JC Master Legal News Issue 1035

Key Takeaways for This Issue

The Supreme People’s Procuratorate and the China Securities Regulatory Commission have signed a Cooperation Agreement to ensure the steady and sustainable development of the capital market through higher‑quality law enforcement and judicial cooperation.
Taking the implementation of the “Collaborative Opinions” as an opportunity, we will further strengthen coordination between the China Securities Regulatory Commission and the Supreme People’s Procuratorate, bolster the rule of law and the foundational institutional framework of the capital market, refine the mechanisms for securities enforcement and judicial administration, maintain a zero‑tolerance stance toward securities‑related violations, and jointly safeguard the market’s principles of fairness, justice, and transparency, thereby protecting the legitimate rights and interests of investors.
Key Interpretations of the Measures for the Compliance Management of Central Enterprises and Their Implications for Listed Companies’ Compliance
To further elevate corporate compliance management to a new level, the State-owned Assets Supervision and Administration Commission of the State Council issued the “Administrative Measures for Compliance Management of Central Enterprises” on September 14, which will take effect on October 1, officially ushering in a new chapter in compliance management for central enterprises.
The Third Belt and Road Tax Administration Cooperation Forum concluded, adopting six outcomes, including the Joint Statement of the Third Belt and Road Tax Administration Cooperation Forum.
At this forum, participants convened under the theme “Uniting Hearts and Pooling Strengths to Tackle Challenges: Building Tax Administration Capacity in the Post-Pandemic Era,” engaging in discussions on strategic planning for tax administration capacity building, the application of information technology in this endeavor, and the development of a lifelong learning system for tax professionals. As a result, they reached significant outcomes spanning six key areas and encompassing numerous specific measures.
The Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, and the Ministry of Justice have jointly issued new regulations on bail pending trial.
Based on thorough research, the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, and the Ministry of State Security have carefully reviewed and deeply analyzed the pressing issues that urgently need to be addressed in the practice of bail pending trial. After repeated deliberations, expert assessments, and revisions, they have revised the “Provisions on Several Issues Concerning Bail Pending Trial,” originally issued in 1999, and officially promulgated it on September 21, 2022.
In the first-instance verdict in the Tangshan barbecue restaurant assault case, the principal offender, Chen Jizhi, was sentenced to 24 years in prison.
On September 23, the People’s Court of Guangyang District, Langfang City, Hebei Province, handed down a public verdict in accordance with the law in the case involving Chen Jizhi and other members of an organized criminal gang.
Finance & Capital Markets
The Supreme People’s Procuratorate and the China Securities Regulatory Commission have signed the “Cooperation Agreement.”
Ensuring the steady and sustainable development of the capital market through higher‑quality law enforcement and judicial cooperation.
Last September, with strong support from the China Securities Regulatory Commission, the Supreme People’s Procuratorate’s Procuratorial Office stationed at the CSRC was established. How has this office fared during its first year of operation? On September 16, leaders of the Supreme People’s Procuratorate and the China Securities Regulatory Commission, along with heads of relevant departments, convened to review progress, hold consultations, and discuss ways to further deepen law enforcement and judicial cooperation in the capital market. They also signed the “Opinions on Establishing and Improving the Coordination Mechanism for Linking Administrative Law Enforcement in the Capital Market with Procuratorial Duties” (hereinafter referred to as the “Coordination Opinions”). Zhang Jun, Secretary of the Party Group and Procurator-General of the Supreme People’s Procuratorate, and Yi Huiman, Secretary of the Party Committee and Chairman of the China Securities Regulatory Commission, attended the signing ceremony and delivered remarks. Yi Huiman presided over the ceremony and, together with Ying Yong, Deputy Secretary of the Party Group and Vice Procurator-General of the Supreme People’s Procuratorate, signed the Coordination Opinions.
“Promoting the stable and healthy development of the capital market is of paramount importance for safeguarding economic and financial security. We must approach this task—using prosecutorial functions to advance high-quality development of the capital market—from a political perspective, continuously deepening and solidifying our efforts,” stated Zhang Jun. Over the past year, the resident procuratorial office—a “rule-of-law seed” sown by the procuratorial organs in the capital market—has not only taken root and sprouted but has also blossomed and borne fruit. Under the conditions of the socialist market economy, regulating and guiding the development of capital while upholding order in the capital market is, at its core, a matter of politics, public sentiment, and the path of socialism with Chinese characteristics. The signing of the “Cooperation Agreement” represents a pragmatic step taken jointly by the Supreme People’s Procuratorate and the China Securities Regulatory Commission to implement Xi Jinping Thought on the Rule of Law and General Secretary Xi Jinping’s important instructions on the capital market, thereby advancing the rule of law in the capital market and providing robust support for the successful convening of the 20th National Congress of the Communist Party of China. It also marks a new milestone in law enforcement and judicial cooperation between the procuratorial organs and the CSRC system. At present, unprecedented changes in a century are intertwined with the global pandemic, making the characteristics of transformation in the world, in our times, and in history even more pronounced. Faced with risks and challenges of an unprecedented scale, we must fully and faithfully implement the decisions and arrangements of the CPC Central Committee, giving full play to the role of the rule of law in consolidating fundamentals, stabilizing expectations, and delivering long-term benefits. Through higher‑quality law enforcement and judicial cooperation, we must harness the power of the rule of law to ensure the steady and sustainable development of the capital market. With a view to further studying and implementing the important instructions of General Secretary Xi Jinping and the decisions and deployments of the CPC Central Committee, consolidating and deepening the achievements of the resident procuratorial office, and working in concert with the securities regulatory authorities to effectively carry out the “Cooperation Agreement,” Zhang Jun put forward three specific requirements.
Deepen law enforcement–judicial collaboration to jointly support the capital market’s law-based regulation. We must strengthen the “administrative‑criminal linkage,” institutionalizing and continuously enhancing the two-way coordination mechanism between administrative enforcement and criminal justice. We should also bolster information sharing; in line with the deepening implementation of the procuratorial big data strategy, starting at the Supreme People’s Procuratorate and the resident procuratorial offices, we will proactively work with the China Securities Regulatory Commission, the Ministry of Public Security, and other relevant authorities to refine information-sharing mechanisms, and urge procuratorial organs across the country to follow up and implement these measures. On the basis of achieving effective information sharing, we will deepen data analysis and application, leveraging big data to further enhance the depth, quality, and effectiveness of law enforcement–judicial cooperation in the capital market. To maximize the impact of such collaboration, we must not only capitalize on the strengths of criminal justice but also draw on the specialized expertise and technical support of securities and futures regulatory agencies, thereby elevating interdepartmental and coordinated case-handling capabilities and ensuring that cases achieve a unified balance among political, social, and legal outcomes.
We must remain committed to addressing issues at their source and preventing problems before they arise, working together to strengthen and refine efforts to tackle the root causes of securities‑related crimes and violations. When law enforcement and judicial authorities prosecute such offenses, their work should not stop at resolving individual cases; more importantly, they must identify the underlying causes of specific incidents and recurring patterns, implement robust measures to address these root causes, and prevent a recurrence of similar cases, thereby safeguarding the integrity of the capital market from the outset. The procuratorial organs should closely integrate oversight with case handling, collaborating with securities and futures regulators to conduct in-depth research and analysis of the characteristics of illegal and criminal activities in the capital market. They should help pinpoint systemic issues and regulatory gaps in corporate governance, industry management, and other areas, and, through issuing prosecutorial recommendations, conducting public legal education, and enhancing crime prevention, promote a “one case handled, one area governed” approach, ensuring that both symptomatic and root‑cause solutions are pursued thoroughly, effectively, and meticulously. Furthermore, we need to intensify research on the application of compliance frameworks for listed companies implicated in criminal cases, deepen compliance initiatives within the capital market, and, in conjunction with case adjudication, work with securities and futures regulators to scientifically define the scope of entities subject to compliance requirements and the types of cases covered. By rigorously overseeing corrective actions and evaluating their effectiveness, we can genuinely help listed companies improve their governance capabilities and standards.
Strengthen professional development and jointly enhance the quality and capabilities of the workforce. Taking the implementation of the “Collaborative Opinions” as an opportunity, we will further bolster the financial prosecution team—particularly the resident procuratorial offices—through measures such as intensifying business seminars, conducting joint investigations, holding joint training sessions, and facilitating personnel exchanges. This will elevate the political awareness, professional competence, and ethical standards of the financial prosecution corps, enabling it to better meet the demands of high-quality development in the capital market and in the broader economy and society.
Zhang Jun concluded by emphasizing that the on-site procuratorial office serves as a “bridge” and a “link” between the Supreme People’s Procuratorate and the China Securities Regulatory Commission, and also functions as an “outpost” for the procuratorial organs in safeguarding the security of the capital market. He further stressed the need to strictly implement the Coordination Opinions, proactively fulfill all statutory duties in accordance with the law, and better pool the strengths of the procuratorial organs and the securities and futures regulatory authorities, so as to jointly carry out all tasks related to risk prevention, ensuring safety, maintaining stability, and promoting development, thereby welcoming the successful convening of the 20th National Congress of the Communist Party of China with concrete actions.
Yi Huiman began by providing an overview of the overall performance of the capital market. He noted that, since the beginning of this year, under the strong leadership of the CPC Central Committee and the State Council, the China Securities Regulatory Commission has prioritized stability, proactively shouldered its responsibilities, strengthened the effective functioning of the capital market, actively supported market entities in overcoming difficulties, and deepened reform and opening-up in the capital market. As a result, significant progress has been made in stabilizing growth, guarding against risks, and advancing reforms.
Yi Huiman stated that, through the concerted efforts of the Supreme People’s Procuratorate and other relevant authorities, significant progress has been made in implementing the “Opinions on Severely Cracking Down on Securities Law Violations in Accordance with the Law.” The longstanding issue of excessively low costs for securities law violations has been fundamentally addressed at the institutional level; the trend of frequent cases in the securities and futures sectors has been brought under control to a certain extent; a unified force for rigorously enforcing the law against securities violations has begun to take shape; the market environment continues to improve; and market resilience has been strengthened. Throughout this process, guided by Xi Jinping’s Thought on the Rule of Law, the Supreme People’s Procuratorate has demonstrated a high degree of political awareness and strong political responsibility, fully leveraging its functions, intensifying the handling of major and high‑profile cases, refining mechanisms for seamless coordination between administrative and criminal enforcement, and deepening communication and cooperation between the two sides. As a result, it has achieved remarkable and tangible outcomes in prosecuting securities law violations in accordance with the law, thereby providing robust support and safeguards for the healthy and stable development of the capital market, the prevention and resolution of financial risks, and the protection of investors’ legitimate rights and interests.
Yi Huiman emphasized that, despite the progress made, there is still a long way to go in rigorously cracking down on securities law violations in accordance with the law and effectively safeguarding market order, making it imperative to strengthen coordination and cooperation with the judicial authorities. The China Securities Regulatory Commission will take the implementation of the “Cooperation Opinions” as an opportunity to further enhance its working synergy with the Supreme People’s Procuratorate, bolster the rule of law and the foundational institutional framework of the capital market, refine the mechanisms for securities enforcement and judicial administration, and maintain a zero‑tolerance stance toward securities law violations. Together, these efforts will help uphold the principles of fairness, justice, and transparency in the market, protect the legitimate rights and interests of investors, and create a favorable market environment for the successful convening of the 20th National Congress of the Communist Party of China.
Sun Qian, a member of the Party Leadership Group and Vice Procurator-General of the Supreme People’s Procuratorate, briefed on three key aspects: the procuratorial organs’ lawful prosecution of securities‑related crimes and the work carried out by the resident procuratorial offices. These efforts include actively advancing the handling of cases in priority areas and major cases, thereby significantly intensifying investigative and prosecutorial efforts; faithfully fulfilling the duty of legal supervision and strengthening communication and coordination among law enforcement and judicial authorities; and refining relevant judicial interpretations and normative documents to ensure uniform standards in law enforcement and judicial practice.
Fang Xinghai, a member of the CPC Committee and Vice Chairman of the China Securities Regulatory Commission, briefed attendees on enforcement activities in the capital market and on the cooperation between the CSRC and the procuratorial organs in areas such as institutional and mechanism development, case coordination and handling, and publicity, exchanges, and training. Wang Jianjun, also a member of the CPC Committee and Vice Chairman of the CSRC, along with heads of relevant departments from the Supreme People’s Procuratorate and the CSRC, attended the signing ceremony.
The CSI 500 ETF options have been listed on the Shanghai Stock Exchange.
On September 19, 2022, the listing ceremony for the CSI 500 ETF options was successfully held at the Shanghai Stock Exchange. At the ceremony, Pi Liuyi, Deputy Director of the First Department of Market Supervision of the China Securities Regulatory Commission and a First‑level Inspector, attended via video link. Liu Ti, Deputy General Manager of the Shanghai Stock Exchange, and Yang Xiaosong, General Manager of Southern Fund, jointly rang the opening bell for the CSI 500 ETF options, while Dai Wengui, Deputy Chief Economist of China Securities Depository & Clearing Corporation, and Yu Wenhong, Deputy General Manager of Southern Fund, unveiled the official contract plaques.
Liu Ti pointed out that the CSI 500 ETF options provide an effective complement to the existing options product lineup on the Shanghai Stock Exchange, which not only helps to strengthen China’s multi-tiered capital market system but also enhances the financial market’s ability to serve the real economy. The SSE will keep the nation’s overarching interests at heart, accurately grasp the new stage of development, and proactively integrate into the new development paradigm. It will strive to build the SSE’s options market into a derivatives marketplace characterized by a diversified product suite, well‑designed trading mechanisms, a broad range of participants, and robust risk‑hedging capabilities, thereby fulfilling its original aspiration and mission of “making investment safer through options.”
Yang Xiaosong pointed out that ETF options are an important financial derivative, and the launch of CSI 500 ETF options is a key measure to implement the comprehensive deepening of capital market reform and to build a multi-tiered capital market system. The Southern CSI 500 ETF is the first CSI 500 ETF on the market and has now become the largest in scale and the most liquid among its peers. Looking ahead, Southern Fund will continue to place great emphasis on fund operations and management, providing robust support for the high-quality development of the capital market and for the transformation and upgrading of the real economy.
Based on the full-day trading activity on the inaugural day of the CSI 500 ETF options, overall trading remained stable and largely in line with expectations. A total of 72 contracts were officially listed, comprising both call and put options across four expiration months—October, November, and December 2022, as well as March 2023—and nine strike price levels. Total daily volume reached 267,800 contracts, with 105,600 call options and 162,100 put options; premium turnover amounted to RMB 229 million, with a notional value of RMB 15.53 billion, and open interest stood at 110,100 contracts. Overall, on its first day of trading, the CSI 500 ETF options exhibited reasonable pricing, smooth market operations, controllable risks, and rational investor participation.
In February 2015, the Shanghai Stock Exchange listed China’s first equity options product—the SSE 50 ETF option—marking the exchange as the country’s first comprehensive exchange offering both cash‑settled equities and derivatives. In December 2019, the CSI 300 ETF option was launched, further expanding risk‑management tools for large‑cap blue‑chip stocks. Over the past seven years, the Shanghai Stock Exchange’s options market has grown steadily, with its economic functions becoming increasingly prominent. Today, the exchange has introduced its third exchange‑traded equity option—the CSI 500 ETF option—thereby not only better meeting the market’s diversified risk‑management needs but also injecting fresh vitality into the Shanghai stock options market, which has enjoyed stable development over many years. Looking ahead, under the leadership of the China Securities Regulatory Commission, the Shanghai Stock Exchange will adhere to the overarching principle of seeking progress while maintaining stability, implement the working philosophy of “four respects and one concerted effort,” and actively work to progressively enrich the options product suite, refine trading mechanisms, and continuously enhance investor awareness, thus making an even greater contribution to the high‑quality development of the capital market.
The Beijing Stock Exchange continues to rally, with several stocks ranking among the top ten gainers on the A-share market.
Since September 16, several stocks listed on the Beijing Stock Exchange have surged into the top ranks of A-share gainers, occupying the top ten positions. Companies such as KunGong Technology and Bond Shares have posted particularly strong performances. Against the backdrop of relatively lackluster recent performance in Shanghai and Shenzhen A-shares, the secondary market on the Beijing Stock Exchange has shaken off its previous lull, with trading remaining robust. Industry insiders attribute this rally to a confluence of factors, including interim earnings reports, sector valuations, and policy expectations.
For four consecutive trading days, turnover has consistently exceeded RMB 1 billion, with some individual stocks even hitting a “30-cm‑plus limit-up,” signaling a quiet but steady rally in the Beijing Stock Exchange’s secondary market.
On September 21, seven of the top ten gainers on the A-share market were listed on the Beijing Stock Exchange. By the close of trading that day, the BSE’s total turnover stood at approximately RMB 2.438 billion, with all individual stocks advancing; out of 110 listed stocks, 107 closed higher.
Notable performers included Zecheng Electronics (837821.BJ), which closed up 29.91%; Kunong Technology (831152.BJ) and Bond Shares (838171.BJ), both of which posted trading volumes exceeding RMB 100 million; and Paiter (836871.BJ), with a turnover ratio as high as 44%.
“On the 21st, a broad-based rally emerged, with individual stocks beginning to follow suit, signaling that trading activity on the Beijing Stock Exchange has picked up,” said Cui Yanjun, a veteran of the New Third Board.
In fact, since last Friday (September 16), several stocks listed on the Beijing Stock Exchange have surged into the top ranks of A-share gainers, occupying the top ten spots. Companies such as Kunong Technology and Bond Shares have posted particularly strong performances. Against the backdrop of relatively lackluster recent performance in Shanghai and Shenzhen A-shares, the secondary market on the Beijing Stock Exchange has shaken off its previous lull, with trading remaining robust. Industry insiders attribute this rally to a confluence of factors, including interim results, sector valuations, and policy expectations.
The “leading stock” rally kicked off earlier.
On September 21, the three major indices diverged throughout the day: the Shanghai Composite Index dipped below 3,100 points before rebounding from its low, while the ChiNext Index edged lower amid volatility, and total turnover across both markets continued to shrink. Meanwhile, stocks listed on the Beijing Stock Exchange all rallied, with only three out of 110 declining; nearly ten stocks—including Youji Shares, Zecheng Electronics, and Zhisheng Information—gained more than 10%.
Even more striking is the trading‑volume data. After three consecutive sessions with turnover exceeding RMB 1 billion, on the 21st, secondary‑market trading on the Beijing Stock Exchange continued to expand, reaching RMB 2.438 billion. The combined total share capital of the 110 listed companies stands at 15.824 billion shares, with a combined market capitalization of RMB 191.561 billion.
Recently, the secondary market on the Beijing Stock Exchange has shown a marked rally. Last Friday (September 16), while both the Shanghai and Shenzhen stock exchanges posted sharp declines, the Beijing Stock Exchange bucked the trend and strengthened. By the close of trading that day, five stocks—including KunGong Technology and Fangda Shares—had risen by more than 20%, and total turnover on the exchange reached RMB 1.29 billion, a significant increase from the previous session’s RMB 559 million.
Overall, over the past four trading days (September 16–21), the Beijing Stock Exchange recorded cumulative turnover exceeding RMB 5.8 billion, with daily turnover standing at RMB 1.291 billion, RMB 1.077 billion, RMB 1.059 billion, and RMB 2.438 billion, respectively.
By comparison, from September 5 to September 9, the Beijing Stock Exchange recorded a cumulative trading volume of approximately RMB 1.885 billion.
Against this backdrop, several individual stocks have recently posted substantial gains. According to statistics, from September 16 to September 21, 15 stocks recorded intraday price increases exceeding 20 percent, with Bond Shares surging a cumulative 63.6 percent and Youji Shares climbing more than 50 percent (54.11 percent).
A total of 13 individual stocks recorded intraday turnover exceeding RMB 100 million, with KunGong Technology (RMB 689 million) and Bond Shares (RMB 357 million) ranking at the top. In terms of intraday trading volume, Rongyi Precision led with 47.123 million shares; including this stock, 20 individual stocks posted aggregate trading volumes surpassing 10 million shares during the same period.
On September 21, Zecheng Electronics closed up 29.91%, hitting the daily limit of 30%; Youji Shares also touched the upper trading limit during the session.
It is worth noting that, in this round of market rally, some of the leading stocks began their upward move even earlier.
On the 21st, Kunong Technology plunged in late trading, closing at 18.18 yuan per share, down 8.6%. The previous trading day, the stock had surged 18.68%.
Starting September 7, Kunong Technology began to rebound, surging 29.93% on that day. On September 13, it once again hit the daily upper limit, gaining 30%. According to data from Eastmoney (300059), from September 7 to 21, the stock’s cumulative gain exceeded 150%.
How long will the hot market trend last?
Prior to this round of market activity, the Beijing Stock Exchange had already experienced a pullback from its year-to-date highs before rebounding.
According to publicly available data, over time, trading activity on the Beijing Stock Exchange remained at a relatively high level in January, with an average daily turnover rate of 2%, before gradually declining thereafter. In terms of stock prices, during the first half of this year, prices continued to fall from January to April, stabilized and began to rise in May, and since June, trading volume on the Beijing Stock Exchange has shown a slight rebound.
Zhou Yunnan, founder of Beijing Nanshan Investment, stated that the Beijing Stock Exchange’s secondary market has witnessed a long-awaited surge in trading activity, driven by factors including expectations of favorable policies marking the exchange’s first anniversary, a return to intrinsic value following sustained share-price corrections, and spillover effects from A-share capital flowing into the Beijing Stock Exchange.
Does the current bullish market have strong support and sustainability?
Notably, KunGong Technology, which has posted substantial gains recently, plunged in the closing minutes on the 21st, dropping 8.5%—the largest single-day decline among all stocks that day.
“As the leading stock Kunong Technology and the second-tier leader Bond Shares both saw sharp late‑day sell-offs on the 21st, this may signal that the current rally has peaked in the short term. However, from a medium‑term perspective, the Beijing Stock Exchange remains a market segment worthy of greater anticipation,” Zhou Yunnan noted.
Cui Yanjun noted that, at present, valuations for some individual stocks are already relatively high, posing significant risks from a value‑investment perspective. “The key factor is market sentiment: if most stocks experience a broad rally, risks could intensify,” he said. He expects the market to become increasingly differentiated going forward. “Stocks with weak earnings and unremarkable industry characteristics that have risen on the back of herd behavior may well see a pullback later.”
Publicly offered funds have distributed dividends nearly 4,000 times this year, handing out over RMB 170 billion in “red envelopes.”
According to Wind data, as of now, a total of 334 funds have distributed dividends in September, with payouts exceeding RMB 9.8 billion—up from RMB 8.324 billion in August. Year-to-date, across the entire market, 2,311 fund products have declared dividends, totaling 3,951 distributions and amounting to nearly RMB 171.1 billion.
Since September, market volatility has persisted. While the profitability of funds has not improved significantly, dividend payouts have increased: in just three trading days—from September 20 to 22—more than 40 fund products (with different share classes counted separately, the same applies hereafter) distributed dividends.
According to industry insiders, whether a fund distributes dividends depends on various factors, including its investment horizon and profitability. Moreover, dividend payouts allow investors to lock in their gains, thereby sharing the fund’s performance and enhancing the investment experience. At the same time, such distributions can help modestly reduce the fund’s size, which in turn facilitates more efficient management.
Since September, dividends have totaled nearly 10 billion.
On September 21, 42 funds—including Changsheng Shengqi One-Year A, Fuguang Juli Pure Bond Three-Month, and Yongying Jiuli—distributed dividends. With the exception of Sino‑German Happiness Consumption and Fuguang High‑Quality Development A/C, which are actively managed equity funds, the remaining funds were all bond funds, among which medium- and long-term pure bond funds accounted for over 70%. According to Wind data, 334 funds distributed dividends in September, totaling RMB 9.844 billion. Of these, 22 funds paid out more than RMB 100 million each. Among them, Xinda‑Australia Advanced Intelligent Manufacturing recorded the largest total dividend payout at RMB 527 million; it also had the highest per‑unit dividend, with RMB 0.6203 per share.
Looking at the longer-term trend, in the first and second quarters of this year, total fund distributions amounted to RMB 94.0 billion and RMB 46.9 billion, accounting for 54.94% and 27.41%, respectively, of the year-to-date total. As the third quarter draws to a close, cumulative distributions stand at just RMB 27.4 billion—less than one-third of the first quarter’s level.
An analysis reveals that fund distributions have been on a downward trend, likely linked to the performance of equity‑type funds—including conventional equity funds, equity‑biased hybrid funds, flexible allocation funds, and balanced hybrid funds (hereinafter referred to as “equity funds”).
In the first quarter, total fund distributions amounted to RMB 94.0 billion, with equity funds accounting for RMB 48.45 billion—more than half of the total. Since the second quarter, equity‑fund distributions have steadily declined: RMB 12.406 billion in Q2 and just RMB 4.097 billion since the start of Q3. As of September 21, cumulative year‑to‑date distributions from equity funds stood at RMB 65.094 billion, down RMB 25.123 billion from RMB 90.217 billion in the same period last year—a year‑on‑year drop of nearly 28%. This has directly resulted in this year’s overall distribution activity falling short of last year’s performance.
According to Wind data, so far this year, a total of 2,311 funds across the market have distributed dividends, up 13.17% year on year; the cumulative number of dividend payouts reached 3,951, an increase of 16.69% compared with the same period last year; and the total year-to-date dividend payout amounted to nearly RMB 171.1 billion, down RMB 8.2 billion from RMB 179.3 billion in the same period last year. Among them, Baoying Core Advantage A has already distributed dividends 12 times this year, making it the fund with the highest number of payouts. Since its inception in March 2009, the fund has cumulatively paid dividends 104 times, placing it among the rare funds that have distributed dividends more than a hundred times. In addition, 36 other funds—including Jingshi Ultra-Short Bond (070009) A, ICBC Credit Suisse 3-Month Fixed‑Open Bond, and Southern Diversified Fixed‑Open—have each recorded more than five dividend distributions.
In addition, several other funds have also handed out substantial “red envelopes,” with 18 fund products having distributed over RMB 1 billion in dividends so far this year. For example, Guofu Deep Value, managed by fund manager Liu Xiao, paid a single dividend of RMB 3.754 billion, ranking first; closely following are GF Small-Cap Growth A, managed by Liu Gesong (162703), and China Merchants CSI Baijiu A, managed by Hou Hao, with dividends of RMB 3.096 billion and RMB 2.89 billion, respectively.
In a volatile market, dividends can deliver timely profits.
“Generally speaking, strong performance is the foundation for fund distributions,” said a fund‑industry analyst. “In the first quarter, equity funds distributed relatively more, thanks to their solid performance last year. However, market conditions have been sluggish so far this year, and equity‑oriented funds have delivered lackluster returns, leaving fewer products that meet the criteria for distributions.”
According to available information, fund distributions refer to the payment of a portion of a fund’s earnings to investors in cash, which requires the simultaneous fulfillment of three conditions: first, distributions may only be made after the fund’s current-year earnings have been used to offset prior‑year losses; second, following such distributions, the fund’s net asset value per unit must not fall below its par value; and third, if the fund incurs a net loss during the current period, no distributions may be made. Currently, there are two primary methods of fund distribution: cash dividends and dividend reinvestment. Investors who opt for dividend reinvestment have their dividends converted into additional fund units at the ex‑dividend net asset value per unit; if an investor does not specify a distribution method, the default is cash distribution.
So, for investors, is it always better when a fund distributes more dividends?
An executive at a major fund management office stated, “Fund distributions are essentially a component of the fund’s net asset value per unit; in other words, they simply shift assets from one hand to another, so viewed from that perspective, they may not carry much substantive significance. However, the ability to distribute dividends does indicate that the product’s performance is unlikely to be poor. Moreover, distributing dividends can help reduce the fund’s AUM and ease pressure from concentrated redemptions.” When asked why the office opted for multiple distributions, another industry professional explained that funds do not issue distributions without reason; such payouts typically arise because the fund’s prospectus imposes specific limits on either the NAV or the number of distributions.
A review of multiple fund announcements reveals that certain funds—particularly those that distribute dividends frequently or in substantial amounts—include explicit provisions regarding dividend distributions in their fund contracts. For example, Baoying Core Advantage A, which has recorded the highest number of dividend payouts this year, stipulates in its contract that income distributions will be made when the fund’s distributable income reaches RMB 0.04 per unit or when the net asset value per unit hits RMB 1.10 or above, provided that the statutory conditions for distribution are met. Furthermore, subject to compliance with applicable dividend‑distribution requirements, the fund is required to distribute income at least once annually and may do so up to 12 times per year.
The fund contract for Southern Excellent Growth A, which distributed over RMB 1.8 billion in dividends within the year, also stipulates that, subject to compliance with applicable dividend‑distribution requirements, each share class of the fund may be allocated dividends up to 12 times per year, and the total annual distribution ratio for each share class shall not be less than 90% of that class’s distributable income for the year.
“Dividends can enhance investors’ experience. In a volatile market, funds that distribute dividends lock in returns ahead of time, enabling investors to realize profits promptly, preserve their gains, and avoid losses stemming from continued market declines,” said the industry insider. “If investors remain cautious about the outlook, they may opt for cash dividends; if they are more optimistic, reinvesting dividends is advisable to capture additional returns.”
Meanwhile, several experts have emphasized that fund distributions are merely one way to realize gains in a fund’s net asset value; whether or not a distribution is paid does not reflect the product’s performance. When selecting investment products, investors should not base their decisions solely on the size of the distribution amount.
Commercial & Corporate
Key Interpretations of the Measures for the Compliance Management of Central Enterprises and Their Implications for Listed Companies’ Compliance
Since 2015, when the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) explicitly set the goal of building law-based central enterprises in its “Opinions on Comprehensively Promoting Law-Based Construction of Central Enterprises,” compliance management has remained a key component of the work of central enterprises. In 2016, SASAC launched a pilot program to establish compliance management systems at five central enterprises, including China National Petroleum Corporation and China Mobile. In 2018, it issued the “Guidance on Compliance Management for Central Enterprises (Trial)” (hereinafter referred to as the “Guidance”), followed by the successive release of a series of 14 compliance guidelines to help central enterprises accelerate the development of their compliance management frameworks. 2022 was designated as the “Year of Strengthening Compliance Management” for central enterprises. To further elevate corporate compliance efforts to a new level, SASAC promulgated the “Measures for Compliance Management of Central Enterprises” (hereinafter referred to as the “Measures”) on September 14, which will take effect on October 1, officially ushering in a new chapter in compliance management for central enterprises. This article will examine the Measures from two perspectives: an analysis of their key provisions and the implications they hold for listed companies.
I. Key Interpretations of the Measures
(1) Elevating from an aspirational provision to a mandatory one
From the perspective of its hierarchical status, the issuance of the Measures signifies that the requirements for compliance management at central state-owned enterprises have been elevated from general policy recommendations to departmental regulations with legal enforceability. Specifically, the Guidelines serve primarily as policy guidance and lack legal force; failure by a central SOE to establish a compliance management system in accordance with the Guidelines’ recommendations will not give rise to direct legal liability. By contrast, the Measures are departmental regulations, and their provisions are legally binding and enforceable on central SOEs. Should a central SOE fail to implement the Measures rigorously, fail to establish a compliance management system, or fail to ensure that its established system meets the requirements set forth in the Measures, it shall bear the corresponding legal liabilities.
Judging from the national-level stance and determination regarding compliance in central state-owned enterprises, ensuring compliance has become imperative. Article 1 of the Measures explicitly states the legislative purpose: “In order to thoroughly implement Xi Jinping’s thought on the rule of law and carry out the strategic plan for governing the country in accordance with the law…” This demonstrates that compliance in central SOEs is no longer merely an internal corporate management requirement but has been endowed with national strategic significance. Moreover, Article 6 of the Measures stipulates financial support: “Central enterprises shall provide the necessary conditions—in terms of organizational structure, personnel, funding, and technology—for compliance management, thereby ensuring the orderly implementation of related work,” signaling robust fiscal backing for the establishment and operation of compliance management systems within these enterprises.
(II) Emphasizing the Party’s Role in Compliance Management within Central State-Owned Enterprises
With regard to the compliance basis, the Measures for the first time explicitly designate “Party regulations” as a type of compliance obligation. Article 7 of the Measures stipulates: “Central enterprises shall strictly comply with Party regulations and systems…” The construction of a compliance system within central enterprises must consistently uphold the leadership of the Party. Given that Party regulations now cover an increasingly detailed and comprehensive scope, treating them as a compliance basis effectively imposes higher requirements on the development of compliance management systems in these enterprises.
With respect to organization and responsibilities, Article 7 of the Measures introduces a new provision on the role of Party committees (leading Party groups), explicitly stipulating that “Party committees (leading Party groups) shall exercise their leadership in setting direction, overseeing the overall situation, and ensuring effective implementation, thereby promoting strict adherence to and enforcement of compliance requirements within the enterprise and continuously enhancing the level of law-based and compliant business management.”
With regard to compliance culture, Article 29 of the Measures stipulates: “Central enterprises shall incorporate compliance management into the Party Committee’s (Party Leadership Group’s) specialized study on the rule of law, thereby encouraging corporate leaders to strengthen their compliance awareness and take the lead in conducting business operations in accordance with laws and regulations.” By having the enterprise’s Party Committee personally spearhead the study of compliance‑related knowledge, large enterprises can, without doubt, foster a top‑down compliance culture.
(III) Clarifying the Roles and Responsibilities of Compliance Organizational Structures
With regard to the organizational structure for compliance management, the Measures, building on the Guidelines, retain the board of directors, the management team, and the compliance committee, while introducing new provisions concerning the enterprise’s top executive and the chief compliance officer. At the same time, they substantively codify the “three lines of defense” framework that has been repeatedly emphasized. Following these adjustments, the compliance management structure of central state-owned enterprises has become clearer and more defined, with more detailed and specific delineations of responsibilities at each level, thereby facilitating the effective implementation of compliance management and the achievement of tangible results.
The Measures have reorganized and clarified the responsibilities of the board of directors and the management team. First, the provisions in the Guidelines pertaining to the supervisory board have been deleted, with certain supervisory board duties integrated into those of the board of directors and the management team. Second, the board of directors’ responsibilities have been defined as “setting strategy, making decisions, and managing risks,” while the management team’s responsibilities are defined as “formulating business plans, ensuring implementation, and strengthening management.” Third, the specific content of these responsibilities has been refined: for example, the board’s original duty to “approve the enterprise’s compliance‑management strategic plan, basic policies, and annual report” has been expanded to include two additional responsibilities—“reviewing and approving the enterprise’s basic compliance‑management policies, system‑building plans, and annual reports”—as well as “studying and deciding on major compliance‑management matters,” thereby shifting the scope of responsibilities from abstract to concrete.
The Measures clearly delineate the roles of three key entities: the primary responsible person, the Compliance Committee, and the Chief Compliance Officer. The primary responsible person is the enterprise’s top executive, whose duties include organizing, promoting, and implementing compliant business operations, thereby reinforcing the compliance responsibilities of senior management and enabling them to exercise effective leadership to ensure the authority of compliance management. The Compliance Committee’s principal responsibilities are to provide organizational leadership and overall coordination, as well as to deliberate on and resolve critical and complex compliance issues. The Chief Compliance Officer, who concurrently serves as the General Counsel, reports directly to the primary responsible person and leads the compliance function in carrying out its related tasks.
The Measures implicitly embody the “three lines of defense” approach to compliance management. In 2006, the State-owned Assets Supervision and Administration Commission of the State Council issued the “Notice on Issuing the Guidelines for Comprehensive Risk Management of Central Enterprises,” which first introduced the three‑lines‑of‑defense framework into the governance of central enterprises. Although the Measures do not explicitly use the term “three lines of defense” in their text, they adopt this risk‑management model in structuring the compliance management system. The “first line of defense” comprises business units, which are primarily responsible for day-to-day compliance management within their respective business areas. This includes formulating compliance policies and procedures specific to their domains, conducting compliance risk identification and addressing potential hazards, issuing timely compliance alerts, performing compliance reviews, managing compliance‑related risks, and assigning key business personnel to serve as compliance officers within their units. The “second line of defense” is the lead compliance function, tasked with drafting the enterprise’s compliance policies and reporting on compliance efforts, conducting compliance reviews of economic contracts and major decisions, identifying and responding to compliance risks, evaluating the effectiveness of the compliance management system, handling whistleblower complaints, and delivering compliance training. The Measures stipulate that central enterprises must appoint dedicated compliance officers. The “third line of defense” consists of disciplinary inspection and supervision bodies, as well as audit and inspection departments, which are responsible for overseeing the implementation of compliance requirements, investigating non‑compliant conduct, and holding accountable those who violate regulations.
(4) Clarify the framework for establishing a tiered and categorized system.
The Measures dedicate a whole chapter to “institutional development,” which can be regarded as one of the most significant highlights of compliance-building among central state-owned enterprises. Previously, the Guidelines merely identified key areas, processes, and positions as compliance priorities, without providing a systematic framework for the institutional structure. By contrast, the Measures have substantially revised the institutional‑building framework, clearly delineating the logical architecture and constituent components of the system.
With regard to tiered management, Article 16 of the Measures stipulates: “Central enterprises shall establish and improve a compliance management system, and, based on factors such as scope of application and hierarchy of authority, build a tiered and categorized compliance management framework.” Within the same enterprise, different departments, business lines, and time periods face varying compliance risks; tiered management facilitates precise oversight and enables proactive, situation‑responsive governance.
With regard to the basic system, Article 17 of the Measures stipulates that central enterprises shall establish a basic compliance management system, clearly defining the overall objectives of compliance management, the responsibilities of relevant departments, management procedures, and mechanisms for assessment and oversight. In practice, central enterprises may take the Measures as a foundation and, in light of their own characteristics and needs, formulate a basic system that aligns with their specific circumstances.
With regard to specialized compliance management guidelines, Article 18 of the Measures stipulates: “Central enterprises shall, with respect to key areas such as antitrust, anti‑commercial bribery, ecological and environmental protection, workplace safety, labor and employment, tax administration, and data protection, as well as business activities posing high compliance risks, formulate specific compliance management systems or dedicated guidelines.” Building on the Guidelines, the Measures further designate environmental protection, labor, taxation, and data protection as priority compliance domains. Of course, enterprises should also, based on their own circumstances, identify high‑risk compliance areas and develop tailored compliance plans accordingly.
(5) Establishing a Systematic Compliance Operating Mechanism
The Measures introduce a systematic compliance‑operation framework. First, a compliance‑risk identification and early‑warning mechanism has been established to comprehensively and systematically map compliance risks in business operations and management, issue timely warnings, and have the compliance function maintain a risk register while coordinating with business units to regularly update and refine it. Second, a legality and compliance review process has been instituted, making it a mandatory preliminary step for major decision‑making matters. Third, a compliance‑risk response mechanism has been put in place: in the event of a significant compliance‑related incident, the Compliance Committee assumes overall leadership to maximize risk mitigation and minimize losses. Fourth, mechanisms for addressing identified issues and for reporting compliance concerns have been established, enabling enterprises to strengthen their governance by reviewing and adjusting compliance frameworks and closing internal gaps. Fifth, a compliance‑reporting and coordination system has been introduced, requiring prompt notification to the National Compliance Commission and relevant authorities in cases of major compliance‑related incidents. Finally, a compliance‑evaluation system has been established, under which companies conduct ad hoc assessments of their compliance management on an appropriate basis and are required to ensure that evaluation findings are effectively acted upon.
(6) Attach great importance to building the soft power of compliance culture.
The Measures introduce a dedicated chapter on building a compliance culture, underscoring the high priority accorded to this endeavor and highlighting the critical importance of such a culture. First, they strengthen leadership‑level thematic study: Article 29 explicitly incorporates compliance management as a key component of rule-of-law development into the regular law‑study sessions of Party committees (Party leading groups), thereby enhancing leaders’ compliance mindset and rule-of-law awareness and fostering top‑down implementation of compliant business operations across central enterprises. Second, they expand the compliance training framework: Article 30 mandates the formulation of an annual compliance training plan, making compliance management a mandatory element of professional training for managerial personnel and staff in key positions, as well as for newly hired employees. Third, they establish a separate mechanism for legal‑rule publicity and education: Building on the preparation of compliance handbooks and the signing of compliance commitments, Article 31 adds the practice of conducting compliance oaths as an important means of communicating and reinforcing compliance principles.
(7) Technology-Driven Digitalization of Compliance Management
Chapter VI of the Measures calls for leveraging technology to advance the digitalization of compliance management. It requires enterprises to accelerate the establishment of compliance‑management information systems, integrate compliance requirements into business processes through digital tools, strengthen process‑level controls, and conduct real‑time, dynamic monitoring of key areas and critical junctures, thereby enabling immediate alerts for compliance risks and proactively halting non‑compliant activities. The chapter also emphasizes the need to expedite the interconnection and interoperability of compliance‑management information systems with other enterprise management systems and with the SASAC’s state‑owned asset supervision information system, so as to achieve shared access to core data. Digital transformation is a vital enabler of corporate compliance management and represents a new imperative for compliance in the digital age.
II. Several Implications of the Measures for Securities Compliance Management in Listed Companies
As of the end of 2021, China’s A-share market included 1,317 state‑controlled listed companies, accounting for approximately 28.2% of the total number of listed offices; their combined A‑share market capitalization stood at roughly RMB 33.54 trillion, representing about 34.74% of the overall market cap.[Note 1] State‑controlled listed companies play a pivotal role in the national economy. In particular, large state‑controlled enterprises operating in sectors such as coal, petroleum, steel, aviation, shipping, defense, manufacturing, telecommunications, power, and finance—whose development is closely tied to national economic stability and people’s livelihoods—exert significant influence on the evolution of China’s capital markets. Current domestic laws and regulations impose stricter governance requirements and higher standards of compliance on state‑controlled listed companies than on non‑listed entities. Following the implementation of the new Securities Law and the Eleventh Amendment to the Criminal Law, legal risks arising from securities‑related compliance have increased substantially, and associated liabilities have been markedly heightened. Accordingly, in implementing the Measures’ provisions on compliance management, state‑controlled listed companies should also take into account relevant securities‑specific laws, regulations, and rules, with a particular focus on establishing and strengthening robust securities‑compliance management systems.
(1) In terms of compliance awareness, we must focus on the “key few” as the crucial leverage point.
The controlling shareholders, actual controllers, directors, supervisors, and senior executives of listed companies are referred to as the “key minority,” playing a pivotal role in corporate governance. China Securities Regulatory Commission Chairman Yi Huiman has set forth clear compliance requirements for this “key minority”: “Illegal and non-compliant conduct undermines market confidence and ultimately harms the enterprises themselves, making such behavior counterproductive. We urge major shareholders and the directors, supervisors, and senior management of listed companies to take laws and regulations as their guiding principle, diligently study and strictly abide by the Securities Law, the Company Law, the Criminal Law, and other relevant statutes, and truly demonstrate respect for the rule of law, a commitment to learning and applying the law, adherence to legal norms, and integrity and compliance.” Past regulatory experience also shows that the “key minority” is a high‑risk group for securities‑related violations; addressing this group effectively addresses the core issue of capital market governance. In other words, only by first enhancing the compliance awareness of the “key minority” can we achieve broader improvements and strengthen the overall compliance culture of listed companies.
Against the backdrop of stringent and rigorous regulatory oversight, the controlling shareholders, actual controllers, and senior executives—often referred to as the “key few”—of state‑controlled listed companies should first enhance their compliance awareness and recognize the value that compliance brings. They must shift from passively responding to compliance inspections or investigations by regulators to proactively embracing the establishment and ongoing operation of a robust compliance framework. By fostering compliance capabilities in a top‑down, cascading manner, they can safeguard the compliance baseline and effectively mitigate compliance risks.
(II) In terms of organizational structure, the Board of Directors has established a Compliance Committee.
The endogenous constraint mechanism of listed companies is pivotal to their sound operations, and standardizing corporate governance and internal controls is a fundamental step toward enhancing securities compliance. The Measures provide clear and detailed provisions regarding the organizational structure and responsibilities within the compliance framework of central state-owned enterprises. With respect to state‑controlled listed companies, the author recommends that, first and foremost, a Compliance Committee be established under the board of directors and report directly to it.
The specific measures are as follows: First, clarify the legal status of the Compliance Committee, elevating it to an equal standing with committees such as the Strategy Committee and designating it as one of the listed company’s committees. A dedicated person shall be assigned to oversee its work, and the Committee shall be explicitly entrusted with the responsibilities of identifying and analyzing internal compliance risks, as well as supervising the implementation of compliance operations and internal control systems; these duties shall be enshrined in the company’s articles of association. Second, emphasize the independent performance of the Compliance Committee’s functions by appointing relevant senior management personnel to lead the Committee, who may not concurrently hold any other positions that conflict with the duties of the Compliance Committee, thereby enhancing the Committee’s independence. Third, strengthen compliance oversight: through key initiatives such as compliance management of information disclosure and the conduct of directors, supervisors, and senior executives, as well as risk prevention and control related to insider trading, the Compliance Committee will continuously refine an internal control and compliance framework aligned with the registration‑based reform, promptly identify compliance risks, intervene in a timely manner, address and mitigate these risks, and promote the sustained, sound development of the listed company. Fourth, advocate establishing a Compliance Department under the Compliance Committee—either as a standalone unit or jointly with audit, internal control, and other departments—on the principle of consolidating this function to enable it to effectively lead, organize, and implement compliance‑related work.
(3) In terms of compliance systems, routine securities compliance is integrated with crisis‑response securities compliance.
The “Institutional Development” chapter of the Measures stipulates that central enterprises shall establish and improve compliance management systems, and, based on their scope of application, hierarchical levels of authority, and other factors, develop a tiered and categorized compliance management framework. In the author’s view, with respect to state‑controlled listed companies, it is essential to put in place two fundamental compliance regimes: one for day‑to‑day securities compliance and another for crisis‑response securities compliance.
In the realm of day-to-day securities compliance, the focus is on addressing the most common and frequently occurring compliance risks faced by listed companies and their “key stakeholders,” such as corporate governance, information disclosure, the performance of duties by directors, supervisors, and senior management, insider trading, and market manipulation. Tailored, effective compliance guidelines or operational manuals are developed for these areas, and their implementation is rigorously enforced to help companies prevent and mitigate compliance risks. “Health checks” precede “treatment,” and “fire prevention” comes before “firefighting.” Well‑designed compliance guidelines enable listed companies to conduct thorough “health assessments” and implement robust preventive measures, thereby striving to avert both “illnesses” and “fires.” By identifying risks promptly, taking appropriate actions, and applying targeted remedies before violations occur or escalate, these guidelines effectively bolster listed companies’ capacity for ongoing compliance management.
Under a regulatory regime of “zero tolerance,” listed companies are facing increasingly frequent and more in-depth investigations. Consequently, beyond their routine securities compliance frameworks, it is essential to establish a dedicated crisis‑response securities compliance system to help listed companies and their “key stakeholders” appropriately navigate administrative inquiries by securities regulators or criminal investigations by public security authorities arising from alleged securities law violations. For instance, when confronted with an unexpected compliance crisis, how can a listed company systematically conduct a comprehensive review of the facts underlying the suspected violations, assess the legal nature of the matters under investigation, formulate an appropriate response strategy, provide timely and effective explanations to the regulatory authorities, and, where necessary, submit lawful statements and defenses? These issues must be clearly addressed through the proactive development of a crisis‑response compliance framework.
(4) In terms of compliance assessment, an independent third-party evaluation mechanism has been introduced.
The Measures propose establishing a compliance management evaluation mechanism, under which the compliance management department will take the lead in conducting regular, comprehensive assessments of the operation of the compliance management system. For key business areas, targeted evaluations may be carried out as needed, and corrective actions shall be organized to address compliance risks and violations. Given the specialized and meticulous nature of securities‑related compliance work at listed companies, independent third‑party evaluation institutions should be engaged during both general and ad hoc assessments and subsequent remediation efforts. It is recommended to draw on the current practice of procuratorial organs by assigning law offices, accounting offices, and other third‑party professional entities with relevant expertise and experience to serve as compliance evaluators. At the same time, these third‑party evaluators should be granted the authority to conduct investigations into a listed company’s compliance framework, assist the company in refining its compliance policies, support the compliance committee in overseeing the implementation of such policies, and issue written compliance evaluation reports that can serve as reference for the company’s internal performance reviews.
The China Consumers Association has commented on unfair standard terms in the housing sector, covering areas such as rentals and property management.
On September 21, the China Consumers Association released the fifth installment of its series critiquing unfair standard contract terms, inviting lawyers from the CCA’s legal advisory panel to analyze ten prominent examples of unfair standard clauses in areas such as the sale and purchase of commercial housing, leasing, home renovation, and property management—issues that have drawn significant consumer concern.
01. When the seller is unable to perform its obligations, it shall be fully exempted from liability for the deposit.
Typical clause: Prior to the execution of a formal pre-sale agreement, if the sale cannot proceed due to reasons attributable to the seller, the seller shall not be bound by any contractual obligations and shall only be required to refund the deposit without paying any interest or damages.
Commentary Opinions
Pursuant to the Civil Code, if the party receiving the deposit fails to perform its contractual obligations, it shall not only return the deposit to the paying party but also compensate the paying party with an amount equal to the deposit—i.e., return the deposit in double.
The provisions of this standard-form clause entirely circumvent the legal liability that the business operator should bear for non-performance, which is highly unfair to homebuyers and violates statutory requirements.
02. When the content of a commercial housing sales contract differs from that of advertising, the party may evade liability by characterizing the advertisement as an invitation to make an offer.
Typical Clause: Upon signing this Agreement, the Purchaser has conducted a thorough and detailed review of the property through on-site inspection and examination of relevant documents and procedures. The Seller makes no false or misleading representations or warranties, and the Purchaser voluntarily purchases the property. Any model units, promotional materials, or advertisements displayed on site shall be deemed invitations to treat only and shall not constitute contractual grounds for the Seller’s delivery of the property; the terms of this Agreement shall prevail in all respects.
Commentary Opinions
When consumers are selecting and purchasing commercial housing at a sales office, carefully prepared sales brochures, model homes, show units, and other marketing materials can significantly influence their purchasing decisions. Developers often include descriptions and assurances regarding the residential units and their ancillary facilities in these promotional materials to entice buyers to enter into contracts.
Pursuant to the Civil Code and the Supreme People’s Court’s Interpretation on Several Issues Concerning the Application of Law in the Trial of Disputes over Commodity Housing Sales Contracts, if the content of commercial advertisements and promotional materials meets the requirements of an offer, it constitutes an offer. Developers are not entitled to unilaterally stipulate in the contract that such advertisements and promotional materials do not form part of the contractual terms. When housing sale advertisements and promotional materials constitute offers, even if they are not incorporated into the contract, developers remain obligated to fulfill the corresponding obligations; failure to do so shall amount to a breach of contract.
03. The seller reserves the right of final interpretation, excludes the other party’s rights, and disclaims its own liability.
Typical Clause: Any drawings, materials, promotional advertisements, or other documents provided by the seller to the buyer during the sale process, unless otherwise expressly stated, are for the buyer’s reference only and shall not be deemed part of the contract. The seller reserves the right of final interpretation.
Commentary Opinions
In accordance with the Civil Code and the Measures for the Supervision and Handling of Contractual Violations, standard terms shall fairly determine the rights and obligations of both parties, and in the event of differing interpretations of such terms, the interpretation most unfavorable to the party that provided them shall prevail.
If a standard-form clause unreasonably reduces the liability of the party providing it or excludes or restricts the other party’s rights, such clause shall be void.
04. Expanding the scope of force majeure application to exempt liability for delayed delivery of housing.
Typical clause: If the commercial housing is not delivered for the buyer’s use within the time limit stipulated in the contract due to design adjustments, climate change, or other reasons, the seller shall not be liable for breach of contract.
Commentary Opinions
In accordance with the Civil Code and the Measures for the Administration of Commodity Housing Sales, this clause constitutes an abuse of force majeure. Force majeure refers to objective circumstances that are unforeseeable, unavoidable, and insurmountable. Design modifications and climate change do not qualify as force majeure; rather, they are factors that should have been thoroughly considered prior to construction. If a developer fails to deliver the property on time due to design-related reasons, such failure constitutes a breach of contract, and the developer shall bear the corresponding contractual liabilities.
05. Upon expiration of the lease term, consumers are restricted from transacting directly with the property owner.
Typical clause: Within three months after the lease term expires and the contract is terminated, Party A (the tenant) shall not enter into a direct transaction with the property owner of the premises; otherwise, Party A shall pay to Party B (the intermediary agency) an indemnity equal to 200% of the monthly rent.
Commentary Opinions
When a consumer enters into a lease agreement with the property owner through an intermediary, and has duly paid the intermediary for the opportunity to conclude the contract or for the intermediary services provided, the intermediary’s contractual purpose has been fulfilled. Upon expiration of the lease term and termination of the contract, the consumer is entitled to negotiate directly with the property owner to enter into a new lease agreement; such circumstances do not fall within the scope of Article 965 of the Civil Code, which prohibits circumventing the intermediary by relying on the transaction opportunity or intermediary services it has provided to conclude the contract directly. Accordingly, the intermediary has no right to impose restrictions, nor may it demand payment of remuneration, liquidated damages, or compensation for losses from the consumer.
06. Problems in renovation construction: material costs are passed on to consumers.
Typical clause: During the renovation and construction period, for projects in which materials are purchased by Party A (the consumer) and installed by Party B (the renovation company), if quality issues arise due to Party B’s workmanship, Party B shall bear the labor costs during the warranty period, while Party A shall be responsible for the cost of materials.
Commentary Opinions
During the renovation process, if quality problems arise due to construction, it is often necessary to dismantle part or all of the original finishing materials and redo the work. In the course of such dismantling, the original materials may suffer partial or total damage. Materials purchased by the consumer are their own property; therefore, any losses incurred by the consumer as a result of the operator’s substandard workmanship should be borne entirely by the operator. This clause reduces the operator’s liability and constitutes an unfair standard term.
07. The threshold for liquidated damages is set too low, resulting in minimal costs of breach for operators.
Typical clause: If the contractor breaches the contract and causes a delay in the project, they shall pay the consumer a liquidated damages of RMB 20 per day.
Commentary Opinions
Under the Civil Code, the determination of liquidated damages shall be guided by the principle of compensating for actual losses. The liquidated damages stipulated herein are unreasonably low and clearly insufficient to cover the actual losses arising from the inability to take possession of the premises on time—such as the extension of the lease term and the increase in rental costs—thereby allegedly depriving consumers of their right to assert contractual liability and reducing the operator’s obligation to compensate.
08. Treating the advance payment as a deposit or liquidated damages, with no refund upon contract termination.
Typical clause: Except in cases of force majeure, if Party A (the consumer) unilaterally terminates the contract, any prepaid amount paid shall not be refunded by Party B (the business operator); furthermore, Party A shall indemnify Party B for all losses incurred as a result. If Party A (the consumer) breaches the contract, the payment made by Party A shall be treated as liquidated damages and paid to Party B.
Commentary Opinions
An advance payment is not, in legal terms, a deposit; therefore, the contractual provision stipulating that an advance payment is non‑refundable upon the consumer’s termination of the contract does not fall under the “deposit penalty” regime. When a business unilaterally stipulates that, upon the consumer’s termination of the contract, the advance payment will not be refunded or that the amount paid shall be treated as liquidated damages payable to the business, such a clause constitutes an unfair standard term that unduly burdens the consumer. Furthermore, when imposing liability for breach of contract upon termination, the amount of liquidated damages must not exceed a reasonable sum.
09. The property management company collects management fees but does not assume civil liability for failing to fulfill its management obligations.
Typical provision: With respect to vehicle management under this Agreement, the property service enterprise shall be responsible only for regulating traffic flow and parking秩序 and shall not assume any obligation to safeguard vehicles. Any property damage—such as vehicle destruction or loss—or theft of personal belongings, or any injury or death occurring within the property management area, shall be the sole responsibility of the party at fault, whether criminally or civilly; the property service enterprise shall bear no liability.
Commentary Opinions
According to the Regulations on Property Management, when a property service enterprise collects parking fees from owners, it is required to fulfill its statutory or contractual obligations of reasonable management. However, the provision stipulating that the property service enterprise shall bear no liability for property losses—such as vehicle damage or loss, or theft of personal belongings—or for personal injury or death occurring within the property management area constitutes an exemption of the enterprise’s own responsibilities and legal obligations.
10. Requiring owners to share common expenses in addition to property management fees.
Typical clause: The comprehensive property service fee does not include utility costs for landscape water features and other common areas; the water and electricity charges for operating these landscape systems shall be allocated based on actual consumption.
Commentary Opinions
In accordance with the Regulations on Property Management and the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in Adjudicating Disputes over Property Services, the property management area shall encompass the community’s common facilities and grounds, including landscaping. Accordingly, expenses for the maintenance of greenery, as well as water and electricity costs associated with garden ponds, fountains, and other such amenities within the property management area, must be covered by the property management service fees and may not be separately allocated to individual owners.
Taxation
The Third Belt and Road Tax Administration Cooperation Forum Concludes
Adopted the Joint Statement of the Third Belt and Road Tax Administration Cooperation Forum.
Six areas of achievements

On the afternoon of September 21, Beijing time, the three-day Third Belt and Road Tax Administration Cooperation Forum concluded. During the forum, participants convened under the theme “Uniting Efforts to Tackle Challenges: Building Tax Administration Capacity in the Post-Pandemic Era,” discussing such topics as strategic planning for tax administration capacity building, the application of information technology in this endeavor, and the development of a lifelong learning system for tax professionals. They reached significant outcomes covering six key areas and encompassing a range of specific measures.
Wang Jun, Director of the State Taxation Administration of China, delivered a keynote address titled “Carrying Forward the Silk Road Spirit and Jointly Promoting Capacity Building” at the opening ceremony. He noted that over the past year, all parties involved in the cooperation mechanism have worked in concert, yielding new achievements across its various initiatives. The Chinese tax authorities have upheld the principles of extensive consultation, joint contribution, and shared benefits, contributing Chinese expertise, providing Chinese support, and sharing Chinese practices, thereby demonstrating their sense of responsibility and commitment to realizing the vision of the Belt and Road Initiative’s tax administration cooperation mechanism. In line with the forum’s theme, Wang Jun shared with the participants the Chinese tax authorities’ recent explorations and practical efforts in strengthening tax administration capacity, and put forward three proposals: further deepening the development of the cooperation mechanism, continuously improving the shared platform, and steadily advancing smart‑tax initiatives.
In his address at the conference, Algerian Minister of Finance Brahim Jamal Kessali stated that the Belt and Road Tax Administration Cooperation Forum has provided an important platform for all parties to share experiences and learn from one another in strengthening tax administration capacity in the post-pandemic era. By leveraging this platform to pool resources and enhance the quality and efficiency of work, it is possible to deliver better services to taxpayers. Meanwhile, Amel Abdellatif, Chair of the Cooperation Mechanism Council, President of the Third Forum, and Director-General of the Algerian Tax Authority, noted in his remarks that, during the Belt and Road Tax Administration Cooperation Forum, participating countries have shared their practical experiences and innovative approaches, while also drawing on the resources of the Belt and Road Tax Administration Capacity‑Building Alliance to bolster staff training and exchanges—efforts that have proven highly beneficial for enhancing the capabilities of tax officials.
At the closing session of the Council of the Belt and Road Tax Administration Cooperation Mechanism, Wang Daoshu, Secretary-General of the Secretariat and Deputy Director of the State Taxation Administration of China, stated that the Third Belt and Road Tax Administration Cooperation Forum had successfully concluded all its agenda items and achieved six key outcomes, including the Joint Statement of the Third Belt and Road Tax Administration Cooperation Forum and the Annual Report of the Belt and Road Tax Administration Cooperation Mechanism.
— The Joint Statement of the Third Belt and Road Tax Administration Cooperation Forum was issued. The Joint Statement comprehensively summarizes the outcomes of the Third Belt and Road Tax Administration Cooperation Forum, reafoffices the commitments made in the Nur-Sultan Action Plan (2022–2024), and articulates the shared objectives of tax authorities from Belt and Road countries and regions in building tax administration capacity. These objectives encompass four key areas: advancing strategic planning for capacity-building, deepening the application of information technology, supporting the development of a lifelong learning system for tax professionals, and jointly cultivating a high-caliber faculty. The Statement also encourages the participation of other international organizations and the private sector.
— Formulation of the curriculum framework for the Belt and Road Tax Administration Capacity‑Building Alliance. Grounded in the core theme of “enhancing tax administration capacity,” the Alliance aligns with cutting‑edge developments in international taxation and supports the goal of high‑quality Belt and Road cooperation through tax‑related services. Drawing on four dimensions—institutional frameworks, management, service delivery, and international cooperation—the Alliance has developed a well‑structured curriculum with clearly defined areas of expertise and distinct levels of progression. The content covers four thematic pillars—tax systems, tax administration and digitalization, the tax‑related business environment and taxpayer services, and tax cooperation—and is further subdivided into eight major topics and 30 subtopics.
— Establishing an expert faculty team for the Alliance. To further strengthen tax administration capacity-building in Belt and Road countries and regions, the Belt and Road Tax Administration Capacity‑Building Alliance has proactively assembled an expert faculty, having so far invited 26 experts from 13 countries and regions to join. These experts’ areas of expertise span tax system design, tax administration and digitalization, taxpayer services, and tax dispute resolution, among others.
— Establishing the Belt and Road Tax Academy Network. This achievement is primarily reflected in the founding of the Riyadh‑based Belt and Road Tax Academy, which conducts training in Arabic. On the one hand, it will leverage its existing resources to deliver courses; on the other, it will share the Alliance’s curricula, faculty, and related knowledge products, thereby jointly providing learners with a higher‑quality learning platform.
— The “Detailed Rules for the Implementation of the Belt and Road Tax Administration Capacity‑Building Alliance (Trial)” have been formulated. The Rules comprise nine chapters and 28 articles. Building on the framework of the Memorandum of Understanding on the Cooperation Mechanism, they further clarify the Alliance’s functions and positioning, define its priority areas of work, streamline its organizational structure, refine internal management regulations and delineate responsibilities, and set out the operational rules and procedural requirements for carrying out all Alliance activities, thereby ensuring that the Alliance is managed in accordance with these Rules and that its work is guided and advanced in a more scientific, standardized, and efficient manner.
— The “Annual Report on the Tax Administration Cooperation Mechanism of the Belt and Road Initiative” was released. The report provides a comprehensive overview of the mechanism’s development and operational achievements since the second forum, covering key areas such as alliance building, thematic seminars, themed‑day events, working‑group activities, the establishment of the Belt and Road website, and the publication of the journal “Belt and Road Taxation (English).”
Danyar Yerengaliyevich Zhanalinov, Chairman of the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan, stated that he hopes to leverage the Belt and Road Tax Administration Cooperation Forum as a platform to deepen mutual learning and exchange among countries in the tax field, share best practices, enhance the modernization of tax administration, and thereby promote high-quality economic development across nations.
“The Belt and Road Tax Administration Cooperation Mechanism has already achieved numerous results in advancing the digitalization of tax administration among all participating parties,” said Tuma Adama Jabbu, Chairperson of Sierra Leone’s National Revenue Authority. As Vice Chair of the Mechanism’s Governing Council, she expressed her sincere hope that the Mechanism will deliver even more collaborative outcomes in the future, strengthen the tax administration capacities of countries and regions, and bring benefits to a greater number of Belt and Road economies.
Evelyn Chua, Assistant Commissioner of the Inland Revenue Authority of Singapore, stated that the principle of “lifelong learning for tax professionals” is of paramount importance and plays a crucial role in strengthening tax administration capacity in the digital age. She also outlined Singapore’s future human resources strategy for the tax authority, which includes leveraging artificial intelligence to empower and delegate responsibilities, cultivating both practical and forward-looking skills, and implementing robust strategic human resource planning along with targeted interventions.
Jeffrey Owens, Director of the Global Tax Policy Center at the Vienna University of Economics and Business, stated that the Belt and Road Initiative’s tax administration cooperation mechanism can help its member jurisdictions better address the challenges of digital transformation by establishing digital platforms, developing tax‑digitalization roadmaps, and offering online training courses.
Steve Van Weyghel, Professor of International Tax Law at the University of Amsterdam and Global Head of Tax Policy at PwC, shared his teaching experience in light of the shifts in instructional approaches before and after the pandemic. He argued that the Belt and Road Initiative’s tax administration cooperation mechanism could establish an online learning platform, develop a blended‑learning model, and tailor personalized curricula to the specific contexts of individual countries, thereby ensuring the replicability and sustainability of training and extending its benefits to more nations and tax officials.
Daniel Witte, Chairman of the International Tax and Investment Center, stated that since its establishment in 2019, the Belt and Road Tax Administration Cooperation Mechanism has brought together diverse stakeholders, established platforms for dialogue, and made significant contributions to fostering a growth‑friendly international tax environment. He expressed hope that, going forward, cooperation with all parties will be further strengthened to achieve shared progress.
The participating parties in the Belt and Road Initiative’s tax administration cooperation mechanism will jointly uphold the Silk Road spirit, work in concert with unwavering commitment, and provide stronger impetus and broader scope for advancing tax administration cooperation under the Belt and Road Initiative, while charting more effective pathways and making greater contributions to fostering global tax governance based on mutual trust and collaboration.
In the first eight months of the year, nationwide tax and fee reductions, refunds, deferrals, and exemptions totaled over 3.3 trillion yuan.
According to the State Taxation Administration, as of August 31, the cumulative total of tax and fee reductions, refunds, deferrals, and payment extensions nationwide this year has exceeded RMB 3.3 trillion. Of this amount, RMB 2.1723 trillion in tax refunds has been credited to taxpayers’ accounts, effectively shaping market expectations and boosting the vitality of market entities.
According to a spokesperson from the State Taxation Administration, the implementation of the large-scale value-added tax (VAT) credit refund policy has effectively eased enterprises’ financial pressures. VAT invoice data show that from April to August this year, companies that received VAT credit refunds saw their sales revenue grow by 6.9% year on year, a growth rate 4.6 percentage points higher than that of offices without such refunds.
VAT invoice data also show that from April to August this year, manufacturing enterprises collectively benefited from tax refunds totaling RMB 537.7 billion. Among those that received additional credit‑tax refunds, their sales revenue increased by 7.5% year on year, a growth rate 4.2 percentage points higher than that of enterprises without such refunds.
Small and micro enterprises play a vital role in boosting employment and safeguarding people’s livelihoods. According to available information, since the beginning of this year, the new package of tax and fee support policies has been heavily tilted toward small and micro businesses. As of August 31, these measures have delivered cumulative tax and fee reductions, refunds, deferrals, and exemptions totaling RMB 1.31 trillion for such enterprises. From April 1 to August 31, among taxpayers who received VAT credit refunds, small and micro enterprises accounted for 93.1% of the total; the total amount of refunds disbursed reached RMB 833.2 billion, representing 40.7% of the overall figure.
A relevant official from the State Taxation Administration stated that the tax authorities have continuously optimized the functions of the electronic tax bureau, enhanced user-friendliness, and reduced the administrative burden on taxpayers. At the same time, they are making full use of tax big data to rigorously prevent risks, ensuring that policy‑related benefits do not end up in the pockets of illegal actors. As of August 31, tax inspection agencies nationwide have recovered RMB 11.99 billion in losses related to input‑credit refunds and other tax revenues, referred 1,399 enterprises suspected of issuing false invoices to fraudulently obtain input‑credit refunds to public security authorities for investigation and joint prosecution, and jointly cracked down on 200 criminal groups engaged in such fraudulent activities.
Litigation & Arbitration
Provisions on Several Issues Concerning Bail Pending Trial
Chapter 1 General Provisions
Article 1: In order to standardize the application of bail pending trial, implement the criminal justice policy of “fewer arrests, cautious prosecution, and prudent detention,” ensure the smooth conduct of criminal proceedings, and protect the legitimate rights and interests of citizens, these Provisions are hereby formulated in accordance with the Criminal Procedure Law of the People’s Republic of China and relevant provisions.
Article 2: With respect to criminal suspects and defendants released on bail pending trial, the public security organs, state security organs, people’s procuratorates, and people’s courts shall, in accordance with the law and based on the specific circumstances of each case, make a decision.
When the public security organs, the people’s procuratorates, or the people’s courts decide to release a suspect on bail pending trial, such decision shall be enforced by the public security organs. When the state security organs decide to release a suspect on bail pending trial, or when the people’s procuratorates or the people’s courts, in handling criminal cases referred by the state security organs, decide to release a suspect on bail pending trial, such decision shall be enforced by the state security organs.
Article 3: For criminal suspects whose release on bail is sufficient to prevent the occurrence of social danger, bail shall be applied in accordance with the law.
Where a decision is made to release a suspect on bail, the investigation, prosecution, and trial of the case shall not be interrupted. It is strictly prohibited to use bail as a means of condoning crime in disguise.
Article 4: When a decision is made to release a criminal suspect or defendant on bail, they shall be required to provide a guarantor or pay a bail deposit.
Where bail is granted to the same criminal suspect or defendant, both a guarantor’s guarantee and a cash deposit guarantee may not be used concurrently. In cases involving minors, the guarantor’s guarantee shall be given priority.
Article 5: Where bail is granted in the form of a cash deposit, the minimum amount of the deposit shall be RMB 1,000; where the person released on bail is a minor, the minimum amount of the deposit shall be RMB 500.
The deciding authority shall, taking into account the need to ensure the proper conduct of litigation, the social dangerousness of the person released on bail, the nature and circumstances of the case, the severity of the potential sentence, and the financial situation of the person released on bail, determine the amount of the bail.
Article 6: Where a suspect or defendant meets the conditions for release on bail pending trial but is unable to provide a guarantor or pay the required bail, residential surveillance may be imposed.
If the person under residential surveillance as stipulated in the preceding paragraph submits a guarantor or pays a bail deposit, the measure may be changed to release on bail.
Chapter 2: Decision
Article 7: When deciding to release a suspect on bail, the authorities may, depending on the circumstances of the case, order the person released on bail not to enter the following “specific places”:
(1) Places that may lead to the commission of another crime;
(2) Places that may give rise to conduct that disrupts social order or interferes with the normal activities of others;
(3) Premises associated with the suspected criminal activities;
(4) Places that may facilitate the commission of acts such as destroying evidence or interfering with witness testimony, thereby obstructing judicial proceedings;
(5) Other specific locations that may impede the execution of bail pending trial.
Article 8: When deciding to grant bail pending trial, the authorities may, depending on the circumstances of the case, order the person released on bail not to meet with or communicate with the following “specified persons”:
(1) Witnesses, experts, victims, and their legal representatives and close relatives;
(2) Co-defendants, criminal suspects, defendants, and other persons connected to the case;
(3) Persons who may be subjected to harm or harassment by the person released on bail;
(4) Persons who may engage in conduct that obstructs the execution of bail pending trial or otherwise impairs litigation proceedings.
The term “communication” as used in the preceding paragraph encompasses direct or indirect communication by various means, including correspondence, text messages, emails, telephone calls, and the exchange of information via online platforms or network-based application services.
Article 9: When deciding to grant bail pending trial, the authorities may, depending on the circumstances of the case, require the person released on bail not to engage in the following “specific activities”:
(1) Activities that may lead it to commit crimes again;
(2) Activities that may have an adverse impact on national security, public safety, or social order;
(3) Activities related to the suspected crime;
(4) Activities that may obstruct the proceedings;
(5) Other specific activities that may jeopardize the execution of bail pending trial.
Article 10. Public security organs shall establish a dedicated account for bail deposit at a bank designated by them, entrust the bank to collect and safeguard the deposit, and notify the people’s procuratorate and the people’s court at the same level of the relevant information.
The security deposit shall be paid in Renminbi.
Article 11: Where a public security organ decides to apply bail as a form of guarantee, it shall promptly serve the notice of collection of bail on the person released on bail, and order such person to pay the full amount of bail in a single lump sum to the designated bank within three days.
Article 12: Where the People’s Courts or the People’s Procuratorates decide to apply bail as a form of guarantee, they shall order the person released on bail to pay the bail in a lump sum, within three days, into a designated account at a bank specified by the public security organ.
Article 13: The person released on bail or the person providing the bail deposit shall deposit the paid bail into a dedicated account for bail deposits, and the bank shall issue the relevant receipt.
Chapter 3: Enforcement
Article 14: When a public security organ decides to release a suspect on bail, after verifying that the person has paid the required bail deposit, it shall simultaneously serve the decision on bail, the notice of execution of bail, and any other relevant documents to the executing authority.
Article 15: When a public security organ decides to release a suspect on bail, it shall promptly notify the local police station at the suspect’s place of residence to carry out the bail. If the suspect’s place of residence is in another jurisdiction, the public security organ shall promptly notify the public security organ of that jurisdiction, which shall designate a local police station at the suspect’s place of residence to implement the bail. Where necessary, the case-handling department may provide assistance in enforcement.
If the residence of a person released on bail is changed, the police station responsible for executing the bail shall promptly notify the public security organ that made the decision to grant bail, which shall then designate a new police station at the person’s altered place of residence to carry out the bail. If the altered place of residence is in another jurisdiction, the public security organ that granted bail shall notify the public security organ of that jurisdiction, which shall appoint the police station at the person’s new place of residence to assume responsibility for enforcement. The original executing authority shall conduct a handover of duties with the newly designated executing authority.
Article 16. “Place of residence” includes the place of household registration and the place of habitual residence. The place of habitual residence refers to the location where the person released on bail has continuously resided for one year or more after leaving their place of household registration.
Release on bail shall, in principle, be enforced at the place of household registration; however, if a habitual residence has been established, it may be enforced at that habitual residence.
A person released on bail may also have their bail pending trial enforced at their temporary residence if they fall under any of the following circumstances:
(1) The person released on bail has been away from their registered domicile for more than one year and has no habitual residence, but maintains a fixed place of residence at their temporary address;
(2) The person released on bail is a foreign national or a stateless person, or a resident of the Hong Kong Special Administrative Region, the Macao Special Administrative Region, or the Taiwan region;
(3) Where the place of household registration of the person released on bail cannot be ascertained and no habitual residence exists.
Article 17: Where bail pending trial is to be executed locally, the public security organ that has decided to grant bail shall serve the legal documents and relevant materials on the police station responsible for enforcement.
When bail pending trial is executed in a different jurisdiction, the public security organ that made the decision shall serve the legal documents and relevant materials containing information such as the bail‑pending‑trial person’s reporting deadline and contact details upon the executing authority. Such service may be effected by direct delivery, through an authorized representative, or by mail, and the executing authority shall promptly issue an acknowledgment of receipt. The bail‑pending‑trial person shall report to the executing authority within five days of receiving the decision on bail pending trial. The executing authority shall, within three days of the bail‑pending‑trial person’s reporting, provide feedback to the deciding authority.
If a person released on bail fails to report to the police station responsible for enforcement within the prescribed time limit and has no justifiable reason, the executing authority shall notify the deciding authority. The deciding authority shall, in accordance with the law, summon the person released on bail; if the person fails to appear, he or she shall be dealt with in accordance with the relevant provisions of this Regulation and Chapter V thereof.
Article 18: When carrying out bail pending trial, the executing authority shall inform the person on bail of the obligations set forth in Article 71 of the Criminal Procedure Law, as well as the legal consequences of violating such obligations or committing another crime during the period of bail pending trial.
Where a guarantor provides a guarantee, the guarantor shall be informed of the obligations that must be fulfilled and of the legal consequences of failing to do so, and shall execute a written guarantee.
The executing authority shall, in accordance with the law, supervise and assess the compliance of persons released on bail with the prescribed conditions, promptly ascertain any changes to their address, place of employment, or contact information, and prevent and stop them from engaging in conduct that violates such conditions.
The person released on bail shall comply with the relevant provisions governing bail, submit to the supervision and administration of the executing authority, and cooperate with the executing authority in regularly providing updates on the relevant circumstances.
Article 19: A person released on bail shall not leave the city or county of his or her residence without approval.
A person released on bail shall submit a written application to the police station responsible for enforcement if they intend to leave the city or county of their residence, specifying the reason, destination, route, mode of transportation, round-trip dates, and contact information. In cases of urgent circumstances where a written application cannot be filed in time, the individual may first make an application by telephone, text message, or other means, and promptly complete the formalities for submitting a written application thereafter.
Upon review, applications submitted for legitimate and reasonable purposes such as employment, study, or medical treatment shall be approved by the head of the local police station.
Upon approval by the police station responsible for enforcement, the decision-making authority shall be notified, and the person released on bail shall be informed of the following requirements:
(1) Keep your contact information up to date and appear promptly upon being summoned;
(2) Travel strictly in accordance with the approved location, route, and round-trip dates;
(3) May not engage in any activities that obstruct the proceedings;
(4) Upon returning to the place of residence, promptly report to the executing authority.
For those who, due to normal work and living needs, frequently travel across cities or counties, the approval procedures may be streamlined as appropriate.
Article 20: When the People’s Courts or the People’s Procuratorates decide to grant bail pending trial, they shall simultaneously transmit the decision on bail pending trial, the notice of execution of bail pending trial, and any other relevant documents to the public security organ at the same level in the place where the case is being handled. The said public security organ shall then carry out the execution in accordance with Articles 15, 16, and 17 of these Regulations.
People’s courts and people’s procuratorates may transmit legal documents and relevant materials to public security organs by electronic means.
The county-level public security organ responsible for enforcement shall, within twenty-four hours of receiving the legal documents and relevant materials, designate the police station in the place of residence of the person released on bail to carry out the bail pending trial, and shall notify the people’s court or the people’s procuratorate that made the decision to grant bail pending trial of the name of the police station assigned to enforce the measure.
If the residence of a person released on bail is changed, the public security organ responsible for enforcement shall notify the public security organ at the new place of residence to carry out the enforcement, and shall also notify the people’s court or the people’s procuratorate that made the decision to release the person on bail.
Where the people’s court or the people’s procuratorate decides to release a suspect on bail, the executing authority shall obtain the consent of the deciding authority before permitting the person released on bail to leave the city or county in which he or she resides.
Article 21. When the public security organ or the people’s procuratorate that has decided to release a suspect on bail summons such a suspect, it shall prepare a legal document and serve it upon the suspect. If the summoned suspect is not present, the document may be delivered to an adult relative residing with the suspect for receipt, and the suspect shall be contacted to conoffice and inform them of the summons. If service cannot be effected or if the suspect fails to appear as required, this fact shall be noted on the legal document, and the executing authority shall be notified.
In cases of urgent necessity, the public security organ or the people’s procuratorate that has decided to release a suspect on bail may summon the person released on bail by telephone or other means; however, such method must be recorded in the relevant legal documents, and the executing authority shall be notified.
In cases where a summons is served in another jurisdiction, the public security organ or the people’s procuratorate that has decided to release the suspect on bail may entrust the executing organ to effect service on their behalf. Upon completion of service, the executing organ shall promptly report back to the deciding organ. If service cannot be effected, this fact shall be noted on the relevant legal document, and the deciding organ shall be notified.
When the people’s court summons a defendant who has been released on bail, it shall proceed in accordance with other relevant provisions.
Article 22: The guarantor shall supervise the person released on bail to ensure compliance with the regulations governing bail, and upon discovering that the guaranteed person has already or may violate the provisions of Article 71 of the Criminal Procedure Law, shall promptly report such circumstances to the executing authority.
If the guarantor is unwilling to continue serving as a guarantor or loses the conditions for providing such guarantee, the guarantor or the person released on bail shall promptly report the situation to the executing authority. The executing authority shall, within three days from the date it discovers or is notified of such circumstances, inform the deciding authority. The deciding authority shall order the person released on bail to either designate a new guarantor or pay a bail deposit, or to have the coercive measures changed, and shall notify the executing authority accordingly.
Article 23: If the executing authority discovers that a person released on bail has violated the prescribed obligations or that a guarantor has failed to fulfill their guarantee obligations, it shall promptly intervene and take appropriate measures, and at the same time notify the deciding authority.
Chapter IV Amendments and Termination
Article 24: Upon the expiration of the period of release on bail, the deciding authority shall issue a decision to terminate the release on bail or to change the coercive measure, and shall forward such decision to the executing authority. If the deciding authority fails to terminate the release on bail or to impose other criminal coercive measures on the person released on bail, that person, together with his or her legal representative, close relatives, or defense counsel, shall have the right to request the deciding authority to terminate the release on bail.
Where it is determined that the person released on bail should not be held criminally liable, and a decision is made to withdraw the case or terminate the investigation, the competent authority shall promptly issue a decision to lift the bail and transmit it to the executing authority.
Where any of the following circumstances exists, bail pending trial shall be automatically terminated without the need for formal termination procedures; the deciding authority shall promptly notify the executing authority:
(1) Where bail pending trial has, in accordance with the law, been changed to residential surveillance, detention, or arrest, and the subsequent coercive measure has already been put into effect;
(2) Where the People’s Procuratorate has made a decision not to prosecute;
(3) Where a judgment or ruling rendered by the People’s Court finding the defendant not guilty, exempting the defendant from criminal punishment, or absolving the defendant of criminal liability has already taken legal effect;
(4) Where the person has been sentenced to public surveillance or granted probation, and community-based correction has already commenced;
(5) Where a supplementary penalty has been imposed on the defendant and the judgment or ruling has already taken legal effect;
(6) Where the person has been sentenced to imprisonment and the sentence has already begun to be served.
Upon receipt of the aforementioned decision or notice from the deciding authority, the executing authority shall immediately enforce it and promptly notify the deciding authority of the enforcement status.
Article 25: If a person released on bail has not violated the provisions of Article 71 of the Criminal Procedure Law during the period of bail, nor has he/she intentionally committed any new crime, the public security organ shall, upon termination of the bail, modification of the coercive measures, or execution of the sentence, notify the bank to refund the full amount of the bail deposit.
The person released on bail or their legal representative may, upon presentation of the relevant legal documents, go to a bank to collect the returned bail deposit. If the person released on bail is unable to collect the deposit in person, upon submission of a written application and with the approval of the public security organ, the public security organ shall issue a written notice to the bank to transfer the returned deposit to the bank account provided by the person released on bail or their authorized representative.
Article 26: Where bail pending trial has already been imposed during the investigation or the review-and-prosecution stage, and upon transfer of the case to the review-and-prosecution or trial stage, if it is necessary to continue bail pending trial, to change the form of guarantee, or to modify the coercive measures, the receiving authority shall render a decision within seven days and notify both the transferring authority and the executing authority.
Upon the case-handling authority’s issuance and execution of a decision to release on bail, the original bail measures are automatically terminated, and no separate formalities for lifting such measures are required. Where bail is continued to be secured by a monetary deposit, the amount of the deposit shall, in principle, remain unchanged, and no new deposit shall be collected. Once the alternative coercive measure imposed by the case-handling authority takes effect, the transferring authority and the executing authority shall be promptly notified; the original bail decision shall then be automatically revoked, without further formalities for its termination, and the executing authority shall return the deposit in accordance with the law.
If the period of release on bail is about to expire and the receiving authority has yet to issue a decision to continue the bail or to modify the coercive measure, the agency that referred the case shall, fifteen days prior to the expiration of the period, notify the receiving authority in writing. The receiving authority shall render its decision before the expiration of the bail period and shall notify both the referring agency and the executing authority.
Chapter 5: Liability
Article 27: Where a person released on bail pending trial, who has been guaranteed by a security deposit, violates the provisions of Article 71 of the Criminal Procedure Law and is therefore subject to confiscation of the deposit in accordance with the law, the public security organ shall make a decision to confiscate part or all of the deposit and notify the competent authority. If the People’s Procuratorate or the People’s Court discovers that such a person has violated Article 71 of the Criminal Procedure Law, it shall inform the public security organ, which shall handle the matter in accordance with the law.
Where the bail bond has been confiscated from a person released on bail, the deciding authority shall, depending on the circumstances, order that person to make a written statement of remorse, re‑deposit the bail bond, provide a guarantor, or have the coercive measures changed, and shall notify the executing authority.
Where the security deposit is re-paid, the provisions of Articles 11, 12, and 13 of these Regulations shall apply.
Article 28: If a person released on bail commits any of the acts specified in Paragraph 4 of Article 60 of the Public Security Administration Punishment Law of the People’s Republic of China, they shall be subject to public security administrative punishment in accordance with the law.
Article 29: If a person on bail does not violate the provisions of Article 71 of the Criminal Procedure Law, but is subject to criminal investigation for intentionally committing a new crime during the period of bail, the public security organ shall temporarily withhold the bail deposit. Upon the entry into force of the judgment rendered by the people’s court, the organ shall decide whether to confiscate the deposit. In cases where the new crime was committed intentionally, the deposit shall be confiscated; in cases where the new crime was committed negligently or does not constitute a crime, the deposit shall be returned.
Article 30: When a public security organ decides to confiscate the bail, it shall prepare a Decision on Confiscation of Bail and, within three days, read it aloud to the person released on bail, informing that, if dissatisfied with the decision, the person released on bail or his or her legal representative may, within five days, apply to the public security organ that made the confiscation decision for a review.
If the person released on bail or their legal representative is dissatisfied with the reconsideration decision, they may, within five days of receiving the written reconsideration decision, apply to the next higher-level public security organ for a single review.
Article 31: If the guarantor fails to perform his or her supervisory duties, or if the person released on bail violates the provisions of Article 71 of the Criminal Procedure Law and the guarantor fails to report such violation in a timely manner or conceals it, upon verification, the public security organ shall impose a fine on the guarantor and promptly notify the deciding authority of the relevant circumstances.
If a guarantor assists a person released on bail in committing acts that obstruct the administration of justice or other offenses, and such conduct constitutes a crime, the guarantor shall be held criminally liable in accordance with the law.
Article 32: Where a public security organ decides to impose a fine on a guarantor, it shall prepare a decision on the imposition of the fine and notify the guarantor within three days, informing the guarantor that, if dissatisfied with the decision, they may, within five days, apply to the public security organ that issued the decision for a review.
If the guarantor is dissatisfied with the reconsideration decision, he or she may, within five days of receiving the reconsideration decision, apply to the next higher-level public security organ for a single review.
Article 33: Where the decision to confiscate bail or the decision to impose a fine on a guarantor has expired the period for administrative reconsideration, or where, following reconsideration or review, the original decision is upheld or the amount of the fine is altered, the public security organ that made such decision shall promptly notify the designated bank to remit the confiscated bail and the fine imposed on the guarantor to the state treasury in accordance with relevant state regulations, and shall, within three days, notify the authority that rendered the decision.
If the bail deposit consists of the personal property of the person released on bail and is required to compensate the victim, fulfill ancillary civil compensation obligations, or enforce a property-based penalty, the people’s court may issue a written notice to the public security organ to transfer the entire bail deposit. The people’s court shall then make a disposition regarding the funds, returning any remaining balance to the defendant.
Article 34: Where the People’s Procuratorate or the People’s Court decides to release a suspect on bail, and the suspect violates the conditions of bail and thereby warrants arrest, the suspect may be taken into custody pending further proceedings, and the People’s Procuratorate or the People’s Court shall be requested to issue an arrest warrant in accordance with the law. When the People’s Court or the People’s Procuratorate orders an arrest, such order shall be executed by the public security organ at the same level in the place where the suspect is located.
Article 35: The collection, administration, and confiscation of security deposits shall be carried out strictly in accordance with these Regulations and the State’s financial and accounting management system. No organization or individual may, on its own initiative, collect, confiscate, or refund security deposits, nor may it withhold, misappropriate, privately divide, divert, or otherwise embezzle such funds. Any violation of these provisions shall be subject to administrative sanctions in accordance with relevant laws and regulations; where the conduct constitutes a crime, criminal liability shall be pursued in accordance with the law.
Chapter VI Supplementary Provisions
Article 36: With respect to the “serious illness” and “inability to care for oneself” stipulated in Article 67, Paragraph 1, Item 3 of the Criminal Procedure Law, implementation shall be in accordance with the “Scope of Serious Diseases for Medical Treatment Outside Prison” attached to the Regulations on Temporary Execution of Sentences Outside Prison issued by the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, the Ministry of Justice, and the National Health and Family Planning Commission, as well as the “Standards for Determining Inability to Care for Oneself” attached to the Notice of the Supreme People’s Court on the Issuance of the “Standards for Determining Inability to Care for Oneself” for Offenders.
Article 37 Where the state security organs decide upon and implement bail pending trial, the provisions of these Regulations concerning the duties of public security organs shall apply.
Article 38: Where the people’s courts or the people’s procuratorates have decided to release a suspect on bail pending trial, but there is no public security organ at the same level in the place of residence, the provincial-level public security organs, in conjunction with the people’s courts and the people’s procuratorates at the same level, shall, in accordance with these Provisions, designate a public security organ to be responsible for enforcement or for handing over the case for enforcement, and shall clearly establish a mechanism for coordinating such work.
Article 39. In these Provisions, the executing authorities refer to the public security organs and the state security organs responsible for implementing bail pending trial.
Article 40: These Provisions shall enter into force as of the date of their issuance.
The Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, and the Ministry of Justice have jointly issued new regulations on bail pending trial.
Release on bail pending trial is an important non-custodial coercive measure in criminal proceedings. Applying this measure in accordance with the law and ensuring its proper implementation is of great significance for respecting and safeguarding human rights, conserving judicial resources, and ensuring the smooth conduct of criminal proceedings. As China’s economy and society continue to develop and the rule of law advances, the structure of crimes and the nature of penalties have gradually become lighter and more lenient. To effectively implement Xi Jinping’s thought on the rule of law, meet the needs of the people in the new era, and fully embody the criminal policy of combining leniency with strictness as well as the criminal justice policy of exercising restraint in arrests, prosecutions, and detention, the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, and the Ministry of State Security, based on thorough research, have carefully reviewed and deeply analyzed the pressing issues that urgently need to be addressed in the practice of release on bail pending trial. After repeated deliberations, rigorous argumentation, and revisions, they have revised the “Provisions on Several Issues Concerning Release on Bail Pending Trial,” originally issued in 1999, and officially promulgated it on September 21, 2022.
The Regulations comprise six chapters and forty articles, setting forth provisions on the general rules, decision-making, execution, modification, termination, and liability pertaining to bail pending trial. Notably, the revisions focus on the following aspects:
First, the scope of application for release on bail pending trial has been further clarified. With respect to the subjects eligible for release on bail, the Regulations expressly stipulate that criminal suspects for whom release on bail is sufficient to prevent the occurrence of social danger shall be subject to such measure in accordance with the law. As for the conditions for granting release on bail, it is specified that the terms “serious illness” and “inability to care for oneself” as set forth in Article 67 of the Criminal Procedure Law shall be interpreted and applied by reference to the relevant normative documents issued by the Supreme People’s Court and other competent authorities.
Second, enforcement and supervision over persons released on bail have been further strengthened. To more clearly define the scope of activities permitted to such individuals, the Regulations refine the meanings of “specific locations,” “specific persons,” and “specific activities” as set forth in Article 71 of the Criminal Procedure Law, thereby facilitating practical implementation. With respect to the execution of bail in a different jurisdiction, the Regulations establish time limits for bailors to report to the executing authority and specify the consequences and remedial measures for failure to comply within those time limits, ensuring the effective enforcement of bail in out-of‑jurisdiction settings. For applications by bailors to leave their place of residence, the Regulations further detail the relevant conditions, approval procedures, and obligations that must be observed. Moreover, in order to impose stricter penalties for violations by bailors, the Regulations provide clearer guidance on the conditions and procedures governing measures such as confiscation of bail deposits, fines imposed on guarantors, and arrest, thereby ensuring the thorough implementation of the provisions governing bail.
Third, the Regulations address specific issues arising in the execution of bail pending trial. In response to the common situation where a criminal suspect or defendant lacks a fixed place of residence and is frequently absent from their registered domicile, the Regulations stipulate that, subject to certain conditions, bail pending trial may be enforced at the suspect’s or defendant’s temporary place of residence. Regarding how to handle cases where the person on bail changes their place of residence, the Regulations require that the public security organ that decided on the bail must designate a new local police station at the person’s revised residence to carry out enforcement, and that the original executing authority must conduct a formal handover with the newly designated authority. Furthermore, to facilitate the return of the bail deposit, the Regulations provide that, upon the individual’s written application, the public security organ may issue a written notice instructing the bank to remit the deposit via transfer.
Fourth, the procedures for coordinating the implementation of bail pending trial have been further standardized. To ensure the smooth transfer of decisions on bail pending trial from the procuratorial and judicial organs to the executing authorities, the Regulations stipulate that when the people’s courts or the people’s procuratorates decide to grant bail pending trial, they shall forward the relevant legal documents and other materials to the public security organ at the same level in the place where the person is located, which shall then carry out the execution in accordance with the prescribed procedures. At the same time, the Regulations require that if a person released on bail violates the applicable regulations and an arrest becomes necessary, the public security organ at the same level in the place where the person is located shall submit a request to the people’s procuratorate or the people’s court to issue an arrest warrant in accordance with the law, and the arrest shall be executed by that same-level public security organ. In addition, the Regulations further clarify the coordination between bail pending trial and other coercive measures, as well as with judgments and decisions.
Going forward, the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Public Security, and the Ministry of State Security will guide people’s courts, people’s procuratorates, public security organs, and state security organs at all local levels to strictly enforce the Criminal Procedure Law, the Provisions on Several Issues Concerning Bail Pending Trial, and other relevant regulations, further standardizing the application of bail pending trial. They will also ensure the thorough implementation of the criminal policy of combining leniency with strictness and the criminal justice policy of minimizing arrests, cautious prosecution, and prudent detention, thereby safeguarding the smooth conduct of criminal proceedings while fully protecting the legitimate rights and interests of citizens.
In the first-instance verdict in the Tangshan barbecue restaurant assault case, the principal offender, Chen Jizhi, was sentenced to 24 years in prison.
From September 13 to 15, 2022, the People’s Court of Guangyang District, Langfang City, Hebei Province, held a public first-instance trial in the case brought by the People’s Procuratorate of Guangyang District, Langfang City, involving defendant Chen Jizhi and others accused of crimes committed as part of an organized criminal group. During the proceedings, the prosecution presented relevant evidence; the legal representatives of the four victims charged with provoking trouble, along with the 28 defendants and their defense counsel, cross-examined the evidence. Under the court’s guidance, both sides fully articulated their arguments, and the defendants made their final statements. In accordance with the law, all victims indicated that they would not appear in court. On September 23, the People’s Court of Guangyang District, Langfang City, rendered a public judgment in accordance with the law.
Upon trial, it was ascertained that at approximately 2:40 a.m. on June 10, 2022, the defendants Chen Jizhi, Ma Yunqi, Liu Bin, Chen Xiaoliang, Li Xin, Shen Xiaojun, along with Li Hongrui, Liu Mou, and Jiang Moping, were dining at a barbecue restaurant on Airport Road in Lubei District, Tangshan City, Hebei Province. Chen Jizhi approached the table of the victims Wang Moumou, Li Mou, Yuan Mou, and Liu Moumou, who were eating in the restaurant. After being rebuffed when he attempted to harass Wang Moumou, he assaulted her; Wang Moumou and Li Mou then resisted. Subsequently, Chen Jizhi, Ma Yunqi, Liu Bin, Chen Xiaoliang, and Li Xin—acting respectively inside the barbecue restaurant, on the sidewalk outside, and in a narrow alley adjacent to the establishment—used chairs, liquor bottles, and their bare hands to strike or kick Wang Moumou, Li Mou, Yuan Mou, and Liu Moumou. Meanwhile, Shen Xiaojun, both inside the restaurant and in the adjoining alley, threatened Yuan Mou, forbidding him from calling the police. Forensic examination determined that the injuries sustained by Wang Moumou and Liu Moumou constituted Grade II minor injury, while those of Li Mou and Yuan Mou were classified as slight injuries.
It was further ascertained that, since 2012, the defendant Chen Jizhi and others have repeatedly assembled, using violence and threats in Tangshan City and other locations, to engage in unlawful activities such as illegal detention, group brawls, intentional injury, operating casinos, robbery, concealing or disguising proceeds of crime, and assisting in cybercrime. Over time, they established an evil criminal syndicate with Chen Jizhi as its ringleader and seven defendants, including Wang Xiaolei, as its members. This criminal organization committed numerous offenses, oppressed the local populace, disrupted the local economic and social order, and inflicted severe adverse social repercussions.
The People’s Court of Guangyang District, Langfang City, ruled that the defendant Chen Jizhi was convicted of provoking trouble, robbery, affray, running a casino, illegal detention, intentional injury, concealing and covering up proceeds of crime, and aiding and abetting cybercrime. Considering all charges together, the court sentenced him to 24 years’ imprisonment and imposed a fine of RMB 320,000. The remaining 27 defendants were each sentenced to fixed-term imprisonment ranging from 11 years to 6 months, with an additional 19 of them also fined amounts ranging from RMB 135,000 to RMB 3,000. Furthermore, Chen Jizhi and five other defendants were held liable for compensating the four victims in the provoking‑trouble case for medical expenses, nursing fees, lost wages, meal allowances, nutritional expenses, transportation costs, and other related losses.
Some deputies to the National People’s Congress, members of the Chinese People’s Political Consultative Conference, relatives of certain defendants, and representatives of the general public attended the proceedings as observers.
First-instance verdict delivered in the case of Fu Zhenghua’s bribery and bending the law for personal gain.
On September 22, 2022, the Intermediate People’s Court of Changchun City, Jilin Province, publicly pronounced its verdict in the case against Fu Zhenghua, former Deputy Director of the Social and Legal Affairs Committee of the National Committee of the Chinese People’s Political Consultative Conference, for accepting bribes and bending the law out of personal favor. The defendant, Fu Zhenghua, was sentenced to death with a two-year reprieve for bribery, with deprivation of political rights for life and confiscation of all his personal property. Upon expiration of the two-year reprieve, his sentence will be commuted to life imprisonment, subject to lifelong incarceration without possibility of reduction or parole. He was also convicted of bending the law out of personal favor and sentenced to fourteen years’ imprisonment. The court decided to impose the death penalty with a two-year reprieve, along with lifelong deprivation of political rights and confiscation of all personal property; upon the expiration of the two-year reprieve, his sentence will be commuted to life imprisonment, with no possibility of reduction or parole. Furthermore, the proceeds and any孳息 derived from Fu Zhenghua’s bribery offenses were ordered to be recovered and turned over to the state treasury in accordance with the law.
Upon trial, it was ascertained that:
From 2005 to 2021, the defendant Fu Zhenghua, taking advantage of his positions as Deputy Director and Director of the Beijing Municipal Public Security Bureau, Member of the Standing Committee of the CPC Beijing Municipal Committee, Vice Minister of Public Security, Member of the Central Political and Legal Commission, Minister of Justice, and Deputy Director of the Social and Legal Affairs Committee of the National Committee of the Chinese People’s Political Consultative Conference, as well as the convenient conditions arising from his official authority and position, provided assistance to relevant organizations and individuals in areas such as business operations, personnel appointments, and case handling. He personally, or through his relatives, illegally accepted property totaling over RMB 117 million.
From 2014 to 2015, while serving as Director of the Beijing Municipal Public Security Bureau, Fu Zhenghua failed to report or investigate leads concerning serious criminal allegations against his younger brother, Fu Weihua, and did not take lawful action, resulting in Fu Weihua remaining unpursued for an extended period.
The Intermediate People’s Court of Changchun City held that the defendant Fu Zhenghua’s conduct constituted the crimes of accepting bribes and bending the law for personal gain. The amount of bribes accepted by Fu Zhenghua was exceptionally large, the circumstances of the crime were particularly serious, the social impact was extremely adverse, and the resulting harm to the interests of the state and the people was of an exceptionally grave nature; accordingly, he should be sentenced to death. Furthermore, Fu Zhenghua’s act of bending the law for personal gain was of particularly grave circumstances and had an especially adverse social impact, and thus also warrants punishment in accordance with the law, to be served concurrently with his conviction for accepting bribes. In view of the fact that, upon surrendering, Fu Zhenghua truthfully confessed to his crimes, demonstrated genuine remorse, actively returned illicit gains, and provided leads concerning other major cases that were verified as true—thereby exhibiting significant meritorious conduct—he is entitled to statutory and discretionary mitigating circumstances. Accordingly, although he has been sentenced to death, execution may be suspended. Based on the facts and circumstances of Fu Zhenghua’s crimes, as well as the severe harm they have inflicted on the state and society, it has been decided that, upon expiration of the two-year period of suspended execution of the death sentence, his sentence shall be commuted to life imprisonment, during which he shall be subject to lifelong incarceration without the possibility of reduction of sentence or parole. The court therefore rendered the above‑mentioned judgment.
The Supreme People’s Procuratorate has released the 41st batch of guiding cases (the Wanfeng Lake Case).
The Supreme People’s Procuratorate Supervised the Rectification of an Environmental Public Interest Litigation Case Involving Damage to the Ecological Environment in the Wanfeng Lake Basin (Prosecutorial Case No. 166).
[Basic Facts of the Case]
Wanfeng Lake is located at the junction of Guangxi, Guizhou, and Yunnan provinces (and autonomous region), belonging to the Nanpanjiang River system, a tributary of the Pearl River. With a water surface area of 816 square kilometers, it serves as a vital water source for the Pearl River Delta economic zone, and its water quality directly affects the livelihoods and production of more than 500,000 residents along its shores, as well as the high‑quality development of the entire Pearl River Basin. Over the years, pollution prevention and control efforts in the lake area have lagged behind; cage aquaculture has expanded in an unregulated manner, leading to continuous deterioration of water quality, severe eutrophication, and, in some areas, water quality falling into Class V or worse—far exceeding the relevant standard limits set forth in the Surface Water Environmental Quality Standard (GB 3838‑2002).
In 2016, during its inspection of Guangxi, the Sixth Inspection Group of the first round of the Central Environmental Protection Inspection found that “in 2015, water quality had significantly deteriorated in five of the region’s eleven key lakes and reservoirs,” including the Guangxi waters of Wanfeng Lake. In 2017, the Seventh Inspection Group of the same round, while inspecting Guizhou, reported that “in the Wanfeng Lake reservoir area of the Pearl River Basin, the area occupied by net cages totaled 7,072 mu, exceeding the planned aquaculture area by a factor of 2.48.” The governments of Qianxinan Prefecture in Guizhou Province and Baise City in the Guangxi Zhuang Autonomous Region each organized remedial measures to address the issues identified during the inspections; however, these problems were not fundamentally resolved. Furthermore, the Wanfeng Lake watershed continues to face challenges such as the direct discharge of industrial wastewater into both main and tributary streams, as well as pollution from domestic waste, all of which directly impact the lake’s water quality and undermine the public interest.
[Guiding Significance]
1. For public-interest damage leads involving complex cases where the specific subject of oversight cannot be readily identified, a case may be filed on the basis of the factual occurrence of public-interest harm. In the fields of ecological environment and resource protection, major issues of public-interest harm often implicate multiple tortfeasors and violators, and may also involve administrative agencies at various levels and in different jurisdictions. When it is difficult to pinpoint the precise entity subject to oversight, delaying case initiation until all facts have been thoroughly verified risks prolonging proceedings, allowing the harm to persist and expand, and undermining the timeliness and effectiveness of public-interest protection. Even if the People’s Procuratorate has not yet ascertained the specific administrative agency that has failed to perform its duties in accordance with the law, or the civil wrongdoer that has directly infringed upon the public interest, it may nonetheless promptly file a case based on the established facts of public-interest harm. Article 29 of the Rules on Handling Public-Interest Litigation by the People’s Procuratorate expressly provides for this.
2. With respect to leads concerning basin‑wide ecological and environmental governance or major public‑interest harm cases that span multiple administrative jurisdictions, the higher‑level People’s Procuratorate may, in accordance with the law, directly institute a case. Public‑interest harm to the ecological environment and natural resources that extends across two or more provincial, municipal, or county‑level administrative divisions is widely recognized as a difficult governance challenge, given inconsistent enforcement standards and varying degrees of remediation efforts among local authorities. Consequently, it is often impractical for the grassroots People’s Procuratorates within the respective jurisdictions to handle such cases directly; in such instances, the higher‑level People’s Procuratorate common to all involved administrative divisions may assume direct jurisdiction and initiate proceedings.
3. Leverage the advantages of an integrated procuratorial system, with superior and subordinate people’s procuratorates coordinating unified management and decentralized execution, thereby fully exercising their respective functions and roles. Superior people’s procuratorates may adopt an integrated case-handling model, legally and uniformly assigning procuratorial personnel within their jurisdiction to form case-handling teams, or establishing specialized case-handling groups within subordinate procuratorates. They shall centrally formulate case-handling plans, clearly defining objectives, forms, procedures, and requirements, while maintaining uniform oversight of case progress and standards. Through mechanisms such as case approval and filing reviews, they shall rigorously scrutinize key stages—including case initiation, investigation, consultation, issuance of prosecutorial recommendations, hearings, and litigation—ensuring consistent quality and compliance. For specific leads involving illegal conduct or harm to public interests, given that subordinate procuratorates are more familiar with local conditions and can exercise more direct and concrete oversight over peer administrative agencies, superior procuratorates may assign cases to subordinate procuratorates for initiation and handling via referral or designation of jurisdiction. Subordinate procuratorates, when encountering significant issues during case handling that they cannot resolve on their own—including matters requiring direct coordination by the superior procuratorate—may seek guidance through hierarchical channels and submit requests to the superior procuratorate responsible for referral or jurisdictional designation. The superior procuratorate that directly initiates a case bears ultimate responsibility for overall coordination and resolution of major issues raised in subordinate procuratorates’ submissions. In this way, a case-handling model is established in which the superior procuratorate takes the lead in initiating cases based on substantive matters, while subordinate procuratorates handle cases arising from their supervisory duties; the two levels work in tandem, tailoring strategies to individual cases and advancing efforts in a unified, integrated manner.
4. Leverage the role of prosecutorial hearings to assess case‑handling outcomes, build consensus on governance, and enhance the effectiveness of litigation. When handling public interest litigation cases, procuratorial organs often address key issues in administrative law enforcement, regulatory oversight, and socio‑economic management, involving a diverse array of stakeholders beyond the parties directly concerned—such as entities subject to administrative regulation—and, in particular, potentially affecting broad segments of the public or society at large, or requiring adjustments to significant inter‑regional interests. To evaluate the interim governance results of public interest litigation, soliciting the views of representatives from relevant stakeholders through open hearings and other mechanisms, and assessing both the status of redress for public harm and the efficacy of case handling, helps foster consensus and strengthen the practical impact of public interest protection. Moreover, for governance measures that have yet to be implemented or remain exploratory in nature, it is equally important to convene public hearings to gather input from all quarters, ensuring the legality and feasibility of such measures, thereby better upholding the principle of protecting the public interest for the people and by the people, more effectively fulfilling the responsibility system of “who enforces the law, who promotes legal awareness,” and achieving the desired outcome of “addressing one case, warning a wider community, and educating and influencing society at large.”
5. Guided by the challenges of cross‑jurisdictional watershed governance, we should establish a normalized public‑interest protection mechanism and advance source‑level governance. The root causes of such issues as “asynchronous upstream–downstream management” and “uneven coordination between left and right banks” lie in the inadequate or imperfect institutional framework for managing across administrative boundaries, which leaves public‑interest harms vulnerable to resurgence even after initial remedial efforts have yielded results. Prosecutorial organs can address this by establishing and refining collaborative mechanisms for cross‑jurisdictional performance of duties; while safeguarding damaged public interests, they can coordinate with and encourage relevant administrative agencies and local governments to adopt unified regulatory and law‑enforcement practices, thereby jointly strengthening economic and social governance and promoting source‑level governance. In the Wanfeng Lake basin, the prevalence of fragmented, unmanageable, or altogether neglected administration has resulted in severe aquaculture‑related pollution. Only through ecologically sound aquaculture practices uniformly and rigorously regulated across the five counties (and cities) surrounding the lake—coupled with coordinated joint enforcement and prosecutorial oversight—can illegal aquaculture‑induced pollution be effectively eradicated, ensuring the preservation of the lake’s pristine waters. Moreover, by harnessing the lake’s resources in a scientifically sound manner, we can help revitalize poverty‑stricken towns and villages, benefit local communities, and create a model demonstrating that lucid waters and lush mountains are invaluable assets.
The China Banking and Insurance Regulatory Commission has warned of the risks associated with credit card lending, noting that it can easily result in financial losses and damage to cardholders’ credit records.
September 22 — According to a September 22 announcement on the official WeChat account of the China Banking and Insurance Regulatory Commission, the regulator recently uncovered, during a special inspection of credit cards, instances in which cardholders have rented out or lent their credit cards. Such practices contravene the provisions of the Measures for the Administration of Bank Card Business, which stipulate that bank cards may be used only by their rightful holders and may not be rented or transferred. Moreover, these actions pose a significant risk of financial loss and damage to the cardholder’s credit record. In response, the Consumer Rights Protection Bureau of the China Banking and Insurance Regulatory Commission has issued Risk Alert No. 6 for 2022.
I. Risks Associated with Credit Card Rental
One risk is falling into excessive overdrafts and damaging one’s credit record. When cardholders rent out or lend their credit cards, it may lead to over‑consumption and excessive overspending. Failure to repay can result in credit‑card delinquencies, which not only incur substantial interest, compound interest, and default penalties but also harm the cardholder’s personal credit standing, hinder future loan applications, and even trigger legal proceedings. Moreover, there is a risk of personal information being leaked.
Risk No. 2: Unauthorized use of the credit card. If a cardholder lends their personal credit card to another party, and that party misuses the available credit—such as channeling it into real estate, securities, mutual funds, wealth management products, or non‑consumptive activities like pawnbroking, mortgaging, or business operations—the cardholder may face violations of credit card usage regulations. This can result in the issuing bank reducing the credit limit, restricting or suspending card use, and even imposing penalties, late fees, and other contractual liabilities.
Risk No. 3: Creating latent risks of illegal and criminal activities. Cardholders who rent out or lend their credit cards may find that the card is used by the actual user or criminal gangs for illicit cash‑out schemes, money laundering, the transfer of fraudulently obtained funds, telecommunications and cyber fraud, and other unlawful purposes. The lessor or lender may also be held liable under the law. For example, according to the “Opinions on Several Issues Concerning the Application of Law in Handling Criminal Cases Involving Telecommunications and Cyber Fraud (II)” issued jointly by the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Public Security, anyone who, knowing or subjectively deemed to have known that another person is using the information network to commit a crime, nevertheless illegally possesses or rents out a credit card, or provides payment‑settlement assistance, shall be found guilty of the crime of assisting in cybercrime activities. Furthermore, Article 11 of the Interpretation by the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases Involving the Illegal Use of Information Networks and Assistance in Cybercrime Activities explicitly stipulates that acquiring, selling, or renting out corporate payment accounts, as well as illegally opening and selling or renting out others’ mobile phone SIM cards, credit cards, bank accounts, or non‑bank payment accounts, shall be deemed to constitute subjective knowledge of the underlying criminal intent. Moreover, relevant provisions of the Criminal Law clearly regulate the possession, use, and management of credit cards; improper use or illegal possession may very likely constitute offenses such as credit card fraud or obstruction of credit card administration.
II. Proper Use of Credit Cards
First, obtain a credit card only when needed. Consumers should apply for a credit card based on their actual daily needs—such as their spending habits and repayment capacity—avoiding impulsive or excessive applications. When conducting credit‑card‑related transactions, always use official channels, including bank branches, the bank’s official mobile app, or online banking.
Second, maintain compliance in card usage. Promptly close long‑inactive or unnecessary cards to avoid loss due to mismanagement and to prevent the accrual of annual fees, interest, late charges, and other penalties. At the same time, prioritize the security of your credit card: never disclose your card number, PIN, verification codes, or other personal financial information to others, and guard against fraud or unauthorized use. If you discover that your personal information has been leaked or unlawfully compromised, contact your issuing bank immediately or report the incident to the public security authorities.
Third, use your card responsibly. Cardholders should make informed, rational spending decisions based on their personal and household financial circumstances. Adhere to the principle of “spending within one’s means” to avoid living beyond one’s means or overextending oneself; moreover, guard against falling into a cycle of borrowing to repay debt or using one card to service another due to excessive indebtedness. At the same time, in everyday use, be sure to thoroughly understand the rules governing credit‑card billing cycles, interest accrual, the grace period for interest‑free repayment, installment plans, and other related provisions, so as to avoid adverse consequences such as late payments.

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