JC Master Legal News Issue 997

Key Takeaways for This Issue

The China Securities Regulatory Commission has approved the launch of a pilot program to optimize account management functions for securities companies.

To implement the requirements for comprehensively deepening capital market reform, further optimize securities offices’ account management capabilities, enhance their service offerings, and promote high-quality industry development, the China Securities Regulatory Commission supports securities offices in, in strict accordance with the Securities Law, the Regulations on the Supervision and Administration of Securities Companies, and other relevant laws and regulations, carrying out internal account‑management function upgrades within the existing framework of third‑party custody of client trading settlement funds.

Several property developers plan to launch issuance programs in the near future, with the Shenzhen Stock Exchange’s bond market maintaining smooth and orderly financing channels.
A review of recent corporate financing activities by real estate developers reveals that the risks faced by certain companies have not disrupted the market’s normal medium- and long-term financing functions, and that real estate offices continue to enjoy smooth and orderly access to the exchange‑traded bond market.
More Innovation, More Green: Tax Incentives Drive the Transformation and Upgrading of Economic and Social Development

According to the State Taxation Administration, from 2016 to 2020, China implemented tax and fee reductions totaling more than 7.6 trillion yuan. The benefits of these measures have continued to unfold, providing strong impetus for the country’s steady and sound economic development.

The Supreme People’s Procuratorate has issued a notice: punish, in accordance with the law, criminal offenses involving malicious wage arrears and safeguard the legitimate rights and interests of rural migrant workers.
Addressing the issue of unpaid wages to rural migrant workers and safeguarding their legitimate rights and interests is a matter of pressing concern for the people and vital to overall social stability. The Party Central Committee with Comrade Xi Jinping at its core has consistently attached great importance to this issue. Recently, the Supreme People’s Procuratorate issued the “Notice on Fully Leveraging the Functions and Roles of the Procuratorial Organs to Legally Assist in Resolving the Problem of Unpaid Wages to Rural Migrant Workers” (hereinafter referred to as the “Notice”), which calls for the lawful punishment of criminal acts involving malicious wage arrears and resolute protection of the lawful rights and interests of rural migrant workers.

Finance & Capital Markets

The China Securities Regulatory Commission has approved the launch of a pilot program to optimize account management functions for securities companies.
To implement the requirements for comprehensively deepening capital market reform, further optimize securities offices’ account management capabilities, enhance their service offerings, and promote high-quality industry development, the China Securities Regulatory Commission supports securities offices in, in strict accordance with the Securities Law, the Regulations on the Supervision and Administration of Securities Companies, and other relevant laws and regulations, carrying out internal account‑management function upgrades within the existing framework of third‑party custody of client transaction settlement funds.
As securities offices diversify their business lines, their account systems have become increasingly complex, placing new demands on the integration and optimization of existing account management frameworks. Based on thorough consultation with industry stakeholders, the China Securities Regulatory Commission, guided by the principles of “safeguarding the bottom line of client fund security, streamlining ongoing risk‑control mechanisms, and enhancing customer service efficiency,” has endorsed pilot initiatives to optimize account‑management functions. These pilots focus on establishing integrated client accounts, permitting same‑name transfers, and implementing tiered account management, among other measures.
To ensure a smooth transition and mitigate business risks, the China Securities Regulatory Commission (CSRC) has adopted an approach of “pilot programs in phases, with gradual liberalization,” supporting applications from a select group of offices that demonstrate strong overall capabilities, robust compliance and risk‑control frameworks, and well‑prepared information systems. Following expert inquiries and reviews conducted by the Securities Association of China, ten securities offices—CITIC Securities, Guotai Junan Securities, Galaxy Securities, CICC Wealth, Guoxin Securities, Anxin Securities, China Merchants Securities, CITIC Securities Investment, Sinolink Securities, and Huatai Securities—were found to meet the basic requirements for the pilot program and received approval. The CSRC has approved these ten securities offices to proceed with the pilot initiative.
Going forward, the China Securities Regulatory Commission will further strengthen oversight, urge relevant securities offices to conduct pilot programs in a prudent manner, enhance compliance and risk‑control management, officely safeguard the security of client funds, and ensure their protection. It will strictly prohibit the misappropriation or diversion of client funds, whether directly or through disguised means; any violations will be rigorously prosecuted in accordance with the law. At the same time, the Commission will continue to monitor, evaluate, and summarize the outcomes of the pilot programs.

Premier Li Keqiang signed a State Council order promulgating the Measures for the Implementation of the Commitment System for Parties in Administrative Enforcement in the Securities and Futures Fields.
Premier Li Keqiang of the State Council recently signed a State Council order promulgating the Measures for the Implementation of the Commitment System for Parties in Securities and Futures Administrative Enforcement (hereinafter referred to as the “Measures”), which shall take effect on January 1, 2022.
The Measures thoroughly implement the decisions and arrangements of the CPC Central Committee and the State Council on advancing the development of fundamental systems in the capital market, as well as the requirements of the Securities Law. Drawing on pilot‑program experience, they ensure the transparent, fair, and impartial application of the administrative enforcement commitment system for securities and futures matters by legally clarifying basic procedures, strictly defining its scope of application, and strengthening oversight and checks-and-balances mechanisms. This approach effectively safeguards investors’ legitimate rights and interests, enhances enforcement efficiency, mitigates moral hazard, and delivers both positive social and legal outcomes.
The Measures consist of 21 articles and primarily set forth the following provisions: First, they clarify the scope and applicable principles of the administrative enforcement commitment system for securities and futures matters, defining such a commitment as an administrative enforcement mechanism whereby, during the course of an investigation conducted by the State Council’s securities regulatory authority into alleged violations of securities or futures laws, the party under investigation undertakes to rectify the suspected unlawful conduct, compensate affected investors, and eliminate any harm or adverse effects, subject to approval by the securities regulatory authority. Upon fulfillment of these commitments, the authority terminates the investigation. The Measures further stipulate that implementation must adhere to the principles of fairness, voluntariness, and good faith. Second, they outline the basic procedural steps for applying the administrative enforcement commitment system, including application, acceptance, negotiation, determination of the commitment amount and signing of a commitment‑recognition agreement, performance of the agreement, suspension of the investigation, and termination thereof. Third, they specify circumstances in which the administrative enforcement commitment system shall not apply, including: where the party has been convicted of a securities or futures‑related crime or subjected to administrative penalties within a prescribed period; where the alleged violation is legally required to be referred to the judicial authorities; where the alleged misconduct is particularly serious and has a severe negative social impact; where the same party re‑submits an application without new facts or grounds, or re‑applies after failing to fulfill, or only partially fulfilling, a prior commitment due to its own reasons; and other situations deemed by the securities regulatory authority, on the basis of prudent regulatory principles, to be unsuitable for the use of this administrative enforcement mechanism. Fourth, they detail the methods for the use and management of the commitment fund, providing that investors who have suffered losses as a result of the party’s alleged violations may apply to the commitment‑fund management agency for reasonable compensation, or pursue compensation through civil litigation or other lawful channels; however, those who have already obtained compensation through other means may not seek reimbursement from the commitment‑fund management agency for amounts already recovered. Fifth, they establish oversight and checks-and-balances mechanisms, including: the department responsible for handling administrative enforcement commitments and the investigative department operating independently of one another; the establishment by the securities regulatory authority of a collective decision‑making system to deliberate and resolve significant matters, with implementation contingent upon approval by the relevant responsible officials; the requirement that personnel engaged in administering administrative enforcement commitments comply with applicable work discipline and recusal rules; and the imposition of appropriate credit‑based sanctions on parties that violate the principle of good faith.

The China Securities Regulatory Commission is soliciting public comments on the “Administrative Measures for Commitment Funds in Securities and Futures Administrative Enforcement (Draft for Comments).”
To implement the decisions and arrangements of the CPC Central Committee and the State Council, as well as the requirements of the Securities Law, the Ministry of Justice, in collaboration with the China Securities Regulatory Commission (CSRC), has, on the basis of summarizing the experience gained from the administrative settlement pilot program, drafted the “Measures for the Implementation of the System of Commitments by Parties to Administrative Enforcement in the Securities and Futures Fields (Draft)” (hereinafter referred to as the “Measures”). These Measures were reviewed and approved at the 148th Executive Meeting of the State Council and have since been promulgated. Article 18, paragraph 2 of the Measures stipulates that the CSRC, in conjunction with the Ministry of Finance, shall separately formulate specific measures governing the management and use of commitment funds. Accordingly, the CSRC, together with the Ministry of Finance, has revised the “Provisional Measures for the Administration of Administrative Settlement Funds” (hereinafter referred to as the “Settlement Fund Measures”) and has now formulated the “Measures for the Administration of Commitment Funds in Securities and Futures Administrative Enforcement (Draft for Public Comment)” (hereinafter referred to as the “Commitment Fund Measures”), along with an accompanying explanatory note, which are hereby made public for public comment.
The revised “Measures on Commitment Funds” largely retain the structure of the 2015 “Measures on Settlement Funds,” while incorporating amendments and refinements in light of higher-level laws and practical needs. The key revisions are as follows: First, in accordance with Article 171 of the Securities Law, the term “settlement fund” has been replaced with “commitment fund,” and the corresponding definition provisions have been deleted. Second, the management framework for commitment funds has been improved to address specific circumstances encountered in practice. Third, investor protection has been strengthened, encouraging parties to proactively compensate investors and providing institutional flexibility for parties to arrange such compensation on their own.
The issuance of the Measures on Commitment Funds will provide a solid safeguard for strengthening investor protection and ensuring that harmed investors receive compensation, thereby enhancing regulatory effectiveness and stabilizing market order.
We welcome valuable feedback from all sectors of society on the “Commitment Deposit Measures.” The China Securities Regulatory Commission will, based on the results of the public consultation, further revise and refine these Measures.
The China Securities Regulatory Commission is soliciting public comments on the “Provisions for the Implementation of the Commitment System for Parties in Administrative Enforcement Cases in the Securities and Futures Sectors (Draft for Comments).”
To implement the decisions and arrangements of the CPC Central Committee and the State Council, as well as the requirements of the Securities Law, the Ministry of Justice, in collaboration with the China Securities Regulatory Commission, has, on the basis of summarizing the experience gained from the administrative settlement pilot program, drafted the “Measures for the Implementation of the Administrative Enforcement Commitment System in the Securities and Futures Fields (Draft)” (hereinafter referred to as the “Measures”). The Measures were reviewed and approved at the 148th Executive Meeting of the State Council and have since been promulgated. To further refine and improve the relevant provisions of the Measures and to fully realize the institutional value of the administrative enforcement commitment system, the CSRC has drafted the “Regulations on the Implementation of the Administrative Enforcement Commitment System in the Securities and Futures Fields (Exposure Draft)” (hereinafter referred to as the “Regulations”) along with accompanying explanatory notes, and is now soliciting public comments.
The drafting of the Regulations adhered to the following principles: First, leveraging the distinctive features of the system. By fully harnessing the unique attributes of the administrative enforcement commitment mechanism, it seeks to promptly compensate investors for their losses, thereby enhancing their sense of gain and satisfaction. Under this mechanism, the commitment funds paid by the parties involved may be used to indemnify investors, providing a new, timely, and effective avenue for redress and better safeguarding the legitimate rights and interests of investors, particularly small and medium-sized investors. It also aims to swiftly restore market order and stabilize market expectations, effectively improve enforcement efficiency, and resolve the tension between the difficulty of investigating and prosecuting violations and the market’s demand for swift action. Moreover, it serves as an effective complement to administrative penalties, enabling the regulatory framework to better adapt to the complexities of the current supervisory environment. Second, advancing in a steady and prudent manner. With respect to the administrative enforcement commitment—a novel enforcement tool—the overall approach remains guided by the principle of steady and prudent progress. On the basis of compliance with higher-level laws and regulations, the experience gained in practice is carefully reviewed, the scope of application is strictly defined, and the procedural guidelines are refined and improved, ensuring the smooth implementation of this new system. Third, strengthening oversight and checks and balances. A rigorous system of internal and external supervision has been established, clearly delineating the responsibilities of the department handling commitment applications and of other relevant units—such as those conducting investigations, imposing penalties, managing investor protection schemes, and operating branch offices—to prevent moral hazard and conflicts of interest.
The Regulations consist of 23 articles without separate chapters. Building on the Securities Law and the Measures, they primarily elaborate on matters such as the applicable conditions, procedural requirements, and the management and use of commitment funds. The specific details are as follows:
First, the scope of application is strictly delimited. Building on the negative circumstances set forth in the Measures, the Regulations further refine the scope of applicability by explicitly stipulating that administrative enforcement commitments are primarily intended to address cases involving significant difficulties in investigation and evidence collection, substantial challenges in the application of law, or situations where more timely and effective compensation for investor losses can be achieved, thereby enhancing regulatory effectiveness. Second, the coordination and interface mechanisms between the commitment‑handling department and the investigation and adjudication departments are clarified. The commitment‑handling department is required to solicit the views of the investigation and adjudication departments on matters related to the application of the commitment procedure; cases subject to such a commitment must undergo necessary investigations, and once a case is accepted, neither the investigation nor the adjudication may be suspended. Third, clear arrangements are established for coordination and cooperation between the commitment‑handling department and the department responsible for calculating the commitment amount. The Investor Protection Fund Company is tasked with assessing investor losses, while the investigation, adjudication, securities and futures trading venues, securities registration and clearing institutions, and investor protection organizations are required to provide necessary support. Fourth, provisions are made regarding the investor compensation mechanism. The institution managing the commitment fund is mandated to formulate a plan for the administration and use of the fund and submit it to the CSRC for record‑keeping; at the same time, procedures for parties to compensate investors directly are specified, with encouragement extended to parties to make advance payments to investors. Fifth, the role of branch offices in administrative enforcement commitment proceedings is clearly defined. On the one hand, branch offices within the jurisdiction of the party concerned are responsible for verifying and accepting the party’s fulfillment of the commitment‑recognition agreement; on the other hand, cases investigated by branch offices may also be eligible for administrative enforcement commitments, with unified processing currently entrusted to the commitment‑handling department. Sixth, oversight and checks are strengthened to guard against moral hazard. A collective decision‑making mechanism and an internal supervision and restraint system have been established, the discretionary scope for negotiating the amount of the commitment fund has been narrowed, the verification and supervisory role of branch offices during the implementation of commitments has been reinforced, and timely public disclosure of relevant information is required.
We welcome valuable feedback from all sectors of society on the Regulations. The China Securities Regulatory Commission will, based on the results of the public consultation, further revise and refine the Regulations.

Commercial & Corporate
Port throughput remains robust, while coal prices are fluctuating and consolidating.
On the thermal coal front, the spot price at ports closed at RMB 1,090 per ton, unchanged from the previous week. With supply‑guarantee policies continuing to take effect and the supply‑demand balance improving, expectations for thermal coal prices at producing regions have weakened marginally. Coal imports into port areas increased week over week, surpassing levels seen in the same period last year and the year before. On the demand side, with the peak season approaching, outbound shipments from ports rose sharply compared with the prior week, exceeding both last year’s and the year before’s figures. The faster growth in outbound volumes relative to inbound flows led to a week‑on‑week decline in port inventories, though stockpiles remain at historically high levels. This week, the implementation plan for medium- and long-term contracts accommodated the upward adjustment of benchmark long‑term contract prices without imposing any constraints on spot prices. Looking ahead, we expect structural supply shortages to gradually ease, keeping coal prices broadly stable in the near term. For coking coal, prices for prime coking coal at producing regions remained steady but edged lower. On the supply side, domestic coking coal supplies continue to be tight. Demand is gradually softening yet remains generally resilient; weak infrastructure investment, insufficient momentum in the real estate sector, and a slowdown in manufacturing growth are all weighing on overall demand. Although capacity utilization rates have risen nationwide, expectations of production cuts, coupled with elevated inventory levels, suggest that annual steel output will likely remain flat. Consequently, coking coal and coke prices are expected to trade in a range, consolidating amid volatility. We particularly recommend China Shenhua and Shaanxi Coal—both stable operators with high dividend yields—as well as Yanzhou Coal, which offers strong dividend‑driven upside potential, and Shanxi Coking Coal, a beneficiary of state‑owned enterprise reform with significant elasticity.
With supply‑guarantee measures strengthened and demand remaining stable, thermal coal prices at producing regions have shown mixed movements: on the thermal coal front, port‑spot prices closed at RMB 1,090 per tonne, unchanged from the previous period. As supply‑assurance policies continue to take effect and the supply‑demand balance improves, expectations for thermal coal prices at producing sites have weakened marginally. Meanwhile, coal inflows into port areas have risen month‑on‑month, surpassing levels seen in the same periods of both last year and the year before. On the demand side, with the peak season approaching, port outflows have surged compared with the prior month, exceeding year‑on‑year levels; the faster growth in outflows relative to inflows has led to a month‑on‑month decline in port inventories, though stockpiles remain at historically high levels. Looking ahead, structural supply shortages are expected to ease gradually, keeping coal prices broadly stable in the near term.
International oil prices declined month-on-month: As of December 3, the settlement price of Brent crude futures fell by $3.05 per barrel to $69.97 per barrel, a decrease of 4.19%. Also as of December 3, after converting to tonne of standard coal on a calorific‑value basis, the international oil‑to‑international coal price ratio stood at 1.62, up 0.09 points (5.99%) from the previous period; meanwhile, the international oil‑to‑domestic coal price ratio was 2.16, down 0.03 points (1.59%). Concerns over the implementation of new rounds of pandemic lockdown measures worldwide weighed on international oil prices, driving their month‑on‑month decline.
Port inventories in the Bohai Rim declined week-on-week: As of December 3, the four major ports in the Bohai Rim recorded an average daily inbound volume of 2.1879 million tonnes, up 109,000 tonnes from the previous week, a 5.24% increase; the average daily outbound volume stood at 2.3439 million tonnes, up 427,100 tonnes week-on-week, a 22.29% rise. By December 3, total inventories across the four ports amounted to 23.9469 million tonnes, down 189,000 tonnes from the prior week, a 0.78% decline. During the week, the four ports collectively hosted an average of 253 vessels at anchor, unchanged from the previous week. Market sentiment weakened, with traders’ willingness to support prices easing, while liquidity in the supply chain gradually improved.
Domestic shipping rates rose month-on-month: As of December 3, the average freight rate on major domestic routes increased by RMB 3.65 per ton compared with the previous week, closing at RMB 79.71 per ton, a gain of 4.80%. Meanwhile, as of December 3, the coal freight rate from Newcastle, Australia, to Qingdao, China (Panamax vessel) stood at USD 18.50 per ton, up USD 1.00 per ton from the prior week, a rise of 5.71%. Strong throughput at domestic ports has been driving the increase in domestic shipping rates.
Risk Warning: With strengthened supply‑guarantee measures and tighter price‑control policies, coal prices continue to decline.

Leading property developers are “taking the lead” in slowing their growth, and steady‑pace sales may become a new industry trend.

Recently, the release of interim performance forecasts for listed real estate companies in 2021 has nearly come to a close. It can be said that these first-half results were achieved against the backdrop of China’s financial regulatory policies having entered a normalized phase.
At present, government regulators and capital markets are paying increasing attention to the operational performance of property developers as reflected in their financial reports. In response to the “mid-term report cards” submitted by numerous developers, we have selected 30 key property companies for in-depth analysis and identified several major trends and characteristics shaping the industry.
I. Leading property developers “take the lead” in slowing down, and sales concentration among top-tier offices declines.
In mid-2021, the sales‑revenue concentration—measured as the share of total national sales accounted for by each tier of property developers—remained broadly stable at its previous levels. However, a notable signal is that, across all tiers—from the top 3 to the top 100—the concentration of sales revenue has been trending downward.
Through data analysis, we have observed a marked deceleration in the growth rates of the three leading property developers—Country Garden, Vanke, and Evergrande. As the top three players in the sector, these companies now account for a level of sales concentration that has reached its lowest point in the past five years. This development clearly challenges our earlier assumption that “property‑developer concentration would continue to intensify going forward.”
Underlying this trend is a clear logic: the era of rapid real‑estate expansion has come to an end, and property developers are shifting their strategies to pursue steady, sustainable, high‑quality growth. Moreover, during this period of transformation—and amid the associated challenges—operational risks at some large and medium‑sized developers have been increasingly exposed.
Based on past trends, we expect that, by the end of 2021, the concentration of sales revenue across property developers’ tiers will remain relatively low.
II. The pandemic has disrupted the industry’s rhythm, resulting in “passive growth” in companies’ sales volumes.
At the end of 2016, following the Central Economic Work Conference’s introduction of the “housing is for living, not for speculation” policy, regulatory measures across the country were steadily tightened. From 2017 to 2019, the market exhibited a general trend of steadily decelerating sales growth among property developers. However, the sudden onset of the pandemic disrupted this trajectory. In 2020, pent-up housing demand stemming from the pandemic was unleashed, leading to a substantial year-on-year increase in nationwide real estate sales revenue by mid-2021, driven by a low base effect.
Our research indicates that the overall performance growth trend of the 30 leading property developers is broadly in line with the national average, yet significant divergence persists among them. Evergrande, Vanke, and Country Garden rank at the top in terms of deceleration, while leading offices such as Poly and Longfor also posted sales‑growth rates below the average for the top 100 developers. Developers’ willingness to proactively slow their pace is evident. Meanwhile, those achieving high growth either benefit from a low base in earlier periods or from the concentrated release of previously accumulated latent demand. The absolute increase in developers’ sales revenue largely reflects the continued momentum of scale expansion, whereas the acceleration in sales‑growth rates appears to be largely passive.
III. Steady sales performance by property developers in the first half of the year may become a new industry trend.
According to our analysis, in the first half of 2021, the average selling price of 30 key real estate developers increased by 10% on average. Given the impact of the pandemic in the first half of 2020, we consider these figures to be within a reasonable range. Among them, six developers reported a year-on-year decline in average selling prices, while most others maintained stable pricing or saw modest increases.
As industry regulation tightens and financial oversight is stepped up, an increasing number of property developers are placing greater reliance on sales proceeds. Over the past two years, these companies have been actively cultivating key sales events—such as “return-to-hometown home‑buying,” Spring Festival home purchases, and the “618 Home‑Buying Festival”—to capture market share in the first half of the year and spread the full‑year sales burden across that period.
Looking ahead, we anticipate that, in a more stable market environment, steady, consistent sales of real estate will likely become the new industry norm.

Several property developers plan to launch issuance programs in the near future, with the Shenzhen Stock Exchange’s bond market maintaining smooth and orderly financing channels.
Following the outbreak of the Evergrande crisis, financing conditions in the real estate sector have drawn close market scrutiny. According to the latest statements from regulators, reasonable bond issuance and financing by real estate companies will continue to be supported.
A review of recent corporate financing trends among property developers reveals that the risks faced by a few offices have not disrupted the real estate sector’s normal medium- and long-term financing channels, with property companies continuing to access the exchange‑traded bond market in an orderly and unimpeded manner.
Among these, on December 1, 2021, China Overseas Enterprise Development Group Co., Ltd. listed its publicly issued corporate bonds on the Shenzhen Stock Exchange, with a total issuance size of RMB 2.9 billion. In addition, the reporter learned that several property developers are planning to issue fixed-income products in the near future.
Several property developers plan to launch fixed-income product offerings in the near future.
According to reports, Vanke plans to issue RMB 777 million in supply-chain asset-backed securities (ABS) in the near term and aims to complete the issuance of its full 2021 supply-chain ABS quota by December. Greentown and Longfor each intend to issue RMB 800–1 billion in supply-chain ABS shortly. Longfor Holdings plans to issue RMB 665 million in commercial mortgage-backed securities (CMBS) in December and subsequently launch approximately RMB 500 million in supply-chain ABS. Meanwhile, China Overseas Property, China Merchants Shekou, and other property developers also plan to issue corporate bonds in the near future.
From the perspective of enterprise type, this group includes both state-owned enterprises and private enterprises, with the latter accounting for a relatively larger share.
An analyst in the real estate sector told reporters that recent risks at Evergrande Group have heightened market scrutiny of property developers’ access to financing. In reality, Evergrande’s troubles represent an isolated incident within a market economy and should not be overstated; however, they serve as a cautionary tale for other developers, underscoring once again the importance of prudent management.
The aforementioned researcher noted that, overall, most property developers have remained committed to their core businesses and maintained prudent operations. As a result, China’s real estate sector has continued to develop in a healthy manner, with corporate financial soundness showing an improving trend. Underpinning this is the steady implementation of long-term mechanisms for the domestic real estate market, coupled with developers’ proactive adoption of prudent growth strategies and responsible financing practices.
On December 3, the People’s Bank of China and the China Banking and Insurance Regulatory Commission issued statements one after another to promote the stable and sound development of the real estate sector and market.
A relevant official from the People’s Bank of China stated that the short-term risks faced by certain property developers will not undermine the market’s normal financing functions over the medium to long term. Recently, domestic real estate sales, land acquisitions, and financing activities have gradually returned to normal, with some Chinese‑owned property developers beginning to repurchase their offshore bonds, while certain investors have also started buying U.S. dollar‑denominated bonds issued by Chinese developers.
A spokesperson for the China Banking and Insurance Regulatory Commission stated that, at this stage, it is essential to tailor policies to local conditions, prioritizing mortgage demand for first-time home purchases and housing upgrades, appropriately extending real estate development and M&A loans, and strengthening support for affordable rental housing, thereby fostering the steady and sound development of the real estate sector and market.
A relevant official from the China Securities Regulatory Commission also stated that it will continue to ensure the effective functioning of market financing, support real estate enterprises in obtaining reasonable and normal financing, and promote the stable and sound development of both the capital market and the real estate market.
Supporting the reasonable financing needs of real estate enterprises.
Affected by negative public sentiment surrounding certain real estate companies, the real estate bond market has recently been on a downward trend. To promote the stable and healthy development of the real estate sector, the Shenzhen Stock Exchange has leveraged the financing functions of its bond market to actively support real estate enterprises in meeting their legitimate financing needs.
According to reports, since October 2021, five real estate companies—including China Resources Land and China Merchants Shekou—have issued six asset-backed securities on the Shenzhen Stock Exchange, with a total issuance size of RMB 10.627 billion, covering such structures as supply-chain ABS, home-purchase‑balance‑payment ABS, CMBS, and REIT‑like products. Meanwhile, two other real estate offices—China Overseas Property and Tianbao Infrastructure—have issued three corporate bonds on the Shenzhen Stock Exchange, totaling RMB 3.3 billion, with proceeds earmarked for repaying existing corporate debt.
A spokesperson for China Merchants Shekou told reporters, “China Merchants Shekou has secured regulatory support for its bond financing through the exchange‑traded market, with smooth issuance channels.” The spokesperson added, “The company’s bond offerings have received strong backing from partner banks and broad recognition from market‑oriented investors, with coupon rates repeatedly hitting record lows among real estate issuers over comparable periods.”
It is understood that, going forward, the China Securities Regulatory Commission and the stock exchanges will continue to implement the CPC Central Committee and the State Council’s major strategic plans for the stable and sound development of the real estate market. They will fully leverage the capital market’s pivotal role, comprehensively put into practice a long-term mechanism for the real estate sector, support real estate enterprises that focus on their core businesses and maintain prudent operations in obtaining reasonable and normal financing, strengthen support for affordable rental housing, and work in concert with relevant departments and local governments to safeguard the stable and healthy development of the real estate market, thereby effectively protecting the legitimate rights and interests of the broad investor base.

E-cigarettes face stricter regulation: they have been brought under the scope of tobacco product control.

The e‑cigarette industry is facing stricter regulation. On November 10, the State Council’s Decision on Amending the Regulations for the Implementation of the Tobacco Monopoly Law of the People’s Republic of China was officially promulgated and came into effect, stipulating that “e‑cigarettes and other new tobacco products shall be governed by the relevant provisions applicable to conventional cigarettes under these Regulations.” On December 2, the State Tobacco Monopoly Administration held a briefing to address regulatory issues concerning e‑cigarettes and other novel tobacco products.
Liu Peifeng, Director of the Office and Spokesperson of the State Tobacco Monopoly Administration, stated that products subject to regulatory oversight include e-cigarette cartridges, vaping devices, product combinations of cartridges and devices, and nicotine for use in e-cigarettes. He emphasized that heated tobacco products—also known as heat-not-burn tobacco products or low-temperature cigarettes—are classified as conventional cigarettes and are therefore already under cigarette‑specific regulation. At present, China has not approved the market launch or sale of heated tobacco products, and no market entity is permitted to engage in their illegal trade.
It is understood that the State Tobacco Monopoly Administration is currently formulating relevant supporting policies. First, it is working with relevant departments to draft a national standard for electronic cigarettes and, on November 30, publicly solicited comments from the public. Second, it is developing administrative measures for the regulation of electronic cigarettes and, on December 2, also sought public input.
Wang Yulin, Director-General of the Department of Policies, Regulations, and Institutional Reform of the State Tobacco Monopoly Administration, stated that the “Administrative Measures for E‑Cigarettes (Draft for Public Comment)” clearly defines e‑cigarettes and specifies the entities subject to regulation. The draft proposes strengthening the management of e‑cigarette production, establishing a quality and safety assurance system for e‑cigarette products, and implementing a product traceability regime. Market entities engaged in the production, wholesale, or retail of e‑cigarettes must obtain the requisite licenses issued by the administrative authority responsible for tobacco monopoly. A nationwide unified trading management platform will be established to regulate the trade of e‑cigarette products and nicotine used in e‑cigarettes. E‑cigarette products shall comply with national standards for e‑cigarettes and with relevant provisions on packaging labeling and health warnings, and must use registered trademarks in accordance with the law. E‑cigarette advertising shall be governed by the applicable regulations on tobacco advertising. The State Council’s administrative authority for tobacco monopoly shall exercise lawful supervision and administration over the import and export of e‑cigarettes as well as related foreign economic and technological cooperation. Tax collection on e‑cigarettes shall be carried out in accordance with the state’s tax laws and regulations.
In accordance with the provisions of the Tobacco Monopoly Law of the People’s Republic of China and its implementing regulations, effective from the date of promulgation and implementation of the Decision, any business activities related to the production and operation of e-cigarettes must obtain the requisite permits; products must comply with relevant national standards; and the import of e-cigarettes shall adhere to the applicable requirements governing conventional cigarettes. However, in view of the time required to formulate and issue the Measures for the Administration of E‑Cigarettes and the National Standards for E‑Cigarettes, as well as the current state of the e‑cigarette industry, a specified transitional period has been established.
Liu Peifeng stated that, during the transitional period, existing e‑cigarette manufacturers and operators may continue to carry out their production and business activities as usual. At this stage, tobacco monopoly administrative authorities at all levels will not accept applications for production or retail licenses, nor product registration applications, from e‑cigarette manufacturers and operators; nor will they process applications by market operators holding tobacco retail licenses to expand their scope of authorization to include e‑cigarette retail (the specific date for resuming such acceptance will be announced separately). Meanwhile, market regulatory authorities will, in accordance with relevant regulations, refrain from issuing business licenses to any e‑cigarette manufacturers or operators.
Meanwhile, in order to standardize the market order of the e‑cigarette industry, bring it steadily onto a track of rule of law and standardized management, and align it with the requirements of the newly amended Implementing Regulations and the relevant supporting policies currently under study and formulation, at this stage, all types of investors are prohibited from investing in the establishment of new e‑cigarette production and business entities; existing e‑cigarette producers and operators are likewise prohibited from building new facilities or expanding production capacity, from opening new retail outlets, or from launching new products, and imports of new e‑cigarettes are suspended.
Liu Peifeng emphasized that, following the end of the transition period, only e‑cigarette producers and operators that have obtained market access approval and whose products comply with national standards may proceed with investment, construction, and production‑and‑operation activities. Those who have not secured market access approval or whose products fail to meet national standards and have not passed the required registration shall be prohibited from engaging in any e‑cigarette‑related business; otherwise, they will be subject to legal enforcement.
In recent years, due to regulatory gaps, the e‑cigarette industry has developed in a disorderly manner. Certain products have been found to have unclear nicotine content, unidentified additives, and leaking e‑liquids, posing potential risks to consumers’ health. Some operators have engaged in misleading marketing by touting claims such as “harmless to health” or “helps quit smoking,” which either contradict objective facts or lack supporting evidence. Moreover, they have excessively promoted e‑cigarettes as “fashionable” or “trendy,” thereby enticing minors to use them and jeopardizing their physical and mental well‑being. Public concern has been widespread, with repeated calls for stronger regulation.
According to statistics, more than 50 countries and regions worldwide have brought e-cigarettes under tobacco product regulations, while over 40 have explicitly banned their sale. However, as illicit trade has surged following these bans, some countries have begun shifting from outright prohibitions to regulating e-cigarettes as tobacco products.

Taxation TAXATATION
More Innovation, More Green: Tax Incentives Drive the Transformation and Upgrading of Economic and Social Development
According to the State Taxation Administration, from 2016 to 2020, China implemented tax and fee reductions totaling more than 7.6 trillion yuan. The benefits of these measures have continued to unfold, providing strong impetus for the country’s steady and sound economic development.
When assessing China’s economy, we must consider both its overall size and scale, but even more so its structural composition and efficiency.
In recent years, technological innovation has continuously optimized China’s industrial structure and enhanced the quality of supply, with an increasing number of “Made in China” products being upgraded to “Smart Made in China.” Data show that in the first half of this year, the value added of high-tech manufacturing grew by 22.6% year on year, and the robust development of this sector has bolstered the innovative profile of the Chinese economy.
The transformation and upgrading of the manufacturing sector cannot be achieved without the support of tax policies. In recent years, China has continuously refined and improved its tax measures to foster scientific and technological innovation, and the effectiveness of fiscal and tax policies in supporting the development of high‑tech industries is steadily becoming apparent.
On March 24, the State Council Executive Meeting outlined and implemented policies, including raising the additional deduction rate for R&D expenses of manufacturing enterprises, to encourage corporate innovation and promote industrial upgrading. The meeting decided that, effective January 1 this year, the additional deduction rate for R&D expenses of manufacturing offices will be increased from 75% to 100%, meaning that for every RMB 1 million invested in R&D, companies can deduct RMB 2 million from their taxable income. Implementation of this policy is expected to generate an additional tax reduction of RMB 80 billion this year, building on last year’s tax cuts totaling over RMB 360 billion.
In Shanghai, Li Zhenhua, the chief financial officer of a high-tech enterprise specializing in semiconductor packaging and testing, outlined the following calculations to a reporter: “In 2020, more than RMB 5 million of the company’s overseas‑commissioned R&D expenses were eligible for additional tax deductions, while over RMB 14 million of domestically commissioned R&D qualified for similar treatment. Additionally, the company’s internally developed R&D projects accounted for more than RMB 90 million in deductible expenses. Altogether, the total deductible R&D costs amounted to approximately RMB 110 million. In 2021, the company plans to further increase its R&D investment, with projected R&D expenditures rising to RMB 117 million.”
In Zhuhai, Guangdong Province, innovation is thriving within the Nanping Science and Technology Park. “Tax cuts and fee reductions have effectively bolstered companies’ working capital and lowered operating costs,” said Zhuo Yiwei, general manager of the finance department at one park‑based enterprise, when discussing tax incentives. According to Mr. Zhuo, the company’s software products are primarily embedded applications integrated into smart cards. As a key software enterprise receiving national support, it benefits from a reduced corporate income tax rate of 10%. Last year, it received an immediate VAT refund of over RMB 12 million, while also enjoying income tax exemptions and reductions totaling more than RMB 5.3 million.
Tang Jiqiang, a professor at Southwestern University of Finance and Economics and chief researcher at the SWUFE Think Tank, told a People’s Daily reporter that raising the additional deduction rate for R&D expenses in the manufacturing sector results in deductible costs exceeding the actual expenditures incurred, thereby reducing the income tax burden on manufacturing offices.
Li Xuhong, Director of the Institute for Fiscal and Taxation Policy and Application at the National Accounting Institute in Beijing, argues that increasing R&D spending can significantly reduce the tax burden and foster a virtuous cycle. By spurring new momentum for enterprises’ innovation and development, it drives their transformation, upgrading, and growth, thereby comprehensively revitalizing market vitality and promoting high-quality economic development.
Innovation must go hand in hand with sustainable development. Today, “prioritizing ecology and pursuing green development” has become a societal consensus.
In recent years, tax authorities have actively participated in designing and implementing a green tax system that integrates multiple taxes—such as the resource tax, environmental protection tax, and farmland occupation tax—to achieve coordinated governance, while also employing a portfolio of systematic tax incentives to drive a comprehensive green transformation of economic and social development.
In Liaoning, a steel conglomerate that generates nearly 10 million tons of solid waste—including steel slag and blast furnace slag—each year has invested over 100 million yuan to comprehensively develop and utilize its metallurgical by-products. To date, it has launched 11 metallurgical‑slag‑based product lines, such as refined slag steel and slag powder. “Comprehensive utilization of solid waste qualifies for tax reductions and exemptions. As a result, we not only avoid substantial environmental‑protection tax liabilities but also see our eco‑friendly new materials generate an additional 200 million yuan in annual revenue,” said the company’s head.
According to data from the State Taxation Administration, environmental protection tax revenues reached RMB 20.56 billion in 2018, RMB 21.32 billion in 2019, and RMB 19.99 billion in 2020. This indicates that corporate pollutant emissions have continued to decline, the energy‑saving and environmental‑protection industries have kept expanding, and the positive incentive effects of the green tax system are already becoming evident.
Lian Qifeng, Director-General of the Department of Property and Behavioral Taxes at the State Taxation Administration, stated that data show the green tax system—centered on the environmental protection tax—has yielded significant energy‑saving and emission‑reduction effects. Moreover, related tax‑reduction and preferential policies have boosted enterprises’ enthusiasm for green development, effectively guiding them to shift from passive to proactive emission reduction.
In an interview with People’s Daily Online, Li Xuhong stated that using environmental taxes to improve the environment represents the first layer of positive spillover effects. Furthermore, environmental taxes can reduce inefficiencies in the tax system, refine the tax structure, and, to a certain extent, boost capital productivity and create jobs, thereby supporting economic growth.

The latest edition of the “Going Global” Tax Guide has been released.
Providing robust support to help enterprises mitigate overseas tax-related risks.
According to a report by China National Radio’s “Global Finance” program, with the Belt and Road Initiative as a key focus, Chinese enterprises have significantly accelerated their overseas expansion, while the scale and quality of their outbound investments continue to improve. The State Taxation Administration recently released the “Tax Guidance for Enterprises Going Global” (2021 revised edition). This latest version of the guidance is designed to help companies effectively mitigate tax-related risks and provide robust support for their international operations.
Ge Yuyu, Director of the Department of Applied Economics at the National Accounting Institute in Shanghai, stated that when companies “go global,” they often encounter tax-related challenges such as underestimating contractual tax liabilities, non‑compliant foreign‑currency accounting records, and difficulties in resolving tax disputes. Generally speaking, tax risks stem from two main sources: first, the transparency, stability, statutory framework, and enforcement standards of local tax policies may still require improvement—for example, policies might be complex and hard to interpret or insufficiently stable, thereby giving rise to tax risks; second, companies themselves may be inadequately prepared, such as failing to conduct thorough due diligence, lacking a sufficient understanding of local tax regulations and compliance requirements, being unable to fully leverage tax treaties to safeguard their rights, or encountering shortcomings in communication with local tax authorities.
This latest edition of the “Tax Guidance for Enterprises Going Global” systematically compiles and organizes tax policies relevant to overseas operations, along with 110 tax treaties, arrangements, and agreements, and identifies common tax‑related issues. The guide is divided into four chapters, which, from the perspectives of tax policy, tax treaties, administrative regulations, and service measures, provide a detailed enumeration of 99 matters affecting taxpayers engaged in international business, organized by applicable entities, policy (treaty) provisions, conditions for application, and the legal basis underlying each provision.
Regarding the key highlights, Ge Yuyu explained: “Compared with the previous edition, this latest version of the guidance has added ‘Foreign Tax Credit for Individual Residents’ to its regulatory framework, and introduced new service measures such as ‘simplified procedures for export tax refund (exemption) filing and certificate issuance’ and ‘issuance of a Certificate of No Tax Arrears by taxpayers.’ Most importantly, it provides timely updates to policies across various areas, including the ‘Country‑Specific Investment Tax Guides’ that enterprises operating overseas frequently consult. In this sense, such a comprehensive, systematic, and practical tax guidance serves as a ‘tax‑protection shield’ for companies expanding abroad: on the one hand, it promptly updates and organizes information on the tax policies and institutional frameworks of host countries and regions; on the other, it helps enterprises conduct due diligence, make effective use of tax treaties, and strengthen compliance in line with the guidance, thereby better preventing and mitigating tax risks.”

 
State Taxation Administration: Nationwide, more than 4,800 coal-fired power and heating enterprises have been supported.
Processed tax reductions, refunds, and deferrals totaling RMB 21.51 billion.
According to the State Taxation Administration, as of November 30, tax reductions, refunds, and deferrals totaling RMB 21.51 billion had been granted nationwide to more than 4,800 coal-fired power and heating enterprises. Specifically, tax exemptions and reductions amounted to RMB 6.55 billion, while tax deferrals and refunds totaled RMB 14.96 billion.
On September 30, the State Taxation Administration issued the “Notice on Ensuring Energy and Power Supply This Winter and Next Spring and Implementing Tax Measures to Help Coal‑Power Enterprises Overcome Difficulties,” introducing tax relief measures—tax reductions, refunds, and deferrals—to support coal‑power and heat‑supply enterprises. These measures ensure that eligible enterprises fully benefit from preferential tax policies, receive all applicable value‑added tax credit refunds, and defer taxes where conditions are met, thereby effectively reducing their tax and fee burdens and alleviating financial constraints and operational pressures.
According to a relevant official from the State Taxation Administration, in order to effectively reduce the tax and fee burden on coal-fired power and heating enterprises and alleviate their financial difficulties and operational pressures, the State Taxation Administration has implemented measures such as progressively reinforcing accountability at each level, conducting a thorough assessment of each enterprise’s situation, and monitoring progress on a daily basis.
In terms of progressively reinforcing accountability, a top-down implementation mechanism has been established across the tax system. Special task coordination bodies have been set up at every level—from the State Taxation Administration down to provincial, municipal, and county tax bureaus—under the overall responsibility of each unit’s principal leader, ensuring effective execution of all tasks. At the same time, communication and coordination with departments such as the National Development and Reform Commission and the Ministry of Finance have been strengthened, with local tax authorities required to proactively integrate into the energy and power supply‑guarantee coordination mechanisms led by the NDRC.
In terms of conducting a household-by-household assessment, tax authorities at all levels, in accordance with the State Taxation Administration’s unified deployment, have carried out detailed surveys of coal‑electricity and heat‑supply enterprises’ operations and tax compliance, resulting in three lists: a list of such enterprises, a list of tax and fee preferential measures, and a list of tax types and amounts eligible for deferred payment. At the same time, through channels such as the 12366 taxpayer service hotline and the electronic tax bureau, enterprises have been notified on a “point-to-point” basis to apply for tax deferral, ensuring full coverage of the policy.
In terms of daily monitoring of outcomes, since October, the State Taxation Administration has maintained a ledger to track, on a day-by-day basis, how coal-fired power and heating enterprises are processing tax reductions, refunds, and deferrals.

Henan: Strengthening Tax Incentives to Safeguard Steady and Sustainable Economic Growth
Market entities are a vital force driving economic and social development; when they remain vibrant, economic growth gains a robust source of momentum. In response to new developments and challenges in the economy, the Henan Provincial Tax Authorities have fully leveraged the tax system’s functions, continuously stepping up efforts to implement tax and fee preferential policies and streamline tax filing and payment services. By ensuring that businesses and individuals fully benefit from these incentives, they are bolstering market confidence and doing their utmost to support steady, sustainable economic growth.
“Blood Transfusion” to Boost “Hematopoiesis”: Helping Enterprises Unleash Their Vitality
In early winter, inside the production workshops of Henan Jindan Lactic Acid Technology Co., Ltd., 12 production lines are running at full capacity, creating a bustling yet well-organized scene. As a national high-tech enterprise, the company boasts an annual production capacity of 100,000 tons of lactic acid and related products.
“This year, rising raw-material prices have placed considerable pressure on production. Fortunately, the favorable tax policies have been a tremendous boost, injecting fresh vitality into our business,” said the company’s general manager. “The additional deduction rate for R&D expenses of manufacturing offices has been increased from 75% to 100%, and companies are now permitted to claim this benefit in advance for the first three quarters. Thanks to these dual incentives, we’ve realized nearly RMB 5 million in policy‑driven benefits, further strengthening our confidence in R&D and innovation.”
“Stepping Up” to “Speed Up”: Helping Businesses Overcome Difficulties and Find Solutions
Small and medium-sized manufacturing enterprises are a vital force in ensuring employment, safeguarding people’s livelihoods, and promoting development. To effectively alleviate these companies’ financial pressures and operational challenges, in October this year, the State Taxation Administration and the Ministry of Finance jointly issued the “Announcement on Matters Relating to the Deferral of Payment of Certain Taxes and Fees for Small and Medium-Sized Manufacturing Enterprises in the Fourth Quarter of 2021,” which clearly sets out the relevant provisions for deferring such payments.
Luoyang Yuanhai New Materials Co., Ltd. is among the enterprises identified in the announcement as eligible for deferred payment under the relevant policy. As a company engaged in the production and sale of refractory materials and the manufacturing and marketing of non-metallic mineral products, it has seen its operating costs rise sharply due to factors such as soaring raw-material prices.
Following big‑data screening and precise matching, the Luoyang Municipal Tax Authority promptly sent deferral reminders to the company’s finance staff via the electronic tax bureau. Additionally, the chief tax service officer organized “one‑on‑one” and face‑to‑face guidance through communication channels such as the tax‑enterprise WeChat group and the “Yu Shuitong” platform, helping the company address its urgent financial needs. “We expect to defer and pay nearly RMB 200,000 in taxes, which will significantly ease our cash‑flow pressures,” said the company’s general manager with satisfaction.
“Temperature” Rises, “Heat” Grows—Empowering Businesses and Bringing Warmth
Winter heating affects countless households and directly impacts people’s comfort, making it a vital public‑service initiative that warms both hearts and homes. The Henan tax authorities have made the effective implementation of tax measures to alleviate the difficulties faced by coal‑, electricity‑, and heating‑supply enterprises a top priority, ensuring these measures are carried out thoroughly and with meticulous attention to detail.
Zhengzhou Yuzhong Energy Co., Ltd., located in Xinmi City, Zhengzhou, serves as the primary heat source for residential heating in both Zhengzhou and Xinmi. As of this winter’s heating season, the company has provided heat to an area totaling 40 million square meters. According to the company’s manager, “The tax policies designed to alleviate difficulties have acted like a warm current, providing strong support as we navigate the current challenges and contribute to ensuring stable energy supplies.”
According to reports, the tax authorities in Xinmi City have conducted a door-to-door assessment of the production and operations of coal‑, power‑, and heating‑related enterprises within their jurisdiction. They have meticulously compiled a comprehensive list of tax and fee preferential policies, provided one‑on‑one guidance on both industry‑specific and universally applicable measures, and promptly reminded and notified businesses to apply for tax payment deferrals. The authorities offer end-to‑end support—covering policy outreach, advisory services, and implementation—to ensure full coverage of policy briefings and robust enforcement.
“We submitted an application to defer tax payments totaling 4.17 million yuan in accordance with the relevant policies, and the tax authorities approved it promptly, helping our business operations gradually improve,” said Manager Fang. “Tax‑benefit policies are truly supportive; we will do everything possible to ensure reliable heating and electricity supply, bringing warmth and light to households across the board.”
 
Litigation & Arbitration
Laws related to standards for compensation for personal injury are set to be revised, with the Supreme People’s Court seeking public input.
Decision of the Supreme People’s Court on Amending the “Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Cases Involving Compensation for Personal Injury”
(Exposure Draft) Notice on Soliciting Public Comments
Establishing and improving the institutional mechanisms and policy framework for integrated urban–rural development was a major decision and deployment adopted at the 19th National Congress of the Communist Party of China. The “Opinions of the CPC Central Committee and the State Council on Establishing and Improving the Institutional Mechanisms and Policy Framework for Integrated Urban–Rural Development,” released on April 15, 2019, explicitly called for “reforming the system of compensation for personal injury and unifying compensation standards for urban and rural residents.” To implement this central directive, on September 2, 2019, our court issued the “Notice on Authorizing Pilot Programs to Unify Personal Injury Compensation Standards between Urban and Rural Areas,” authorizing each higher people’s court to conduct pilot projects within its jurisdiction to standardize compensation for personal injury disputes across urban and rural populations. To further advance the implementation of the central decisions and deployments, we now propose amending the relevant provisions in the Supreme People’s Court’s Interpretation on Several Issues Concerning the Application of Law in the Trial of Personal Injury Compensation Cases, which currently differentiate compensation standards for disability, death, and dependent support expenses between urban and rural areas. In order to further refine this judicial interpretation and better safeguard the health and safety of the public, we are hereby soliciting public comments through the Supreme People’s Court’s official website, the China Court Network, and other channels, and warmly welcome valuable suggestions from all sectors of society. Specific feedback may be submitted in writing or by email; when submitting proposals, please provide detailed justifications. Written submissions should be addressed to Li Xuewei, First Civil Adjudication Division, Supreme People’s Court, No. 27 Dongjiaominxiang, Dongcheng District, Beijing, Postal Code 100745. Electronic submissions should be sent to mytlaw@163.com. The deadline for this public consultation is December 10, 2021.
Hereby announced!
Supreme People’s Court of the People’s Republic of China
December 3, 2021
Decision of the Supreme People’s Court on Amending the “Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Cases Involving Compensation for Personal Injury”
(Draft for Comments)
At its [ ]th meeting, the Judicial Committee of the Supreme People’s Court decided to amend the “Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Cases Involving Compensation for Personal Injury” as follows:
I. Article 12 is amended to read as follows: “The disability compensation shall be calculated, based on the degree of loss of labor capacity or the disability rating of the victim, at the per capita disposable income of urban residents in the location of the court hearing the case for the preceding year, and shall be payable for a period of twenty years commencing from the date the disability is determined. However, for persons aged sixty or above, the period shall be reduced by one year for each additional year of age; for those aged seventy-five or above, it shall be calculated over a period of five years.”
Where the victim has sustained a disability due to injury but their actual income has not decreased, or where the degree of disability is relatively mild yet the impairment significantly affects their ability to work and find employment, the disability compensation may be adjusted accordingly.
II. Article 15 is amended to read: “Death compensation shall be calculated based on the per capita disposable income of urban residents in the location of the court hearing the case for the preceding year, multiplied by twenty years. However, for individuals aged sixty or above, the period shall be reduced by one year for each additional year of age; for those aged seventy-five or above, it shall be calculated over a period of five years.”
III. Article 17 is amended to read as follows: “The living expenses of a dependent shall be calculated based on the degree of the supporter’s loss of working capacity, using the per capita annual consumer expenditure of urban residents in the location of the court hearing the case for the preceding year. If the dependent is a minor, the period shall be computed up to the age of eighteen; if the dependent is unable to work and has no other source of livelihood, the period shall be twenty years. However, for those aged sixty or above, the period shall be reduced by one year for each additional year of age; for those aged seventy-five or above, the period shall be calculated as five years.”
A dependent refers to a minor who, according to law, is entitled to support from the victim, or an adult close relative who has lost the capacity to work and lacks any other source of livelihood. If the dependent has other supporters, the party liable for compensation shall only compensate the portion that the victim is legally obligated to bear. Where there are multiple dependents, the total annual compensation shall not exceed the per capita consumption expenditure of urban residents in the preceding year.
IV. Article 18 is amended to read: “If the claimant for compensation provides evidence demonstrating that the per capita disposable income of urban residents in their domicile or habitual residence exceeds the standard applicable in the jurisdiction of the court hearing the case, the disability compensation or death compensation may be calculated according to the relevant standard applicable in such domicile or habitual residence.”
The relevant calculation standards for the living expenses of dependents shall be determined in accordance with the principles set forth in the preceding paragraph.
V. Article 22 is amended to read: “The terms ‘per capita disposable income of urban residents,’ ‘per capita consumption expenditure of urban residents,’ and ‘average wage of employees’ as used in this Interpretation shall be determined on the basis of the relevant statistical data for the preceding year, as published by the government statistical authorities, for each province, autonomous region, municipality directly under the central government, special economic zones, and cities separately listed in the national plan.”
“The ‘preceding year’ refers to the statistical year immediately preceding the conclusion of the first-instance court debate.”
VI. Article 24 is amended to read: “This Interpretation shall come into force as of [date] 202_.”
Where any prior judicial interpretation issued by this Court is inconsistent with this Interpretation, this Interpretation shall prevail.

The General Office of the Ministry of Justice and the General Office of the China Banking and Insurance Regulatory Commission have jointly issued a notice to strictly standardize judicial appraisal work related to insurance claims.
Recently, the General Office of the Ministry of Justice and the General Office of the China Banking and Insurance Regulatory Commission jointly issued the “Notice on Standardizing Judicial Appraisal Work Related to Insurance Claims” (hereinafter referred to as the “Notice”), setting forth clear requirements for the standardization of judicial appraisal activities involving insurance claims (hereinafter referred to as insurance‑related judicial appraisals).
The Notice points out that, in recent years, a broad range of forensic appraisal institutions and insurance entities have conscientiously fulfilled their duties and taken proactive measures, effectively safeguarding the legitimate rights and interests of the public and upholding social fairness and justice. However, forensic appraisals related to insurance still face issues such as non‑standard practices and a lack of integrity. Judicial administrative organs at all levels and the banking and insurance regulatory bureaus are required to thoroughly study and implement Xi Jinping’s Thought on the Rule of Law, raise their political awareness, and earnestly put into practice the people‑centered development philosophy. They should regard standardizing insurance‑related forensic appraisals and strengthening industry oversight as concrete steps under the initiative “Doing Practical Things for the People,” improve relevant systems and mechanisms, intensify regulatory efforts, resolutely prevent “judicial scalpers” and “backroom dealings” in insurance‑related forensic appraisals, officely crack down on all kinds of illegal and non‑compliant activities, enhance the insurance sector’s service capacity and quality, elevate the quality and credibility of forensic appraisals, and effectively protect the legitimate rights and interests of insurance consumers.
The Notice emphasizes the need to further strengthen oversight and regulation and to standardize professional conduct. First, impartiality and compliance must be upheld: forensic appraisal institutions and appraisers shall not be subject to unlawful interference by any organization or individual, nor shall they engage in illegal or unethical practices such as accepting bribes, soliciting meals or favors, issuing false appraisal opinions, or seeking improper gains. Insurance institutions and parties involved must not interfere with the independent and impartial practice of forensic appraisal institutions, nor may they collude with forensic appraisers, related organizations, or individuals to manipulate insurance‑related forensic appraisals for profit. Furthermore, insurance institutions are prohibited from entering into cooperation agreements with forensic appraisal institutions, and their employees may not concurrently serve as forensic appraisers in violation of applicable regulations. Second, joint commissioning is encouraged: parties should negotiate to select a forensic appraisal institution and jointly verify the appraisal materials. If no agreement can be reached, both sides may randomly choose from the lists of forensic appraisers and institutions published by the judicial administrative authorities. Prior to the issuance of the appraisal report, neither the insurance institution nor the party concerned may commission another appraisal on the same matter. Third, on‑site witnessing is encouraged: where conditions permit, insurance institutions should dispatch personnel to attend the appraisal and sign to conoffice the relevant documentation. Should either the insurance institution or the party concerned fail to cooperate without justifiable reason, they shall bear the corresponding legal consequences.
The Notice requires judicial administrative organs at all levels to strengthen communication and coordination with their counterparts in the banking and insurance regulatory authorities, and to establish long-term mechanisms. Specifically, it calls for: establishing an information-sharing mechanism to promptly provide and update lists of forensic experts and forensic institutions, contact information for insurance‑industry liaisons, and relevant regulatory data; instituting a notification‑and‑consultation mechanism to facilitate the timely reporting of major cases involving insurance‑related forensic examinations and the joint deliberation of significant issues, thereby collaboratively addressing emerging circumstances and challenges in this field; developing a dispute‑resolution framework that ensures smooth channels for receiving complaints and reports, refines dispute‑mediation procedures, leverages expert expertise, and actively defuses conflicts; and setting up a joint enforcement mechanism that, through measures such as joint operations, delegated enforcement, and cross‑jurisdictional, alternating inspections, rigorously cracks down on illegal and non‑compliant practices—such as insurance fraud perpetrated by “forensic scalpers”—using forensic examinations.

The Supreme People’s Procuratorate has issued a notice: punish, in accordance with the law, criminal offenses involving malicious wage arrears and safeguard the legitimate rights and interests of rural migrant workers.
The Supreme People’s Procuratorate has issued the “Notice on Fully Leveraging the Functions and Roles of the Procuratorial Organs to Legally Assist in Resolving the Issue of Delinquent Payment of Wages to Rural Migrant Workers.”
Punish, in accordance with the law, criminal offenses involving malicious wage arrears.
Safeguarding the legitimate rights and interests of rural migrant workers
Addressing the issue of unpaid wages to rural migrant workers and safeguarding their legitimate rights and interests is a matter of pressing concern for the people and vital to overall social stability. The Party Central Committee with Comrade Xi Jinping at its core has consistently attached great importance to this issue, and General Secretary Xi Jinping has issued important instructions on multiple occasions. As the year draws to a close, cases of wage arrears and violations of migrant workers’ rights tend to occur more frequently in certain sectors. Recently, the Supreme People’s Procuratorate issued the “Notice on Fully Leveraging the Functions and Roles of the Procuratorial Organs to Assist, in Accordance with Law, in Resolving the Problem of Unpaid Wages to Rural Migrant Workers” (hereinafter referred to as the “Notice”), which calls for the lawful punishment of malicious wage‑arresting crimes and the resolute protection of the lawful rights and interests of rural migrant workers.
The Notice emphasizes that, as the legal supervisory authority, the procuratorial organs have an inescapable duty and a core responsibility to contribute, through more effective performance of their duties, to resolving the issue of unpaid wages to migrant workers. This is also an essential requirement for thoroughly implementing the people-centered development philosophy. Procuratorial organs at all levels must earnestly study and implement the spirit of the Sixth Plenary Session of the 19th CPC Central Committee and the important instructions of General Secretary Xi Jinping, officely strengthen their political awareness, rule-of-law consciousness, and procuratorial self-awareness, and treat assisting in addressing the problem of unpaid wages to migrant workers as an important and urgent task, ensuring its rigorous and effective execution.
The Notice requires that malicious wage arrears and related criminal offenses be punished in accordance with the law, and that the legitimate rights and interests of migrant workers be officely safeguarded. At all levels, procuratorial organs, when handling cases involving refusal to pay labor remuneration and similar matters, should fully leverage the advantages of the “integrated arrest-and-prosecution” mechanism to enhance the quality and efficiency of case handling. They must implement the criminal justice policy of “fewer arrests, cautious prosecution, and prudent detention,” effectively apply the system of leniency for those who admit guilt and accept punishment, and strive to achieve a win-win, multi-win, and shared‑win outcome—protecting both the rights and interests of migrant workers and the normal operation of enterprises. Measures to combat wage‑arrears crimes should be planned and carried out in tandem with efforts to recover unpaid wages. At the same time, unlawful and criminal acts such as filing false lawsuits by fabricating employment or service contracts under the names of migrant workers must be prosecuted in accordance with the law, so as to uphold judicial authority and public trust.
The Notice states that civil and administrative prosecution functions should be better fulfilled to support the resolution of wage‑arrears issues faced by migrant workers. Efforts should be made to provide prosecutorial assistance, offering support to migrant workers in bringing lawsuits to safeguard their rights. The principle of targeted supervision must be put into practice, with flexible application of various measures—including procuratorial recommendations for retrial, protests, and other forms of prosecutorial advice—to handle, with high quality and efficiency, cases involving the supervision of final civil and administrative judgments and the oversight of enforcement proceedings related to wage arrears.
The Notice emphasizes the need to strengthen internal and external coordination and collaboration to pool efforts. Procuratorial organs at all levels should proactively enhance cooperation with the courts and public security organs, urging them to expedite the handling and enforcement of cases involving wage arrears owed to rural migrant workers in accordance with the law. Furthermore, they should intensify collaboration with departments such as human resources and social security, housing and urban–rural development, and transport, establishing a mechanism for the exchange and sharing of information on wage and debt recovery by rural migrant workers.
The Notice emphasizes the need to actively implement the “Fengqiao Experience” of the new era and promote diversified dispute resolution and root‑cause governance. It calls for improving the efficiency of handling letters and visits from migrant workers, and, in cases where enterprises or industries exhibit widespread, systemic, or emerging issues related to wage payments, issuing prosecutorial recommendations to the relevant competent authorities in accordance with the law, proposing targeted solutions, and advancing preventive measures at the source. At the same time, it urges proactive efforts to publicize and interpret laws and regulations on the protection of migrant workers’ rights and interests to both employers and migrant workers, thereby fostering a favorable social environment in which employers respect and abide by the law, and workers are aware of their rights and know how to defend them.

The Supreme People’s Court has issued a document to further standardize the exercise of discretionary power and promote the correct and uniform application of the law.
To thoroughly study and implement Xi Jinping’s Thought on the Rule of Law, to carry out the CPC Central Committee’s directives on strengthening the building of political and legal teams, to consolidate and deepen the outcomes of the first phase of education and rectification within the court system, and to ensure that the second phase progresses in a substantive and effective manner, the Supreme People’s Court has focused on the specific manifestations of persistent problems and deep-rooted malpractices in judicial practice, emphasizing achievements in institutional development. Based on extensive research and rigorous deliberation, it recently issued the “Measures for the Implementation of Unified Application of Law by the Supreme People’s Court” (hereinafter referred to as the “Measures”). Grounded in the functional positioning of the highest judicial organ, the Measures set forth concrete requirements for further standardizing and unifying the application of law, ensuring its uniform and correct implementation, thereby effectively safeguarding the dignity and authority of the national legal system, upholding judicial fairness, and enhancing public confidence in the judiciary.
The “Implementation Measures” comprise twenty articles and, with respect to various tasks aimed at ensuring the uniform application of law—such as the Supreme People’s Court’s drafting and promulgation of judicial interpretations or other normative documents, the publication of case precedents, the implementation of a system for retrieving similar cases, and the convening of specialized judges’ conferences to deliberate on cases—primarily set forth provisions concerning the circumstances, scope, and reference standards for retrieving similar cases in case handling; the scope of cases subject to deliberation at specialized judges’ conferences; specific mechanisms for resolving issues of legal application; and the development of a unified platform for the application of law and its associated database.
The Implementation Measures stipulate that, in the course of adjudicating cases, the Supreme People’s Court, in addition to those cases required by the “Guiding Opinions of the Supreme People’s Court on Standardizing Legal Application and Strengthening Case‑Similarity Retrieval (Trial)” to undergo such retrieval, shall also conduct case‑similarity searches for “four categories of cases” as defined in the “Guiding Opinions of the Supreme People’s Court on Further Improving the Supervisory and Management Mechanism for ‘Four Categories of Cases’,” for cases protested by the Supreme People’s Procuratorate, and for cases in which, during the proceedings, the public prosecution authority, the parties, their defense counsel, or litigation agents submit guiding cases or effective judgments of the Supreme People’s Court on similar cases in support of their claims. These measures aim to strengthen the supervision and management of the “four categories of cases,” address the expectations of the parties, and ensure that no discrepancies in the application of law arise among the Supreme People’s Court’s final judgments. The Implementation Measures further standardize the format of case‑similarity retrieval reports, ensuring that they comprehensively document the handling judge’s process of conducting case‑similarity searches with respect to the key points of contention, the divergent judicial views identified, and the views and rationale proposed for adoption.
The Implementation Measures further clarify and expand the scope of cases to be discussed at the specialized judges’ conferences of the various departments of the Supreme People’s Court. Specifically, pending cases in which the proposed judicial outcome is inconsistent with guiding cases or with the legal application standards set by the Supreme People’s Court for similar cases, as well as pending cases whose outcomes would establish new standards for the application of law, shall all be referred by the collegial panel to the presiding judge of the relevant department for convening a specialized judges’ conference. The Measures also stipulate that the Supreme People’s Court will establish and improve a cross‑departmental mechanism for specialized judges’ conferences to examine and resolve discrepancies in the application of law across departments or significant issues of legal application spanning multiple fields.
To address, in a targeted manner, disputes over the application of law that arise in judicial practice, the Implementation Measures have introduced an innovative mechanism for resolving such issues. Specifically, when specific problems of inconsistent or unclear legal application are identified through various channels—particularly where the conditions for issuing judicial interpretations or normative documents governing adjudication are not yet fully mature—the Judicial Administration Office of the Supreme People’s Court shall organize research and propose solutions, which will then be submitted to the Adjudication Committee for deliberation. The Committee will subsequently adopt “Resolutions on Issues of Legal Application” to clarify specific rules of adjudication, with each rule being finalized as it matures, thereby providing timely guidance to judicial practice.
To implement the “Key Work Priorities for Judicial Reform of the People’s Courts in 2021” and to provide judges with normative guidance and reference cases, the Implementation Measures stipulate that the Supreme People’s Court shall establish a unified platform for the application of law and its associated database. The Trial Management Office, the Research Office, the China Institute of Applied Law, and the Information Technology Service Center of the People’s Courts shall, in accordance with their respective functions, be responsible for the platform’s planning, construction, research and development, operation and maintenance, as well as its ongoing upgrading and refinement. The types of cases included in the database encompass guiding cases issued by the Supreme People’s Court; second-instance cases, retrial cases, cases submitted for instruction, and enforcement review and supervision cases handled by the various trial departments; cases deliberated by specialized adjudication conferences, compensation committees, judicial assistance committees, and adjudication committees; as well as other typical cases of broad guiding significance, among others.
Following the promulgation of the Measures, the Supreme People’s Court will promptly organize all judges to study them in depth and ensure their full implementation in judicial proceedings, thereby further advancing the uniform application of the law, ensuring the proper exercise of discretionary powers, and conducting fair, efficient trials in accordance with the law, so as to enable the people to experience fairness and justice in every judicial case.

During the 14th Five-Year Plan period, there will be these major legislative initiatives in the field of ecological and environmental protection.

In recent years, the legal framework in the field of ecological and environmental protection has been steadily improved. What major initiatives can we expect in the future? On the 25th, Bie Tao, Director-General of the Department of Laws and Standards at the Ministry of Ecology and Environment, stated that during the 14th Five-Year Plan period, efforts will be intensified to strengthen legislation in key areas, fill legislative gaps, and actively support legislative bodies in advancing the compilation of an environmental code.
At a press conference held that day by the Ministry of Ecology and Environment, Bie Tao stated that since the start of the 13th Five-Year Plan, 13 laws—including the Environmental Protection Law and the Yangtze River Protection Law—along with 17 administrative regulations such as the Regulations on the Administration of Pollutant Discharge Permits and the Regulations on the Administration of Environmental Protection for Construction Projects, have been formulated or revised. Additionally, 673 national ecological and environmental standards have been revised and promulgated. Work to reform the system for compensating ecological and environmental damage has been comprehensively advanced; as of November this year, more than 7,600 ecological and environmental compensation cases have been handled nationwide, involving compensation totaling over RMB 9 billion.
Bie Tao stated that during the 14th Five-Year Plan period, China will strengthen legislation in key areas and fill legislative gaps. It will, as scheduled, advance the formulation or revision of laws and regulations in priority fields such as Yellow River protection, noise pollution prevention and control, climate change response, and ecological and environmental monitoring, thereby accelerating the establishment of a legal and regulatory framework for ecological civilization that aligns with the goals of building a Beautiful China. At the same time, efforts will be made to promote legislation related to reforms of the ecological civilization system.
He stated that the Ministry of Ecology and Environment will work closely with the legislative authorities to actively conduct research and feasibility studies for the compilation of an environmental code, scientifically integrate existing legislation in the field of ecological and environmental protection, and establish a system for ecological and environmental conservation that ensures rigorous prevention at the source, stringent management throughout the process, and accountability for violations, thereby advancing the modernization of the environmental governance system and governance capacity.
In addition, it is necessary to improve the system of stringent penalties and heavy sanctions. We should actively promote the coordinated application of administrative, criminal, and civil liabilities, establishing a legal liability framework that prioritizes administrative responsibility while supplementing it with criminal and civil accountability, and continuously strengthen the principal responsibility of enterprises and public institutions for ecological and environmental protection. Furthermore, we should innovate approaches to assuming legal liability, systematically expand the scope of enforcement mechanisms such as the “dual-penalty system,” daily fines, and credit-based sanctions, and proactively explore new mechanisms for bearing legal responsibility, including ecological restoration and joint and several compensation.

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