JC Master Legal News Issue 993

Key Takeaways for This Issue
The China Securities Regulatory Commission has issued two financial industry standards, including “Data Model for the Securities and Futures Industry – Part 3: Logical Model for Securities Companies.”

Recently, the China Securities Regulatory Commission issued two financial industry standards—“Data Model for the Securities and Futures Industry, Part 3: Logical Model for Securities Companies” and “Log Specification for Internal Application Systems of Securities and Futures Operating Institutions”—which shall take effect from the date of their publication.
Ministry of Commerce: China will steadily expand market access in service sectors such as telecommunications and healthcare.
As China’s business environment continues to improve and efforts to promote investment and attract foreign capital intensify, the country has become a major global destination for cross-border investment. On November 5, Zong Changqing, Director-General of the Department of Foreign Investment Administration of the Ministry of Commerce, stated at the special press conference on promoting foreign investment during the Fourth China International Import Expo that China’s share of global foreign direct investment inflows has risen significantly.

Deepen the reform of the disciplinary inspection and supervision system within the tax administration to address the challenges of peer-level oversight.

　General Secretary Xi Jinping, at the Fourth and Fifth Plenary Sessions of the 19th Central Commission for Discipline Inspection, set forth clear requirements for strengthening oversight of vertically managed institutions and enhancing supervision of “principal leaders” and leading teams. He emphasized the need to improve the Party and state oversight system, integrate oversight into the development efforts outlined in the 14th Five-Year Plan, and establish a responsibility and oversight framework that ensures full coverage.

Supreme People’s Court: Launches a special campaign to address issues such as improper contact and interactions between court personnel and lawyers.
On the 3rd, a reporter learned from the Supreme People’s Court that the court has issued a notice requiring courts nationwide to conscientiously implement the “Opinions on Establishing and Improving Systems and Mechanisms to Prohibit Improper Contacts and Interactions Between Judges, Prosecutors, and Lawyers” and the “Opinions on Further Regulating the Practice of Law by Former Court and Procuratorial Personnel,” thereby effectively safeguarding judicial integrity and impartiality.

Finance & Capital Markets
The China Securities Regulatory Commission has issued two financial industry standards, including “Data Model for the Securities and Futures Industry – Part 3: Logical Model for Securities Companies.”

Recently, the China Securities Regulatory Commission issued two financial industry standards—“Data Model for the Securities and Futures Industry, Part 3: Logical Model for Securities Offices” and “Log Specification for Internal Application Systems of Securities and Futures Operating Institutions”—which shall take effect from the date of their publication.
To further enhance the industry’s level of informationization and to guide system development and inter‑institutional data exchange, the Securities Standards Committee has undertaken the development of an industry data model and organized the drafting of the “Securities and Futures Industry Data Model” series of standards. The securities office logical model constitutes Part 3 of this standard series. The standard “Securities and Futures Industry Data Model – Part 3: Securities Office Logical Model” outlines a methodology for structuring the securities office logical model and specifies the associated deliverables. During its formulation, due consideration was given to supporting technology‑based regulatory oversight. By systematically mapping out the various business lines of securities offices, the standard facilitates a clear understanding of the current state of industry data and clarifies data relationships, thereby helping to identify data sources, harmonize collection practices, and establish mechanisms for coordinated data management and sharing. This, in turn, provides robust support for institutions seeking to build comprehensive data asset management frameworks, standardize end‑to‑end data lifecycle management, and advance data‑driven business operations.
The “Standard for Internal Application System Logging in Securities and Futures Industry Operating Institutions” sets forth the requirements governing the management, recording, storage, collection, monitoring, auditing, and destruction of application system logs within securities and futures industry operating institutions. The development and implementation of this standard will help enhance the level of standardization of application system logging across the industry, providing data support for stable system operation, functional optimization, automated fault recovery, and real-time monitoring, while also furnishing foundational data for user behavior analysis. This, in turn, will facilitate the mining and utilization of log data, thereby fully realizing the value of such data.
Going forward, the China Securities Regulatory Commission will continue to advance the informatization of the capital market, focus on developing foundational standards, promote the harmonization of industry data standards, and steadily strengthen the data infrastructure underpinning technology‑driven regulatory oversight.

With the Beijing Stock Exchange set to open, five industry experts have weighed in.
With the Beijing Stock Exchange set to open, securities offices are not only benefiting from new favorable policies but also facing high market expectations. How can they strengthen their own accountability and ensure robust corporate‑quality standards? Recently, reporters interviewed five industry experts to discuss how securities offices can fulfill their duties as intermediary institutions and build bridges between the investment and financing sides of the market.
Extension of the Continuous Supervision Period
Strengthen the “gatekeeper” responsibilities of securities offices.
The ongoing regulatory framework for listed companies on the Beijing Stock Exchange aligns with the existing principal regulatory arrangements for listed offices, abolishing the sponsor‑broker system. Instead, sponsoring institutions will assume responsibility for providing continuous supervision over a prescribed period. At the same time, the framework takes full account of the operational characteristics and development patterns of innovative small and medium-sized enterprises, strengthening corporate self‑governance and market‑based constraints.
Liu Li, Assistant Director of the Research Institute at Shanxi Securities and a non‑bank financial analyst, told reporters: “Ongoing supervision serves two key purposes: first, it leverages the market’s nurturing function to provide professional guidance, oversight, and encouragement on issues such as a company’s continued operations after going public, thereby helping it achieve sustainable growth; second, by relying on its investment banking underwriting business, it assists promising enterprises in accessing the capital markets, participating in their financing and M&A activities, and fostering shared growth with small and medium‑sized enterprises.”
The Rules for Stock Listing of the Beijing Stock Exchange further strengthen the responsibilities of sponsoring institutions and appropriately extend their ongoing supervision periods, with the ongoing supervision periods for initial public offerings and refinancing extended to three years and two years, respectively.
In response, Chen Li, Chief Economist and Director of the Research Institute at Chuan Cai Securities, told a reporter: “Extending the period of ongoing supervision underscores the need to strengthen securities offices’ ‘gatekeeper’ responsibilities in investment banking. As they engage in investment‑banking activities, offices can no longer simply pursue performance blindly; they must conduct comprehensive due diligence on companies, remain accountable to investors, provide continuous oversight, and safeguard investor interests.”
Chen Mengjie, Chief Strategy Analyst at Yuekai Securities Research Institute, told reporters: “The Beijing Stock Exchange is committed to serving small and medium-sized enterprises. Against the backdrop of the pilot registration-based system, the extension of the ongoing supervision period is intended to strengthen sponsoring institutions’ sense of principal responsibility. This means that securities offices’ investment banking divisions must exercise greater diligence and accountability, strive to ensure the authenticity of companies’ financial data both before and after listing, and fulfill their role as gatekeepers of the capital market.”
Fully leverage the bridging role of intermediary agencies.
Supporting innovative companies in going public
To meet the needs of developing a multi-tiered capital market following the establishment of the Beijing Stock Exchange, securities offices must enhance their capabilities across multiple fronts. While continuing to closely monitor investment opportunities in innovative small and medium-sized enterprises, they should also serve as intermediaries, bridging the gap between the financing and investment sides.
Chen Li told reporters: “As a bridge between investors and financiers, securities offices must both safeguard investors’ fundamental interests and fulfill their obligation to help issuers raise capital smoothly. At its core, the financial sector exists to serve the real economy. In the face of numerous innovative small and medium-sized enterprises, securities offices should fully leverage their intermediary role, identify such companies, and assist them in going public, thereby ensuring that financial services truly support the real economy.”
Today, the Beijing Stock Exchange has imposed stricter and more detailed requirements on intermediary institutions, such as placing greater emphasis on the quality of information disclosure in prospectuses, enforcing the principle of “accountability upon filing,” and urging issuers and intermediaries to prioritize the quality of their initial filing documents.
Yang Delong, chief economist at Qianhai Open Source Fund, said in an interview with reporters: “The establishment of the Beijing Stock Exchange will enable more eligible innovative enterprises to list on the capital market, generating additional revenue for securities offices while also raising their standards. Crucially, securities offices must ensure robust information disclosure and rigorously safeguard the quality of listed companies.”
“In line with the objective of extending the period of ongoing supervision, these measures are also intended to strengthen the principal responsibility of sponsoring institutions in the process of a company’s listing. Against the backdrop of the Beijing Stock Exchange’s pilot implementation of the registration-based system, it has a relatively comprehensive delisting regime, making the quality of listed companies’ information disclosure particularly crucial for investors. Intermediary institutions play a key role in the information-disclosure process, so reinforcing their sense of responsibility is of paramount importance,” Chen Mengjie added to the reporter.
The multi-tiered capital market has been further improved.
It will bring incremental business to securities offices.
During interviews, reporters learned that numerous securities offices have undertaken comprehensive and in-depth preparations for Beijing Stock Exchange‑related business, covering strategic planning, project research, and personnel deployment. For instance, some offices have coordinated across multiple departments to launch primary‑market private equity fund operations and establish secondary‑market public funds and securities‑office asset‑management products. Others are gearing up to provide market‑making services for innovative small and medium‑sized enterprises and “specialized, refined, distinctive, and new” companies listed on the Beijing Stock Exchange, thereby offering specialized liquidity support.
“We can see that many stocks on the Select Tier now have brokerage offices listed among their shareholders. The investment‑research strengths of these brokerages will enable them to better position themselves in high‑quality companies. Moreover, brokerage operations stand to benefit from the Beijing Stock Exchange; as the exchange opens, expands gradually, and sees sustained growth in daily trading volume, it is poised to become a new driver of growth for brokerage businesses,” Chen Li added to the reporter.
Chen Mengjie stated: “Since the establishment of the Beijing Stock Exchange, a large number of companies listed on the New Third Board have announced plans for private placements. Securities offices should seize this opportunity to accelerate their efforts to capture market share in wealth management, investment banking, and research services. Brokerages must prioritize enhancing their research capabilities for both Beijing Stock Exchange‑listed companies and New Third Board‑listed enterprises. In addition, they need to strengthen their market‑making activities on the New Third Board and actively pursue equity investments in these companies through their private‑equity subsidiaries, thereby creating synergies across investment, investment banking, and research functions. For some small and medium‑sized brokerages that have already made early, deep inroads into the New Third Board business, this represents an excellent chance to leapfrog ahead.”
Liu Li also told reporters: “The Beijing Stock Exchange fully leverages its role as a bridge, strengthening connectivity within the capital market. This helps to build and refine a multi-tiered capital market system comprising venture capital and private equity funds, regional equity markets, the New Third Board, and exchange‑listed markets. It also supports the diversification and differentiated development of securities offices, fosters synergistic growth between investment and investment banking activities, and enhances the comprehensive end‑to‑end service ecosystem.”
However, from a short-term profitability perspective, Gui Haoming, chief market strategist at SW Securities Research Institute, told reporters: “Because service fees on the New Third Board are relatively low and leading securities offices have previously been under‑invested in this area, some smaller and mid‑size offices enjoy structural competitive advantages. That said, many offices will soon ramp up their efforts to establish a presence; yet generating meaningful profit growth in the near term will remain challenging.”
The Beijing Stock Exchange is shaking up the primary market.
What does “specialized, refined, distinctive, and innovative” look like?
Being included on the MIIT’s “Little Giant” list for specialized, refined, distinctive, and innovative enterprises does not necessarily mean a company will list on the Beijing Stock Exchange; however, the BSE’s mission is to nurture a cohort of such enterprises.
The Guoke Jiahe Fund, backed by investment from the Chinese Academy of Sciences and directly managed by CAS Holdings, has already invested in nine companies listed on the Ministry of Industry and Information Technology’s “Specialized, Refined, Distinctive, and Innovative” roster. An investor at Guoke Jiahe painted a vivid picture of these offices: they operate in highly niche industries or perform specialized roles that are exceedingly rare, often occupying small yet indispensable segments within their respective value chains—playing a critical role in safeguarding the nation’s broader ecosystem and supply chain. Thanks to proprietary technological or process expertise, or by pushing a particular service or business model to its absolute limit, they have risen to the top of their respective sub‑sectors, driven by human capital rather than mere asset accumulation or low‑cost labor. Today, having achieved a certain scale of operations and validated their technologies through market‑ready products and services, they stand poised to replicate their success across multiple markets.
Wu Xi, deputy general manager of Dacheng Cai Zhi’s Beijing headquarters, noted that for companies to master a single endeavor, refine it thoroughly, and generate distinctive value while contributing to both upstream and downstream sectors, the process often spans a long period and requires repeated trial and error. What these enterprises need most is time. Despite their specialized focus and small scale, they have consistently failed to win favor in the primary market because the secondary market frequently struggles to understand their unique positioning. As a result, many startups do not secure their first round of funding until after ten years of operation. The listing threshold on the Shanghai and Shenzhen stock exchanges is a market capitalization of RMB 1 billion; some entrepreneurs, in pursuit of an IPO, expand into unrelated areas or even acquire listed companies to meet this requirement. Meanwhile, other offices remain true to their original vision but face numerous challenges and continue to wait for the opportunity to go public.
Wang Guangxi, a partner at Lenovo Capital, told reporters that Lenovo Capital has invested in 10 specialized, niche, and innovative enterprises. Among them is a company called Jingwei Qili, which, more than a decade ago, undertook a national R&D project to develop a domestically produced FPGA chip—a type of advanced semiconductor. Given the substantial capital required for such investments, coupled with an unfavorable macro environment, the company sought support from both domestic and international sources but ultimately found no viable solutions, leading to a breakdown in its funding chain. Nevertheless, the management team remained committed: having taken on the national project, they were determined to see it through. They considered bankruptcy and restructuring, aiming to clean up the aftermath, bring back employees who had already moved on, and stage a comeback. As an investor, Wang participated in the company’s two-year debt-restructuring process, providing hands-on assistance and gaining firsthand insight into the challenges involved.
Wu Xi stated that the STAR Market has opened the door by allowing companies that are not yet profitable to go public, while the Beijing Stock Exchange has further lowered the listing threshold to a market capitalization of RMB 200 million, demonstrating greater inclusiveness in terms of revenue requirements. For investors, this means earlier exit opportunities and clearer expectations—both of which are positive developments. At the same time, it will encourage more social capital to increase support for hidden‑champion offices in specialized, niche, and innovative sectors, fostering a virtuous cycle.
Wang Guangxi stated that, viewed from a longer historical perspective, many sectors are capable of generating value; however, due to the immaturity of the secondary market, they have been deprived of opportunities, leading some companies to adopt overseas corporate structures or, for extended periods, to receive insufficient resource allocation in China. The establishment of the Beijing Stock Exchange has helped to fill this gap in the capital market.
Policy Certainty
Wu Xi told reporters that from the Beijing Stock Exchange to the “specialized, refined, distinctive, and innovative” initiative, policy guidance has become increasingly clear, and such policy certainty is a significant positive for the primary market. Liu Yanlai, PwC China Mainland and Hong Kong Private Equity Fund Services Managing Partner, noted that between 2019 and 2021, both the volume and value of transactions in China’s private equity market were on an upward trajectory; however, since 2021, both metrics have declined compared with their respective peaks reached in the second half of 2020.
Liu Yanlai stated that the market continues to maintain a high level of activity, and the overall upward momentum remains unchanged. The recent slowdown in the pace of investment is primarily attributable to investment offices adopting a more cautious stance in response to certain market uncertainties.
“Institutions that invest in specialized, niche, and innovative companies all possess a technology‑driven character,” said Wu Xi. He added that the establishment of the Beijing Stock Exchange will provide a boost to this cohort of offices, though it is unlikely to trigger a significant market reaction. Among the portfolio companies of Dacheng Capital, 62 have been included on the national-level list of specialized, niche, and innovative enterprises; going forward, the office will remain steadfast in its chosen sectors and strategic direction, adhering to its established investment philosophy and discipline.
A primary‑market investor focused on consumer‑focused sectors told reporters that the Beijing Stock Exchange has a greater impact on institutions with higher asset‑based requirements and liquidity expectations, and that late‑stage investors are also closely aligned with its developments. These investors pay close attention to the exchange’s progress, while earlier‑stage offices are more concerned with how to position themselves and identify the highest‑quality companies within the ecosystem.
The aforementioned sources noted that policy uncertainty remains high, causing many investors in the education and internet sectors to stumble. Once policy clarity emerges, they will quickly follow suit and scramble to position themselves. When the Select Tier was launched last year, some institutions keenly sensed the trend and had already begun acting; over the coming period, valuations for specialized, niche, and innovative companies are likely to rise. Drawing parallels with the chip sector, currently 90 out of every 100 projects are trading at premium valuations.
For many institutions, small, specialized companies are not easy to invest in. A primary‑market investor at a securities office told our reporter that, given the Beijing Stock Exchange’s 200‑million‑yuan market‑cap threshold, offices without deep industry expertise lack the capacity to make sound judgments, and finance‑focused investors often struggle to identify promising targets. After a wave of rush‑in, some institutions will inevitably end up “paying their dues,” and the subsequent trajectory will likely follow a spiral upward. An official at the Beijing Equity Trading Center noted that recently, several SMEs have become unusually proactive in seeking financing and boosting their performance. These are no longer start‑ups; they have already reached a certain scale and could easily qualify for the Beijing Stock Exchange. In recent years, having seen little prospect of listing on the New Third Board, many had essentially “given up.” He worries that the market may see practices such as artificially inflating growth or overstating financial results—what he calls “forcing seedlings to grow too fast.”
Wu Xi noted that the industry is debating whether tech investing is heading toward a bubble. When substantial capital flows into a sector, the resulting input‑output dynamics ultimately hinge on efficiency—making it a true test of skill for investment offices. The establishment of the Beijing Stock Exchange will accelerate differentiation in the primary market. Much like tech investing, which has now entered deep waters, the low-hanging fruit has largely been picked, leaving fewer and fewer investable targets that are both promising and easy to evaluate.
As investments become increasingly specialized and technology‑driven, investment offices must build robust industry networks that connect portfolio companies as upstream and downstream partners, thereby fostering cohesive value chains. At the same time, such networks deepen investors’ sectoral insights, enabling them to identify and validate investment targets along industry‑specific pathways rather than purely capital‑centric ones.

With economic conditions steadily improving, the securities industry is seizing new opportunities in wealth management.
The Beijing Stock Exchange recently released two fundamental business rules—the “Beijing Stock Exchange Trading Rules (Trial)” and the “Beijing Stock Exchange Member Management Rules (Trial)—along with 31 detailed rules, guidelines, and accompanying instructions, further refining its institutional framework. As a key enabler of the multi-tiered capital market, which includes the Beijing Stock Exchange, securities offices are fully benefiting from the market’s growth and experiencing rapid expansion, thereby enhancing their capacity to serve the real economy.
2021 marked the inaugural year of the 14th Five-Year Plan. Grounded in the present, the securities industry is contributing vigorously to the deepening reform of the capital market; looking ahead, it is also meeting the public’s growing demand for wealth management by offering securities products and services of higher standards and greater quality, thus ushering in a new chapter of high‑quality development.
Be a pioneer in the deep reform of the capital market.
Including the establishment of the Beijing Stock Exchange, reforms to the registration-based system and policies of opening up to the outside world have been steadily advanced, serving as powerful catalysts for the high-quality development of the securities industry. In turn, the securities sector has proactively responded to these policies, striving to take the lead in deepening capital market reforms.
During its research, the reporter learned that following the announcement of the establishment of the Beijing Stock Exchange, securities offices have promptly set up dedicated leading groups or working teams. Across all business lines—including investment banking, investment management, research, and wealth management—they have intensified their analysis and resource allocation for the New Third Board, continuing to provide capital support to small and medium-sized enterprises while also addressing their diverse and customized growth needs. For example, Guotai Junan has launched a series of initiatives, urging all branches to fully appreciate the strategic significance of the Beijing Stock Exchange for the capital market, the securities industry, and the company’s own high-quality development. The office is also stepping up promotional efforts and guiding investors through the process of obtaining qualified investor status. Online, the company has identified a pool of potential Beijing Stock Exchange investors who meet the eligibility criteria and, using multiple outreach channels, has engaged these investors to encourage them to activate their trading access on the exchange.
Since the establishment of the Beijing Stock Exchange, attention to “specialized, refined, distinctive, and innovative” enterprises has risen sharply, prompting securities offices’ research institutes to intensify their coverage of these companies by bolstering talent pools and collaborating with investment banking divisions. For instance, Sinolink Securities has formed a dedicated team to study national strategic priorities and the “specialized, refined, distinctive, and innovative” sector; it offers tailored advisory services for SMEs in this space, publishes an in-depth research series on the topic, and hosts frequent conference calls to explain BSE policies. The office also plans to organize a series of specialized strategy seminars focused on “specialized, refined, distinctive, and innovative” SMEs in Beijing and other regions where such enterprises are concentrated, providing a professional platform for dialogue among SMEs and investment institutions.
The industry’s overall strength has improved significantly.
After decades of development, as of the end of July 2021, the total number of securities offices in China had expanded to 140, with aggregate assets exceeding RMB 10 trillion. Alongside the continued growth in total asset size, the business portfolios of these offices have become increasingly diversified, evolving from traditional brokerage, investment banking, and proprietary trading to encompass asset management, margin financing and securities lending, derivatives, over-the-counter (OTC) activities, and cross-border services—thus effectively meeting the direct investment‑financing and trading needs of market participants.
Serving the real economy is the original aspiration and mission of the financial sector, and as intermediaries in the capital markets, securities offices continue to contribute their industry expertise to this end. Since 2012, securities offices have provided underwriting and sponsorship services for equity financings totaling over RMB 11 trillion and exchange‑traded bond issuances approaching RMB 23 trillion, while also offering financial advisory services for M&A and restructuring transactions involving listed companies valued at more than RMB 5 trillion.
In 2020, while actively fulfilling their social responsibility in combating the pandemic, securities offices remained committed to their core business, further enhancing their ability and effectiveness in serving the real economy. Throughout the year, securities companies facilitated initial public offerings (IPOs) for a total of 399 enterprises, raising RMB 472.649 billion; they also underwrote share issuances, rights issues, and preferred stock offerings for 247 entities, raising an additional RMB 544.4 billion; they underwrote 4,196 corporate bonds, raising RMB 4.53 trillion; and they underwrote 1,355 asset-backed securities, raising RMB 1.46 trillion.
In support of poverty alleviation efforts, from 2016 to 2020, the securities industry facilitated 26 enterprises in impoverished regions to go public through the IPO “green channel” policy, raising a total of over RMB 17.8 billion. Additionally, via corporate bonds, mergers and acquisitions, equity financing on the New Third Board, industrial funds, and other channels, the industry has helped these enterprises secure cumulative financing exceeding RMB 300 billion.
Leverage the role of the wealth management platform.
As capital market reforms, including the pilot registration-based system, continue to advance steadily, residents’ demand for wealth management is growing, and institutional clients’ needs are becoming increasingly diversified—creating historic opportunities for the burgeoning securities industry. According to performance data, listed securities offices reported third-quarter 2021 revenue of RMB 163.4 billion, up 14% year over year, and net profit of RMB 50.2 billion, up 13% year over year, with both metrics posting substantial year-on-year growth despite a high base.
“From a regulatory perspective, the continued easing of policies is fostering a favorable environment for the securities industry,” said Cheng Yimin, an analyst at China Post Securities. He added that, at this stage, the long-term benefits stemming from the brokerage business’s shift toward a wealth-management model have become the primary driver of performance growth in the sector. This trend is underpinned by the persistent shift of household savings into the stock market—where higher returns and greater liquidity are available—coupled with the expansion of pilot programs for securities offices’ fund‑investment advisory services and the steady increase in assets under management. As a result, overall industry sentiment continues to strengthen.
Strong, improving fundamentals are also providing robust momentum for enhancing the intrinsic investment value of the securities industry. Hu Xiang, a non‑bank financial analyst at Dongwu Securities, notes that the three core pillars underpinning the long-term growth of securities offices are: the segmented value chain within wealth management; derivatives and capital‑intermediation services, which offer room for expansion compared with their overseas counterparts; and investment‑banking activities, asset management, M&A and restructuring, along with a range of other ancillary businesses, all benefiting from the registration‑based IPO system. With market conditions currently favorable, overall third‑quarter results have been solid, and with a flurry of policy measures—such as those related to the Beijing Stock Exchange—securities offices’ long-term investment appeal is becoming increasingly evident.

Commercial & Corporate
Ministry of Commerce: China will steadily expand market access in service sectors such as telecommunications and healthcare.
As China’s business environment continues to improve and efforts to promote investment and attract foreign capital intensify, the country has become a major global destination for cross-border investment. On November 5, Zong Changqing, Director-General of the Department of Foreign Investment Administration of the Ministry of Commerce, stated at the special press conference on foreign investment promotion during the Fourth China International Import Expo that China’s share of global foreign direct investment inflows has risen significantly. From 2017 to 2020, China maintained its position as the second-largest recipient of foreign investment for four consecutive years.
Zong Changqing stated that, in the next phase, while continuing to ensure stable foreign investment across the board, efforts will be focused on major trade fairs such as the China International Import Expo, innovating investment promotion approaches, enhancing service and support capabilities, and fostering a fair competitive environment, thereby encouraging more exhibitors to become investors.
2021 marked the inaugural year of the 14th Five-Year Plan. Despite ongoing challenges posed by the pandemic, China continued to attract substantial foreign investment. Zong Changqing told a reporter from the 21st Century Business Herald, “This year, we are fully on track to achieve the stable‑foreign‑investment targets set by the CPC Central Committee and the State Council.”
In 2020, China’s foreign investment inflows grew against the trend.
2020 was an extraordinary year; under the impact of the COVID‑19 pandemic, the scale of outward investment across countries contracted. According to data from UNCTAD, global cross‑border investment plummeted by 34.7% in 2020, with FDI inflows totaling just US$998.89 billion.
In 2020, China’s actual utilization of foreign investment recorded growth against the trend, reaching US$149.34 billion—up 5.7% year on year—and RMB 1.03428 trillion, an increase of 7.4% compared with the previous year. This accounted for 15% of the global total, placing China second worldwide and maintaining its position as the top recipient among developing countries for the 29th consecutive year.
Specifically, four key features stand out: First, foreign investment followed a pattern of initial decline followed by gradual recovery throughout the year—down 12.8% year-on-year in the first quarter, with actual utilized FDI growing 5.1%, 17.6%, and 10.1% in the second, third, and fourth quarters, respectively. Second, the sectoral structure continued to improve: by industry, the shares of actual utilized FDI were 0.3% in agriculture, 24.5% in manufacturing, and 75.2% in services. Third, the main sources of investment remained stable; based on actual investment amounts, the top 15 countries (or regions) largely held steady, accounting for a combined US$140.8 billion—up 5.4% from the previous year—and representing 94.3% of total inflows. Fourth, key regions provided strong support, with the eastern, central, and western regions accounting for 85.4%, 5.9%, and 5.4% of actual utilized FDI, respectively. Jiangsu, Guangdong, and Shanghai ranked first, second, and third nationwide in terms of total foreign investment inflows.
The United Nations Conference on Trade and Development’s World Investment Report notes that China’s 2020 growth in foreign direct investment partly reflects the success of its efforts to contain the pandemic and achieve a rapid economic recovery. The report commends the Chinese government for its liberalization measures—such as revising the national and free-trade‑zone negative lists for foreign investment, easing market access for foreign investors, and removing restrictions on foreign investment in key sectors—to facilitate investment.
Faced with China’s increasingly open market, executives at several multinational corporations have voiced their support. Chen Yudong, President of Bosch China, told the 21st Century Business Herald that China’s unwavering commitment to expanding openness has encouraged Bosch to further deepen its investment and development in the country. “We have witnessed China’s proactive move toward high‑level opening-up and have reaped substantial benefits from the vast opportunities this open market offers. The Chinese market remains Bosch Group’s most important overseas market and a key hub for innovation.”
Hu Zhizhi, CEO of Credit Suisse China, told reporters from the 21st Century Business Herald and other outlets that, in recent years, the Chinese government and regulatory authorities have consistently implemented proactive yet prudent measures to foster a thriving capital market, with achievements that are plain for all to see. China’s capital market has entered a fast track of two-way opening-up, with trading volumes under mutual connectivity expanding month by month, mechanisms further refined, and the quality of investors steadily improving.
Ni Zhiwei, CEO of the LEGO Group, stated that the Chinese government is vigorously advancing a broader, wider‑ranging, and deeper level of opening-up, which has bolstered the confidence and momentum of foreign‑invested enterprises in China. “We are fully confident in our future prospects. Over the past few years, we have laid a solid foundation and positioned ourselves well for continued growth.”
Zong Changqing told reporters from the 21st Century Business Herald and other outlets that the key to the counter‑trend growth of foreign investment in 2020 was the CPC Central Committee and the State Council’s strategic decisions to stabilize the fundamentals of foreign trade and foreign investment, as well as their “Six Stabilities” and “Six Guarantees” policies.
Release of the New Version of the Foreign Investment Guidelines
The counter‑trend growth in 2020 brought the 13th Five-Year Plan to a successful close. Looking back over the period of the 13th Five-Year Plan, China’s foreign investment inflows posted robust growth, making a significant contribution to economic and social development.
Notably, the scale of foreign investment attracted reached a record high. A total of 204,000 new foreign-invested enterprises were established, and the actual utilized foreign capital amounted to US$698.9 billion—up 61.8% and 10.4%, respectively, compared with the 12th Five-Year Plan period. By the end of 2020, the cumulative number of foreign-invested enterprises exceeded 1.04 million, with total actual utilized foreign capital surpassing US$2.4 trillion. High‑tech industries experienced rapid growth, with actual utilized foreign investment in this sector reaching US$171.75 billion—up 129.4% from the 12th Five-Year Plan period—and its share of total foreign investment rising from 12.2% in 2015 to 28.6% in 2020.
Its global share has also risen sharply: the share of actual utilized foreign investment in total global cross-border direct investment increased from 6.7% in 2015 to 15% in 2020, and China maintained its position as the world’s second-largest recipient of foreign investment for four consecutive years from 2017 to 2020. Foreign-invested enterprises have made outstanding contributions to economic and social development, paying RMB 14.1 trillion in taxes—accounting for more than one-sixth of the nation’s total tax revenue; their total import and export value reached US$9.1 trillion, representing over 40% of China’s total foreign trade; and they have helped create approximately 40 million urban jobs, or about one-tenth of the country’s urban employment.
Zong Changqing emphasized that foreign-invested enterprises have effectively propelled the upgrading of China’s industrial structure, facilitated the country’s deep integration into global industrial and supply chains, and played a vital role in achieving a moderately prosperous society in all respects.
Zong Changqing also stated that during the 13th Five-Year Plan period, China’s level of opening-up continued to expand, policy support grew stronger, the management system became more efficient, and the investment environment improved steadily. Looking ahead to the 14th Five-Year Plan, while ensuring stable foreign investment, China will further deepen its opening-up, continuously enhance investment promotion through major trade fairs such as the China International Import Expo, the China International Fair for Trade in Services, the China International High-Tech Fair, and the China International Investment and Trade Fair, strengthen services and safeguards for key foreign-invested enterprises and projects, and keep optimizing the business environment.
At the press conference that day, the Ministry of Commerce released the “China Foreign Investment Guide (2021 Edition).” The compilation and publication of this guide is a robust measure to implement the relevant provisions of the Foreign Investment Law and its implementing regulations, and to advance the “delegation, regulation, and service” reform and efforts to stabilize foreign investment.
Li Yong, Deputy Director-General of the Investment Promotion Department of the Ministry of Commerce, stated that the new edition of the Investment Guide, while retaining the basic framework of the previous version, has undergone adjustments, updates, and optimizations across all chapters. It includes corresponding revisions to various data sets, administrative procedures, institutional directories, and other materials, as well as refinements to certain textual formulations. This will provide foreign-invested enterprises with a more comprehensive guide for investing in China, offering enhanced services and support to facilitate their investment, business operations, and daily life in the country.
Li Yong pointed out that Chapter One, “Entering China,” has been updated to include China’s 14th Five-Year Plan and the 2035 Long-Term Goals Outline, the 14th Five-Year Plan for Commercial Development, and the 14th Five-Year Plan for Utilizing Foreign Investment. The existing section on “Regional Development Strategies” has been substantially expanded and refined, and content on achieving carbon peaking and carbon neutrality has been added.
Chapter 2, “Investing in China,” has been updated with the latest data on infrastructure, innovation levels, and human resources. It highlights key measures outlined in the Regulations on Optimizing the Business Environment, introduces the State Council’s Opinions on Further Advancing the “Delegation, Regulation, and Service” Reform to Support the “Six Stabilities” and “Six Guarantees,” and provides an overview of the business environment innovation pilot programs being implemented in six major cities.
Chapter Three, “The Legal Framework for Foreign Investment in China,” has been updated to include an overview of foreign market access and a more detailed description of the “Catalogue of Industries Encouraged for Foreign Investment.” It also adds information on “Work Permits for Foreign Nationals Working in China” and provides relevant online service portals. Furthermore, the specific provisions under “Intellectual Property Protection” and “Tax Administration” have been revised and updated.
Chapter Four, “Procedures for Foreign-Invested Enterprises,” visually presents, in the form of flowcharts, the specific steps involved in establishing and amending foreign-invested enterprises, as well as in submitting information reports, handling tax matters, managing foreign exchange, and addressing complaints. The details of the “Enterprise Amendment Procedure,” the “Tax Procedure,” and the “Foreign Exchange Procedure” have been revised to provide foreign-invested enterprises with more precise guidance.
Chapter Five, “Life in China for Foreigners,” provides a guide for expatriates on matters such as entry and residence, housing, education, healthcare, and tourism.
Li Yong emphasized that the “China Foreign Investment Guide (2021 Edition)” comprehensively showcases China’s business environment, which is market‑oriented, rule‑of‑law based, and internationally aligned. The Ministry of Commerce will continue to regularly revise and refine this guide in light of annual statistical data and changes in laws, regulations, and policies, thereby providing greater support and higher‑quality services to foreign investors seeking to invest in China and operate here.
Zong Changqing revealed that, in the next phase, China will further shorten the negative list for foreign investment access, steadily expand market opening-up in service sectors such as telecommunications and healthcare, revise and broaden the Catalogue of Industries Encouraged for Foreign Investment, and introduce a negative list for cross-border trade in services within the free trade pilot zones.
The steel sector has weakened across the board—after eight consecutive weeks of declines, when will the sector bottom out?
Recently, steel prices have been undergoing sustained adjustments. According to the Lange Steel Research Center, as demand weakens and raw material prices are revised, risks in the steel market are gradually being unwound. This week, the decline in prices has widened, with major product grades continuing to fall; the price drops for Grade III rebar and hot-rolled coil have both exceeded RMB 300 per ton.
The outlook for steel prices remains pessimistic. According to an analysis by the Lange Steel Research Center, blast furnace operating rates at major steelmakers nationwide continue to decline, while the pace of destocking in the broader market has slowed markedly. Both supply and demand are weakening, and with colder weather setting in, end‑user demand is unlikely to improve. Expectations for a robust infrastructure push are also muted. With prices of key steel grades now hovering near cost levels, the market may seek support after a rapid sell‑off. However, the high‑level correction in coking coal and coke prices may not yet be over, leaving residual risks to be unwound. As a result, steel prices could continue to test lower lows next week.
Recently, Luo Tiejun, vice president of the China Iron and Steel Association, stated that a coordinated package of policies—including production restrictions, export controls, and measures to ensure supply and stabilize prices—has worked in concert to curb the rapid rise in iron ore prices. Experience has shown that a series of measures—such as follow-up reviews of capacity‑reduction efforts, cuts in crude steel output, adjustments to import and export policies for steel products, and initiatives to safeguard supply and price stability—are both appropriate and effective, yielding positive results: supply and demand have largely reached equilibrium, and steel enterprises have broadly agreed on this approach. Mr. Luo further forecasts that, barring any significant increase in demand next year, China’s steel market can maintain this year’s production levels, allowing supply and demand to remain broadly balanced.
Luo Tiejun specifically pointed out that administrative measures this year have corrected market distortions, but industry self‑regulation still needs to be strengthened. The first half of this year saw the steel sector characterized by robust supply and demand, high costs, and significant price volatility—conditions that highlight the drawbacks of low industry concentration in China, with offices operating independently and a notably weaker degree of coordinated self‑discipline compared with other sectors. “This calls for reflection; more importantly, it underscores how the steel industry can seize the favorable window provided by macroeconomic regulation to gradually establish mechanisms for industry self‑governance—this is the starting point for enhancing concentration,” said Luo Tiejun.
How do steel companies view the industry’s pronounced cyclicality? Baosteel Co., Ltd. recently stated publicly that the cyclical fluctuations in China’s steel sector are primarily driven by uncontrolled supply, with oversupply prevailing for much of the time, and that its current product mix has yet to fully develop the resilience needed to decouple from these cycles. On the macro front, the Chinese government has significantly intensified efforts to curb steel supply in recent years—ranging from capacity‑reduction initiatives to output controls, as well as the policy red lines set by the carbon‑peak and carbon‑neutral goals. These measures suggest that the cycle of steel capacity expansion in China has come to an end, and future steel output is likely to trend gradually downward, easing the situation of excessive competition within the industry.
In addition, this week Shougang Shares held a briefing on its performance for the first three quarters of 2021. When asked about whether the company has any merger and acquisition plans, Shougang Shares stated that its strategy is to further strengthen, refine, and optimize its existing high‑quality sheet‑metal capacity of 22–23 million tons, enhance value added, reduce costs, and secure a more favorable market position and improved profitability. The company will conduct studies in line with the requirements of high‑quality development and in accordance with its strategic needs, but currently it has no specific M&A plans.

The “dual carbon” goals are driving industrial upgrading, making supply-chain carbon‑emissions management a key priority.
China has set the “3060” goals of peaking carbon emissions and achieving carbon neutrality. In response, many enterprises have also successively announced their own dual-carbon targets, driving corporate transformation and development.
Xiao Song, Siemens’ Global Executive Vice President and Chairman, President, and CEO of Siemens China, stated in interviews with media outlets including the 21st Century Business Herald that companies should not only accelerate their own decarbonization efforts but also commit to helping their supply chains and customers achieve their carbon‑reduction targets.
“Today, the dual‑carbon goals are compelling us to accelerate decarbonization, thereby driving industrial upgrading,” says Xiao Song. He notes that the share of carbon emissions attributable to each product varies across the supply chain, yet managing supply‑chain emissions remains a critical priority. This involves everything from foundational design and carbon‑emission modeling to providing assessment and advisory services, as well as implementation and delivery. Moreover, companies can incorporate sustainability and carbon‑emission performance into their supplier‑selection criteria, thereby incentivizing suppliers to undergo transformative change.
In the industrial sector, where traditional energy-intensive industries such as steel, petrochemicals, and cement face high carbon emissions, complex processes, and substantial decarbonization costs, Siemens released the “Siemens China Carbon Neutrality White Paper” (hereinafter referred to as the “White Paper”) during the fourth China International Import Expo. The paper recommends, on the one hand, promoting industrial upgrading in high-emitting sectors through policy planning—such as strictly controlling new capacity in energy‑intensive industries and using policy incentives to support the development of high‑tech industries, advanced manufacturing, and emerging sectors like the digital industry. On the other hand, it suggests reducing energy consumption across the entire product lifecycle, leveraging data‑driven production and manufacturing, and employing technologies such as artificial intelligence and digital twins to achieve end-to-end connectivity, thereby identifying non‑traditional, high‑potential opportunities for carbon reduction.
The white paper notes that, as China’s economy continues to demonstrate resilience, future carbon‑emission pressures will be concentrated in the energy and industrial sectors. Meanwhile, under the backdrop of population growth and ongoing urbanization, the share of carbon emissions from the transport and building sectors is also expected to rise, making these areas critical components of the “dual carbon” pathway.
Accordingly, to achieve the “dual carbon” goals, governments and enterprises should begin by accurately assessing their carbon‑emission baselines, then develop sustainable zero‑carbon roadmaps and robust implementation mechanisms that align with economic development. They should also formulate science‑based, systematic top‑level plans for the dual carbon agenda, taking into account both internal and external conditions across industries and within individual offices. At the same time, throughout the dual carbon journey, these roadmaps should be iteratively refined and adjusted in response to changes in economic and business dynamics, evolving policy landscapes, and advances in decarbonization technologies.
For example, in the industrial sector—particularly in traditional energy-intensive industries such as steel, petrochemicals, and cement—the white paper points out that, on the one hand, policy frameworks can drive industrial upgrading in high-emission sectors by strictly controlling new capacity in energy‑intensive industries and by implementing policies that encourage and support the development of emerging sectors like high‑tech industries, advanced manufacturing, and the digital industry. On the other hand, it is possible to reduce overall energy consumption across a product’s entire life cycle by leveraging data‑driven production and manufacturing processes, and by integrating end‑to‑end operations through technologies such as artificial intelligence and digital twins, thereby identifying non‑traditional, high‑potential opportunities for carbon reduction.
In the transportation sector, amid challenges such as steadily rising passenger vehicle demand, a low share of new‑energy vehicles, and the immaturity of new‑energy technologies in civil aviation and water transport, the white paper proposes policy‑driven measures to optimize and transform the industry’s structure—such as promoting shared public transit and expanding the scope of traffic management systems through digital tools; reducing overall fuel consumption via hybrid‑power and vehicle lightweighting technologies; and transitioning toward electrification, diversification, and cleaner operations by adopting clean‑fuel technologies like fuel cells and hydrogen energy.
In the construction sector, existing buildings face several challenges, including poor thermal insulation in older structures, low energy‑efficiency of building management systems, suboptimal architectural design, and a high reliance on fossil fuels for residential heating. The white paper recommends gradually refining the standards framework for green buildings, strengthening requirements and oversight for new constructions in terms of energy conservation and emissions reduction, and introducing incentive policies to boost building utilization rates and reduce vacancy levels. At the same time, large‑scale deployment of emerging construction technologies should be pursued to effectively enhance the energy efficiency of future new builds.
In the energy sector, the white paper underscores the need to further advance reforms of the energy and power systems from both policy and market perspectives, shifting from a coal‑dominated, high‑carbon generation mix to a low‑carbon structure centered on clean energy. In terms of technological innovation, measures such as hydrogen‑blending gas turbines can be deployed to reduce greenhouse gas emissions, while in the medium to long term, vigorous efforts should be directed toward developing integrated multi‑energy solutions, distributed energy systems, microgrids, and smart grids.

Enhancing Green Finance to Support the “Dual Carbon” Goals
During the Fourth China International Import Expo, numerous regulators and experts stated at related forums that they will further support the development of the national carbon emissions trading market, continuously enrich and refine the green finance toolkit, and leverage additional social capital to drive carbon reduction.
Significant development achievements have been made.
China has made significant progress in promoting the development of green finance. According to Chen Yulu, Vice Governor of the People’s Bank of China, both the outstanding balance of green loans and the total stock of green bonds rank among the highest in the world. The overall quality of green assets remains sound, with the non‑performing loan ratio for green loans substantially lower than the average for all loans, and no defaults have yet been reported on green bonds.
“China continues to refine and optimize its green finance policy framework,” Chen Yulu stated. Since the beginning of this year, the People’s Bank of China has revised the Catalogue of Projects Supported by Green Bonds, enhanced green taxonomy standards, issued guidelines on environmental information disclosure for financial institutions, and engaged deeply in international cooperation, thereby steering the global development of green finance.
In addition, the national carbon emissions trading market has been launched. Zhou Xiaoquan, Chairman of the Shanghai United Property Exchange, stated that this is a major initiative to leverage market mechanisms to reduce and control greenhouse gas emissions and promote green development. “Since its launch on July 16 this year, the national carbon emissions trading market has operated smoothly and in an orderly manner, with relatively stable price fluctuations. As of the end of October, the total volume of quota transactions in the national carbon market reached 22 million tons, with a cumulative value approaching RMB 1 billion,” he said.
Strengthen institutional development
Looking ahead, Shanghai Vice Mayor Chen Tong stated that the city will further intensify its efforts to support the development of the national carbon emissions trading market, foster coordinated growth between the financial market and the carbon‑emissions‑trading market, and accelerate the opening-up of green finance. The city will facilitate overseas investors’ access to domestic green financial products through direct investment, Bond Connect, Stock Connect, and other channels; encourage foreign financial institutions and international financial organizations to issue green panda bonds; and, in tandem with the city’s digital transformation, refine the green‑finance credit framework, actively promote the alignment of industry and finance, and expedite the establishment of an international green‑finance hub, thereby contributing proactively to the achievement of the “dual carbon” goals.
Chen Yulu stated that financial institutions must deeply understand the opportunities and risks associated with implementing the “dual carbon” goals. On the basis of sound analysis, they should formulate short-, medium-, and long-term decarbonization targets and business development strategies, establish and refine their own green finance organizational frameworks, and strengthen institutional arrangements and long-term capacity-building in the field of green finance.
In addition, Chen Yulu believes that the green finance support toolkit must be continuously enriched and refined. The People’s Bank of China will further strengthen its safeguards and support for green finance by establishing incentive mechanisms such as carbon‑reduction support tools, providing eligible financial institutions with low‑cost funding on an ongoing basis, and helping them extend preferential‑rate financing to key projects with significant carbon‑reduction impacts, thereby leveraging additional social capital to advance decarbonization.
Taxation TAXATATION
The “Spring Breeze” initiative to facilitate tax services has yielded significant results.
In the first half of this year, tax authorities at all levels across the country, guided by the “Four‑Pronged” requirements—“ensure robust implementation of preferential policies, strengthen contactless tax services, maximize data‑driven support for the broader economic and social agenda, and intensify efforts to contain and control the epidemic”—launched the “Spring Breeze Action for Convenient Tax Services,” making a positive contribution to the coordinated advancement of epidemic prevention and control and socio‑economic development.
During the 2020 “Spring Breeze Action for Convenient Tax Services,” tax authorities at all levels implemented and refined various tax and fee preferential policies, continuously expanding contactless tax filing and payment services. Following the outbreak of the pandemic, they repeatedly extended tax return filing deadlines and, in accordance with the law, granted taxpayers extensions for both filing and payment, thereby consistently easing their financial burdens.
The tax authorities have also leveraged the advantages of tax‑related big data to facilitate connections between enterprises, supporting evidence‑based decision‑making at all levels of government. By conducting comprehensive, in-depth analyses across both upstream and downstream segments of supply and marketing chains, they are helping to safeguard market entities and ensure the stability of industrial and supply chains. From March 18 to June 30, the national tax system facilitated a total of RMB 19.6 billion in transactions to support the resumption of work and production by businesses.
Tan Heng, Director of the Tax Science Research Institute of the State Taxation Administration, stated that in the second half of the year, the national tax system will continue to implement the overall plan of the “Spring Breeze Action for Convenient Tax Services,” closely adhering to key timelines to ensure the effective rollout and execution of all measures, thereby making tax compliance simpler, smoother, and more convenient for taxpayers.

Deepen the reform of the disciplinary inspection and supervision system within the tax administration to address the challenges of peer-level oversight.

General Secretary Xi Jinping, at the Fourth and Fifth Plenary Sessions of the 19th Central Commission for Discipline Inspection, set forth clear requirements for strengthening oversight of vertically managed institutions and enhancing supervision of “principal leaders” and leading teams. He emphasized the need to improve the Party and state oversight system, integrate oversight into the implementation of the 14th Five-Year Plan, and establish a comprehensive accountability and oversight framework. In March this year, the CPC Central Committee issued the “Opinions on Strengthening Oversight of Principal Leaders and Leading Teams,” stating that to address the challenges of supervising principal leaders and peer-level officials, it is essential to clarify priorities, enforce accountability, refine oversight measures, and improve institutional mechanisms. The Central Commission for Discipline Inspection and the National Supervisory Commission have also rolled out a series of related arrangements.
Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the Party Committee of the State Taxation Administration and the Discipline Inspection and Supervision Group of the Central Commission for Discipline Inspection and the National Supervisory Commission stationed at the State Taxation Administration have earnestly implemented the CPC Central Committee’s and the CCDI‑NSC’s directives on deepening the reform of the discipline inspection and supervision system within vertically managed institutions. They have continued to advance pilot reforms of the discipline inspection and supervision system within the tax sector, promoted the establishment of an integrated, comprehensive oversight framework, strengthened peer‑level oversight in both substance and detail, and encouraged leading Party members and cadres to enhance their political awareness. These efforts have advanced the Party’s comprehensive and rigorous governance in depth and extended it to the grassroots level, thereby providing robust institutional support for further deepening tax collection and administration reform and for high‑quality progress in modernizing taxation in the new stage of development.
Overcoming the Challenges of Peer-Level Oversight
The Party Committee’s “top leader” is the key.
The “principal leader” serves as the vanguard of the Party’s cause, shouldering significant political responsibilities for upholding Party discipline and governing the Party. To enhance the effectiveness of peer‑level oversight, the key lies in the principal leader strengthening political accountability and fulfilling the duties of the primary responsible person. This requires setting an example by officely upholding the system of collective leadership, taking the lead in voluntarily accepting oversight, and spearheading efforts to foster a clear orientation and a robust culture of proactive self‑supervision. At the same time, the principal leader must effectively serve as the “team leader,” manage the leadership team, and guide the ranks, earnestly discharging responsibilities for education, management, and oversight, while fully supporting disciplinary inspection bodies in performing their specialized supervisory functions. Since the launch of the pilot reform of the disciplinary inspection and supervision system within the tax sector, the sense of responsibility among principal leaders at all levels of Party committees in the tax system—regarding Party governance and voluntary acceptance of oversight—has continued to strengthen.
Hu Liwen, Secretary of the Party Committee and Director of the Jiangxi Provincial Tax Service Bureau, stated when discussing how to strengthen peer-level oversight: “Enhancing peer-level supervision is a crucial lever for advancing the tax system’s comprehensive and rigorous governance in greater depth. As the principal leader of the unit, one must not only take the lead in consciously accepting oversight and set an example, but also work diligently and implement concrete measures to proactively carry out peer-level supervision.” Recently, members of the Bureau’s Party Committee, under the guidance of the top leader, have voluntarily embraced “three forms of proactivity”: first, committee members proactively engage in quarterly exchanges with the head of the discipline inspection team; second, they proactively share significant developments outside working hours; and third, they proactively seek the head of the discipline inspection team’s feedback on their personal self-assessment reports regarding Party conduct.
Since the beginning of this year, the Party Committee of the Jiangsu Provincial Tax Service has translated the CPC Central Committee’s requirements for enhancing political judgment, political comprehension, and political execution into 10 specific tasks, and organized a specialized training program for party secretaries across the provincial tax system, achieving positive results in strengthening the political competence of top leaders. Wang Xuedong, Party Secretary and Deputy Director of the Jiangsu Provincial Tax Service, summarized: “I deeply feel that leading by example from the top is the key to overcoming the challenge of peer-level oversight. As both the subject and the principal actor of oversight, party secretaries must not only take the lead in implementing intra‑party supervision mechanisms and proactively accept political scrutiny, but also align themselves with the principles of ‘strengthening conviction, politics, responsibility, capability, and conduct,’ actively carry out political oversight, serve as vanguards for cadres and the public, and set a clear example.”
The Guangdong Provincial Tax Service Bureau consistently integrates the Party Committee’s comprehensive oversight with the discipline inspection department’s specialized supervision, jointly addressing systemic issues within the unit and system, as well as emerging trends and potential problems within the purview of leading cadres. It supports the Party Committee’s discipline inspection group in conducting reminders and follow-ups, communicating requirements for compliance with rules and discipline, and reinforcing accountability for Party governance. Wu Zili, Secretary of the Party Committee and Director of the Guangdong Provincial Tax Service Bureau, stated: “I urge the discipline inspection authorities to carry out their supervisory duties and reporting in strict accordance with the requirements, without any hesitation. Strengthening oversight—especially over myself and all members of the leadership team—will benefit the cause of the Party and the country, advance the Bureau’s work in all areas, and help me and my colleagues better fulfill our responsibilities. We will—and must—fully support this effort.”
Strengthen the quarterly reporting system.
Play a dedicated supervisory and promotional role.
Peer-level oversight is an important mechanism of intra‑party supervision and a crucial component of strengthening oversight over principal leaders and leading bodies. The Regulations on Intra‑Party Supervision of the Communist Party of China stipulate that disciplinary inspection commissions at all levels of the Party shall intensify their oversight of how peer‑level Party committees—particularly members of the standing committees—as well as Party work departments, directly affiliated Party organizations, and Party leading cadres perform their duties and exercise their powers.
In August 2021, the Party Committee of the State Taxation Administration and the Discipline Inspection and Supervision Group stationed at the State Taxation Administration revised and issued the “1+7” set of institutional documents for piloting the deepening reform of the discipline inspection and supervision system within the tax administration, as well as the “1+6” framework for establishing an integrated, comprehensive oversight system. Among these, a key regulation is the “Measures on Requesting Instructions and Reporting by Principal Officials of Disciplinary Inspection Institutions of Provincial Tax Authorities in Performing Their Oversight Duties (Trial)” (hereinafter referred to as the “Quarterly Reporting System”), which explicitly stipulates that the principal officials of disciplinary inspection institutions at each provincial bureau must submit quarterly reports on the status of their oversight duties.
The quarterly reporting system serves to extend on-site oversight downward, urging the discipline inspection bodies of provincial-level bureaus and their principal officials to fulfill their responsibilities, fully leveraging the advantages of close‑range, routine supervision, and strengthening an important mechanism for peer‑level oversight. Effectively implementing the quarterly reporting system—particularly by providing candid, objective, and comprehensive assessments of how cadres under the Party Committee of the State Taxation Administration comply with regulations and discipline and fulfill their “dual responsibility” obligations, as well as conducting heart-to-heart talks with such cadres—is a critical duty of the principal officials of discipline inspection bodies.
In September 2021, the Discipline Inspection and Supervision Group stationed at the State Taxation Administration issued the “Notice on the Reporting of the Performance of Supervisory Duties by the Principal Officials of the Discipline Inspection Institutions of Provincial Tax Authorities in the Second Quarter of 2021.” The Henan Provincial Tax Service promptly convened a special Party Committee meeting to study the contents of the notice. Zuo Wei, a member of the Party Committee and head of the Discipline Inspection Group, explained the importance of the quarterly reports on the fulfillment of supervisory duties and set forth requirements for the Party Committee members of the provincial bureau to assume their responsibilities. Other Party Committee members then, one by one, shared their insights, experiences, and impressions, linking them to their respective areas of responsibility and their implementation of the “dual-responsibility” system. Ding Xiaowei, a member of the Party Committee and deputy director of the Henan Provincial Tax Service, stated: “As the secretary of the organ’s Party Committee, I must, in accordance with the ‘dual-responsibility’ requirement, further focus on strengthening grassroots work and laying solid foundations, officely shoulder principal responsibility, and proactively communicate with the head of the Discipline Inspection Group to forge synergy in our work.”
Since the beginning of this year, the Party Committee of the Xiamen Municipal Tax Service has, in accordance with the Implementation Measures for the “Two Responsibilities” and the Key Work Points for Comprehensively Strengthening Party Governance, and taking into account the areas of responsibility assigned to each member of the leadership team, formulated “customized responsibility lists” that specify concrete tasks, implementation requirements, and target completion dates. During its quarterly reporting, the Discipline Inspection Group of the Municipal Party Committee has assessed the progress and outcomes of these listed tasks through document reviews, briefings, integrity talks, field visits and surveys, as well as oversight and inspection activities. For items that have not been completed on time or are advancing slowly, the Group promptly convenes interviews and issues reminders to the relevant Party committee members, thereby promoting a “list‑based approach to fulfilling responsibilities.”
Through quarterly reports, the system of regular, institutionalized heart-to-heart talks between the head of the discipline inspection team and other members of the leadership at the same level has been promoted, ensuring that the “dual responsibility” for each post is fulfilled and that Party building and governance within their respective areas of responsibility are effectively carried out. In the first half of this year, the principal officials of the discipline inspection bodies at 44 provincial tax authorities held 222 such talks with cadres under the management of the CPC Committee of the State Taxation Administration. In March 2021, Wu Jie, a member of the CPC Committee and deputy director of the Dalian Municipal Tax Service Bureau, stated during a one‑on‑one conversation with the head of the discipline inspection team: “The greatest risk is failing to recognize risk. It is essential for the discipline inspection team to conduct regular admonitory interviews and issue reminders about integrity risks. Working and living in an atmosphere of oversight makes us feel much more secure.”
The Discipline Inspection Group of the Party Committee of the Shaanxi Provincial Tax Service Bureau places great emphasis on routine, preventive oversight. Over two consecutive quarters, it held exchanges with the Party Secretary and members of the leading team—focusing respectively on areas where integrity risks are most likely to arise in grassroots tax authorities and on cases of disciplinary and legal violations involving cash-based tax collection—and discussed responsibilities, supervision, identified problems, and proposed concrete measures. Wang Hongwei, a member of the Bureau’s Party Committee and head of the Discipline Inspection Group, stated: “From an economic perspective, addressing issues early and at their nascent stage—by urging the principal leader to fulfill their primary responsibility and ensuring that all members of the leadership team implement the ‘dual responsibility’ system—is the most cost-effective and least burdensome approach to preventing potential risks. As head of the Discipline Inspection Group, I must translate our supervisory duties into concrete actions, closely monitor typical problems within our unit and system, intensify candid conversations, and encourage the principal leader and the leadership team to effectively carry out Party building and governance tasks within their respective areas of responsibility.”
The special-topic consultation has yielded tangible results.
Ensure that the “two responsibilities” are aligned and exert force in the same direction.
To overcome the challenges of peer-level oversight, the key lies with Party committees. The principal responsibility is the linchpin, while the supervisory responsibility serves as the safeguard; only by ensuring that these two responsibilities are advanced in concert can we address the critical links in Party governance and better leverage the guiding and protective role of comprehensively strengthening Party discipline.
The Party Committee of the State Taxation Administration and the Discipline Inspection and Supervision Group stationed at the SAT have designated the joint fulfillment of principal responsibility and supervisory responsibility as a key task in deepening the reform of the discipline inspection and supervision system within the tax administration. They have stipulated that party committees at all levels within the tax system must, at least once every six months, convene with their corresponding discipline inspection bodies to deliberate on comprehensively strengthening Party governance, building a clean and honest government, and combating corruption; meanwhile, discipline inspection bodies are required to report to their respective party committees any systemic or salient issues identified during routine oversight.
Since 2021, the Party committees of provincial tax authorities have convened 162 special joint meetings with their corresponding disciplinary inspection bodies. During these meetings, the principal responsibility has focused on reviewing the implementation of comprehensive and strict Party governance and the “dual responsibility” system for each post, while the supervisory responsibility has emphasized analyzing problems and putting forward recommendations for action. This has established a working mechanism for identifying issues and ensuring corrective measures are implemented, thereby enabling Party committees at all levels within the tax system to effectively exercise their leading role in intra‑Party oversight and enhancing the coordination and effectiveness of various forms of supervision.
The Party Committee and the Discipline Inspection Group of the Shenzhen Municipal Tax Service Bureau have remained officely problem‑oriented, conducting multiple political “diagnostics” to identify shortcomings and weak links in the implementation of responsibilities for Party governance. In April 2021, based on extensive research, they put forward 22 recommendations—such as establishing a fully comprehensive discipline‑inspection accountability system covering both tax authorities and their subordinate institutions, and developing a “smart discipline‑inspection” platform—to promote targeted interventions and precision‑driven measures. At the same time, they have placed particular emphasis on rigorous follow‑up after meetings, creating a closed-loop rectification process that integrates lead‑agency implementation, oversight of execution, performance‑based monitoring, and end‑to‑end supervision, ensuring that every issue receives a response and every matter is properly addressed. “Going forward,” said Yao Huiling, Member of the Party Committee and Head of the Discipline Inspection Group of the Shenzhen Municipal Tax Service Bureau, “the Party Committee and its Discipline Inspection Group will focus tightly on strengthening political oversight around ‘safeguarding systems, implementing decisions, fulfilling responsibilities, and exercising power,’ further leveraging the positive role of consultative mechanisms in addressing the challenges of supervising ‘principal leaders’ and peer‑level oversight, and in reinforcing accountability for Party governance.”
In August 2021, the Party Committee of the Qingdao Municipal Tax Service and its Discipline Inspection Group convened a special consultation meeting focused on ensuring accountability, conducting a comprehensive “health check” on the performance of duties by the Party Committee and its leadership team during the first half of the year. During the meeting, the Discipline Inspection Group put forward 16 recommendations to the Party Committee and, following the session, prepared an individualized checklist for each member of the leadership team, thereby promoting precise implementation through a one‑on‑one approach. Wu Fang, Secretary of the Party Committee and Director of the Qingdao Municipal Tax Service, stated: “This special consultation addressed issues related to exercising full and rigorous governance over the Party and to building a clean and honest government; ultimately, however, it all comes down to the word ‘responsibility,’ seeking to resolve problems such as the absence of principal responsibility, gaps in oversight, and laxity and weakness in Party management and governance.”
In September 2021, the Party Committee of the State Taxation Administration’s Special Commissioner’s Office in Beijing, together with its Discipline Inspection Group, convened a special consultation meeting on the theme of “studying and implementing the deployment requirements for deepening the pilot reform of the tax system’s discipline inspection and supervision mechanisms and for building an integrated, comprehensive oversight system, and deliberating specific measures for their concrete implementation.” Drawing on four major categories of prominent issues identified through routine oversight, the Discipline Inspection Group put forward 12 recommendations. The meeting specially invited members of the Organs Party Committee, the Organs Commission for Discipline Inspection, discipline inspection officers from each Party branch, and relevant personnel from the Party Committee’s working departments to attend as observers. Participants engaged in a thorough discussion of each recommendation submitted by the Discipline Inspection Group, thereby further broadening the scope and enhancing the influence of the consultation meeting.
Since the launch of the reform pilot, the Party Committee of the Jiangxi Provincial Tax Service Bureau and its Discipline Inspection Group have held six special meetings to deliberate on comprehensively strengthening Party self‑discipline and discipline inspection work, reported 27 issues, and put forward 18 recommendations. The provincial bureau’s Party Committee has carefully reviewed and addressed six negative opinions raised by the Discipline Inspection Group, while accepting and implementing 15 of the group’s suggestions. He Lichun, a member of the Party Committee and head of the Discipline Inspection Group of the Jiangxi Provincial Tax Service Bureau, stated: “These focused consultations constitute a form of ‘dual oversight.’ By conducting face-to-face deliberations, we bring issues and recommendations into the open, aligning the principal responsibility for Party governance with the supervisory responsibility, and jointly drawing a ‘concentric circle’ of comprehensive, rigorous Party management and tax administration.”
Make good use of disciplinary inspection recommendations.
Promote the effective implementation of principal responsibility.
For prominent issues identified during oversight, disciplinary inspection bodies issue disciplinary inspection recommendations to the relevant Party organizations or units; this constitutes an effective means and a key responsibility in fulfilling their supervisory functions.
Article 21 of the “Opinions on Strengthening Oversight of ‘Principal Leaders’ and Leading Teams” requires the refinement of mechanisms for proposing, supervising, providing feedback on, and conducting follow-up reviews of disciplinary inspection recommendations. This provision helps prevent the practice of issuing recommendations without effective implementation or merely formalizing rectifications on paper, thereby safeguarding the seriousness and authority of such recommendations and ensuring that principal responsibilities are fully discharged and that ‘principal leaders’ and members of leading teams fulfill their duties.
Party committees and discipline inspection groups at all levels of the tax authorities have earnestly implemented the directives issued by the Party Committee of the State Taxation Administration and the Discipline Inspection and Supervision Group stationed at the SAT, thereby enhancing their roles as “sentinels” and “eyes in the field.” In light of issues identified during oversight activities, they have formulated corresponding disciplinary inspection recommendations to help peer-level Party committees and relevant functional departments improve their work.
The Discipline Inspection Group of the Party Committee of the Heilongjiang Provincial Tax Service Bureau has consistently integrated the principles of addressing both symptoms and root causes and adopting a systematic approach throughout its oversight and disciplinary enforcement work. In response to violations of discipline and law identified during inspections, supervision, and disciplinary reviews, the group analyzes underlying patterns, pinpoints effective solutions, and promptly issues disciplinary inspection recommendations. These measures urge Party committees to officely assume and fulfill their primary responsibility for exercising full and rigorous governance over the Party, require relevant departments to effectively perform their functional oversight roles, and facilitate the identification and rectification of institutional weaknesses and managerial loopholes in the exercise of power. By formulating targeted rules and regulations, strengthening oversight, and improving governance, the group seeks to close “backdoors” that could give rise to disciplinary or legal violations, ensuring that each case investigated leads to systemic improvements across the relevant jurisdiction. Since the beginning of this year, the Bureau’s Party Committee Discipline Inspection Group has issued 15 disciplinary inspection recommendations, prompting relevant departments to undertake two governance initiatives—covering areas such as taxpayer credit ratings and official vehicle management—and uncovering 128 issues. Meanwhile, the Party Committees of municipal (prefectural) tax service bureaus have addressed 26 problems and established two new systems based on these recommendations.
The Discipline Inspection Group of the Party Committee of the Sichuan Provincial Tax Service has institutionalized the issuance of disciplinary inspection recommendations as a key mechanism for urging tax service party committees at all levels to fulfill their primary responsibility for exercising full and rigorous Party self‑discipline. Since the beginning of this year, it has issued 22 such recommendations to party committees and functional departments at various levels, while intensifying follow-up inspections to ensure their effective implementation. This ongoing effort reinforces pressure to strengthen Party governance and strives to foster a clean and upright political environment throughout the provincial tax system.
The Discipline Inspection Group of the Party Committee of the Chongqing Municipal Tax Service has conducted research on the topic “Using Disciplinary Recommendations to Advance Comprehensive and Strict Party Governance within the Tax System,” prompting the Municipal Bureau’s Party Committee to issue the “Opinions on Implementing Closed-Loop Management of Disciplinary Recommendations.” This has established a work cycle that identifies problems, analyzes their root causes, formulates recommendations, oversees corrective actions, and evaluates effectiveness. Since the beginning of this year, disciplinary inspection bodies at all levels across the city have promptly detected issues in areas such as epidemic prevention and control, second-hand housing transactions, tax assessment, and data security, putting forward 59 disciplinary recommendations. These efforts have encouraged leading cadres to strengthen oversight of their respective areas of responsibility; to date, 84 problems have been rectified, six systems have been improved, and accountability for principal responsibilities has been further reinforced and refined.
The Discipline Inspection Group of the Party Committee of the Dalian Municipal Tax Service Bureau has established and refined a mechanism for preventing and controlling integrity risks. By issuing disciplinary inspection recommendations, it has strengthened the oversight responsibilities of various functional departments, broadened channels for identifying leads, and provided a key leverage point for advancing integrated, comprehensive supervision. Since the beginning of this year, the 11 divisions within the municipal bureau have collectively submitted 29 batches of integrity-risk data to the Party Committee’s Discipline Inspection Group, totaling over 3,300 flagged items, covering areas such as cash-based tax and fee collection and social security premium refunds.
Exercising full and rigorous governance over the Party is an ongoing journey. As we enter a new stage of development, the national tax system will continue to unswervingly uphold the centralized and unified leadership of the CPC Central Committee, regard upholding full and rigorous governance over the Party as a matter of political principle, and constantly enhance our political discernment, political comprehension, and political execution. By exercising effective oversight, we will ensure that the “key few” are properly managed and held accountable, fully leverage the exemplary and leading role of Party-member leading cadres, and accelerate the modernization of tax governance in the new era, thereby contributing the tax sector’s strength to embarking on a new journey toward building a modern socialist country in all respects and advancing toward the Second Centenary Goal.
 
Wang Jun: Deepening Tax Collection and Administration Reform to Support the Modernization of National Governance
The Party Central Committee with Comrade Xi Jinping at its core has called for leveraging the fundamental, pillar-like, and safeguarding roles of taxation in national governance. In March this year, the CPC Central Office and the General Office of the State Council issued the “Opinions on Further Deepening Tax Collection and Administration Reform” (hereinafter referred to as the “Opinions”), which will usher in a third major transformation in tax administration—following the 2015 cooperation between the State Taxation Administration and local tax authorities and the 2018 merger of the two. This transformation can be summarized as “integration”: building a smart tax system driven by tax‑related big data, characterized by high integration, robust security, and strong application effectiveness; achieving integrated upgrading across tax collection and administration processes, institutional standards, information technology, data elements, and job‑responsibility frameworks; and thereby enabling taxation to better support the modernization of national governance.
Driven by tax big data, we are accelerating the development of smart taxation and actively supporting the transformation of national governance.
Leveraging big data and modern information technologies to innovate tax administration is a widely adopted approach in tax‑administration reforms around the world. In December 2020, the Organisation for Economic Co‑operation and Development (OECD) convened an online session of the Forum on Tax Administration (FTA), where it introduced Tax Administration 3.0, with digital transformation at its core. Compared with the FTA’s vision for Tax Administration 3.0, the “Opinions” not only align with contemporary trends and reform priorities but also set out a clear timetable and roadmap for the digital upgrading and intelligent modernization of China’s tax administration, while articulating a series of concrete measures. Many of these initiatives surpass the FTA’s Tax Administration 3.0 in terms of implementation timelines, scope of coverage, and, in particular, comprehensive integration.
By effectively implementing the “Opinions,” a nationwide, unified taxpayer‑facing service platform, a tax‑authority‑facing work platform, and a decision‑maker‑facing command platform will be established, comprehensively advancing the digital transformation of tax governance. The completion of these platforms will fully leverage the advantages of tax‑related big data, providing a comprehensive and in‑depth picture of the overall economic and social landscape as well as the development dynamics across regions, industries, and enterprises, thereby significantly enhancing the precision of national governance and the efficiency of public services. Furthermore, the invoice‑digitalization reform, pursued in accordance with the “Opinions,” will enable the full‑scope, end‑to‑end, and all‑element digitization of invoices, substantially reducing institutional transaction costs, vigorously promoting digital transformation in areas such as records management and financial administration, and ultimately facilitating the establishment of a comprehensive set of digital standards in corporate finance and taxation—thus serving as a powerful catalyst for achieving the nation’s broader digital transformation of governance.
With the goal of enforcing the law in a rigorous, standardized, impartial, and civilized manner, we will deepen the implementation of precision‑based enforcement and continuously enhance our capacity and level of tax‑related rule‑of‑law services in support of the modernization of national governance.
The rule of law is the fundamental approach to governing the country. As a key administrative law enforcement agency, the tax authorities shoulder important responsibilities in advancing law-based administration and building a law-based government. Since the 18th National Congress of the Communist Party of China, guided by Xi Jinping’s thought on the rule of law, the development of tax governance based on the rule of law has made significant strides. The tax authorities have rigorously implemented the tax enforcement accountability system, continuously deepened the informatization of internal control mechanisms, and, with a spirit of self‑criticism, worked to maximize the standardization of tax officials’ conduct. At the same time, they have steadfastly ensured that tax and fee revenues are collected in accordance with laws and regulations, resolutely refraining from levying excessive taxes or fees, and have consistently and successfully fulfilled the budgetary targets for tax revenue year after year, thereby providing solid financial support for economic and social development and national governance.
The “Opinions” propose advancing precision-based law enforcement and establishing a new tax‑enforcement framework characterized by “no interference in the absence of risk, accountability for violations, and robust intelligent oversight throughout the entire process,” with particular emphasis on two key areas of work.
On the one hand, we will deepen efforts to ensure law enforcement is rigorous and standardized. The Opinions lay out measures to establish an information‑based internal control and oversight system for tax‑related enforcement risks that achieves full coverage, end-to-end prevention, and assigns responsibility to all personnel. This will help put in place a risk‑management mechanism characterized by “four layers of accountability”: ensuring that risks are identified when they should be, promptly communicated when identified, addressed without delay after communication, and continuously improved following resolution—thereby enabling early detection and mitigation, preventing minor issues from escalating, and fostering ongoing enhancement.
On the other hand, there is an active effort to explore non‑coercive enforcement measures. The Opinions emphasize the need to effectively employ non‑coercive approaches such as persuasion and education, and advisory interviews, thereby making tax administration more humane and responsive. It is essential to clearly delineate the boundary between ordinary tax‑related violations and tax‑related crimes, and to study and promote a “no penalty for first‑time offenses” regime in the field of tax enforcement, refraining from imposing administrative penalties on first‑time violations that are minor in nature and promptly rectified. By ensuring the thorough and meticulous implementation of these Opinions, the quality and effectiveness of tax enforcement will be significantly enhanced, making a positive contribution to the advancement of law‑based governance.
Centering on taxpayers and payers, we will vigorously promote refined services and fully implement the fundamental principle of people-centered governance.
The tax authorities are among the public service agencies that interact most frequently and closely with the general public, serving tens of millions of corporate taxpayers, hundreds of millions of individual taxpayers, and over one billion payers. The tax authorities have consistently placed taxpayer and payer services at the heart of their work, launching the “Spring Breeze Action for Convenient Tax Services” for eight consecutive years. Through the dedicated efforts of tax officials, they have fostered innovative tax‑and‑fee service measures and a cleaner, more business‑friendly tax environment.
The “Opinions” propose advancing refined services and building a new tax‑and‑fee service system characterized by “comprehensive offline coverage, round‑the‑clock online support, and broad reach of customized services.” In line with the plan set out in the document, such refined tax‑and‑fee services will be able to accurately identify and analyze taxpayers’ and payers’ real‑time and potential needs. By leveraging smart taxation, taxpayers can access information on specific tax and fee policies, and the system will promptly deliver relevant policy guidance and operational instructions, thereby providing more intelligent, personalized assistance. Even more convenient, once the smart taxation platform is fully established, information systems will automatically extract data, compute tax liabilities, and generate tax returns. After taxpayers and payers conoffice or rectify the information, they can submit their returns online, significantly reducing the burden of tax filing and payment. From the previous model of “passive compliance,” where only tax laws and regulations were provided and tax officials visited households to collect taxes, to the now‑more‑common approach of offering both regulatory frameworks and algorithmic tools—enabling taxpayers to file online while tax authorities review and conoffice—this has evolved into “collaborative compliance”: providing not only rules and algorithms but also data, with tax authorities calculating tax liabilities and inviting taxpayers to verify them, thus achieving automated tax computation. Smart taxation will propel tax‑and‑fee services toward leapfrog development, opening up new pathways for strengthening and improving national governance with the people at the center.
Focusing on improving and perfecting the tax supervision system, we will implement precise regulation in a scientifically sound manner, thereby demonstrating the effectiveness of national governance while officely upholding social fairness and justice.
In recent years, tax authorities have steadily advanced the development of a tax‑regulation system, helping market entities to operate in compliance while growing, and to grow through compliance. In particular, they have launched intensive special campaigns to crack down on illegal and criminal activities involving “fake enterprises,” “fake exports,” and “fake declarations”—including the fraudulent issuance of invoices and the defrauding of tax refunds and preferential tax treatments—thereby effectively safeguarding the national economic and tax order. Recently, the State Taxation Administration, together with the Ministry of Public Security, the Supreme People’s Procuratorate, the General Administration of Customs, the People’s Bank of China, and the State Administration of Foreign Exchange, has made arrangements and deployments for the ongoing effort to combat these “three fakes” offenses, further strengthening tax supervision and tax inspections, maintaining a rigorous stance of both crackdown and prevention, and promoting long‑term, sustainable results.
The “Opinions” propose advancing precision‑based regulation and establishing a new tax‑regulation framework that relies on “double random inspections, one public disclosure” and “Internet Plus Regulation” as its core tools, supplemented by targeted oversight and underpinned by “credit‑plus‑risk” management. On the one hand, this approach strengthens tailored, differentiated measures: taxpayers with high credit and low risk will face minimal or no interference, while those with low credit and high risk will be subject to stringent management and rigorous supervision, striving to minimize disruption to market entities and maximize regulatory effectiveness. On the other hand, it reinforces law‑based, precision‑driven governance: unlawful acts of malicious tax evasion will be resolutely and severely cracked down upon, with zero tolerance. As precision‑based regulation continues to deepen, it will sustain a favorable regulatory environment in which violators are kept under constant scrutiny and law‑abiding entities experience unimpeded operations, thereby demonstrating the role of taxation in supporting national governance and upholding economic and fiscal order, as well as social equity and justice.
Guided by the principle of joint construction, joint governance, and shared benefits, we will proactively expand collaborative governance based on mutual trust and sincerity, thereby providing a model for modernizing national governance.
In recent years, tax‑administration co‑governance has taken root in the nationwide rollout of the pilot program to replace business tax with value‑added tax, been strengthened through reforms of the national and local tax collection and administration systems, deepened in the implementation of larger‑scale tax and fee reductions, and achieved further breakthroughs in personal income tax reform and in the transfer of responsibilities for collecting social security contributions and non‑tax revenues. With each major reform, the understanding and support of all departments and regions for tax work have grown, and the framework of tax‑administration co‑governance has become increasingly broadened and more officely established.
The “Opinions” propose advancing collaborative governance based on mutual trust and shared responsibility, establishing a new tax‑governance framework characterized by Party and government leadership, primary responsibility of the tax authorities, inter‑departmental coordination, social participation, public involvement, and international cooperation. They also lay out measures to strengthen inter‑departmental collaboration, enhance social coordination, bolster judicial safeguards for taxation, and reinforce international tax cooperation. Following the issuance of the “Opinions,” Party committees and governments at the provincial (autonomous region, municipality) level have provided strong support, each formulating its own implementation plan. These plans integrate the deepening of tax collection and administration reform into the province’s 14th Five‑Year Plan or key work priorities, refining and concretizing specific measures for collaborative tax governance, thereby ensuring the effective and orderly advancement of reform tasks.
The national tax system will remain guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, strengthen the “Four Consciousnesses,” officely uphold the “Four Confidences,” and ensure the “Two Upholds.” It will spare no effort to ensure the thorough implementation of the Opinions, thereby contributing greater and more substantial tax‑related support to advancing the modernization of national governance and promoting high‑quality development.

Shaanxi: Digitalization of Tax Services Enhances Taxpayer Convenience
Since the beginning of this year, the tax authorities in Shaanxi Province have, in accordance with the requirements set forth in the CPC Central Committee and the State Council’s “Opinions on Further Deepening Tax Collection and Administration Reform” and under the unified deployment of the State Taxation Administration, focused on addressing taxpayers’ pressing concerns and difficulties. Taking the facilitation of tax administration as a key breakthrough, they have leveraged digital technologies to enhance the implementation of tax policies, shifting from a model where “people seek out policies” to one where “policies reach out to people,” and from broad‑based public announcements to targeted, precision‑driven outreach, thereby providing taxpayers and payers with higher‑quality, more convenient, and more refined services.
Promote digital transformation and optimize the tax-related business environment.
“We are vigorously advancing the digital transformation of tax services, leveraging a dual‑core approach—‘business scenarios plus data innovation’—to enable data to flow more freely while reducing the need for taxpayers to make in-person visits. We continue to push forward reforms in the tax sector under the ‘delegation, regulation, and service’ framework, ensuring that the benefits of preferential policies are delivered swiftly and directly to those who qualify,” said Bao Donghong, Party Secretary and Director of the Shaanxi Provincial Tax Service Bureau of the State Taxation Administration.
As one of the four national pilot units for deepening tax collection and administration reform, the Shaanxi Provincial Tax System has closely aligned itself with the requirements set forth in the “Opinions,” striving to build an integrated big‑data repository that combines tax and economic data, and to establish a robust data chain covering enforcement, service, supervision, and collaborative governance. This effort is aimed at comprehensively advancing the digital transformation and intelligent upgrading of tax collection and administration. The bureau has proactively integrated “smart taxation” with Shaanxi Province’s “digital government” initiative, pursuing coordinated planning and joint development to further enrich local government data resources and enhance the efficiency of cross‑regional, cross‑departmental, and cross‑hierarchical digital collaboration.
At present, the Shaanxi Provincial Tax Authority has established data-sharing arrangements with departments including social security, medical insurance, public security, market supervision, and environmental protection. It has also rolled out the “Internet Plus Real Estate Registration and Tax Services” model, enabling integrated processing and digitizing the transmission of 47 types of documents across three agencies, thereby reducing the average tax-processing time from 30 minutes to just 3 minutes. Furthermore, it has upgraded and expanded the “Tax-Bank Collaboration” initiative, achieving mutual access to taxpayer information with 20 banks and establishing a streamlined credit‑approval channel, with funds reaching accounts in as little as 3 minutes.
Implement tax and fee reductions to ensure that benefits are delivered promptly and enjoyed without delay.
“The tax bureau staff provided thorough policy guidance and attentive service, helping our company overcome real‑world challenges,” said a finance professional from China Construction Xi’an High‑Tech Construction Investment Co., Ltd., who recently paid a special visit to the Xi’an High‑Tech Zone Tax Bureau to express their gratitude.
The Xi’an Science and Technology Eighth Road Expressway, constructed by China Construction Xi’an High-Tech Construction Co., Ltd., is currently the longest underground tunnel in Northwest China. During construction, the company faced severe cash-flow constraints due to rising material costs, labor expenses, and stringent requirements for schedule and quality. Upon learning of the enterprise’s difficulties, the Xi’an High-Tech Zone Tax Bureau promptly provided tax‑filing guidance, coordinated the submission of review documents, and expedited the processing of tax refunds, thereby significantly easing the company’s financial strain.
To ensure that tax and fee reduction policies are delivered with greater precision, the Shaanxi Provincial Tax Service has rolled out more than 100 targeted measures covering convenient processing, tailored services, and taxpayer integrity. These efforts further streamline procedures and documentation for market entities in areas such as business registration, invoice issuance, tax refunds, and deregistration, while vigorously promoting “acceptance of incomplete applications” to maximize convenience for taxpayers and payers in accessing preferential tax and fee policies. In addition, the electronic tax bureau has been integrated with the provincial tax service’s big data platform, leveraging the 12366 tax‑and‑fee knowledge‑tagging system to proactively identify eligible taxpayers and deliver relevant policy information directly to them.
Streamline service processes to address bottlenecks and challenges in tax administration.
“After the new export‑tax‑rebate system went live, we now only need to complete two forms, and the form content has been streamlined, reducing the amount of information required by 50% while speeding up the rebate process,” said a finance professional at Xianyang Caihong Optoelectronics Technology Co., Ltd. “The tax authorities’ newly launched export‑tax‑rebate system is smarter and more efficient.”
The new system referred to by financial personnel is an export‑tax‑rebate management module developed within the Golden Tax Project Phase III, which integrates the Phase III system with the export‑tax‑rebate management system in accordance with the unified deployment of the State Taxation Administration.
Since the beginning of this year, the Shaanxi Provincial Tax Service Bureau has vigorously advanced the digital transformation of tax services, establishing three major online platforms—web-based, mobile‑app‑based, and self‑service—to enable end-to-end online processing for 372 tax‑related services and one‑stop online handling of 42 types of taxes and fees. As a result, the average number of annual tax filings per taxpayer has been reduced to six, and the average processing time for each transaction has been cut to under three minutes.
Meanwhile, the Shaanxi Provincial Tax Service Bureau has been steadily enhancing taxpayer convenience by continuously expanding the coverage of self-service terminals. Grassroots tax authorities have actively collaborated with management committees, industrial parks, chambers of commerce, and other stakeholders to jointly fund the procurement of self-service equipment and ensure its optimal deployment, thereby bridging the “last mile” in delivering taxpayer‑friendly services. The bureau has also continued to enrich online tax and fee services, upgrading the functionality of the electronic tax bureau to achieve full coverage of tax and fee payments via Alipay and WeChat QR‑code scanning. Furthermore, it has expanded “mobile‑based” services by launching an electronic tax bureau app that offers 84 features, including invoice issuance on behalf of taxpayers, invoice collection, and real estate transaction filing, enabling end‑to‑end online processing of export tax rebate applications.
The Shaanxi Provincial Tax Service Bureau has also established a team of 1,300 tax and fee service experience officers. Focusing on tax deregistration and tax refunds, the bureau organized multiple thematic experience events in Xi’an, identifying issues in taxpayer services through these activities and proposing targeted solutions, thereby effectively enhancing the tax authorities’ taxpayer service capabilities.

Litigation & Arbitration
The Supreme People’s Procuratorate and the Central Committee of the Communist Youth League have jointly issued a notice, calling for 80 regions nationwide to collaboratively launch pilot projects to establish a social support system for juvenile prosecution.
Recently, the Supreme People’s Procuratorate and the Central Committee of the Communist Youth League jointly issued the “Notice on Launching the Demonstration Construction of a National Social Support System for Juvenile Prosecution Work” (hereinafter referred to as the “Notice”), which stipulates that, from November 2021 to October 2022, a year-long demonstration project to establish a social support system for juvenile prosecution will be carried out in 80 regions nationwide.
The “Opinions of the CPC Central Committee on Strengthening Legal Supervision by the Procuratorial Organs in the New Era” explicitly calls for bolstering judicial protection for minors and improving a protection system that integrates professional expertise with social participation. Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the Supreme People’s Procuratorate and the Central Committee of the Communist Youth League have thoroughly implemented Xi Jinping’s thought on the rule of law, enforced the newly revised Law on the Protection of Minors and the Law on the Prevention of Juvenile Delinquency, and, taking the demonstration project for building a social support system for juvenile procuratorial work as a key initiative, vigorously promoted the involvement of social organizations, social workers, and other stakeholders in psychological intervention, legal aid, social investigations, guardianship and assistance, educational correction, and community-based corrections for minors involved in cases, thereby contributing to the development of a comprehensive framework for the protection of minors.
The Notice requires procuratorial organs at all levels and Communist Youth League organizations to leverage their respective functions, strengthen communication and collaboration, and, with the goal of enabling social organizations to serve as model entities, mobilize resources from across sectors and coordinate efforts to address the resource‑related, professional, and institutional challenges currently hindering the development of a social support system for juvenile justice. Procuratorial organs are to collaborate closely with public security authorities, courts, and judicial administration departments to foster coordinated judicial protection; promote the establishment of supporting mechanisms covering personnel admission, training, management, remuneration, and performance evaluation and incentive‑punishment systems, thereby elevating the professional standards of judicial social work; and intensify innovation in both concepts and institutions, further refining approaches and improving institutional frameworks to effectively resolve the obstacles impeding the construction of a social support system for juvenile justice, while cultivating a set of replicable best practices.
It is understood that the Supreme People’s Procuratorate and the Central Committee of the Communist Youth League will strengthen guidance, research, and oversight of the work of demonstration‑building units, and provide appropriate support through measures such as fostering social organizations. Units that fail to perform their duties effectively or deliver substandard results will have their demonstration‑building status adjusted or revoked.
Supreme People’s Court: Launches a special campaign to address issues such as improper contact and interactions between court personnel and lawyers.
On the 3rd, a reporter learned from the Supreme People’s Court that the court has issued a notice requiring courts nationwide to conscientiously implement the “Opinions on Establishing and Improving Systems and Mechanisms to Prohibit Improper Contacts and Interactions Between Judges, Prosecutors, and Lawyers” and the “Opinions on Further Regulating the Practice of Law by Former Court and Procuratorial Personnel,” thereby effectively safeguarding judicial integrity and impartiality.
The notice stipulates that priority should be given to addressing conduct by court personnel that violates the “negative list,” with a focus on issues such as improper contact and interactions with lawyers, unauthorized representation of cases by relatives, and former court staff engaging in legal practice in violation of regulations. A thorough special‑purpose review shall be conducted, and for any problems identified, specific corrective measures and deadlines must be established, ensuring that each individual is brought into compliance and each case is closed upon resolution. The policy of “leniency for self‑reporting, strictness for those under investigation” must be officely upheld, with efforts to educate and guide relevant personnel to proactively disclose any issues and to rigorously investigate and uncover leads related to violations of law and discipline.
The notice requires strengthening routine oversight by leveraging the “Three Regulations” record‑and‑report platform, improving and refining work logs on matters such as the engagement of judicial officers’ relatives and former personnel in the legal profession, compliance with appointment‑conflict‑avoidance rules, and the handling of cases involving violations by lawyers. These records shall be managed dynamically, with timely follow‑up and ongoing supervision. Furthermore, it calls for rigorously carrying out pre‑departure reporting on career paths, reviewing and verifying professional restrictions, and obtaining signed commitments from departing personnel, while conducting regular follow‑up visits and verification checks.
It is reported that the Supreme People’s Court recently issued the “Guiding Opinions on Strengthening and Improving Judicial Assessment.” The document explicitly stipulates that judicial assessments shall be conducted in accordance with relevant regulations on civil servant evaluation, accurately grounded in the functional positioning of the four-tier court system, and differentiated by court level and substantive jurisdiction. Such assessments are to be carried out at different levels and in a categorized manner, in line with the authority for cadre management and the prescribed standards and procedures.
With regard to the withdrawal of judicial positions, these guiding opinions adhere to the principle of “survival of the fittest and both entry and exit,” explicitly stipulating that judges who receive an unsatisfactory annual performance evaluation, or who are rated as basically competent for two consecutive years, shall be removed from their judicial posts.

The Party Leadership Group of the Supreme People’s Procuratorate heard a report on the seventh round of inspection and on the progress of the education and rectification campaign within the procuratorial system, conducted in coordination with supervisory guidance.
The education and rectification campaign for the procuratorial workforce and the internal inspection system are crucial tasks that must be jointly advanced under the overarching framework of comprehensively strengthening Party self‑discipline and comprehensively enforcing strict governance within the procuratorial system. How can these two initiatives be integrated and implemented in a coordinated, holistic manner? More than two months ago, the Supreme People’s Procuratorate convened a special meeting, under the unified leadership of the National Leading Group for the Education and Rectification Campaign of Political and Legal Personnel, to lay out plans and set forth requirements for seamlessly integrating the second batch of national procuratorial‑force education and rectification with the seventh round of inspections conducted by the Party Leadership Group of the Supreme People’s Procuratorate. What progress has been made? What salient problems have been identified? And what critical gaps remain in putting Xi Jinping’s thought on the rule of law into practice and ensuring that “the people are at the center” of our work? On November 5, Zhang Jun, Secretary of the Party Group and Procurator-General of the Supreme People’s Procuratorate, presided over a Party Group meeting, heard reports on the inspection and oversight of the Party Groups of the Shandong Provincial Procuratorate, the Sichuan Provincial Procuratorate, the Tibet Autonomous Region Procuratorate, the Xinjiang Uyghur Autonomous Region Procuratorate, the Xinjiang Production and Construction Corps Procuratorate, as well as on the follow‑up work related to the education and rectification campaign for the procuratorial workforce. He also outlined arrangements for effectively integrating the latter phase of inspection and oversight with the ongoing education and rectification efforts, and for deepening this reform initiative.
“Study and implementation of Xi Jinping’s thought on the rule of law have been unsystematic and superficial, with weak integration of learning and practice.” “The implementation of major decisions and deployments of the CPC Central Committee has fallen short.” “The ‘Three Regulations’ aimed at preventing interference in judicial proceedings have not been fully enforced.” “During the education and rectification campaign, officers’ self‑inspections and reporting have downplayed serious issues and failed to provide concrete details about specific individuals and cases.” “Day-to-day supervision and management have been overly lenient, weakening the rigidity of established rules and prohibitions.” “Some officers believe that ‘pursuing political outcomes is the responsibility of higher‑level procuratorial organs; grassroots procuratorates need only handle cases in accordance with the law.’” “A tendency toward laziness, laxity, inefficiency, and procrastination persists, with work standards set low rather than high.” “Long‑standing problems within the respective business lines have been ignored, and overlapping responsibilities are routinely deferred; draft documents often consist of verbatim copying.” “There is a skewed view of performance, with assessments emphasizing quantity over quality.” “The criminal justice policy of ‘fewer arrests, cautious prosecution, and prudent detention’ has yet to be fully implemented, resulting in an overemphasis on case handling at the expense of governance.” “The adoption rate of civil prosecution supervisory recommendations has declined.” “The quality of administrative prosecution supervision remains low, with frequent oversight of individual cases but scant attention to systemic issues.” “In public interest litigation, relatively few landmark or high‑impact cases have been handled…” Jia Zhihong, head of the First Inspection Group of the Party Leadership Group of the Supreme People’s Procuratorate; Li Dingda, head of the Second Inspection Group; Dong Guiwen, head of the Third Inspection Group; Lu Zhiqiang, head of the Fourth Inspection Group; and Zhang Peizhong, head of the Fifth Inspection Group, adopted a problem‑oriented approach in presenting their inspection and oversight findings, pinpointing deficiencies, and offering targeted recommendations to the Party leadership groups of the inspected procuratorates, local Party committees, and the Party Leadership Group of the Supreme People’s Procuratorate.
“We must earnestly implement the spirit of the CPC Central Committee’s Seventh Symposium on Work in Tibet and the Third CPC Central Committee Symposium on Work in Xinjiang, fully and accurately applying the Party’s governance strategies for Tibet and Xinjiang in the new era in the course of performing procuratorial duties.” “We will give high priority to Party building at the grassroots level and vigorously promote the integration of Party building with professional work.” “We will rigorously control personnel selection, ensure that leadership teams at all levels of the procuratorates are adequately staffed, strong, and well‑managed, and build a high‑quality procuratorial workforce.” “We will relentlessly follow up on the implementation of the ‘No. 1 Procuratorial Recommendation,’ effectively preventing and resolutely curbing crimes of sexual abuse against minors.” “In response to the problems identified and highlighted during this round of education and rectification as well as the inspection, we will conduct an in‑depth analysis of their root causes and deepen corrective measures.” “Tailoring the procuratorial personnel assessment mechanism to local conditions, we will compel prosecutors in some areas to reject the mentality of ‘lying flat.’”… After hearing the reports, leaders of the Supreme People’s Procuratorate and full-time members of the Procuratorial Committee offered their views and put forward recommendations for further strengthening the education and rectification of the procuratorial workforce.
“The inspection and supervision efforts embody a ‘political lens,’ providing a precise assessment of the Party leadership groups of the relevant procuratorates, with problems identified that are both profound and spot‑on!” Zhang Jun emphasized that inspection and supervision serve as a mirror, revealing issues that exist to varying degrees across the national procuratorial system. All levels and local procuratorial organs must, in earnesting the spirit of Xi Jinping’s thought on the rule of law, strengthen their “four consciousnesses,” bolster their “four confidences,” and uphold the “two safeguards.” They should approach the implementation of the CPC Central Committee’s Opinions on Strengthening Legal Supervision by the Procuratorial Organs in the New Era from a politically high standpoint, seamlessly integrate follow‑up work stemming from the inspection and supervision processes, deepen the education and rectification campaign within the procuratorial workforce, and clearly identify the shortcomings and bottlenecks hindering the work of their respective levels and localities. With a high degree of political, legal, and procuratorial self‑awareness, they must rigorously advance comprehensive Party self‑governance and comprehensive self‑governance of the procuratorial system, forging an iron‑clad procuratorial force that is loyal, clean, and responsible—capable of achieving innovative breakthroughs—to promote the all‑round, coordinated, and robust development of the “four major areas of procuratorial work” and to use high‑quality procuratorial performance to underpin and safeguard high‑quality economic and social development.
Leaders of the Supreme People’s Procuratorate, full-time members of the Procuratorial Committee, the inspection teams under the Party Leadership Group of the Supreme People’s Procuratorate, the Discipline Inspection and Supervision Group stationed at the Supreme People’s Procuratorate by the Central Commission for Discipline Inspection and the National Supervisory Commission, as well as relevant officials from the General Office, the Political Department, and the Inspectorate (Inspection Office) of the Supreme People’s Procuratorate attended the meeting.
The Ministry of Public Security has strictly standardized the business and enterprise‑related activities of the spouses, children, and their spouses of people’s police officers in public security organs.
Recently, the Ministry of Public Security issued the “Provisional List of Business and Enterprise Restrictions for Spouses, Children, and Their Spouses of People’s Police Officers,” requiring public security organs at all levels to treat regulating the business activities and enterprise‑establishment practices of cadres’ (and employees’) spouses, children, and their spouses as a crucial political task for comprehensively strengthening Party governance and police discipline, and as a key component in advancing the education and rectification campaign within the public security force. Efforts will be focused on forging a robust contingent of public security officers who are loyal, clean, and capable of shouldering responsibilities.
The list of prohibited occupations clearly defines five categories of business and enterprise‑related activities that are barred, covering both the conduct of individuals engaging in commercial ventures and the business activities of the spouses, children, and spouses of those children of public security officers. The scope of these prohibitions primarily encompasses business and enterprise‑related activities within the jurisdiction of the public security organ where the officer is posted—activities that are closely linked to public security duties or that could potentially compromise the strict and impartial enforcement of the law by the public security authorities.
The list of prohibited activities stipulates that the spouses, children, and their spouses of cadres at the department‑ or bureau‑level and above within the public security system (including those holding official ranks) shall be subject to the relevant regulations issued by the Organization Department of the CPC Central Committee and the local Party committees’ organization departments on regulating the business and enterprise‑related conduct of leading cadres’ spouses, children, and their spouses. Furthermore, the spouses, children, and their spouses of police officers at the division‑level and below in public security organs at all levels shall not engage in business or establish enterprises within the scope of the business areas under the jurisdiction of the officer’s respective police unit. Public security officers are also prohibited from leveraging their official authority or positional influence to provide convenience or preferential treatment for close relatives or other persons with whom they have special relationships in their business or enterprise‑related activities, nor may they seek benefits for such individuals in connection with their business ventures.
The list of prohibited occupations emphasizes that, for spouses and children of public security officers, as well as their spouses, who encounter difficulties in employment or social security due to their withdrawal from business and enterprise‑related activities, public security organs shall proactively report to the relevant departments of the local Party committees and governments to seek assistance in resolving these issues.
The Ministry of Public Security has instructed public security organs at all levels to elevate their political awareness and attach great importance to standardizing their work; to uphold a tone of strictness, rigorously conduct verification and comparison; to accurately grasp the boundaries and policies, and organize orderly and compliant exit procedures; and to strengthen organizational leadership, enforce strict work discipline, and ensure that standardization efforts are carried out with rigor, practicality, and meticulous attention to detail.

A landmark new regulation from the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Public Security! It aims to eradicate judicial brokers at their root.
Recently, following deliberation and approval by the Leading Group for the Education and Rectification of the National Political and Legal Teams, the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Justice jointly issued the “Opinions on Establishing and Improving Systems and Mechanisms to Prohibit Improper Contact and Interaction Between Judges, Prosecutors, and Lawyers” (hereinafter referred to as the “Opinions on Prohibiting Improper Interaction”) and the “Opinions on Further Regulating the Practice of Lawyers by Former Court and Procuratorial Personnel” (hereinafter referred to as the “Opinions on Regulating the Practice of Former Personnel”). The promulgation of these two sets of opinions is an objective requirement for thoroughly implementing Xi Jinping’s Thought on the Rule of Law, advancing the comprehensive governance of the country according to law, and ensuring strict Party and police governance across the board. They also represent significant institutional achievements of the nationwide education and rectification campaign within the political and legal system. These measures are of great significance for comprehensively strengthening the ranks of judges, prosecutors, and lawyers; fostering a relationship of both closeness and integrity between them; jointly upholding judicial integrity and impartiality; and better fulfilling their responsibilities and missions in advancing the comprehensive governance of the country according to law.
The “Opinions on Prohibiting Improper Interactions” builds upon the recent emerging forms of improper contact and interactions between judges, prosecutors, and lawyers. Based on the “Three Regulations” aimed at preventing interference in judicial proceedings, it adopts a negative‑list approach to comprehensively enumerate seven types of improper conduct, including prohibitions against private meetings, meddling in cases, referring case sources, transferring benefits, engaging in inappropriate interactions, and forming collusive ties for personal gain. The Opinions set forth clear requirements for improving mechanisms to monitor, detect, and address improper interactions; strengthening systems of judicial oversight and checks; reinforcing regulation of lawyers’ professional practice; and promoting mechanisms for legitimate and proper engagement. They emphasize that courts, procuratorates, and judicial administrative organs must establish and refine working mechanisms for monitoring and early warning of improper interactions, referral of leads, and joint investigations. Courts and procuratorates are to refine internal operating procedures for judicial power and strictly implement the monthly reporting system under the “Three Regulations” on preventing interference in judicial affairs. Judicial administrative organs are to strengthen oversight of lawyers’ professional conduct, accelerate the development of platforms for publicly disclosing lawyers’ integrity information, promptly make public any penalties or disciplinary actions imposed on lawyers for improper interactions, and regulate risk‑based representation practices. Courts, procuratorates, and judicial administrative organs should also enhance safeguards for lawyers’ professional rights, implement systems for soliciting lawyers’ defense and representation opinions, improve mechanisms that facilitate lawyers’ participation in litigation, and establish open and transparent platforms for communication and exchange among judges, prosecutors, and lawyers.
The “Opinions on Regulating the Employment of Former Public Officials” are formulated in accordance with the Judges Law, the Prosecutors Law, the Lawyers Law, the Civil Service Law, and relevant normative documents issued by the Organization Department of the CPC Central Committee concerning the regulation of concurrent posts or positions held by Party and government leading cadres in enterprises, as well as the employment of civil servants after they resign from public office. These opinions further standardize the practice of former court and procuratorial personnel at law offices. First, the system of employment restrictions for former public officials is refined. Building upon the general restrictions already in place for all categories of former court and procuratorial personnel engaging in the legal profession, specific provisions are established for those who have been dismissed from public office, resigned, or retired. Specifically, individuals who have been dismissed from public office may not engage in any work at a law office. Retired court and procuratorial personnel, provided they do not violate applicable employment restrictions, may—when required by their professional duties—practice law or serve as “legal advisors” or administrative staff at a law office; however, they must strictly comply with the requirements and approval procedures set forth in the Organization Department’s “Opinions on Further Regulating Concurrent Posts or Positions Held by Party and Government Leading Cadres in Enterprises,” and promptly transfer their administrative and salary relationships out of the people’s courts or people’s procuratorates, thereby relinquishing all associated benefits. Second, a “two-way early warning” mechanism is promoted. It is stipulated that the courts and procuratorates, together with the judicial administrative authorities, shall establish databases on former public officials and on their employment at law offices. Judicial administrative authorities, relying on the former‑officials database, will strengthen scrutiny and oversight of applications for lawyer’s practice licenses and internship registrations submitted by such individuals. Meanwhile, the courts and procuratorates, drawing on the database of former officials’ employment at law offices, will intensify efforts to identify and monitor cases where former officials improperly serve as litigation agents or defense counsel. Third, the regulatory framework governing the employment of former public officials at law offices is improved. Judicial administrative authorities and bar associations are required to tighten review and approval procedures for applications by former court and procuratorial personnel seeking to practice law. Courts, procuratorates, and judicial administrative bodies must conduct counseling and reminders with those who have taken up legal practice. If a court or procuratorate discovers that a lawyer serving as a litigation agent or defense counsel has violated the employment restrictions applicable to former public officials, it must notify the client to replace the agent or counsel and promptly report the matter to the judicial administrative authorities. Judicial administrative authorities, in turn, shall strengthen oversight of former officials’ activities at law offices; if a law office accepts former officials who do not meet the eligibility criteria or assigns its lawyers to serve as litigation agents or defense counsel in violation of employment restrictions, appropriate measures shall be taken in accordance with laws and regulations. Finally, courts, procuratorates, and judicial administrative authorities are obligated to conduct regular inspections of instances of improper employment by former public officials and to carry out rectification in line with relevant provisions.

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