JC Master Legal News Issue 1007

Key Takeaways for This Issue

The China Securities Regulatory Commission is soliciting public comments on the “Guiding Opinions on Improving Post-Delisting Supervision of Listed Companies.”
To align with the requirements of the registration-based reform and the normalization of delisting, further enhance post‑delisting supervision of listed companies, foster a sound market environment characterized by “both entry and exit, and the ability to enter and exit,” and promote the healthy and stable development of the capital market, the China Securities Regulatory Commission has, in accordance with relevant provisions of the Company Law, the Securities Law, and other applicable laws and regulations, drafted the “Guiding Opinions on Improving Post‑Delisting Supervision of Listed Companies” (hereinafter referred to as the “Guiding Opinions”). These opinions are now being made public for public comment.
The steel sector fell 1.49%, while global crude steel production in January declined 6.1% year over year.
　Reversing the strong performance of the previous two weeks, the steel sector fell 1.49% this week (February 21–25). Among the 10 steel companies closely tracked by a reporter from the China Times, only Baogang Shares posted gains; meanwhile, CITIC Special Steel dropped 6.46%, Baosteel Shares declined 5.78%, and Hualing Steel’s share price slipped 4.96%.
Two departments: Continue to implement tax preferential policies for certain national commodity reserves.

On the 24th, reporters learned from the Ministry of Finance that, in order to support national commodity reserves, the Ministry of Finance and the State Taxation Administration recently issued an announcement stating that, from January 1, 2022, to December 31, 2023, certain tax preferential policies for commodity reserves will be extended.

The Supreme People’s Court has issued the Judicial Interpretation of the General Provisions of the Civil Code, further clarifying the rules governing systems such as legitimate defense.
To guide people’s courts at all levels in effectively implementing the Civil Code, fully leveraging the General Provisions section’s overarching role within the Code, safeguarding the legitimate rights and interests of civil subjects in accordance with the law, and vigorously promoting the core socialist values, the Supreme People’s Court has formulated the “Interpretation on Several Issues Concerning the Application of the General Provisions Section of the Civil Code of the People’s Republic of China” (hereinafter referred to as the “Interpretation”), which was officially released to the public on February 25 and will take effect on March 1, 2022.

Finance & Capital Markets
The China Securities Regulatory Commission is soliciting public comments on the “Guiding Opinions on Improving Post-Delisting Supervision of Listed Companies.”

To align with the requirements of the registration-based reform and the normalization of delisting, further enhance post‑delisting supervision of listed companies, foster a sound market environment characterized by “both entry and exit, and the ability to enter and exit,” and promote the healthy and stable development of the capital market, the China Securities Regulatory Commission has, in accordance with relevant provisions of the Company Law, the Securities Law, and other applicable laws and regulations, drafted the “Guiding Opinions on Improving Post‑Delisting Supervision of Listed Companies” (hereinafter referred to as the “Guiding Opinions”). These opinions are now being made public for public comment.
The “Guiding Opinions” are grounded in the implementation of the requirements of the Securities Law, aimed at safeguarding investors’ legitimate rights and interests and ensuring the smooth and orderly execution of routine delisting. Relying on the existing Share Transfer Agency System as the delisting board, and guided by the principles of “seamless connectivity, appropriate regulation, risk prevention, and coordinated efforts,” the document seeks to address existing bottlenecks and risks in practice, thereby establishing a set of institutional arrangements that align with the functional positioning of the delisting board and are tailored to the characteristics of delisted companies. Specifically, these measures include: first, strengthening the linkage among delisting procedures, streamlining the stock exchange’s exit mechanism, improving arrangements for sponsoring securities offices to take over responsibilities, simplifying the equity‑conofficeation and registration process, and optimizing the listing procedures on the delisting board, so as to facilitate the steady and seamless transition of delisted companies into the delisting board; second, refining the ongoing regulatory framework for delisted companies by setting reasonable information‑disclosure and corporate‑governance requirements based on their actual circumstances, establishing differentiated regulatory mechanisms, and enhancing the precision and adaptability of oversight; third, bolstering risk‑prevention mechanisms through enhanced suitability management for investors, guiding enterprises lacking the capacity for sustained operations to exit the market via market‑based channels, and promoting risk reduction and gradual market clearance; and fourth, improving the regulatory system for delisted companies by establishing a clear‑responsibility, collaboratively efficient regulatory framework, reinforcing division of labor and coordination among all stakeholders, and fostering effective regulatory synergy.
We welcome valuable feedback from all sectors of society on the “Guiding Opinions.” The China Securities Regulatory Commission will revise and refine the document based on the public consultation, and after completing the requisite procedures, it will promulgate and implement it.

The number of investors in the securities market has surpassed 200 million.
The number of A-share investors has surpassed 200 million.
Data released by China Securities Depository and Clearing Corporation on the evening of the 25th show that, since surpassing 150 million in March 2019, the number of investors has continued to grow, reaching 200.0087 million as of February 25, 2022, marking the first time the securities market’s investor base has exceeded 200 million.
In January this year, the two markets added 1.3243 million new investors, bringing the total number of investors to 198.7328 million. Compared with the previous month, the monthly increase in new investors fell by 3.6%, while year-on-year growth declined by 36.77%—the largest year-on-year drop in nearly six years.
Based on this calculation, since the beginning of the month, at least 1.2759 million new investors have been added to the two markets.
Market investor sentiment remains robust. Data show that in 2021, the A-share market added 19.63 million new investors, an 8.9% year-on-year increase, marking the highest level since 2016.
Looking at the longer-term trend, the total number of A-share investors has been steadily rising in recent years. As of the end of February 2021, the investor base exceeded 180 million; by the end of July that year, it surpassed 190 million; and by the end of December, it reached 197 million.
In the first two months of this year, the monthly average increase in new investors remained robust, helping the total number of A-share investors surpass the 200 million mark.
Looking at the longer-term trend, it took six years to accumulate the second “100 million investors.” In January 2016, the number of A-share investors surpassed 100 million.
Over the past two years, the monthly increase in new investors has repeatedly exceeded one million. In the most recent three months alone, the number of new A-share investors each month has consistently surpassed 1.3 million.

Beware of炒作 (speculation) around the “East Data, West Computing” initiative; investors should remain vigilant.
The successful development of major infrastructure projects is by no means an overnight achievement; it requires all stakeholders to proceed steadily and persistently, with a strong start and a solid foundation. The “East Data, West Computing” initiative is both profound in its implications and of great significance, bearing on the overall trajectory of economic and social development. All parties must adopt a long-term perspective, curb speculative hype, and exercise patience, refraining from viewing it through the narrow lens of short‑term conceptual trends.
Recently, the “East Data, West Computing” project was officially launched nationwide, prompting a swift response from the capital markets. Within just a few trading days following the policy announcement, the index for related concept sectors surged by more than 10%, and several stocks even hit their daily upper limits consecutively. In some cases, shares that reached their limit-up price and met the criteria for abnormal volatility prompted the Shenzhen Stock Exchange to issue inquiry letters, requesting companies to clarify the specific link between the “East Data, West Computing” initiative and their core business operations, as well as whether they were deliberately capitalizing on market hype to drive up their stock prices.
“East Data, West Computing” establishes a new integrated computing‑power network that combines data centers, cloud computing, and big data, systematically channeling eastern computing demand to the west, optimizing the spatial layout of data‑center construction, and fostering coordinated collaboration between eastern and western regions. This initiative is regarded as another major infrastructure project—following the South-to-North Water Diversion, the West-to-East Power Transmission, and the West-to-East Gas Pipeline—characterized by broad coverage, substantial investment, and strong spillover effects. As the project advances, it will undoubtedly provide robust growth momentum for numerous related enterprises and create long‑term investment themes and abundant opportunities in the capital markets. Some institutions forecast that, over the next five years, the “East Data, West Computing” program could generate annual investments totaling hundreds of billions of yuan.
The introduction of major policy incentives is undoubtedly a significant boon for numerous market players, sending ripples of excitement through the capital markets. It is only natural that investors from all corners are rushing to snap up shares, and indeed, many listed companies have demonstrated genuine capabilities in applying technologies and solutions within the “East Data, West Computing” initiative.
The wind is blowing, and everyone wants to take flight. However, we must remain vigilant against those who exploit the “East Data, West Computing” initiative to hype up hot topics, peddle speculative concepts, or even engage in illicit profit‑shifting. Hardly had the strategy been rolled out when numerous listed companies rushed to tout themselves, claiming their business aligns closely with the project’s plans and that they will provide substantial support for its implementation. Yet some offices clearly lack sufficient data‑processing capacity and computing power, with existing operations far from robust enough to justify the sharp spikes in their stock prices. Meanwhile, a few companies have gone so far as to assert they have established operational hubs in multiple cities nationwide, helping enterprises build specialized “information highways”—only to stage carefully timed share sell‑offs shortly after their stocks surge, drawing the scrutiny of regulators.
Such attempts to piggyback on trending topics and engage in hype are clearly at odds with the original intent behind the nation’s “East Data, West Computing” strategy. As is well known, the successful development of major infrastructure projects is no overnight achievement; it requires all relevant stakeholders, including listed companies, to proceed steadily and persistently over the long term. Particularly at this early stage, getting off to a strong start and ensuring a stable launch are of paramount importance. If “East Data, West Computing” is treated as a quick‑turnover money‑making scheme—wasting resources on speculation and luring investors with empty concepts—it will not only disrupt market order but also undermine the realization of the project’s objectives, ultimately proving to be a lose‑lose proposition.
It should also be noted that listed companies that opportunistically latch onto trending topics may be found to have violated disclosure requirements and engaged in market manipulation; once such violations are substantiated, they will inevitably be met with zero tolerance from the regulatory authorities. Recently, the China Securities Regulatory Commission stated that it will prioritize the full implementation of the “Opinions on Strictly Cracking Down on Securities Law Violations in Accordance with the Law,” focusing on key areas, highlighting major cases, adhering to the principle of “dual investigation for each case,” substantially raising the cost of illegal conduct, and effectively enhancing the deterrent effect of enforcement, thereby providing robust legal safeguards for the reform, development, and stability of the capital market.
Investors, too, need to remain vigilant. At present, some investors welcome listed companies’ attempts to capitalize on hot topics, actively touting their proactive “affiliations” with major national strategies such as the “East Data, West Computing” initiative, in the hope of driving up stock prices and reaping profits. However, past experience has shown that after a frenzy around a particular theme, the outcome often leaves investors holding nothing but losses, with small and medium-sized investors bearing the brunt. As for speculative maneuvers seeking to cash in on the policy dividends of the “East Data, West Computing” initiative, investors should stay sharp, avoid relying on luck, and refrain from being misled by hype.
The “East Data, West Computing” initiative is profoundly substantive and of great significance, bearing on the overall landscape of economic and social development and exerting far-reaching influence on capital markets. It holds substantial potential for value creation going forward, calling for a long-term perspective, less hype, and greater patience—rather than being viewed through the lens of short-lived speculative narratives.

SZSE: Will Place *ST Jingang, which has recently posted unusual gains, Under Intensive Surveillance.
I. Regulatory Updates for Listed Companies (February 18–24, 2022)
From February 18 to February 24, the office imposed disciplinary sanctions on seven violations: five related to information disclosure and compliant operations, and two involving securities trading. Regulatory letters were issued for eleven violations—ten concerning information disclosure and compliant operations, and one pertaining to stock trading and share reduction. This week, 18 attention‑raising letters and 17 other communications were dispatched.
II. Market Trading Regulatory Updates (February 21–25, 2022)
From February 21 to February 25, the Exchange imposed self-regulatory measures on a total of 55 cases of abnormal securities trading, including intraday price manipulation such as pump-and-dump schemes and false order submissions. The Exchange also placed “*ST Jingang,” which has recently posted unusually sharp gains, under enhanced monitoring. In addition, it conducted investigations into three material matters involving listed companies and reported one lead concerning a suspected violation of laws or regulations to the China Securities Regulatory Commission.
III. Member Supervision Updates (February 21–25, 2022)
This week, in response to violations of routine operational procedures and errors in information disclosure in a member’s underwriting activities for an IPO on the ChiNext Board, the Exchange has imposed regulatory measures in the form of a regulatory interview.

Commercial & Corporate
The steel sector fell 1.49%, while global crude steel production in January declined 6.1% year over year.
　Reversing the strong performance of the previous two weeks, the steel sector fell 1.49% this week (February 21–25). Among the 10 steel companies closely tracked by a reporter from the China Times, only Baogang Shares posted gains; meanwhile, CITIC Special Steel dropped 6.46%, Baosteel Shares declined 5.78%, and Hualing Steel’s share price slipped 4.96%.
HBIS Group received RMB 520 million in demolition compensation.
The steel industry is set to see the world’s first demonstration production line for a short-process, zero‑carbon steel plant. On February 15, Bayi Steel and the People’s Government of Hejing County in Xinjiang’s Bayingolin Mongol Autonomous Prefecture signed an investment agreement for the construction of this pioneering project—the Bayin’gele Green Short‑Process Steel Plant. Under the partnership, the parties will build in Hejing County the world’s first new‑energy‑based, short‑process, zero‑carbon steel plant, integrating green electricity, electric arc furnaces, and thin‑strip continuous casting and rolling. The project aims to commence construction in the second half of this year and to be completed and commissioned by the second half of 2023. By leveraging photovoltaic green power and forestry carbon sinks, the production line will achieve net‑zero carbon emissions.
Shougang Shares’ asset restructuring matter was recently submitted for review. The company has received a notice from the M&A and Restructuring Review Committee of the China Securities Regulatory Commission, stating that it will soon convene a working meeting to examine the company’s proposed issuance of shares to acquire assets and raise accompanying funds, as well as related-party transactions. The specific date of the meeting will be announced on the CSRC’s official website.
In addition, HBIS Co., Ltd. continues to receive relocation compensation payments. On February 24, 2022, its Tangshan Branch received a relocation compensation payment of RMB 520 million from the Tangshan Municipal Government. To date, the total relocation compensation payable to the Tangshan Branch for its urban relocation amounts to RMB 33.4 billion, and it has already received 36.96% of this total.
In addition, the controlling shareholder of Hualing Steel has undergone a name change. To “strengthen quality and brand development, establish a high‑quality image for Hunan‑made products,” further enhance the visibility and influence of Hunan’s steel enterprises, and build a first‑class metallurgical base nationwide, “Hunan Hualing Steel Group Co., Ltd. (hereinafter referred to as Hualing Group)” has been renamed “Hunan Iron & Steel Group Co., Ltd. (hereinafter referred to as Hunan Iron & Steel Group).”
The steel market faces downside risks.
In January, global crude steel production fell 6.1% year on year. According to data released by the World Steel Association, crude steel output in the 64 countries included in its statistics totaled 155.0 million tonnes in January 2022, down 6.1% from the same month a year earlier. China’s estimated crude steel production stood at 81.7 million tonnes, a decline of 11.2% year on year. India produced 10.8 million tonnes, up 4.7% year on year. Japan’s output was 7.8 million tonnes, down 2.1% year on year. U.S. crude steel production reached 7.3 million tonnes, an increase of 4.2% year on year. Russia’s estimated crude steel output was 6.6 million tonnes, up 3.3% year on year. South Korea’s estimated crude steel production was 6.0 million tonnes, down 1.0% year on year.
Demand is picking up slowly, and steel prices may continue to decline. According to the Lange Steel Research Center, policy oversight on the raw-materials side is steadily tightening, while steel demand has yet to be officely conofficeed, leading to a weakening and volatile market. Among major steel grades, only seamless pipes have posted modest gains, with other products experiencing varying degrees of adjustment. This week, social steel inventories continued to build, though the pace of accumulation was relatively subdued; current stock levels remain below those of the same period last year, and inventories at key steelmakers are also slightly lower than last year’s levels.
The aforementioned institutions noted that, since last November, the spot steel market has remained broadly range-bound, with prices edging higher on the back of strong expectations and cost support, though upward momentum has been somewhat limited. With the Winter Olympics now concluded, blast furnace operating rates at major steelmakers have rebounded noticeably; should peak-season demand fall short of expectations this year, downside risks could materialize. According to estimates, domestic steel prices are likely to experience volatile adjustments next week: long‑product prices are expected to decline slightly, section‑steel prices to fluctuate mildly, sheet‑metal prices to trend lower amid volatility, and pipe prices to trade in a choppy, sideways range.
In addition, the National Development and Reform Commission and the State Administration for Market Regulation have convened a special meeting to address the prevention of excessive hoarding of iron ore. In response to the recent anomaly—where overall supply and demand in the iron‑ore market remain broadly stable, port inventories continue to rise to multiyear highs, yet prices have surged sharply—the Price Department of the NDRC and the Price Supervision and Competition Bureau of the SAMR recently co‑hosted a working session with the Port Association and selected port operators. The meeting examined measures such as significantly shortening the free storage period for iron ore at trading companies, raising the cost of port storage, and other steps to curb excessive stockpiling. It also aimed to guide port operators in urging iron‑ore traders to release excess inventories and bring them back to reasonable levels as soon as possible.

Several banks in Nantong, Jiangsu Province have lowered the down payment ratio for home loans, with the minimum now at 20%.
On the afternoon of the 25th, China News Service’s Jingwei learned from relevant branches of the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China, the China Construction Bank, and the Jiangsu Bank in Nantong City, Jiangsu Province, that these five banks have lowered the down-payment ratio for personal housing loans in the city. For first-time homebuyers applying for a mortgage for the first time, the minimum down payment has been reduced from the previous 30% to 20%. However, some branches noted that applicants seeking the 20% down payment are subject to stricter eligibility requirements.
A relationship manager at a branch of the Industrial and Commercial Bank of China in Nantong told China Newsweek that the bank recently lowered the down-payment requirement for personal housing loans, with the minimum down payment now set at 20% for first-time homebuyers applying for a mortgage for the first time. A relationship manager at a Jiangsu Bank branch in Nantong also said that, for first-time homebuyers obtaining a mortgage for the first time, the minimum down payment is now 20%. She added, “We didn’t used to offer such low down payments; it’s just that this policy was recently introduced—it’s a new adjustment.”
Customer managers at the Nantong branches of the Agricultural Bank of China, Bank of China, and China Construction Bank all stated that the down-payment requirement for individual housing loans has been lowered from a previous minimum of 30% to a minimum of 20%. Several customer managers also noted that not all homebuyers are eligible for the 20% rate, as additional qualifications are required.
Industrial and Commercial Bank of China stated that customers applying for a 20% down payment must provide relevant documentation. A client manager at China Construction Bank said, “Previously, the minimum down payment was 30%, but it has recently been relaxed to 20%—though this applies only to homebuyers who have never owned a property, do not currently own one, and have never obtained a mortgage.” Several banks indicated that if a buyer fails to meet both the criteria of being a first-time homebuyer and obtaining their first mortgage, the down-payment requirement will revert to the previous policy, with a minimum of 30% or 40%.
In fact, in recent days, several residential developments in Nantong have issued promotional posters stating that the down-payment requirements at some of their partner banks have been lowered to as low as 20%. These partner banks include both major domestic institutions and smaller-to-medium-sized lenders. One development’s poster highlights that its partners—China Merchants Bank, China Construction Bank, Bank of China, Jiangsu Bank, Industrial Bank, Agricultural Bank of China, and Industrial and Commercial Bank of China—have reduced down-payment thresholds, while another mentions Jiangsu Bank, Bank of China, China Construction Bank, and Agricultural Bank of China. Sales consultants at two developments conofficeed to China Newsweek that the down-payment ratio for “no‑home, no‑loan” buyers has been cut to 20%, though they do impose certain eligibility criteria.
In addition, several bank and property‑sales consultants interviewed reported that mortgage rates in Nantong have been cut, with first‑home loan rates now around 4.9%. For example, Bank of China and China Construction Bank offer minimum rates of 4.9% for first homes, while the Agricultural Bank of China sets its floor at 4.97%. A client manager at Jiangsu Bank added that the bank can currently provide first‑home mortgage rates as low as 4.85%.

Weekly Coal Industry Outlook: Strong Supply and Demand Fundamentals; Price Policies May Influence Market Sentiment.
Although the National Development and Reform Commission’s new mechanism for setting thermal coal prices has constrained the room for electricity‑coal price increases, casting a negative sentiment on the market, it should help stabilize long-term expectations for electricity‑coal pricing. Since the beginning of the year, factors such as steady yet improving non‑electricity‑coal prices, sharp rises in global energy prices, and the easing of real estate policies are likely to continue supporting the sector’s medium‑term performance.
Last week, the sector underperformed the broader market, with futures prices declining sharply. For the week ending February 25 (the same applies hereafter), the CITIC Coal Industry Index posted a return of -2.11%, lagging the CSI 300 Index by 0.44 percentage points. The top five performers were Huaihe Energy (+46.74%), Dayou Energy (+2.54%), Yanzhou Coal Mining (+2.06%), Meijin Energy (+0.90%), and Shanxi Coking Coal (+0.79%). Last week, the most active thermal coal futures contract, ZC2205, settled at RMB 745 per tonne, down 8.25% from the previous week; the most active coking coal futures contract, JM2205, closed at RMB 2,511.5 per tonne, down 1.82%; and the most active coke futures contract, J2205, ended at RMB 3,183.0 per tonne, down 4.00%.
Port‑based 5,500 kcal/kg coal prices posted a structural decline, while coastal power plants saw a seasonal month‑over‑month rebound in daily consumption; coking coal and metallurgical coal prices rose. Last week, Qinhuangdao’s 5,500 kcal/kg coal settled at RMB 940 per tonne (down 6% from the previous week), with most other calorific‑value grades trending higher.
The spot price of coking coal from Jingtang Port (produced in Shanxi) stands at RMB 3,225 per tonne, up 0.00% month-on-month, while the spot price of Grade‑II metallurgical coke (produced in Tangshan) is RMB 2,850 per tonne, up 6.34% month-on-month. Profit margins for shipping coal from Inner Mongolia and Shanxi to the port are RMB 193 and RMB 288 per tonne, respectively. Last week, average rail inbound volumes at Qinhuangdao Port totaled 470,000 tonnes, down 2.48% from the previous week, with a daily throughput of 490,000 tonnes. The average number of vessels anchored in Qinhuangdao’s anchorage area was 50, a decrease of 2.53% week-on-week, while Qinhuangdao’s inventory stood at 4.91 million tonnes, down 2.19% from the prior week. Combined coal inventories across the three northern ports reached 8.745 million tonnes, up 2.04% week-on-week.
Daily coal consumption at power plants in the eight coastal provinces rose 32.74% month-on-month, while inventories fell 8.25% month-on-month. Nationwide blast-furnace operating rates remained unchanged from the previous period. Last week, the average daily road sales volume in Ordos reached 1.5846 million tonnes, up 27.61% month-on-month.
Short-term industry fundamentals update: Demand for thermal coal remains robust, with coking coal and coke prices trending steadily higher. Following the holiday period, mine output has gradually picked up, resulting in a balanced supply-and-demand dynamic at production sites. Rail shipments and procurement by chemical offices are strong, and thermal‑coal prices have largely returned to their price‑cap levels. Despite rising rail volumes, port inventories remain tight, with limited available resources. Traders, uncertain about policy outlooks, are currently holding back and adopting a wait-and-see stance. We expect high overseas coal prices to weigh on import volumes in the near term, making it unlikely that port prices will decline. On the coking‑coal front, downstream steel mills are expected to increase production, prompting them to ramp up restocking. Meanwhile, coking‑coal producers, facing short-term losses and growing reluctance to sell, are increasingly inclined to raise prices. As coking‑coal market conditions stabilize, coking plants are stepping up raw‑material purchases, driving steady upward pressure on coking‑coal prices and a growing trend of price hikes. Overall, both coking coal and coke prices are showing a stable yet improving trajectory.
Risk factors: slowing economic growth; concentrated supply releases suppressing coal prices, among others.
Investment Strategy: Short-term volatility is possible, but the full-year outlook remains positive. Coal prices have outperformed expectations so far this year; while near-term regulatory measures may weigh on market sentiment, persistently high global energy prices and expectations of policy easing—particularly in areas such as stable growth and real estate—should support the sector’s medium-term performance. Although thermal coal prices are constrained by price caps, non‑thermal coal segments like coking coal and industrial‑use coal are unlikely to be affected. We continue to recommend investments along three key themes:
1) Shaanxi Coal Industry and Huayang Shares, which enjoy substantial sales of coal for chemical applications; 2) Yankuang Energy and Lanhua Sci-Tech, whose performance in the coal‑chemical sector demonstrates strong elasticity; 3) Among metallurgical coal companies, Pingmei Share, Huaibei Mining, and Lu’an Environmental Energy, which offer valuation advantages.

Taxation TAXATATION
Tax incentives are being implemented thoroughly and effectively, thereby boosting enterprises’ innovation vitality.
“Corporate technological innovation and business development cannot do without the support and assistance of national policies,” said Cheng Jing, a deputy to the National People’s Congress and an academician of the Chinese Academy of Engineering, during a recent visit by Beijing tax authorities to NPC deputies and CPPCC members.
According to reports, leveraging an independently developed and commercially deployed fully integrated lab-on-a-chip detection technology, throughout the 2022 Beijing Winter Olympics and Paralympics, the fully integrated COVID‑19 nucleic acid testing mobile laboratories manufactured by BGI Group—where Cheng Jing is affiliated—were deployed across the entire closed-loop system, including airports, the Olympic Village, and competition venues.
From 2019 to 2021, the company benefited from cumulative tax reductions and exemptions totaling RMB 12.48 million. In 2021 alone, the policy of additional deduction for R&D expenses resulted in a direct income tax reduction of RMB 3.32 million, with the resulting tax savings promptly reinvested in advancing various technology‑development projects.
This is not the only market entity to have benefited from tangible tax‑cut and fee‑reduction measures. In recent years, China has consistently regarded tax and fee reductions as a key strategic move to invigorate market entities, striving to achieve greater corporate profitability and enhanced market dynamism by reducing government revenue—thereby driving economic growth.
In 2021, the R&D expense super‑deduction policy was “upgraded” twice, enabling enterprises to claim tax reductions and exemptions totaling 333.3 billion yuan in advance, thereby strongly boosting innovation and development. Many deputies and members of the Two Sessions noted that the thorough and meticulous implementation of tax‑policy benefits has bolstered market entities’ confidence in innovation.
In recent years, the Songbei New Area of Harbin has continuously upgraded and optimized its development scale, attracting clusters of emerging industries and witnessing robust acceleration of the digital economy across various sectors. Founded in 1995, Harbin Kaina Technology Co., Ltd. is a comprehensive, technology‑driven national high‑tech enterprise. In 2021, the company reported revenue of approximately RMB 210 million, benefited from corporate income tax incentives totaling RMB 1.02 million, and is expected to claim an additional R&D expense super‑deduction of RMB 2.292 million. “The company’s growth and expansion are inseparable from independent technological innovation and from the strong support of government tax policies,” said Tian Likun, a deputy to the National People’s Congress and Chairman of Harbin Kaina Technology Co., Ltd. “In particular, the increased super‑deduction rate for R&D expenses has served as a powerful boost, injecting much‑needed financial vitality into our operations.”
“As a high-tech enterprise, in 2021 alone we benefited from an additional R&D expense deduction of 10 million yuan, tax‑exemption incentives totaling over 350,000 yuan, and a tax‑payment deferral of more than 4 million yuan. These measures not only effectively eased our financial pressures but also gave us greater confidence to invest in product research and development and innovation,” said Li Yanping, a deputy to the National People’s Congress and chairman of Hebei Jinhouduan Plastics Co., Ltd.
“In the past two years, we have benefited from various tax incentives totaling 120 million yuan. We will continue to strive to accelerate innovation, ensure that consumers enjoy high-quality dairy products, and make an even greater contribution to Hebei’s economic development,” said Wei Lihua, a deputy to the National People’s Congress and Chairman and President of Junlebao Dairy Group, during a symposium with Cheng Junfeng, Party Secretary and Director of the Hebei Provincial Tax Service Bureau, who had paid a visit to the company.
“Last year, the Junlebao Dairy Innovation Research Institute, with a total investment of 500 million yuan, was put into operation. Thanks to the policy of additional tax deductions for R&D expenses, we benefited from tax reductions and exemptions totaling 16.32 million yuan, providing crucial support for Junlebao’s innovative development,” said Wei Lihua. He added that the tax incentive of additional R&D expense deductions serves as an excellent incentive for companies to increase their investment in scientific research.
Inside the UHV production base of TBEA’s Xinjiang Transmission and Transformation Industrial Park, employees work busily yet in an orderly manner, fully committed to ensuring the steady progress of supporting products for key projects that deliver Xinjiang’s electricity to other regions, as well as major national energy initiatives and overseas export programs. Over the years, TBEA Co., Ltd. has actively participated in the Belt and Road Initiative, continuously deepening project cooperation with more than 30 countries, including Tajikistan and Uzbekistan.
“In 2021, TBEA benefited from nearly RMB 200 million in tax and fee reductions under favorable policies. The increasingly convenient and efficient tax and fee services have given the company both confidence and greater momentum to make a bold leap from ‘manufacturing’ to ‘intelligent manufacturing.’” Zhang Xin, a deputy to the National People’s Congress and Party Secretary and Chairman of TBEA Co., Ltd., stated that corporate development is inseparable from technological innovation. A series of tax incentives supporting scientific and technological advancement serve as a powerful driving force, encouraging enterprises to ramp up R&D investment and channel innovative resources toward businesses.

Two departments: Continue to implement tax preferential policies for certain national commodity reserves.

On the 24th, reporters learned from the Ministry of Finance that, in order to support national commodity reserves, the Ministry of Finance and the State Taxation Administration recently issued an announcement stating that, from January 1, 2022, to December 31, 2023, certain tax preferential policies for commodity reserves will be extended.
The announcement clarifies that stamp duty shall be exempted on the tax registers of commodity reserve management companies and their directly affiliated warehouses; stamp duty shall also be exempted on purchase and sale contracts executed in the course of performing commodity reserve operations, while stamp duty payable by all other parties to such contracts shall be levied in accordance with applicable regulations. Furthermore, property tax and urban land use tax shall be exempted on properties and land used by commodity reserve management companies and their directly affiliated warehouses for carrying out commodity reserve activities.
The announcement states that, for amounts paid on or after January 1, 2022, which are eligible for tax exemption, such payments shall be credited against the enterprise’s corresponding tax liabilities or refunded.

How will individual income tax be refunded or supplemented in 2021?
Starting March 1, the annual individual income tax settlement for 2021 has officially begun. How do you file the annual settlement? What are the procedures for receiving a tax refund or making additional payments? Recently, the State Taxation Administration has provided detailed guidance on these matters.
When can I file my taxes, and how do I make a mobile appointment?
The 2021 annual tax settlement period runs from March 1 to June 30, 2022, spanning four months and available 24/7. Taxpayers have ample time to file, so there is no need to rush and crowd the system during the first few days.
To enhance tax-processing efficiency and improve the filing experience, and to avoid congestion at the start of the annual tax settlement period, the tax authorities are introducing a new appointment‑based service this year. Taxpayers who need to complete their annual tax settlement between March 1 and March 15 may make an appointment by logging into the Individual Income Tax mobile app from 6:00 a.m. to 10:00 p.m. each day between February 16 and March 15. The appointment‑booking feature will go live on February 16, with a corresponding user guide released at the same time.
After March 16, appointments are no longer required. In addition, taxpayers with urgent circumstances who have been unable to secure an appointment on a suitable date may also visit the tax service hall of their competent tax authority for in-person processing.
Under what circumstances are tax-deductible expenses allowed?
The following pre-tax deductions incurred during the tax year that were either not claimed or were under‑claimed may be reported or supplemented by the taxpayer during the annual tax reconciliation period:
1. Eligible major medical expenses incurred by the taxpayer, their spouse, and their minor children;
2. Taxpayers may claim eligible special additional deductions for their children’s education, continuing education, housing loan interest or housing rent, and support of elderly parents, as well as standard deductions, special deductions, and other deductions prescribed by law.
3. Donations made by taxpayers to eligible public welfare and charitable causes.
Taxpayers who derive both comprehensive income and business income may claim deductions of RMB 60,000, special deductions, special additional deductions, and other legally prescribed deductions either in their comprehensive income or their business income; however, such deductions may not be claimed more than once.
How do I file for an annual tax refund or pay any additional taxes?
If, after the annual tax reconciliation, there is an amount eligible for a tax refund, the taxpayer may apply for a refund. Once the taxpayer checks the “Apply for Refund” box in the relevant section of the return and submits it to the competent tax authority, the application process is complete. Following the necessary review procedures as prescribed by the tax authorities and the State Treasury, the refund will be processed and paid directly into the taxpayer’s bank account. Specifically, for taxpayers whose annual comprehensive income for the tax year is less than RMB 60,000 but who nevertheless had individual income tax withheld and paid in advance during the year, the tax authorities will issue service prompts and provide a pre-filled simplified return form. The taxpayer need only conoffice the amount of tax already paid in advance and enter their bank account information to submit a quick online refund application. If the taxpayer has any questions about the data in the pre-filled form, they may also choose to file the annual reconciliation using the standard return form.
For taxpayers making supplementary tax payments as part of their annual individual income tax settlement, the tax authorities offer a variety of convenient payment channels. Taxpayers may remit the outstanding tax liability via online banking, by swiping their card at a POS terminal in a tax service hall, at a bank counter, or through non‑bank payment services (i.e., third‑party payment platforms). Taxpayers who file and pay by mail are required to promptly monitor the filing progress and make their tax payments through the Individual Online Tax Service Platform or directly with the competent tax authority (tax service hall).

 
Litigation & Arbitration
The Supreme People’s Court has issued the Judicial Interpretation of the General Provisions of the Civil Code, further clarifying the rules governing systems such as legitimate defense.
To guide people’s courts at all levels in effectively implementing the Civil Code, fully leveraging the General Provisions section’s overarching role within the Code, safeguarding the legitimate rights and interests of civil subjects in accordance with the law, and vigorously promoting the core socialist values, the Supreme People’s Court has formulated the “Interpretation on Several Issues Concerning the Application of the General Provisions Section of the Civil Code of the People’s Republic of China” (hereinafter referred to as the “Interpretation”), which was officially released to the public on February 25 and will take effect on March 1, 2022.
The Judicial Interpretation of the General Provisions comprises 39 articles, organized into nine sections: General Provisions; Capacity for Civil Rights and Capacity for Civil Conduct; Guardianship; Declaration of Missing Persons and Declaration of Death; Civil Legal Acts; Agency; Civil Liability; Statute of Limitations; and Supplementary Provisions.
The Interpretation vigorously upholds the core socialist values in its guiding principles, reflecting the Civil Code’s emphasis on fairness and justice and its advocacy of honesty and good faith. In particular, it refines the institutional rules governing legitimate defense, emergency avoidance, and acts of bravery, thereby clearly articulating its stance on such issues as whether to help or not, whether to offer advice or not, whether to pursue or not, whether to provide assistance or not, whether to act or not, and whether to intervene or not. It resolutely prevents a “watered-down” approach, ensuring that the judiciary is both robust and discerning, yet compassionate; and that the public feels supported, guided, and protected.
At the same time, the Interpretation places the protection of natural persons’ rights at its core, establishing a comprehensive framework that safeguards the interests of minors and fetuses, regulates the exercise of rights, and balances the interests of missing persons with those of interested parties, thereby reflecting a judicial stance that puts the people first.

Supreme People’s Procuratorate: Strengthen Criminal Protection of Personality Rights in the Digital Age; Cyberspace Is Not a Lawless Zone.
The Supreme People’s Procuratorate held a press conference, at which it was highlighted that while the rapidly evolving internet brings convenience to daily life, it is also sometimes exploited by criminals who recklessly spread false rumors, defame others’ reputations, and intrude upon and disseminate personal privacy. Anyone can become a victim, making the protection of personality rights and human dignity a matter of vital concern for every individual. In recent years, procuratorial organs across the country have continuously strengthened safeguards for personality rights, thereby upholding the public’s right to defend their interests in the digital age.
An official from the Supreme People’s Procuratorate stated that since 2019, procuratorial organs nationwide have approved the arrest of 168 suspects for the crimes of insult and defamation, 12,410 suspects for the crime of infringing on citizens’ personal information, and 12 suspects for the crime of infringing upon the reputation and honor of heroes and martyrs. In addition, they have prosecuted 213 defendants for insult and defamation, 21,923 defendants for infringing on citizens’ personal information, and 15 defendants for infringing upon the reputation and honor of heroes and martyrs, thereby effectively safeguarding the legitimate rights and interests of victims.
At the meeting, it was noted that criminal cases involving infringements of personality rights in the online environment exhibit distinct phase‑specific patterns in their occurrence. Such cases often emerge in tandem with high‑profile incidents—for example, the series of cases concerning the defamation of the reputation and honor of heroes and martyrs who defended the country’s borders, as well as those targeting the reputation and honor of Academician Yuan Longping—typically arising shortly after related news reports. As public attention shifts to new hot topics, these cases tend to subside; however, they also portend the potential for a resurgence when the next major event sparks renewed interest. On the other hand, online acts of insult, defamation, and unauthorized access to or disclosure of citizens’ personal information spread rapidly, reach wide audiences, cause severe harm, and yield consequences that are difficult to control. For instance, in Case No. 136—the case of Qiu’s infringement upon the reputation and honor of heroes and martyrs—his defamatory remarks garnered over 130,000 views within just five hours, generating a profoundly negative social impact. Similarly, in Case No. 137—the defamation case involving Lang and He—its Weibo topic “Woman falsely accused of infidelity still unable to find work” amassed 470 million views and drew 58,000 discussions. The procuratorial organs have officely grasped the distinctive features of such cases, handling representative individual cases lawfully, promptly, and accurately, thereby providing guidance for similar cases. They have actively implemented the legal‑education responsibility system of “who enforces the law, who promotes the law,” aiming to guide and regulate social conduct and underscore that “cyberspace is not a lawless zone.”
In accordance with the law, accurately assess the nature and circumstances of conduct and implement a criminal policy that balances leniency with severity. The Supreme People’s Procuratorate has strengthened its policy guidance on case handling, ensuring a precise understanding of the nature of the conduct and adherence to fundamental principles in case management. For instance, in handling cases involving infringement upon the reputation and honor of heroes and martyrs—newly added under the Eleventh Amendment to the Criminal Law—the Procuratorate has explicitly stipulated that, whether imposing administrative penalties or criminal sanctions, the principle of strict punishment in accordance with the law must be followed. In cases of serious circumstances, decisions to approve arrest and to institute prosecution are made in accordance with the law. Where conduct does not constitute a crime but still amounts to an administrative violation, the Procuratorate legally recommends that public security organs impose heavier administrative penalties. For example, in 2021, in Beijing, the procuratorial organs handled the case of Chen, who infringed upon the reputation and honor of heroes and martyrs who defended the country’s borders. After the procuratorial organs determined that the conduct did not constitute a crime and accordingly declined to approve arrest, the public security organs imposed a 14-day administrative penalty in accordance with the law. At the same time, during case handling, the procuratorial organs have applied, in accordance with the law, the system of leniency for those who plead guilty and accept punishment, encouraging defendants to voluntarily admit guilt and express remorse. Some defendants have even issued public apologies through national media, effectively mitigating adverse effects and thereby achieving lawful protection of the victims’ personal rights.
In response to criminal cases involving violations of personality rights that have attracted widespread public attention, the Supreme People’s Procuratorate has fully leveraged the advantages of its integrated procuratorial system, established and refined a rapid-response mechanism, and promptly supervised and provided ongoing guidance. Tailoring its approach to the specific characteristics of each case, it has exercised flexible yet lawful application of policies and laws, rigorously upheld case‑quality standards, and overseen and guided more than 30 such cases—including the series of cases involving “La Bi Xiao Qiu” infringing upon the reputation and honor of heroes and martyrs, as well as the “Hangzhou woman defamed for picking up a package” case. At the same time, it has strengthened mutual cooperation and checks and balances with public security organs and people’s courts, guiding timely, standardized, and comprehensive investigation and evidence collection to establish the facts. It has also engaged in prompt coordination with public security authorities on issues such as the nature of the conduct and the assessment of circumstances, ensuring differentiated handling based on the specifics of each case. Furthermore, it has maintained close communication with the people’s courts regarding evidentiary standards and procedural application, thereby safeguarding both the quality and efficiency of case handling. Notably, the case of Qiu Mou’s infringement upon the reputation and honor of heroes and martyrs, along with the online defamation cases involving Lang Mou and He Mou, were recognized by the Cyberspace Administration of China and the Supreme People’s Procuratorate as two of the ten landmark cases in the field of cyber rule of law since the 19th National Congress of the Communist Party of China.
Last June, the CPC Central Committee issued the “Opinions of the CPC Central Committee on Strengthening Legal Supervision by the Procuratorial Organs in the New Era” (hereinafter referred to as the “Opinions”). The Opinions set forth clear requirements for “effectively strengthening judicial safeguards for people’s livelihoods” and “actively fostering public awareness of the rule of law.” Moving forward, the Supreme People’s Procuratorate will take the implementation of the Opinions as an opportunity to continuously enhance the protection of personality rights.
The “Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases Involving Defamation and Other Offenses Committed via Information Networks,” issued in 2013 by the Supreme People’s Court and the Supreme People’s Procuratorate, has played an important role in guiding judicial practice. However, with the rapid development of information networks—particularly the emergence of social media platforms such as WeChat, Weibo, and Douyin—the modes of information dissemination and interaction have been profoundly transformed. Faced with the high costs of protecting their rights and the practical difficulties of self‑initiated prosecution—namely, the challenges of obtaining evidence, presenting proof, and establishing guilt—the Supreme People’s Procuratorate is currently working jointly with the Supreme People’s Court and the Ministry of Public Security to draft relevant normative documents. These documents aim to further clarify issues such as what constitutes “serious harm to social order and national interests” and the procedural coordination between private and public prosecutions, thereby providing better guidance for handling defamation cases. Moreover, in order to effectively implement the provisions of the Eleventh Amendment to the Criminal Law concerning the crime of infringing upon the reputation and honor of heroes and martyrs, the Ministry of Public Security, together with the Supreme People’s Procuratorate and the Supreme People’s Court, has issued related normative documents. The next step is to ensure the thorough implementation of these guidelines, so as to punish, in accordance with the law, any illegal or criminal acts that undermine the reputation and honor of heroes and martyrs.

Three departments have issued guidelines to strengthen administrative law enforcement in the oversight of off-campus training.
To thoroughly implement the spirit of the “Opinions of the CPC Central Committee and the State Council on Further Reducing the Homework Burden and Off‑Campus Training Burden of Students at the Compulsory Education Stage” and the “Implementation Outline for Building a Law-Based Government (2021–2025)” issued by the CPC Central Committee and the State Council, and to strengthen administrative law enforcement in the supervision of off‑campus training, the Ministry of Education, the Central Institution Organization Commission, and the Ministry of Justice recently jointly issued the “Opinions on Strengthening Educational Administrative Law Enforcement and Deepening Comprehensive Governance of Off‑Campus Training” (hereinafter referred to as the “Opinions”).
The Opinions state that administrative law enforcement for the regulation of off-campus training is a statutory duty of education administrative departments at all levels in performing their governmental functions related to off-campus training. It calls for accelerating the establishment of an enforcement system characterized by clear powers and responsibilities, standardized management, smooth operations, robust safeguards, and effective oversight, so as to comprehensively enhance the quality and efficiency of administrative law enforcement in this area, rigorously investigate and prosecute illegal and non-compliant activities in off-campus training in accordance with the law, ensure the solid and effective implementation of the “double reduction” policy, and strive to deliver education that meets the expectations of the people.
The Opinions emphasize the need to improve the existing mechanism of joint law enforcement among various departments under the leadership of Party committees and governments, clearly defining responsibilities, ensuring each department performs its own duties, fostering division of labor and cooperation, and promoting coordinated and concerted efforts across hierarchical levels, among peers, and across different localities. Market regulation, cyberspace administration, public security, sports, culture and tourism, as well as other relevant departments, shall, within their respective areas of responsibility, conduct either individual or joint oversight of issues related to off-campus training.
The Opinions clearly stipulate that the education administrative departments must strengthen their administrative law enforcement responsibilities for regulating off-campus training, and effectively enhance their awareness and capacity to conduct administrative inspections, impose administrative penalties, and enforce administrative measures in accordance with the law. It is necessary to bolster the administrative law enforcement capabilities of education authorities in this area by expediting institutional establishment, reinforcing staffing, and improving the professional competence of personnel. Furthermore, a checklist of enforcement actions should be developed, enforcement procedures standardized, and innovative enforcement methods adopted to elevate the effectiveness of administrative law enforcement in overseeing off-campus training.
The Opinions require that education, staffing, and judicial authorities at all levels incorporate funding for administrative law enforcement in the oversight of off-campus training into their fiscal budgets, strengthen support measures, and appropriately allocate essential resources such as transportation, communications equipment, and body-worn cameras. Furthermore, administrative law enforcement related to the regulation of off-campus training shall be brought under the purview of educational supervision, with local governments encouraged to reinforce such enforcement efforts. Any failure to effectively implement central policies or inadequate governance of off-campus training will be subject to strict accountability.

The Supreme People’s Court has issued a newly revised judicial interpretation on the criminal liability for illegal fundraising.
On the 24th, the Supreme People’s Court issued the “Decision on Amending the Interpretation of the Supreme People’s Court on Several Issues Concerning the Specific Application of Law in the Trial of Criminal Cases Involving Illegal Fund-Raising,” revising and improving the criteria for conviction and sentencing related to the crimes of illegally absorbing public deposits and fundraising fraud as set forth in the original judicial interpretation, and clarifying relevant issues concerning the application of law.
It is reported that the Eleventh Amendment to the Criminal Law has introduced significant revisions to the statutory provisions on the crimes of illegally absorbing public deposits and fundraising fraud, thereby having a major impact on the criteria for conviction and sentencing in these cases. According to the head of the Third Criminal Division of the Supreme People’s Court, in light of developments in the economy and society and judicial practice, there is an urgent need to revise and improve the Supreme People’s Court’s judicial interpretation on criminal cases involving illegal fundraising, and to make appropriate adjustments to the relevant standards for conviction and sentencing.
According to the introduction, the revised judicial interpretation comprises fifteen articles and focuses on refining and improving the criteria for conviction and sentencing with respect to the crimes of illegally absorbing public deposits and fundraising fraud. At the same time, it further revises and clarifies the constituent elements for establishing the crime of illegally absorbing public deposits and the methods of engaging in such activities; specifies the standards for determining the amount of fines imposed for these offenses; delineates the principles governing concurrent punishment when the crimes of illegally absorbing public deposits or fundraising fraud overlap with the crime of organizing or leading pyramid-scheme activities; and sets forth the criteria for conviction and sentencing applicable to corporate offenders of these crimes.
The revised judicial interpretation adds provisions addressing new forms of illegal fundraising, such as online lending, virtual‑currency trading, and financial leasing. In addition, in response to the salient issue of illegal fundraising in the elderly‑care sector, it further specifies cases involving the unlawful solicitation of funds through “providing ‘elderly‑care services,’ investing in ‘elderly‑care projects,’ or selling ‘products for seniors,’” thereby providing a legal basis for prosecuting crimes of illegal fundraising in areas such as P2P lending, virtual‑currency trading, and the elderly‑care sector.
In addition, the revised judicial interpretation clarifies the criteria for conviction and sentencing with respect to the crimes of illegally absorbing public deposits and fundraising fraud, abolishing the distinction between the penalties applicable to individual offenders and those applicable to corporate offenders, and appropriately raising the threshold for establishing the crime of illegally absorbing public deposits. At the same time, it specifies the circumstances under which mitigating factors—such as active restitution and compensation—are to be taken into account: where restitution and compensation are made prior to the filing of public prosecution, thereby reducing the extent of harm caused, the offender may be given a lighter or reduced punishment.

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