JC Master Legal News Issue 1011

Key Takeaways for This Issue

The China Securities Regulatory Commission has revoked the securities investment consulting service licenses of two securities investment consulting offices.
In recent years, in line with the “zero tolerance” policy, the China Securities Regulatory Commission has continuously strengthened regulatory enforcement against securities investment advisory institutions, thereby effectively safeguarding the stable and sound development of the capital market. Recently, the CSRC, in accordance with the law, revoked the licenses for securities investment advisory services held by Shanghai Zhenghua Securities Investment Advisory & Consulting Co., Ltd. (formerly known as Shanghai Xinland Securities Investment Advisory & Consulting Co., Ltd.) and Shanghai Senyang Investment Advisory Co., Ltd.
The China Securities Association convened its regular meeting of chief economists, with experts recommending that real estate policies be adjusted in a timely and appropriate manner.
　On March 24, 2022, the Securities Association of China convened its first-quarter 2022 regular meeting of chief economists from the securities and fund industries. The meeting studied and implemented the spirit of the National Two Sessions and the special meeting of the Financial Stability and Development Committee of the State Council, and conducted an in-depth analysis and discussion on two key issues: macroeconomic measures to ensure stable growth, and the impact of overseas market volatility on the domestic capital market.
1.5 trillion yuan in additional tax refunds have benefited market entities.

With the State Council Executive Meeting clarifying policy arrangements and the finance and tax authorities issuing detailed implementation rules, the large-scale refund of outstanding input VAT credits has officially begun. A series of targeted policies and measures is now being rolled out to ensure the effective implementation of this major initiative, providing strong support for stabilizing the overall macroeconomic landscape.

The Supreme People’s Court has issued a judicial interpretation on administrative compensation.
To safeguard the legitimate rights and interests of citizens, legal persons, and other organizations, and to ensure that administrative organs fulfill their obligations to provide administrative compensation in accordance with the law, the Supreme People’s Court recently issued the “Provisions on Several Issues Concerning the Adjudication of Administrative Compensation Cases” (hereinafter referred to as the “Judicial Interpretation on Administrative Compensation”), which clarifies the scope, constituent elements, and allocation of liability in administrative compensation cases, thereby enabling precise oversight of administrative organs.

Finance & Capital Markets
The China Securities Regulatory Commission has revoked the securities investment consulting service licenses of two securities investment consulting offices.
In recent years, the China Securities Regulatory Commission (CSRC), in line with its “zero tolerance” policy, has continuously strengthened regulatory enforcement against securities investment advisory institutions, thereby effectively safeguarding the stable and sound development of the capital market. Recently, the CSRC, in accordance with the law, revoked the securities investment advisory service licenses of Shanghai Zhenghua Securities Investment Advisory & Consulting Co., Ltd. (formerly known as Shanghai Xinland Securities Investment Advisory & Consulting Co., Ltd.) and Shanghai Senyang Investment Advisory Co., Ltd. This move represents an important step by the regulator to rigorously crack down on illegal activities in the advisory sector and further raise the cost of non‑compliance.
Upon investigation, the illegal acts of the two institutions include providing and disseminating false or misleading information to investors, as well as promising investors guaranteed returns. These unlawful practices have severely disrupted market order and had an exceptionally adverse social impact; the individuals involved have been found to have committed the crime of fraud and shall bear criminal liability in accordance with the law. Moving forward, the China Securities Regulatory Commission will resolutely implement the “Opinions on Strictly Cracking Down on Securities‑Related Illegal Activities in Accordance with the Law,” issued by the General Office of the CPC Central Committee and the General Office of the State Council. Upholding a zero‑tolerance policy, the Commission will focus on preventing and defusing financial risks and safeguarding the legitimate rights and interests of investors, rigorously prosecuting all types of illegal and non‑compliant conduct by securities investment advisory offices, and maintaining an open, fair, and just market environment. It will also work to establish a comprehensive, multi‑dimensional accountability framework spanning administrative, criminal, and civil remedies, thereby fostering a sound market ecosystem.

China Banking and Insurance Regulatory Commission: The establishment of the Financial Stability Guarantee Fund is underway, with its primary purpose being to address systemic and major risks.
The 2022 Government Work Report proposed establishing a Financial Stability Guarantee Fund to defuse potential risks through market‑based and rule‑of‑law approaches, thereby officely safeguarding the bottom line of preventing systemic risk.
On March 25, a responsible official from the relevant department of the China Banking and Insurance Regulatory Commission stated that the Financial Stability Guarantee Fund is an important risk‑resolution mechanism designed to address systemic vulnerabilities, providing routine support for crisis management. The fund is financed by contributions from the market and deployed back into the market. With regard to fee structures, differentiated charges will be applied across industries and among different entities, thereby better balancing risk, returns, and accountability.
In fact, establishing a financial stability guarantee fund is a common practice among countries for addressing troubled financial institutions. The official stated, “We also believe it is necessary to draw on international experience and, based on China’s specific circumstances, set up a financial stability guarantee fund to build a financial stability framework with Chinese characteristics. At present, related work is still underway, covering areas such as the legal and regulatory framework, institutional design, governance mechanisms, and the mobilization and allocation of funds.”
The official stated that, at present, China’s financial sector is operating generally stably, and financial risks are trending toward convergence. The earlier intensive campaign to prevent and defuse major financial risks has yielded significant interim results. However, with an increasingly volatile domestic and external environment and a growing array of uncertainties, the risks and challenges we face remain substantial. Therefore, it is imperative to proactively build up reserves of resources for risk mitigation. Going forward, we will closely coordinate with the People’s Bank of China, expedite the study and refinement of relevant regulations and technical arrangements, and swiftly implement related measures, thereby ensuring adequate contingency funding to address major risks.

The Provisional Measures for the Listing and Trading of Depositary Receipts under the Interconnectivity Arrangements between the Shanghai and Shenzhen Stock Exchanges and Overseas Stock Exchanges Have Been Issued.
The Provisional Measures for the Listing and Trading of Depositary Receipts under the Interconnectivity Arrangement between the Shanghai Stock Exchange and Overseas Securities Exchanges, together with the relevant supporting guidelines, have been officially promulgated.
To further deepen the interconnectedness between domestic and overseas markets, the Shanghai Stock Exchange today officially released the Provisional Measures for the Listing and Trading of Depositary Receipts under the Interconnectivity Arrangement between the Shanghai Stock Exchange and Overseas Securities Exchanges (hereinafter referred to as the “Provisional Measures”), along with accompanying guidelines on cross-border conversion and market-making activities, which shall take effect from the date of their publication.
Building on the extensive feedback received from the public during the earlier consultation phase, the Shanghai Stock Exchange, in alignment with the China Securities Regulatory Commission’s “Regulatory Provisions on the Interconnectivity of Depositary Receipt Business between Domestic and Overseas Securities Exchanges,” has further refined and revised the original “Provisional Measures for the Listing and Trading of Depositary Receipts under the Interconnectivity Arrangement between the Shanghai Stock Exchange and the London Stock Exchange.” This revision covers such areas as the scope of application, listing review procedures, circumstances and procedures for delisting, ongoing information disclosure requirements, and investor suitability standards, and has resulted in the issuance of the “Provisional Measures” along with related supporting guidelines.
Going forward, the SSE will, in accordance with the unified arrangements of the China Securities Regulatory Commission, continue to provide high-quality services for the interconnectivity of depositary receipt business, further deepen cross-border cooperation mechanisms, and steadfastly advance the institutionalized two-way opening-up of the capital market.
Notice on the Issuance of the Provisional Measures for the Listing and Trading of Depositary Receipts under the Interconnectivity Arrangement between the Shanghai Stock Exchange and Overseas Securities Exchanges
SSE Document No. 37 [2022]
To all market participants:
To further advance the institutional opening-up of the capital market and deepen the interconnection between domestic and overseas markets, in accordance with the “Regulatory Provisions on the Interconnectivity of Depositary Receipt Business between Domestic and Overseas Securities Exchanges,” and with the approval of the China Securities Regulatory Commission, the Shanghai Stock Exchange has revised the “Provisional Measures for the Listing and Trading of Depositary Receipts under the Interconnectivity Arrangement between the Shanghai Stock Exchange and the London Stock Exchange” and renamed it the “Provisional Measures for the Listing and Trading of Depositary Receipts under the Interconnectivity Arrangement between the Shanghai Stock Exchange and Overseas Securities Exchanges” (see attachment). These measures are hereby promulgated and shall take effect from the date of promulgation.
The previously issued “Provisional Measures for the Listing and Trading of Depositary Receipts under the Shanghai–London Stock Connect” (SSE Document No. 87 [2018]), the “Notice on Matters Relating to Information Disclosure Time Slots for China Depositary Receipt Business under the Shanghai–London Stock Connect” (SSE Document No. 93 [2018]), and the “Statement and Undertaking by Directors (Senior Management) of Overseas Underlying Securities Issuers under the Shanghai–London Stock Connect” (SSE Letter No. 1226 [2018]) are hereby repealed simultaneously.
This is to notify you.
The Shenzhen Stock Exchange has officially released the supporting business rules for the interconnectivity of depositary receipts.
To implement the China Securities Regulatory Commission’s “Regulatory Provisions on the Interconnectivity of Depositary Receipt Business between Domestic and Overseas Stock Exchanges,” on March 25, 2022, the Shenzhen Stock Exchange (hereinafter referred to as the SZSE) officially issued three supporting rules: the “Provisional Measures for the Listing and Trading of Depositary Receipts under the Interconnectivity Arrangement between the Shenzhen Stock Exchange and Overseas Stock Exchanges,” the “SZSE Guidelines on Interconnectivity Depositary Receipt Business No. 1—Cross-Border Conversion of Depositary Receipts,” and the “SZSE Guidelines on Interconnectivity Depositary Receipt Business No. 2—Market Making for Chinese Depositary Receipts.”
From December 24, 2021, to January 16, 2022, the Shenzhen Stock Exchange publicly solicited comments from the public on the relevant supporting rules. During this consultation period, market participants—including depositary institutions, custodians, and securities offices—put forward suggestions and opinions on strengthening investor protection and optimizing the procedures and mechanisms for issuance, trading, and cross-border conversion. Based on careful study and deliberation, the Exchange thoroughly incorporated reasonable feedback and further revised and refined the rule text. Following the promulgation of these three supporting rules, the Shenzhen Stock Exchange will continue to formulate and issue the corresponding implementing details.
Going forward, the Shenzhen Stock Exchange will, in accordance with the unified arrangements of the China Securities Regulatory Commission, continue to diligently carry out preparatory work on detailed rules, upgrade its technical systems, and provide follow-up market services. It will support eligible main‑board and ChiNext listed companies to apply for issuing global depositary receipts in the United Kingdom, Switzerland, and Germany, and will also facilitate applications from eligible issuers in those markets to issue financing‑oriented Chinese depositary receipts on the Shenzhen Stock Exchange. In this way, it will steadily broaden two‑way financing channels for domestic and overseas enterprises, officely advance institutional and high‑level opening up of the capital market, actively contribute to building a new development paradigm, and promote the high‑quality development of the real economy.
Notice on the Issuance of the Provisional Measures for the Listing and Trading of Depositary Receipts under the Interconnectivity Arrangement between the Shenzhen Stock Exchange and Overseas Securities Exchanges
Shenzhen Stock Exchange Document No. 299 [2022]
To all market participants:
In order to standardize the listing, trading, cross-border conversion, and information disclosure of depositary receipts under the mutual market access mechanism between the Shenzhen Stock Exchange and overseas stock exchanges, to maintain market order, and to protect the legitimate rights and interests of investors, and in accordance with the China Securities Regulatory Commission’s “Regulations on the Supervision of Depositary Receipt Business under the Mutual Market Access Mechanism between Domestic and Overseas Stock Exchanges” and other relevant provisions, this Exchange has formulated the “Provisional Measures for the Listing and Trading of Depositary Receipts under the Mutual Market Access Mechanism between the Shenzhen Stock Exchange and Overseas Stock Exchanges,” which are hereby promulgated.
This is to notify you.

China Banking and Insurance Regulatory Commission: Will guide insurance institutions to allocate more funds to equity‑type assets.
Going forward, the China Banking and Insurance Regulatory Commission will fully leverage the long-term investment advantages of insurance funds and guide insurance institutions to allocate more capital to equity‑type assets. First, it will further diversify the channels through which insurance funds participate in capital market investments, supporting insurers in increasing their exposure—particularly in shares of high‑quality listed companies—via direct investment, entrusted investment, and investments in public mutual funds. It will also permit insurance funds to invest in wealth‑management products issued by asset management offices, thereby enabling them to engage with the capital markets through a range of specialized institutions. Second, in line with the “one institution, one policy” principle, it will effectively implement the transitional arrangements under the Solvency II regulatory framework to ensure stable investment in equity‑type assets. Third, it will revise and refine the regulatory rules governing insurance asset management companies, encouraging them to expand the issuance of portfolio‑based insurance asset management products and to strengthen support for investments in equities, bonds, and other securities. Fourth, it will establish and improve a long‑term performance‑assessment mechanism for insurance funds, guiding insurance institutions to officely embrace a long‑term investment mindset.

Commercial & Corporate
The China Securities Association convened its regular meeting of chief economists, with experts recommending that real estate policies be adjusted in a timely and appropriate manner.
On March 24, 2022, the Securities Association of China convened its first-quarter 2022 regular meeting of chief economists from the securities and fund industries. The meeting reviewed and implemented the spirit of the National Two Sessions and the special meeting of the Financial Stability and Development Committee of the State Council, and conducted an in-depth analysis and discussion on two key issues: macroeconomic measures to ensure stable growth, and the impact of overseas market volatility on the domestic capital market.
The experts attending the meeting agreed that setting the 2022 GDP growth target at around 5.5% would help clarify market expectations for steady economic expansion. In the first two months of this year, the year-on-year growth rate of value added by industrial enterprises above designated size accelerated nationwide, signaling an improving economic outlook. However, the “triple pressures” remain fundamentally unchanged, and achieving the established growth target will require further strengthening of policies and measures to ensure stable growth. The Two Sessions have laid out clear plans for pro‑growth policies, while a special meeting of the Financial Stability and Development Committee of the State Council emphasized that development is the Party’s top priority for governing the country and rejuvenating it, reafofficeed the central role of economic development, and called for maintaining stable and consistent policy expectations—measures that have played a crucial role in bolstering both the economy and market confidence. On the macro policy front, the experts recommended further smoothing the transmission channels of monetary policy and expanding medium- and long-term lending to enterprises. They also suggested adopting more targeted credit and tax measures to help small and medium-sized enterprises cope with the cost pressures stemming from the pandemic as well as rising prices of energy and other raw materials. With regard to boosting domestic demand and ensuring smooth internal economic circulation, the experts advised that real estate policies be adjusted in a timely and appropriate manner in line with the overarching goal of stabilizing growth, while intensifying supply-side reforms to stabilize real estate investment and market expectations, thereby fostering a virtuous cycle and sound development of the sector. Moreover, they underscored the need to leverage manufacturing’s leading role in economic development, safeguard the stability of manufacturing industry chains and supply networks, and step up support for digital transformation and the implementation of the dual carbon goals.
The experts attending the meeting agreed that the special session of the Financial Stability and Development Committee of the State Council held on March 16 promptly addressed market concerns, effectively stabilized market expectations, and played a crucial role in bolstering investor confidence. At present, evolving international dynamics, volatility in commodity markets, and the implications of the Federal Reserve’s exit from its accommodative policy constitute significant sources of uncertainty for the market. The participants recommended continuing to advance comprehensive reforms of the capital market, with a focus on strengthening the endogenous stability mechanisms of the domestic capital market. Specifically, they called for further enhancing corporate governance and regulatory oversight of listed companies, refining the stock market delisting regime, improving the quality of listed offices, and increasing the attractiveness of China’s equity markets to long-term investors, including insurance funds and pension schemes. Additionally, they emphasized the importance of intensifying investor education and capacity-building efforts to foster a culture of long-term and value‑oriented investing and to optimize the investor base. Strengthening the service capabilities of intermediary institutions, refining performance‑based incentive systems, and expanding the supply of products tailored to diverse risk profiles would better serve investors. While ensuring the stable functioning of the market, it is essential to deepen connectivity between domestic and overseas markets, leverage the complementary roles of both, and promote high‑level, two‑way opening-up of the capital market.
Xu Gao, Chief Economist at BOC International Securities; Li Xunlei, Chief Economist at Zhongtai Securities; Wu Ge, Chief Economist at Changjiang Securities; Zhang Jun, Chief Economist at Morgan Stanley Securities (China); Fu Peng, Chief Economist at Northeast Securities; Li Chao, Chief Economist at Zhejiang Commercial Securities; Wei Zhichao, Chief Economist at First Capital Securities; Lu Ting, Chief China Economist at Nomura Securities; Xiong Jun, Chief Economist at Tianhong Fund; and Zhuang Tengfei, Chief Strategy Analyst at Taida‑Huali Fund, attended the meeting. Xu Gao chaired the session. More than 100 participants, including representatives from relevant government departments, officials from pertinent divisions of the China Securities Regulatory Commission, and leaders of the Securities Association, as well as members of the Securities Association’s Committee of Chief Economists, took part in the regular meeting both on-site and online.

No new production capacity will be added until the existing new-energy vehicle bases reach an appropriate scale.
　Lin Nianxiu, Deputy Director of the National Development and Reform Commission, stated today at the 8th China EV100 Forum that, while accelerating the growth and expansion of the new‑energy vehicle industry, greater emphasis will be placed on comprehensively enhancing quality and brand reputation. First, we will uphold a nationwide coordinated approach, focusing on optimizing industrial layout. Coordinated planning is an objective necessity for the high‑quality development of the new‑energy vehicle sector. On the basis of respecting market forces, we will strengthen guidance through regulatory frameworks, reinforce overall strategic planning, refine industrial layout, and implement supportive policies. Relevant local governments and industry enterprises must fully and faithfully implement national policy directives. Specifically: First, in line with the principle of concentrating key players and clustering in designated regions, we will guide the industry to gravitate toward areas and entities with strong development foundations and robust capacity utilization—particularly in the Yangtze River Delta, the Pearl River Delta, the Beijing–Tianjin–Hebei region, and the Chengdu–Chongqing area—so as to foster internationally competitive industrial clusters. Second, we will encourage and support key regions in formulating industry development plans, leveraging existing production capacities to advance new‑energy vehicle manufacturing, and ensuring that project construction proceeds in a standardized and orderly manner. Vehicle manufacturers should prioritize strategic site selection, building on their current production bases; until these facilities reach an appropriate scale, they should refrain from establishing new production capacity. Third, we will strictly enforce regulations governing investment in the automotive industry, intensify efforts to rectify and eliminate non‑compliant new‑energy vehicle projects, and rigorously investigate and address violations such as commencing construction without approval or proceeding with construction while awaiting approval. Fourth, we will standardize mergers and reorganizations among vehicle manufacturers, vigorously facilitate the exit of outdated enterprises and idle production capacity, and work to establish an industrial structure characterized by rational spatial distribution, orderly development, and efficient operations.

Green Power–Driven Green Hydrogen: A Powerful Tool for Achieving the “Dual Carbon” Goals
The hydrogen energy industry chain encompasses production, storage, transportation, and refueling, with hydrogen serving as an energy carrier in sectors such as transportation, power generation, industry, and buildings. In the transportation sector, hydrogen and fuel cell technologies are primarily targeted at heavy‑duty trucks and other high‑fuel‑consumption commercial vehicles, complementing battery electric vehicles. In the power sector, hydrogen can be produced using renewable electricity, providing large‑scale energy storage and peak‑shaving capabilities, thereby effectively addressing the integration challenges of renewable power. It also enables cross‑regional and cross‑temporal coordination among different energy sources, facilitating the deployment of renewable electricity in industries and buildings to support their deep decarbonization.
Hydrogen energy is set to become an integral component of China’s energy system. By the end of 2021, China had achieved a hydrogen production capacity of approximately 40 million tonnes per year, with actual output around 33 million tonnes per year. According to projections by the China Hydrogen Energy Alliance, by 2050 hydrogen will account for at least 10% of the country’s final energy consumption, with demand exceeding 60 million tonnes and enabling a reduction in carbon dioxide emissions of roughly 700 million tonnes.
Currently, hydrogen production relies predominantly on fossil fuels, with green hydrogen accounting for a small share. As of 2020, the sources and respective shares of hydrogen produced in China were: coal at 64%, industrial by‑products at 21%, natural gas at 14%, and electrolysis of water at 1%. Electrolysis pathways include alkaline electrolysis (AEL), proton exchange membrane electrolysis (PEMEL), and solid oxide electrolysis (SOEL). Among these, SOEL boasts high energy conversion efficiency but has not yet reached commercial deployment. The energy conversion efficiency of AEL is approximately 10% lower than that of PEMEL, while its cost is about RMB 40 per kilogram lower.
Electricity costs account for more than 75% of the total cost of hydrogen production via water electrolysis, and as the levelized cost of electricity from renewable sources continues to decline, the economic viability of green‑hydrogen production is becoming increasingly evident. According to calculations by Zhang Xuan et al., with an electricity price of RMB 0.2 per kWh and equipment utilization of 5,000 hours, the cost of hydrogen production could fall as low as RMB 20 per kilogram. This cost threshold also represents the economic prerequisite for the large‑scale deployment of hydrogen fuel cells and other hydrogen‑based applications.
Electrolyzers and proton exchange membranes are investment areas that urgently warrant attention in the green‑energy‑to‑hydrogen sector. By 2025, domestic renewable‑energy‑based hydrogen production is expected to reach 200,000 tonnes, still in the early stages of commercialization and scale‑up. Assuming AEL technology accounts for 85% and PEM electrolysis for 15%, the market potential for AEL electrolyzers would amount to RMB 1.519 billion, while that for PEM electrolyzers would reach RMB 1.775 billion, bringing the total equipment market for renewable‑energy‑driven hydrogen to RMB 4.371 billion. Meanwhile, proton exchange membranes—previously dominated by foreign offices—are now being addressed through domestic manufacturers developing mid‑ to low‑end products as part of efforts to achieve import substitution.
Hydrogen Energy Investment Recommendation: The “Medium- and Long-Term Plan for the Development of the Hydrogen Energy Industry (2021–2035)” has been officially implemented, providing top-level design for the commercialization and large-scale development of hydrogen energy over the next 15 years. As a clean and highly efficient energy carrier, hydrogen can be widely applied across all sectors of national production. In the hydrogen‑production stage—the very foundation of the hydrogen economy—green electricity‑based water electrolysis, whose costs continue to decline, can accelerate the early realization of hydrogen’s commercial viability.

Taxation TAXATATION
1.5 trillion yuan in additional tax refunds have benefited market entities.
With the State Council Executive Meeting clarifying policy arrangements and the finance and tax authorities issuing detailed implementation rules, the large-scale refund of outstanding input VAT credits has officially begun. As the centerpiece of this year’s new package of tax and fee support measures, what types of market entities will primarily benefit from this relief initiative, which totals 1.5 trillion yuan? How can its precise and effective implementation be ensured? Will the rollout of these refunds lead to revenue shortfalls for local governments? A series of targeted policies and measures are now being put into action, helping to translate this major policy decision into concrete results and providing robust support for stabilizing the overall macroeconomic landscape.
Prioritize support for small and micro enterprises.
“This year, we are implementing a new package of tax and fee support policies, with total tax refunds and reductions amounting to approximately RMB 2.5 trillion for the year. Among these measures, large-scale tax refunds constitute the main component, with carryforward VAT refunds totaling about RMB 1.5 trillion,” said Xu Hongcai, Vice Minister of Finance, at a briefing held by the State Council Information Office on March 23.
In recent years, China’s tax and fee‑support policies have primarily included tax reductions, tax exemptions, tax deferrals, and fee cuts. The introduction of the value‑added tax (VAT) credit refund policy has drawn widespread attention from all sectors of society. “With large‑scale tax and fee reductions having been implemented for many consecutive years, there is limited room to further cut taxes by lowering tax rates or narrowing the tax base. By contrast, the VAT credit refund not only directly eases offices’ cash‑flow pressures but also helps refine the VAT system, effectively counteracting downward economic pressures and delivering multiple benefits,” said Feng Qiaobin, Deputy Director of the Department of Macroeconomic Research at the Development Research Center of the State Council.
Prior to 2018, China’s treatment of outstanding input VAT credits primarily involved carrying them forward for deduction in the following period. Since 2019, all incremental input VAT credits arising in advanced manufacturing have been fully refunded, while for other sectors, refunds are granted on a pro‑rata basis subject to certain conditions. According to Feng Qiaobin, the substantial accumulated input VAT credits built up over this process have become a key lever for supporting businesses and alleviating their difficulties this year.
“This year, we are implementing large-scale refunds of outstanding input VAT credits, substantially reducing the existing stock of such credits, and significantly improving the system for refunding incremental input VAT credits—steps that represent a deepening and continued advancement of previous VAT reforms,” said Xu Hongcai.
According to the plan, this year’s large-scale carryforward VAT refund program will give priority to small and micro enterprises and focus on supporting industries such as manufacturing. All eligible small and micro enterprises, individual business households, and businesses in sectors including manufacturing, scientific research and technical services, production and supply of electricity, heat, gas, and water, software and information technology services, ecological protection and environmental governance, and transportation, warehousing, and postal services will receive full refunds of their outstanding input VAT credits.
“This year’s large-scale carryforward VAT refund is a major boon for small and micro enterprises as well as key sectors such as manufacturing. In particular, for companies with substantial investment scales and high accumulated historical cash reserves, the simultaneous refund of both existing and newly generated tax credits directly boosts their cash flow, effectively invigorating business vitality and strengthening endogenous growth drivers. This will help promote steady and sound economic development and send a positive signal to the capital markets,” said Li Xuhong, Director of the Institute of Fiscal and Tax Policies and Applications at the National Accounting Institute in Beijing.
The central government provides financial support.
Implementing the carryforward VAT refund policy will reduce local government revenues. To ensure timely refunds and adequate funding for the “three guarantees,” the central government is providing robust fiscal support. Building on its existing commitment to cover 50% of refund costs under the current tax system, the Ministry of Finance has allocated an additional RMB 1.2 trillion in transfer payments to help local governments implement tax and fee reductions, carryforward VAT refunds, and safeguard employment and basic living standards. On March 21, the first tranche of RMB 400 billion in transfer payments—intended to support small and micro enterprises in obtaining carryforward VAT refunds—was disbursed ahead of schedule.
Xu Hongcai stated that the central government’s subsidies to local governments average over 82 percent. Through the implementation of a series of policy measures, the actual revenue shortfalls incurred by counties and districts in implementing the new additional tax credit refunds and other tax and fee reductions are expected to be fully offset, thereby effectively ensuring the stable operation of their fiscal systems.
Feng Qiaobin analyzes that this year’s 1.5 trillion yuan in tax refunds, under the VAT revenue-sharing arrangement whereby the central and local governments split the proceeds 50‑50, should have been borne equally by each. “However, given the uneven fiscal capacity across China’s localities—many of which face significant practical challenges—the central government has stepped up transfer payments to ensure that tax‑rebate, tax‑reduction, and fee‑cut policies are implemented fully and without distortion, while also preventing large‑scale tax refunds from adversely affecting local fiscal operations and public services.”
According to reports, the Ministry of Finance has clarified management requirements for the allocation and filing of special funds, budget issuance, and fund reallocation, bringing these funds under the direct‑allocation framework and subjecting them to dynamic monitoring. This approach ensures both the timely and full disbursement of refundable tax credits and prevents the misappropriation or idling of special‑purpose funds.
The amount of outstanding input VAT refunds is substantial, posing a risk of tax fraud by some enterprises. In response, Wang Daoshu, Deputy Director of the State Taxation Administration, stated that the tax authorities will further intensify their efforts. While ensuring that input VAT refunds are processed in a standardized, efficient, and timely manner, they will also rigorously prevent and severely crack down on illegal acts of fraudulently obtaining such refunds, thereby safeguarding the smooth implementation of the refund program.
“In light of this year’s expanded scope and enhanced力度 of the carryforward VAT credit refund policy, we will leverage tax‑related big data to rigorously strengthen the review of VAT credit refund applications. We will further refine a new, dynamic, and precision‑based regulatory mechanism grounded in ‘credit + risk’ and a robust risk‑prevention and control system for VAT credit refunds, conducting pre‑, mid‑, and post‑event scanning and monitoring to promptly identify potential risks and, based on risk levels, implement differentiated response measures—ensuring that our management of VAT credit refunds keeps pace while effectively containing risks,” said Wang Daoshu.
Effectively managing and utilizing tax rebate funds is crucial to ensuring that policy benefits are fully realized. Feng Qiaobin argues: “On the one hand, we must leverage the direct‑allocation mechanism for fiscal funds, strengthen oversight, and ensure efficient fund deployment; on the other hand, we should make full use of tax‑related big data to resolutely crack down on illegal practices such as tax fraud and subsidy fraud, particularly preventing some enterprises from issuing false VAT invoices and certain localities from inflating tax rebate amounts, thereby guaranteeing the orderly implementation of the outstanding‑credit refund program.”
Ensure that subsidies are delivered directly to enterprises.
According to the deployment, for small and micro enterprises across all sectors and for individual business households taxed under the general tax calculation method, the existing outstanding input VAT credit will be fully refunded in a lump sum by the end of June: micro‑enterprises will receive a concentrated refund in April, while small enterprises will be refunded in May and June. Starting April 1, the incremental outstanding input VAT credit will be refunded in full on a monthly basis. For enterprises in manufacturing and other industries, the existing outstanding input VAT credit will begin to be fully refunded on July 1 and must be completed by year‑end; the incremental outstanding input VAT credit will also be refunded in full on a monthly basis, starting April 1.
Faced with challenges such as large scale, broad coverage, long operational chains, and tight timelines, how can we ensure the effective and precise implementation of all measures so that businesses can promptly and fully benefit from policy incentives? Recently, the Ministry of Finance and the State Taxation Administration have stepped up their efforts, jointly issuing an announcement to further strengthen the implementation of the value-added tax end-of-period credit refund policy, while the State Taxation Administration has released supporting administrative and collection documents, clarifying a series of detailed rules and operational procedures.
To ensure the thorough and meticulous implementation of the carryforward VAT refund policy, comprehensive publicity and guidance must be provided throughout the entire process. Wang Daoshu stated that, by April 1, the tax authorities will leverage tools such as prompts and reminders on the electronic tax bureau to complete the first round of full‑coverage policy outreach to taxpayers, while also delivering targeted guidance and conducting multiple rounds of timely Q&A sessions to address taxpayers’ questions and resolve their concerns.
Meanwhile, focusing on key milestones, the authorities will expedite the refund of outstanding input VAT credits for micro and small enterprises by April 30 and June 30, fully honoring their commitment to refund such credits to these businesses by the end of June. By September 30 and December 31, they will likewise process refunds for medium- and large-sized enterprises, ensuring that the established targets are met. “By phasing out refunds in an orderly manner according to enterprise size, this approach underscores a strong emphasis on supporting small, medium, and micro‑enterprises,” said Li Xuhong.
“The tax authorities will further streamline the tax refund process. For taxpayers who meet the policy requirements and are classified as low-risk, we will simplify the review procedures, enhance processing efficiency, and ensure that applications are processed promptly and refunds are issued swiftly. At present, all related work is progressing smoothly, and we are confident that we will complete the necessary preparatory measures by April 1, ensuring that taxpayers can benefit on time,” said Wang Daoshu.

The “big package” of tax and fee cuts boosts the confidence of small and micro enterprises.
At its executive meeting held on March 21, the State Council decided to refund nearly one trillion yuan in value-added tax credits to small and micro enterprises across all sectors, as well as to individual business households that pay taxes under the general taxation method. On the same day, the Ministry of Finance allocated 400 billion yuan in special transfer payments for 2022 to support the refund of outstanding VAT credit refunds for small and micro enterprises, helping local governments ensure timely disbursement of these refunds. According to the “2022 Budget Allocation Table for Special Funds Supporting VAT Credit Refunds for Small and Micro Enterprises” released by the Ministry of Finance on March 22, of the total 400 billion yuan in special funds, 304.215 billion yuan is earmarked for implementing the newly introduced VAT credit refund policy, while 95.785 billion yuan is designated to support the institutionalized VAT credit refund system under the existing policy.
On March 18, the Ministry of Finance and the State Taxation Administration issued an announcement stating that for small and low-profit enterprises, the portion of annual taxable income exceeding RMB 1 million but not exceeding RMB 3 million will be taxed at a reduced rate of 25% when calculating taxable income, and corporate income tax will be paid at a rate of 20%.
On March 4, three policies were announced: the value-added tax additional deduction policy for production and lifestyle service industries has been extended through December 31, 2022; the pre-tax deduction for equipment and instruments purchased by small, medium, and micro enterprises has been increased; and the “six taxes and two fees” exemption and reduction policy for small and micro enterprises has been further implemented.
Over the longer term, additional tax and fee reduction measures have been rolled out—steps that inject much-needed liquidity and revitalize economic activity, helping market entities overcome difficulties, bolstering confidence, and unleashing dynamism. According to data from the State Taxation Administration, in 2021, nationwide tax reductions totaled RMB 1.0088 trillion, while fee cuts amounted to RMB 164.7 billion. Among these, tax incentives introduced in 2021 to support the development of small and micro enterprises generated an additional RMB 295.1 billion in tax relief, accounting for 29.3% of the country’s total new tax reductions.
A series of tax and fee reduction policies have been rolled out one after another, benefiting 150 million market entities. These measures provide timely support to businesses, help them regain vitality, and ensure that small and micro enterprises face a lighter tax and fee burden, proceed with greater stability, and enjoy stronger confidence.
Moreover, the effective implementation of tax and fee reduction policies has provided robust support for stabilizing the overall macroeconomic landscape. In this regard, some have likened it to a “combination of addition, subtraction, multiplication, and division”: by applying the “subtraction” of reduced government revenue and the “division” of removing obstacles and alleviating burdens for businesses, we can achieve the “addition” of improved corporate performance and the “multiplication” of market vitality.
However, “subtraction” does not imply a reduction in overall tax revenue. On the contrary, thanks to tax and fee‑cutting policies, tax revenues can become more diversified and underpinned by a stronger fiscal base, playing a crucial role in stabilizing the economy’s fundamentals.
The data speak for themselves. According to figures released by the Ministry of Finance, in 2021, 13.26 million new tax‑related market entities were registered, a year-on-year increase of 15.9%. This year’s Government Work Report notes that experience has shown that tax and fee reductions are a direct and effective means of helping businesses overcome difficulties; in fact, they also constitute “letting the water rise to nurture the fish,” thereby fostering the tax base. Since 2013, the newly established tax‑related market entities paid taxes totaling 4.76 trillion yuan last year.
Preserve our green mountains, and secure our future. Although revenues are sluggish and spending pressures remain high, our tax and fee reductions will stimulate economic growth, thereby boosting fiscal revenues in the longer term.
Another spring has arrived. A series of sustained, in-depth, and robust tax and fee reduction “packages,” like spring rain nourishing seedlings, are helping more enterprises feel a strong sense of gain.

Jiangsu: The tax authorities’ “Cloud Window, Cloud Consultation” service helps businesses overcome challenges.
In the face of a severe epidemic prevention and control situation characterized by sporadic cases and localized outbreaks, the Jiangsu Provincial Tax Service Bureau of the State Taxation Administration has taken proactive measures, introducing 40 specific initiatives across six key areas to provide taxpayers and payers with “cloud-based services” that are unconstrained by geography, region, or time, ensuring that epidemic prevention efforts remain unwavering while high-quality services remain uninterrupted.
Cloud-based portal, remote integration to solve challenges.
“I had feared that, given the impact of the pandemic, it might be difficult to get the refund approved and credited to our account. But to my surprise, in just two days, more than 16.8 million yuan in export tax rebates was already deposited—truly a tremendous relief.” After successfully completing their export tax rebate application through “cloud services,” the tax manager of Jiangsu Sulbo Petrochemical Co., Ltd. expressed heartfelt gratitude to the tax officials in the enterprise‑tax WeChat group.
The convenience of tax services during the pandemic has been made possible by the Jiangsu tax authorities’ ongoing efforts to enhance their “non-contact” service offerings.
At the very outset of this wave of the epidemic, the Jiangsu Provincial Tax Authorities promptly issued a friendly reminder on “non-contact” tax filing and payment, providing detailed information on non-contact channels and publishing lists such as the “Electronic Tax Bureau Tax Filing and Payment Items List,” the “Jiangsu Tax” App Tax Filing and Payment Items List, and the “Individual Income Tax” App Tax Filing Function List. These measures aim to encourage taxpayers and payers to “spend less time in person and more time online,” thereby reducing the risk of infection.
In addition, the tax authorities of Jiangsu Province have focused on pressing issues of concern to taxpayers and payers, leveraging tax‑related big data to compile a list of key enterprises. They have then assigned seasoned professionals to form “online service teams,” which provide tailored guidance and remote assistance via WeChat official accounts, taxpayer‑payer communication groups, and video conferencing, thereby enabling ultra‑fast online processing of tax refunds.
“At present, online tax services have become the norm, and especially in the context of the pandemic, we have an even greater responsibility to continuously explore new avenues for online tax filing and payment, thereby providing taxpayers and payers with greater convenience,” said the head of the Taxpayer Services Division of the Jiangsu Provincial Tax Service Bureau.
Cloud consulting: integrating inquiry and service delivery to boost efficiency.
“I’m calling to commend your consultant No. 2008…” This was the content of a call received on the morning of March 21 by the Jiangsu Provincial Tax Service Bureau’s 12366 taxpayer service hotline, and it also reflects the high‑quality advisory services provided by Jiangsu’s tax authorities during the pandemic.
“Contactless” simply means a physical distance; between the tax authorities and taxpayers, our hearts remain closely connected.
“Hello, is this Rudong Tax Service? I need to make an advance tax payment…” A call from Zhoushan, Zhejiang, came into the Rudong Tax Service’s 12366 hotline. The caller was Accountant Li from Zhoushan Baorui Marine Engineering Co., Ltd., who was eager to handle cross‑regional tax‑related matters. As this was his first time dealing with such procedures, he was unfamiliar with the operational flow and interface. “Don’t worry—we’ll immediately assign a dedicated representative to provide remote guidance,” the consultant replied. After assessing the situation, they promptly contacted the Rudong “Tax No Worries” Expert Studio. With the assistance of tax officials, Accountant Li successfully completed the advance tax payment.
With enhanced prevention and control measures and staffing shortages, intelligent consultation has proven its worth during the pandemic. According to reports, the Jiangsu Provincial Tax Service Bureau’s 12366 taxpayer service hotline offers smart assistance covering a wide range of common services, including policy guidance, tax‑filing procedures, software operation, and form completion. It provides “one‑click access” for single‑turn queries and enables “step‑by‑step” exploration through multi‑round interactions, making it in recent years the most important alternative to human‑assisted consultation.
In response to the sudden outbreak, Jiangsu Province’s tax authorities have prioritized more timely handling of taxpayer requests by further integrating specialized tax and fee advisory services with the efficient 12345 hotline for public inquiries. They have established a unified “one-stop response” mechanism for business concerns and enabled direct communication among policy specialists at the provincial, city, and county levels, ensuring round-the-clock intelligent consultation and comprehensive remote assistance. Data show that since March, the Jiangsu Provincial Tax Service Bureau’s 12366 taxpayer service hotline has handled 156,400 calls, while its intelligent consultation system has provided 165,300 effective responses—up 187.97% year over year.
“Epidemic prevention and control must be rigorous and meticulous. As the tax authorities, we must also provide attentive, finely-tuned tax services during this period, doing our utmost to alleviate taxpayers’ and payers’ concerns,” said a responsible official from the Jiangsu Provincial Tax Service Bureau. “The pandemic cannot halt the arrival of spring. With taxpayers and tax authorities working in concert and united as one, this ‘late-spring cold snap’ will eventually pass, and the beautiful land of Jiangsu will once again welcome a bright and vibrant spring.”

Litigation & Arbitration
The Supreme People’s Court has issued a judicial interpretation on administrative compensation.
To safeguard the legitimate rights and interests of citizens, legal persons, and other organizations, and to ensure that administrative organs fulfill their obligations to provide administrative compensation in accordance with the law, the Supreme People’s Court recently issued the “Provisions on Several Issues Concerning the Adjudication of Administrative Compensation Cases” (hereinafter referred to as the “Judicial Interpretation on Administrative Compensation”), which clarifies the scope, constituent elements, and allocation of liability in administrative compensation cases, thereby enabling precise oversight of administrative organs.
This judicial interpretation shall take effect as of May 1, 2022.
Clarifying the requirements for the scope of administrative compensation and the allocation of liability.
The Judicial Interpretation on Administrative Compensation is based on the “Provisions of the Supreme People’s Court on Several Issues Concerning the Adjudication of Administrative Compensation Cases,” issued in 1997. In response to new circumstances and emerging issues arising in the practice of adjudicating administrative compensation cases, it focuses on clarifying major, complex legal questions that have given rise to divergent interpretations, while emphasizing the specificity, precision, and practical effectiveness of its provisions, thereby further standardizing the adjudication of administrative compensation cases.
The head of the Administrative Adjudication Division of the Supreme People’s Court told reporters: “For matters explicitly regulated by the Administrative Litigation Law, the State Compensation Law, and relevant judicial interpretations, we will refrain from reiterating such provisions. As for issues that may or may not be regulated, or where a basic consensus has yet to be reached, we will temporarily leave them unregulated. We will continue to uphold those provisions in existing judicial interpretations that have proven effective. And for matters that have urgently arisen in recent years in judicial practice but were not addressed in earlier judicial interpretations, we will add corresponding provisions.”
The full text of the “Judicial Interpretation on Administrative Compensation” comprises 33 articles, which regulate the scope of cases accepted in administrative compensation litigation, further clarify the scope and constituent elements of administrative compensation, stipulate circumstances involving the reversal of the burden of proof, and scientifically delineate administrative liability, thereby achieving precise oversight of administrative organs. It also reasonably defines the scope of “direct losses,” further specifies the standards for compensating property damage, clarifies that administrative compensation awarded by the people’s courts to expropriated parties shall not be less than the resettlement and compensation rights to which they are legally entitled, and refines the provisions governing claims for compensation for mental damages, thus ensuring comprehensive protection of the legitimate rights and interests of the parties. Moreover, it further clarifies the standing of plaintiffs and defendants in administrative compensation litigation, improves the systems governing the limitation period for filing claims and the time limit for bringing suit, addresses procedural issues arising from concurrent or separate filings of administrative compensation actions, and enhances the coordination between public‑law and private‑law compensation proceedings, thereby fully safeguarding the litigants’ procedural rights. Finally, it strengthens the courts’ duty to provide clarification, standardizes the people’s courts’ discretionary criteria for determining damages, and specifies the methods of adjudication in administrative compensation cases, thereby strengthening the substantive effectiveness of administrative compensation litigation in resolving administrative disputes.
The official stated that the Judicial Interpretation on Administrative Compensation strictly implements the provisions of the State Compensation Law and the amended Administrative Litigation Law, emphasizing that citizens, legal persons, or other organizations who believe that administrative organs and their staff have unlawfully exercised administrative powers, thereby causing personal or property damage to their legitimate rights and interests—such as the right to work or neighboring rights—may also file an administrative compensation lawsuit in accordance with the law.
The provisions governing litigation for compensation for mental damages have been improved.
To accurately determine the criteria under which an administrative act constituting a tort has been conofficeed as unlawful, the Judicial Interpretation on Administrative Compensation sets forth two common specific manifestations: first, the administrative act has been revoked, amended, or declared unlawful or invalid by a competent authority in accordance with statutory procedures; second, the administrative agency official who carried out the act has been found, through a final legal document or a disciplinary sanction imposed by the supervisory authority, to have engaged in dereliction of duty or abuse of power.
The Judicial Interpretation on Administrative Compensation provides that people’s courts shall review, in a unified manner, whether the exercise of administrative powers by administrative organs and their staff complies with the law, whether the facts of damage alleged by the plaintiff are established, whether a causal relationship exists between the damage and the unlawful administrative act, and whether the plaintiff’s losses have already been adequately remedied through administrative compensation or other avenues, thereby refining the statutory elements of administrative compensation.
In general, when a plaintiff seeks administrative compensation, they bear the burden of proving both the existence of damage caused by the unlawful administrative act and the extent of such damage. However, in the following two circumstances, the burden of proof is reversed: first, if the defendant’s actions prevent the plaintiff from producing evidence, the defendant shall bear the burden of proof; second, if the plaintiff alleges that they suffered physical injury during a period of deprivation of personal liberty, and the defendant denies either the occurrence of the alleged harm or the causal link between the harm and the unlawful administrative act, the defendant must furnish corresponding evidence to rebut such claims.
The interpretation further refines the provisions governing claims for compensation for mental damages, specifying that where any of the following circumstances applies, it shall be deemed to constitute “serious consequences” as referred to in Article 35 of the State Compensation Law, thereby entitling the claimant to compensation for mental harm: the victim has been unlawfully deprived of personal liberty for a period exceeding six months; the victim has been assessed as having sustained injuries classified as minor or more severe, or as having a disability; the victim has been diagnosed or certified as suffering from a mental disorder or mental disability, and such condition is causally linked to the unlawful administrative act; or the victim has suffered serious harm to their reputation, honor, family life, career, education, or other related aspects, and such harm is causally linked to the unlawful administrative act.
Equal protection of the lawful property rights of all types of market entities.
The Judicial Interpretation on Administrative Compensation lists the circumstances encompassed by the “other unlawful acts” stipulated in Articles 3 and 4 of the State Compensation Law. Such “other unlawful acts” include failure to perform statutory duties, as well as actions taken by administrative organs and their staff in the course of performing administrative functions that do not produce legal effects but, in fact, infringe upon the personal rights, property rights, or other legitimate rights and interests of citizens, legal persons, or other organizations.
The Judicial Interpretation on Administrative Compensation clarifies that where an unlawful administrative act causes property damage to citizens, legal persons, or other organizations, and the damaged property cannot be returned or restored to its original condition, the loss shall be calculated based on the market price of the property at the time the damage occurred. If the market price cannot be determined, or if that price is insufficient to compensate the losses of the citizen, legal person, or other organization, other reasonable methods may be employed for calculation. In cases of unlawful expropriation or requisition of land or buildings, the administrative compensation awarded by the people’s court to the expropriated party shall not be less than the resettlement and compensation rights to which the expropriated party is entitled under the law.
The Judicial Interpretation on Administrative Compensation upholds the principle of equal protection of property rights and effectively safeguards the legitimate property rights of the private sector. It explicitly stipulates that, under the State Compensation Law, compensation for “direct losses” amounts to compensation for “actual losses”; when unlawful administrative actions by administrative organs cause harm to citizens, legal persons, or other organizations, full compensation must be provided. The interpretation also sets forth specific criteria for calculating property damages and delineates the scope of necessary recurring expenses incurred during periods of suspension of production or business operations, thereby establishing concrete standards for full compensation. Furthermore, it clarifies that, in cases where unlawful forced demolition during land and housing expropriation or requisition results in losses, the compensation standard and amount shall not be lower than the compensation and resettlement standards and amounts to which the expropriated party is legally entitled.
The official stated that, going forward, the people’s courts will further implement the Party Central Committee’s various policies and requirements, strictly adhere to the provisions of the Administrative Litigation Law and the State Compensation Law, adjudicate administrative compensation cases fairly and promptly, effectively resolve administrative disputes, supervise and support administrative organs in exercising their powers in accordance with the law, and fully safeguard the legitimate rights and interests of citizens, legal persons, and other organizations, striving to ensure that the people feel fairness and justice in every judicial case.

The Supreme People’s Procuratorate has issued “Prosecutorial Recommendation No. 8” to promote source‑based governance of workplace safety.
Recently, a reporter learned from the Supreme People’s Procuratorate that, in response to prominent issues in current work on safety production supervision, the Supreme Procuratorate has issued a prosecutorial recommendation to the Ministry of Emergency Management on tracing and addressing the root causes of safety‑production incidents. This is the Supreme Procuratorate’s eighth prosecutorial recommendation (hereinafter referred to as “Recommendation No. 8”).
The “No. 8 Procuratorial Recommendation” points out that, in recent years, the national work safety situation has generally improved markedly; however, serious and extremely serious work safety accidents resulting in mass casualties continue to occur, and common accidents are also frequent in both production and daily life settings. The causes of work safety accidents are multifaceted, primarily including: first, some localities have failed to adequately implement the CPC Central Committee and the State Council’s decisions and arrangements on work safety, as well as relevant laws and regulations; second, there is a weak awareness of addressing issues early, at their nascent stage, and taking proactive measures, coupled with insufficient enforcement; third, certain regulatory responsibilities remain unclear, with ambiguities in accountability; and fourth, some enterprises pursue profit maximization to an excessive degree, leading to inadequate fulfillment of their primary responsibility for work safety.
In response to the aforementioned issues, the “No. 8 Procuratorial Recommendation” puts forward specific measures: First, fully leverage the comprehensive supervisory and administrative functions over national work on workplace safety, and urge and coordinate all regions and departments to earnestly implement the decisions and arrangements of the CPC Central Committee and the State Council on workplace safety. Second, prioritize addressing risks at their earliest stages and tackling emerging hazards as the top priority for ensuring workplace safety. Strengthen awareness of the principles that “risks are dangers” and “potential hazards are accidents,” focusing not only on addressing consequences after incidents occur but, more importantly, on preventing problems before they arise. Intensify efforts to identify, investigate, and rectify safety risks and hidden dangers, taking preventive measures to avert accidents. For example, promptly impose appropriate legal accountability for every instance of non‑accidental violations of laws or regulations in enterprise operations, thereby raising the cost of unlawful conduct; establish a nationwide credit system for workplace safety among production and business entities, and implement joint punitive measures against enterprises found to be untrustworthy; and improve mechanisms for reporting and lodging complaints related to workplace safety. Third, intensify investigations into and hold accountable law enforcement and regulatory personnel for dereliction of duty, malfeasance, and other violations of laws and disciplines. Refine and完善 a accountability framework that combines pre‑event and post‑event oversight, imposing strict and severe penalties on those responsible, with particular emphasis on rigorously investigating and prosecuting instances of negligence or misconduct by enforcement and regulatory officials prior to accidents. Fourth, urge enterprises to earnestly fulfill their principal responsibilities, bolster their intrinsic motivation for workplace safety, and guide them to develop safety management systems tailored to their specific circumstances, thereby effectively enhancing their inherent level of safety.
The head of the Second Procuratorial Office of the Supreme People’s Procuratorate told a reporter from the Rule of Law Daily that the “No. 8 Prosecutorial Recommendation” was simultaneously circulated to 11 relevant departments, including the Central Commission for Discipline Inspection and the National Supervisory Commission, the State Council Work Safety Committee, the Ministry of Public Security, and the Ministry of Transport, with the aim of jointly enhancing the level of work safety governance.
According to reports, the Supreme People’s Procuratorate recently issued a notice on implementing the Supreme Procuratorate’s “No. 8 Prosecutorial Recommendation,” calling on procuratorial organs at all levels to promptly make arrangements and take proactive measures in accordance with the law to effectively advance source‑based governance; to strengthen communication and coordination with relevant departments so as to achieve win‑win and multi‑win outcomes; and to intensify public awareness‑raising and education efforts, thereby fostering a community of shared responsibility for workplace safety.

The Ministry of Justice has released guiding cases for legal practice.
To fully leverage the functions and roles of the judicial administration, advance legal practice in the new era, and better meet the public’s demand for legal services, on March 26, the Ministry of Justice released three litigation cases in which lawyers successfully represented clients or mounted effective defenses.
The three cases released this time comprise two civil litigation cases and one administrative litigation case. Case One concerns a civil dispute arising from a contract between a real estate company and Mr. Yang. The attorney’s arguments were closely focused on the key points of contention, with clear positions, logical coherence, and a well‑structured presentation. Case Two involves inheritance disputes among stepparents and stepchildren, as well as between biological children and stepchildren. The attorney meticulously analyzed the prerequisites for stepchildren’s right to inherit, demonstrating clear reasoning and robust evidence. Case Three is an administrative litigation matter in which the counsel thoroughly examined the relevant laws, regulations, and rules governing social insurance, petitioned the social insurance administration for advance payment, and secured judicial support. This approach ensured the fullest possible protection of the client’s lawful rights and interests when the employer evaded liability or lacked assets available for enforcement.
All of the above cases can be searched and accessed in the “Judicial Administration (Legal Services) Case Database” on the 12348 China Legal Service Network.
Case One
The lawyer represented a certain real estate company in participating in…
Yang v. [Defendant] — First-instance, retrial, and second-instance proceedings concerning a contract dispute.
This case is a civil dispute arising from a contract between a real estate company and Mr. Yang. As the agent for Hunan某 Real Estate Development Co., Ltd. in the first instance, retrial, and second instance proceedings, the attorney contends that the central issues are whether the provisions of the “Cooperation Agreement,” the “Shareholders’ Meeting Resolution,” and the “Agreement” contravene mandatory legal and regulatory requirements; whether the subject matter of the transaction is lawful; and whether the RMB 3 million stipulated in the agreement constitutes a “relationship‑handling fee” or “remuneration for services,” as well as whether the relevant conduct amounts to a civil legal act entered into through malicious collusion or a false expression of intent. In presenting the agency’s arguments, the attorney maintains that the RMB 3 million specified in the Cooperation Agreement, the Shareholders’ Meeting Resolution, and the Agreement is, in fact, a “relationship‑handling fee,” which violates mandatory legal and regulatory provisions and should therefore be deemed invalid. Furthermore, Mr. Yang was not a bona fide third party or counterparty, and during his tenure as manager of the company, the company had already fully paid him a monthly remuneration of RMB 22,000. Accordingly, Mr. Yang’s claim for RMB 3 million in wages lacks both factual and legal basis, and the company is under no obligation to make such payment.
The agent’s legal opinion in this case is clear in its arguments, logically sound, and meticulously structured, leading the court to adopt its position. This represents a landmark victory in cases involving disputes over the nature of relationship‑based fees versus labor remuneration, demonstrating the attorney’s profound legal expertise and providing valuable guidance for handling similar matters.
Case Two
The lawyer represents Liu Moujia in his lawsuit against his stepmother, Liu Mou,
Half-sister Wen,
First-instance case of inheritance dispute involving Liu Moujia’s father and his stepson, Liu Mouyi.
This case is a relatively complex inheritance matter, involving disputes among multiple spouses, biological children, and stepchildren of the deceased. Furthermore, it presents the added complication that some heirs, after reaching an agreement, subsequently reneged and sought to join the litigation by bringing the stepchildren into the proceedings. The counsel focused intently on the central issue—the prerequisites for stepchildren’s right to inherit—arguing that whether a stepparent–stepchild relationship confers inheritance rights should be determined by the existence of a “supportive relationship.” The term “support” denotes mutual assistance and constitutes both a right and an obligation for each party; accordingly, the supportive relationship under inheritance law encompasses both upbringing and maintenance. Since there is no blood tie between stepparents and stepchildren to serve as the basis for an inheritance connection, the law requires that their relationship be “constructed” to approximate the degree of the bond between biological parents and children before stepchildren may inherit from their stepparents. Thus, the legal requirement of a “supportive relationship” between stepparents and stepchildren should be understood as comprising both the stepparent’s duty to provide for the stepchild and the stepchild’s duty to support the stepparent. In this case, only Father Liu provided for Stepchild Liu B, while Stepchild Liu B did not, in turn, provide for Father Liu; consequently, no legally recognized “supportive relationship” exists between the two parties.
In their legal opinion, the attorney systematically and comprehensively analyzed the case from multiple angles, elucidating the law through the facts of the case. The arguments were clear, the evidence robust, and the reasoning logically sound, ultimately being accepted by the court. This demonstrated the attorney’s profound legal expertise and provided valuable guidance for handling similar inheritance cases.
Case Three
Lawyer representing Jiang, a worker injured on the job.
Lawsuit against a Certain Medical Insurance Fund Management Center
First-instance and second-instance administrative litigation cases concerning the advance payment of workers’ compensation benefits.
In this case, the attorney represented Jiang, an injured worker, in filing an application with a certain medical insurance fund management center for advance payment of workers’ compensation benefits. The attorney argued that the Social Insurance Law, for the first time, established a system of advance payment under social insurance, with the aim of safeguarding citizens’ right to receive assistance from the state and society when facing hardships such as illness or work‑related injuries. The Interim Measures on Advance Payment from the Social Insurance Fund explicitly sets out the specific conditions and procedures for such advance payments. The significance of the advance‑payment system for workers’ compensation lies in providing timely relief to injured workers when their employer fails to pay the relevant benefits. After an injury occurs, if the employing entity evades liability or lacks assets available for enforcement, effectively protecting the legitimate rights and interests of the injured party presents a significant challenge. The counsel carefully reviewed the pertinent laws, regulations, and rules governing social insurance and concluded that the client met the statutory requirements for applying for advance payment of workers’ compensation benefits. Consequently, the court upheld the claim, thereby maximizing the protection of the client, Jiang’s, lawful rights and interests and achieving positive social outcomes.

The revised Measures for Cybersecurity Review Have Officially Come into Effect, Strengthening the “Protective Net” of Information Security.

　The Measures for Cybersecurity Review, jointly revised and issued by 13 departments (hereinafter referred to as the “Measures”), recently came into effect and has attracted widespread attention. An official from the Cyberspace Administration of China stated that the primary purpose of revising the Measures is to further safeguard cybersecurity and data security, thereby upholding national security.
Platform expansion into overseas markets has “standard procedures.”
In recent years, China’s internet applications have accelerated their development, giving rise to several massive, globally leading platforms across sectors such as telecommunications, payments, e‑commerce, and audiovisual services. Many of these companies have already gone public overseas or are planning to do so.
According to reports, Article 7 of the Measures explicitly stipulates that operators of online platforms that hold personal information of more than one million users must submit a cybersecurity review application prior to listing overseas. This provision has drawn widespread attention from all sectors.
Tang Wang, a senior engineer at the China Network Security Review and Certification Center, stated that if internet platforms fail to comply with national cybersecurity requirements and neglect their obligations to protect critical data and personal information, and if, after going public, they engage in disorderly expansion under the influence of financial interests, cybersecurity risks and threats will escalate exponentially.
Industry insiders view the inclusion of overseas listings by online platform operators within the scope of cybersecurity reviews as a major highlight of the revised Measures. In practice, platforms that proceed to list abroad typically have user bases well above one million. The amendment to the Measures signifies that, going forward, cybersecurity review will become a mandatory step for platforms seeking to list overseas.
“Cybersecurity reviews do not restrict openness. Once a review is initiated, if the assessment determines that it does not pose a threat to national security, companies may proceed with overseas listings,” said Gui Changni of the China Information Security Evaluation Center. She added that conducting cybersecurity reviews is a globally accepted practice and helps advance the modernization of China’s cyberspace governance system and governance capabilities.
In line with this, the Measures have made appropriate adjustments to the review’s working mechanisms and procedures, such as adding the China Securities Regulatory Commission as a member of the cybersecurity review working group and including listing application documents as part of the materials submitted for review. Qi Yue, an engineer at the China Network Security Review Technology and Certification Center, believes that, overall, the review mechanism and processes continue to follow the existing framework, while targeted optimizations have been introduced to address the newly added requirement for reviewing overseas listings. As a result, the review system has been continuously refined in practice.
Safeguarding the Digital Economy
In the era of the digital economy, the importance of data is increasingly evident. As a key new factor of production and a fundamental strategic resource for the nation, data security has become the cornerstone for building a cyber power and safeguarding the development of the digital economy. The Measures stipulate that data security is an integral part of the cybersecurity review system, treating data security risks as a critical review criterion. Furthermore, building on the assessment of supply-chain security risks, they introduce an additional evaluation of national data security risk factors.
Li Xueying, a member of the National Technical Committee for Information Security Standardization, stated that the revised Measures have added numerous provisions related to data security, reflecting greater emphasis on data protection, broader coverage, and more quantifiable review criteria. Huang Min, also a member of the committee, cautioned that data security has become an integral component of national security, necessitating prioritized safeguards for critical information infrastructure, core data, and important data.
“This revision places data security at its core and adopts an additive approach, introducing numerous noteworthy provisions,” said Lei Zhenwen, a researcher at the Institute of Law on Industry and Information Technology of Beijing University of Aeronautics and Astronautics. He added that implementing cybersecurity reviews and strengthening risk identification and management have become standard practices among major countries worldwide for mitigating cybersecurity risks. The enactment of these Measures will also elevate society’s overall awareness of cybersecurity and data security.
Multi-stakeholder collaboration to govern the internet in accordance with the law.
Cybersecurity review is an essential component of national security review. According to data released by the China Internet Network Information Center, in the first half of 2021, the Ministry of Industry and Information Technology’s cybersecurity threat and vulnerability information-sharing platform received a total of 49,605 reported cybersecurity incidents. At present, the security situation of the network product and service supply chain remains grave, and data‑security risks are expected to become even more pronounced in the future.
To address the evolving cybersecurity landscape, China’s cybersecurity review system must keep pace with the times. From the National Security Law, which explicitly established a framework for national security reviews and oversight mechanisms, to the Cybersecurity Law, which defined the key subjects and entities of such reviews, China has consistently worked to safeguard cybersecurity and data security, thereby upholding national security. Gui Changni argues that the recent Measures, by implementing the latest requirements on data and cybersecurity, represent a concrete advancement and a vivid manifestation of China’s law-based governance of cyberspace.
In the view of Zhou Hui, an associate researcher at the Institute of Law of the Chinese Academy of Social Sciences, the effective implementation of the Measures requires the joint participation and active collaboration of multiple stakeholders: regulatory authorities must fulfill their duties strictly in accordance with the law; key infrastructure providers and online platform operators must proactively ensure compliance; and the general public must engage through public discourse and oversight.

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