JC Master Legal News Issue 987

Key Takeaways for This Issue
The China Securities Regulatory Commission has spearheaded the establishment of a Coordination Task Force to combat illegal activities in the capital markets, and its inaugural meeting outlined four key areas of work.

The official website of the China Securities Regulatory Commission (CSRC) announced yesterday that, in order to implement the “Opinions on Strictly Cracking Down on Securities Law Violations in Accordance with the Law” issued by the CPC Central Committee and the State Council (hereinafter referred to as the “Opinions”), the CSRC has taken the lead in establishing a Coordination Task Force for Combating Illegal Activities in the Capital Market (hereinafter referred to as the “Coordination Task Force”). Recently, the Coordination Task Force held its inaugural meeting and put forward four key areas of work requirements.

The coal price “fever” must come to an end.
The sustained surge in coal prices has reignited the once‑dormant “coal frenzy.” On September 9, domestic coal futures hit an all-time high. In particular, the benchmark thermal coal contract broke through the RMB 1,000 per ton mark for the first time, while coking coal and coke followed suit, with their respective main contracts also climbing to record‑high levels.
An “excellent” business environment and tax‑and‑fee reductions have unleashed new vitality in the market.
　To track the development of newly established tax‑related market entities, the Development Research Center of the State Council and the State Taxation Administration have leveraged tax‑related big data to conduct a comprehensive research and assessment of all such entities since the start of the 13th Five‑Year Plan. The study finds that, over the past five-plus years, sustained efforts to optimize the business environment and large‑scale tax and fee reductions have spurred the rapid growth of these new market entities, giving rise to a positive feedback loop characterized by their expanding numbers, an expanding tax base, and an increasingly competitive market landscape.
The National Development and Reform Commission has issued the “Plan for Improving the Dual-Control System for Energy Consumption Intensity and Total Volume,” further strengthening the dual-control mechanism for energy consumption.
The overarching goal of the plan is that, by 2025, the dual‑control system for energy consumption will be further refined, with more rational allocation of energy resources and a substantial increase in utilization efficiency. By 2030, the dual‑control system will be further improved, energy intensity will continue to decline significantly, total energy consumption will be kept within an appropriate range, and the energy mix will be further optimized. By 2035, the mechanisms for optimal allocation of energy resources and for comprehensive energy conservation will be fully matured and institutionalized, providing strong support for achieving the target of stabilizing and reducing carbon emissions after peaking.

Finance & Capital Markets
The China Securities Regulatory Commission has spearheaded the establishment of a Coordination Task Force to combat illegal activities in the capital markets, and its inaugural meeting outlined four key areas of work.

Yesterday, the China Securities Regulatory Commission (CSRC) announced that, in order to implement the “Opinions on Strictly Cracking Down on Securities Law Violations in Accordance with the Law” issued by the CPC Central Committee and the State Council (hereinafter referred to as the “Opinions”), the CSRC has taken the lead in establishing a Coordination Task Force for Combating Illegal Activities in the Capital Market (hereinafter referred to as the “Coordination Task Force”). Recently, the Coordination Task Force held its inaugural meeting and put forward four key areas of work requirements.
The meeting reviewed and approved the division of tasks among various departments, reported on the implementation status of work at each unit, and formulated plans for the next phase of work. During the meeting, Guangdong Province shared its practices in implementing the “Opinions” and establishing a provincial-level leading group. Yi Huiman, Chairman of the China Securities Regulatory Commission and convener of the coordination group, presided over the meeting and delivered a speech.
The meeting noted that rigorously cracking down on securities‑related illegal activities in accordance with the law is of great significance for building a capital market that is standardized, transparent, open, dynamic, and resilient, as well as for supporting high‑quality economic development. The CPC Central Committee and the State Council attach great importance to combating illegal and criminal conduct in the capital market, having convened numerous meetings to make arrangements for related work. The establishment of the Coordination Group represents a concrete step to implement the principles of “establishing sound systems, non‑interference, and zero tolerance”; it is an essential requirement for improving China’s distinctive securities‑enforcement and judicial system; and it is urgently needed to foster a healthy ecosystem for the development of the capital market. This initiative will undoubtedly play a vital role in further advancing the implementation and effective execution of all tasks set out in the “Opinions.”
The meeting emphasized that the “Opinions” provide a dedicated plan for securities enforcement and judicial work in the current period and for the foreseeable future, characterized by systematic comprehensiveness and clear priorities. All member units of the coordination group are urged to remain problem‑oriented, strengthen their systemic thinking, and fully leverage the group’s role in coordinating major cases, formulating key regulations, convening consultations on critical issues, and sharing information, so as to continuously improve working mechanisms, sustainably enhance enforcement synergy, and ensure the effective implementation of all priority tasks outlined in the “Opinions.”
First, it is essential to strengthen interagency coordination, ensure that all parties fulfill their respective responsibilities, and further streamline mechanisms for interministerial collaboration and central–local synergy. At the same time, we should support and encourage localities to establish flexible and efficient coordination frameworks tailored to their specific circumstances, thereby fostering a capital market governance model that aligns with national conditions and is jointly built and governed.
Secondly, we must strengthen the punishment of major and complex cases, continuing to focus on illegal and non‑compliant conduct such as financial fraud, market manipulation, and insider trading. We will enhance cooperation between administrative and criminal law enforcement and judicial authorities, accelerate the establishment of a multi‑layered accountability framework that seamlessly links and mutually reinforces administrative enforcement, civil recovery, and criminal sanctions, and further foster a robust deterrent effect rooted in “zero tolerance.”
Furthermore, it is essential to strengthen the rule of law by continuously intensifying efforts to expand the legal framework for capital markets, streamline civil compensation mechanisms, improve market‑based disciplinary systems, and bolster the development of a credit‑based market infrastructure, thereby accelerating the establishment of a liability regime for capital markets that reflects China’s national conditions.
Finally, it is essential to strengthen expectation management, fully leverage the deterrent effect of investigating and prosecuting high‑profile cases, accelerate the institutionalization and long-term sustainability of mechanisms for news and public opinion work in the capital market, and urge all types of market participants to officely embrace a culture of lawfulness and integrity, thereby fostering a favorable external environment for the development of the capital market.
Relevant officials from the member units of the coordination group, including the Publicity Department of the CPC Central Committee, the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, the Ministry of Justice, and the Ministry of Finance, as well as heads of relevant departments, attended the meeting.
The Beijing Stock Exchange has released three major review rules for public comment, aiming to refine the Select Tier system and enhance review efficiency.
Institutional reforms ahead of the Beijing Stock Exchange’s launch are gaining momentum. Yesterday, the BSE released for public consultation its rules on public offerings and listings, refinancing by listed companies, and the review of major asset restructurings. These three sets of rules are: the “Beijing Stock Exchange Rules on the Review of Public Offerings and Listings to Unspecified Qualified Investors (Trial)” (hereinafter referred to as the “Issuance and Listing Review Rules”); the “Beijing Stock Exchange Rules on the Review of Securities Issuances and Listings by Listed Companies (Trial)” (hereinafter referred to as the “Refinancing Review Rules”); and the “Beijing Stock Exchange Rules on the Review of Major Asset Restructurings by Listed Companies (Trial)” (hereinafter referred to as the “Restructuring Review Rules”).
According to the introduction, these three sets of rules serve as the fundamental regulatory framework for the Beijing Stock Exchange’s pilot registration-based system and its review functions. Their overall structure aligns with that of the STAR Market and the ChiNext Board, while also drawing on the practical experience gained from the Select Tier of the New Third Board, thereby establishing a institutional framework that is well-suited to the development patterns and specific needs of innovative small and medium-sized enterprises.
Implement the requirements of the pilot registration system and clarify the procedures.
From the perspective of its main contents, the “Rules on Issuance and Listing Review,” the “Rules on Refinancing Review,” and the “Rules on Restructuring Review” respectively set forth the review procedures for public offerings and listings on the Beijing Stock Exchange, listed companies’ refinancing, and major asset restructurings, primarily stipulating provisions in the following areas:
First, we will implement the requirements of the pilot registration-based system, adhere to an examination approach centered on information disclosure, and, through methods such as inquiry during the review process, urge issuers, listed companies, and other information-disclosure obligors to enhance the quality of their disclosures. We will also hold sponsoring institutions, independent financial advisors, securities service providers, and relevant personnel accountable, thereby guiding all market participants to fulfill their respective roles and responsibilities.
Second, the principle of open and transparent review is fully implemented by making key information—such as review procedures, outcomes, and exchange inquiries—publicly available to the market, thereby ensuring robust public oversight. Time limits are established for all review processes: restructuring and listing reviews shall not exceed three months, while other review matters shall be completed within two months, thus providing clear market expectations.
Furthermore, the specific review procedures have been clearly defined, with detailed arrangements for each stage, including acceptance of applications, issuance of review opinions by the reviewing authorities, submission to the Listing Committee or the M&A and Restructuring Committee for deliberation, issuance of review opinions or decisions by the stock exchange, and filing for registration with the China Securities Regulatory Commission. These measures clarify the division of responsibilities and ensure seamless procedural coordination, thereby guaranteeing the efficient and orderly conduct of issuance, M&A, and registration reviews.
Finally, strengthen self-regulatory oversight, further reinforce accountability for violations by issuers, intermediary institutions, and other relevant parties, refine the categories of violations, diversify enforcement measures, and align these provisions with the regulatory framework governing violation handling under the CSRC’s issuance and registration rules. Overall requirements remain consistent with those applicable to the STAR Market and the ChiNext Board.
“Single Submission, Single Acceptance” for Issuance and Listing
According to a responsible official from the Beijing Stock Exchange, the “Rules on Issuance and Listing Review” have thoroughly incorporated the review experience gained from earlier public offerings to unspecified qualified investors and listings on the Select Tier, and, in line with the principles of the registration-based system, have introduced a series of refinements and adjustments.
Under the rules governing the Select Tier, after the National Equities Exchange and Quotations Company (NEEQ) accepts the application materials and completes its self-regulatory review, it must submit the approval application documents to the China Securities Regulatory Commission (CSRC) on behalf of the issuer, thereby involving a second review stage. By contrast, the Issuance and Listing Review Rules clearly delineate the exchange’s review functions under the registration-based system, implementing a “one-time submission, one-time acceptance” approach: once the Beijing Stock Exchange has accepted and approved the application, it may forward the file to the CSRC for the registration procedure, eliminating the need for the CSRC to conduct a duplicate review.
In accordance with the relevant rules, the validity period of financial statements cited in a Beijing Stock Exchange company’s prospectus remains six months; however, under special circumstances, the allowable extension has been increased from one month to three months.
In addition, the Rules on Issuance and Listing Review stipulate that the total response period for inquiries from issuers and sponsoring institutions is three months, while the review suspension period by the Listing Committee is two months, thereby further clarifying expectations for the review process.
Two targeted measures have been introduced in the refinancing review process.
The key provisions of the Beijing Stock Exchange’s “Rules on Refinancing Review” are broadly aligned with the relevant regulatory frameworks of the STAR Market and the ChiNext Board. According to the responsible officials at the Beijing Stock Exchange, given the exchange’s market positioning—primarily serving innovative small and medium-sized enterprises—the refinancing review process has been tailored in two principal areas.
On the one hand, to align with the distinctive mechanisms of higher-level laws, the application requirements and filing procedures have been streamlined for self‑initiated issuances that meet the relevant criteria set forth in the “Administrative Measures for the Registration of Securities Issuance by Listed Companies on the Beijing Stock Exchange (Trial)” (Draft for Comments). For authorized issuances that satisfy the requisite conditions, a fast‑track, user‑friendly simplified review process has been established.
On the other hand, uniform provisions have been established for the review procedures of various types of securities offerings. In addition to setting out distinct review processes for equity offerings—such as those directed to an indefinite pool of qualified investors and those issued to specific investors—the Refinancing Review Rules explicitly apply these procedures equally to other securities instruments, including convertible bonds and preferred shares, thereby facilitating market comprehension and implementation.
Establish a convenient and efficient restructuring review mechanism.
To support listed companies on the Beijing Stock Exchange in achieving high-quality growth through mergers and acquisitions and restructuring, the “Rules on Review of Restructuring” have established an efficient and streamlined review mechanism. From the perspective of its content, these rules exhibit the following key features:
First, the criteria for identifying restructuring have been refined, with a clearer definition of the specific meaning of “routine operating activities.” Cash purchases of land, factory buildings, machinery, and equipment—provided they can adequately demonstrate their reasonableness and necessity—are now regarded as routine operating activities and are excluded from restructuring oversight.
Second, the restructuring review mechanism will be refined. The Beijing Stock Exchange will establish a M&A and Restructuring Committee within its Listing Committee to deliberate on the review reports issued by the review bodies and the application documents submitted by listed companies, thereby further enhancing the professionalism, prudence, and authority of the restructuring review process and strengthening risk management.
Third, the criteria for restructuring and relisting have been clarified: only assets that meet either the net profit or operating revenue threshold stipulated in the listing requirements may undergo a restructuring and relisting, thereby ensuring the steady enhancement of listed companies’ quality.
Fourth, we will diversify M&A payment methods and stipulate that, when a listed company issues preferred shares or convertible bonds to acquire assets or raise accompanying funds, the review procedures shall be applied by analogy to the “Rules on Restructuring Review,” thereby facilitating market choice.
Review of applications for admission to the Select Tier and issuance activities are proceeding as normal.
The three rules currently under public consultation establish the basic institutional framework for the Beijing Stock Exchange to carry out its responsibilities in reviewing and approving issuances, listings, and financing and M&A transactions. According to a reporter from the Shanghai Securities News, in addition to the provisions already clearly set out in the rules open for public comment, specific review requirements and procedural guidelines for the Exchange’s various review functions will still need to be detailed in accompanying implementing rules, guidance documents, and handbooks. The Beijing Stock Exchange plans to finalize these regulations as soon as possible and issue them at an appropriate time.
With respect to the relevant organizational bodies—such as the Listing Committee and the M&A and Restructuring Committee—that have been explicitly established under the rules, the Beijing Stock Exchange will promptly complete their formation, clarify their operating procedures and requirements, and ensure the orderly functioning of these bodies following the exchange’s launch.
A responsible official from the Beijing Stock Exchange stated that the seamless transition of all companies currently listed on the Select Tier to the BSE will be managed through a coordinated framework for regulatory transition. At present, review processes for Select‑Tier listings and issuance activities are proceeding as usual. The BSE will ensure smooth coordination between the implementation of new rules and ongoing operations, safeguarding uninterrupted project reviews and an unbroken issuance schedule, thereby facilitating a steady transition from the Select Tier to the Beijing Stock Exchange.
Securities offices are fully preparing for the Beijing Stock Exchange’s launch, providing services across the entire corporate lifecycle.
The Beijing Stock Exchange recently unveiled its second batch of business rules, opening for public consultation the fundamental regulations governing issuance and listing, refinancing, and major asset restructurings. This marks another step forward in the exchange’s launch. Meanwhile, securities offices, as intermediary institutions, are set to gain new opportunities for business development.
According to reports, many securities offices have responded swiftly and are actively expanding their business related to the Beijing Stock Exchange, ramping up investment to build out the New Third Board value chain and support the growth of small and medium-sized enterprises.
The New Third Board business continues to increase its investment.
The construction of the Beijing Stock Exchange is advancing rapidly, with numerous brokerage offices stepping up preparations to swiftly capture market share.
“The establishment of the Beijing Stock Exchange underscores the nation’s commitment to supporting ‘specialized, refined, distinctive, and innovative’ enterprises. As a key bridge in capital services, securities offices should keep pace with the times and continuously channel high-quality companies that meet listing requirements to the BSE,” said Li Tongchao, Deputy General Manager of the Growth Enterprises Department at Tianfeng Securities’ Investment Banking Headquarters, in an interview with the Shanghai Securities News. He added that Tianfeng Securities will further ramp up its investment in New Third Board business, ensuring adequate staffing and funding to actively serve both the Beijing Stock Exchange and the New Third Board market.
Peng Hai, head of the Capital Markets Department at the headquarters of Open Source Securities Investment Bank, stated that, on the one hand, the office will increase its market-making capital to boost trading activity and enhance market stability on the Beijing Stock Exchange; on the other hand, it will expand direct investments in innovative small and medium-sized enterprises, serving as a powerful catalyst for technological innovation.
Zhu Jun, head of the New Third Board Market-Making Department at First Capital, told reporters that the office will continue to step up its efforts to provide financing support and market-making services to “specialized, refined, distinctive, and innovative” SMEs, deepen its investment research, focus on high-quality companies in the Select Tier and Innovation Tier, and consistently help innovative SMEs list on the Beijing Stock Exchange and raise capital through subsequent financings.
Building a full industry chain to enhance value.
In the view of Zhu Haibin, Assistant General Manager of the Anxin Securities Research Center, following the establishment of the Beijing Stock Exchange, securities offices will need to coordinate across all business units—integrating investment banking, proprietary trading, research, and brokerage—to fully leverage their multi-channel capabilities under the registration-based system.
As one of the earliest sponsoring securities offices to engage in the development of the New Third Board market, Shenwan Hongyuan regards serving the full‑life‑cycle growth of small and medium-sized enterprises as a core mission. According to relevant officials, the company will further strengthen business synergy and integration, proactively build a comprehensive industrial chain for New Third Board services, and continuously enhance its suite of integrated financial offerings, including sponsorship for listing, private placements, M&A and restructuring, IPO underwriting, market‑making trading, industry research, wealth management, and asset allocation.
Yang Yun, General Manager of the Growth Enterprise Investment Banking Department at Hengtai Changcai Securities, stated that the company will, building on its existing business synergy framework of “investment banking–brokerage–wealth management,” further strengthen its collaborative system. It will enhance the coordinated integration across business lines—including public mutual funds, market-making investments, and research—aiming to establish a more efficient organizational structure that serves small and medium-sized enterprises and the real economy, thereby delivering value through its services and sharing in the resulting benefits.
Securities offices are still actively identifying potential targets. Peng Hai stated that Kaiyuan Securities has conducted a comprehensive review of high-quality companies eligible for its services and has provided tailored guidance on the new policies. At the same time, for companies that have previously delisted and those in its pipeline slated to list on the New Third Board, the office has offered customized solutions to help them access the capital markets.
Opportunities for small and medium-sized brokerages to overtake competitors?
The Shanghai Securities News reporter noted that, unlike the project‑level dynamics on the Shanghai and Shenzhen stock exchanges, which highlight the dominance of leading securities offices, the New Third Board currently sees a landscape in which mid- and small‑size brokers hold the upper hand across areas such as ongoing supervision, underwriting and sponsorship for the Select Tier, and market‑making.
Data show that as of September 13, there were 7,264 companies listed on the New Third Board. Among sponsoring securities offices, the top five in terms of the number of supervised clients are Shenwan Hongyuan, Kaiyuan Securities, Guorong Securities, Dongwu Securities, and Zhongtai Securities. Regarding the professional quality ratings of these sponsoring offices, according to the “Second-Quarter 2021 Professional Quality Evaluation Results for Sponsoring Securities Offices” released by the National Equities Exchange and Quotations Company, the highest‑scoring listed securities offices are Shenwan Hongyuan, Northeast Securities, Western Securities, Dongxing Securities, and Tianfeng Securities.
Zhu Jun stated that the establishment of the Beijing Stock Exchange represents a major expansion of the capital market, creating new opportunities for small and medium-sized securities offices to pursue specialized operations and build their brands in niche segments.
Zhang Keliang, General Manager of the Share Transfer Business Department at Yintai Securities, stated that the Beijing Stock Exchange is an incremental market. In the early stages, small and medium-sized securities offices that have invested heavily in the New Third Board will continue to enjoy a certain competitive edge in the short term. Going forward, several large securities offices are also expected to join the fray, leveraging their platform advantages to capture a share of the market.
Closely aligned with the Beijing Stock Exchange, banks are launching a fierce battle to win over “specialized, refined, distinctive, and innovative” clients.
Following the registration of the Beijing Stock Exchange, which was established on the foundation of the Select Tier of the New Third Board, “smart” banks quickly set their sights on this hot topic.
Recently, Bank of Beijing announced at the China International Fair for Trade in Services that it serves 541 New Third Board–listed companies in Beijing, achieving a service coverage rate of 56%; moreover, it provides services to 75% of the companies listed on Beijing’s Select Tier and Innovation Tier.
The term “services” encompasses a broad range of offerings, from opening corporate settlement accounts or payroll‑disbursement accounts to extending loans or credit lines, providing investment‑banking services such as debt underwriting, and even simply having a corporate wealth‑management product purchased through the bank. However, making statements that closely align with current market trends is crucial, as it helps all market participants better understand how banks can capitalize on the opportunities created by the establishment of the Beijing Stock Exchange—particularly in serving “specialized, refined, distinctive, and innovative” clients.
To this end, reporters conducted an investigation to find out how banks are positioning themselves as lead banks for “specialized, refined, distinctive, and innovative” clients.
Focusing on the “specialized, refined, distinctive, and innovative” customer segment
At present, there are 7,281 companies listed on the New Third Board, including 66 in the Select Tier, 1,248 in the Innovation Tier, and 5,967 in the Basic Tier. It is understood that regions characterized by a high concentration of “specialized, refined, distinctive, and innovative” enterprises—boasting cutting-edge industries, advanced technologies, and a vibrant private sector—have, from an early stage, implemented dedicated strategies for science-and‑technology‑focused finance.
Relevant officials from Bank of Beijing and Bank of Hangzhou briefed a Securities Times reporter on the latest developments in their operations. As of September 10, Bank of Hangzhou had provided services to 365 companies listed on the New Third Board in Zhejiang Province, achieving a service coverage rate of 58%. Among these clients, 70% were enterprises listed on the Select Tier or Innovation Tier.
Meanwhile, Bank of Beijing’s service coverage for companies listed in Beijing stands at 56%; it serves 75% of the selected‑tier and innovation‑tier enterprises in the Beijing region, and 22% of such enterprises nationwide.
According to the Bank of Beijing, its priority clients in the “specialized, refined, distinctive, and innovative” sector are technology‑driven enterprises that possess critical core technologies in fields such as information technology, artificial intelligence, biopharmaceuticals, and new energy. The bank has tailored comprehensive financial product and service packages for these companies, encompassing settlement, financing, investment banking, mergers and acquisitions, payroll services, and financial advisory.
A journalist’s investigation revealed that small and medium-sized banks in the head‑office region generally enjoy a high penetration rate among locally listed companies on the New Third Board, enabling them to acquire customers quite effectively.
Meanwhile, banks are actively reaching out to listed companies that demonstrate sound operations, strong financial performance, low credit risk, and stable founding and management teams. As a result, it is possible that some banks may offer “excessive” services to their high‑quality clients. Consequently, the key to winning such business lies in becoming these companies’ “lead bank.”
To date, the Ministry of Industry and Information Technology has reviewed and selected a total of 4,922 “specialized, refined, distinctive, and innovative” “Little Giant” enterprises across three batches, primarily concentrated in mid- to high-end sectors such as next-generation information technology, high-end equipment manufacturing, new energy, new materials, and biopharmaceuticals. Among them, only about 300 are currently listed on the A-share market; more importantly, many listed companies still have the potential to spin off their subsidiaries or business units.
For banks, the causal relationship is not that New Third Board clients have become important only because the Beijing Stock Exchange was established; rather, “specialized, refined, distinctive, and innovative” clients have always been a priority. Whether listed companies on the Beijing Stock Exchange maintain their fundraising escrow accounts with the bank, whether payroll‑processing accounts can be opened at the bank, and whether the bank serves as these clients’ primary provider of comprehensive financial services—these are all key indicators of the effectiveness of the bank’s “commercial banking plus investment banking” strategy.
The traditional loan‑approval logic is undergoing a shift.
What is “specialized, refined, distinctive, and innovative”? For banks, it refers to a high-quality customer base characterized by strong company valuations, core technologies, an outstanding management team, and the participation of venture capital.
This means that, in the early stages when banks provide them with basic credit services, they must shift from the traditional loan‑approval model that focuses narrowly on financial statements to one that assesses a company’s growth potential. Moreover, entrepreneurs of high‑growth offices do not necessarily rely solely on bank lending; they can also leverage venture capital and the capital markets to a significant extent.
In fact, this also aligns with regulatory policies and guiding principles. On September 8, the People’s Bank of China released the “Analysis Report on China’s Inclusive Finance Indicators (2020),” which explicitly underscores the importance of leveraging venture capital guidance funds to invest early and in small-scale ventures, lowering the listing and financing thresholds for micro and small enterprises, and supporting eligible “specialized, refined, distinctive, and innovative” offices in accessing direct financing.
The central bank also stated, “We will continue to explore the organic integration of investment with credit, insurance, and other financial services, encourage banking and financial institutions to shift their approach to valuing ‘specialized, refined, distinctive, and innovative’ enterprises, adopt an investment‑oriented perspective to comprehensively assess corporate value, and further leverage the role of intellectual property in enhancing creditworthiness for corporate financing.”
An increasing number of banks are placing greater emphasis on the concept of FPA—total client financing—which, in addition to traditional lending, encompasses non‑traditional financing channels such as direct equity investments, proprietary investments, bond underwriting, and matchmaking transactions.
China Merchants Bank plans to deliver strong results in this assessment. A spokesperson for the bank told a Securities Times reporter that, in addition to traditional financial services such as account opening, payroll processing, and corporate lending, CMB’s comprehensive financial offerings for New Third Board companies—particularly those on the Select Tier—are centered on four key areas of need:
First, by focusing on enterprises’ debt‑financing needs and aligning with specific financing scenarios, we offer tailored, innovative credit products such as option‑based loans, investment‑linked loans, medical‑insurance‑secured loans, and government‑procurement‑secured loans.
Second, focusing on enterprises’ equity‑financing needs, we offer services such as direct investments through the New Momentum Fund and equity‑matching platforms, while exploring opportunities to bring in strategic or financial investors to help expand companies’ capital bases.
Third, we will focus on enterprises’ fundamental management needs—such as human resources and finance—and fully digitize our business service tools.
Fourth, by focusing on the personalized needs of enterprises, we have launched a suite of value-added services, including an equity‑incentive system, financing solutions, compensation plans, corporate pension schemes, VIP express loans, and cloud‑based private‑access offerings.

Accelerating the digital transformation of capital markets: building digital infrastructure is key.
Accelerating the development of digital infrastructure has become a key focus in the capital market’s digital transformation. Industry experts generally agree that building such infrastructure can unlock the potential of data as a factor of production, foster a fairer and more transparent trading environment, lay a solid foundation for digital regulation, enhance the professionalism and granularity of oversight, and further promote the prosperity and stability of the capital market.
Accelerate the development of digital infrastructure.
Meet regulatory requirements
With the rise of next-generation information technologies, digital transformation has opened up new opportunities for the development of capital markets. Digitalization not only enhances the quality and efficiency of financial institutions’ services but also strengthens their capacity to prevent and mitigate risks, thereby further fostering innovation and growth in the capital markets.
Regarding the directions for exploring digital transformation in capital markets, the Minsheng Bank Research Institute suggests in its research report that a digital infrastructure should be established: the foundational data architecture for securities trading should be designed with a digital mindset, and a big-data system based on standardized, massive datasets should be built.
Cui Lili, Executive Director of the E‑Commerce Research Institute at Shanghai University of Finance and Economics, stated, “Securities trading and digital technologies share an inherent foundation for integration.” For stock exchanges, digital transformation can expand the scope of data utilization in the securities‑trading domain. Moreover, leveraging big data to integrate multi‑source data and information helps foster a more impartial, equitable, and transparent trading environment.
In a research report, the Minsheng Bank Research Institute stated that the emerging digital capital market must meet the demands of digital regulation. As financial transactions grow increasingly complex, the requirements for financial oversight are steadily rising, and digitalization plays a pivotal role in enhancing regulatory efficiency. The new‑generation capital market platform will establish a digital infrastructure, providing a robust foundation for digital supervision; it will enable real‑time monitoring of all transactions, leverage big data to efficiently track and process transaction information, and employ artificial intelligence to automate the detection of illegal and non‑compliant activities.
Cui Lili argues, “Digital regulation is a common challenge facing the public administration sector today, while finance is a critical domain that underpins socio-economic development.” Without timely, multi‑dimensional monitoring of financial data, latent vulnerabilities or systemic risks could emerge. Strengthening digital financial regulation is an essential task for aligning with the broader digital transformation of the economy and society; accordingly, it places higher demands on regulatory personnel, requiring deeper expertise in big data and proficiency in big‑data analytics tools.
Zheng Lei, Chief Economist at Baoxin Financial, emphasized, “Digital regulation must be launched in tandem with digital trading; otherwise, the development of digital trading could give rise to financial risks that are difficult to manage.” In advancing the digitization of securities trading systems, digital regulatory technologies and transaction‑clearing‑based digital technologies must progress in parallel, so as to truly establish a comprehensive digital infrastructure for both securities trading and regulatory oversight.
Digital Technology Empowers the Capital Market
The financing challenges facing small and medium-sized enterprises are expected to be resolved.
In the era of the digital economy, digital technologies such as big data, artificial intelligence, and blockchain are gradually transforming the way capital markets operate, reshaping their new landscape and forms, and creating opportunities for building a next-generation capital market system.
It is reported that, in the realm of big data applications, the development of financial big data has demonstrated significant value across multiple domains, including risk control, pricing, marketing, credit reporting, credit rating, and regulatory oversight. For instance, the Shenzhen Stock Exchange has leveraged big data to build an intelligent monitoring platform, enabling comprehensive surveillance of key capital market activities and in-depth historical data analysis. Meanwhile, the advent of artificial intelligence has ushered in a wave of intelligent decision-making, with applications such as robo-advisors, AI‑driven investment research, smart risk management, and automated customer service emerging as hotspots. In the blockchain space, the securities and futures industry has undertaken active experimentation and deployment, including the China Securities Regulatory Commission’s Central Regulatory Chain, the Shanghai and Shenzhen Stock Exchanges’ SSE Chain and SZSE Chain, the Securities Association of China’s Securities Industry Consortium Chain, and the CCDC’s OTC Consortium Chain.
In a research report, the Minsheng Bank Research Institute argues that China’s capital market will need to adopt a digital mindset and place customers at the center of its operations, particularly in addressing the financing needs of small and medium-sized enterprises (SMEs). At present, SMEs face significant challenges in accessing capital—namely, difficulty in raising funds, high borrowing costs, and limited access to diverse financing channels—issues that digital technologies hold the potential to help resolve.
For blockchain technology, which has already been widely adopted in capital markets, it can help address the financing challenges faced by small and medium-sized enterprises in typical applications such as supply-chain finance. Wang Haifeng, a senior researcher at Ouke Cloud Chain, stated, “As the level of industrial digitalization continues to rise, ‘blockchain + supply-chain finance’—a model of deep integration between blockchain and the real economy—is playing an increasingly important role in solving SMEs’ financing problems.” Meanwhile, blockchain’s inherent characteristics of immutability, openness, transparency, and traceability enable the verification and conofficeation of accounts receivable, ensuring their authenticity and validity while preventing fraudulent practices such as fabricated conofficeation certificates, inflated conofficeation amounts, or repeated financing against the same certificate. This significantly reduces the risks associated with receivables‑backed loans.
Cui Lili stated that digital technologies such as big data, artificial intelligence, and blockchain can be widely applied to financial data storage, analysis, rights conofficeation, traceability, and certification, helping to identify new economic factors—such as intangible assets or data assets—and thereby accelerating the transformation of capital markets. These technologies also encourage the circulation of new economic resources, including data‑driven assets and virtual assets, thus fostering the development of the new economy and emerging business models. At the same time, they enable small and medium-sized enterprises to unlock their resources and secure greater room for growth.

Commercial & Corporate
The coal price “fever” must come to an end.
The sustained surge in coal prices has reignited the once‑dormant “coal frenzy.” On September 9, domestic coal futures hit an all-time high. In particular, the benchmark thermal coal contract broke through the RMB 1,000 per ton mark for the first time, while coking coal and coke followed suit, with their respective main contracts also climbing to record‑high levels.
Although the aforementioned prices plunged across the board during intraday trading the following day, the sharp rise and fall in coal prices nonetheless triggered a cascade of “butterfly effects,” putting all stakeholders on edge. In the short term, coal prices have remained volatile at elevated levels, closely tied to fluctuations in coal inventories, shipping rates, and other related indicators. However, over the longer term, the key determinant of coal prices remains the balance between supply and demand in the market.
Take the coal industry’s “capacity reduction” as an example: during the 13th Five-Year Plan period, more than 5,500 coal mines were closed nationwide, and outdated coal‑production capacity exceeding 1 billion tons per year was phased out. Although a substantial amount of obsolete capacity has been retired, new, advanced capacity has failed to keep pace. According to publicly available data, the total addition of advanced coal‑production capacity this year amounts to just over 200 million tons.
Typically, the domestic coal market’s supply gap is partially filled by imports. However, this year the import coal market has cooled across the board, widening the gap for two main reasons: first, persistently rising global shipping rates have driven up the landed cost of imported coal; second, factors such as international political and economic dynamics and the COVID‑19 pandemic have constrained Australian coal imports and disrupted customs clearance for Mongolian coal, leading to a rapid decline in inventory levels at major ports.
The “Report on Coal Industry Economic Performance in the First Half of 2021,” released by the China National Coal Association, corroborates the aforementioned assessment. Data show that in the first half of this year, national coal consumption totaled approximately 2.1 billion tonnes, up 10.7% year on year. During the same period, raw coal output from large-scale enterprises nationwide reached 1.95 billion tonnes, an increase of only 6.4% compared with the previous year. In addition, total coal stocks at major national ports stood at 62.98 million tonnes, down 8.3% year on year.
From the perspective of coal’s absolute price, China’s coal prices are currently at their highest level since 2008, prompting widespread “fear of further increases” among market participants and traders. Meanwhile, downstream enterprises are also feeling substantial cost pressures being passed down the supply chain. In response to these concerns, relevant authorities have implemented proactive measures to help businesses navigate their challenges. However, to address the issue at its root, the key lies in devising strategies to boost coal supply in the market.
Since the second half of this year, signs of a gradual release in coal‑production capacity have been striking. In particular, since August, Inner Mongolia alone has granted land‑use approvals for 36 open‑pit coal mines, and more high‑quality coal‑producing capacity is expected to come online one after another after mid‑September. Despite growing expectations across the board that policy measures will rein in the coal market, the longstanding pattern—where tighter regulation tends to drive prices higher—has left many wondering: can coal prices really be brought under control this year?
To be realistic, the factors influencing the coal supply‑demand balance are highly complex, and it will indeed be difficult to fully resolve the imbalance in the short term. However, this should not undermine our resolve or confidence at the national level to stabilize coal prices. Across the country, as coal production capacity is gradually brought online, a substantial increase in supply is foreseeable—though it will still take time for policy measures to fully take effect.
On the one hand, it is essential to steadily and sustainably expand coal supply; on the other, we must continue to strengthen collaboration between the coal sector and its upstream and downstream industries—this approach also serves as an effective means of ensuring the smooth functioning of the supply-and-demand market. Practice has shown that since the introduction in 2016 of the “medium- and long-term coal contract” system and the “base price plus floating price” pricing mechanism, a development pattern of mutual benefit and win-win outcomes among upstream, midstream, and downstream sectors has been gradually taking shape, with growing acceptance across all market participants. This model balances the interests of both supply and demand, helps optimize resource allocation and stabilize the fundamentals of coal supply, and strengthens the coal industry’s resilience to risks, thereby elevating the overall level of high-quality development.
It should be noted that behind the current surge in coal prices, there is also deliberate speculation and hoarding by certain institutions and individuals. Relevant authorities must promptly crack down on such illegal and non‑compliant practices to effectively safeguard market order. After all, any rational market cannot tolerate disorderly, irrational price hikes.

Addressing the supply-demand imbalance to alleviate pain points in the rental market.
As population inflows continue, demand for rental housing is likely to remain robust for an extended period, with supply‑demand imbalances in the rental markets of megacities potentially becoming even more pronounced. To effectively govern the rental market, efforts should focus on the supply side—expanding existing housing stock, developing new supply, implementing equal rights for renters and homeowners, and strengthening market oversight—to better safeguard tenants’ rights and interests.
This summer, after two years of sluggishness, Beijing’s housing‑rental market has experienced a modest upswing. At the end of August, the Beijing Municipal Commission of Housing and Urban–Rural Development released the “Beijing Housing Rental Regulations” (draft for public comment), proposing measures such as prohibiting real estate agencies from offering subletting services and capping rent increases. Shortly thereafter, administrative penalties were imposed on two companies found to have engaged in related violations. For megacities like Beijing, high rental prices remain a significant pain point for many tenants, making it crucial to effectively manage and standardize the rental market. In this context, certain viewpoints warrant clarification.
Is the high cost of rent due to long‑term rental apartments pocketing a “price markup”? Data show that in China’s super‑first‑tier cities, rental yields are below 2%, significantly lower than international norms. Most long‑term rental operations in China consist of decentralized, apartment‑style units—essentially acting as sub‑landlords—and typically employ a business model of “high‑in, low‑out” and “long‑term collection, short‑term payment,” resulting in slow cash flow and leaving many such companies under financial strain. By contrast, centralized apartment models—where property developers build first and then lease out—are capital‑intensive, constrained by high land prices and elevated costs, and likewise face substantial operational pressures. Clearly, it would be premature to conclude that long‑term rental offices are raking in hefty profits.
Could it be that the rental market is characterized by monopolistic practices and cutthroat bidding? In recent years, large‑city, scale‑operated housing‑rental offices have captured only about 2% of the market, leaving ample room for growth. Yet, judging by indicators of market competition and concentration, among the leading players in the decentralized apartment segment—such as Ziroom and Xiangyu—their respective market shares hover around 30%, while in the centralized‑apartment sector, with Magic Cube at the forefront, industry concentration stands at 56%. These top offices enjoy clear channel advantages and substantial bargaining power; in their drive to expand, they vie for properties by offering prices 20% or even more above market rates, thereby pushing up rental costs across the board.
Price gouging is one contributing factor, but at its root lies the principle that “scarcity drives value.” According to data from the seventh national census, over the past decade, Beijing, Shanghai, and Shenzhen have each seen average annual increases of 228,000, 185,000, and 713,000 permanent residents, respectively. Although growth rates have moderated, the trend of net population inflow into major cities is expected to persist, keeping housing rental demand robust for the foreseeable future. In the period ahead, as population continues to flow into these megacities, supply‑demand imbalances in the rental market are likely to intensify, becoming a key driver of persistently high rents.
Only by accurately identifying the root of the problem can we prescribe the right remedy. Years ago, many Chinese cities began tackling the imbalance between supply and demand in the rental market and the issue of cutthroat price competition; some have seen success, while others are still exploring solutions. In my view, the key to regulating the rental market lies in strengthening the supply side. First, we must make better use of existing housing stock by offering tax incentives and other policies to encourage long‑term rental‑apartment operators to repurpose idle, underutilized commercial buildings and hotels, thereby expanding current supply. Next, we should expand new supply by increasing the share of land allocated for rental housing in major cities, improving planning for public‑rental‑housing development, and boosting the construction of affordable rental units. At the same time, we must ensure equal rights for renters and owners—enforcing “equal rights for renting and buying”—while tightening market oversight, monitoring rent levels in real time, curbing unfair competition, and promptly penalizing illegal practices that harm tenants’ interests. It is worth noting that German law caps rent increases at 15% over a three‑year period, which offers valuable lessons for us.
Several real estate indicators remain weak, making it highly likely that this year’s “Golden September and Silver October” will fall short of expectations.
At present, the real estate market has entered the traditional “Golden September and Silver October” period. However, according to the latest data released by the National Bureau of Statistics on September 15, in August, the month-on-month and year-on-year growth rates of sales prices for commodity residential properties in 70 major and medium-sized cities continued to decelerate overall. The lackluster performance of several key real estate indicators suggests that this year’s “Golden September and Silver October” may fall short of expectations.
Shen Guoqing, chief statistician of the Urban Division of the National Bureau of Statistics, expects that, as localities fully implement the long-term mechanism for the real estate sector and continue to strengthen market regulation, month-on-month price increases for both new and existing residential properties in cities across all tiers will moderate or even decline further.
On a month-over-month basis, calculations show that in August, new‑home sales prices in first‑tier cities rose 0.3% compared with the previous month, a pace 0.1 percentage point slower than the prior month; secondhand‑home sales prices in these cities increased 0.2% month over month, down 0.2 percentage points from the previous month. In second‑tier cities, new‑home sales prices climbed 0.2% month over month, a slowdown of 0.2 percentage points; secondhand‑home prices turned flat after rising 0.2% the month before. In third‑tier cities, new‑home sales prices remained unchanged, reversing last month’s 0.2% gain; secondhand‑home prices fell 0.1% month over month, marking the second consecutive monthly decline.
Looking at year-on-year changes, the growth rates of sales prices for both new and existing residential properties in cities across all tiers have also eased. According to calculations, in August, in first-tier cities, the year-on-year increases in sales prices for new and existing residential properties were 5.7% and 9.1%, respectively—down 0.3 and 0.9 percentage points from the previous month. In second-tier cities, these increases stood at 4.4% and 3.2%, respectively, both down 0.3 percentage points from the prior month. In third-tier cities, the year-on-year rises were 2.8% for new homes and 1.9% for existing homes, with declines of 0.5 and 0.4 percentage points, respectively, compared with the previous month.
Zhang Bo, deputy director of the Research Institute at 58 Anjuke Real Estate, told reporters that, based on August data, housing price growth across various cities has moderated to varying degrees, signaling a shift in market expectations. Although prices in some cities continue to rise, the overall pace of increases has slowed. It is expected that this year’s “Golden September and Silver October” real estate season will be less robust than last year, with weaker-than-expected performance likely to prevail.
Notably, in August, not only did the pace of housing price increases moderate, but on the same day, data released by the National Bureau of Statistics—covering commercial housing sales area and the growth rate of real estate development investment for the first eight months—also continued to decelerate.
Data show that from January to August, sales of commercial residential properties totaled 114.193 million square meters, up 15.9% year on year; this represents a 12.1% increase compared with the same period in 2019, with an average two-year growth rate of 5.9%, down 1.1 percentage points from January–July. Nationwide real estate development investment reached RMB 9.806 trillion, up 10.9% year on year; it was 15.9% higher than in the same period of 2019, with an average two-year growth rate of 7.7%, down 0.3 percentage points from January–July. Notably, the growth rate of real estate development investment has decelerated steadily from a high of 38.3% at the beginning of the year to 10.9% today.
Li Qilin, director of the Hongta Securities Research Institute and chief economist, told reporters that, under the combined influence of factors such as the “three red lines” for property developers, pressure from real estate credit‑concentration regulations, stricter oversight of non‑standard financing, and difficulties in issuing bonds, external financing for property offices has become constrained. Meanwhile, these companies have long relied on pre‑sales proceeds to sustain their cash flow, but with housing sales data also beginning to decline, they now face significant liquidity pressures, leading to a reduction in land acquisitions and new construction starts.
Data show that from January to August, the nationwide land acquisition area totaled 107.33 million square meters, down 10.2% year on year. Meanwhile, the national floor space of newly started housing projects reached 135.502 million square meters, a decrease of 3.2% compared with the same period last year.
“The most critical factor to watch in the real estate sector is the uncertainty on the sales side,” said Li Qilin. As downward pressure on property sales intensifies and developers face severe liquidity constraints, leading indicators such as land acquisitions and new construction starts are already trending lower. Accordingly, real estate development investment is likely to continue its downward trajectory going forward.

Taxation TAXATATION
An “excellent” business environment and tax‑and‑fee reductions have unleashed new vitality in the market.
To track the development of newly established tax‑related market entities, the Development Research Center of the State Council and the State Taxation Administration have leveraged tax‑related big data to conduct a comprehensive research and assessment of all such entities since the start of the 13th Five‑Year Plan. The study finds that, over the past five-plus years, sustained efforts to optimize the business environment and large‑scale tax and fee reductions have spurred the rapid growth of these new market entities, giving rise to a positive feedback loop characterized by their expanding numbers, an expanding tax base, and an increasingly competitive market landscape.
Research indicates that newly established tax‑related market entities exhibit three key characteristics:
— They play a strong role in supporting economic development, generally exhibiting the “6543” characteristics. The number of newly established tax‑related market entities accounts for over 60% of all such entities. During the 13th Five-Year Plan period, a total of 58.74 million new tax‑related market entities were registered; by the end of 2020, 47.52 million remained active, representing 66% of all tax‑related market entities nationwide. The four major economic regions account for half of the newly established tax‑related market entities. Together, the Yangtze River Delta, the Pearl River Delta, the Beijing–Tianjin–Hebei region, and the Chengdu–Chongqing region comprise 48.7% of the national total. Newly established foreign‑invested tax‑related market entities make up 40% of the total. As of the end of 2020, those newly registered during the 13th Five-Year Plan period that remained active represented 39% of the country’s total stock of foreign‑invested tax‑related market entities. Sales revenue generated by newly established tax‑related market entities accounts for 30%. In 2020, the sales revenue of newly established and still‑active tax‑related market entities from the 13th Five-Year Plan period amounted to 30% of the total sales revenue of all tax‑related market entities nationwide.
— The capacity for sustained growth continues to strengthen. The survival rate of newly established tax‑related market entities has risen year after year; by 2020, the number of surviving entities accounted for 80.9% of the cumulative total of new registrations over the past five years. Meanwhile, the proportion of businesses that ceased operations within two years of inception declined from 12.4% in 2018 to 9.9% in 2020. Business performance has steadily improved, with average sales revenue per entity growing at an annual rate of 25.6% between 2016 and 2020. This has provided robust support for labor‑market stability. By the end of 2020, the newly established tax‑related market entities created during the 13th Five-Year Plan period employed a total of 199 million people, both generating substantial new job opportunities and offering ample scope for retraining and reallocation of existing workers.
— The trends of industrial structure optimization and technological upgrading are pronounced. As of the end of 2020, among the “13th Five-Year Plan”‑era newly established tax‑related market entities still in operation, nearly 90% belonged to the service sector. Among these, productive services exhibited the highest level of new‑business activity, with the share of newly established tax‑related entities in this sector rising from 26.2% in 2016 to 37.6% in 2020. In particular, modern service industries such as software and information services, business services, and professional technical services saw a rapid increase in their share of new entrants, climbing from 11.2% to 16.9%. By contrast, in consumer‑oriented service sectors with lower technological requirements, the share of new entrants declined by 12.9 percentage points.
The study finds that tax and fee reductions, improvements to the business environment, and the growth of newly established tax‑related market entities are mutually reinforcing, as evidenced by the following:
— Tax and fee reductions have provided strong support for the operations of newly established tax‑related market entities. Sectors benefiting from more substantial tax and fee cuts have seen a greater increase in new business formations. In 2019, the manufacturing sector and its related segments, along with leasing and business services, and construction, together accounted for over 60% of all newly added tax reductions; as a result, the share of newly established tax‑related market entities in these sectors rose from 50.4% in 2016 to 65.3% in 2019. Tax and fee reductions have also enhanced the profitability of these new market entities. The average profit per surviving newly established tax‑related entity stood at just RMB 11,000 in 2018, but, bolstered by large‑scale tax and fee relief measures, it surged to RMB 21,000 in 2019. Industries such as equipment manufacturing and computer and electronic product manufacturing, which benefited most from VAT cuts, experienced even sharper gains in profitability. In 2019, regions with relatively higher social security contribution reductions—such as Jiangsu, Yunnan, and Hainan—saw their next‑year growth rate of new business formations exceed the national average by more than 10 percentage points.
— Optimizing the business environment has effectively fostered the growth of newly established tax‑related market entities. Since further improvements were introduced, the annual increase in such entities has averaged over 10 million. Regionally, pilot free trade zones that have implemented the “separation of licenses and business permits” reform have seen even faster growth: for example, in 2020, the Tianjin Binhai New Area, Shenzhen’s Nanshan District, Chengdu, and Qingdao reported year‑on‑year increases of 20.1%, 14.1%, 24.2%, and 34.4%, respectively—significantly above the national average. By sector, the road transport, business services, and professional technical services industries have experienced particularly rapid expansion among newly established tax‑related market entities. By the end of 2020, in these sectors, the number of new tax‑related entities created during the 13th Five‑Year Plan period had already accounted for more than 70% of the total number of tax‑related entities in each respective industry—higher than the overall average.
— Newly established tax‑related market entities are effectively contributing to tax revenues. First, during the 13th Five‑Year Plan period, these new entities have emerged as a significant source of tax collection. The tax payments made by market entities to some extent reflect their production and operational capabilities and vitality. Compared with the 12th Five‑Year Plan period, tax revenue collected by the tax authorities increased by RMB 18.5 trillion; meanwhile, newly established tax‑related market entities cumulatively paid over RMB 7.8 trillion in taxes, accounting for 42% of the total tax revenue growth between the two periods and thus becoming a key driver of tax‑revenue expansion. Second, in certain sectors, these newly established entities are gradually evolving into major taxpayers. Among 97 major industrial categories, in 28 industries the share of tax payments attributable to new tax‑related market entities exceeds 30% of the industry’s total tax burden—particularly in sectors that experienced robust development during the 13th Five‑Year Plan, such as internet services, environmental protection, and cultural media.
— Newly established tax‑related market entities have effectively boosted market competition and innovation. On the one hand, these new entities exhibit high dynamism, with rapid growth in revenue and profitability, significantly expanding the overall base of market participants and intensifying competitive pressures. From 2016 to 2020, the annual tax‑filing rate among newly established tax‑related entities was 44.98%, 48.07%, 48.13%, 48.32%, and 45.74%, respectively; except for a slight dip in 2020 due to the pandemic, the trend has been broadly upward. Moreover, the growth rate of income tax paid by these new entities has outpaced that of value‑added tax, and by 2020, the share of income tax in their total tax liabilities had largely converged with the level observed across all tax‑related market entities. On the other hand, newly established tax‑related entities are more inclined to enter modern service sectors and emerging industries, and they are more willing to engage in innovative activities. Among the top 15 major industry categories with the highest proportion of new tax‑related entities, with the exception of relatively short‑lived sectors such as retail, real estate, and construction, the remaining segments are predominantly modern services and emerging industries—including business services, software and information technology services, and scientific and technological promotion and application services—sectors that typically require substantial R&D investment.
Going forward, the Development Research Center of the State Council and the State Taxation Administration will continue to ground their work in the new stage of development, implement the new development philosophy, and support the establishment of the new development paradigm. They will delve deeper into the value of tax‑related big data, fully leverage its advantages in advancing economic and social development, and consistently develop authoritative, highly credible tax‑economic analysis products, thereby better supporting the growth of market entities and providing stronger support for macroeconomic policymaking.

Announcement of the State Taxation Administration on Further Implementing Relevant Issues Concerning the Policy of Additional Deduction for R&D Expenses
To implement the State Council’s measures to encourage enterprises to increase R&D investment and optimize the policy on additional deductions for R&D expenses, and to carry out in depth the 2021 “Doing Practical Things for Taxpayers and Payers” initiative and the Spring Breeze Action for Convenient Tax Services, thereby enabling enterprises to benefit earlier from the preferential policy of additional R&D expense deductions, the following matters are hereby announced:
I. Regarding the Application of the Policy on Additional Deduction for R&D Expenses in 2021
(1) When making the October provisional corporate income tax return for the third quarter (for quarterly filers) or the September return (for monthly filers), enterprises may voluntarily elect to apply the additional deduction policy to R&D expenses incurred during the first three quarters.
For those who did not elect to claim the preferential treatment during the October provisional tax filing period, they may uniformly apply it when completing the 2021 annual corporate income tax final settlement in 2022.
(2) Enterprises applying the policy of additional deduction for R&D expenses shall follow the procedure of “actual occurrence, self‑determination, declaration for benefit, and retention of relevant documentation for record‑keeping.” Based on their actual R&D expenditures, enterprises shall independently calculate the amount of the additional deduction, complete the “People’s Republic of China Enterprise Income Tax Monthly (Quarterly) Provisional Tax Return (Type A)” to claim the tax benefit, and, in accordance with the R&D expenses eligible for the additional deduction (for the first three quarters), fill out the “Detailed Statement of Additional Deduction for R&D Expenses” (A107012). The “Detailed Statement of Additional Deduction for R&D Expenses” (A107012) shall be retained together with other documents prescribed by the policy for record‑keeping purposes.
II. Issues Regarding the Format of the Supplementary Ledger for R&D Expenses
(1) The formats for the auxiliary ledger of research and development expenses and the summary table of such ledgers, as issued in the State Taxation Administration’s Announcement No. 97 of 2015 (hereinafter referred to as “Announcement No. 97”), shall remain valid. In addition, a simplified version of the auxiliary ledger of research and development expenses and its corresponding summary table have been introduced (hereinafter referred to as the “2021 Version of the R&D Expense Auxiliary Ledger Format”). Specific formats and instructions for completion are provided in the attached documents.
(2) When establishing supplementary accounting records for R&D projects, enterprises may independently choose to use either the 2015 version or the 2021 version of the R&D Expenditure Supplementary Ledger, or they may design their own R&D Expenditure Supplementary Ledger in accordance with the aforementioned formats.
The enterprise‑designed auxiliary ledger for R&D expenditures shall include all data items listed in the 2021 version of the R&D Expenditure Auxiliary Ledger, maintain consistent logical relationships, and accurately allocate R&D expenses eligible for additional tax deductions.
III. Issues Regarding the Calculation of Limits for Other Related Expenses
(1) Where an enterprise conducts multiple R&D activities within a tax year, the previous practice of calculating the cap for “other related expenses” separately for each R&D project has been replaced by a unified calculation of the cap for “other related expenses” across all R&D projects.
Enterprises shall calculate the cap for “other related expenses” as specified in item 6 of paragraph (1) of Article 1, “R&D expenses eligible for additional tax deductions,” of the Notice issued by the Ministry of Finance, the State Taxation Administration, and the Ministry of Science and Technology on Improving the Policy for Pre-Tax Additional Deductions for Research and Development Expenses (Cai Shui [2015] No. 119), using the following formula. Expenses incurred in capitalized projects shall be uniformly included in the calculation in the year in which the intangible asset is formed.
The cap on other related expenses for all R&D projects equals the sum of the five expense categories, including personnel wages, for all R&D projects, multiplied by 10% divided by (1 − 10%).
“The five categories of expenses, including personnel wages,” refer to the expenses listed in Items 1 through 5 under Subparagraph (1) of Article 1 of Document Cai Shui [2015] No. 119, “R&D Expenses Eligible for Additional Deduction,” namely: “personnel wages,” “direct input costs,” “depreciation expenses,” “amortization of intangible assets,” and “expenses for new product design, development of new process specifications, clinical trial costs for new drug development, and on-site testing costs for exploration and development technologies.”
(2) When the actual amount of “other related expenses” is less than the prescribed limit, the pre‑tax additional deduction shall be calculated based on the actual amount; when the actual amount exceeds the limit, the pre‑tax additional deduction shall be calculated based on the limit.
IV. Effective Date
Article 1 of this announcement applies to the year 2021, while the remaining provisions apply to 2021 and subsequent years. The provision in Article 2, Item (3) of Announcement No. 97, “Allocation and Limit Calculation of Other Related Expenses,” is hereby repealed.
This is hereby announced.

Tax and fee services are stepping up to bolster small and micro enterprises, strengthening their vitality and dynamism.
“Guidance on Tax and Fee Preferential Policies for Small and Micro Enterprises and Individual Business Households,” “How to Benefit from the Corporate Income Tax Reduction and Exemption Policy for Small and Low‑Profit Enterprises”... Today, whether on the State Taxation Administration’s official website or its WeChat app, policy information relevant to small and micro enterprises is readily accessible at your fingertips.
Since the beginning of this year, tax authorities have launched the “Doing Practical Things for Taxpayers and Payers” initiative, along with the Spring Breeze Campaign to Facilitate Tax Services, promptly addressing the personalized needs of small and micro enterprises. A series of enhanced tax and fee‑related support measures has been rolled out to provide robust backing for their growth and development, helping these businesses bolster their vitality and resilience.
Tax and fee policies should be enjoyed promptly.
Since the beginning of this year, the CPC Central Committee and the State Council have further strengthened their support for small and micro enterprises and individual business households. In July, the State Taxation Administration issued the “Guidance on Tax and Fee Preferential Policies for Small and Micro Enterprises and Individual Business Households,” which comprehensively reviews 27 tax and fee preferential policies targeting these entities from three perspectives—reducing their burdens, facilitating access to financing, and supporting entrepreneurship—thereby helping taxpayers and payers promptly understand and apply the applicable measures.
Located in the Huanglong Industrial Cluster Zone of Kaifeng, Henan Province, Kaifeng Hushi Furniture Co., Ltd. is a small and micro enterprise that manufactures and sells modern, New‑Chinese‑style furniture. Recently, after receiving a personalized guidance package on tax and fee preferential policies from the local tax authorities, General Manager Chen Jiancong was pleasantly surprised: “These policies are exactly what we’ve been in urgent need of lately—truly, I never expected the tax bureau to provide such precise and meticulous service.”
Behind the phrase “unexpected” lies the tax authorities’ precision‑driven, differentiated approach—covering content curation, target‑group selection, mechanism design, and performance analysis—to ensure that taxpayers and payers of different types can promptly and comprehensively understand policies, master the relevant procedures, and readily access the benefits, thereby enabling swift and direct delivery of tax and fee preferential policies.
In Shanxi Province, the “Jinxiang Tax Benefits” smart assistant was recently launched and put into operation. According to Qi Zhihong, Director of the Shanxi Provincial Tax Service Bureau, the “Jinxiang Tax Benefits” system leverages big data technology to disaggregate taxpayer information and tax‑related preferential policies across multiple dimensions. It precisely consolidates tax incentives—covering 16 tax categories and scattered across various laws, regulations, departmental rules, and normative documents—into tailored “policy packages” that are highly relevant to different taxpayers. This enables one‑click access to a comprehensive overview of available benefits, shifting the paradigm from “people seeking policies” to “policies finding people,” thereby ensuring that all eligible taxpayers can fully and swiftly benefit from a wide array of tax‑related preferential measures.
“This system is built on taxpayers’ needs and designed with a ‘user‑centric’ approach, delivering precise, personalized services that enhance the accuracy of advisory support—making it highly practical,” said Han Mingming, Manager of the Technical Support Department at Zhonghui Shanxi Tax Consulting Office.
In Ningbo, Zhang Qianle, the financial director of Anjiyou Automation Co., Ltd., a small and micro enterprise, stated: “The tax authorities promptly notified us of the relevant policies, enabling our newly purchased equipment—valued at 3.52 million yuan—to qualify for a one-time pre-tax deduction.” This outcome was made possible by the intelligent online consultation system and the “list management” feature integrated into Ningbo’s tax‑payer communication platform, which automatically matches eligible preferential policies and delivers them in a targeted manner to the company, ensuring that it is fully informed and can swiftly access all applicable benefits.
Supporting the Growth of Small and Micro Enterprises
As a key initiative under the 2021 “Doing Practical Things for Taxpayers and Payers and the Spring Breeze Action for Convenient Tax Services,” starting this May, the State Taxation Administration and the All-China Federation of Industry and Commerce jointly launched the “Spring Rain Nurtures Seedlings” special campaign to support the development of small and micro enterprises. The campaign introduces 12 measures across three major categories—“Bringing Beneficial Policies to Every Household,” “Providing High-Quality Support Services,” and “Safeguarding Growth to Promote Development”—to help small and micro businesses overcome difficulties and pursue sustainable growth.
“With more than 20 instructional videos covering common business procedures—available on demand—and the option to connect via video with back‑office experts when facing challenges, tax compliance has become increasingly convenient for small and micro enterprises like ours,” said Xie Han, a finance professional at Anhui Xubin Construction Engineering Co., Ltd., after experiencing the smart tax service hall firsthand. “During my last visit, I inquired about the consolidated filing of property and behavioral taxes; this time, I noticed that relevant explanatory videos have already been uploaded to the intelligent guidance knowledge base.”
In response to the realities faced by small and micro enterprises—namely, limited staffing and weak tax‑filing capabilities—the tax authorities, as part of the “Supporting Small Businesses, Enhancing Service Experience” initiative, have expanded convenient tax‑filing channels, strategically coordinated service resources, and recruited tax‑and‑fee service experience officers. These efforts are aimed at bolstering small and micro enterprises’ sense of gain and helping them master tax‑filing procedures while enjoying a superior service experience.
The reporter learned that, today, tax authorities across all provinces, autonomous regions, and municipalities directly under the central government have set up experience zones in their taxpayer service halls, with dedicated staff providing guidance to small and micro enterprises on how to use the systems, and organizing both online and offline training sessions to help these businesses issue invoices.
“Since last year, our hospital has benefited from VAT exemptions and reductions totaling over 2.7 million yuan, reaping tangible policy dividends,” said the head of Jinan Microsurgical Hospital in Shandong Province.
Since the launch of the “Spring Rain Nurtures Seedlings” special campaign, the Shandong Provincial Tax Service Bureau has worked closely with the Shandong Federation of Industry and Commerce to further help small and micro enterprises restore their vitality, gain momentum, and strengthen their dynamism. By ensuring that tax and fee support policies and innovative service measures reach these businesses in a timely manner, the initiative has effectively boosted market entity vitality, sustained the growth of small and micro enterprises, and contributed more to Shandong’s high-quality economic and social development.
Han Guorong, Director-General of the Taxpayer Services Department of the State Taxation Administration, stated that for small and micro enterprises to thrive, they not only need targeted, comprehensive guidance on tax and fee policies and streamlined, efficient tax‑filing and payment services, but also a regularized, institutionalized mechanism to provide ongoing support. The “Protecting Seedlings, Fostering Growth” initiative establishes a model for boosting the development of small and micro enterprises that integrates point‑level, line‑level, and area‑level measures while balancing short‑term and long‑term needs, thereby building a sustained, coordinated response system to help these businesses achieve stable growth and sustainable development. At present, tax authorities across the country have all established joint mechanisms with federations of industry and commerce to promptly address the tax‑related concerns of small and micro enterprises, collecting feedback from their respective chambers of commerce and handling such requests in accordance with an expedited response protocol.
Bringing a steady flow of capital to enterprises.
Guangzhou Benchang Ecological Agriculture Co., Ltd. is a farming and agricultural‑product‑processing enterprise founded by local villager Deng Zhifeng upon his return to his hometown. In the height of summer, the 100 mu of hillside he has contracted is lush with fruit trees—such as lychee, wampee, and sugar mandarin—as well as ornamental flowers like azaleas and orchids.
This orchard and garden has thrived thanks to the financial “living water” brought in through the “tax‑bank‑enterprise” collaboration. “Farmers rely on the weather for their livelihoods, and it takes several years from planting to harvest, placing significant pressure on cash flow. Coupled with the impact of last year’s pandemic, we faced serious difficulties in managing working capital,” said Deng Zhifeng. “After visiting our farm and assessing our situation, the Guangzhou tax authorities leveraged the ‘tax‑bank‑enterprise’ initiative to help us secure a bank credit loan of RMB 200,000, smoothly resolving our financing challenges. As a result, we expect to further expand our planting operations this year.”
In recent years, the tax authorities and the banking and insurance regulatory authorities have worked closely together to continuously refine the “tax‑bank‑interaction” cooperation mechanism, leveraging taxpayers’ credit ratings to ease financing constraints faced by law-abiding small and micro enterprises and address their most pressing needs.
In Shandong, thanks to the expansion of the “Tax-Bank Interaction” program—from A‑rated taxpayers to include B‑ and M‑rated enterprises—Lin Yao Wood Industry Co., Ltd. in Linqing City recently secured a loan. “Because we’re on a strong growth trajectory, operate in compliance with regulations, and have no record of tax violations, we applied for the loan via our mobile app, and the 3 million yuan ‘Cloud Tax Loan’ was approved almost immediately,” said Hou Dongyue, the company’s head.
“I never imagined that tax credit could actually be turned into cash. After the bank accessed our tax information through the ‘Bank-Tax Collaboration’ platform, they promptly approved a loan,” said an employee of a metal company in Gejiu City, Yunnan, at a recent meeting to advance the “Bank-Tax Collaboration” initiative. “With raw material prices on the rise, we were facing some financial difficulties. Thanks to this loan, we’ve managed to address our most pressing needs.”
Since the beginning of this year, the Honghe Prefecture Tax Service Bureau has signed “Bank–Tax Collaboration” cooperation agreements with 22 banking institutions and referred more than 1,600 A‑level taxpayer credit users to financial institutions. The number of loan accounts under bank–tax collaboration has reached 642, with an outstanding loan balance approaching RMB 500 million.
Access to financing has long been one of the major challenges hindering business growth. The Xuzhou Municipal Tax Service Bureau has leveraged taxpayer credit information to help enterprises convert their credit standing into tangible financial resources, bolstering the cash reserves of small and medium-sized enterprises (SMEs) and alleviating the persistent issues of difficult, expensive, and slow access to funding. This initiative has injected much-needed liquidity into SMEs. Since the beginning of this year, Xuzhou Pan’an Shui Town Cultural Tourism Development Co., Ltd. has entered a period of promising growth; however, financial constraints have posed significant concerns for its management. Upon learning of the company’s predicament, the Jiawang District Tax Service Bureau promptly coordinated with banking institutions and, relying on the enterprise’s strong taxpayer credit rating, secured a 2-million-yuan unsecured loan, swiftly resolving its cash‑flow difficulties.

Litigation & Arbitration
The Procuratorial Office of the Supreme People’s Procuratorate stationed at the China Securities Regulatory Commission was officially inaugurated.
On September 18, 2021, the Procuratorial Office of the Supreme People’s Procuratorate stationed at the China Securities Regulatory Commission (hereinafter referred to as the Stationed Procuratorial Office) was officially inaugurated. Zhang Jun, Procurator-General of the Supreme People’s Procuratorate, and Yi Huiman, Chairman of the China Securities Regulatory Commission, jointly unveiled the plaque for the Stationed Procuratorial Office and delivered remarks at the ceremony. Also in attendance were Sun Qian, Deputy Procurator-General of the Supreme People’s Procuratorate; Pan Yiqin, Director of the Political Department; Zheng Xinjian, Director of the Fourth Procuratorial Division; Nie Jianhua, Member of the Procuratorial Committee; Liu Guixiang, Full-time Member of the Judicial Committee of the Supreme People’s Court; Li Chao, Vice Chairman of the China Securities Regulatory Commission; Zhao Zhengping, another Vice Chairman; Jiao Jinhong, Chief Legal Counsel; Gao Feng, Director of the Economic Crime Investigation Bureau of the Ministry of Public Security; as well as leading officials from relevant departments of the Supreme People’s Procuratorate and the China Securities Regulatory Commission.
Chief Prosecutor Zhang Jun pointed out that the socialist market economy is a rule-of-law economy. The establishment of resident procuratorial offices represents a pioneering step taken jointly by the Supreme People’s Procuratorate and the China Securities Regulatory Commission to implement the requirements set forth in the Opinions of the General Office of the CPC Central Committee and the General Office of the State Council on Strictly Cracking Down on Securities‑Related Illegal Activities in Accordance with the Law—specifically, “exploring the establishment of a mechanism for stationing prosecutors at the CSRC”—with the aim of improving the procuratorial system and mechanisms for handling securities cases and advancing the rule of law in the capital market. It also constitutes a pragmatic measure to implement the Opinions of the CPC Central Committee on Strengthening Legal Supervision by the Procuratorial Organs in the New Era, fully leveraging the functions of the procuratorial organs to provide equal judicial protection to all types of market entities. Such efforts will help promote stricter, law‑based regulation and consolidate the rule‑of‑law foundation of the capital market. Resident procuratorial offices enjoy convenient access to communication with regulators and financial professionals, which enables them to capitalize on the advantages of their “stationed” presence, closely integrate supervision with case handling, and assist in identifying systemic issues and management vulnerabilities in corporate governance, industry oversight, and other areas. By issuing prosecutorial recommendations and promptly releasing typical cases as measures for addressing root causes, these offices can foster a “one case handled, one area governed” approach, ensuring that both symptomatic and fundamental solutions are pursued thoroughly, effectively, and meticulously. At present, the Supreme People’s Procuratorate is vigorously advancing pilot programs for compliance reforms involving enterprises implicated in legal cases. While implementing the criminal policy of “fewer arrests, cautious prosecution, and prudent detention,” it is urging such enterprises to make compliance commitments and undertake proactive rectification, thereby promoting lawful and compliant operations. This pilot program for corporate compliance is equally applicable to the capital market. In our work at the resident procuratorial offices, we will actively collaborate with law enforcement, judicial authorities, and industry regulators to advance compliance‑based operations and effective oversight among listed companies and other enterprises involved in legal cases, ensuring both rigorous regulation and genuine care. Chief Prosecutor Zhang Jun particularly emphasized the need to further strengthen the internal development of the resident procuratorial offices, enhancing their political awareness, professional competence, and ethical standards, so that they may deliver high‑quality performance in service of the capital market’s high‑quality development.
Chairman Yi Huiman stated that the successful implementation of the stationed procuratorial mechanism fully demonstrates the Supreme People’s Procuratorate’s office and efficient commitment to carrying out the central government’s decisions and arrangements, as well as its high regard for and strong support of law enforcement and judicial work in the capital market. The establishment of a procuratorial office stationed at the CSRC will help elevate the overall level of law enforcement and judicial oversight in the capital market, facilitate the seamless coordination between administrative enforcement and criminal justice, strengthen joint efforts to combat securities-related illegal and criminal activities, and bolster the professionalization of the securities law enforcement and judicial workforce—actions of great significance and far-reaching impact. At present, the capital market is entering a new stage of high-quality development. The China Securities Regulatory Commission will thoroughly study and implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and Xi Jinping Thought on the Rule of Law, enhance coordination with the Supreme People’s Procuratorate, improve the legal framework and foundational institutional arrangements, refine the capital market’s law enforcement and judicial system, and continuously advance the modernization of the capital market’s governance system and governance capacity, thereby jointly safeguarding the “three publics” market order and protecting the legitimate rights and interests of investors.
Exploring the establishment of a mechanism for stationing prosecutors at the China Securities Regulatory Commission is an important task explicitly set forth in the “Opinions on Severely Cracking Down on Securities‑Related Illegal Activities in Accordance with the Law,” jointly issued by the CPC Central Committee and the State Council. Going forward, the CSRC will maintain close coordination with the Supreme People’s Procuratorate, the Supreme People’s Court, the Ministry of Public Security, and other relevant authorities, vigorously advancing all measures to combat securities‑related illegal activities in accordance with the law, accelerating the improvement of the securities enforcement and judicial systems and mechanisms, intensifying investigations and penalties for major violations, and fostering a sound market environment that upholds the rule of law and trust. These efforts will provide stronger legal safeguards for building a capital market that is standardized, transparent, open, dynamic, and resilient.

The National Development and Reform Commission has issued the “Plan for Improving the Dual-Control System for Energy Consumption Intensity and Total Volume,” further strengthening the dual-control mechanism for energy consumption.
On September 16, the National Development and Reform Commission issued the “Plan for Improving the Dual-Control System for Energy Consumption Intensity and Total Volume,” aimed at further refining the dual-control mechanism for energy consumption.
The overarching goal of the plan is that, by 2025, the dual‑control system for energy consumption will be further refined, with more rational allocation of energy resources and a substantial increase in utilization efficiency. By 2030, the dual‑control system will be further improved, energy intensity will continue to decline significantly, total energy consumption will be kept within an appropriate range, and the energy mix will be further optimized. By 2035, the mechanisms for optimal allocation of energy resources and for comprehensive energy conservation will be fully matured and institutionalized, providing strong support for achieving the target of stabilizing and reducing carbon emissions after peaking.
To improve the management of dual control targets for energy consumption, the state will appropriately set national and local dual‑control targets and optimize their allocation and implementation. Taking energy output per unit of energy input as a key criterion, and taking into account factors such as each region’s level of economic and social development, development priorities, industrial structure and spatial layout, current energy consumption patterns, energy‑saving potential, and environmental quality, the state will rationally determine the targets for reducing energy intensity and controlling total energy consumption in each province, autonomous region, and municipality directly under the central government.
The plan also proposes enhancing flexibility in managing total energy consumption by implementing unified energy‑consumption allocation for major national projects, rigorously regulating high‑energy‑consumption and high‑emission projects, and encouraging local authorities to increase renewable energy consumption and exceed their targets for reducing energy intensity.
With regard to the stringent regulation of high‑energy‑consumption and high‑emission projects, the plan stipulates that all provinces, autonomous regions, and municipalities directly under the central government shall establish lists of ongoing, planned, and existing high‑energy‑consumption, high‑emission projects (hereinafter referred to as “two‑high” projects), clearly define disposition measures, and promptly report any adjustments to the National Development and Reform Commission. For new “two‑high” projects with an annual energy consumption of 50,000 tonnes of standard coal or more, the NDRC, in coordination with relevant departments, will strengthen guidance through a review process against criteria such as energy efficiency levels, environmental protection requirements, industrial policies, and related planning. For new “two‑high” projects with an annual energy consumption below 50,000 tonnes of standard coal, local authorities shall, in accordance with their dual‑control targets for energy consumption, tighten management and enforce rigorous oversight. For “two‑high” projects that fail to meet the required standards, local governments must strictly scrutinize access procedures, including energy‑conservation reviews and environmental impact assessments, and financial institutions shall refrain from providing credit support.
The Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, and the Ministry of Justice have jointly issued a notice urging fugitives involved in organized crime and evil forces to turn themselves in.
To further advance the ongoing campaign to eradicate organized crime and evil forces, punish such crimes in accordance with the law, safeguard social stability, and protect the lives and property of the people, the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, and the Ministry of Justice recently jointly issued the “Notice on Urging Fugitives Involved in Organized Crime and Evil Forces to Surrender.”
The Notice states that, from the date of its issuance until October 31, 2021, fugitives who voluntarily surrender themselves and truthfully confess their crimes may, in accordance with the law, receive a lighter or reduced punishment; in cases involving relatively minor offenses, they may be exempted from punishment altogether. Those who fail to surrender within this prescribed period will be severely punished in accordance with the law, taking into account the circumstances of the crime and the harm caused. Fugitives are urged to recognize the situation, promptly turn themselves in, and seek lenient treatment.
The Notice states that no individual, company, enterprise, or organization may provide hiding places, property, transportation, or communication devices to fugitives; assist them by tipping them off or furnishing false testimony to shield them; or offer any other form of assistance to help them evade capture. Relatives and friends of fugitives are urged to actively persuade them to turn themselves in without delay. Any citizen who becomes aware of information regarding a fugitive is obligated to report such information to the judicial authorities. The judicial authorities shall, in accordance with the law, afford protection and maintain confidentiality for those who make such reports. Anyone who threatens or retaliates against whistleblowers or accusers, thereby committing a criminal offense, shall be held criminally liable in accordance with the law.
The full text of the Notice is as follows:
Notice on Urging Fugitives Involved in Organized Crime and Evil Forces to Surrender Themselves
In order to further advance the sustained campaign against organized crime and evil forces, punish such crimes in accordance with the law, safeguard social stability, and protect the lives and property of the people, we will resolutely pursue all fugitives—whether suspects or defendants—involved in organized crime and evil activities, leaving no one at large and ensuring that every case is pursued to the fullest extent. At the same time, in implementing the criminal policy of combining leniency with strictness, we will afford fugitives the opportunity to reform themselves and seek more favorable treatment. In accordance with the Criminal Law of the People’s Republic of China, the Criminal Procedure Law of the People’s Republic of China, and relevant provisions, the following notice is hereby issued:
I. From the date of issuance of this notice until October 31, 2021, fugitives who voluntarily surrender and truthfully confess their crimes may, in accordance with the law, receive a lighter or reduced punishment; for cases involving relatively minor circumstances, they may be exempted from punishment altogether. Those who fail to surrender within this prescribed period will be severely punished in accordance with the law, taking into account the nature of the offense and the harm caused. Fugitives are urged to recognize the situation, seize this opportunity, and promptly turn themselves in to seek lenient treatment.
II. Where, due to objective reasons, the person concerned is unable to surrender to the judicial authorities within the prescribed time limit, but instead entrusts another person to do so on their behalf, or first surrenders by letter, telephone, telegraph, email, or other means and subsequently appears in person, such surrender shall be deemed a voluntary surrender. Likewise, a person who flees after committing a crime and voluntarily surrenders during the period of being wanted or pursued, or who, upon investigation, is found to have genuinely intended to surrender or was en route to surrender when apprehended by the public security organs, shall also be deemed to have surrendered voluntarily.
III. Relatives and friends of fugitives shall actively urge them to surrender themselves as soon as possible. Where a fugitive surrenders upon the persuasion and accompaniment of relatives or friends, or where relatives or friends, after voluntarily filing a report, escort the fugitive to turn themselves in, such cases shall be deemed to constitute voluntary surrender.
IV. Fugitives who, upon investigation, are found to have reported or exposed the criminal conduct of others, or who have provided crucial leads that led to the solving of other cases, or who have actively assisted judicial authorities in apprehending other fugitives—thus demonstrating meritorious service—may, in accordance with the law, receive a lighter or reduced punishment; those who have made particularly significant contributions may, in accordance with the law, have their punishment reduced or exempted.
V. No individual, company, enterprise, or organization may provide hiding places, property, or means of transportation and communication to fugitives; assist them by tipping them off; furnish false testimony to shield them; or offer any other form of assistance that facilitates their escape. Whether within or outside the territory of China, once verified as true and constituting a crime, the perpetrators shall be held criminally liable in accordance with the law.
VI. Any citizen who becomes aware of information or circumstances pertaining to a fugitive shall be obligated to report such information to the judicial authorities. The judicial authorities shall, in accordance with the law, afford protection and maintain confidentiality for those who make such reports. Anyone who threatens or retaliates against a whistleblower or accuser, thereby constituting a criminal offense, shall be held criminally liable in accordance with the law.
VII. This notice shall take effect as of the date of its issuance (September 2).

Measures introduced to address concerns about “facial recognition” and “overtime workers”; the Supreme People’s Court’s two practical initiatives aimed at benefiting the public have sparked widespread discussion and praise.
“Facial recognition must never be abused—never, never, never!” In the comment section of news reports about the Supreme People’s Court’s issuance of the “Provisions on Several Issues Concerning the Application of Law in Adjudicating Civil Cases Involving the Processing of Personal Information Using Facial Recognition Technology,” some netizens voiced this sentiment. Others chimed in with thumbs‑up, calling it “a legal embodiment of the value and significance of one’s ‘face.’” Still others expressed their excitement, declaring: “If anyone again illegally collects or uses your facial data, just slap these Provisions right in their face!”
Recently, the Supreme People’s Court has introduced two practical measures to serve the public, which have garnered widespread attention and high praise from all sectors of society. One of these is the judicial interpretation on the protection of facial information mentioned earlier. In recent years, public concerns about the misuse of facial recognition technology have continued to grow, and calls for stronger safeguards for facial data have become increasingly urgent. On the morning of July 28, 2021, the Supreme People’s Court held a press conference to issue unified judicial guidelines addressing the abuse of facial recognition.
“It’s a good thing to be able to hit the brakes and make improvements in time during rapid development; standardization, self-discipline, and oversight are all indispensable.” In response, countless netizens have voiced their approval and left comments, and the related Weibo topics were featured at the top of Sina Weibo’s trending list for two consecutive days. As of September 16, 2021, hashtags such as “#SupremePeople’sCourtIssuesJudicialInterpretationToProtectFacialDataSecurity” and “#SupremePeople’sCourtIssuesJudicialInterpretationToRegulateFacialRecognitionApplications” had collectively amassed over 200 million views.
Another measure addresses a long-standing social concern—the unhealthy culture of excessive overtime. On August 26, the Ministry of Human Resources and Social Security and the Supreme People’s Court jointly released a set of typical cases involving illegal overtime work, further clarifying the legal standards for working hours and overtime pay. Following the release of these cases, public response was overwhelmingly positive. On Sina Weibo, the topic #SupremeCourtClarifies996IsSeriousViolation# topped the platform’s trending list; as of September 16, it had amassed 460 million views and 52,000 discussions. Meanwhile, the hashtag #TwoDepartmentsClarify996IsSeriousViolation# recorded 190 million views and 45,000 comments.
In a poll with 26,000 participants titled “What do you think about the Supreme People’s Court explicitly deeming ‘996’ a serious violation of the law?”, 11,000 respondents said, “We’ve finally waited for this day,” while over 6,000 expressed their intention to “like it so the boss can see.” At the same time, many netizens remained remarkably level-headed, arguing that although “996” has been officially classified as a grave legal offense, the key issue lies in how to effectively oversee and enforce compliance.
However, it must be acknowledged that the two departments’ efforts to clarify the law through case‑based guidance and to clearly delineate the consequences of unlawful conduct are of great significance for effectively improving the quality and efficiency of handling labor and personnel dispute cases, promptly rectifying employers’ illegal practices, and safeguarding workers’ rights to rest and to remuneration. As one netizen commented, this signal “helps boost the enthusiasm of labor inspection authorities across regions to crack down on the illegal ‘996’ work regime, reduces enterprises’ incentive to violate the law, and, in disputes between employees and employers, strengthens employees’ bargaining position.”
More than 100 days after the three-child policy was implemented: Many localities have officially announced supporting measures, and over 920,000 new enterprises related to the policy have been established.
From May 31 to September 16, the three-child policy has been in effect for 108 days, during which many localities have successively introduced comprehensive support measures. Data show that, over this 108-day period, China saw the establishment of more than 920,000 new businesses related to maternal and infant care, postpartum recovery, and household services.
Experts interviewed by reporters believe that the flurry of supporting measures for the three-child policy will generate new market expectations and create development opportunities for related industries; meanwhile, companies must prioritize quality in their growth to attract greater capital investment.
Individual regions
The total subsidies exceed RMB 100,000.
Recently, Linze County in Gansu Province introduced 11 measures to optimize its fertility policies, drawing widespread attention from the market. According to calculations by reporters, in Linze County, a family that has three children can cumulatively receive birth allowances, childcare subsidies, educational grants, housing assistance, and other benefits totaling more than RMB 100,000.
Previously, Panzhihua City in Sichuan Province issued the “Sixteen Policy Measures to Promote the Agglomeration of Human Resources,” which stipulated that Panzhihua‑registered households who give birth to a second or third child in accordance with the policy would receive a monthly childcare subsidy of 500 yuan per child until the child reaches the age of three.
“Encouraging families to have a third child has become an important measure for continuously advancing China’s economic and social development, as well as a systematic undertaking aimed at building a family-friendly society and strengthening the social safety net,” said Song Xiangqing, deputy director of the Institute of Government Management and director of the Center for Industrial Economics at Beijing Normal University, in an interview with reporters. He added that local governments’ timely formulation of robust, comprehensive policies and detailed implementation measures to promote childbirth has significantly alleviated many families’ concerns about the three major barriers—economic burdens, childcare responsibilities, and women’s career prospects—that previously deterred them from having or even considering a third child.
 In addition to providing financial subsidies, several provinces—including Anhui, Guangxi, Tianjin, Gansu, and Shandong—have issued official documents explicitly including the costs of having a third child within the scope of medical insurance coverage. On August 19, Anhui Province issued a notice mandating that expenses related to the birth of a third child for insured female employees be covered under maternity insurance benefits, and requiring local medical insurance authorities to disburse maternity medical expenses and maternity allowances promptly and in full as prescribed.
 Some regions have also increased the length of maternity leave. For example, on September 13, the Guangdong Provincial Health Commission issued a notice clarifying that, in addition to statutory maternity leave, couples who give birth in accordance with relevant laws and regulations are entitled to an 80-day reward leave for the mother and a 15-day paternity leave for the father.
 In addition, provinces and municipalities including Anhui, Jiangsu, Fujian, and Shandong have introduced implementation plans for developing inclusive childcare services. For example, Tongling in Anhui has launched pilot programs across the city to provide various forms of infant and toddler care, offering subsidies and rewards of 2,000 yuan per childcare spot to eligible inclusive childcare institutions.
 Song Xiangqing stated that the three-child‑related policies introduced at the local level exhibit three key features: first, they establish a seamless, end-to-end linkage across the entire lifecycle—from childbirth and childcare to parenting and education—providing comprehensive support to families; second, they offer all‑encompassing care through institutional assistance, leave‑based incentives, and direct fiscal subsidies, with policy priorities squarely aligned with the public’s most pressing concerns and challenges; and third, they have fostered a nationwide, coordinated policy environment.
 The policy has stirred up a wave of activity. Reporters have observed that, 108 days after the three-child policy was implemented, the number of newly established businesses in related sectors has been steadily rising. According to data from Tianyancha, based on business registration records, from May 31 to September 16, 2021, China saw the addition of more than 920,000 enterprises in the maternal‑infant, postpartum care, and household services industries—up 93% year over year compared with 2020 and 383% compared with 2019. Notably, individual business households account for over 70% of this total.
 Song Xiangqing believes that the three-child policy will boost market demand, benefiting numerous industries and potentially giving rise to a host of well-known brands and businesses specializing in maternal and infant services, thereby turning this sector into a new blue ocean for service-sector development across China.
 Capitalization rates in the relevant industries remain low.
 Listed companies are actively making strategic deployments.
 In fact, as local governments actively roll out supportive policies, many listed companies have stepped up their investments to tap into the consumption potential driven by population growth.
 For example, on September 9, Xinhe Co., Ltd. disclosed in its investor relations materials that an investor asked whether, now that the three-child policy has been introduced, the company intends to make strategic moves in this area. Xinhe stated that it will actively leverage capital market tools and, at the appropriate time, explore investment and M&A opportunities as well as equity‑fund investments. The company plans to base its investments on its core business, with a scope that includes, but is not limited to, upstream and downstream segments of its supply chain, as well as related industries such as cosmetics, accessories, and beauty services.
The reporter noted that many investors have also been pressing, via the Interactive Easy platform, for information on how the three-child policy will affect listed companies. Mindray Medical stated that its maternal and child health business will directly benefit from the three-child policy. AiYingShi added that the introduction of the national three-child policy, along with a series of subsequent supporting measures, is expected to play a positive role in boosting China’s newborn birth rate. At the same time, as the era of consumption upgrading unfolds, consumer demand in the retail market has remained robust and continues to grow. In the long run, this trend will not only bolster the company’s infant‑care product segment but also deliver favorable impacts across its overall business.
According to data compiled by Tonghuashun iFinD, as of September 16, there were 78 stocks in the A-share market classified as “three-child concept” stocks. As of the close on that date, the combined market capitalization of these 78 companies totaled RMB 971.07 billion.
“The implementation of the three-child policy, coupled with the gradual rollout of supporting measures, will to some extent boost the birth rate, thereby stimulating demand for related maternal and infant products and services. Listed companies in sectors such as infant formula, children’s apparel, childcare, maternal‑and‑infant services, and healthcare are set to benefit directly,” said Guo Yiming, Director of Investment Advisory at Jufeng Investment Consulting, to a reporter.
Tian Lihui, Dean of the Institute for Financial Development at Nankai University, also agrees, noting that the three-child policy will not only create opportunities for related industries but is also expected to boost overall economic growth. However, given that a significant surge in birth rates has yet to materialize, companies in these sectors must pursue high-quality development and avoid reckless, undisciplined investment.
Notably, data from Tianyancha shows that China currently has 5.049 million enterprises related to maternal and infant care, postpartum recovery, and household services. As of now, among all such companies, only 1,650 have ever engaged in investment or financing activities, accounting for a mere 0.033%.
“China’s maternal‑and‑infant and household‑services sectors are home to a large number of enterprises, facing intense homogeneous competition. At the same time, owing to regional characteristics and word‑of‑mouth effects, many have managed to survive for the long term as small and micro‑enterprises.” In Tian Lihui’s view, building corporate competitiveness requires winning the favor of capital; for the capital markets to place such offices in high regard, their services must be standardized and franchised, while also guarding against isolated issues that could pose systemic risks to the entire industry.

 
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