JC Master Legal News Issue 1015

Key Takeaways for This Issue

The China Securities Regulatory Commission has issued the “Guiding Opinions on Improving Post-Delisting Supervision of Listed Companies.”
To align with the requirements of the registration-based reform and the normalization of delisting, and to further enhance post‑delisting supervision of listed companies, the China Securities Regulatory Commission has issued the “Guiding Opinions on Improving Post‑Delisting Supervision of Listed Companies” (hereinafter referred to as the “Guiding Opinions”), which shall take effect from the date of their promulgation.
Real estate sector—new language has been added to “optimize the supervision of pre-sale funds,” and policy signals continue to be positive.
On April 29, the Central Politburo convened a meeting, during which the real estate section stated: “We must uphold the principle that housing is for living in, not for speculation; support localities in refining real estate policies based on their specific circumstances; bolster both first-time homebuyer and upgrade‑type housing demand; optimize oversight of pre-sale funds for commercial housing; and promote the stable and sound development of the real estate market.”
1 trillion yuan! The new package of tax and fee support policies is injecting fresh liquidity into businesses.
This year, China has implemented a new package of tax and fee support policies, with an estimated total tax and fee relief of approximately RMB 2.5 trillion for the full year. According to data released by the State Taxation Administration on the 27th, as of April 20, these measures have already reduced enterprises’ tax and fee burdens and boosted their cash flow by more than RMB 1 trillion.
Supreme People’s Court: China Has Basically Established a Specialized Intellectual Property Adjudication System
The Supreme People’s Court recently held a press conference in Beijing, officially launching the 14th “Intellectual Property Public Awareness Week” and releasing the report “Status of Judicial Protection of Intellectual Property by Chinese Courts (2021),” along with the Top Ten Intellectual Property Cases of Chinese Courts in 2021 and 50 representative intellectual property cases. These materials comprehensively and from multiple perspectives showcase the people’s courts’ achievements in judicial protection of intellectual property over the past year.

Finance & Capital Markets
The China Securities Regulatory Commission has issued the “Guiding Opinions on Improving Post-Delisting Supervision of Listed Companies.”
To align with the requirements of the registration-based reform and the normalization of delisting, and to further enhance post‑delisting supervision of listed companies, the China Securities Regulatory Commission has issued the “Guiding Opinions on Improving Post‑Delisting Supervision of Listed Companies” (hereinafter referred to as the “Guiding Opinions”), which shall take effect from the date of their promulgation.
The “Guiding Opinions” are grounded in the implementation of the fundamental requirements of the Securities Law, aiming to better ensure the smooth and orderly execution of routine delisting. Relying on the existing share transfer agency system as the delisting board, and guided by the principles of “seamless connectivity, appropriate regulation, risk prevention, and coordinated efforts,” they seek to address and refine existing bottlenecks and potential risks in current practice. The key components include: first, strengthening the linkage among delisting procedures, streamlining exchange‑based exit mechanisms, improving arrangements for sponsoring securities offices to take over responsibilities, simplifying equity‑conofficeation and registration processes, and optimizing listing procedures on the delisting board, thereby facilitating a steady and seamless transition of delisted companies into the delisting board; second, refining the ongoing regulatory framework for delisted companies by tailoring information‑disclosure and corporate‑governance requirements to their specific circumstances, establishing differentiated regulatory approaches, and enhancing the precision and adaptability of oversight; third, bolstering risk‑prevention mechanisms through enhanced investor suitability management, guiding enterprises lacking sustainable operating capabilities to exit the market via market‑based channels, and promoting risk convergence and gradual resolution; and fourth, improving the regulatory regime for delisted companies by establishing a clear‑responsibility, collaboratively efficient supervisory framework, reinforcing division of labor and coordination among all stakeholders, and fostering effective regulatory synergy.
The “Guiding Opinions” were publicly solicited from February 25 to March 27, 2022. During this consultation period, market participants generally endorsed the drafting rationale, institutional framework, and key provisions of the document, while also offering comments and suggestions on its specific implementation. The China Securities Regulatory Commission has carefully reviewed each proposal and will incorporate them into its subsequent work.
Going forward, the CSRC will guide the National Equities Exchange and Quotations Company and other relevant entities to continuously refine the applicable self-regulatory rules, ensure the effective functioning of the delisting board mechanism, safeguard investors’ fundamental rights, and facilitate the smooth implementation of the delisting regime, thereby fostering a sound market ecosystem characterized by both entry and exit, and the ability to enter as well as to exit.

The China Securities Regulatory Commission is soliciting public comments on the “Administrative Measures for Cybersecurity in the Securities and Futures Industry (Draft for Comments).”
To establish and improve the regulatory framework for cybersecurity in the securities and futures industry, to prevent and mitigate cybersecurity risks and vulnerabilities, and to ensure the safe, stable, and efficient functioning of the capital market, the China Securities Regulatory Commission has drafted the “Administrative Measures on Cybersecurity in the Securities and Futures Industry (Draft for Public Comment)” (hereinafter referred to as the “Measures”), which is now being made available for public consultation.
The Measures comprise eight chapters and sixty-six articles, covering key areas such as the cybersecurity supervision and management framework for the securities and futures industry, secure operations, integrated data security management, cybersecurity incident response, cybersecurity of critical information infrastructure, the promotion and development of cybersecurity, as well as oversight and legal liabilities. For detailed content, please refer to the Explanatory Notes on the Drafting of the Measures.
We welcome valuable feedback from all sectors of society on the Measures. The China Securities Regulatory Commission will, based on the results of the public consultation, further refine the Measures and, after completing the requisite procedures, issue and implement them.

The capital markets and the fund industry remain in a critical period of strategic opportunity.
Recently, the second meeting of the third council of the Asset Management Association of China (hereinafter referred to as “the Association”) was held in Beijing. After hearing the council members’ views and suggestions on industry development and the Association’s work, Fang Xinghai, a member of the CPC Committee and Vice Chairman of the China Securities Regulatory Commission, stated that economic development remains the central task of the Party. Although the current economic landscape faces certain prominent difficulties and challenges, the capital market and the fund industry are still at an important strategic juncture. The council is called upon to guide the entire industry in fully recognizing the vital role of securities investment funds in driving economic innovation and development, bolstering confidence in growth, fostering innovation, leveraging the advantage of talent aggregation, seizing opportunities presented by the new circumstances, and focusing on high-quality development and strengthening its own capabilities, thereby comprehensively enhancing its ability to serve the public and the real economy.
The meeting noted that, going forward, the Association will continue to resolutely implement all work arrangements of the China Securities Regulatory Commission, earnestly upholding the principles of “strengthening professionalism, safeguarding the bottom line, building a strong brand, and fostering a sense of commitment.” In terms of enhancing services and ensuring development, the Association will foster a professional, high‑quality ecosystem characterized by orderly competition; guide the industry in reinforcing its core capabilities; further deepen reforms related to registration and filing; and continuously optimize public services. With regard to institutional development and promoting standardization, it will refine a self‑regulatory framework that is standardized, transparent, and well‑coordinated; advance the improvement of the legal and regulatory framework for the fund industry; and continually enhance the system of self‑regulatory rules. On risk prevention and maintaining the bottom line, the Association will boost governance effectiveness through a mechanism of survival of the fittest and orderly entry and exit; strengthen end‑to‑end risk early‑warning systems; conduct targeted risk assessments in key areas; intensify risk‑mitigation efforts; enforce strict investment discipline; and uphold industry order. Finally, in strengthening fundamentals and improving the operating environment, the Association will upgrade infrastructure that is culturally driven and open to collaborative progress; cultivate a robust industry culture and build up its “soft power”; reinforce political guidance; establish a modern governance system for asset management institutions that reflects Chinese characteristics; promote the creation of an institutional framework that makes long‑term capital both willing to enter and able to stay; and, with investor capacity‑building as a central focus, deepen investor education.

CSRC: Supporting Macroeconomic Stability and Steadily Advancing Comprehensive and In-Depth Reform of the Capital Market
On May 4, according to the CSRC website, the Commission recently convened a special meeting to thoroughly convey and study the spirit of the CPC Central Politburo meeting and the important remarks delivered by General Secretary Xi Jinping during the 38th collective study session of the CPC Central Politburo. The meeting also examined measures to deepen capital market reform, ensure the stable functioning of the capital market, and support macroeconomic stability.
The meeting concluded that, since the beginning of this year, the COVID‑19 pandemic and the Ukraine crisis have given rise to mounting risks and challenges, thereby increasing the complexity, severity, and uncertainty of China’s economic development environment. In response, the CPC Central Committee has clearly mandated that “the epidemic must be contained, the economy must be stabilized, and development must be secure.” The CSRC is called upon to align its thinking and actions with the CPC Central Committee’s critical assessment of the situation and its strategic decisions, keep the nation’s overarching interests at heart, and, in light of the realities of the capital markets, effectively study, implement, and carry out these directives. It must balance the twin objectives of ensuring steady growth and managing risks, maintain office confidence, overcome difficulties, and ensure the thorough implementation of the CPC Central Committee’s major policies and guidelines.
First, we will redouble our efforts to stabilize the overall macroeconomic landscape. We will prudently and appropriately normalize IPOs and refinancing, expand the range of bond‑financing instruments—including corporate bonds for technological innovation and credit‑enhanced collective bonds for small and medium‑sized enterprises—and actively support bond financing by real estate offices. In addition, we will explore broadening the pilot scope of infrastructure REITs and, at an appropriate time, introduce further policy measures to bolster the development of the real economy.
Second, we will steadily advance the comprehensive deepening of reforms in the capital market. We will steadily push forward the reform of the stock issuance registration system, launch market-making trading on the STAR Market, expand the array of risk-management tools such as futures and options, accelerate reforms on the investment side, actively attract long-term investors, further enhance the role of institutional investors, and invigorate market dynamism.
Third, we will steadily expand the institutional opening-up of the capital market. We will broaden the scope of connectivity between domestic and overseas markets, deepen cooperation between the mainland and Hong Kong capital markets, and implement the regulatory framework for domestic enterprises seeking listings abroad.
Fourth, we will steadfastly strengthen risk prevention and control in the capital market. Upholding the principle that regulation is, by its very nature, supervisory, we will enhance proactive research and early warning of cross-border and cross-market risks, improve the institutional framework for risk prevention, early warning, response, and accountability, systematically defuse risks in key areas, and officely safeguard the bottom line of preventing systemic risks.
The meeting emphasized the need to deeply understand and resolutely implement the spirit of General Secretary Xi Jinping’s important speeches, strengthen research on capital theory in the new era, steadfastly uphold the “two unwavering commitments,” continuously deepen our understanding of China’s various forms of capital and their roles, and gain a profound grasp of capital’s dual nature. It also called for enhancing coordination between securities regulation and industry oversight, elevating governance capacity and standards, and ensuring the sound and orderly development of capital. Furthermore, it underscored the importance of continuing to improve the capital market’s foundational institutional framework, building a system and market structure that fosters the positive functions of capital, guiding the allocation of various production factors toward key areas and weak links, promoting the formation of innovative capital, and creating greater room for the development of all types of capital.
The meeting called on leading cadres at all levels within the CSRC system to prioritize stability while seeking progress, strengthen their risk‑awareness and sense of responsibility, remain pragmatic and fact‑based, and make every effort to ensure the stable functioning of the capital market, thereby welcoming the successful convening of the 20th National Congress of the Communist Party of China with concrete actions. (Source: Voice of Securities Daily)

The China Banking and Insurance Regulatory Commission is soliciting public comments on the “Administrative Measures for Internal Controls of Wealth Management Companies (Draft for Comments).”
To implement the important directives of the CPC Central Committee and the State Council on strengthening financial rule of law, promote lawful and compliant operations and sustained, sound performance by wealth management companies, and ensure that they faithfully discharge their fiduciary duties in accordance with the principles of good faith and due diligence, the China Banking and Insurance Regulatory Commission has formulated the Measures for the Internal Control Management of Wealth Management Companies (hereinafter referred to as the “Measures”), in compliance with the Banking Supervision Law, the Guiding Opinions on Regulating Asset Management Business of Financial Institutions, and other relevant laws and regulations. The Measures have been made public for public comment effective April 29, 2022.
The Measures refine and supplement the principled requirements set forth in regulations such as the Guiding Opinions on Regulating Asset Management Business of Financial Institutions, the Supervisory Measures for Commercial Bank Wealth Management Business, and the Administrative Measures for Commercial Bank Wealth Management Subsidiaries, thereby forming, together with these frameworks, the fundamental guidelines for internal control management at wealth management companies. The Measures comprise six chapters and 41 articles, covering General Provisions, Internal Control Responsibilities, Internal Control Activities, Internal Control Safeguards, Internal Control Oversight, and Supplementary Provisions.
The Measures adhere to the principles of problem‑oriented guidance, industry benchmarking, and risk‑based safeguards, requiring wealth management companies to establish comprehensive, checks-and-balances‑driven, well‑aligned, and prudent internal control mechanisms and organizational structures; to refine tiered authorization frameworks for investment management; to strengthen end-to-end governance of trading processes; to enhance all‑round oversight of key personnel in critical positions; to reinforce the management of related‑party transactions and risk isolation; and to fully leverage the internal supervisory roles of dedicated internal control functions and internal audit departments. Regulatory authorities should uphold a people‑centric regulatory philosophy, intensify ongoing supervision, gradually develop an evaluation system for wealth management companies, and enhance the effectiveness of regulation.
The Measures constitute an important institutional safeguard for the wealth management industry’s transition to high-quality development. Their promulgation and implementation will help standardize regulatory requirements across similar asset‑management activities, strengthen wealth management offices’ commitment to the rule of law and their compliance awareness, facilitate the establishment of internal control and compliance management systems tailored to each office’s business scale, characteristics, and risk profile, and foster a sound development ecosystem within the wealth management sector.
Going forward, the China Banking and Insurance Regulatory Commission will solicit public input on the Measures, continue to urge wealth management companies to strengthen their internal control and compliance frameworks, enhance the quality and efficiency of their operations, bolster their risk‑management capabilities, and promote the sound, sustainable development of the wealth‑management business.

Commercial & Corporate
Financial Engineering: Observing Quantitative Investing Under the “Dual Carbon” Goals Through the Recent Repeated Surge in Coal Prices
In light of the recent trend of continuously rising coal prices and industry indices, this paper examines the effectiveness of carbon‑reduction efforts by listed companies, the underlying rationale behind the sharp increase in coal prices over the past few years, and how to implement quantitative investment strategies within the framework of the “dual carbon” goals. The main findings are as follows:
Against the backdrop of the “dual carbon” goals, China has entered the inaugural year of development centered on carbon neutrality, and its new‑energy industry chain is experiencing unprecedented rapid growth. At the same time, however, the traditional coal sector—long a major source of high carbon emissions—has also posted remarkably strong market performance over the past two years.
In recent years, policy-driven carbon‑reduction and emissions‑cutting requirements have exerted a strong constraining effect on listed companies. Whether viewed across the full sample or by industry, the trend of declining carbon emissions among listed offices is pronounced.
Under the “dual carbon” framework, the underlying rationale behind the sharp and sustained rise in coal prices over the past two years lies in robust recent demand, the ongoing advancement of supply-side reforms, and disruptions to international coal supplies.
For quantitative investing, the information coefficient (IC) of carbon‑emission metrics varies across industries: in green sectors—such as media, information technology, and new energy—the annual IC shows a downward trend, whereas in brown sectors—such as coal, nonferrous metals, and chemicals—the annual IC continues to exhibit a slight upward trend.
Currently, the risk premium associated with carbon‑related risks is relatively high, causing low‑carbon portfolios to underperform their high‑carbon counterparts. However, from a medium- to long-term perspective, high‑carbon portfolios are fundamentally at odds with the goal of carbon neutrality. As China’s energy supply‑and‑demand dynamics evolve, the expected risk premium on carbon‑related factors is likely to decline, paving the way for low‑carbon sectors to generate higher excess returns relative to high‑carbon sectors.
In our earlier report, we constructed carbon‑risk‑neutral portfolios based on relative and absolute carbon betas. During the backtesting period, both portfolios effectively managed the carbon risk of their equity holdings, with volatility lower than that of the benchmark indices. Their annualized excess returns were 6.1% and 7.3%, respectively, and their Sharpe ratios stood at 1.2 and 1.25, both outperforming the benchmarks.

Localities should tailor their hydrogen‑energy industry strategies to their specific conditions, rather than blindly following trends.
Hydrogen energy offers the advantages of long-duration, large-scale energy storage, which can drive the scaled-up development of renewable energy in China, promote the integrated and synergistic development of hydrogen, electricity, and thermal energy systems, and provide critical support for a green and low-carbon energy transition. To advance the high-quality development of the hydrogen industry, it is essential to focus on the following key areas.
First, the development of the hydrogen energy industry must prioritize safety. Reviewing hydrogen‑related safety incidents over the past two years, both domestically and internationally, reveals that South Korea experienced accidents during hydrogen production, the United States in storage and transportation, Norway at hydrogen refueling stations, and China with malfunctions in commonly used equipment at refueling stations—covering virtually the entire hydrogen supply chain. The “Medium‑ and Long‑Term Plan for the Development of the Hydrogen Energy Industry (2021–2035)” emphasizes that China should make safety an intrinsic requirement for the sector’s growth, promptly establish and improve a robust regulatory framework and standardized norms for hydrogen safety, strengthen the prevention and control of major safety risks across the entire value chain—including production, storage, transportation, refueling, and end‑use—and elevate the overall level of safety management throughout the process.
Second, we should advance end‑use applications and international cooperation on the premise of achieving technological self‑reliance and controllability. At present, certain core technologies, critical materials, and equipment manufacturing within the industrial chain remain beyond domestic control, and key components such as base materials for hydrogen storage and transportation vessels, as well as hydrogen refueling infrastructure, still rely heavily on imports. Under these circumstances, it is essential to systematically expand end‑use markets, fully leverage the advantages of the new national‑level system, and, through mechanisms like industry development alliances and national‑level innovation platforms, mobilize leading enterprises in the value chain to establish collaborative R&D consortia. This will comprehensively strengthen capabilities in basic research, cutting‑edge technologies, and original innovation, swiftly break through bottlenecks in critical core technologies, and accelerate the localization of related technologies. At the same time, we must strike an appropriate balance between international cooperation and independent innovation, striving to achieve a high‑level “dual circulation” model—avoiding both isolationist “self‑circulation” and allowing the domestic market to become a mere “testing ground” for foreign technological iterations.
Third, local governments should tailor their hydrogen‑energy industry strategies to regional conditions and maintain a measured, rational approach. While enthusiasm for hydrogen energy is growing, it is crucial to avoid over‑enthusiasm and ensure that policies are grounded in objective analysis. Some regions have designated the hydrogen sector as a key driver of new growth, launching comprehensive, end‑to‑end industrial plans without first conducting a thorough assessment of their comparative advantages in developing this industry. This has led to heightened enthusiasm and intensifying competition. At present, local authorities are progressively formulating hydrogen‑energy development plans, implementation roadmaps, and guiding policies, setting targets for fuel cells, fuel‑cell vehicles, hydrogen refueling stations, and other related areas, and actively advancing the local hydrogen economy. Regions must base their strategies officely on reality, systematically considering their unique resource endowments, industrial foundations, market capacity, and fiscal capabilities, and adopt a prudent, evidence‑based approach to planning. They should refrain from blindly following trends or pursuing short‑term “vanity projects” driven by political expediency.
At present, as regions roll out hydrogen‑energy application scenarios, there is a tendency for many to rush into vehicle manufacturing. The Plan underscores the need to leverage planning guidance and policy incentives to encourage localities to align their hydrogen‑energy strategies with their specific endowments, fostering sound, orderly, and clustered industrial development. Over the coming period, pilot and demonstration projects will be steadily launched in areas characterized by substantial supply potential, a solid industrial foundation, ample market space, and extensive commercialization experience. Adhering to a strategy that integrates point‑based initiatives with broader regional rollout, we will actively expand hydrogen‑energy applications and progressively promote its diversified use across transportation, energy storage, industry, and other sectors.
Fourth, guided by the goals of peaking carbon emissions and achieving carbon neutrality, we will promote the green development of hydrogen energy and drive the large-scale deployment of renewable energy. Given the high costs associated with developing and utilizing renewable energy, many in the industry have advocated for the widespread use of hydrogen produced from fossil fuels. However, against the backdrop of carbon peaking and carbon neutrality, the Plan has designated renewable‑energy‑based hydrogen production as the primary development pathway. China ranks first globally in installed renewable‑energy capacity, giving it substantial potential to supply “green hydrogen.” As renewable energy continues to be scaled up, electricity costs are expected to keep falling, thereby further reducing the cost of hydrogen production.

Real estate sector—new language has been added to “optimize the supervision of pre-sale funds,” and policy signals continue to be positive.
On April 29, the Central Politburo convened a meeting, during which the real estate section stated: “We must uphold the principle that housing is for living in, not for speculation; support localities in refining real estate policies based on their specific circumstances; bolster both first-time homebuyer and upgrade‑type housing demand; optimize oversight of pre-sale funds for commercial housing; and promote the stable and sound development of the real estate market.”
Change 1—Introduction of “Housing Is for Living, Not for Speculation” and “City‑Specific Policies”: Last year’s Politburo meeting did not mention either “housing is for living, not for speculation” or “city‑specific policies,” but this session reiterated both, aligning with the central government’s longstanding stance on real estate. The overarching principle of “housing is for living, not for speculation” remains unchanged, while specific policies are being adjusted and refined within the framework of “city‑specific policies,” tailored to local conditions. Recent policy adjustments in many cities further underscore this approach.
Change 2 – Addition of “Optimizing Supervision of Pre-sale Funds for Commodity Housing”: “Optimizing Supervision of Pre-sale Funds for Commodity Housing”
This is new content added for this meeting. In January and February of this year, reports indicated that a nationwide regulatory framework for the supervision of pre-sale funds for commercial housing was imminent. Specifically, it was said that “the focus would be on capping the amount of pre-sale funds under regulatory oversight, with the specific threshold determined by municipal and county-level urban–rural construction authorities based on engineering cost estimates and contracts, ensuring that the funds are sufficient to complete the project. Once the account balance reaches the prescribed cap, any funds exceeding that threshold could be withdrawn and used at the developer’s discretion.” However, no formal document has since been issued, nor have there been any announcements regarding its implementation. At this meeting, it was explicitly stated that “pre‑sale fund supervision for commercial housing will be optimized,” and the release of relevant policies and detailed rules is eagerly anticipated. Currently, the regulation of pre-sale funds is governed primarily by the 1994 “Administrative Measures for the Pre‑Sale of Urban Commodity Housing,” which was revised in the 2000s. Yet these revisions largely retained broad, principle‑based provisions, leaving the formulation of specific rules and the allocation of supervisory responsibilities to local authorities—resulting in significant variation across cities. Given that pre‑sale proceeds are closely tied to the public interest of ensuring timely delivery of homes, while also serving as a major source of funding for developers, optimizing the oversight of these funds would help clarify rights and responsibilities and prevent policy settings that are either too lax or overly restrictive.
Two constants—supporting both rigid and improvement‑type housing demand and fostering the stable and healthy development of the real estate market: 1) Supporting reasonable demand: At the end-of-last-year Politburo meeting, the wording was “supporting the commercial housing market in better meeting homebuyers’ reasonable housing needs”; at this meeting, the relevant phrasing was “supporting rigid and improvement‑type housing demand,” which essentially conveys the same commitment to underpinning legitimate housing demand. Recently, demand‑side policies such as reductions in down payment requirements and interest rates have continued to be rolled out, and more cities are expected to follow suit. 2) Promoting the stable and healthy development of the real estate market: Given the ongoing downward pressures on the economy and the real estate sector, policy is likely to remain accommodative in pursuit of the goal of ensuring the market’s steady and sound growth.
Maintaining an “Outperform” rating: Overall, this meeting once again reafofficeed the policy stance of “housing is for living, not for speculation,” “stable development,” and “city-specific policies.” Given the downward pressures it faces, we expect demand-side support measures to continue rolling out, while supply-side financing policies are also likely to be refined.
We maintain our “Outperform” rating on the sector and recommend the following stocks: 1) High-quality, stable state-owned and centrally‑owned enterprises—Poly Development, Vanke; we also suggest keeping an eye on China Overseas, China Merchants Shekou, and China Resources, as these companies still have room to expand both in scale and profitability; 2) Relatively aggressive, high‑growth private‑sector leaders—Xincheng Holdings; other names to watch include Sunac China and Country Garden Services. With policy support gradually easing, valuation recovery is worth anticipating; 3) Property‑management‑related companies such as CR Wanda Life, Sunac Services, and Country Garden Services.
Taxation TAXATATION
Large-scale refunds of outstanding tax credits have moved from paper to bank accounts, helping market entities alleviate their difficulties.
This year, amid an increasingly complex, severe, and uncertain international environment, in response to mounting downward pressure on the domestic economy, China has introduced a new package of tax and fee support measures. Among these, the implementation of the value-added tax credit refund has been further strengthened, making it the centerpiece of the tax and fee reduction policy.
This year, the total scale of VAT credit refunds in China will reach 1.5 trillion yuan. This represents a direct and efficient relief measure that upholds the “two unwavering commitments” and benefits all types of market entities; it is a key step to stabilize growth, safeguard market players, and preserve employment, while also serving as a reform aimed at nurturing tax bases and significantly improving the VAT system.
Refund of outstanding input VAT refers to returning to taxpayers the amount of VAT that remains uncredited at the end of a tax period. The value-added tax system operates on a chain‑based credit mechanism: the tax payable is the balance remaining after deducting input VAT from output VAT for the current period. Here, output VAT is the VAT calculated on sales revenue and the applicable tax rate, while input VAT is the VAT borne on purchases of raw materials and other inputs. When input VAT exceeds output VAT, the excess becomes an outstanding input VAT credit.
According to a spokesperson from the State Taxation Administration, this year’s new policy on refunding outstanding input VAT credits will inject approximately RMB 1.5 trillion in additional cash flow into market entities. By returning tax refunds in the form of actual cash, the policy directly boosts enterprises’ immediate revenues. For companies currently in an expansion phase and in urgent need of financial support, this measure will provide timely assistance, help them overcome difficulties, and offer sustained relief, enabling them to operate with greater agility and efficiency.
Data show that, from April 1 to 15 alone, tax refunds totaling 420.2 billion yuan have been credited to the accounts of 527,000 taxpayers. Many market entities, upon receiving this policy‑driven “windfall,” have expressed that the new policy on refunding outstanding input VAT credits demonstrates the government’s office commitment to supporting business development and bolsters confidence in their future growth.
Inside the warehouses of Shandong Laiyang Luhua Group Co., Ltd., rows of “mountains” of oil and grain are neatly arranged. “Sufficient reserves and reliable supply are key to reducing consumers’ grain‑purchasing costs. Affected by the pandemic, the company has increased both production and stockpiles, which has in turn raised operating expenses,” said Yan Shengxin, the company’s chief financial officer. He added that the continually strengthened tax and fee‑reduction policies have provided crucial support for the enterprise’s growth, helping to ensure a stable supply of grain and edible oils to a certain extent.
According to reports, in recent years the group has benefited from a range of preferential policies, including corporate income tax reductions and exemptions for primary agricultural processing enterprises, universal tax relief for small and micro businesses, refunds of outstanding input VAT credits, and additional deductions for R&D expenses under the corporate income tax regime. In 2022, with the introduction of a large-scale policy to refund outstanding input VAT credits—raising the refund rate for incremental credits from the previous 60% to 100%—the Luhua Group’s enterprises within the Laiyang jurisdiction alone received VAT credit refunds totaling RMB 19.75 million, an increase of RMB 9.80 million compared to the earlier 60% refund rate.
“We have received a total of over 30 million yuan in tax refunds, which will be used to fund our company’s expansion and reinvestment, providing a significant boost to the overall project timeline and effectively easing operational pressures.” In Hebei, Zhang Jia, CFO of Tongfu Group Co., Ltd., stated that the large-scale policy of refunding outstanding VAT credits is undoubtedly a timely lifeline for businesses.
“The refund of our outstanding input VAT credit was swiftly credited to our account, which, at this critical juncture in the fight against the pandemic, has helped us overcome funding challenges in constructing makeshift hospitals,” said Cao Wensheng, Chairman of Changchun Chengtou Construction Investment (Group) Co., Ltd.
It is reported that, during the pandemic, the company undertook urgent tasks such as constructing and operating local makeshift hospitals, accumulating a certain amount of outstanding tax credits. The Changchun Jingyue High-Tech Industrial Development Zone Tax Bureau of the State Taxation Administration established a “green channel” for the company’s business processing and approval procedures, and coordinated in advance with the treasury. As a result, the outstanding tax credit was refunded to the company’s bank account in less than one day.
“The carryforward VAT refund has turned money that had been sitting on our books into hard cash, bolstering our confidence to pursue innovation and development,” said Jiang Meiling, the finance director of Hunan Simao Semiconductor Co., Ltd., after receiving a VAT carryforward refund of 5.2 million yuan.
According to reports, the company is a “Little Giant” enterprise in Hengyang City, distinguished for its specialization, refinement, uniqueness, and innovation. It primarily focuses on the development and production of high‑power, industrial‑grade power‑system chips. “For innovative enterprises, ample cash flow provides confidence and support; the receipt of deferred tax refunds helps stabilize corporate cash flow and drives both innovative growth and long-term sustainable development,” said Jiang Meiling.
Several experts told People’s Daily Online in interviews that, from the perspective of policy effectiveness, the substantial cash flow generated by the approximately RMB 1.5 trillion in additional tax refunds will help ensure stable growth, support market entities, and safeguard employment.
Li Xuhong, Director of the Institute for Fiscal and Taxation Policy and Application at the National Accounting Institute in Beijing, stated in an interview with People’s Daily Online that further strengthening the implementation of the value-added tax (VAT) end-of-period credit refund system will not only help optimize the VAT framework, highlight its neutrality, and align with international practice, but also demonstrate the effectiveness of China’s ongoing modern tax‑system reform.
“The new policy on refunding outstanding input VAT credits provides a one-time refund of existing credit balances to small and micro enterprises, the manufacturing sector, and five other industries, significantly boosting market confidence,” said Wang Tingting, an associate professor at the School of Economic Law of Southwest University of Political Science and Law and a researcher at the China Institute for Fiscal and Tax Law, in an interview with People’s Daily Online. She added that, when combined with new tax‑reduction and fee‑cutting measures and tax‑deferral policies, this initiative underscores the precision, targeted approach, and continuity of this year’s comprehensive package of tax and fee relief.

1 trillion yuan! The new package of tax and fee support policies is injecting fresh liquidity into businesses.
This year, China has implemented a new package of tax and fee support policies, with an estimated total tax and fee relief of approximately RMB 2.5 trillion for the full year. According to data released by the State Taxation Administration on the 27th, as of April 20, these measures have already reduced enterprises’ tax and fee burdens and boosted their cash flow by more than RMB 1 trillion.
The reporter learned that the policy-driven benefits comprise three key components: first, from January 1 to April 20 this year, a total of RMB 578.5 billion in outstanding tax refunds was processed; second, in the first quarter, nationwide tax and fee reductions and exemptions amounted to RMB 198 billion; and third, in the first quarter, deferred tax and fee payments for small, medium, and micro manufacturing enterprises totaled RMB 333.5 billion.
According to a responsible official from the State Taxation Administration, to ensure the effective and precise implementation of the policy, the tax authorities have refined the guidelines for tax refund procedures, upgraded their information systems, conducted internal video training, and provided external guidance and interpretations. Prior to April 1, they carried out a comprehensive round of publicity and guidance, leveraging a nationwide unified system of promotional and instructional labels to deliver targeted notifications on the carryforward VAT refund policy to taxpayers. At the same time, they have established and improved a rapid-response mechanism, setting up 100 direct liaison points for carryforward VAT refund work to ensure smooth channels for reporting issues.
The official stated that, going forward, the tax authorities will continue to fully implement the new package of tax and fee support policies, rigorously carry out all measures designed to make tax filing and payment more convenient, and introduce additional service initiatives as needed. They will also keep enhancing the functionality of the electronic tax bureau and offer refund processing services during the May Day holiday. Furthermore, the 31st National Tax Publicity Month will be extended through the end of May, with a particular focus on promoting the policy on refunds of outstanding input VAT credits and providing targeted publicity and guidance. Finally, leveraging tax‑related big data, the authorities will continue to refine risk‑assessment indicators for refund reviews, effectively guarding against fraudulently obtained input VAT credit refunds.

Jiangsu: Tax and fee support policies serve as a “pressure relief valve” for businesses.
Large-scale refunds of outstanding VAT credits, reductions in six taxes and two fees, continued cuts to unemployment and work‑injury insurance contribution rates, and tax deferrals for small and medium‑sized manufacturing enterprises—facing the triple pressures of shrinking demand, supply shocks, and weakening expectations, a new package of tax and fee support measures has served as an effective “pressure relief valve.” According to a recently compiled policy guide issued by the Jiangsu Provincial Tax Service, this year introduces 10 new tax and fee preferential policies, extends the implementation of six pandemic‑response measures, and prolongs the validity of 16 existing tax incentives. At present, this comprehensive set of tax policies aimed at helping businesses and alleviating their difficulties is being gradually rolled out across the province—so what results are being seen?
New policies have been introduced to provide businesses with seamless, barrier-free access.
“The 14 million yuan in outstanding tax refunds has injected much-needed liquidity into our company—far exceeding our expectations.” Wuxi Yuning Intelligent Technology Co., Ltd., a fast-growing “gazelle” enterprise, told its finance director that, due to the pandemic, its cash flow had become extremely tight. “We will allocate the entire sum to R&D and talent recruitment, bolstering the intellectual foundation for our journey toward specialization, refinement, uniqueness, and innovation.”
“Among the enterprises benefiting from this year’s carryforward VAT refund policy, small and micro businesses account for the majority,” said an official from the Goods and Services Tax Division of the Jiangsu Provincial Tax Service Bureau of the State Taxation Administration. The tax authorities have further streamlined the refund application process and procedures, strengthened coordination with the finance department, the People’s Bank of China, and other agencies to accelerate refund processing, and now allow taxpayers to submit a single application form through the electronic tax bureau or at a tax service hall. Once the backend review is approved, the refund is credited to the enterprise’s account promptly.
Affected by factors such as office size, transformation and upgrading, and the external environment, small and medium-sized enterprises—particularly those in the manufacturing sector—continue to face numerous challenges. Mr. Tang, the legal representative of Jiangsu Hongding Automotive Components Co., Ltd., shares this sentiment: “Due to the pandemic, sales orders have dropped significantly compared with previous years, while production costs remain stubbornly high, leaving us with a severe shortage of working capital. Fortunately, the tax and fee reduction policy for ‘six taxes and two fees,’ which granted us 140,000 yuan in tax relief, has helped us tide over this urgent crisis.”
With a flurry of new tax‑incentive policies being rolled out, how can we ensure they reach businesses without any obstacles? According to the Jiangsu Provincial Tax Service Bureau, these new measures cover a broad range of sectors and come with tight deadlines, heavy workloads, and stringent requirements. To address this, the tax authorities are continuously stepping up training for their staff. To date, more than 1,200 internal training sessions have been organized across the province.
Continuing preferential policies has yielded a clear relief effect.
In March 2020, in response to the pandemic and to help businesses alleviate financial difficulties, Jiangsu Province promptly introduced a tax preferential policy exempting certain sectors from property tax and urban land use tax (hereinafter referred to as the “two taxes on real estate and land”). This year, taking into account the actual situation, the policy has been extended and its scope expanded from four sectors—accommodation and catering, culture, sports and entertainment, transportation, and tourism—to include retail and warehousing, which have also been severely affected by the pandemic. Meanwhile, the exemption of the two taxes for small-scale VAT taxpayers in 2022 remains in effect.
The precise and efficient tax‑cut benefits have delivered a significant relief effect. “With sporadic outbreaks occurring in multiple locations, all types of retail businesses have been hit hard. Fewer people are visiting shopping malls, leading to a drop in revenue, yet operating expenses remain unchanged, putting immense pressure on cash flow,” said the finance director of Wuxi Savira Commercial Market Co., Ltd., a commercial leasing company, who deeply appreciates the impact of the tax cuts. “Waiving over 5 million yuan in property and land taxes for the year is equivalent to two months’ worth of profit.”
Supporting businesses in overcoming difficulties and fostering development hinges on stabilizing employment. For small and micro enterprises, reductions in workers’ compensation and unemployment insurance rates have translated into tangible benefits. The legal representative of Wuxi Xilongji Catering Management Co., Ltd. noted that the lowered rates for workers’ compensation and unemployment insurance cut monthly social security contributions by more than RMB 10,000—equivalent to saving the wages of two employees. Meanwhile, the general manager of Nanjing Kaiding Electronic Technology Co., Ltd. calculated that the continued implementation this year of the temporary reduction in unemployment insurance rates will save the company approximately RMB 83,000 in premiums. “This measure provides crucial support for both employment stability and business resilience,” he added.
Extend the implementation period to invigorate market entities.
“The recent epidemic has had a significant impact on our production and operations. The upfront purchase of equipment and materials tied up a substantial amount of capital, so we sincerely hope that the policies designed to help businesses alleviate their difficulties can be extended once again,” a representative of Nanjing Greens New Materials Technology Co., Ltd. told reporters. With the latest extension of the policy allowing small and medium-sized manufacturing enterprises to defer payment of certain taxes and fees, the company promptly received notification from the Pukou District tax authorities, enabling it to defer another RMB 592,000 in tax payments.
Ni Yunguo, Director of the Pukou District Tax Bureau of the State Taxation Administration, told reporters that tax‑big data analysis has proactively identified numerous enterprises in the district—many of which are at a critical stage of development—that still require additional policy support. “Through our ‘Tax Matters, Let’s Discuss’ policy service team, we promptly deliver the latest policy extending the implementation period to these businesses,” he said.
The production and consumer services sectors are closely linked to people’s daily lives—covering food, clothing, housing, and transportation—and extending the implementation period of the value-added tax (VAT) additional deduction policy for these sectors will effectively enhance the overall quality of public services.
“Affected by the pandemic, costs related to epidemic prevention supplies and personnel management have risen sharply, significantly impacting our operations,” an accountant at Nanjing Jin Feng Huang Property Management Co., Ltd. told reporters. Last year, the company benefited from a VAT additional deduction of RMB 28,300. In March this year, the Qinhuai District tax authorities proactively reached out to inform us that the implementation period for the VAT additional deduction policy for lifestyle service industries had been extended, allowing us to file again in the first quarter and claim an additional deduction of RMB 14,800. “We will use these savings to enhance our service standards and work together with our property owners to win this tough battle against the epidemic.”

Litigation & Arbitration
The “Regulations of the Supreme People’s Procuratorate and the Ministry of Public Security on the Standards for Filing and Prosecuting Criminal Cases under the Jurisdiction of Public Security Organs (II)” have been comprehensively revised. On April 29, 2022, the Supreme People’s Procuratorate and the Ministry of Public Security issued the fully revised version of these regulations (hereinafter referred to as the “Filing and Prosecution Standards (II)”). The revised standards comprehensively amend and supplement the criteria for initiating investigations and prosecutions in 78 types of economic crimes, including 11 securities‑related offenses. In particular, in light of the Eleventh Amendment to the Criminal Law, the new Securities Law, and relevant judicial interpretations, the regulations have refined the circumstances under which cases involving fraudulent issuance of securities, unlawful disclosure or failure to disclose material information, and breach of trust causing harm to the interests of listed companies are subject to filing and prosecution. Notably, taking into account the characteristics of financial‑fraud cases, provisions concerning the artificial inflation or deflation of assets and profits have been added, thereby strengthening the legal framework for accountability. To enhance investor protection, the standards for initiating investigations and prosecutions in cases such as unauthorized issuance of stocks, corporate bonds, or enterprise bonds; manipulation of securities and futures markets; and fabrication and dissemination of false information in securities and futures trading now include additional aggravating factors, such as causing losses to investors or inducing them to trade. Furthermore, in line with the realities of capital market development, certain monetary thresholds for initiating cases have been appropriately raised and will be strictly enforced, better reflecting the spirit and requirements of a stringent approach.
Improving the legal liability framework for securities‑related crimes and revising the criteria for initiating criminal investigations and prosecutions are key tasks explicitly set forth in the CPC Central Committee and the State Council’s “Opinions on Severely Cracking Down on Securities‑Related Illegal Activities in Accordance with the Law.” The comprehensive revision of the “Standards for Initiating Criminal Investigations and Prosecutions (II)” fully reflects the new circumstances and developments that have emerged in the capital market in recent years, thereby strengthening the legal foundation for punishing securities‑related offenses. This reform is of great significance for rigorously investigating and prosecuting securities‑related violations and crimes in accordance with the law, and for promoting the stable and sound development of the capital market.
Going forward, the China Securities Regulatory Commission will be guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and, in accordance with the spirit of the “Opinions on Severely Cracking Down on Securities Law Violations in Accordance with the Law,” adopt a zero‑tolerance stance. It will systematically implement and seamlessly integrate the “Standards for Filing and Prosecuting Cases (II),” further refine institutional mechanisms such as discretionary penalty enforcement and criminal referrals, and uphold comprehensive law enforcement and end-to-end accountability. By working in concert with judicial authorities at all levels, the Commission will safeguard the order of the securities and futures markets and protect the legitimate rights and interests of investors, striving to build a capital market that is standardized, transparent, open, dynamic, and resilient.

Supreme People’s Court: China Has Basically Established a Specialized Intellectual Property Adjudication System
The Supreme People’s Court recently held a press conference in Beijing, officially launching the 14th “Intellectual Property Public Awareness Week” and releasing the report “Status of Judicial Protection of Intellectual Property by Chinese Courts (2021),” along with the Top Ten Intellectual Property Cases of Chinese Courts in 2021 and 50 representative intellectual property cases. These materials comprehensively and from multiple perspectives showcase the people’s courts’ achievements in judicial protection of intellectual property over the past year.
Lin Guanghai, Chief Judge of the Third Civil Division of the Supreme People’s Court, stated that in 2021, the people’s courts handled and concluded a record-breaking number of intellectual property cases—both exceeding 600,000—up 22.33% and 14.71%, respectively, compared with 2020. In response to challenges such as difficulties in presenting evidence, low damages awards, high litigation costs, and lengthy proceedings, the courts have actively applied, in accordance with the law, measures like the exclusion of evidence due to obstruction and evidence preservation, thereby easing the burden of proof on rights holders. By imposing punitive damages, they have steadily increased award amounts; in 2021, punitive damages were awarded in 895 cases. Moreover, through mechanisms such as small-claims procedures, single-judge trials under ordinary procedures, and single-judge panels in second-instance reviews, as well as adjudicative approaches like “preliminary judgment plus temporary injunctions,” the duration of litigation has been shortened. The Supreme People’s Court has strengthened its guidance on criminal IP cases, and the integrated civil–administrative–criminal reform is advancing steadily, underscoring the increasingly prominent role of criminal IP justice in safeguarding intellectual property rights.
“Courts across the country have adjudicated a number of major cases, focusing on punishing crimes such as counterfeiting registered trademarks for epidemic‑prevention supplies, online film piracy, infringement of trade secrets in critical technological fields, and the production and sale of counterfeit seeds, thereby effectively safeguarding public interests and protecting the rights and legitimate interests of right holders,” said Lin Guanghai. He added that, to mitigate the impact of the COVID‑19 pandemic, the people’s courts have made full use of information technologies—including the internet and big data—to conduct online litigation.
At present, a specialized adjudication framework has been largely established, with the Intellectual Property Division of the Supreme People’s Court serving as the driving force, intellectual property courts setting an example, local intellectual property tribunals playing a key role, and local intellectual property adjudication divisions providing robust support. Meanwhile, the diversified mechanism for ascertaining technical facts continues to improve, and the “National Court Technical Investigation Talent Pool” now includes more than 450 technical experts, covering over 30 technical fields.

Ensuring Stability and Smooth Operations, Tackling Difficulties, and Promoting Recovery: Jiangsu Implements 12 Judicial Measures to Help Businesses Overcome Challenges
Recently, the Higher People’s Court of Jiangsu Province issued the “Twelve Judicial Measures for Courts Across the Province to Support Epidemic Prevention and Control and Economic and Social Development,” requiring courts throughout the province to further bolster epidemic prevention efforts, provide assistance to businesses facing difficulties, and promote steady and sound economic growth.
The measures include ensuring the stability of industrial and supply chains. For contract disputes arising from the pandemic—such as those involving sales, leasing, processing contracts, and construction projects—parties are encouraged and guided to either maintain the contractual relationship or adjust and amend the terms of the agreement. In applying the law, the impact of the pandemic on different regions, industries, and cases shall be comprehensively assessed to determine the respective liabilities of all parties in a fair and reasonable manner. Efforts will also be made to ensure the smooth flow of freight and logistics by adjudicating transportation contract disputes in accordance with the law; where the pandemic leads to changes in transport routes, restrictions on loading and unloading operations, or delays in delivery, carriers’ corresponding liabilities may, as appropriate, be exempted under the law. Furthermore, disputes arising from the pandemic—such as delays in the delivery of goods by sea, inability of vessels to berth, route deviations, and demurrage—will be resolved efficiently, with the responsibilities of shipping companies accurately determined to safeguard the order of the shipping market.
To address the challenges enterprises face in accessing financing, measures clearly implement the state’s policies on financial services for epidemic prevention and control and economic and social development. For cases where enterprises delay repayment of financial loans due to the pandemic, default shall be determined with prudence, and efforts should be made to facilitate dispute resolution through loan extensions, renewals, or installment payments. For enterprises that, despite being unable to repay all their debts due to the pandemic, still hold potential for recovery, when creditors file for bankruptcy, parties should be actively encouraged to pursue out-of-court settlements via debt restructuring, asset reorganization, and other means, helping these enterprises navigate their difficulties. For enterprises already in bankruptcy proceedings but possessing rehabilitation potential, proactive guidance should be provided to enable them to resolve their debt crises and achieve corporate revitalization through bankruptcy reorganization, compromise, and other procedures. Where appropriate, bankruptcy assets related to epidemic prevention and control should be disposed of expeditiously, or the disposal of assets whose market value has declined due to the pandemic may be temporarily suspended, so as to maximize the value of bankruptcy estates.

Four departments: Prohibit minors from participating in live-stream tipping; strictly regulate minors’ engagement as livestream hosts.
On the 7th, the National Radio and Television Administration and three other departments issued the “Opinions on Regulating Online Live‑Streaming Rewards and Strengthening the Protection of Minors.” The document stipulates that minors are prohibited from participating in live‑stream rewards. Website platforms must adhere to the principle of acting in the best interests of minors, improve and refine mechanisms for protecting minors, strictly enforce real‑name registration requirements, and prohibit providing minors with cash top-ups, “gift” purchases, online payments, or any other form of reward services. The employment of minors as livestreamers is subject to strict controls. Platforms must strengthen the review and management of broadcaster account registrations, refrain from offering online broadcasting services to those under 16, and obtain guardian consent when providing such services to individuals aged 16 to 18. Furthermore, routine oversight will be intensified to curb practices that exploit so‑called “child internet celebrities” for profit; violative accounts will face stringent enforcement measures, and the relevant website platforms will be held accountable.

 
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