JC Master Legal News Issue 1044

Key Takeaways for This Issue

The China Securities Regulatory Commission has approved the Guangzhou Futures Exchange to launch trading in industrial silicon futures and options.

The China Securities Regulatory Commission recently approved the Guangzhou Futures Exchange to launch trading in industrial silicon futures and options.

The Shanghai Stock Exchange is soliciting public comments on the business rules for asset-backed securities.

To further enhance the role of asset-backed securities in serving the real economy and strengthen investor protection, the Shanghai Stock Exchange today released the “Shanghai Stock Exchange Rules on Asset-Backed Securities (Draft for Public Comment)” (hereinafter referred to as the “Rules”) and is soliciting public feedback.

China’s express delivery volume has once again surpassed 100 billion parcels, with 100 million parcels entering and leaving rural areas every day.

Since the beginning of this year, China’s postal and express delivery sector has withstood multiple pressures by stepping up efforts to ensure smooth operations and unimpeded logistics, while intensifying measures to alleviate difficulties. As a result, the volume of express deliveries reached 100 billion parcels seven days earlier than last year, underscoring the industry’s remarkable resilience.

Deliver a comprehensive package of tax and fee policies to help the manufacturing sector grow stronger, better, and larger.

Since the beginning of this year, in the face of a complex and challenging domestic and international environment and multiple unexpected shocks, China has strengthened macroeconomic policy adjustments that span both cyclical and counter-cyclical periods. It has implemented a new package of tax and fee support measures, including large-scale refunds of outstanding VAT credits, as well as a comprehensive set of policies and follow-up measures—such as extending the deferral of tax and fee payments for small, medium, and micro-sized manufacturing enterprises—to stabilize the economy, thereby helping the manufacturing sector and the real economy to grow stronger, improve quality, and expand in scale, and driving a sustained recovery and improvement in China’s economic performance.

China’s first local regulation on family doctor contract services has been promulgated in Tianjin, with the rule of law providing robust support for these services.

On December 1, the 38th meeting of the Standing Committee of the 17th Municipal People’s Congress adopted the “Several Provisions on Family Doctor Contractual Services in Tianjin,” which will take effect on January 1, 2023. This marks the country’s first local regulation governing family doctor contractual services.

Finance and Capital Markets

FINANCE &CAPITAL MARKETS

The China Securities Regulatory Commission has approved the Guangzhou Futures Exchange to launch trading in industrial silicon futures and options.

The China Securities Regulatory Commission recently approved the Guangzhou Futures Exchange to launch trading in industrial silicon futures and options.

Industrial silicon futures and options are the first products listed for trading on the Guangzhou Futures Exchange. Industrial silicon is a key raw material for the “silicon‑energy” industry and is classified as a green, low‑carbon commodity. China is the world’s largest producer, consumer, and exporter of industrial silicon. The launch of industrial silicon futures and options will help refine the price‑formation mechanism, enhance market participants’ risk‑management capabilities, and support the development of China’s low‑carbon economy, aligning with the Guangzhou Futures Exchange’s mission to promote green development.

Going forward, the China Securities Regulatory Commission will urge the Guangzhou Futures Exchange to diligently carry out all preparatory work for the listing of industrial silicon futures and options, ensuring their smooth launch and stable operation.

The Shanghai Stock Exchange is soliciting public comments on the business rules for asset-backed securities.

To further enhance the role of asset-backed securities in serving the real economy and strengthen investor protection, the Shanghai Stock Exchange today released the “Shanghai Stock Exchange Rules on Asset-Backed Securities (Draft for Public Comment)” (hereinafter referred to as the “Rules”) and is soliciting public feedback.

In recent years, under the guidance of the China Securities Regulatory Commission, the Shanghai Stock Exchange has upheld the principle of “establishing sound systems, non-interference, and zero tolerance,” actively leveraging the functions of the asset-securitization market. As of the end of October 2022, the SSE had cumulatively issued asset-backed securities totaling RMB 5.37 trillion, with outstanding assets under custody amounting to RMB 1.35 trillion, playing a vital role in revitalizing existing assets, reducing corporate leverage, broadening financing channels, and supporting supply-side structural reform. To align with the new stage of development in asset-securitization and evolving market demands, the SSE has adhered to the principles of “true sale” and “bankruptcy remoteness,” adopted a problem‑oriented approach, and, drawing on its day-to-day regulatory experience, revised the “Shanghai Stock Exchange Guidelines for Asset Securitization Business.” The revised document has been renamed the “Shanghai Stock Exchange Rules for Asset‑Backed Securities Business.”

This revision covers multiple aspects, including listing eligibility and conofficeation procedures, issuance and transfer, information disclosure, investor protection, suspension and resumption of trading, and delisting. The key provisions are as follows: First, focusing on the distinctive features of asset-backed securities and emphasizing asset‑level creditworthiness, the rules refine requirements for underlying assets and cash‑flow projections, thereby establishing a regulatory framework that aligns with the development dynamics of the asset‑securitization market. Second, the conofficeation process for listing eligibility is clarified, with strengthened measures to prevent integrity risks and enhanced oversight and constraints on the review of such eligibility, thus improving standardization and transparency. Third, information‑disclosure arrangements across the entire value chain are standardized, investor rights are better protected, a new holder‑meeting mechanism is introduced, and risk‑management responsibilities of market participants are reinforced, guiding market institutions to fulfill their roles and obligations. Fourth, the issuance and listing procedures are streamlined, suspension and resumption of trading are more effectively regulated, listing application documents are simplified, and overall efficiency in the listing process is enhanced.

Going forward, the SSE will diligently collect, assess, and incorporate relevant feedback, promptly issue and implement its business rules, and establish an open, transparent, and predictable institutional framework. It will also build an asset‑backed securities regulatory system under a “1+5+N” structure—comprising one core business rule, five business guidelines, and N supplementary operational guides—so as to enhance the user‑friendliness of its rules, strengthen market participants’ sense of gain, stimulate innovation and dynamism in the market, promote high‑quality development of the bond market, and improve the quality and effectiveness of services supporting national strategies and the real economy.

Were all违规 share reductions due to “mistaken operations”? More than 60 shareholders of listed companies have received penalties.

Despite repeated warnings from regulators, unauthorized share reductions by shareholders of A-share listed companies continue to persist. According to a review by a reporter from the Economic Information Daily, as many as nine A-share companies issued apology announcements in November alone for unauthorized share sales by shareholders and senior executives, with most attributing the violations to “mistaken operations.”

“Before and after a company’s listing, directors, supervisors, senior executives, and shareholders holding more than 5% of the shares are required to undergo multiple rounds of compliance training on share reductions conducted by securities offices, local securities regulatory authorities, and stock exchanges. Yet illegal share reductions persist despite repeated prohibitions. A key reason is that, compared with the substantial profits they can generate, the costs of violating regulations remain relatively low, leading those involved to pay insufficient attention to relevant laws and regulations,” a seasoned board secretary at an A-share listed company told a reporter from the Economic Information Daily on December 1. He recommended that regulatory authorities refine their oversight mechanisms, strengthen enforcement and penalties, and safeguard the orderly functioning of the capital market.

It is worth noting that, with respect to unauthorized share reductions by shareholders and directors, supervisors, and senior executives of listed companies, regulators have consistently taken a office stance, resolutely investigating and prosecuting such violations in accordance with the law. According to statistics, so far this year, more than 60 shareholders from at least 30 companies have received regulatory penalties for unauthorized share reductions.

The reasons cited for违规 share reductions are mostly “mistaken operations.”

On November 30, the Shanghai Stock Exchange issued a corporate supervision announcement, issuing a regulatory warning to Xie Yulong, a shareholder of Dongwei Technology. The announcement stated that, upon investigation, from July 30 to October 14, 2022, Xie Yulong, without prior disclosure of a share‑reduction plan, sold a total of 500,429 shares of the company through centralized bidding transactions, representing 0.34% of the company’s total share capital and amounting to RMB 75.6143 million. It was only on November 3, 2022, that he fulfilled his information‑disclosure obligations regarding these share transactions, thereby breaching his earlier commitments. In accordance with relevant regulations, the Shanghai Stock Exchange has issued a regulatory warning to Xie Yulong.

On November 2, Dongwei Technology issued an announcement regarding a specific shareholder’s reduction of the company’s shares and an apology. Following an internal review, the company discovered that shareholder Xie Yulong had partially sold shares he held in the company. Upon verification with Mr. Xie, the primary cause was an inadvertent personal error, resulting in his securities account being used to sell shares without providing the required 15‑trading‑day advance notice of the intended reduction. The company hereby apologizes for this incident and for any inconvenience it may have caused to the company and its investors.

Earlier, on July 20, the company had also issued an announcement regarding the results of a block‑trade sale by its core technical personnel and an apology. The announcement stated that Liu Tao, a core technical employee, intended to reduce his holdings in the company through block‑trade transactions, with the total number of shares sold not exceeding 150,000, representing no more than 0.102% of the company’s total share capital. Between July 11 and July 19 this year, Liu Tao sold a total of 200,000 shares via block‑trade transactions. “Due to an operational error, the number of shares sold in the block‑trade transaction exceeded the planned reduction by 50,000 shares.”

Coincidentally, on November 28, Hua’an Securities also issued an announcement regarding a shareholder holding more than 5% of the company’s shares who engaged in unauthorized share reductions and subsequently apologized. The announcement stated that Dongfang International Entrepreneurship Co., Ltd., “due to insufficient understanding of relevant regulations,” failed to disclose its reduction plan within 90 days after reducing its shareholding below 5%, and instead proceeded to sell an additional 2,750,000 shares through centralized bidding transactions, totaling RMB 13.884 million.

In addition, on November 25, Canaan Technology issued an apology announcement stating that the securities account of its director, Zhou Zhendao, engaged in unauthorized share sales without prior disclosure of a reduction plan. The violation was attributed to an inadvertent operational error by Mr. Zhou himself.

A review of listed companies’ announcements reveals that, in November alone, nine A-share offices issued apology statements regarding unauthorized share reductions by their shareholders and senior executives. In addition to the aforementioned companies, these include Shengxun Shares, Xingfa Group, Anshuo Information, Geke Micro, Zhongrong Electric, and Zhengtong Electronics. Furthermore, more than a dozen other companies released apology notices after their shareholders engaged in short-term trading due to “operational errors.”

It is worth noting that, when explaining share reductions by company shareholders or senior executives, many listed companies typically characterize such violations as “mistaken operations” by the shareholders or executives themselves or their relatives, or as resulting from a “failure to fully understand the relevant regulations.” The parties concerned have also submitted written statements indicating that they have conducted “thorough self-examinations and reflections.”

Increase the intensity of regulatory oversight over illegal share reductions.

Irregular share reductions by shareholders, directors, supervisors, and senior executives of listed companies have long been a key focus of enforcement by the China Securities Regulatory Commission, local securities regulatory authorities, and stock exchanges. According to data from Wind and announcements by listed companies, since the beginning of this year, more than 60 shareholders across at least 30 A-share offices have received penalties from the CSRC, local securities regulators, and stock exchanges for violating regulations on share reductions.

On November 29, *ST Furen announced that, due to violations including failure to fulfill performance‑compensation commitments and failure to disclose share‑reduction plans as required, the company had received an administrative regulatory measures decision from the Henan Securities Regulatory Bureau on November 25, 2022. On November 9, the company had already been subject to disciplinary sanctions by the Shanghai Stock Exchange for the same violations. The SSE publicly censured *ST Furen and issued a critical notice, while also publicly censuring several responsible individuals, including the then‑Chairman and Board Secretary Zhu Chenggong.

Previously, as the first case of illegal share reduction penalized since the new Securities Law came into effect, the Wuxi AppTec share‑reduction violation drew widespread market attention.

On May 13, WuXi AppTec announced that on May 12, its shareholder, Shanghai Yingyi Investment Center (Limited Partnership) (“Shanghai Yingyi”), received a “Pre‑Notice of Administrative Penalty” from the China Securities Regulatory Commission. The notice indicated that, for engaging in share reductions without making the required disclosures as promised, Shanghai Yingyi was ordered to make corrections, issued a warning, and fined RMB 200 million. This RMB 200 million penalty also set a new record for the highest fine ever imposed in A‑share market history for violations related to unauthorized share reductions.

A responsible official from the relevant department of the China Securities Regulatory Commission previously stated that unauthorized share reductions by listed-company shareholders, directors, supervisors, and senior executives undermine the order of the securities market and harm investors’ rights and interests, and have long been a key focus of the CSRC’s regulatory enforcement. Article 36 of the new Securities Law specifically regulates share‑reduction activities, stipulating that such actions must not violate the CSRC’s provisions on holding periods, timing of sales, quantities sold, methods of sale, and information disclosure, and must also comply with the business rules of the stock exchanges; it further sets out corresponding penalties. Shareholders, directors, supervisors, and senior executives of listed companies are required to study these provisions carefully and strictly abide by them. Any violation of these regulations will entail corresponding legal liabilities.

“When shareholders of listed companies engage in unauthorized increases or reductions of their holdings, they not only violate relevant regulations but also inflict negative repercussions on the company and create unfavorable expectations among investors. The persistent recurrence of illegal share reductions by listed-company shareholders may stem from ‘mistaken operations,’ but it could also be due to low enforcement costs, which allow such violations to persist. I recommend strengthening regulatory enforcement,” said Yang Delong, Chief Economist at Qianhai Open Source Fund.

Business and Corporations

COMMERCIAL & CORPORATE

Expectations of a slowdown in the Federal Reserve’s rate hikes have become a key support for U.S. stocks.

Despite the better-than-expected U.S. nonfarm payrolls data for November released on the 2nd, markets still anticipate that the Federal Reserve will slow the pace of rate hikes. Following a sharp lower open, New York stocks saw their losses steadily narrow, with the three major indices closing mixed.

At the close of trading that day, the Dow Jones Industrial Average rose 34.87 points from the previous session, closing at 34,429.88, a gain of 0.10%; the S&P 500 fell 4.87 points to 4,071.70, down 0.12%; and the Nasdaq Composite dropped 20.95 points to 11,461.50, a decline of 0.18%.

According to data from the U.S. Department of Labor, nonfarm payrolls increased by 263,000 in November, exceeding the market’s expectation of 200,000. In response, U.S. stocks opened sharply lower that day, while yields on long-term Treasury bonds and the U.S. dollar index briefly surged. However, as investors continued to digest the news, market dynamics reversed.

Bryce Doty, Senior Vice President at U.S.-based Sit Investment Associates, believes that despite November’s nonfarm payrolls increase exceeding expectations, the Federal Reserve will likely still need to reduce the size of its December rate hike to 50 basis points. The stock market’s pullback triggered by the employment data has created buying opportunities for investors on dips.

On November 30, Federal Reserve Chair Jerome Powell stated that it would be “appropriate” for the Fed to slow the pace of rate hikes once interest rates approach a “restrictive level sufficient to bring down inflation,” adding that such a slowdown could come as early as the December meeting.

Bank of America Global Research said on the same day that it expects the Federal Reserve to raise interest rates by 50 basis points in December and February next year, and by 25 basis points in March next year.

The Chicago Mercantile Exchange’s “FedWatch Tool” indicates that the market assigns a 23% probability to the Federal Reserve raising interest rates by 75 basis points at its December policy meeting, slightly up from 21.8% the previous day.

Market analyst James Hailchik said that, as investors adjust their portfolios ahead of the Federal Reserve’s December policy meeting, short-term volatility in U.S. stocks could rise.

Since March of this year, the Federal Reserve has raised interest rates six times in a row, with nearly four of those increases totaling 75 basis points. Minutes from the Fed’s November monetary policy meeting indicated that most officials favor promptly slowing the pace of rate hikes to mitigate the risk of overtightening.

Promote the entrepreneurial spirit and accelerate the development of world-class enterprises.

From November 25 to 28, the 2022 China Entrepreneurs Boao Forum was held in Boao, Hainan. At the main forum on the 28th, Zong Qinghou, Chairman of the Hangzhou Wahaha Group, stated in his keynote address that how to achieve new accomplishments on the new journey is the core challenge facing all enterprises. We must uphold the entrepreneurial spirit, accelerate the development of world-class enterprises, and make contributions in the new era.

Zong Qinghou stated that to promote the entrepreneurial spirit, it is essential to deeply understand and grasp its five core dimensions: First, entrepreneurs must possess a patriotic commitment. Patriotism can be expressed in many ways, but above all, it means running first‑class enterprises and building world‑renowned brands. Second, they must embrace a spirit of bold innovation. Innovation is the primary driving force behind development. Entrepreneurs should dare to lead, willingly take risks, and continuously explore new business opportunities to achieve sustainable growth. Third, they must uphold integrity and abide by the law. A socialist market economy is one grounded in trust and the rule of law; entrepreneurs should set an exemplary standard of honesty and compliance. Fourth, they must actively shoulder social responsibility. Enterprises are part of society; only those who sincerely give back to the community will earn genuine societal recognition and meet the demands of our times. Fifth, they must cultivate a global outlook. Rooted in China yet with a worldwide perspective, entrepreneurs should closely monitor international market trends and consumer needs while guarding against global risks, thereby enabling their companies to thrive through higher‑level opening-up and contributing to the dual circulation of domestic and international markets.

How can we carry forward the entrepreneurial spirit on this new journey? Zong Qinghou believes it is essential to keenly grasp the current economic landscape—both its opportunities and challenges, as well as its risks and prospects. The 20th National Congress of the Communist Party of China has sent a strong, positive signal to businesses. Entrepreneurs should remain confident, anchor themselves in the real economy, enhance their capacity for scientific and technological innovation, accelerate technological upgrading, overcome difficulties, and forge a new engine of growth for China’s economic development.

How should entrepreneurs work diligently to strengthen the nation while upholding core principles and pursuing innovation? Zong Qinghou believes that entrepreneurs should:

 I. Product Transformation: From Demand Insight to Demand Creation

As an entrepreneur in the food and beverage industry, it is essential to align with the trends of the times, capitalize on the growing health‑conscious consumer demand, and seize opportunities to develop high‑quality products that meet evolving customer needs. Only then can you sustain robust growth and maintain a competitive edge in an increasingly fierce market.

Over the past two years, Wahaha Group has made a major strategic priority of capitalizing on the booming health‑care sector. The company has established the Modern Bioengineering Research Institute and the Traditional Chinese Medicine and Dietary Therapy Research Institute, leveraging its core traditional beverage business while tapping into the transformative potential within the industry. By continuously empowering the traditional beverage segment, expanding its customer base, and growing the overall market size, Wahaha is also relentlessly exploring innovative health‑focused products that meet consumers’ diverse needs.

II. Production Transformation: From Traditional Manufacturing to “Smart+” Manufacturing

With technological advancement progressing at a breakneck pace, only by building robust capabilities in independent innovation and cutting-edge technologies can we secure the initiative and voice in development, and accelerate the transition of “Made in China” to “Created in China.”

Entrepreneurs must be pioneers, organizers, and leaders in independent innovation. In recent years, Wahaha Group has leveraged digital technologies to strengthen the real economy, driving the transformation and upgrading of traditional manufacturing. The company has advanced beverage production from automation toward intelligent manufacturing, making its operations interconnected, smart, safe, and environmentally friendly. Looking ahead, Wahaha will remain committed to its “Smart Plus” strategy, staying true to its core beverage business while expanding into the high-end equipment manufacturing sector, thereby setting a new benchmark for intelligent manufacturing across the industry.

Zong Qinghou emphasized that to be an outstanding entrepreneur, one must possess a clear mission, vision, set of core values, and a distinctive growth-oriented mindset. Professional leadership—comprising four dimensions—is also essential: effective decision-making, inspiring others, a craftsman’s spirit, and the ability to drive change and innovation. In addition, character‑based leadership is crucial, focusing on four core qualities: integrity and honesty, accountability and reliability, win‑win collaboration, and courageous responsibility.

The four-day 2022 China Entrepreneurs Boao Forum was co-hosted by Xinhua News Agency and the People’s Government of Hainan Province, with the Xinhua News Agency National Brand Project Office and Xinhuanet serving as co-organizers. This year’s forum was themed “Embarking on a New Journey and Making Contributions in the New Era,” aiming to harness the initiative of enterprises and entrepreneurs, build consensus on development, bolster confidence in growth, and foster new drivers of development. It seeks to consolidate the foundations for economic recovery and growth, and, guided by the new development philosophy, to demonstrate renewed commitment and deliver fresh achievements on the path toward high-quality development.

Driving high-quality development through technological innovation.

From November 25 to 28, the 2022 China Entrepreneurs Boao Forum was held in Boao, Hainan. At the main forum on the 28th, Zheng Yongnian, a professor at The Chinese University of Hong Kong (Shenzhen) and director of the Qianhai Institute for International Affairs, stated in a video address that the importance of high-quality development has reached an unprecedented level, and that such development must be driven by science and technology, with technological advancement at its core. He also proposed establishing a business‑finance hub to support the growth of China’s real economy.

Zheng Yongnian argues that to achieve high-quality development, it is essential to strengthen scientific and technological innovation. Regarding how to better advance such innovation, he underscores the pivotal role of talent. “In today’s world, capital follows talent, and at the heart of technology lies human expertise. Beijing, Shanghai, and the Guangdong–Hong Kong–Macao Greater Bay Area can each develop specialized talent hubs—hubs that could serve as centers for scientific and technological innovation as well as financial powerhouses.”

In addition to human capital, Zheng Yongnian recommends establishing a commercial and financial hub to support the development of China’s real economy, enhance financial stability, and integrate the financial centers of Hong Kong, Guangzhou, and Shenzhen into a single, unified financial center.

Zheng Yongnian argues that, as China transitions from achieving moderate prosperity in all respects to fully building a modern socialist country and becoming a high-income economy, many key factors will hinge on deepening reform and further opening up.

The four-day 2022 China Entrepreneurs Boao Forum was co-hosted by Xinhua News Agency and the People’s Government of Hainan Province, with the Xinhua News Agency National Brand Project Office and Xinhuanet serving as co-organizers. This year’s forum was themed “Embarking on a New Journey and Making Contributions in the New Era,” aiming to harness the initiative of enterprises and entrepreneurs, build consensus on development, bolster confidence in growth, and foster new drivers of development. It seeks to consolidate the foundations for economic recovery and growth, and, guided by the new development philosophy, to demonstrate renewed commitment and deliver fresh achievements on the path toward high-quality development.

China’s express delivery volume has once again surpassed 100 billion parcels, with 100 million parcels entering and leaving rural areas every day.

Just after 8:00 a.m. on December 1, strings of figures were continuously scrolling and rising on the large display of the State Post Bureau’s express delivery big data platform.

At 8:10, as the screen flashed, the words “In 2022, China’s cumulative express delivery volume has surpassed 100 billion parcels!” appeared on the big screen.

Staff retrieved the information for the 100-billionth parcel—a box of honey pomelos shipped from Pinghe County, Zhangzhou City, Fujian Province, to Xiamen City in the same province, carried by J&T Express.

Since the beginning of this year, China’s postal and express delivery sector has withstood multiple pressures by stepping up efforts to ensure smooth operations and unimpeded logistics, while intensifying measures to alleviate difficulties. As a result, the volume of express deliveries reached 100 billion parcels seven days earlier than last year, underscoring the industry’s remarkable resilience.

Under the pandemic, handling a business volume of hundreds of billions of parcels has been no easy feat. Lin Hu, Deputy Director-General of the Market Supervision Department of the State Post Bureau, stated that to counter the adverse impacts, the State Post Bureau has adopted a multi‑pronged approach:

— Strengthen routine epidemic prevention and control efforts, implement all basic epidemic‑prevention measures, adhere to the principle of “preventing imported cases and domestic resurgences,” rigorously and meticulously enforce joint prevention and control of both people and goods, and strictly prevent the spread of the epidemic through postal and delivery channels.

— To ensure the smooth flow of goods and services, a working mechanism has been established, a series of policies have been introduced, and continuous monitoring and coordination have been carried out. Progress is being advanced in a tiered, categorized, and region-specific manner, helping to address issues such as disruptions on trunk routes and bottlenecks at the last mile caused by the pandemic.

— Continuously expand the reach of “express delivery to villages,” strengthen the service network, unlock the potential of the rural market, and support rural revitalization.

— Deepen the coordinated development of e‑commerce and express delivery, ensuring the overall stability of the express delivery sector during e‑commerce promotional periods. Further safeguard the legitimate rights and interests of delivery workers and maintain a stable workforce.

In Zhangzhou, the birthplace of this year’s 100-billionth express parcel, in addition to honey pomelos, there are many other local agricultural specialties. To boost the delivery of parcels to rural areas and villages, and to facilitate the outbound flow of agricultural products from mountainous regions into urban markets, the Zhangzhou Postal Administration has been advancing the development of a rural postal‑logistics system and fostering the integrated growth of express delivery and modern agriculture. It has successively cultivated several “gold‑standard” express‑service‑for‑modern‑agriculture projects, including Zhangzhou flowers and trees, Zhangzhou honey pomelos, and Zhangzhou sweet potatoes, with the “Express Plus” model emerging as a new engine driving rural economic development in Zhangzhou.

It’s not just Zhangzhou—across the country, as the “express delivery to villages” initiative gains momentum, rural postal and logistics networks are steadily improving, and the postal and express delivery sector is playing an increasingly vital role in boosting rural revitalization.

In ancient times, the mysterious Western Regions; today, the prosperous Xinjiang. Back then, it was the camel‑bell‑ringing Silk Road; now, it has become the northwest’s “express delivery artery.” Take YTO Express as an example: its dedicated courier shuttle service between Hangzhou and Urumqi runs up to seven round trips per week, with each vehicle carrying more than 20,000 parcels.

Every winter is the peak season for selling cotton quilts in Xinjiang. YTO Express trucks, loaded with raw cotton, quilt covers, and other cotton products, head out of southern Xinjiang to the YTO Urumqi transshipment center, where the goods are sorted before being shipped across the country.

The benefits of the “express delivery plus modern agriculture” model are becoming increasingly evident. According to Xu Liangfeng, Deputy Director of the Data Management Division at the Postal Security Center of the State Post Bureau, rural express parcels are undergoing encouraging changes: more specialty agricultural products are reaching consumers with significantly shortened supply chains; express delivery services have expanded into villages through various channels, greatly facilitating online shopping in rural areas and continuously enhancing the overall delivery experience; meanwhile, efforts to bring express services to villages in central and western regions are accelerating, enabling an increasing number of fruits and other agricultural products to be distributed nationwide via courier networks.

According to monitoring data from the State Post Bureau, with the accelerated development of rural delivery and logistics systems in recent years, the coverage of “express delivery to villages” has continued to expand, and today more than 100 million parcels are delivered to and from rural areas every day.

Accelerating the development of a rural delivery and logistics system is also a key priority for the postal and express delivery sector during the 14th Five-Year Plan period.

Lin Hu stated that, in the next phase, the State Post Bureau will promote joint last-mile delivery in rural areas. In response to the reality of high costs and low profitability in rural parcel delivery, it will encourage the integration and sharing of resources, foster deeper cooperation among rural postal services, express delivery companies, transportation providers, and other stakeholders, and jointly establish public rural delivery distribution centers.

Meanwhile, efforts are being stepped up to build integrated village-level postal and logistics service stations. “Building on the initial entry of certain brands into rural areas, we will consolidate these gains through station development, further enhance rural residents’ awareness and satisfaction with express delivery services, and encourage more brands to expand into villages,” said Lin Hu. He added that channels for shipping agricultural products will also be further streamlined. Work is underway to launch pilot projects promoting coordinated e‑commerce and express delivery in rural areas, and to continuously develop flagship express‑delivery initiatives that support modern agriculture, thereby better serving rural revitalization.

Taxation

TAXATION

Deliver a comprehensive package of tax and fee policies to help the manufacturing sector grow stronger, better, and larger.

Since the beginning of this year, in the face of a complex and challenging domestic and international environment and multiple unexpected shocks, China has strengthened macroeconomic policy adjustments that span both cyclical and counter-cyclical periods. It has implemented a new package of tax and fee support measures, including large-scale refunds of outstanding VAT credits, as well as a comprehensive set of policies and follow-up measures—such as extending the deferral of tax and fee payments for small, medium, and micro-sized manufacturing enterprises—to stabilize the economy, thereby helping the manufacturing sector and the real economy to grow stronger, improve quality, and expand in scale, and driving a sustained recovery and improvement in China’s economic performance.

The value-added tax credit refund policy for iron ore mining and beneficiation has effectively helped enterprises alleviate their financial difficulties.

Iron ore is a crucial raw material for steelmaking; however, the raw ore extracted from mines cannot be directly fed into a blast furnace. Instead, it must undergo a series of processing steps to become sintered feedstock suitable for smelting. As an upstream link in the steel industry chain, iron ore mining and beneficiation constitutes the initial stage of the steelmaking process. Tangshan Jiawang Industrial Co., Ltd. (hereinafter referred to as Jiawang Industrial) is a company that undertakes the beneficiation and processing of imported raw ore.

“The company has capitalized on Caofeidian’s strengths—its concentration of the steel industry and its abundant port resources—by establishing a 6.6-million-ton-per-year ore‑beneficiation and blending base within the Steel and Power Industrial Park of the Caofeidian Industrial Zone. By processing imported raw ore through beneficiation, the company then sells the refined products to steel smelting and processing enterprises in the Caofeidian area,” said Qin Baoyu, the company’s chief financial officer.

In recent years, amid the pandemic, mineral market prices have experienced significant volatility, driving up upstream offices’ costs for imported raw materials. Coupled with rising quality expectations from downstream customers, upstream companies seeking to ensure their survival and pursue growth have been compelled to further upgrade their production lines.

The large-scale refund of outstanding input VAT credits is the centerpiece of this year’s new package of tax and fee support measures. As of November 10, the total amount of such refunds has reached RMB 2.3097 trillion. By sector, manufacturing offices have received RMB 617.6 billion in refunds, accounting for 26.7% of the total—making it the sector that has benefited most prominently. According to VAT invoice data, since the beginning of this year, manufacturing enterprises with tax refunds have seen their sales revenue rise by 8.8% year on year, 4.2 percentage points higher than that of non‑refunded offices; meanwhile, their purchases have increased by 11.7% year on year, 5.8 percentage points above the growth rate of non‑refunded offices.

A “combination punch” of tax policies for steel smelting and processing boosts confidence and fuels momentum.

High atop towering mountains, the golden Great Wall gleams brilliantly; its dominant hues of gold and red exude solemn grandeur. This is the steel‑crafted cultural‑creative product—the “Ode to the Great Wall” postcard.

Holding the postcard in my hand, the most striking impressions are its remarkable thinness and sheen. According to reports, the “Ode to the Great Wall” postcard is crafted from a cutting-edge steel known as “Cicada Wing Steel,” produced by Shougang Jingtang Iron & Steel Co., Ltd. (hereinafter referred to as Shougang Jingtang), with a thickness of just 0.08 millimeters.

Stepping into the production facility for “Cicada‑Wing Steel,” the processes of ironmaking, steelmaking, hot rolling, and cold rolling are all proceeding in an orderly fashion. Sheets of material, as thin as a cicada’s wing, emerge from the production line, are neatly rolled into coils, and stacked in the plant’s storage area, awaiting loading and shipment. These products will be used in applications such as 5G components and food packaging, with the thinnest measuring just 0.07 millimeters.

With raw materials in hand, smelting and processing constitute the midstream segment of the steel industry chain. At Shougang Jingtang, raw materials sourced from upstream are transformed into high‑quality sheet products through processing.

This year, the state issued the “Notice on Accelerating the Processing of Export Tax Rebates for a Limited Period,” requiring that the average processing time for normal export tax rebates or exemptions for Category I and Category II exporters be shortened to within three working days. At the same time, the additional deduction rate for R&D expenses in the manufacturing sector has been increased from 75% to 100%, further bolstering market entities’ confidence in stepping up their R&D efforts.

The policy “combination punch” has effectively helped a broad range of market entities overcome challenges and alleviate difficulties. According to monitoring by the tax authorities, among 100,000 key tax‑paying enterprises nationwide, the tax and fee burden per 100 yuan of operating revenue decreased by 5.3%, with the equipment manufacturing sector seeing a decline of 9.6%.

Equipment Maintenance: Policy Benefits Delivered with Precision and Rigor through Targeted Implementation

In the steel industry, a specialized equipment maintenance team is essential for ensuring the long service life of large-scale machinery. Changbai Mechanical and Electrical Equipment Maintenance Co., Ltd. is a company that provides equipment repair services to enterprises such as Shougang Jingtang.

“The company has long placed a strong emphasis on R&D, continuously enhancing its market competitiveness,” said Wang Lei, a finance professional at the office. “The tax authorities have promptly communicated and provided guidance on the latest policies, enabling our enterprise to fully benefit from the government’s favorable measures.”

“Manufacturing is a pillar of the national economy and a key driver for building a modern industrial system and advancing Chinese‑style modernization,” said Li Xuhong, Director of the Institute of Fiscal and Tax Policies and Applications at the National Accounting Institute in Beijing, in an interview with People’s Daily Online. Since the beginning of this year, to mitigate the impact of the pandemic on the manufacturing sector, China has continued to strengthen tax and fee‑related support measures, focusing on three main areas to foster manufacturing development. For small and medium‑sized manufacturers, support has been provided primarily through measures such as deferring tax payments and reducing the VAT rate for small‑scale taxpayers to zero, thereby helping to safeguard employment, maintain economic stability, and protect market vitality. For traditional manufacturing, efforts have centered on enhancing the additional deduction for R&D expenses, among other initiatives, to facilitate transformation and upgrading, promote high‑end, intelligent, and green development, and accelerate the country’s drive to become a manufacturing powerhouse. As for emerging industries that already enjoy certain technological advantages, policy incentives—including one‑time write‑off of equipment purchases for high‑tech enterprises and a suite of tax and fee concessions aimed at fostering the growth of high‑tech offices—have been deployed to advance the integrated development of strategic emerging sectors, cultivating new engines of growth in next‑generation information technology, artificial intelligence, biotechnology, new energy, new materials, high‑end equipment, and green environmental protection.

Shanghai: Tax and fee cuts “inject fresh liquidity” and “boost confidence”

Since the beginning of this year, thanks to the effective implementation of a new package of tax and fee support measures, Shanghai’s economy has continued to grow. From January to October, the city’s cumulative tax and fee reductions, refunds, and deferrals exceeded RMB 220 billion, bolstering corporate cash flow and helping to stabilize the overall macroeconomic landscape.

Shanghai Yongda Municipal Construction and Maintenance Engineering Co., Ltd. undertakes the renovation, upgrading, and operational maintenance of municipal infrastructure, including urban roads and sewer systems. Affected by the pandemic, the company’s first-half revenue amounted to only 30% of its full-year projected income. Since resuming operations, the company has been facing severe liquidity constraints.

“The RMB 7.53 million in outstanding tax refunds was credited to our account promptly, relieving our immediate financial strain,” said Yu Jun, chairman of the company. “We swiftly resumed several maintenance and construction projects, further ensuring the safety and convenience of citizens’ daily commutes.”

Small, medium, and micro enterprises are an essential component of the market economy; supporting their development helps expand employment and improve people’s livelihoods.

Shanghai Coatings Research Institute Co., Ltd. is a small- to medium-sized technology enterprise. “During our most challenging times, we consistently felt the support of the tax authorities,” said Shen Jiamin, the company’s finance director. Thanks to the policy allowing technology-based SMEs to deduct R&D expenses at an enhanced rate before tax, the company has been able to claim tax benefits totaling 3 million yuan.

“The further extension of the deferred‑payment policy for small and medium‑sized manufacturing enterprises has secured us an interest‑free loan of RMB 860,000,” said Wu Bin, finance manager at Shanghai Duanya Rubber & Plastic Products Co., Ltd. He added that recently, silicone‑rubber raw material prices have risen sharply on the international market, and due to the pandemic, the procurement cycle for imported materials has been extended by nearly six months, tying up a substantial portion of working capital in deposits for these inputs. “With this fresh injection of liquidity, we’ve not only stabilized our order book but also gained greater capacity to handle year‑end expense settlements, building up reserves to fuel our company’s future growth.”

Ma Zhengwen, Director of the Shanghai Municipal Tax Service Bureau of the State Taxation Administration, stated that the Shanghai tax authorities will intensify efforts to ensure the thorough and effective implementation of all tax and fee support policies, proactively advance the modernization of the tax system, and better serve Shanghai’s high-quality economic and social development.

Fujian: Smart Services Enable Precise, Targeted Policy Delivery

“From learning about the policy to receiving the 1.12 million yuan tax refund, the entire process was handled online—fast and personable. This tangible financial support has given our company even greater confidence in pursuing research and innovation,” said Wei Leichen, Deputy General Manager of Quanzhou Zhongke Xingqiao Aerospace Technology Co., Ltd. He added that the continuous improvement of tax and fee services has enabled the company to benefit more easily and efficiently from national preferential policies, allowing it to focus on development with greater peace of mind.

Since the beginning of this year, the Fujian Provincial Tax Service Bureau of the State Taxation Administration has thoroughly implemented the “delegation, regulation, and service” reform, advanced the digital transformation and intelligent upgrading of tax filing and payment services, and integrated the development of the “Minjieban” smart tax platform, which is built on a foundation of “data plus rules.” This initiative has enabled end-to-end online automation for the new package of tax and fee support policies—covering learning, application, and benefit realization—while achieving integrated, seamless delivery, rapid access, and robust safeguards. These efforts have helped enhance the quality of tax and fee services and further improve people’s well-being.

“The 1.85 million yuan in outstanding tax refunds has truly allowed us to experience the tangible value of the tax and fee preferential policies,” said Kong Jiaoyang, a tax officer at Shunchang Tianlong Public Transportation Co., Ltd. She added that the state has rolled out a comprehensive package of tax‑benefit measures, and thanks to the Fujian Provincial Tax Service Bureau’s “Smart Benefit Enjoyment” module, companies can access all available incentives with a single click, helping them fully leverage these policies.

The “Smart Benefit Enjoyment” mentioned by Kong Jiaoyang is a key component of the “Minjieban” smart tax‑administration platform. By comprehensively cataloging and tagging relevant policies, the platform enables users to quickly identify policy highlights pertinent to their businesses, read the full text of any policy that interests them, and even subscribe to and save their favorite items.

To ensure seamless service coverage, the Fujian Provincial Tax Authorities have vigorously expanded a dual‑channel online–offline guidance model, guaranteeing the steady implementation of policies designed to benefit businesses and the public. As a pilot unit for the “Smart Benefit Enjoyment” module, the Quanzhou Economic and Technological Development Zone Tax Bureau of the State Taxation Administration has established a dedicated service team. Leveraging a “1+3” integrated outreach and guidance framework—comprising “Smart Benefit Enjoyment + Remote Tax Assistance,” “Smart Benefit Enjoyment + Clever Tax Officer,” and “Smart Benefit Enjoyment + Instant Tax Calculation”—the bureau is promoting subscription guidelines for the “Smart Benefit Enjoyment” platform. At the same time, 12 corporate finance professionals have been invited to serve as functional experience officers, conducting hands‑on trials and providing feedback to refine and upgrade the module’s features.

“We will earnestly implement the spirit of the 20th National Congress of the Communist Party of China, uphold the principle of putting the people first and the approach of upholding fundamental principles while fostering innovation, and further upgrade and refine the ‘Minjieban’ smart tax platform. Guided by the goal of addressing the urgent, difficult, and pressing concerns of the public, we will continue to introduce practical measures that benefit the people, steadily enhance taxpayers’ and payers’ sense of gain and satisfaction, and fully leverage the role of taxation in supporting the cause of Chinese‑style modernization,” said Zheng Yuanfang, a member of the Party Committee and Deputy Director of the Fujian Provincial Tax Service Bureau.

Litigation and Arbitration

LITIGATION & ARBITRATION

China’s first local regulation on family doctor contract services has been promulgated in Tianjin, with the rule of law providing robust support for these services.

On December 1, the 38th meeting of the Standing Committee of the 17th Municipal People’s Congress adopted the “Several Provisions on Family Doctor Contractual Services in Tianjin,” which will take effect on January 1, 2023. This marks the country’s first local regulation governing family doctor contractual services.

Implementing the family doctor contracting service is of great significance for advancing tiered diagnosis and treatment, enhancing primary healthcare capacity, and better meeting the public’s medical, health, and wellness needs. Since launching this initiative in 2017, our city has enjoyed widespread recognition and strong support from residents. To further standardize and promote the effective implementation of family doctor contracting services, a set of regulations has been formulated and put into practice, codifying the city’s distinctive features and proven experiences, thereby ushering in a new stage of law-based development for this work.

Who may serve as family physicians? Several regulations specify the following: registered general practitioners (including assistant general practitioners and traditional Chinese medicine–qualified general practitioners) working at primary-level medical and health institutions; capable physicians from township health centers and village doctors; practicing clinicians who are registered in the specialty of general medicine or who have completed relevant training for general practice and have chosen to engage in multi‑site practice at primary-level medical and health institutions; and retired clinical physicians who have successfully completed general‑practice‑related training.

What services can you access by signing a family doctor service agreement? The relevant regulations clearly stipulate the following: basic medical services, including diagnosis and treatment of common and frequently occurring diseases using both traditional Chinese and Western medicine, rational drug use, and guidance on seeking medical care; national and municipal basic public health service programs; conducting health status assessments, developing health management plans, and providing health education, health counseling, and health guidance; giving priority to appointment services for specialized departments at the same medical institution, regular family doctor outpatient appointments, preventive vaccinations, and other health-related services; under the terms of bilateral referral agreements with secondary‑level and higher‑level medical institutions, offering priority referral services to contracted residents; provided that medication safety is ensured, for contracted patients with chronic diseases who have a clear clinical diagnosis, a stable medication regimen, good adherence, well‑controlled conditions, and who require long‑term pharmacotherapy, the single dispensing quantity may be appropriately increased, the dispensing cycle extended, and appropriate medication guidance provided; under the supervision of a traditional Chinese medicine physician, offering TCM‑based health education and preventive health interventions; and any other personalized services specified in the service agreement.

Two-way referrals aim to ensure that “minor illnesses are treated in the community, while serious conditions are referred to hospitals,” encompassing both upward and downward referrals. Several regulations explicitly encourage secondary- and higher-level medical institutions to provide contracted residents who have been referred by their family doctors with priority access to consultations, examinations, and hospital admissions. For contracted residents referred downward from higher-level medical facilities, family doctors may, based on the patient’s condition, continue to prescribe medications in accordance with the prescriptions issued by the referring institution.

Several provisions stipulate that, during the service period, contracted residents shall be entitled to preferential reimbursement under the city’s basic medical insurance scheme in accordance with relevant regulations. In addition, it is clarified that the fee for family‑doctor contracted services shall be shared among the basic medical insurance fund, basic public health service funding, and payments made by the contracted residents.

Typical Cases of the Supreme People’s Court and the Supreme People’s Procuratorate, November 2022

Issued by the Supreme People’s Court

I. The Supreme People’s Court Releases Ten Typical Antitrust Cases (2022)

1. “Driving School Joint Operation” Horizontal Monopoly Agreement Dispute Case — Determination of the Validity of Contracts Involving Horizontal Monopoly Agreements

2. “Patent Infringement and Settlement Agreement for Non‑Excitation Switches” — Antitrust Review of Abusive Intellectual Property Practices

3. “Kindergarten” Horizontal Monopoly Agreement Dispute Case — Determination of the Right to Claim Damages for Breach by a Perpetrator of a Horizontal Monopoly Agreement

4. “Reverse Payment Agreement in the Patent Infringement Dispute over Saxagliptin Tablets” — Antitrust Review in a Case Not Based on Monopolistic Conduct

5. “Yan’an Concrete Enterprise” Contract Dispute and Horizontal Monopoly Agreement Dispute Case — Calculation of Damages for Horizontal Monopoly Agreements

6. “Images Related to the Chinese Super League” Case of Abuse of a Dominant Market Position — Antitrust Review in the Context of Exclusive Licensing of Commercial Rights to Sports Events

7. “Weihai Water Affairs Group” Case of Abuse of a Dominant Market Position — Determination of Exclusive Dealing by a Public Utility and Calculation of Damages

8. “Horizontal Monopoly Agreement Case Involving Hainan Fire‑Safety Inspection Enterprises” — Interpretation of the Antitrust Fine Base as “Sales Revenue for the Previous Year”

9. Antitrust Administrative Penalty Case Involving the “Horizontal Monopoly Agreement among Maoming Concrete Enterprises” — Determination of “Other Collusive Conduct” and Interpretation of “the Previous Year”

10. Antitrust Administrative Penalty Case Involving the “Huizhou Motor Vehicle Inspection Industry Association” — Antitrust Review of Alleged Monopolistic Conduct by an Industry Association

II. The Supreme People’s Court has released ten typical cases of anti-unfair competition adjudicated by the people’s courts (2022).

1. “Companion‑style” Live‑Streaming Unfair Competition Dispute Case — Determination of Unfair Competitive Conduct in Live Streaming

2. “Non-stick Pan” Commercial Disparagement Dispute Case — Determination of Commercial Disparagement Conduct

3. “King of Comedy” Unfair Competition Dispute Case — Protection of Rights in the Title of a Work

4. “App Wake-Up Strategy” Unfair Competition Dispute Case — Determination of Online Unfair Competitive Conduct

5. Administrative Penalty Case for “WeChat Lottery” Prize‑Winning Sales — Determination of Illegal Prize‑Winning Sales Practices

6. Unfair Competition Dispute Involving “Order‑Farming and Reputation‑Boosting” — Determination of the “Order‑Farming and Reputation‑Boosting” Conduct

7. “Zhang Bai Nian” Counterfeit and Confusion Dispute Case — Determination of Counterfeit and Confusion Acts

8. Case of Unfair Competition Dispute over False Advertising in Engineering Projects — Determination of False Advertising Conduct

9. “Guanidinoacetic Acid” Trade Secret Infringement Dispute — Determination of the Licensee’s Confidentiality Obligations

10. Case of Provisional Measures for the Infringement of Trade Secrets in the “Mass-Production Testing System for Chips” — Application of Provisional Measures in Cases of Trade Secret Infringement

Issued by the Supreme People’s Procuratorate

I. The Supreme People’s Procuratorate has released four typical cases of punishing crimes involving the illegal mining of mineral resources in accordance with the law.

1. Case of Zhang Moshan and 31 others for illegal mining, and Ma Moyu for concealing and disguising proceeds of crime

2. Case of Illegal Mining and Bribery Involving Wu Moubin, Li Moujun, and Others

3. The illegal mining case involving Fu Mouliang and 11 others

4. Case of Wu Mocun and Ren Mou, who are suspected of illegal mining, not prosecuted

II. The Supreme People’s Procuratorate has released seven typical cases under the “Procuratorial Work for the People: Doing Practical Things” series—Administrative Prosecution Walking with the People (Ninth Batch).

1. Administrative Non-Litigious Enforcement Case of Yan Moumou for Illegal Logging Subject to Procuratorial Supervision

2. Case of Procuratorial Supervision over Administrative Non-Litigious Enforcement in the Matter of Wang Moumou’s Illegal Occupation of Yellow River Floodplain Land

3. Case of Procuratorial Supervision over Non-Litigious Administrative Enforcement in an Illegal Mining Matter Involving Luo Moumou

4. Case of Procuratorial Supervision over Administrative Penalties for the Illegal Occupation of Land in a National Nature Reserve by a Sports and Cultural Tourism Company

5. Administrative non-litigious enforcement case involving procuratorial supervision of the failure by five enterprises, including a certain materials company, to pay soil and water conservation compensation fees in accordance with the law.

6. Case of Procuratorial Supervision over Administrative Non-Litigious Enforcement for Environmental Law Violations Involving a Metal Products Factory and 31 Other Enterprises

7. Case of the Shanghai Municipal Procuratorial Organs Promoting the Standardization of Social Governance in Ship Operations

III. The Supreme People’s Procuratorate has released five typical cases of procuratorial organs prosecuting money‑laundering crimes.

1. Huang’s Money Laundering Case

2. Case of Ding Mouhuan and Zhu Mou for money laundering, and Lu Mou for concealing and disguising proceeds of crime

3. Li Mouhua Money Laundering Case

4. Case of Ma Mouyi’s Bribery and Money Laundering

5. Case of Feng Moucai and others for drug trafficking and money laundering
 

IV. The Supreme People’s Procuratorate has released 12 typical cases of public-interest litigation on wetland protection.

1. Administrative Public Interest Litigation Case by the People’s Procuratorate of Gong’an County, Hubei Province, to Supervise and Protect the Ecological Environment of the Honghu Wetland

2. A series of public interest litigation cases in which Hunan’s procuratorial organs have urged the rectification of illegal low-lying enclosures at Xiasai Lake in Dongting Lake, which have damaged the wetland ecosystem.

3. Criminal Public Interest Litigation Case of the Longsha District People’s Procuratorate of Qiqihar City, Heilongjiang Province, v. Li et al., 13 Individuals, for Illegal Hunting

4. Administrative Public Interest Litigation Case by the People’s Procuratorate of Fengze District, Quanzhou City, Fujian Province, to Supervise and Protect the Ecological Environment of the Quanzhou Bay Estuary Wetland Provincial Nature Reserve

5. Civil public-interest litigation case of the Henan Provincial Corporate Social Responsibility Promotion Center against the H Breeding Professional Cooperative of Jili District, Luoyang City, Guan Moumou, and the M State-owned Forest Farm of Henan Province for damaging the wetland ecological environment.

6. Administrative Public Interest Litigation Case in Which the Jilin Procuratorial Organs Supervised the Protection of the Momo Ge Wetland’s Ecological Environment

7. Administrative Public Interest Litigation Case in which Shandong Procuratorial Organs Supervised the Protection of the Ecological Environment of the Dahe East Wetland

8. Administrative Public Interest Litigation Case on the Supervision and Protection of the Ecological Environment of the Yellow River Wetland National Nature Reserve, Zhengzhou Railway Transport Branch of the People’s Procuratorate of Henan Province

9. Administrative Public Interest Litigation Case in Which the First Branch of the Hainan Provincial People’s Procuratorate Urged Remediation of Illegal Aquaculture in a Mangrove Nature Reserve

10. Administrative Public Interest Litigation Case by the Third Branch of the Tianjin People’s Procuratorate to Supervise and Rectify Illegal Construction in the Tianjin Ancient Coast and Wetlands National Nature Reserve

11. Administrative Public Interest Litigation Case by the People’s Procuratorate of Guangling District, Yangzhou City, Jiangsu Province, to Supervise the Rectification of Illegal Encroachment on Yangtze River Wetlands

12. Administrative Public Interest Litigation Case by the People’s Procuratorate of Yangdong District, Yangjiang City, Guangdong Province, Urging Rectification of Illegal Aquaculture in the Mangrove Wetland Park
 

V. The Supreme People’s Procuratorate has released 12 typical cases of administrative public interest litigation in the areas of state‑owned property protection and the transfer of state‑owned land use rights.

1. Administrative Public Interest Litigation Case by the People’s Procuratorate of Ganzhou City, Jiangxi Province, to Supervise and Protect the Security of Medical Insurance Funds

2. Administrative Public Interest Litigation Case by the People’s Procuratorate of Daowai District, Harbin City, Heilongjiang Province, to Supervise the Recovery of Enterprise Tax Arrears

3. Administrative Public Interest Litigation Case by the People’s Procuratorate of Changsha City, Hunan Province, to Supervise the Recovery of Illegally Disbursed Proceeds from the Transfer of State-Owned Land Use Rights

4. Administrative Public Interest Litigation Case by the People’s Procuratorate of Tongcheng City, Anhui Province, to Supervise the Protection of State-Owned Property in the Real Estate Sector

5. Administrative Public Interest Litigation Case in which the People’s Procuratorate of Weihai City, Shandong Province, urged the recovery of state-owned idle land

6. Administrative Public Interest Litigation Case of the People’s Procuratorate of Baisha Li Autonomous County, Hainan Province, Urging the Recovery of Off-site Construction Fees for Civil Air Defense Projects

7. Administrative Public Interest Litigation Case by the People’s Procuratorate of XiuZhou District, Jiaxing City, Zhejiang Province, to Supervise the Recovery of Idle Land Use Rights

8. Administrative Public Interest Litigation Case by the People’s Procuratorate of Huian County, Fujian Province, to Supervise the Collection of Proceeds from the Transfer of State-Owned Land Use Rights

9. Administrative Public Interest Litigation Case by the People’s Procuratorate of Zhongzhan District, Jiaozuo City, Henan Province, to Supervise the Collection of Water Resources Tax

10. Administrative Public Interest Litigation Case by the People’s Procuratorate of Hongkou District, Shanghai, to Supervise the Recovery of State-Owned Property

11. Administrative Public Interest Litigation Case Concerning the Nanning People’s Procuratorate of Liangqing District, Guangxi Zhuang Autonomous Region, Urging Fulfillment of Duties to Assist in the Collection of Cultivated Land Occupation Tax

12. Administrative Public Interest Litigation Case by the People’s Procuratorate of Yanta District, Xi’an City, Shaanxi Province, Urging Remediation of the Occupation of Land Designated for Urban Road Construction
 

VI. The Supreme People’s Procuratorate has released seven typical cases of procuratorial organs’ efforts to combat fraud and other illegal and criminal activities targeting the elderly (second batch).

1. Case of fundraising fraud and illegal acceptance of public deposits involving Wang, Tang, and others—fraudulent scheme targeting elderly individuals under the guise of investing in blockchain-based free retirement services.

2. The case of Liu Mouping and others for illegally absorbing public deposits—raising funds from elderly individuals through a “square dancing” mobile application.

3. The fraud case involving Chen and others—setting up shopping traps during low‑price tours to defraud elderly individuals

4. The Fraud Case Involving Fang Mouliang — Fraud Committed Under the Guise of Arranging Pension Insurance

5. Zhang’s Fraud Case — Fraud Committed Under the Guise of an Investment-Based Business to Monetize Senior Care Service Vouchers

6. Criminal Case with Associated Public Interest Civil Action Involving Yang Mouge’s Sale of Toxic and Harmful Food—Selling “Diabetes-Reducing Tea” Containing Ingredients Prohibited by the State to Elderly Consumers

7. Administrative Public Interest Litigation Case by the People’s Procuratorate of Jianghai District, Jiangmen City, Guangdong Province, to Supervise and Rectify Disorderly Practices in the Elderly Health Product Market
 

VII. The Supreme People’s Procuratorate has released the third batch of five typical cases involving complaints and appeals related to the non-public sector of the economy.

1. Case of a clothing company applying for lawful supervision of the modification of coercive measures

2. A commercial company applies for case‑withdrawal supervision.

3. A case of non‑filing supervision filed by a certain silk company

4. Case of Shi’s Application for Supervision of Non‑litigious Administrative Enforcement

5. Case of Application for Civil Support to Prosecute a Settlement between a Small and Micro Enterprise and Certain Parties
 

VIII. The Supreme People’s Procuratorate, in conjunction with the All-China Women’s Federation, has jointly released 10 typical cases of public interest litigation on the protection of women’s rights.

1. Administrative Public Interest Litigation Case by the People’s Procuratorate of Weicheng District, Xianyang City, Shaanxi Province, to Supervise and Protect Women’s Labor Rights

2. Administrative Public Interest Litigation Case by the People’s Procuratorate of Nayong County, Guizhou Province, to Supervise and Protect Women’s Labor and Social Security Rights

3. Administrative Public Interest Litigation Case on the Beijing Railway Transport Procuratorate’s Supervision of Rectifying Employment Discrimination Against Women

4. Administrative Public Interest Litigation Case by the People’s Procuratorate of Songjiang District, Shanghai, to Supervise the Protection of the Equal Employment Rights of Women with Disabilities

5. Criminal Public Interest Litigation with Civil Component Filed by the People’s Procuratorate of Binhai County, Jiangsu Province, against Wang Mouhong for Infringing on Reproductive Information of Pregnant and Postpartum Women

6. Administrative Public Interest Litigation Case by the People’s Procuratorate of Zhangshu City, Jiangxi Province, to Supervise the Rectification of Vulgar Advertisements That Demean and Harm Women’s Dignity

7. Administrative Public Interest Litigation Case by the People’s Procuratorate of the Bortala Mongol Autonomous Prefecture, Xinjiang Uygur Autonomous Region, to Supervise and Protect Rural Women’s Rights to Land Contract Management

8. Administrative Public Interest Litigation Case by the People’s Procuratorate of Baoying County, Jiangsu Province, to Supervise the Implementation of Mandatory Reporting for Women Subject to Domestic Violence

9. Administrative Public Interest Litigation Case in Qingyuan City, Guangdong Province: The People’s Procuratorate of Qingcheng District Urges Strengthened Coordinated Performance of Duties to Combat Domestic Violence

10. Administrative Public Interest Litigation Case by the People’s Procuratorate of Jiashan County, Zhejiang Province, to Supervise and Protect Women’s Privacy Rights
 

IX. The Supreme People’s Procuratorate has released five typical cases demonstrating how procuratorial organs have implemented the “No. 7 Procuratorial Recommendation.”

1. The drug trafficking case involving Zhang Moufeng of Zhejiang Province

2. Case of Meng and Su Fei of Tianjin for Drug Trafficking and Money Laundering

3. Case of Wan from Shaanxi involving drug smuggling and harboring others for drug use

4. Case of Wang Mou Tao and Dong Mou Ting of Jiangsu Province for Infringing on Citizens’ Personal Information

5. Case of Dai Moulin of Sichuan for endangering precious and endangered wild animals

Attention: These five typical cases involve foreign-invested enterprises and cross-border equity transfers.

Foreign-related and cross‑border commercial litigation constitutes an important component of the people’s courts’ adjudicatory work. Properly adjudicating foreign‑related and Hong Kong, Macao, and Taiwan‑related commercial disputes is of great significance for ensuring the lawful and equal protection of the legitimate rights and interests of market entities and for fostering a fair, just, and rule‑of‑law business environment.

Recently, the Xuhui District People’s Court of Shanghai held a press conference to release its White Paper on Foreign‑Related and Hong Kong, Macao, and Taiwan‑Related Commercial Adjudication for the period 2017–2022. This event marked the ninth installment in the “Adding Weight to the Business Environment” series, during which the court unveiled the aforementioned white paper and provided an overview of its work in this area. The conference also offered both theoretical and practical perspectives on the next phase of advancing foreign‑related and Hong Kong, Macao, and Taiwan‑related commercial adjudication.

From January 2017 to October 2022, the Xuhui District People’s Court accepted a total of 247 commercial dispute cases involving foreign parties or parties from Hong Kong, Macao, and Taiwan. Over the past six years, such cases have shown an upward trend; the types of cases are diverse, yet the causes of action remain relatively concentrated. Foreign-related cases outnumber those involving Hong Kong, Macao, and Taiwan, with Hong Kong‑related cases accounting for a significant share. The white paper indicates that the judicial needs of parties in foreign‑related and cross‑strait commercial disputes handled by the Xuhui Court have been steadily increasing year after year, while the professionalism and complexity of these cases continue to grow. At the same time, market rules and the predictability of legal mechanisms for resolving disputes have become increasingly clear, further highlighting an open, fair, and rule‑of‑law business environment.

Over the years, the Xuhui District People’s Court has adjudicated foreign-related and cross‑strait commercial disputes with impartiality and efficiency, clarified rules governing commercial adjudication, appropriately guided market expectations, and effectively safeguarded market order and transactional security. It has also handled a number of high‑quality commercial cases involving foreign parties and the Hong Kong, Macao, and Taiwan regions, which have yielded favorable legal outcomes and enjoyed widespread public acclaim.

At the press conference, the Xuhui District People’s Court unveiled five landmark cases, highlighting its practical achievements in recent years in commercial adjudication involving foreign parties and parties from Hong Kong, Macao, and Taiwan.

Following the devolution of jurisdiction over foreign-related and Hong Kong, Macao, and Taiwan–related commercial cases, the Xuhui District People’s Court has undergone a transformation—from starting from scratch to achieving expertise. At present, the court’s capacity in adjudicating such cases has expanded several-fold compared with its early days.

Going forward, the Xuhui District People’s Court will take the release of this White Paper as an opportunity to align precisely with the requirements of the Municipal Higher People’s Court and the initiative to “build a new Xuhui and recreate a new Xuhui.” It will earnestly carry out commercial adjudication involving foreign parties and cases concerning Hong Kong, Macao, and Taiwan, sustaining its efforts over the long term to provide more robust judicial services and safeguards for the region’s high-quality development, thereby helping to foster a fair, just, efficient, and rule-of-law‑based business environment.

Case One

Plaintiff [Name] Trust Co., Ltd. v. [Name] Industrial Co., Ltd. and [Name] — Dispute over Liability for Creditors’ Interests (This case was selected as one of the 100 Exemplary Cases of the Shanghai Courts in 2017, and as a Typical Case in Foreign-related and Commercial Trials Involving Hong Kong, Macao, and Taiwan from 2010 to 2020.)

In this case, the law has duly held the relevant incorporators liable for the legal obligations of the foreign‑registered company, thereby safeguarding the legitimate rights and interests of creditors.

Case Two

Plaintiff Shi Moumou v. a certain overseas company et al. — Dispute over the conofficeation of the validity of a contract

This case concerns the determination of whether the parties to the contract engaged in malicious collusion that harmed the interests of a third party. By examining both the subjective intent of malicious collusion and the objective consequences of harm to others, the court found that the equity transfer agreement entered into by the foreign‑registered company did not fall under any grounds for invalidity, and accordingly dismissed the plaintiff’s claims, thereby providing equal protection for the lawful rights and interests of domestic and foreign commercial entities. Following the judgment, no similar disputes have arisen—where an individual sues a limited liability company or a foreign‑registered entity seeking a declaration of contract invalidity—thus serving as a positive precedent.

Case Three

Plaintiff (Defendant in the Counterclaim), Chen Moumou, and Defendant (Plaintiff in the Counterclaim), Yu Moumou, in a dispute over an enterprise contracting and operating agreement.

In this case, with regard to the adjustment of liquidated damages, and taking into account that the impact of the COVID‑19 pandemic has yet to subside, the court, in accordance with the principle of fairness, appropriately determined the liability for breach of contract of both parties.

Case Four

Plaintiff Zhou Moumou v. Defendants Ding Jia, Third Parties Ding Yi, Ding Bing, Ding Ding, et al.—Dispute over the Conofficeation of Contract Validity

In this case, the apparent shareholder sought a declaration that the Share Transfer Agreement was invalid. In adjudicating the matter, the court applied the principle of balancing interests: even if the exercise of the principal rights by the hidden shareholder were to infringe upon the apparent shareholder’s right to name, such infringement would not invalidate the outcome of that exercise; instead, any resulting harm must be remedied through alternative means. Accordingly, the court dismissed the plaintiff’s claim. The reasoning underlying this judgment is consistent with the legislative spirit embodied in Judicial Interpretation No. 3 of the Company Law.

Case Five

Plaintiff Zhang Moumou v. Defendant某某 Pharmaceutical Company and Third Party Li Moumou, et al., Dispute over the Revocation of a Resolution

Corporate resolutions are adopted by a majority vote of the capital, and the legitimacy of such a majority rule rests on procedural fairness. In this case, the voting on each item in the “Resolution of the Extraordinary Shareholders’ Meeting” failed to meet the legally required threshold, and numerous procedural defects were present, constituting a violation of the company’s articles of association. Under these circumstances, the shareholders’ claim for annulment of the resolution should be upheld.