JC Master Legal News Issue 989

Key Takeaways for This Issue
The China Securities Regulatory Commission has issued the “Regulations on the Supervision of Sponsorship for Initial Public Offerings and Listings.”

To implement the relevant requirements of the State Council’s “Opinions on Further Enhancing the Quality of Listed Companies” (Document No. 14 [2020] of the State Council), further standardize guidance-related work, fully leverage the local regulatory strengths of dispatched institutions, strengthen the accountability of intermediary institutions, and improve the quality of listed companies at the source, thereby proactively creating favorable conditions for the steady advancement of the registration-based reform across the entire market, the China Securities Regulatory Commission has formulated the “Regulations on the Supervision of Guidance for Initial Public Offerings and Listings” (hereinafter referred to as the “Guidance Supervision Regulations”).

China Banking and Insurance Regulatory Commission: It is strictly prohibited to curtail or terminate credit to eligible coal-fired power and other enterprises, in order to prevent campaign-style carbon reduction.
The China Banking and Insurance Regulatory Commission has explicitly mandated strict measures to prevent banking and insurance funds from disrupting the normal order of commodity markets. It strictly prohibits unauthorized loan reductions or terminations for coal-fired power, coal, and other enterprises and projects that meet eligibility criteria, while also guarding against campaign-style carbon‑reduction efforts and one-size-fits-all credit policies. At the same time, the CBIRC emphasized in its notice that it will ensure the reasonable financing needs of producers in sectors such as coal-fired power, coal, steel, and nonferrous metals are adequately met.
Tax and fee incentives help the cultural industry “move swiftly with a lighter load.”
　In recent years, the tax authorities have fully leveraged the role of taxation, rigorously implemented preferential tax and fee policies for the cultural industries, and provided high-quality, convenient, and efficient services to cultural enterprises, enabling the cultural sector to “move swiftly with a lighter load.”
Strengthening Intellectual Property Protection: Judicial Interpretations on Antitrust and Unfair Competition Are Set to Be Issued
On September 30, the State Council Information Office held a press conference on embarking on a new journey to build China into a strong country in intellectual property. At the event, Lin Guanghai, Chief Justice of the Third Civil Division of the Supreme People’s Court, stated that the judiciary will strengthen its efforts to combat monopoly and unfair competition, release landmark cases, and issue relevant judicial interpretations as appropriate, thereby upholding a market environment under the rule of law that ensures fair competition among enterprises of all sizes.

Finance & Capital Markets
The China Securities Regulatory Commission has issued the “Regulations on the Supervision of Sponsorship for Initial Public Offerings and Listings.”
To implement the relevant requirements of the State Council’s “Opinions on Further Enhancing the Quality of Listed Companies” (Document No. 14 [2020] of the State Council), further standardize guidance-related work, fully leverage the local regulatory strengths of dispatched institutions, strengthen the accountability of intermediary institutions, and improve the quality of listed companies at the source, thereby proactively creating favorable conditions for the steady advancement of the registration-based reform across the entire market, the China Securities Regulatory Commission has formulated the “Regulations on the Supervision of Guidance for Initial Public Offerings and Listings” (hereinafter referred to as the “Guidance Supervision Regulations”).
The “Regulations on Guidance and Supervision” comprise 27 articles, primarily covering the objectives of guidance, the content and methods of guidance acceptance, the timing and deadlines for guidance work, as well as technology‑based supervision. Specifically, they include:
First, regarding the objectives of the guidance: the primary aim is to help the guided entity establish the corporate governance framework, accounting practices, and internal control systems required of a listed company; to ensure a thorough understanding of the characteristics and attributes of the various segments within the multi-tiered capital market; and to foster a sense of integrity, self-discipline, and adherence to the rule of law in entering the securities market. At the same time, it is clarified that the guidance acceptance process shall assess the progress and effectiveness of the guidance provider’s work, but shall not make any substantive determination as to whether the guided entity meets the conditions for issuance and listing.
Second, with regard to the content of the guidance and acceptance review, it specifically includes: the implementation status of the guidance institution’s guidance plan and implementation scheme; the extent to which the guidance institution has urged the guided entity to standardize its corporate governance structure, accounting practices, and internal control systems, as well as the progress in guiding the entity to rectify identified issues; the measures taken by the guidance institution to ensure that the guided entity and its relevant personnel have a thorough understanding of the laws, regulations, and rules pertaining to issuance and listing, standardized operations, and other related matters, and are fully aware of their responsibilities, obligations, and the legal consequences associated with information disclosure and the fulfillment of commitments; and the efforts made by the guidance institution to help the guided entity and its relevant personnel gain a comprehensive understanding of the characteristics and attributes of the various segments of the multi-tiered capital market, as well as to grasp the positioning of the intended listing segment and the applicable regulatory requirements.
Third, with respect to the methods for conducting guidance and acceptance reviews, the reviewing body shall carry out such reviews by examining the guidance and acceptance documentation, conducting on-site visits to the guided entity, holding interviews with relevant personnel, reviewing company records, and inspecting or randomly sampling the sponsor’s working papers, among other approaches.
Fourth, with respect to the timing and duration of the guidance process: the guidance period shall, in principle, be no less than three months; the acceptance agency’s review and acceptance procedures shall not exceed twenty working days, excluding any time required for the guidance institution to supplement or revise the submitted materials; the validity period of the letter conofficeing completion of the acceptance process is twelve months, and if, upon expiration of this period, the applicant has still not filed a registration application for an initial public offering and listing, the guidance and acceptance procedures must be repeated.
Fifth, with regard to technology‑based supervision, the acceptance authorities shall leverage the guidance‑and‑supervision system to carry out their oversight functions, digitizing processes such as the submission of guidance materials, the issuance of official guidance documents, and information sharing, and making guidance and supervision information publicly available. Furthermore, to enable both guided entities and guidance institutions to accurately grasp the specific requirements for submitting materials at each stage of the guidance process, the CSRC has established standardized templates for materials in stages such as guidance filing and guidance acceptance within the guidance‑and‑supervision system. Going forward, based on practical experience, the CSRC will continue to refine, through this system, the formats and detailed requirements for submitting materials at each stage, thereby meeting market participants’ expectations and ensuring the consistent and coordinated implementation of the relevant regulatory framework.
During the drafting of the “Regulations on Guidance and Supervision,” the China Securities Regulatory Commission (CSRC) actively sought public input by convening symposiums and soliciting written comments, thereby gathering views from relevant stakeholders. The broader community generally endorsed the content of the Regulations. The CSRC carefully reviewed, item by item, the proposed amendments and refinements submitted by various parties and incorporated those suggestions that were deemed reasonable.
Going forward, the CSRC’s local branches will rigorously carry out guidance and supervision in accordance with the requirements of the “Guidance and Supervision Regulations,” leveraging technological tools such as the guidance and supervision system to enhance regulatory effectiveness, strengthen the accountability of intermediary institutions, and effectively improve the quality of listed companies at the source.

Rectifying Off-site Branches of Trust Companies: The CBIRC Has Set a One-Year Deadline for Relocating Mid- and Back-Office Functions to the Registered Location.
Reporters have learned that several trust companies today received an important document from the regulatory authorities—the “Notice of the General Office of the China Banking and Insurance Regulatory Commission on Rectifying Matters Related to Off-site Branches of Trust Companies (Draft for Comments)” (hereinafter referred to as the “Draft for Comments”).
The aforementioned draft for public comment explicitly requires trust companies to complete the restructuring of their out-of‑location headquarters within one year. Key provisions include relocating middle- and back-office functions back to the company’s registered domicile or merging them with domestic units, and ensuring that the total number of employees in all out-of‑location branches does not exceed 35% of the trust company’s overall workforce. The draft also stipulates that the chairman (including vice chairmen), senior management, and the chairperson of the supervisory board must maintain their primary office at the registered domicile and may not establish any offices outside the registered location.
An insider at a trust company told reporters, “Regulatory authorities have mandated that trust companies submit their feedback by October 13, leaving an exceptionally tight timeline.”
Additionally, according to sources, regulatory authorities conducted a preliminary survey of relevant trust companies several months ago to ascertain their specific headcount and the status of their out-of‑province branches.
A one-year deadline to rectify the off-site management headquarters.
In this draft for public comment, the regulatory authorities also address the policy rationale: “In recent years, to facilitate business operations, trust companies have commonly established business and marketing units outside their registered locations. As the management span has expanded, most trust companies have lacked effective oversight over these out-of‑location entities, giving rise to latent risks and undermining the transmission and implementation of regulatory policies. Moreover, certain trust companies exhibit severe homogenization in the business activities of their remote branches, intensifying unnecessary internal competition and disrupting market order. Furthermore, some trust companies have adopted a model in which their out‑of‑location units function as de facto headquarters, thereby weakening and rendering nominal the role of their registered offices.”
To this end, regulatory authorities have mandated that trust companies rectify their off-site headquarters management.
First, trust companies may not establish off-site management headquarters or adopt an operational model featuring such off-site headquarters outside their place of registration.
Second, trust companies shall complete the rectification of their off-site headquarters within one year from the date of issuance of the draft for public comment. Specifically, middle- and back-office departments must be relocated to the company’s place of registration or merged with the corresponding departments at that location, while front-office departments must undergo rectification in accordance with the requirements set forth in this notice. The chairman (including vice chairmen), senior management, and the chairperson of the supervisory board shall maintain their primary office at the company’s place of registration and may not establish any offices in other locations.
Rectifying off-site branches of trust companies
This draft for public comment likewise requires trust companies to restructure their out-of‑province branches within one year, with restructuring measures including, but not limited to, mergers, spin-offs, relocations, and closures.
Specific requirements include that trust companies’ front-office functions (business and marketing) may be established in locations other than the company’s registered domicile, while all middle- and back-office functions must be located at the registered address. Front-office units operating outside the registered jurisdiction shall not possess any authority to approve or authorize business activities. Trust companies may establish out-of‑jurisdiction branches in seven provincial-level administrative regions—Beijing, Shanghai, Jiangsu, Zhejiang, Hubei, Guangdong, and Sichuan—but within each such region, they may designate only one location for the centralized establishment of these out-of‑jurisdiction units (at the same address), and each must appoint a regional head. The total number of out-of‑jurisdiction branches established by a single trust company across the seven aforementioned provincial-level regions shall not exceed 22, with no more than five such branches in any given location; moreover, the number of marketing branches established at any single location shall be limited to one. Trust companies are also required to appropriately size the staffing of each out-of‑jurisdiction branch, ensuring that the combined headcount of all out-of‑jurisdiction branches does not exceed 35% of the trust company’s total workforce.
A seasoned industry insider told a reporter from Trust Hundred Masters that “if this draft for public comment is actually implemented, it will have a profound impact on the sector. Currently, many of the trust companies ranked highest in terms of business scale operate substantial out-of‑province operations. For example, while most trust offices designate Beijing as their management headquarters, only 11—namely CITIC Trust, China Credit Trust, COFCO Trust, National Trust, SDIC Taikang Trust, Foreign Trade Trust, Minsheng Trust, Beijing Trust, Yingda Trust, Huaxin Trust, and Jingu Trust—are legally registered in Beijing.”
It is worth noting that the aforementioned draft for public comment also leaves “some room” for trust companies following the restructuring. The draft stipulates that, upon expiration of the restructuring period, trust companies whose most recent regulatory rating is B+ or higher and which continue to meet regulatory requirements after establishing new out-of‑province branches may apply each year to add up to two such branches. In addition, eligible trust companies must submit to the local banking and insurance regulatory bureau, by the end of June each year, a plan for establishing additional out-of‑province branches. The plan should specify the types of new branches, proposed locations, staffing levels, the purposes and rationale for their establishment, as well as the implementation timeline, among other details.

More than 20 cryptocurrency-related companies have announced their withdrawal from the Chinese market.
On September 24, the People’s Bank of China and nine other departments issued new regulations to crack down on “virtual‑currency speculation.” Following this, numerous virtual‑currency trading platforms, mining offices, and market‑data websites announced that they would actively comply with the regulatory measures. According to an incomplete tally by a reporter from the Securities Daily, as of October 7, more than 20 companies involved in virtual currencies had announced that they would cease providing related services to users within China and fully withdraw from the Chinese market.
Specifically, regarding virtual‑currency trading platforms, the well‑known Huobi announced on September 24 that it had halted new user registrations within China. On September 26, Huobi issued a notice titled “Announcement on the Gradual and Orderly Exit of Existing Users in Mainland China.” On October 2, Huobi released another announcement, conofficeing detailed arrangements such as the timeline for mainland Chinese users to exit. Meanwhile, smaller platforms like BiKi and BHEX have, under regulatory pressure, opted outright to cease operations.
On the mining‑enterprise front, the largest Ethereum mining pool, Spark Pool, announced on September 24 that it would no longer provide pool services to users within China. On September 27, it issued another notice stating that, while ensuring the safety of user assets, it would wind down all Spark Pool operations both domestically and internationally. BeePool and Easy Miner also announced the complete cessation of their operations, while the GPU‑mining management software NBMINER declared that it would no longer offer technical support to users in China and would disband its QQ group.
According to other media reports, the Development and Reform Commission of Bayannur City in Inner Mongolia recently seized 10,100 cryptocurrency “mining rigs.” To date, Inner Mongolia has shut down or phased out 45 cryptocurrency “mining” projects, which, in theory, could save 6.58 billion kilowatt-hours of electricity annually—equivalent to roughly 2 million tons of standard coal. In addition, in September, Gansu and Hebei provinces once again launched special campaigns targeting cryptocurrency mining and trading activities, implementing ongoing regulatory oversight.
On the information‑service front, the Non‑Small Account app announced that, in response to Chinese government regulatory requirements, it will cease providing relevant services to users within China as of September 28. Additionally, users with IP addresses located in China can no longer access cryptocurrency market‑data websites such as CoinGecko and CoinMarketCap.
Industry insiders generally agree that this round of regulation amounts to a targeted crackdown, clarifying previously ill-defined “gray areas.” The domestic virtual‑currency market has suffered a severe blow and may no longer have any chance of a resurgence.
On September 24, the People’s Bank of China and nine other departments jointly issued the “Notice on Further Preventing and Addressing Risks Associated with Speculation in Virtual Currency Trading” (hereinafter referred to as the “Notice”), which explicitly classifies virtual‑currency‑related business activities as illegal financial operations. The Notice also stipulates that any activities providing information‑intermediation or pricing services for virtual‑currency transactions are strictly prohibited and will be resolutely banned in accordance with the law.
“Following the classification of virtual‑currency‑related activities as illegal financial operations, there are no longer any substantial legal obstacles to holding the relevant parties criminally liable,” said Ding Feipeng, director of Beijing Liantong Law Office, in an interview with a reporter from the Securities Daily. He added that regardless of whether the legal entity operating such virtual‑currency‑related businesses is domiciled domestically or abroad, and irrespective of whether its personnel are based inside or outside China, as long as the platform continues to provide services to users within China, both the platform and its employees will face identical criminal penalties.
Ding Feipeng further stated that, for the first time, this Notice explicitly lists judicial authorities—such as the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Public Security—thereby facilitating the enforcement and implementation of its provisions at the law‑enforcement stage.
Some analysts told reporters that, at present, most companies involved in virtual currencies are registered overseas but operate domestically, and a significant number of them issue their own tokens. Many of these projects are essentially “siphoning off retail investors,” which can easily give rise to financial risks.
“The issuance of the Notice has provided the virtual‑currency market with a clear expectation: the room for institutions and practitioners involved in virtual currencies will continue to shrink,” said Su Xiaorui, a senior analyst at Analysys. She added that going forward, regulators should focus on business entities engaged in cryptocurrency trading, their ultimate controllers, and the financial channels linked to virtual currencies. She also recommended that oversight authorities step up enforcement against such activities and use high‑profile cases to send a strong deterrent signal to the market.

Ministry of Agriculture and Rural Affairs: Strengthen guidance and support for social capital investment in agriculture and rural areas.
On September 29, the Ministry of Agriculture and Rural Affairs announced that it will guide local authorities in adopting a multi-pronged approach to further strengthen guidance and support for social capital investment in agriculture and rural development.
The Ministry of Agriculture and Rural Affairs stated that private enterprises are an important social force in advancing rural development. By the end of 2020, 127,000 private enterprises had been registered in the “Ten Thousand Enterprises Assist Ten Thousand Villages” targeted poverty‑alleviation initiative, providing assistance to 139,100 villages, including 73,200 poverty‑stricken villages on the official poverty‑alleviation roster. These enterprises invested RMB 110.59 billion in industrial development, contributed RMB 16.864 billion in public‑interest initiatives, created employment for 900,400 people, and provided skills training to 1.3055 million individuals, thereby benefiting a total of 18.0385 million registered impoverished people.
In the new stage of consolidating and expanding the achievements of poverty alleviation while effectively linking them with rural revitalization, policy measures have been further strengthened to guide social capital in supporting rural revitalization efforts. The 2018 No. 1 Central Document explicitly called for accelerating the formulation of guiding opinions to encourage and steer industrial and commercial capital to participate in rural revitalization. In 2019, the State Council issued the “Guiding Opinions on Promoting the Revitalization of Rural Industries,” which clearly stipulated optimizing the business environment to attract industrial and commercial investment in rural areas. In 2020, the Ministry of Agriculture and Rural Affairs and other departments successively introduced policies mandating that all regions develop and promulgate guiding opinions on social capital investment in agriculture and rural areas, continuously boosting the enthusiasm and initiative of social capital to invest in these sectors.
The Ministry of Agriculture and Rural Affairs stated that, going forward, it will guide local authorities to adopt a multi‑pronged approach, establish effective platforms for work, strengthen guidance and policy support for private enterprises, and strategically encourage these enterprises to prioritize assistance in key counties receiving focused support for rural revitalization, thereby promoting the healthy and sustainable development of rural industries.
Meanwhile, the People’s Bank of China and other relevant authorities have implemented a comprehensive package of policy measures to encourage financial institutions to innovate financial products and services, expand the supply of financial resources for agriculture, rural areas, and farmers, and strengthen credit support for key areas and vulnerable links in rural revitalization. Going forward, efforts will be further intensified to unlock the value of rural assets, facilitate the flow of rural resources and factors of production, and attract and leverage additional social capital to support the modernization of agriculture and rural areas.
Reducing costs does not necessarily require cutting interest rates; interest-rate marketization reform is still underway.
A well-known domestic scholar once remarked that sorting out and fully understanding China’s interest-rate framework is a complex and profound undertaking. At the time, since 2013, the People’s Bank of China had successively introduced a series of monetary-policy tools—each with an English acronym—such as SLO, SLF, PSL, and MLF. These instruments, often jokingly referred to by outsiders as various “pinks,” not only perform quantitative functions by injecting liquidity into the market but also have their own benchmark rates, which have become integral components of the central bank’s policy‑rate system, thereby fulfilling price‑based policy‑tool roles. However, an abundance of policy rates can easily send confusing signals to the market, leading, for a time, many institutional research reports to engage in extensive analysis and speculation about which instrument truly serves as the “anchor” for interest rates.
The answer has become increasingly clear as the 2019 LPR reform gained momentum. Since the reform, the central bank has gradually established a routine of conducting reverse repos on a daily basis and one MLF operation per month, thereby reinforcing the dual role of these two monetary policy tools as the “anchor” for interest rates. In his article, Yi Gang also explicitly stated that the MLF rate serves as the central bank’s medium-term policy rate, and together with the 7-day reverse repo rate in open market operations, it forms the central bank’s policy rate framework.
Policy rates are crucial because they serve as the “stabilizing anchor” of the entire interest-rate system. However, ensuring that policy rates are effectively transmitted to the market—providing market participants with a benchmark for funding costs in everyday transactions and enabling the policy rate to exert its macroeconomic regulatory influence, which can ripple through the economy—is no simple task. After nearly three decades of sustained reform, China has largely established a market‑based mechanism for setting and transmitting interest rates. Among these, the transmission chain of “MLF rate–LPR–loan rates” plays a pivotal role in shaping changes in financing costs for the real economy. As interest-rate marketization deepens, this three-tiered transmission framework leaves room for market rates—including the LPR and loan rates—to be adjusted flexibly by market participants, thereby accommodating the varying sensitivities of economic agents to funding costs and providing greater scope for fine‑tuning financing expenses in the real economy, collectively driving adjustments in those costs. Consequently, reducing financing costs for the real economy does not necessarily require the central bank to cut interest rates.
Although China has already established a relatively complete market-based interest-rate system, the reform toward full interest-rate liberalization remains an ongoing process. As Yi Gang has noted, interest-rate marketization requires both “greater flexibility” and the ability to “form stable market-determined rates.” In addition to expanding the scope for adjusting the Loan Prime Rate (LPR) and loan‑rate pricing, numerous obstacles that hinder the emergence of market‑based interest rates—such as soft budget constraints on financing platforms and disorderly competition in the deposit market—must also be gradually removed, thereby further enhancing the efficiency of financial resource allocation.

Commercial & Corporate
China Banking and Insurance Regulatory Commission: It is strictly prohibited to curtail or terminate credit to eligible coal-fired power and other enterprises, in order to prevent campaign-style carbon reduction.
On October 5, the China Banking and Insurance Regulatory Commission (CBIRC) officially issued the “Notice on Matters Concerning Supporting Normal Production in the Coal‑Power Industry and Ensuring the Orderly Circulation of Commodity Markets to Safeguard Stable Economic Operation” (hereinafter referred to as the “Notice”). The CBIRC explicitly requires that banking and insurance funds be strictly prevented from disrupting the normal order of commodity markets. It prohibits any unauthorized reduction or suspension of credit to eligible coal‑power and coal enterprises and projects, and seeks to avert campaign‑style carbon‑reduction measures and one‑size‑fits‑all lending restrictions. At the same time, the Notice underscores the importance of ensuring that producers of coal‑power, coal, steel, non‑ferrous metals, and other related industries have their reasonable financing needs met.
To maintain the normal order of the coal‑power industry and commodity markets, support efforts to ensure supply and stabilize prices, strictly prevent the use of banking and insurance funds for hoarding and price gouging, and safeguard high‑quality economic and social development, on October 4—while still during the National Day holiday—the General Office of the China Banking and Insurance Regulatory Commission issued a Notice, which has been circulated to all local banking and insurance regulatory bureaus and to all departments within the Commission. According to the reporter, the Notice is divided into seven key sections, including “ensuring the reasonable financing needs of producers in sectors such as coal‑power, coal, steel, and non‑ferrous metals” and “strictly preventing banking and insurance funds from disrupting the normal order of commodity markets.”
The Notice emphasizes the need to ensure that coal-fired power, coal, steel, non‑ferrous metals, and other production enterprises have their reasonable financing needs met. It calls on banking and insurance institutions to make every effort to provide financial services supporting energy and electricity supply this winter and next spring, satisfying legitimate funding requirements for energy and power provision, and actively supporting major coal‑producing regions and key coal enterprises in increasing supplies of thermal coal, thereby ensuring that the public can spend a warm winter. The Notice also warns against any practices that could disrupt the normal order of commodity markets. It strictly prohibits the use of banking and insurance funds to engage in illegal speculation or price manipulation in bulk commodities such as coal, steel, and non‑ferrous metals; it forbids the misappropriation of various loans, including business and consumer loans, for speculative trading in high‑end consumer goods like Moutai liquor and premium Pu’er tea; and it bans the unauthorized flow of banking and insurance funds into the stock, bond, and futures markets.
Meanwhile, in the Notice, the China Banking and Insurance Regulatory Commission calls for actively promoting the sound and standardized development of consumer credit. It prohibits inducing financial consumers to borrow blindly or engage in excessive, premature consumption; forbids infringing on consumers’ rights through practices such as encouraging “excessive installment plans” for credit cards; prohibits offering consumer credit products with interest rates significantly above market levels; and bans the development of consumer credit products that violate public order and good morals or perpetuate social vices and unhealthy trends.
The reporter noted that consumer credit products previously drawing public attention—such as “cemetery loans,” “beauty loans,” and “dowry loans”—were specifically named by the China Banking and Insurance Regulatory Commission. The notice explicitly calls for “resolutely cracking down on all forms of ‘pseudo-innovation.’”
At the same time, the Notice requires banking institutions to promptly and proactively adjust and refine their credit policies. Relevant credit‑granting conditions must strictly comply with applicable laws and regulations, be aligned with macroeconomic, industrial, investment, and environmental protection policies, and not exceed national standards, so as to prevent raising the threshold for access to financing.
The China Banking and Insurance Regulatory Commission stated that, in the next phase, it will strengthen the principal responsibility of banking and insurance institutions, encourage them to conduct thorough self-inspections and rectifications, promptly implement targeted corrective measures, and establish a normalized monitoring and screening mechanism. The Commission will also maintain a stringent regulatory stance, rigorously investigating and addressing illegal and non-compliant practices such as the misappropriation of banking and insurance funds for speculative trading, hoarding, and price gouging. For institutions that fail to conduct earnest self‑inspections, fail to report proactively, or engage in particularly egregious misconduct, the Commission will impose regulatory measures in accordance with the law, promptly initiate administrative penalty proceedings, and hold those responsible strictly accountable in line with applicable laws and regulations.

Headquarters-based cross‑regional management “is off the table”; the trust industry faces another major regulatory crackdown.
Recently, industry insiders revealed that some trust companies have received a document from the regulatory authorities—the “Notice of the General Office of the China Banking and Insurance Regulatory Commission on Rectifying Matters Related to Off-site Branches of Trust Companies (Draft for Comments)” (hereinafter referred to as the “Draft for Comments”).
The Draft for Comments stipulates that trust companies must complete the rectification of their out-of‑location management headquarters within one year from the date of issuance of this notice; mid‑ and back‑office departments shall be relocated to the company’s place of registration or merged with the corresponding departments at the registered location, while front‑office departments must carry out rectification in accordance with the relevant requirements set forth in the Draft. Furthermore, the chairman (including vice chairmen), senior management, and the chairperson of the supervisory board shall maintain their primary office at the registered location and may not establish any offices in other locations. In addition, the Draft imposes strict limits on the number of out‑of‑location branches that a trust company may establish in a single jurisdiction, as well as on the staffing levels of each such branch.
“Overall, regulatory authorities have stipulated that trust companies may not establish off‑site management headquarters outside their place of registration, nor adopt similar off‑site management and operational models,” a senior executive at a trust company told reporters. In their view, the draft for public comment will have little impact on trust companies registered in Beijing, Shanghai, Guangzhou, or Shenzhen, but will significantly affect those headquartered in other regions whose business units—or even their management headquarters—are located in those major cities, potentially prompting adjustments to their subsequent management and operational frameworks.
With regard to the rationale for imposing stringent oversight on out-of‑province branches of trust companies, the draft for public comment states that, in recent years, in order to facilitate business expansion, trust companies have widely established operational and marketing units outside their registered locations. As a result, the management span has grown longer, and most trust companies have failed to exercise effective control over these out‑of‑province entities, thereby accumulating potential risks and undermining the transmission and implementation of regulatory policies. Moreover, certain trust companies exhibit severe homogenization in the operations of their out‑of‑province branches, intensifying unnecessary internal competition and disrupting market order. In addition, some trust companies have adopted a “headquarters‑in‑another‑jurisdiction” management model, which weakens or renders nominal the functional role of their registered domicile.
“Indeed, business homogenization across different departments and internal competition are prevalent. Often, the same line of business is pursued simultaneously by two teams within a single company. So this document does make sense. However, it’s quite challenging for senior executives—such as the chairman and the management team—to be based permanently at the registered office. Trust company executives are typically appointed by the shareholders, and some chairmen also hold key positions on the shareholder side. Upon receiving this document, trust companies will relay the practical implementation challenges to higher levels,” a trust industry insider stated frankly.
Some trust company officials who have received the relevant documents also told reporters that, regarding cross‑regional business operations, adjustments have already been made in recent years. “Certain back‑office functions are gradually being relocated back to their registered locations; however, compared with the regulatory guidelines, many provisions remain difficult to implement at this stage, and making these adjustments is far from straightforward.”
A senior trust industry researcher notes that the draft for public comment will have a significant impact on trust companies’ out-of‑region wealth management teams. As their primary clients are concentrated in first- and second-tier cities, most trust offices have sizable wealth‑management teams deployed in these markets, meaning their subsequent business growth will be markedly constrained. Nevertheless, overall, the issuance of this draft carries more substantive weight than mere formalities; regulatory oversight of the trust sector is set to become increasingly meticulous and stringent. The era of “non‑standard” products is drawing to a close, and trust companies must return to their core businesses, leveraging their unique resource endowments and distinctive service offerings.
Real Estate Sector: Quantitative Assessment of Mortgage Reduction Progress; Mortgage Lending Acceleration Leaves Room for Further Expansion
On December 31, 2020, the People’s Bank of China and the China Banking and Insurance Regulatory Commission officially issued the “Notice on Establishing a Concentration Management System for Real Estate Loans of Banking Financial Institutions,” thereby instituting such a system. The key elements include the following: (1) Setting caps on the outstanding balance of real estate loans and the outstanding balance of individual housing loans.
(2) Banks that exceed the requirements of the regulatory framework shall be granted a transition period to adjust their loan‑size portfolios. (3) Banks shall be categorized and graded, with local authorities tailoring supervisory requirements to suit regional conditions. (4) Lease‑related loans and on‑balance‑sheet reclassifications of assets during the transitional period under the new asset‑management regulations shall be excluded from the scope of these regulations.
Banking landscape: The number of banks exceeding regulatory limits remains stable, and the proportion of such banks has been reduced in most cases.
This paper presents statistical analyses of the share of individual mortgage loans and housing‑related loans among a sample of 54 banks. Among these 54 banks, 14 exceeded the regulatory cap on the share of individual mortgage loans as of year‑end 2020; by mid‑2021, the same 14 banks remained in breach, though the extent of their overages had narrowed. Similarly, 15 banks were found to exceed the cap on the share of housing‑related loans at year‑end 2020; by mid‑2021, this number had decreased to 14. With the exception of Industrial Bank and Huishang Bank, the remaining banks that were in breach all reported reductions in the magnitude of their excesses.
Loan‑to‑value (LTV) reduction progress: The pace of reduction has accelerated, with approximately one-third completed in the first half of 2021. Based on our calculations, the theoretical LTV reduction required for the 54 sampled banks in H1 2021 amounted to RMB 177.8 billion; however, the actual reduction in outstanding personal housing loans reached RMB 717.3 billion—substantially exceeding the level implied by a linear assumption. This discrepancy stems primarily from two factors: (1) Banks that were required to reduce the share of personal housing loans have largely stepped up their reduction efforts, with an average reduction rate of 35.4% in the first half of 2021—higher than the pace projected under a linear assumption; and (2) Even banks not subject to mandatory caps on the share of personal housing loans have further lowered the proportion of such loans. For instance, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and Bank of Communications—all of which remain below the regulatory threshold—have all seen declines in the share of personal mortgage loans.
In the first half of 2021, the 54 sampled banks theoretically reduced their real estate‑related loans by RMB 107.6 billion; however, the actual reduction amounted to RMB 326.9 billion, significantly exceeding the level implied by a linear assumption. During the same period, the average decline in the share of real estate‑related loans was 31%, also surpassing the rate projected under a linear reduction scenario.
Investment Recommendation:
On September 24, 2021, Beijing hosted the third-quarter (94th overall) meeting of the People’s Bank of China Monetary Policy Committee for 2021. The meeting emphasized the need to ensure the sound development of the real estate market and safeguard the legitimate rights and interests of homebuyers. On September 29, 2021, the People’s Bank of China and the China Banking and Insurance Regulatory Commission jointly convened a symposium on real estate finance. The meeting called on financial institutions to adhere to principles of rule of law and market orientation, working in concert with relevant authorities and local governments to maintain the stable and healthy development of the real estate market and protect the lawful rights and interests of housing consumers. According to our calculations, the reduction in banks’ outstanding personal mortgage loans has been significantly greater than what would be expected under a linear assumption, leading to tighter mortgage lending in 2021 and further impacting property developers’ sales proceeds as well as consumers’ home‑buying decisions. With the recent meetings of the People’s Bank of China Monetary Policy Committee and the real estate finance symposium—both underscoring the importance of fostering a healthy real estate market and protecting housing consumers’ rights—we anticipate that mortgage policies may see some easing. At present, most banks have not yet reached the regulatory cap on the share of personal mortgages, and certain banks have been reducing their mortgage portfolios too rapidly, leaving room for a more accelerated expansion of mortgage lending. If mortgage disbursements pick up pace in the fourth quarter of 2021, this could help alleviate the current liquidity pressures faced by property developers and further support the stable and healthy development of the real estate market.

In the second half of the year, the rapid growth in China’s crude steel output was brought under control.
Recently, the 2021 (Third) China Steel High-Quality Development Standardization Forum was held in Beijing. At the forum, Lv Guixin, First-Level Inspector of the Raw Materials Department of the Ministry of Industry and Information Technology, stated that in the second half of the year, the rapid growth momentum of China’s crude steel output has been effectively curbed, with monthly declines observed. Specifically, crude steel production fell 8.42% year-on-year in July and 13.2% year-on-year in August.
At the forum, reporters learned that China, as the world’s largest steel producer, accounts for more than half of global crude steel output and generates roughly 15% of the nation’s total carbon emissions, making it a key focus of China’s carbon‑reduction efforts. At the end of last year, the Ministry of Industry and Information Technology explicitly stated that it would resolutely curb crude steel production to ensure a year‑on‑year decline in 2021.
Data show that, in the first eight months of this year, China’s crude steel output exhibited a trend of higher growth earlier in the period and slower growth later. Cumulatively, crude steel production reached 730 million tonnes, up 5.3% year on year, still falling considerably short of the target to ensure a year-on-year decline in crude steel output.
“As an energy-intensive industry, the steel sector is a major source of carbon emissions in the industrial sphere and faces formidable challenges in achieving peak carbon emissions and reducing carbon intensity. It should further elevate its policy priorities, adopt a coordinated and strategic approach, tailor measures to local conditions, and implement staggered production schedules effectively to ensure the successful completion of the target to reduce crude steel output,” said Lü Guixin.
Lü Guixin emphasized that the steel industry, as a vital foundational sector of China’s national economy, serves as an important pillar for building a modern, strong nation and is also a key area for achieving green, low‑carbon development. As China enters a new stage of development and confronts new circumstances and challenges, the steel industry must maintain a clear-headed approach, grasp the broader trends, adopt a holistic perspective, and deliver concrete results. Looking ahead, priority tasks for the Chinese steel industry include fully, comprehensively, and accurately implementing the new development philosophy; continuing to consolidate the gains made in capacity reduction; proactively yet prudently managing crude steel production caps; comprehensively upgrading intelligent manufacturing capabilities; and effectively strengthening the security of iron ore resources.
Addressing the issue of China’s steel industry being “large but not strong,” Zhang Xiaogang, former President of the International Organization for Standardization (ISO) and Chief Advisor at the Metallurgical Industry Planning & Research Institute, points out that achieving high-quality development in China’s steel sector requires, on the one hand, focusing on strengthening the industry’s technological foundation—this calls for original innovation, and even disruptive innovation, led by leading enterprises. On the other hand, it is essential to address the industry’s quality‑and‑technology infrastructure, specifically the capacity for scientific experimentation and validation. In leveraging digital technologies, the steel industry must achieve mutual recognition of data and standards; such mutual recognition is key to bolstering the sector’s quality‑and‑technology base.
“Under the goals of peaking carbon emissions and achieving carbon neutrality, China’s steel industry urgently needs standardized frameworks to support its low‑carbon development,” said Li Xinchuang, Party Secretary of the Metallurgical Industry Planning & Research Institute and a Foreign Member of the Russian Academy of Natural Sciences. He added that standards not only provide crucial guidance and safeguards for addressing excess steel production capacity and driving high‑quality development of products and services, but also serve as a key lever for advancing green technological innovation and fostering technological progress.
Li Xinchuang believes that during the 14th Five-Year Plan period, China’s steel industry should prioritize three key areas in its standardization efforts: First, conduct research and establish a comprehensive standards framework covering high-quality development, green development, and low-carbon development, systematically advancing the formulation and revision of relevant standards in line with this framework. Second, with an eye toward enhancing the competitiveness of the steel industry, strengthen the development of critical technical standards to meet the demands of flexible manufacturing and personalized customization, focusing on improving product and service quality and creating a greater supply of high‑quality offerings through the pursuit of higher standards. Third, promote green and low‑carbon development by reinforcing the development and implementation of standards related to energy conservation, material efficiency, water saving, and emission reduction, accelerating the pace of standard upgrades, and ensuring that standards become more stringent, higher‑level, and faster‑moving, thereby better advancing ecological civilization.
The housing market cooled during the National Day holiday, with new-home sales area in 15 cities falling 19% year on year.
On October 8, the 58 Anjuke Real Estate Research Institute released data on the housing market during the 2021 National Day holiday. The figures show that, over this year’s extended holiday, new-home sales in 15 key monitored cities totaled 8,309 units, with a combined sales area of 924,400 square meters—down 19% from the same period last year but roughly on par with 2019 levels.
Industry insiders note that, overall, home‑buying enthusiasm across the country has waned during this year’s National Day holiday, with the market returning to a more rational footing.
New-home sales in 15 cities show mixed performance.
According to data from the 58 Anjuke Real Estate Research Institute, among the four first-tier cities—Beijing, Shanghai, Guangzhou, and Shenzhen—new-home sales totaled 4,000 units during this year’s National Day holiday, driven by Beijing and Shenzhen, a 50% year-on-year increase. However, this growth was partly attributable to delayed online registration in those two cities, and the market did not experience an overheating trend compared with the same period last year. Among nine key second-tier cities, new-home sales reached 4,193 units during the holiday, down 41% year on year. Meanwhile, in two key third-tier cities, new-home sales stood at 116 units over the seven-day holiday, a nearly 80% year-on-year decline.
Xu Zhijing, an analyst at the Anjuke Real Estate Research Institute, believes that under the framework of long-term market‑stabilization policies, new‑home markets across cities are showing marked disparities. The degree to which third‑tier, second‑tier, and first‑tier cities respond to policy measures generally follows a gradient, declining from strong to weak. In some cities, such as Beijing and Shenzhen, a surge in online contract signings occurred during the three days leading up to National Day, resulting in significant year‑on‑year fluctuations in overall holiday‑period housing‑market data—likely reflecting the concentrated online registration of properties sold earlier in the month.
Real estate market regulation is taking effect, with markets in many regions cooling down.
Xu Zhijing believes that during this year’s National Day holiday, home‑buying enthusiasm across the country has waned, largely because stringent property‑market regulations nationwide—aimed at achieving the “three stabilizations” (stable land prices, stable housing prices, and stable market expectations)—have cooled the market.
In fact, the waning momentum of the housing market during the National Day holiday had long been foreseeable. According to data from the 58 Anjuke Real Estate Research Institute, among the 63 key cities it monitors, new-home sales in September this year declined year over year in 55 cities, with an average drop of 47%. Specifically, new-home sales in first-tier cities fell by an average of 49%; in second-tier cities, with the exception of Xi’an, which posted a slight increase, the remaining 21 cities saw an average decline of 44%; and among the 38 third- and fourth-tier cities, only Kunshan, Zhuhai, Xinxiang, Changshu, Taicang, Nanping, and Xiaogan recorded growth, while the other 31 all experienced declines, with drops averaging 50%.
This demonstrates that, under the combined impact of multiple stringent regulatory measures, the real estate market has largely achieved deleveraging and deflation of speculative bubbles. From January to September this year, more than 400 real estate policies were introduced nationwide, with a frequency that once again set a new historical record. Meanwhile, from imposing financing caps on property developers through the “three red lines,” to formulating new land‑auction rules that link housing and land markets, to refining restrictions on home purchases and sales, introducing point‑based lottery systems, and establishing guideline prices for secondhand homes—alongside nationwide campaigns to curb speculation in school‑district properties and combat false listings—these patchwork policies have been rolled out across the entire lifecycle of the real estate sector. The central government has comprehensively upgraded its regulatory approach, enriching its policy toolkit and enhancing its precision, thereby directly addressing the various adverse factors and phenomena that undermine the market’s healthy development.
Judging from the increasingly frequent trend of real estate regulation, the 58 Anjuke Real Estate Research Institute forecasts that, by the end of 2021, regulatory measures will remain stringent and unchanged, making it inevitable for the market to cool down. The traditional “Golden September, Silver October” boom—characterized by a surge in new‑home launches, frenzied home‑hunting, rapid sell‑outs, instant sold‑out situations, and price hikes—will be hard to replicate. “Golden September, Silver October” has become a thing of the past; under sustained, high‑intensity regulatory pressure, the housing market is likely to maintain a stable trajectory for an extended period, with both buyers and sellers gradually shedding their reliance on seasonal patterns.
Industry insiders expect that “patchwork” measures will continue to be introduced in the fourth quarter.
According to online data monitored by the 58 Anjuke Real Estate Research Institute, nationwide housing market activity during this year’s National Day holiday declined slightly compared with the same period last year, though the drop was modest; in particular, online activity for new homes rose by 2%. Meanwhile, as the seasonal fluctuations in the housing market grow increasingly muted and pandemic control measures become the new normal, online property viewings and digital transactions are increasingly replacing the traditional approach of making multiple in-person visits.
Notably, the “three red lines” policy has put an end to the windfall benefits of corporate financing, while a flurry of new land‑auction regulations under the centralized land‑supply framework has made it increasingly difficult for developers to secure plots. At the second round of centralized land auctions, many cities saw bids fail to attract any buyers. Coupled with stringent real‑estate market controls, property offices are now facing their toughest period yet. In some cities where price increases had stalled, developers have begun slashing prices to draw buyers, triggering a vicious cycle of cutthroat competition.
In response to these new developments, real estate regulation has adopted a “two-pronged approach,” simultaneously seeking to prevent both sharp price increases and steep price declines. To date, several cities—including Yueyang—have introduced “price‑floor measures” to mitigate the risks associated with a rapid market downturn. Meanwhile, other localities have rolled out housing subsidies for talent and reduced transaction‑related individual income taxes, implementing city‑specific policies tailored to stabilize market expectations. On this basis, Xu Zhijing anticipates that, in the fourth quarter of this year, local governments will continue to introduce a steady stream of targeted measures to address emerging challenges in the property market.

Taxation TAXATATION
Data from the State Taxation Administration’s VAT invoices show that during the National Day holiday, residents’ consumption potential continued to be unleashed, with a clear upward trend in “Internet Plus Consumption” services.
According to the latest data from the State Taxation Administration’s VAT invoice system, during this year’s National Day Golden Week, consumer spending grew steadily, and “Internet Plus” consumption services continued to expand. During the holiday period, the national wholesale and retail sectors recorded an average daily sales revenue increase of 9.9% year on year, up 25.4% compared with 2019.
— The confluence of the traditional peak consumption season and the extended holiday period has fully unleashed residents’ spending potential. According to VAT invoice data, during the holiday period, consumers showed strong enthusiasm for shopping at malls and other retail outlets, with sales revenue at department stores and convenience stores rising 12.9% and 3.8% year on year, respectively—up 26.9% and 37.7% compared with 2019. Sales of daily necessities such as grains, oils, fruits, and vegetables also expanded rapidly, increasing 19.6% and 23.2% year on year, respectively—up 8.1% and 49.5% from 2019. Meanwhile, sales of household durable goods like furniture and decorative materials grew 16.2% and 10.4% year on year, respectively, representing increases of 47.3% and 26.9% compared with 2019.
— “Internet Plus Consumption” services continued to expand, with surging demand for online shopping, food delivery, and travel bookings. According to VAT invoice data, during the National Day holiday, internet retail sales revenue increased by 12.7% year-on-year, up 73.2% compared with 2019, driving a 10.4% year-on-year rise in express delivery service revenue, which was 79% higher than in 2019. Revenue from internet-based lifestyle services grew by 28.5% year-on-year, 29.5% above 2019 levels; among these, food delivery revenue rose 30.2% year-on-year, 39% higher than in 2019, while ticketing and hotel‑booking services increased by 21.4%, recovering to 71.9% of the level recorded in the same period of 2019.
— Consumption related to healthy living remained robust, while cultural and sports services posted strong growth. According to VAT invoice data, during the National Day holiday, sales revenue for cultural and artistic services rose 51.6% year on year and 53.2% compared with 2019; in particular, cultural‑creative and performance services increased by 86.6% year on year and 84.7% versus 2019. Sales revenue for sports services grew 21% year on year and 62.9% compared with 2019, with fitness and leisure activities seeing a 12.8% year‑on‑year increase and a 35.5% rise relative to 2019.
During the holiday period, tax authorities across the country have leveraged self-service and online tax services, among other channels, to ensure “uninterrupted service and round-the-clock tax processing,” fully meeting taxpayers’ diverse needs for tax filing and payment, fostering a favorable consumer environment, and better supporting economic and social development.

Tax and fee incentives help the cultural industry “move swiftly with a lighter load.”
In recent years, the tax authorities have fully leveraged the role of taxation, rigorously implemented preferential tax and fee policies for the cultural industries, and provided high-quality, convenient, and efficient services to cultural enterprises, enabling the cultural sector to “move swiftly with a lighter load.”
“Tax support for the cultural industries covers a wide range of taxes and fees, extending across multiple sectors and dimensions of the cultural economy, thereby highlighting the catalytic role of taxation in the development of the cultural sector,” said Dai Shiyou, Deputy Director-General of the Policy and Regulations Department of the State Taxation Administration.
Faced with a series of targeted tax incentives rolled out by the state, executives at publishing, animation, and other cultural enterprises feel more confident about their prospects. According to Chen Xiaoman, the financial director of Chongqing University Press Co., Ltd., “The tangible benefits that tax breaks bring to business development are plain to see.”
“As the leading domestic publisher of educational supplementary materials, Century Tianhong’s growth and development have been inseparable from the support of tax policies and the services provided by the tax authorities,” said Shan Jingyi, CFO of Century Tianhong Education Technology Co., Ltd. To date, the company has benefited from various tax incentives supporting the cultural industries—such as VAT exemptions on wholesale and retail book transactions—totaling over RMB 70 million. Meanwhile, its operating revenue has grown from less than RMB 100 million in 2010 to nearly RMB 400 million in 2020.
Zhang Rui, head of the Feiyang Cinema at Guangdong Xivi Cultural Development Co., Ltd., also applauds the tax‑benefit policies. “The recovery of cinemas would not have been possible without the government’s targeted, precision‑delivered tax and fee measures. The tax‑relief packages that have been smoothly implemented have allowed us to experience both the speed and the warmth of tax services,” Zhang Rui said. He added that in 2020, the company benefited from temporary reductions and exemptions on value‑added tax, cultural undertakings development fees, and social security contributions, totaling 1.89 million yuan.
“Strong government support is the driving force behind the anime and cartoon industry’s sustained growth,” said Mr. Shen, the financial director of Zhejiang Zhongnan Cartoon Co., Ltd. In 2020, Zhongnan Cartoon benefited from an additional R&D expense deduction exceeding RMB 2 million. This year, the company’s revenue from broadcasting its animated works overseas qualifies for the VAT exemption on cross-border taxable services, with exempted sales already surpassing RMB 1 million.
“Thanks to the benefits of tax policies, a large number of cultural and creative enterprises have risen rapidly in Hangzhou, injecting new momentum into Zhejiang’s cultural‑creative industry and helping to bring Chinese culture to the world,” said Zhang Huiqing, Party Secretary and Director of the Hangzhou Municipal Tax Service Bureau of the State Taxation Administration.
At present, the cultural industry is advancing toward its goal of becoming a pillar sector of the national economy. According to data from the Ministry of Culture and Tourism, in 2019, the value added of the cultural and related industries reached RMB 4.4363 trillion, accounting for 4.5% of GDP.
Li Chengshi, president of the Nixing Pottery Association of Qinzhou City, Guangxi, and a national-level master craftsman, stated that, thanks to tax incentives and a range of other supportive policies, Qinzhou has fostered more than 600 enterprises and studios related to Nixing pottery. The city has also attracted 169 masters of arts and crafts and ceramic art at the national, provincial, and municipal levels, creating employment opportunities for 15,000 people and boosting job creation among approximately 6,000 rural residents in surrounding areas.
The green tax system has erected a protective barrier for our clear waters and lush mountains.
Recently, two sets of environmental tax data released by the State Taxation Administration have drawn particular attention: the number of taxpayers subject to China’s environmental tax has reached 462,000, nearly doubling from the 267,000 at the outset of the Environmental Protection Tax Law in 2018. Meanwhile, environmental tax revenues have remained stable and even declined, with collections totaling RMB 20.56 billion, RMB 21.32 billion, and RMB 19.99 billion in 2018, 2019, and 2020, respectively.
“Data show that the average tax paid per household has declined significantly, corporate pollutant emissions have continued to fall, and the energy‑saving and environmental‑protection industries are steadily expanding, demonstrating that the green tax system is already delivering positive incentive effects,” said Lian Qifeng, Director-General of the Property and Behavioral Tax Department of the State Taxation Administration.
The tax authorities have fully leveraged the role of taxation in advancing ecological civilization, actively participating in the design and implementation of a green tax system that integrates multiple taxes—such as the resource tax, environmental protection tax, and farmland occupation tax—and employs a comprehensive package of systematic tax incentives. This framework guides enterprises to pursue green development and achieve prosperity through environmentally sustainable practices.
Building a Green Tax System Based on Multi-Tax Governance
On July 1, 2016, the resource tax reform was fully implemented, with the vast majority of mineral resources shifting from a quantity-based, fixed-rate levy to a value-based taxation system. Hebei Province took the lead in launching a pilot program for water resource tax reform, adopting a fee-to-tax conversion approach and bringing both surface water and groundwater within the scope of taxation.
On December 1, 2017, China launched a pilot program to expand the water resources tax reform in nine provinces, autonomous regions, and municipalities—Beijing, Tianjin, Shanxi, Inner Mongolia, Henan, Shandong, Sichuan, Ningxia, and Shaanxi. Together with Hebei Province, which had previously initiated the reform, a total of ten provinces are currently conducting pilot projects to replace water resource fees with a water resources tax.
Effective January 1, 2018, China’s first standalone tax law dedicated to implementing a “green tax system” and advancing ecological civilization—the Environmental Protection Tax Law—was officially put into effect.
On September 1, 2020, the Resource Tax Law, upgraded from the Regulations on Resource Tax, came into effect. With a higher legal status and greater enforceability, the law has established another robust safeguard for protecting our green mountains and clear waters.
With the implementation of one measure after another, the tax authorities have established a green tax system that combines both tax incentives and tax constraints, linking the five stages of resource extraction, production, distribution, emissions, and consumption. This system leverages the coordinated governance of multiple taxes—such as the resource tax, the environmental protection tax, and the farmland occupation tax—and employs a comprehensive package of systematic tax preferential policies.
Green taxation has established a clear policy orientation for enterprises: guiding them to conserve resources. Taking the resource tax as an example, by adopting ad valorem taxation and establishing a direct regulatory mechanism that links tax rates to resource prices, it encourages market entities to comprehensively develop and utilize resources, thereby promoting their efficient and economical use and unlocking ecological dividends.
It encourages enterprises to reduce emissions. Taking the environmental protection tax as an example, differentiated pollution‑equivalent values are set for pollutants based on their respective levels of harm, thereby implementing a positive incentive mechanism: “the more you emit, the more you pay; the less you emit, the less you pay; and if you don’t emit, you pay nothing.” This institutional design helps guide enterprises to upgrade their processes and cut pollutant discharges, particularly those of highly hazardous substances.
Promote the transformation and upgrading of enterprises. Whether it is the environmental protection tax, the resource tax, or the water resources tax, each reform encourages companies to weigh both economic and environmental considerations, proactively shifting away from previously inefficient production practices and embarking on a path of accelerated technological innovation and industrial restructuring.
According to data released by the State Taxation Administration, in 2020, among the 10 pilot provinces for the water resources tax—including Beijing and Hebei—the proportion of groundwater withdrawals to total water consumption stood at 33.5%, a decrease of 8 percentage points from 41.5% in 2016, prior to the reform. Over the three years since the Environmental Protection Tax Law came into effect, the pollution‑equivalent emissions per RMB 10,000 of GDP fell from 1.16 in 2018 to 0.86 in 2020, representing a decline of 25.8%. During this period, taxpayers nationwide benefited from tax reductions totaling RMB 10.26 billion for low‑emission discharges, tax exemptions amounting to RMB 15.22 billion for centralized wastewater treatment, and tax exemptions of RMB 3.99 billion for the comprehensive utilization of solid waste.
“This demonstrates that the green tax system, with the environmental protection tax at its core, has yielded significant energy‑saving and emission‑reduction effects,” said Lian Qifeng. He added that, in particular, the related tax‑reduction and preferential policies have boosted enterprises’ enthusiasm for green development, effectively guiding them to shift from passive to proactive emission reductions.
Precision Services Support Enterprises in “Greening” Their Operations
An effective tax system relies on efficient tax administration and collection. In response to the new landscape of green development, tax authorities have adopted a problem‑oriented approach, drawing on practical experience to continuously innovate and refine their administrative and service measures.
Take the environmental protection tax as an example: given the transient, concealed, and mobile nature of pollutant emissions, and the high technical requirements for monitoring such emissions, the Environmental Protection Tax Law has carefully defined the responsibilities of all stakeholders, maximizing collaborative governance and fostering a new tax administration mechanism characterized by “tax collection and administration, enterprise reporting, environmental monitoring, information sharing, and coordinated joint governance.”
Relying on information from the tax administration system, the tax authorities precisely identify taxpayers and provide tailored training and guidance—“one policy for each enterprise” and “one‑on‑one” support—while adopting a problem‑oriented approach to address, face‑to‑face, questions regarding the interpretation of tax policies and practical filing procedures. This targeted assistance helps taxpayers understand the relevant policies, perform accurate calculations, and file their returns effectively.
Following the implementation of the Resource Tax Law, tax authorities have streamlined tax payment deadlines and tax return forms, introducing quarterly filing to minimize taxpayers’ administrative burdens. Effective June 1 this year, a consolidated declaration system for ten property and behavioral taxes, including the resource tax and the environmental protection tax, has been rolled out nationwide, enabling taxpayers to log in once and complete all filings in a single step, thereby significantly enhancing tax administration efficiency.
Among these measures, businesses have felt the most direct and tangible benefits. “Compared with the past, when each tax required its own form—sometimes even multiple forms for a single tax—now we can file everything with just one form. It’s truly much more convenient!” said Wu Xiaoyan, a financial accountant at Baisheng Valve Co., Ltd. in Yongjia County, Zhejiang Province, with deep conviction. Previously, filing environmental protection tax every quarter involved entering 158 data items and taking about two hours. Now, thanks to the tax authorities’ service improvements and the launch of a batch‑submission feature that allows for easy export and import, the process can be completed in just two minutes.
Continuously “greening” the future of enterprises
In addition to the obvious tax‑reduction effects, the precise implementation of a green tax system has also generated a stronger leverage effect in fiscal policy.
This strength is reflected in the enterprise’s green development impact. Guangdong Dabaoshan Mining Co., Ltd., a large-scale resource-extraction company, has, following the implementation of the Resource Tax Law and spurred by tax‑reduction incentives, abandoned its long‑standing “exploit the rich, leave the poor” business model. By continuously improving resource utilization and leveraging tax benefits to reduce production costs, the company has embarked on a virtuous cycle.
Qinghai Huadian Datong Power Generation Co., Ltd. operates two 300 MW coal-fired generating units. Following the implementation of the Environmental Protection Tax Law, the company invested RMB 107 million to carry out ultra‑low emission retrofits on Units 1 and 2 in two phases during 2019. After the project was completed, the company’s atmospheric pollutant emissions decreased from 1.7404 million tons in 2018 to 307,700 tons in 2020. According to statistics, the taxpayer’s reported environmental protection tax liability fell from RMB 1.5913 million in 2018 to RMB 214,100 in 2020. Prior to the introduction of the environmental protection tax, the company’s pollution discharge fee in 2017 amounted to RMB 1.2159 million; the enactment of the Environmental Protection Tax Law has both incentivized and facilitated its efforts to control pollution and reduce emissions.
The green tax system adopts a multi‑pronged approach—strict prevention at the source, rigorous oversight throughout the process, and severe penalties for violations—to address both symptoms and root causes. This has enabled former major polluters to reinvent themselves, while also driving energy conservation and emissions reductions, leading to marked improvements in the ecological environment.
The 2020 Bulletin on China’s Ecological and Environmental Conditions indicates that in 2020, the country’s ecological and environmental quality improved overall, with a substantial reduction in the total emissions of major pollutants. According to data from the National Ecological and Environmental Monitoring Network, during the 13th Five-Year Plan period, China’s ecological and environmental conditions saw marked improvement, making it the five-year span with the most significant gains in environmental quality and the strongest progress in ecological and environmental protection to date.
Looking ahead, tax cuts and development dividends—along with both individual green initiatives and broader ecological benefits—have vividly demonstrated to businesses the power of energy conservation, emissions reduction, and green development, bolstering their confidence in sustaining environmentally friendly practices going forward. According to the “2021 A‑Share Listed Companies Corporate Social Responsibility Report Study” released by relevant institutions, among the 992 A‑share listed companies that disclosed CSR reports, investment in environmental protection has shown a clear upward trend.

Ningxia: Three Years After the Environmental Protection Tax Was Introduced, It Has Pioneered Green Development Among Enterprises
Since China introduced the environmental protection tax on January 1, 2018, Ningxia recorded environmental protection tax revenues of RMB 122 million, RMB 164 million, and RMB 157 million in 2018, 2019, and 2020, respectively. As of August this year, the region’s cumulative environmental protection tax revenue totaled RMB 567 million, with cumulative tax reductions and exemptions amounting to RMB 166 million. Over the past three years, taxpayers across the region have collectively benefited from environmental protection tax relief measures a total of 401 times.
To ensure the smooth and stable operation of the tax system, the Ningxia tax authorities have vigorously carried out publicity and guidance on environmental protection tax policies, helping enterprises accurately benefit from tax and fee concessions and ensuring that national policy dividends are effectively implemented. They have also proactively strengthened communication, coordination, and collaborative efforts with ecological and environmental departments, establishing a new tax administration model characterized by “tax collection and management, enterprise reporting, environmental monitoring, information sharing, and joint governance.” Since the introduction of the environmental protection tax, this approach has effectively leveraged the dual mechanisms of reverse constraints—“more emissions, more payments; less emissions, less payments; no emissions, no payments”—and positive incentives, thereby boosting enterprises’ enthusiasm for clean production. This shift has guided businesses from “passive emission reduction” to “proactive action,” promoting the coordinated advancement of energy conservation, emissions reduction, and environmental protection, and gradually yielding tangible results in sustainable green development that balances economic growth with environmental stewardship.
Ningxia DianTou Xixia Combined Heat and Power Co., Ltd. supplies 14.818 million gigajoules of heat annually and generates 6.05 billion kilowatt-hours of electricity each year. Leveraging the environmental tax policy, the company has invested a total of RMB 105 million over the past three years in pollution‑control upgrades, achieving emissions at ultra‑low concentrations. In 2019, it converted its open‑air coal‑unloading chute into a fully enclosed structure, effectively preventing fugitive dust from polluting the environment. In 2020, the company’s environmental tax payments declined by nearly 60% year on year, resulting in cost savings of approximately RMB 1.8 million.
Ningxia Taiyang Magnesium Industry Co., Ltd. has made significant investments in environmentally friendly and energy-efficient equipment, accelerated the transition from old to new growth drivers, and reduced pollutant emissions. Over the past three years, the company has benefited from tax reductions totaling RMB 1.63 million. With the support of these tax incentives, the enterprise has allocated more funds to upgrading its facilities and cutting emissions, thereby fostering a virtuous cycle of sustainable development.
The better a company performs in environmental protection, the lower its tax burden. An increasing number of enterprises are stepping up investment in environmental protection facilities and sites, transitioning to green production. From January to August this year, Ningxia granted environmental tax reductions and exemptions totaling 71 million yuan to taxpayers whose concentrations of taxable atmospheric or water pollutants fell below national and local standards, as well as to those who comprehensively utilized solid waste. Within the region, resource‑efficient and environmentally friendly enterprises are on the rise; their pollutant concentrations are far below regulatory limits, leading to a substantial decline in overall emissions, and demonstrating that tax incentives have effectively driven upgrades in environmental protection.

Litigation & Arbitration
Strengthening Intellectual Property Protection: Judicial Interpretations on Antitrust and Unfair Competition Are Set to Be Issued
On September 30, the State Council Information Office held a press conference on embarking on a new journey to build China into a strong country in intellectual property. At the event, Lin Guanghai, Chief Justice of the Third Civil Division of the Supreme People’s Court, stated that the judiciary will strengthen its efforts to combat monopoly and unfair competition, release landmark cases, and issue relevant judicial interpretations as appropriate, thereby upholding a market environment under the rule of law that ensures fair competition among enterprises of all sizes.
Recently, the CPC Central Committee and the State Council issued the Outline for Building a Country Strong in Intellectual Property (2021–2035) (hereinafter referred to as the “Outline”), which sets out the goals and tasks for building an IP‑strong nation and lays out a series of specific measures to strengthen IP protection. According to Shen Changyu, Commissioner of the National Intellectual Property Administration, the Outline places legal safeguards and stringent protection at the forefront of its guiding principles, emphasizing the need to implement the fundamental strategy of governing the country according to law, ensure rigorous IP protection in accordance with the law, and effectively uphold social fairness and justice as well as the legitimate rights and interests of right holders.
Lin Guanghai stated that, in the near future, the Supreme People’s Court will issue guidelines on providing judicial support for building a strong country in the field of intellectual property, putting forward a series of targeted policies and measures to strengthen intellectual property adjudication in the new era, thereby offering effective judicial services and safeguards for the development of an IP‑strong nation.
Specifically, Lin Guanghai stated that all types of intellectual property will be strictly protected in accordance with the law; patent and other technology‑related cases will be adjudicated in compliance with legal provisions, and safeguards for scientific and technological innovation will be strengthened. Efforts to protect intellectual property in key sectors such as agriculture and traditional Chinese medicine will be intensified, while protection in emerging fields—including the internet, big data, artificial intelligence, and genetic technologies—will be reinforced, thereby proactively addressing judicial needs arising from new technologies, industries, business models, and modes of operation. Judicial measures to combat monopoly and unfair competition will be strengthened, with the publication of landmark cases and the timely issuance of relevant judicial interpretations, so as to uphold a market environment underpinned by the rule of law that ensures fair competition among enterprises of all sizes. Furthermore, the legitimate rights and interests of entities engaged in scientific and technological innovation will be safeguarded, with due regard given to researchers’ statutory rights to determine technical approaches, manage budgets, and allocate resources, thereby fostering dynamism and creativity in innovation.
Regarding the strengthening of intellectual property enforcement, Yan Jun, Director of the Enforcement and Inspection Bureau of the State Administration for Market Regulation, stated that, in the next phase, the Administration will refine its mechanisms for coordinated and collaborative law enforcement, fully leverage the roles of enforcement‑cooperation frameworks in regions such as the Yangtze River Delta, the Beijing–Tianjin–Hebei area, and the Huaihai Economic Zone, disseminate proven best practices, and bolster interregional synergy in enforcement.

Regulations on the supervision of children’s cosmetics have taken effect, banning ingredients such as those used for spot removal and whitening.
To standardize the production and operation of children’s cosmetics, strengthen the supervision and administration of such products, and ensure the safety of cosmetic use by children, the National Medical Products Administration has, in accordance with the Regulations on the Supervision and Administration of Cosmetics and other relevant laws and regulations, formulated the Regulations on the Supervision and Administration of Children’s Cosmetics (hereinafter referred to as the “Regulations”).
The Regulations stipulate that ingredients intended for purposes such as spot removal and whitening, acne treatment, hair removal, deodorization, dandruff control, hair loss prevention, hair dyeing, or hair perming are prohibited. When ingredients with potential efficacy in these areas are used for other purposes, their necessity and safety for use in children’s cosmetics must be evaluated. Children’s cosmetics shall assess the scientific validity and necessity of all ingredients—considering their safety, stability, functionality, and compatibility—and taking into account the physiological characteristics of children, with particular attention to ingredients such as fragrances, colorants, preservatives, and surfactants.
Cosmetic operators shall establish and implement a system for recording incoming‑goods inspections, verifying the market entity registration certificates of direct suppliers, the registration certificates for special cosmetics or the filing information for ordinary cosmetics, the children’s cosmetic labeling, and the certificates of product quality inspection, and retaining relevant supporting documents. They shall accurately record such details as the name of the cosmetic, the registration certificate number for special cosmetics or the filing number for ordinary cosmetics, the period of use, the net content, the quantity purchased, the supplier’s name, address, contact information, and the date of purchase.
Cosmetic product operators shall verify the label information of the children’s cosmetics they sell against the corresponding product information published on the official website of the National Medical Products Administration, including: the cosmetic product name, the registration certificate number for special‑purpose cosmetics or the filing number for ordinary cosmetics, the name of the cosmetic product registrant or filer, the name of the contract manufacturing enterprise, and the name of the responsible party within China, to ensure that such information is consistent with the publicly disclosed details.
If sampling inspections reveal quality and safety issues in children’s cosmetics, the cosmetic product registrant, filer, or contract manufacturer shall immediately cease production, conduct a self‑inspection of compliance with the Cosmetic Production Quality Management Standards, and report to the provincial drug regulatory authority where the facility is located. Production may resume only after the risk factors affecting quality and safety have been eliminated. The provincial drug regulatory authority may, based on the actual circumstances, organize on‑site inspections.
If a cosmetic product registrant or filer discovers that a cosmetic product has quality defects or other issues that may endanger human health, they shall, in accordance with Article 44 of the Regulations on the Supervision and Administration of Cosmetics, immediately cease production, recall cosmetics that have already been placed on the market, and notify relevant cosmetic operators and consumers to stop selling and using such products.
The registrant or filer of a cosmetic product shall, based on the reasons for non‑compliance in testing, conduct analysis and evaluation of other related products to ensure product quality and safety.
Ministry of Public Security: Continuously Maintaining a High-Pressure Approach to Crimes Involving the Illegal Trade and Recycling of Medicines Covered by Medical Insurance
On October 8, the Ministry of Public Security held a press conference to brief the public on the measures and outcomes of a special campaign jointly launched with the National Healthcare Security Administration and the National Health Commission to crack down on fraud and abuse of medical insurance funds in accordance with the law.
Xu Chenglei, a second-level inspector with the Food and Drug Crime Investigation Bureau of the Ministry of Public Security, explained that, owing to the substantial profit margin between the purchase price and the resale price of drugs recovered through the medical insurance system, some criminals, driven by financial gain, have resorted to various methods to engage in illegal activities involving the illicit trade of such recovered medications. At present, this type of crime exhibits the following key characteristics: First, the methods of illegal procurement are diverse—some offenders set up stalls near hospitals to buy drugs; others use proxy medical insurance card swipes to fraudulently obtain medications directly from hospitals; and a small number collude with pharmaceutical institutions, designated medical insurance pharmacies, or their staff to conspire in issuing prescriptions for drugs. Second, these criminal activities have become increasingly professionalized and organized into gangs. Such criminal networks typically comprise numerous members with clearly defined roles, forming extensive illicit supply chains that acquire drugs at low prices in large and medium-sized cities rich in medical resources, then mark them up at each stage before selling them for profit. Third, the drugs involved are predominantly those used to treat chronic conditions, with traditional Chinese medicine injections and herbal materials—especially high‑priced tonifying herbs—accounting for a notable share. Fourth, the use of internet‑based instant messaging platforms to facilitate collusion is becoming increasingly apparent.
In response to the characteristics of such crimes, the Ministry of Public Security has directed public security organs nationwide to launch an in-depth “Kunlun” operation. As a key initiative under the campaign “Doing Practical Things for the People,” this effort maintains a high-pressure stance against pharmaceutical-related offenses, particularly the illegal trade of drugs obtained through the misappropriation of medical insurance funds. By implementing law-based crackdowns that cover all elements, stages, and links in the supply chain, authorities have successfully solved a number of major cases, effectively deterring such criminal activities and safeguarding both drug safety and the integrity of medical insurance funds. According to statistics, since 2021, food and drug investigation units across the country have cracked more than 300 cases involving the illegal trading of medical insurance‑covered drugs, apprehended over 1,000 suspects, and seized assets totaling more than RMB 1.16 billion.
Xu Chenglei stated that, in the next phase, public security organs will work closely with relevant administrative authorities to strengthen coordination between administrative and criminal enforcement, deepen targeted crackdowns and rectification efforts, and continuously refine and improve long-term mechanisms for combating and preventing illegal and criminal activities, thereby effectively safeguarding the security of the national medical insurance fund and maintaining order in pharmaceutical management. He also urged the public to enhance their awareness of the rule of law and personal safety by adhering to the “three don’ts”: do not purchase medicines through illegal channels; do not sell surplus medications in your possession to individuals engaged in illicit drug‑purchasing; and do not hand over or rent your medical insurance card or special‑disease certificate to professional card‑collectors for safekeeping, nor participate in schemes to fraudulently obtain prescriptions for medications. Reselling recovered medical insurance‑covered drugs without a valid pharmaceutical business license constitutes an illegal act; if such conduct is suspected of constituting a crime, those involved will be held criminally liable in accordance with the law. Anyone who discovers leads related to such offenses is encouraged to report them promptly to the public security authorities.

Local authorities have taken strong measures to crack down on counterfeit and infringing seeds as well as “three‑no” seeds, with tangible results.
To severely crack down on illegal practices such as the use of counterfeit or unauthorized trademarks and the sale of “three‑no” seeds, since the beginning of this year, the Ministry of Agriculture and Rural Affairs has launched a Year of Seed Industry Regulation and Enforcement and a special campaign to protect intellectual property rights in the seed sector. These initiatives focus on key areas, critical stages, and pivotal seasons, strengthening oversight across the entire industry chain and throughout all processes, while intensifying coordination between administrative law enforcement and criminal justice. By pooling resources and efforts, these measures aim to ensure that violators and infringers bear substantial consequences. At present, local authorities are steadily implementing and enforcing these remedial measures, imposing strict penalties for infringements and illegal activities in the seed industry, with initial results already evident. To date, more than 4,000 cases of seed‑related violations have been investigated and prosecuted nationwide.
In response to media reports of illegal activities involving “three‑no” wheat seeds, the Ministry of Agriculture and Rural Affairs immediately instructed Anhui Province to investigate and address the matter, dispatching a working group to conduct on-site supervision and inspections. At the same time, cracking down on “three‑no” seeds was designated as a key focus of autumn market inspections, with enforcement extended nationwide. Anhui promptly launched a month-long special campaign; across the province, 24 leads related to “three‑no” seed violations have been identified, 21 cases have been formally investigated, seven have been referred to public security authorities, and five individuals have been placed under administrative detention. Regarding trademark‑infringement cases, local authorities have enforced the law rigorously and taken decisive action. Zhejiang Province solved an infringement case involving the “Yongyou” series of rice varieties, arresting seven suspects and seizing goods worth 1.57 million yuan; in Zhangye, Gansu, agricultural law‑enforcement agencies organized the destruction of more than 50 mu of infringing corn seedlings in the field and over 10 tons of illegally transferred corn seeds; in Hainan, the departments of agriculture and rural affairs and public security jointly conducted a special enforcement operation targeting watermelon and melon seeds, filing six cases, impounding over 16,000 bags of implicated seeds valued at more than 3 million yuan; Hebei Province cracked a major case of manufacturing and selling substandard seeds, with涉案金额 exceeding 20 million yuan; and Henan Province uncovered a case of counterfeit corn seeds, involving 3 million yuan. Meanwhile, in Xinjiang, Inner Mongolia, and other regions, leads concerning infringement of Hami melon varieties and illegal corn seed production are undergoing thorough verification; once substantiated, such violations will be punished severely in accordance with the law.
Going forward, the Ministry of Agriculture and Rural Affairs will further strengthen market oversight in the seed industry, expedite the investigation and handling of case leads, and enhance the seamless coordination between administrative law enforcement and criminal justice. By pooling enforcement efforts, it will impose strict penalties on illegal practices such as trademark infringement through unauthorized use of registered trademarks and the sale of “three‑no” seeds, thereby comprehensively purifying the seed market and fostering a favorable environment for the revitalization of the seed sector.
Eight departments have jointly issued a document to advance the management of hospital safety and order.
Recently, eight departments—the National Health Commission, the Central Political and Legal Affairs Commission, the Cyberspace Administration of China, the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, the Ministry of Justice, and the State Administration of Traditional Chinese Medicine—jointly issued the “Guiding Opinions on Promoting the Management of Hospital Safety and Order,” stipulating that the number of hospital security personnel shall be determined according to the principle of “taking the higher standard,” with staffing levels set at no less than 3% of the total number of on-duty medical staff or one security guard per 20 beds, or 3‰ of the average daily outpatient volume. Hospitals meeting the necessary conditions may further increase their security staffing beyond these benchmarks.
The guidelines aim to further safeguard the normal order of medical care, protect the personal safety of healthcare professionals, and foster a positive clinical environment for both patients and medical staff. The primary objectives of this initiative are to strengthen hospital security structures, standardize hospital safety management systems, enhance the efficiency of risk‑early‑warning mechanisms, improve emergency response protocols, and progressively establish a comprehensive, scientific, efficient, and intelligent high‑level hospital security framework.
The opinion clearly states that hospitals shall, in accordance with relevant national and industry standards, establish and refine intrusion alarm systems, video surveillance systems, access control systems, and electronic patrol systems, and ensure interconnectivity among these systems.
At the same time, the guidelines emphasize that hospitals must enhance the quality of medical care and the standard of services, strengthen communication between doctors and patients, further streamline complaint-handling procedures, and strive to resolve medical disputes at their earliest stages.
With regard to establishing and improving mechanisms for sharing information on high-risk patients and for early warning, the guidelines stipulate that health administrative departments and public security organs at all levels shall set up hospital security information platforms to share data on high-risk patients, 110‑related police alerts involving medical institutions, and individuals involved in criminal or unlawful acts related to healthcare. Hospitals are required to implement a real-name registration system for appointment-based consultations and to establish an early-warning and alert mechanism for high-risk individuals.
In addition, the guidelines require that all localities deepen police–medical cooperation, establish effective information‑sharing mechanisms, and ensure thorough collection, monitoring, analysis, and assessment of various types of medical‑related security information, so as to promptly identify emerging trends and early warning signs. Health administrative departments are also expected to work closely with public security organs to further refine local procedures for handling medical‑related emergencies, particularly by clearly defining operational requirements for on‑site response, medical care, public opinion management, and maintaining social stability.

Ministry of Justice: Multiple punitive measures impose severe penalties for the illegal act of issuing false seismic‑resistance appraisal reports.
Recently, the Regulations on Earthquake-Resistant Management of Construction Projects (hereinafter referred to as the “Regulations”) have officially come into force. Today, a relevant official from the Ministry of Justice provided an overview of the legal liabilities of various parties under the Regulations.
A major highlight of the Regulations is the clear delineation of legal responsibilities for all parties involved. At today’s regular State Council policy briefing, Huang Yi, Director-General of the Fourth Legislative Bureau of the Ministry of Justice, stated that, to ensure the institutional measures established in the Regulations are effectively implemented and to promote high-quality development, the Regulations impose stringent legal liabilities and strengthen accountability. These measures primarily encompass the following aspects:
First, the penalties imposed on entities involved in seismic design and construction have been strengthened. While ensuring consistency with relevant laws and administrative regulations, such as the Law on Earthquake Prevention and Disaster Reduction, the Building Law, and the Regulations on Quality Management of Construction Projects, the Regulations further reinforce accountability for key stakeholders—including project owners, design offices, construction contractors, engineering quality inspection agencies, and seismic performance appraisal institutions—particularly by increasing the severity of sanctions against project owners and their responsible personnel.
Second, a comprehensive array of enforcement measures is employed. For violations of the provisions of the Regulations, the law prescribes penalties including ordering a halt to construction, imposing fines, mandating suspension of operations for rectification, downgrading or revoking qualification certificates, revoking professional practice licenses, and imposing a lifetime ban from engaging in the relevant activities.

Third, severe penalties are imposed for unlawful acts involving the issuance of false reports. The Regulations provide clear provisions: for instances where engineering quality inspection agencies issue false test data or test reports, or where seismic performance appraisal agencies produce falsified appraisal results, in addition to imposing fines of a specified amount, particularly serious cases may result in the revocation of qualification certificates and professional practice licenses, as well as restrictions on engaging in the relevant profession, all in accordance with the law, applied to the offending entities, their directly responsible supervisors, and other persons bearing direct responsibility.

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