JC Master Legal News Issue 1034

Key Takeaways for This Issue

A 22% plunge in just 15 days has pushed “Ning Wang’s” market capitalization below the trillion‑dollar mark. What’s going on with the new‑energy sector?
As the frontrunner of the rebound since late April this year, the new-energy sector has recently undergone a broad-based correction. Taking industry leader CATL as an example, its share price has cumulatively fallen 22% over the past 15 trading days, with its latest market capitalization hovering around the trillion-yuan mark at 1.06 trillion yuan.
A “policy package” has been rolled out to boost private-sector investment, with private offices accounting for 60% of IPO proceeds this year.
Recently, some localities have introduced or rolled out policies to encourage private investment, aiming to better leverage its crucial role in expanding effective investment and stabilizing economic growth.
Announcement of the State Taxation Administration and the Ministry of Finance on Matters Concerning the Continued Deferral of Payment of Certain Taxes and Fees by Small, Medium, and Micro Enterprises in the Manufacturing Sector
To further support the development of small, medium, and micro-sized manufacturing enterprises and help them alleviate difficulties, the “Announcement of the State Taxation Administration and the Ministry of Finance on Matters Relating to the Continued Deferral of Payment of Certain Taxes and Fees for Small, Medium, and Micro-Sized Manufacturing Enterprises” has been in effect since September 14, 2022.
The Supreme People’s Procuratorate has released typical cases of public interest litigation aimed at urging the rectification of illegal mining.
On September 14, the Supreme People’s Procuratorate released typical cases of public-interest litigation in which procuratorial organs have urged the rectification of illegal mining. In these cases, it issued recommendations for similar matters to address governance gaps and shortcomings identified during investigations, thereby promoting source‑level prevention and control. The procuratorial organs also fully leveraged the roles of external experts and think tanks, strengthened their awareness of technology‑driven empowerment, and enhanced the quality and efficiency of handling major cases.
Regulations on the Administration of Internet Pop-up Information Push Services
In order to standardize internet pop-up information push services, safeguard national security and public interests, protect the legitimate rights and interests of citizens, legal persons, and other organizations, and promote the healthy and orderly development of the industry, the Regulations on the Administration of Internet Pop-up Information Push Services have been in effect since September 30, 2022.
Finance & Capital Markets
A 22% plunge in just 15 days has pushed “Ning Wang’s” market capitalization below the trillion‑dollar mark. What’s going on with the new‑energy sector?
As the frontrunner of the rebound since late April this year, the new-energy sector has recently undergone a broad-based correction. Taking industry leader CATL as an example, its share price has cumulatively fallen 22% over the past 15 trading days, with its latest market capitalization hovering around the trillion-yuan mark at RMB 1.06 trillion.
Behind Ningwang’s lackluster stock performance lies the mounting pressure faced by midstream power‑battery manufacturers in the new‑energy‑vehicle supply chain. Meanwhile, upstream raw‑material costs remain stubbornly high—most notably, lithium carbonate prices have once again surged to 500,000 yuan per ton this year, nearly eight times their level at the start of last year—while the industry’s supply‑demand balance continues to tighten.
In addition, it is worth noting that, as a high-growth sector, the new‑energy industry remains subject to liquidity dynamics. With expectations that the Federal Reserve may continue to pursue aggressive rate hikes, how should investors position themselves?
Ningwang’s market capitalization has rebounded to the trillion-yuan mark.
Since late August, the new-energy sector has undergone a noticeable correction. Leading stock CATL, often seen as a bellwether, has posted consecutive declines, with another drop of nearly 5% on September 14. Over the past 15 trading days, CATL has cumulatively fallen 22%, bringing its latest market capitalization back to around the trillion-yuan mark, at 1.06 trillion yuan.
Notably, this occurred immediately after CATL released its semi-annual report. The report showed that in the first half of 2022, CATL posted revenue of RMB 112.971 billion, up 156.32% year over year, and net profit attributable to shareholders of RMB 8.168 billion, up 82.17% year over year.
Despite robust year-on-year growth in both revenue and net profit, the continued decline in gross margin has raised concerns in the market. CATL’s gross margin for the first half of the year stood at 18.68%, down 8.58 percentage points from the same period last year. By segment, the gross margins of its key products—power battery systems, lithium‑ion battery materials, and energy storage—all declined to varying degrees, falling by 7.96%, 0.5%, and 30.17%, respectively.
This is primarily due to persistently high upstream raw-material costs, which are weighing on gross margins. According to the investor relations activity record released by CATL on the 23rd, in response to the decline in the gross margin of energy-storage batteries, CATL explained that the business models and customer bases for energy storage and power‑train applications differ. The price‑pass‑through mechanism for energy storage is slower, making it more sensitive to cost fluctuations, which has resulted in lower gross margins in the first half of the year. Similar to the trend in power‑battery pricing, CATL expects gross margins to improve going forward. For most power‑battery customers, price‑adjustment negotiations for the second quarter have largely been concluded, while a portion of energy‑storage contracts are still under discussion.
Both the midstream and downstream are working for the upstream.
With power‑battery costs accounting for nearly 60% of a vehicle’s total cost, some automakers have publicly complained that they are “working for CATL.” Meanwhile, as the gross margins of CATL and other battery manufacturers continue to decline, upstream suppliers have become a shared constraint for both midstream and downstream players.
In the first half of this year, CATL’s gross margin fell from 27.26% last year to 18.68%, while Gotion High‑Tech’s gross margin declined from 19.88% to 14.42%. By contrast, Tianqi Lithium’s gross margin surged from 51.15% last year to 84.26%, and Ganfeng Lithium’s gross margin rose from 35.13% to 60.53%.
At present, the upward trend in upstream raw material prices shows no sign of abating. In particular, lithium carbonate—a key raw material—has hit new record highs for several days running. According to the latest data released by Shanghai Steel Bund on September 13, battery-grade lithium carbonate prices rose by RMB 2,600 per ton in a single day, pushing the average price above RMB 500,000 per ton. This marks the second time this year that the price has surpassed the RMB 500,000-per-ton threshold, up nearly eightfold from the beginning of last year and nearly 80% higher than at the start of this year.
Some analysts note that upstream raw-material prices are unlikely to decline in the short term, and with prices remaining at current levels, pressure on mid- and downstream sectors will be substantial.
In response to these expectations, leading manufacturers are accelerating their efforts to secure upstream resources. CATL, BYD, Gotion High‑Tech, and EVE Energy have all established positions in upstream lithium‑mining assets through equity investments and joint ventures. By year‑end, CATL, EVE Energy, and Gotion High‑Tech are expected to have combined production capacities of 125,000 tonnes, 15,000 tonnes, and 20,000 tonnes, respectively.
However, it will still take time for the industry to achieve supply-demand balance. At its recent earnings call, Tianqi Lithium stated that a mismatch in the expansion cycles between upstream and downstream sectors will keep lithium supply relatively tight in the medium to short term, and that it will require additional time for the lithium market to reach a genuine supply-demand equilibrium.
According to estimates by Shanghai Steel联, with the gradual commissioning of numerous projects—including those at salt lakes and spodumene mines—starting in 2023, the growth rate of lithium supply is expected to surpass that of demand, thereby closing the previously existing demand gap caused by supply‑demand mismatches. Coupled with additional supply from lithium‑ion battery recycling, this will lead to roughly three consecutive years of inventory build‑up. As a result, lithium prices may gradually return to more rational levels as the supply‑demand balance adjusts.
Valuations in the new-energy sector may face continued challenges in expanding.
It is worth noting that, as a high-growth sector, the new‑energy industry remains subject to liquidity dynamics. Some market participants believe that, amid expectations of continued aggressive rate hikes by the Federal Reserve, this environment is unlikely to support further expansion in growth‑stock valuations.
Meanwhile, the relatively high allocation to the new‑energy sector among mainstream investors also carries certain risks. Recently, Chen Li, Vice Chairman and Global Chief Strategist at East Asia International, pointed out at Dongwu Securities’ 2022 Golden Autumn Strategy Conference that equity‑oriented public funds currently hold an astonishing 40% of their assets in new‑energy stocks—a level unprecedented in the history of A‑shares. He noted that this allocation rests on several macroeconomic assumptions: ample liquidity, economic growth concentrated in a handful of sectors, manageable global inflation, and a prolonged energy crisis. “I’m not saying these assumptions are wrong,” Chen Li said, “but personally, I believe they will face significant vulnerabilities over the next six months.”
From today’s vantage point, many fund managers whose primary investment focus is on new energy say they will carefully select specific sub-sectors and individual stocks.
Wang Di, fund manager of the Rongtong New Energy Vehicle Fund, stated that he remains optimistic about leading companies in segments such as power batteries, separators, lithium‑ion battery equipment, automotive intelligence, and new‑energy power semiconductors. These sectors feature relatively high entry barriers, giving incumbent leaders clear advantages. From last year through this year, lithium carbonate prices have continued to rise; however, from a long-term perspective, lithium carbonate is not in short supply, and the current windfall profits are unsustainable. Moreover, following the sharp price surge that began in 2020, supply is expected to expand more rapidly, while lithium carbonate prices have already become an unbearable burden for downstream industries, bringing the price ceiling ever closer. Nevertheless, both the actual price of lithium and its stock‑market performance have continued to exceed expectations, prompting the fund to maintain a close watch on this niche sector.
Han Guangzhe, a fund manager at Golden Eagle Fund, stated that in the second half of the year, he will focus on high-quality segments within thriving industrial chains, with particular optimism toward certain sub‑sectors in photovoltaics, new‑energy vehicles, and wind power. In the photovoltaic space, his key areas of interest are module manufacturing and inverters; in the new‑energy vehicle sector, he will target well‑positioned sub‑segments such as power batteries, structural components, and separators; and in wind power, he believes the most promising segments are tower manufacturers and submarine cables.
The ChiNext Index fell 1.84%, while total market turnover hit another phase-low.
On September 14, the three major indices opened lower and trended downward throughout the day, with trading volume shrinking amid choppy conditions. At the close, the Shanghai Composite fell 0.79%, the Shenzhen Component Index dropped 1.25%, and the ChiNext Index declined 1.84%. Overall, more stocks declined than advanced, with over 3,600 issues on both exchanges ending lower. Total turnover across the Shanghai and Shenzhen markets reached RMB 722.8 billion, down RMB 48.5 billion from the previous session, marking another phase‑low in trading value.
In terms of sectors, newly listed stocks, natural gas, ports, and retail led the gains, while HJT batteries, animal husbandry, propylene oxide, and pumped-storage hydropower were among the biggest decliners.
Specifically, the port and shipping sector led gains across both markets, with COSCO Shipping Specialized Carriers and Jinzhou Port both hitting their daily upper limits. China Merchants Oil also briefly probed the limit during trading, while COSCO Shipping Energy, Ningbo Shipping, Shenghang Shares, and Changhang Phoenix followed suit.
Energy stocks were buoyant, with oil and gas leading the gains; Shuifa Gas, Shengtong Energy, and Zhunyou Shares all hit their daily upper limits. Mid‑cap new listings staged a counter‑trend rally in the afternoon, with Runbei Aviation Technology notching its fourth straight涨停, while Dechang Shares, Changjiang Materials, and several other stocks also reached their upper limits. Retail shares moved higher amid volatility, with Zhongbai Group posting its fourth consecutive涨停, and Dalian Youyi, Xujiahui, and Tianhong Shares all hitting their upper limits as well.
On the downside, cyclical stocks continued to adjust.
[Capital Flows]
According to Wind data, northbound funds entered the market swiftly at the open before gradually flowing out, resulting in net sales of RMB 1.414 billion for the day; specifically, Shanghai Stock Connect recorded net sales of RMB 1.354 billion, while Shenzhen Stock Connect posted net sales of RMB 0.06 billion.
In the closing session, major institutional investors continued to see net inflows into sectors such as defense and military industry, transportation, nonferrous metals, real estate, and semiconductors, while experiencing net outflows from power equipment, automobiles, basic chemicals, and agriculture.
Turning to individual stocks, Shenkai Shares, Shengxin Lithium Energy, and Zhiwei Intelligence saw net inflows of RMB 377 million, RMB 343 million, and RMB 337 million, respectively, while Xizang Mining and China Merchants Southern Oil ranked among the top in terms of additional share purchases.
On the net outflow front, CATL, Guizhou Moutai, EVE Energy, Changan Automobile, and BYD saw net outflows of RMB 720 million, RMB 595 million, RMB 430 million, RMB 303 million, and RMB 295 million, respectively.
[Institutional Perspective]
According to the latest research report from China Galaxy Securities, although production cuts and shutdowns of primary aluminum smelters in Sichuan, Chongqing, and other regions—triggered by earlier heatwaves and power shortages—have begun to resume, the restart process is lengthy and relatively slow. Meanwhile, in Yunnan, sustained high temperatures, drought, and reduced rainfall since July have led to a sharp decline in inflow, raising concerns that hydropower constraints could result in further production cuts at local aluminum smelters due to insufficient power supply. Overseas, escalating energy crises in Europe and frequent labor strikes have increased the risk of production reductions in the region. With both domestic and international factors contributing to output curtailments driven by energy costs, aluminum prices are likely to find support. In addition, with China’s aggregate financing and credit data showing signs of recovery in August, coupled with stronger infrastructure investment, potential stabilization in the real estate sector, and the onset of the peak downstream construction season, demand for primary aluminum may see marginal improvement.
According to a research report by CITIC Securities, the normalization of centralized procurement for traditional Chinese medicine (TCM) products is likely to trigger a major industry reshuffle, and TCM decoction pieces—including formula granules—have also been piloted under such procurement schemes in some regions. The state has frequently introduced policies to support the development of TCM, elevating its strategic planning to the national level. A significant portion of TCM products are exclusive; for instance, among the 53 items included in Guangdong Province’s alliance‑based centralized procurement, 36 are proprietary. Moreover, TCM products possess characteristics of both consumer goods and health supplements, endowing them with long-term growth potential amid population aging and rising consumption standards. Overall demand for the TCM sector is expected to remain robust. We recommend selecting investment targets across five key dimensions: ① leading companies with strong competitive moats and high brand barriers; ② offices whose earnings growth is sustainable and aligned with their valuations—particularly those benefiting from the scale‑up following the new national standard reform for formula granules, or those whose core products enjoy pricing power coupled with upward pricing momentum; ③ companies demonstrating improved management quality; ④ enterprises positioned to capture incremental demand from innovative TCM drugs; and ⑤ TCM service providers, including emerging leaders in integrated online‑offline (OMO) medical care, whose nationwide expansion continues to gain traction.
A research report by Tianfeng Securities notes that, at present, thin-film solar cells still account for a relatively small share of the Chinese market, with BIPV curtain walls remaining their primary application area. As perovskite‑based solar cell technology continues to evolve, its initial cost per watt has begun to demonstrate a competitive edge; if stability can be further improved, it could emerge as a next‑generation photovoltaic technology. Meanwhile, leading domestic perovskite manufacturers are accelerating the deployment of pilot production lines, suggesting that the commercialization of perovskite solar cells is likely to gain momentum and drive a substantial increase in demand for TCO glass—their key substrate material.
The Shanghai Stock Exchange and China National Investment Holding Co., Ltd. have signed a strategic cooperation agreement.
Recently, the Shanghai Stock Exchange (hereinafter referred to as SSE) and China National Investment Holding Co., Ltd. (hereinafter referred to as CNIC) held a cloud‑based signing ceremony for their strategic cooperation agreement. At the ceremony, CSI Index Co., Ltd. and CNIC’s subsidiary, CNIC Investment Co., Ltd., jointly announced that they will co‑develop a “1+N” series of central enterprise indices and unveiled the first CSI–CNIC Comprehensive Index for Central Enterprises. Cai Jianchun, Deputy Secretary of the SSE Party Committee and General Manager, and Zhou Yubo, Secretary of the Party Committee and Chairman of CNIC, attended the signing and delivered remarks. Dong Guoqun, Member of the SSE Party Committee and Deputy General Manager, and Liu Xueshi, Member of the CNIC Party Committee and Chief Accountant, signed the agreement on behalf of their respective organizations.
Under the agreement, the two parties will focus on serving central state-owned enterprises (SOEs), helping them optimize existing operations and refine new growth initiatives. They will engage in comprehensive cooperation across areas such as enhancing the quality of SOE‑listed companies, fostering the sound development of the capital market, and promoting the optimization of the state‑owned economic structure and its structural adjustments. The parties will actively organize events that bring institutional investors and analysts into SOEs, support SOE‑listed companies in holding earnings presentations, strengthen public‑offering REITs outreach and promotion targeted at SOEs, and advance research on ESG disclosure frameworks. Together, they will provide SOEs with professional, systematic capital‑market advisory and training services.
Zhou Yubo stated that the in-depth strategic cooperation between China National Investment Corporation and the Shanghai Stock Exchange is an important measure to implement the major decisions and arrangements of the CPC Central Committee and the State Council, and to help central state-owned enterprises achieve high-quality development by leveraging the capital market. This collaboration is of great significance for optimizing the layout and restructuring the state‑owned economy. China National Investment Corporation and the Shanghai Stock Exchange share aligned goals and a common mission in advancing national strategies and serving state‑owned assets and central SOEs. In recent years, the two parties have undertaken extensive and proactive efforts to harness the capital market’s pivotal role, accelerate asset securitization, and bolster innovation‑driven growth, laying a solid foundation for cooperation. Moving forward, China National Investment Corporation will work in close coordination with the Shanghai Stock Exchange, ensuring the effective implementation of a series of initiatives designed to serve central SOEs, thereby further promoting the sound development of the capital market and helping state‑owned assets and central SOEs grow stronger, better, and larger.
Cai Jianchun stated that central state-owned enterprises (SOEs) play a pivotal role and hold a crucial position in China’s economic and social development. Earlier, the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) issued the “Work Plan for Enhancing the Quality of Listed Companies Controlled by Central SOEs,” which is of great significance and will further guide these enterprises in becoming stronger, better, and larger. The Shanghai Stock Exchange attaches great importance to this agenda, continuously optimizing its services for central SOEs, refining institutional mechanisms, and providing comprehensive support across all product lines, thereby actively contributing to the reform and development of state‑owned and central SOEs. In recent years, the Shanghai Stock Exchange and China National Investment Corporation have leveraged their respective strengths to achieve a series of collaborative outcomes. Taking this signing as an opportunity, the Shanghai Stock Exchange will work together with China National Investment Corporation to promote greater engagement between the capital market and central SOEs—helping the market understand, appreciate, and embrace these enterprises—and foster a mutually beneficial synergy between the capital market and the high‑quality development of central SOEs, thus better serving the construction of a new development paradigm.
Listed securities offices have raised over RMB 57 billion through rights issues this year.
Since the beginning of this year, securities offices have accelerated rights‑issue fundraising, with four companies having completed rights issues raising over RMB 57 billion (including H‑shares). Moreover, on the evening of September 13, CICC unveiled an ultra‑large A‑ and H‑share rights issue plan to raise up to RMB 27 billion, drawing widespread market attention; its controlling shareholder, Central Huijin, also pledged to subscribe in full, in cash, to all shares offered. However, on September 14, CICC’s A‑shares fell 9.2%, while its H‑shares declined 7.95%.
CICC’s proposed rights issue ranks second only to that of CITIC Securities.
On the evening of September 13, 2022, CICC unveiled its first post‑A‑share‑listing refinancing plan, proposing a rights issue of no more than 1.448 billion shares, with expected proceeds second only to CITIC Securities’ rights offering of approximately RMB 28 billion.
According to the proposed share placement plan, CICC intends to offer shares to all A‑share and H‑share shareholders at a ratio of no more than 3 shares for every 10 shares held, with the total number of shares to be placed not exceeding 1.448 billion. With respect to the use of proceeds, CICC plans to allocate up to RMB 24 billion—representing 89%—to meet capital requirements for business development, and up to RMB 3 billion—accounting for 11%—to replenish other working capital.
CICC stated that the proceeds from the rights issue will be allocated, among other priorities, to meet capital‑related funding needs for the development of its capital services and products, investment banking, wealth management, private equity, and asset management businesses.
Major shareholders’ commitments to fully subscribe for allotted shares have become a standard feature of securities offices’ rights issues in recent years. On September 13, Central Huijin, the controlling shareholder of CICC, pledged to fully subscribe—in cash—by the number of shares it holds as of the close of trading on the record date for this rights issue, for the allotted shares allocated to it under the current rights‑issue plan.
“As CICC continues to grow and expand into new businesses and products, the scale of its on- and off‑balance‑sheet operations has steadily increased, putting upward pressure on key regulatory metrics such as the capital leverage ratio. As of June 30, 2022, CICC’s capital leverage ratio stood at 11.73%, only slightly above the regulatory alert threshold of 9.6%.” Shen Juan, chief analyst for the large‑finance team at Huatai Securities, forecasts that, with a stronger capital base, CICC will unlock additional room for growth across its various business lines. Based on data as of the end of the first half of 2022, if the proposed full‑scale fundraising is completed, the office’s ranking in terms of parent‑company net assets would rise from 10th to 5th place.
CITIC Securities stated that, following the implementation of the rights issue, CICC’s leverage ratio is expected to rebound to around 6 times. If it can raise approximately RMB 20 billion in equity capital, this could, over the long term, drive an increase of RMB 120 billion in assets, positioning CICC to challenge for a place among the top three offices in the industry in terms of total asset size.
The secondary market reaction was muted.
CICC’s A-shares and H-shares both declined.
Since the beginning of this year, listed securities offices have accelerated rights‑issue financing, with four companies completing A‑share rights issues and raising a total of RMB 52.367 billion. Adding CITIC Securities’ H‑share rights issue, which raised approximately RMB 4.93 billion, the aggregate proceeds from rights issues by listed securities offices this year amount to roughly RMB 57.297 billion. Among them, CITIC Securities, Orient Securities, and Industrial Securities each raised over RMB 10 billion, while Caitong Securities raised RMB 7.172 billion.
Securities offices undertake refinancing to support their long-term growth and enhance their core competitiveness. However, the secondary market has historically responded tepidly to rights issues, leaving these offices under pressure from declining share prices even as they raise substantial capital. Since rights offerings are open to all existing shareholders, participating in such an offering amounts to making an additional investment—requiring out-of-pocket cash—so shareholders can choose to buy in or sell before the record date.
In a volatile market, rights issues are typically viewed as negative news. On September 14, CICC’s A-shares fell 9.2%, leading the decline among securities‑sector stocks that day, while its H-shares dropped 7.95% in tandem.
CICC stated that, upon completion of this rights issue, the company’s share capital and net asset base will increase substantially, while it will take a certain period for the proceeds from the offering to be converted into tangible benefits. Furthermore, if the funds raised in this offering fail to deliver the expected returns, the company’s earnings per share and return on equity could be diluted, thereby reducing shareholder returns.
“Following the completion of the rights issue, CICC’s ROE is expected to be diluted in the short term. However, the company has a clear plan for how the proceeds will be used, which should further expand its business growth prospects—particularly by boosting high-ROE segments such as capital‑market services and products—thereby laying a solid foundation for the office’s long-term sustainable development,” said Liu Xinqi, Chief Analyst for Non‑Bank Financials at Guotai Junan Securities.
The China Securities Industry Association has introduced a special procedure for the employment of overseas securities professionals.
To implement the state’s policies on opening up to the outside world, which facilitate the employment of overseas financial professionals within China, the Securities Association of China recently issued a notice stipulating that overseas financial professionals holding work and residence permits issued in areas such as the Jiangsu Pilot Free Trade Zone, and who are employed by securities offices, securities investment consulting offices, or securities rating agencies registered in Jiangsu, may, subject to meeting the relevant requirements, benefit from special procedures. These include exemptions from the professional knowledge examination and the recognition of overseas work experience as equivalent to domestic work experience. In addition, the Association has introduced bilingual Chinese–English legal and regulatory tests, as well as an assessment test for senior management competency. Overseas financial professionals can complete their practice registration through their employing office.

Commercial & Corporate
A “policy package” has been rolled out to boost private-sector investment, with private offices accounting for 60% of IPO proceeds this year.
Recently, some localities have introduced or rolled out policies to encourage private investment, aiming to better leverage its crucial role in expanding effective investment and stabilizing economic growth.
Specifically, on September 9, the Sichuan Provincial Private Investment Office issued the “Several Measures to Further Promote the Development of Private Investment,” calling for proactive guidance of private capital investment directions. It clearly outlined six key areas—rural revitalization, transportation infrastructure, municipal development, modern services, social undertakings, and green, low-carbon initiatives—where private capital is encouraged to actively participate. On September 13, the Shanxi Provincial Leading Group for Promoting the Development of the Private Economy convened a special working conference in Taiyuan titled “Boosting Investment, Accelerating Transformation, and Driving Development.” The meeting emphasized the need to adopt effective measures, maintaining sustained efforts in market access, policy implementation, transformation leadership, key project development, tax and fee reductions, business environment improvement, reform and innovation, and oversight and inspection, thereby fully stimulating private investment enthusiasm.
“From the perspective of total investment, private investment not only constitutes the mainstay of fixed‑asset investment across the entire economy but also serves as the core driving force behind market‑economy progress and a key indicator of corporate investment trends. Only when the dynamism and incremental growth of private investment continue to strengthen can we truly signal that the economy is stabilizing and improving,” said Zhang Yiqun, deputy director of the Performance Management Committee of the Chinese Fiscal Society. He added that the series of policies recently introduced to encourage private investment—ranging from industry‑specific project guidance and tax‑fee reductions, exemptions, deferrals, and refunds to the issuance of bonds and the expansion of direct financing—create favorable conditions for enterprises to increase investment, pursue innovation, and foster development. These measures aim to anchor macroeconomic expectations, invigorate the micro‑economy, curb the adverse effects of the sustained slowdown in private investment growth, and spur more private offices to ramp up investment and accelerate their modernization and upgrading, thereby hastening the stabilization and recovery of the economy.
On August 24, the State Council Executive Meeting outlined follow-up measures to implement the package of policies aimed at stabilizing the economy. Among these measures was the introduction of initiatives to support the development and investment of private enterprises. On September 5, Yang Yinkai, Deputy Secretary-General of the National Development and Reform Commission, presented six key priorities at a regular policy briefing held by the State Council Information Office, including accelerating the implementation of privately funded projects and strengthening financing support for private investment.
Among the measures to support the development of private investment, promoting major projects to private capital has become a key component. For example, on September 8, the centralized signing ceremony for major projects of Fujian Province at the 22nd China International Fair for Investment & Trade was held at the Xiamen Convention and Exhibition Center, with 50 projects signed in total, representing a planned total investment of RMB 99.63 billion. Of these, 12 were private‑sector investment projects, with a planned investment of RMB 20.38 billion.
Chen Yucheng, a senior investment advisor at Jufeng Investment Consulting, stated that since the beginning of this year, the growth rate of private investment has consistently lagged behind overall investment. Supporting private capital in participating in the construction of major projects will play a positive role in expanding effective investment and help ensure that the economy remains within an appropriate range.
In terms of financing support, the policy issued by the Sichuan Provincial Private Sector Office also emphasizes broadening direct financing channels, guiding qualified securities service institutions to leverage their professional expertise, and facilitating the listing of private enterprises—particularly innovative ones.
In fact, since the beginning of this year, regulatory authorities have introduced a series of policies and measures that have further enhanced the capacity to provide direct financing services. According to data from Eastmoney Choice, the share of private enterprises among A-share listed companies—and their proportion of total fundraising—has continued to rise. As of September 14, among the 273 companies that completed IPOs this year, 218 were private offices, accounting for nearly 80% of the total. These 218 private enterprises raised a combined RMB 262.335 billion through their initial public offerings, representing 60% of the total proceeds from all 273 IPOs, thereby providing substantial support to the real economy.
Li Mingjin, a senior investment advisor at Jufeng Investment Consulting, stated that strengthening support for direct financing among private enterprises can both alleviate their financing constraints and effectively stimulate economic growth and job creation, thereby providing robust fundamental support to the stock and bond markets.
Speaking about how to further invigorate private investment, Zhang Yiqun stated that it is necessary to further liberalize investment sectors, encourage and attract the full participation of private enterprises across all areas, and leverage the dynamism of the private sector to boost overall economic vitality and resilience. At the same time, financing channels should be broadened to enable private offices to raise capital through diverse avenues such as the bond and stock markets, thereby maximizing their competitive advantages.
Chen Yucheng added that commercial banks, social security funds, insurance companies, and other institutions could be encouraged to increase their financing support for private enterprises, thereby fostering a robust financing ecosystem and improving the overall financing environment.
Li Mingjin recommends optimizing the business environment for private investment, expanding its development space, establishing mechanisms to safeguard and promote private investment, alleviating investors’ concerns, and at the same time strengthening the foundations for its sustained growth.
Notice on the Regulatory Oversight of New Third Board Listed Companies and Relevant Entities for August 2022
In August 2022, the National Equities Exchange and Quotations Company imposed disciplinary sanctions on eight violations and adopted self-regulatory measures in response to 170 violations. Among these, 136 violations were subject to verbal warnings and requests for written commitments, while 34 violations were addressed through written self-regulatory measures. The specific details are as follows:
I. Disciplinary Actions
First, Sichuan Chuanjing Clean Technology Co., Ltd. (hereinafter referred to as Chuanjing Shares) sold goods totaling RMB 123,173,488.23 to entities controlled by its actual controller, Cui Jingtao. This amount exceeded the year‑beginning forecast by RMB 83,173,488.23, representing 111.79% of the most recent audited net assets. In failing to promptly comply with the deliberation procedures and information disclosure obligations when the related‑party transaction amount surpassed the initial forecast, Chuanjing Shares violated Article 103 of the “Governance Rules for Companies Listed on the National Equities Exchange and Quotations System for Small and Medium‑Sized Enterprises” (hereinafter referred to as the “Governance Rules”) and Article 42 of the “Information Disclosure Rules for Companies Listed on the National Equities Exchange and Quotations System for Small and Medium‑Sized Enterprises” (hereinafter referred to as the “Information Disclosure Rules”). In accordance with relevant regulations, Chuanjing Shares, Chairman Cui Jingtao, and Board Secretary Long Wei have each been subject to a disciplinary sanction of public censure.
Second, Zhejiang Haoteng Electronics Technology Co., Ltd. (hereinafter referred to as Haoteng Technology) disclosed on April 28, 2022, an announcement regarding the correction of prior-period accounting errors. The retrospective adjustments resulted in a net profit impact of RMB 24,336,111.37 for the year 2020—adjusted from RMB 25,777,266.42 to RMB 50,113,377.79, representing an adjustment ratio of 94.41%. Additionally, the adjustments reduced the company’s equity at year-end 2020 by RMB 224,584,119.44—adjusted from RMB 410,332,885.72 to RMB 185,748,766.28, corresponding to an adjustment ratio of 54.73%. These adjustments violated Article 1.5 of the “Business Rules of the National Equities Exchange and Quotation System for Small and Medium-sized Enterprises (Trial)” (hereinafter referred to as the “Business Rules”) and Article 3 of the “Information Disclosure Rules.” In accordance with the relevant provisions, Haoteng Technology, its Chairman Chen Lihui, the Chief Financial Officer, and the Board Secretary Lei Shuangyu have each been subject to disciplinary action in the form of a public reprimand.
Third, in 2007, Xu Le and Zhong Guangzi, who were then directors of Kunshan Huaheng Welding Co., Ltd. (hereinafter referred to as Huaheng Shares), along with three other individuals, held shares on behalf of 21 company employees. As of the date of listing, this share‑holding arrangement had not been unwound. Beginning in 2008, Shanghai Huaheng Enterprise Management Co., Ltd., the controlling shareholder of the listed company, Kunshan Chengtong Investment Co., Ltd., the company’s fifth largest shareholder, and an individual surnamed Wang, entered into nominee‑holding relationships to facilitate share‑exchange transactions. By the time of listing, these nominee holdings remained unresolved. Such nominee shareholding arrangements by the listed company violated Article 1.5 of the Business Rules, Article 4 of the “Guidance on the Application of Basic Standards for Stock Listing Conditions on the National Equities Exchange and Quotation System for Small and Medium‑Sized Enterprises (Trial)”, and Articles 11 and 28 of the “Guidance on the Content and Format of Public Transfer Prospectuses on the National Equities Exchange and Quotation System for Small and Medium‑Sized Enterprises (Trial)”. Xu Xujiong, then Chairman and General Manager, arranged and was aware of the aforementioned nominee‑holding arrangements; Qian Luhong, then Vice Chairman and Board Secretary, was informed of the related nominee activities; and Xu Le and Zhong Guangzi, who were then directors, engaged in nominee‑holding practices. None of the aforementioned persons fulfilling information‑disclosure obligations disclosed these nominee‑holding matters, constituting a failure to exercise due diligence. In accordance with relevant regulations, Huaheng Shares, together with its then Chairman and General Manager Xu Xujiong and its then Vice Chairman and Board Secretary Qian Luhong, have been subject to disciplinary action in the form of a public reprimand, while Xu Le and Zhong Guangzi, who were then directors, have been issued warning letters as self‑regulatory measures.
Fourth, Bihe Technology Co., Ltd. (hereinafter referred to as Bihe Shares) entered into an Equity Transfer Agreement on December 24, 2021, and completed the industrial and commercial registration change for the equity transfer on December 30, 2021, transferring its entire 100% stake in Ganzhou Bihe Technology Co., Ltd. to another party. This equity transfer met the threshold for a major asset restructuring as defined in the Measures for the Administration of Major Asset Restructuring of Non‑Listed Public Companies (hereinafter referred to as the “Major Asset Restructuring Measures”). However, the company failed to duly follow the prescribed deliberation procedures and information disclosure obligations for such a major asset restructuring, thereby violating Articles 13 and 14 of the Major Asset Restructuring Measures and Article 14 of the Detailed Rules for the Administration of Major Asset Restructuring of Non‑Listed Public Companies on the National Equities Exchange and Quotations System. At the time, Chairman Liu Peng, General Manager Zhang Yinghao, and Information Disclosure Officer Wang Jian were aware of the aforementioned major asset restructuring but did not exercise due diligence or fulfill their duties. Furthermore, Bihe Shares failed to prepare and disclose its 2021 annual report by April 30, 2022, in violation of Articles 11 and 13 of the Information Disclosure Rules. In accordance with relevant regulations, Bihe Shares has been subject to a public reprimand; former Chairman Liu Peng, former General Manager Zhang Yinghao, and former Information Disclosure Officer Wang Jian have each received a written criticism; and Information Disclosure Officer Wang Haichen has been issued a warning letter as a self-regulatory measure.
Fifth, on August 13, 2019, Shaohuatang National Pharmaceutical Co., Ltd. (hereinafter referred to as “Shaohuatang”) convened a shareholders’ meeting and resolved to purchase from its controlling shareholder, actual controller, chairman, and general manager, Li Minghui, the property known as Guoyao Guan, which was then subject to a mortgage. Under the relevant contractual provisions, the company was required to make payments of 40%, 30%, and 30% respectively within five business days of the contract’s effective date, the completion of the release of the asset’s mortgage, and the completion of the asset’s transfer, totaling RMB 54,976,600.00. Starting August 14, 2019, due to litigation, an application for property preservation was filed against Li Minghui, resulting in a judicial freeze on Guoyao Guan. The company made the initial payment on August 20, 2019, and as of March 18, 2020, had cumulatively paid RMB 53,924,299.90. As of July 4, 2022, Guoyao Guan remained mortgaged and frozen, with the transfer of ownership still pending. By making payments while Guoyao Guan was still encumbered by a mortgage and subject to a judicial freeze, and without completing the requisite property registration and transfer procedures, Shaohuatang constituted a situation in which its controlling shareholder and actual controller misappropriated company funds, thereby violating the relevant provisions of the Business Rules, the Corporate Governance Rules, and the Information Disclosure Rules. Furthermore, the controlling shareholder, actual controller, and concurrently serving chairman and general manager, Li Minghui, as well as director, deputy general manager, chief financial officer, and board secretary, Li Mingchao, failed to exercise due diligence and fulfill their fiduciary duties. In accordance with applicable regulations, disciplinary measures consisting of public censure have been imposed on Shaohuatang, Li Minghui, and Li Mingchao.
Sixth, on April 15, 2021, Bohai Aquatic Products Co., Ltd. (hereinafter referred to as “Bohai Aquatic Products”) lent RMB 28 million—raised through a targeted issuance—to Shandong Chengkou Salt Chemical Co., Ltd. (hereinafter referred to as “Chengkou Salt Chemical”), an entity controlled by its actual controllers, Zhang Dateng and Zhang Xiaofei. Chengkou Salt Chemical repaid the funds on April 30, 2021, and on the same day re‑lent the same RMB 28 million from the proceeds of the offering, returning it on May 13, 2021. In light of these fund‑lending transactions, Bohai Aquatic Products failed to follow the requisite prior deliberation procedures and did not disclose the relevant announcements in a timely manner. By using the raised funds to provide loans to entities controlled by its actual controllers, Bohai Aquatic Products engaged in improper use of the raised capital and misappropriation of funds, thereby violating the provisions of the “Rules on Targeted Issuance of Shares of the National Equities Exchange and Quotations for Small and Medium‑Sized Enterprises,” the “Corporate Governance Rules,” and the “Information Disclosure Rules.” Pursuant to applicable regulations, disciplinary measures were imposed, including public censure, against Bohai Aquatic Products, Chairman Zhang Haimin, and General Manager and then‑Chief Financial Officer Liu Mingliang; additionally, oral warnings were issued as self‑regulatory measures to the actual controllers, Zhang Dateng and Zhang Xiaofei.
Seventh, Zhang Shouquan, Chairman of Tianjin Zanpu Technology Co., Ltd. (hereinafter referred to as ST Zanpu), and Lu Yu, the company’s board secretary, each pledged 15 million shares of the company’s stock, representing a combined 62% of the total outstanding shares. Such pledges, if exercised, could result in a change in the company’s control; however, they were not disclosed in a timely manner, thereby violating Article 50 of the Information Disclosure Rules. Furthermore, ST Zanpu failed to prepare and disclose its 2021 annual report by April 30, 2022, in violation of Articles 11 and 13 of the Information Disclosure Rules. In accordance with the relevant provisions, ST Zanpu and its Chairman, Zhang Shouquan, have been subject to public censure as disciplinary measures, while Board Secretary Lu Yu has been issued a warning letter as a self-regulatory sanction.
Eighth, Henan Tiancheng Environmental Protection Technology Co., Ltd. (hereinafter referred to as Tiancheng Environmental Protection) entered into transactions with 26 related parties, including Henan Pingmei Shenma Environmental Protection and Energy-Saving Co., Ltd., yet failed to promptly comply with the deliberation procedures and information disclosure obligations. Such conduct constitutes a violation of regulations governing related-party transactions, involving a total amount of RMB 99.3294 million, which represents 319.33% of the company’s most recent audited net assets, thereby breaching relevant provisions of the Corporate Governance Rules and the Information Disclosure Rules. In accordance with applicable regulations, Tiancheng Environmental Protection, along with Xue Liuyi, then Chairman, and Yang Lei, then Secretary of the Board, have been subject to disciplinary sanctions in the form of public censure.
II. Status of Imposing Written Self-Regulatory Measures
In August, the violations subject to written self-regulatory measures fell into three categories: disclosure violations, corporate governance violations, and other violations.
With respect to violations of information disclosure requirements, first, listed companies have failed to promptly disclose material information that is required to be disclosed, such as significant litigation or arbitration matters; information regarding the pledge or freezing of 5% or more of a listed company’s shares held by any shareholder; details of major transactions; information indicating that the actual controller has been placed on the list of persons subject to joint punitive measures for dishonesty; notices of abnormalities in the company’s operations; reports of bank account freezes; and information concerning the seizure, freezing, or mortgaging of assets. Second, material accounting errors have been found in the periodic reports disclosed by listed companies.
With respect to corporate governance violations, the following issues have been identified: first, controlling shareholders, actual controllers, and their controlled entities have misappropriated funds from listed companies; second, listed companies have failed to promptly comply with deliberation procedures and disclosure obligations when providing external guarantees; third, related-party transactions of listed companies have not been promptly subject to the required deliberation procedures and disclosure obligations; fourth, there have been irregularities in the convening, holding, and voting processes of shareholders’ meetings, board meetings, and supervisory board meetings; and fifth, listed companies have failed to fulfill the requisite deliberation procedures and disclosure obligations when repurchasing shares.
With respect to other violations: first, the acquirer of a listed company failed to promptly disclose the acquisition report, the financial advisor’s professional opinion, the legal opinion, and the report on changes in equity interests; meanwhile, the listed company itself did not timely disclose the legal opinion or the details of any change in actual control. Second, in cases of major asset restructuring, the listed company failed to promptly fulfill its deliberation procedures and information disclosure obligations, nor did it seek a trading suspension in a timely manner. Third, the listed company failed to disclose the relationships among its shareholders, and certain responsible parties engaged in nominee shareholding, resulting in unclear equity ownership and non‑compliant information disclosure. Fourth, during the issuance of shares, relevant responsible parties at the listed company were found to have engaged in nominee shareholding. Fifth, after an investor and its concert parties held equity interests reaching 10% of the listed company’s outstanding shares, they failed to suspend trading whenever their holdings increased or decreased by an additional multiple of 5%. Sixth, in connection with equity distribution, the listed company did not disclose the implementation announcement prior to the record date nor apply for the necessary administrative procedures. Seventh, certain responsible parties at the listed company sold shares they held within six months of purchase, or repurchased those same shares within six months of selling them.
The National Equities Exchange and Quotations Company, guided by the principles of “establishing sound systems, non‑interference, and zero tolerance,” diligently fulfills its frontline regulatory duties, continuously strengthens self‑regulatory oversight, and steadily enhances both the operational quality of the New Third Board market and the standardized practices of market participants. It resolutely imposes regulatory measures against violations, effectively safeguards investors’ legitimate rights and interests, and ensures the healthy and orderly development of the New Third Board market.

Taxation
State Taxation Administration and Ministry of Finance on the Continued Deferral of Payment of Certain Taxes and Fees for Small, Medium, and Micro Manufacturing Enterprises
Announcement Regarding Relevant Matters
To thoroughly implement the decisions and arrangements of the CPC Central Committee and the State Council and further support the development of small, medium, and micro-sized manufacturing enterprises, the following matters concerning the policy of continuing to defer payment of certain taxes and fees for such enterprises—including sole proprietorships, partnerships, and individual business households (hereinafter referred to as “small, medium, and micro-sized manufacturing enterprises”)—are hereby announced:
I. Effective September 1, 2022, medium-sized manufacturing enterprises that have already benefited from a 50% deferral of tax and fee payments, as well as small and micro manufacturing enterprises that have received a 100% deferral, shall have the remaining deferral period extended by an additional four months upon the expiration of their original deferral terms.
II. The taxes and fees eligible for deferred payment include corporate income tax, individual income tax, domestic value-added tax, domestic consumption tax, and the associated urban maintenance and construction tax, education surcharge, and local education surcharge—whether paid monthly for the periods of November and December 2021, February through June 2022, or paid quarterly for the fourth quarter of 2021 and the first and second quarters of 2022—that have already been deferred in accordance with applicable regulations. This exemption does not apply to taxes and fees withheld and remitted on behalf of others, collected and remitted on behalf of others, or paid when applying to the tax authorities for agency‑issued invoices.
III. For the taxes and fees deferred by the aforementioned enterprises in November 2021 and February 2022 that were remitted to the treasury after September 1, 2022, but prior to the issuance of this announcement, such entities may, at their discretion, apply for a refund of the deferred amounts and continue to benefit from the extended deferral policy.
IV. Upon expiration of the deferred payment period specified in this announcement, taxpayers shall pay the taxes and fees for the relevant month or quarter in accordance with the law. Where they meet the conditions set forth in the Law of the People’s Republic of China on the Administration of Tax Collection and its Implementing Rules for applying for an extension of the tax payment deadline, they may, in accordance with the law, submit an application to defer such payments.
V. If a taxpayer fails to meet the conditions set forth in this Announcement and fraudulently obtains benefits under the tax and fee deferral policy, the tax authorities shall impose strict penalties in accordance with the Tax Collection and Administration Law of the People’s Republic of China, its implementing rules, and other relevant provisions.
VI. This announcement shall take effect from the date of its issuance.
This is hereby announced.
State Taxation Administration Ministry of Finance
September 14, 2022
Regarding the “Announcement of the State Taxation Administration and the Ministry of Finance on Matters Concerning the Continued Deferral of Payment of Certain Taxes and Fees for Small, Medium, and Micro Manufacturing Enterprises”
interpretation of
To support the development of small, medium, and micro enterprises in the manufacturing sector, the State Taxation Administration, together with the Ministry of Finance, previously introduced a policy allowing these enterprises to defer payment of taxes and fees. Under the original deferral arrangement, the deferred tax and fee payments were scheduled to expire successively from August this year through January next year. In order to thoroughly implement the decisions and arrangements of the CPC Central Committee and the State Council and continue to help businesses alleviate their difficulties, the State Taxation Administration, in conjunction with the Ministry of Finance, issued the “Announcement of the State Taxation Administration and the Ministry of Finance on Matters Concerning the Continued Deferral of Certain Taxes and Fees for Small, Medium, and Micro Manufacturing Enterprises” (No. 17 of 2022, hereinafter referred to as the “Announcement”). The Announcement clarifies that, effective September 1, 2022, for medium-sized manufacturing enterprises that have already benefited from a 50% deferral of taxes and fees under the “Announcement of the State Taxation Administration and the Ministry of Finance on the Continued Implementation of the Deferral of Certain Taxes and Fees for Small, Medium, and Micro Manufacturing Enterprises” (No. 2 of 2022), and for small and micro manufacturing enterprises that have enjoyed a 100% deferral, the remaining deferral period will be extended by an additional four months upon the expiration of the originally granted deferral term.
I. What specific taxes and fees are covered by the continued deferral of payment as stipulated in the Announcement?
The taxes and fees deferred under this Notice include corporate income tax, individual income tax, domestic value-added tax, domestic consumption tax, and the associated urban maintenance and construction tax, education surcharge, and local education surcharge that were already deferred in accordance with regulations for the tax periods of November and December 2021, February through June 2022 (if paid monthly), or the fourth quarter of 2021 and the first and second quarters of 2022 (if paid quarterly). This does not apply to taxes and fees withheld and remitted on behalf of others, collected and remitted on behalf of others, or paid when applying to the tax authorities for agency issuance of invoices.
As the deferral periods for taxes and fees pertaining to October 2021 and January 2022 have expired, taxpayers are required to remit such amounts to the treasury in August 2022 in accordance with applicable regulations, and this Notice shall not apply to them.
Taxes and fees incurred during the period of August 2022 (or the third quarter, if paid quarterly) and thereafter shall be declared and paid in accordance with applicable regulations.
II. When are the taxes and fees specified in the Announcement, which continue to be deferred, required to be remitted to the treasury?
The tax and fee deferral for the periods of November and December 2021 (including the fourth-quarter 2021 taxes and fees paid on a quarterly basis) has been further extended by an additional four months, on top of the initial nine-month extension, for a total extension of thirteen months. The deferred amounts will be remitted in January and February 2023, respectively.
Tax and fee payments deferred for the periods of February and March 2022 (including quarterly taxes and fees for the first quarter of 2022), as well as April, May, and June 2022 (including taxes and fees for the second quarter of 2022), will be further extended by an additional four months on top of the initial six-month extension—resulting in a total extension of ten months—and are to be remitted between January and May 2023. The specific deferral periods are set out in the table below.
(1) Taxpayers who file and pay taxes on a quarterly basis
Tax Period (Quarterly) Original Filing and Payment Month Deferral Period Deferral Expiration Month

Fourth Quarter 2021
January 2022: Deferral has been in place for 9 months.
Another four-month deferral.
A total of 13 months
    
February 2023

First Quarter 2022
April 2022: Deferred for 6 months.
Another four-month deferral.
A total of 10 months
    
February 2023

Second Quarter 2022
July 2022: Deferred payment for 6 months.
Another four-month deferral.
A total of 10 months
    
May 2023
(2) Taxpayers who file and pay taxes on a monthly basis
Tax Period (Monthly) Original Filing and Payment Month Deferral Period Deferral Expiration Month

November 2021
    
December 2021: Deferred for 9 months.
Another four-month deferral.
A total of 13 months
    
January 2023

December 2021
    
January 2022
Deferred for 9 months
Another four-month deferral.
A total of 13 months
    
February 2023

February 2022
March 2022: Deferred payment for 6 months.
Another four-month deferral.
A total of 10 months
    
January 2023

March 2022
April 2022: Deferred for 6 months.
Another four-month deferral.
A total of 10 months
    
February 2023

April 2022
May 2022: Deferred payment for 6 months.
Another four-month deferral.
A total of 10 months
    
March 2023

May 2022
June 2022: Deferred payment for 6 months.
Another four-month deferral.
A total of 10 months
    
April 2023

June 2022
July 2022: Deferred payment for 6 months.
Another four-month deferral.
A total of 10 months
    
May 2023
III. How can small and medium-sized manufacturing enterprises benefit from the continued tax payment deferral policy?
To facilitate taxpayers’ access to this policy, the tax authorities have optimized and upgraded the information system. For small, medium, and micro manufacturing enterprises that have already benefited from the tax and fee deferral policy in accordance with Announcement No. 2 of 2022, the deferral period will be automatically extended by four months upon its expiration, without any further action required on the part of the taxpayers.
Example 1: Taxpayer A is a small, medium, or micro manufacturing enterprise as defined in Announcement No. 2 of 2022 and files and pays relevant taxes and fees on a monthly basis. Previously, the taxpayer had, in accordance with the regulations, deferred payment of the taxes and fees attributable to November 2021 for a period of nine months; under the original policy, such amounts were due for payment before the end of the September 2022 filing period. Following the issuance of this Announcement, the deadline for paying the November 2021 taxes and fees is automatically extended by four months, allowing the taxpayer to remit these liabilities together with the December 2022 taxes and fees during the January 2023 filing period.
If taxpayer A files and pays relevant taxes and fees on a quarterly basis, and has already deferred payment of the corresponding taxes and fees for the fourth quarter of 2021 in accordance with the applicable regulations—subject to a nine-month deferral period—such payments were originally due before the end of the October 2022 filing period under the previous policy. Following the issuance of this Notice, the deadline for paying the relevant taxes and fees for the fourth quarter of 2021 is automatically extended by four months, allowing payment during the February 2023 filing period.
Example 2: Taxpayer B is an individual industrial and commercial household in the manufacturing sector that meets the criteria for tax payment deferral and adopts the simplified declaration method, making quarterly payments. With respect to the relevant taxes and fees deferred for the fourth quarter of 2021, the taxpayer is not required to take any action to conoffice the deferral. In October 2022, the tax authorities will temporarily refrain from debiting the personal income tax, value-added tax, consumption tax, and the associated urban maintenance and construction tax, education surcharge, and local education surcharge that were deferred for the fourth quarter of 2021. The deferral period for these taxes and fees will be further extended by four months, with the amounts being collected and remitted by the tax authorities in February 2023.
IV. How should taxpayers who paid, between September 1, 2022, and the date of this announcement, the taxes and fees deferred in November 2021 and February 2022—taxes that had already been remitted to the treasury—be treated under the extended deferral policy?
For small, medium, and micro manufacturing enterprises, any taxes and fees deferred for payment in November 2021 and February 2022 that were remitted to the treasury between September 1, 2022, and the date of this announcement may, at the enterprise’s discretion, be subject to a refund application and continue to benefit from the deferred-payment policy.
Example 3: Taxpayer C, in accordance with Announcement No. 2 of 2022, deferred the payment of taxes and fees attributable to February 2022 and remitted such amounts to the treasury on September 5, 2022. With respect to this portion of taxes and fees, the taxpayer may voluntarily apply for a refund (or credit) and continue to benefit from the deferred-payment policy.
V. For taxpayers who deferred payment of enterprise income tax in the fourth quarter of 2021, the deferral period may be further extended by four months in accordance with the provisions of this Announcement. How should the additional tax payable arising from the 2021 annual tax reconciliation and final settlement be handled?
Pursuant to Announcement No. 2 of 2022, small and medium-sized manufacturing enterprises that benefited from the policy deferring corporate income tax payments for the fourth quarter of 2021 may defer payment of any additional corporate income tax liability arising from their 2021 annual final tax settlement together with the taxes already deferred for the fourth quarter of 2021. Such deferred tax liabilities shall, in accordance with the provisions of this Announcement, be further eligible for an additional four-month extension of the payment deadline.
Example 4: Taxpayer D, who makes quarterly estimated corporate income tax payments, was required to pay RMB 100,000 in corporate income tax for the fourth quarter of 2021. Under the provisions of Announcement No. 2 of 2022, this tax liability could be deferred until October 2022. Following the issuance of this Announcement, the deferral period has been further extended by four months, allowing the payment to be remitted to the treasury by February 2023.
Furthermore, if the taxpayer incurred an additional tax liability of RMB 200,000 in the 2021 annual corporate income tax final settlement, under the previous deferral policy, such amount could have been remitted to the treasury by October 2022. Following the issuance of this Notice, the taxpayer may now defer payment of this RMB 100,000—corresponding to the fourth quarter of 2021—by an additional four months, with the payment due in February 2023.
VI. Does the taxpayer’s eligibility for the tax deferral policy affect their final individual income tax settlement and clearance for business income?
For taxpayers who have benefited from the tax deferral policy and are conducting their annual individual income tax settlement for business income, the handling rules set forth in the earlier deferral policy shall continue to apply: the taxes deferred by such taxpayers shall be treated as “taxes already paid in advance” and shall be duly included in the calculation of any additional tax payments or refunds arising from the annual individual income tax settlement for business income. At the same time, upon expiration of the deferral period specified in this Announcement, taxpayers shall, in accordance with the law, remit the corresponding deferred taxes and fees.
Example 5: Taxpayer E is an individual industrial and commercial household in the manufacturing sector with annual sales of RMB 1 million. Under the account-based tax collection system, E files quarterly returns for personal income tax on business income. Pursuant to the earlier tax deferral policy, during the July 2022 filing period, E elected to defer the personal income tax that was due for the second quarter of 2022 until the January 2023 filing period. Following the issuance of this Notice, the deferral period for the aforementioned tax has been further extended by four months, requiring payment by the May 2023 filing period. When taxpayers file their final settlement and clearance of personal income tax on business income for 2022 by March 31, 2023, the deferred tax shall be treated as “tax already paid in advance” and will be duly included in the calculation of any additional tax payable or refund due under the final settlement process. Any additional tax liability must be settled by March 31, 2023; eligible refunds may be claimed as usual, without being affected by the taxpayer’s prior entitlement to the deferral of the second-quarter 2022 tax. Meanwhile, the previously deferred tax must be paid within the May 2023 filing period.
VII. After small, medium, and micro manufacturing enterprises have benefited from the tax and fee deferral policies stipulated in this Announcement, may they, in accordance with the law, apply for an extension of the tax payment deadline?
Manufacturing SMEs that meet the conditions set forth in this Announcement, and that also satisfy the requirements under the Tax Collection and Administration Law of the People’s Republic of China and its implementing rules for applying for an extension of tax payment, may, in accordance with the law, file an application to defer tax payments.
Premier Li Keqiang presided over an executive meeting of the State Council.
It has been decided to further extend the deadline for deferred tax payments and subsequent make‑up payments in the manufacturing sector, thereby bolstering efforts to help enterprises overcome difficulties.
The State Taxation Administration recently announced that this year’s new package of tax and fee support policies is diverse in type, substantial in scale, and broad in coverage. The tax authorities have rigorously implemented the decisions and arrangements of the CPC Central Committee and the State Council, ensuring that the benefits of these policies are delivered precisely to market entities. As of June 25, the nationwide cumulative total of additional tax refunds, tax reductions, fee cuts, and deferrals has reached approximately RMB 2.58 trillion. It is estimated that, in the first half of the year, the new package of tax and fee support measures will generate an additional RMB 2.86 trillion in tax refunds, reductions, cuts, and deferrals.
On September 13, Premier Li Keqiang of the State Council presided over an executive meeting of the State Council, which decided to further extend the deadline for deferred tax payments and subsequent make‑up payments in the manufacturing sector, thereby bolstering efforts to help enterprises overcome difficulties. The meeting also approved a plan to provide targeted re‑loans coupled with fiscal interest subsidies to support equipment upgrades and technological renovations in specific sectors, aiming to expand market demand and strengthen long-term growth momentum. In addition, measures were outlined to further stabilize foreign trade and foreign investment, helping to consolidate the foundations of economic recovery. The meeting adopted steps to streamline regulation in the electronics and electrical appliances industry, reduce institutional transaction costs, and further invigorate market vitality. Finally, it was decided to approve the second phase of the Zhangzhou Nuclear Power Project in Fujian and the first phase of the Lianjiang Nuclear Power Project in Guangdong, with strict requirements to ensure absolute safety.
The meeting emphasized that stabilizing the economy hinges on safeguarding market entities. As the backbone of the real economy, the manufacturing sector is currently facing significant challenges; accordingly, in line with the directives of the CPC Central Committee and the State Council, policy measures to alleviate these difficulties must be strengthened. For small, medium, and micro enterprises in the manufacturing sector, as well as individual business households, the deadline for paying deferred income taxes and other “five taxes and two fees” will be extended by an additional four months, starting from September 1, following the original expiration date, thereby covering deferred tax liabilities totaling RMB 440 billion. Meanwhile, newly generated input VAT credit balances in the manufacturing sector will be refunded immediately upon application, with the average processing time reduced to two working days. It is estimated that, over the remaining four months of this year, an additional RMB 32 billion in tax refunds will be issued to manufacturing offices.
The meeting noted that advancing the renewal and upgrading of equipment in weak areas of economic and social development will help expand market demand in the manufacturing sector, boost consumption as the primary driver of economic growth, and strengthen long-term development momentum. The meeting decided to provide support to manufacturers, service providers, social service entities, as well as small, medium, and micro enterprises and individual business households, by encouraging nationwide commercial banks to actively extend medium- and long-term loans at interest rates no higher than 3.2% for equipment upgrades and renovations in the fourth quarter. The People’s Bank of China will offer special-purpose relending to commercial banks, covering 100% of the loan principal. The total amount of such special-purpose relending will exceed RMB 200 billion, with efforts made to meet actual demand; the loans will have a one-year term and may be extended twice. In parallel, existing policies will be implemented: the central government will subsidize borrowers by 2.5% of the loan interest, ensuring that, for loans taken out during the fourth quarter of this year to upgrade or renovate equipment, the effective borrowing cost does not exceed 0.7%.
The meeting noted that opening-up is a fundamental national policy of China, and that imports and exports provide strong support for stabilizing growth and employment. Efforts to stabilize foreign trade and foreign investment must be intensified. First, we will support businesses in securing orders and expanding markets by strengthening guarantees for energy, labor, logistics, and other key inputs, providing full‑scale assistance when necessary to ensure timely fulfillment of contracts. We will expedite the disbursement and effective use of special funds for foreign economic and trade development, and enhance services and support for overseas exhibitions and business negotiations. Second, we will foster the further development of new forms of foreign trade by promptly establishing additional cross‑border e‑commerce comprehensive pilot zones and stepping up support for the construction of overseas warehouses. Third, we will improve port‑side collection and distribution as well as domestic transportation efficiency to ensure swift handling and rapid transit of import and export goods, thereby safeguarding the stability of industrial and supply chains. We will continue to eliminate unreasonable charges in port‑related services. Fourth, we will strengthen factor‑supply guarantees to help a batch of key foreign‑invested projects get off the ground as soon as possible, and further facilitate the entry and exit of business and technical personnel from foreign enterprises and their family members. Fifth, we will hold major provinces with robust foreign trade and foreign investment accountable, enabling them to play an even more prominent role, while relevant departments will enhance coordination and service provision.
The meeting noted that China’s electronics and electrical appliances industry is large in scale and a major employer, and that “delegation, regulation, and service” reform measures should be employed to unleash greater dynamism. First, mandatory certification and telecommunications equipment usage licensing will be abolished for a range of products with low safety risks and mature technical standards, thereby facilitating market access. Second, unreasonable restrictions on the market entry of manufactured goods will be comprehensively reviewed and eliminated, while production licensing procedures will be streamlined and consolidated—on the premise of ensuring safety. Certification and assessment schemes related to energy efficiency, green practices, and other areas will be simplified and integrated to establish a unified national certification system. Third, regulatory responsibilities will be officely enforced, with targeted oversight strengthened for products that directly affect life and property safety.
To enhance energy security and promote green development, the meeting decided to approve the second phase of the Zhangzhou Nuclear Power Project in Fujian and the first phase of the Lianjiang Nuclear Power Project in Guangdong, both of which have been included in the national plan and meet all requisite conditions. Comprehensive oversight will be strengthened throughout the entire lifecycle to ensure that construction and operation are absolutely safe.
Litigation & Arbitration
The Supreme People’s Procuratorate has released typical cases of public interest litigation aimed at urging the rectification of illegal mining.
On September 14, the Supreme People’s Procuratorate released typical cases of public interest litigation in which procuratorial organs have urged the rectification of illegal mining activities. Hu Weilie, a member of the Procuratorial Committee of the Supreme People’s Procuratorate and Director of the Eighth Procuratorial Office, stated that the protection of mineral resources falls under the category of “ecological environment and resource protection” and constitutes a statutory area for public interest litigation by the procuratorate. In urging the remediation of illegal mining, public interest litigation by the procuratorate has leveraged the advantages of integrated case handling and employed cross‑regional collaboration mechanisms to effectively overcome challenges and resistance. Throughout the process, it has adhered to the principle of win‑win and multi‑win outcomes, coordinating with administrative authorities to pool efforts for public interest protection. Moreover, in response to governance gaps and shortcomings identified during investigations, it has issued recommendations on similar cases to promote source‑level governance. Finally, by fully harnessing the expertise of external experts and think tanks, it has strengthened its commitment to technology‑driven empowerment, thereby enhancing the quality and efficiency of handling major cases.
Criminal cases with accompanying public-interest civil litigation protect the Yangtze River.
Dali Mountain, adjacent to the Yangtze River, is a provincial scenic area in Anhui Province and serves as an ecological barrier for Dongzhi County. The limestone quarry operated by a certain new‑materials technology limited liability company in Anhui Province (hereinafter referred to as Company A) is located within the Dali Mountain Provincial Scenic Area. For an extended period, the company has engaged in mining operations exceeding its authorized scale, resulting in large‑scale ecological damage and causing serious harm to the public interest.
[Investigation and Litigation] The “2020 Ecological and Environmental Warning Film on the Yangtze River Economic Belt” exposed illegal mining activities by Company A. The Supreme People’s Procuratorate forwarded this lead through successive levels to the People’s Procuratorate of Dongzhi County, Chizhou City, Anhui Province. Following the initiation of a case in March 2021, the Dongzhi County Procuratorate conducted multiple joint on-site inspections with the County Bureau of Natural Resources and Planning and the public security authorities, uncovering that, under the requirements of the first round of central ecological and environmental protection inspection rectification, the mine was supposed to have been closed and its geological environment remediated by the end of 2017; however, during the remediation process, Company A continued to engage in illegal mining.
Upon calculation, Company A was found to have over-mined 932,700 tonnes of ore, with an assessed value of RMB 27.981 million. The relevant investigation report indicates that Company A’s illegal mining has disrupted the structure and functions of the mine‑pit land ecosystem, increasing the risk of geological hazards. Relevant authorities have also conducted an assessment of the costs associated with ecological and environmental restoration resulting from Company A’s unlawful mining activities.
The Dongzhi County People’s Procuratorate, upon review, determined that Company A’s illegal mining activities resulted in severe harm and were committed with clear intent, thus warranting the imposition of punitive damages. Accordingly, based on the property loss of RMB 27.981 million caused by Company A’s over‑mining, and taking into account the defendant’s admission of guilt and acceptance of punishment as well as their financial circumstances, the procuratorate proposed a punitive damage award of RMB 1.3991 million, equivalent to 5% of the assessed loss.
In May 2021, the Dongzhi County People’s Procuratorate filed a criminal public interest lawsuit with civil claims in court, seeking to hold Company A and its de facto controller, Shao Moping, criminally liable for illegal mining. The procuratorate also requested that Company A and Shao Moping be jointly ordered to compensate more than RMB 28.72 million, covering ecological restoration costs, appraisal and assessment fees, and punitive damages. The court convicted Company A and Shao Moping of the crime of illegal mining, imposed criminal penalties and fines, and ordered the confiscation of RMB 27.981 million in illicit proceeds from Company A. At the same time, the court upheld the procuratorial organ’s civil claims in the criminal public interest lawsuit. Dissatisfied with the ruling, Company A appealed, but its appeal was dismissed.
During the investigation phase of this case, the Dongzhi County People’s Procuratorate, recognizing the lengthy litigation process and the risk of further environmental damage if remediation were not promptly undertaken, convened a roundtable meeting with relevant competent authorities to urge Company A to accelerate its environmental restoration efforts. As a result, the government advanced 8.9 million yuan for emergency repair and remediation, enabling the completion of basic mine rehabilitation and partial ecological revegetation prior to the filing of the lawsuit. At the end of 2021, the Chizhou Municipal People’s Procuratorate organized visits by selected provincial People’s Congress deputies, public supervisors, and experts to inspect the on-site restoration work. To date, the mine‑related restoration and remediation project has passed acceptance inspection.
[Typical Significance] When determining the claims in a civil public interest litigation, the procuratorial organ comprehensively considered multiple factors and sought punitive damages, also setting an appropriate rate for such damages. After securing criminal evidence, the procuratorial organ flexibly employed mechanisms such as roundtable meetings to facilitate the timely implementation of ecological and environmental restoration measures, thereby effectively safeguarding the damaged ecosystem.
Integrated oversight and close coordination to protect mineral resources.
Unlawfully excavating sand on cultivated land, thereby undermining its agricultural suitability, is expressly prohibited under the Land Management Law. Between July and September 2019, Wu Mokun, Wu Mocun, and Wu Mosheng conspired to contract, in Wu Mosheng’s name, 14 mu of collectively owned farmland in a village within the Economic and Technological Development Zone of Puyang City, Henan Province. In violation of relevant provisions of the Mineral Resources Law, the three individuals extracted and sold sand from this land without obtaining a mining permit. From October 2019 to January 2020, Ma Moumou, after paying Wu Mokun and others, continued to extract and sell sand. The unlawful acts of Wu Mokun and three others resulted in significant damage to the topsoil layer of the farmland and the impairment of the land’s original functions.
[Investigation and Litigation] During the performance of its duties, the Criminal Prosecution Department of the Nanle County People’s Procuratorate in Henan Province identified this lead and referred it to the Public Interest Litigation Department of the same procuratorate. In February 2021, the Nanle County Procuratorate instituted a case and issued a pre-litigation notice.
The Nanle County People’s Procuratorate conducted an investigation and verification, coordinating with the County Public Security Bureau, the Provincial Department of Natural Resources, and other relevant authorities to carry out multiple on-site inspections and measure the extent of the damaged land. Given the substantial area affected by illegal sand extraction and the fact that some areas had been backfilled with construction waste, investigators, after consulting with the pertinent departments, opted to employ a drilling‑based approach for data collection and invited experts to provide on‑site guidance. According to the expert appraisal, Wu Moukun and others illegally extracted 22,000 cubic meters of sand, resulting in damage to mineral resources valued at RMB 606,000. The Nanle County People’s Procuratorate, in collaboration with the relevant administrative agencies, formulated a land reclamation plan and, following an assessment, determined the ecological and environmental restoration costs to be RMB 3.447 million.
Upon expiration of the public notice period, the Nanle County People’s Procuratorate filed a criminal public interest lawsuit with civil claims before the court. The court convened pre-trial conferences to address issues such as damage assessment and ecological restoration, and held two public hearings. During the proceedings, all four defendants pleaded guilty and expressed their willingness to bear the costs of ecological restoration. The court granted all of the procuratorial organ’s claims: defendants Wu Moukun, Wu Mocun, Wu Mousheng, and Ma Moumou were each sentenced to fixed-term imprisonment ranging from one year to one year and three months, and fined amounts ranging from RMB 20,000 to RMB 40,000; their illegal gains totaling RMB 420,000 were confiscated. Furthermore, the four defendants, jointly and severally, were ordered to pay RMB 3.447 million for ecological and environmental restoration.
The Nanle County People’s Procuratorate promptly reported to its superior procuratorial organ. In response, the Puyang Municipal People’s Procuratorate, in conjunction with the Municipal Intermediate People’s Court and the Municipal Bureau of Natural Resources and Planning, jointly issued guidelines on strengthening coordination and cooperation in land‑related law enforcement and judicial matters, thereby laying the groundwork for curbing and cracking down on illegal mining activities in the region.
[Typical Significance] In handling cases of illegal sand mining, the procuratorial organs have fully leveraged their public-interest litigation functions, adopting an integrated oversight model that combines criminal prosecution with public-interest litigation. By maintaining close coordination with public security and administrative authorities, and drawing on the expertise of third-party appraisal institutions and specialists, they objectively establish the facts of damage to mineral resources, scientifically assess the value of the damaged resources and the costs required for ecological restoration, and hold the perpetrators legally accountable for ecological remediation.
Comprehensively employ oversight mechanisms to ensure full performance of duties.
Bayueshan Mountain is located at the tri‑boundary of Dazu District, Tongliang District, and Yongchuan District in Chongqing Municipality. It harbors a variety of mineral resources and serves as an important ecological barrier for the region. Since 2013, individuals including Zhou, Yang, and Li have, through joint equity participation and independent organization, engaged in long‑term illegal mining activities within the Dazu District of Bayueshan Mountain, resulting in severe damage to mineral resources, forestry resources, and the ecological environment. For an extended period, the relevant administrative authorities failed to effectively curb these unlawful acts, thereby infringing upon national and public interests.
[Investigation and Litigation] In the second half of 2017, the People’s Procuratorate of Dazu District, Chongqing, received reports from deputies to the municipal and district people’s congresses as well as from members of the public. It promptly conducted on-site visits to verify the allegations, dispatched personnel multiple times to the scene for inspection and surveying, and collected and preserved evidence, ultimately filing a case in November of the same year.
Investigations revealed that Zhou, Yang, Li, and others illegally mined carbonaceous shale (mudstone) for sale, thereby causing losses to state mineral resources, damaging mountain slopes, destroying large areas of forest, exposing bare rock and soil, and increasing the risk of landslides. According to expert appraisal, a total of 46,000 tons of mineral resources were extracted, and at eight mining sites, 24.2 mu of forestland suffered ecological damage. The resulting economic losses exceed RMB 4.5 million. Furthermore, Zhou and others engaged in group brawls with other illegal miners and, through violence and threats, obstructed law enforcement by administrative authorities and the forest protection efforts of state-owned forestry stations.
To ensure that the relevant administrative authorities perform their duties in accordance with the law, the Dazu District People’s Procuratorate issued pre-litigation prosecutorial recommendations to the former Dazu District Bureau of Land and Resources and Housing Administration and the Dazu District Forestry Bureau, calling for strengthened joint law enforcement and rigorous investigation and punishment of illegal mining activities and deforestation. Upon receiving these recommendations, both agencies promptly formulated rectification plans and implemented measures such as imposing severe penalties on unauthorized excavation and indiscriminate mining, blocking access routes for heavy machinery into mountainous areas, and conducting public awareness campaigns, thereby effectively curbing such practices. Under the supervision of the Dazu District People’s Procuratorate, the former Dazu District Bureau of Land and Resources and Housing Administration referred Zhou Moumou and others, who were suspected of criminal offenses, to the public security organs for investigation as leads related to organized crime. The Dazu District People’s Procuratorate subsequently brought public prosecution against Zhou Moumou and others, and the court convicted them of illegal mining, sentencing each to fixed-term imprisonment ranging from one year and six months to three years and six months.
In May 2018, the Dazu District People’s Procuratorate initiated a criminal‑civil public interest litigation procedure. The Dazu District People’s Government subsequently issued a work plan and filed an action for compensation for ecological and environmental damage. In response, the Dazu District People’s Procuratorate reclassified the case as a support‑for‑prosecution proceeding and dispatched personnel to appear in court. The court ruled in favor of all the administrative agency’s claims and the procuratorial organ’s arguments, ordering Zhou et al. to bear joint and several liability for compensating RMB 1.4052 million in ecological and environmental damage, together with appraisal fees and litigation costs, in proportion to their respective involvement in the illegal mining activities.
[Typical Significance] The procuratorial organs have focused on pressing issues strongly raised by deputies to the People’s Congress and the general public, primarily through administrative public-interest litigation, while comprehensively employing a variety of supervisory measures to urge administrative agencies to perform their duties in accordance with the law. At the same time, they have held those who committed unlawful acts accountable for ecological and environmental damage compensation, and have probed deeply into cases involving organized crime and evil forces from public-interest litigation matters, thereby achieving positive results in case handling.
The Ministry of Public Security has released five typical cases of cracking down on crimes involving food agricultural products.
To effectively address issues such as the illegal use of prohibited and restricted drugs in the edible agricultural products sector, as well as excessive residues of conventional veterinary and agricultural drugs, the Ministry of Public Security has directed public security organs nationwide to rigorously crack down, in accordance with the law, on criminal activities that endanger the safety of edible agricultural products—such as the illicit use of prohibited and restricted substances and unauthorized additives like “lean meat powder”—throughout the entire production chain, thereby safeguarding the quality of these products and ensuring public food safety. To date, more than 2,300 criminal cases in this field have been solved, and all 28 major cases placed under the Ministry’s direct supervision have been successfully concluded. On September 14, the Ministry of Public Security released five typical cases illustrating its efforts to combat crimes that jeopardize the safety of edible agricultural products.
According to reports, the Ministry of Public Security has closely integrated its three-year “Rectify Prohibitions, Control Residues, and Promote Improvement” campaign for food agricultural products with its efforts to combat crimes that endanger the safety of such products. Making the crackdown on illegal and criminal activities that jeopardize food‑agricultural‑product safety a key priority of both the “100‑Day Campaign” and the “Kunlun” operation, the Ministry has directed public security organs nationwide to launch sustained, robust enforcement actions. These efforts focus on priority agricultural products—including vegetables, poultry eggs, meat products, and aquatic products—and target serious offenses such as the illegal use of prohibited or restricted drugs in farming, breeding, and slaughtering, as well as the production and sale of counterfeit or substandard veterinary and agricultural medicines. By strengthening inter‑agency coordination, expanding channels for gathering leads, and prioritizing the swift resolution of major cases while addressing numerous smaller ones, authorities have successfully solved a number of high‑profile cases involving the illegal manufacture, sale, and use of clenbuterol and the injection of drugs or water into livestock. They have also promptly investigated and prosecuted a series of offenses—though often involving relatively small sums—directly threatening public health and safety. Furthermore, they have dismantled a number of illicit “black factories” and “illegal dens” producing and selling counterfeit or substandard veterinary and agricultural medicines, thereby effectively safeguarding the quality and safety of food agricultural products.
Leverage the advantages of rapid testing technology to deliver efficient enforcement.
Case One: In October 2021, based on leads uncovered during routine investigations, the public security organs of Suqian and Suzhou in Jiangsu Province successively cracked a series of cases involving the production and sale of toxic and harmful soaked food products, arresting 38 criminal suspects and seizing on-site a batch of soaked foods, including beef tripe and beef chitterlings. Investigations revealed that the suspects, including Liu Moumou and Qin Moumou, had soaked animal offal such as beef tripe and beef chitterlings, as well as aquatic products like silverfish, in toxic and harmful non‑food substances before selling them to the public.
This case is a typical example of public security organs leveraging the rapid‑testing capabilities of their food and drug investigation labs to proactively uncover criminal leads and rigorously crack down on the illegal addition of toxic and harmful substances to soaked foods. In this instance, the food and drug investigation units of the public security authorities in Suzhou and Suqian relied on their in‑house rapid‑testing laboratories to conduct targeted screenings of soaked products at agricultural markets, thereby identifying unscrupulous vendors. Following these leads, they conducted an in‑depth investigation that successfully severed the entire profit chain. After solving the case, the local public security organs promptly notified the administrative regulatory authorities, prompting strengthened measures to address the problem at its source. In turn, the administrative regulators intensified proactive sampling inspections, further bolstering oversight and enforcement.
In the series of cases uncovered by Zhejiang public security authorities—investigating how Zheng and others in Jiaxing illegally added malachite green and other prohibited or restricted substances to produce and sell substandard food—the rapid-testing laboratory of the food and drug investigation unit played a pivotal role.
Case No. 2: In March 2022, based on leads uncovered during routine operations, the public security authorities in Jiaxing, Zhejiang Province, cracked a series of cases involving the illegal addition of prohibited and restricted substances to produce and sell swollen‑and‑expanded food products. Authorities raided and shut down 20 production, storage, and sales sites, apprehended nine suspects, and seized 27 tons of substandard swollen‑and‑expanded food, along with 43 kilograms of prohibited and restricted substances such as malachite green and sodium metabisulfite. Investigations revealed that the suspects, including Zheng Moumou, illegally processed and manufactured foods adulterated with malachite green, excessively used sodium metabisulfite beyond permitted limits, and produced food products with aluminum levels exceeding regulatory standards, subsequently distributing them through wholesale and retail channels.
Public security organs conducted rapid‑testing analyses of suspicious swollen food products in the market, uncovering leads indicating the illegal addition of prohibited or restricted substances such as malachite green. They meticulously organized investigations and evidence collection, successfully solving a series of cases. Following the resolution of these cases, the public security authorities promptly notified the relevant administrative regulatory authorities, prompting strengthened risk monitoring and industry oversight, addressing longstanding illicit practices within the swollen‑food sector, and preventing the emergence of systemic and regional food‑safety risks.
Deepen regional and industry-wide cooperation to crack down across the entire value chain.
Case Three: In June this year, acting on leads provided by the administrative authorities, the public security organs in Guangyuan, Sichuan, cracked a series of cases involving the production and sale of counterfeit and substandard pesticides. They apprehended 74 suspects and seized more than 40 tons of finished and semi-finished counterfeit and substandard pesticides, as well as raw materials, at the scene. Investigations revealed that 18 criminal gangs, led by Sun Moumou, Chang Mou, and others, had established pesticide production and processing facilities in other provinces. They manufactured over 100 types of fake and substandard pesticides by mixing chemicals lacking any active pesticide ingredients, then promoted and sold them at low prices through online platforms, with a total case value of RMB 120 million.
This case is a typical example of public security organs strengthening regional police cooperation and conducting end-to-end crackdowns on upstream crimes that jeopardize the safety of food agricultural products. The production and sale of substandard and counterfeit pesticides are key targets in the special campaign to “prohibit illegal practices, control pesticide residues, and promote quality improvement” in the food agricultural sector. Public security authorities in Sichuan and other regions have adopted a comprehensive approach—targeting all links, all elements, and the entire supply chain—and, leveraging regional police‑cooperation mechanisms, have worked in close coordination to trace the problem back to its source. They have thoroughly uncovered dozens of clandestine production sites and “black factories” manufacturing substandard and counterfeit pesticides, launching multiple coordinated operations to dismantle cross‑regional criminal networks involved in the manufacture and distribution of such products.
Case Four: In April 2021, acting on leads provided by the competent administrative authorities, the public security organs in Wuhu, Anhui, cracked a case involving the production and sale of water‑injected beef. Eleven suspects were apprehended, and over 300 kilograms of water‑injected beef and six live cattle awaiting slaughter were seized at the scene. Investigation revealed that a criminal gang led by Lu and others had, in rural areas of Wuhu and Tongling, either built their own or rented slaughter facilities. They processed water‑injected beef by injecting water into the animals prior to slaughter and then sold it on the market, with total sales exceeding RMB 20 million.
This case is a typical example of public security organs strengthening collaboration and coordination with administrative authorities to severely crack down on the crime of injecting water into meat. Upon receiving the case referred by the administrative authority, the public security organs promptly initiated an investigation and conducted a meticulous probe, successfully dismantling a criminal gang led by Lu Moumou that manufactured and sold water-injected beef. In this case, the water content of the beef served as crucial evidence for determining the nature of the offense; testing revealed that the water content exceeded the statutory limit. Accordingly, the public security organs, in accordance with the law, prosecuted the perpetrators for the crime of producing and selling substandard and fake products.
Strengthen criminal protection of property rights and deliver targeted crackdowns.
Case Five: In July 2022, based on leads provided by the competent administrative authorities, the Shanghai Public Security Organs cracked a series of cases involving the production and sale of counterfeit “Green Food” products, arresting 20 suspects and seizing over 300,000 counterfeit “Green Food” trademark labels at the scene. Investigations revealed that several criminal gangs, led by suspect Deng Moumou, had, without authorization from the China Green Food Development Center, commissioned individuals such as Gong Moumou to illegally manufacture counterfeit “Green Food” trademark labels, which were affixed to the packaging of agricultural products—including strawberries, grapes, and rice—to falsely represent them as high‑priced “Green Food” items for sale.
This case is a typical example of public security organs strengthening criminal protection of intellectual property in the field of food agricultural products and severely cracking down on infringement and counterfeiting crimes. Protecting and developing green, high-quality agricultural products is an important measure for promoting the development of specialty industries, revitalizing rural economies, and carrying forward farming culture. Green food refers to safe, high-quality edible agricultural products and related products that have been granted the right to use the “Green Food” logo in accordance with the Regulations on the Administration of the Green Food Logo. The “Green Food” logo is a certification mark, with the China Green Food Development Center as its owner. Only after undergoing inspection and approval by the China Green Food Development Center and obtaining authorization may agricultural products bear the “Green Food” logo on their packaging.
In recent years, as living standards have risen and consumer attitudes have evolved, green food has gained increasing favor among consumers. However, some unscrupulous businesses, driven by illicit profits, have been passing off ordinary agricultural products that fail to meet the required quality standards as green food, selling them at inflated prices. Such practices seriously infringe upon the brand rights of green food and the legitimate rights and interests of consumers. In response, public security authorities have adopted a strategy of combating crime to promote governance, stepping up efforts to crack down on illegal and infringing activities involving counterfeit and substandard edible agricultural products. At the same time, they have actively worked with administrative regulators to improve the certification system for green food and strengthen industry oversight, raise law-abiding awareness among industry professionals, and enhance consumers’ vigilance and their ability to identify and distinguish counterfeit products, thereby jointly fostering the high-quality development of the edible agricultural products sector.
An official from the Food and Drug Crime Investigation Bureau of the Ministry of Public Security stated that public security organs will closely integrate with the “100-Day Campaign,” maintaining an unwavering, high‑intensity crackdown on crimes that jeopardize the safety of food and agricultural products. They will impose severe penalties, take resolute enforcement actions, intensify their efforts, strengthen inter‑agency coordination, and actively promote the enhancement of end-to-end oversight of food and agricultural products. Furthermore, they will improve comprehensive governance across the entire chain of pesticide and veterinary drug residues, thereby effectively safeguarding the public’s food safety and welcoming the successful convening of the 20th National Congress of the Communist Party of China with concrete measures.
Regulations on the Administration of Internet Pop-up Information Push Services
Article 1: In order to regulate internet pop-up information push services, safeguard national security and the public interest, protect the legitimate rights and interests of citizens, legal persons, and other organizations, and promote the healthy and orderly development of the industry, these Provisions are hereby formulated in accordance with the Cybersecurity Law of the People’s Republic of China, the Law of the People’s Republic of China on the Protection of Minors, the Advertising Law of the People’s Republic of China, the Measures for the Administration of Internet Information Services, the Regulations on the Administration of Internet News Information Services, the Regulations on the Governance of the Online Information Content Ecosystem, and other relevant laws and regulations.
Article 2: These Provisions shall apply to the provision of internet pop-up information push services within the territory of the People’s Republic of China.
For the purposes of these Regulations, “internet pop-up information push services” refer to information‑push services delivered to internet users in the form of pop-up message windows via operating systems, application software, websites, and other platforms.
For the purposes of these Regulations, “provider of internet pop-up information push services” refers to any organization or individual that provides such services.
Article 3: Providers of internet pop-up information push services shall abide by the Constitution, laws, and administrative regulations; promote the core socialist values; uphold the correct political direction, public opinion guidance, and value orientation; and safeguard a clean and healthy cyberspace.
Article 4: Providers of internet pop-up information push services shall assume primary responsibility for information content management and establish and improve management systems covering information content review, ecosystem governance, data security and personal information protection, as well as the protection of minors.
Article 5 Entities providing internet pop-up information push services shall comply with the following requirements:
(1) It is prohibited to disseminate illegal or harmful information as defined in the Regulations on the Governance of the Online Information Content Ecosystem, particularly content that maliciously sensationalizes entertainment gossip, scandalous private matters, ostentatious displays of wealth, or grotesque and vulgar portrayals—any material that violates public order and good morals. Furthermore, it is forbidden to deliberately rehash old news by linking it to a specific topic with the sole purpose of stirring up controversy.
(2) No entity that has not obtained a license for Internet news information services may display pop-up windows to push news information. If the information pushed via such pop-ups pertains to other Internet information services that, in accordance with law, require review and approval by or licensing from the relevant competent authorities, such review and approval or licensing shall be obtained.
(3) For pop-up notifications delivering news information, strict adherence to the “List of Designated News Source Organizations” issued by the Cyberspace Administration of China is required; unauthorized retransmission beyond the designated scope is prohibited, and the original intent of headlines and the content of news reports must not be distorted or altered, ensuring that the sources of news information are traceable.
(4) Enhance the diversity of pop-up push notifications, scientifically determine the proportion of news content and vertical‑domain content, and ensure that the content reflects positive, healthy, and uplifting mainstream values. It is prohibited to concentrate on pushing or sensationalizing socially sensitive issues, heinous crimes, disasters, or accidents in a manner that could incite public panic.
(5) Improve the regulatory framework for managing pop-up message content, refine workflows for content screening, editing, and delivery, allocate review resources commensurate with the scale of services, and strengthen the review of pop-up message content.
(6) Safeguard users’ rights and interests by clearly informing them, through service agreements or other means, of the specific format, content, frequency, and opt-out mechanisms of pop-up information‑push services. Fully take user experience into account, scientifically plan push frequencies, refrain from imposing unreasonable differential treatment between ordinary users and member users, and ensure that no form of interference or obstruction is permitted in users’ ability to close pop-ups. Pop-up messages must prominently display the identity of the provider of the pop-up information‑push service.
(7) It is prohibited to design algorithmic models that induce user addiction, encourage excessive consumption, or otherwise violate laws and regulations or contravene ethical standards; it is also prohibited to use algorithms to engage in malicious information blocking, over‑recommendation, or other such practices; furthermore, it is forbidden to employ algorithms to profile minor users and serve them content that may adversely affect their physical and mental well‑being.
(8) Pop-up advertisements shall be clearly identifiable, prominently marked with the word “Advertisement” and a close button, and must allow users to close the ad with a single click.
(9) It is prohibited to use pop-up messages to present third-party links, QR codes, or other information that maliciously redirect users; nor shall such pop-up messages be used to entice users to click, thereby engaging in fraudulent traffic generation or traffic hijacking.
Article 6: Providers of internet pop-up information push services shall proactively accept public oversight, establish convenient channels for complaints and reports, and promptly address public complaints and reports concerning such services.
Article 7: Internet industry organizations shall be encouraged and guided to establish and improve industry codes of conduct for pop-up information push services, thereby fostering the healthy and orderly development of the industry.
Article 8: The cyberspace administration shall, in conjunction with the telecommunications regulatory authority, the market supervision authority, and other relevant departments, establish and improve collaborative regulatory mechanisms and other working frameworks to supervise and guide providers of internet pop-up information push services in delivering their services in compliance with laws and regulations.
Article 9: Where an internet pop-up information push service provider violates these Provisions, the cyberspace administration, telecommunications regulatory authorities, market supervision departments, and other relevant competent authorities shall, within their respective jurisdictions, impose penalties in accordance with applicable laws and regulations.
Article 10 This Regulation shall enter into force on September 30, 2022.

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