JC Master Legal News Issue 1021

Key Takeaways for This Issue

The Shanghai Stock Exchange has further strengthened oversight of convertible bond trading to effectively safeguard investors’ legitimate rights and interests.
To implement the requirements of the Measures for the Administration of Convertible Corporate Bonds and further mitigate trading risks associated with convertible corporate bonds (hereinafter referred to as “convertible bonds”) while upholding market order, the Shanghai Stock Exchange (hereinafter referred to as “SSE”), under the unified guidance of the China Securities Regulatory Commission, has drafted the Detailed Rules for the Trading of Convertible Corporate Bonds of the Shanghai Stock Exchange (Draft for Comments) (hereinafter referred to as the “Trading Rules”) and, effective June 17, has publicly solicited comments from the market. Concurrently, to further strengthen suitability management for convertible bond investors, the SSE has issued the Notice on Matters Related to Suitability Management for Convertible Corporate Bonds (hereinafter referred to as the “Suitability Notice”), which takes effect as of June 18.
New Oriental’s livestream room gained over 10 million new followers in a single week, as the online education sector continues to explore its transformation.
Vocational education, holistic education, and educational informatization are popular areas for transformation. Among them, New Oriental’s decision to enter livestream‑based e‑commerce stands out as rather unique. Following an unexpected surge in popularity in its livestream room, several online‑education professionals have hailed it as a positive example of how online‑education companies can pivot.
Notice of the State Taxation Administration on Matters Relating to the Phased Acceleration of the Processing of Export Tax Refunds
To thoroughly implement the decisions and arrangements of the CPC Central Committee and the State Council on further stabilizing foreign trade and foreign investment, and to fully and faithfully carry out the requirements of the State Council Executive Meeting to temporarily accelerate the processing of export tax refunds (and exemptions) for enterprises with good credit standing, thereby promoting stable and high-quality foreign trade and raising the level of opening-up, it has been decided to expedite the temporary processing of export tax refunds.
Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Adjudication of Civil Disputes Involving Forest Resources
In order to properly adjudicate civil disputes involving forest resources and to protect, in accordance with the law, the ecological environment and the legitimate rights and interests of the parties concerned, this Interpretation is hereby formulated, drawing upon the provisions of the Civil Code of the People’s Republic of China, the Environmental Protection Law of the People’s Republic of China, the Forest Law of the People’s Republic of China, the Rural Land Contracting Law of the People’s Republic of China, the Civil Procedure Law of the People’s Republic of China, and other relevant laws, and in light of judicial practice.

Finance & Capital Markets
The Shanghai Stock Exchange has further strengthened oversight of convertible bond trading to effectively safeguard investors’ legitimate rights and interests.
　To implement the requirements of the Measures for the Administration of Convertible Corporate Bonds and further mitigate trading risks associated with convertible corporate bonds (hereinafter referred to as “convertible bonds”) while upholding market order, the Shanghai Stock Exchange (hereinafter referred to as “SSE”), under the unified guidance of the China Securities Regulatory Commission, has drafted the Detailed Rules for the Trading of Convertible Corporate Bonds of the Shanghai Stock Exchange (Draft for Comments) (hereinafter referred to as the “Trading Rules”) and, effective June 17, has publicly solicited comments from the market. Concurrently, to further strengthen suitability management for convertible bond investors, the SSE has issued the Notice on Matters Related to Suitability Management for Convertible Corporate Bonds (hereinafter referred to as the “Suitability Notice”), which takes effect as of June 18.
In recent years, convertible bonds have increasingly become an important financing tool for listed companies, particularly small and medium-sized private enterprises. They have played a positive role in supporting the real economy, increasing the share of direct financing, and optimizing financing structures. However, they have also revealed certain issues, such as mismatches between regulatory frameworks and product characteristics, significant intraday volatility, and inadequate investor suitability management, all of which call for improvement. The drafting of the “Trading Rules” and the “Suitability Notice” has adhered to market‑based principles, balancing market efficiency, stability, and investor protection. These measures aim to effectively curb excessive speculation and ensure the stable functioning of the convertible bond market. Importantly, they do not involve adjustments to primary‑market financing policies, nor do they impede the normal operation of the convertible bond market’s financing function, and they will not weaken support for the real economy, especially for small and medium-sized private listed companies.
The key points of the “Trading Rules” and the “Suitability Notice” are as follows: First, the price‑limit mechanism is clarified. On the first day of a convertible bond’s listing, the daily price fluctuation limits are set at 57.3% upward and 43.3% downward; from the second day onward, a 20% limit applies. Second, criteria for abnormal price movements are defined. In conjunction with the adjustment of price limits, standards for both ordinary and severe abnormal price fluctuations have been introduced, specifying the obligations of listed companies to conduct verification and disclose information in such circumstances. Third, investor suitability requirements for the issuance of convertible bonds to an indefinite pool of investors are specified. Building on the newly added eligibility criteria of “two years of trading experience plus RMB 100,000 in investable assets,” a transitional arrangement has been established to strengthen investor protection while ensuring that existing investors can continue to participate without disruption. Fourth, a special identifier has been added: the letter “Z” will be prefixed to the security abbreviation on the last trading day of a convertible bond, thereby fully alerting investors to risks and effectively safeguarding their legitimate rights and interests. Fifth, in line with bond‑trading rules, relevant terminology has been revised—for example, “auction trading” has been replaced with “matched trading.”
Three Years Since the Launch of the STAR Market: Paving the Way for a New Era of “Hard Tech” Enterprises

On June 13, 2022, the STAR Market celebrated its third anniversary since launch; July 22 marked the third anniversary of its official trading debut.
 Over the past three years, the STAR Market has played a pivotal role in fostering effective alignment between capital and industry, providing a new platform for the development of science-and‑technology‑oriented enterprises and injecting robust capital momentum into China’s technological innovation.
Data show that as of June 10, the STAR Market had 428 listed companies, with cumulative IPO proceeds totaling approximately RMB 611.068 billion and a combined market capitalization exceeding RMB 5.1 trillion.
Innovate and improve the institutional framework, and leverage the role of reform as a “testing ground.”
In January 2019, the China Securities Regulatory Commission issued the “Implementation Opinions on Establishing the STAR Market at the Shanghai Stock Exchange and Piloting the Registration-Based System,” while the Shanghai Stock Exchange released documents such as the “Shanghai Stock Exchange Rules for Listing Stocks on the STAR Market (Draft for Comments).” As a result, a comprehensive set of more inclusive listing criteria for the STAR Market gradually took shape, laying the institutional groundwork for its launch.
From the experimental field to new frontiers, every step in the STAR Market’s journey of exploration and development has been of profound significance for China’s capital market. Over the past three years, the STAR Market’s institutional framework has been steadily refined, with a series of innovative measures taking root and delivering tangible results, thereby opening up a whole new landscape for “hard‑tech” enterprises.
Looking back on the three-year journey since the launch of the STAR Market, Chen Li, Chief Economist and Director of the Research Institute at Chuan Cai Securities, remarked: “The STAR Market is a crucial component of the comprehensive registration‑based reform. By further streamlining the listing process and enhancing the efficiency of review and approval, it has created a more efficient and convenient financing channel for science and technology enterprises, enabling investors to share in their growth potential, directing more capital toward the field of technological innovation, and helping to better address the ‘bottleneck’ challenges in the tech sector.”
“Since the launch of the STAR Market, it has not only helped a number of technology‑focused companies gain access to the capital markets but has also demonstrated the success of the pilot registration‑based IPO system,” said Yang Delong, Managing Director and Chief Economist at Qianhai Open Source Fund.
Yang Delong stated that the STAR Market is positioned to “face the forefront of global science and technology, serve the main battlefields of the economy, and address major national needs,” and that it “serves science and technology innovation enterprises that align with national strategies, break through critical core technologies, and enjoy high market recognition.” It serves as an effective complement to the Main Board and the ChiNext, and constitutes an important component of China’s multi-tiered capital market.
From the Shanghai Stock Exchange’s issuance of the “Rules for Listing Stocks on the STAR Market” in March 2019 to the China Securities Regulatory Commission’s release of the “Pilot Provisions on Market-Making Trading of STAR Market Stocks” in May 2022, over the past three years, innovating and refining the institutional framework has remained the central thread guiding the development of the STAR Market, covering areas such as issuance and listing, information disclosure, and ongoing supervision.
“The company operates under a complex structure involving special voting rights and contractual control arrangements. The STAR Market’s inclusive policies have provided strong support for our IPO, significantly reducing issuance costs. Listing on the STAR Market has also enhanced our brand visibility,” said a representative from Ninebot, the first red-chip company with a VIE structure to file for a CDR offering.
In the view of Xing Xing, Director of the Bosheng Securities Research Institute and Chief Investment Advisor, the institutional innovations of the STAR Market can be summarized in four key aspects: first, pioneering a new approach to registration‑based reform that fully respects market dynamics and effectively harnesses the market’s price‑discovery function; second, lowering the thresholds for issuance and listing—easy entry, stringent oversight, and adherence to established rules; third, rigorously enforcing the information‑disclosure regime, implementing routine regulatory monitoring, and raising the cost of violations; and fourth, introducing a market‑making system tailored to market trading conditions to enhance liquidity and flexibility.
Yang Delong believes that the innovations in the STAR Market’s trading mechanisms, pricing‑by‑inquiry system, and market‑maker regime have accumulated valuable experience for refining China’s capital‑market framework. In particular, the market‑maker system, while enhancing trading efficiency, will help the STAR Market grow stronger and more robust.
Chen Li stated that, going forward, companies listed on the STAR Market should set clear goals for high-quality development, operate in full compliance with laws and regulations, and, in particular, proactively tackle a number of critical technological bottlenecks, thereby highlighting their science-and‑technology‑driven characteristics and boosting the real economy.
Hard-tech companies are accelerating their IPOs, with cumulative R&D spending exceeding 200 billion yuan.
The STAR Market was originally established with the mission of “focusing on building China’s core, cutting-edge technologies” to achieve self-reliance and controllability across domestic industrial chains. After three years of rigorous development, its commitment to “hard technology” has become increasingly evident.
According to data from Tonghuashun, STAR Market–listed companies are predominantly concentrated in the fields of next-generation information technology, biopharmaceuticals, high-end equipment manufacturing, and new materials. Specifically, there are 93 biopharmaceutical offices, 83 electronics companies (including 54 semiconductor offices), 74 machinery and equipment companies, 50 computer offices, and 41 power‑equipment companies.
In addition, from 2019 to 2021, the total R&D expenditures of STAR Market–listed companies amounted to RMB 52.74 billion, RMB 66.85 billion, and RMB 87.328 billion, respectively, with cumulative R&D spending exceeding RMB 200 billion. On average, each listed company’s R&D expenditure was RMB 123 million, RMB 156 million, and RMB 204 million, showing a year-on-year upward trend.
On April 16, 2021, the China Securities Regulatory Commission revised the “Guidelines for Evaluating Science and Technology Innovation Attributes,” adding a standard criterion requiring that R&D personnel account for more than 10% of the workforce, thereby fully recognizing the pivotal role of scientific and technological talent in innovation. From 2019 to 2021, the proportion of R&D staff to total employees among STAR Market–listed companies was 29.6%, 28.8%, and 29.5%, respectively.
As of now, STAR Market–listed companies have collectively obtained 84,988 patents, with an average of 200 patents per company. Among these, the number of invention patents stands at 64,484, averaging 152 invention patents per listed company.
Xing Xing believes that, compared with traditional industries, companies listed on the STAR Market place a strong emphasis on innovation. The level of R&D investment is a key indicator of a company’s growth potential, and offices that allocate a disproportionately high share of their resources to R&D typically exhibit stronger growth prospects.
Yang Delong stated that, as STAR Market–listed companies enter the capital market, they face higher corporate governance standards while also strengthening their ability to overcome technological challenges. The STAR Market has gradually become a leading platform for supporting research and development in “hard tech.”
“Since the launch of the STAR Market, it has provided crucial financial support to technology companies. Compared with other market segments, the STAR Market’s mechanisms are more flexible and efficient, aligning closely with the development needs of high-tech enterprises and equipping companies with richer, more effective tools and measures in areas such as fundraising, talent acquisition and retention, and R&D investment. Leveraging these mechanisms will help companies further enhance their competitiveness,” said Ma Leshi, Secretary of the Board at Qi An Xin, a leading cybersecurity office in China.
Adjusting the STAR Market’s eligibility threshold to extend innovation-driven benefits to more investors
Allowing companies that align with the STAR Market’s positioning—whether not yet profitable or carrying accumulated losses—to list on the STAR Market, thereby enabling domestic investors to share in the benefits of their innovation, is one of the market’s defining features. Data show that offices such as Elys, Mabwell Biotech, Tuojing Technology, Shanghai Yizhong, Anlu Technology, Shanghai Silicon Industry, Weijie Chuxin, Effector, Yarong Pharma, Junshi Biosciences, Dizhe Pharmaceutical, and Shouyao Holdings—companies still in the high‑investment phase of R&D—have successfully entered the capital markets thanks to this innovative regulatory framework.
Ma Lesi explained that Qi An Xin has been operating at a loss over the past few years because it adopted a development strategy characterized by substantial R&D investment. To build its R&D platform, develop new‑market products, enhance its offensive and defensive capabilities, and establish a nationwide emergency response center, the company has committed significant capital. From 2019 to 2021, its R&D expenditures totaled RMB 1.047 billion, RMB 1.228 billion, and RMB 1.748 billion, respectively, accounting for 33.20%, 29.51%, and 30.10% of its revenue, respectively.
“The company has steadily increased its investment over many years and has already achieved solid results. Revenue from new‑track products now accounts for 70% of total security products and services revenue, with several offerings maintaining industry‑leading market share and competitiveness. Meanwhile, multiple R&D platforms—including Dayu, Kunpeng, and Chuanduo—have entered mass production, significantly boosting R&D efficiency and product performance. At present, the peak of our R&D spending has passed, laying a robust foundation for enhancing operational efficiency and driving future profitability,” Ma Lese told reporters.
Regarding the adjustments to relax listing requirements for non‑profit enterprises, Zheng Hongda, chief analyst for the technology sector at Haitong Securities, stated that without the STAR Market, many Chinese semiconductor and computer software companies would have found it extremely difficult to list on the A‑share market. “The growth of technology offices depends on substantial R&D investment; if such investment is scaled back in pursuit of short‑term profit targets, it will diminish their appeal to top tech talent.”
“For technology companies, when they are still relatively small and incur losses, the market should exercise a degree of tolerance. Only then can offices in sectors like semiconductors and foundational software leverage the capital markets to drive their growth,” Zheng Hongda told our reporter. “If we wait until these companies turn profitable before taking them public, first, they will miss the opportunity to use the capital markets to grow rapidly; second, investors will be unable to share in the benefits of the rapid expansion these companies experience before profitability.”
Focusing on key industries prioritized by the state to empower high-tech enterprises and ensure their sustained growth.
The STAR Market remains committed to addressing the forefront of global science and technology, primarily serving innovative enterprises that align with national strategies, have achieved breakthroughs in critical core technologies, and enjoy high market recognition, thereby fully demonstrating the Chinese capital market’s support for technology‑driven innovation.
Zheng Hongda stated that the growth and maturation of the STAR Market can enhance China’s technological competitiveness and drive industrial upgrading.
In the photovoltaic power generation sector, when discussing the impact of listing on the STAR Market, a representative from JinkoSolar, which went public in January 2022, stated: “The IPO has helped the company further expand its financing channels, attract high-quality long-term strategic capital, and optimize its capital structure. This listing has also strengthened our production and R&D capabilities for N-type high-efficiency cells and high-performance modules, improved our financial performance, and solidified our market position.”
In the smart information terminal sector, a representative from Transsion Holdings stated during a presentation on the evolution of the mobile phone industry that commercial applications of mobile internet will continue to expand, while the technological refresh cycle for mobile communication devices is steadily shortening—posing significant technical challenges for handset manufacturers. Consequently, companies across the mobile phone value chain must continuously ramp up R&D investment and secure robust capital support to keep pace with the rapid pace of technological change in the industry.
In the biopharmaceutical sector, bringing a drug from the laboratory to market is a long and complex journey. Effectively translating scientific research into a mature product not only tests the technology’s potential for commercial application but also serves as a comprehensive assessment of a company’s management team, operational capabilities, and marketing strategies. Over the past three years, a large number of biopharmaceutical offices have listed on the STAR Market, making it the sector’s largest group. “The STAR Market has attracted a substantial cohort of fast‑growing, innovation‑driven biopharmaceutical companies, injecting fresh vitality into the industry. By drawing in a broad array of high‑tech, high‑barrier, and high‑valuation enterprises, it has also entrusted decision‑making to the market, creating a capital platform brimming with competitive dynamism. For PE, VC, and industry funds investing in innovative companies, the STAR Market has closed the investment loop more seamlessly and efficiently, fostering coordinated linkages between primary and secondary markets, optimizing industrial resource allocation, and accelerating the sector’s innovation and upgrading,” said an official from Haohai Bioscience, the first biopharmaceutical office to adopt the “H+STAR” model.
Seize opportunities to accelerate development; the sector’s earnings midpoint is shifting higher.
With the support of capital, the performance growth of companies listed on the STAR Market has been quite pronounced, leading to an overall upward shift in their earnings baseline.
According to data from Tonghuashun, from 2019 to 2021, the STAR Market’s listed companies collectively reported operating revenues of RMB 517.457 billion, RMB 615.91 billion, and RMB 843.999 billion, with average revenues per company of RMB 1.215 billion, RMB 1.442 billion, and RMB 1.971 billion, respectively. Net profits attributable to shareholders of the parent company totaled RMB 34.485 billion, RMB 53.745 billion, and RMB 95.513 billion, with average net profits per company of RMB 78 million, RMB 126 million, and RMB 223 million, respectively. During this period, 13 companies—including Transsion Holdings, LONGi Green Energy, and JinkoSolar—achieved annual revenues exceeding RMB 10 billion in 2021.
“Thanks to the establishment of a robust R&D moat, the company’s products have achieved strong competitive positioning in the global market. To date, the company has emerged as a global leader in the innovative short‑distance transportation and robotics sectors, with cumulative production of its smart electric scooters exceeding 10 million units. In 2021, the company reported revenue of RMB 9.146 billion and net profit attributable to shareholders of RMB 410 million, up 459% year over year,” said a spokesperson from Ninebot.
Chang Jing, Chairman of Roborock, stated that R&D investment and revenue generation should reinforce each other: high‑quality products deliver excellent user experiences and create value for customers, which in turn unlocks greater returns. With the support of the STAR Market, Roborock has posted steady, consecutive growth; in 2021, the company reported operating revenue of RMB 5.837 billion and a net profit of RMB 1.402 billion, with a five‑year compound annual growth rate of 84%. By 2021, the company’s transition to its own branded products was nearly complete.
At present, the STAR Market has nurtured three listed companies with market capitalizations exceeding RMB 100 billion, yet 296 companies still have combined market caps below RMB 10 billion, accounting for over 69% of the total. Among these, 107 offices have market capitalizations under RMB 3 billion.
In this regard, Zheng Hongda believes that “a portion of companies currently operating on a smaller scale also have the potential to grow gradually in the future.”

A-share turnover has exceeded RMB 1 trillion for five consecutive trading days, and brokerage offices’ top‑ranked branches have posted monthly trading volumes surpassing RMB 110 billion.

Since June, volatility in the A-share market has intensified, with trading volume exceeding RMB 1 trillion for five consecutive trading days. Meanwhile, the trading activity of brokerage branches listed on the Dragon and Tiger List often provides a clear snapshot of the latest market‑driven trading trends.
According to data compiled by Tonghuashun iFinD, since June, a total of 2,256 brokerage branches have appeared on the Dragon and Tiger List 7,906 times, with aggregate trading volume reaching RMB 110.981 billion. Among them, the top 100 branches accounted for RMB 72.921 billion in trading value, representing 66% of the combined trading volume of all 2,256 branches.
In terms of trading volume on the Dragon and Tiger List, five brokerage branches have each recorded over RMB 4 billion in transactions since June, with East Money Securities’ “Lhasa Team” accounting for four of those spots. Notably, East Money Securities’ Lhasa Donghuan Road No. 2 branch currently tops the list with RMB 6.173 billion in turnover, while its Lhasa Donghuan Road No. 1 branch ranks second with RMB 5.832 billion. The largest net‑buying stock at both branches is Zhongtong Bus. Meanwhile, Huatai Securities’ headquarters claims third place with RMB 5.399 billion in turnover, and its biggest net‑buying stock is China Resources Double Crane. East Money Securities’ Lhasa Tuanjie Road No. 2 and No. 1 branches hold fourth and fifth positions, respectively, with turnovers of RMB 4.328 billion and RMB 4.159 billion.
Over the past half month, the combined trading volume of the four brokerage branches under East Money Securities reached RMB 20.491 billion, accounting for 18% of the total trading volume across all 2,256 listed branches. Meanwhile, over the past month, the top three co‑trading branches associated with East Money Securities’ Lhasa Donghuan Road No. 2 branch—those that jointly appear on the buy‑side rankings of individual stock “Dragon and Tiger Lists”—were all its sister branches. Specifically, it has collaborated with Lhasa Donghuan Road No. 1 on 276 occasions, with Lhasa Tuanjie Road No. 1 on 241 occasions, and with Lhasa Tuanjie Road No. 2 on 225 occasions.
Notably, the brokerage sector has remained highly volatile recently. Guangda Securities alone saw its share price surge by 72.55% between June 1 and June 15, posting five consecutive daily limit-ups in just six trading days, while the SW Level‑2 Securities Industry Index rose 14.45% over the same period.
As of June 15, the average price-to-book ratio for the securities sector at the SW Level‑2 classification stood at 1.65 times; among the top 20 listed securities offices by net asset size, the average price‑earnings ratio was 18.03 times, with an average price‑to‑book ratio of 1.40 times. By contrast, Everbright Securities reported a P/E ratio of 26.61 and a P/B ratio of 1.72, with both its stock gains and its valuation metrics exceeding the industry average. In light of this, Everbright Securities has issued a special warning to investors, urging them to remain mindful of secondary‑market trading risks and to make rational, prudent investment decisions. On June 16, the stock once again surged toward the daily upper limit during trading hours; however, as the session drew to a close, its share price accelerated lower, ultimately closing down 7.23% and appearing on the Dragon and Tiger List, with net sales totaling RMB 141 million that day.
Looking at the daily stock‑by‑stock “Dragon and Tiger List” (with a five‑day statistical period), 16 stocks recorded aggregate turnover exceeding RMB 1 billion. Guangfa Securities, which has drawn significant attention, ranked fifth, with total turnover on the list reaching RMB 3.551 billion and a net purchase amount of RMB 7.7369 million. Among these, Huatai Securities’ headquarters, Shenwan Hongyuan Securities’ Chongming District, Chuanshin Street branch in Shanghai, and East Money Securities’ Lhasa Donghuan Road No. 1 branch each net‑purchased over RMB 100 million worth of Guangfa Securities, while Anxin Securities’ Xi’an Furong East Road branch, Zhejiang Commercial Securities’ Baoding Fuxing Middle Road branch, and East Money Securities’ Lhasa Tuanjie Road No. 2 branch each net‑sold more than RMB 100 million. In addition to Guangfa Securities, Caida Securities also made the list, with total turnover of RMB 150 million and a net purchase of RMB 45.1577 million. On June 16, Industrial Securities was subject to net sales totaling RMB 172 million, closing the day down 8.29%.
However, for the brokerage sector as a whole, CITIC Securities’ non‑bank financials team believes that rising risk appetite has pushed trading volume back above RMB 1 trillion, driving a corresponding revaluation of brokerage stocks. Beta‑driven rallies combined with undervaluation are hallmarks of this round of gains. At present, brokerage valuations stand at the 21st percentile since 2018, remaining near historical lows. Looking ahead, beta remains the short‑term catalyst, while supply‑side reforms and wealth‑management businesses continue to underpin medium‑ to long‑term investment themes.

Uncovering New Profit Growth Drivers: Brokerages Actively Prepare for Market-Making on the STAR Market

Securities offices are actively preparing to launch market-making services on the STAR Market. Since the pilot regulations for STAR Market market-making trading were introduced, proposals from six securities offices to engage in market-making for STAR Market stocks have been approved by their shareholders’ meetings, while another office’s proposal has been endorsed by its board of directors.
For securities offices, the introduction of a market-making regime on the STAR Market will open up substantial business opportunities. Industry observers note that, on the one hand, it can diversify investment banking revenue streams and broaden the range of services offered, while also generating positive synergies with underwriting and sponsorship activities. On the other hand, since the profitability of market-making in STAR Market equities primarily stems from capital gains on underlying positions, trading spreads, and exchange‑provided market‑making incentives, this arrangement not only expands the options available for proprietary trading but also helps reduce the volatility of proprietary investment performance, thereby enhancing the overall stability and resilience of securities offices’ earnings.
A dedicated market-making team for the STAR Market
Reviewing recent announcements, the shareholders’ meetings of Orient Securities, Guosen Securities, GF Securities, Dongwu Securities, Caitong Securities, and Founder Securities have all approved proposals to apply for authorization to conduct market-making trading in STAR Market stocks. In addition, the board of directors of Zhejiang Commercial Securities has approved a proposal to initiate market-making trading in STAR Market stocks, which is now pending submission to the shareholders’ meeting for deliberation.
“The company has established a dedicated STAR Market market-making team within its market-making division, with an adequate staffing complement. At present, we are refining our business policies and operational procedures across key areas, including business management, trade execution, risk management, internal controls, and emergency response. The next phase of preparatory work will focus on testing and enhancing our technology systems,” said a responsible official from the investment banking department of Guojin Securities.
Why are securities offices so eager to obtain market‑making qualifications on the STAR Market? Industry insiders note that securing this license would, on the one hand, enhance liquidity in the STAR Market, and on the other, create an additional profit driver, diversify business offerings, and generate positive synergies with underwriting and sponsorship activities. By offering a comprehensive suite of services—including sponsorship and underwriting, research and pricing, and market‑making—offices can further strengthen client retention and bolster their overall brand competitiveness.
Diversify securities offices’ capital utilization methods
Although market making is not traditionally part of a securities office’s proprietary trading business, from the perspective of effectively leveraging their own capital, market-making activities for STAR Market stocks can diversify how securities offices deploy their funds.
Currently, securities offices’ proprietary trading is predominantly directional, making it highly sensitive to capital market conditions and subject to significant revenue volatility. Consequently, developing non‑directional investment strategies with lower volatility has increasingly become an industry consensus. “The primary profit model for STAR Market market‑making is capturing bid‑ask spreads; while this approach is subject to market fluctuations, it generally exhibits a degree of stability, aligning with the industry’s push to explore non‑directional investment activities,” said a representative from Caitong Securities.
Chen Mengjie, Chief Strategy Analyst at Yuekai Securities Research Institute, believes that the market-making mechanism will directly enhance the efficiency with which securities offices utilize their proprietary capital and securities. Large brokerage offices are likely to leverage their equity positions—acquired through co‑investment in the STAR Market or hedging via over-the-counter options—as sources of securities for market‑making activities, which in turn requires robust interdepartmental coordination, comprehensive service capabilities, and strong capital strength. As China’s market‑making system gains wider adoption, it is expected to become a new driver of earnings growth for securities offices and one of their primary revenue streams.
The market‑making regime for STAR Market stocks places higher demands on market‑making securities offices in terms of pricing capabilities and quote‑response speed. According to a responsible official from the investment banking division of Guojin Securities, market makers can only effectively manage risks and deliver high‑quality market‑making services by thoroughly and meticulously refining their research and stock‑selection processes, closely monitoring and analyzing market conditions, and continuously honing and optimizing their trading strategies—while also strengthening risk‑control and operational management.
Small and medium-sized securities offices have opportunities to catch up.
Regarding the approval for market-making on the STAR Market, the CSRC has set stringent requirements in areas such as net capital strength, regulatory ratings, compliance and risk control, and technical systems. Industry insiders generally believe that leading securities offices possess robust capital resources and favorable ratings, have more comprehensive compliance and risk-control frameworks, and boast strong overall capabilities, giving them a distinct first-mover advantage.
However, some brokerage industry insiders point out that whether the first-mover advantage can translate into genuine business strength depends on how pilot market makers position this line of business, the degree of their prioritization, and the extent to which they allocate resources. This suggests that smaller and mid-sized brokerages also have opportunities to catch up. “For eligible small and mid-sized brokerages, this business represents a new frontier where they can excel and grow stronger. By adopting a well-defined, differentiated, and specialized approach, they can certainly carve out a high‑quality growth trajectory in the STAR Market market‑making space,” said a relevant executive from Guojin Securities’ investment banking division.
An official at Caitong Securities also believes that, although small and medium-sized securities offices may face certain disadvantages in terms of capital strength and client base, they can leverage their unique business strengths to identify and cultivate the core competencies necessary for excelling in market-making activities.

Commercial & Corporate

New Oriental’s livestream room gained over 10 million new followers in a single week, as the online education sector continues to explore its transformation.
Half a year after launching its livestream‑shopping operation, Dongfang Zhenxuan, a brand under New Oriental, has suddenly become a top-tier player in the livestream‑commerce space. Going from sparse viewers—often just a handful or a few dozen—to topping Douyin’s “Livestream Sales Chart,” with hundreds of thousands tuning in even late at night, Dongfang Zhenxuan achieved this transformation in just one week. As of 4 p.m. on June 17, its Douyin following had surpassed 13 million.
Since last year, numerous online education companies, including New Oriental, have embarked on a path of transformation. Vocational education, holistic education, and educational informatization have emerged as popular areas for this shift. Among them, New Oriental’s decision to venture into livestream‑based e‑commerce stands out as particularly distinctive. Following an unexpected surge in popularity in its livestream channel, several professionals in the online education sector have hailed it as a promising example of how such companies can pivot in response to changing market dynamics.
Suddenly skyrocketing in popularity
On December 28, 2021, New Oriental launched its livestream‑e-commerce platform, Dongfang Zhenxuan, via its official WeChat account. The company’s founder, Yu Minhong, conducted the platform’s inaugural livestream selling agricultural products, marking the beginning of New Oriental’s foray into livestream e‑commerce.
As a sub-brand of New Oriental, Dongfang Zhenxuan is backed by the New Oriental Group. In terms of its equity structure, Dongfang Zhenxuan is a subsidiary of New Oriental Online, New Oriental’s online education platform.
From education and training to livestreaming agricultural products, New Oriental’s move came as a surprise to many, and its livestreaming venture got off to a rocky start. Since the launch of Dongfang Zhenxuan, aside from a few broadcasts featuring Yu Minhong, the platform failed to generate much buzz until May this year, with both viewership and sales remaining disappointingly low at times.
However, since June this year, the bilingual Chinese–English livestream shopping approach adopted by Dongfang Zhenxuan has suddenly captured public attention, leading to a rapid surge in viewership. In particular, over the past week, the number of followers in Dongfang Zhenxuan’s livestream channel has risen steadily. As of press time, its follower count has surpassed 13 million, with more than 10 million new subscribers added in just the last seven days.
Interestingly, when Dongfang Zhenxuan first launched, New Oriental emphasized that its livestreams uniquely blend knowledge sharing with product recommendations. The platform’s host team is almost entirely composed of former New Oriental teachers, allowing viewers to learn, enjoy food‑related content, and laugh at jokes—all in one place. Recently, what has drawn fans to Dongfang Zhenxuan is precisely its hosts’ deep reservoir of knowledge and their distinctive, unconventional approach to product promotion.
Internet analyst Zhang Shule stated that the meteoric rise of Dongfang Zhenxuan was an inevitable outcome of steady, long-term preparation. After entering the livestreaming space, New Oriental gradually honed its approach and successfully broke into the market—a process that inherently involves learning. At the same time, New Oriental needed to leverage its unique strengths and selling points to gain traction; spending roughly half a year experimenting is hardly a lengthy period.
How much revenue does New Oriental generate?
The unexpected surge in popularity of its livestreaming operations has undoubtedly bolstered New Oriental’s confidence in its new‑business strategy and clarified the prospects for its transformation. However, the key question on everyone’s mind is whether livestreaming revenue can shoulder the responsibility of driving New Oriental’s broader strategic shift.
According to data from the third-party monitoring platform XinDou, as of 1:00 p.m. on June 17, Dongfang Zhenxuan’s livestream sales over the past 30 days totaled RMB 280 million. Based on Dongfang Zhenxuan’s 15% commission rate, its livestream‑driven e‑commerce commissions amounted to approximately RMB 42 million.
Over the past week, Oriental Selection’s popularity has risen sharply, with its sales volume surging compared to earlier periods. According to data from the Xindou platform, during eight livestreams held from June 11 to 17, Oriental Selection averaged RMB 29.63 million in daily sales. If this momentum continues, its monthly sales could reach approximately RMB 900 million, generating substantial revenue for New Oriental Online and New Oriental.
In a recent research report, Tianfeng Securities noted that Dongfang Zhenxuan’s bilingual livestreaming on Douyin has broken into broader audiences, with its GMV (Gross Merchandise Volume) surging significantly. This is expected to directly boost the revenue and profits of New Oriental Online and related entities, while also diversifying its future growth drivers. Meanwhile, Guohai Securities’ report highlights that Dongfang Zhenxuan’s daily GMV continues to hit new highs, suggesting substantial room for further growth going forward.
In fiscal years 2020 and 2021, New Oriental Online reported total revenues of RMB 1.08 billion and RMB 1.418 billion, respectively. Given its relatively modest scale, livestreaming e‑commerce is likely to become a significant driver of its revenue going forward. By contrast, New Oriental, which operates on a much larger scale, posted revenues exceeding RMB 20 billion in both fiscal years 2020 and 2021; thus, relying solely on livestreaming sales to offset losses in its K‑9 business would be no easy feat.
“Livestreaming e‑commerce is merely a stopgap measure for New Oriental and will not alter its core business or overall strategic direction in the slightest. In other words, livestreaming is a lifeline that buys the company more time and resources to pursue its educational vision,” said Zhang Shule.
Although it has high hopes for livestreaming e-commerce, New Oriental has not abandoned its education and training business; livestreaming is merely one component of the company’s broader transformation strategy.
In its financial report released in February this year, New Oriental Online stated that, on the one hand, it will continue to expand its existing university and institutional business segments, as well as the company’s online education products and services; on the other hand, the company is actively exploring new initiatives to broaden its customer base and product offerings, while transforming itself to meet the evolving regulatory and educational landscape.
New Oriental Online stated that the company has been exploring new initiatives, including livestreaming sales of agricultural and other products, as well as developing innovative educational smart hardware, with the aim of driving sustained business development and growth in an innovative and sustainable manner.
New Oriental stated that the company will continue to redirect its core resources toward educational products and services unrelated to K‑9 academic tutoring, such as exam preparation courses, adult language training programs, and instructional materials. Additionally, leveraging its accumulated educational resources, the company will explore other business opportunities and cultivate new drivers of growth.
Many live streaming rooms
"Deserted by visitors"
New Oriental is far from the only online education company to venture into livestream‑based e‑commerce. Companies such as TAL Education Group, Yuanfudao, and Gaotu have long since launched their own livestream channels. Unlike New Oriental, which has spun off its livestream‑selling operations into an independent brand, most online education offices treat livestream commerce merely as a marketing channel, with their respective channels generally attracting modest levels of engagement.
Take Yuanfudao as an example: on the Douyin platform, it maintains multiple verified accounts, including “Yuanfudao Official Flagship Store,” “Yuanfudao Official Live Room,” and “Yuanfudao Live Room.”
According to TikTok data, over the past year, the “Yuanfudao Official Flagship Store” has hosted 103 live streams, averaging one every three days. Its livestream sales primarily feature educational supplementary books, notebooks, and merchandise. As of now, the account has only 272,000 followers, and during most of its broadcast hours, the concurrent viewership remains below 100.
Another Douyin account under Yuanfudao, called “Yuanfudao Live Room,” has hosted a total of 70 live streams over the past year, but as of now, it has only 108,000 followers. Meanwhile, the “Yuanfudao Official Live Room” has conducted 145 live broadcasts in the last year, yet its follower count stands at just 16,000.
On June 17, five accounts under the TAL Education Group’s Xueersi brand—including the “Xueersi Official Flagship Store,” “Xueersi Secret Tips,” and “Xueersi Junior & Senior High School”—launched live streams on Douyin.
The reporter noted that the “Xueersi Official Flagship Store” has hosted more than 400 livestreams over the past year, primarily selling books, supplementary learning materials, and reading‑pen products. In most cases, the number of concurrent viewers in its livestream room hovers around 60, while other rooms typically attract only about 10 to 20 viewers at a time.
Live-streaming rooms hosted by online education companies such as NetEase Youdao and Gaotu typically have fewer than 100 concurrent viewers. The hosts’ enthusiastic presentations stand in stark contrast to the sparse, subdued atmosphere.
Even though Dongfang Zhenxuan has recently become a top-tier livestreaming brand, the viewership of other livestreaming channels under New Oriental has not risen significantly in tandem. Taking the data from June 17 as an example, while Dongfang Zhenxuan’s livestream maintained a steady concurrent audience of around 70,000, “New Oriental Livestream” typically drew just over 1,000 viewers at most times.
For most online education companies, engaging in livestream‑shopping is more of a supplement to their existing marketing channels. Without the dramatic backdrop of a cross‑industry transformation or distinctive branding like “bilingual livestream selling,” breaking through in the fiercely competitive livestream‑e-commerce space is no easy feat.
Paths Beyond Live Streaming
Since the “Double Reduction” policy was introduced at the end of July 2021, nearly a year has passed. Over the past year, transformation and upgrading, along with cost reduction and efficiency enhancement, have become top priorities for many online education companies.
A review by a Securities Times reporter reveals that the primary transformation paths for online education companies include vocational education, quality‑oriented education, educational informatization, and international expansion.
Currently, some companies that are making rapid progress have already achieved breakthroughs in their new business lines. Take NetEase Youdao as an example: excluding its K‑9 academic tutoring business, its revenue for the first quarter of this year increased by 26.6% year over year. Notably, revenue from new segments such as adult and vocational education, as well as smart hardware products, posted significant growth.
Online education companies such as Gaotu, Yiqi Education, and Worry-Free English all reported year-over-year growth in new‑business revenue during the first quarter of this year. Against a backdrop of supportive government policies and rapid market expansion, the prospects for these offices’ digital transformation are expected to become increasingly clear.
“In the past, online education focused too heavily on the K‑12 sector, which left it particularly vulnerable to the upheaval brought about by the ‘double reduction’ policy. For online education platforms, there remains ample room for growth both within and beyond this segment—whether in vocational education, skills training, or even teaching square‑dance routines. Even English‑language instruction, the very field where New Oriental first made its mark, can still uncover new blue oceans by deepening its expertise in niche, specialized areas,” said Zhang Shule.
“The unexpected surge in popularity of Dongfang Zhenxuan is a very positive sign,” an executive at an online education company told our reporter. “Dongfang Zhenxuan began broadcasting last December, and it’s now been half a year. In the past few months, its livestream room rarely drew much attention—on some days, sales barely reached a few thousand yuan, making the journey quite challenging. But its recent explosive growth demonstrates that even education companies venturing into livestream e‑commerce can rise to the top. This is an excellent example of transformation and has boosted confidence across the board.”

Audi Group’s 2021 Financial Report: Sales revenue reached €53 billion, with continued progress in electrification and digital transformation.
In recent years, the real estate sector has undergone significant adjustments, with a major shift in regulatory approaches. Over the long term, de‑financialization of the industry has emerged as the overarching trend, “housing is for living, not for speculation” has become the bottom line, and the “high‑turnover” business model is no longer sustainable.
Some property developers anticipated policy shifts in advance and made timely adjustments, enabling them to thrive. Others moved a bit too slowly, resorting to drastic measures to survive—and they did manage to stay afloat—but some companies refused to acknowledge these changes and ultimately collapsed.
In the short term, the real estate sector faces the risk of a hard landing due to its rapid downturn, prompting policy adjustments; some cities have already fully deregulated their housing markets. Nevertheless, the overall market remains in decline. Where will the real estate industry head next? How will property developers survive? And how should individual investors respond?
If one were to name the industry that has undergone the most dramatic transformation in recent years, real estate would undoubtedly take the top spot.
Once upon a time, real estate development in China was widely regarded as the most lucrative industry, attracting eager investors in the capital markets. However, as the traditional real estate development sector has entered a prolonged downturn, real estate stocks have been consigned to the sidelines in the equity market.
“Ducks are the first to know when the spring river warms.” It’s not just the capital markets— even the leading real estate developers themselves are stepping back at an accelerating pace.
Vanke, the real estate giant that was among the first to go public, has openly stated that in ten years it will no longer be a real estate company. Chairman Yu Liang even went so far as to say he would remove the word “real estate” from the names of its regional subsidiaries, adding, “Anyone who still calls Vanke a residential developer can take it up with me.”
In recent years, Wanda Group, once led by China’s former richest man Wang Jianlin, has also shifted its strategy, moving from relentless acquisitions to aggressive disposals. It has steadily sold off its real estate assets, embracing a light‑asset business model. As Wang Jianlin put it, “By 2020, Wanda will no longer generate revenue from real estate sales.”
In addition, real estate giants such as Poly, Longfor, and Sino-Ocean have also rebranded, replacing “real estate” with “development” or “group,” with virtually every major player you can think of rushing to de‑real‑estate themselves.
Why are investors across the board suddenly and unusually “de‑real‑estate‑izing”? The root cause is that making money in the real estate development sector has become increasingly difficult. In an era of “housing is for living, not for speculation,” developers’ traditional business models can no longer sustain themselves.
In the past, real estate developers’ core strategy was simple: borrow aggressively from financial institutions, collect hefty down payments from homebuyers, and then use those funds to acquire land and commission construction. With homes selling easily and housing prices on the rise, even highly leveraged operations seemed risk-free—essentially allowing them to sit back and count their money.
However, this highly leveraged business model is now difficult to sustain. Against the backdrop of macroeconomic policies such as “housing is for living, not for speculation” and “preventing and defusing financial risks,” the real estate sector has entered a painful phase of deleveraging.
First, debt‑financing channels have been comprehensively tightened, making deleveraging a prevailing trend for property developers.
Bank credit remains one of the primary sources of financing for the real estate sector, accounting for roughly 14% of total funding. In recent years, as financial regulation has tightened, the volume of new real estate loans has steadily declined. At the same time, oversight of non‑standard financing channels—such as real estate investment trusts—has been further strengthened, effectively closing off many previously used off‑balance‑sheet avenues for circumventing regulatory constraints. Under these circumstances, property developers have been forced to turn overseas to raise capital. An increasing number of Chinese offices are issuing bonds abroad, but borrowing costs have risen sharply; yields above 10% are no longer uncommon, with Tahoe’s 2019 U.S. dollar bond carrying a coupon rate as high as 15%. The introduction of the “three red lines” policy has imposed even stricter debt‑management constraints on developers. Coupled with substantial maturing liabilities, this has led to frequent debt crises, exemplified by companies such as Evergrande and Huaxia Happiness.
Second, the pre-sale system is trending toward tighter regulation, and relying on advance payments to leverage financing is no longer viable.
In recent years, a host of issues have emerged—ranging from quality problems and contractual disputes to delayed deliveries, reduced specifications, and even cases of developers absconding with funds and leaving projects unfinished. As a result, regulators have tightened oversight of pre-sale housing funds. If the pre-sale system were abolished, property developers would lose their zero‑cost leverage through advance payments, so it’s hardly surprising that many are now facing severe liquidity crises. This has little to do with a company’s size; some developers, in fact, have very little net equity, relying almost entirely on debt—and paradoxically, the larger they grow, the more vulnerable they become. So the question arises: what lies ahead for real estate developers? Is there still a way out? In the short term, while China’s real estate sector does face localized overcapacity, it hasn’t yet reached a point where it needs to disappear entirely. After all, China still has 10 to 20 years of urbanization ahead, meaning there will continue to be demand for new housing. However, unlike in the past, the long-term trend is becoming increasingly clear: the overall pie of new‑home development is shrinking, which will inevitably accelerate industry consolidation and concentrate market share among leading players. That said, neither large nor small and medium‑sized developers can buck the broader trend of contraction; all must speed up their transformation. At present, such transformation essentially boils down to a few key directions:
First, we are upgrading our internal quality by focusing on niche, high‑end projects that deliver premium living experiences. For example, we are developing green, boutique‑style, and smart homes, as well as specialized real estate offerings tailored to the needs of seniors and young families.
Second, we will pursue vertical industry expansion by extending along the real estate value chain, reaching upstream and downstream segments such as home decoration, property management, leasing, and smart communities. For example, we will develop one-stop home‑decoration services, property management, long‑term rental apartments, and build community‑focused O2O platforms.
Third, horizontal industrial integration—namely, penetrating into sectors such as healthcare, education, technology, cultural tourism, and logistics. For example, Vanke’s Wanwei Logistics, after six years of development, has risen to the forefront of the industry.
Transformation is an exceedingly difficult undertaking. While some real estate companies have achieved success, for many others still in the exploratory phase, drawing appropriate lessons and fostering innovation have become pressing priorities. It is undeniable that, amid the broader deleveraging trend, numerous developers have resorted to layoffs over the past two years; yet at the same time, many offices continue to hire across various departments. After all, with annual sales exceeding 15 trillion yuan, the industry remains substantial. From a sector-wide perspective, the areas currently exhibiting the strongest demand for talent are asset management and property operations, alongside the technology segment. For instance, developers’ property‑management, commercial‑real‑estate, long‑term rental‑apartment, and buy‑to‑let divisions will sustain their need for skilled professionals. Earlier, Longfor set a new internal target: by 2024, its operating‑business revenue would surpass 100 billion yuan, joining its development business as a pillar of the hundred-billion‑yuan scale. Undoubtedly, these segments all point toward managing existing assets. The golden age of real estate development has long since passed; now, the era of optimizing and operating existing assets has arrived. On May 25, the State Council issued a landmark document titled “Opinions of the General Office of the State Council on Further Revitalizing Existing Assets and Expanding Effective Investment.” Following measures to address non‑performing individual loans and provide relief to troubled developers, China’s real estate sector is poised to unlock an even larger market—reviving trillions of yuan in idle, underutilized assets. After years of investment and construction, China’s infrastructure stock has reached a scale of tens of trillions of yuan, leaving ample room for revitalizing these existing assets. At the same time, further unlocking the potential of existing assets represents a key lever for expanding effective investment. The document calls for focusing on priority sectors, regions, and enterprises, and for effectively advancing the revitalization of existing assets through multiple channels—promoting the healthy development of REITs, standardizing and orderly advancing PPP projects, and actively facilitating compliant property‑rights transactions. In recent years, the national policy emphasis on real estate transformation—covering asset management, industrial parks, logistics and warehousing, urban renewal, as well as project‑delivery services, new infrastructure, and rental housing—continues to highlight significant talent shortages across these fields.

Tongwei Co., Ltd. has once again secured a massive 50.9-billion-yuan contract, with the photovoltaic company going all out to lock in raw-material supplies.
On the evening of June 17, Tongwei Co., Ltd. announced that four of its subsidiaries recently signed long-term polysilicon sales contracts with Qinghai Gaojing, with a projected total sales value exceeding RMB 50.9 billion (excluding tax).
This is the second major silicon‑material supply contract that Tongwei Co., Ltd. has signed this year. In March, Tongwei entered into a two‑year agreement with LONGi Green Energy to supply 203,600 tonnes of polysilicon, with an estimated total value of RMB 44.2 billion. As a wave of photovoltaic projects commences, demand for solar panels has surged, driving strong growth in the upstream silicon‑material market. To secure stable supplies of raw materials, PV companies are increasingly locking in long‑term silicon‑material contracts.
Tongwei Co., Ltd. has locked in nearly RMB 100 billion in orders.
The announcement indicates that from 2022 to 2026, Qinghai Gaojing will purchase a total of no less than 216,100 metric tons of silicon material from subsidiaries of Tongwei Co., Ltd. The specific order prices will be negotiated on a monthly basis, and the total contract value will be determined by the final transaction amount.
Based on the average domestic transaction price of 266,100 yuan per ton (tax included) for monocrystalline dense silicon material, as announced by the Silicon Branch of the China Nonferrous Metals Industry Association on June 15, the total sales revenue is projected to exceed 50.9 billion yuan.
Tongwei Co., Ltd. stated that the execution of this contract will facilitate the stable sales of the company’s polysilicon products, align with its future business strategy, and have a positive impact on its financial performance.
The announcement indicates that Qinghai Gaojing has a registered capital of RMB 1 billion, with Guangdong Gaojing Solar Technology Co., Ltd. (hereinafter referred to as “Gaojing Solar”) holding 100% of its shares. The latter primarily engages in the research, development, and manufacturing of large‑size silicon wafers and ingots.
As early as 2020, the State-owned Assets Supervision and Administration Commission of Zhuhai City signed an investment‑implementation cooperation agreement with Gaojing Solar for a photovoltaic new‑energy project with a total investment of approximately RMB 17 billion. The agreement covers a 50 GW photovoltaic large‑wafer project to be developed in three phases.
On June 10, Gaojing Solar announced that the first and second phases of its 50 GW silicon wafer project have already reached full production ahead of schedule. Meanwhile, the third phase—a 20 GW project originally slated to commence in 2023—will now begin construction this year, accelerating progress toward achieving the company’s 50 GW capacity target.
In late May this year, Gaojing Solar signed cooperation agreements with the Yibin Municipal People’s Government and the Xuzhou District People’s Government to develop a project that will produce 50 GW of direct‑drawn monocrystalline silicon ingots and 30 GW of monocrystalline silicon ingot‑sawing and slicing capacity annually, with a total investment of RMB 22 billion.
High‑tech Solar is not the only company to have signed a long-term contract securing silicon‑material capacity from Tongwei Co., Ltd. On the evening of March 21, Longi Green Energy and Tongwei Co., Ltd. entered into a two-year silicon‑material supply agreement for 203,600 tonnes, with an estimated total value of up to RMB 44.2 billion.
Competing for upstream raw material resources
Against the backdrop of a broad global consensus on vigorously developing clean energy, photovoltaic (PV) installed capacity continues to surge, while prices for PV-grade silicon feedstock remain on the rise. Companies across the industry are rushing to sign long-term contracts to secure upstream raw material supplies.
Among them, Longi Green Energy has, over the past year, signed long-term procurement contracts with several silicon‑material suppliers, including Jiangsu Zhongneng and Xinte Energy, to secure its silicon‑material supply.
In addition, on February 27, Daquan Energy announced that it had entered into a long-term polysilicon sales contract with a customer, under which it is expected to supply 30,000 tons of solar-grade, ultra‑premium, wash‑free monocrystalline‑grade polysilicon between 2022 and 2026. The average monthly procurement volume is projected at 500 tons, with total sales revenue estimated at RMB 7.26 billion, inclusive of tax.
The Silicon Branch of the China Nonferrous Metals Industry Association (hereinafter referred to as the “Silicon Branch”) notes that, with silicon wafer margins remaining relatively robust, both existing and expanding producers are highly motivated to maintain high capacity utilization rates. Meanwhile, the ability to secure a stable supply of raw materials significantly influences profitability. Consequently, the current scramble to procure polysilicon has resulted in demand for polysilicon continuing to rise without abating.
“Polysilicon, an indispensable upstream segment in the current development of the photovoltaic industry, also represents the link with the smallest production capacity within the main industrial chain. Against the backdrop of growing downstream demand, polysilicon prices have received solid support,” Tongwei Co., Ltd. stated on June 14 on its investor‑relations platform.
According to data released by the Silicon Industry Branch, this week domestic monocrystalline recast silicon material prices ranged from RMB 263,000 to RMB 270,000 per ton, with an average transaction price of RMB 268,500 per ton, up 0.41% week over week. Monocrystalline dense‑grade silicon prices ranged from RMB 261,000 to RMB 268,000 per ton, with an average transaction price of RMB 266,100 per ton, up 0.42% week over week.
Tongwei Co., Ltd. believes that clean energy and the photovoltaic industry have tremendous growth potential, with the entire value chain set to benefit from the sector’s robust expansion. The silicon‑material segment, in particular, is poised to capture a substantial share of the industry’s growth dividends.
However, some industry insiders predict that silicon‑material prices could decline within the year. In a research report, Everbright Securities noted that, as more manufacturers ramp up silicon‑material production capacity, silicon‑material prices are expected to enter a downward cycle in the fourth quarter of 2022, and the ensuing price drop will trigger a reallocation of profits across the supply chain.

Country Garden has launched a tender offer to repurchase nearly US$700 million in bonds, raising hopes that property developers can navigate the peak debt‑repayment period smoothly.
On the evening of June 15, Country Garden announced that it is making a tender offer to repurchase its 4.75% notes due July 2022, offering cash at a purchase price of US$1,000 per US$1,000 principal amount for any and all outstanding notes not yet redeemed.
Country Garden stated that the company has already made advance arrangements for the disbursement of funds required for this tender offer to repurchase its bonds. The company will continue to monitor market conditions and does not rule out undertaking additional proactive debt management measures in the future, such as tender offers or secondary‑market buybacks, depending on developments in the secondary market and the company’s own financial position.
In this regard, analysts believe that launching a tender‑offer buyback is a more efficient and transparent form of proactive debt management, helping companies further optimize their debt structure. At the same time, this move can bolster investor confidence in the sector and in high‑quality private property developers.
Meanwhile, with the recent clear signaling of policies aimed at stabilizing the property sector and a gradual improvement in financing conditions, leading developers—including Country Garden—have been actively repaying their debts, setting a positive example. As a result, the real estate industry as a whole is expected to experience a wave of debt repayments in the second half of the year.
Proactive debt management underscores “confidence”
According to the latest announcement from Country Garden, the total principal amount of the notes subject to this tender offer is US$700 million, with US$683 million currently outstanding in the market. The tender offer will expire at 4:00 p.m. London time on June 22, 2022. The company will fund the offer using internal resources, and the expected settlement date is around June 24, 2022.
Adopting a proactive debt‑management strategy through tender‑to‑repurchase also underscores the confidence of this leading private real estate developer, built on years of prudent operations. According to its latest financial report, as of year‑end 2021, the company’s cash balance stood at RMB 181.3 billion; total borrowings had declined to RMB 317.9 billion, with short‑term debt accounting for just 24.9%; its net debt-to-equity ratio was only 45.4%, and its cash‑to‑short‑term‑debt ratio exceeded 2.3 times.
While continuously optimizing its debt structure and ensuring robust cash flow, Country Garden has also maintained diversified and unimpeded access to financing channels. Since December 2021, the company has successfully issued a series of direct financings—covering various markets and instruments—including corporate bonds, supply-chain asset-backed securities, and overseas financing. Furthermore, on March 1 this year, it secured an issuance quota of RMB 5 billion in medium-term notes from the National Association of Financial Market Institutional Investors.
Notably, on the evening of May 20, Country Garden announced that it had completed the bookbuilding process for its first tranche of 2022 corporate bonds, “22 Bidi 01,” with an issuance size of RMB 500 million and a coupon rate of 4.5%.
This is among the first domestically issued corporate bonds by private real estate developers to incorporate credit protection instruments and successfully close a bond offering. Previously, Country Garden, Longfor, and Midea Real Estate were selected by regulatory authorities to join the pilot program for issuing bonds.
In this regard, analysts believe that Country Garden’s selection as a model property developer and its pioneering use of a “bond issuance plus credit protection” financing structure unequivocally reflects the regulatory authorities’ recognition of the company’s sound fundamentals and its ability to maintain sustainable operations.
Debt repayment peaks are approaching, and the financing environment is easing.
According to the latest statistics from the third-party research office CRIC, from June to July, the total amount of maturing domestic and overseas debt for 200 core real estate developers reached approximately RMB 175.5 billion, accounting for about 61% of the total maturities in the second half of the year. Among them, private‑sector developers face particularly heavy repayment pressures: over the past two months, their aggregate maturing debt totaled roughly RMB 117.8 billion, representing 67% of the overall figure.
However, in recent months, a series of supportive policies have been introduced. The Politburo meeting of the CPC Central Committee has repeatedly addressed real estate issues, emphasizing the need to effectively manage key risks, encouraging local governments to tailor real estate policies to their specific circumstances, and supporting both first-time homebuyers and those seeking to upgrade their housing. Additionally, measures have been taken to optimize oversight of pre-sale funds for commercial housing.
The financing environment for property developers is also showing signs of recovery. The aforementioned real estate company’s bond issuance, which for the first time utilized credit protection instruments, has been widely seen as a clear signal from regulators to support stable corporate financing and bolster market confidence. Analysts note that credit protection contracts represent an innovative measure to broaden financing channels for private enterprises and alleviate their funding constraints; by leveraging their own creditworthiness to provide direct credit enhancement for reference obligations, securities offices and other sellers help strengthen issuers’ ability to raise capital through bond markets.
Data from the China Index Academy show that, boosted by supportive policies, corporate bond issuance by property developers saw significant month‑over‑month and year‑over‑year growth in May. This marks the first time since the fourth quarter of 2021—when financing conditions tightened—that both month‑over‑month and year‑over‑year growth have been recorded, with a notable rebound in private‑sector bond issuance playing a key role. In May alone, private developers including Longfor, Country Garden, Midea, and Xincheng utilized credit protection instruments to issue four bonds, raising RMB 3 billion; meanwhile, several other private offices indicated they have begun preparing for upcoming bond offerings.
With the real estate market likely to rebound, an improving financing environment, and easing liquidity pressures, property developers are poised to navigate this round of debt‑repayment peaks smoothly. In fact, in addition to Country Garden’s proactive debt‑management strategy—announcing a tender offer to repurchase its notes—several listed property offices, including Nanshan Group, Beijing Capital Development, and Yuexiu Group, have recently disclosed comprehensive financing plans, with proceeds primarily earmarked for repaying maturing debt and bolstering working capital.
According to information obtained by reporters from Country Garden, following this repayment, the company will have no outstanding U.S. dollar bonds maturing within the year.

Taxation TAXATATION
Notice of the State Taxation Administration on Matters Relating to the Phased Acceleration of the Processing of Export Tax Refunds
To the tax bureaus of all provinces, autonomous regions, municipalities directly under the central government, and cities separately listed in the national plan; to the Commissioner’s Offices of the State Taxation Administration stationed in various localities; and to all units within the Administration:
To thoroughly implement the decisions and arrangements of the CPC Central Committee and the State Council on further stabilizing foreign trade and foreign investment, to fully and faithfully carry out the requirements of the State Council Executive Meeting regarding the temporary acceleration of export tax refund (exemption) processing for enterprises with good credit standing, and to promote the stabilization and quality improvement of foreign trade while raising the level of opening-up, the following clarifications are hereby issued:
I. Temporarily Accelerating the Processing of Export Tax Refunds
From June 20, 2022, to June 30, 2023, the tax authorities will reduce the average processing time for normal export tax refunds or exemptions for Category I and Category II export enterprises to within three working days. Upon expiration, the processing time requirements will be further clarified based on developments in foreign trade and actual implementation.
Category I and Category II export enterprises refer to those whose export tax rebate management classification is either Category I or Category II.
Normal export tax refund (exemption) refers to export tax refund (exemption) transactions that have been reviewed by the tax authorities, comply with current regulations, and are free from any suspicions of tax fraud or other irregularities.
II. Effectively carry out publicity, interpretation, and taxpayer guidance.
(1) Strengthen training for frontline staff. Tax authorities at all levels shall ensure that frontline personnel—such as those working on the 12366 taxpayer service hotline and in tax service halls—are adequately trained on the requirements to further accelerate the processing of export tax refunds. Emphasis should be placed on intensive training covering the specific measures outlined in this notice to expedite refund processing, the content of the earlier “Notice from the State Taxation Administration and Nine Other Departments on Further Enhancing Support for Export Tax Refunds to Promote Stable Foreign Trade Development” (Tax General Letter [2022] No. 36, hereinafter referred to as the “Ten-Department Notice”), as well as the required submission materials and operational guidelines, so as to comprehensively improve their professional competence and service capabilities.
(2) Implement targeted policy outreach. Tax authorities at all levels shall, in accordance with the mechanism for precisely delivering tax and fee preferential policies, utilize their provincial electronic tax bureaus to disseminate information on measures aimed at temporarily accelerating the export tax rebate process. Such outreach should be tailored to eligible entities, including Category I and Category II exporters, and proactively leveraged through local taxpayer‑administration communication platforms and other channels, with differentiated messaging designed to address the specific needs of different types of enterprise personnel.
(3) Strengthen taxpayer outreach and guidance. Tax authorities at all levels should, in light of local conditions, develop targeted promotional materials on the measures to expedite the processing of export tax refunds during this phase, and carry out extensive yet practical publicity through tax authority websites, taxpayer‑administration communication platforms, and new media channels. Further reinforce the grid‑based service responsibilities of the competent tax authorities, providing policy briefings and specialized guidance tailored to different eligible entities. This includes highlighting the significance of the temporary acceleration of export tax refund processing, clearly explaining the contents of this notice, and offering hands-on instruction on operational procedures to ensure taxpayers understand the policies, can file returns, and are proficient in using the relevant systems. In addition, taxpayers should be reminded to strictly strengthen internal risk controls to prevent any tax‑related violations or non‑compliance.
III. Job Requirements
(1) Enhance ideological awareness and strengthen organizational leadership. Temporarily expediting the processing of export tax rebates for enterprises with strong credit ratings is an important policy decision made by the CPC Central Committee and the State Council to further stabilize foreign trade and foreign investment. Building on the “Notice of Ten Departments,” this measure represents a key step by tax authorities to support the steady development of foreign trade and better serve the broader goal of high‑level opening-up. Tax authorities at all levels must earnestly assume their political responsibilities, deepen their understanding, and, in conjunction with self‑inspection and rectification efforts following central inspection tours, strengthen organizational leadership, intensify supervision and guidance, and ensure accountability. Adhering to the five coordinated measures—“fast refunds, vigorous crackdowns, rigorous investigations, external oversight, and sustained publicity”—they should ensure that the average processing time for normal export tax refunds (or exemptions) for Category I and Category II export enterprises in their respective regions does not exceed three working days.
(II) Strengthen overall coordination to ensure prompt tax refunds. Provincial tax authorities must earnestly assume primary responsibility, make advance arrangements, and do their utmost to ensure the stable operation of information systems. They should closely monitor progress across regions and promptly provide guidance and oversight to grassroots tax authorities to ensure thorough and meticulous implementation. Enhanced interdepartmental collaboration among export tax rebate, planning and accounting, tax administration and technology, information centers, and data risk management units is required to facilitate timely information sharing and ensure that tax refunds are processed on schedule. Tax authorities at all levels must coordinate vertically and work closely together, pooling their efforts to guarantee swift tax refunds.
(3) Strengthen risk prevention and control, and intensify efforts to combat tax fraud. Tax authorities at all levels must coordinate the acceleration of export‑tax rebate processing with robust measures to prevent and crack down on export tax fraud, officely upholding a bottom‑line mindset. While meeting statutory deadlines and expediting export‑tax rebate procedures, they must also ensure that an undue focus on speed does not compromise risk‑management controls against export tax fraud. Authorities should enhance risk analysis and response mechanisms for export‑tax rebates, fully leverage the six‑department mechanism for routine anti‑fraud and anti‑fictitious‑transaction enforcement, and strengthen interagency collaboration with public security organs, procuratorates, customs, the People’s Bank of China, and the State Administration of Foreign Exchange. They must closely monitor emerging trends and developments in export tax fraud, maintain a stringent, high‑pressure stance against tax‑related illegal and criminal activities involving “three falsities,” and thereby foster a fairer and more equitable business environment.
(4) Strengthen internal oversight and rigorously investigate risks and problems. While implementing the new measures to accelerate export tax rebate processing, tax authorities at all levels must fully uphold the spirit of self-revolution, maintain a commitment to self‑improvement, and ensure that “strict scrutiny of internal errors” is integrated throughout every stage and link of policy implementation. They should rigorously investigate dereliction of duty and negligence—such as inaction, slow action, or improper action—by tax officials in carrying out these measures, with particular emphasis on illegal activities like colluding with external parties to fraudulently obtain export tax rebates. A thorough “dual investigation” approach must be adopted for each case, ensuring swift, stringent, and comprehensive enforcement.
(5) Proactively accept oversight and solicit input from all stakeholders. As tax authorities at all levels strive to accelerate the processing of export tax refunds, they should make full use of mechanisms such as the direct‑link working mechanism for implementing tax and fee support policies, “tax and fee service product experience” initiatives, government websites, and the bureau director’s mailbox, to sincerely welcome public scrutiny, proactively seek feedback from diverse sources, and diligently collect, analyze, address, and respond to the views and suggestions of all parties. This will ensure that taxpayers and other relevant stakeholders receive timely and effective responses to their concerns, thereby continuously refining and improving service measures.
(6) Continue to carry out extensive publicity to foster a favorable environment. Tax authorities at all levels should proactively engage in policy communication, continuously monitor taxpayers’ benefits and the effectiveness of policy implementation, strengthen liaison with the media, and widely publicize the positive impacts of the “Notice from Ten Departments” and the new measures to further accelerate export tax rebates on stabilizing and upgrading foreign trade, enhancing the level of opening-up, and maintaining macroeconomic stability, thereby creating a conducive public‑opinion climate.
Tax authorities at all levels shall closely monitor progress, promptly summarize achievements, and report any issues encountered in implementation to the State Taxation Administration without delay.

Increasing the scale and accelerating the pace of carryforward VAT refunds to help businesses overcome difficulties.
Tianke Mineral Co., Ltd. of Mingguang City, Anhui Province, is a small and micro enterprise primarily engaged in the processing and sale of attapulgite. According to the company’s legal representative, Yang Fuming, following the recent receipt of nearly RMB 300,000 in additional input VAT credit refunds, the company plans to allocate RMB 100,000 toward upgrading and modernizing its thermal‑control furnace equipment. This investment is expected to double production capacity, significantly improve product quality, reduce sulfur dioxide emissions, and enhance the company’s competitiveness. The remaining funds will be used to purchase raw materials and expand production.
“Due to the pandemic and other factors, our sales channels have been disrupted, and coupled with aging equipment, this has severely hampered both production efficiency and product quality. The tax rebate has provided much-needed relief, helping small businesses like ours regain momentum,” Yang Fumeng remarked with emotion.
The refund of outstanding input VAT credits is a key component of this year’s tax and fee reduction policies, and Tianke Minerals Co., Ltd. is among the many entities that have benefited from it.
Since the beginning of this year, the Ministry of Finance, in coordination with relevant departments, has fully implemented the large-scale value-added tax credit refund policy, steadily accelerating the refund process and strengthening financial support, thereby providing tangible relief to businesses and yielding significant results. According to data released by the tax authorities, from April 1 to June 9, a total of RMB 1.43 trillion in new VAT credit refunds was processed. Adding this to the RMB 123.3 billion refunded in the first quarter under previously introduced credit‑refund policies, cumulative refunds have reached RMB 1.55 trillion, more than double the total amount refunded for the entire last year.
Li Xuhong, Director of the Academic Committee of the National Accounting Institute in Beijing and Director of the Research Institute of Fiscal and Tax Policies and Applications, stated that large-scale refunds of outstanding input VAT credits represent one of China’s key measures to innovate macroeconomic regulation. These measures not only help address, to a certain extent, the longstanding issue of accumulated credit balances that have built up over many years—thereby upholding the neutrality principle of the value-added tax—but also alleviate funding constraints faced by enterprises of varying sizes, serving as a “booster” for economic development, enabling the policy of “letting the water rise to nurture the fish,” and invigorating market vitality.
Early departure, quick departure; refund all that is due.
The large-scale policy of refunding outstanding input VAT credits has been implemented since April 1 this year. The Anhui Provincial Finance Department has treated the effective implementation of this policy as a major political task, meticulously refining and solidifying its measures to ensure that the central government’s policies are swiftly put into practice in Anhui and yield early results.
“Compared with previous measures, the new policy on refunding outstanding input VAT credits has broadened the scope of eligible taxpayers: enterprises in six designated sectors that meet the criteria can all benefit, with priority given to small and micro businesses,” said Zuo Zizhi, Director of the Budget Division at the Anhui Provincial Department of Finance. He added that, building on this, the eligibility requirements have also been relaxed—any taxpayer whose incremental outstanding input VAT credit for the current month exceeds zero may apply for a refund. After applying for a refund of their existing outstanding credits, enterprises may continue to apply for refunds of their incremental credits as well.
“The intensified tax and fee reduction policies have injected stronger momentum into our development. So far this year, the company has benefited from nearly RMB 30,000 in exemptions and reductions on the ‘six taxes and two fees,’ including urban maintenance and construction tax, the education surcharge, and the local education surcharge,” said Xu Zhizhen, General Manager of Hefei Dahui Gene Technology Co., Ltd. “As an R&D‑focused enterprise, both our investment in talent and in equipment are inseparable from financial resources. At present, we are advancing a nucleic acid testing R&D project, and every funding allocation is a crucial driver for accelerating its progress.”
Chen Hui, Deputy Director of the Tax Policy Division of the Anhui Provincial Department of Finance, stated that this year, Anhui Province has implemented the maximum allowable reduction—50% of the national authorization—for the “six taxes and two fees.” Small-scale VAT taxpayers, small and low-profit enterprises, and individual business households are directly benefiting from this measure.
According to statistics, from April 1 to May 31 this year, Anhui Province processed VAT credit refunds for 78,000 enterprises, totaling RMB 40.1 billion. Combined with the RMB 4.8 billion in credit refunds already processed in the first quarter, the total amount of VAT credit refunds disbursed from January to May reached RMB 44.9 billion.
Like Anhui, numerous provinces across the country have swiftly implemented policies to refund outstanding tax credits and cut taxes and fees, helping businesses alleviate their difficulties.
Yunnan Province’s finance, tax, and People’s Bank of China departments have worked in close coordination to advance the value-added tax credit refund program with high quality. As of May 31, the province had processed VAT credit refunds totaling RMB 55 billion. Of this amount, RMB 2.5 billion was refunded under the previously issued old VAT credit refund policy from January to March, while RMB 52.5 billion has been refunded since the implementation of the new VAT credit refund policy in April.
Since the beginning of this year, Guangdong Province has, in accordance with the principles of “maximizing benefits for eligible entities, maximizing tax reductions where possible, and expediting implementation wherever feasible,” coordinated the effective rollout of policies across the province, including refunds of outstanding input VAT credits, tax deferrals, and tax and fee reductions. As of May 31, the province had cumulatively issued nearly RMB 147 billion in tax refunds and deferred taxes totaling nearly RMB 60 billion, benefiting more than 195,000 market entities, over 90 percent of which were small, medium, and micro enterprises.
Since the implementation of the carryforward VAT refund policy, the Zhejiang Provincial Department of Finance has adhered to the principles of early and swift refunds, ensuring that all eligible refunds are fully disbursed. As of May 28, a total of RMB 122.52 billion in refunds has been issued, benefiting 196,400 market entities.
Expanding coverage and increasing volume, with 7 additional industries and enterprises added.
Recently, after a vocational college in Yunnan had all the required tax‑refund documentation prepared, the tax authorities completed the entire refund process and disbursed the funds in just one day, successfully returning over 32 million yuan in taxes.
According to the academy’s director, the refund will be used to repay long-term loans incurred during the school’s construction phase and to expand the institution’s teaching equipment and facilities, thereby enhancing the learning experience for students and strengthening the school’s efforts to embrace smart education.
Educational‑sector enterprises are among the beneficiaries of this expanded policy.
Since the beginning of this year, China has implemented a large-scale policy to refund outstanding input VAT credits, ensuring that enterprises—particularly small and micro businesses—can promptly benefit from the tax‑rebate measures. At the same time, the implementation dates for refunding existing outstanding credits held by medium‑sized and large enterprises have been significantly advanced: for medium‑sized enterprises, the refund period has been moved forward from the third quarter of this year to May 1, with all refunds to be completed by June 30; for large enterprises, the deadline has been brought forward from the fourth quarter to June 1, with all refunds to be settled by June 30, thereby concentrating the policy’s impact in the first half of the year.
To further strengthen the policy of refunding outstanding input VAT credits, the State Council recently decided to extend the scope of the policy—under which incremental input VAT credits are fully refunded on a monthly basis and existing credits are refunded in a lump sum—to seven sectors: wholesale and retail trade; agriculture, forestry, animal husbandry, and fishery; accommodation and catering; resident services, repair, and other service industries; education; health and social work; and culture, sports, and entertainment.
According to a responsible official from the Yunnan Provincial Department of Finance, the department has established four mechanisms—work coordination, information sharing, collaborative capacity‑building, and direct, expedited access to deferred VAT credit refunds—to address challenges and issues in policy implementation. The department also shares data on tax and fee reductions and has conducted on-site surveys at enterprises in cities and prefectures including Kunming, Qujing, Yuxi, and Xishuangbanna. Based on these field assessments, businesses have welcomed policies such as the VAT credit refund, noting that this year’s measures are robust, swiftly implemented, precisely targeted, and highly effective—providing timely support to alleviate operational and production difficulties amid the dual pressures of economic downturn and the pandemic.
Zhejiang Province has a large number of market entities and a substantial scale of tax refunds. Following the introduction of this new policy covering seven additional industries, the Provincial Department of Finance promptly collaborated with the tax authorities to conduct an analysis and estimate, projecting an additional approximately RMB 10 billion in tax refunds. The department has also swiftly prepared implementation plans and secured funding for the expanded scope of industries, ensuring timely and effective execution.
“This round of additional tax refunds for both existing and newly incurred input VAT credits further expands the scope of eligible industries, increasing the total refund amount by more than 140 billion yuan on top of the existing 1.5 trillion yuan. Moreover, funds under earlier refund policies will be disbursed as much as possible in the first half of the year. These measures will help boost corporate cash flow, alleviate business challenges, and strengthen offices’ resilience to risks,” said Li Xuhong.
Feng Qiaobin, Deputy Director of the Department of Macroeconomic Research at the Development Research Center of the State Council, stated that implementing a large-scale policy to refund outstanding input VAT credits is a key measure in this year’s macroeconomic regulation. As the scope and scale of the VAT credit refund policy expand, its inclusive nature has become even more pronounced. It is estimated that the total new refunds for outstanding VAT credits will reach 1.64 trillion yuan for the year—significantly higher than the initial projection—thereby further reducing the amount of capital tied up by enterprises.
Luo Zhiheng, Chief Economist and Dean of the Research Institute at Yuekai Securities, stated that the additional seven industries now eligible for the carryforward VAT refund policy feature greater policy intensity and a larger refund scale, with broader sectoral coverage. This measure will help bolster corporate cash flow and strengthen business expectations and confidence, while ensuring more equitable treatment for struggling industries hit by the pandemic.

Breaking: McDonald’s has been fined 8.7 billion euros in France over tax issues and is also required to pay back taxes.
Less than a month after agreeing to sell its Russian operations to the franchisee, McDonald’s is now facing a hefty fine in France over issues related to franchise fees. The company has agreed to pay approximately $1.3 billion (about 8.7 billion yuan) in penalties and back taxes to settle a tax dispute in France. McDonald’s had previously been under investigation in France for several years, primarily concerning whether it had properly and voluntarily declared all of its economic activities conducted in the country. As of the close of trading on June 15 local time, McDonald’s shares closed at $238.90, up 0.06%, with a total market capitalization of $176.7 billion. According to reports, the roughly $1.3 billion penalty will be detailed during a court hearing scheduled for Thursday morning in Paris. A McDonald’s spokesperson did not immediately respond to media requests for comment. The tax dispute involving McDonald’s in France dates back eight years. In 2014, French tax authorities began investigating whether McDonald’s was shifting revenue generated from its restaurants to other countries, thereby reducing its taxable income in France. According to McDonald’s official website in France, the country is one of the chain’s most popular markets, with nearly 1,500 restaurants nationwide—most of which are franchised outlets that pay royalties for brand usage, IT system fees, restaurant renovations, and employee training. McDonald’s is just one of several multinational corporations facing tax investigations across Europe, accused of shifting profits or engaging in other tax‑avoidance practices by using royalty payments between business units. Among these companies, some cases have drawn particularly harsh scrutiny in European courts. Last year, an EU court invalidated a ruling ordering Amazon to pay Luxembourg an additional €250 million (approximately $260 million). However, the same court overturned a 2020 decision requiring Apple to pay Ireland about €13 billion in back taxes. Currently, the EU executive is appealing both rulings to the EU’s highest court. In fact, as early as 2018, EU regulators abandoned a similar investigation into McDonald’s tax arrangements in Luxembourg, concluding that the company’s practices were lawful because they did not confer an unfair advantage over other businesses operating in Luxembourg. Nevertheless, France has succeeded in several comparable cases. In 2019, the same financial prosecutor who issued that ruling reached a settlement with Google, compelling the company to pay more than €965 million in back taxes and penalties to resolve its French tax dispute. This is not the first time McDonald’s has faced such investigations in Europe: in August 2010, following complaints, Italy’s antitrust authority AGCM launched an inquiry into the terms and conditions of McDonald’s agreements with its franchisees. Meanwhile, the anticipated net addition of roughly 1,300–1,400 new restaurants in 2022 is likely to weigh heavily on McDonald’s, beyond the impact of the $1.3 billion fine. In late April, the company reported quarterly results showing revenue of $5.666 billion, up 11% year over year, but net profit fell 28% to $1.104 billion. During the quarter, the closure of stores in Russia and Ukraine resulted in $27 million in lost rent, supplier costs, and payroll expenses, along with an additional $100 million in unsold inventory. Collectively, these costs shaved 13 cents per share from McDonald’s first‑quarter earnings. McDonald’s revenues comprise sales from company‑operated restaurants, as well as fees collected from franchised outlets, license holders, and affiliated entities. In the first quarter, revenue from company‑owned restaurants totaled $2.302 billion, up 7% year over year, while franchised restaurants generated $3.263 billion, a 13% increase. Notably, as of March 31, 2022, franchised restaurants accounted for 93% of McDonald’s global footprint. Given this structure, it’s hardly surprising that franchise fees represent the lion’s share of McDonald’s overall revenue—and that the company has sought to shift franchise‑fee income out of France to other jurisdictions for tax‑avoidance purposes. For 2022, McDonald’s forecasts capital expenditures of approximately $2.2–$2.4 billion, with about half earmarked for expanding its U.S. and international operations. More than 40% of this spending will support U.S. business, much of which will be reinvested. Globally, McDonald’s expects to open roughly 1,700–1,800 new restaurants, including around 400–500 in the U.S. and international markets. At the same time, the company projects a net addition of approximately 1,300–1,400 restaurants in 2022.

Litigation & Arbitration
Supreme People’s Court
On the Application of Law in Adjudicating Civil Disputes Involving Forest Resources
Interpretation of Certain Issues
(Adopted at the 1869th Meeting of the Judicial Committee of the Supreme People’s Court on April 25, 2022, and effective as of June 15, 2022)
In order to properly adjudicate civil disputes involving forest resources and to protect, in accordance with the law, the ecological environment and the legitimate rights and interests of the parties concerned, this Interpretation is hereby formulated, drawing upon the provisions of the Civil Code of the People’s Republic of China, the Environmental Protection Law of the People’s Republic of China, the Forest Law of the People’s Republic of China, the Rural Land Contracting Law of the People’s Republic of China, the Civil Procedure Law of the People’s Republic of China, and other relevant laws, and in light of judicial practice.
Article 1. When hearing civil disputes involving forest resources, including forests, timber, and forest land, the people’s courts shall uphold the green principles of the Civil Code, respect nature, history, and customary practices, and, in accordance with the law, promote the integrated realization of ecological, economic, and social benefits in the protection and sustainable use of forest resources, thereby fostering harmonious coexistence between humanity and nature.
Article 2 Where the parties, on account of the following acts, have a dispute concerning the ownership or content of real rights in forest land or timber, and bring a civil action pursuant to Article 234 of the Civil Code seeking conofficeation of their rights, the people’s court shall accept the case in accordance with the law:
(1) Forest land contracting;
(2) Exchange or transfer of forest land contract management rights;
(3) Transfer of forest land use rights;
(4) Transfer of forest land use rights;
(5) Security over forest land and timber;
(6) Inheritance of forest land and timber;
(7) Other acts that give rise to changes in property rights over forest land and timber.
Where a party brings a civil action arising from a dispute over the administrative authority’s decisions to conoffice or register rights to forest land and timber, the people’s court shall inform the party that such disputes must be resolved through administrative reconsideration or administrative litigation in accordance with the law.
Article 3. Where a party claims that a contract concerning forest land contracting, the exchange or transfer of forest land contracting and management rights, the transfer of forest land operating rights, the transfer of timber, or the provision of forest resource collateral is invalid on the ground that the requisite procedures—such as approval, registration, filing, examination, or review—have not been completed, the people’s court shall not uphold such claim.
Where, on the grounds set forth in the preceding paragraph, a party is unable to acquire the relevant rights and seeks to rescind the contract and hold the breaching party liable for breach of contract, the people’s court shall, in accordance with the law, grant such relief.
Article 4: If one party, without obtaining the consent of all co-owners as duly recorded in the forest rights certificate or other relevant title documents, unilaterally disposes of forest land or timber, the people’s court shall not support the other party’s claim to acquire the corresponding rights, unless such claim falls within the scope of the bona fide acquisition provisions set forth in Article 311 of the Civil Code.
Article 5: Where a party claims that a collective forestland contracting agreement is invalid on the ground that it was concluded in violation of the legally prescribed democratic deliberation procedures, the people’s court shall uphold such claim. However, the following circumstances are excepted:
(1) At the time of contract formation, there are no mandatory provisions in laws or administrative regulations requiring a democratic deliberation procedure;
(2) Where the contract was concluded without prior discussion and decision through the democratic deliberation procedure, or where such procedure contained defects but was duly rectified in accordance with the law before the conclusion of the first-instance court debate;
(3) The contractor has conducted a reasonable review of the resolutions adopted by the villagers’ assembly or the villagers’ representative assembly, was unaware of and should not have been aware that the resolutions were forged or altered, and has already made substantial investments in the forest land.
Article 6: Where the contractor of a forest land under household contract transfers the contractual management rights to a third party without the consent of the contracting party, or where the transferee is not a member of the same collective economic organization, the people’s court shall not support the transferee’s claim to acquire such contractual management rights. However, this provision shall not apply if the contracting party, without any legal justification, refuses to give its consent or unduly delays rendering a decision.
Article 7: Where the parties have entered into multiple contracts for the transfer of forest land management rights over the same collectively-owned forest land, and all transferees claim to acquire such rights while the contracts are valid, the right shall be granted to the transferee who falls under any of the following circumstances:
(1) Where the forest land use right has been registered in accordance with the law;
(2) Where the rights to manage forest land have not been registered in accordance with the law, but the party had legally occupied and used the forest land and made substantial investments prior to the dispute arising;
(3) Where neither of the preceding two circumstances applies, the contract that took effect first shall prevail.
Where a party that has not obtained the right to operate forest land seeks to rescind the contract and hold the breaching party liable for breach of contract, the people’s court shall uphold such claim in accordance with the law.
Article 8: Where a contractor under a household‑contracting arrangement for forest land seeks to rescind the contract for the transfer of forest‑land operating rights and to reclaim the forest land on the ground that the holder of such operating rights has unilaterally retransferred it, the people’s court shall grant such relief. However, this shall not apply where the holder of the forest‑land operating rights can prove that the retransfer was made with the contractor’s written consent.
Article 9: Where a member of this collective economic organization seeks to have a contract for the transfer of the operating rights to family‑contracted forest land declared invalid on the ground that his or her priority right under equal conditions has been infringed, the people’s court shall not uphold such claim; however, if the member requests compensation for losses, such request shall be granted in accordance with the law.
Article 10. During the term of a forest land contract, if the contracting party changes due to reasons such as the exchange, transfer, or inheritance of the forest land contract management rights, and the forest land operator requests that the new contractor continue to perform the original forest land operation right transfer contract, the people’s court shall uphold such request, unless the parties have otherwise agreed.
Article 11: Where the term of transfer stipulated in a contract for the transfer of forest land use rights exceeds the remaining term of the original contracted period, or where the term of sub‑transfer stipulated in a subsequent contract for the transfer of forest land use rights exceeds the remaining term of the original transfer contract, the people’s court shall not uphold the parties’ claim that the excess portion is invalid.
Article 12: Where the term of transfer stipulated in a contract for the transfer of forestland operating rights exceeds the remaining term of the contracted period, and the contracting party asserts that the portion exceeding such remaining term is not legally binding upon it, the people’s court shall uphold such assertion, unless the contracting party knew or ought to have known of this.
If the term of a sub‑transfer contract for forest land use rights exceeds the remaining term of the original forest land use rights transfer contract, and the contractor contends that the portion exceeding such term is not legally binding on it, the people’s court shall uphold such claim, unless the contractor knew or ought to have known of this.
Where, for the reasons set forth in the preceding two paragraphs, contracts for the transfer of forestland operating rights or subsequent sub‑transfers cannot be performed, and a party requests termination of the contract and that the breaching party bear liability for breach, the people’s court shall, in accordance with the law, grant such request.
Article 13: Upon termination of the contract for the transfer of forest land use rights, standing timber planted by the forest land use right holder shall be handled in accordance with the following circumstances:
(1) Where the contract contains a stipulation, such stipulation shall govern, unless it is deemed invalid pursuant to Article 153 of the Civil Code.
(2) Where the contract is silent or its terms are unclear, and the parties have mutually agreed to extend the contract term until the end of the rotation period or another reasonable period, if the contractor requests that the holder of the forest land use right bear the forest land use fee, the reasonable portion thereof shall be upheld.
(3) Where the contract is silent or its terms are unclear, and the parties have failed to reach agreement on extending the contract term, if the forest land operator requests compensation for the value of the timber, the reasonable portion thereof shall be granted.
Upon termination of the forest land contract, the disposition of standing timber planted by the contractor shall be governed by the provisions of the preceding paragraph.
Article 14. With respect to contracts entered into by the parties for conducting under-forest economic activities, forest tourism, forest health and wellness, or other business operations utilizing the land resources and forest landscape resources of public-benefit forests, the people’s courts shall, in accordance with the law, determine the validity of such contracts by comprehensively considering factors including the ecological site‑specific protection requirements of public‑benefit forests, their ecological functions, and whether the proposed use has been scientifically justified.
Where a party seeks to invalidate an operating contract solely on the ground that it involves public-interest forests, the people’s court shall not uphold such claim.
Article 15: Where forest resource assets—such as timberland use rights and timber ownership—are mortgaged in accordance with laws and administrative regulations that do not prohibit such mortgages, and the debtor fails to perform the due debt or any event occurs as agreed by the parties that triggers the exercise of the mortgage right, if the mortgagee and the mortgagor agree to settle the debt by valuing the mortgaged forest resource assets at their appraised value and, on that basis, request to take over the management of the mortgaged property, the people’s court shall, in accordance with the law, uphold such request.
If the mortgagee and the mortgagor have failed to reach an agreement on the method for enforcing the mortgage right over forest resource assets, and the mortgagee applies for enforcement of the mortgage right in accordance with Articles 203 and 204 of the Civil Procedure Law, the people’s court shall, in accordance with the law, issue a ruling to auction or sell off the mortgaged property.
Article 16 Where security is provided by forest ecological benefit compensation proceeds, forestry carbon sinks, or the like, and the debtor fails to perform a due obligation or any event occurs as agreed by the parties that triggers the realization of the security interest, the people’s court shall, in accordance with law, support the secured creditor’s request for priority repayment from the secured property.
Article 17: Where damage to the forest ecological environment is caused in violation of state regulations and such damage is capable of being remedied, the organs prescribed by the state or the organizations prescribed by law may, pursuant to Article 1234 of the Civil Code, request the tortfeasor to assume liability for restoration within a reasonable time frame by means such as replanting trees, restoring vegetation, rehabilitating the soil properties of the forest land, or introducing appropriate biological populations; the people’s courts shall, in accordance with the law, uphold such requests.
Where a people’s court orders an infringer to assume liability for restoration, it may concurrently determine the forest ecological environment restoration costs that the infringer shall bear in the event of failure to perform the restoration obligation within the prescribed time limit.
Article 18: Where a people’s court orders an infringer to assume responsibility for the restoration of the forest ecological environment, it may, based on expert appraisal opinions or by referring to professional opinions issued by forestry administrative authorities, forestry survey and planning design institutions, and relevant research institutions and experts, reasonably determine a plan for restoring the forest ecological environment and specify the particular requirements that the infringer must meet in fulfilling their restoration obligations.
Article 19: When determining the amount of compensation for damage to the forest ecological environment that an infringer shall bear pursuant to Article 1,235 of the Civil Code, the people’s court shall comprehensively take into account the ecological service functions of the damaged forest resources—such as climate regulation, carbon sequestration and enhancement of carbon sinks, biodiversity conservation, water source conservation, soil and water conservation, and windbreak and sand fixation—and make a reasonable determination accordingly.
Article 20: Where a party requests to fulfill its liability for compensation for damage to the forest ecological environment by purchasing certified forestry carbon credits, the people’s court may, after comprehensively considering the views of all parties and the reasonableness of different methods of liability, grant such request in accordance with the law.
Article 21: Where a party requests to fulfill its liability for compensation for damage to the forest ecological environment by performing labor services such as forest conservation, wildlife and plant protection, or community service, the people’s court may, taking into account factors including the tortfeasor’s willingness to provide substitute performance, financial capacity, work capacity, the amount of compensation, and the prevailing local wage standards, decide whether to grant such request and reasonably determine an appropriate labor‑based compensation plan.
Article 22: If an infringer voluntarily deposits a security deposit as a guarantee for fulfilling the obligation to restore the forest ecological environment, the people’s court may, in the event that the infringer fails to perform such obligation, use the deposit to cover the costs of restoring the forest ecological environment.
Article 23 This Interpretation shall take effect as of June 15, 2022. For any judicial interpretations previously promulgated by this Court that are inconsistent with this Interpretation, this Interpretation shall prevail.

Building the “Shandong Financial Cloud Court Intelligent Trial Platform” to pioneer a new model for adjudicating internet finance litigation.
On the morning of June 15, the launch ceremony for the Shandong Financial Cloud Court Intelligent Trial Platform was held at the Shandong Provincial Higher People’s Court. Wang Chuang, Deputy Secretary of the Party Group and Vice President of the Shandong Provincial Higher People’s Court; Chen Ying, Member of the Party Committee and Deputy Director of the Shandong Regulatory Bureau of the China Banking and Insurance Regulatory Commission; and Yang Jun, Secretary of the Party Committee and President of the Shandong Branch of the China Construction Bank, among other leaders, attended the ceremony and delivered remarks.
In recent years, driven by the rapid growth of the financial sector and the continuous innovation in digital finance, financial dispute cases in Shandong Province have become increasingly diverse and complex, exhibiting characteristics of networking, data‑driven processing, and mass‑scale adjudication. To adapt to the transformations of the digital era and foster deep integration between smart courts and fintech, the Shandong High People’s Court has focused on establishing a judicial defense line for preventing financial risks and safeguarding financial security. Guided by the dual objectives of enhancing the intelligence of financial adjudication and ensuring the credibility of electronic evidence, and taking into account the province’s judicial needs, trial practices, and progress in building smart courts, it has developed the “Shandong Financial Cloud Court Intelligent Trial Platform.” The platform’s key features can be summarized as the “Four Ones”:
A high-speed data transmission “highway.” By establishing a province‑wide point‑to‑point private network with the Shandong Branch of China Construction Bank, a dedicated data channel has been opened between financial institutions and the courts, achieving full coverage of 174 courts and 118 CCB branches across the province. This has made litigation services more convenient and efficient, enabling financial transaction data generated online to be securely and seamlessly integrated into the court’s litigation system.
An intelligent litigation “assistant.” The platform standardizes raw data and electronic evidence provided by banks, then directly converts them into electronic litigation documents. This fully digitizes and paperlessly streamlines financial litigation, significantly simplifying key procedural steps such as filing applications, serving legal documents, and conducting court hearings.
A “fast-track” for financial adjudication. Building on the Shandong Courts’ End-to-End Case Management System 4.0, the platform enables intelligent handling of financial cases. It automatically extracts the essential elements required for trial and electronically prompts the parties to conoffice these elements and the supporting evidence. Judges conduct expedited review and judgment by verifying evidence and screening key factors, while the system generates judicial documents with a single click, achieving an accuracy rate exceeding 90%. As a result, both the quality and efficiency of adjudication have been further enhanced.
A secure and reliable “chain of evidence.” The platform leverages blockchain technology, relying on the People’s Courts’ “Judicial Chain” and China Construction Bank’s “Zhixin Chain” notarization platforms, to achieve instant immutability and verifiable evidence preservation for electronic documents and digital evidence generated during financial litigation, thereby ensuring, at the source, the authenticity and trustworthiness of the original electronic evidence.
Going forward, the Shandong High People’s Court will remain officely committed to the goal of “taking the lead and breaking new ground,” uphold the principle of “serving the people, serving judges, and serving oversight,” strive to excel, pioneer innovation, and focus its efforts on building a smarter court system at an even higher standard, thereby providing stronger judicial support for ushering in a new phase in the endeavor to build a strong, modern socialist province in the new era.

The High-Level Dialogue on Maritime and Commercial Arbitration in China was held in Beijing.
On June 16, the 2022 China Maritime and Commercial Arbitration High-Level Dialogue (hereinafter referred to as the “High-Level Dialogue”) was held in Beijing. The event, themed “Reform, Innovation, and High-Quality Development of Maritime and Commercial Arbitration in the New Context,” was conducted in a hybrid format, combining online and offline participation.
Ren Hongbin, President of the China Council for the Promotion of International Trade, stated that, amid the confluence of once-in-a-century changes and a century‑long pandemic, the global economy is experiencing a difficult and tortuous recovery, placing higher demands on international legal services. To vigorously advance high‑level opening-up, accelerate the establishment and improvement of an international economic and trade system along with supporting legal service frameworks, and enable economic and trade arbitration to play an even more pivotal role in safeguarding the global economic and trade order and driving reforms in the governance system, Ren Hongbin put forward three recommendations: first, strengthen coordinated cooperation and continuously enhance a market‑oriented, law‑based, and internationally aligned business environment; second, uphold innovation‑driven development and continually unlock the growth potential of international economic and trade services; and third, remain committed to both theoretical research and practical exploration, and actively engage in global governance.
Sandra Raju, Chair of the Asian Institute for Dispute Resolution, stated that the high-level dialogue provided a rare platform for industry professionals from various countries to discuss cutting-edge innovations, developments, and trends in international maritime and commercial arbitration across different legal jurisdictions. She noted that while the efficacy and applicability of artificial intelligence in arbitration remain subject to debate, adopting innovative approaches in dispute resolution nonetheless warrants further exploration as a path forward for the field.
According to reports, as a specialized arbitration institution renowned for resolving maritime and commercial disputes, the China Maritime Arbitration Commission has, over its more than 60-year history, adjudicated and rendered awards in thousands of cases. Today, the number of maritime and commercial cases it handles ranks among the highest of global maritime arbitration institutions, with foreign-related cases accounting for over 50 percent. The Commission’s degree of internationalization continues to rise, and its diversified dispute‑resolution services—centered on arbitration—are increasingly well received.

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