JC Master Legal News Issue 1031

Key Takeaways for This Issue

Nearly 60% of securities offices’ collective wealth management products posted positive returns this year, with over 1,400 new products registered.
Since August, following a three-year transition period under the new asset‑management regulations, securities offices’ asset‑management businesses have gradually returned to their core functions, with a marked improvement in active‑management capabilities, marking the industry’s full entry into a new phase of high‑quality development. So far this year, securities offices have filed registrations for more than 1,400 new collective investment products.
Geshang’s Q2 2022 Financial Report: Revenue of RMB 2.15 billion, with results exceeding expectations.
On August 24, Beijing time, Wanwu Xinsheng (Aihuishou) Group, a Chinese platform for trading and servicing secondhand consumer electronics (NYSE: RERE), released its financial results for the second quarter of 2022. According to the report, the group’s total revenue in Q2 2022 reached RMB 2.15 billion, up 14.9% year over year, surpassing market expectations. The group’s GMV for the quarter totaled RMB 8.6 billion, a 10.3% increase compared with the same period last year. Operating cash flow turned positive at RMB 280 million, marking two consecutive quarters of positive operating cash flow. As of the end of the second quarter, Wanwu Xinsheng operated in 241 cities nationwide, with a total of 1,629 stores.
Jiangsu: Leveraging Tax Policies to Boost Employment and Support Entrepreneurship
In Jiangsu Province, the tax authorities are taking a two-pronged approach—addressing both demand and supply. On the one hand, leveraging the advantages of tax‑related big data, they precisely identify enterprises, shifting from a model where “people seek out policies” to one where “policies find people.” This enables more targeted implementation of a suite of tax and fee support measures, including VAT credit refunds, tax relief for small and micro‑enterprises, and unemployment insurance subsidies for stabilizing employment, thereby helping these businesses overcome difficulties. On the other hand, the authorities are strengthening collaboration with federations of industry and commerce, human resources and social security departments, and higher education institutions to gain a deeper understanding of the employment and entrepreneurship needs of key groups. By bringing preferential tax policies directly to campuses and into the hands of job seekers and entrepreneurs, they are bolstering the capacity and confidence of the supply side to support employment and business creation.
Beijing Financial Court: An enforcement settlement has been reached in a 7.2-billion-yuan dispute, safeguarding the legitimate rights and interests of over ten thousand investors.
Recently, a wealth investment management company filed an application to enforce a series of commercial trust dispute cases involving a certain holding group and others, with the amount in question totaling RMB 7.2 billion. The party subject to enforcement is a large domestic private enterprise, while the applicant, the wealth investment management company, represents the interests of over ten thousand investors and has attracted widespread attention from all sectors of society.
Finance & Capital Markets
Nearly 60% of securities offices’ collective wealth management products posted positive returns this year, with over 1,400 new products registered.
Following a three-year transition period under the new asset‑management regulations, securities offices’ asset‑management businesses have gradually returned to their core functions, with a marked enhancement in active‑management capabilities, marking the industry’s full entry into a new phase of high‑quality development.
Since the beginning of this year, securities offices have filed more than 1,400 new collective asset management products. With significant market volatility, investment challenges for securities‑office asset managers have also intensified. Nevertheless, as of August 22, among the 3,190 securities‑office collective asset management products for which data are available this year—separate statistics are provided for structured products, the same applies hereafter—the average return stood at 0.03%, outpacing the Shanghai Composite Index over the same period, which posted a cumulative decline of 9.95%.
Collective wealth management products within the year
The average yield is 0.03%.
Despite ongoing market volatility, securities offices, with their inherent strengths in investment research, have delivered reasonably solid performance. According to Wind data, since the beginning of this year, the average return of 3,190 listed securities‑office collective wealth‑management products stood at 0.03%, significantly outpacing the Shanghai Composite Index over the same period. Among them, 30 products posted returns exceeding 10%, while 1,836 maintained positive returns, accounting for 58% of the total.
By major product category, since the beginning of the year, equity‑type funds have been affected by market volatility, posting an average return of –7.07%; however, ten funds still delivered returns exceeding 10%. Mixed‑asset funds averaged a return of –4.92%, with twelve funds achieving returns above 10%. Bond‑type funds recorded an average return of 2.89%, while FOFs posted an average return of –3.62%.
Since the beginning of this year, in response to market volatility, securities offices have proactively strengthened their product pipelines, developed distinctive product lines, and actively expanded into “fixed income plus” and FOF‑type offerings. As active management capabilities continue to improve, China’s FOF business has experienced robust growth. Among the 1,407 newly registered collective investment products, 128 are FOFs, accounting for 9.1%. Notably, Huatai Securities’ 61 newly registered products include 20 FOFs, representing 33% of the total.
Although market volatility remains relatively high, securities‑office FOF products have demonstrated comparatively stable returns compared with equity‑ and hybrid‑type funds.
According to Wind data, over the long term, the 117 brokerage‑office‑issued FOF products with available performance records have delivered an average three‑year return of 10.12%. Among them, 13 FOFs posted returns exceeding 50%, and 115 recorded positive returns, accounting for 98% of the total—demonstrating strong performance, with only two products posting negative returns.
An executive at a securities office’s asset management division stated: “Only by continuously enhancing its active‑management capabilities can a securities office’s asset management business secure a foothold amid the broader shift toward wealth management. Compared with traditional equity and fixed‑income products, securities offices’ asset management units enjoy a distinct advantage in FOF‑structured offerings.”
Newly registered collective wealth management products
Primarily consisting of fixed-income and hybrid products.
According to publicly available data from the Asset Management Association of China, as of August 22, a total of 1,407 new securities‑office collective asset management products have been filed so far this year, down 11% year over year.
Among them, First Capital Securities has the largest number of registered products, with a total of 99; CITIC Securities, Guohai Securities, CITIC Securities Investment, Sinolink Securities, and Huatai Asset Management follow closely behind, with 82, 75, 65, 63, and 61 products, respectively. By product type, since the beginning of this year, among the newly registered collective investment products issued by securities offices, fixed-income and hybrid products account for the highest share; the newly registered offerings also include equity‑type, commodity‑related, and financial‑derivatives products.
Meanwhile, against the backdrop of two-way capital market opening and significantly eased access for foreign‑invested institutions, foreign‑controlled securities offices have also stepped up their expansion. Nomura Orient International Securities has filed four products this year, including one FOF focused on commodities and financial derivatives, as well as three hybrid‑type products.
At present, competition in the asset management sector is intensifying. According to the latest data released by the Asset Management Association of China for the second quarter—ranking the top 20 securities offices by average monthly private‑placement asset‑management scale—CITIC Securities leads by a wide margin with an average monthly AUM of RMB 1.18 trillion, more than RMB 520 billion ahead of the second‑place office. Meanwhile, 11 securities offices reported varying degrees of decline in their average monthly AUM, with four seeing month‑over‑month drops exceeding 10%. Notably, First Capital Securities, which has filed the largest number of collective investment products so far this year, also made the top 20 list in the second quarter, ranking 19th with an average monthly AUM of RMB 79.63 billion.
CICC’s Non-Bank Financials and Fintech team believes that, as equity‑based products gain favor, specialized offerings such as retirement‑oriented and “fixed income plus” products continue to develop, and digitalization on the technology front keeps advancing, non‑bank asset management institutions—led by leading securities offices, public mutual funds, and private equity funds—are likely to see their competitive edge further strengthened. While industry competition may intensify in the short term, the long-term trend toward higher market concentration remains unchanged.
Xu Kang, head of the non-bank financials team and chief analyst at Huachuang Securities, stated, “The market will always experience volatility, and indices will inevitably rise and fall. However, looking ahead over the next decade, the asset management industry remains one of the most promising sectors.”
Hongtai’s major shareholder status has been approved, underscoring Tianfeng Securities’ positioning as a key provincial‑level financial institution.
 On the evening of August 23, Tianfeng Securities issued an announcement stating that it had received approval from the China Securities Regulatory Commission (CSRC) to change its major shareholder. The CSRC approved Hubei Hongtai Group Co., Ltd. as a major shareholder and raised no objections to its lawful acquisition of shares in the company. According to informed sources, Hongtai Group’s acquisition of the 7.85% stake in Tianfeng Securities held by Renfu Pharmaceutical reflects the group’s strategic objective of building and upgrading its financial holding platform.
The pace of state-owned enterprise reform and mixed-ownership reform is accelerating.
The province’s pivotal position in the financial sector has been consolidated.
In recent years, Tianfeng Securities has significantly accelerated its efforts to bring in state‑owned strategic shareholders. Last April, the company completed a private placement raising RMB 8.18 billion, with subscribers including central and local state‑owned capital platforms such as Guangdong Hengjian, Qujiang Financial Control, Wuhan Financial Control, Xi’an Free Trade Port, and Sichuan State‑Owned Assets. According to Tianfeng Securities’ 2021 annual report, state‑owned capital already accounted for 68.52% of its top ten shareholders; if this equity transfer is finalized, that share will rise to 89.18%, and all shareholders holding more than 5% of the company’s shares will be state‑owned entities.
Public records indicate that Hongtai Group is a state‑owned, first‑class commercial platform enterprise under the supervision of the State-owned Assets Supervision and Administration Commission of the Hubei Provincial Government. It is wholly owned by the Hubei Provincial Department of Finance and serves as the authorized central holding entity for state equity (capital), the provincial-level state capital management entity, and the designated channel for the orderly entry and exit of provincial state capital.
According to reports, Hongtai Group’s equity investment in Tianfeng Securities is part of a strategic initiative outlined in Hubei Province’s 14th Five-Year Plan for Financial Industry Development, aimed at establishing the province as a major regional financial hub. At present, Tianfeng Securities has become Hubei’s sole provincial‑owned securities office and its only listed financial institution under provincial control, underscoring its status as a key local financial player. “It may enjoy a range of advantages in the future, including preferential local policies, while the synergies brought by Hongtai Group—its new shareholder in the financial sector—could further expand Tianfeng’s business reach,” analysts noted.
Leverage business strengths
Actively serving Hubei’s regional economic development.
Currently, Tianfeng Securities has forged a distinctive path, with its research business serving as the core driver for the comprehensive development of its institutional‑client operations. By conducting in-depth, end-to‑end industry‑wide research that bridges upstream and downstream segments, and by leveraging its investment banking team’s precise pricing capabilities, the office has identified and successfully executed a number of landmark projects, including the IPOs of Jin Ying Heavy Industry and Anbotong, the underwriting of CATL’s RMB 20 billion private placement, and the underwriting of China Railway Signal & Communication’s STAR Market offering. In both market performance and regulatory assessments, Tianfeng Securities’ bond‑investment‑banking division ranks among the industry’s top tier: on the one hand, according to Wind data’s ranking of securities offices’ corporate bond underwriting in the first half of 2022, Tianfeng Securities secured the No. 1 position; on the other, in the National Development and Reform Commission’s 2021 credit rating results for corporate bond lead underwriters, Tianfeng Securities earned a score of 96.40, placing it first among the 85 participating underwriting institutions.
As a financial institution registered in Hubei, the head of Tianfeng Securities has stated on numerous occasions: “Deeply cultivating Hubei is not only a strategic priority for our company but also an inescapable responsibility and obligation as a locally‑based financial institution.” According to statistics, in the area of expanding direct financing, Tianfeng Securities has facilitated over RMB 100 billion in funding for Hubei‑based enterprises over the past three years. Specifically, it has assisted companies such as Jin Ying Heavy Industry, Jingshan Light Machinery, and Taijing Technology in completing IPOs, private placements, and convertible bond issuances; oversaw major asset restructurings for five offices, including Easyhome, Changyuan Power, Xingfa Group, Renfu Pharmaceutical, and Jingshan Light Machinery; and arranged bond financings for 41 provincial entities, including Hubei Science & Technology Investment, Hubei Transportation Investment, Hubei Tourism Investment, and Wuhan Metro.
In supporting Hubei’s industrial transformation and upgrading, as well as the development of emerging industries, Tianfeng Securities has leveraged private‑fund subsidiaries—through equity investment funds, industry‑M&A funds, and other vehicles—to mobilize social capital and attract external funding, thereby facilitating the modernization of traditional sectors and the healthy growth of emerging industries. Data show that among the 27 funds directly managed or co‑invested in by Tianfeng Securities’ private‑fund subsidiary, 27 are registered in Hubei Province, with investments spanning 72 local enterprises.
In building a “think tank” for the local capital market, we have strengthened cooperation among government, financial institutions, and enterprises, signing strategic financial cooperation agreements with multiple local governments, including Xianning, Yichang, Qianjiang, and Suizhou, and providing specialized services in areas such as state‑owned capital management, corporate restructuring and IPOs, and the development of emerging industry clusters.
A senior executive at Tianfeng Securities stated that China’s economy is currently transitioning from a phase of rapid growth to one of high-quality development. As an essential component of the capital market, securities offices are a key driving force in building a modernized economic system; they must take the lead in pursuing high-quality development and set an example in implementing the new development philosophy. “This is Tianfeng’s historic mission and also a rare historical opportunity. With Hubei Hongtai stepping in as a shareholder, the company’s equity structure has become even clearer. Under the leadership of Party building, Tianfeng Securities will advance high-quality development and create value for society.”
Shenwan Hongyuan has been awarded an AA rating in the Shenzhen Stock Exchange’s CSI ESG Rating.
Recently, Shenzhen Securities Information Co., Ltd., a wholly owned subsidiary of the Shenzhen Stock Exchange, officially launched the CSI ESG Rating Methodology, along with ESG benchmark and ESG leader indices constructed based on this methodology and anchored to core Shenzhen‑listed indices (the SZSE Component Index, the ChiNext Index, and the SZSE 100 Index). Shanghai Securities News reports that Shenwan Hongyuan Group Co., Ltd. (hereinafter referred to as “Shenwan Hongyuan”) received an AA rating thanks to its strong ESG performance.
The CSI ESG Rating methodology comprehensively assesses companies’ sustainability practices and performance across three dimensions—Environment, Social, and Governance—aiming to provide an ESG evaluation tool tailored to the Chinese market. Its rating criteria integrate international best practices with local realities, seamlessly aligning China’s distinctive development trajectory with global ESG standards. Relying on objective rules and quantifiable publicly available data, the methodology applies sector‑specific weighting and standardized procedures to evaluate all A‑share listed companies, offering a holistic view of their ESG performance and updating results quarterly. The CSI ESG ratings are graded on a 10‑tier scale from AAA to D, reflecting the relative standing of listed companies’ ESG performance in the market.
Since 2015, Shenwan Hongyuan has proactively published a Corporate Social Responsibility Report. Following its A+H share listing in 2019, the company aligned with the regulatory requirements of both markets and international standards, upgrading its reporting framework. It now issues a Corporate Social Responsibility Report and an Environmental, Social, and Governance (ESG) Report in three languages—Simplified Chinese, Traditional Chinese, and English—released concurrently with its annual report. These reports comprehensively disclose the company’s performance across key areas, including environmental management and green finance, employee development, product innovation, customer service, social contributions, financial support initiatives, corporate governance by directors, supervisors, and senior management, and ESG management.
In the realm of environmental governance, the company aligns with the national strategic goals of “carbon peaking and carbon neutrality,” rigorously implements the principles of sustainable development, and actively pursues green finance initiatives. It has taken a pioneering role in the industry by establishing a dedicated “carbon neutrality” team and setting up a specialized department. Through deepening comprehensive cooperation in green finance and supporting green corporate bond financing, the company has forged carbon‑neutral financial partnerships with numerous central state‑owned enterprises. Additionally, the company invests in green‑related companies via direct equity investments and fund‑of‑funds structures, thereby fostering their industrial growth. ESG considerations are integrated into its proprietary investment decision‑making process, and financial investment activities are leveraged to amplify positive environmental impacts.
In the realm of social responsibility, Shenwan Hongyuan, as a state‑owned financial institution that “upholds its principles and takes bold responsibility,” places great emphasis on poverty alleviation and rural revitalization. In collaboration with 12 leading securities offices and six fund and futures companies, it initiated the Capital Markets Public Welfare Alliance and, as the rotating chair, hosted the “Securities Industry Symposium on Supporting the Rural Revitalization Strategy.” The company has also established dedicated “Capital Markets Assistance Zones” on five major e‑commerce platforms and four major bank‑run marketplaces, helping agricultural products from assisted regions build brands and expand sales channels. At the beginning of 2022, responding to the call of the Securities Association, the company donated RMB 8 million to establish the Shenwan Hongyuan Public Welfare Foundation, which funds public‑interest initiatives such as providing assistance to people and families in need. The company was selected as a model case for financial support by the Party Building Work Committee of Central and State Organs, recognized among the National Rural Revitalization Administration’s six national exemplary cases of assistance, and received the China Listed Companies Association’s 2022 “Best Practice Case for Rural Revitalization by Listed Companies” award, among other honors.
In the area of corporate governance, the company has strengthened its board of directors, consistently benchmarked against best practices, and enhanced governance effectiveness, earning accolades such as the “Golden Roundtable Award” for listed‑company boards. The company has also continuously improved the quality of its information disclosure, receiving an A‑grade rating in the Shenzhen Stock Exchange’s annual information‑disclosure assessment for seven consecutive years. In response to evolving investor‑relations dynamics, the company has organized a variety of investor‑engagement and communication initiatives, garnering honors including the China Listed Companies Association’s award for outstanding practices in annual report earnings‑call presentations and the “Best Innovation Award” in the China Excellence in IR rankings.
Looking ahead, Shenwan Hongyuan will continue to align with international and domestic ESG rating frameworks, benchmark against industry best practices, and steadily advance its ESG initiatives. Internally, it will strengthen its ESG risk management capabilities; externally, it will establish a robust ESG value proposition. By delivering enhanced ESG performance, the office aims to improve its ESG ratings, continuously elevate its ESG governance, and earn recognition from investors, regulators, and clients for its ESG value creation. Together with upstream and downstream partners and other stakeholders, Shenwan Hongyuan will seize the opportunities of our times and pursue sustainable development.
Securities offices have successively released their first-half results, with three companies posting growth against the market trend—earning them the title of “model students.”
Recently, brokerage offices’ interim reports are still being disclosed, and performance among companies is markedly divergent.
Affected by recurring COVID-19 outbreaks, geopolitical tensions, and external inflationary pressures, the secondary market remained volatile in the first half of this year, leading to widespread expectations that the securities industry would face earnings pressure. Indeed, some brokerage offices reported year-on-year declines in their first-half results.
However, the fortunes of brokerage offices have diverged. Amid a subdued industry outlook, as of now, Ping An Securities, East Money Securities, and Founder Securities have emerged as among the few brokers to post growth against the market trend. Specifically, Ping An Securities and East Money Securities both reported double-digit year-on-year increases in net profit for the first half of the year, while Founder Securities posted a net profit of RMB 1.421 billion, up nearly 10% year over year—a six-year high for the same period.
Proprietary trading can be described as the “decisive factor” behind securities offices’ profitability and turnaround from losses; those that have posted better-than-expected results have all benefited from a sharp surge in proprietary‑trading income. Conversely, offices whose year‑on‑year performance has declined sharply have also been closely tied to weak proprietary‑trading earnings.
Three brokerage offices have posted growth against the market trend.
As of press time, nine listed securities offices have released their interim reports. Combined with those that previously issued preliminary results and performance forecasts, a total of approximately 21 securities offices have disclosed their first-half results.
Overall, the securities industry—led by listed brokerage offices—has delivered lackluster results. Among the 21 listed brokers, 18 reported year-on-year declines in net profit, with some even posting losses; only East Money Information, Founder Securities, and Ping An Securities managed to post year-on-year growth in net profit.
According to East Money’s interim report, the company posted total operating revenue of RMB 6.308 billion in the first half of the year, up 9.13% year over year, and net profit of RMB 4.444 billion, up 19.23% year over year. Notably, its securities business—the largest segment—accounted for more than 60% of total revenue, generating RMB 3.958 billion in the first half, a year-on-year increase of 22.81%.
With the release of Ping An Insurance Group’s interim report, Ping An Securities’ first-half results have also come to light. The company reported first-half operating revenue and net profit of RMB 9.947 billion and RMB 2.421 billion, up 6.9% and 38.5% year over year, respectively.
Fangzheng Securities, which recently released its semi-annual report, reported first-half operating revenue of RMB 4.076 billion, essentially unchanged from the same period last year. Net profit attributable to shareholders of the listed company reached RMB 1.421 billion, up 9.29% year over year despite the challenging market conditions, marking a six-year high for the corresponding period.
“Recently, I’ve noticed that securities offices have been releasing their interim reports one after another, but compared with last year, there are still relatively few that have posted growth against the market trend,” said He Yagang, director, head of the Executive Committee, and board secretary of Founder Securities, at the company’s interim results briefing.
He Yagang explained that Founder Securities’ half-year results managed to grow against the market trend for three key reasons: First, the company’s balance sheet expanded, leading to a substantial boost in investment income. After a three-year hiatus, Founder Securities resumed bond issuance and successfully raised RMB 3.1 billion through a non‑public corporate bond offering in the first half of the year, thereby reducing its financing costs. With asset yields hitting new highs and liability costs at record lows, the net interest margin widened, delivering a direct contribution to earnings. Second, the company’s business is trending toward greater diversification and resilience, effectively mitigating cyclical and market volatility. In the first half, Founder Securities achieved breakthroughs across fixed‑income investing, private equity funds, and public mutual funds, turning these areas into significant drivers of profit growth. Moreover, amid a sluggish capital market, its proprietary equity‑investment business generated positive returns, with investment yields far outpacing major market indices. Third, by adhering to a prudent operating philosophy, the company maintained zero impairment charges and zero provisions. During the first half, it further refined its comprehensive risk‑management framework, continuously strengthened risk controls, and enhanced risk‑mitigation measures, achieving zero impairment provisions and no new risks arising.
Proprietary trading has become the decisive factor.
Looking back at the market performance in the first half of 2022, it was marked by sharp volatility, which dealt a severe blow to the securities industry, particularly its proprietary trading business.
“In the first half of the year, as everyone knows, the equity‑related sector delivered a rather challenging performance—indeed, it was quite perilous,” said Cui Xiao, Vice President of Founder Securities, commenting on the blow that securities offices’ proprietary trading businesses endured in the first half.
CICC’s non‑bank financial research team forecasts that, in the first half of the year, listed securities offices will see operating revenue decline 19% year over year and net profit fall 28% year over year. Investment‑related businesses—including proprietary trading, co‑investment in STAR Market IPOs, and private equity investments—have become the primary drag on performance, as their directional exposures are highly sensitive to market volatility.
Taking Zhongyuan Securities as an example, the brokerage reported a net loss of RMB 125 million in the first half of the year, a year-on-year decline of 154.79%, marking a shift from profit to loss compared with the same period last year. Specifically, its proprietary trading revenue stood at RMB 161 million, down 62% year over year.
Similarly, Guoyuan Securities’ revenue growth without a corresponding increase in profit is closely tied to its proprietary trading income. In the first half of the year, the company reported operating revenue of RMB 2.446 billion, up 7.49% year over year, and net profit of RMB 748 million, down 11.57% from the same period last year—performance that was reasonably solid. However, proprietary‑trading revenue totaled RMB 149 million, a year‑on‑year decline of 74.53%.
By contrast, the other three securities offices that posted year-on-year growth in performance all reported positive year-over-year growth in their proprietary trading businesses. According to unaudited results from East Money Securities, a subsidiary of East Money Information, the office generated investment income of RMB 832 million in the first half of the year, up 204.76% year over year. Similarly, Ping An Securities stated that it has strengthened its competitive edge in bond‑related trading and capitalized on interest‑rate and reserve‑requirement‑ratio cuts in the first half, resulting in a year-on-year increase in investment income.
Fangzheng Securities stated that its outperformance of the industry average in the traditional proprietary investment business was a key driver behind the company’s counter‑trend growth in the first half of the year. Using the calculation formula—“Investment income + Changes in fair value − Investment income from associates and joint ventures + Interest income from other debt investments = Proprietary investment income”—the office reported proprietary investment income of RMB 1.131 billion as of June 30.
Commercial & Corporate
Geshang’s Q2 2022 Financial Report: Revenue of RMB 2.15 billion, with results exceeding expectations.
On August 24, Beijing time, Wanwu Xinsheng (Aihuishou) Group, a Chinese platform for trading and servicing secondhand consumer electronics (NYSE: RERE), released its financial results for the second quarter of 2022.
According to the financial report, in the second quarter of 2022, Wanwu Xinsheng Group reported total revenue of RMB 2.15 billion, up 14.9% year over year, surpassing market expectations. The group’s GMV for the quarter reached RMB 8.6 billion, a year-on-year increase of 10.3%. Operating cash flow turned positive at RMB 280 million, marking two consecutive quarters of positive operating cash flow. As of the end of the second quarter, Wanwu Xinsheng’s retail network spanned 241 cities nationwide, with a total of 1,629 stores.
Both revenue and GMV grew.
Performance exceeded expectations.
In the second quarter of 2022, despite the recurring impact of the COVID-19 pandemic, Wanwuxinsheng maintained growth across key performance metrics, including revenue and GMV.
According to the financial report, in the second quarter, Wanwu Xinsheng Group reported total revenue of RMB 2.15 billion, up 14.9% year over year. By revenue mix, 1P (self-operated) product sales amounted to RMB 1.85 billion, a year-on-year increase of 15.6%, while 3P (platform) service revenue reached RMB 290 million, up 10.3% year over year. The platform’s fee rate stood at 4.54%, an increase of 39 basis points quarter over quarter.
In terms of transaction scale, the Group’s second-quarter used‑goods sales across all platforms totaled 7.8 million orders, with total GMV reaching RMB 8.6 billion, up 10.3% year over year. Specifically, 1P business generated RMB 2.2 billion in GMV, a 15.8% year-over-year increase, while 3P business contributed RMB 6.4 billion in GMV, up 8.5% year over year.
Notably, following a positive operating cash flow of RMB 120 million in the first quarter of 2022, this quarter saw net operating cash inflows of RMB 280 million, marking two consecutive quarters of positive operating cash flow.
In addition, as of June 30, 2022, the Group’s total cash and cash equivalents, short-term investments, and balances in third-party payment platform accounts amounted to RMB 2.59 billion. Following share repurchases and capital expenditures, this represented an increase of RMB 170 million compared with year-end 2021, thereby ensuring the Group’s stable operations.
Chen Chen, Chief Financial Officer of Wanwusheng, stated: “Amid the recurring pandemic, businesses are confronting a rapidly evolving consumer and operational landscape, posing challenges to both our company‑owned store operations and platform‑driven transactions. Nevertheless, we responded swiftly by adjusting our operating strategies and optimizing cost expenditures, ultimately achieving a year‑over‑year narrowing of losses in the second quarter compared to the same period last year. Following the full resumption of work and production in Beijing and Shanghai in June, our self‑operated recycling business has demonstrated a clearly visible recovery trajectory. Furthermore, at the end of the second quarter, the Group maintained robust overall cash reserves and sustained healthy, sustainable operations. Looking ahead, we will prudently explore opportunities across multiple product categories, making appropriate investments to enhance the synergies of our integrated urban‑model strategy and expand our market share, thereby creating long‑term value for our shareholders and society.”
The store network is expanding in an orderly manner.
Empowering Partners Overseas
On the offline operations front, Wanwu Xinsheng Group continues to expand its store network in an orderly manner. As of June 30, 2022, the Group’s physical stores had reached 241 cities nationwide, an increase of 27 compared with the end of the previous quarter; the total number of stores stood at 1,629, up 183 from the end of the prior quarter.
Notably, since the beginning of this quarter, in addition to its core mobile phone and 3C‑related recycling business, Wanwu Xinsheng has accelerated the expansion of its multi‑category recycling operations. The Group has selected more than 30 flagship Aihuishou stores in cities including Beijing, Shanghai, Shenyang, and Nanjing as pilot locations, offering secondhand luxury goods and imaging equipment—high‑value items—alongside its existing services. Without incurring additional costs, it is leveraging its existing store network to deliver a more diversified and convenient recycling experience for consumers.
Meanwhile, the Group’s overseas operations have also made new strides. During this quarter, Wanwu Xinsheng partnered with a major Japanese chain of secondhand‑goods trading companies, and its self‑developed next‑generation mobile phone self‑service recycling kiosk has been deployed and is now in operation at the Tokyo flagship store of its Japanese partner. This next‑generation kiosk can swiftly and automatically perform visual and functional inspections and generate an instant valuation—all without any human interaction. Looking ahead, Wanwu Xinsheng will continue to expand into additional target markets, including Japan, South Korea, Europe, and North America, exporting its technological capabilities abroad and empowering local partners.
Chen Xuefeng, Chairman of the Board and CEO of Wanwusheng, stated: “The resurgence of COVID‑19 in China during the second quarter posed challenges to both social and economic activities. Our team responded proactively, and our quarterly revenue exceeded the guidance we provided last quarter. While short‑term operations remain under pressure from the pandemic, from the long‑term perspective of the circular economy, consumer and merchant demand for electronic product recycling, trade‑in programs, and value‑added services will continue to grow alongside economic development. We remain committed to an urban‑integrated approach as our core strategy, aiming to increase our penetration in the recycling market; we will continue to invest in automation to lay a solid foundation for scaling up, reducing costs, and improving efficiency; and we will further expand our capabilities across a broader range of product categories, offering consumers more choices and delivering recycling services that surpass expectations.”
Release the annual ESG report
Leading the industry toward green and sustainable development
As a circular‑economy enterprise under the “Internet Plus Environmental Protection” model, Wanwu Xinsheng Group, in addition to focusing on the development of its core business, released its 2021 Environmental, Social, and Governance Report (ESG Report) this quarter. The report marks the first time the company has adopted the Task Force on Climate‑related Financial Disclosures (TCFD) framework.
In this report, Wanwuxinsheng for the first time employed a life-cycle assessment approach to disclose that, in 2021, the average carbon‑reduction contribution per secondhand mobile phone successfully sold by the Group was 30.41 kilograms, with the platform’s total carbon‑reduction contribution from secondhand phones reaching 463,692 tonnes—equivalent to the annual carbon sequestration capacity of 2.3 million mu of urban forest.
In addition, the report highlights Wanwu Xinsheng’s achievements in building a green circular‑economy value chain, leveraging technological innovation to drive industry standardization, and fulfilling its corporate social responsibility. According to the data, in 2021, Wanwu Xinsheng collected and oversaw the environmentally sound disposal of a total of 223,000 units of end‑of‑life electronic devices, thereby reducing electronic‑product pollution by approximately 35.7 tons.
In the long term, Wanwuxinsheng is committed to adopting a greener, lower‑carbon approach—extending the lifecycle of more products through circular reuse—thereby reducing overall carbon emissions while meeting the same market demand. In doing so, it also aims to set an industry benchmark in support of the national policy direction on the circular economy and to contribute to the shared goals of peaking carbon emissions and achieving carbon neutrality.
ZhiDianMai released its 2022 interim report: its core business continues to grow steadily, and its innovative ventures are being actively advanced.
On the evening of August 22, Beijing ZhiDeMai Technology Co., Ltd. officially released its 2022 semi-annual report. During the reporting period, the company recorded operating revenue of RMB 606.4752 million and net profit attributable to shareholders of the listed company of RMB 20.1990 million. Notably, its core business, “What’s Worth Buying,” generated operating revenue of RMB 445.2292 million, accounting for 73.41% of the company’s total revenue.
The core business is growing steadily.
In the first half of 2022, guided by the company’s new ten-year strategic roadmap and grounded in fresh perspectives, innovative solutions, and renewed value for the future consumer landscape, ZDM Technology undertook a strategic upgrade of the “What’s Worth Buying” brand. This initiative reinforced the brand’s recognition in consumers’ minds, sharpened its differentiated market positioning, delivered irreplaceable value to users, and aspired to become a beloved, science‑driven consumption platform.
This “scientific consumption platform” is built on a foundation of high‑quality content creators. As its value system evolves, What’s Worth Buying has further boosted users’ enthusiasm for content creation by organizing events and launching dedicated columns around trending consumer topics, while also rolling out support, incentive, and incubation programs for creators. These efforts have kept the platform’s overall content‑posting volume on a rapid growth trajectory. In the first half of 2022, What’s Worth Buying published 9.7164 million pieces of content, up 49.72% year over year; user‑generated content (UGC) accounted for 72.71% of the total.
A healthy, thriving content ecosystem is driving the continued growth of “What’s Worth Buying’s” user base. In the first half of 2022, the platform recorded an average of 36.81 million monthly active users, up 7.42% year over year. As of June 30, 2022, the total number of registered users reached 24.42 million, a year-over-year increase of 32.52%, while mobile app activations totaled 61.03 million, up 16.43% from the same period last year.
As user experience continues to improve, “What’s Worth Buying” has also seen steady gains in commercial monetization efficiency. In the first half of 2022, the platform and its mobile app reported a GMV of RMB 10.247 billion, with a total of 78.6875 million orders fulfilled.
Proactive innovation across all content areas
In the realm of consumer content, during the first half of 2022, “What’s Worth Buying” incubated multiple niche sectors and launched several brand‑new IPs, including “Mass Consumer Testing,” “Treasure Videos,” and “From Beginner to Expert.” It also rolled out high‑profile initiatives such as “Good Product Research Institute,” “Public Tip‑Off Season,” and the “2022 Midyear Treasure Content Awards.” These efforts not only boosted creator engagement and content quality but also provided users with rich, comprehensive information to inform their purchasing decisions, earning widespread acclaim from its community of “value‑seeking” users.
Beyond the “What’s Worth Buying” platform, to support users’ purchasing‑decision‑making across other online channels, ZDM Technology is steadily expanding its consumer‑focused MCN business. In the first half of 2022, leveraging external traffic ecosystems on platforms such as Douyin, Kuaishou, Bilibili, and Xiaohongshu, ZDM incubated and operated more than 150 accounts spanning over 20 vertical categories, amassing a combined fan base of over 35 million and generating cumulative video views exceeding 5.2 billion.
Regarding the “metaverse”—a completely new content ecosystem—ZDM Technology began proactively laying out related business initiatives as early as late 2021. With respect to digital collectibles (NFTs), ZDM Technology is committed to providing brands and IP holders with a compliant, secure, and hassle-free one-stop service solution, encompassing creative planning, collectible design, multi-channel issuance, and promotional operations. To date, ZDM Technology has partnered with several leading digital collectible platforms, including Xinhua News Agency’s Shicang and Alibaba’s Jingtan, and in the first half of 2022 successfully launched two digital collectibles: the Cizhou Kiln series “Zhaojun Leaves the Frontier” and the Hainan Daily commemorative issue marking the establishment of Hainan Province. In June 2022, ZDM Technology also joined forces with industry leaders in cultural tourism and prominent metaverse‑focused enterprises to launch China’s first “Cultural Tourism Metaverse Laboratory,” aiming to drive integrated innovation in cutting-edge metaverse technologies and deepen the convergence of cultural tourism and technology.
In addition, in July 2022, the “Huaxia Fengwuguan,” developed by ZhiDeMai Technology, made a striking debut at the second China International Consumer Goods Expo. By seamlessly integrating offline and online channels, it presented to the world the collective brand identity of “Huaxia Fengwu,” helping outstanding domestic brands leverage the expo’s platform to break through barriers and gain wider recognition. As a result, “ZhiDeMai Technology’s support for more than 30 premium Chinese brands to participate in the Consumer Expo” became a focal point of industry attention.
ZhiDian Technology stated: In an era of stock‑based competition and amid a complex and challenging external environment, the company will steadfastly continue to advance the strategic transformation and upgrading of its business. Grounded in a consumer‑content‑centric approach, it will deepen its deployment across three core business segments—consumer content, marketing services, and consumer data—aiming to evolve into a diversified enterprise that leverages the consumer industry and the content sector as its foundation, while delivering a wide array of products and services to both users and clients.
China Biopharmaceutical’s newly appointed CEO makes his debut, launching a multi-pronged strategy to drive operational reforms.
On the evening of August 23, China Biopharmaceutical Corporation released its interim results, showing that in the first half of this year, its operating revenue reached RMB 15.19 billion, up 5.9% year over year. The company maintained prudent financial management, with cash reserves of approximately RMB 22.24 billion. In terms of expenditures, the company continued to ramp up R&D investment, with total R&D spending reaching RMB 2.19 billion in the first half, a year-on-year increase of 16.5%. Meanwhile, cost‑reduction and efficiency‑enhancement measures yielded significant results, sustaining a five-year downward trend and further bolstering the company’s innovative R&D efforts and shareholder returns.
On July 28 this year, Xie Chengrun assumed the role of Chief Executive Officer of China Biopharmaceutical Corporation. The company’s management team will adopt a clear division of responsibilities to jointly drive the group’s expansion into broader pharmaceutical markets. Chairman Xie Qirun will focus on corporate strategic planning, internationalization initiatives, capital market operations, and matters related to the listed company, while CEO Xie Chengrun will concentrate on the operational management, organizational optimization, and performance enhancement of all subsidiaries under the listed entity.
Among the five operational reforms, Xie Chengrun placed particular emphasis on enhancing R&D efficiency. He stated that the company will further integrate the resources of China Biopharmaceutical and its subsidiaries. In both domestic and international business development and M&A activities, the Group will strategically focus on four core therapeutic areas—oncology, surgery/pain management, hepatology, and respiratory diseases—leveraging the unique strengths of each subsidiary to ensure precise product‑pipeline alignment and accelerate commercialization.
He cited examples: for instance, the Group led an investment in Yiyi Bio to introduce a novel oncology drug for leukopenia, with commercialization entrusted to its member company, CP Tianqing; likewise, the Group’s acquisition of Anyuan’s hepatology products has also been implemented at CP Tianqing. In addition, the Group plans to explore collaborations with Japanese companies to strengthen the pipeline of its member enterprise, Taidé.
“In terms of our project‑approval process for the R&D pipeline, we previously focused primarily on generic drugs and high‑certainty innovative medicines, adopting a broad, all‑encompassing approach. Over the past two years, we’ve made substantial adjustments, sharpening our focus on innovation,” said Xie Chengrun. He added that the company’s R&D investment has shifted from a 50/50 split between innovative and generic drugs to a structure in which more than three-quarters is now allocated to innovative medicines, with an even stronger emphasis on four key therapeutic areas—marking a transition from a ‘broad and comprehensive’ strategy to one that is ‘fast and precise.’”
According to the performance report of China Biopharmaceutical Corporation, the company has steadily accelerated its innovation-driven development and transformation in recent years. In the first half of the year, R&D spending reached RMB 2.19 billion, up 16.5% year on year, accounting for 14.4% of total revenue. The contribution of innovative drugs to overall performance has become increasingly prominent, with combined revenues of RMB 3.49 billion, representing 22.9% of total revenue and growing 14.2% year on year. The interim report also disclosed that the company’s revenue from innovative drugs is expected to exceed RMB 10 billion in 2023.
Deepening state-owned enterprise reform by bringing in strategic investors: The controlling shareholder of Huaguang Energy plans to publicly transfer a 25% stake.
On the evening of August 24, Huaguang Energy issued an announcement stating that its controlling shareholder, Wuxi Guolian Development (Group) Co., Ltd. (hereinafter referred to as “Guolian Group”), plans to transfer, via a public solicitation for transfer, shares representing no more than 25% of Huaguang Energy’s total share capital.
Under this transaction, Guolian Group plans to transfer a 25% stake in Huaguang Energy—comprising 236 million shares—to a publicly solicited transferee. The shares are non‑restricted legal‑person shares. As of now, Guolian Group directly holds 72.23% of the company’s shares and, through its wholly owned subsidiary Wuxi Guolian Financial Investment Group Co., Ltd., indirectly holds an additional 1.24% of the company’s shares. Upon completion of this transfer, neither the company’s largest shareholder nor its actual controller will change.
In accordance with the relevant provisions of the Measures for the Supervision and Administration of State‑Owned Equity in Listed Companies, the transfer price shall not be lower than the higher of: (i) the arithmetic mean of the daily weighted average prices over the 30 trading days preceding the date of this preliminary announcement (August 25, 2022); and (ii) the audited net asset value per share for the most recent fiscal year.
Preliminary calculations indicate that the arithmetic mean of the daily weighted average prices over the 30 trading days preceding the date of this announcement is RMB 8.69 per share. For the company’s most recent fiscal year (2021), the audited net asset value per share was RMB 9.9987; however, following the completion of the 2021 equity distribution plan, the adjusted net asset value per share stands at RMB 7.4221.
“The price for this public transfer will not be lower than RMB 8.69 per share,” said a representative from Hua Guang Huan Neng. “The controlling shareholder is transferring a 25% stake this time to further deepen state‑owned enterprise reform, optimize the structure of state‑owned asset allocation, attract strategic resources to support the company’s future development, refine its equity structure, enhance its growth potential, and promote sustained corporate development.”
It is understood that this share transfer transaction may only proceed to the public solicitation of a transferee upon approval by the state‑owned assets supervision and administration authority. Until the public solicitation process is completed, the identity of the transferee remains uncertain.
Taxation
Jiangsu: Leveraging Tax Policies to Boost Employment and Support Entrepreneurship
“Click, click, click…” As we step into Nanjing Yilairuian Optoelectronic Technology Co., Ltd. in Nanjing’s Qixia District, the brightly lit workshop is bustling with full‑speed production. Rolls of protective films and adhesive tapes flow continuously from one end of the production line; through a series of tightly coordinated processes, these raw materials are transformed into specialized tapes tailored to various models of tablets and smartphones. Forklifts shuttle back and forth between the workshop and the warehouse, and after inspection and packaging, the finished products are shipped across the country.
The company is a high-tech enterprise with more than 200 employees, primarily manufacturing double-sided adhesive tapes and prism optical films used in the liquid crystal industry. “Last year, the company experienced rapid growth, with sales exceeding RMB 200 million. However, due to the COVID‑19 pandemic, some upstream raw-material suppliers suspended production, creating a significant gap between sales revenue and accounts payable,” said Qiao Baofei, the company’s general manager. Thanks to concrete fiscal and tax policy support, the company not only avoided layoffs but also recently hired nearly 50 production workers.
Qiao Baofei stated that in the first half of this year, the company benefited from policies such as a six-month deferral of value-added tax and corporate income tax payments. Additionally, as a high-tech enterprise, it qualified for the preferential policy of paying corporate income tax at a reduced rate of 15%, resulting in tax savings of nearly RMB 700,000. Furthermore, the company also received favorable treatment on urban construction and maintenance taxes and other surcharges, with tax reductions and exemptions totaling over RMB 100,000.
“The funds saved and deferred are being used to pay for raw materials, which not only eases the financial strain on upstream suppliers but also revitalizes the industrial chain, fostering a virtuous cycle of product sales and business operations,” said Qiao Baofei. He added that the company’s production capacity has now returned to last year’s level, and the next step will be to fully leverage policy benefits and strengthen innovation and R&D. “With the support of tax incentives, I am even more confident in recruiting talent and creating additional jobs.”
“In May this year, the ‘Spring Breeze and Gentle Rain’ service team established by the Qixia District Tax Bureau in Nanjing visited our company, warmly inquired about our needs and challenges, proactively helped us reduce our tax burden, and, using advanced modeling to pinpoint our specific circumstances, customized personalized tax‑related information推送 tailored to our situation—ensuring that preferential policies reached the production floor at the earliest possible moment,” said Chen Hui, the company’s finance manager.
Every June and July marks the peak season for college students’ employment and entrepreneurship. Tax authorities across Jiangsu Province, in collaboration with human resources and social security departments and other relevant agencies, are visiting universities to provide services that support students in finding jobs and starting their own businesses.
“A few of us classmates have just registered an agricultural company and are in the early stages of starting up; funding is our biggest challenge. Are there any tax incentives we can benefit from?”
“Engaging in agricultural projects qualifies for reductions or exemptions from corporate income tax. For agritourism, if the enterprise meets the criteria for a small and micro‑enterprise, it can also benefit from the corresponding tax incentives—this is a universally applicable policy. Additionally, when an enterprise incurs R&D expenses, it may claim an additional 75% deduction; in other words, for every 100 yuan invested in R&D, the enterprise can deduct 175 yuan of R&D costs from its taxable income…”
Recently, Cao Hui, a graduate of the Modern Agricultural Technology program at Jiangsu Vocational College of Agriculture and Forestry, visited the “Shui Xiaoxi” tax‑service studio at the Jurong City Tax Bureau during a campus outreach event to receive policy guidance. He posed several questions to the staff and received thorough, satisfactory answers, remarking, “I now feel much more confident about starting my own business.”
Since the beginning of this year, the “Tax Xiaoxi” studio of the Jurong City Tax Service Bureau has organized five policy briefings—both on campus and via online livestreams—providing detailed information on tax and fee preferential policies for college students seeking employment or starting businesses. For newly established enterprises founded by students, the studio also offers integrated “online plus offline” follow-up guidance, addressing tax-related issues on a one‑on‑one basis to help them take their first steps in employment and entrepreneurship.
In Jiangsu Province, the tax authorities are taking a two-pronged approach—addressing both demand and supply. On the one hand, leveraging the advantages of tax‑related big data, they precisely identify enterprises, shifting from a model where “people seek out policies” to one where “policies find people.” This enables more targeted implementation of a suite of tax and fee support measures, including VAT credit refunds, tax relief for small and micro‑enterprises, and unemployment insurance subsidies for stabilizing employment, thereby helping these businesses overcome difficulties. On the other hand, the authorities are strengthening collaboration with federations of industry and commerce, human resources and social security departments, and higher education institutions to gain a deeper understanding of the employment and entrepreneurship needs of key groups. By bringing preferential tax policies directly to campuses and into the hands of job seekers and entrepreneurs, they are bolstering the capacity and confidence of the supply side to support employment and business creation.
Tibet: Epidemic Prevention and Control Remains Steady; Tax and Fee Services Continue Uninterrupted
In response to the pandemic, the Tibet tax authorities have, while rigorously implementing all epidemic prevention and control measures, made every effort to address taxpayers’ and payers’ tax‑related needs. They promptly adapted their tax filing and payment service delivery methods, offering businesses a diverse array of personalized “non‑contact” services to ensure that epidemic control remains stringent while tax and fee‑related services continue uninterrupted.
“Contactless” tax services help maintain rigorous epidemic prevention and control measures.
In the face of the pandemic, to ensure the continued implementation of the carryforward VAT refund policy and to fully unlock its benefits, the Tibet tax authorities have leveraged tax‑related big data to identify enterprises eligible for refunds. They have then strategically deployed targeted, precision‑driven online policy outreach, providing “point‑to‑point” and “one‑on‑one” guidance on policy application and tax‑filing procedures via WeChat, telephone, and other digital channels. Taxpayers are encouraged to conduct their tax affairs through “non‑contact” channels, with active promotion of e‑tax services, self‑service terminals, mobile‑app filing, and appointment‑based staggered‑peak processing.
Referring to “contactless” tax filing and payment, Chen Ying, the finance director of the Basu County branch of State Power Investment Corporation Changdu Energy Co., Ltd., said: “The tax authorities processed our value-added tax credit refund with high efficiency and excellent quality, and the application procedure was simple and convenient—trouble-free and reassuring.”
The tax authorities in Tibet have fully leveraged the electronic tax bureau, streamlined workflows, and refined the tax refund mechanism, thereby establishing a comprehensive, scientifically sound, efficiently operated, and readily replicable “paperless” system for tax refunds. This ensures that tax reductions and refunds are processed without delay, even during special periods.
“Precision Guidance” online services achieve multi-point connectivity and seamless integration.
“I filed for a tax refund by calling 12366, and my confusion was quickly resolved. With step-by-step guidance from the call center staff, the refund has now been credited to my account—truly a lifesaver in a time of urgent need,” said a finance professional at a manufacturing company.
As one of the primary channels for policy consultation and tax‑and‑fee guidance, the 12366 Taxpayer Service Hotline has, in order to best meet the advisory needs of taxpayers and payers across the region, activated an emergency response plan. Under a work‑from‑home call‑handling model, the hotline remains fully operational around the clock, ensuring uninterrupted service even during epidemic prevention and control. In addition, the hotline has established dedicated “expert seats” to address bundled tax and fee policies, opened up comprehensive channels for handling inquiries on pandemic‑related tax and fee service policies, and clearly defined the responsibilities of call‑center staff, all in an effort to provide taxpayers and payers with policy advice, software‑usage guidance, online‑operation instructions, and other support—truly putting into practice the service principle of “listening attentively and serving sincerely.”
The Lhasa Municipal Tax Service Bureau leverages “Sunshine Radio Live Broadcasts” to provide one‑on‑one tax guidance and policy advice to taxpayers and payers of various types. “Tax officials offered remote online assistance in processing our application for refund of outstanding input VAT credits, and we received the refund shortly after submitting it,” said Wu Mengyao, finance manager at the Gangdis Hotel, with delight.
Meanwhile, the Tibet tax authorities provide online policy inquiries and advisory services through their WeChat official account and portal website, leveraging channels such as the “Hufeng Tax Talk” livestream and the “Yangzhen Studio” to deliver targeted, one‑on‑one reminders and offer step‑by‑step remote guidance, ensuring uninterrupted tax and fee services around the clock.
A relevant official from the Tibet Autonomous Region Tax Service of the State Taxation Administration stated that, amid the ongoing pandemic, the Tibet tax authorities are not only continuing to strengthen epidemic prevention and control and ensure public safety but also steadily enhancing tax and fee‑related services, providing taxpayers and payers with higher‑quality, more convenient administrative and payment services, thereby ensuring that both epidemic prevention and tax‑fee services proceed without compromise.
Zhejiang: Tax Benefits Provide Support, as “Digital Factories” Set Sail for a Promising Future Market
At the recently held Provincial Conference on High-Quality Development of the Digital Economy, Zhejiang unveiled its ambitious plan to upgrade its “No. 1 Project” for the digital economy: within five years, it aims to achieve a new round of “double growth” in the overall scale of the digital economy, thereby seizing the commanding heights in the global digital competition.
Amid the wave of high-quality development driven by digital transformation and powered by digital innovation, Zhejiang’s tax authorities have meticulously implemented a new package of tax and fee support policies, steadfastly upholding business‑friendly measures to further optimize the business environment. They are helping benchmark enterprises—such as digital factories and future‑oriented manufacturing facilities—achieve high‑quality growth, thereby providing “tax‑driven momentum” for Zhejiang Province to seize the next strategic frontier in digital competition. According to data, as of July 20, a total of RMB 166.1 billion in tax refunds had been disbursed to taxpayers’ accounts, 2.04 times the amount refunded during the same period last year.
Embracing Change: Digital Empowerment for Smart Factories
Data indicate that 22% of global GDP is currently closely linked to the digital economy, and seizing the “key variable” of digitalization is the “winning formula” for ensuring steady and sustainable progress in the future global economic landscape. As Zhejiang’s leading city in the digital economy, Hangzhou has adopted a development strategy centered on “Industrial Brain + Future Factory.”
Hangzhou Shenhao Technology Co., Ltd., recently recognized as a benchmark digital factory in Zhejiang Province, is dedicated to pioneering digital technologies that empower the development of “smart factories.” The company has developed 15 intelligent robots with fully independent intellectual property rights, which are widely deployed across sectors such as power grids, rail transit, and oil, gas, and chemical industries, providing comprehensive, integrated hardware solutions to help traditional industrial enterprises achieve a transformation from conventional manufacturing to intelligent manufacturing.
“During this special period, the state has continuously strengthened its tax‑incentive policies, enabling us to steadily increase the proportion of our spending on research and development, break through technological bottlenecks and barriers, and secure a leading position in core technologies,” said Qian Ying, CFO of Shenhao Technology. With the support of these favorable policies, the company enjoys relatively ample funding for R&D, allowing its products to swiftly adapt to market changes and ensuring steady growth in its market share.
The innovation-driven impact of R&D investment has given the company wings to soar, while tax incentives have provided a favorable tailwind. Since 2016, the company’s R&D spending has surged from RMB 13.86 million to RMB 61.75 million, an increase of 340%. Over the past three years, it has cumulatively benefited from an additional R&D expense deduction totaling RMB 120 million, received more than RMB 50 million in immediate VAT refunds, and enjoyed corporate income tax reductions and exemptions exceeding RMB 40 million as a high-tech enterprise. The company’s latest batch of dual‑track ultrasonic rail‑inspection robots has already been delivered, injecting powerful smart momentum into the digital transformation of the traditional rail‑transportation industry.
Empowering Capabilities: The Platform Fuels the Digital Ecosystem
As enterprises progressively undergo digital transformation, digital ecosystem platforms—such as big data platforms and industry‑wide common‑technology platforms—are taking shape. In response to the expanding reach of these digital ecosystems across various sectors, tax authorities have promptly deployed digital tools to build smart tax administration platforms. Leveraging big data as a key enabler, they are precisely targeting policy benefits and ensuring full and faithful implementation of tax rebate and reduction measures.
Recently, many parts of Zhejiang Province have been experiencing sustained high temperatures. China Mobile (Hangzhou) Information Technology Co., Ltd. has developed a “5G + Industrial Internet Command Center Platform” tailored specifically for production workshops, enabling workers to leave behind the traditional, sweat‑soaked labor and operate in a cool, comfortable indoor environment. At present, the company’s “5G+ Platform” digital ecosystem has expanded to 58 application scenarios, including industrial manufacturing workshops, logistics and warehousing facilities, and port container yards, driving over RMB 10 billion in revenue for its industry‑wide ecosystem partners and becoming a key enabler of digital and intelligent transformation across various sectors.
Li Rong, the head of the enterprise, stated: “The tax authorities’ ‘one-click direct connection’ guidance has enabled us to swiftly and fully benefit from tax incentives. This year, we have already received exemptions and reductions in property tax and urban land use tax totaling over RMB 3 million, and we anticipate an additional R&D expense super‑deduction of more than RMB 37 million. The resulting cash flow has given us greater momentum to expand, extend, and deepen our digital ecosystem initiatives.” The tax authorities have issued a “Needs‑Assessment QR Code” to businesses. By simply scanning the code, enterprises can access a dedicated backend service that handles the entire process—policy guidance, eligibility assessment, and Q&A—enabling them to complete all steps remotely and seamlessly. This new self‑service model allows businesses to enjoy “online needs assessment + policy guidance + remote collaboration” without leaving their offices, all through a single click.
Pooling Strength: Digital Technology Unites Industrial Momentum
From the factory floor to digital platforms, the digital economy has been rapidly empowering Zhejiang’s manufacturing sector in recent years. In Yueqing, a national advanced manufacturing cluster for the electrical industry is experiencing rapid growth.
“We aim to undertake further exploration and experimentation in driving the digital transformation and upgrading of Yueqing’s electrical industry,” said Luan Guangfu, Rotating President of Chint Group. Since 2014, the company has been focusing on integrating automation with information technology. Over the past five years, it has upgraded more than 2,000 production lines and equipment sets. Through digitalization and automation initiatives, its production efficiency has improved significantly, while labor costs have fallen by 50% and the first‑pass yield has risen by 50%.
The path of technological transformation is long, but fortunately, favorable tax policies have consistently been there to support it. According to Luan Guangfu, “In recent years, the state has adopted a ‘let the fish swim’ approach, introducing a series of measures—such as increasing the deduction rate for R&D expenses—that have provided enterprises with tangible financial support for their digitalization efforts.” Taking Zhejiang Chint Electric Co., Ltd., one of Chint Group’s core subsidiaries, as an example, in the first half of 2022, the company benefited from various tax incentives totaling RMB 324 million, including an additional R&D expense deduction of RMB 119 million.
Jilin: Tax Rebates—“Living Water”—Empower and Bolster the Development of Enterprises Serving People’s Livelihoods
People’s wellbeing is the foundation of happiness and the cornerstone of social harmony. Since the implementation of the large-scale value-added tax credit refund policy, the tax authorities in Jilin Province have focused on the needs and priorities of enterprises serving the public, adopting targeted measures to deliver much-needed liquidity through tax refunds, bolstering business confidence, and ensuring that the benefits of tax policies safeguard the people’s well-being.
With food in hand, one feels secure; the bowl of rice is now held even more officely.
Siping Siliang Group Shuangshan Grain Depot Co., Ltd. is an enterprise engaged in the procurement, drying, marketing, and storage of corn and rice. Constrained by rising energy prices and increasing logistics costs, the company’s operating performance has continued to deteriorate.
“With the guidance of tax officials, we swiftly received a tax rebate package totaling 460,000 yuan, effectively resolving our shortage of storage capacity,” said Dai Shouhui, the company’s head. The promptly credited refund will fund the construction of two new covered warehouses, each with a capacity of 20,000 tons and another with a capacity of 30,000 tons.
Tax incentives provide a powerful boost, bringing smiles to businesses. Since the implementation of the large-scale policy for refunding outstanding input VAT credits, the tax authorities in Jilin Province have strengthened tax‑big‑data analytics, offered targeted guidance, and streamlined communication channels between tax authorities and enterprises. By focusing on the key pain points and challenges faced by businesses, accurately identifying critical policy‑implementation milestones, promptly tracking refund progress, and effectively monitoring the status of refunds, they have helped companies swiftly reap the benefits of these measures.
Traffic flows continuously, and logistics and transportation are running smoothly.
The logistics and transportation sector links the production chain on one end to the consumer chain on the other, serving as a vital component of the market economy. Leveraging “targeted guidance,” tax authorities are helping logistics enterprises alleviate financial pressures and steadily bolster their capacity for self-sustaining growth.
“With one‑on‑one remote guidance from tax officials, we applied for a refund of outstanding input VAT credits. The 500,000 yuan in tax refunds we received has effectively eased our cash‑flow pressures, giving our company greater confidence to move forward,” said Ms. Liu, the finance director of a transportation company in Erdaojiang District, Tonghua City.
Affected by the pandemic and disrupted logistics, the company experienced a buildup of inventory, a sharp drop in orders, and a failure to recover its working capital. After learning of the situation, the Second District Tax Bureau of Tonghua City used big data analytics to identify that the company met the eligibility criteria for the relevant policy. The bureau promptly contacted the enterprise by phone and, leveraging the “JiShuiBan” taxpayer‑service platform, provided step‑by‑step guidance to help the taxpayer complete the tax refund application.
Healing the world with medicine, spring fills the apricot grove, and our R&D confidence has grown even stronger.
“The new policy on refunding outstanding input VAT credits has truly been a godsend for our company! At a time when we were facing the most severe cash-flow constraints, the Dongfeng County Tax Bureau, through its ‘tax-refund green channel,’ credited over 10.69 million yuan in refunds of existing credit balances directly to our corporate account,” said Tan Yue, Chief Financial Officer of Jilin Hongjing Pharmaceutical Co., Ltd.
The company primarily engages in the manufacturing of both traditional Chinese and Western medicines, as well as the breeding, processing, and marketing of sika deer. Following a corporate equity restructuring, the company faced financial constraints and encountered operational bottlenecks. With this additional funding secured, it successfully landed orders totaling over RMB 2 million, bolstering its confidence to pursue research and development and innovation.
In Tonghua, Dongfanghong American Ginseng Pharmaceutical (Tonghua) Co., Ltd. has been hit by the pandemic, leaving its three production centers—specializing in traditional Chinese medicine decoction pieces, imported decoction pieces, and ginseng‑fermented food products—with significant funding shortfalls and putting product development at risk of suspension.
Upon learning of the company’s difficulties, the Tax Bureau of the Tonghua Pharmaceutical High-Tech Industrial Development Zone promptly communicated relevant policies by phone, conducted on-site guidance to assist the company in applying for a tax refund, and helped it navigate the challenging period smoothly. “The RMB 9.5 million in outstanding input VAT refunds is undoubtedly a major boost for a growing enterprise like ours, giving us the confidence to ramp up R&D and innovation and catch up with the competition,” said Tao Wenping, the company’s head.
Tax incentives benefit both businesses and the public, bringing a sense of relief and encouragement to the people. The tax authorities of Jilin Province will continue to implement a five-pronged approach—expediting tax refunds, cracking down on fraudulent claims, rigorously investigating internal errors, welcoming external oversight, and maintaining ongoing publicity—to provide taxpayers with swift, high-quality, and efficient services. This will ensure the precise implementation and effective delivery of policies, thereby contributing the tax sector’s strength to stabilizing the local macroeconomic landscape.
Litigation & Arbitration
Beijing Financial Court: An enforcement settlement has been reached in a 7.2-billion-yuan dispute, safeguarding the legitimate rights and interests of over ten thousand investors.
Recently, a wealth investment management company filed an application to enforce a series of commercial trust dispute cases involving a certain holding group and others, with the total amount sought exceeding RMB 7.2 billion. The judgment debtor in this case is a large domestic private enterprise, drawing widespread attention from all sectors of society. The applicant, the wealth investment management company, represents the rights and interests of more than ten thousand investors, making the matter highly consequential.
After the case entered the enforcement stage, with the consent of all parties, the Business Environment Optimization Studio of the Beijing Financial Court promptly initiated efforts to facilitate settlement. During the conciliation process, the party subject to enforcement informed the court that a funding crisis in the company’s real estate division had triggered a “domino‑effect” of debt disputes, which in turn precipitated a liquidity crunch in its financial segment. The company is currently actively disposing of assets to restore its financial health and respectfully requests the court to temporarily suspend any compulsory measures against its assets, so as to prevent a collective panic among investors.
After thoroughly ascertaining the debtor’s asset and liability situation from all parties to the case, the Municipal Federation of Industry and Commerce, financial regulatory authorities, and other stakeholders, and after hearing the debtor’s proposed debt‑resolution plan, the Beijing Financial Court’s Business Environment Optimization Studio specially invited members of the Beijing Municipal Expert Committee on Optimizing the Business Environment to conduct a professional assessment of the case.
Following expert assessment, the judgment debtor possesses high‑quality real estate and financial assets, qualifying as a “private enterprise with potential for rehabilitation.” This situation allows the market‑based mechanism to play its full role, enabling the debtor to achieve self‑rescue through accelerated asset disposal. To ensure the effective implementation of policies aimed at safeguarding market entities, employment, and people’s livelihoods, and to provide relief to high‑quality private enterprises mired in debt crises, the presiding judge has decided to facilitate a settlement among all parties, thereby resolving the debt dispute and creating opportunities for the debtor to optimize asset disposal and pursue self‑recovery.
To this end, the presiding judge collaborated closely with the Municipal Federation of Industry and Commerce and the Municipal Chamber of Commerce’s experts on the business environment, taking proactive measures and engaging in repeated communications with all parties. By objectively and comprehensively assessing the pros and cons, and guided by the goal of “reviving a business through the resolution of a single case,” the court fully leveraged the self‑healing capacity of market entities. Through the application of enforcement‑settlement mechanisms, the principle of benevolent and civilized enforcement was integrated throughout the entire enforcement process, leading the parties to voluntarily reach, in recent days, an installment‑based enforcement settlement agreement. This approach safeguarded the legitimate rights and interests of all stakeholders in accordance with the law, enhanced the quality and efficiency of enforcement proceedings, and yielded positive results. The holding group expressed its sincere gratitude to the Beijing Financial Court for its thorough consideration of the company’s actual circumstances, for affording it the opportunity to manage its assets and seek self‑rescue, and for addressing the company’s most pressing needs. It also earnestly requested that the court leverage the advantages of its Business Environment Optimization Studio platform to actively mediate among all creditors during the company’s self‑help efforts, thereby advancing the asset‑disposal process in a prudent and orderly manner.
The successful resolution of this case marks the Beijing Financial Court’s first attempt to implement its mediation‑and‑dispute‑resolution mechanism through the Business Environment Optimization Studio, and it also represents the largest‑value case settled via enforcement‑based reconciliation. The settlement not only ensures the gradual realization of investors’ rights but also affords the debtor an opportunity for self‑rehabilitation, thereby achieving an organic integration of political, legal, and social outcomes.
The Business Environment Optimization Studio is an innovative mechanism established by the Beijing Financial Court to implement the CPC Central Committee’s decisions and arrangements on optimizing the business environment, thoroughly carry out General Secretary Xi Jinping’s important instructions on “creating a world-class business environment,” and proactively explore ways to enhance the business climate. Under this framework, the Beijing Financial Court fully leverages the judiciary’s leading, driving, and safeguarding roles in building a diversified dispute-resolution system. Its core responsibilities include pre-litigation diversified dispute resolution, facilitating settlement during enforcement proceedings, and connecting with high-quality investment and financing resources. Working in tandem with the Beijing Federation of Industry and Commerce and local chambers of commerce, the Court employs rule-of-law mechanisms to support and ensure sound economic development, foster a fair, transparent, and predictable rule-of-law‑based business environment, and advance a social governance model characterized by joint construction, joint governance, and shared benefits. In particular, for cases involving the disposal of significant assets, the Court safeguards corporate property rights and promotes amicable dispute resolution by devising and promoting specialized dispute‑resolution frameworks and linking enterprises with premium investment and financing channels. To further strengthen efforts to optimize the business environment, the Beijing Financial Court has successively introduced a series of measures, including a representative litigation platform, a model judgment mechanism, and a “protect, diversify, establish, adjudicate, enforce” working model, thereby providing high‑level judicial services and safeguards to improve the capital’s business climate and support Beijing’s initiatives to build its “Two Zones” and advance its “Five‑Pronged Coordination” strategy. As of August 20, 2022, the Beijing Financial Court had concluded 65 cases through enforcement‑based settlement, with the total value of the settled claims exceeding RMB 12 billion. While fully protecting the legitimate creditor rights of applicants, the Court also ensured the continued operation of numerous private enterprises—such as private hospitals, photovoltaic power companies, and livestock‑breeding offices—thereby achieving mutually beneficial outcomes.
Going forward, the Beijing Financial Court will continue to leverage its Business Environment Optimization Studio as a platform, working in tandem with the Municipal Federation of Industry and Commerce and local chambers of commerce to implement the capital’s high-quality development strategy. By adopting a novel model—“precise market assessment + enterprises’ full‑scale self‑rescue + angel‑investor‑led external support”—the Court will provide targeted relief to high‑quality private enterprises temporarily mired in debt crises but still worthy of rehabilitation, thereby fostering a business environment in the capital that is market‑oriented, rule‑of‑law based, and internationally competitive.
Behind the 13.6% Drop in Case Filings: A Chronicle of Chongqing Courts’ Multi‑Pronged Efforts to Strengthen Source‑Based Dispute Resolution
On the Chongqing courts’ performance report for the first half of 2022, one set of figures stands out: from January to June this year, the city’s three-tier court system received 457,000 new cases, a 13.6% year-on-year decline; among them, 31 primary-level courts and 4 intermediate-level courts each recorded a year-on-year drop of more than 10% in new case filings.
Where did the 13.6% reduction in cases come from?
Chongqing’s courts have fully implemented the Supreme People’s Court’s requirements for one-stop litigation services and source‑level dispute resolution, elevating the strengthening of source‑level governance to a key measure for putting the “Fengqiao Experience” of the new era into practice, and have pioneered a new approach to source‑level governance tailored to Chongqing’s judicial system.
Innovate working mechanisms and pool collaborative efforts to resolve disputes.
“The boss has been withholding our wages for several months. We’ve got elderly parents to support and young children to raise—we can barely make ends meet. What are we supposed to do?” This June, a group of workers flooded into the “Old Ma Studio” at the People’s Court of Jiulongpo District, Chongqing.
They are employees of an automobile sales and service company in Chongqing. Due to a breakdown in the company’s cash flow, 56 employees were owed more than one million yuan in unpaid wages. After repeated unsuccessful negotiations and being unable to file for arbitration because of time limits, they filed a lawsuit with the Jiulongpo District People’s Court, left with no other recourse.
Upon accepting the case, the Source‑Based Dispute Resolution Team of the Jiulongpo District People’s Court, recognizing that the matter involved a large number of parties and bore on people’s livelihoods and social stability, decided to convene an on‑site mediation session and invited Ma Shanxiang, a National People’s Congress deputy with extensive experience in mass work and head of the “People’s Court Lao Ma Studio,” to participate. Ultimately, through the concerted efforts of the presiding judge and Ma Shanxiang—employing both empathy and legal expertise—the two sides reached a settlement: the company agreed to pay all outstanding wages to its employees by July 31. With this resolution, the collective labor dispute was brought to a satisfactory conclusion, and the employees present warmly commended both the judge and Ma Shanxiang for their efficient mediation.
Such “Old Ma Workshops” of the people’s courts now cover all three levels of courts in Chongqing Municipality.
As of June this year, 2,233 mediation organizations and 8,470 mediators have joined the platform. In the first half of the year, the platform handled a total of 208,000 mediation cases—either independently through its online platform or upon referral—and concluded 190,000 of them, with 143,000 successfully resolved, yielding a success rate of 75%. Among these, 181,000 were pre-litigation mediations, accounting for 68.7% of the city’s courts’ total filings in first-instance civil cases.
To pool greater resources and strengthen diversified dispute-resolution efforts, Chongqing’s courts have established “Representative and Committee Member Liaison Stations” across the board. As of June this year, 1,010 deputies and committee members have been stationed at these centers, collectively receiving 3,491 members of the public and mediating over 1,000 cases while resolving more than 1,000 petitions involving legal or litigation-related issues.
Intermediate and primary-level people’s courts across the country have also, in light of local conditions, introduced signature initiatives for addressing disputes at their source: The Third Intermediate People’s Court of Chongqing Municipality has proactively established a mechanism featuring “model judgments + specialized mediation + judicial conofficeation,” coordinating with the Chongqing Securities Regulatory Bureau, the Chongqing Securities and Futures Industry Association, and the China Securities Capital Markets Legal Service Center to form a pre-litigation mediation team; the Wuxi County People’s Court has set up the “Liao Zihuai Mediation Studio,” advancing the professionalization and branding of dispute resolution; the Wanzhou District People’s Court has established the “Li Defang Mediation Studio,” achieving pre-litigation control over the growth of labor dispute cases; and the Yunyang County People’s Court, grounded in rural revitalization, has created the “Tianping Post” mediation studio—a rural rule-of-law platform that integrates legal publicity, legal services, and conflict resolution.
Extending judicial services and integrating into the comprehensive governance framework.
“I only discovered during the renovation that the ceiling of my new home is actually slanted, with a height difference of 5 centimeters. How can I protect my rights?” On June 30, Ms. Li, a resident of Shapingba District in Chongqing, came to the “Tianping Studio” in Longta Subdistrict, Yubei District, seeking assistance.
On that day, the person on duty was Cheng Qihua, former chief judge of the First Civil Division of the Chongqing No. 1 Intermediate People’s Court. While soothing Ms. Li’s emotions, Cheng Qihua took out his work notebook and recorded the concerns she had been facing.
It turns out that in 2019, Ms. Li purchased a newly built apartment. This year, during the renovation, workers discovered that the ceiling in one of the guest bedrooms was sloped, with a height difference of 5 centimeters between the highest and lowest points—clearly failing to meet national building standards. Left with no choice, Ms. Li ordered the work to be halted and demanded accountability from both the developer and the contractor. After numerous discussions, the contractor agreed to carry out repairs using a “mesh‑plus‑cement‑plus‑gypsum board” approach but refused to entertain any other compensation claims. However, Ms. Li maintains that the contractor should also compensate her for losses incurred due to the suspension of renovations, as well as for the emotional distress caused by the diminished quality of her living experience.
“The best approach is still for both parties to engage in constructive negotiations to resolve the issue,” Cheng Qihua advised after carefully reviewing the situation. He noted that, in the case of prefabricated‑frame residential buildings, it is not uncommon for multiple units to develop sloping roofs, so the root cause should be identified first. “You can apply to the Municipal Construction Commission’s Engineering Quality Inspection Center for an expert appraisal,” Cheng Qihua said. “At the same time, you may file a complaint with the Consumer Association, or seek judicial mediation. Once a settlement agreement is reached, if the other party fails to comply, you can petition the court for compulsory enforcement.”
“Thank you, Judge Cheng. My thoughts are now clear, and I know how to use the law to protect my rights!” Ms. Li said gratefully.
The “Tianping Studio” was established through proactive collaboration between the Chongqing No. 1 Intermediate People’s Court and the Longta Subdistrict where it is located. Four seasoned retired judges were seconded to staff the studio, with the aim of promoting source‑level prevention, front‑end resolution, and rigorous control at critical junctures, thereby effectively curbing the growth of litigation at its root. Since its inception, the number of disputes and conflicts within the subdistrict has declined year after year, essentially achieving the goal of keeping conflicts within the community and resolving disputes locally.
Turning conflict into resolution outside the courtroom and quelling disputes within it. In advancing the proactive resolution of conflicts at their source, Chongqing’s courts have taken the initiative to integrate themselves into a new framework for source‑based governance: they have established a coordinated mechanism for resolving disputes through “one court and two institutions” and a working model of “one judge per subdistrict or town,” thereby pooling grassroots rule-of-law resources and strengthening the foundations of judicial administration. They have also aligned with Party and government comprehensive governance centers, community grid systems, social management platforms, and dispute mediation and resolution centers, vigorously ensuring the effective implementation of 24 concrete measures to bolster source‑based governance and the substantive operation of grassroots comprehensive governance centers. Furthermore, they have actively collaborated with judicial administrative authorities to launch the “Litigation‑Free Village (Community)” initiative, leveraging the courts’ big‑data platform to provide data support and indicator‑driven guidance. Finally, they have proactively enhanced coordination with relevant industry regulators, trade associations, chambers of commerce, and mass organizations, supporting the development of sector‑specific and specialized mediation bodies and fostering a dispute‑resolution model that prioritizes non‑litigious approaches while reserving litigation as a last resort.
Strengthening technology-driven empowerment to provide judicial convenience.
“Da Niu is currently drafting a legal advisory opinion for you.” On the morning of July 12, the People’s Court of Banan District, Chongqing, successfully mediated a compensation dispute arising from a traffic accident by utilizing its “Smart Mediation System.”
During the mediation process, the mediator leveraged the legal advisory function of the “Smart Mediation System” to swiftly submit the case details to the smart cloud platform. In just five seconds, the voice‑controlled interactive display generated a legal advisory opinion, clearly outlining the facts of the case, the key points of contention, and the relevant statutory provisions, thereby gaining the consent of both parties and facilitating the immediate conclusion of a mediated settlement agreement.
“The smart mediation system’s built-in speech‑to‑text feature instantly transcribes the statements of all parties into written records, which are displayed on the screens at each mediation station and on a large suspended screen facing the public gallery. With an accuracy rate of around 90% for both standard Mandarin and the Chongqing dialect, the court clerk need only proofread and make minor edits, saving substantial time throughout the mediation process, significantly boosting its success rate, and enabling disputes to be resolved at their earliest stage,” explained Wu Jichao, a rostered judge in the Case Filing Division of the Banan District People’s Court.
Technology empowers source‑level dispute resolution, and such scenarios are ubiquitous in Chongqing’s courts.
On January 6 this year, Chongqing’s courts delivered the first batch of 20 “mobile convenience courts” — version 3.0 — to 20 primary-level people’s courts, effectively bridging the “last mile” in judicial services. Today, these mobile courts travel daily to towns, communities, and rural fields, resolving disputes at residents’ doorsteps and bringing legal education directly to the public.
On April 1 this year, Chongqing’s courts officially launched the “Cloud‑Based Shared Court,” establishing an online judicial platform that links courts with subdistricts, village communities, and law offices, enabling seamless internal and external connectivity. This initiative provides litigants and lawyers with convenient access to online litigation services nearby, while also offering the public a platform to witness court proceedings and participate in mediation from their local communities.
Going forward, the Chongqing courts will precisely define the role of judicial adjudication in source‑level dispute resolution, strengthen the one‑stop, multi‑channel dispute‑resolution and litigation service system, deepen the implementation of the six key initiatives under the “strengthening the foundation” strategy, and refine both the legal framework and operational mechanisms for source‑level governance. In doing so, they will take new steps and make fresh contributions to advancing source‑level governance and fostering innovation in social governance.
Jilin courts are promoting the “one-stop, cross-jurisdictional service” litigation mechanism.
The Jilin courts have summarized and promoted throughout the province the experience of the Yanbian Forest Area Court’s “one-stop, province-wide service” litigation mechanism, designating it as a key measure to earnestly advance the initiative to establish model courts that deliver tangible benefits to the public.
It is reported that the Yanbian Forest Area Court has established a “one‑stop, cross‑jurisdictional” litigation service mechanism, creating an integrated “1+5” framework: with the Intermediate People’s Court serving as the central hub, the five primary-level courts within its jurisdiction collaborate across jurisdictions. Under this system, the six primary and intermediate courts in the forest area jointly handle seven key services—cross‑jurisdictional case filing, collection and forwarding of litigation documents, pre‑litigation mediation guidance, pre‑litigation asset preservation, fee‑payment agency, entrusted service of process, and inquiry and advisory services. As a result, parties to litigation can, regardless of geographic or hierarchical constraints, choose the nearest forest‑area court or local people’s tribunal to access these services remotely, thereby effectively facilitating the remote processing of litigation matters across regions and the coordinated handling of cases across different levels of the judicial system.
At the same time, this mechanism adheres to the principles of “handling cases locally within the jurisdiction, providing one-stop centralized services, prioritizing cross‑jurisdictional processing, and delivering assistance directly to those in need.” Both levels of the Yanbian Forestry Area’s courts have established dedicated “One‑Stop Universal Service” windows at their litigation service centers, assigning dedicated staff to oversee these efforts, thereby ensuring that parties to litigation can enjoy convenient and efficient judicial services across the entire Yanbian Forestry Area.
In addition, parties and their legal representatives may, at any time and according to their own needs, apply for relevant services at the nearest available location—either in person at a dedicated service window or online through the People’s Courts’ Lawyer Service Platform, the Online Services Mini‑Program, the Jilin Electronic Court website, and other digital channels. Staff at these windows leverage the litigation service halls of the two-level courts in the Yanbian Forestry Region, the litigation service network, mobile devices, and the 12368 litigation service hotline, integrating cross‑jurisdictional filing, online filing, electronic service, and other functional modules and proven operational models. By categorizing matters by type, they provide residents and parties in the forestry region with a new litigation service experience: “convenient local access, jurisdiction‑wide processing, and remote accessibility.”
At present, the courts in Jilin Province are advancing a “one‑stop, cross‑jurisdictional” litigation service mechanism, enabling “one‑stop processing” for three services: cross‑jurisdictional case filing, pre‑litigation mediation guidance, and entrusted service of process. Online services have been rolled out to provide “one‑stop processing” for four additional services—pre‑litigation asset preservation, receipt and forwarding of litigation documents, fee payment agency, and inquiry/consultation—and efforts are underway to fully implement these services offline as well.
Are one-minute short videos that document everyday life protected under copyright law?
Short videos are a means of documenting life and sharing one’s emotions. When carefully crafted short‑video content is infringed upon, can creators rely on legal measures to safeguard their legitimate rights and interests? Recently, the Beijing Intellectual Property Court addressed this question in a case it heard.
Douyin user “ahua” independently designed and filmed a series of short videos documenting daily life, which were uploaded to Douyin, including the copyrighted video at issue, “Paper Flying Pig.” Subsequently, “ahua” discovered that Kuaishou user “Xuechang Huahua” had posted a short video titled “Paper Flying Pig” on Kuaishou, the content of which was identical to that of the video for which “ahua” holds rights. The video has garnered nearly 6.5 million views, approximately 510,000 likes, and over 10,000 comments, some of which even read, “Ahua has finally come to Kuaishou!”
Beijing Weibo Shijie Technology Co., Ltd. (hereinafter referred to as Weibo Company), the operator of the Douyin platform, has obtained authorization from “ahua,” the author of the short life‑record videos at issue. Weibo Company has brought a lawsuit against Beijing Kuaishou Technology Co., Ltd. (hereinafter referred to as Kuaishou Company), the operator of the Kuaishou platform, alleging that the playback of the disputed short videos on the Kuaishou platform by a Kuaishou account infringes Weibo Company’s right of information network dissemination with respect to those videos. Weibo Company seeks a judgment ordering Kuaishou Company to cease its infringement of the right of information network dissemination and to compensate for damages.
After hearing the case, the court of first instance held that Kuaishou’s conduct infringed Douyin’s right of information network dissemination in respect of the “Paper Flying Pig” video recording, and ordered Kuaishou to cease the infringement and pay damages in the amount of RMB 2,000.
Dissatisfied with the ruling, the two companies filed an appeal. In its second-instance judgment, the Beijing Intellectual Property Court corrected the determination of the type of work at issue and ordered compensation for economic losses in the amount of RMB 2,500, together with reasonable expenses.
Judicial Commentary
Audiovisual works and video recordings differ. An audiovisual work refers to a work captured and stored on a specific medium, consisting of a sequence of images with or without sound, which is projected by appropriate devices or disseminated in other ways; it emphasizes the unique selection, arrangement, and design of filming techniques, angles, content, and so forth, thereby reflecting the creator’s individualized expression. A video recording, by contrast, is a recording of continuous, related moving images or visual sequences—whether with or without sound—that falls outside the scope of an audiovisual work; it focuses on the objective documentation of the recorded content and does not impose personalized requirements regarding the subject, timing, or angle of recording. The author of an audiovisual work enjoys full copyright in the work, whereas the rights holder of a video recording is entitled only to the rights to authorize others to reproduce, distribute, rent, and transmit the recording to the public via information networks, together with the right to receive remuneration for such uses.
The short video at issue possesses originality and qualifies as an audiovisual work. The key to determining whether the “Paper Flying Pig” short video in this case constitutes a work lies in assessing its originality. First, there is no necessary correlation between a video’s length and the determination of originality. Although the video in question lasts only about one minute and may, objectively speaking, struggle to achieve an original expression, some short videos can nonetheless convey the creator’s thoughts and emotions in a relatively complete manner, thereby meeting the threshold for copyright protection. Second, the fact that the “Paper Flying Pig” video is primarily structured around recording everyday life cannot, by itself, serve as grounds for rejecting its originality. The creator sought to capture domestic life and project an optimistic outlook; under such circumstances, the scope for creative expression is necessarily constrained, making it more challenging to demonstrate originality. The video depicts a young man engaging in hands‑on origami to craft a “paper flying pig”—a childhood pastime—while moving from his desk to the balcony and then the hallway, before following the paper toy’s flight path out the window. After being edited and assembled, the footage is presented through a combination of normal speed and accelerated playback, accompanied by narration and upbeat music. The short video forms an organic, unified audiovisual whole, embodying the creator’s intellectual contributions across filming, editing, music selection, voice‑over, and production, and thus exhibiting originality. Although created using limited source material, the video’s arrangement, choices, and overall effect on the audience reflect the creator’s distinctive personal expression. Third, the “Paper Flying Pig” short video resonates with viewers. A love of life and a spirit of hope have long been recognized as admirable qualities. By conveying a passion for life in a format readily embraced by the public and by communicating a positive attitude toward living through humor and wit, the video offers viewers a meaningful aesthetic experience—an additional manifestation of its originality. Accordingly, the “Paper Flying Pig” short video satisfies the requirements for originality and qualifies as an audiovisual work.
The judge noted that affording copyright protection to short-form videos aligns with current judicial policy, and that technological innovation inevitably poses challenges to established legal doctrines. Although lifestyle‑recording short videos are brief, they nonetheless convey the creators’ personal emotions; their nature should be appropriately recognized and robustly protected, thereby encouraging the public to produce more short videos that resonate with the spirit of the new era—thoughtfully documenting the present while looking ahead—so as to avoid clinging rigidly to outdated standards. Only in this way can we chart an appropriate course today and better prepare for the future.

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