JC Master Legal News Issue 978

Key Takeaways for This Issue
The China Securities Regulatory Commission has issued the “Administrative Penalty Measures for Securities and Futures Law Violations.”
From July 17 to August 16, 2020, the China Securities Regulatory Commission (CSRC) publicly solicited comments on the “Administrative Penalty Measures” and sought input from relevant parties through symposiums and written consultations. The broader public generally endorsed the content of the Measures; the CSRC carefully reviewed each of the proposed amendments and refinements, and incorporated all reasonable suggestions.
In 2020, the Chinese steel industry accounted for 15% of the nation’s total carbon emissions: reducing pollution and cutting carbon in the steel sector faces multifaceted challenges.
On July 17, at the “2021 (12th) China Steel Energy Conservation and Emission Reduction Forum” hosted by the Metallurgical Industry Planning & Research Institute, Li Xinchuang, Secretary of the Party Committee, Chief Engineer, and Foreign Academician of the Russian Academy of Natural Sciences, stated that the steel industry still faces numerous practical challenges in reducing pollution and carbon emissions.

Interpretation of the “Announcement of the State Taxation Administration on Matters Related to the Integration of Value-Added Tax, Consumption Tax, and Additional Tax and Fee Declaration Forms”
To 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 in the tax field, and to optimize the business environment, and in accordance with the requirements of the Party history study and education campaign to carry out the practical activity “Doing Concrete Things for the People,” the State Taxation Administration has decided, in order to effectively reduce the reporting burden on taxpayers and payers, to comprehensively implement the integration of the value-added tax and consumption tax return forms with their respective supplementary tax and fee return forms, as stipulated in the “Opinions of the State Taxation Administration on Launching the 2021 ‘Doing Practical Things for Taxpayers and Payers and the Spring Breeze Action for Convenient Tax Services’” (Tax Total Issue [2021] No. 14).
Delegating enforcement powers to the grassroots level, standardizing the use of “electronic eyes” in law enforcement, and addressing “duplication of enforcement”... How does the new Administrative Penalty Law address the challenges facing law enforcement?
Grassroots-level agencies lack enforcement authority, making it difficult to meet practical needs; “electronic eyes” may capture violations but merely record them without providing notice; and the same issue is subject to repeated penalties, placing an additional burden on the public… In recent years, such problems in administrative law enforcement have frequently drawn widespread public complaints. The newly revised Administrative Penalty Law, which came into effect on July 15, is expected to address these persistent enforcement challenges.

Finance & Capital Markets

Upholding Our Original Aspiration, Shouldering Our Mission, Delivering Practical Results, and Elevating Investor Protection in the Capital Market to a New Level—Vice Chairman Yan Qingmin at
Speech at the 2021 “May 15 National Investor Protection Public Awareness Day” Event
Respected Chairman Yi Huiman and Vice President Jiang Wei,
Distinguished guests, dear friends:
Good morning, everyone! The annual National Investor Protection Public Awareness Day has become an important platform for promoting capital market knowledge across society, strengthening investor protection awareness, and fostering a culture of rational investing. On behalf of the China Securities Regulatory Commission, I would like to extend our heartfelt gratitude to all leaders and friends from all sectors who have long shown concern for and supported the reform and development of the capital market and investor protection efforts.
This year marks the centenary of the founding of the Communist Party of China and the inaugural year of the 14th Five-Year Plan. Against this backdrop, we have designated this year’s “May 15 National Investor Protection Public Awareness Day” under the theme “Caring for Investors, Acting Together—Staying True to Our Original Aspiration, Shouldering Our Mission, and Delivering Concrete Results for Investors.” In particular, we have launched the investor protection campaign “Retracing a Century of History: A Red Journey in Investor Education,” leveraging Party history study and education as an opportunity to further uphold our original aspiration and mission, deliver tangible benefits to investors, and continuously enhance our capacity and effectiveness in serving them.
Distinguished guests, dear friends,
China’s capital market boasts the world’s largest and most active investor base, with the number of A‑share investors now exceeding 180 million. Upholding a people-centered approach to capital market regulation and safeguarding the legitimate rights and interests of the broad investor community are intrinsic imperatives for the capital market in fulfilling its original aspirations and mission. At present, in pursuit of building a capital market that is standardized, transparent, open, dynamic, and resilient, the China Securities Regulatory Commission is earnestly implementing the guiding principle of “establishing sound systems, refraining from unnecessary intervention, and adopting zero tolerance” toward misconduct. It is vigorously advancing a new round of comprehensive capital market reforms centered on registration‑based system reform. As a result, the market’s institutional framework, operational mechanisms, and cultural ethos are undergoing increasingly profound structural transformations, and a market ecosystem conducive to strengthening investor protection is gradually taking shape. Entering a new stage of development, embracing a new development philosophy, and forging a new development pattern require us to steadfastly keep service to the real economy and investor protection as our fundamental starting point and ultimate goal. We must remain committed to a market‑oriented, law‑based, and internationally aligned path, continue to deepen capital market reforms, and further leverage the capital market’s pivotal role in driving high‑quality development, enabling investors to participate more equitably in the capital market. This constitutes an important mission and responsibility of the capital market in the new era, and it is also a concrete manifestation of putting the people at the center of development.
Distinguished guests, dear friends,
Over the past year, the China Securities Regulatory Commission has resolutely implemented the decisions and arrangements of the CPC Central Committee and the State Council, coordinating efforts to contain the epidemic, deepen reform, guard against risks, and support economic and social development. It has focused on addressing a number of practical issues of concern to a broad base of investors, striving to create a market environment that attracts and retains investors.
First, new progress has been made in the rule of law. Following the implementation of the new Securities Law, the Eleventh Amendment to the Criminal Law was successfully enacted, fundamentally reversing the situation in which the costs of securities-related violations and crimes were excessively low. Meanwhile, a guiding document on rigorously cracking down on securities‑related illegal activities in accordance with the law has been reviewed and approved by the Central Commission for Comprehensive Deepening Reform. The China Securities Regulatory Commission is working closely with legislative and judicial authorities to accelerate the improvement of a securities‑enforcement and judicial system and mechanism with Chinese characteristics, which will help further enhance the effectiveness of capital market governance and strengthen the legal foundation for better protecting investors’ legitimate rights and interests.
Second, new breakthroughs have been achieved in investor redress and compensation. With strong support from the Supreme People’s Court and local courts, the judicial interpretation on representative litigation in securities disputes has been officially promulgated, and judgments have already been handed down in several ordinary representative‑litigation cases. The first-ever special representative‑litigation case has also been successfully concluded, marking a landmark event in the history of capital market development. Through institutional arrangements such as the special representative mechanism, professional expertise, and reductions or exemptions in litigation costs, the costs and risks associated with pursuing legal remedies for investors will be significantly reduced, effectively addressing the challenges of difficult litigation and high维权 costs faced by large numbers of dispersed victims.
Third, significant progress has been made in safeguarding investors’ rights and enhancing the returns‑driving mechanism. The “toolbox” for investor protection continues to expand: in 2020, mediation organizations handled over 6,100 cases, successfully resolving more than 4,900 of them, with total amounts involved exceeding RMB 800 million. To date, over 50,000 investors have recovered losses through a range of redress mechanisms, including diversified dispute resolution, litigation support, advance compensation, and model judgments. Meanwhile, the 12386 hotline has processed more than 600,000 investor complaints. Listed companies have been urged to increase cash dividends and share buybacks, with last year’s dividend payouts reaching an all‑time high. For six consecutive years, the Blue Book on Investor Protection in China’s Capital Market has been published, earning widespread acclaim from all sectors of society.
Fourth, investor education services have achieved new results. Since the China Securities Regulatory Commission and the Ministry of Education jointly issued the Memorandum of Cooperation on Strengthening Public Awareness and Education in Securities and Futures Matters, the long-term collaborative mechanism has been advancing smoothly and yielding significant outcomes. At present, 31 provinces, municipalities, and autonomous regions have integrated investor education into the national education system, with pilot programs now being conducted in nearly 5,000 schools. Nationwide, there are now more than 140 securities and futures investor education bases, and the investor education service system is steadily improving.
Fifth, international cooperation on investor protection has yielded new results. In January this year, the document “Global Handling of Complaints and Redress of Rights for Small and Medium-Sized Investors,” spearheaded by the China Securities Regulatory Commission and jointly developed with regulatory authorities from 14 jurisdictions, including those under common law, was approved by the IOSCO Council. This marks the first time China has taken the lead in drafting an international instrument in the field of investor protection, underscoring the international community’s recognition of the effectiveness of China’s efforts to safeguard investors in its capital markets. In the World Bank’s Doing Business 2020 report, China’s score for the “Protecting Minority Investors” indicator improved markedly for two consecutive years, climbing from 119th place to 28th.
Distinguished guests, dear friends,
Investor protection is a long-term, foundational undertaking. Going forward, the China Securities Regulatory Commission will continue to make respecting, revering, and protecting investors the central theme of its regulatory work. It will effectively integrate Party history study and education with efforts to advance capital market reform and development and strengthen investor protection, further reinforcing the “comprehensive investor protection” philosophy, proactively fostering an open, fair, and just market environment, and providing investors with more effective regulatory safeguards and redress mechanisms, thereby genuinely enhancing their sense of security and satisfaction. Key priorities will focus on implementing “four ‘ones’.”
First, we will further advance a series of capital market reform measures. We will vigorously promote the enhancement of listed companies’ quality and continue to encourage them to deliver tangible returns to investors through cash dividends, share buybacks, and other means. We will maintain a zero‑tolerance approach to cracking down on all forms of securities‑related violations and misconduct, continuously improve the market ecosystem, and bolster investor trust and confidence. We will hold intermediary institutions accountable and urge asset management offices to strengthen their professional capabilities and compliance management, thereby better fulfilling the capital market’s wealth‑management role. In addition, we will accelerate the development of the capital market’s foundational institutional framework, refine the multi‑tiered market structure, and provide a more robust foundation for enhancing governance effectiveness and ensuring the market’s long-term, healthy development.
Second, further refine the comprehensive system of supporting regulations. Centered on advancing the implementation of the new Securities Law, we will accelerate the formulation and revision of relevant ancillary rules and regulations, and promptly improve corresponding operational measures and standards. We will also, at an appropriate time, initiate the drafting of a Regulation on the Protection of Investors’ Rights and Interests and explore the establishment of a special compensation fund for investor protection.
Third, we will further refine the “one‑stop” mechanism for protecting investors’ rights. By leveraging the synergistic effects of a comprehensive set of mechanisms for investor rights enforcement and redress, we will promote the regular implementation of representative litigation by investor protection institutions and fully harness the role of these institutions in safeguarding investor interests. We will put into practice the “Fengqiao Experience” of the new era, elevating the institutionalization and standardization of diversified dispute resolution in the securities and futures sectors. Drawing on the successful experiences of mechanisms such as advance compensation, we will enrich the body of cases supporting litigation, disseminate effective practices, and provide investors with more convenient legal services.
Fourth, we will further enhance the range of convenient services under the “one-stop” framework. We will intensify the use of technological tools in investor protection, make full use of the investor service hotline and operate a dedicated investor‑focused website, gradually establish a national investor database, and advance initiatives such as online legal assistance, thereby shifting investor rights‑protection from “in‑person visits” to “online processing.” We will also leverage the strengths of investor education bases, continue to integrate investor education into the national education system, provide investors with tangible, easily accessible services, organize engaging, memorable activities, and deliver practical, actionable knowledge.
　Distinguished guests, friends, and investors, investor protection is a comprehensive undertaking that requires the concerted efforts of all stakeholders. We hope that legislative and judicial bodies, relevant ministries and commissions, local governments, market participants, and the media will continue to show their concern and support for investor protection. At the same time, we urge all investors to strengthen their awareness of self‑protection, further embrace the principles of rational investing, value investing, and long‑term investing, and work together to foster a healthy, sustainable, and thriving investment ecosystem, thereby driving continuous progress in the cause of investor protection.
　Thank you, everyone!
The China Securities Regulatory Commission has issued the “Administrative Penalty Measures for Securities and Futures Law Violations.”
On July 15, 2021, the China Securities Regulatory Commission issued the Measures for Administrative Penalties for Securities and Futures Law Violations (hereinafter referred to as the “Penalty Measures”), which took effect from the date of their promulgation.
Since the 18th National Congress of the Communist Party of China, the Party Central Committee with Comrade Xi Jinping at its core has comprehensively advanced law-based governance, deepened reform of the administrative law enforcement system, and put forward a series of tasks and requirements aimed at further promoting law-based administration and accelerating the building of a law-based government. At the same time, with the rapid development of the capital market, administrative penalties in the securities and futures sectors are facing new circumstances, placing higher demands on strengthening law enforcement capacity and elevating the level of law-based administration. Accordingly, it is necessary to formulate and promulgate specific measures for imposing administrative penalties for violations in the securities and futures fields, thereby providing robust institutional support for further enhancing the effectiveness of inspection and penalty work. From July 17 to August 16, 2020, the China Securities Regulatory Commission (CSRC) publicly solicited opinions from the public on the “Penalty Measures” and also sought input through symposiums and written consultations. All sectors of society generally expressed support for the content of the Measures; the CSRC carefully reviewed each of the proposed amendments and improvements, and incorporated all reasonable suggestions.
The “Administrative Penalty Measures” comprise 41 articles. The main provisions include: First, clarifying the case‑filing procedures and enforcement powers. Where illegal leads are discovered and the relevant conditions are met, a case shall be filed. To ensure that administrative penalties are imposed lawfully and smoothly, the measures and authorities of enforcement have been further specified and refined, covering the implementation of actions such as freezing, sealing, seizing, preserving, restricting exit from the country, imposing trading restrictions, and requiring relevant entities to submit documents and materials, as well as the circumstances under which parties fail to cooperate and the corresponding consequences. Second, standardizing investigation and evidence‑collection practices. The standards and requirements for collecting and examining key types of evidence—physical evidence, documentary evidence, statements by parties, electronic data, and others—have been further clarified, thereby regulating case‑investigation and evidence‑gathering activities. Provisions have also been made for the conversion of evidence in specific situations and for engaging intermediary agencies to provide professional support. Third, improving the review and adjudication mechanism. The China Securities Regulatory Commission has established an Administrative Penalty Committee, which reviews cases referred to it in accordance with regulations and conducts legal compliance reviews. In line with the authorization granted by the Administrative Penalty Law, it is stipulated that an administrative penalty decision must be rendered within one year from the date of case filing; in exceptional circumstances, with approval by the head of the competent authority, the deadline may be extended, but each extension shall not exceed six months. Fourth, implementing the three institutional mechanisms for administrative law enforcement. The entire enforcement process is documented through written records and other means, archived and preserved; audio‑visual recordings may be made of enforcement procedures that are likely to give rise to disputes. Prior to issuing an administrative penalty decision, a legal compliance review must be conducted in accordance with the law. Furthermore, administrative penalty decisions shall be made public in accordance with regulations on government information disclosure. Fifth, strengthening the protection of the rights of parties concerned and the oversight of law‑enforcement personnel. Before an administrative penalty decision is issued, a notice of impending administrative penalty must be served on the party concerned, and the party’s rights to make representations, present defenses, request a hearing, and inspect case files must be safeguarded in accordance with the law. Law‑enforcement officers are required to perform their duties conscientiously, act in accordance with the law, and maintain impartiality and integrity; they may not abuse their power or exploit their official position to seek improper gains.
Going forward, the China Securities Regulatory Commission will earnestly implement the “Opinions on Strictly Cracking Down on Securities Law Violations in Accordance with the Law,” issued by the General Office of the CPC Central Committee and the General Office of the State Council. It will further standardize enforcement practices, enhance enforcement effectiveness, and ensure full compliance with the provisions of the Securities Law, the Administrative Penalty Law, and the Measures for the Administration of Administrative Penalties. The Commission will rigorously enforce the law against all types of securities and futures violations, intensify investigations and penalties for major illegal cases, and provide a stronger legal framework to support the development of a capital market that is standardized, transparent, open, dynamic, and resilient.

The China Securities Regulatory Commission has centrally deployed a special enforcement campaign to rigorously crack down on securities law violations in accordance with the law.
　To implement the “Opinions on Severely Cracking Down on Securities Law Violations in Accordance with the Law,” issued by the General Office of the CPC Central Committee and the General Office of the State Council, and in line with the Financial Stability and Development Committee of the State Council’s guiding principles of “establishing sound systems, non‑interference, and zero tolerance,” the China Securities Regulatory Commission has recently launched a coordinated special enforcement campaign. This campaign targets serious violations such as financial fraud, misappropriation of funds, unauthorized guarantees, market manipulation, and insider trading, with rigorous, swift, and severe investigations and prosecutions of 16 major, high‑profile cases. At present, the relevant investigative work has been fully initiated.
The 16 cases primarily involve the following: First, cases that severely undermine the foundations of market integrity and erode the rigor of the information disclosure regime. These include systematic financial fraud through fictitious inventory and trading activities, the abusive application of accounting standards and policies to inflate profits, and the use of various schemes to artificially embellish corporate performance. Some companies have repeatedly engaged in such violations, while a small number of directors, supervisors, and senior executives have breached their fiduciary duties by orchestrating and planning financial fraud to conceal misappropriation of funds. Second, cases that gravely harm the interests of listed companies and impede efforts to enhance their quality. These encompass prolonged, large-scale misappropriation of listed‑company funds by actual controllers or major shareholders, as well as unauthorized guarantees; some misappropriated funds were used to repay bank loans or settle commercial drafts, while others involved the unauthorized forging of official seals to provide improper guarantees in the name of the listed company for the benefit of the actual controller. Third, cases that seriously undermine the principle of fair trading and damage investor interests. These include situations where actual controllers or major shareholders of listed companies, under the guise of “market capitalization management,” collude with private equity offices, fund managers, and margin‑financing intermediaries to leverage their financial resources and shareholding positions to drive up stock prices; major shareholders who, upon learning of impending earnings losses, sell their shares ahead of time to avoid losses; and, in certain instances, repeated insider trading during the planning stages of material corporate events. Fourth, cases that represent a grave departure from professional ethics and a failure to fulfill the role of “gatekeeper.” These include situations where auditing offices associated with listed companies unilaterally rely on information provided by the companies themselves, conducting “copybook‑style” audits, failing to perform adequate audit procedures to address fraud risks, and even pre‑arranging with the listed companies the type of audit opinion they intend to issue.
Going forward, we will resolutely implement a “zero-tolerance” policy, concentrate and deploy inspection and enforcement resources, innovate investigation and case‑handling models, pursue full‑chain crackdowns, and ensure accountability across all fronts. We will maintain sustained high‑pressure enforcement against securities fraud, financial statement fraud, “pseudo‑market‑capitalization management,” and other types of securities‑related violations, strengthen the deterrent effect of law enforcement, purify the market environment, and promote the healthy and stable development of the capital market. Details of relevant cases will be made public in a timely manner.
Wangxin Securities’ bankruptcy reorganization has been accepted; securities trading remains unaffected.
Recently, the Shenyang Intermediate People’s Court ruled to accept the application for bankruptcy reorganization of Wangxin Securities. The China Securities Regulatory Commission stated that during the bankruptcy reorganization period, all of Wangxin Securities’ branches will remain open as usual, securities trading will not be affected, and clients’ securities transactions and fund transfers will proceed normally, ensuring the continued protection of the legitimate rights and interests of clients and other relevant parties.
Earlier, during routine supervision, the China Securities Regulatory Commission (CSRC) found that Netxin Securities’ financial condition had continued to deteriorate, with its net capital and other risk‑control indicators failing to meet regulatory requirements, posing significant risks. Effective May 5, 2019, the CSRC’s Liaoning Regulatory Bureau dispatched an on-site risk‑monitoring task force to conduct a special inspection, overseeing the company’s operations and management activities. At the same time, the CSRC urged the company to implement a range of measures to mitigate these risks. According to Netxin Securities’ audited 2020 annual report, the company’s total assets amounted to RMB 703 million, total liabilities stood at RMB 4.279 billion, and shareholders’ equity was negative RMB 3.576 billion, indicating substantial uncertainty regarding its ability to continue as a going concern. The auditing office issued a qualified opinion on the annual report. Recently, Netxin Securities filed for bankruptcy reorganization with the Shenyang Intermediate People’s Court in order to address its risks. The Shenyang Intermediate People’s Court has, in accordance with the law, ruled to accept the bankruptcy reorganization application. Bankruptcy reorganization is a common practice under market‑economy conditions for resolving corporate risks; through judicial proceedings, it enables restructuring and rehabilitation, thereby mitigating Netxin Securities’ risks and restoring its capacity to operate as a going concern.
The China Securities Regulatory Commission stated that it will actively cooperate with and support the bankruptcy reorganization of Wangxin Securities. Following the completion of the bankruptcy reorganization, if Wangxin Securities meets the requirements set forth in the Securities Law, the Regulations on the Supervision and Administration of Securities Companies, and other relevant provisions, the company will resume normal operations.
The China Securities Regulatory Commission stated that, following two years of risk monitoring, Netcom Securities has now effectively managed risks associated with bond trading and interbank operations, gradually scaled back its business, ensured the safety and integrity of client funds and assets, and maintained overall employee stability.
During the bankruptcy reorganization proceedings, the court has, in accordance with the law, appointed a bankruptcy administrator, who is tasked with performing its duties under the Enterprise Bankruptcy Law. A field working group dispatched by the Liaoning Securities Regulatory Bureau of the China Securities Regulatory Commission maintains a permanent presence on site to supervise and provide guidance to Netcom Securities and the bankruptcy administrator. Throughout the reorganization period, all branches of Netcom Securities remain open as usual, with securities trading unaffected; clients can continue to buy and sell securities and transfer funds in and out without disruption, and the legitimate rights and interests of clients and other stakeholders remain protected.
The China Securities Regulatory Commission stated that bankruptcy reorganization is a judicial restructuring conducted under the auspices of the court, in accordance with laws and regulations including the Enterprise Bankruptcy Law, the Securities Law, and the Regulations on the Risk Disposal of Securities Companies, and guided by market‑based and rule‑of‑law principles. Throughout the process, the wishes of creditors and other relevant stakeholders will be respected, and their legitimate rights and interests will be protected fairly in accordance with the law. Regulatory authorities will fully cooperate with the courts to ensure that the reorganization proceeds in a prudent and orderly manner, thereby safeguarding financial market stability and social stability.
In addition, the China Securities Regulatory Commission has decided to extend the receivership period for New Era Securities, Guosheng Securities, and Guosheng Futures until July 16, 2022. The CSRC stated that during this extended period, the composition of the receivership team and the scope of the receivership will remain unchanged; the companies under receivership will continue to operate normally, customer trading will not be affected, and fund transfers—both inflows and outflows—will proceed as usual. The CSRC will guide the receivership teams to continue fulfilling their duties in accordance with the law and to expedite the completion of the disposal tasks.
CSRC: Optimize M&A and Restructuring Mechanisms to Enhance the Quality of Listed Companies
In light of M&A and restructuring activity so far this year, CSRC spokesperson Gao Li provided an overview. She noted that as of the end of May, the A-share market had recorded 1,215 M&A and restructuring transactions totaling RMB 553.2 billion, with no significant decline compared to previous years, indicating sustained high market activity. The CSRC will continue to uphold the principles of “establishing sound systems, non-interference, and zero tolerance,” further refine its regulatory framework for M&A and restructuring, and promote a comprehensive improvement in the quality of listed companies.
Gao Li stated that, to further leverage the capital market’s role as the primary channel for mergers and acquisitions (M&A) and restructuring, the China Securities Regulatory Commission (CSRC) has taken the revision of the Securities Law and the registration‑based reform as opportunities to deepen market‑oriented reforms in this area, continuously stimulating and unleashing market vitality. First, administrative procedures have been streamlined and powers delegated, with a significant reduction in the number of administrative approval items, thereby enhancing transaction convenience. At present, projects requiring CSRC review account for less than 3% of the total number of M&A and restructuring transactions across the entire market. Second, payment instruments have been diversified to better meet diverse investment and financing needs; in particular, the “targeted convertible bond‑based M&A” model has transitioned from a pilot program to a standard practice. Third, the registration‑based reform of M&A and restructuring is being steadily advanced. In the first half of the year, the Shanghai and Shenzhen stock exchanges each established dedicated M&A and restructuring committees and revised their supporting regulations, setting up independent review units. The CSRC will continue to uphold the guiding principle of “establishing sound systems, non‑interference, and zero tolerance,” continually refining the regulatory framework for M&A and restructuring, and promoting a comprehensive improvement in the quality of listed companies.
Meanwhile, Gao Li also outlined the progress of the fund investment advisory pilot program. She noted that, in order to comprehensively deepen capital market reform and better align the industry with residents’ wealth‑management needs, the China Securities Regulatory Commission launched a pilot initiative for public‑fund investment advisory services in October 2019, granting pilot qualifications to an initial cohort of 18 institutions. The pilot has operated smoothly; to date, total assets under management exceed RMB 50 billion, serving approximately 2.5 million investors. Preliminary results are already evident: first, investors’ sense of participation, satisfaction, and alignment continues to strengthen, enhancing the sector’s capacity to support household wealth management; second, pilot institutions have begun to fulfill their role as buyer‑side intermediaries, with checks and balances between buyers and sellers fostering healthy industry development; third, the initiative has injected more long‑term, professional, and incremental capital into the market; and fourth, an endogenous mechanism for the standardized development of fund investment advisory services is taking shape, while the institutional framework is being rapidly refined.
Gao Li noted that the CSRC is currently continuing to expand the pilot program for fund investment advisory services, progressively rolling out a second batch of pilot institutions while concurrently conducting pilot evaluations to facilitate the transition of the pilot program into a regularized framework.

Commercial & Corporate
In 2020, the Chinese steel industry accounted for 15% of the nation’s total carbon emissions: reducing pollution and cutting carbon in the steel sector faces multifaceted challenges.
On July 17, at the “2021 (12th) China Steel Energy Conservation and Emission Reduction Forum” hosted by the Metallurgical Industry Planning & Research Institute, Li Xinchuang, Secretary of the Party Committee, Chief Engineer, and Foreign Academician of the Russian Academy of Natural Sciences, stated that the steel industry still faces numerous practical challenges in reducing pollution and carbon emissions.
First, over the next five years, total steel demand is expected to remain at a high level. The 14th Five-Year Plan sets out that during this period, China’s GDP will maintain an average annual growth rate within a reasonable range, and the urbanization rate will rise to 65%. Li Xinchuang argues that, although the intensity of steel consumption will continue to decline as China’s economic structure further optimizes, the ongoing increase in urbanization will keep infrastructure investment at elevated levels. Meanwhile, the expansion of manufacturing sectors—particularly machinery and automobiles—will provide sustained support for steel demand. Overall, during the 14th Five-Year Plan period, China’s economic development will continue to sustain a relatively high level of aggregate steel demand; given that it will be difficult to achieve a substantial reduction in overall steel production capacity, the scope for reducing carbon emissions across the sector remains limited.
Secondly, from the perspective of industrial structure and spatial distribution, China’s steel industry is characterized by a pattern of heavier concentration in the north and lighter in the south, with greater density in the east and lesser in the west. Northern Chinese steel enterprises are more numerous and larger in scale, whereas those in the south are relatively fewer and smaller. Taking Jiangsu Province as the dividing line, among the top 20 steel producers by crude steel output in 2020, only five—China Baowu, Hualing, Fangda Steel, Liugang, and Shenglong Metallurgy—were located in the south; the remaining 15 were all situated in Jiangsu or north of it.
At the current stage, the restructuring of the steel industry’s spatial layout is confronting new challenges. The state has yet to introduce policies governing the transfer of total emission caps for major pollutants and energy‑consumption targets in tandem with the relocation of steel production capacity, making cross‑regional capacity reallocation extremely difficult. Meanwhile, certain localities, driven by fiscal and tax pressures, have adopted protectionist measures that restrict the relocation of steel capacity, further impeding the optimization and adjustment of steel enterprises’ spatial strategies.
Furthermore, from the perspective of the energy mix, China’s steel industry is still dominated by a high‑carbon, long‑process production model, with coal and coke accounting for nearly 90% of its energy inputs, resulting in a markedly high‑carbon energy structure. In 2020, the Chinese steel sector accounted for more than 60% of global steel‑related carbon emissions and approximately 15% of the country’s total carbon emissions.
Meanwhile, constrained by site‑specific factors such as land availability and temperature, steel enterprises have limited capacity to deploy renewable energy. At present, thermal power continues to dominate the electricity mix, while subsidies for renewables like solar and wind are being scaled back, and external green‑power quotas are increasingly tilted toward the tertiary sector.
Li Xinchuang noted that, owing to historical factors and resource endowments, China’s steelmaking process mix has long been dominated by the integrated blast‑furnace–basic oxygen furnace route. In 2020, electric‑arc furnace steel accounted for only 10.4% of China’s total crude steel output, a significant gap compared with the global average of around 30%, the U.S. level of nearly 70%, and the roughly 50% recorded in regions outside China.
Analysis of countries that have already achieved industrialization and whose crude steel output once exceeded 100 million tons—such as the United States, the European Union, and Japan—reveals that electric‑arc furnace (EAF)–based short processes typically emerged in the mid-to-late stages of peak crude steel production, and the share of EAF steel has risen over a prolonged period. Increasing the EAF steel ratio from 10% to 20% took 10 to 15 years, while raising it from 10% to 30% required 25 to 30 years or even longer, accompanied by persistent fluctuations and adjustments; moreover, the 20%–40% range represents a key resistance zone for further growth in the EAF steel share.
Li Xinchuang stated that, as China’s steel industry continues to advance into the mid-to-late stages of its peak‑production phase, with supporting conditions such as scrap steel resources and electricity gradually improving, restructuring the production process will inevitably become a prevailing trend—though the adjustment period may be relatively lengthy. Moreover, most enterprises remain at an early stage of low‑carbon development, facing practical challenges such as insufficient awareness and weak foundations in both low‑carbon technologies and skilled personnel.
The Ministry of Industry and Information Technology addresses the shortage of automotive chips: it will support alternative applications and enhance manufacturing capacity.
China News Service, July 16 — In response to the issue of automotive chip supply shortages, Tian Yulong, a member of the Party Leadership Group, Chief Engineer, and spokesperson for the Ministry of Industry and Information Technology, stated on the 16th that the ministry will adopt a combination of short-term and long-term measures, strengthen supply-demand coordination, actively support alternative applications, enhance manufacturing capacity, and continue to ensure the steady and healthy development of the automotive industry.
On the 16th, the State Council Information Office held a press conference to present an overview of industrial and information technology development in the first half of the year. A media outlet asked: Since May, China’s automobile production and sales have posted year-on-year declines, reversing the “rapid growth” trend seen in the preceding months. How does the Ministry of Industry and Information Technology view this situation? Is this downturn largely attributable to factors such as the shortage of automotive chips, and what measures has the ministry taken in response? Additionally, does the ministry have any forecasts regarding the full-year trajectory of the automotive market?
In response, Tian Yulong stated that, due to factors such as the shortage of semiconductor chips and the transition period for upgrading emission standards, automobile production and sales experienced a certain decline in May and June. In June alone, vehicle output and sales reached 1.943 million and 2.015 million units, respectively, down 4.8% and 5.3% month-on-month, and down 16.5% and 12.4% year-on-year.
Tian Yulong stated that, in order to proactively address the shortage of automotive chips, the Ministry of Industry and Information Technology has established a Working Group on the Promotion and Application of Automotive Semiconductors. The group has convened multiple coordination meetings, fully leveraging the strengths of local governments, vehicle manufacturers, and chip companies to strengthen supply‑demand matching and inter‑agency collaboration, and to formulate targeted measures aimed at enhancing the supply capacity of automotive chips—efforts that are already yielding tangible results. Moving forward, the ministry will adopt a dual‑pronged approach, combining short‑term and long‑term strategies, intensify supply‑demand coordination, actively support alternative applications, boost manufacturing capabilities, and continue to ensure the steady and sound development of the automotive industry.
Tian Yulong also noted that, taking into account both domestic and international economic conditions, China’s automotive sector is expected to maintain steady and positive growth in 2021, driven by the ongoing recovery of the macroeconomy, the government’s clear policies aimed at stabilizing and boosting consumption of major durable goods such as automobiles, and the pursuit of the strategic goals of peaking carbon emissions and achieving carbon neutrality.
“Our industry associations have also conducted analyses indicating that total automobile production and sales for the year are expected to register a modest increase, reflecting an overall positive trend. In particular, new‑energy vehicle production and sales are projected to grow rapidly, reaching approximately 2 million units,” noted Tian Yulong. He added that, on the whole, the automotive sector continues to play an increasingly significant role in China’s industrial economic development, and ensuring its steady, rapid growth remains both a key objective and a guiding principle of our efforts.

Automotive chip shortages, app regulation, vaccine production capacity… the Ministry of Industry and Information Technology addressed these concerns at a press conference.
At 10:00 a.m. on July 16, the State Council Information Office held a press conference, during which a spokesperson for the Ministry of Industry and Information Technology presented an overview of industrial and information technology development in the first half of 2021 and addressed public concerns regarding vaccine production capacity, the protection of app users’ rights and interests, and the automotive industry’s “chip shortage.”
In the first half of the year, the industrial economy continued to recover steadily, with major indicators showing steady growth.
The Ministry of Industry and Information Technology noted that in the first half of the year, the industrial economy continued to recover steadily, with major indicators showing moderate growth. Industrial output expanded at a relatively rapid pace: nationwide value added by industrial enterprises above designated size rose 15.9% year on year, with an average two-year growth rate of 7.0%; manufacturing value added increased 17.1% year on year, averaging 7.5% over the past two years—outpacing overall industrial growth.
From a balance-of‑payments perspective, in the first half of the year, 39 out of 41 major industrial sectors recorded growth, with the share of expanding sectors exceeding 90 percent. Policies to boost domestic demand and stimulate consumption have taken effect, investment to address structural weaknesses has been stepped up, and the pull of domestic demand on industrial growth has strengthened. In the first half, the two-year average growth rate of value added in the consumer goods manufacturing sector reached 4.8 percent, accelerating by 0.6 percentage points compared with the first quarter.
From an endogenous perspective, the benefits of various policies aimed at supporting and benefiting enterprises continue to materialize, further restoring the vitality of market entities. In the first five months, the total profits of industrial enterprises above designated size surged by 83.4% year on year, while the operating income profit margin reached a historically high level of 7.11%.
Building on a substantial improvement in corporate profitability, manufacturing investment rose 19.2% year-on-year in the first half of the year, while market confidence in investment continued to strengthen.
The 14th Five-Year Plan and medium- to long-term development plans for industry and information technology will be released successively in the second half of the year.
The Ministry of Industry and Information Technology stated that it is currently expediting the formulation of the 14th Five-Year Plan and medium- to long-term development plans for industry and information technology, which will be released in stages during the second half of this year. These plans will focus squarely on accelerating the advancement of a new type of industrialization in pursuit of the Second Centenary Goal. Over the 14th Five-Year Plan period and beyond, they will comprehensively lay out strategies, implementation pathways, and priority tasks aimed at building China into a manufacturing powerhouse and a cyber power.
As of July, China’s vaccine production capacity has reached 5 billion doses.
According to the Ministry of Industry and Information Technology, since the beginning of this year, we have proactively ensured the supply of materials for routine epidemic prevention and control as well as vaccine supplies, comprehensively boosting China’s vaccine production capacity and output. As of July, China’s vaccine production capacity had reached 5 billion doses, with cumulative domestic deliveries exceeding 1.4 billion doses and overseas shipments surpassing 500 million doses.
Increase penalties for enterprises that repeatedly infringe upon the rights and interests of app users.
The Ministry of Industry and Information Technology (MIIT) stated that it attaches great importance to protecting the rights and interests of app users. In recent years, the MIIT has adopted a comprehensive set of measures and continuously refined its governance framework. Work in this area has been advanced across four key areas, yielding new progress and tangible results. First, it has sustained efforts to address violations of user rights by apps. Second, it has strengthened oversight of critical links in the accountability chain. Third, it has launched targeted campaigns to tackle the issue of intrusive pop-up windows disturbing users. Fourth, it has significantly enhanced its technical inspection and monitoring capabilities.
Going forward, the Ministry of Industry and Information Technology will treat app governance as a concrete measure under the initiative “Doing Practical Things for the People,” stepping up efforts on three fronts without letting up or slowing down, and striving to create a safer, healthier, and cleaner app‑use environment for the general public. First, it will work to refine regulatory policies and industry standards. Second, it will launch initiatives to enhance user experience, further improving the quality of app services. Third, it will conduct follow-up reviews of identified issues, imposing stricter penalties on enterprises repeatedly found to misuse permissions such as access to contact lists and users’ location data, and ensuring that remedied problems do not reoccur.
The Ministry of Industry and Information Technology stated that it plans to jointly issue, in the near future with relevant departments, the Provisional Regulations on the Protection of Personal Information in Mobile Internet Applications. These regulations are highly targeted and have been formulated through extensive consultation with all stakeholders, resulting in a broad consensus. This will be a key priority for our next phase of work. At the same time, given the growing diversity of app categories, we will devote significant effort to developing robust systems, norms, and standards, further refining standard‑setting and normative testing to provide a stronger foundation and greater capacity for effective governance.
Promote the enhancement of automotive chip supply capacity and manufacturing capabilities.
The Ministry of Industry and Information Technology noted that, due to factors such as chip supply shortages and the transition period for upgrading emission standards, automobile production and sales experienced a moderate decline in May and June. In June alone, vehicle output and sales reached 1.943 million and 2.015 million units, respectively, down 4.8% and 5.3% month-on-month, and 16.5% and 12.4% year-on-year.
The Ministry of Industry and Information Technology (MIIT) stated that, in order to proactively address the shortage of automotive chips, it has established a Working Group on the Promotion and Application of Automotive Semiconductors. The group has convened multiple coordination meetings, fully leveraging the strengths of local governments, vehicle manufacturers, and chip companies to strengthen supply–demand matching and inter‑agency collaboration, and to formulate targeted measures aimed at enhancing the supply capacity of automotive chips. These efforts are already yielding tangible results. Moving forward, we will adopt a balanced approach that combines short‑term and long‑term strategies, implement a range of measures, reinforce supply–demand linkages, actively support alternative applications, and boost manufacturing capabilities, thereby continuing to ensure the steady and sound development of China’s automotive industry.
The Ministry of Industry and Information Technology responded to Caixin: Accelerating the formulation of data security management policies in the ministry’s areas of responsibility.
The Ministry of Industry and Information Technology stated that, in the next phase, it will strengthen regulatory oversight of data security across industries, introduce institutional frameworks for data security management, accelerate the formulation of policies on data security management within the MIIT’s purview, organize efforts to classify industry‑specific data, develop a catalog of critical data, and establish a standards system for data security in the sector. Additionally, it will conduct research and draft key data‑security standards for areas such as the Internet of Vehicles and the Industrial Internet.
Implementation plans for peaking carbon emissions in key sectors such as nonferrous metals, building materials, steel, and petrochemicals will be formulated.
The Ministry of Industry and Information Technology stated that it will soon release the “14th Five-Year Plan for Industrial Green Development” and the “14th Five-Year Plan for the Raw Materials Industry.” These plans will promote the green and low-carbon transformation of the industrial sector, including high-energy-consuming industries, by addressing industrial structure, energy consumption, production processes, resource utilization, and product supply. They will also strengthen the supporting role of the green manufacturing system and intensify efforts to reduce emissions and carbon footprints at the source.
At the same time, efforts will be accelerated to implement carbon‑peak initiatives in the industrial sector. Working with relevant departments, implementation plans for achieving carbon peaking in key industries—including nonferrous metals, building materials, steel, and petrochemicals—will be formulated, outlining clear pathways for industrial decarbonization, promoting the deployment of major low‑carbon technologies and processes, launching demonstration projects for large‑scale decarbonization, and ensuring that all sectors effectively meet their carbon‑peak targets and tasks.
Accelerate the development of standards for the integrated application of “5G + Industrial Internet” in vertical industries.
The Ministry of Industry and Information Technology stated that “5G plus the Industrial Internet” will continue to be a key priority going forward. The ministry has already released two action plans: the 5G Application “Sail Away” Action Plan and the Industrial Internet Innovation and Development Action Plan, both of which focus on four key areas.
First, we will continue to strengthen the network infrastructure. Adhering to the principle of appropriate forward planning, we will accelerate the deployment of 5G networks, expand 5G coverage in key areas and industries such as factories and industrial parks, and launch pilot projects for private 5G networks, thereby enhancing the industry’s capacity to deliver robust network services.
Second, strengthen industrial support. Accelerate the development of standards for the integration of “5G + Industrial Internet” applications across vertical industries, and continue to advance customized solutions. In particular, significant efforts should be devoted to the research, development, and industrialization of key products and components such as 5G chips, modules, and terminals, with a focus on delivering high‑quality technological offerings.
Third, we will continue to expand and enrich integrated applications. We will launch pilot and demonstration projects for the industrial internet and establish leading zones for integrated applications; release a second batch of application‑scenario demonstrations and industry best practices; and guide localities in leveraging their distinctive strengths and pillar industries. By convening a series of on‑site conferences, we will cultivate a number of benchmark initiatives across industries and sectors, using these exemplary cases to drive broader adoption and further deepen the integration of digital technologies with traditional industries.
Fourth, we will prioritize the optimization of the 5G ecosystem. By coordinating and collaborating across all relevant departments, we will pool resources and drive innovative development in the “5G + Industrial Internet” domain. We will continue to encourage local governments to provide support and incentives in areas such as 5G infrastructure deployment, electricity access, and talent recruitment. At the same time, we will empower enterprises to pursue continuous innovation, leverage their initiative, foster collaborative synergy, and achieve win‑win outcomes, ensuring that the “5G + Industrial Internet” plays a guiding and leading role in the digital economy.
This round of commodity price increases is unlikely to trigger a “supercycle”; therefore, it is essential to ensure stable supply and prices for commodities.
The Ministry of Industry and Information Technology has pointed out that the current round of rising commodity prices stems from a complex set of factors. Overall, global demand has rebounded faster than supply, domestic demand has recovered more rapidly than international demand, and liquidity has been unleashed at a pace outstripping the recovery of the real economy. As a result, price increases largely reflect the combined effects of supply–demand mismatches, external spillovers, and speculative trading. Looking ahead, unlike the two previous “supercycles” of commodity price hikes in the 1970s and the early 2000s, this round of price rises is driven primarily by the cumulative impact of short-term factors. Meanwhile, deep-seated structural issues—such as high global debt levels, widening income inequality, and population aging—make it unlikely that demand will expand sustainably over the long term, while the likelihood of a significant contraction in supply remains relatively low. Consequently, it is difficult to expect the emergence of a “supercycle.”
Going forward, the Ministry of Industry and Information Technology will coordinate with relevant departments to ensure the stable supply and prices of bulk commodities, strengthen public communication and policy clarification, and support upstream and downstream industries in establishing long-term, stable cooperative relationships. It will guide the industrial chain to secure steady raw-material supplies and foster coordinated production‑supply‑marketing linkages, thereby jointly addressing risks associated with market price volatility. Furthermore, it will resolutely crack down on hoarding, malicious speculation, and price gouging.
Taxation TAXATATION

Interpretation of the “Announcement of the State Taxation Administration on Matters Related to the Integration of Value-Added Tax, Consumption Tax, and Additional Tax and Fee Declaration Forms”
To 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 in the tax sector, and to optimize the business environment, and in accordance with the requirements of the Party history study and education campaign to carry out the practical activity “Doing Concrete Things for the People,” the State Taxation Administration has decided, in order to effectively reduce the reporting burden on taxpayers and payers, to comprehensively implement the integration of the value-added tax and consumption tax return forms with their respective supplementary tax and fee return forms, as stipulated in the “Opinions of the State Taxation Administration on Launching the 2021 ‘Doing Practical Things for Taxpayers and Payers and the Spring Breeze Action for Convenient Tax Services’” (Tax Total Issue [2021] No. 14). The following is an interpretation:
I. What does it mean to integrate the value-added tax and consumption tax return forms with the supplementary tax and fee return forms?
When filing value-added tax (VAT) and consumption tax returns, taxpayers shall simultaneously declare the associated surcharges, including urban maintenance and construction tax, the education surcharge, and the local education surcharge. The integration of VAT and consumption tax return forms with their respective surcharge‑related forms means that the “VAT Return Form (for General Taxpayers),” the “VAT Return Form (for Small-Scale Taxpayers)” together with their supplementary schedules, the “VAT Advance Payment Return Form,” and the “Consumption Tax Return Form” are each consolidated into the “Urban Maintenance and Construction Tax, Education Surcharge, and Local Education Surcharge Return Form.” Accordingly, the “VAT and Surcharges Return Form (for General Taxpayers),” the “VAT and Surcharges Return Form (for Small-Scale Taxpayers),” the “VAT and Surcharges Advance Payment Return Form” along with its supplementary schedules, and the “Consumption Tax and Surcharges Return Form” are now in effect.
II. Why is it necessary to integrate the VAT and consumption tax return forms with the supplementary tax and fee return forms?
To further optimize the tax-related business environment, enhance tax administration efficiency, and improve the taxpayer experience, the State Taxation Administration, building on the successful implementation of consolidated filing for all property‑related taxes, has now integrated the value‑added tax and consumption tax returns with their respective supplementary tax and fee return forms.
First, we are streamlining tax‑filing procedures. Since additional taxes and fees are levied alongside value‑added tax (VAT) and consumption tax, filing them separately often leads to inconsistencies with VAT and consumption‑tax returns. To address this, we have integrated the main‑tax and ancillary‑tax return forms and adopted a “single‑form filing, unified collection and administration” approach. Under this framework, information on additional taxes and fees is incorporated as supplementary schedules to the VAT and consumption‑tax returns, enabling the shared use of data across these tax types. This enhances filing efficiency and simplifies operations for taxpayers.
Second, it reduces the tax compliance burden. By consolidating the main tax and additional tax/fee return forms and comprehensively streamlining and integrating the existing forms and data items, the number of forms and data fields has been significantly reduced. The new return forms make full use of inter‑departmental shared data and data from other tax administration processes, enabling automatic pre‑population of existing information, thereby substantially easing the reporting burden on taxpayers and payers and lowering the likelihood of filing errors.
Third, we have enhanced the quality and efficiency of tax administration. By consolidating the main‑tax and ancillary‑tax return forms and leveraging information technology, we have enabled automatic tax‑amount calculation, data cross‑checking and reconciliation, and alerts for reporting irregularities. These measures effectively reduce underreporting and misreporting, thereby ensuring high‑quality filings and facilitating the timely implementation of preferential policies. Furthermore, by integrating the return forms for various taxes and fees, we have achieved a “single form, one filing, one payment, one receipt” process for multiple tax types, significantly improving tax‑administration efficiency.
III. How to File VAT, Consumption Tax, and Related Surcharges?
In the newly implemented “Value-Added Tax and Additional Taxes and Fees Return (for General Taxpayers),” “Value-Added Tax and Additional Taxes and Fees Return (for Small-Scale Taxpayers),” “Value-Added Tax and Additional Taxes and Fees Advance Payment Return,” along with their supplementary schedules, and the “Consumption Tax and Additional Taxes and Fees Return,” the additional taxes and fees return is treated as a supplementary schedule or annex. Taxpayers may file the additional taxes and fees return concurrently with their value-added tax and consumption tax returns.
Specifically, after the taxpayer completes the VAT and consumption tax return information, the system automatically populates the supplementary schedules for additional taxes and fees. Once the taxpayer has entered the remaining additional tax and fee details, they return to the main VAT and consumption tax return form, where the data for the current period’s payable VAT, consumption tax, and additional taxes and fees are generated. All of the above‑mentioned pre‑filled information is automatically populated by the system.
IV. After the integrated declaration form is implemented, can the original supplementary tax and fee declaration forms still be used?
Following the consolidation of the VAT, consumption tax, and ancillary tax return forms, not only have the forms themselves been refined, but the underlying information systems and the e‑tax platform have also undergone functional optimization and enhancement, covering all scenarios for filing VAT, consumption tax, and ancillary taxes. Consequently, after the integrated return forms take effect, the original “Urban Maintenance and Construction Tax, Education Surcharge, and Local Education Surcharge Return Form” is no longer in use.
V. What changes have been made to VAT filing following the consolidation of tax return forms?
In the newly filed tax return forms, in addition to the consolidated filing of main taxes and ancillary surcharges, the VAT return has also been optimized and adjusted.
(1) After adopting the new tax return form, what changes have been made to the VAT return filing requirements for general taxpayers?
The newly implemented “Value-Added Tax and Additional Taxes Return (for General Taxpayers)” and its supplementary schedules feature three major changes: First, columns 39 through 41 under the “Additional Taxes” section have been added to the main form of the original “Value-Added Tax Return (for General Taxpayers),” and the form’s title has been revised to “Value-Added Tax and Additional Taxes Return (for General Taxpayers).” Second, column 23 of the original “Supplementary Schedule II to the Value-Added Tax Return (Details of Input Tax for the Current Period)” — titled “Other Cases Requiring Transfer of Input Tax” — has been split into two new columns: column 23a, “Input Tax Transferred Due to Abnormal Certificates,” and column 23b, “Other Cases Requiring Transfer of Input Tax.” The schedule’s title has also been adjusted to “Supplementary Schedule II to the Value-Added Tax and Additional Taxes Return (Details of Input Tax for the Current Period).” Specifically, column 23a is dedicated to reporting the transfer of input tax arising from abnormal VAT credit certificates, while column 23b continues to reflect the content previously reported in column 23. Third, a new supplementary schedule, “Supplementary Schedule V to the Value-Added Tax and Additional Taxes Return (Schedule of Additional Taxes),” has been added.
The main change concerning VAT tax return filing is that, when filing their returns, taxpayers must report the input VAT amounts that, in accordance with regulations, are to be transferred out as abnormal VAT credit notes for the current period in Column 23a of “Supplementary Schedule (II) to the VAT and Additional Tax Return” (Details of Input VAT for the Current Period), under the heading “Input VAT Transferred Out Due to Abnormal Credit Notes.” For cases where such transfers were previously made, but the abnormal status has since been lifted or the tax authorities have verified that the credits may continue to be deducted, and the taxpayer has re‑conofficeed the input VAT to be used for deduction, a negative figure should be entered in this column.
(2) After adopting the new tax return form, what changes have been made to the VAT return filing requirements for small-scale taxpayers?
The newly implemented “Value-Added Tax and Additional Taxes Return (for Small-Scale Taxpayers)” and its supplementary schedules feature three major changes: First, columns 23 through 25 under the “Additional Taxes” section have been added to the main form of the original “Value-Added Tax Return (for Small-Scale Taxpayers),” and the form’s title has been revised to “Value-Added Tax and Additional Taxes Return (for Small-Scale Taxpayers).” Second, the names of certain columns in the main form of the original “Value-Added Tax Return (for Small-Scale Taxpayers)” related to sales revenue from special VAT invoices and ordinary invoices have been adjusted to more precise wording: specifically, columns 2 and 5 have been renamed from “Sales Revenue of Special VAT Invoices Issued on Behalf of the Tax Authority (Excluding Tax)” to “Sales Revenue of Special VAT Invoices (Excluding Tax),” and columns 3, 6, 8, and 14 have been renamed from “Sales Revenue of Ordinary Invoices Issued via Tax-Controlled Devices (Excluding Tax)” to “Sales Revenue of Other VAT Invoices (Excluding Tax).” The specific reporting requirements for these columns remain unchanged. Third, a new supplementary schedule, “Supplementary Schedule (II) to the Value-Added Tax and Additional Taxes Return (for Small-Scale Taxpayers)” (Schedule of Additional Taxes), has been added.
The content and scope of the VAT return, as set forth in the “Value-Added Tax and Additional Taxes Return (for Small-Scale Taxpayers)” and its supplementary schedules, remain unchanged.
(3) For tax periods falling on or after July 2021, if a taxpayer receives a Tax Matter Notification from the competent tax authority informing them that a special VAT invoice they have already declared for credit is an abnormal VAT credit certificate, how should the taxpayer proceed when filing their tax return?
In accordance with the Instructions for Completing the “Value-Added Tax and Additional Taxes Return (for General Taxpayers)” and its supplementary schedules, the “Supplementary Schedule (II) to the Value-Added Tax and Additional Taxes Return,” column 23a, “Input VAT Transferred Out Due to Abnormal Certificates,” shall be used to report the amount of input VAT transferred out this period as a result of abnormal VAT credit certificates.
If a taxpayer’s tax credit rating is not Class A, in accordance with Article 3, Paragraph (1) of the State Taxation Administration’s Announcement on Matters Relating to the Administration of Abnormal VAT Credit Certificates (No. 38 of 2019, hereinafter referred to as Announcement No. 38), when filing the VAT and additional tax returns for the tax period to which the relevant tax‑related notice pertains, the taxpayer shall, as required by the Instructions for Completing Form II of the VAT and Additional Tax Return, enter the amount of VAT already credited against the corresponding special invoice in Column 23a of Form II.
If a taxpayer’s tax credit rating is Class A, in accordance with Article 3, Paragraph (4) of Announcement No. 38, the taxpayer may, within 10 working days from the date of receiving notification from the tax authority, submit a verification request to the competent tax authority. Until the tax authority issues the verification result, no outbound transfer of input VAT shall be made, nor is it necessary to report the VAT amount already credited on the corresponding special invoice in Column 23a of the “Supplementary Information Sheet (II) to the Value-Added Tax and Additional Taxes Return.”
If a taxpayer fails to submit a verification request within the prescribed time limit, or if a verification request is submitted but the relevant invoice is subsequently verified and found not to comply with the applicable provisions governing the input VAT credit, the taxpayer shall continue to account for the input tax as an outgoing transfer.
(4) For tax periods falling on or after July 2021, if a taxpayer receives a Tax Matter Notification from the competent tax authority informing them that an abnormal VAT input tax credit certificate—previously subject to transfer—has been de‑listed as abnormal, the corresponding special VAT invoice may continue to be used for input tax credit in accordance with the current regulations. How should taxpayers handle this when filing their tax returns?
In accordance with the Instructions for Completing the Value-Added Tax and Additional Tax Return (for General Taxpayers) and its supplementary schedules, fill in Column 23a of Supplementary Schedule (II) to the Value-Added Tax and Additional Tax Return—“Input VAT Transferred Out Due to Abnormal Certificates”—with the amount of input VAT transferred out this period as a result of abnormal VAT credit certificates. If, following verification, such certificates are subsequently permitted to be credited and the taxpayer re‑conoffices their use for deduction, enter a negative figure in this column.
For tax periods on or after July 2021, taxpayers who have previously treated abnormal input VAT credit notes as subject to out-of‑account adjustment shall, upon removal of the abnormal status, first re‑select the relevant invoices for deduction through the Integrated VAT Invoice Service Platform. Subsequently, when filing the VAT and additional tax returns for the tax period in which the deduction was originally selected, they shall, in accordance with the instructions for completing Form II of the VAT and Additional Tax Returns, enter the amount of tax eligible for continued deduction as a negative figure in Column 23a of Form II. For abnormal input VAT credit notes that were already adjusted as out‑of‑account prior to the July 2021 tax period, no further re‑selection for deduction is required; instead, after verification by the tax authorities, the amount of tax eligible for continued deduction may be directly entered as a negative figure in Column 23a of Form II of the VAT and Additional Tax Returns.
VI. With the consolidation of tax return forms, what changes have been made to consumption tax filing?
Under the new tax return form, in addition to the consolidated filing of main taxes and ancillary taxes and fees, the consumption tax return has also been streamlined and optimized.
(1) After adopting the new tax return form, what changes have been made to the consumption tax return?
First, the original eight main forms of the consumption tax return, which were previously organized by tax category, have been consolidated into a single master form. The basic framework remains unchanged, comprising three sections—sales information, tax calculation, and tax payment—and incorporates additional fields, column numbering, and internal cross‑checking relationships. Three items that do not factor into the consumption tax calculation, such as “taxes payable at the beginning of the period,” have been removed, thereby facilitating a smooth transition for taxpayers to the new return format.
Second, the original 22 supplementary schedules to the consumption tax return forms have been consolidated into seven. Of these, four are standard supplementary schedules, one is a dedicated schedule for taxpayers of the refined petroleum product consumption tax, and two are dedicated schedules for cigarette consumption tax taxpayers.
(2) After adopting the new tax return form, are taxpayers subject to consumption tax under different tax categories required to complete all main forms and supplementary schedules?
The new tax return form integrates the original main and supplementary schedules of the consumption tax return, which were previously organized by tax category. Based on the taxpayer’s registered information on the consumption tax‑levied items, the system automatically populates the “Name of Taxable Consumer Goods” and “Applicable Tax Rate” fields in the main schedule, as well as any supplementary schedules that the taxpayer is required to complete, thereby simplifying the filing process. Special supplementary schedules are required only for taxpayers of refined oil consumption tax and cigarette consumption tax; other taxpayers are not required to file such schedules, nor will they be prompted by the system.
(3) After the withholding agent for consigned processing of taxable consumer goods has withheld the tax, how should it issue a tax payment receipt and file and remit the withheld consumption tax?
After the withholding agent has withheld the consumption tax, it shall issue to the consignor a “People’s Republic of China Tax Payment Certificate (For Withholding and Collection Only)”; the consignor may, on the strength of this certificate, file a return and claim a credit for the consumption tax in accordance with the relevant regulations.
When the withholding agent files and remits the withheld consumption tax with the competent tax authority, it shall no longer complete the “Current Period Withheld and Remitted Tax Calculation Form.” Instead, it must submit the General “Detailed Report on Withheld and Remitted Taxes” and the supplementary schedule to the “People’s Republic of China Tax Payment Certificate (For Withholding and Collection Only),” and remit the withheld tax based on the total amount shown in the “Actual Withheld and Remitted Tax Amount” column of the system‑generated “Detailed Report on Withheld and Remitted Taxes.”
(4) If an enterprise is engaged in the production of lubricating oils, does it still need to complete the “Consumption Tax Return for Refined Petroleum Products” after the new return form has been implemented?
The original “Consumption Tax Return for Refined Petroleum Products” is no longer required. The new return form has been designed to fully accommodate the functions of all previous consumption tax return formats and automatically links to taxpayer registration information. During filing, the system will automatically populate the “Current Period Allowable Deduction Calculation Form (for Refined Petroleum Product Consumption Taxpayers),” which is specific to refined petroleum product taxpayers, and will also automatically import the beginning inventory of refined petroleum products, enabling taxpayers to continue calculating their deductible tax amounts.
VII. What other issues should be taken into account when filing after the Announcement takes effect?
This Announcement shall take effect as of August 1, 2021. Taxpayers who file and pay value-added tax, consumption tax, and related surcharges on a monthly basis shall apply this Announcement to the filing and payment of such taxes and surcharges for the tax period of July 2021 and thereafter. Taxpayers who file and pay value-added tax, consumption tax, and related surcharges on a quarterly basis shall apply this Announcement to the filing and payment of such taxes and surcharges for the third quarter of 2021 and thereafter. Where taxpayers adjust tax and fee matters pertaining to prior tax periods, they shall do so in accordance with the relevant rules set forth in the tax return forms applicable to those respective periods.
VIII. When will the integrated tax return form be implemented?
Building on the initial pilot programs in Hainan, Shaanxi, Dalian, and Xiamen, the integrated filing of value-added tax, consumption tax, and related surcharges and levies has been rolled out nationwide as of August 1, 2021.

The State Taxation Administration convened an expanded meeting of the Party Committee’s Theoretical Study Center Group.
Thoroughly study and implement the spirit of General Secretary Xi Jinping’s important speech on July 1.
Contribute the tax sector’s strength to the comprehensive building of a modern socialist country.
On the morning of July 13, Wang Jun, Secretary of the Party Committee and Director of the State Taxation Administration, presided over an expanded meeting of the Party Committee’s Theoretical Study Center Group. The meeting once again conducted an in-depth study and implementation 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, further deliberating and deploying measures for the tax system to carry out and implement these directives. Guo Qingping, head of the 19th Central Guidance Group for Party History Study and Education, along with relevant officials from the CPC Central and State Organs Work Committee, attended the meeting to provide guidance. Wang Jun emphasized the need to strengthen faith, conviction, and confidence through studying the spirit of General Secretary Xi Jinping’s “July 1” important speech, and to draw wisdom, experience, and strength from the Party’s glorious century-long history. He called for sustained efforts to deepen and solidify Party history education within the tax system, striving to open up a new chapter in the modernization of taxation during this new stage of development, and contributing the tax sector’s strength to the comprehensive building of a great modern socialist country.
Xin Xiangyang, Secretary of the Party Committee and Vice President of the Institute of Marxism at the Chinese Academy of Social Sciences, was invited to deliver a special briefing on 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. Focusing on his reflections on studying General Secretary Xi’s “July 1” address, several major theoretical innovations contained therein, the century-long history of the Party demonstrating the vitality of Marxism, the hundred-year journey of adapting Marxism to Chinese conditions, and the idea that safeguarding the country means winning the hearts of the people, he provided a comprehensive and in-depth analysis of the significant implications, rich content, core principles, and practical requirements of General Secretary Xi’s “July 1” speech, thereby helping tax‑related Party members and cadres further deepen their understanding and accurately grasp the spirit of this landmark address.
After carefully listening to the briefing, Wang Jun shared his reflections on studying General Secretary Xi Jinping’s important speech delivered on July 1. He stated that the speech demonstrates a profound understanding of historical trends, a deep grasp of historical laws, heartfelt remembrance of our forebears and martyrs, sincere tribute to the people’s heroes, and earnest hopes for China’s youth. It is marked by strong political, ideological, theoretical, historical, and practical significance. By thoroughly studying and internalizing the spirit of General Secretary Xi Jinping’s important speech, we gain an even deeper appreciation for the magnificence of the century-long答卷, the arduousness of a century of struggle, the steadfastness of our original aspiration, the greatness of the centennial spirit, and the boldness of the century‑long declaration. Party-member leading cadres in the tax system must earnestly shoulder the missions and responsibilities entrusted by the Party and the people; consciously draw strength from the spirit of General Secretary Xi Jinping’s important speech; and take the great spirit of Party building as the source of their spiritual vitality. With a broad vision for matters of national importance, they should serve, safeguard, and support these priorities, aligning their goals, defining their roles, and staying true to the right course in serving the overall development agenda of the Party and the country. With an unwavering work style and an indomitable spirit, they must advance with greater resolve along the new journey of testing, making due contributions as tax officials to the realization of the Second Centenary Goal.
Wang Jun emphasized that studying and implementing the spirit of General Secretary Xi Jinping’s important July 1 speech is a major political task for the national tax system, both now and in the period ahead. Party committees at all levels of the tax authorities must earnestly raise their political awareness, continuously strengthen their political, ideological, and practical consciousness in studying and applying the spirit of the July 1 speech, deeply understand and grasp its profound significance, and constantly enhance their sense of responsibility and mission in doing so, ensuring that learning leads to reflection, insight, and tangible results. In light of the requirements set forth in General Secretary Xi Jinping’s important speech, they should rigorously review and improve all aspects of their respective units and systems, giving priority to well‑planning and effectively implementing key tasks such as Party history study and education, deepening tax collection and administration reform, comprehensively strengthening Party self‑discipline, and building a strong contingent of cadres, thereby striving to open up a new chapter in the modernization of taxation.
Wang Jun emphasized that Party committees at all levels of the tax authorities must strengthen organizational leadership, incorporating the study of General Secretary Xi Jinping’s important speech on July 1 into the Party committee’s “first agenda item,” the Party committee’s central study group’s “primary theme,” and the mandatory curriculum of all cadre education and training programs. Party secretaries must earnestly fulfill their responsibilities as the “primary persons in charge”; members of the leading team must implement the “dual responsibility” system; and leading Party members should set a good example by taking the lead in studying and gaining a deeper understanding, thereby sustaining a strong momentum in studying and implementing the spirit of General Secretary Xi Jinping’s important July 1 speech. Relevant departments should work in close coordination, providing unified guidance to ensure that grassroots Party organizations effectively integrate learning arrangements with tangible outcomes, conduct well‑organized thematic organizational life meetings, and extend the study and implementation efforts to every Party branch, every Party member, and every cadre. Furthermore, leveraging platforms such as “Study China” and “Learning to Strengthen Taxation,” they should continuously deepen, expand, and achieve concrete results in this learning campaign.
Wang Jun urged that Party committees at all levels of the tax authorities must attach great importance to publicity and guidance, thoroughly disseminate the new ideas, perspectives, and conclusions put forward in General Secretary Xi Jinping’s important speech on July 1, and actively foster a strong atmosphere of learning throughout the system. They should vigorously organize diverse outreach activities highlighting exemplary role models, telling compelling stories of tax work and tax officials in the new era, and inspiring Party members and cadres to learn from and strive to be pioneers. Special attention should be given to showcasing the concrete measures and tangible results achieved by tax authorities at all levels in implementing these directives, thereby igniting a wave of enthusiastic study, vigorous action, and unwavering dedication to advancing the Party’s tax cause and serving the goal of building a modern socialist country in all respects.
Wu Haiying, Head of the Discipline Inspection and Supervision Group of the Central Commission for Discipline Inspection and the National Supervisory Commission stationed at the State Taxation Administration and a member of the Party Committee of the State Taxation Administration, pointed out in her remarks at the symposium that General Secretary Xi Jinping emphasized in his important speech on July 1 that the courage to carry out self‑revolution is a defining hallmark that sets the Communist Party of China apart from other political parties. Comrades of the Discipline Inspection and Supervision Group stationed at the State Taxation Administration, together with discipline inspection cadres across the tax system, must bear in mind the call of General Secretary Xi Jinping and the CPC Central Committee, inherit our glorious traditions and fine work style, cultivate political integrity rooted in loyalty to the Party, uphold the ideological line of seeking truth from facts, dare to tackle tough issues head‑on and wield disciplinary authority with resolve, intensify rigorous oversight and self‑purification, align ourselves at every step with the expectations of the people, benchmark ourselves against exemplary models, and consciously define our roles and shoulder our responsibilities in the “two revolutions” of the new era. We must remain steadfast in our original aspiration to safeguard the leadership of the Party and the authority of the CPC Central Committee, unwavering in our mission to ensure the effective implementation of the Party’s guidelines, policies, and principles, faithful to our duty of preserving the health of the Party as an organism, and committed to transforming institutional strengths into governance effectiveness. In doing so, we will help build a loyal, clean, and responsible tax‑administration force, fully leveraging our role in supervising, ensuring implementation, and promoting sound development as we advance the modernization of taxation.
Yao Laiying, a member of the Party Committee and Deputy Director of the State Taxation Administration, stated in his remarks at the symposium that General Secretary Xi Jinping’s important speech on July 1 was both far-sighted and profound, rich in content, and served as a comprehensive lesson in Party history for the entire Party. It is the finest textbook for studying history to gain insight, strengthen confidence, cultivate virtue, and put knowledge into practice, and it holds major and far-reaching guiding significance in inspiring the whole Party to remain true to its original aspiration and keep its mission officely in mind as it embarks on a new journey. The national tax system and the vast ranks of tax officials must unswervingly use Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era to fortify their minds, guide their work, and advance their tasks; uphold the great spirit of Party building; implement the requirements of the “Nine Musts”; steadfastly safeguard the “Two Upholds”; bear in mind the “two overarching situations”; and continuously apply the people-centered development philosophy in tax administration. They should conscientiously act in the vital interests of taxpayers, payers, and the broader public, earnestly carry out the “I Do Practical Things for Taxpayers and Payers” initiative and the Spring Breeze Campaign to facilitate tax services, fully and rigorously implement tax and fee reduction policies, strive to provide excellent service to taxpayers and payers, and open up new prospects for the cause of taxation.
In his remarks, Guo Qingping, head of the 19th Central Guidance Group for Party History Study and Education, noted that the Party Committee of the State Taxation Administration has rigorously and effectively implemented the spirit of General Secretary Xi Jinping’s important speech on July 1. Throughout the campaign, the administration has remained grounded in reality, emphasized practical results, and achieved significant learning outcomes. Moving forward, it will prioritize studying the spirit of General Secretary Xi Jinping’s July 1 speech, further translating its commitment to serving the people into concrete work achievements, and earnestly, wholeheartedly, and with dedicated effort delivering tangible benefits to the public, thereby advancing tax modernization in the new stage of development with high quality.
Leaders from other departments of the State Taxation Administration delivered written statements. Some principal leading officials at the department and bureau levels across the national tax system, drawing on their practical work experience, engaged in discussions and shared their views on studying and implementing the spirit of General Secretary Xi Jinping’s important speech delivered on July 1. Attending the meeting were leaders of the State Taxation Administration, relevant responsible comrades from the Discipline Inspection and Supervision Group of the Central Commission for Discipline Inspection and the National Supervisory Commission stationed at the Administration, tax authorities of all provinces, autonomous regions, municipalities directly under the central government, and cities separately listed in the national plan, the Administration’s resident special offices in various localities, as well as principal officials and selected cadre representatives at the department and division levels from the Administration’s internal departments and directly affiliated units.
Hebei: 32 Facilitation Measures Bolster Market Entities’ Vitality
Recently, the Hebei Provincial Tax Service of the State Taxation Administration and the Provincial Federation of Industry and Commerce jointly issued the “Spring Rain Nurtures Seedlings” Special Action Plan for 2021 to support the development of small and micro enterprises in Hebei Province. The plan introduces three categories of thematic activities and 32 specific measures aimed at delivering policies, enhancing service experiences, and fostering growth for small and micro businesses, ensuring that tax and fee‑related support policies and innovative service initiatives reach these enterprises in a timely manner, thereby effectively boosting market vitality and expanding their room for development.
Starting in April, tax authorities and federations of industry and commerce across the country have jointly launched a 100-day publicity campaign titled “Bringing Beneficial Policies to Every Household,” aimed at promoting tax and fee reduction measures. The campaign further innovates outreach and guidance methods, proactively delivering the latest policies with precision to eligible businesses, ensuring that small and micro enterprises fully understand the preferential policies they qualify for and can fully benefit from the associated tax and fee reductions.
From May to June, the “Premium Experience in Supporting Small and Micro Enterprises” campaign was launched. Tax authorities across the country, in accordance with the standardized procedures uniformly formulated and issued by the State Taxation Administration, have actively expanded online tax filing and payment services. With the exception of particularly complex matters, online processing has been largely implemented for tax-related services and payments for small and micro enterprises, and where conditions permit, mobile‑based handling has also been introduced. In line with the State Taxation Administration’s unified arrangements, efforts have been stepped up to fully digitize the entire tax refund process, diversify methods of tax and fee payment, and enable online processing of simplified penalty cases, further streamlining the procedures for frequently encountered tax‑related matters faced by small and micro enterprises.
The “Protecting Young People’s Growth and Promoting Development” initiative continues to be implemented. Building on the effective rollout of universal tax and fee preferential policies for small and micro enterprises, we remain committed to balancing universality with targeted support, focusing on policies that bolster technological innovation, promote balanced regional development, and ensure a seamless transition between poverty alleviation and rural revitalization. In tandem with the All-China Federation of Industry and Commerce’s empowerment program for innovative, growth‑oriented private enterprises, we are leveraging these tax and fee incentives to encourage small and micro businesses to increase R&D investment, facilitate their transformation and upgrading, and drive high‑quality development. Local tax authorities are strengthening collaboration with the banking and insurance regulatory authorities and financial institutions, continuously refining and standardizing bank–tax information‑sharing mechanisms. While safeguarding data security and protecting taxpayers’ legitimate rights and interests, they are staying true to the guiding principle of “using tax data to build credit, converting credit into loans, and using loans to support small and micro businesses,” thereby consistently helping these enterprises overcome financing challenges.

Jilin: Tax Policies Support Enterprises on the Path of Innovation
Project after project is breaking ground, and new factory buildings are springing up one by one… Today, in Changchun—the “Spring City of the North”—a wave of entrepreneurship and innovation is sweeping across the city. Seizing the opportunity presented by the implementation of the “Opinions on Further Deepening Tax Collection and Administration Reform,” the Changchun Municipal Tax Authority is working tirelessly to create a business environment characterized by faster tax processing and higher‑quality services, thereby contributing the tax sector’s strength to enterprises’ innovative development.
Paving the way for more makers to realize their dreams.
On Xiuzheng Road in Changchun, there stands a small building whose side façade is adorned with a model sailboat—this is the Bidu Innovation Factory. As you step into the lobby, your eye is drawn to a massive anchor. According to Jin Zheshun, the head of the Bidu Innovation Factory, the anchor symbolizes makers setting sail from this very spot, while “Bidu”—meaning “ferry”—is here to help them navigate toward the shores of success.
Baidu Innovation Factory is a new‑type incubator and makerspace invested in and built by the private enterprise Jilin Baidu Innovation Factory Co., Ltd., and it began operations in 2014. As Jilin Province’s first privately‑owned “mass entrepreneurship and innovation” service provider, Baidu Innovation Factory offers makers a range of services, including “zero‑barrier” entry and “zero‑cost” startup support. To date, it has incubated and mentored more than 200 startups, many of which have gone on to become publicly listed companies or national high‑tech enterprises. In supporting business incubation, the tax authorities have proactively provided front‑line services, established green channels for tax processing, and strengthened communication between tax authorities and taxpayers, ensuring that all preferential tax and fee policies are fully implemented.
“We are not incubating individual enterprises; rather, we are nurturing entire emerging industries and building a comprehensive industrial ecosystem. Throughout this effort, the tax authorities of the Changchun High‑Tech Industrial Zone have provided unwavering support, offering streamlined access to tax and fee incentives, end-to-end guidance, and “tax‑bank collaboration” services, thereby fostering a high‑quality innovation‑and‑entrepreneurship environment for businesses,” said the operations director of Jilin Baidu Innovation Factory Co., Ltd. In recent years, with the continued implementation of a series of policy measures—such as the incremental value‑added tax credit refund and the further increase in the additional deduction rate for enterprise R&D expenses—financial pressures on business incubators and science‑and‑technology enterprises have been effectively alleviated, while the innovative spirit of small and medium‑sized enterprises has remained robust.
From 2015 to the present, Baidu Innovation Factory Group Co., Ltd. has cumulatively benefited from tax and fee relief measures—such as incubator tax incentives and pandemic‑response policies—totaling RMB 3.8035 million. Thanks to the swift and direct delivery of these preferential policies, Baidu Innovation Factory provides support to science‑and‑technology enterprises in areas like equity investment and industrialization, accelerating the innovation and growth of small and medium‑sized businesses and enabling more entrepreneurs and innovators to expand their reach across China and even globally.
“Tax Momentum” Helps Enterprises Set Sail for the Future
“Chinese medicinal culture is profound and extensive, with a long and illustrious history. We remain committed to carrying it forward through innovation, enabling traditional Chinese medicine to make an even greater contribution to the cause of human health.” Gong Xiaoying, the legal representative of Jilin Beiyao Herbal Medicine Processing Co., Ltd., has long cherished a dream: to give Chinese medicinal culture wings and help it soar onto the world stage.
However, his efforts to promote traditional Chinese medicine have faced significant challenges. Just as the company was beginning to expand its overseas operations, it was hit by the pandemic. Coupled with a lack of familiarity among its staff regarding foreign tax policies, the company encountered numerous difficulties in managing projects in countries such as Russia and Indonesia.
To help enterprises swiftly grasp overseas tax policies, the tax authorities of Lianhuashan District in Changchun City have conducted multiple on-site assessments of business development, gaining an in-depth understanding of corporate needs. They have also invited a team of experts from the International Tax Administration Division of the Changchun Municipal Tax Service Bureau to Lianhuashan to provide policy guidance to businesses.
The tax authorities have tailored comprehensive overseas tax‑regulation manuals for Russia and Indonesia, providing in‑depth guidance on tax credits, tax policies governing outbound investments, and measures to mitigate tax‑related risks. These resources offer robust policy support for enterprises engaged in overseas investment and operations, helping them avoid unnecessary pitfalls and achieve steady, sustainable growth.
Recently, the North Pharmaceutical Herbal Medicine Processing Co., Ltd. successfully launched its projects in Russia and Indonesia. Gong Xiaoying happily called the tax authorities in Lianhua Mountain District to share this good news with the tax officials. “With the tax authorities’ support, we can confidently and boldly ‘go global,’ spreading and promoting Chinese medicinal culture,” said Gong Xiaoying, expressing full confidence in her company’s overseas expansion.
“The business environment is the lifeblood of enterprises’ survival and growth; optimizing it means unleashing productive forces, enhancing competitiveness, and expanding influence,” said Lü Hui, Director of the Changchun Municipal Tax Service Bureau of the State Taxation Administration. He added that the bureau will focus on the needs of market entities, continuously improve the tax-related business environment, and provide enterprises with a steady stream of “tax‑driven momentum,” helping them set sail and forge ahead.

Litigation & Arbitration

Notice of the General Office of the Ministry of Natural Resources on Strengthening and Improving Mineral Resource Law Enforcement

To the natural resources authorities of all provinces, autonomous regions, and municipalities directly under the central government, and to the Natural Resources Bureau of the Xinjiang Production and Construction Corps:
In order to thoroughly implement the major decisions and arrangements of the CPC Central Committee and the State Council, safeguard the order of mineral resource exploration and exploitation, promote the intensive and economical use of mineral resources, and strengthen ecological and environmental protection, and in accordance with the work requirements of the Party Leadership Group of the Ministry—namely, “upholding the spirit of the CPC Central Committee, maintaining a national stance, ensuring equal rights and responsibilities, and enforcing strict standards”—the following notice is hereby issued on strengthening and improving law enforcement in the field of mineral resources:
I. Fully Recognize the Important Significance of Strengthening Mineral Resource Law Enforcement
Mineral resources constitute an essential material foundation for economic and social development and are a precious national asset. For some time now, illegal mining activities have been on the rise in certain localities: longstanding issues such as unlicensed mining and boundary‑crossing mining persist despite repeated prohibitions, while new problems—such as profiting from mining during construction projects and engaging in illegal mining under the guise of remediation or management—have also emerged from time to time. Moreover, in some areas, enforcement of mineral‑related laws is lax; leads on violations are not thoroughly verified, unlawful conduct is not duly identified in accordance with laws and regulations, and cases that should be filed are left unfiled, assets that should be confiscated remain unrecovered, and matters that ought to be referred to the competent authorities are instead neglected, resulting in a pervasive problem of weak and permissive law enforcement.
All levels of natural resources authorities must thoroughly implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, particularly Xi Jinping’s Thought on Ecological Civilization. Grounded in the new stage of development, they should uphold the new development philosophy, foster a new development pattern, and draw profound lessons from the issues that arose in the Muli coal mine in Qinghai and in the coal‑resource sector in Inner Mongolia. They must elevate their political awareness, align their thinking and actions with the central government’s requirements, and translate these into concrete implementation of the “two unified” responsibilities. By adopting stricter standards, a more rigorous approach, and more stringent measures, they should strengthen law enforcement in the field of mineral resources and, through concrete actions, ensure the “two upholds.”
II. Strictly investigate and address prominent issues of illegal activities in the mineral resources sector.
In strict accordance with laws and regulations on mineral resources, we will rigorously investigate and prosecute illegal activities such as unlicensed exploration and mining, cross‑boundary exploration and mining, and destructive mining. For cases involving serious violations that severely damage the ecological environment, we will impose the maximum penalties within the scope of discretionary authority, publicly disclose the outcomes of enforcement actions, and ensure that each case investigated serves to educate a broader community and warn the entire region.
Strictly adhere to the legal and policy boundaries governing construction projects and restoration‑remediation efforts, and rigorously investigate and prosecute, in accordance with the law, any instances of mining for profit during construction or illegal mining conducted under the guise of restoration and remediation. Where the same unlawful entity has been subject to two or more administrative penalties for illegal mining within a two‑year period and subsequently engages in further illegal mining activities that may constitute the crime of illegal mining, such cases shall be referred to the judicial authorities for criminal prosecution in accordance with the law.
III. Continuously Strengthen Daily Law Enforcement in the Field of Mineral Resources
Strengthen analysis and assessment of the situation regarding mineral-related violations. Give priority attention to regions where the number of such violations has been high and rapidly increasing over a given period, as well as to mineral commodities experiencing sharp price surges. Enhance political vigilance by designating ecologically sensitive areas—such as the banks of the Yangtze and Yellow Rivers, nature reserves, zones where prospecting and mining are prohibited, and areas within ecological red lines—as well as areas prone to frequent illegal mining, as key enforcement priorities, and intensify targeted law enforcement and investigations in these zones. For cases involving serious problems, recurring violations, or persistent non‑compliance, delineate specific operational areas and submit them to the corresponding level of government for coordinated remediation efforts.
Strengthen the detection and prevention of mineral-related violations. In light of local conditions, leverage technological tools and management innovations to enhance the capacity for identifying illegal mining activities. Where feasible, intensify oversight of mineral resources by deploying video surveillance in areas prone to illegal mining and at open-pit mines, and conducting drone‑based patrols. In conjunction with local “mountain chief” and “field chief” systems, explore extending the responsibilities and authority for detecting and halting mineral‑related violations to the township and village levels, thereby further reinforcing territorial regulatory accountability. Ensure timely identification and prompt intervention; when interventions prove ineffective, promptly report such cases to the county‑level government and higher‑level natural resources authorities.
Deepen enforcement efforts related to mineral‑related satellite imagery. Conduct thorough on‑site verification of suspected illegal patches, prioritizing those that have exhibited continuous changes over multiple years. Carefully compare imagery from successive years, systematically identify the causes of these changes, and ensure rigorous determination and appropriate handling. The natural resources authorities at both provincial and municipal levels must earnestly assume their responsibilities for review and oversight, strengthen internal quality‑control procedures, intensify random field inspections, and undertake unannounced spot checks and re‑examinations as needed.
IV. Focus on Rectifying the Problem of Lax Enforcement in Mineral Resource Management
The natural resources authorities at both the ministerial and provincial levels shall, through methods such as case file reviews, research and supervision, and on-site spot checks, strengthen oversight and guidance over their counterparts at the city and county levels. For major or typical cases of illegal activity, the Ministry will directly initiate investigations, place them under supervised management, or issue public notifications. City and county natural resources authorities must earnestly fulfill their primary responsibility for mineral resource law enforcement and their territorial responsibilities; adhere to factual accuracy; perform their duties in accordance with the law; and refrain from falsification or perfunctory compliance. Where conditions for filing a case are met, cases must be filed and investigated without resorting to non‑filing dispositions, and the three systems—public disclosure of administrative enforcement, full‑process recording of enforcement, and legal review of major enforcement decisions—must be strictly implemented. Any administrative penalties imposed for violations of mineral resource laws and regulations must be based on the relevant laws and regulations, with unlawful gains and illegally extracted mineral products confiscated in accordance with the law; fines may not be used as a substitute for confiscation. Mineral‑related cases suspected of criminal offenses must be referred to the judicial authorities for criminal prosecution. With regard to lax enforcement, falsification, and other issues, a self‑critical approach must be adopted: relevant problems should be promptly rectified, public reprimands issued, and, where disciplinary or legal violations are involved, the responsible units and individuals held accountable.
V. Strive to forge a powerful synergy of concerted efforts and joint governance.
Further refine the joint responsibility mechanism. In collaboration with relevant departments, explore the establishment of a mechanism for sanctioning those who lose trust. When mineral‑related law enforcement identifies violations that fall under the jurisdiction of other agencies, promptly forward the case to the appropriate authorities for handling. For cases where illegal mining activities persist despite being ordered to cease, promptly notify the water resources, power supply, and other relevant departments, which, in accordance with the joint responsibility mechanism, shall take appropriate measures to promptly halt such unlawful conduct.
Further strengthen the coordination between administrative enforcement and criminal justice. For illegal mining cases suspected of constituting a crime, strictly enforce the “Regulations on the Transfer of Cases Suspected of Criminal Offenses by Administrative Enforcement Agencies,” referring such cases to public security organs and simultaneously sending a copy to the procuratorial organs. Any leads involving suspected organized‑crime or evil‑force‑related illegal mining activities—such as “sand barons” or “mining barons”—shall be promptly handed over to the public security authorities. In regions where specific sentencing standards for the crimes of illegal mining and destructive mining have not yet been established, the provincial natural resources authorities shall proactively enhance communication with the higher people’s courts and request the clarification of concrete criteria; pending the issuance of such standards, the transfer of cases shall, for the time being, be conducted in accordance with the strictest standards set forth in the “Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases of Illegal Mining and Destructive Mining.”
Strengthen coordination with disciplinary inspection and supervision authorities and auditing bodies; enhance collaboration between mineral‑resource enforcement and mineral‑resource inspections as well as ecological‑environmental inspections; and ensure thorough follow‑up on all aspects of mineral‑resource enforcement. Diligently implement the mechanism for seamless integration and coordination between administrative oversight of natural resources and disciplinary inspection and supervision, promptly referring to the relevant disciplinary inspection and supervision organs for investigation and handling any leads concerning official misconduct or criminal offenses uncovered during mineral‑resource enforcement, as well as any clues involving public officials engaged in organized crime, evil forces, or other violations of discipline and law. Earnestly apply the working mechanism for collaborative enforcement and inspection in the field of natural resources, reinforcing cooperation and coordination in major special projects, case investigations, referral and transfer procedures, and information sharing. Faithfully uphold the collaborative mechanism between natural‑resource inspection and enforcement and the off‑duty audit of natural‑resource assets for leading cadres, actively supporting auditing authorities in carrying out their duties in accordance with the law. For significant ecological‑environmental damage identified during mineral‑resource enforcement, refer such cases to ecological‑environmental inspection authorities for appropriate action. In areas where comprehensive administrative enforcement reform has been implemented, local natural‑resource management departments shall strengthen coordination and business guidance with comprehensive administrative enforcement agencies to prevent gaps in enforcement.
Natural resource authorities at all levels shall, in accordance with the principle of aligning authority with responsibility, refine the regulatory duties of their internal business units, strengthen interagency coordination, and improve mechanisms for sharing information on internal approval, supervision, and law enforcement. Any violations identified during the approval or supervisory processes shall be promptly referred to the law enforcement agencies for investigation and handling, while any management‑related or oversight‑related issues uncovered during mineral‑related law enforcement shall be promptly reported to the relevant business units.

Beijing: The “Regulations on the Administration of Prepaid Cards” have opened for public comment, with provisions—including clauses such as “final interpretation rights”—subject to a maximum fine of 30,000 yuan.
To strengthen the management of single-purpose prepaid cards and safeguard consumers’ legitimate rights and interests, the “Beijing Municipal Regulations on the Administration of Single-Purpose Prepaid Cards” (Draft for Public Comment), drafted by the Beijing Municipal Bureau of Commerce and the Beijing Municipal Administration for Market Regulation, is hereby made available to the public for comments, effective immediately.
Many consumers have encountered the frustrating situation where it is easy to obtain a prepaid card but difficult to get a refund. In sectors such as dining, education and training, sports and fitness, beauty, hairdressing and nail care, and car washing, issues like “unfair terms” in single-purpose prepaid‑card transactions, failure to honor contractual obligations, non‑delivery of promised services, substandard service quality, and difficulties in obtaining refunds when businesses close or cease operations continue to arise. According to the Market Supervision Administration, the integration of traditional offline activities—such as transportation and tourism—with the platform economy has, on the one hand, diversified single‑purpose prepaid‑card operations; on the other hand, it has also given rise to various problems, risks, and potential hazards that infringe upon consumers’ legitimate rights and interests and undermine fair market competition. Citizens have voiced strong concerns about existing issues in certain industries and fields, highlighting an urgent need to address these “pain points” and challenges through legislative action.
All unused cards will be fully refunded unconditionally within 7 days.
Unable to resist the persistent persuasion of sales staff, consumers often end up purchasing beauty and fitness membership cards. Previously, canceling such memberships was no easy task; however, under the newly proposed policy, consumers will now have up to seven days to change their minds and reverse impulsive purchases.
A Beijing Youth Daily reporter noted that the draft for public comment introduces a new requirement to establish a seven-day “cooling-off period” and clarifies the refund rules applicable when a contract is terminated during that period. The draft stipulates that, within seven days from the day after the contract is signed, if the consumer has not yet used the single-purpose prepaid card to redeem goods or services, they have the right to unilaterally terminate the contract without condition, and the operator must refund the full prepaid amount in a lump sum via the original payment channel. The fact that the consumer has already received free trials, test services, or complimentary offerings provided by the operator does not affect their right to unconditionally terminate the contract. Furthermore, the draft requires operators issuing single-purpose prepaid cards to enter into a written contract with consumers, which must specify the procedures for returning the card, the method for calculating refunds, and the mechanisms for resolving disputes.
Contracts now include “unfair terms”; fines of up to RMB 30,000 are proposed.
“Fees paid for card issuance are non‑refundable; lost or damaged single‑purpose prepaid cards will not be reissued; expired single‑purpose prepaid cards shall be deemed to have been fully consumed, with any remaining balance belonging to the operator; and the operator reserves the right of final interpretation,” among other such provisions, constitute “unfair terms” and will be prohibited from appearing in contracts. Any violation may result in a warning or a fine of up to RMB 30,000, imposed either separately or in combination, by the market supervision and administration authorities.
When the two parties hold conflicting interpretations of a contract, how should such disputes be handled? The draft for public comment stipulates that, in the event of a disagreement over the meaning of contractual terms provided by the business operator, the interpretation shall be based on the ordinary understanding; if there are two or more possible interpretations, the one most favorable to the consumer shall prevail. Furthermore, when issuing single-purpose prepaid cards, if the business operator offers physical goods, value-added services, or credit balances as gifts, it must clearly specify in the contract the scope of application, conditions of use, and time limits for such complimentary items. Consumers have the right to require the business operator to incorporate any verbal commitments into the written contract.
If the operator absconds, they must refund the remaining balance in a lump sum.
Where an operator suspends performance of the contract due to business closure, renovation of the service premises, relocation, or other similar circumstances, it shall notify consumers in advance by any appropriate means at least 30 days prior to such suspension. If the consumer requests termination of the contract, the operator shall refund the remaining balance of the prepaid fees in a lump sum through the original payment channel. If the consumer does not request termination, the term of the contract shall be extended accordingly, or the parties shall otherwise negotiate and agree on a mutually acceptable resolution.
If an operator is unable to continue performing the contract due to closure, deregistration, or other reasons, it shall notify consumers in advance by any appropriate means at least 30 days prior and refund, in a lump sum and through the original payment channel, any remaining balance of prepaid funds. Even if the business changes ownership, the new operator remains responsible for honoring any unused card balances held by consumers. The draft for public comment stipulates that when an operator changes its name, legal representative, person in charge, or designated handler, it may not refuse to fulfill its obligations under a single-purpose prepaid card consumption contract. Furthermore, the draft requires that if an operator leases premises or counters from another party, the lease term must be clearly specified in the contract, and the validity period of the single-purpose prepaid card may not exceed the lease term.
If the operator changes the service location, adjusts the principal business items, raises the promised price, or imposes additional service restrictions, it shall negotiate with consumers and enter into a supplementary agreement; if no agreement is reached, consumers have the right to terminate the contract and require the operator to refund, in a lump sum and through the original payment channel, the remaining balance of the prepaid fees.
The card balance can be activated upon expiration, exchanged for a new card, or refunded.
If a card expires and the balance remains unused, must it be canceled? Regarding the handling of remaining balances, the draft for public comment stipulates that as long as there is a balance on the card, it may continue to be used. Operators are required to provide ancillary services such as activation and card replacement. If a consumer requests a refund of the balance, the operator shall comply in accordance with the contract; if the contract is silent on this matter, the operator shall refund the corresponding prepaid balance in a lump sum via the original payment channel. If the balance on a single-purpose prepaid card falls short of the minimum amount required for a single transaction and the consumer requests a refund, the operator shall refund the full balance to the consumer through the original payment channel in a lump sum.
The draft for public comment also stipulates that it is prohibited to offer goods or services under a false name or without proper labeling; to deceive consumers into paying fees without providing the goods or services, or without delivering them as agreed; to advertise single-purpose prepaid cards with false or misleading price tags; to engage in deceptive sales practices such as fabricating transactions, inflating transaction volumes, or hiring others to mislead consumers; and to make unrealistic promises, such as lifetime service or lifetime free access.
“Prepaid” services will be held in escrow by a custodian bank.
The draft for public comment stipulates that the competent industry authorities, in light of industry development trends, the scale of prepaid funds, the extent of public involvement, and the duration of prepayments, shall, in coordination with local financial regulatory agencies, formulate rules on the escrow of prepaid funds, determine the scope of operators subject to such escrow, and specify matters including the escrow ratio, conditions for fund transfers, and transfer cycles.
Municipal local financial regulatory authorities shall establish a unified information platform for the escrow of prepaid funds associated with single-purpose prepaid cards and formulate access standards for escrow banks. Operators subject to the escrow regime must open corresponding accounts with an escrow bank and hold prepaid funds in accordance with the relevant industry‑specific escrow rules. For operators not covered by the escrow regime, when engaging in single‑purpose prepaid card business activities, they shall, in compliance with the regulations of the competent industry authorities, implement measures such as risk reserve funds, guarantee insurance, industry mutual guarantees, or third‑party escrow to ensure the safety of prepaid funds.

Delegating enforcement powers to the grassroots level, standardizing the use of “electronic eyes” in law enforcement, and addressing “duplication of enforcement”... How does the new Administrative Penalty Law address the challenges facing law enforcement?
Grassroots agencies lack enforcement authority, making it difficult to meet practical needs; when “electronic eyes” detect violations, they merely record the infractions without providing notice; and the same issue is subject to repeated penalties, placing an undue burden on the public… In recent years, such problems in administrative law enforcement have repeatedly drawn public complaints. The newly revised Administrative Penalty Law, which took effect on July 15, is expected to address these persistent enforcement challenges.
A responsible official from the Legislative Affairs Commission of the Standing Committee of the National People’s Congress recently told a reporter from “Xinhua Viewpoint” that the newly revised Administrative Penalty Law has introduced a comprehensive administrative enforcement system, refined the rules governing administrative penalties, and improved the procedures for imposing such penalties, thereby providing legal safeguards for deepening law-based administration and advancing the building of a law-based government.
How can we address the problem of “what’s visible is beyond our control, and what’s controllable is invisible”?
A key highlight of the newly revised Administrative Penalty Law is the explicit provision that, in light of local conditions, provinces, autonomous regions, and municipalities directly under the central government may decide to delegate the administrative penalty powers of county-level people’s government departments—powers urgently needed for grassroots governance—to township people’s governments or subdistrict offices that are capable of effectively exercising them.
Zhang Guilong, a first‑level inspector in the Administrative Law Division of the Legislative Affairs Commission of the Standing Committee of the National People’s Congress, stated that townships and subdistricts shoulder a substantial array of service functions and administrative responsibilities, many of which must be carried out through administrative law enforcement. However, current laws and regulations generally designate people’s governments at or above the county level and their subordinate departments as the entities authorized to impose administrative penalties, giving rise to the problem of “being able to see but unable to manage, and being able to manage but unable to see,” which makes it difficult to meet the practical needs of grassroots social governance.
He stated that the newly revised Administrative Penalty Law sets forth provisions for strengthening the law‑enforcement capacity of township people’s governments and subdistrict offices entrusted with administrative penalty powers, and requires the relevant local people’s governments and their departments to enhance organizational coordination, provide professional guidance, and conduct enforcement oversight, while also improving evaluation and assessment mechanisms, so as to ensure that administrative penalty powers are “delegated appropriately, effectively assumed, well managed, and subject to adequate supervision.”
How can the enforcement of “electronic eyes” be standardized?
In recent years, some localities have indiscriminately installed and deployed “electronic eyes” to capture traffic violations, resulting in an overwhelming number of fines and drawing widespread public attention.
Zhang Xiaoying, Director of the Administrative Law Division of the Legislative Affairs Commission of the Standing Committee of the National People’s Congress, stated that the newly revised Administrative Penalty Law sets out comprehensive provisions regarding the quality standards, installation, use, and procedural requirements for electronic surveillance equipment, thereby preventing “covert law enforcement.”
For example, where electronic surveillance devices are used to collect and document evidence of violations, such use must undergo both legal and technical review to ensure that the devices meet applicable standards, are appropriately positioned, and are clearly marked; the locations of these devices must be publicly disclosed. Records of violations captured by electronic surveillance devices must be authentic, clear, complete, and accurate. Administrative authorities shall verify that the recorded information complies with the relevant requirements; any records that have not been reviewed or that fail to meet the requirements upon review may not be used as evidence in administrative penalties. Furthermore, administrative authorities shall promptly notify the parties concerned of the facts of the violation and provide convenient access for them to review, make statements, and present their defenses.
Zhang Xiaoying stated that, following the implementation of the newly revised Administrative Penalty Law, the following measures will be advanced: First, relevant legislative bodies should promptly review and revise pertinent provisions, abolishing any non‑on‑site enforcement rules that exceed their statutory authority. Second, competent administrative agencies should promptly complete the required procedures—such as legal and technical reviews and the public announcement of installation locations—to ensure the lawful establishment of electronic surveillance equipment. Third, these agencies should conduct timely calibration and verification of such equipment, promptly retiring or replacing any devices that fail to meet applicable standards. Fourth, they should promptly optimize technical methods and measures to enhance the efficiency and effectiveness of notifying parties of information recorded by electronic surveillance systems.
How can the problem of repeated law enforcement be resolved?
“Seven or eight ‘big hats’ can’t manage one ‘little straw hat.’” This is a vivid description used by the public to characterize the confusion over authority and responsibility, as well as the phenomenon of redundant enforcement, in certain law‑enforcement agencies. In response, the newly revised Administrative Penalty Law has introduced a comprehensive administrative enforcement system.
“‘No double punishment for the same offense’ is an important principle established by the Administrative Penalty Law. Building on this principle, the newly revised Administrative Penalty Law introduces a provision addressing situations in practice where a single unlawful act violates multiple legal norms: when the same unlawful act contravenes several legal provisions that each prescribe a monetary penalty, the penalty shall be imposed in accordance with the provision prescribing the higher fine,” said Zhang Guilong.
He emphasized that the principle of “no double punishment for the same offense” means that a single violation may not be subject to two or more monetary penalties. Certain laws provide that, for a particular unlawful act, authorities may impose a warning, confiscate illegal gains, levy a fine, and even revoke a license; however, such non-monetary sanctions may be imposed concurrently with a fine.
Furthermore, in response to public concerns about practices such as substituting fines for criminal penalties, the newly revised Administrative Penalty Law has refined the mechanisms for coordinating administrative penalties with criminal justice.
“We will establish a system for information sharing, case‑by‑case reporting, and case referrals among administrative law enforcement agencies, public security organs, procuratorial organs, and judicial organs, resolutely addressing the problems of failing to refer cases, encountering difficulties in referral, and substituting fines for criminal penalties, thereby ensuring seamless coordination between administrative and criminal sanctions,” said Zhang Guilong.
How are the legitimate rights of the parties protected?
In practice, some local authorities and government departments have encountered issues such as non-standard administrative penalty procedures, a lack of transparency in the handling process, and untimely notification of outcomes, all of which undermine public trust in law enforcement. The revised Administrative Penalty Law significantly expands the provisions governing administrative penalty procedures, thereby further safeguarding the legitimate rights and interests of the parties concerned.
“The State Council’s reform of the ‘three systems’ for administrative law enforcement has comprehensively established mechanisms for publicizing administrative enforcement, recording the entire enforcement process, and conducting legal reviews of major enforcement decisions. The newly revised Administrative Penalty Law embodies the spirit of this reform and consolidates its achievements, actively incorporating reasonable opinions and suggestions from all stakeholders to strengthen and refine the procedural framework for administrative penalties,” said Huang Haihua, Deputy Director of the Legislative Planning Office of the Legislative Affairs Commission of the Standing Committee of the National People’s Congress.
Huang Haihua explained that the newly revised Administrative Penalty Law, building on the existing three categories of penalty procedures—summary procedure, general procedure, and hearing procedure—has added emergency administrative penalty procedures and non‑on‑site administrative penalty procedures, thereby promoting the establishment of a tiered, multi‑type system of due process for administrative penalties. At the same time, it has lowered the threshold for the summary procedure and expanded the scope of application of the hearing procedure, encouraging and guiding greater use of these two procedures in administrative law enforcement practice.
The newly revised Administrative Penalty Law has also enhanced the transparency of law enforcement. For example, it extends the time limit for imposing administrative penalties, stipulating that administrative agencies must render an administrative penalty decision within ninety days from the date the case is filed; it introduces systems for publicly disclosing administrative enforcement actions and for recording the entire enforcement process, and it refines the legal review mechanism for major enforcement decisions; moreover, it improves the notification procedures, explicitly requiring administrative agencies to inform the party concerned of the proposed content of the administrative penalty prior to rendering a decision.

Supreme People’s Procuratorate: Cases involving damage to the ecological environment and resource protection, as well as food and drug safety, may seek punitive damages.
On the 14th, the Supreme People’s Procuratorate issued the “Rules on Handling Public Interest Litigation Cases by People’s Procuratorates,” stipulating that, in cases involving damage to the ecological environment and resource protection, if the defendant, in violation of legal provisions, intentionally pollutes the environment or damages the ecosystem, thereby causing serious consequences, the procuratorial organs may seek punitive damages and other relief. Similarly, in cases concerning food and drug safety, the procuratorial organs may also seek punitive damages and other remedies, thereby increasing the cost of unlawful conduct for offenders and ensuring that they suffer such severe consequences that they are deterred from repeating their violations.

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