JC Master Legal News Issue 1004

Release Date:

2022-01-24 08:18

Key Takeaways for This Issue

The China Securities Regulatory Commission continues to deepen the “delegation, regulation, and service” reform for securities and fund operating institutions.

To further implement the CPC Central Committee and the State Council’s directives on deepening the “delegation, regulation, and service” reform and optimizing the business environment, and to earnestly deliver tangible benefits to the public, the China Securities Regulatory Commission has further streamlined administrative licensing and filing procedures for securities and fund management institutions, thereby effectively reducing the burden on market entities and facilitating their operations.
The National Development and Reform Commission and six other departments: Gradually lift local restrictions on the purchase of new-energy vehicles.

Finance & Capital Markets
The Supreme People’s Court has issued the “Several Provisions on the Trial of Civil Compensation Cases for Infringement Caused by False Statements in the Securities Market.”
On January 21, 2022, the Supreme People’s Court issued the “Several Provisions of the Supreme People’s Court on Adjudicating Civil Compensation Cases for Infringement Caused by False Statements in the Securities Market” (hereinafter referred to as the “Several Provisions”). The promulgation of these Provisions represents a major step in implementing the “Opinions of the General Office of the CPC Central Committee and the General Office of the State Council on Strictly Cracking Down on Securities Law Violations in Accordance with the Law,” and constitutes an important achievement in improving the fundamental systems of the capital market. It helps raise the costs of illegal and non-compliant behavior in the capital market, encourages all market participants to fulfill their respective duties, safeguards the legitimate rights and interests of investors, and plays a crucial role in advancing the comprehensive deepening of capital market reforms and fostering a sound market ecosystem.
The “Several Provisions” comprehensively summarize the market developments, legislative evolution, and challenging issues encountered in judicial practice since the implementation of the 2003 “Several Provisions of the Supreme People’s Court on the Trial of Civil Compensation Cases Arising from False Statements in the Securities Market.” Drawing on the Civil Code, the new Securities Law, and other relevant provisions, it further refines and clarifies the constituent elements of civil liability for torts arising from false statements in the securities market, as well as the mechanisms for pursuing such liability. Specifically: it abolishes the administrative‑criminal pre‑condition procedure previously stipulated in the earlier judicial interpretation, thereby promptly and fully safeguarding the litigation rights of injured investors; it clearly defines various types of false statements, including false records, misleading representations, material omissions, and failure to disclose as required, and establishes a safe harbor regime for forward‑looking information; it optimizes and improves key criteria—such as the date of occurrence, the date of disclosure, materiality, and the causal link between trading and the false statement—facilitating practical application in judicial proceedings; in light of statutory provisions and judicial practice, it elaborates standards for determining fault and grounds for exemption or defense applicable to directors, supervisors, senior management, other directly responsible persons, independent directors, sponsoring and underwriting institutions, and securities service providers, thus addressing market concerns and stabilizing market expectations; it strengthens the liability of controlling shareholders and de facto controllers to ensure targeted accountability of those primarily responsible, imposes obligations on counterparties in major asset restructuring transactions to curb “deceptive” restructurings, holds accomplices to fraudulent practices accountable to deter peripheral support for false statements, and disallows compensatory arrangements by sponsoring and underwriting institutions to encourage their diligent performance throughout the process, thereby reinforcing the responsibilities of all relevant parties; it refines the benchmark‑date and benchmark‑price regimes, supplementing the traditional “bull‑market‑inducing” category of false statements with a loss‑calculation methodology for “bear‑market‑inducing” cases, prescribes procedures for calculating losses arising from multi‑account trading, and clarifies the determination of causation, thereby systematically improving the rules for assessing damages. After years of effort, the “Several Provisions,” through its comprehensive revision and refinement of the earlier judicial interpretation, will better facilitate the pursuit of civil liability for securities‑related false statements, while also helping to delineate the boundaries of responsibility among all market participants and stabilize market expectations.
To ensure the steady and effective implementation of the “Several Provisions” and to address the evidentiary and certification challenges that investors may face following the abolition of prior‑approval procedures, the Supreme People’s Court and the China Securities Regulatory Commission have actively coordinated their efforts. They have made legally sound arrangements to align judicial proceedings with the CSRC’s specialized support and investigative functions, and have issued a dedicated “Notice on Issues Concerning the Application of the Supreme People’s Court’s ‘Several Provisions on the Trial of Civil Compensation Cases for False Statements in the Securities Market’” (hereinafter referred to as the “Notice”).
Securities misrepresentation is a frequently occurring and widespread form of securities-related misconduct, seriously undermining investors’ legitimate rights and interests and eroding investor confidence. Holding perpetrators accountable through civil liability for torts arising from securities misrepresentation is a crucial component of a multi‑pronged approach to addressing illegal conduct in the capital market, as well as an important measure for raising the costs of such violations. The promulgation and implementation of the “Several Provisions” and the “Notice” have further strengthened the legal framework governing the capital market, streamlined channels for investors to seek redress, and solidified the institutional foundation for all market participants to fulfill their respective duties and responsibilities, thereby providing robust judicial safeguards for building a capital market that is standardized, transparent, open, dynamic, and resilient.
The China Securities Regulatory Commission will work closely with the Supreme People’s Court to steadily and orderly implement the “Several Provisions” and the “Notice,” leveraging the market-wide registration‑based reform as a driving force to comprehensively advance efforts to enhance the quality of listed companies, strengthen the accountability of intermediary institutions, and continuously improve the effectiveness and efficiency of investor protection. At the same time, the CSRC will continue to uphold the principle of “zero tolerance,” refine the mechanisms for law enforcement and judicial cooperation in the capital market, intensify crackdowns on illegal and non‑compliant activities, and promote the high‑quality development of the capital market.

The China Securities Regulatory Commission continues to deepen the “delegation, regulation, and service” reform for securities and fund operating institutions.
To further implement the CPC Central Committee and the State Council’s directives on deepening the “delegation, regulation, and service” reform and optimizing the business environment, and to earnestly deliver tangible benefits to the public, the China Securities Regulatory Commission has further streamlined administrative licensing and filing procedures for securities and fund management institutions, thereby effectively reducing the burden on market entities and facilitating their operations.
First, we will further streamline 63% of certification requirements, thereby reducing bureaucratic red tape. In line with the principle of “reducing wherever possible and simplifying whenever feasible,” we will abolish administrative certification documents for 20 securities and fund management institutions, adopt a notification-and-commitment system for 7 types of certificates, and simplify 2 additional certification requirements, collectively accounting for 63% of the total.
Second, we further streamlined and reduced 91 types of application documents to ease the burden on market entities. In line with the principle of “minimum and necessity,” we abolished or simplified 91 items: specifically, we directly eliminated 51 non-essential or redundant documents, consolidated 26 application materials that did not require separate submission, and simplified 14 others.
Third, we have developed public‑notice and filing‑based service guides to enhance convenience and efficiency. For seven matters involving securities and fund management institutions that have been reclassified from administrative licensing to filing‑based administration, we have prepared corresponding filing‑procedure guides that clearly set out the legal basis, procedures, requirements, and required documents, and made these guides publicly available on the CSRC website to facilitate market participants.
In light of the aforementioned changes, the China Securities Regulatory Commission has concurrently updated the Administrative Licensing Service Guide for Securities and Fund Management Institutions on its official website, making corresponding adjustments to the items whose supporting documents have been abolished or streamlined, as well as to the content of application materials for administrative licenses.
Going forward, with respect to proof documents and administrative licensing application materials that have been canceled or simplified, the CSRC will conduct verification through public inquiries, regulatory information sharing, and strengthened public oversight. Any violations, including false commitments, will be dealt with strictly to ensure that deregulation does not lead to disorder.

The central bank has acted again, cutting SLF rates across all maturities by 10 basis points in a single move.
Following the implementation of the reserve requirement ratio cut and interest rate cuts, the closely watched upper bound of the interest rate corridor—the Standing Lending Facility (SLF) rate—was also lowered in tandem, with one‑off reductions of 10 basis points across the overnight, 7‑day, and 1‑month tenors.
Industry analysts believe that the People’s Bank of China’s repeated interventions over the past week reflect the continued substantial downward pressure on the Chinese economy. The 10-basis-point cuts across all tenors of the Standing Lending Facility (SLF), aligned with this week’s reductions in the Medium-term Lending Facility (MLF) rate and open-market operation rates, signal a comprehensive easing of funding costs by the central bank, which should help guide the market interest-rate center lower in a measured manner.
The SLF rates across all tenors have been cut by 10 basis points.
On January 21, the People’s Bank of China released its SLF rate schedule: effective January 17, the overnight SLF rate is 2.95%, the 7-day rate is 3.10%, and the 1-month rate is 3.45%.
Compared with the situation in December 2021, the overnight, seven-day, and one-month SLF rates were each lowered by 10 basis points.
Zhou Maohua, an analyst at the Financial Markets Department of China Everbright Bank, told reporters that China’s economy is currently facing renewed downward pressure. To bolster financing demand in the real economy, the central bank has further lowered the SLF rate, effectively reducing the upper bound of the interest-rate corridor and narrowing the rate band. This move will help guide the market‑rate center of gravity lower while also dampening volatility in market rates.
The SLF is a liquidity‑adjustment tool established by the central bank in 2013 to meet financial institutions’ short‑term, large‑scale liquidity needs; it primarily serves policy banks and nationwide commercial banks.
PBOC Governor Yi Gang has noted in a published article that, within China’s market-based interest-rate framework, the most important benchmark rates include: the open market operations (OMO) rate and the interest-rate corridor, the medium-term lending facility (MLF) rate, the loan prime rate (LPR), the reserve requirement ratio‑linked deposit rate, and the Shanghai Interbank Offered Rate (Shibor). With the support of an interest-rate corridor—capping rates at the standing lending facility (SLF) rate on the upper end and the excess reserve rate on the lower end—short-term rate fluctuations are kept within an appropriate range.
Yi Gang stated that the SLF is a tool through which the central bank provides short-term liquidity to financial institutions on an as-needed basis. Because financial institutions can obtain funds from the central bank at the SLF rate, they are not compelled to raise capital in the market at rates higher than the SLF; accordingly, the SLF rate can be regarded as the upper bound of the interest-rate corridor.
Zhou Maohua stated that narrowing the interest-rate corridor will help further stabilize market expectations regarding adequate and appropriate liquidity, facilitate the transmission of monetary policy, and reduce financing costs for the real economy in the bond market, among other benefits.
Further RRR cuts may be implemented in the future.
Over the past week, the central bank has taken a series of measures, cutting both the Medium-term Lending Facility (MLF) rate and the Loan Prime Rate (LPR).
On January 17, the People’s Bank of China conducted a 700 billion yuan medium-term lending facility (MLF) operation and a 100 billion yuan open market reverse repurchase operation. The winning bid rates for both the MLF and the open market reverse repo operations were lowered by 10 basis points, to 2.85% and 2.10%, respectively.
On January 20, the People’s Bank of China announced a dual reduction in the Loan Prime Rate (LPR): the 1-year LPR was set at 3.7%, down 10 basis points from the previous period, while the LPR for maturities of five years and above was lowered to 4.6%, a decrease of 5 basis points.
Mingming, Chief Economist at CITIC Securities, told reporters that the reduction in the SLF rate is a continuation of the earlier interest-rate cuts. Following the reductions in the MLF and OMO rates, the SLF cut was in line with market expectations.
At present, China’s economic recovery remains fragile, and the “triple pressures” are becoming increasingly pronounced. Recently, PBOC Vice Governor Liu Guqiang stated that the primary objective is to ensure stability, while policy calls for vigorous action—specifically, deploying ample policy力度, further expanding the toolkit of monetary policy instruments, maintaining overall stability, and preventing a sharp contraction in credit.
Looking ahead, as the central bank’s policy stance shifts, the market still sees room for another reserve requirement ratio (RRR) cut. Wang Yunjin of the Zhixin Investment Research Institute notes that, amid an external environment in which rate‑hike expectations in major developed economies have been brought forward further, China’s scope and timeline for lowering policy rates are more constrained, making a further cut in the first quarter unlikely. By contrast, an RRR cut can serve multiple purposes—maintaining overall credit growth, reducing financing costs, stabilizing market expectations, and optimizing financial institutions’ funding structures. Against the backdrop of today’s complex domestic and international conditions, the likelihood of another RRR cut in the first quarter of 2022 is relatively high.

The China Banking and Insurance Regulatory Commission has issued the “Notice on Streamlining Regulatory Reporting Requirements for the Use of Insurance Funds.”
To further implement the State Council’s “delegation, regulation, and service” reform requirements, consolidate regulatory resources, focus on risk-based supervision, and enhance the quality and effectiveness of oversight, the China Banking and Insurance Regulatory Commission recently issued the “Notice on Streamlining Regulatory Reporting Requirements for the Use of Insurance Funds” (hereinafter referred to as the “Notice”).
The Notice comprises three provisions, primarily aimed at abolishing and consolidating regulatory reporting requirements to further standardize the submission of reports on the use of insurance funds. First, 34 regulatory reporting items have been eliminated. In light of actual developments in insurance‑fund investment activities and evolving market conditions, reports that are already submitted through the regulatory information system, as well as internal investment management matters, have been discontinued, thereby reinforcing institutions’ responsibilities for sound operations and management and enhancing the quality and effectiveness of risk oversight. Second, six separate regulatory reports have been merged into a single report. By integrating different asset classes, reports on equity, real estate, financial products, and other investments have been consolidated into a quarterly report on the use of insurance funds, reducing fragmented and siloed information and improving the overall systematic nature of reporting. Third, the submission of regulatory reports has been further standardized. Insurance companies are required to submit such reports strictly in accordance with regulatory provisions, eliminating delays, inaccuracies, omissions, and concealment, and effectively elevating the quality of reporting.
The issuance and implementation of the Notice represent an important measure by the China Banking and Insurance Regulatory Commission to carry out the CPC Central Committee and the State Council’s requirements for deepening the “delegation, regulation, and service” reform. It will help advance regulatory reform, leverage the advantages of information technology, focus on risk-based supervision of insurance fund deployment, reduce unnecessary reporting burdens on market entities, enhance the quality and efficiency of regulation, and safeguard against related business risks. Going forward, the CBIRC will concentrate on key areas to further streamline regulatory reporting, continue to deepen reforms, and steer the industry toward high-quality development.

The China Banking and Insurance Regulatory Commission has standardized related-party transactions of banking and insurance institutions, delineating ten “red lines” to guard against the risk of illicit transfer of interests.
To further strengthen the oversight of related-party transactions, standardize the conduct of such transactions by banking and insurance institutions, and prevent the transfer of benefits, the China Banking and Insurance Regulatory Commission recently issued the Measures for the Administration of Related-Party Transactions of Banking and Insurance Institutions (hereinafter referred to as the “Measures”), which delineate ten “red lines” and impose prohibitive restrictions on related-party transactions by these institutions. The Measures will take effect on March 1, 2022.
On the same day, in response to irregularities in related-party transactions involving the use of insurance funds, the China Banking and Insurance Regulatory Commission (CBIRC) decided to launch a nationwide special inspection of such transactions across all relevant CBIRC bureaus in 2022. This marks the first-ever targeted inspection since the establishment of the CBIRC.
Integrate bancassurance into the regulatory framework.
Prior to the issuance of these Measures, regulations governing related-party transactions for banks and insurance institutions were formulated separately. In 2004, the China Banking Regulatory Commission issued the Measures on the Administration of Related-Party Transactions between Commercial Banks and Their Insiders and Shareholders, while in 2019 it promulgated the Measures on the Administration of Related-Party Transactions of Insurance Companies.
Li Guangqu, an attorney at Beijing Yingke (Zhengzhou) Law Office, stated that, with the rapid development of China’s banking, insurance, and other financial sectors, the two existing regulations have encountered issues such as inconsistent standards in identifying related-party transactions, making them ill-suited to meet the current demands of market evolution and regulatory oversight.
The Measures standardize the definition of related parties, drawing on and integrating the institutional strengths of both the banking and insurance sectors. They not only harmonize the rules governing related-party transactions but also take into account the distinctive characteristics of different types of institutions, thereby achieving differentiated regulation while ensuring consistency in regulatory standards.
Moreover, with respect to the institutions subject to these regulations, the “Measures” define banking and insurance institutions to encompass not only banks and insurance companies, but also trust companies, financial asset management companies, financial leasing companies, auto finance companies, and consumer finance companies established in accordance with the law. Banking institutions include commercial banks, policy banks, rural banks, rural credit cooperatives, and rural cooperative banks. The scope of insurance institutions covers insurance groups (holding companies), insurance companies, and insurance asset management companies.
The Measures standardize all banking and insurance institutions within China, which will help to coordinate and unify the regulation of related-party transactions, enhance institutions’ management of such transactions, and mitigate financial risks.
According to Li Guangqu, the reason for formulating these Measures is that, in recent years, certain banking and insurance institutions have circumvented regulatory oversight by concealing related-party relationships, structuring complex transactions, and using subsidiaries to illegally provide funds. By engaging in off‑balance‑sheet activities in disguised forms to inflate profits and siphon off benefits, such practices have increasingly exposed risks stemming from related-party transactions within banking and insurance entities. Among small and medium-sized financial institutions—particularly rural commercial banks with private enterprises or individuals as major shareholders—shareholders often wield voting power and participate in day-to-day management. As a result, these banks are frequently subjected to “hostage‑taking” through loans extended to related parties, with illegal financing and guarantees provided to affiliated entities, thereby creating asset black holes that further exacerbate systemic vulnerabilities.
As Professor Qiang Li of the Law School at Northwest University of Political Science and Law has pointed out, the promulgation and implementation of these Measures are of great significance for strengthening the management of related-party transactions by banking and insurance institutions, addressing irregularities in such transactions, and preventing risks associated with the transfer of interests. The special inspection recently launched by the China Banking and Insurance Regulatory Commission focuses on one specific category of related-party transactions—those involving the use of funds—among the various types of related-party dealings undertaken by insurance institutions. Related-party transactions in the insurance sector encompass several categories, including those involving the use of funds, service provision, and the transfer of benefits.
Clearly define seven prohibitive provisions.
With regard to the management of related-party transactions by banking and insurance institutions, the Measures adhere to the fundamental principles of safeguarding corporate operational independence and controlling both the number and scale of such transactions. They place particular emphasis on preventing risks of benefit transfer to shareholders and their affiliates, as well as avoiding multi-layered nested structures. To address illicit practices—such as channeling funds to related parties through complex transaction structures or leveraging conduit arrangements to circumvent regulatory oversight—the Measures set forth seven prohibitive provisions in Articles 27 through 33, clearly stipulating “ten不得s.”
There are two prohibitions that apply universally to banking and insurance institutions: first, they must not circumvent the approval or regulatory requirements for material related-party transactions by means of concealment—such as masking affiliations or fragmenting transactions; second, they must not exploit nested transactions to lengthen financing chains, obscure the true nature of their business, or evade regulatory provisions, thereby facilitating illicit financing for shareholders and their affiliates, asset transfers, circular arbitrage, or the concealment of risks.
There are two requirements unique to banking institutions: they may not, directly or through interbank channels, wealth management products, off-balance-sheet activities, or other such arrangements, exceed prescribed limits or provide funds to related parties in violation of applicable regulations; nor may they extend credit using their own equity as collateral or provide guarantees (including contingent liabilities that function as guarantees) for the financing activities of related parties, except where the related party furnishes adequate counter‑guarantees in the form of bank certificates of deposit or government bonds.
The regulations governing insurance institutions stipulate that they may not circumvent regulatory restrictions—whether through real estate projects, non-insurance subsidiaries, trust schemes, asset management products, or other conduit or nested structures—to illegally extend financing to related parties.
Financial asset management companies shall not engage in unsecured, fund‑based related-party transactions with their affiliated parties.
If a financial leasing company incurs losses from related-party transactions involving assets or funds, it shall refrain from entering into any new asset- or fund‑based related-party transactions with that related party for a period of two years from the date the loss is discovered.
There are three requirements applicable to trust companies: First, in conducting proprietary business, they may not extend loans to or transfer assets to related parties, nor provide guarantees for such parties. Second, when engaging in structured trust business, they must not designate any interested party as a subordinate beneficiary; “interested parties” include, but are not limited to, the trust company itself and all its employees, as well as its shareholders. Third, when managing collective fund trust schemes, trust companies may not allocate trust funds, directly or indirectly, to the trust company’s shareholders or their affiliated entities.
The Measures integrate corporate governance with related-party transactions, stipulating that banking and insurance institutions whose corporate governance regulatory assessment results are rated as Grade E shall not engage in credit‑related, fund‑utilization‑related, or fund‑based related-party transactions.
Strengthen oversight and hold violators accountable.
Liu Xiaoyu, an attorney at Beijing Zhongyin Law Office, stated that the Measures’ provisions on legal liability are directly grounded in laws such as the Banking Supervision and Administration Law, the Commercial Bank Law, the Insurance Law, and the Trust Law.
The Measures stipulate that, in the event a banking or insurance institution violates the provisions thereof, the CBIRC or its branch institutions may take the following measures: (1) order a prohibition on conducting transactions with specific related parties; (2) require the preparation of an audit report for specified transactions; (3) based on the institution’s level of related-party transaction risk, impose requirements to reduce the proportion of transaction amounts with individual or all related parties, up to and including the suspension of related-party transactions; (4) order the replacement of accounting offices, professional appraisal agencies, law offices, and other service providers.
For directors, supervisors, senior management, or other relevant practitioners who violate applicable regulations, regulatory measures may include ordering corrective action, recording the violation in their performance‑record files and issuing industry-wide notifications, and requiring banking and insurance institutions to hold them accountable.
According to Liu Xiaoyu, since the launch in 2019 of a special campaign to rectify equity and related-party transactions at banking and insurance institutions, numerous entities have been penalized for engaging in non-compliant related-party dealings. At the end of 2021, the China Banking and Insurance Regulatory Commission reported that, following two years of targeted enforcement, more than 2,600 shareholders found to have violated laws or regulations had been removed, with total penalties amounting to RMB 140 million imposed on violating institutions and responsible individuals, and 395 individuals disciplined. In addition, certain personnel had their qualifications revoked, and they were barred from the industry. The regulator also urged banking and insurance institutions to hold relevant departments or branches accountable on 360 occasions and to discipline 5,383 individuals, including 674 who received Party‑disciplinary or administrative sanctions. Furthermore, in three phases, the names of 66 major shareholders engaged in serious violations were publicly disclosed.
According to Qiangli, in 2021 alone, regulatory authorities issued 155 penalties against banking institutions for violations related to related-party transactions, with total fines and confiscations amounting to RMB 427.4851 million. The grounds for these penalties covered multiple areas, including the review, approval, disclosure, and reporting of significant related-party transactions. Notably, on May 17, 2021, the China Banking and Insurance Regulatory Commission imposed a fine of RMB 11.2 million on Bank of East Asia (China) for failing to disclose information on significant related-party transactions on a case-by-case basis as required. Meanwhile, on August 23, 2021, the Dalian Branch of the China Banking and Insurance Regulatory Commission fined Dalian Rural Commercial Bank RMB 1.4 million for inadequate disclosure of information on significant related-party transactions.
Substantial fines have become increasingly common in recent years. According to Liu Xiaoyu, an administrative penalty information disclosure notice issued in March 2020 by the Sichuan Regulatory Bureau of the China Banking and Insurance Regulatory Commission indicates that Chengdu Rural Commercial Bank was penalized with a fine of RMB 11 million for violations including conducting equity changes without administrative approval, failing to conduct prudent due diligence, accepting transferees who did not meet the eligibility requirements as shareholders, engaging in material related-party transactions in breach of regulations and improperly extending credit, and conducting non-standard business activities in violation of applicable laws and the Measures for the Administration of Related-Party Transactions between Commercial Banks and Their Insiders and Shareholders.

Commercial & Corporate
The Ministry of Transport has released the Green Transportation Plan for the 14th Five-Year Period, which will promote the adoption of electric trucks and hydrogen fuel cell vehicles.
On January 21, the Ministry of Transport publicly released the “Green Transportation Development Plan for the 14th Five-Year Period.” Against the backdrop of the dual carbon goals, this plan will serve as a guiding framework for restructuring the transportation sector’s energy mix and reducing emissions in the years ahead.
The Plan sets forth that, using 2020 as the baseline, by 2025, carbon dioxide emissions per unit of transport turnover for commercial vehicles shall be reduced by 5%, carbon dioxide emissions per unit of transport turnover for commercial vessels shall be reduced by 3.5%, and the total nitrogen oxide emissions from commercial vessels shall be cut by 7%.
　To achieve these objectives, adjustments are needed in both the energy consumption structure and the transportation structure.
In terms of energy consumption structure, the promotion and application of new‑energy vehicles in urban public transport, taxis, and logistics‑delivery sectors will be accelerated. By 2025, the share of new‑energy vehicles in national urban public transport is to reach 72%, in taxis (including ride‑hailing services) 35%, and in urban logistics and delivery 20%.
Among these, in national ecological civilization pilot zones and key regions for air pollution prevention and control, the share of new-energy vehicles among newly added or replaced buses, taxis, logistics delivery vehicles, and the like shall be no less than 80%.
The Plan specifically notes that the use of electric trucks and hydrogen fuel-cell vehicles will be promoted. In cities such as Beijing, Tianjin, and Shijiazhuang, pure‑electric logistics delivery vehicles will be deployed in central urban areas; within industrial and mining enterprises—particularly in sectors like steel and coal—pure‑electric heavy-duty trucks will be rolled out for short‑haul transport on plant premises; and in cities including Zhangjiakou, pilot applications of hydrogen fuel‑cell vehicles will be advanced for intercity passenger transport, heavy‑duty trucks, and cold‑chain logistics vehicles.
The energy‑consumption structure of water transport also requires adjustment. In the coming years, efforts will be stepped up to promote the adoption of LNG‑powered inland vessels; tailored to local conditions, the use of all‑electric tourist passenger ships will be advanced; and the application of hybrid‑electric, hydrogen‑fuel, ammonia‑fuel, and methanol‑powered vessels will be actively explored.
In terms of the transport structure, efforts will be accelerated to build railway dedicated lines, and the shift of bulk and medium- to long-distance freight from road to rail and from road to water will continue to be promoted.
In the Beijing–Tianjin–Hebei region and its surrounding areas, the share of ore and coke transported via rail, waterways, enclosed belt conveyors, and new‑energy vehicles at major coastal ports has reached over 70%. The proportion of container transshipment by water and intermodal transport combining rail and water has been significantly increased, with annual growth in container intermodal volume exceeding 15%.
With regard to urban transportation, the focus will be on establishing approximately 100 green‑travel cities, encouraging the public to prioritize green modes of transport such as public transit, walking, and cycling. By 2025, the goal is for more than 60% of these pilot cities to achieve a green‑travel share of at least 70%.
In addition to reducing carbon emissions, the Plan also proposes enhancing carbon sequestration by expanding green cover. By 2025, the greening rate for eligible sections of expressways and ordinary national and provincial trunk roads in humid regions will exceed 95%, while in semi-humid regions it will reach at least 85%.
The Plan states that by 2025, a preliminary green and low-carbon production model in the transport sector will have taken shape, with infrastructure becoming environmentally friendly, transport equipment clean and low-carbon, and transport operations intensive and efficient. Breakthroughs will have been achieved in key areas, and the overall level of green development will be broadly aligned with the phased requirements for building a transportation powerhouse.

“Providing timely help in times of need,” with both “stability” and “flexibility,” the energy structure continues to improve.
With both stability and change, the energy structure continues to be optimized.
In 2021, China’s thermal coal prices continued to decline from their historical peak, while the reform of the electricity market accelerated.
At the Ping朔 Mining Area of China National Coal Group in Shanxi, where snow is falling, on-site workers are manually shoveling away the snow from the coal. Meanwhile, at Huanghua Port—China’s busiest coal‑handling port—coal‑carrying vessels ply the docks day and night, and in 2021, the State Energy Group’s Huanghua Port Operations handled 214.95 million tons of coal loading. Every winter’s warmth is made possible by the tireless dedication of countless individuals—year after year, yet always extraordinary.
In 2021, China’s energy sector faced the dual challenges of ensuring supply and driving transformation. The National Development and Reform Commission, together with relevant departments, pressed ahead with determination, safeguarding residential heating, ensuring energy security, strengthening policy guidance, and promoting industrial restructuring.
Alleviating the Coal Shortage: Prices Have Rapidly Fallen to Ensure Heating Supply
In 2021, the energy market experienced a series of dramatic developments. Like a breeze stirring at the tip of a green reed, the turbulence in the energy sector originated from surging coal consumption, which accelerated in response to rising industrial exports.
Xiao Xinjian, a researcher at the Energy Research Institute of the National Development and Reform Commission, attributes this to supply-and-demand dynamics: “Market demand for coal is growing, while coal production itself is inherently planned, constrained by factors such as mining progress, roadway layout, safety measures, and transportation logistics.”
As a country rich in coal, why does China still face coal shortages? Some public opinion attributes this to the impact of the “capacity‑reduction” efforts initiated during the 13th Five-Year Plan period.
“The ‘capacity reduction’ in the coal sector targets outdated production capacity, while China’s overall coal supply capacity continues to strengthen,” Xiao Xinjian countered. He added that the planned nature of coal production will not disappear simply because of capacity‑reduction efforts. Since the start of the 13th Five-Year Plan, the coal industry has deepened supply‑side structural reform, cumulatively shutting down and phasing out nearly 1 billion tons per year of backward coal‑producing capacity, while adding approximately 630 million tons per year of advanced capacity.
“In fact, it is precisely because the ‘capacity‑reduction’ policy has been implemented successfully that the share of high‑quality production capacity has increased substantially, and that the orderly production of coal has been systematically improved and robustly safeguarded. The pace at which production capacity has been released since the 2021 policies to boost output and ensure supply were put into effect clearly demonstrates the significance and value of the capacity‑reduction effort,” said Xiao Xinjian.
“Driven by a sharp surge in demand for thermal coal, coal prices soared from September to October 2021,” said Xiao Xinjian. He added that this round of price increases was primarily attributable to supply-and-demand dynamics, and that, as key coal-producing regions such as Shanxi, Shaanxi, and Inner Mongolia took the lead in fulfilling their commitments to boost production and supply, coal prices have since continued to decline.
“Speculative price manipulation by capital is one of the primary reasons behind this round of irrational coal price increases, which have even completely decoupled from supply-and-demand fundamentals,” said an industry insider.
Data show that in 2021, China saw the addition of more than 30,000 new coal‑trading entities, while coal prices continued to rise sharply, fueled by speculative activity from various capital players. In response, the National Development and Reform Commission and other relevant regulatory authorities have clearly signaled their intention to strengthen oversight in accordance with the law and to rigorously investigate and punish malicious speculation in thermal‑coal futures.
On October 19, 2021, the National Development and Reform Commission stated: “It will make full use of all necessary measures prescribed by the Price Law, study specific steps to intervene in coal prices, and work to bring coal prices back into a reasonable range.” That evening, the NDRC issued three consecutive documents; among them, the document titled “The NDRC Is Studying Legal Measures to Intervene in Coal Prices” sparked market reactions, sending futures prices for thermal coal, coking coal, and coke sharply lower. In the days that followed, coal‑related futures contracts continued to decline.
Under a series of coordinated measures, the tight supply-and-demand situation in the coal market has been effectively eased, and coal prices have gradually returned to relatively reasonable levels. On October 18, 2021, China’s daily coal production exceeded 11.6 million tons, indicating that the shortfall in coal supplies for winter‑spring heating has been fully addressed. By December 31, according to data from the National Bureau of Statistics, the composite transaction price of 4,500 kcal/kg thermal coal at Qinhuangdao Port stood at RMB 584 per ton, bringing coal prices back squarely within an appropriate range.
“The Northeast region, which was the first to feel the strain of energy supply, now enjoys a stable and orderly power supply, with heating services generally starting ahead of schedule,” an employee at a power-generation company in the area told reporters. As of October 9, all 13.47 million kilowatts of coal-fired generating units that had been temporarily shut down in August 2021 have been brought back online, playing a clear role in ensuring supply and bolstering load‑carrying capacity.
“Electric” Power: Promoting Coordinated Development of Coal and Electricity Through Reform
As closely interdependent upstream and downstream industries, China’s coal and power sectors have long been locked in a seesaw‑like “zero‑sum game.”
The 2021 demand for energy security has brought to the fore the years-long disputes between the coal and power markets, prompting broader societal reflection. While acknowledging the tensions between coal and electricity, it is equally important to recognize the evolution and ongoing changes in this sector. Against this backdrop, the “medium- and long-term coal contract” system undoubtedly serves as a stabilizing anchor and a reliable safeguard, ensuring that essential coal supplies meet basic public needs while helping to maintain supply stability and price control.
“Since 2021, coal has been supplied safely and steadily, with medium- and long-term contracts serving as a stabilizing anchor. The ‘benchmark price plus floating price’ pricing mechanism has gained broad acceptance among upstream and downstream coal enterprises, effectively aligning production, transportation, and demand, while establishing an enterprise credit‑based regulatory framework that has helped balance supply and demand in the coal market, ensured a stable and reliable supply, and safeguarded national energy security,” said Li Zhongmin, Deputy General Manager of the National Coal Trading Center. “With fuel supplies secured and generating units operating normally, overall power‑system balance remains broadly under control,” stated Xu Tao, Deputy Director of the State Grid’s National Dispatch Center. He added, however, that given factors such as the uncertainty of renewable energy sources across regions and uneven load distribution, conditions could still tighten during certain peak periods.
From the demand side, ensuring a balance between coal supply and demand requires accelerating market‑based reforms in the power sector. Several experts noted in interviews that coal‑fired power generation is a major coal consumer, yet for a long time the relationship between coal and electricity has been strained. Following a sharp rise in coal prices, power tariffs have been only marginally adjusted, making it difficult to reflect actual costs; as a result, the more electricity generators produce, the greater their losses.
On October 11, 2021, the National Development and Reform Commission issued the “Notice on Further Deepening the Market-Based Reform of On-Grid Electricity Prices for Coal-Fired Power Generation,” deciding to progressively lift price controls on all coal-fired power generation output, thereby marking the beginning of a strategy to ensure electricity supply through market‑based mechanisms.
On November 10, 2021, the National Energy Administration issued the “Notice on Strengthening Market Regulation, Effectively Leveraging Market Mechanisms, and Ensuring Electricity Supply This Winter and Next Spring,” further clarifying that “market-based approaches should be used to bolster electricity supply security.”
Recently, the “Guiding Opinions on Accelerating the Development of a Nationally Unified Electricity Market System,” approved by the Central Commission for Comprehensively Deepening Reform, devoted considerable attention to rationalizing coal‑power pricing. It calls for reforming and improving the market‑based mechanism for setting coal‑power prices, refining the price‑transmission mechanism, and fostering an effective balance between electricity supply and demand. The National Development and Reform Commission has mandated that the first batch of pilot provinces for electricity spot markets must commence trial settlement operations by the end of 2021, thereby enabling the spot market to send clearer and more precise price signals. At present, the initial eight provincial-level electricity spot‑trading pilots have completed continuous trial settlement runs. For instance, Shanxi Province, one of these eight pilots, has been conducting continuous trial operations in its electricity spot market since April 2021, spanning more than nine months.
According to the Shanxi Provincial Energy Administration, in 2021, the total volume of electricity traded in Shanxi’s power market reached approximately 150 billion kilowatt-hours, up about 8% year on year. To further advance the development of a market‑based electricity system, Shanxi will continue to expand the scale of power‑market transactions in 2022. “The recent national electricity‑price reform policies are of great significance for alleviating the cost pressures faced by coal‑fired power generation, easing supply‑security challenges, and stabilizing market expectations,” said Xu Tao. He added that State Grid Corporation will work in concert with all stakeholders to ensure stable electricity prices for residential and agricultural consumers, facilitate a smooth transition between pre‑ and post‑reform pricing frameworks, and maintain orderly and steady operations in both supply and demand. The company will proactively adapt to major changes brought about by the reform—such as a sharp increase in the number of market participants, a broader range of fluctuations in coal‑fired power prices, a substantial expansion in the scale of market transactions, and greater diversity in trading mechanisms—so that prices fully reflect supply‑and‑demand dynamics and low‑carbon, environmentally friendly costs, while being fairly and reasonably passed on to end‑users.
“New” Brings Prosperity, Steadily Advancing with the Adjustment of the Energy Structure
Large-scale wind and solar power base projects are commencing in an orderly manner, pilot programs for county-wide rooftop distributed photovoltaic development are gaining momentum, and wind turbines are being deployed across offshore and plain regions—construction of a wave of renewable energy projects is well underway.
Since 2021, China has seen substantial year-on-year growth in both the installed capacity and electricity generation of wind and solar power. From January to November, the nation’s combined wind and solar installed capacity reached 592 million kilowatts, while total wind and solar power generation increased by 34.7% compared with the same period last year. Notably, construction of large-scale wind and solar power bases is progressing steadily, with 50 projects totaling approximately 100 million kilowatts already identified as part of the first batch. The “Action Plan for Peaking Carbon Emissions Before 2030” sets a clear target: by 2030, the combined installed capacity of wind and solar power will exceed 1.2 billion kilowatts. Supported by favorable policies and their effective implementation, the green transition of energy supply is gaining momentum. It is important to recognize that vigorously promoting renewable energy substitution entails more than simply expanding installed capacity; it involves solving a complex, multifaceted equation that requires balancing clean and low‑carbon options, ensuring safety and reliability, and maintaining economic feasibility—thus facilitating a smooth and steady shift toward a low‑carbon energy system.
The Central Economic Work Conference held in December 2021 made it clear that, based on China’s fundamental national condition of coal‑dominance, efforts should be focused on promoting the clean and efficient utilization of coal, enhancing the capacity to absorb new energy, and advancing an optimized mix of coal and new energy sources.
“Even with energy sources that can replace coal, coal will still have a role to play after carbon emissions peak,” said Tang Baoguo, a member of the CPC Committee Standing Committee and Deputy General Manager of China National Coal Group.
At present, China’s energy resource endowment remains dominated by coal, and coal continues to serve as a “ballast” in safeguarding energy security and ensuring stable supply. Under the goals of peaking carbon emissions and achieving carbon neutrality, greening black coal is an indispensable path for the future development of the coal industry. Industry experts emphasize that the transition between energy sources should be carried out through orderly, gradual substitution, with vigorous efforts to clean up fossil fuels and promote green, clean, and efficient production and utilization in the coal sector.
In 2021, international natural gas supply and demand were tight and prices remained high, while China’s domestic natural gas market achieved steady and rapid growth, with new record‑breaking increases in consumption. Dr. Tian Lei of the China Academy of Macroeconomic Research told reporters that China’s efforts to ensure a stable natural gas supply in 2021 were underpinned by strong confidence, vividly illustrating the principle that “preparedness pays off in times of need.” “This energy‑supply challenge has further underscored both the necessity and urgency of accelerating the energy transition and upgrading, while also highlighting the arduousness and complexity of the process,” Dr. Tian noted. He added that the European energy crisis has revealed that relying solely on market forces to provide reliable backup for fossil fuels is insufficient; it calls for a more robust role for government, the development of additional market‑based mechanisms, and greater resilience within the energy system to better withstand shocks—thus safeguarding the energy transition and upgrading.
“Natural gas boasts large‑scale economic availability, cleanliness, and relatively low carbon intensity. On the one hand, it is one of the primary energy sources for replacing existing coal and oil; on the other, it will, alongside renewable energy, become a key pillar in meeting growing energy demand,” Tian Lei told reporters. He added that, as China builds a new type of power system centered on new energy, taking into account factors such as grid security and carbon reduction, gas‑fired power generation will play an important role during the peak‑carbon phase, and natural gas and renewables will forge a “partnership.” “We should proceed in an orderly manner, establishing the new framework before dismantling the old, to optimize the energy mix. At the same time, we must vigorously advance the development of large‑scale wind and solar power bases, focusing on desert, gobi, and arid regions, while continuing to leverage the peaking and supply‑guaranteeing roles of traditional energy sources—especially coal and coal‑fired power,” Tian Lei said.

One year after the implementation of the new “two‑集中” land‑supply policy, real estate developers’ investment intensity remains uneven.
Looking back at the real estate sector in 2021, both the land‑acquisition side, the sales front, and the financing landscape witnessed changes unlike anything seen before. Notably, 2021 marked the first year that the new “dual‑concentration” policy was implemented.
According to data from the China Index Academy, 50 leading real estate companies experienced a peak in land acquisitions in mid-2021, after which the market shifted toward greater rationality. In December 2021, as many regions completed their third round of centralized land auctions, developers broadly stepped up their land‑acquisition efforts at year‑end, driving a sharp late‑year surge in land transaction volumes.
In fact, during the first half of 2021, the land‑transaction market was once exceptionally buoyant. The head of investment and land acquisition at a mid‑size developer deeply rooted in the Greater Bay Area told a reporter from China Business News, “Land auctions were extremely hot in the first quarter of 2021, so at that time we chose to proactively pass on opportunities in certain regions.” According to this executive, although his company has long focused on the Greater Bay Area, it decided to temporarily forgo participating in the first batch of “two‑集中” land supply rounds in Guangzhou due to the city’s overheated market. However, this lively scene did not persist into the second half of 2021; developers as a whole became far more cautious in their land‑acquisition strategies.
Despite an overall lackluster performance, some property developers maintained a relatively aggressive investment stance in 2021. According to data from the China Index Academy, among the 22 cities participating in centralized land auctions, state-owned enterprises accounted for more than 60% of land acquisitions across all three rounds. In Xiamen, Guangzhou, and Shenzhen, their share of land purchases exceeded 75% in each city. Meanwhile, CRIC Research Center notes that the second round of centralized land supply in 2022 may present a window for developers to acquire land; however, differentiation among offices is likely to persist, with central and state-owned enterprises remaining the primary investors. Most private developers should continue to adopt a cautious approach, while local government‑backed platforms—underpinned by policy support—may find cooperative development a viable strategy for boosting land reserves.
The share of land acquisitions by central and state-owned enterprises has increased.
According to the “2021 Top 100 List of Chinese Real Estate Enterprises by Land Acquisition Value and Area” released by the China Index Academy, in 2021, the total land acquisition spending of the top 100 companies amounted to RMB 2.5377 trillion, down 21.5% year on year. The combined land‑acquisition value of these offices accounted for 45.1% of the total land‑sale revenue across 300 cities nationwide, a decline of 8.9 percentage points compared with the same period in 2020. Among them, Country Garden secured the top spot in both categories, with RMB 139.7 billion in land‑acquisition spending and 40.17 million square meters of land acquired, while Vanke and Poly Development ranked second and third, respectively, on the lists for land‑acquisition value and area.
Notably, compared with 2020, both China Railway Group and China State Construction Engineering Corporation saw year-on-year increases in land acquisition spending exceeding 100%; meanwhile, Shenzhen Metro Group, Wuhan Urban Construction Group, Yuexiu Property, and Xiamen C&T all recorded year-on-year growth in land‑acquisition expenditures of more than 50%. Analysts point out that central and state‑owned enterprises enjoy strong credit profiles, adopt prudent development strategies, and possess clear financial advantages over private offices. According to CRIC Research Center, overall, these state‑owned players can be described as “working nonstop throughout the year,” consistently serving as a key driving force in the land market.
Looking at the trend by phase, according to CRIC data, in 2021, the top 100 real estate developers spent over RMB 920 billion on land acquisitions during the first round of centralized land supply. By contrast, their spending in the second round plummeted to around RMB 340 billion, a drop of 63%. By company type, private developers experienced the sharpest decline: while central and state-owned enterprises saw their second-round land‑acquisition spending fall by 42% compared with the first round, private offices recorded an even more pronounced contraction, with a 83% reduction.
Specifically, regionally focused developers and large-scale property offices were relatively active in the first round of centralized land auctions, while many private enterprises opted to stay on the sidelines in the second and third rounds, with state-owned enterprises and local platform companies emerging as the main players in securing land. For instance, in Shenzhen’s first round of centralized land sales, only six residential plots were put up for bid, yet they still drew participation from more than 20 developers. The most fiercely contested lot that day was a marketable talent‑housing site in Xili. Initially, the market expected the plot to likely be won by Shenzhen Talent Housing Group, but it ultimately turned into a bidding battle between the Vanke–Tecreate joint venture and Longfor. After more than 150 rounds of bidding spanning nearly 120 minutes, Longfor secured the parcel at a premium of 44.96%.
Meanwhile, in the second round of centralized land auctions, according to data from CRIC, private developers’ share of total investment fell by half to 25%, with the remaining 75% accounted for by state-owned enterprises. In the first round, among the top 100 property developers, private offices secured 52% of the land value, while state-owned enterprises captured 48%, with the two groups evenly matched. Data compiled by local public resource trading centers and CICC Securities show that China Overseas Property recorded a total land‑acquisition spend of RMB 33.72 billion, acquiring 13 parcels and emerging as the highest spender in the second round. It also tied with China Railway Construction Corporation for the top spot among the top 50 developers in terms of the number of land parcels acquired.
According to data from the China Index Academy, in 2021, China Overseas Property acquired land worth RMB 109.2 billion, covering a total area of 6.32 million square meters, with projects located in cities including Beijing, Tianjin, Suzhou, Shenyang, Chongqing, Guangzhou, Nanjing, and Shenzhen. In fact, property developers’ land‑acquisition activities are closely linked to their sales and financing operations. The head of investment and land acquisition at the aforementioned developer told reporters that one of the biggest challenges posed by the centralized land‑supply policy for his company lies in managing its cash flow.
Since the introduction of financial regulatory policies such as the “Three Red Lines,” property developers’ financing cash flows have contracted sharply. Meanwhile, during the second round of centralized land auctions in 2021, cities tightened scrutiny of developers’ own‑funds for land acquisitions, significantly raising the bar for securing land. For example, in June 2021, seven departments—including the Dongguan Bureau of Natural Resources, the Dongguan Housing and Urban–Rural Development Bureau, and the Dongguan Bureau of Human Resources and Social Security—jointly issued the “Notice on Regulating Eligibility for Bidding in Land Auctions and Listings” (Trial) (hereinafter referred to as the “Notice”).
In accordance with the relevant provisions of the Notice, shell companies established on an ad hoc basis by real estate developers prior to participating in land auctions shall be disqualified from bidding.
According to the CRIC Research Center, as financing conditions and land‑auction policies continue to tighten, private enterprises are being hit far more severely than central and state‑owned enterprises.
Prudent land acquisition remains the dominant theme.
On January 17, 2022, the National Bureau of Statistics released full-year real estate data for 2021. In 2021, nationwide real estate development investment totaled RMB 14.76 trillion, reaching a record high, up 4.4% year on year—though the growth rate has declined for two consecutive years. Real estate land acquisition area stood at 216 million square meters, down 15.5% year on year; new construction starts fell 11.4% compared with the previous year, with cumulative growth remaining negative for six consecutive months since the second half of the year, and the pace of decline continuing to widen. From January to November 2021, land‑acquisition expenditures (included in development investment) edged down 0.6% year on year. Despite the contraction in land‑acquisition area, total proceeds from land sales reached RMB 1.7756 trillion, up 2.8% year on year. At present, while land‑sale revenues remain robust and land‑acquisition spending stays elevated, the decline in new construction starts suggests that a substantial portion of land parcels remains undeveloped.
On January 7, 2022, Beijing issued the first batch of centralized land‑sale announcements for 2022, becoming the first city nationwide to kick off the market and putting 18 parcels up for tender, with transactions scheduled to take place in mid-to-late February 2022. In the short term, the centralized land‑supply model is expected to persist, leaving some property developers under significant financial pressure—akin to a sword hanging over their heads. To cope with the funding challenges posed by this policy and boost their chances of securing land, the head of the marketing department at a private developer headquartered in Shenzhen told reporters that his company opted in 2021 to adopt a “back‑to‑back” partnership approach with other offices, a strategy widely embraced by most small and medium‑sized developers.
According to data from the China Index Academy, in 2021, the average share of land‑acquisition rights obtained through public auctions and tenders among the 50 leading property developers was 78.5%, a slight decrease of 0.6 percentage points compared with the same period, indicating that the level of joint‑venture land acquisitions remained broadly stable. Specifically, compared with the same period in 2020, the share of land‑acquisition rights held by companies in the TOP 11–30 bracket remained relatively steady; for the TOP 10 group, this share declined by 4.3 percentage points; while for the TOP 31–50 cohort, it edged up slightly. CRIC Research also believes that, going forward, most private developers should continue to adopt a cautious approach, with cooperative development—supported by local government platforms acting as a “safety net”—likely to serve as an effective strategy for replenishing land reserves.
He further noted that it will still take three to six months for property developers’ investment activity to fully recover. For most companies, a cautious approach will remain the dominant tone going forward. On the one hand, the industry has entered the “post‑scale” era, making land‑acquisition strategies driven by sheer expansion increasingly ill‑suited to the current environment. On the other hand, amid broader deleveraging efforts, prioritizing sales and accelerating cash collection to safeguard liquidity remains the top priority—“survive first, then thrive.”
Li Yujia, chief researcher at the Guangdong Provincial Housing Policy Research Center, also noted that the real estate sector’s high‑growth, high‑investment model—propped up by new land supply and new‑home development—is now approaching a broad ceiling. Judging from factors such as the housing supply‑demand balance, household leverage ratios, and the shift away from large‑scale demolition and construction, the market may face downward pressure going forward. Nevertheless, Li Yujia argues that, even under these circumstances, two countervailing trends deserve attention: on the one hand, efforts to revitalize existing housing stock—through renovating older residential neighborhoods, urban renewal, and the development of affordable rental housing—will partially offset the slowdown; on the other hand, as population continues to concentrate in major cities and metropolitan areas, effective housing demand and supply are increasingly shifting to these regions. Coupled with the equalization of public services and the development of well‑planned residential communities, this trend will help steer the industry away from investment‑driven growth toward a greater focus on housing consumption.

The National Development and Reform Commission and six other departments: Gradually lift local restrictions on the purchase of new-energy vehicles.

The National Development and Reform Commission and six other departments recently issued the “Implementation Plan for Promoting Green Consumption” (hereinafter referred to as the “Plan”), which calls for vigorously promoting new-energy vehicles and gradually lifting local restrictions on the purchase of such vehicles.
The Plan stipulates that by 2025, the concept of green consumption will be deeply ingrained in the public consciousness, extravagance and waste will be effectively curbed, the market share of green and low‑carbon products will increase substantially, significant progress will be made in the green transformation of consumption in key sectors, green consumption practices will be widely adopted, and a preliminary consumer system supporting green, low‑carbon, and circular development will take shape. By 2030, green consumption will have become a conscious choice for the general public, green and low‑carbon products will dominate the market, green and low‑carbon development models in key sectors will be largely established, and the institutional and policy framework as well as the governance mechanisms for green consumption will be essentially sound.
The Plan emphasizes that, in pursuit of the carbon peak and carbon neutrality goals, we must vigorously promote green consumption, raise public awareness of resource conservation, oppose extravagance, waste, and excessive consumption, expand the supply and uptake of green and low‑carbon products, and refine the institutional and policy framework and mechanisms that foster green consumption. It calls for advancing the green transformation and upgrading of the consumption structure, accelerating the development of a simple, moderate, green, low‑carbon, civilized, and healthy lifestyle and consumption pattern, thereby providing crucial support for high‑quality development and the creation of a high‑quality life.
In terms of fostering green transportation consumption, the Plan calls for vigorously promoting new‑energy vehicles, gradually lifting local restrictions on their purchase, and implementing supportive policies such as exemptions from driving‑restriction measures and granting priority road access. It also emphasizes strengthening the development of supporting infrastructure—including charging and battery‑swapping facilities, advanced energy‑storage systems, and hydrogen refueling stations—and actively advancing the use of LNG in vehicles and vessels. Pilot programs will be launched to explore battery‑swap models for new‑energy vehicles, while demonstration projects for fuel‑cell vehicles will be carried out in an orderly manner. Furthermore, initiatives to bring new‑energy vehicles to rural areas will be deepened, encouraging automakers to develop and market high‑quality, affordable, and technologically advanced new‑energy vehicles tailored to the travel needs of rural residents, and to improve rural maintenance and service networks. Consumers should be guided toward purchasing lightweight, compact, low‑emission passenger cars. The electrification of vehicles in the public sector will be vigorously promoted, increasing the share of new‑energy vehicles in urban bus services, taxis (including ride‑hailing), sanitation, urban logistics and delivery, postal and express services, civil aviation airports, and official government fleets. Efforts to build “bus‑oriented cities” will be intensified, with a focus on creating an efficient, well‑connected, fast, and comfortable public‑transport system, further raising the proportion of trips made by city buses and rail transit. Cities are encouraged to adopt pedestrian‑friendly designs, enhancing urban slow‑mobility networks such as sidewalks and dedicated bicycle lanes. The standardized development of bike‑sharing services will also be supported.

Taxation TAXATATION
Continue to implement certain expiring tax and fee reduction policies.
At its executive meeting held on January 19, the State Council decided to extend certain expiring tax and fee reduction policies to support enterprises in overcoming difficulties and fostering development. The meeting noted that tax and fee reductions are direct, effective, and equitable measures that benefit both businesses and the public. To help enterprises alleviate their challenges and promote entrepreneurship and innovation, the meeting resolved, building on earlier extensions of some expiring tax and fee preferential policies, to further extend another 11 such policies—covering areas such as science and technology, employment and entrepreneurship, healthcare, and education—through the end of 2023.
First, value-added tax is exempted on incubation services provided by qualified science and technology business incubators, university science parks, and maker spaces, and property tax and urban land use tax are waived on properties and land used by these entities themselves or leased to incubatees. The criteria for recognizing start-up technology enterprises will continue to be relaxed; venture capital offices and angel investors that meet the requirements may deduct a specified percentage of their investment from their taxable income. Furthermore, enterprises that hire demobilized soldiers seeking self-employment, as well as demobilized soldiers engaged in individual business operations, will continue to enjoy tax reductions and related surcharges, applied sequentially up to prescribed limits.
Second, property tax and urban land use tax are exempted for agricultural product wholesale markets and farmers’ markets. Urban land use tax is also exempted for operational land used for urban public bus terminals and other similar facilities.
Third, continue to authorize provincial governments to independently decide whether to exempt, suspend, or reduce the local reservoir resettlement support fund.
Fourth, personal income tax is exempted on temporary allowances, bonuses, and in-kind benefits such as preventive medications provided by employers to medical personnel and epidemic prevention workers. Registration fees for pharmaceuticals and medical devices related to epidemic prevention are also waived.
Fifth, property tax on university student dormitories and the stamp duty on related lease contracts are exempted. Property tax and urban land use tax are also exempted for properties and land used by enterprises engaged in policy‑driven commodity reserve operations. The corporate income tax rate for third‑party pollution‑control service providers is reduced to 15%.

The tax administration reform of “delegation, regulation, and service” is steadily advancing.
In recent years, the tax authorities have vigorously advanced the development of “smart” taxation, making full use of tax‑related big data to drive comprehensive innovation and transformation across tax collection, administration, and service processes. The tax reform aimed at streamlining administration, delegating power, improving regulation, and enhancing services has deepened year after year, yielding significant convenience for taxpayers and payers and boosting market vitality.
— Services have been refined, with the promotion of “contactless” tax filing and payment, ensuring that “no in-person visits are required” in the vast majority of tax‑related scenarios.
“Now, we can access preferential policies with a single click—relevant measures for all tax types are presented in one centralized location, and each policy is accompanied by its legal basis. The ‘Jinxiang Tax Benefits’ smart assistant feature in the electronic tax bureau truly enables precise targeting and intelligent delivery of tax incentives, so we no longer have to wade through endless searches to find the information we need,” said Mao Zhiming, head of the Finance Department at Shanxi Coal Mining Machinery Manufacturing Co., Ltd.
Daily business operations and production are inseparable from invoices, making invoice management one of the most frequently handled tax‑related tasks for taxpayers. Today, invoicing has also jumped on the information‑technology bandwagon, embracing cutting‑edge digital solutions. In Beijing, the tax authorities have developed a classified and tiered management system for VAT invoices, leveraging tax‑big data and “credit + risk” analytics to enable fully automated, end‑to‑end, online approval across all invoice types. They have also launched the “Piao e Song” service, allowing taxpayers to obtain invoices without leaving their offices. Meanwhile, in Shenzhen, the tax authorities are pioneering the use of blockchain‑based electronic invoices. By recording invoice data on the blockchain, they achieve end‑to‑end process management—from issuance to reimbursement—ensuring that every invoice is verifiable, trustworthy, and traceable.
— Enhanced regulatory precision enables a taxpayer‑focused approach: “no interference for zero risk, proactive alerts for low risk, and stringent monitoring for medium to high risk.”
“Thanks to the tax authorities’ timely reminder, we would have ended up paying tens of thousands of yuan in late‑payment penalties,” said Zhou Guang, the financial director of Wuhan Fenghua Energy Investment Group Co., Ltd. It turned out that last year, the company had incurred interest expenses of RMB 39.3105 million on a RMB 381 million loan for which no invoices had been obtained. During a risk‑assessment review, tax officials from the Wuhan East Lake New Technology Development Zone Tax Bureau identified red flags and promptly notified the company to issue the missing invoices, thereby mitigating any potential tax‑related risks.
According to reports, the Hubei Provincial Tax Service Bureau, drawing on its day-to-day tax administration experience, risk incidents, and risk characteristics, has designed tiered and categorized risk indicators—focusing on the quality of corporate income tax baseline data, the implementation of preferential policies, special business matters, and high‑risk issues—by leveraging specialized data extraction and intelligent analytics tools. This enables real-time scanning for potential risks. To date, the bureau’s corporate income tax smart management platform has automatically identified and issued over 40,000 risk tasks; among these, 95% of risk alerts have been resolved through automated data matching, effectively eliminating risks such as premature collection and improper assessed taxation.
— Cooperation has been further deepened, with cross-provincial one-stop processing of tax-related matters advancing, and the tax authorities have made new progress in their “delegation, regulation, and service” reform.
Seven prefecture-level cities across four provinces—Hubei, Hunan, Chongqing, and Guizhou—have achieved cross-provincial access to 108 government services, including invoice issuance on behalf of taxpayers. The tax authorities of Tongzhou District in Beijing, Wuqing District in Tianjin, and Langfang City in Hebei have signed a framework agreement on tax cooperation. Meanwhile, Shanxi’s tax authorities, in collaboration with the provincial Department of Natural Resources, have jointly established a “one-window acceptance, integrated processing” platform, enabling real-time sharing of 21 categories of tax-related information between parties involved in real estate transactions and the real-time transmission of tax payment details.
Professor Li Xuhong of the National Accounting Institute in Beijing believes that strengthening “smart” tax administration—by achieving precise alignment between tax and fee policies and taxpayers’ needs and preferences, continuously enhancing the integration of online services, and expanding the range of intelligent, data‑driven tax application scenarios—will help improve taxpayers’ and payers’ experience and satisfaction. At the same time, building a “smart” tax system not only boosts the efficiency of tax collection and administration but also facilitates tax‑system reform; by combining streamlined administration with a well‑designed tax framework, it can better serve businesses and the public.

Enabling “smart” taxation to benefit businesses and the public.
“In the early 1980s, we used to issue invoices by hand; later, we switched to computer‑generated invoices; and today, taxpayers no longer need to come to the service counter at all.” When it comes to tax services, Ren Guimei, a retired official of the Dongguan Municipal Tax Service Bureau with nearly 40 years of experience, is most struck by the transformation of invoice‑related procedures.
It’s not just invoices—tax‑benefit policies are now accessible at the touch of a button, smart tax refunds are automatically credited with a single click, and input‑VAT credit refunds are pre‑filled on a single page… Behind all these “one‑click” conveniences lies the steady march of tax services toward greater intelligence. In interviews, many seasoned accountants and finance professionals repeatedly emphasize how much easier it has become to handle tax matters—so much so that they no longer need to visit a tax service hall even once a year. Meanwhile, newcomers to tax‑related tasks have come to regard the electronic tax bureau as a familiar “friend”: they can complete their transactions without leaving home and resolve any issues by simply consulting this “friend.” With tax services becoming increasingly intelligent, the gap between the tax authorities and businesses has grown ever narrower.
Corporate development is inseparable from tax matters. Newly established enterprises must navigate tax registration, tax‑type determination, and invoice application; as businesses grow and expand, they need to stay abreast of various tax policies and handle a range of tax‑related tasks; even at the end of a company’s life cycle, procedures such as deregistration remain essential. In short, the tax authorities are involved at every stage of a business’s lifecycle. Ensuring that tax and fee preferential policies are implemented with precision, streamlining tax‑related administrative processes, and fostering a high‑quality tax‑friendly business environment all call for tax services to evolve in an increasingly “smart” direction.
To make tax services smarter, the focus should be on benefiting businesses and the public. For a long time, tax‑related inquiries have relied primarily on telephone support; however, this approach has its drawbacks. Taxpayers and payers often have to call multiple times, each time reiterating their specific procedures—and if they cannot explain themselves clearly, they may still end up visiting a tax service hall for assistance. In response, the tax authorities have introduced an “online guidance” feature, making advisory services more user‑friendly and personalized. This helps promptly and efficiently meet taxpayers’ and payers’ needs, thereby boosting satisfaction with online tax administration. Moving forward, more such measures that benefit businesses and the public should be rolled out, with a problem‑oriented approach and a taxpayer‑ and payer‑centric focus to further strengthen the development of smart tax services.
To make tax services more “intelligent,” it is essential to fully leverage tax‑related big data. On the one hand, the tax authorities directly serve tens of millions of corporate taxpayers, hundreds of millions of individual taxpayers, and over a billion payers; the resulting tax data—comprehensive in scope, finely categorized, and rapidly collected—constitutes a robust foundation for advancing the intelligence of tax services. Tax authorities should continuously refine their tax‑big‑data cloud platform, strengthen the development and utilization of data resources, and harness the driving force of data as a key production factor. On the other hand, delivering higher‑quality tax services places greater demands on technological capabilities. Tax authorities should comprehensively promote the digital transformation and intelligent upgrading of tax administration, making full use of modern information technologies such as big data, cloud computing, and artificial intelligence to achieve seamless integration and interconnection of internal and external tax‑related data, as well as organic convergence between online and offline channels, thereby ensuring steady and sustainable progress in building a “smart” tax system.
This year, China will implement new tax and fee reduction policies, and taxpayers and payers alike are looking forward to further substantive progress in building a “smart” tax system. To make tax services even smarter, the tax authorities must continue to pioneer and innovate, maintain a steady pace while sustaining momentum, enhance the efficiency of tax collection and administration, and continually boost taxpayer and payer satisfaction and sense of gain.

Litigation & Arbitration
The National Development and Reform Commission and eight other departments have issued regulations to standardize the development of the platform economy, formulating and promulgating provisions prohibiting unfair online competitive practices.
According to the National Development and Reform Commission, recently, nine government departments—including the NDRC, the State Administration for Market Regulation, the Cyberspace Administration of China, and the Ministry of Industry and Information Technology—issued the “Several Opinions on Promoting the Standardized, Healthy, and Sustainable Development of the Platform Economy” (hereinafter referred to as the “Opinions”), which set forth 19 measures to further advance the platform economy’s standardized, healthy, and sustainable growth.
The Opinions clearly state that it is necessary to improve and refine the regulatory framework. This includes revising the Anti-Monopoly Law, enhancing the supporting regulations for the Data Security Law and the Personal Information Protection Law, formulating and promulgating provisions prohibiting unfair online competitive practices, and further specifying rules governing data processing by platform enterprises. Additionally, price‑related rules for the platform economy will be developed and implemented to promote the industry’s orderly and sound development. The regulatory framework in the financial sector will also be refined, with a steadfast commitment to bringing all financial activities under financial supervision and requiring that all financial businesses operate only with proper licenses.
Clarify the boundaries of platform responsibilities and strengthen the accountability of ultra-large internet platforms. Establish a platform compliance management system and develop an effective external oversight and evaluation framework for platform compliance. Intensify efforts to develop national standards related to the platform economy. Put in place an information disclosure regime for internet platforms to enhance operational transparency and reinforce credit-based constraints and social oversight. Systematically establish a regulatory framework for ensuring fair competition in the platform economy. Refine the “tiered classification plus negative list” regulatory regime for cross-border data flows, and explore the formulation of an algorithmic safety framework for internet information services.
Strengthen inter‑departmental coordination and adhere to the principle of “integrated online‑offline regulation.” Competent authorities in each sector, while responsible for offline oversight, shall also assume corresponding online regulatory duties, thereby ensuring alignment between approval, supervisory, and enforcement powers. Promote mutual recognition among regulatory agencies of inspection, testing, and certification results to avoid redundant checks and assessments, and explore mechanisms for case consultations, joint law enforcement, and coordinated punitive measures, thus achieving end‑to‑end, full‑cycle regulation—before, during, and after the event. Foster industry self‑regulation by urging platform enterprises to operate in compliance with the law and encouraging trade associations to take the lead in developing group standards and industry codes of conduct. Enhance public oversight by piloting a supervision model that engages both the general public and independent third‑party professional organizations, thereby increasing the openness and transparency of platform enterprises’ compliance practices.
The Opinions propose enhancing regulatory capacity and standards. They call for improving competition‑related enforcement, with strengthened end‑to‑end oversight in key industries and sectors where public concerns are most acute. In accordance with the law, monopolistic practices and unfair competition in the platform economy will be investigated and prosecuted. Strict legal action will be taken against monopoly agreements, abuse of dominant market positions, and unlawful concentrations of undertakings in this sector. Regulatory scrutiny over advertising on platforms will be intensified, with particular attention paid to high‑risk areas. Key issues such as misleading consumers through under‑specification or downgraded products, and failure by platforms to verify the market access qualifications of sellers, will be rigorously addressed. For defective consumer goods, online operators will be required to fulfill their obligations to recall products. Efforts to crack down on illegal operations by platform enterprises in the mobility sector will be stepped up. Platforms’ tax‑related reporting and other assistance obligations will be reinforced, and their tax compliance will be closely monitored; tax‑related violations—including the issuance of false invoices and tax evasion—will be investigated and prosecuted in accordance with the law. Management and oversight of platform‑collected deposits, prepaid funds, security deposits, and other similar fees will also be strengthened.
Explore data and algorithmic security regulation, ensuring the lawful, legitimate, and necessary principles are fully implemented in the collection and use of personal information, and rigorously cracking down on illegal practices such as platform enterprises’ excessive collection of personal data and unauthorized access to personal information. Strictly regulate non‑essential data collection activities, and, in accordance with laws and regulations, combat illicit data trading, “big data price discrimination,” and other forms of data misuse. While strictly safeguarding commercial secrets, including algorithms, support third‑party organizations in conducting algorithm assessments, guide platform enterprises to enhance algorithm transparency and interpretability, and promote algorithmic fairness. Severely investigate and prosecute illegal and non‑compliant conduct, such as using algorithms to fabricate information, disseminate negative or harmful content and vulgar, low‑quality material, engage in traffic hijacking, and create fake user accounts. Encourage platform enterprises to thoroughly implement the network security classification protection system, explore the establishment of data security risk monitoring and reporting mechanisms, and put in place emergency response procedures. State organs, in the course of law enforcement, shall obtain and use personal information in accordance with the law to protect data security.
Strengthen digital regulatory support by establishing a contactless regulatory framework for the online identification, referral, investigation, and handling of violations, thereby enhancing capabilities in monitoring and early warning, online enforcement, and public information disclosure. Support regions that meet the necessary conditions to launch pilot initiatives for innovative digital regulation. Reinforce and improve credit-based regulation, with a particular focus on managing the list of entities subject to severe legal violations and breaches of trust in the platform economy. Leverage the role of industry associations to encourage internet enterprises to enhance mutual sharing, interconnection, and mutual recognition of credit‑related assessments, including those on the list of serious violators and untrustworthy entities, and to promote coordinated prevention and joint control measures by platform operators against illegal activities by online merchants.
The Opinions clearly state that the development environment must be optimized. This includes reducing operating costs for participants in the platform economy, fostering an orderly and open platform ecosystem, and strengthening safeguards for the rights and interests of workers in new forms of employment. With regard to workers in new employment models—such as online‑ride‑hailing delivery personnel and ride‑hailing drivers—relevant policies and measures must be implemented; standards for determining labor relationships between these workers and platform enterprises or employing partner offices should be refined; criteria for identifying situations that do not fully meet the requirements for establishing a formal labor relationship should be explored; and the rights and obligations of enterprises and workers should be appropriately defined.
In addition, the Opinions propose supporting platforms in strengthening technological innovation, encouraging platform enterprises to continuously increase their R&D investment, and accelerating breakthroughs in research and development across fields such as artificial intelligence, cloud computing, blockchain, operating systems, and processors. The document also supports platform enterprises in expanding the international reach of their digital products and services, bolstering their capacity for global growth, and enhancing their international competitiveness. Furthermore, it encourages platform enterprises, while adhering to laws and regulations, to fully leverage their strengths in technology, talent, capital, distribution channels, and data, thereby playing a pivotal role in driving innovation and advancing “Internet Plus” toward broader scope, deeper integration, and greater efficiency. The Opinions also clearly outline measures to harness the platform economy to empower economic transformation and upgrading, including initiatives to facilitate the transformation and upgrading of the manufacturing sector, promote the digital transformation of agriculture, and enhance the consumption‑creating potential of platforms.

The Supreme People’s Court and the Ministry of Human Resources and Social Security have established a “top-to-top” online mediation‑litigation linkage mechanism to comprehensively advance diversified dispute resolution in labor and personnel matters.
On January 18, the Supreme People’s Court and the Ministry of Human Resources and Social Security jointly convened a work deployment meeting on the “top-to-top” online litigation‑mediation linkage mechanism for labor and personnel disputes, setting forth specific requirements to ensure the effective implementation of online, multi‑channel dispute resolution in this area. The initiative aims to further enhance the quality and efficiency of diversified dispute resolution in labor and personnel matters, thereby fostering harmonious labor‑personnel relations and social stability.
The reporter learned that, recently, the General Office of the Supreme People’s Court and the General Office of the Ministry of Human Resources and Social Security jointly issued the “Notice on Establishing a ‘Top‑to‑Top’ Online Mediation‑Litigation Coordination Mechanism for Labor and Personnel Disputes” (hereinafter referred to as the “Notice”), setting out clear requirements for improving the substantive linkage between mediation and litigation in labor and personnel disputes and for advancing the implementation of the “top‑to‑top” online mediation‑litigation coordination mechanism.
The Notice implements the CPC Central Committee’s important directives to “place non-litigious dispute-resolution mechanisms at the forefront” and to “improve the comprehensive mechanism for the diversified prevention, mediation, and resolution of social conflicts and disputes,” and fulfills the requirements set forth in documents such as the “Opinions on Further Strengthening Mediation and Arbitration of Labor and Personnel Disputes and Improving the Multi‑Channel Handling Mechanism,” jointly issued by the Supreme People’s Court and the Ministry of Human Resources and Social Security. It will further advance the establishment of a new framework for online, multi‑channel resolution of labor and personnel disputes in the internet era, reduce the costs of rights protection for workers, and comprehensively enhance the quality and effectiveness of diversified dispute resolution in this field.
The Notice stipulates that the Supreme People’s Court, leveraging the People’s Courts Mediation Platform, and the Ministry of Human Resources and Social Security, utilizing the National Online Mediation Service Platform for Labor and Personnel Disputes, will, through a combination of system integration and the onboarding of institutions and personnel, progressively streamline online–offline channels for mediation‑litigation coordination. Together, they will provide parties with end-to-end online dispute‑resolution services, including entrusted mediation, audio‑video mediation, drafting of mediation agreements, and mediation‑litigation linkage.
The Notice sets out the specific procedural framework for online litigation‑mediation coordination in labor and personnel dispute resolution, calls for the strengthening of audio‑video mediation, and stipulates that people’s courts and human resources and social security authorities shall establish provincial‑level pools of mediation experts, conduct mediator training, and provide robust professional guidance.
The Notice stipulates that the two departments shall strengthen communication and consultation, promote the establishment of work coordination and information-sharing mechanisms at the local level, form a roster of specially appointed mediators, and actively advance system development and integration, thereby ensuring the effective implementation of relevant construction and application requirements at the operational level.

The Ministry of Public Security has launched a special campaign to rigorously crack down, in accordance with the law, on crimes involving the production and sale of counterfeit and substandard drugs.
On the 20th, a video conference was held to launch and deploy a special campaign targeting the severe crackdown on crimes involving the production and sale of counterfeit and substandard drugs, in accordance with the law. Du Hangwei, member of the CPC Committee of the Ministry of Public Security and Vice Minister, attended and addressed the meeting. The conference emphasized the need to earnestly implement the important instructions of General Secretary Xi Jinping and the decisions and arrangements of the CPC Central Committee, strengthen the “Four Consciousnesses,” officely uphold the “Four Confidences,” and ensure the “Two Upholds.” In line with the requirements of the Central Political and Legal Work Conference and the National Conference of Directors of Public Security Departments, it called for raising political awareness, reinforcing a sense of responsibility, and adopting robust measures to carry out a focused, law-based campaign against the production and sale of counterfeit and substandard drugs, thereby effectively safeguarding drug safety and the lives and health of the people, and welcoming the successful convening of the 20th National Congress of the Communist Party of China with concrete actions.
The meeting called for a strong sense of responsibility and urgency, swift action, decisive enforcement, and all‑out efforts to launch a vigorous crackdown on crimes involving the production and sale of counterfeit and substandard drugs. It urged the concentrated investigation and resolution of major cases, the dismantling of criminal networks, the severe punishment of offenders, the rectification of key high‑risk areas, and the elimination of drug‑related safety hazards. Priority must be given to pharmaceutical sectors closely tied to public health and safety and characterized by high daily consumption, with stringent measures against illicit operations—such as black‑market production and distribution of counterfeit or substandard drugs—that pose significant risks and cause grave harm. Special attention should be paid to critical zones and venues—including source regions, centralized transit hubs, and areas around hospitals—where such crimes are prevalent, and coordinated, targeted operations should be conducted in collaboration with relevant authorities. Intelligence gathering and analysis must be strengthened, public reporting widely encouraged, and capabilities for identifying leads and mounting precise strikes continuously enhanced. All legal tools should be fully and effectively deployed, with “end‑to‑end, all‑elements, full‑chain” investigations launched against organized, serial, and cross‑regional cases, ensuring thorough, accurate, and decisive outcomes that achieve the objectives of striking at the source, dismantling criminal dens, disrupting networks, severing supply chains, and tracing illicit flows. Major, emblematic cases must be placed under direct supervision, investigated to the fullest extent, and punished strictly in accordance with the law. Professional capacity building must be reinforced, with police resources pooled and mobilized, cross‑regional cooperation and inter‑agency coordination intensified, and innovative mechanisms for combating crime refined and improved, so as to mount a comprehensive, integrated campaign. Close communication and collaboration with drug regulatory and health authorities should be strengthened, mechanisms for seamless coordination between administrative and criminal enforcement refined, and efforts to address root causes and implement holistic governance advanced, thereby forging a unified front in this campaign. Leadership and organizational oversight must be bolstered, with robust supervision and guidance, legal safeguards, and public awareness campaigns to ensure that this special initiative is effectively implemented and yields tangible results.
Since 2019, in accordance with the unified deployment of the CPC Committee of the Ministry of Public Security, public security organs nationwide have continuously and thoroughly carried out the “Kunlun” special campaign, cracking down hard on crimes such as the production and sale of counterfeit and substandard drugs. A total of over 12,000 criminal cases involving the manufacture and sale of fake or substandard medicines and the illegal operation of pharmaceuticals have been solved, and 17,000 suspects have been apprehended, thereby effectively safeguarding the lives and health of the people.

The Supreme People’s Court has issued the “Twenty Measures for Judicial Support of the Development of Small and Micro Enterprises,” establishing a “green channel” for handling cases involving unpaid debts owed to small and micro enterprises.
On January 14, the Supreme People’s Court held a press conference to release the “Guiding Opinions of the Supreme People’s Court on Fully Leveraging the Functions and Roles of the Judiciary to Support the Development of Small, Medium, and Micro Enterprises” (hereinafter referred to as the “Opinions”), also known as the “20 Measures for Judicial Support of the Development of Small, Medium, and Micro Enterprises.”
Foster a market environment characterized by fair competition and honest business practices.
Small, medium, and micro enterprises are a vital driving force for national economic and social development, playing an important role in expanding employment, improving people’s livelihoods, and fostering entrepreneurship and innovation. At the press conference, Liu Guixiang, a full-time vice-minister‑level member of the Supreme People’s Court Adjudication Committee, stated that the recently held Central Economic Work Conference emphasized the need to “implement new tax and fee reduction policies and strengthen support for small, medium, and micro enterprises, individual business households, the manufacturing sector, and risk‑mitigation efforts.” To fully, accurately, and comprehensively implement the new development philosophy and effectively carry out the spirit of the Central Economic Work Conference, the Supreme People’s Court, based on thorough research and in accordance with relevant laws and judicial interpretations, has drafted these Opinions.
“To foster a market environment characterized by fair competition and honest business practices, the people’s courts must play a decisive role,” Liu Guixiang stated. The Opinions proactively create such an environment for the development of small, medium, and micro enterprises by intensifying the adjudication of antitrust and anti-unfair competition cases and imposing strict legal penalties on monopolistic and unfair competitive practices, including forced “choose one” requirements, predatory pricing, mandatory bundling, blocking and censorship, and fabricated orders and manipulated reviews. The Opinions also provide for the lawful identification of conduct by operators that abuses data, algorithms, technology, capital advantages, or platform rules to exclude or restrict competition, thereby curbing the disorderly expansion of capital and safeguarding the space for the survival and growth of small, medium, and micro enterprises. Furthermore, the Opinions seek to improve the coordination mechanism between judicial and law‑enforcement bodies, support antitrust administrative enforcement agencies in performing their duties in accordance with the law, strengthen communication and collaboration, and promote synergistic efforts across sectors.
Efficiently adjudicating cases involving unpaid debts owed to small and medium-sized enterprises and micro-enterprises.
“The ‘20 Measures to Provide Judicial Support for the Development of Small and Micro Enterprises’ can be said to offer concrete, practical solutions in every provision, with many innovative approaches as well,” stated Liu Guixiang. He added that the Supreme People’s Court has consistently attached great importance to addressing the issue of overdue payments owed to small and micro enterprises. The “Opinions” both codify and refine previous experience in this area while also introducing a number of new, effective measures:
Establish a “green channel.” Given that migrant workers are relatively concentrated in small, medium, and micro-sized enterprises, the Opinions stipulate that cases involving unpaid debts owed to such enterprises shall be collectively incorporated into a fast-track mechanism for case filing, adjudication, and enforcement.
Strengthen measures to ensure equal protection for small, medium, and micro enterprises in litigation. Taking into full account the actual circumstances of these enterprises, provide them with appropriate litigation guidance and clarification in accordance with the law, intensify the court’s ex officio collection of evidence, and strive to establish the factual basis of cases, thereby preventing the disadvantaged position of some small, medium, and micro enterprises in market transactions from translating into an adverse position in litigation, and working to achieve a balance between procedural fairness and substantive justice. Where, due to the pandemic or other factors, a small, medium, or micro enterprise is rendered unable to perform its contractual obligations, or where continued performance would be manifestly unfair to it, apply, in accordance with the law, the doctrines of force majeure or frustration of contract, appropriately allocate liability, modify the contract, or terminate it. In cases where certain entities or large enterprises, in response to outstanding debts, compel small, medium, and micro enterprises to accept unequal terms—such as settling debts with non‑monetary assets at prices markedly divergent from market value, or agreeing to payment schedules and conditions that are manifestly unreasonable—courts should uphold the requests of such enterprises to rescind these agreements or arrangements on the ground that they are grossly unfair.
It is strictly prohibited to seize special accounts designated for migrant workers’ wages. The Opinions explicitly forbid the seizure of such accounts, as well as wage‑deposit accounts. Where seizure measures are imposed on escrow accounts for pre‑sale housing funds, the relevant regulatory authorities must be promptly notified, and the dedicated use of funds in these accounts must not be compromised. The legitimate rights and interests of homebuyers and migrant workers shall be effectively safeguarded.
Establish a collaborative governance mechanism. The Opinions clearly state that close cooperation and coordinated governance with regulatory authorities should be advanced. Specifically, this entails summarizing practical experience, strengthening communication and collaboration with relevant administrative departments in accordance with the Regulations on Ensuring Payment of Funds Owed to Small and Medium-sized Enterprises and other applicable laws and regulations, proactively seeking to integrate case enforcement into the overall framework for addressing payment arrears, and working with relevant departments to refine implementation measures, thereby forging a powerful synergy.
“Through this comprehensive package of measures, we are confident that we will fully implement the CPC Central Committee’s directives on addressing the issue of overdue payments to small and medium-sized enterprises and micro‑enterprises, thereby providing robust judicial safeguards for their development,” said Liu Guixiang.
Effectively strengthen judicial protection of property rights for small, medium, and micro enterprises.
In response to the distinctive characteristics of small, medium, and micro enterprises and the key issues in property‑rights protection, the “20 Measures for Judicial Support of the Development of Small, Medium, and Micro Enterprises” adopts a targeted approach to protection, dedicating its second section to specific provisions on property‑rights safeguards for such enterprises—
Resolutely prevent the use of criminal measures to interfere in economic disputes involving small, medium, and micro enterprises. In response to the widespread issues of inadequate internal governance mechanisms and non‑standard business practices among such enterprises, Article 7 of the Opinions strictly implements the “Opinions on Improving the Property Rights Protection System and Lawfully Protecting Property Rights,” clearly stipulating that judicial authorities must rigorously adhere to legal principles such as the principle of legality in criminal law and the presumption of innocence. It further requires strict differentiation between legitimate financing by small, medium, and micro enterprises and illegal fundraising; between contractual disputes and contract fraud; and between participation in mergers and reorganizations and malicious encroachment upon state‑owned assets. The Opinions resolutely prohibit the use of criminal means to meddle in civil disputes, the treatment of economic disputes as criminal offenses, and the conversion of civil liabilities into criminal liabilities. With respect to cases where small, medium, and micro enterprises illegally or deceptively solicit public deposits—provided that the funds are used primarily for normal production and business activities and the funds raised are promptly repaid—criminal penalties may be waived; where the circumstances are demonstrably minor and the harm negligible, such conduct shall not be treated as a crime.
Uphold the unity of substantive justice and procedural justice, and strengthen procedural safeguards for small, medium, and micro enterprises. For example, the Opinions emphasize fully taking into account the actual circumstances of these enterprises, providing lawful guidance and clarification in litigation, improving and advancing one-stop diversified dispute resolution and online litigation mechanisms, and making effective use of judicial assistance measures to reduce their litigation costs, thereby preventing their disadvantaged position in market transactions from translating into an adverse position in legal proceedings. In cases involving overlapping civil, administrative, and criminal matters, it is essential to earnestly implement the principle of prioritizing the assumption of civil liability as stipulated in Article 187 of the Civil Code.
The principle of comprehensive protection is upheld, with particular emphasis placed on safeguarding the intellectual property rights of small, medium, and micro enterprises. To stimulate their innovative vitality, the Opinions, while ensuring all‑round substantive and procedural safeguards across civil, criminal, administrative, and enforcement domains and providing full protection for property rights, creditor’s rights, equity interests, and other entitlements, further strengthen the protection of intellectual property for these enterprises. Article 6 of the Opinions underscores the need to implement a punitive damages regime for intellectual property infringement, intensifying protection for the critical core technologies and original innovations of “specialized, refined, distinctive, and innovative” small, medium, and micro enterprises; to declare invalid, in accordance with the law, contracts or contract clauses that, by virtue of a party’s dominant position, unreasonably restrict such enterprises from engaging in technological competition or making technological improvements—actions that violate mandatory legal provisions; to strike an appropriate balance between protecting trade secrets and ensuring the legitimate mobility of talent; and to impose lawful sanctions on dishonest and malicious litigation, thereby curbing various unlawful practices—including the abuse of intellectual property—that impede innovation among small, medium, and micro enterprises.

The Shanghai Financial Court has comprehensively upgraded its model judgment mechanism for securities disputes.

On January 11, the Shanghai Financial Court issued Version 2.0 of the “Regulations on the Model Judgment Mechanism for Securities Disputes,” comprehensively upgrading the regulations promulgated in January 2019.
It is understood that, over the past three years, the Shanghai Financial Court has developed a series of replicable and scalable best practices by refining supporting mechanisms such as data integration, loss assessment, and intelligent assistance. With the amendments to the Securities Law and the Civil Procedure Law, along with the issuance of a series of new judicial interpretations, in order to better adapt to the evolving landscape and emerging needs of small‑ and medium‑sized investor protection and to enable the model judgment mechanism for securities disputes to deliver greater vitality and effectiveness, the Shanghai Financial Court has undertaken a comprehensive revision of its original regulations. The revisions place particular emphasis on further innovating and exploring areas such as the adjudication of parallel cases, end-to-end online case handling, litigation preservation and enforcement, and the establishment of a robust institutional support framework.
— Strengthening the principle of mediation as the preferred method. Establishing a preliminary mediation procedure for parallel cases, refining the coordination process between litigation and mediation, and tilting the standards for reductions or exemptions of court fees toward pre‑filing referral to mediation, thereby encouraging parties to resolve disputes through non‑litigious means.
——Streamlining the adjudication of parallel cases. Guided by the principle of centralized adjudication, we will simplify court‑proceeding procedures and document‑submission requirements, and, in accordance with the law, curb parties’ abusive exercise of litigation rights in parallel proceedings aimed at delaying the proceedings, thereby further expediting the litigation process.
——Deepen reforms in online litigation. Enhance the convenience of online proceedings, explore the establishment of a registration system for securities dispute cases, and, leveraging an integrated online litigation service platform, enable one-stop, end-to-end online processing across all stages of litigation.
——Standardize the professional support mechanism. Explore a roster‑based management system for loss‑assessment institutions, clearly defining their qualification requirements and the procedures for compiling the roster. Standardize the selection process for such institutions and refine the relevant rules governing the expert system.
——Innovating rules for case enforcement. The regulations stipulate that courts may, on their own initiative, order provisional measures without being limited by the amount in dispute in individual cases; they introduce an ex‑ante urging procedure, establish a mechanism for holding the de facto controller jointly and severally liable for property subject to enforcement, and explore the use of securities registration and settlement systems to disburse funds in enforcement proceedings, thereby providing comprehensive safeguards for investors’ rights and interests upon winning a lawsuit.

The Supreme People’s Court has called for curbing the hype surrounding “judicial auction properties.”
The National Conference of Presidents of Higher People’s Courts was held recently, during which the Supreme People’s Court called for the lawful adjudication of cases in areas vital to people’s livelihoods—such as education, healthcare, elderly care, childcare, and social security—while strengthening the protection of the rights and interests of college graduates, rural migrant workers, and those in flexible employment, thereby safeguarding workers’ right to fair employment. The principle that “housing is for living in, not for speculation” must be officely implemented, and speculative practices such as “buying homes under another’s name” and trading in foreclosed properties should be curbed in accordance with the law.

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