JC Master Legal News Issue 1009

Release Date:

2022-03-14 08:21

Key Takeaways for This Issue

The China Securities Regulatory Commission is soliciting public comments on the “Provisions on Matters Concerning the Priority Use of the Property of Persons Who Have Committed Securities Law Violations to Assume Civil Compensation Liability (Draft).”

To implement the principle of prioritizing civil compensation liability and effectively safeguard the legitimate rights and interests of investors, in accordance with the Securities Law of the People’s Republic of China, the Detailed Rules for the Implementation of the Regulations on the State Treasury of the People’s Republic of China, and other relevant provisions, the China Securities Regulatory Commission and the Ministry of Finance have jointly drafted the “Provisions on Matters Concerning the Priority Use of the Property of Persons Who Have Committed Securities Violations to Assume Civil Compensation Liability (Draft)” (hereinafter referred to as the “Provisions”), which are now being made public for public comment.
Fiscal and tax policies deliver a “combination punch,” accelerating high-quality development.
This year, the deficit-to-GDP ratio is slated to be around 2.8 percent, a slight reduction from last year; central government transfers to local governments will increase by approximately RMB 1.5 trillion, bringing the total to nearly RMB 9.8 trillion; measures will continue to combine temporary relief with structural reforms, with both tax cuts and tax refunds implemented in tandem; overall tax refunds and reductions for the year are expected to total about RMB 2.5 trillion, including roughly RMB 1.5 trillion in carryforward VAT refunds, with all refund funds channeled directly to enterprises… In this year’s Government Work Report, enhancing the effectiveness of proactive fiscal policy and rolling out a new package of tax and fee support measures have drawn widespread attention.
Small and medium-sized manufacturing enterprises have once again received tax relief support.
Recently, the State Taxation Administration and the Ministry of Finance issued an announcement clarifying that small, medium, and micro-sized manufacturing enterprises will continue to defer payment of certain taxes and fees for the fourth quarter of 2021, as well as for the first and second quarters of 2022. Experts believe that this tax‑relief policy, which has drawn close attention from SMEs, will help foster steady growth in the industrial economy and support the development of small, medium, and micro‑sized manufacturing offices.

Finance & Capital Markets
The China Securities Regulatory Commission is soliciting public comments on the “Provisions on Matters Concerning the Priority Use of the Property of Persons Who Have Committed Securities Law Violations to Assume Civil Compensation Liability (Draft).”
To implement the principle of prioritizing civil compensation liability and effectively safeguard the legitimate rights and interests of investors, in accordance with the Securities Law of the People’s Republic of China, the Detailed Rules for the Implementation of the Regulations on the State Treasury of the People’s Republic of China, and other relevant provisions, the China Securities Regulatory Commission and the Ministry of Finance have jointly drafted the “Provisions on Matters Concerning the Priority Use of the Property of Persons Who Have Committed Securities Violations to Assume Civil Compensation Liability (Draft)” (hereinafter referred to as the “Provisions”), which are now being made public for public comment.
The Regulations consist of fourteen articles and set forth the specific mechanisms for allocating administrative fines and confiscated proceeds paid by offenders to cover civil liability, which primarily include the following:
First, with respect to the applicant: Where an offender who has committed a violation of the Securities Law is required, for the same unlawful act, to bear both civil liability for damages and administrative liability in the form of fines and confiscations, and where, after payment of such fines and confiscations, the remaining assets are insufficient to satisfy the civil liability, any injured investor who, following a favorable judgment or mediation agreement obtained through litigation filed with the people’s court, still fails to receive full compensation despite enforcement by the people’s court or distribution under bankruptcy liquidation proceedings, may submit a written application. In ordinary representative lawsuits involving securities disputes, the litigation representative; and in special representative lawsuits, the investor protection institution serving as the litigation representative, may file such an application on behalf of the injured investors.
Second, with respect to the application deadline and the amount claimed: Affected investors may file an application within one year after the people’s court issues a ruling terminating enforcement; if the violator has been declared bankrupt by the people’s court, the application must be filed within one year after the bankruptcy proceedings or the supplementary distribution procedure have concluded. Applications filed after the one-year period will not be accepted by the China Securities Regulatory Commission. The amount claimed by affected investors shall not exceed the compensation liability expressly determined in the civil judgment or other relevant documents, nor may they re‑file claims for amounts already paid by the defendant. The funds confiscated or fined that are used to satisfy civil compensation obligations shall not exceed the actual amount of such penalties and fines paid by the violator. Where multiple affected investors submit applications simultaneously and the total amount claimed exceeds the violator’s actual payment of penalties and fines, refunds shall be made on a pro rata basis according to the proportion of each investor’s claim as determined under the Regulations.
Third, with respect to the processing procedure: The CSRC’s Administrative Penalty Committee accepts and reviews the application materials submitted by injured investors, and obtains from the people’s court that issued the ruling terminating enforcement or the ruling terminating bankruptcy proceedings information and verification regarding the case’s prior enforcement and the distribution of bankruptcy assets. The CSRC submits an annual request to the Ministry of Finance for the return of funds to the treasury; upon approval by the Ministry of Finance, the fines and confiscated proceeds related to the unlawful act are remitted to the CSRC’s account. Upon receipt of these returned funds, the CSRC promptly disburses the fines and confiscated proceeds to the injured investors. After completing the disbursement procedures, the CSRC promptly notifies the people’s court that issued the ruling terminating enforcement or the ruling terminating bankruptcy proceedings of the disbursement and publicly discloses the relevant details of the refund.
The Regulations represent an important measure to implement the people-centered development philosophy, improve the civil compensation system for securities-related disputes, and provide a more robust legal framework to support the full implementation of the stock issuance registration system. They are of significant practical importance in addressing the challenge of ensuring the priority of civil compensation liability and effectively safeguarding the legitimate rights and interests of investors.
We welcome valuable feedback from all sectors of society on the Regulations. The China Securities Regulatory Commission will, based on the results of the public consultation, work with the Ministry of Finance to further revise and refine the Regulations.

Within the year, 86 listed companies received regulatory letters, with disclosure-related issues emerging as a major area of concern.
Recently, numerous listed companies have been repeatedly issued regulatory letters. According to a preliminary tally by our reporter, since the beginning of 2022 and as of March 10, a total of 86 listed companies have received such notices, with disclosure-related issues emerging as the most common concern.
“The frequent issuance of regulatory letters stems, on the one hand, from the fact that certain listed companies have indeed engaged in violations and have not accorded sufficient attention to securities market laws and regulations; on the other hand, it reflects an ongoing strengthening of regulatory oversight, aimed at fostering a sound secondary-market investment environment and better protecting investors,” said Zhang Xuefeng, an independent financial commentator, to a reporter.
Several listed companies have received regulatory letters due to issues with information disclosure.
According to publicly available information, several listed companies have received regulatory letters due to issues with information disclosure. Among these, violations by shareholders holding more than 5% of the shares are particularly common, as seen in cases involving ST Yuanchi and Hailunzhe, among others.
Hangzhou Qinshang Sports Culture Co., Ltd. (hereinafter referred to as “Qinshang Sports”) is a shareholder of ST Yuancheng holding more than 5% of its shares. From November 15, 2019, to February 10, 2021, Qinshang Sports cumulatively reduced its holdings by 40.36 million shares, representing 5.62% of ST Yuancheng’s total share capital. However, when the aggregate proportion of shares held by Qinshang Sports in ST Yuancheng fell by 5%, it failed to promptly fulfill its reporting obligations and, as of the date of issuance of the regulatory letter, had still not filed the required report on changes in equity interests.
Industry insiders suggest that, on the one hand, shareholders may lack legal expertise and be unaware of the requirement to disclose share reductions; on the other hand, they might harbor a sense of complacency—knowing that disclosure is required yet seeking to circumvent the relevant legal obligations. Yet another possibility is that deficiencies in the listed company’s oversight mechanisms and internal governance systems have created opportunities for such behavior.
Inaccurate or incomplete information disclosure is also a key area of concern. On March 13, 2021, Yingluohua disclosed that the total amount of related-party transactions in 2020 was RMB 269 million, which differed from the actual amount of RMB 329 million reported in its 2020 annual report.
Jiu’an Pharmaceutical has also received regulatory notices for inaccurate and incomplete information disclosure. In an announcement released on January 7, Jiu’an Medical stated that it had received a test‑performance report from the U.S. National Institutes of Health’s RADx program—arranged by the U.S. FDA—regarding the iHealth COVID‑19 antigen home self‑test OTC kit’s performance against the Omicron variant. The report indicated that, in laboratory tests, the iHealth kit detected 100% of Omicron‑positive samples with maximum CT values of 21.59 (n=5). However, in a subsequent response to an inquiry letter, Jiu’an Medical revised its earlier statement, asserting that “in all experimental groups, positive detection rates were as follows: samples with CT values ≤21.59 were fully detected; at a CT value of 22.86, 60% were detected; and at CT values ≥23.87, no detections were observed.” Thus, the company provided incomplete disclosure of the test results in its January 7 announcement. Furthermore, during a period of consecutive abnormal stock price movements, Jiu’an Medical repeatedly issued inaccurate or incomplete responses on the Interactive Easy platform and included such inaccuracies in its published records of investor‑relations activities.
“The reasons behind incomplete and inaccurate information disclosure are multifaceted,” Su Shaohua told reporters. “For example, some listed companies deliberately withhold information for specific purposes, thereby circumventing legal requirements. It may also stem from insufficient awareness of sound corporate governance among the actual controllers, shareholders, and the company itself, as well as inadequate identification of compliance risks. Furthermore, weak internal controls, coupled with a lack of risk awareness and legal consciousness among the relevant personnel responsible for handling such matters, have resulted in the failure to effectively implement the company’s internal control systems and the applicable rules governing listed companies.”
It is also quite common to receive letters regarding the misappropriation of funds by controlling shareholders and others.
Moreover, it is not uncommon for listed companies to receive regulatory letters regarding the misappropriation of funds by controlling shareholders or actual controllers.
Cao Kebо, the actual controller’s related party and concurrently the chairman and general manager of Moulding Technology, misappropriated company funds through improper expense reimbursements between 2018 and the end of September 2021, with a peak daily outstanding balance of RMB 3.5783 million. As of December 2021, the aforementioned misappropriated funds, together with interest totaling RMB 280,200, had been fully repaid. Due to this non‑operating fund occupation and irregularities in financial management and accounting at the Group’s Mexican subsidiary, Minghua, several financial indicators in the Company’s 2020 Annual Report and 2021 Third‑Quarter Report were revised; the difference in net profit before and after the correction amounted to RMB 5.0799 million.
*ST Qunxing has also received an inquiry letter due to a series of issues arising from the misappropriation of funds. On April 30, 2021, the company disclosed an announcement effecting retrospective adjustments to its 2019 annual financial statements. The primary reason for these adjustments was that, from March 2019 to April 30, 2020, the company’s controlling shareholder, Wang Sanshou, appropriated a total of RMB 327 million in the company’s own funds. Accordingly, the company recognized credit impairment losses on the principal and interest related to non‑operating fund misappropriations as of December 31, 2019, amounting to RMB 141 million. Following the correction of these accounting errors, the company’s net profit for 2019 increased by RMB 124 million, representing a change of 65.27%.
Commenting on this phenomenon, Su Shaohua, a partner at Beijing Ankun Law Office, told reporters, “One of the root causes is gaps in the governance structure of listed companies and inadequate oversight of their actual controllers. In addition, some actual controllers lack a strong compliance mindset and fail to clearly delineate the boundaries between the company’s assets and their personal wealth, which can also contribute to this issue. However, it cannot be ruled out that certain actual controllers, fully aware that their actions are unlawful or non‑compliant, nonetheless deliberately challenge legal authority and fundamental red lines in pursuit of related gains.”

Implementing “T+0” trading, defining intermediary responsibilities, and optimizing the new‑stock issuance system—these proposals and recommendations are of paramount importance to the capital market.
A reporter from Securities Times China has compiled the proposals and suggestions put forward by some deputies and committee members. Key topics of concern include the Beijing Stock Exchange, the STAR Market, the registration-based IPO system, and the allocation of responsibilities among intermediary institutions. Deputies and committee members have recommended: reasonably defining the liability of securities‑issuance intermediaries; piloting the granting of underwriting qualifications for exchange‑traded bonds to banks; refining the stock‑issuance pricing mechanism; supporting Wuhan in establishing a futures exchange; further expanding the range of financing products available on the Beijing Stock Exchange and the New Third Board; optimizing the subscription procedures for the Beijing Stock Exchange; accelerating the introduction of a hybrid trading system on the Beijing Stock Exchange; conducting a trial run of “T+0” trading on the Beijing Stock Exchange; and lowering the investment threshold for the STAR Market, among other measures (in no particular order).
Wang Junfeng: Reasonably Defining the Liability of Securities Issuance Intermediaries
National People’s Congress deputy, member of the NPC Constitution and Law Committee, and vice president of the China Law Society, Wang Junfeng, has proposed reasonably defining the responsibilities of securities‑issuance intermediaries to promote the steady development of the capital market. He stated that ensuring intermediary institutions fulfill their duties is a crucial step in enhancing the quality of information disclosure in the capital market, a vital foundation for preventing securities fraud and safeguarding investors’ legitimate rights and interests, and an indispensable requirement for deepening capital market reform and fostering high‑quality market development. While reinforcing the “gatekeeper” role of intermediary institutions, further clarifying the boundaries of responsibility among all parties will better encourage these entities to perform their functions conscientiously, thereby promoting and securing the stable growth of the capital market. Wang Junfeng put forward five recommendations:
First, clarify the boundaries of responsibilities among securities‑issuance intermediaries; second, adhere to the principle of holding “the principal wrongdoer” accountable, thereby avoiding an unwarranted expansion of liable parties and the scope of liability; third, promote uniformity in judicial standards for adjudicating securities‑related tort disputes; fourth, ensure that compensation to investors is not based on the bond’s face value; and finally, reform the mechanism linking the initiation of investigations and administrative licensing for securities intermediaries.
Wang Jingwu: Pilot Program to Grant Banks Exchange-Traded Bond Underwriting Qualifications
At the beginning of this year, a pivotal step was taken toward interconnectivity between the interbank and exchange‑traded bond markets. The Shanghai Stock Exchange, the Shenzhen Stock Exchange, the National Interbank Funding Center, China Securities Depository & Clearing Corporation, and the Shanghai Clearing House jointly issued the Provisional Measures for the Interconnection between the Interbank Bond Market and the Exchange‑Traded Bond Market (hereinafter referred to as the “Measures”), thereby establishing the regulatory framework for linking the two markets. More than a month has now passed since the Measures were promulgated, and industry participants are closely watching developments as they seek to achieve genuine market integration. During the Two Sessions, National People’s Congress deputy Wang Jingwu, a member of the CPC Committee, an executive director, vice president, and chief risk officer of the Industrial and Commercial Bank of China, proposed that, building on the Measures, efforts to advance interconnectivity could be further accelerated by piloting the granting of exchange‑bond underwriting qualifications, corporate bond underwriting qualifications, and ABS program management and underwriting licenses to commercial banks.
Wang Jingwu believes that the aforementioned qualifications granted to commercial banks on a pilot basis are of practical significance: first, they will help better leverage the combined strength of financial resources to support the development of the real economy; second, large commercial banks possess extensive experience in bond underwriting and investment, as well as the necessary capabilities to participate in the exchange‑traded bond and corporate bond markets.
Feng Yidong: Proposes Optimizing the Stock Issuance Pricing Mechanism
Feng Yidong, a member of the National Committee of the Chinese People’s Political Consultative Conference and a director at China-Thailand Securities, has submitted a proposal to optimize the stock issuance pricing mechanism. He put forward three recommendations:
First, refine the pricing mechanism for new share offerings by effectively implementing the bookbuilding system, broadening the pool of eligible investors, and engaging more sophisticated institutional investors and seasoned individual investors in the pricing process, thereby further enhancing the information‑gathering and value‑discovery functions of the bookbuilding regime. Second, advance reforms to the allocation system for new shares by gradually reducing the proportion of shares allocated offline and introducing online, transparent subscription procedures open to all qualified investors. Third, strengthen the information‑disclosure framework in the primary market to robustly safeguard investor interests.
Yan Zhi: Supports the establishment of a futures exchange in Wuhan.
Yan Zhi, a deputy to the National People’s Congress and chairman of Zhuoer Holdings Co., Ltd., believes that, as Hubei and Wuhan strive for high-quality post‑pandemic development and seek to become a strategic pivot in the new development paradigm for the central region, they urgently require robust policy support and sustained empowerment from the central government. To bolster Wuhan’s post‑pandemic economic recovery, Yan Zhi has put forward three recommendations. One of these calls for supporting Wuhan in establishing a futures exchange, with trading focused primarily on bulk commodities, agricultural products, and aquatic products, and for creating a nationwide futures market anchored in a diverse array of green resources—such as electricity, hydropower, timber, agricultural and aquatic products—as well as indices covering consumer goods, logistics, and Yangtze River shipping. “This would provide significant impetus to Wuhan’s efforts to become a national hub for commerce and logistics, while also helping it leverage its strengths in the commerce‑logistics sector and its role as a regional financial center,” Yan Zhi said.
Chen Haijia: Further enrich the financing products of the Beijing Stock Exchange and the New Third Board.
Chen Haijia, a member of the National Committee of the Chinese People’s Political Consultative Conference and chairman of Saila, a company listed on the Innovation Layer of the New Third Board, has put forward proposals to further diversify the financing products available on the Beijing Stock Exchange and the New Third Board. He recommends that, going forward, efforts should be intensified to enhance these exchanges’ capacity to support small and medium-sized enterprises in raising capital, thereby boosting companies’ sense of gain. Chen noted that, in practice, corporate bonds issued by companies listed on the Beijing Stock Exchange and those listed on the New Third Board are currently traded only on the Shanghai and Shenzhen stock exchanges, creating cross‑market regulatory challenges and increasing issuance and financing costs. To address this, he suggests establishing a comprehensive framework of rules governing the issuance and trading of corporate bonds on both the Beijing Stock Exchange and the New Third Board, and introducing corporate bond products on these platforms at an appropriate time. In addition, he advocates that local governments step up their support for companies on the Beijing Stock Exchange and the New Third Board seeking to issue convertible bonds—through measures such as interest subsidies—to fully leverage the catalytic effect of fiscal funds. He also calls for local government special‑purpose funds to invest in convertible bonds issued by companies on these exchanges, thereby providing the financial resources needed to bolster the innovation and development capabilities of SMEs.
Xi Guohua: Optimizing the Subscription Model for the Beijing Stock Exchange
Xi Guohua, a member of the National Committee of the Chinese People’s Political Consultative Conference, deputy secretary of the Party Committee of CITIC Group, and vice chairman and general manager, has proposed further enhancing the Beijing Stock Exchange’s ability to serve innovative small and medium-sized enterprises by addressing four key areas: optimizing the subscription process, attracting additional capital, innovating trading mechanisms, and clarifying the legal status of public companies. He noted that the exchange currently faces challenges, including the need to refine the new‑stock issuance and subscription procedures, boost trading activity, strengthen its appeal to institutional investors, and provide greater clarity regarding the legal status of public companies.
In response, Xi Guohua put forward four recommendations: first, optimize the subscription model by transitioning from full‑amount prepayment to credit‑based subscription; second, innovate trading mechanisms and adopt a multi‑pronged approach to boost trading activity on the Beijing Stock Exchange; third, attract additional capital and create favorable conditions to draw in various institutional investors; and fourth, clarify the legal status of public companies to resolve issues related to the application of laws governing both the Beijing Stock Exchange and the New Third Board.
Cui Ronghua: The Beijing Stock Exchange Introduces a Hybrid Trading System
Cui Ronghua, a deputy to the National People’s Congress and Party Secretary and Chairman of Ronghua Holdings Group, stated that he looks forward to the Beijing Stock Exchange accelerating the introduction of market makers and implementing a hybrid trading system, thereby enhancing its trading functions, improving market liquidity, and establishing institutional linkages with the New Third Board. This would provide small and medium-sized enterprises with a specialized trading regime that supports their full‑cycle development. Cui Ronghua believes that to fully leverage the Beijing Stock Exchange’s role in serving innovative SMEs and fostering their innovation‑driven growth, the key lies in offering long‑term financing to these enterprises and promoting deep integration among innovation, capital, and industry. To achieve this, the exchange must develop a distinctive trading framework and market ecosystem that aligns with the developmental patterns of SMEs. Positioned to serve innovative SMEs, the Beijing Stock Exchange is dominated by stocks with smaller market capitalizations; however, current secondary‑market liquidity and depth remain inadequate, which to some extent dampens investors’ trading enthusiasm.
Cui Ronghua stated that, drawing on the experience of mature overseas markets, introducing market makers and adopting a hybrid trading model can help enhance liquidity for small- and mid-cap stocks and strengthen the market’s price‑discovery function. At present, the Beijing Stock Exchange’s trading rules explicitly provide that, with the approval of the China Securities Regulatory Commission, a market‑making mechanism may be introduced into auction‑based trading, leaving no institutional barriers. Meanwhile, the market‑making system has been in place on the New Third Board for eight years, establishing a solid track record; it neither disrupts investors’ trading habits nor fails to effectively manage market risks.
He Qiang: The Beijing Stock Exchange is piloting “T+0” trading.
He Qiang, a member of the National Committee of the Chinese People’s Political Consultative Conference and director of the Institute of Securities and Futures at the Central University of Finance and Economics, has submitted a proposal to pilot “T+0” trading on the Beijing Stock Exchange. He Qiang argues that the Beijing Stock Exchange differs in its positioning from the Shanghai and Shenzhen stock exchanges: it is primarily designed to support the development of specialized, refined, distinctive, and innovative small and medium-sized enterprises. Since its launch, the exchange has faced two major challenges: first, risk—its listing requirements are relatively lenient, raising concerns about fraud; second, liquidity—on the one hand, a 500,000-yuan threshold bars many retail investors from participating, while on the other, the companies listed on the exchange are typically very small, making them ill-suited for large-scale institutional investment and deterring substantial capital inflows. Consequently, should the market experience significant volatility, liquidity could quickly dry up.
In response, He Qiang suggested that, in light of the Beijing Stock Exchange’s risks and liquidity challenges, further reforms and innovations should be advanced. “Piloting a ‘T+0’ trading regime on the Beijing Stock Exchange would be of great significance for mitigating market risks, ensuring stable market operations, and fostering the exchange’s development,” He Qiang said.
Qian Chunyang: Lowering the Investment Threshold for the STAR Market
National People’s Congress deputy Qian Chunyang submitted a proposal at this year’s Two Sessions titled “On Lowering the Entry Threshold for the STAR Market.” Qian Chunyang argues that the STAR Market’s eligibility criteria should be aligned with those of the ChiNext Board, requiring investors to maintain an average daily balance of at least RMB 100,000 in their stock accounts over the past 20 trading days and to have at least two years of trading experience.

Commercial & Corporate
Policy-driven market support has spurred a rebound in the housing markets of some cities, but a widespread “mini spring” may prove elusive.
Since the beginning of this year, the real estate sector has seen a steady stream of supportive policy measures. Following February’s rollout of fiscal and monetary stimulus—such as reduced down-payment requirements and lower mortgage rates—in more than 40 cities, March brought further targeted regulatory moves in popular cities and regions including Zhengzhou, Jimo District of Qingdao, and Huadu District of Guangzhou, which eased restrictions on home purchases and sales.
As some cities implement easing measures in the housing market, the traditional “golden March and silver April” effect has once again emerged in select markets. Meanwhile, a recent report titled “2022 Real Estate Industry Talent Market Analysis” released by Zhaopin.com shows that, in the first week after the Spring Festival, the year-on-year growth rate of real estate agent job postings reached 14.2%, with first-tier cities posting a year-on-year increase of 44.1%. This development also signals a recovery in the housing market.
However, several brokerage professionals from intermediary offices interviewed by Hong Zhou Kan reporters reported markedly divergent perceptions of the “mini spring recovery” in different cities. Meanwhile, industry insiders note that it will take time for related stimulus measures to percolate through the market, and a full‑scale rebound in the housing sector is not expected until May.
Localized recovery in the housing market of first-tier cities
Leading property developers are the first to benefit.
Hui Qiang (a pseudonym), an agent at a leading real estate brokerage in Beijing, has clearly noticed a trend of “hiring expansions” among his peers. “Lately, there’s been a steady turnover as old staff leave and new hires come on board, with many brokerage positions needing to be filled after the Lunar New Year,” he told a reporter from Hong Zhou Kan. “This ‘recruitment surge’ is largely attributable to the industry’s traditionally high employee attrition rate—rather than being directly tied to market conditions. That said, Beijing’s housing market has indeed begun to show signs of a modest spring rebound.”
In Beijing’s Shunyi New Town, where Huiqiang is focusing its efforts, secondhand home sales exceeded 40 units in the final week of February, while an agent representing a newly launched development sold 48 units, signaling robust activity across the sector. “Sales are roughly on par with previous years; among colleagues, there’s even talk that some sub‑markets are performing better than in past years.”
Another agent with similar sentiments is Xiong Chuan (a pseudonym), an executive at a leading brokerage office in Shanghai: “In mid-last year, Shanghai’s transaction volume dipped slightly amid policy announcements such as the ‘three‑price convergence’ rule. However, activity gradually picked up afterward, and since the New Year, the housing market has begun to show signs of recovery.”
According to Xiong Chuan, as one of the cities that recently cut lending rates, Shanghai’s recovering housing market is closely tied to policy direction. “At present, Shanghai has lowered its mortgage rates by 5 basis points, bringing first‑home and second‑home loan rates down from 5% and 5.7% to 4.95% and 5.65%, respectively. The loan‑disbursement process has also accelerated: whereas last year it could take three to four months at its longest, it now typically takes less than a month.”
In the view of the two brokers mentioned above, thanks to robust demand from both first-time homebuyers and those seeking to upgrade their housing, first-tier cities have been able to remain relatively stable amid a volatile market.
By contrast, Hangzhou, located 160 kilometers from Shanghai, remains stuck in a state of frozen demand. Mr. Ji, an agent at a local brokerage office, told a reporter from Hong Zhou Kan that he has little optimism for this year’s “Golden March and Silver April” sales peak, noting that transaction volumes handled after the 2022 Lunar New Year fell by half compared with the same period last year.
Mr. Ji believes that, due to insufficient purchasing power among buyers, Hangzhou’s housing market is currently “price‑in‑but‑no‑trade.” “Although mortgage rates in Hangzhou have been cut recently, homebuyers are not necessarily responding positively. Many landlords and clients we’ve spoken with think that once the 2022 Asian Games conclude, the tailwind will have run out, and local home prices will begin to fall. As a result, they’re eager to cash out as soon as possible, reflecting rather pessimistic market expectations.”
In fact, the varying sales performances across these cities reflect the current polarization of the housing market. This indicates that the so‑called “mini spring recovery” has yet to take hold nationwide: while certain sub‑markets in first‑tier cities are seeing brisk transaction activity, industry insiders in some non‑first‑tier cities remain skeptical about a rapid market rebound.
Data from the China Index Academy and other institutions also show that in January–February 2022, the top 20 real estate developers in Shanghai collectively recorded sales of RMB 103.7 billion, up 48.97% year on year. Meanwhile, the local secondhand housing market saw transaction value of approximately RMB 49.3 billion in February, marking a five-year high for the same period. In Guangzhou, during January–February this year, online-signed commercial housing totaled about 1.62 million square meters, with a transaction value of roughly RMB 54.5 billion; although these figures declined compared with the same period last year, they remain the second-highest level in the past five years when viewed over a longer time frame. By contrast, in Hangzhou’s ten central districts, commercial housing sales in February reached 358,700 square meters, the lowest level in nearly 23 months, down 53% month-on-month.
Meanwhile, localized market activity has benefited leading property developers in sales rankings. According to data compiled by a reporter from Hong Zhou Kan, among the top 10 developers by attributable sales in January–February this year, seven reported that attributable sales in the four first-tier cities—Beijing, Shanghai, Guangzhou, and Shenzhen—accounted for more than 10% of their total attributable sales. Notably, China Resources Land and Gemdale Group recorded attributable sales of RMB 5.753 billion and RMB 4.128 billion, respectively, in these first-tier cities, representing 33.74% and 28.12% of their respective total attributable sales.
Meanwhile, the sales performance of leading property developers is also likely to improve as a result. Taking Shanghai as an example, a review of institutional data by a reporter from Hong Zhou Kan reveals that, in January and February this year, eight developers in the city posted attributable sales exceeding RMB 3 billion. Among them, Dahua Group recorded RMB 4.853 billion in attributable sales in Shanghai, with its Shanghai‑only sales accounting for 100% of its total attributable sales for the first two months.
“Living to the Future” Remains the Mainstream
In the first two months, 70% of the top 100 real estate developers did not acquire any land.
Although leading property developers have sensed a localized recovery in the housing market, they remain cautious about expanding investment. Several industry insiders told reporters at Hong Zhou Kan that cost reduction and efficiency gains, along with strategic focus and consolidation, will continue to be the core strategies for property offices in 2022.
Huang Tao, General Manager of the Project Department at Centaline Property in Guangdong, stated that the “post-holiday surge in real estate agent recruitment” widely discussed in the media remains a localized phenomenon. On the contrary, many property developers and brokerage offices around him have been scaling back, including layoffs and other cost‑cutting measures. “As for Centaline Property, we are not adopting an aggressive expansion strategy at this time; instead, we are focusing on achieving break-even profitability. We remain confident about the future, but empty slogans won’t get us anywhere—you first need to survive to see what lies ahead.”
In fact, at the start of this year, the total value of newly acquired land across the industry has generally declined, and aggressive land‑acquisition activity has been rare among the top 100 property developers. According to data from CRIC, in January–February 2022, more than 70% of the top 100 developers had yet to acquire any land, leaving their investment activity essentially stalled. Instead, local government financing vehicles and state-owned enterprises have stepped in to fill the gap, becoming the main drivers of land acquisition and inventory expansion.
Additionally, according to data compiled by a reporter at Hong Zhou Kan, among the top 30 property developers ranked by new land‑acquisition value in January–February 2021, half of them did not undertake any new land‑acquisition activities this year. Notably, Country Garden, which ranked fourth with RMB 49.54 billion in new land‑acquisition value during the same period last year, saw its figure drop to RMB 6.04 billion this year, pushing it down to 19th place.
In addition, 15 leading property developers—including Hengli Group, Baolong Real Estate, Dexin Real Estate, Greenland Holding, Hailunburg, Wanda Group, Rongsheng Development, Excellence Group, Zhongjun Group, PowerChina Real Estate, Guangming Real Estate, and Dragon China—each recorded new land‑acquisition value exceeding RMB 10 billion in the first two months of 2021; however, their combined new land‑acquisition value for the same period this year stood at zero.
A review of the underlying causes reveals that, this year, in addition to the deceleration of the centralized land‑supply market led by Beijing, the inability to secure land has emerged as a key factor behind developers’ sluggish land‑acquisition activity.
Meanwhile, unlike the earlier phase when property developers extended their management reach during rapid expansion, since January this year, most have entered a period of intensive organizational restructuring, focusing on cost reduction and efficiency gains. For example, Country Garden has reduced its original 106 regional offices to 65; Shimao Group has centralized certain functions—such as investment, auditing, and procurement—under group-level oversight to strengthen control over frontline operations; and Jianye Group has streamlined its existing five-tier management structure into a three-tier model, with roughly half of its headquarters staff potentially returning to the front lines, where they can deliver greater value.
“The downsizing measures taken by property developers are a rational response to market volatility. Among the various departments within these companies, those with low value-added and low productivity tend to be hit hardest. For instance, as land acquisitions decline, some developers have begun scaling back their investment‑and‑development teams in the short term. Meanwhile, non‑productive units such as research, branding, and market analysis are particularly vulnerable to cuts and restructuring,” said Huang Tao. “Eliminating unprofitable operations while retaining profitable ones is, after all, the most straightforward approach for property offices to both boost revenue and curb expenses at this juncture.”
A comprehensive recovery in the housing market is expected to materialize in May.
Real estate companies need to prioritize sales collection.
Despite a favorable housing market and cautious behavior among property developers, the real estate sector’s start to 2022 remains far from optimistic. According to data from CRIC, in February this year, the top 100 property companies recorded total sales of RMB 401.58 billion, down 23.5% month-on-month and 47.2% year-on-year.
Additionally, according to an analysis of institutional rankings by a reporter from Hong Zhou Kan, property developers’ sales volumes in January–February 2022 declined significantly year over year. Specifically, the number of developers with total sales exceeding RMB 10 billion fell from 53 in the same period last year to 30, while the number of developers with sales above RMB 5 billion dropped from 85 to 61.
The same holds true for intermediary agencies that are aggressively expanding their workforce; Shilianhang, which focuses on new-home brokerage, expects a loss of between RMB 850 million and RMB 1.25 billion for the 2021 fiscal year.
“Affected by the sluggish market during the Spring Festival, coupled with broader policy adjustments and pandemic-related factors, overall purchasing power declined in January and February this year. In other words, developers are eager to sell, but homebuyers are fewer—unlike two years ago, when rising prices triggered panic‑driven buying. Instead, we’re seeing intensifying competition among property offices and a spate of defaults,” said Huang Tao.
Huang Tao believes it is still premature to declare a widespread “mini spring” revival, but there is no reason for excessive pessimism either. “Recently, many developers have been ramping up new launches, and transaction volumes are gradually recovering—though the pace remains slow, with no strong rebound or sharp surge.” He went on to explain that although housing policies have been eased in many localities, measures continue to be tailored to individual cities, targeting first-time buyers and those seeking to upgrade rather than adopting a one-size-fits-all approach. Taking Guangzhou as an example, some luxury residential projects have recently drawn significant market attention, yet this represents only a structural uptick within specific segments. The city continues to employ dynamic management and impose zone‑specific price caps. “In short,” he concluded, “the overarching theme of this year’s market will remain stability, with progress sought within that stable framework.”
Yan Yuejin, Research Director at the E-House Institute Think Tank, told a reporter from Hong Zhou Kan that it takes time for policy measures—such as the relaxation of home‑purchase restrictions and reductions in down‑payment ratios—to percolate through to the market. He forecasts, “At present, hot cities like Shanghai and Xi’an are performing reasonably well, but signs of a full‑scale recovery in the housing market may not emerge until May. For property developers, it is crucial to prioritize cash collection from sales to ensure a sustainable, virtuous cycle of resources—turning commodity housing into sales proceeds to repay debts. Only then can companies strengthen their ability to generate internal growth.”

Over the past eight months, cumulative carbon‑emission‑allowance transactions have totaled 189 million tonnes, with trading compliance showing a pattern of gradual slowdown followed by a sharp acceleration.
According to data from the Shanghai Environment and Energy Exchange, on March 11, the national carbon market recorded a trading volume of 60 tonnes under the listed agreement trading scheme, with a total transaction value of RMB 3,456.00. The closing price was RMB 57.60 per tonne, up 0.59% from the previous day.
Since its official launch on July 16, 2021, the national carbon market has been in operation for nearly eight months. As of March 11, the cumulative trading volume of carbon emission allowances (CEAs) in the national carbon market reached 189 million tonnes, with a total transaction value of RMB 8.18 billion.
In this regard, Sun Hao, a researcher at Tianfeng Futures, told reporters, “At present, only power‑generation companies are participating in the national carbon market, yet daily trading volumes are already quite high and prices remain relatively stable. This indicates that corporate participation has increased significantly and that the pricing mechanism has become fairly mature.”
Lü Hongbing, Chairman of the Supervisory Board of the All China Lawyers Association and Chief Executive Partner of Grandall Law Office, told reporters, “The financial attributes of the national carbon market have been well realized, resulting in relatively high market activity and liquidity. This, in turn, helps to better guide the rational allocation of resources and lay the groundwork for a more stable, orderly, and efficient carbon‑trading market.”
“The carbon‑trading market can help resolve the supply‑demand imbalances between producers and consumers of coal, oil, natural gas, and other energy sources; it can accelerate the adoption and dissemination of clean energy technologies such as wind, hydro, hydrogen, and solar power; and it can strike a balance between the finite reserves of energy resources and the ever‑growing demand for energy. As a result, the functions and roles of the national carbon‑trading market will become increasingly evident,” said Song Xiangqing, Vice Dean of the Institute of Government Management and Director of the Center for Industrial Economics at Beijing Normal University.
However, judging from the trends in trading volume and prices of carbon allowances in China’s national carbon market between November 1, 2021, and March 11, 2022, Ren Yujie, a senior researcher at the International Institute of Green Finance of Central University of Finance and Economics and assistant director of the Yangtze River Delta Institute for Green Value Investment, observes a pattern characterized by “stable yet rising carbon prices, room for improvement in trading volume, and markedly increased activity as the compliance period approaches.” Meanwhile, according to data released by the Shanghai Environment and Energy Exchange, from July 16 to December 31, 2021, the cumulative trading volume of carbon emission allowances in the national carbon market reached 179 million tons, with three-quarters of these transactions occurring in December 2021. Ren Yujie notes that “this may suggest that compliance entities are still primarily motivated by ‘meeting their obligations,’ indicating that their awareness of and strategies for carbon trading remain incomplete.”
Song Xiangqing expressed agreement with this view. “At present, the carbon‑trading market and its trading rules remain relatively new to most enterprises, which are not yet familiar with the relevant regulations. As a result, in 2021 many companies were still in a phase of tentative exploration and observation. Although carbon‑trading prices have remained stable while trending upward, trading volumes have lingered at low levels, and compliance has followed a pattern of initial sluggishness followed by gradual warming, then a more rapid surge. Overall, market performance has been in line with expectations and consistent with typical market‑development dynamics,” he said.
“It is recommended that, in 2022, efforts be focused on the supply side to drive a comprehensive transformation across high‑carbon industries, high‑carbon consumption patterns, and high‑carbon institutional frameworks, encouraging carbon‑trading entities to fully recognize the multiple benefits of carbon trading, thereby expanding market size and enhancing trading effectiveness.” Song Xiangqing forecasts that, this year, both the price and volume of carbon transactions in the national carbon market are likely to experience steady increases, with accelerating growth rates and widening expansion.
Of course, market vitality cannot be separated from robust policy support. Industry insiders reveal that, with regard to the fiscal and tax policies supporting carbon trading—areas of particular concern to businesses—the relevant regulatory authorities are currently moving forward with their implementation.
Lü Hongbing suggests that it is advisable to closely monitor changes in market supply and demand, refine carbon‑price‑management mechanisms, guard against market failures, and standardize government intervention, thereby avoiding the supply‑excess‑demand‑shortage dilemma that many carbon‑trading markets worldwide have encountered. In addition, a unified platform for disclosing carbon‑emission information could be established to enhance transparency among relevant financial institutions; a system for protecting carbon‑trading investors should also be put in place, along with an investor‑service platform, to strengthen investor support and further improve the legal framework for investor protection.

A landmark regulatory framework for e-cigarettes has been unveiled, with the national standard now seeking public feedback on restrictions on flavorings, sending shares of industry giants plummeting.
Since last year, the e‑cigarette industry has been navigating a turbulent path, with frequent policy announcements and increasingly stringent regulatory oversight. Today, the State Tobacco Monopoly Administration issued the “Administrative Measures for E‑Cigarettes,” which will take effect on May 1. In addition to strict market access requirements, companies seeking to go public must also obtain approval from the tobacco monopoly authorities.
In addition, the State Tobacco Monopoly Administration today released the national standard for “Electronic Cigarettes” (second draft for public comment), inviting feedback from the public. Written comments must be submitted to the project team by March 17, leaving very little time. Among the provisions, one particularly striking requirement is that electronic cigarettes may not contain non-tobacco flavors, which would significantly diminish their appeal.
The news was highly unfavorable for the industry, sending RLX Technology, which is listed on the U.S. stock market, plunging 20% in pre-market trading to a low of $1.88—a full 95% below its recent peak of $39.11 shortly after its IPO.
The e‑cigarette market operates under a highly stringent licensed‑sales regime. Entities seeking to establish e‑cigarette manufacturers—including those engaged in product manufacturing, contract processing, and brand‑holding activities (hereinafter the same)—as well as manufacturers of vaping liquids and nicotine‑containing e‑cigarette products, must obtain prior review and approval from the State Council’s administrative authority for tobacco monopoly before project approval may be granted in accordance with relevant national regulations. Such enterprises must be approved by the State Council’s administrative authority for tobacco monopoly, hold a tobacco‑monopoly production license, and complete registration with the market supervision and administration authorities. Any division, merger, or dissolution of these entities likewise requires approval from the State Council’s administrative authority for tobacco monopoly and the completion of the requisite registration procedures with the market supervision and administration authorities. Enterprises that have not obtained a tobacco‑monopoly production license shall not be registered by the market supervision and administration authorities.
In addition, IPOs must also be reviewed and approved by the tobacco regulatory authorities. This has significantly dampened investors’ enthusiasm to enter the sector. Previously, China’s e‑cigarette market experienced rapid growth, attracting substantial capital that poured into this entrepreneurial avenue, with numerous emerging brands launching and opening many dedicated retail stores.
The IPO must undergo review by the tobacco regulatory authorities, a requirement that was not included in the earlier draft for public comment, underscoring the government’s stringent regulatory stance.
Many provisions of the administrative measures are identical to those in the draft for public comment, subjecting all stages—from production to sales, and from import and export to brand promotion—to stringent regulation.

Taxation TAXATATION
How can policies to help businesses and alleviate their difficulties be made more effective?
More than 150 million market entities support the employment and entrepreneurship of hundreds of millions of people. Under the dual pressures of economic downturn and the COVID‑19 pandemic, businesses have faced severe challenges in production and operations. Over the past year, fiscal, monetary, and other macro policies were coordinated to deliver robust support to enterprises, with total tax and fee reductions exceeding RMB 1 trillion. Credit provision to sectors and offices hardest hit by the pandemic was significantly expanded, and policies extending loan principal and interest repayment deadlines and providing credit‑based lending support for small and micro enterprises were maintained, leading to a steady decline in overall corporate financing costs.
“The state has introduced a series of tax and fee reduction policies that have genuinely eased the burden on businesses, enabling them to free up more funds for innovation, production, and development,” said Li Yanping, a deputy to the National People’s Congress and chairman and general manager of the Jinhouduan Special Equipment Manufacturing Group.
Li Yan, a deputy to the National People’s Congress and president of Qilu Pharmaceutical Group, presented the following figures: In 2021, Qilu Pharmaceutical invested RMB 3.32 billion in R&D, up 25.3% year on year, and benefited from an additional R&D expense deduction of RMB 248 million in advance income tax payments. Meanwhile, the company continued to ramp up fixed‑asset investment, taking advantage of a preferential policy that allows for one‑time depreciation of fixed assets, resulting in tax savings of RMB 293 million.
“Since last year, amid the intertwined impacts of the pandemic and other factors, pharmaceutical companies have faced significant challenges in production and operations. We have made full use of the series of national policies aimed at stabilizing growth, particularly benefiting from tax and fee incentives for technological innovation and industrial project development. We have channeled the refunded funds and cost savings into R&D, thereby accelerating the progress of our research and development projects,” said Representative Li Yan.
With tax and fee reduction policies coupled with refined, high‑quality services, the business environment for enterprises has continued to improve. “The series of service initiatives introduced by the tax authorities have steadily enhanced the tax‑related business climate, giving overseas Chinese, Hong Kong, Macao, and Taiwan entrepreneurs greater confidence to stay in Xiamen and pursue development here,” said Xu Xipeng, a member of the National Committee of the Chinese People’s Political Consultative Conference and Party Secretary of Huaqiao University.
Zhou Tongyu, a member of the National Committee of the Chinese People’s Political Consultative Conference and Chairman of Weida High-Tech Holdings Co., Ltd., believes that, at present, the external environment has grown increasingly complex, severe, and uncertain. China’s economic development is confronting triple pressures—shrinking demand, supply shocks, and weakening expectations—and the real economy, particularly small and micro enterprises, continues to face significant challenges in production and operations.
How will macro policies this year further help businesses alleviate their difficulties and promote their development? The Government Work Report states that efforts will be focused on stabilizing market entities and safeguarding employment, with stronger implementation of macro policies; policies to reduce burdens and provide relief will be refined to lay a solid foundation for stable economic performance and improved quality.
According to the plan, a new package of tax and fee support measures will be rolled out this year, with a major focus on refunding outstanding input VAT credits. Total tax and fee reductions for the year are expected to amount to approximately RMB 2.5 trillion, including about RMB 1.5 trillion in refunds of input VAT credits, with all refund funds being disbursed directly to enterprises.
“This year, we are implementing tax and fee reductions on an even larger scale, with the overall magnitude exceeding market expectations. By combining tax cuts with tax refunds and expanding the scope of carryforward VAT refunds, we are helping to ease offices’ cash‑flow pressures—particularly by unlocking funds that businesses were previously unable to offset when purchasing equipment—thereby bolstering their confidence to expand reproduction. At the same time, this approach encourages enterprises to channel more resources into R&D and other productive activities,” said Li Xuhong, Director of the Institute for Fiscal and Tax Policies and Applications at the National Accounting Institute in Beijing.
This year’s new package of tax and fee support policies covers a wide range of tax and fee categories, applies to a large number of enterprises, demands rigorous implementation, meets high expectations from market entities, and must be rolled out under tight timelines and heavy workloads. A responsible official from the State Taxation Administration stated that the tax authorities will resolutely implement the decisions and arrangements of the CPC Central Committee and the State Council, fully, accurately, and comprehensively apply the new development philosophy, continuously refine the mechanism for ensuring that tax and fee preferential policies are delivered swiftly and directly to eligible taxpayers, and adopt a series of robust measures to spare no effort in ensuring the successful implementation and effective execution of this pivotal initiative.
The Government Work Report proposes strengthening financial support for the real economy, making effective use of inclusive small and micro‑loan support tools, increasing re-lending for agriculture and small businesses, and further addressing financing challenges faced by the real economy, particularly small, medium, and micro enterprises.
Li Yanping, speaking on behalf of her group, noted that local governments have already undertaken substantial efforts in providing financing‑matching services; however, the issues of high borrowing costs and limited access to finance persist. She recommended that financing policies be made more targeted and flexible, with a “one‑click integration” of enterprise‑related data from tax authorities, gas providers, water utilities, electricity companies, insurers, and housing‑fund administrators, while also streamlining online and big‑data‑driven channels for connecting banks and enterprises to address the challenge of information asymmetry.
Wen Bin, Chief Researcher at China Minsheng Bank, stated that this year, monetary policy will continue to encourage financial institutions to lower real loan rates and reduce fees. On the one hand, reducing the reserve requirement ratio can release long-term liquidity, enabling financial institutions to expand credit issuance and cut financing costs for the real economy. On the other hand, there remains both room and a need to lower policy rates such as reverse repos and the medium-term lending facility; this would not only reduce funding costs for financial institutions, thereby guiding the Loan Prime Rate downward, but also help bring broader interest-rate levels lower.
“To stabilize the macroeconomic fundamentals and employment, it is necessary to further strengthen the ability of financial services to support the real economy,” suggested Committee Member Zhou Tongyu. He proposed enhancing coordination between fiscal and monetary policies, increasing credit risk compensation for private and small‑and‑micro enterprises, improving the policy‑based guarantee and re‑guarantee systems, and guiding financial institutions to expand credit lending. Additionally, he called for making full use of structural monetary policy tools such as relending and rediscounting, and for further raising regulatory tolerance for indicators like the non‑performing loan ratio.
Delegates and members attending the Two Sessions stated that adopting more vigorous measures and taking proactive steps is a defining feature of this year’s macroeconomic policy, which will inject stronger momentum into market entities as they navigate difficulties and challenges, and provide officeer support for the steady operation of the economy.

Fiscal and tax policies deliver a “combination punch,” accelerating high-quality development.
This year, the deficit-to-GDP ratio is slated to be around 2.8 percent, a slight reduction from last year; central government transfers to local governments will increase by approximately RMB 1.5 trillion, bringing the total to nearly RMB 9.8 trillion; measures will continue to combine temporary relief with structural reforms, with both tax cuts and tax refunds implemented in tandem; overall tax refunds and reductions for the year are expected to total about RMB 2.5 trillion, including roughly RMB 1.5 trillion in carryforward VAT refunds, with all refund funds channeled directly to enterprises… In this year’s Government Work Report, enhancing the effectiveness of proactive fiscal policy and rolling out a new package of tax and fee support measures have drawn widespread attention.
During the 2022 Two Sessions, as the “national budget” was once again carefully unveiled, the fiscal policy framework for this year was clearly defined: prioritizing stability while seeking progress, focusing on bolstering counter-cyclical measures and enhancing policy effectiveness, and aiming to underpin the overall macroeconomic landscape.
Several deputies, members of the CPPCC, and experts and scholars told People’s Daily reporters that over the past year, China’s fiscal policy has enhanced its effectiveness, helping to stabilize the overall macroeconomic landscape. This year’s policy framework strikes a balance between strength and pacing, short-term needs and long-term goals, and development and security. By seamlessly integrating counter-cyclical and cross‑cycle adjustments, fiscal and tax policies will inject new momentum into high‑quality economic and social development.
Fiscal and tax policies continue to exert strong support, consolidating the foundation for economic recovery.
In the southwestern Sichuan Basin, as the call to build “China’s Green Silicon Valley” resounds, the ancient city of Leshan is taking on a fresh new look.
In December 2021, the Tenth Plenary Session of the Eleventh CPC Sichuan Provincial Committee explicitly called for advancing the integrated development of the crystalline silicon photovoltaic industry across Chengdu, Leshan, and Meishan, and for building Leshan into “China’s Green Silicon Valley.” To this end, the local tax authorities introduced “Twelve Measures to Support the Development of China’s Green Silicon Valley,” providing robust support for the region’s growth. With these policy measures in place, advantageous industrial resources and innovation assets have been rapidly concentrated.
Jiang Ximeng, a deputy to the National People’s Congress and president of the Leshan Solar Energy Research Institute, stated that the timely introduction of a series of policies will, in the long run, encourage enterprises to undergo a green transformation and accelerate high-quality economic development at the local level.
The development of the “Green Silicon Valley” has become a microcosm of China’s fiscal and tax policies, which have consistently delivered robust support and helped steer the economy toward steady improvement.
This year’s Government Work Report stated that, over the past year, China maintained the continuity and targeted nature of its macro policies, ensuring that economic performance remained within an appropriate range.
In 2021, China established a regular mechanism for the direct allocation of fiscal funds, bringing 2.8 trillion yuan of central government funds under this direct‑allocation framework. Li Xuhong, Director of the Academic Committee at the National Accounting Institute in Beijing and Director of the Institute for Fiscal and Tax Policies and Applications, told reporters that these directly allocated funds are primarily aimed at helping enterprises maintain market entities, ensuring employment, and safeguarding basic living standards, thereby providing robust fiscal support to local governments in implementing the “Six Guarantees” tasks.
Meanwhile, China continues to optimize the issuance and utilization of local government special-purpose bonds. Li Xuhong points out that these bonds are one of the key tools of proactive fiscal policy. On the one hand, by sending clear policy signals, they stimulate investment appetite and promote high-quality economic development; on the other hand, as the scale of local government special-purpose bonds expands, they to some extent reduce the incentives for local governments to incur new hidden debt, thereby helping to prevent and defuse risks associated with local government debt.
The government work report this year stated that in 2021, China optimized and implemented policies to support businesses and alleviate their difficulties, consolidated the foundations of economic recovery, and introduced new tax and fee reductions totaling over one trillion yuan.
Looking back at 2021, the combination of tax and fee reductions along with tax and fee payment deferrals emerged as a major highlight of China’s tax‑related policies. To boost innovation and technological development, enterprises benefited from the twice‑“upgraded” policy on additional deductions for R&D expenses, enabling them to claim tax relief totaling 333.3 billion yuan in advance.
“In 2021, the company’s headquarters is expected to benefit from tax incentives—such as the 15% corporate income tax rate for high-tech enterprises and the additional deduction for R&D expenses—totaling over RMB 1.5 billion,” said Dong Mingzhu, a deputy to the National People’s Congress and Chairwoman and President of Gree Electric Appliances. She added that these tax优惠政策 have played a crucial role in encouraging companies to increase R&D investment and supporting technological innovation.
An active fiscal policy is enhancing its effectiveness, with greater emphasis on precision and sustainability.
This year’s Government Work Report states that in 2022, the proactive fiscal policy will be made more effective and place greater emphasis on precision and sustainability. At the same time, several key fiscal measures have been clarified. Notably, the deficit-to-GDP ratio is proposed to be set at around 2.8%, a slight reduction from last year, which will help bolster fiscal sustainability.
A fiscal deficit refers to the portion of government expenditures that exceeds government revenues, while the deficit-to-GDP ratio measures the deficit as a share of gross domestic product. By adjusting the deficit-to-GDP ratio and the overall size of the deficit, it is possible to calibrate the intensity of fiscal policy to some extent.
With the deficit-to-GDP ratio lowered, can fiscal spending still be ensured? Experts offered an afofficeative answer in interviews with People’s Daily Online.
Zhang Lianqi, a member of the Standing Committee of the National Committee of the Chinese People’s Political Consultative Conference, pointed out in an interview with People’s Daily Online that setting the deficit-to-GDP ratio at around 2.8%—following 3.6% in 2020 and 3.2% in 2021—helps bolster fiscal sustainability. This year’s deficit-to-GDP ratio is 0.4 percentage points lower than last year’s budget, reducing the overall funding by RMB 200 billion. However, through inter‑year adjustments, funds transferred from the central government’s own budget into the general budget alone amount to RMB 1.267 trillion. This level of funding is equivalent to raising the deficit-to-GDP ratio by one percentage point, ensuring that the intensity of fiscal spending remains robust.
Li Xuhong stated that, while the deficit-to-GDP ratio is slated to be set at around 2.8%, China also plans to issue 3.65 trillion yuan in special-purpose local government bonds this year, unchanged from last year. Issuing these bonds will not only help meet local financing needs and ensure the successful completion of key projects and major tasks, but will also boost effective investment and stabilize the broader macroeconomic landscape by expanding government spending.
In the view of Finance Minister Liu Kun, whether fiscal policy has enhanced its effectiveness hinges on whether it has been fully, accurately, and comprehensively implemented in accordance with the decisions and arrangements of the CPC Central Committee, whether it has fostered sound economic development, and whether it has delivered greater benefits to the people.
“We will conduct meticulous analysis of each fiscal policy and carefully allocate every allocation of public funds, ensuring that policies are introduced promptly, funds are disbursed early, and measures take effect without delay. At the same time, we will adhere to the principle of doing our utmost within our means—maintaining sufficient policy力度 to support economic recovery and growth while preserving policy flexibility to address potential risks and challenges ahead,” said Liu Kun.
The new package of tax and fee support policies will be implemented, delivering large-scale tax cuts to boost confidence.
This year’s Government Work Report states that in 2022, a new package of tax and fee support policies will be implemented. These measures will combine temporary relief with institutional arrangements, adopting both tax reductions and tax refunds. Total tax and fee reductions and refunds for the year are expected to reach approximately RMB 2.5 trillion, including about RMB 1.5 trillion in carryforward VAT refunds, with all refund funds disbursed directly to enterprises.
Zhang Lianqi stated that this year’s tax and fee reductions exhibit four key features: First, the total scale of tax and fee cuts is the highest in history, reaching 2.5 trillion yuan; second, support is concentrated on six sectors—including manufacturing and small and micro enterprises—through tax refunds and reductions, ensuring that small, medium, and micro businesses as well as individual business households benefit; third, the primary measure is the value-added tax credit refund, which involves advancing the refund of taxes that enterprises have not yet offset, while also extending certain tax preferential policies and resolutely cracking down on tax evasion and avoidance; and fourth, to help local governments alleviate revenue shortfalls, government transfer payments are being used to ensure the effective implementation of these tax and fee reduction policies.
Industry analysts believe that the total scale of tax refunds and reductions, estimated at around RMB 2.5 trillion, will reach a record high, once again providing a powerful boost to market entities.
“I listened to the Government Work Report at the conference and was deeply inspired. When I heard about the new tax and fee reduction policies, the entire venue erupted in thunderous applause,” said Li Changgeng, a deputy to the National People’s Congress and Party Secretary of Luanxie Village in Shahe City, Hebei Province. He added that in recent years, favorable tax and fee policies targeting agriculture have been highly effective, and the tax authorities have ensured that these pro‑agricultural measures are fully implemented, thereby empowering the comprehensive advancement of green rural development.
Ding Zhaomin, a deputy to the National People’s Congress and a senior technician at the Liaoyuan Branch of Jilin Fu’ao Auto Parts Co., Ltd., stated that the further halving of the corporate income tax rate and the continued expansion of the carryforward VAT refund program have provided a solid platform for the manufacturing sector—where innovation is most vigorous—to upgrade and transform. The benefits of these tax incentives extend beyond easing the tax burden; they also help enterprises address funding challenges, bolster their long-term growth potential, and inject new vitality into their operations.
Tang Jiqiang, a professor at Southwestern University of Finance and Economics and chief economist at the SWUFE Think Tank, told a People’s Daily reporter that this year, fiscal and tax policies should play a macro‑regulatory role, prioritizing stability while fostering progress in economic development. First, it is essential to prevent and defuse major risks, accurately assess both the opportunities and challenges of China’s high‑quality development, and closely align policy responses with profound changes in the external environment and domestic reform and development trends, thereby actively exercising regulatory functions under the overarching principle of “stability.” Second, fiscal policy effectiveness must be refined and targeted, with greater emphasis on outcomes in areas such as stabilizing growth and adjusting the economic structure, thus enhancing the precision and efficacy of both policies and funding.

Ensure that the package of tax and fee support policies is effectively implemented and takes root.
This year’s Government Work Report proposes implementing a new package of tax and fee support policies, combining temporary measures with institutional arrangements and pairing tax reductions with tax refunds. It is estimated that the total tax refunds and reductions for the year will amount to approximately 2.5 trillion yuan. In response, National People’s Congress deputy and Deputy Director-General of the State Taxation Administration, Zhao Jing, stated that tax authorities at all levels are, in accordance with the unified deployment and requirements of the Party Committee of the State Taxation Administration, meticulously carrying out supporting measures for tax collection and administration, upgrading information systems, and other related tasks, making every effort to ensure that these new tax and fee support policies take root and deliver tangible benefits to market entities and the general public.
Zhao Jing stated that the tax authorities will continue to refine the mechanism for ensuring that tax and fee preferential policies are delivered swiftly and directly to eligible taxpayers and payers, precisely identifying those who meet the eligibility criteria and enabling targeted policy outreach. They will also pilot the issuance of “tax and fee reduction benefit statements” through channels such as the electronic tax bureau, further enhancing taxpayers’ and payers’ sense of gain from these measures. In addition, the tax authorities will fully leverage tax‑related big data to conduct robust monitoring and analysis, ensuring that the full impact of these policies is realized and better demonstrated.
“At the same time, we will continue to optimize the business environment in implementing tax and fee support policies, consolidate and build on the achievements of Party history study and education, and ensure that practical measures for the people are carried out on a regular and sustainable basis,” said Representative Zhao Jing. In January this year, the State Taxation Administration, under the theme “Smart Taxation Fuels Development, Benefits Enterprises and the People, and Stabilizes Growth,” launched its ninth consecutive “I Do Practical Things for Taxpayers and Payers—Spring Breeze Action for Convenient Tax Services.” The initiative introduces an initial package of 80 measures across five major categories and 20 sub‑categories, striving to deliver faster responses to taxpayers’ service needs, an improved online experience, more tailored services, enhanced enforcement and oversight, and smoother inter‑agency collaboration.
“Going forward, the State Taxation Administration will continue to refine its taxpayer‑friendly tax and fee‑payment measures in response to new circumstances and emerging needs, further alleviating the difficulties faced by market entities and steadily improving the tax‑related business environment,” said Zhao Jing.

Litigation & Arbitration
Ministry of Justice: Law-based administration has been comprehensively implemented and yielded tangible results, while the rule-of-law‑based business environment continues to improve.
In 2021, the Ministry of Justice, guided by the principle of law-based administration, launched the second phase of its initiative to establish model governments under the rule of law, comprehensively strengthening the standardization and regularization of administrative law enforcement. For the first time nationwide, it standardized the design and format of administrative law enforcement credentials and unified the styles of uniform attire and insignia for integrated law enforcement. Furthermore, it promoted the widespread establishment of public‑sector lawyers or the implementation of public‑sector lawyer and legal advisory services within Party and government organs at or above the county level, thereby continuously elevating the level of law-based administration.
Throughout the year, the Ministry of Justice completed more than 60 legislative projects, achieving breakthroughs in a number of key legislative initiatives urgently needed for national governance and essential to improving people’s lives. The ministry also carried out thorough revisions and cleanups of relevant laws, administrative regulations, rules, and normative administrative documents, as well as the necessary authorization procedures; it rigorously conducted filing and review of laws and regulations, reviewing 1,939 such instruments in accordance with the law, thereby effectively safeguarding the unity of the national legal system. Efforts were made to deepen reforms of the administrative reconsideration system across the country, with a focus on establishing a unified, efficient, impartial, and authoritative administrative reconsideration framework. Administrative reconsideration bodies at all levels were guided to handle cases strictly in accordance with the law; in 2021, administrative reconsideration agencies nationwide concluded a total of 254,000 cases. Among these, the Ministry of Justice handled over 6,000 cases—ranging from State Council administrative reconsideration decisions to administrative reconsideration and litigation matters involving ministry-level organs—in compliance with the law. The ministry also organized efforts to implement the Administrative Penalty Law and to eliminate “unreasonable” fines, promoted the full implementation of the Regulations on Optimizing the Business Environment, and advanced the comprehensive rollout of the “separation of licenses and business permits” reform. As a result, progress continued to be made in building a law-based government, and the business environment underpinned by the rule of law has been steadily improved.

Supreme People’s Court: Criminal trials must accurately address public concerns, ensuring that the public understands and accepts the judicial outcomes.
Criminal adjudication bears on national security and the overall stability of society, on the judicial protection of human rights, and on the realization of social fairness and justice. So how should criminal adjudication be conducted? On the 9th, Vice President Shen Liang of the Supreme People’s Court stated, while interpreting the Supreme People’s Court’s Work Report, that criminal trials must balance principles of natural justice, national law, and human sentiment; they must uphold the rationality of the judiciary through rigorous legal reasoning and demonstrate its moral conscience by appealing to widely accepted norms of reason and humanity. In doing so, they should both adhere strictly to the law—clearly articulating the facts, the merits of the case, and the full context—and respond sensitively to public concerns, ensuring that the public understands and accepts the court’s rulings and that the people feel that criminal justice is both office and fair, and imbued with warmth.
Shen Liang stated that China is one of the safest countries in the world. The people’s courts, by exercising their criminal adjudication functions, resolutely safeguard national security and overall social stability, support and ensure economic development, strengthen judicial protection of human rights, and uphold the bottom line of public safety, thereby doing their utmost to ensure the peace and well-being of the people.
Shen Liang stated that criminal gangs and evil forces are a “cancer” that erodes the Party’s governing foundation, harms the people’s interests, undermines public order, and threatens grassroots governance. He noted that in 2021, courts at all levels concluded 3,409 cases involving organized crime and evil forces, with 18,360 defendants. In adjudicating these cases, the people’s courts have consistently pursued both “striking at the assets to cut off funding” and “exposing protective umbrellas and dismantling networks,” enforcing property penalties and recovering or confiscating illicit proceeds totaling RMB 40.57 billion. At the first-instance level, 255 cases involving crimes of “protective umbrellas” linked to organized crime and evil forces were concluded, involving 628 defendants, with a rate of severe sentencing reaching 70.2%. Furthermore, courts at all levels have issued 3,816 judicial recommendations addressing management shortcomings in key industries and sectors, participated in targeted rectification campaigns, consolidated achievements in tackling issues such as “village tyrants,” “sand tyrants,” and “vegetable tyrants,” and advanced efforts to purify grassroots organizations.
“Food is paramount for the people.” Shen Liang pointed out that courts at all levels have rigorously implemented the “four strictest” requirements and, in accordance with the law, punished crimes endangering food safety. At the end of last year, the Supreme People’s Court and the Supreme People’s Procuratorate issued the “Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases Involving Endangering Food Safety,” addressing issues of widespread public concern such as “water‑injected meat,” “illegal workshops,” and “expired food,” thereby helping to ensure that the public can consume meat and vegetables with confidence. The interpretation also designates “main and complementary foods exclusively supplied to infants and young children” and “sales targeting minors and the elderly in primary and secondary schools, childcare institutions, elderly care facilities, and their surrounding areas” as aggravating circumstances, reflecting special protections for the food safety of minors and the elderly.
Telecom and online fraud schemes are constantly evolving, increasingly taking on the characteristics of organized crime, professionalization, and transnational operations, causing substantial financial losses to the public and severely undermining social trust. Shen Liang pointed out that the people’s courts have resolutely imposed strict legal penalties on such crimes, concluding 79,000 cases involving 149,000 individuals last year. Various forms of fraudulent activities—such as “loan‑trapping,” “campus loans,” “beauty‑related loans,” as well as scams targeting the elderly like “housing‑for‑elderly‑care,” “investment‑based retirement schemes,” and “health‑product scams”—have been prosecuted in accordance with the law, thereby supporting the nationwide campaign to combat fraud.
Drugs gravely undermine the people’s happiness and well-being. As an essential component of drug‑control efforts, criminal adjudication sees the people’s courts consistently upholding a policy of zero tolerance and maintaining a high‑pressure stance against drug‑related crimes. Shen Liang pointed out that, while adhering to this stringent approach, it is equally important to focus on precision in law enforcement and to strengthen the crackdown on emerging forms of drug‑related offenses. In accordance with the law, such crimes—where new psychoactive substances are disguised as alcoholic beverages, soft drinks, cookies, and other products that endanger the health of young people—are being met with severe punishment.
Shen Liang pointed out that last year’s education and rectification campaign targeting the political and legal workforce focused on addressing the prominent public concerns regarding irregular and unlawful handling of cases involving sentence reduction, parole, and temporary release from prison. The campaign undertook a concerted effort to address these issues, conducting a comprehensive review of 13.345 million “sentence reduction, parole, and temporary release” cases since 1990, and urging corrective action for 59,000 cases found to have problems or deficiencies. At the end of last year, the Supreme People’s Court, the Supreme People’s Procuratorate, and two other ministries jointly issued the “Opinions on Strengthening Substantive Review of Sentence Reduction and Parole Cases,” requiring people’s courts to adhere to thorough, law-based examination, give equal weight to both subjective and objective assessments of offenders’ rehabilitation, and rigorously scrutinize evidentiary materials, so that the public can genuinely perceive the fairness and impartiality of penal enforcement.
Preventing wrongful convictions is the bottom line of criminal adjudication. Shen Liang pointed out that criminal trials uphold the dual principles of punishing crime and protecting human rights: first, they adhere to the principles of legality, evidence-based adjudication, and presumption of innocence, rigorously applying the evidentiary standard of “certainty and sufficiency, leaving no reasonable doubt” to ensure that the innocent are not subjected to criminal prosecution and that the guilty receive just punishment; second, they vigorously advance reforms to the criminal procedure system centered on trial, establishing a framework in which litigation is trial‑oriented, trials are courtroom‑oriented, and court hearings are evidence‑oriented, thereby ensuring that every case can withstand the test of history; third, they fully implement the provisions of the Criminal Procedure Law and its new judicial interpretations, mandating open court hearings for all second‑instance cases involving suspended death sentences, effectively safeguarding lawyers’ professional rights, and piloting comprehensive legal defense coverage in criminal cases, so as to promote substantive justice through procedural fairness.

Work Report of the Supreme People’s Procuratorate: Crimes of purchasing, failing to rescue, or obstructing the rescue of women and children who have been trafficked will be resolutely and severely punished.
We will resolutely safeguard national security and social stability. We will fight proactively to protect national political security. The campaign to eradicate organized crime and eliminate evil forces will be carried out on a regular basis, with public order steadily improving. In coordination with public security organs, we will continue to implement the “Anti‑Human Trafficking” and “Reunion” operations, severely punish human trafficking offenses, and thoroughly investigate long‑standing unresolved cases. From 2000 to 2021, the number of prosecutions for the crime of trafficking women and children fell from 14,000 to just over 1,100, an average annual decline of 11.4%; meanwhile, prosecutions for the crime of purchasing trafficked women and children increased from 155 to 328. In line with the China Action Plan Against Human Trafficking, prosecution of human trafficking offenses will remain strictly enforced; and those who purchase, fail to rescue, or obstruct the rescue of trafficked women and children will be punished with the utmost severity.
We are committed to fostering a law-based business environment that ensures stability for businesses and delivers tangible benefits. We strive to prevent enterprises from falling into distress due to legal proceedings, consistently implementing prosecutorial policies such as refraining from arrest or prosecution whenever legally permissible in cases involving business‑related offenses. We are further advancing pilot programs for corporate compliance reforms: where arrest or prosecution is not warranted under the law, we require implicated companies to make compliance commitments and carry out effective rectification; and we have jointly established with eight departments a third‑party oversight and assessment mechanism, bringing together judicial, law‑enforcement, and industry regulatory authorities to demonstrate both strict oversight and genuine support. In Hubei, a private enterprise was implicated in a business‑related crime. During the investigation, the procuratorial organs facilitated its compliance‑driven remediation. Six months later, following rigorous third‑party evaluation and conofficeation of compliance, the case was decided not to be prosecuted. With its rectification efforts underway, the company has returned to normal operations, announced new investments exceeding RMB 100 million, and created over a hundred jobs. In response to certain long‑pending cases involving enterprises, we have worked with the Ministry of Public Security to conduct ongoing special clean‑up campaigns. Where evidence is insufficient or investigations have yielded no results, we resolutely apply the principle of “in dubio pro reo,” thereby unlocking the vitality of these businesses. In a pilot initiative led by the Ministry of Justice, individuals undergoing community‑based correction are permitted to temporarily travel outside their jurisdiction to engage in production and business activities. This flexible regulatory approach, grounded in trust, better supports rehabilitation and fosters development.
Actively engaged in preventing and defusing financial risks. Established a procuratorial office stationed at the China Securities Regulatory Commission to support law-based oversight of the capital market and safeguard investors’ legitimate rights and interests. Prosecutions for financial crimes increased by 3.3% year on year. Money‑laundering offenses were prosecuted rigorously, ensuring that both the underlying crimes and the illicit proceeds have nowhere to hide.
Jointly advancing the fight against corruption. We have streamlined the coordination between supervisory and procuratorial authorities, accepting more than 20,000 cases of official misconduct referred by the National Supervisory Commission, a 5% increase year on year. In collaboration with the National Supervisory Commission and other bodies, we have promoted the joint investigation of bribery and corrupt practices, resulting in a year-on-year rise of 21.5% in prosecutions for bribery and 16.6% in prosecutions for offering bribes. With respect to Cheng Sanchang, who fled abroad and refused to return, we initiated public prosecution under the procedure for trials in absentia and have held him criminally accountable in accordance with the law. No corrupt official will escape justice; the legal net is an all‑encompassing one.
Dedicated to serving innovation and development. Twenty provincial-level procuratorates have deepened the integrated exercise of criminal, civil, and administrative prosecution powers in intellectual property cases, strengthening comprehensive protection. Efforts to combat crimes infringing on intellectual property rights have been continuously intensified, with 14,000 individuals prosecuted—an increase of 15.4% year on year.
Creating a clean and healthy cyberspace. In collaboration with the Ministry of Public Security and other agencies, we have issued guiding opinions on handling criminal cases involving telecom and online fraud, implementing end-to-end crackdowns and integrated prevention and control measures. We have also coordinated the “Cut-Card” campaign; in response to cases involving some students, we jointly released typical cases with the Ministry of Education and launched anti-fraud initiatives on campuses, both protecting students from falling victim and preventing them from being deceived into harming others. Following the transformation of the self‑initiated prosecution in the case of a woman falsely accused of infidelity after picking up a package into a public prosecution, we have continued to issue guiding cases on the protection of citizens’ personality rights, rigorously prosecuting serious crimes that severely disrupt social order and infringe upon citizens’ rights—such as online defamation, insult, and the unlawful acquisition and use of personal information. Over 3,400 individuals have been prosecuted, an increase of 51.3% year on year. Wu某 downloaded a photograph of a woman with her maternal grandfather from the internet, fabricated a malicious “old man–young wife” parody, and posted it online, amassing more than 470 million views. Guangdong’s public security authorities initiated a public prosecution, and the procuratorial organs approved the arrest. In the virtual realm of cyberspace, governance must be grounded in law.
Supporting the building of a Beautiful China. The sustained, rigorous prosecution of crimes that harm the ecological environment and natural resources has yielded tangible results: last year, 49,000 individuals were prosecuted, marking the first decline in eight years. To address issues at their source, 88,000 public-interest litigation cases in this area were handled, up 4.7% year on year. The Nansi Lake basin spans Shandong, Jiangsu, Henan, and Anhui provinces; uneven governance standards between upstream and downstream, as well as between banks, have led to overlapping sources of pollution. The Supreme People’s Procuratorate directly initiated investigations and mobilized prosecutors from all four provinces to work together, helping local governments coordinate efforts to establish unified wastewater discharge standards and a plan for phasing out coal mines within protected areas. This included clearing solid waste, demolishing illegal structures, and shutting down unlawful aquaculture operations—efforts that, after more than a decade, have finally begun to restore the lake to its former clarity.

The Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, the Ministry of Justice, and the China Disabled Persons’ Federation have jointly issued the “Opinions on Deeply Studying Xi Jinping Thought on the Rule of Law and Effectively Strengthening Judicial Protection for Persons with Disabilities.”
“Building a moderately prosperous society in all respects leaves no one behind, including persons with disabilities.” Persons with disabilities are vital members of our social family, and ensuring, in accordance with the law, their equal rights and dignity is an important hallmark of socialism with Chinese characteristics. Recently, the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, the Ministry of Justice, and the China Disabled Persons’ Federation, in earnestly implementing the spirit of General Secretary Xi Jinping’s important instructions on the cause of persons with disabilities and thoroughly studying and applying Xi Jinping Thought on the Rule of Law, jointly issued the “Opinions on Thoroughly Studying and Implementing Xi Jinping Thought on the Rule of Law and Effectively Strengthening Judicial Protection for Persons with Disabilities” (hereinafter referred to as the “Opinions”).
Effectively safeguarding the legitimate rights and interests of persons with disabilities, facilitating their participation in litigation, and providing judicial services and safeguards for the development of disability-related undertakings are key responsibilities of the Supreme People’s Court as a member unit of the Leading Group for Coordination on Disability Affairs. The Supreme People’s Court has thoroughly implemented the principle of justice for the people, intensifying its efforts in areas such as the construction of barrier-free facilities, the provision of convenient litigation services, and the assurance of equal participation by persons with disabilities in social and economic life, and has introduced a series of important measures to protect their lawful rights and interests.
The Opinions emphasize that people’s courts at all levels must adhere to a criminal policy of combining leniency with strictness, punish crimes against persons with disabilities in accordance with the law, fully safeguard the right to defense of defendants with disabilities in criminal cases, and impose lighter sentences on such defendants as prescribed by law. Where a person with a disability who has suffered domestic violence or faces an imminent risk of domestic violence is unable to apply for a personal safety protection order, and a relevant organization such as the Disabled Persons’ Federation files the application on their behalf, the people’s court shall accept the case.
Prioritizing the development of barrier-free environments throughout all stages of litigation—filing, trial, and enforcement—and making every effort to ensure that persons with disabilities can participate in legal proceedings without barriers have been key priorities for the people’s courts in recent years as they continue to enhance their public‑oriented judicial services. The “Opinions” mandate the integration of barrier‑free services into every phase of the litigation process; courts at all levels are actively establishing “green channels” to assist persons with disabilities and adopting measures such as online filing, cross‑jurisdictional filing, and on‑site filing to facilitate case registration for this group. Efforts should be strengthened to provide guidance and clarification throughout the litigation process, while vigorously promoting mobile court models—including courtroom‑on‑wheels, on‑site hearings, and door‑to‑door mediation—and making full use of information‑technology tools like online hearings and remote mediation to make litigation more accessible. Furthermore, timely provision of communication support—such as sign language, Braille, large‑print materials, and subtitles—should be ensured for those with relevant needs, and standardized registries of personnel trained to offer such assistance should be established, enabling persons with disabilities to access judicial services without impediment.
An accessible environment is essential and vital infrastructure for safeguarding the human rights of persons with disabilities. The Opinions also, for the first time, stipulate that newly constructed litigation service centers and courtrooms must comply with national accessibility standards, such as the “General Code for Accessibility in Buildings and Municipal Engineering” (GB 55019‑2021). At the same time, the Supreme People’s Court has explicitly required that, when retrofitting existing facilities to meet accessibility standards, any pre‑existing litigation service centers or courtrooms that fail to comply with these national standards must develop specific renovation plans, ensuring compliance by the end of 2025.
Ensuring the smooth implementation of laws and regulations pertaining to persons with disabilities in accordance with the law, and providing them with impartial, efficient, and convenient judicial services that meet their aspirations for a better life, is an essential requirement for the people’s courts to strengthen judicial protection of the rights and interests of persons with disabilities. The people’s courts will perform their duties in compliance with the law, enabling persons with disabilities to experience fairness, justice, and the warmth of the law in every judicial case, and will continue to make concerted efforts to promote the sound development of the cause of persons with disabilities.

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