JC Master Legal News Issue 1006

Key Takeaways for This Issue

The China Securities Regulatory Commission has issued the Measures for the Supervision and Administration of Directors, Supervisors, Senior Management Personnel, and Practitioners of Securities and Fund Operating Institutions.

To implement the new Securities Law, standardize the appointment and professional conduct of directors, supervisors, senior management personnel, and practitioners at securities and fund operating institutions, strengthen the principal responsibility of these institutions, promote their compliant and sound operations, and safeguard the legitimate rights and interests of investors, the China Securities Regulatory Commission has formulated and promulgated the Measures for the Supervision and Administration of Directors, Supervisors, Senior Management Personnel, and Practitioners of Securities and Fund Operating Institutions (hereinafter referred to as the “Measures”).
Down payments have been reduced in many regions, and the sector’s performance continues to climb.
　Weekly sales of new homes declined year over year but rose month over month. This week, the total floor space sold in key cities fell 50.6% year over year, while increasing 72.5% month over month; among them, first-tier cities saw a month-over-month rise of 121.2%, second-tier cities 65.5%, and third-tier cities 41.1%.
2021 Individual Income Tax Annual Settlement: Three Filing Methods Available
According to the official WeChat account of the State Taxation Administration, the annual individual income tax settlement for 2021 will take place from March 1 to June 30. The Administration recently issued the “Announcement on Matters Related to the Annual Individual Income Tax Settlement for 2021” (State Taxation Administration Announcement No. 1 of 2022, hereinafter referred to as the “Announcement”), which clarifies the relevant procedures and requirements.

Supreme People’s Court: Arrangements for Mutual Recognition of Judgments in Marriage and Family Matters Between Mainland China and Hong Kong Have Come into Effect
On February 15, the Arrangement on the Mutual Recognition and Enforcement of Civil Judgments in Matrimonial and Family Matters between the Courts of the Mainland and the Hong Kong Special Administrative Region entered into force simultaneously in both jurisdictions. Widely hailed as a groundbreaking initiative that best reflects public sentiment, closely addresses people’s livelihoods, and enjoys broad popular support in the field of judicial assistance between the two regions, this arrangement represents a major step to implement and further enrich the “One Country, Two Systems” principle through legal instruments. It is of great significance for safeguarding the rights and interests of parties to cross-border marriages and their families, and for enhancing the well-being of the people in both places.

Finance & Capital Markets
The China Securities Regulatory Commission has issued the Measures for the Supervision and Administration of Directors, Supervisors, Senior Management Personnel, and Practitioners of Securities and Fund Operating Institutions.

To implement the new Securities Law, standardize the appointment and professional conduct of directors, supervisors, senior management personnel, and practitioners at securities and fund operating institutions, strengthen the principal responsibility of these institutions, promote their compliant and sound operations, and safeguard the legitimate rights and interests of investors, the China Securities Regulatory Commission has formulated and promulgated the Measures for the Supervision and Administration of Directors, Supervisors, Senior Management Personnel, and Practitioners of Securities and Fund Operating Institutions (hereinafter referred to as the “Measures”).
From November 20, 2020, to December 20, 2020, the China Securities Regulatory Commission (CSRC) publicly solicited comments from the public on the Measures. Overall, stakeholders expressed strong approval of the Measures’ underlying principles and key provisions. Following careful review, the CSRC incorporated and adopted those suggestions deemed reasonable.
The Measures integrate existing regulations and normative documents governing the personnel management of operating institutions, drawing on higher-level laws and regulations such as the new Securities Law and the Fund Law, and, in light of institutional supervisory practice, comprehensively set forth the qualification requirements, professional conduct standards, and institutional accountability for personnel at securities and fund operating entities. The key provisions include: first, optimizing personnel appointment management in accordance with a classification-based approach; second, strengthening professional conduct and enforcing a “zero-tolerance” policy; and third, reinforcing the principal responsibility of operating institutions to lay a solid foundation for the industry’s development.
Going forward, the CSRC will guide the Securities Association, the Fund Association, and its local branches to earnestly implement the Measures, formulate supporting self-regulatory rules, enhance the standardization of personnel management, and promote the compliant and sound development of industry institutions.

CSRC: Continue to facilitate the entry of various pension funds and other institutional capital into the market.
Recently, the China Securities Regulatory Commission issued responses to a number of proposals submitted by deputies to the National People’s Congress and members of the National Committee of the Chinese People’s Political Consultative Conference, covering various aspects of capital market reform.
With regard to encouraging medium- and long-term capital to enter the market, the China Securities Regulatory Commission stated that it will continue to encourage national social security funds, basic pension funds, enterprise annuities, occupational annuities, and other types of pension funds, as well as insurance funds and bank wealth-management funds, to actively invest in the capital markets. It will also work to improve the national pension security system and expedite the implementation of policies facilitating individual pension investments in public mutual funds, while supporting securities and futures offices in providing professional services to facilitate the market‑based investment and management of various medium- and long-term capital sources.
With regard to accelerating the development of the new‑energy vehicle industry, the China Securities Regulatory Commission stated that it is actively implementing the decisions and arrangements of the CPC Central Committee and the State Council, and supporting eligible new‑energy vehicle companies to raise capital through listings on the capital markets. Going forward, the CSRC will continue to refine its fundamental institutional framework, further facilitating the listing and financing of qualified new‑energy vehicle enterprises in the capital markets, thereby leveraging these markets to foster their growth and expansion.
With regard to improving the regulatory framework for stock trading by securities professionals, the China Securities Regulatory Commission stated that it will conduct in-depth research into the relevant provisions governing the buying and selling of securities by such professionals, further strengthen refined management of this group, and reinforce both internal controls within securities offices and external oversight mechanisms. At the same time, it will accelerate efforts to revise and refine criminal prosecution standards and judicial interpretations on civil compensation for false statements, continuously deepen cooperation with judicial authorities, maintain a “zero-tolerance” stance toward illegal and criminal activities in the securities and futures markets, and effectively raise the costs of unlawful conduct in the capital market.

Comprehensively deepen the reform of the bond issuance registration system and further expand opening-up.
　On February 19, the China Securities Regulatory Commission (CSRC) announced that on February 18 it convened the 2022 Bond Regulation Work Conference. The meeting emphasized the need to be guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, to prioritize stability while seeking progress within that stability, and to uphold the principles of “establishing sound systems, non-interference, and zero tolerance,” as well as the “four respects and one concerted effort.” It called for placing greater emphasis on bottom-line thinking and targeted policy measures to fully prevent and defuse bond default risks, while also prioritizing quality improvement amid stability to better support the development of the real economy and the implementation of national strategies.
The meeting emphasized the need to place greater emphasis on openness and transparency, comprehensively deepen reforms of the bond‑issuance registration system, and further expand market opening-up; to strengthen rigorous regulation and adopt a zero‑tolerance approach, accelerate the transformation of regulatory practices, and further refine regulatory frameworks and mechanisms that align with the development patterns and characteristics of the bond market; and to adopt a more systematic approach, bolstering market infrastructure, foundational institutional frameworks, legal safeguards, and technological support, thereby fostering a sound ecosystem for market development, underpinning macroeconomic stability, and marking the successful convening of the 20th National Congress of the Communist Party of China with outstanding achievements.
Solidly advance the development of the bond market’s foundational institutional framework.
The meeting thoroughly implemented the spirit of the Central Economic Work Conference and carried out the arrangements set forth at the 2022 CSRC System Work Conference. It reviewed bond‑market regulatory work in 2021, analyzed the current situation, and formulated plans for key priorities in bond‑market regulation for 2022. Li Chao, a member of the CPC Committee of the CSRC and Vice Chairman, attended the meeting and delivered a speech. Leading officials from the CSRC’s Discipline Inspection and Supervision Group, relevant departments within the CSRC headquarters, all local securities regulatory bureaus, as well as exchanges and industry associations—along with other related entities across the system—participated either on site or via video link.
The meeting noted that, in the face of profound changes unseen in a century and the ongoing pandemic, in 2021 the CSRC’s bond regulatory division conscientiously implemented the decisions and arrangements of the CPC Central Committee and the State Council, adhered to the overarching principle of seeking progress while maintaining stability, thoroughly applied the new development philosophy, and remained committed to market‑based and law‑based approaches. It made solid progress in strengthening the bond market’s foundational institutional framework, preventing and defusing risks, piloting public REITs, and advancing unified enforcement across the bond market, thereby ensuring the overall stable and sound development of the exchange‑traded bond market.
The meeting concluded that the current domestic and international environment has grown increasingly complex and challenging; however, the fundamental trend of China’s economy—steady progress with long-term improvement—remains unchanged, and the market enjoys a solid foundation for stable and sound development. It is essential both to strengthen risk awareness and adhere to bottom-line thinking, while maintaining strategic resolve, taking bold responsibility, and earnestly advancing the high-quality development of the exchange‑traded bond market.
Safely mitigating bond default risks
The China Securities Regulatory Commission recently convened its 2022 system-wide work conference, emphasizing the need to address both symptoms and root causes, prudently defuse bond default risks, and further refine market‑based, law‑based mechanisms for handling bond defaults.
In the recently released responses from the China Securities Regulatory Commission to the proposals and suggestions submitted during the 2021 Two Sessions, preventing and defusing risks in the bond market was one of the key issues of concern among deputies and members.
In its response to the “Proposal on Preventing and Resolving Credit Bond Risks of Private Enterprises,” the China Securities Regulatory Commission stated that, going forward, it will continue to strengthen regulatory coordination with local governments and relevant departments, improve the mechanisms for preventing and early-warning of bond‑related credit risks, enhance collaborative efforts to control such risks, and prudently resolve existing bond‑related credit risks. At the same time, it will reinforce market supervision and enforcement in the bond sector, further implement the “zero tolerance” policy, and rigorously crack down on illegal and non‑compliant activities in the bond market.
In its response to the “Proposal on Further Optimizing the Business Environment through the Continuous Improvement of the Reorganization and Rescue Mechanism under the Enterprise Bankruptcy Law of the People’s Republic of China,” the China Securities Regulatory Commission stated that, in the next phase, it will strengthen coordination and cooperation with relevant departments, advance the clarification of the legal basis for cracking down on debt‑evading behavior, further implement the principle of “zero tolerance,” rigorously investigate and prosecute capital market violations such as debt evasion, maintain a high‑pressure enforcement stance, and continually raise the cost of illegal conduct.
In its response to the “Proposal on Strengthening Corporate Financing and Debt Management,” the China Securities Regulatory Commission stated that it will continue to refine the bond market’s foundational institutional framework, actively encourage the judicial authorities to draft and issue specific regulations to clarify the legal basis for cracking down on debt evasion, optimize bond market access management, hold issuers and intermediary institutions more accountable, and enhance regulatory coordination with relevant departments and entities, thereby fostering high-quality development of the bond market.

The Beijing Stock Exchange has been operational for 100 days, and the multi-tiered capital market is becoming increasingly active.
The establishment of the Beijing Stock Exchange marks a significant milestone in the reform and development of China’s capital market. From the outset, the BSE has adhered to a market positioning that emphasizes differentiated development and serves innovative small and medium-sized enterprises, respecting the developmental patterns and growth stages of these offices while enhancing the inclusiveness and precision of its institutional framework—efforts that have earned broad market recognition. With the BSE now operating smoothly since its launch, market vitality has been invigorated, and the initial benefits of the reform are beginning to emerge. As a result, innovative SMEs, intermediary institutions, and investors alike stand to gain new opportunities.
On February 23, 2022, the Beijing Stock Exchange (hereinafter referred to as the “BSE”) will mark its 100th day of trading.
According to the official website of the Beijing Stock Exchange, as of February 16, 2022, the exchange had 84 listed companies, with a total share capital of 12.349 billion shares and an average share capital of 147 million shares per company; a total market capitalization of RMB 225.273 billion, with an average market cap of RMB 2.682 billion; a circulating share capital of 6.762 billion shares, averaging 81 million shares per company; a circulating market capitalization of RMB 134.110 billion, with an average of RMB 1.597 billion; and a trading volume of 57.5252 million shares, valued at RMB 936.452 million. If we include Weimao Electronics, Hongxi Technology, Kaide Quartz, and Lusi Shares—companies that have passed review but have not yet gone public—the number of listed companies on the Beijing Stock Exchange will soon expand to 88.
Several respondents told a reporter from China Business News that, since its inception, the Beijing Stock Exchange has enjoyed robust overall growth, with liquidity markedly improving. Average daily trading volume has roughly tripled compared to the Select Tier era, and the average daily turnover ratio has risen to around 3.00%. Valuation multiples have also increased significantly, with the average price-to-earnings ratio now exceeding 30 times. The BSE’s role as the primary platform for serving innovative small and medium-sized enterprises is steadily strengthening.
The establishment of the Beijing Stock Exchange represents a major reform of China’s multi-tiered capital market system, addressing the market’s shortcomings in supporting small and medium-sized private enterprises and further advancing the development of China’s capital market toward greater multi‑tieredness and inclusiveness.
A senior executive at Guojin Securities has hailed the Beijing Stock Exchange as the “junior class” of the capital market; Liu Liang, deputy general manager of the Investment Banking Department at Lianchu Securities, believes that the establishment of the Beijing Stock Exchange addresses the core issues of difficult and costly financing faced by small and medium-sized enterprises; meanwhile, Zhang Keliang, general manager of the Share Transfer System Business Department at Yintai Securities, goes even further, viewing the launch of the Beijing Stock Exchange as the dawn of a new era for China’s capital market.

Commercial & Corporate
Down payments have been reduced in many regions, and the sector’s performance continues to climb.
Weekly sales of new homes declined year over year but rose month over month. This week, the total floor space sold in key cities fell 50.6% compared with the same period last year, while increasing 72.5% from the previous week. Among them, first-tier cities saw a 121.2% month-over-month increase, second-tier cities a 65.5% rise, and third-tier cities a 41.1% jump.
Since February, the pace of new property launches has slowed. As of now in February, a total of 55 projects have been launched, down 62.3% year-on-year and 76.7% month-on-month. Among them, first-tier cities saw a month-on-month decline of 78.1%, second-tier cities fell by 73.5%, and third-tier cities dropped by 95.2%.
New land supply in 100 cities declined year-on-year but rose month-on-month. This week, the total new land supply across these cities amounted to 2.31 million square meters, down 61.6% year-on-year but up 258.9% month-on-month. Among them, first-tier cities recorded no new land releases; second-tier cities saw 1.75 million square meters of new supply, a month-on-month increase of 438.0%; and third-tier cities added 564,700 square meters, up 76.9% from the previous month.
Industry News: In Heze, Shandong, the down payment ratio for home loans has been lowered to as low as 20%, though a local bank president noted that only a small number of high-quality borrowers are eligible. Recently, some banks in Chongqing, Heze, and Ganzhou, Jiangxi, have also reduced the down payment requirement for first-time homebuyers to 20%. (21st Century Business Herald)
Industry Perspective:
This week, the CITIC Real Estate Index fell 0.8%, while the CSI 300 rose 1.1%, with the sector underperforming the broader market. Amid the release of industry‑wide risks, the sector declined 3.9% over the first four days of the week. However, on Friday it rebounded sharply by 3.3%, largely driven by media reports suggesting that cities such as Heze in Shandong, Chongqing, and Ganzhou in Jiangxi are considering lowering down‑payment requirements. We believe that policy space for demand‑side, city‑specific measures continues to expand, gradually encroaching on core policies like mortgage‑loan restrictions. We reiterate our view that Q1 2022 represents the optimal allocation window for the real estate and property‑management sectors, with equity performance likely to be characterized by pronounced office‑level alpha outweighing sector‑wide beta; select high‑quality companies are poised to stand out. In the residential‑development segment, we favor developers with strong credit profiles or exceptional commercial‑operation capabilities, while those demonstrating successful diversification efforts also merit attention. For developers, we recommend the following A‑share stocks: Poly Development, China Merchants Shekou, Gemdale Group, Vanke A, Binjiang Group, New City Holdings, Guangyu Development, and Wanye Enterprise; and Hong Kong‑listed names: China Overseas Development, CR Land, Longfor Group, and Agile Holdings. For property management, we suggest A‑share candidates including China Merchants Capital and Xindazheng, alongside Hong Kong‑listed options such as Country Garden Services, Poly Property, Agile Yongsheng Services, and CR Wanda Life. As for project‑delivery services, we recommend Greentown Management Holdings.
Risk Warning: Escalation of real estate regulatory policies; sales and revenue recognition falling short of expectations; recurring COVID‑19 outbreaks; intensifying competition among property management companies, with external expansion hampered, among other risks.

Steel prices decline, profits expand.
There is no need to worry about falling steel prices; robust regulatory oversight will help the industry achieve steady and sustainable growth.
This week, steel prices edged lower: compared with last week, rebar fell by 90 yuan, hot-rolled sheet by 170 yuan, cold-rolled sheet by 40 yuan, and medium‑and‑thick plate by 60 yuan. The recent decline in steel prices is not driven by weakening supply and demand; rather, it stems primarily from a sharp drop in raw material costs, particularly iron ore. In fact, during this round of corrections in the black‑steel sector, finished‑steel prices have held up better than raw‑material prices, and smelting‑and‑processing margins have continued to widen. According to our model, as of February 18, weekly profit margins for rebar, hot‑rolled sheet, medium‑and‑thick plate, and cold‑rolled sheet expanded by 117 yuan, 46 yuan, 143 yuan, and 161 yuan, respectively, reaching 541 yuan, 512 yuan, 459 yuan, and 458 yuan.
From a longitudinal perspective, current steel‑industry profitability stands at a near‑five‑year high for the same period. Using a cost‑lagged 30‑day profit‑averaging model that more closely aligns with steelmakers’ operating cycles, as of this weekend, Q1 2022 average profits were: rebar RMB 688, hot‑rolled sheet RMB 741, medium‑and‑thick plate RMB 643, and cold‑rolled sheet RMB 731—up year over year by RMB 445, RMB 400, RMB 428, and RMB 203, respectively. We expect strong year‑on‑year growth in Q1 2022 steel‑maker earnings to be highly probable, with Q1 reports potentially exceeding market expectations. On the one hand, this year’s winter heating season production curtailments in the “2+26” cities, measured in terms of crude steel output, are having a more direct impact on supply; coupled with stricter air‑quality controls during the Beijing Winter Olympics, low‑supply conditions are likely to persist through the end of the first quarter. On the other hand, supported by pro‑growth policies, infrastructure investment is expected to pick up significantly in the next quarter, leading to an overall supply‑demand balance that should outperform last year. Following this year’s Spring Festival, steel inventories accumulated at a rate of 225,000 tonnes per day—lower than last year’s 294,000 tonnes—and rebar stocks are at their lowest level for this time of year in recent years. Recently, policymakers have adopted a clear and decisive stance against hoarding and price‑gouging in the iron‑ore market, introducing a steady stream of measures that directly address the root causes. In the long run, a return to more rational pricing for raw materials such as iron ore and coal will help foster healthy industry development. Unlike last year’s “steel‑and‑ore boom” that expanded margins primarily through higher ore prices, this year’s strategy of squeezing ore costs while expanding margins is both more favorable and more sustainable, substantially easing downstream cost pressures, reducing capital tied up in inventory, and facilitating a more effective release of demand.
Supply quality is improving, and specialty steel and new materials exhibit strong growth potential.
Recently, the Ministry of Industry and Information Technology and two other departments jointly issued the “Guiding Opinions on Promoting High-Quality Development of the Iron and Steel Industry,” which stipulate that the industry must “adhere to overall capacity control,” “strictly enforce the capacity‑replacement policy,” and “prohibit any new steel‑production capacity.” Under policies that constrain total supply, the sector is shifting toward optimizing existing capacity structures and enhancing supply quality. From an industrial‑structure perspective, future coordinated development across upstream and downstream segments will strengthen the competitive edge of the industrial chain. Meanwhile, accelerated mergers and reorganizations, coupled with rising market concentration, will optimize resource allocation, enable enterprises to better coordinate production and maintenance schedules, increase supply flexibility, shorten response times to supply adjustments, and more swiftly align with changing demand—thereby mitigating sharp market swings and ensuring stable corporate profitability. Furthermore, “accelerating product quality upgrades” in the strategic emerging‑industry framework will focus on breakthroughs in high‑end equipment, core components, and other advanced special‑steel materials, thereby further improving supply quality, fostering “single‑category champions” in niche markets, and unlocking long‑term growth potential in the special‑steel and new‑material subsectors.
Total demand remains stable, industry profit growth is diversifying, and the profit midpoint is shifting upward.
Recently, the market has lacked confidence in steel demand due to a temporary slump in real estate investment. However, judging from the trends in urbanization rates and apparent crude steel consumption, we believe there is no need for excessive concern. Over the past three years (2019–2021), China’s apparent crude steel consumption has remained stable at around 980 million tons. In 2021, China’s urbanization rate stood at 64.72%, still lagging behind that of developed countries such as the United States (82.66%), Japan (91.78%), and the United Kingdom (83.9%). Drawing on the experiences of the U.S. and Japan, when urbanization rates are below 70% and annual growth rates range between 0.5% and 1%, the compound growth rate of steel production (and consumption) typically falls within 2.6% to 4.7%. At present, China’s urbanization rate remains relatively low, with an average annual growth rate of 0.89% from 2017 to 2021, indicating that the country is still in a phase of expansion.
Accordingly, in the medium term, China’s steel demand is expected to remain robust. Taking into account the “high-quality development of the construction sector” — with national steel‑structure usage projected to rise from 89 million tonnes in 2020 to 150 million tonnes by 2025 — as well as the “engineer dividend” driving enhanced global competitiveness in Chinese manufacturing, we estimate that indirect steel exports could reach 119.4 million tonnes in 2021. Combined with direct net steel exports of 52.65 million tonnes, total steel exports would amount to 172 million tonnes. Moreover, as China deepens its opening-up and manufacturing products increasingly penetrate international markets, overall steel exports are likely to grow further, with indirect exports—primarily of electromechanical products—expected to expand. From a structural perspective, during the 14th Five-Year Plan period, China will seek to optimize its economic structure and accelerate the transformation and upgrading of its manufacturing sector, placing higher demands on steel materials. On the demand side, there is a gradual shift toward high-end, customized solutions; industry segments are becoming more specialized, profit growth is diversifying, and business models are evolving from traditional product‑centric sales to customer‑oriented service‑driven manufacturing. This transition not only enhances brand value and premium pricing but also boosts corporate profitability.
General steel investment recommendation:
The combined effects of rising industry concentration and constrained supply are shifting the steel sector from a strong-cycle to a weak-cycle phase, with the industry’s earnings midpoint moving higher and dividend payout ratios gradually increasing. Over the long term, manufacturing is expected to become the primary driver of steel demand. We recommend focusing on undervalued, high-dividend plain‑steel stocks (see the attached table). In addition, following the General Secretary’s instructions, during the 14th Five-Year Plan period, pipeline renovation and construction must be treated as a key infrastructure project, which could benefit related investment targets going forward.
Investment Recommendation for Special Steel and New Materials:
Special steel differs from ordinary steel and is a sector strongly supported by policy. In China, mid- to high-end special‑steel materials are seeing both “import substitution” at home and “global market share expansion” abroad. Currently, mid‑to‑high‑end special steel accounts for roughly 4% of the domestic market, still lagging significantly behind developed regions such as Japan and Europe. With the rapid growth of China’s mid‑to‑high‑end manufacturing sector, demand for mid‑to‑high‑end special steel is poised for robust expansion, and valuations of relevant companies are likely to rise further. Based on valuation multiples of special‑steel offices in Japan, Hong Kong, and the United States, these typically hover at a relatively high level of 15–25 times earnings. While Japan and Europe have already passed the phase of rapid special‑steel development, China’s mid‑to‑high‑end special steel remains in its growth stage, warranting a certain valuation premium. We recommend keeping an eye on: CITIC Special Steel, Jiuli Special Materials, Tiangong International, Yongxing Materials, and Fushun Special Steel, among others.
Risk Analysis: Steel demand falls short of expectations, and raw material prices rise sharply.

The China Banking and Insurance Regulatory Commission has issued the “Off-site Supervision Procedures for Financial Leasing Companies.”
To clarify the division of responsibilities for off-site supervision of financial leasing companies, standardize the procedures, content, methods, and reporting channels of such supervision, and improve the off-site supervisory reporting system, the China Banking and Insurance Regulatory Commission recently issued the “Regulations on Off-Site Supervision of Financial Leasing Companies” (hereinafter referred to as the “Regulations”).
The Regulations comprise six chapters and twenty-seven articles, covering key provisions such as general principles, information collection and verification, risk monitoring and assessment, information reporting and utilization, supervisory measures, and supplementary provisions. In the general principles section, the regulations set forth the purpose and legal basis for their formulation, define non‑on‑site supervision, outline its principles and phases, and delineate the respective responsibilities of the CBIRC and local financial regulatory authorities. The information collection and verification section specifies the obligations of local financial regulators regarding information gathering, data review, conofficeation and validation, and record‑keeping. The risk monitoring and assessment section details the duties of local financial regulators, including monitoring and analysis, on‑site inspections, handling of abnormal indicator changes, reporting major risk events, and preparing annual supervisory reports. The information reporting and utilization section establishes the submission channels and timelines for reports, as well as the procedures for applying analytical and evaluative findings. The supervisory measures section prescribes differentiated regulatory measures and penalties. Finally, the supplementary provisions address the development of implementing rules, the CBIRC’s authority to revise and interpret these Regulations, and the effective date.
The issuance of the Regulations is of great significance in addressing gaps in the regulatory framework for financial leasing companies and enhancing the quality of off-site supervision. Going forward, the China Banking and Insurance Regulatory Commission will further refine the business‑operation and supervisory rules for financial leasing companies, guiding the industry toward standardized and sound development.

Nonferrous Metals Industry: Demand Expectations Lead the Way; Downstream Resumption of Work Likely to Accelerate
Post-holiday, end‑user demand for metals has been recovering slowly, while processing activity remains on a steady pace, keeping both supply and demand weak. However, expectations of expanded credit, infrastructure‑driven support, and inventory restocking across the value chain are providing some price support. Meanwhile, the accelerated resumption of operations downstream could unlock greater demand and enhance price elasticity.
Cyclical Assessment: Expectations of U.S. interest-rate hikes have been gradually priced in, with metal prices fully reflecting this; localized geopolitical tensions may to some extent dampen risk appetite but also boost demand for precious metals as safe-haven assets. In January, China’s PPI declined somewhat due to the high base effect, though a new round of price increases—particularly for metals—since December 2021 could keep the PPI hovering at elevated levels. Domestically, post‑holiday metal demand remains on the mend; following the sharp destocking seen in 2021, short‑term restocking across the entire metal value chain is supporting demand, resulting in visible inventory buildups that are lower than historical norms for this time of year. Meanwhile, industrial supply chains in developed economies in Europe and North America continue to recover, driving robust metal demand; combined with energy‑supply constraints, these factors are sustaining upward pressure on prices. The narrowing price differentials between domestic and international markets has closed import arbitrage opportunities, partially offsetting the growth in domestic supply.
Electrolytic Aluminum: Supply‑demand disruptions persist, with profits at elevated levels but slightly easing. ① Supply side: Production resumption continues, though capacity utilization remains relatively low. As of mid‑February, operating electrolytic aluminum capacity stood at approximately 38.2 million tonnes per year (according to BaiChuan Information). The impact of the Guangxi outbreak on both electrolytic aluminum and alumina production has waned, while the recent surge in Inner Mongolia has introduced some temporary disruption; overall domestic production is steadily recovering. Overseas, high energy prices continue to weigh on electrolytic aluminum output, while the closure of import arbitrage opportunities in China has further constrained supply, leaving total supply broadly stable. ② Demand and inventories: Downstream processing activity is accelerating, driving a rebound in processing fees. Post‑holiday demand has remained relatively subdued, yet aluminum fabrication has picked up rapidly; as of the 18th, the aluminum processing capacity utilization rate had recovered to 65.4%, approaching mid‑January levels, with plate, strip, and extruded profiles remaining at strong levels. Processing fees for aluminum sheet, strip, and foil have risen sharply, reflecting structurally improving end‑user demand amid tight inventory conditions. In the second week after the holiday, electrolytic aluminum inventories continued to build, though stocks of aluminum billets and factory‑held inventories declined. Spot inventories of aluminum ingots, billets, and factory‑held stock across twelve major regions stood at 103.9 (+9), 26.46 (−0.29), and 16.0 (−0.3) thousand tonnes, respectively. ③ Profitability: Flat aluminum prices, coupled with rising costs, have dragged gross margins down by roughly RMB 300, to around RMB 4,700 per tonne.
Copper: Narrow-range fluctuations, with no clear force yet to break the current equilibrium. After last week’s sharp volatility, the copper market has settled back into a calmer phase. A dovish tone from the Federal Reserve pushed the U.S. dollar index lower, while persistent high inflation expectations have provided some support for prices. Domestic demand remains sluggish, with downstream processing and end‑use sectors still relatively weak, and SHFE inventories have surged. Until domestic demand picks up and validates the growth‑stabilization narrative’s impact on copper consumption, positive expectations for domestic demand will continue to be the primary driver of prices. Global copper‑mine supply is expected to ramp up in 2022, though recycled‑copper output is likely to show less elasticity than last year. Meanwhile, the ongoing production halt at Las Bambas will keep weighing on the market, and the March 1 implementation of a value‑added tax on domestic scrap copper will also constrain recycled‑copper supply. Consequently, we believe that, in the near term, no decisive factor is likely to disrupt the current trading range around RMB 70,000 per tonne.
We maintain an “Overweight” rating on the aluminum sector. Recommended stocks include Shenhuo Co., Ltd., China Hongqiao Group, Mingtai Aluminum, Nanshan Aluminum, Yun Aluminum Co., Ltd., and Tianshan Aluminum, among others; beneficiary stocks comprise Chinalco, Zijin Mining, Western Mining, Jiangxi Copper, Chujiang New Material, Boway Alloy, and Hailiang Co., Ltd., among others.
Risk Warning: Downstream demand weaker than expected, the Federal Reserve’s interest-rate hikes and balance-sheet reduction exceeding expectations, domestic economic stabilization measures falling short of expectations, and growth in the new-energy-vehicle sector lagging behind forecasts, among other risks.

Taxation TAXATATION
The annual individual income tax settlement is significant not only for “refunds and additional payments.”
We should not only focus on issues of overpayment or underpayment, but also recognize the profound significance of the individual income tax annual final settlement in advancing the modernization of national governance, and appreciate its role in better safeguarding taxpayers’ legitimate rights and interests.
Recently, the State Taxation Administration issued an announcement clarifying procedures for the 2021 individual income tax comprehensive annual settlement, which will be processed from March 1 to June 30. Although the public has become increasingly familiar with the annual individual income tax settlement, discussions about “additional tax payments” and “tax refunds” continue to attract widespread attention. In fact, the significance of the annual individual income tax settlement extends far beyond simply “refunding or collecting additional taxes.”
This is the third annual individual income tax settlement conducted since China implemented the latest round of personal income tax reform. With the new Individual Income Tax Law coming into effect on January 1, 2019, the annual settlement has become a routine procedure for millions of households. At the end of the tax year, taxpayers are required to reconcile their previously withheld taxes by reviewing their income from wages and salaries, labor services, manuscript fees, and royalty income—four categories of comprehensive income—and, based on these figures, “identify any omissions or underpayments, aggregate all income and expenses, calculate the annual tax liability, and settle any overpayment or underpayment.” This approach is also widely adopted internationally.
The results generated by the mobile individual income tax app—whether a tax payment is due or a refund is issued—can be a source of concern for taxpayers. If additional tax is required, some may view it as an added expense, while a tax refund can come as an unexpected “pleasant surprise.” In fact, beyond simply paying attention to the amount of the refund or additional payment, it’s equally important to understand where that amount originates.
The purpose of the annual tax reconciliation is to accurately determine the amount of individual income tax that a taxpayer should pay on their total annual income, thereby fulfilling their tax obligations in accordance with the law. Under the personal income tax system that combines comprehensive and categorized approaches, taxpayers’ income is subject to withholding and provisional payment by their employers throughout the year. However, given the diversity of income sources and the complexity of individual circumstances, the total annual income and the applicable tax rates can only be calculated after the year has ended. Consequently, in most cases, there will be a “difference” between the tax already withheld and the tax liability determined through the annual reconciliation, necessitating a “refund‑or‑additional‑payment” adjustment. Whether a taxpayer is required to pay additional tax or receive a refund, the ultimate outcome is that they settle the tax liability prescribed by law. Put another way, an additional payment arises when too little tax was withheld during the previous year, while a refund occurs when too much tax was withheld. By achieving precise tax settlement through this “refund‑and‑supplement” process, the annual tax reconciliation plays a crucial role in the personal income tax system.
At the same time, we should not only focus on issues of overpayment or underpayment, but also recognize the profound significance of annual individual income tax settlement in advancing the modernization of national governance. Under the previous individual income tax system, individuals relied on their employers for withholding and remittance, thereby fulfilling their legal obligation to pay taxes, yet this arrangement often left them with little sense of personal tax responsibility. By contrast, the new system treats each taxpayer as an individual, and the annual settlement provides a direct channel for communication between the tax authorities and taxpayers. Building on the employer‑based withholding and advance payment, taxpayers are now required to aggregate all sources of income included in their annual comprehensive taxable income and file a tax return with the tax authorities. Through active participation and engagement, taxpayers not only discharge their tax obligations but also gain a deeper understanding of tax laws, enhance public awareness of lawful tax compliance, and strengthen their willingness to take part in public affairs. Since the implementation of the revised Individual Income Tax Law—particularly following two rounds of annual settlements—the principle of law‑based taxation has taken deeper root in the public consciousness, marking a change of historic significance.
Beyond its overarching significance for national governance, the annual tax reconciliation process also better safeguards taxpayers’ legitimate rights and interests. For instance, if a taxpayer is eligible for certain special additional deductions during the tax year but failed to claim them when paying taxes in advance, they can do so during the annual reconciliation. Taxpayers should familiarize themselves with all relevant regulations, particularly the policies on special additional deductions, to fully benefit from the reforms. At present, the mobile individual income tax app has become the primary channel for taxpayers to complete their annual reconciliation, allowing them to handle the process quickly and conveniently with just a few taps. Of course, taxpayers must strictly comply with legal requirements and make truthful declarations, ensuring that their integrity records remain untarnished.
The personal income tax system plays a crucial role in steadily advancing common prosperity, particularly in expanding the size of the middle-income group and strengthening the regulation and adjustment of high incomes. The standardized and smooth implementation of the annual individual income tax settlement will help translate a range of reform dividends into tangible benefits, thereby further deepening personal income tax reform.

2021 Individual Income Tax Annual Settlement: Three Filing Methods Available
According to the official WeChat account of the State Taxation Administration, the annual individual income tax settlement for 2021 will take place from March 1 to June 30. To implement the requirements set forth in the “Opinions on Further Deepening the Reform of Tax Collection and Administration,” issued by the CPC Central Committee and the State Council, safeguard taxpayers’ legitimate rights and interests, and help them smoothly and compliantly complete the 2021 annual individual income tax settlement for comprehensive income (hereinafter referred to as the “annual settlement”), the State Taxation Administration recently released the “Announcement on Matters Relating to the 2021 Annual Individual Income Tax Settlement for Comprehensive Income” (State Taxation Administration Announcement No. 1 of 2022, hereinafter referred to as the “Announcement”), which clarifies the relevant procedures.
Article 6 of the Notice specifies three methods for handling the annual tax reconciliation: self‑service, employer‑assisted, or engaging a third party.
First, self-service processing, meaning taxpayers handle the procedures themselves.
Taxpayers may file their annual tax reconciliation themselves. The tax authorities will continue to strengthen policy guidance and operational support for the annual reconciliation process, provide tax-related advisory services through multiple channels, and enhance the notification and reminder functions of the Individual Online Tax Service Platform to help taxpayers complete their annual reconciliation smoothly.
For elderly individuals, persons with mobility challenges, and other special groups who may face difficulties completing their annual tax reconciliation on their own, the tax authorities may, upon application by the taxpayer, provide personalized annual tax reconciliation services.
Second, the employer‑based method, whereby the employing organization handles the application.
Given that employers have a comprehensive and accurate grasp of taxpayers’ tax-related information and maintain close communication with them, which facilitates more effective assistance in completing the annual tax reconciliation, the Announcement stipulates that taxpayers may entrust their employers to handle the annual tax reconciliation on their behalf.
In addition to employers that pay wages and salaries, the category of “employing entities” also includes those that withhold and remit individual income tax on labor‑service income under the cumulative withholding method, typically in cases such as insurance salespersons, securities brokers, or interns enrolled in full-time academic programs.
If a taxpayer requests the employer to handle the annual tax settlement on their behalf, the employer shall comply, or provide training and guidance to enable the taxpayer to file the annual tax return and claim refunds or pay any additional taxes independently through the Individual Online Tax Service Platform. The tax authorities will supply employers with dedicated filing software to facilitate centralized annual tax settlement processing for their employees.
It should be noted that if a taxpayer chooses to have their annual tax reconciliation handled by their employer, they must conoffice this arrangement with the employer during the annual reconciliation period (before April 30). Taxpayers may provide conofficeation via email, text message, WeChat, or other electronic means, which carry the same legal effect as written conofficeation.
To safeguard taxpayers’ legitimate rights and interests, the Notice further stipulates that, prior to the taxpayer’s conofficeation, the employer shall not handle the annual tax reconciliation on the taxpayer’s behalf. Once conofficeation is completed, the taxpayer must truthfully provide the employer with all information pertaining to their comprehensive income, deductions, and tax benefits for the tax year—excluding income from the employer—and shall be responsible for the authenticity, accuracy, and completeness of such information.
Third, entrust others to handle it, that is, delegate the task to a tax‑related professional service agency or other entities and individuals.
Taxpayers may, based on their individual circumstances and conditions, independently engage a tax‑related professional service agency or other entities or individuals (hereinafter referred to as the “trustee”) to handle their annual tax reconciliation. If this option is chosen, the trustee must enter into a power of attorney with the taxpayer, clearly defining the rights, responsibilities, and obligations of both parties.
It should be noted that, after a tax‑withholding agent or trustee has filed the annual tax reconciliation on behalf of a taxpayer, they must promptly notify the taxpayer of the outcome. If a taxpayer discovers errors in their annual tax reconciliation return, they may request the agent to correct it or file an amended return themselves.

Tax-cut “red envelopes” inject new momentum into the development of enterprises related to the Winter Olympics.
On February 15, Eileen Gu won the silver medal in the freestyle skiing slopestyle event at the Genting Snow Park in Zhangjiakou. Owned by Miyun (Zhangjiakou) Tourism Resort Co., Ltd., Genting Snow Park served as the venue for the freestyle skiing and snowboarding events at the Beijing 2022 Winter Olympics. The park features 41 ski runs with a total length of 24 kilometers, including 12 advanced trails, 15 intermediate trails, 2 beginner trails, 6 off-piste runs, and 6 professional courses.
“When we first arrived here in 2009, it was just a small mountain village with fewer than 300 residents. Today, it has become an internationally renowned ski resort—thanks in no small part to the support of various favorable national policies,” said Wang Kai, the company’s chief financial officer.
Miyuan Company is not the only one to benefit from favorable policies. Since China’s successful bid to host the Winter Olympics, the country’s tax authorities have fully leveraged the role of taxation, effectively implemented various tax‑related preferential policies, and supported the growth and expansion of a wide range of enterprises involved in the Games, with the “spillover effects” of the Winter Olympics gradually becoming evident.
Since the opening of the Winter Olympics, the mascots Bing Dwen Dwen and Shuey Rhon Rhon have quickly become immensely popular, with the market even seeing a situation where “one Bing Dwen Dwen is hard to come by.”
“As of the end of January 2022, the company had sold nearly 150,000 licensed Winter Olympics products, generating sales revenue of close to RMB 14 million—exceeding our expectations,” Zhang Xiang, CFO of Zhangjiakou Culture and Tourism Investment Group Co., Ltd., a licensed retailer of Beijing 2022 Winter Olympics merchandise authorized by the Beijing Organizing Committee for the Winter Olympic Games, told reporters.
To provide comprehensive support to businesses, tax officials have offered remote guidance and personalized in-person assistance, helping companies streamline tax filings and optimize tax‑administration procedures, thereby ensuring robust tax‑related services for the sale of licensed Olympic merchandise. “The tax authorities included our company on the list of Olympic‑related enterprises, providing not only regular expert‑led advisory sessions but also a dedicated ‘Olympic green channel’ for expedited processing of tax matters. Since last year, we have benefited from various tax‑incentive policies totaling RMB 1.585 million,” Zhang Xiang explained.
“10, 9, 8… 3, 2, 1!” On the evening of February 4, as the entire venue erupted in a countdown, massive digital fireworks lit up the sky above the Bird’s Nest. Fireworks spelling out “Lichun” in both Chinese and English soared into the air, marking the opening of the Beijing 2022 Winter Olympics amid global anticipation. Creative firework displays—featuring the “Welcoming Pine,” the “Ice Cube,” “Snowflakes Dancing Across the Sky,” and the “Dandelion”—captivated audiences around the world.
As the lead organization responsible for the fireworks display at the Winter Olympics opening ceremony, Zhong Ziqi, head of Hunan Liuyang Dongxin Fireworks Group Co., Ltd., and his team conducted meticulous research and relentless efforts—spanning R&D, experimentation, and technical development to construction and installation—working day and night for more than 100 days to deliver a result that fully met expectations.
According to reports, Dongxin Fireworks is a leading enterprise in Liuyang, Hunan, specializing in the manufacture and display of fireworks. It has undertaken major fireworks‑display projects, including those for the 2008 Beijing Olympics.
“Nowadays, setting off fireworks entails extremely stringent environmental and energy‑saving requirements—especially when it comes to high‑standard events like the Winter Olympics. We have therefore invested heavily in the research and development of environmentally friendly technologies,” said Liu Yongzhang, the company’s deputy general manager. He added that the pyrotechnic compositions used in this fireworks display are free of heavy metals and contain low sulfur levels, ensuring both safety and environmental sustainability. To achieve a spectacular yet safe performance, the company has allocated over RMB 3 million to eco‑friendly R&D, accounting for 70% of its total R&D expenditure.
“Tax incentives have delivered tangible financial benefits, supporting our company’s technological innovation. In terms of the R&D expense super‑deduction, we estimate that, for environmental‑protection technology alone, we will see tax savings of over 400,000 yuan in 2021,” said Jiang Jiazi, head of the company’s finance department.
A review by reporters reveals that, in order to fully honor the tax commitments set forth in the “Beijing 2022 Winter Olympic Games Bid Report” and the “Host City Contract for the Beijing 2022 Winter Olympic Games,” the State Taxation Administration, together with the Ministry of Finance and the General Administration of Customs, issued, in two batches in 2017 and 2019, a series of tax policies tailored to the Beijing 2022 Winter Olympics and Paralympics. These policies cover a wide range of taxes, including value-added tax, consumption tax, corporate income tax, individual income tax, land appreciation tax, stamp duty, and resource tax, providing comprehensive tax support across all stages of the preparation and hosting of the Winter Olympics and Paralympics.
“As the number of enterprises involved in the Olympics continues to grow, so too does the scope of their tax-related activities. The series of tax‑preferential policies recently introduced by the state has further strengthened support for taxpayers,” said Li Huaqing, head of the Winter Olympics service window at the Chongli District Tax Bureau in Zhangjiakou City.

 
Litigation & Arbitration
Supreme People’s Court: Arrangements for Mutual Recognition of Judgments in Marriage and Family Matters Between Mainland China and Hong Kong Have Come into Effect
On February 15, the Arrangement on the Mutual Recognition and Enforcement of Civil Judgments in Matrimonial and Family Matters between the Courts of the Mainland and the Hong Kong Special Administrative Region entered into force simultaneously in both jurisdictions. Widely hailed as a groundbreaking initiative that best reflects public sentiment, closely addresses people’s livelihoods, and enjoys broad popular support in the field of judicial assistance between the two regions, this arrangement represents a major step to implement and further enrich the “One Country, Two Systems” principle through legal instruments. It is of great significance for safeguarding the rights and interests of parties to cross-border marriages and their families, and for enhancing the well-being of the people in both places.
On June 20, 2017, the Supreme People’s Court and the Department of Justice of the Government of the Hong Kong Special Administrative Region signed the “Arrangement on the Mutual Recognition and Enforcement of Civil Judgments in Matrimonial and Family Matters between the Mainland and the Hong Kong Special Administrative Region” (hereinafter referred to as the “Matrimonial and Family Arrangement”). On May 5, 2021, the Legislative Council of the Hong Kong Special Administrative Region enacted the “Ordinance on the Mutual Recognition and Enforcement of Judgments in Matrimonial and Family Cases of the Mainland” (hereinafter referred to as the “Ordinance”), thereby completing the local legislative process in Hong Kong. Following unanimous agreement between the Supreme People’s Court and the Department of Justice of the Government of the Hong Kong Special Administrative Region, the Arrangement entered into force simultaneously in both jurisdictions today. The Supreme People’s Court has implemented the Arrangement by issuing a judicial interpretation titled “Arrangement on the Mutual Recognition and Enforcement of Civil Judgments in Matrimonial and Family Matters between the Mainland and the Hong Kong Special Administrative Region.”
In recent years, as ties between the mainland and Hong Kong have grown increasingly close, population mobility has become more frequent, and cross-border marriages have risen steadily, with over 20,000 cases recorded annually. However, due to the prior absence of institutional arrangements, judgments rendered by courts in one jurisdiction on issues such as marital property and child custody in cases involving both jurisdictions could not be recognized in the other, nor could they be enforced. As a result, parties were left with no choice but to seek redress by filing new lawsuits. This not only imposes significant burdens on the parties in terms of time, money, and effort, but also undermines the effective protection of the legitimate rights and interests of women and children.
The mainland and Hong Kong belong to two distinct legal jurisdictions within the same country. Over the 25 years since Hong Kong’s return to the motherland, the two sides have, in accordance with Article 95 of the Basic Law of the Hong Kong Special Administrative Region, successively concluded nine judicial assistance agreements, thereby establishing an inter‑regional judicial assistance framework with Chinese characteristics. The vigorous development of civil and commercial judicial assistance between the two regions fully demonstrates the strong vitality of the “One Country, Two Systems” principle. “One Country” is the root; only with deep roots can the leaves flourish. “One Country” is the foundation; only with a solid foundation can the branches thrive. Within the framework of “One Country,” the two legal systems can and should coexist harmoniously over the long term.
To safeguard the interests of both parties and their families in cross-border marriages, it is imperative for the Mainland and Hong Kong to establish institutional arrangements that enable mutual recognition and enforcement of judgments in matrimonial and family matters between the two jurisdictions. This will help avoid redundant litigation, thereby saving time and costs and alleviating the emotional burden on the parties involved. Following the entry into force of the “Arrangement on Matrimonial and Family Matters,” the vast majority of judgments in cross-border matrimonial and family cases will be mutually recognized and enforced in both jurisdictions. This not only significantly reduces the burden of repeated litigation for the parties concerned, bringing tangible benefits to the people of both regions, but also lays a more solid foundation for the continued expansion and deepening of judicial exchanges and cooperation between them.
The “Arrangement on Marriage and Family Matters” achieves closer and broader mutual assistance within a single jurisdiction. Adhering to an open‑minded approach, the two regions seek the greatest common denominator by bringing into the scope of mutual recognition and enforcement both cases falling under the purview of marriage and family matters and consensual divorces. Moreover, the scope of such recognition and enforcement is not limited to the acknowledgment of personal status; it also encompasses property‑related adjudications.
The “Arrangement on Marriage and Family Matters” has achieved a closer alignment of legal and judicial rules under the “two systems.” Both jurisdictions have remained committed to emancipating the mind and pursuing flexible innovation, integrating the Mainland’s concept of “ownership” with Hong Kong’s notion of “transfer” in court orders, thereby realizing a proactive convergence in legal articulation. Upholding a judicial philosophy of mutual respect, the arrangement replaces the 2006 “Arrangement Concerning the Mutual Recognition and Enforcement by the Courts of the Mainland and the Hong Kong Special Administrative Region of Judgments in Civil and Commercial Cases Based on Parties’ Agreed Jurisdiction” term “final judgment” with “effective judgment,” while, to the greatest extent possible, respecting the original trial court’s legal definition of an “effective judgment.”
The “Arrangement on Marriage and Family Matters” reflects the shared commitment of legal professionals on both sides to serving the public good and well‑being. It establishes the principle of reviewing matters in the best interests of the child, requiring courts on both sides to give full consideration to the child’s best interests. Even though the mainland has not yet acceded to the 1980 Hague Convention on the Civil Aspects of International Child Abduction, it upholds the principle of maximizing the child’s interests by allowing applications for recognition and enforcement in mainland courts of custody orders issued by Hong Kong courts, thereby ensuring the child’s normal education and daily life are adequately protected. With the gradual improvement of a series of laws, including the Civil Code, the Law on the Protection of Minors, and the Law on Promoting Family Education, protection of minors on both sides will become even more comprehensive and robust.
The entry into force and implementation of the “Arrangement on Marriage and Family Matters” represent only the first step; in its concrete application, numerous challenges remain. It will require the courts of both jurisdictions to deepen their mutual understanding of legal terminology, enhance communication regarding the articulation of dispositive provisions, and improve coordination on enforcement measures, thereby progressively achieving an efficient alignment between substantive law and procedural rules. Moreover, it calls for further strengthening the collaborative mechanisms for the mutual recognition of judgments, as well as for closer engagement between the legal communities of both regions. At the same time, scholars from both sides must undertake more in-depth deliberations on issues such as grounds for challenge and how to best safeguard the best interests of the child, so as to support the overarching goal of fostering ever‑closer judicial ties under the “One Country, Two Systems” framework.
Although the legal and judicial systems of the mainland and Hong Kong differ in certain respects, the legal communities on both sides remain united in their commitment to upholding the principle of “One Country, Two Systems,” working together to promote the prosperity and development of the motherland, and enhancing the well-being of the people in both regions. The distinctive and mutually complementary legal systems of the mainland and Hong Kong constitute valuable resources for mutual learning and shared progress in the rule of law. Institutional differences are not chasms, a lack of experience is not an obstacle, and unique circumstances are not barriers. By staying officely aligned with the principles of “One Country, Two Systems” and the Basic Law of the Hong Kong Special Administrative Region, and by forging ahead in concert, we can continuously overcome challenges, achieve breakthroughs, and write a new chapter in judicial cooperation between the two places.

Supreme People’s Procuratorate: Continuously intensifying efforts to crack down on securities-related crimes.
On the 15th, Zheng Xinjian, Director of the Fourth Procuratorial Office of the Supreme People’s Procuratorate, stated in an interview that in recent years, procuratorial organs have continuously intensified their efforts to combat securities-related crimes. From January to November 2021, procuratorial organs nationwide prosecuted a total of 211 individuals for securities and futures offenses, a year-on-year increase of 90.1 percent. Zheng Xinjian further explained that following the official inauguration of the Supreme People’s Procuratorate’s Resident Procuratorial Office at the China Securities Regulatory Commission on September 18, 2021, the two agencies, together with the Ministry of Public Security, launched a special law-enforcement campaign targeting securities‑related illegal and criminal activities. They also strengthened oversight and guidance over case handling by local procuratorial organs. The successful prosecution of high-profile cases involving financial fraud and market manipulation—such as those involving Kangmei Pharmaceutical, Kangde New, and Beiba Dao—has sent a strong signal to the capital markets that the procuratorial system adopts a “zero-tolerance” stance toward securities crimes.

The Supreme People’s Procuratorate has issued guidelines: proactively expand military–local procuratorial cooperation in the new era.
Reporters learned from the Supreme People’s Procuratorate that, recently, the Supreme Procuratorate issued the “Opinions on Several Issues Concerning the Strengthening of Collaboration Between Military and Local Procuratorial Organs in the New Era” (hereinafter referred to as the “Opinions”). The document underscores the significant importance of enhancing such collaboration in the new era, emphasizing that it is an objective necessity for procuratorial organs to serve the goal of building a strong military, support combat readiness and warfighting, advance reform‑driven military strengthening, and promote law‑based governance of the armed forces. It also constitutes both a political and a legal responsibility of the procuratorial system.
According to the introduction, the “Opinions” are divided into three parts and comprise a total of eleven articles. In particular, Part II sets forth clear requirements for proactively expanding the scope of military‑civilian procuratorial cooperation in the new era, covering eight key areas: rigorously prosecuting, in accordance with the law, all crimes that undermine national defense, military development, and the rights and interests of service members and their families; strengthening legal oversight over cases involving the military; enhancing protection for minor children in military families; and jointly providing judicial assistance to demobilized military personnel, among other measures.
The Opinions stipulate that military and local procuratorial organs shall collaborate closely, establish a “green channel” for military-related cases, and ensure the lawful and expedited acceptance and referral of such cases, thereby giving priority to their handling in accordance with the law. Upon receiving a case, if clues indicate that it falls under the jurisdiction of the other party, the relevant materials shall be promptly transferred as prescribed, along with all pertinent evidence and any funds or property involved. In handling military-related cases, military and local procuratorial organs may engage in cooperative efforts regarding information inquiries, evidence collection, technical support, and other areas.
The Opinions stipulate that, with a focus on enhancing the quality and effectiveness of the “Four Major Prosecutorial Functions,” the “Ten Key Areas of Work,” and collaborative efforts, joint investigations and research should be conducted, the scope of cooperation expanded, and attention paid to identifying salient issues that are both widespread and representative in relevant fields and critical stages. Furthermore, data analysis of military-related cases should be strengthened, with concerted efforts to examine case characteristics, patterns of occurrence, and preventive measures; case materials should be actively consolidated to compile and issue guiding and typical cases, thereby fostering innovative development in collaborative work.
The Opinions require that procuratorial organs at all levels, from a holistic and strategic perspective, closely focus on the goal of building a strong military in the new era, serve preparations for and conduct of combat, support military reform and strengthening, and uphold law-based governance of the armed forces. They are also called upon to further strengthen their sense of responsibility and mission, keep pace with the times, and intensify cooperation between military and local procuratorial organs in the new era.

Ministry of Public Security: Be on Guard Against Scams Exploiting the Winter Olympics Craze
Since the opening of the Winter Olympics, the mascot “Bing Dwen Dwen” has quickly become an internet sensation, leading to a situation where it is extremely difficult to obtain one. This afternoon, the Ministry of Public Security held an online press conference. Spokesperson Li Bei stated that, in the course of their work, public security authorities have discovered individuals engaging in illegal reselling at designated sales outlets and other locations at inflated prices for illicit profit, as well as selling counterfeit “Bing Dwen Dwen” products through online platforms, thereby disrupting the normal purchasing order.
According to reports, recently, public security organs in Beijing, Zhejiang, and other localities, in coordination with market supervision authorities, have swiftly and rigorously cracked down, in accordance with the law, on illegal activities involving the reselling of infringing “Bing Dwen Dwen” products at exorbitant prices or their sale through online platforms for profit.
Police remind the public that relevant authorities have announced that the factories producing “Bing Dwen Dwen” have resumed operations in an orderly manner, and licensed Beijing Winter Olympics merchandise will remain on sale at least through the end of June this year. Consumers are urged to shop rationally and avoid purchasing at inflated prices from scalpers, and to refrain from falling for price‑gouging schemes that could result in financial losses. At the same time, be on high alert for other scams capitalizing on the Winter Olympics hype, including impersonation of the official Olympic website, fraudulent sales and unauthorized reselling of “Bing Dwen Dwen” and other Olympic memorabilia, fake prize‑winning messages sent under corporate names, bogus Olympic fundraising scams, and “red envelope” frauds celebrating alleged victories. Exercise extreme caution to guard against common scam tactics such as “getting something for nothing” or “passing off fakes as genuine.”
“For any activities related to the Winter Olympics, if you encounter situations requiring advance payments such as ‘prepayments,’ ‘deposits,’ or ‘processing fees,’ be sure to verify through the official Winter Olympics website or by contacting authorized agencies—never trust unsolicited offers. If you suspect you’ve been scammed, please promptly call 110 to report the incident and seek assistance,” said Li Bei.

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