaction value of RMB 341 billion. From January 1, 2018, to March 31, 2021, the platform generated approximately RMB 600 billion in total driver earnings.
From a regulatory perspective, Didi is not the only company singled out by relevant state authorities. In June 2021 alone, the Ministry of Industry and Information Technology (MIIT) publicly reported 291 apps that infringed upon users’ rights and interests. According to the announcement, the MIIT has prioritized urging companies in five key categories—utility tools, education, daily life and travel, job seeking and recruitment, and sports and fitness—where user complaints are most frequent, to carry out rectification. Furthermore, the ministry has intensified efforts to address prominent issues such as app pop-up messages that cannot be closed or fail to clearly indicate how to disable them, as well as deceptive practices—such as using splash-screen notifications—to mislead users into being redirected to other pages, thereby fully safeguarding users’ rights to information and to choose.
As of the Ministry of Industry and Information Technology’s June report, 83 apps had yet to complete remediation, including 51job and Douban. Inspections conducted by the telecommunications administrations of Tianjin, Shanghai, Jiangsu Province, Zhejiang Province, Guangdong Province, and Sichuan Province revealed that an additional 208 apps remained non-compliant, among them Yangmatou and Rise of Kingdoms.
Li Jinqing, an analyst at Bida Consulting, told reporters that China has now established a relatively comprehensive legal framework for protecting personal information. Under this framework, relevant authorities have issued clearer guidance on the scope and purposes of personal data collection by apps. As evidenced by the notices and rectification measures issued by these authorities in response to irregularities in app‑based personal data collection, safeguarding personal information will become a routine regulatory practice. For individual apps and enterprises, this approach is conducive to their long-term, sustainable development.

The Cybersecurity Review Office has initiated cybersecurity reviews of Yunmanman, Huochebang, and BOSS Zhipin.
Recently, the Cybersecurity Review Office issued an announcement initiating cybersecurity reviews of “Yunmanman,” “Huochebang,” and “BOSS Zhipin.” The announcement stated that, in order to safeguard national data security, uphold national security, and protect the public interest, and in accordance with the National Security Law of the People’s Republic of China and the Cybersecurity Law of the People’s Republic of China, the Cybersecurity Review Office is conducting cybersecurity reviews of these three platforms pursuant to the Measures for Cybersecurity Review. To facilitate the review process and prevent risks from escalating, during the review period, “Yunmanman,” “Huochebang,” and “BOSS Zhipin” have suspended the registration of new users.
Earlier, on July 2, the Cybersecurity Review Office issued an announcement initiating a cybersecurity review of Didi Chuxing. The announcement stated that, in order to safeguard national data security, uphold national security, and protect the public interest, and in accordance with the National Security Law of the People’s Republic of China and the Cybersecurity Law of the People’s Republic of China, the Cybersecurity Review Office is conducting a cybersecurity review of Didi Chuxing pursuant to the Measures for Cybersecurity Review. To facilitate the review process and prevent risks from escalating, Didi Chuxing has suspended new user registrations during the review period.
Taxation TAXATATION

Supplementary Announcement of the State Taxation Administration and the State Administration of Foreign Exchange on Matters Relating to Tax Filing for Foreign Payments in Respect of Services Trade and Other Items
In order to thoroughly implement the “Opinions on Further Deepening Tax Collection and Administration Reform” issued by the General Office of the CPC Central Committee and the General Office of the State Council, to advance the “delegation, regulation, and service” reform, to foster a market‑oriented, law‑based, and internationally competitive business environment, to promote the liberalization and facilitation of trade and investment, and to deliver tangible benefits to the public, the following supplementary announcement is hereby issued with respect to the “Announcement of the State Taxation Administration and the State Administration of Foreign Exchange on Issues Concerning Tax Filing for Outward Payments Related to Trade in Services and Other Items” (originally promulgated as Announcement No. 40 of 2013 by the State Taxation Administration and the State Administration of Foreign Exchange, and subsequently amended by Announcement No. 31 of 2018 by the State Taxation Administration):
I. For domestic institutions and individuals (hereinafter referred to as the filers) that are required to make multiple outward payments under the same contract, tax filing is only necessary prior to the first remittance.
II. The following matters do not require tax registration:
(1) Foreign investors reinvest within China the lawful proceeds derived from their direct investments in China;
(2) Non‑trade, non‑commercial foreign‑exchange payments by government agencies, public institutions, and social organizations within the fiscal budget.
III. The filer may obtain and complete the “Tax Filing Form for Foreign Payments Related to Services Trade and Other Items” (hereinafter referred to as the “Filing Form”) through the following methods:
(1) Submit the form online through the Electronic Tax Bureau or other online channels;
(2) Download and complete the form from the official websites of the tax bureaus of all provinces, autonomous regions, municipalities directly under the central government, and cities separately listed in the national plan.
(3) Obtain and complete the form at the tax service hall of the competent tax authority.
IV. Where the filer chooses to file online through the Electronic Tax Bureau or other electronic channels, they shall complete and accurately submit the “Filing Form” together with the relevant supporting documents. Upon completion of the filing, the filer may, using the “Filing Form” number and verification code, proceed to a bank to handle foreign‑exchange payment procedures in accordance with applicable foreign‑exchange management regulations.
V. If the filer chooses to complete the filing at a tax service hall, and the submitted documents are complete and the Filing Form is duly filled out, the competent tax authority shall not conduct an on-the-spot review of the tax-related matters. Instead, it shall enter the information from the Filing Form into the system and generate a Filing Form number and verification code. The filer may then use the Filing Form number and verification code, in accordance with relevant foreign exchange administration regulations, to proceed with remittance procedures at a bank.
VI. This Announcement shall take effect from the date of its issuance. Article 1, paragraph 2; Article 2, paragraph 2; Articles 5, 6, 7, 8, and 10; and Annex 2 of the “Announcement of the State Taxation Administration and the State Administration of Foreign Exchange on Issues Concerning Tax Filing for Foreign Payments in Respect of Services Trade and Other Items” (issued as Announcement No. 40 of 2013 by the State Taxation Administration and the State Administration of Foreign Exchange, and amended by Announcement No. 31 of 2018 by the State Taxation Administration) are hereby repealed simultaneously.
This is hereby announced.
State Taxation Administration, State Administration of Foreign Exchange
June 29, 2021

The State Taxation Administration convened an expanded meeting of its Party Committee.
Deeply study and thoroughly understand General Secretary Xi Jinping’s remarks at the celebration of the Communist Party of China…
The spirit of the important speech delivered at the centenary celebration大会
On the afternoon of July 1, Wang Jun, Secretary of the Party Committee and Director of the State Taxation Administration, presided over an expanded meeting of the Party Committee to study and thoroughly grasp the spirit of General Secretary Xi Jinping’s important speech at the rally celebrating the 100th anniversary of the founding of the Communist Party of China, and to deliberate and deploy measures for implementing the spirit throughout the tax system. The Party Committee of the State Taxation Administration called on all Party members and cadres in the tax system to rally even more closely around the CPC Central Committee with Comrade Xi Jinping at its core, resolutely heed the call of the CPC Central Committee, put into practice the development philosophy centered on the people, carry forward the great spirit of Party building, and make unremitting efforts to advance tax modernization in the new stage of development and to serve the goal of fully building a strong socialist modern country.
At the meeting, Wang Jun shared his profound excitement and personal impressions from listening live to General Secretary Xi Jinping’s important address. He stated that in his speech, General Secretary Xi Jinping comprehensively reviewed the glorious century-long journey of the Communist Party of China, profoundly expounded on the great achievements the Party has made in each historical period, and clearly identified the overarching theme of the Party’s centennial struggle: realizing the great rejuvenation of the Chinese nation. He also creatively articulated the great spirit of Party building, explicitly set forth the “nine musts” for drawing lessons from history and forging a new future on the new journey, and issued a powerful call to all Party members to continue striving tirelessly to fulfill the people’s aspirations for a better life and to secure even greater glory for the Party and the people. General Secretary Xi Jinping’s important speech is marked by its lofty vision, profound thought, and rich substance, imbued with deep affection for the Party, the nation, the country, and the people. It stands as another classic work of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and serves as the most significant Party‑history lesson delivered to the entire Party on the occasion of the centenary of the CPC. With epoch‑making significance, it provides a milestone guide for the whole Party and all the people of China as they advance into the new era and embark on a new journey, inspiring, enlightening, and edifying all who hear it. It stirs the heart and fills one with boundless enthusiasm, cleansing both mind and soul, and offers crucial, far‑reaching guidance for further unifying thinking, elevating our strategic perspective, carrying forward the past while breaking new ground, and striving to create new achievements worthy of the expectations of our revolutionary forebears and deserving of history and the people.
The meeting emphasized that the Party Committee of the State Taxation Administration and the Party Committees of tax authorities at all levels must earnestly align their thinking and actions with the spirit of General Secretary Xi Jinping’s important speech, strengthen the “Four Consciousnesses,” officely uphold the “Four Confidences,” and ensure “Two Upholds.” They are to regard studying and implementing the spirit of General Secretary Xi Jinping’s important speech as a major political task for the present and the period ahead, conducting in-depth study and comprehension through Party committee meetings, study sessions of the Party committee’s theoretical study center group, and theoretical reading classes, so as to continuously enhance ideological, political, and practical awareness in its implementation, and to constantly improve political judgment, political understanding, and political execution, thereby ensuring that the spirit of General Secretary Xi Jinping’s important speech is thoroughly implemented, meticulously carried out, and effectively put into practice throughout the tax system.
The meeting noted that General Secretary Xi Jinping’s important speech has charted the course for continuously advancing the new great project of Party building in the new journey and set forth fresh requirements for upholding the principle of exercising full and rigorous governance over the Party. The Party Committee of the State Taxation Administration and the Party committees of tax bureaus at all levels must earnestly raise their political awareness, align themselves closely with the spirit of the speech, and translate its guiding principles into new momentum for promoting high-quality Party building within the tax system and into concrete actions to deepen the comprehensive and rigorous governance of the Party. With the Party’s political development as the overarching guide, they should further refine the “vertical‑horizontal integration and robust Party building” mechanism and institutional framework of the tax system, strive to establish a new pattern of comprehensive and rigorous Party governance characterized by “six‑in‑one” integration, and unswervingly advance efforts to foster integrity and combat corruption, thereby providing strong safeguards for the development of the tax sector. All Party members and cadres in the tax system are called upon to respond enthusiastically to General Secretary Xi Jinping’s grand call, keep their original aspirations and mission officely in mind, strengthen their ideals and convictions, put the Party’s fundamental purpose into practice, and endeavor to make even greater contributions to the cause of the Party and the country.
The meeting called for the State Taxation Administration and the entire tax system to integrate the study and understanding of the spirit of General Secretary Xi Jinping’s important speech at the rally celebrating the 100th anniversary of the founding of the Communist Party of China with the study and understanding of his important speech at the ceremony for awarding the “July 1st Medal,” as well as with his important speech at the mobilization conference on Party history study and education and his key expositions on Party history. It also emphasized integrating these efforts with the study and implementation of General Secretary Xi Jinping’s important instructions and directives on tax work, so as to swiftly ignite a vigorous upsurge in studying and implementing the spirit of his important speeches and to ensure that Party history study and education within the tax system is carried forward in greater depth and yields concrete results. All levels of leading cadres at the department and bureau level across the national tax system are to be organized into special study classes on Party history, ensuring that the spirit of General Secretary Xi Jinping’s important speeches is thoroughly studied, deeply understood, effectively implemented, and fully put into practice. Furthermore, all available platforms and channels should be leveraged to promote “universal learning,” particularly by making full use of online resources such as “Study in China” and “Learning to Prosper the Tax System,” so as to continuously deepen learning, extend its reach, achieve tangible outcomes, and further inspire tax officials with an inexhaustible drive to love the Party and the country and to strengthen the nation through sound taxation.
The meeting emphasized that the State Taxation Administration and the broader tax system must earnestly translate the outcomes of studying the spirit of General Secretary Xi Jinping’s important speeches into a powerful driving force for advancing all aspects of tax work, making substantial efforts to deepen reform and break new ground. They must keep in mind the nation’s major interests, serve those interests, and safeguard them; officely uphold the principle that tax authorities are, above all, political organs; be adept at planning, deploying, and advancing work from a political perspective; and courageously shoulder the responsibility and burden of reform. Efforts must be intensified to ensure the thorough, concrete, and meticulous implementation of the CPC Central Committee and the State Council’s “Opinions on Further Deepening Tax Collection and Administration Reform,” striving to achieve greater breakthroughs in tax collection and administration—moving from cooperation and consolidation toward integration—and thereby better leveraging the foundational, pivotal, and safeguarding roles of taxation in national governance. It is essential to strengthen the sense of purpose and commitment to serving the people, organize tax and fee revenues in strict accordance with laws and regulations, fully and faithfully implement policies to reduce taxes and fees, further enhance the reputation of service brands, and ensure that innovative measures are effectively put into practice. All these efforts should be directed toward addressing the urgent, difficult, and pressing concerns of taxpayers and payers, thereby further enhancing their sense of gain, happiness, and satisfaction.
The meeting noted that, as the tax system advances tax modernization in the new stage of development with high quality, young cadres constitute the main force. It is imperative to resolutely implement the spirit of General Secretary Xi Jinping’s important speeches, earnestly strengthen work related to young cadres within the tax system, and educate and guide the vast ranks of young tax officials to keep in mind General Secretary Xi Jinping’s earnest exhortations, take the great rejuvenation of the Chinese nation as their own responsibility, carry forward time-honored traditions, and continue the red lineage. They should dedicate their youthful endeavors to the great cause of taxation under the leadership of the Party, and, with their passion and dedication, write new chapters and achieve new splendor on the journey toward realizing the Second Centenary Goal. Party committees at all levels of the tax authorities must place youth work in a prominent position and strive to create favorable conditions and platforms for young cadres to grow, develop their talents, and make contributions.
Leaders of the State Taxation Administration who attended the meeting each delivered remarks. All agreed that General Secretary Xi Jinping’s speech was imbued with deep affection, unwavering confidence, and a strong sense of responsibility, and that the century-long journey of this great Party fills one with profound pride and supreme honor. Over the past hundred years, under the leadership of the Communist Party of China, the tax sector has continuously grown and strengthened, traversing a path of arduous struggle and momentous achievements. Tax officials have made their due contributions to China’s revolution, development, and reform. As we stand at the new starting point of the second centenary goal, we feel an even greater sense of responsibility and a noble mission; we must respond more vigorously to the Party’s call, uphold the essence of Communists, remain true to our original aspiration and mission, and make even greater contributions to fully building a modern socialist country.
At the meeting, several Party-member delegates shared their reflections on their studies. Some comrades remarked that listening to General Secretary Xi Jinping’s important address filled them with profound excitement and inspiration, enabling them to deeply appreciate the enduring spiritual strength and glorious legacy of our Party, as well as the vibrant prosperity and remarkable achievements of our country. A comrade who attended the celebration in person stated that General Secretary Xi Jinping’s speech was imbued with a powerful spirit of confidence, optimism, and unity—experiences that will remain unforgettable—and that they would surely be grateful to the Party, heed its guidance, and follow its lead. Another comrade noted that, fortunate to live in such a great era, under the leadership of the great Communist Party of China, guided by the great leader General Secretary Xi Jinping, and inspired by the grand dream of the great rejuvenation of the Chinese nation, they would resolutely carry forward the cause forged by revolutionary predecessors, strive with all their might to advance tax modernization in the new stage of development, seize every moment, cherish their youthful years, and write a life‑long testament worthy of the times, the Party, and the people.
Prior to the meeting, Wang Jun met with the national “Two Excellences and One Pioneer” award recipients from the tax system who had come to Beijing to attend the rally celebrating the 100th anniversary of the founding of the Communist Party of China, and posed for a group photo. He shook hands with each of them and engaged in warm, cordial conversation, expressing, on behalf of the CPC Committee of the State Taxation Administration, his heartfelt gratitude and profound respect. He emphasized that the “Two Excellences and One Pioneer” honor is not only a source of pride but also a solemn responsibility, embodying resilience and dedication, and reflecting painstaking effort and hard work. He urged all recipients to cherish this honor, press ahead with renewed vigor, take the lead in studying the spirit of General Secretary Xi Jinping’s important speeches, translate their commitment to serving taxpayers and payers into concrete actions in their daily work, continuously enhance their capacity and competence in addressing taxpayers’ and payers’ practical concerns and solving their difficulties, and remain steadfastly committed to the new journey toward achieving the Second Centenary Goal of building a modern socialist country in all respects.
Members of the State Taxation Administration’s leading team based in Beijing attended the meeting. Relevant officials from the Discipline Inspection and Supervision Group of the Central Commission for Discipline Inspection and the National Supervisory Commission stationed at the State Taxation Administration, along with principal officials from the Administration’s various departments, bureaus, and directly affiliated units, were present as observers.
In the first five months of this year, more than 5 million new tax-related market entities were established, reflecting robust vitality and strong confidence among market players.
According to a report by China National Radio’s “Global Finance” program, the latest data from the State Taxation Administration show that in the first five months of this year, more than 5 million new tax-related market entities were established nationwide, reflecting a steady recovery of the national economy and robust vitality and strong confidence among market players.
Compared with the “Newly Established Market Entities” indicator, the “Newly Registered Tax‑Related Market Entities” indicator offers a finer level of granularity. The term “tax‑related” signifies that actual production and business activities are taking place; accordingly, this indicator encompasses enterprises, individual business households, and other market entities that have newly completed tax‑related procedures with the tax authorities, such as tax type registration, invoice acquisition, and tax filing and payment.
According to the latest data, in the first five months of this year, the number of newly established tax-related market entities reached 5.2225 million, up 40.19% year-on-year compared with the same period in 2020 and 24.75% compared with the same period in 2019, with an average two-year growth rate of 11.69%.
In this regard, Fu Yangfan, Deputy Director-General of the Department of Tax Collection and Management and Science & Technology Development at the State Taxation Administration, explained: “On the one hand, this demonstrates that China’s efforts to deepen the ‘delegation, regulation, and service’ reform and optimize the business environment have yielded significant results; on the other hand, it reflects that, since the beginning of this year, market entities in China have remained generally highly active, and the economic recovery has maintained a steady and improving momentum.”
By type, in the first five months, 2.7841 million new enterprises were established, up 37.14% year on year; 2.3704 million new individually owned businesses were registered, an increase of 45.37% year on year.
From the perspective of ownership structure, in the first five months, newly established tax‑related market entities owned by private investors totaled 5.1632 million, with their share continuing to rise to 98.86 percent—up 0.09 and 0.53 percentage points compared with 2020 and 2019, respectively.
By sector, the wholesale and retail trade, business services, and construction industries together accounted for 2.9274 million newly established tax‑related market entities, representing more than half of all such new entrants. Meanwhile, the share of newly established tax‑related market entities in modern service sectors—such as information technology services and scientific research and technical services—has continued to rise, increasing from 3.81% and 5.49%, respectively, in 2020 to 5.19% and 6.08% in 2021.
Fu Yangfan stated, “Among newly established tax‑related market entities, the share of the tertiary sector and modern service industries has been steadily rising, indicating that China’s national economic structure is continuously being optimized and the quality of economic development is steadily improving.”
Furthermore, by region, the four major economic circles exhibit a clear advantage in market dynamism. The Yangtze River Delta, the Pearl River Delta, the Beijing–Tianjin–Hebei region, and the Chengdu–Chongqing economic circle accounted for 1.2927 million, 539,000, 353,500, and 377,200 newly established tax‑related market entities, respectively, totaling 2.5624 million—49.06% of all newly established tax‑related market entities.
A spokesperson from the State Taxation Administration recently stated that it will continue to deepen the “delegation, regulation, and service” reform in the tax sector and, in collaboration with the All-China Federation of Industry and Commerce, launch the “Spring Rain Nurtures Seedlings” special campaign. In particular, it will ensure that various tax and fee support policies and innovative service measures promptly benefit small and micro enterprises, thereby optimizing the tax-related business environment and continuously fostering and stimulating the vitality of market entities.

China’s tax-related business environment continues to improve, bolstering foreign offices’ confidence in investing in the country.
From January to May 2021, China saw the establishment of 18,497 new foreign-invested enterprises, up 48.6% year on year and 12.4% compared with the same period in 2019, averaging more than 120 new establishments per day. At a recent regular press conference hosted by the Ministry of Commerce, China’s foreign investment performance for the first five months of 2021 stood out as particularly strong. “This fully demonstrates foreign investors’ recognition of China’s business environment and their confidence in making long-term investments in the country,” said Gao Feng, spokesperson for the Ministry of Commerce.
In the first five months of 2021, foreign investment surged into China. Behind this trend lies the continuous improvement of the tax and business environment, which has delivered policy-driven benefits to foreign enterprises investing in the country.
According to reports, since the 2008 implementation of a unified corporate income tax regime for both domestic and foreign-invested enterprises, the tax-related business environment for foreign investors has steadily improved. The favorable tax policies have further bolstered foreign-invested offices’ confidence in investing in China.
Confidence stems from the continuous strengthening of tax‑incentive policies. The “comprehensive package” of tax benefits for foreign‑invested enterprises encompasses not only universal tax and fee reductions—such as the deepened VAT reform—and a series of measures to support epidemic prevention and control, but also investment‑encouraging tax incentives, including deferred taxation on reinvested earnings.
Zhong Zhijie, Deputy Director of Finance at Mentholatum (China) Pharmaceutical Co., Ltd., told reporters that, under the latest policy increasing the additional deduction rate for R&D expenses of manufacturing enterprises from 75% to 100%, the company expects to benefit from an additional pre-tax R&D expense deduction of RMB 17.5 million, which will reduce its corporate income tax by more than RMB 4.37 million.
Since 2018, China has implemented a deferred‑tax policy for overseas investors who reinvest profits earned from domestic resident enterprises into direct investment within China, temporarily suspending the withholding income tax. From January 2018 to May 2020, overseas investors benefited from this preferential measure to the tune of RMB 14.3 billion, spurring an additional RMB 150.5 billion in dividend reinvestment. “This deferred‑tax policy sends a positive signal: it not only lightens the burden on enterprises but also bolsters parent companies’ confidence in investing in China,” said Ye Shaofen, chief financial officer of Dongguan Lide Mechanical & Electrical Co., Ltd.
The Foreign Investment Law, which came into effect in January 2020, enshrined in law the rights of foreign-invested enterprises to enjoy tax and fee reductions and other preferential treatments. Subsequently, in January 2021, the newly revised Catalogue of Industries for Encouraging Foreign Investment (2020 Edition) entered into force, allowing eligible foreign-invested enterprises to avail themselves, in accordance with applicable regulations, of preferential measures such as tariff exemptions and reduced corporate income tax rates.
Moreover, since 2021, the tax authorities have introduced a series of import‑tax preferential policies, including measures to support the development of the integrated circuit and software industries, further opening China’s doors to the world.
Confidence also stems from the meticulous implementation of various tax and fee preferential policies, which have bolstered the morale of business operators. Since the onset of the COVID‑19 pandemic, tax authorities across the country have rigorously adhered to the State Taxation Administration’s directive that “the delivery of preferential policies must be robust,” ensuring that all such measures are fully and precisely put into practice. This has enabled market entities, including foreign‑invested enterprises, to promptly benefit from these incentives, while leveraging tax‑related big data to streamline industrial chains and help businesses resume production and operations.
Confidence also stems from the continuously upgraded service quality offered by tax authorities across the country. Since the beginning of this year, tax authorities have actively implemented the “Opinions on Further Deepening Tax Collection and Administration Reform,” issued by the CPC Central Committee and the State Council, to enhance collection and administration efficiency. For the eighth consecutive year, they have launched the “Spring Breeze Action for Convenient Tax Services,” introducing 100 facilitative measures across 10 key areas. Nationwide, they have further streamlined export‑tax‑rebate procedures, reducing the volume of submitted documentation by more than 40 percent and simplifying three categories of certification requirements…
On this basis, as Hainan, Guangdong, Jiangsu, and other regions advance the high-quality “attracting-in” process, the tax authorities have proactively collaborated with local governments to implement a range of measures supporting foreign-invested enterprises and encouraging foreign investment, thereby contributing their tax expertise to the development of foreign investment across these areas.
Li Xuhong, Director of the Institute for Fiscal and Taxation Policy and Application at the National Accounting Institute in Beijing, stated in an interview with reporters that the continuously improving tax‑related business environment is an essential component of China’s high‑level opening-up policy. It facilitates the free flow of trade and holds significant importance for both China’s and the global economy.

The increasingly favorable tax and business environment has become a “gravity field” for China’s economy.
In the first five months of 2021, foreign investment surged into China. According to data from the Ministry of Commerce, 18,497 new foreign-invested enterprises were established nationwide during this period, up 48.6% year on year and 12.4% compared with the same period in 2019—averaging more than 120 new foreign‑invested offices per day. Meanwhile, the total cumulative inflow of foreign capital reached a post‑pandemic high. On June 25, reporters learned from the State Taxation Administration that “recognition” and “confidence” are key factors behind China’s ability to attract foreign investment; in particular, the continuous improvement of the tax‑related business environment has been a major driver of China’s economic “gravitational pull.”
According to reports, many foreign-invested enterprises feel that the tax-related business environment is steadily improving and becoming increasingly convenient. Some investors note that the accelerated pace of foreign investment is underpinned by growing confidence in the tax‑related business climate. Since the 2008 implementation of a unified corporate income tax regime for both domestic and foreign‑invested enterprises, the tax‑related business environment for foreign investors has been gradually refined. In particular, over the past two years, amid efforts to forge a new pattern of comprehensive opening-up in the new era, foreign‑invested offices have seen their confidence in the tax system strengthen.
Confidence stems from the positive signals conveyed by the enhanced tax‑incentive policies. For foreign‑invested enterprises, the package of tax benefits encompasses not only universal tax and fee reductions—such as the deepened VAT reform—and a series of measures to support epidemic prevention and control, but also investment‑encouraging tax incentives, including deferred taxation on reinvested earnings.
Ye Shaofen, the financial director of Dongguan Lide Mechanical & Electrical Co., Ltd., has a deep appreciation for the policy of “deferred taxation” for foreign investors. Since 2018, China has implemented a deferred‑taxation regime for overseas investors who reinvest profits earned from domestic resident enterprises into direct investments within China, temporarily suspending the withholding income tax. From January 2018 to May 2020, overseas investors benefited from this preferential treatment to the tune of RMB 14.3 billion, spurring an additional RMB 150.5 billion in dividend reinvestment. “This deferred‑taxation policy sends a positive signal: it not only lightens the burden on enterprises but also bolsters parent companies’ confidence in investing in China,” said Ye Shaofen.
The Foreign Investment Law, which came into effect in January 2020, enshrined in law the rights of foreign-invested enterprises to enjoy tax and fee reductions and other preferential treatments. Subsequently, in January 2021, the newly revised Catalogue of Industries for Encouraging Foreign Investment (2020 Edition) entered into force, allowing eligible foreign-invested enterprises to avail themselves, in accordance with applicable regulations, of preferential measures such as exemption from customs duties and reduced corporate income tax.
Moreover, since 2021, the tax authorities have introduced a series of import‑tax preferential policies, including measures to support the development of the integrated circuit and software industries, further opening China’s doors to the world.
Confidence also stems from the reassurance brought by swift implementation. “Since the outbreak of COVID‑19, the tax authorities helped us rapidly restore production capacity, which has given us great peace of mind,” said Sun Junlei, CFO of Philips Home Appliances Co., Ltd. Following the pandemic’s onset, tax authorities across the country have rigorously enforced the State Taxation Administration’s directive to “ensure robust implementation of preferential policies,” meticulously and fully rolling out all tax and fee relief measures. This has ensured that all market entities, including foreign‑invested enterprises, can promptly benefit from these incentives, while leveraging tax‑related big data to unblock supply chains and support businesses in resuming work and production—thus becoming a key source of confidence.
Confidence also stems from continuously upgraded service quality. Since the beginning of this year, tax authorities have actively implemented the “Opinions on Further Deepening Tax Collection and Administration Reform” issued by the CPC Central Committee and the State Council, enhancing collection and administration efficiency. For the eighth consecutive year, they have launched the “Spring Breeze Action for Convenient Tax Services,” introducing 100 facilitative measures across 10 key areas. Nationwide, they have further streamlined export‑tax‑rebate procedures, reducing the volume of submitted documentation by more than 40 percent and simplifying three categories of certification requirements.
On this basis, as Hainan, Guangdong, Jiangsu, and other regions advance the high-quality “attracting-in” process, the tax authorities have proactively collaborated with local governments to implement a range of measures supporting foreign-invested enterprises and encouraging foreign investment, thereby contributing their tax expertise to the development of foreign investment across these areas.
Confidence continues to grow. According to a survey by the American Chamber of Commerce in China, nearly two-thirds of companies plan to increase their investments in China in 2021; meanwhile, a survey by the European Union Chamber of Commerce in China shows that 60% of offices intend to expand their operations in the country. The ongoing improvement of the business environment—including tax policies—has become a powerful magnet for foreign investment, forging a lasting “gravitational field” for China’s economy. “The continuously refined tax and business climate is an essential component of China’s high‑level opening-up policy, facilitating the free flow of trade and holding significant importance for both China’s and the global economy,” said Li Xuhong, Director of the Institute of Fiscal and Tax Policies and Applications at the National Accounting Institute in Beijing, in an interview with reporters.

Nationwide, 574,000 taxpayers have benefited, and the first filing period for the combined declaration of property and behavioral taxes has begun to show initial results.
To implement the “Opinions on Further Deepening Tax Collection and Administration Reform” (hereinafter referred to as the “Opinions”) issued by the General Office of the CPC Central Committee and the General Office of the State Council, and to advance the “delegation, regulation, and service” reform in the tax field while delivering tangible benefits to taxpayers and payers, the State Taxation Administration has, since June 1, rolled out nationwide the combined filing of property and behavioral taxes. Recently, the first filing period concluded smoothly, with the filing procedures and forms significantly streamlined. A total of 574,000 taxpayers across the country have benefited, including taxpayers in Hebei, Liaoning, Jilin, Heilongjiang, Yunnan, and other provinces, who saw a reduction of more than 15% in the number of filings, thereby effectively easing their reporting burden.
According to reports, the consolidated filing of property and behavioral taxes involves combining the tax returns for ten types of taxes, including urban land use tax, property tax, vehicle and vessel tax, stamp tax, and farmland occupation tax. When filing multiple taxes, taxpayers no longer need to use separate return forms for each tax; instead, they can file all applicable taxes on a single return form.
While streamlining tax forms, the State Taxation Administration has also simplified the operational procedures of the Electronic Tax Bureau, implementing “centralized management” for 10 types of taxes and achieving “one form, one submission, one payment, one receipt.” Taxpayers can log in once and complete all steps without having to search for multiple forms, significantly boosting tax-processing efficiency and enabling them to fully experience the convenience brought by intelligent tax administration.
“In the past, filing required completing several forms, and even with all the data in order, the online process on the electronic tax bureau still took about ten minutes. Now, everything is consolidated onto a single return form, and the system automatically populates the information, so the entire procedure takes less than six minutes from start to finish.” Recently, Ruan Min, an accountant at Sichuan Zigong Jinlong Cement Co., Ltd., experienced combined filing for the first time through the electronic tax bureau.
According to Lian Qifeng, Deputy Director-General of the Property and Behavioral Tax Department of the State Taxation Administration, June is a monthly tax filing period, during which taxpayers report fewer tax types, whereas quarterly filing periods involve reporting on a broader range of taxes. As a result, the effects of the reform are expected to be more pronounced.
In addition, to help taxpayers promptly benefit from the reforms, on the one hand, the tax authorities have leveraged digital tools to introduce features such as automatic tax calculation, data correlation and verification, and alerts for reporting irregularities, thereby providing a new integrated model for filing and paying taxes that effectively prevents underreporting and misreporting. On the other hand, the tax authorities have strengthened taxpayer education and guidance through initiatives like “Taxpayer Workshops” and a series of instructional courses delivered via new media platforms. They have also established teams of seasoned professionals who go directly to the front lines, helping taxpayers minimize unnecessary visits, reduce form‑filling, and avoid errors during the filing process.
“The reform to consolidate the declaration of property and behavioral taxes is a concrete manifestation of the tax authorities’ efforts to implement the requirements set forth in the ‘Opinions’ and deliver tangible benefits to taxpayers and payers,” said Lian Qifeng. He added that, going forward, the tax authorities will, in conjunction with the “Doing Practical Things for Taxpayers and Payers” initiative and the Spring Breeze Action for Convenient Tax Services, conduct further baseline surveys, thoroughly solicit feedback from taxpayers and frontline tax officials, and continue to make concerted efforts to enhance user experience, reduce burdens, and improve quality and efficiency. Through these measures, they will deepen the reform of consolidated declaration for property and behavioral taxes, thereby continuously boosting taxpayers’ and payers’ sense of gain and satisfaction.

Litigation & Arbitration

Measures for the Administration of Performance of Funds for Local Government Special Bonds Projects
Chapter I General Provisions
Article 1: In order to strengthen performance management of funds allocated to local government special-purpose bond projects, enhance the efficiency of such fund utilization, and effectively mitigate risks associated with government debt, these Measures are hereby formulated in accordance with the Budget Law of the People’s Republic of China, the Regulations for the Implementation of the Budget Law of the People’s Republic of China, the Opinions of the CPC Central Committee and the State Council on Comprehensively Implementing Performance-Based Budget Management, the Opinions of the State Council on Further Deepening Reform of the Budget Management System, the Measures for the Administration of Performance Evaluation of Project Expenditures, and other relevant laws, regulations, and provisions.
Article 2: For the purposes of these Measures, “local government special-purpose bonds” (hereinafter referred to as “special-purpose bonds”) mean government bonds issued by provincial governments for public-interest projects that generate a certain level of revenue, with principal and interest repayment financed by government-managed fund revenues or dedicated revenues attributable to such projects. These include newly issued special-purpose bonds as well as refinancing special-purpose bonds, among others.
Article 3: For the purposes of these Measures, “performance management” refers to the process by which fiscal authorities, project supervisory departments, and project entities, with respect to projects supported by special-purpose bonds, enhance the efficiency of bond‑fund allocation and the effectiveness of their utilization through a series of stages, including ex‑ante performance assessment, performance‑target management, ongoing performance monitoring, performance evaluation, and the application of evaluation results.
Article 4 Performance management shall adhere to the following principles:
(1) Scientific and Standardized Management. Performance of special bond project funds is managed throughout the entire lifecycle. Adhering to the principle that “borrowing must be accompanied by performance evaluation, and ineffectiveness must be held accountable,” this approach follows the fundamental requirements of project‑based expenditure performance management, with a strong emphasis on balancing financing returns and managing debt‑repayment risks. A standardized workflow and indicator system have been established to ensure the orderly implementation of performance‑management activities.
(2) Coordination and Collaboration. Fiscal departments at all levels shall take the lead in organizing performance management of special bond project funds, and shall supervise and guide the competent authorities and project entities in the effective implementation of all relevant management tasks. Higher-level fiscal departments shall strengthen guidance and oversight.
(3) Openness and transparency. Performance information is an essential component of special bond project information and shall be disclosed in accordance with laws and regulations, voluntarily subject to public oversight, and leveraged through transparency to enhance the performance of special bond fund utilization.
(4) Strengthen application. Emphasize the incentive and constraint effects of performance management outcomes by incorporating the performance‑based management results of special bond project funds as a key factor in the allocation of special bond quotas, and linking these outcomes to relevant management measures and policy pilot programs.
Chapter 2: Ex-Ante Performance Evaluation
Article 5. Prior to applying for special bond funds, the project entity or the competent authority shall conduct a ex-ante performance assessment and incorporate the assessment results into the implementation plan for the special bond project. The ex-ante performance assessment shall primarily determine the necessity and feasibility of the project’s request for support from special bond funds, with particular emphasis on evaluating the following aspects:
(1) The necessity, public benefit, and profitability of the project’s implementation;
(II) Compliance of project construction investment and project maturity;
(3) Sources of project funding and the feasibility of ensuring their availability;
(4) Reasonableness of the project’s revenue, cost, and profit forecasts;
(5) Reasonableness of bond‑funding requirements;
(6) The feasibility of the project’s debt repayment plan and the key risk factors associated with debt repayment;
(7) Reasonableness of performance objectives;
(8) Other matters that require inclusion in the ex-ante performance assessment.
Article 6: Local fiscal authorities shall guide the competent departments and project entities to conduct ex-ante performance assessments, making such assessments a prerequisite for including projects in the special bond project pool. When necessary, the fiscal authorities may engage third-party institutions to independently carry out performance assessments, and shall use the assessment results as an important reference for determining whether to grant funding support from special bonds.
Chapter 3: Performance Objective Management
Article 7: Performance objectives shall primarily reflect the output quantity, quality, timeliness, and cost of special bond projects, and shall also encompass performance indicators such as economic benefits, social benefits, ecological benefits, sustainability impacts, and satisfaction among service recipients.
Article 8: When applying for funding from special-purpose bond projects, project entities shall concurrently establish performance targets. Following review by the competent department overseeing the project, these targets shall be submitted to the fiscal authority at the same level for approval. Performance targets shall be as specific and quantifiable as possible, effectively reflecting the project’s expected outputs, financing costs, debt‑repayment risks, and other relevant indicators.
Article 9: Local fiscal authorities shall make the establishment of performance targets a prerequisite for the allocation of special bond funds, strengthen the review of such performance targets, and issue the approved performance targets concurrently with the disbursement of the corresponding special bond funds.
Article 10: In principle, performance targets shall not be adjusted during implementation. If adjustments are necessary due to significant changes in the project’s construction or operational environment, they shall be processed in accordance with the procedures applicable to newly established projects.
Chapter 4: Performance Monitoring and Oversight
Article 11. Performance monitoring during implementation refers to the “dual monitoring” of both the progress in executing the budget for special bond funds and the achievement of performance targets throughout the process of their use, with the aim of identifying weaknesses in fund utilization and project implementation and promptly rectifying any deviations.
Article 12: The competent authorities and project entities shall establish a performance tracking and monitoring mechanism for special bond‑financed projects, conduct ongoing oversight of the achievement of performance targets, promptly rectify any identified issues and notify the fiscal authorities at the same level, thereby enhancing the efficiency of special bond fund utilization and ensuring that performance targets are met on schedule.
Article 13: Local fiscal authorities shall monitor the extent to which the performance targets of special bond projects are achieved. For projects that significantly deviate from their performance targets, disbursement of funds shall be temporarily suspended or halted, and corrective measures shall be promptly urged. If a project cannot be implemented or is found to have serious issues, the corresponding special bond funds shall be promptly recovered, and the intended use shall be adjusted in accordance with prescribed procedures.
Article 14: The financial authorities shall, by means of information technology, explore the implementation of granular, end-to-end oversight of special-purpose bond projects. As required by their work, they shall organize on-site inspections of the construction, operation, and other relevant aspects of such projects, and promptly take corrective measures to rectify any deviations or errors.
Chapter 5 Performance Evaluation Management
Article 15: Local fiscal departments are responsible for organizing the performance evaluation of funds allocated to special bond projects within their respective jurisdictions. Upon completion of the annual budget execution, project implementing entities shall conduct self-assessments of performance and submit the evaluation results to the competent authorities and the local fiscal department. The project‑competent authorities and the local fiscal departments shall select a portion of key projects for performance evaluation.
Article 16: Based on operational needs, provincial finance departments shall annually select a number of major projects for focused performance evaluation. The total funding allocated to the selected projects shall, in principle, not be less than 5% of the region’s newly added special-purpose debt ceiling for the preceding year, with this proportion to be gradually increased. The use of third-party institutions to conduct focused performance evaluations of major projects is encouraged. When necessary, the Ministry of Finance may directly organize and carry out such performance evaluations.
Article 17: The performance evaluations conducted by the project‑responsible authorities and the financial departments shall reflect the project’s decision‑making, management, outputs, and outcomes. The framework of performance evaluation indicators and the outline for performance evaluation shall be independently formulated by the provincial financial departments in light of actual conditions, drawing on relevant examples from the Measures for the Administration of Performance Evaluation of Project Expenditures, while emphasizing the specific characteristics of performance evaluation for special bond‑funded projects. Such evaluations shall cover, but are not limited to, the following:
(1) Decision-making: the status of project approval; the progress of preliminary procedures, including site investigation, design, land acquisition, environmental impact assessment, and construction commencement permits; compliance with the eligible sectors and priorities for special-purpose bond financing; the formulation of project performance targets; and the alignment between the requested special-purpose bond allocation and actual funding needs.
(2) Management aspects: the inclusion of special bond revenues and expenditures, principal and interest repayments, and special‑purpose revenues within the government fund budget; the use of bond proceeds in accordance with their designated purposes; the alignment between disbursement and expenditure progress and project construction progress; the registration of assets and property rights following project completion; the implementation of the principal and interest repayment schedule for special bonds; the reasonableness of project revenues, costs, and expected returns; the balance of annual revenues and expenditures or the consistency between the projected full‑life‑cycle returns and the scale of the special bonds; the matching of the bond’s maturity with the project’s duration; the transparency of information disclosure related to special‑bond projects; the rectification of issues identified through external oversight; the management and utilization of information systems; and other financial, procurement, and administrative matters.
(3) Output-related aspects: the status of asset formation; compliance of project construction quality with relevant standards; progress of project implementation; project construction costs; the effective cost of bond financing after accounting for idle capacity; the provision of public goods and services following project completion; and project operating costs, among others.
(4) Performance Outcomes: The extent to which the project has achieved its overall benefits; the extent to which the project has leveraged effective social investment; the extent to which the project has supported major national regional development strategies; and the level of satisfaction among the project’s direct beneficiaries, among other factors.
Article 18: Special-purpose bond projects shall establish a full-lifecycle tracking and performance‑evaluation mechanism. During the project construction phase, performance evaluation shall focus on project decision‑making, management, and outputs; during the operational phase, it shall focus on project outputs and benefits.
Article 19: Local financial departments at all levels shall be responsible for organizing and implementing the public disclosure of performance evaluation results within their respective jurisdictions, and for guiding project supervisory authorities and project entities to publicly disclose, by the end of June each year, the performance evaluation results of special bond‑funded projects for the preceding year. Such performance evaluation results shall be made public on the nationally unified platform for disclosing local government debt information.
Chapter 6: Application of Evaluation Results
Article 20: Performance evaluation results shall be quantified as a comprehensive score on a 100-point scale and graded accordingly. A comprehensive score of 90 points or above is rated “Excellent”; 80 to 90 points is rated “Good”; 60 to 80 points is rated “Average”; and below 60 points is rated “Poor.”
Article 21: The project supervising authorities and the project implementing entities shall promptly address identified issues based on the results of performance evaluations. Provincial-level financial departments shall also promptly communicate the key performance evaluation findings to the project supervising authorities and the project implementing entities, and provide recommendations for corrective actions. In light of the evaluation results and the corrective measures proposed, the project supervising authorities and the project implementing entities shall formulate specific remedial actions and diligently carry out the corresponding rectification efforts.
Article 22: The higher-level fiscal authorities shall conduct regular spot checks on the performance management work of their lower-level counterparts, providing guidance and urging improvements in performance management. The Ministry of Finance shall organize its local supervisory bureaus to carry out periodic spot checks on the performance management practices of various regions and on the implementation of key performance evaluations by provincial-level fiscal authorities, with the results of such checks reported in writing to the Ministry of Finance.
Article 23: In accordance with the principle of aligning evaluation and the application of results, the Ministry of Finance shall, when allocating additional special-purpose debt quotas for local governments, take into account factors such as the Ministry’s performance evaluation results and the spot-check findings of local supervisory bureaus. Provincial-level fiscal departments, in allocating special-purpose debt quotas, shall consider factors including the outcomes of spot checks and the results of key performance evaluations they have conducted. Local fiscal departments shall use performance evaluation results as adjustment factors in determining the allocation of special bond quotas during the project construction phase and the disbursement of fiscal subsidies during the operational phase.
Article 24: Where fiscal departments at all levels, project supervisory authorities, project entities, or individuals violate the regulations on performance management of special bond project funds, resulting in serious inefficiency and ineffectiveness in the use of public funds and causing significant losses, or engage in other unlawful or disciplinary violations such as abuse of power, dereliction of duty, or favoritism and fraud, they shall be ordered to make corrections in accordance with the law; the responsible leading personnel and other directly responsible persons shall be subject to disciplinary sanctions in accordance with the law; and where criminal offenses are suspected, the cases shall be referred to the relevant authorities for handling in accordance with the law.
Chapter VII Supplementary Provisions
Article 25: Provincial finance departments shall formulate measures for the management of performance of funds allocated to special bond projects within their respective regions, submit them to the Ministry of Finance for record‑keeping, and forward copies to the relevant supervisory bureaus of the Ministry of Finance.
Article 26 This Measures shall enter into force as of the date of its issuance. For special-purpose bonds newly issued in 2022 and subsequent years, the refinancing special-purpose bonds issued upon maturity in accordance with relevant regulations shall be governed by these Measures by analogy.

Effective August 1! The “Sanya City Regulations on the Promotion and Administration of Rural Homestays” have been promulgated.
Announcement of the Standing Committee of the Sanya Municipal People’s Congress
No. 5 (2021)
The Regulations of Sanya City on the Promotion and Administration of Rural Homestays, adopted at the 49th Meeting of the Standing Committee of the 7th People’s Congress of Sanya City, were approved at the 28th Meeting of the Standing Committee of the 6th People’s Congress of Hainan Province on June 1, 2021. They are hereby promulgated and shall enter into force as of August 1, 2021.
Standing Committee of the People’s Congress of Sanya City
June 30, 2021
The Standing Committee of the Hainan Provincial People’s Congress on
Decision on the Approval of the Regulations of Sanya City on the Promotion and Administration of Rural Homestays
(Adopted at the 28th Meeting of the Standing Committee of the Sixth Hainan Provincial People’s Congress on June 1, 2021)
The 28th Meeting of the Standing Committee of the Sixth Hainan Provincial People’s Congress has decided to approve the “Regulations of Sanya City on Promoting and Managing Rural Homestays,” as submitted for review by the Standing Committee of the Sanya Municipal People’s Congress, and to have it promulgated and put into effect by the Standing Committee of the Sanya Municipal People’s Congress.
Regulations of Sanya City on the Promotion and Administration of Rural Homestays
(Adopted at the 49th Meeting of the Standing Committee of the Seventh Sanya Municipal People’s Congress on April 30, 2021; approved at the 28th Meeting of the Standing Committee of the Sixth Hainan Provincial People’s Congress on June 1, 2021)
Chapter I General Provisions
Article 1: In order to promote the sustained and sound development of the rural homestay industry, standardize the management of rural homestays, enhance their quality, safeguard the legitimate rights and interests of both operators and consumers, and advance rural revitalization, this Regulation is hereby formulated in accordance with relevant laws and regulations and in light of the actual conditions of this municipality.
Article 2 This Regulation shall apply to the promotion, operation, management, and other related activities of the rural homestay industry within the administrative territory of this municipality.
Article 3: For the purposes of these Regulations, “rural homestays” refer to small-scale lodging establishments located in rural areas, operated using villagers’ or residents’ privately owned residences, village collective buildings, former state-owned agricultural (forestry) farm buildings, or other relevant facilities. The specific criteria for defining the scale of rural homestays shall be in accordance with the relevant provisions of the State and this Province.
The “rural areas” referred to in the preceding paragraph include villages, communities, and residential neighborhoods located outside the urban built-up area of this municipality. The boundaries of the urban built-up area of this municipality shall be designated and adjusted by the Municipal People’s Government and publicly announced.
Article 4: The development of the rural homestay industry shall adhere to the principles of ecological priority, scientific planning, streamlined market access, law-based regulation, distinctive branding, and shared development, thereby enabling consumers to experience the region’s pristine natural environment, unique cultural heritage, and traditional ways of life, and achieving a harmonious integration of economic, social, and ecological benefits.
Article 5: The Municipal People’s Government shall provide unified leadership over rural homestay development throughout the city, establish a comprehensive coordination mechanism, deliberate and resolve major issues in the field of rural homestays, and coordinate and advance the development of the rural homestay industry.
In accordance with the principle of jurisdictional management, the district people’s government shall organize and implement the supervision and administration of activities related to the construction, establishment, and operation of rural homestays within its administrative area.
The Management Committee of the Yucai Ecological Zone shall perform its relevant duties in accordance with the provisions of the preceding paragraph.
Large community comprehensive service institutions and village (residents’) committees shall, in coordination with the relevant authorities, ensure the safety management, service provision, and other related tasks of rural homestays.
Article 6 The housing and urban–rural development authorities shall coordinate with relevant departments to exercise oversight and administration over the construction, operation, and other related activities of rural homestays.
The competent authority for tourism and culture shall coordinate with relevant departments to exercise oversight and management over rural homestay operations.
The competent authorities for natural resources and urban planning are responsible for the supervision and administration of rural homestay land use and planning.
The market supervision and administration authorities are responsible for registering rural homestay business entities, supervising and guiding rural homestay operators to conduct business with integrity and engage in fair competition, and overseeing food safety in the rural homestay sector.
The health and health administrative authorities are responsible for the public health supervision and management of rural homestays.
Public security organs are responsible for the public security management of rural homestays, guiding operators in installing and maintaining public security information systems and equipping them with the necessary security measures.
Fire and rescue agencies and public security police stations, in accordance with relevant regulations, are responsible for the supervision and management of fire safety at rural guesthouses.
In accordance with relevant regulations, the comprehensive administrative law enforcement authorities are responsible for investigating and prosecuting violations in activities related to the construction, establishment, and operation of rural homestays, and they assume the corresponding supervisory and administrative duties associated with administrative penalties.
The departments of development and reform, finance, ecological environment, and agriculture and rural affairs shall, in accordance with their respective responsibilities, effectively carry out work related to rural homestays.
Article 7: Rural homestay operators are encouraged to join the rural homestay industry association. The rural homestay industry association shall strengthen self-regulation, promote ethical business practices, enhance service quality, safeguard the legitimate rights and interests of rural homestay operators, and cooperate with relevant authorities in formulating industry service specifications and standards, as well as conducting inspections of service quality, grading assessments, integrity evaluations, and promotional activities.
Chapter 2: Promotional Measures
Article 8: The Municipal People’s Government shall incorporate the development of the rural homestay industry into the Municipal Plan for National Economic and Social Development and the Rural Revitalization Strategy, and, in accordance with the Municipal Land and Space Planning, Village Planning, and the Provincial Rural Homestay Development Plan, shall formulate a Municipal Rural Homestay Development Plan. This plan shall clearly define the development orientation, spatial layout, and regional characteristics of the rural homestay sector, and guide the industry toward standardized and orderly growth.
Article 9: The people’s governments of municipalities and districts shall formulate and implement policies and measures that are aligned with the development of the Hainan Free Trade Port and conducive to the sustained, healthy growth of the rural homestay industry; optimize the investment and business environment; cultivate regionally distinctive brands; and promote the integrated development of the rural homestay industry with related sectors.
Support the development of rural homestay industries in villages rich in tourism resources and with distinctive local characteristics, as well as in villages located around scenic areas and tourist attractions. Encourage households, village collective economic organizations, and economically organized entities with professional management capabilities to participate in the construction, operation, and management of rural homestays through self‑operation, leasing, joint ventures, equity participation, and other models.
Article 10: The district people’s government shall, in accordance with the law, organize efforts to revitalize idle rural residential land, houses, and other related facilities for the development of the rural homestay industry.
Article 11: The people’s governments of municipalities and districts shall include the funds required for rural homestay development in their respective fiscal budgets, formulate reward measures for rural homestays in accordance with relevant regulations, and coordinate tourism industry development and related agricultural funds to support the growth of the rural homestay sector and the construction of supporting infrastructure.
Article 12: Financial institutions are encouraged to promote specialized financial products such as rural housing mortgage loans and credit loans for rural residents, streamline loan approval procedures, and increase credit support for the development of the rural homestay industry.
The municipal and district people’s governments may provide interest subsidies for loans extended to rural homestay businesses operated by farming households and village collective economic organizations.
Article 13: The municipal tourism and cultural authorities shall standardize the grading of rural homestays, establish an exit mechanism, support the development of high-quality rural homestays, and, as necessary, formulate local standards for rural homestays. They shall also supervise and guide rural homestay operators to conduct their businesses in compliance with national, industry, and local standards.
Article 14: The relevant municipal and district authorities shall strengthen professional training for personnel working in rural homestays, enhancing their service skills, safety awareness, and emergency response capabilities, and fostering a pool of professionally trained staff for the rural homestay sector.
Article 15: The municipal tourism promotion agency shall incorporate the promotion of rural homestays into its annual tourism marketing plan, organize and carry out promotional activities for rural homestays, and enhance the market visibility of high-quality rural homestays.
Chapter 3: Procedures for Establishment
Article 16: The establishment of rural homestays shall comply with relevant national and provincial requirements concerning planning, land use, building quality, fire safety, public security management, public health, and facilities and equipment, and shall be subject to the prescribed procedures for business registration in accordance with applicable national and provincial regulations.
Article 17: The relevant municipal and district authorities shall streamline the procedures for establishing rural guesthouses and enhance administrative efficiency. Except as otherwise provided by national laws and regulations or by this province, no additional restrictive conditions may be imposed on the establishment of rural guesthouses.
Article 18: Personnel employed in rural homestays shall hold valid identification and a valid health certificate.
Foreign nationals who invest in or operate rural guesthouses, or who are employed by such establishments, shall comply with the relevant national and provincial regulations.
Chapter 4: Business Standards
Article 19: Operators of rural homestays shall conduct their business in accordance with the law, engage in fair competition, act with honesty and integrity, and abide by and uphold market order.
Article 20: Operators of rural homestays shall primarily provide accommodation services. Where they also engage in ancillary services such as food sales, catering, wedding photography, car rental, fishing, fruit picking, or health and wellness activities, they shall comply with applicable industry laws, regulations, and relevant provisions to ensure safe and compliant operations.
Article 21: Operators of rural guesthouses shall display relevant licenses and permits, accommodation guidelines, and emergency evacuation maps in prominent locations within their premises, and shall publicly disclose their service offerings and fee schedules.
Rural homestays that have completed the required registration procedures in accordance with relevant regulations and operate in compliance with the law may obtain the provincially standardized rural homestay identification mark from the district housing and urban–rural development authority and display or affix it at their premises. Rural homestays that have not complied with the prescribed registration requirements shall not use this identification mark without authorization.
Article 22: Operators of rural homestays shall assume primary responsibility for production safety and fire safety, establish and improve safety management systems, formulate emergency response plans and conduct regular drills, assign full-time or part-time security personnel and fire safety managers in accordance with the scale of operations, standardize safety management in compliance with the law, and fulfill their obligations to ensure safety.
Operators of rural guesthouses have a duty to warn and inform guests of any circumstances that may endanger their personal safety or property; areas posing safety risks must be marked with warning signs, and appropriate protective measures must be implemented.
In the event of a sudden safety incident, rural homestay operators shall immediately activate their emergency response plan, promptly and accurately report to the relevant authorities in accordance with applicable regulations, and, when necessary, assist the authorities in evacuating guests.
Article 23: The service information and advertising provided by rural homestay operators to consumers shall be objective and truthful, and shall not involve false or misleading advertising.
Article 24: When accommodating guests, staff of rural homestays shall verify the guests’ identification documents, record the information in accordance with prescribed items, and transmit and report such registration data to the public security authorities in real time.
Article 25: When staff members of rural guesthouses discover that a guest falls under any of the following circumstances, they shall immediately report to the public security authorities:
(1) Using another person’s identity documents without authorization, or using forged or altered identity documents;
(2) Carrying dangerous items, prohibited items, stolen goods that have been reported by public security organs as being sought, or other suspicious items;
(3) Those suspected of committing illegal acts or who are wanted by public security organs;
(4) Other circumstances prescribed by laws and regulations.
Article 26: After a guest has completed check-in, except in the following circumstances, no one may enter the guest’s room without the guest’s consent or otherwise interfere with the guest’s stay:
(1) In the event of an emergency that may endanger the personal safety or property of guests;
(2) When staff members of state organs perform official duties in accordance with the law;
(3) When staff at a rural guesthouse clean the guest rooms in accordance with the prescribed schedule and the guest has not explicitly objected;
(4) Other circumstances prescribed by laws and regulations.
Article 27: Operators of rural homestays shall install video surveillance equipment in accordance with relevant regulations and ensure that such equipment in the public areas of the homestay remains operational throughout the period of business. Video surveillance recordings shall be retained for no less than thirty days.
Rural homestay operators shall safeguard consumers’ privacy by refraining from installing video surveillance equipment in private areas such as guest rooms, and by not disseminating, selling, disclosing, or altering guests’ accommodation information or video surveillance footage. Except where authorized by law for investigative or inquiry purposes by competent authorities, or with the consumer’s consent, they may not disclose to any entity or individual any information pertaining to consumers or their video surveillance records.

Article 28: Rural homestay operators are encouraged to obtain commercial insurance, such as public liability insurance, fire insurance, and personal accident insurance, to mitigate operational risks.
Chapter Five: Supervision and Administration
Article 29: The district-level tourism and culture authorities shall coordinate with relevant departments, in accordance with their respective responsibilities, to strengthen ongoing and post‑event supervision of rural homestay operations through mechanisms such as “double random inspections, one public disclosure” and cross‑departmental joint oversight. Where it is found that a rural homestay has failed to complete the required establishment procedures, does not meet statutory operating conditions, or engages in other unlawful business practices, it shall be dealt with in accordance with applicable laws and regulations.
Article 30: The district housing and urban–rural development authority shall coordinate with relevant departments to establish an information exchange and sharing mechanism for rural homestays, promptly transmitting registration information on the establishment of such establishments to the tourism and culture, public security, health, market supervision, fire safety, and comprehensive administrative law enforcement authorities for ongoing and post‑event regulatory oversight.
Article 31: The municipal market supervision and administration department shall, in coordination with relevant departments, strengthen the development of an integrity system for rural homestays, collect and integrate credit information on rural homestays, incorporate such information into the municipal social credit information sharing platform in accordance with the law, and implement tiered and categorized regulatory measures based on the credit status of rural homestays. Rural homestays that engage in illegal or dishonest conduct or pose higher risks shall be subject to enhanced oversight, and those with serious violations shall be subject to joint punitive measures in accordance with the law.
Article 32: In the course of routine grid-based management, comprehensive service institutions of large communities and village (residents’) committees shall, upon discovering that a rural homestay has failed to complete the required registration procedures in accordance with relevant regulations, urge the operator to promptly comply with such procedures. If they identify any illegal business activities by a rural homestay, they shall promptly report the matter to the competent authorities for lawful handling.
Article 33 Any organization or individual shall have the right to file complaints or reports regarding violations of these Regulations. The department receiving such complaints or reports shall handle them in accordance with the law and promptly provide the complainant or reporter with feedback on the outcome of the handling.
Article 34 The people’s governments of municipalities and districts, relevant departments, comprehensive service institutions for large communities, village (residents’) committees, and other social organizations shall, in accordance with the relevant provisions of the Hainan Province Regulations on the Diversified Resolution of Disputes, and within the scope of their respective responsibilities, establish and improve mechanisms for consumer rights protection in rural homestay consumption, as well as systems for consultation services, investigations, mediation, and other related functions, so as to promptly resolve disputes arising from rural homestay consumption.
Chapter VI Legal Liability
Article 35 Where acts in violation of the provisions of these Regulations are already subject to penalties under relevant laws, administrative regulations, or local regulations of this province, such provisions shall prevail.
For acts that violate the provisions of these Regulations but for which no penalty is prescribed herein, if other local regulations of this municipality have already established penalties, such penalties shall apply.
Any act in violation of the provisions of these Regulations that constitutes an administrative penalty for public order shall be dealt with by the public security organs in accordance with the law; if it constitutes a crime, criminal liability shall be pursued in accordance with the law; and if it causes damage, the responsible party shall bear compensation liability in accordance with the law.
Article 36: In violation of Article 23 of these Regulations, if a rural homestay operator publishes false advertisements, the comprehensive administrative law enforcement authority shall impose penalties in accordance with the provisions of the Advertising Law of the People’s Republic of China.
Article 37: In violation of the provisions of Article 24 of these Regulations, if staff members of rural homestays fail to register guests and report such information in accordance with the relevant regulations, the public security authorities shall impose penalties in accordance with applicable laws and regulations.
Article 38: If the people’s governments of municipalities and districts, as well as relevant departments, engage in any of the following circumstances in the administration of rural homestays, the directly responsible leading officials and other persons directly liable shall be held accountable in accordance with laws and regulations:
(1) Failing to investigate and prosecute illegal operations by rural homestays, or deliberately shielding such activities;
(2) Conducting inspections, imposing fees, or issuing penalties on rural homestays without lawful basis;
(3) Those who, having the duty to resolve disputes, unreasonably refuse to accept or mediate consumer disputes arising from rural homestays;
(4) Other acts of abuse of power, dereliction of duty, or corruption for personal gain.
Chapter VII Supplementary Provisions
Article 39: Rural homestays that were already in operation prior to the entry into force of these Regulations but have not yet completed the required establishment procedures shall, within ninety days from the date of such entry into force, comply with the relevant provisions and complete the necessary formalities. Failure to do so within the prescribed time limit shall be subject to handling in accordance with applicable laws and regulations.
Article 40 The Municipal People’s Government shall, in accordance with the provisions of these Regulations and in light of actual working conditions, formulate specific implementation measures.
Article 41 This Regulation shall come into force on August 1, 2021.

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