JC Master Legal News Issue 1046

Key Takeaways for This Issue

The second AMC-affiliated brokerage is racing toward an IPO; Cinda Securities’ IPO has received approval from the China Securities Regulatory Commission.
Capital strength has become one of the key factors shaping the development of securities offices. At present, small and medium-sized brokerage houses are actively raising equity capital through IPOs. Following First Capital Securities, Cinda Securities also announced on December 16 that its initial public offering has received approval from the China Securities Regulatory Commission. With this development, the number of securities offices listed on the A-share market is expected to rise to 43, and Cinda Securities may become the second AMC‑affiliated brokerage to go public, following Dongxing Securities.
Several pharmaceutical companies have successively announced progress on COVID-19 therapies, amid intense competition in the field and with demand potentially set to decline.
Oral COVID‑19 medications are seen as the “final piece of the puzzle” in the fight against the virus, alongside vaccines and neutralizing antibody therapies. Recently, several publicly listed pharmaceutical companies have successively disclosed the clinical progress of their own investigational COVID‑19 drugs.
Tai’an Tax Authorities: Tax Benefits Delivered Directly to Boost Momentum, with an Enhanced Smart Tax Service Environment
“Tax bureau staff provided guidance on our tax refund application via video link, and with just a few clicks through the electronic tax service platform, we completed the application for a carryforward VAT refund. The refund—over 5.7 million yuan—was credited to our account almost immediately, without us having to leave home,” said Xu Jianxin, legal representative of Shandong Yitianjian Chemical Co., Ltd. “This tax‑refund ‘red envelope’ arrived at just the right time, effectively easing our financial burden and resolving a major challenge. With so many favorable tax policies from the state, our confidence in future growth has grown even stronger.”
Upholding Workplace Safety Through Enhanced Performance of Duties—An Overview of the People’s Courts’ Lawful Prosecution of Crimes Endangering Production Safety
Safe production is a matter of paramount importance that safeguards the lives and property of the people; it is a hallmark of coordinated and sound economic and social development, and an indispensable requirement for building a China that is even safer and for meeting the growing safety needs of the public.

Finance & Capital Markets
The second AMC-affiliated brokerage is racing toward an IPO; Cinda Securities’ IPO has received approval from the China Securities Regulatory Commission.
Capital strength has become one of the key factors shaping the development of securities offices. At present, small and medium-sized brokerage houses are actively raising equity capital through IPOs. Following First Capital Securities, Cinda Securities also announced on December 16 that its initial public offering has received approval from the China Securities Regulatory Commission. With this development, the number of securities offices listed on the A-share market is expected to rise to 43, and Cinda Securities may become the second AMC‑affiliated brokerage to go public, following Dongxing Securities.
Luo Zhanhui, chief analyst for the non-bank financial sector at Western Securities, stated, “Going public has become an indispensable path for more small and medium-sized securities offices to achieve leapfrog growth. The proactive pursuit of equity financing by these offices underscores their strong need for capital.”
Performance remained stable in the first three quarters.
However, the CSRC has approved Cinda Securities to issue no more than 324.3 million new shares to the public. Yet on December 1, an updated prospectus disclosed by Cinda Securities indicated that the company had originally planned to issue up to 972.9 million shares. The preliminary bookbuilding for this offering is scheduled for December 20, with the subscription period set for December 26.
Meanwhile, Cinda Securities’ latest prospectus has updated its performance for the first three quarters, with results that are quite commendable. Against a backdrop of overall pressure on the securities industry, Cinda Securities reported operating revenue of RMB 2.692 billion for the first three quarters, up 4.24% year over year, and net profit attributable to shareholders of the parent company of RMB 724 million, up 0.29% year over year. Like First Capital Securities, Cinda Securities has also provided full-year 2022 earnings forecasts based on its realized operating performance: full-year revenue is expected to decline by 7.97% to 7.8% year over year, while net profit attributable to shareholders of the parent company is projected to fall by 7.74% to 7.96%, indicating an overall deterioration compared with 2021. Notably, First Capital Securities anticipates year‑over‑year declines across all major business segments—brokerage, margin financing, investment banking, and proprietary trading.
Public information indicates that Cinda Securities was established in September 2007 as a joint-stock company jointly initiated by China Cinda, China Ocean Trust, and China National Materials Group. It is the first securities office in China affiliated with an AMC. Moreover, Cinda Securities enjoys the advantage of holding a full suite of licenses. In terms of its shareholding structure, China Cinda holds 87.42% of Cinda Securities’ shares, making it the controlling shareholder.
On June 30, the China Securities Regulatory Commission announced that the 74th meeting of the 18th Issuance Examination Committee in 2022 approved the initial public offering of Cinda Securities. Among the key issues raised during the committee’s review were administrative penalties and regulatory measures, related-party transactions, and information system security management.
In this regard, Cinda Securities has also disclosed its violations of laws and regulations and the corresponding penalties over the past three years. The company stated that, in response to regulatory measures, it and its subsidiaries have undertaken proactive and comprehensive rectification efforts. Drawing on the lessons learned, they have meticulously reviewed and streamlined all business processes, continuously strengthened compliance management and internal controls, and worked diligently to mitigate various risk factors.
With respect to related-party transactions and同业 competition, Cinda Securities stated that the company maintains an independent and fully integrated business system and associated assets for its securities operations, which are effectively segregated from those of China Cinda and other entities under its control. There are no instances of assets or funds being improperly appropriated by the controlling shareholder or its controlled affiliates to the detriment of the company’s interests. In terms of information system security management, Cinda Securities further indicated that it has not been subject to administrative penalties for inadequate personal information protection, nor have there been any disputes—or potential disputes—arising from such deficiencies.
Focuses on alternative investment banking.
From the perspective of fundraising purposes, Cinda Securities plans to allocate all proceeds from this IPO to replenish its capital base, increase working capital, and expand its core business. Specifically, the company will further strengthen its traditional brokerage operations, scale up capital‑intermediation activities, appropriately expand its securities investment business, diversify its proprietary trading offerings, ramp up investment in asset management, bolster the financial strength of its underwriting business, enhance support for its subsidiaries, and continue to invest heavily in upgrading its information technology systems. At the same time, reinforcing compliance and risk management remains the cornerstone of a securities office’s development; Cinda Securities intends to use a portion of the raised funds to build a specialized compliance and risk‑management team, ensuring an adequate staffing level in these critical functions.
Differentiating and pursuing specialized development is the strategic path chosen by many mid-sized and small securities offices today. For Cinda Securities, the strategic objective is to position itself as an alternative investment bank, deeply exploring and precisely identifying client needs, and aggressively expanding its alternative investment banking services—including mergers and acquisitions, restructuring, mezzanine financing, liquidity support, and phased equity holdings. By leveraging a comprehensive suite of tools—such as financial advisory, bridge financing, asset reorganization, and market‑capitalization management—the office aims to deliver multi‑channel, multi‑tiered, and multidimensional integrated financial services, thereby establishing a distinctive competitive edge in the areas of non‑performing asset management and special‑opportunity investing.
Sun Jiageng, a non‑bank financial analyst at Orient Securities, stated, “The industry is currently mired in an ‘involution’ characterized by cutthroat competition and product homogenization. In the face of all‑round competitive pressures, small and mid‑size securities offices are at a distinct disadvantage; only by adopting unconventional strategies can they secure victory.”
According to industry rankings, in 2021, Cinda Securities ranked 39th in total assets, 52nd in net capital, 42nd in operating income, and 37th in net profit, while its return on equity placed it at 17th. In response, Cinda Securities stated that over the next five years, it aims to elevate its overall strength into the top 30% of the industry, with steady growth across key performance indicators such as total assets, net capital, operating income, and net profit.
As 2022 draws to a close, among the three securities offices that received IPO approval this year, Cinda Securities and Shouchuang Securities have both obtained regulatory clearance and have initiated their listing processes, while Dongguan Securities, which was the first to pass review, is still awaiting approval from the China Securities Regulatory Commission.
Unlawfully freezing funds allocated to newly issued shares—when brokerage offices act without proper guidance, they risk “doing more harm than good.”
 A dispute has arisen over the freezing of funds for newly issued shares allocated through lottery. How should this be resolved? Recently, the Investor Service Center has clarified the responsibilities of the parties involved.
Since the beginning of this year, newly listed stocks have frequently fallen below their IPO prices, raising an unavoidable question: once subscription funds are frozen, who should bear responsibility when investors choose not to subscribe? In practice, there have already been numerous cases of complaints and disputes between investors and securities offices over this very issue.
The Investor Service Center stated that, while investors are generally required to fulfill their payment obligations based on the lottery results, brokerage offices that arbitrarily freeze funds allocated to investors’ accounts without prior agreement or consent clearly infringe upon investors’ rights to information and to choose. The brokerage offices acknowledged this view, expressing their willingness to compensate investors for a portion of their losses and pledging to promptly enhance the pre‑freeze functionality for new‑share lottery allocations.
Can the pre-freeze operation be canceled?
Recently, a typical case released by the Investor Service Center revealed that an investor, Mr. Cheng, was allocated shares in a new stock offering. Given the relatively high price‑earnings ratio at issuance and the associated risk of the stock trading below its IPO price, Mr. Cheng carefully reconsidered and decided to forgo payment. However, he discovered that the system of a certain securities office had already placed a preliminary hold on the funds allocated to his account, and the brokerage explicitly stated that it could not lift the hold—meaning that, once allocated, he would be required to fulfill his payment obligation. As a result, the stock listed below its IPO price, leaving Mr. Cheng with losses.
Mr. Cheng does not accept the aforementioned practices of a certain securities company, contending that he is entitled to exercise his right of waiver of subscription. Accordingly, he has filed a request for mediation with the Guangdong Mediation Workstation of the Investor Service Center, seeking compensation from the securities company for losses incurred as a result of the new share’s price falling below its IPO price.
The Investor Service Center stated that the central issue in this dispute is whether it is reasonable for a securities office to refuse to lift a pre‑freeze order. Investor Cheng contends that the securities office’s actions have infringed upon his legitimate rights and interests, and he seeks compensation for losses incurred due to the IPO price falling below the offering price. In contrast, the securities office argues that, following successful subscription and allocation of new shares, investors are obligated to make payment; by refraining from lifting the freeze, the office was safeguarding investors’ lawful rights and interests. Accordingly, the office maintains that it bears no fault and therefore cannot accede to the investor’s claim for compensation.
Unlawful freezing of the right to choose damages
The Investor Service Center stated that, upon accepting this dispute, it promptly arranged for both parties to select a mediator and initiated mediation. After reviewing the relevant evidence, the mediator determined that, in order to ensure that successful bidders could remit their full subscription amounts on time, a certain securities office had specifically implemented a pre‑freeze feature for new‑share allocations—namely, freezing the funds allocated to a client’s account at the end of day T+1 following settlement. However, the securities office had not entered into a clear agreement with Mr. Cheng regarding this pre‑freeze mechanism, nor was it able to provide any evidence demonstrating that it had informed Mr. Cheng of this practice in advance.
After ascertaining the basic facts of the dispute, the mediator conducted a “back-to-back” mediation. On the one hand, the mediator pointed out to the securities office that, while investors like Mr. Cheng are generally required to fulfill their payment obligations based on the lottery results, the office’s unauthorized freezing of the funds allocated to Mr. Cheng’s account without prior agreement or the investor’s consent clearly infringed upon the investor’s rights to information and to choose. The securities office concurred with the mediator’s view, expressed its willingness to compensate the investor for part of the losses, and pledged to promptly improve the pre‑freezing mechanism for new‑share lottery allocations.
On the other hand, the mediator, in accordance with relevant regulations, patiently explained to the investor the obligations associated with paying for a successful lottery allocation and the consequences of forfeiting the subscription. The mediator also clarified the purpose of the securities office’s pre‑freeze function—namely, to safeguard winning subscribers and prevent inadvertent forfeitures due to operational errors. Ultimately, through the mediator’s impartial facilitation, Investor Cheng and the securities office reached a settlement agreement, thereby resolving the dispute amicably.
Investors should exercise caution when subscribing to new shares.
In accordance with Article 18 of the “Detailed Rules for Online Issuance of Shares in Initial Public Offerings on the Shenzhen Market” (revised in June 2018): “Upon being allocated shares in a new share offering, investors shall fulfill their fund settlement obligations in accordance with the allocation results and ensure that their funding accounts hold sufficient funds for the subscription of the new shares as of the end of day T+2. If an investor’s subscription funds are insufficient, the shortfall shall be deemed a waiver of the subscription, and the investor shall bear all consequences and related legal liabilities arising therefrom.”
Article 21 further stipulates: “If an investor, within any consecutive 12-month period, accumulates three instances of being allocated shares through the lottery but failing to remit the full subscription amount, such investor shall be prohibited from participating in online subscriptions for new shares, depositary receipts, convertible corporate bonds, and exchangeable corporate bonds for a period of six months (calculated as 180 calendar days, inclusive of the day following the most recent declaration of waiver) commencing from the day after the settlement participant last reported the waiver.”
The Investor Service Center stated that the Shanghai Stock Exchange has similar regulations. Therefore, investors should carefully assess the risks before applying for new shares and participate with caution to avoid having their subscription eligibility restricted due to failing to purchase shares after being allocated.
In addition, the Investor Service Center stated that securities offices should respect investors’ rights to information and to choose. In recent years, there have been numerous complaints and disputes arising from clients’ successful allocations in new‑share offerings. Particularly in the new context where the myth of “new shares never lose” has been debunked, disputes related to the pre‑freezing of funds for new‑share subscriptions have occurred from time to time. When providing this service, securities offices should honor investors’ rights to information and to make informed choices, engage in thorough communication with clients about the service details, and enter into appropriate agreements. They should grant clients the option to opt in or out, preserve their right to cancel, and ensure proper guidance and documentation, thereby enhancing the overall customer experience and preventing well‑intentioned measures from backfiring.

The Measures for Assessing Securities Offices’ Integrity Have Launched a Public Consultation; AA- and A‑rated Securities Offices Will Receive Special “Attention”
Recently, the Securities Association of China (hereinafter referred to as “SAC”) has sought industry feedback on the “Measures for Assessing Integrity in the Capital Market of Securities Offices (Draft for Comments).” This move aims to further strengthen integrity-building within the securities industry, refine mechanisms for rewarding good faith and sanctioning breaches of trust, and standardize the conduct of industry-wide integrity assessments.
According to available information, the overall assessment is scored out of 100 points, with basic indicators accounting for 60 points and both bonus‑point and penalty‑point indicators each carrying 20 points. Bonus‑point indicators primarily reflect the contributions made by securities offices to fostering integrity in the capital market, while penalty‑point indicators mainly capture instances of illegal or untrustworthy conduct and failure to cooperate with the assessment.
Based on the scoring rankings, the assessment results are categorized into five levels, from highest to lowest: 5A (AAAAA), 4A (AAAA), 3A (AAA), 2A (AA), and 1A (A). In processes such as membership admission, registration, filing, licensing, and business‑innovation arrangements, 5A‑rated securities offices will receive priority processing, streamlined procedures, or simplified submission requirements, while 1A‑rated offices may face temporary suspension or denial of services. Meanwhile, regulators will reduce the inspection rate and frequency for 5A‑rated offices and increase them for 2A‑ and 1A‑rated offices.
Securities offices’ integrity assessments are on the way.
It is understood that the integrity assessment is conducted every two years, with the assessment period running from January 1 of the preceding year to December 31 of the following year. The assessment employs a combined approach, involving self-assessment by securities offices and a re‑assessment by the China Securities Association. During any given assessment cycle, companies established within the past year may apply to opt out of participating in that cycle’s assessment.
The integrity assessment indicators are broadly categorized into baseline indicators, bonus‑point indicators, and penalty‑point indicators. The total assessment score is 100 points, with baseline indicators accounting for 60 points and both bonus‑point and penalty‑point indicators each carrying 20 points. Specifically, the baseline indicators primarily assess how well a securities office fulfills its fundamental obligations of integrity and its internal integrity‑management responsibilities as stipulated in the “Code of Integrity for the Securities Industry.” Bonus‑point indicators evaluate the contributions made by the securities office and its employees to fostering integrity in the capital market, as well as their receipt of external incentives for upholding integrity and the strengthening of internal integrity‑related incentives. Penalty‑point indicators reflect instances where the securities office or its employees have engaged in unlawful or dishonest conduct or have failed to cooperate with the assessment process.
The integrity assessment results will be categorized into five levels based on the ranking of scores, from highest to lowest: 5A (AAAAA), 4A (AAAA), 3A (AAA), 2A (AA), and 1A (A).
For cases falling under any of the following circumstances, the assessment result shall be directly classified as Level 1A: the company, its directors, supervisors, or senior management personnel have been listed as discredited persons subject to enforcement; during the assessment process, there has been falsification, misrepresentation, or deceptive conduct; there has been unjustified failure to participate in the assessment; or other situations that have resulted in serious adverse consequences due to discredited behavior.
The primary sources of information for integrity assessments include on-site and off-site inspections conducted by the association, the Securities and Futures Market Integrity Archives Database, the Securities Industry Professional Reputation Information Repository, self-assessment reports submitted by industry institutions, and external government credit information inquiry and analysis platforms, among others.
The China Securities Association incorporates the results of integrity assessments into the constituent indicators of securities offices’ professional reputation profiles, and designates 5A‑rated offices as entities whose positive professional reputation information is recorded in the securities industry’s professional reputation database.
Based on the results of the integrity assessment, the China Securities Association may implement the following measures to incentivize compliance and constrain misconduct: 5A‑rated offices will be designated as “integrity members” and promoted and publicized through the Association’s official website, its official WeChat account, and relevant media; the assessment results will be reported to the China Securities Regulatory Commission and its local branches for use as reference in credit‑based classification and tiered regulatory practices; in matters such as membership admission, registration, filing, recordal, and business‑innovation arrangements, 5A‑rated offices will receive priority processing, streamlined procedures, or reduced documentation requirements, while 1A‑rated offices will have their applications deferred or denied; when selecting experts or members of professional committees, staff from 5A‑rated offices will be given priority consideration; inspection rates and frequencies will be reduced for 5A‑rated offices and increased for 2A‑ and 1A‑rated offices; and other measures deemed appropriate by the Association.
The China Securities Association stated that the integrity assessment does not include economic credit indicators. The assessment results merely reflect a securities office’s compliance with basic integrity obligations, its efforts to strengthen internal integrity management, and its overall level of integrity during the assessment period; they do not constitute an indicator of the office’s operational strength. Securities offices are prohibited from exaggerating or misrepresenting the integrity assessment results in their business activities, or using such results to disparage or defame other industry peers.
The indicator scores are clearly defined and detailed.
According to reports, the assessment methodology has a base score of 60 points, encompassing two major categories and 17 sub‑indicators, with each indicator further broken down into specific scoring criteria.
The fair competition indicator is scored at 2 points, and the assessment covers respecting industry peers and refraining from soliciting business through unfair practices such as predatory pricing, offering kickbacks, engaging in false advertising, or disparaging and defaming other institutions; it also includes avoiding inappropriate remarks that undermine or damage the reputation and interests of fellow professionals.
The diligence and responsibility indicator is scored at 8 points and encompasses adherence to professional ethics, acting with loyalty and diligence, exercising professional prudence, fulfilling the duty of reasonable and professional care, and honoring responsibilities and obligations to investors and other stakeholders. It also includes continuous learning to enhance professional competence and ensure service quality, maintaining a thorough self-assessment of one’s professional capabilities, refraining from undertaking engagements that are beyond one’s capacity or cannot be completed on schedule, and avoiding shirking responsibilities. Furthermore, it requires proper documentation, compilation, and archival management of relevant working papers in accordance with applicable regulations.
The investor protection indicator is scored at 6 points and encompasses the following requirements: prior to entering into a contract with an investor, the institution must fully fulfill pre-contractual obligations such as providing adequate disclosure, offering assistance, and maintaining confidentiality; when using standard-form clauses to conclude a contract, the institution must conspicuously draw the investor’s attention to provisions that exempt or reduce the institution’s liability or otherwise involve significant interests of the investor, and, upon the investor’s request, provide explanations regarding such clauses; furthermore, the institution should strengthen investor education and outreach initiatives to help investors enhance their professional competence and risk‑management capabilities.
A total of 11 indicators for plus-and-minus points
There are six scoring criteria, specifically including specialized research, training and exchanges, information sharing, recognition and rewards, internal integrity incentives, and the implementation of measures to incentivize trustworthiness.
So‑called thematic research refers to the generation of research findings through participation in topic‑specific studies on capital market integrity organized by the association; the publication of research articles related to capital market integrity in core journals of the CSRC system or other leading academic journals; and the publication of articles on integrity building in the securities industry in influential publications within the CSRC system.
Information sharing refers to the practice of sharing with the industry, beyond regulatory requirements and the self-regulatory obligations of the China Securities Regulatory Commission, information on clients’ breaches of trust and misconduct. Internal integrity incentives involve incorporating ethical professional conduct as a key criterion in internal performance evaluations.
There are five scoring‑deduction criteria, including regulatory penalties, self‑regulatory sanctions, criminal penalties, external violations and breaches of trust, and non‑compliance with assessment requirements.
External violations and breaches of trust refer to being listed by the competent authorities or judicial organs on public‑notice lists of serious violations or serious breaches of trust. Failure to comply with assessment requirements means failing to complete the self‑assessment or submit the relevant assessment materials within the timeframes or according to the standards stipulated by the association.
The first-ever assessment of investment banking quality has been released, with Class A offices showcasing their distinctive business strategies.
To further enhance the quality of investment banking practices, the China Securities Association evaluated offices across three key dimensions—investment banking practice quality, internal controls, and business management—and released its first-ever assessment of investment banking quality on December 9. Twelve securities offices’ investment banking divisions were rated as Class A; among the leading “Big Three plus one,” one was left out, while several smaller, high‑quality offices also made the list.
At present, the investment banking industry is shifting from a focus on “quantity” to one of “quality.” Many Class A securities offices’ investment banks have developed distinctive business models of their own, underpinned by high levels of expertise and robust compliance and risk‑control capabilities. Meanwhile, the results of this evaluation have provided significant motivation for front‑office professionals at numerous brokerage houses’ investment banking divisions.
A senior executive from Guojin Securities’ investment banking division, which was rated Class A this time, stated, “Among the three key metrics, ‘professional practice quality assessment’ carries the highest weight and is the most critical. Our office achieved strong results across all three indicators, with particularly outstanding performance in the ‘professional practice quality assessment’ category.”
12 securities offices’ investment banking divisions were rated Class A.
On December 2, the China Securities Association officially issued and implemented the “Measures for Evaluating the Quality of Investment Banking Business of Securities Offices (Trial),” which establishes a professional‑practice quality evaluation system based on the execution of business projects and adherence to professional ethics. This framework assigns accountability for implementing the capital market’s “gatekeeper mechanism” to specific business activities and clarifies individual responsibilities along the three lines of defense for ensuring practice quality, thereby fostering a market‑based mechanism that constrains the professional conduct and reputational standing of sponsor‑underwriter institutions and their practitioners.
Subsequently, on December 9, the China Securities Association released the 2022 evaluation results for the quality of securities offices’ investment banking business. Among them, Shenwan Hongyuan Underwriting & Sponsorship, Guoyuan Securities, CITIC Securities, Huatai United, CICC, Industrial Securities, Zhongyuan Securities, Changjiang Securities Underwriting & Sponsorship, Zhongtai Securities, Anxin Securities, Minmetals Securities, and Guojin Securities—12 offices in total—were rated Class A; 50 offices were rated Class B; and 15 offices were rated Class C.
It is reported that the evaluation period spanned from January 1 to December 31, 2021. The subjects of the assessment were 77 sponsor institutions that completed projects during this timeframe, and the evaluation covered all main‑board, ChiNext, and STAR Market IPO and refinancing projects concluded within the period, totaling 1,349 cases. The assessment primarily focused on three key indicators: professional practice quality, internal control, and business management.
For a long time, many securities offices’ investment banking divisions have not only actively secured new projects but also consistently recommended high-quality companies and continuously urged them to enhance their corporate governance and operational standards. In doing so, they have developed distinctive approaches tailored to their own business models, such as strengthening cultural and institutional frameworks, establishing end-to‑to‑end lifecycle service systems, integrating underwriting with advisory services, and placing compliance and risk control at the forefront.
The aforementioned head of the investment banking division at Guojin Securities stated, “The 2022 evaluation of securities offices’ investment banking quality comprehensively reflects the true level of each office’s professional practice. Building robust capabilities in professional quality is by no means an overnight achievement. Our company’s attainment of an A‑class rating this time is the result of years of concerted cultural and institutional development, as well as the natural outcome of rigorous adherence—by everyone from senior management to frontline staff—to compliance‑driven and high‑standard professional practices.”
The individual also acknowledged, “Being recognized with an A‑class rating for professional quality is a significant acknowledgment and honor for the company, and it has provided substantial motivation to our front‑office colleagues in the investment banking division. Moving forward, we will seize this opportunity to strengthen guidance, remain steadfast in our existing investment banking strategy—pursuing both equity and debt financing—and, while continuing to serve our current clients, steadily expand into new business lines and usher in a fresh chapter.”
Among the remaining investment banks rated Class A, Guoyuan Securities stated that it places the quality of its investment‑banking projects first, diligently fulfills its underwriting responsibilities, conducts rigorous due diligence at the source, and truly integrates “guarantee” with “recommendation” for each project. Meanwhile, Zhongtai Securities’ investment banking division emphasized that it consistently adheres to the business philosophy of “compliance and risk control above all,” fully leverages its three lines of defense, comprehensively enhances professional standards and risk‑control and compliance awareness, fosters an internal culture of high‑quality practice, and has achieved a balanced approach between business development, compliant operations, and effective risk management.
Wang Weiyi, chief analyst for the non-bank financial sector at Ping An Securities, stated, “In recent years, the concentration of investment banking business has continued to rise, with a clear trend of ‘the strong getting stronger.’ As regulators place increasing emphasis on compliance‑driven practice, leading securities offices that excel in compliance risk management and professional services are poised to reap greater benefits going forward.”
Shifting from “competing on quantity” to “competing on quality”
Since the beginning of this year, securities offices have collectively generated equity underwriting revenue totaling RMB 30.973 billion (including IPOs, additional offerings, rights issues, and convertible bonds). Among them, the top ten offices accounted for nearly 70% of the total, reflecting a steadily rising concentration in the investment banking sector and a pronounced head‑tail advantage. However, even as investment banking has expanded rapidly and delivered strong results, a number of underlying issues have gradually come to light, underscoring the need for ongoing improvements in professional standards and internal controls.
To this end, the China Securities Association has adopted a risk-management‑oriented approach, strengthened compliance‑based operations, implemented differentiated regulatory measures, and worked with review authorities to establish mechanisms for constraining and incentivizing professional reputation, thereby guiding industry offices to shift from “quantity‑driven competition” to “quality‑driven competition.” In this round of investment‑banking business quality assessments, the 12 Class A securities offices’ investment banking divisions did not all belong to the industry’s leading tier, and the number of projects submitted for evaluation varied considerably among them.
According to the preliminary results of the 2022 securities offices’ investment banking business quality assessment, among Class A securities offices, CITIC Securities submitted the largest number of projects—151 (including co‑lead underwriters in all cases)—while Minmetals Securities had the fewest, with just 7.
Among the 12 investment banks rated as Class A, all except CITIC Securities Investment Banking were included in the top tier; meanwhile, CITIC Securities Investment Banking submitted the second-highest number of projects—120—yet received a Class B rating. Leading investment banks such as Haitong Securities, Guotai Junan, China Merchants Securities, Guoxin Securities, and Minsheng Securities were also rated Class B. On November 25, the China Securities Regulatory Commission announced that it had conducted a special inspection of internal controls and integrity practices at eight securities offices’ investment banking divisions. Several top-tier investment banks were specifically named, with issues ranging from inadequate internal controls over investment‑banking activities to insufficient mechanisms for managing integrity‑related risks.
However, based on the results of this assessment, the number of investment banking projects does not necessarily correlate directly with the quality of investment banking services. For instance, among the 15 Category C securities offices’ investment banks, Lianchu Securities, Xiangcai Securities, and Credit Suisse Securities each had only one project included in the evaluation.
Based on the preliminary results of the 2022 securities offices’ investment banking business quality assessment, the highest score among brokerage offices was 94.82, while the lowest was only 17. In the “Professional Practice Quality” component, which carries a significant weight in the overall evaluation, a particularly notable issue is the high number of IPO applications withdrawn or rejected: in 2021, a total of 253 projects were withdrawn or rejected, accounting for 32.6% of all completed projects for the year—including those that passed, were withdrawn, and were rejected.
Looking at the withdrawal‑and‑rejection rates of IPO filing projects, Wind data show that in 2021, four securities offices had withdrawal‑and‑rejection rates exceeding 50%. So far this year, eight offices have maintained rates above 50%, with three reporting a 100% rate. Meanwhile, 13 offices have kept their rates below 10%; many leading offices are able to ensure project quality even amid a high volume of filings, thereby striking a balance between business growth and compliance‑risk management.
The China Securities Association stated that, by leveraging evaluation outcomes to establish a market‑based mechanism for professional reputation oversight, it aims to encourage securities offices to further refine and strengthen their principles, organizational structures, and capabilities in alignment with the registration‑based system. This will foster a professional practice ecosystem that prioritizes expertise, places great emphasis on credibility, upholds accountability, and champions quality, thereby ensuring diligent and responsible gatekeeping at the entry point of the capital market and contributing to the enhancement of listed company quality.
Wang Fangchao, chief analyst for the non-bank financial sector at Cinda Securities, stated, “As regulatory frameworks continue to be refined and oversight mechanisms for brokerage offices’ various business lines are gradually improved, the overall quality of industry operations is expected to see meaningful enhancement. Going forward, high-quality securities offices that demonstrate greater specialization, more robust internal control systems, and a stronger client‑base are likely to enjoy heightened competitiveness.”

Commercial & Corporate
Several pharmaceutical companies have successively announced progress on COVID-19 therapies, amid intense competition in the field and with demand potentially set to decline.
Oral COVID‑19 medications are seen as the “final piece of the puzzle” in the fight against the virus, alongside vaccines and neutralizing antibody therapies. Recently, several publicly listed pharmaceutical companies have successively disclosed the clinical progress of their own investigational COVID‑19 drugs.
On December 15, Guangshengtang announced that its wholly owned subsidiary’s investigational oral small-molecule COVID‑19 drug, GST‑HG171, has recently received ethical committee approval to initiate Phase II/III clinical trials. In addition, pharmaceutical companies including Yuekang Pharmaceutical, China Resources Double Crane, and Shiyao Group have also successively obtained clinical trial approvals for their independently developed COVID‑19 therapies.
Pang Bo, chief physician and director of the International Medical Department at Guang’anmen Hospital of the China Academy of Traditional Chinese Medicine, stated that the development of new drugs against COVID‑19 represents a critical gap and a major challenge faced globally. For public health emergencies and severe infectious diseases, early-stage preparatory research and development are of paramount importance, relying on medium- to long-term strategic planning, coordinated management, rational resource allocation, and sustained investment in research. Domestically produced oral COVID‑19 medications offer multiple advantages, including cost-effectiveness and proven efficacy; while the domestic market remains robust, they also hold potential to rank among the global leaders in overseas markets. Nevertheless, whether they will achieve substantial market scale in the short term remains uncertain.
Clinical progress of multiple drugs disclosed
Currently, two oral small-molecule COVID‑19 drugs have been approved for market launch in China: Pfizer’s Paxlovid and Genuine Biotech’s Azvudine, priced at RMB 2,300 per box (reimbursement price) and RMB 270 per vial (based on local reimbursement listing prices), respectively. Meanwhile, Merck’s oral COVID‑19 drug Molnupiravir has also submitted its marketing application in China.
Meanwhile, COVID‑19 drugs such as VV116 from Junshi Biosciences, SIM0417 from CSPC Pharmaceutical Group, and Proxalutamide from KPIT are in Phase III clinical trials, placing them among the frontrunners in R&D progress. Notably, on December 9, Junshi Biosciences informed investors that “VV116 has completed a Phase III study in China and is currently undergoing several international, multi‑center Phase III clinical trials.”
In addition, KP Pharmaceuticals publicly stated that proxalutamide has completed a Phase III, global, multicenter clinical trial in the United States and other countries for the treatment of mild-to-moderate COVID-19 patients, with results showing that proxalutamide can effectively reduce hospitalization and mortality rates among COVID-19 patients.
In addition to the companies mentioned above that are at the forefront of R&D, several listed pharmaceutical offices have recently disclosed clinical progress on their COVID‑19 drug candidates, signaling their entry into the oral COVID‑19 therapeutic pipeline.
On December 8, Sinovac Biotech responded to investors, stating, “The company is advancing enrollment for the Phase II clinical trial of the SHEN26 project and has obtained approval from the Third People’s Hospital of Shenzhen and the Second People’s Hospital of Guangdong Province.”
On December 7, Shiyao Group announced that its orally administered small-molecule COVID‑19 3CL protease inhibitor, SYH2055, has received approval from the National Medical Products Administration (NMPA) to initiate clinical trials in China. Additionally, its generic version of Pfizer’s Paxlovid, SYHX1901 tablets, has also been approved by the NMPA to proceed with clinical trials in China, including studies evaluating its efficacy in treating adult patients with severe COVID‑19 pneumonia.
On November 29, Ascletis Pharma announced that its application for a clinical trial of the 3CL protease inhibitor ASC11 has been accepted by the National Medical Products Administration. On November 30, Yuekang Pharmaceutical and China Resources Double Crane also separately reported that their investigational COVID‑19 drugs have received approval to proceed to clinical trials, officially entering the early stages of drug development.
In addition, new entrants are increasingly moving into the COVID‑19 therapeutics space. For example, Changjiang Health has entered the market for oral COVID‑19 drugs through an acquisition: its wholly owned subsidiary has acquired Jianghe Pharmaceutical, which is currently conducting independent research and development on CH2101, an innovative small‑molecule oral antiviral agent targeting the RNA‑dependent RNA polymerase (RdRp). The drug is now in Phase I clinical trials.
What is the market outlook?
The development of oral COVID‑19 therapies is in full swing, but from a capital markets perspective, what are the prospects for this emerging market?
Recently, two domestically approved oral COVID-19 medications—Paxlovid and Azvudine—have become embroiled in controversy over online sales, a situation that also highlights the state of market demand for these drugs.
On December 12, the Medical Treatment Group of the State Council’s Joint Prevention and Control Mechanism for COVID‑19 issued the “Notice on Ensuring the Provision of Internet‑Based COVID‑19 Medical Services,” effectively opening the door to online prescriptions for COVID‑19 therapeutics. Recently, Fosun Pharma publicly conofficeed that it will make Azvudine prescriptions available through online platforms. With the advent of online prescribing for COVID‑19 treatments, issues such as pricing, accessibility, purchasing channels, target patient populations, clinical efficacy, drug interactions, and even the use of generic alternatives are likely to draw widespread attention from all sectors.
“At present, medical institutions are under the greatest pressure. To prevent excessive strain on healthcare systems, introducing online diagnosis and treatment for COVID‑related symptoms and lifting certain first‑visit restrictions would be highly practical,” Pang Bo stated.
Pang Bo believes that the large-scale domestic launch and widespread use of oral small-molecule antiviral drugs against COVID‑19 is just around the corner. Effective pandemic control requires a three‑pronged approach—vaccines, small‑molecule therapeutics, and neutralizing antibodies—integrating prevention, treatment of mild cases, and management of severe disease. Compared with the two mainstay classes of current COVID‑19 therapies, neutralizing antibodies exhibit greater immune evasion in the face of continuous viral mutations, whereas small‑molecule drugs target conserved sites that are less susceptible to mutation, making them less affected by emerging variants. In terms of convenience, most small‑molecule drugs can be formulated as oral preparations, thus avoiding the need for intravenous infusions and reducing the burden on healthcare resources. From a manufacturing standpoint, small‑molecule drugs also offer relative advantages in production costs, pricing, and scalability. Consequently, the market prospects for oral small‑molecule therapeutics are particularly promising.
However, is the market demand for COVID‑19 therapeutics sustainable? Pang Bo argues that developing oral COVID‑19 drugs entails considerable risks: the virus mutates rapidly, and it remains highly uncertain whether any such product will demonstrate clinically meaningful efficacy. Moreover, given the unpredictability of national pandemic‑control policies and the dynamic nature of the epidemic, even successful drugs face uncertainties in scaling up production and achieving widespread uptake. In addition, with numerous companies now pursuing oral COVID‑19 therapies, those lagging behind in development may find it difficult to capture market share; and as more such products come to market, prices are likely to trend downward.
Dong Xiaoyu, a specially appointed researcher at the Capital Institute for Science and Technology Development Strategy, stated that currently, there are still only a limited number of proven therapies available for treating the novel coronavirus, and global supply pressures remain substantial. At present, the market for oral COVID‑19 medications remains promising; however, as the pandemic is gradually brought under effective control, downstream demand may subsequently decline.

Chongqing’s government–enterprise collaboration is supporting the resumption of work and production, with numerous Chongqing‑listed companies stepping up efforts to achieve their annual targets.
“We have fully resumed production as of December 4, and our current capacity has returned to pre‑shutdown levels,” said a spokesperson for Fuling Pickled Mustard Tuber. Meanwhile, Changan Automobile stated: “With active coordination from government authorities at all levels—including the Chongqing Municipal Party Committee and Municipal Government, Jiangbei District, and Liangjiang New Area—we and our suppliers are steadily advancing the full resumption of work and production.”
Data show that Chongqing is home to nearly 70 listed companies, whose operations span a wide range of sectors, including automobiles and auto parts, real estate, biopharmaceuticals, and food manufacturing. As COVID‑19 control policies continue to be refined, these listed offices are focusing all their efforts on accelerating toward their full-year business targets.
Pressing the “accelerator” for resuming work and production.
Since November, Chongqing has been hit by a relatively severe COVID-19 outbreak, leaving many enterprises temporarily shut down. However, as December began, an increasing number of companies that had suspended operations have gradually resumed business.
Regarding epidemic prevention measures during the resumption of work and production, the aforementioned Fuling Pickled Mustard Tubers official explained: “For example, at our production facilities where employees are relatively concentrated, the company provides dedicated shuttle buses to transport workers between the plant and their residences, with temperature checks and disinfection conducted before boarding. Thanks to these measures, no infections have been reported on campus so far. As for administrative offices, any employee who tests positive is promptly placed under home isolation. At this stage, it appears that the temporary production halt earlier in the year will not significantly impact the company’s performance this year.”
Changan Automobile stated: “Starting December 5, the company’s five vehicle assembly plants, one engine plant, and one stamping-and-welding parts manufacturing facility (located at the Airport Industrial Park in Yubei District), along with relevant suppliers, have progressively implemented a point-to-point ‘community private car + shuttle bus’ model to achieve closed-loop production, which is expected to restore normal operations soon.”
The automotive industry is a core sector in Chongqing. With a lengthy supply chain—typically involving more than 20,000 components per vehicle—this poses significant challenges for automakers seeking to resume production. Beyond their own operations, they must coordinate the resumption of production across a vast network of component suppliers. However, many of these suppliers are small-scale, financially constrained, or lack adequate coordination capabilities, making it far from straightforward to restore full production capacity.
In response, Chongqing has coordinated government and enterprises to systematically address bottlenecks and chokepoints along the chain of resuming work and production, thereby fostering synchronized resumption across upstream and downstream sectors.
It is reported that the local authorities have established a dedicated task force for the resumption of work and production in key industries such as the automotive sector, promptly addressing the needs of vehicle manufacturers and coordinating solutions to help numerous supplier companies resume operations. At present, suppliers to several major automakers in Chongqing have already achieved stable production.
Reduce the impact of production shutdowns
Changan Automobile stated: “The impact of the pandemic is gradually diminishing. With the support of government departments at all levels, we will do our utmost to ensure smooth production and operations. Moving forward, the company will strengthen assistance to suppliers outside Chongqing and, by increasing inventory levels, mitigate the effects of the previous production shutdown.”
Similarly, achieving “steady growth” in operations is also Fuling Pickled Mustard Tubers’ top priority. As for “pursuing development,” a company official stated that pickled mustard tubers currently account for a significant share of the company’s overall business portfolio. Moving forward, the company will invest heavily in expanding into areas beyond pickled mustard tubers, gradually developing these into flagship products and further diversifying its product lineup.
Sifang New Materials stated that the company will promptly and comprehensively resume production and operations to mitigate the impact of intermittent shutdowns. With ready-mixed concrete as its core business, the company has reportedly experienced varying degrees of disruption—ranging from raw material supply and transportation of ready-mixed concrete to downstream construction activities—due to temporary production halts.
In addition, real estate developer Yufa KaiFa stated that the temporary suspension of operations will have a certain adverse impact on the company’s production and business performance in 2022. The company will make every effort to minimize losses resulting from these temporary shutdowns, ensure the safe resumption of operations, and actively safeguard the interests of the company and all its shareholders. On December 5, Yufa KaiFa issued an announcement indicating that temporary control measures at its headquarters’ Nan Yue Tian Chen project, Guan Jin He Fu project, and at the construction and sales sites of its controlling subsidiary, Chongqing Langfu Real Estate Co., Ltd., have been lifted. Project sales offices resumed operations on the same day, and construction activities were also gradually restarted in phases.
State-owned enterprise reform in the power equipment sector is advancing once again, with China Electrical Equipment set to become the controlling shareholder of China XD Electric.
On December 16, China XD Electric issued an announcement stating that China XD Group Co., Ltd. (hereinafter referred to as “China XD Group”) has transferred, without compensation, its 2,611,325,701 shares in the company—representing 50.94% of the company’s total share capital—to China Electrical Equipment Group Co., Ltd. (hereinafter referred to as “China Electrical Equipment”).
Following the completion of this gratuitous transfer, China Electrical Equipment has become the direct controlling shareholder of China XD Electric, while China XD Electric Group will no longer hold any shares in the company. The company’s actual controller remains the State-owned Assets Supervision and Administration Commission of the State Council.
“This is one of the key measures in state-owned enterprise reform. Following this consolidation, China Electrical Equipment Group will emerge as a world-class international electrical equipment company with comprehensive strength,” said Qu Fang, an investment advisor at Wanlian Securities.
State-owned enterprise reform advances further.
“Behind this equity transfer lies a further optimization of state-owned assets,” said Dr. Ding Bingzhong, a partner at Wuxu Asset. The recently established China Electrical Equipment Group, which brings together high-quality assets from China’s electrical equipment industry chain—including the Xi’an XD Group, Xuji Group, and Pinggao Group—holds the potential to grow even stronger and more competitive.
According to an announcement issued by China XD Electric, in line with the spirit of the “Guiding Opinions of the General Office of the State Council on Promoting Structural Adjustment and Reorganization of Central Enterprises” (Guobanfa [2016] No. 56), which encourages relevant central enterprises in sectors such as telecommunications and power to jointly establish specialized joint-stock platforms, and in implementation of the requirements set forth in the “Three-Year Action Plan for State-Owned Enterprise Reform” to foster deep integration among various forms of capital, China Electrical Equipment Corporation has been established. With the approval of the State Council, the State-owned Assets Supervision and Administration Commission of the State Council, acting on behalf of the State Council as the investor, has incorporated the relevant enterprises under State Grid Corporation of China and the entire China XD Electric Group into China Electrical Equipment Corporation, with the aim of optimizing management systems and mechanisms, improving corporate asset structures, enhancing the applicability of products and technologies, promoting integrated development across industrial chains, and strengthening the competitiveness, innovation capacity, influence, and risk resilience of state-owned capital.
The announcement stated that this transfer will further clarify equity relationships and optimize the shareholding structure. Upon completion, China Electrical Equipment Group will become the direct controlling shareholder of China XD Electric, which will help advance policy objectives, enhance management efficiency, support adjustments to the company’s asset structure, effectively leverage synergies through unified coordination, and promote the business development of relevant listed companies.
Building a giant in the electrical equipment industry
Behind this equity transfer lies a major milestone in the reform of state-owned enterprises in the power sector.
On September 25, 2021, China Electrical Equipment Corporation, a new state-owned enterprise in the power equipment sector formed through the restructuring of power‑equipment companies including China XD Group, XJ Group, Pinggao Group, and Shandong Electric Power Equipment Group, was officially established.
“This is an important initiative in the reform of state-owned enterprises in the power sector, one that carries strategic significance,” said Ding Bingzhong. He added that China Electrical Equipment Group was established against the backdrop of the new era, with the goal of becoming a world-class smart electrical equipment conglomerate, completing its global industrial footprint, fully developing the advantages of a world‑leading advanced manufacturing cluster, and positioning itself as “a leader in electrical technology, a driver of the energy revolution, and a practitioner of green development.”
China XD Group is the only central enterprise in China whose core business is the complete transmission and distribution industry, established in July 1959. The Group has successively provided turnkey transmission and distribution equipment and services for numerous first‑of‑their‑kind AC and DC transmission projects nationwide, as well as for major national projects such as the Three Gorges Project, the West-to-East Power Transmission initiative, and ultra‑high‑voltage AC/DC systems.
Xuji Group, Pinggao Group, and Shandong Electric Power Equipment Group are all directly affiliated industrial companies within the State Grid’s manufacturing business segment.
Among the aforementioned companies, China XD Group has two listed subsidiaries—China XD Electric and Baoguang Shares—while XJ Group and Pinggao Group respectively control the listed companies XJ Electric and Pinggao Electric.
At the same time that China XD Electric disclosed the transfer of equity interests, Xuji Electric and Pinggao Electric also issued announcements regarding their own equity transfers.
Following the completion of this transfer, China Electrical Equipment Group will directly hold controlling interests in China XD Electric, Xuji Electric, and Pinggao Electric, and will indirectly hold a stake in Baoguang Shares.
“Going forward, China Electrical Equipment Group aims to become an integrated supplier of power‑generation technologies and equipment,” said Qu Fang. An integrated supplier, he explained, shifts the focus from providing individual components to delivering end‑to‑end solutions across the entire product value chain. This merger and restructuring also signifies a more efficient consolidation of internal resources: China XD Electric enjoys a full‑industry‑chain advantage in the ultra‑high‑voltage sector, while XJ Electric and Pinggao Electric hold strong positions in specific niche markets. As China Electrical Equipment Group continues to integrate, its resources will be further optimized, bolstering the group’s overall competitiveness in the power‑equipment industry.
Building on the foundational technologies of synthetic biology, Jabiyou sets sail into the “blue ocean” of the bioeconomy.
On December 19, 2022, Jiabiyou will mark the third anniversary of its listing. Three years ago, this bio‑manufacturing company was listed on the A‑share market, becoming Hubei Province’s first enterprise to be listed on the STAR Market. Over the past three years since its IPO, what changes has Jiabiyou undergone? And how has it leveraged the capital markets to achieve high‑quality growth? Recently, Yi Dewei, Chairman of Jiabiyou, outlined the transformations the company has experienced in the three years since its listing.
Grounded in the foundational technologies of synthetic biology
Standing at the forefront of the bioeconomy.
As a pioneer who has witnessed two decades of development in the bio-manufacturing industry, Yi Dewei stated: “Over the past three years, the most significant shift I’ve observed is that the ‘bioeconomy’ has increasingly become a key driver of socio-economic growth—this marks the industry’s spring.”
If, prior to its IPO, Jiabiyou was branded as a leading enterprise in the food‑additive sector, then three years later, leveraging the capital markets, it has now integrated the entire synthetic biology value chain and positioned itself at the forefront of the bioeconomy.
As a strategic emerging industry prioritized for development under the nation’s 14th Five-Year Plan, the bioeconomy is poised to seize a golden opportunity for explosive growth, becoming the next major driver of China’s economic expansion.
“The core of the bioeconomy is biomanufacturing, and microbial strains are like the ‘chips’ of biomanufacturing. Cell factories represent the central governance approach in biomanufacturing, while natural products are our end products. Based on the theoretical functions of these natural products, they find applications across all sectors of the national economy—ranging from biopharmaceuticals and biomedical technologies to food production, bioenergy, and agricultural microbiology. It is only when these fields are brought together that we arrive at the concept of the bioeconomy,” said Yi Dewei.
Through years of sustained R&D investment, Jiabiyou has gradually established a leading platform‑based technology foundation rooted in biomanufacturing capabilities such as targeted strain selection, precise fermentation control, and efficient separation and purification. Building on this foundation, the company has overcome technical challenges across multiple specialized domains—including strain development, fermentation, extraction and refining, microencapsulation, application, and high‑precision testing and analysis—while continuously innovating at the three levels of front‑end R&D, engineering scale‑up, and industrialization. This has strengthened its biomanufacturing capacity and given rise to a portfolio of products with remarkable bioactivity, including DHA, sialic acid (SA), and β‑carotene, providing global customers in infant formula, health foods, and dietary supplements with high‑quality nutrient ingredients and innovative solutions.
“Over the past three years since our IPO, what has struck me most is that synthetic biology technologies and the industry have entered a phase of rapid growth. Advances in gene editing, protein engineering, and cell culture are injecting fresh momentum into the microbial fermentation sector,” said Yi Dewei.
According to the “Synthetic Biology: Global Market” report published in 2020 by U.S. market research office BCC Research, the global market size directly driven by synthetic biology reached US$5.319 billion in 2019 and is projected to grow to US$18.885 billion by 2024, with a compound annual growth rate of 28.8% from 2019 to 2024.
“The third anniversary of our IPO is also a major test for Jabiyou,” said Yi Dewei. “Over the past three years, synthetic biology has begun to see large-scale applications in areas such as biomanufacturing and biopharmaceuticals, fundamentally reshaping the underlying technological logic and R&D paradigms of our industry. At the same time, the three-year COVID‑19 pandemic has overlapped with the initial three-year period since our listing, prompting Jabiyou to embark on new explorations and strategic planning in both foundational technology development and future industry growth,” Yi Dewei added.
In its 2020 development strategy, Jia Bi You proposed establishing a business structure of “one core, two wings,” with human nutrition as the “core” and personal care & beauty and animal nutrition serving as the “two wings.” By expanding product application areas, diversifying product solutions, and strengthening research into product functionality and underlying mechanisms, the company aims to provide robust scientific support for product use, broaden application domains, and build a comprehensive application ecosystem.
“We are deeply grateful to the STAR Market for providing Jiabiyou with ample funding and resources. Over the past three years, we have continuously invested in R&D and talent development, which has enabled the company to undergo a transformative evolution,” said Yi Dewei.
Jiabiyou has made steady progress on its synthetic biology technology platform, with its R&D achievements attracting significant attention. In 2021, the company completed the establishment of its synthetic biology laboratory and built a bioinformatics analysis platform. Pilot-scale production of products such as OPO and fucosylated lactose has been successfully scaled up, paving the way for industrialization, while work has also commenced on developing high‑yielding strains for astaxanthin, EPA, sialylated lactose, and other key compounds.
In early 2022, the “Genome‑Scale Artificial Re‑arrangement Technology for Industrial Microbial Strains” project—jointly submitted by Jiabiyou together with Tianjin University, Tsinghua University, and other institutions under the National Key R&D Program’s “Green Biomanufacturing” key special project—was approved by the Ministry of Science and Technology and officially launched. In addition, the company has partnered with research institutions such as the Chinese Academy of Sciences to develop high‑density fermentation technologies that produce highly active products, building up technological capabilities to support the continued expansion of its future business.
According to the financial report, Jiabiyou’s R&D expenses reached RMB 30.95 million in 2021, up 51.9% year over year, while in the first three quarters of 2022, R&D spending totaled RMB 26.33 million, a year-on-year increase of 51.8%. Meanwhile, the company has strengthened its talent pool; as of June 30, 2022, it employed 74 R&D personnel, accounting for 18.1% of its total workforce, thereby providing robust technical support to the nutritional‑ingredient biomanufacturing industry.
Officely implement the internationalization strategy.
Continue to expand into overseas markets.
“Over the past three years, driven by geopolitical shifts and disruptions in global supply chains, Jiabiyou has faced significant challenges—yet these have also presented tremendous opportunities. We remain committed to pursuing internationalized operations. Only when our technology, products, quality, food safety, and operational management standards all meet international benchmarks and we obtain certification under global supplier systems can we truly be considered internationally competitive,” said Yi Dewei.
On the one hand, through years of joint ventures and collaborations with renowned multinational corporations, Jiabiyou has established a bio‑synthetic nutrient production line and an operational management system that meet international standards—covering fermentation, purification, and microencapsulation—and has successfully passed food safety audits and quality certifications from multiple global food companies, becoming their worldwide supplier. On the other hand, by reaching a settlement agreement with DSM, a global giant in the nutrition and health industry, regarding ARA patents, Jiabiyou has facilitated the integration of its products into the supply chains of major multinational clients in the infant formula sector worldwide.
Meanwhile, the company is actively strengthening its international operations team and customer service system, and collaborating with distributors such as Cargill and Wolfkanya to leverage their global distribution networks and brand influence in expanding into international markets.
It is understood that Jabiyou’s ARA product and algal DHA product have both obtained FSSC 22000 food safety certification; the ARA product has further secured EU Novel Food approval and U.S. FDA GRAS status. In 2021, the company’s algal DHA product also received U.S. FDA GRAS certification. Jabiyou’s collaborative clients include Cargill, Feihe, Yili, Nestlé, Danone, and others, with its products distributed across more than 30 countries and regions.
According to the financial report, the company’s overseas revenue accounted for nearly 50% in the first half of 2022, and the development of several major international clients has entered the commercial negotiation stage. Meanwhile, the company has begun establishing new distribution channels in the European market and is promptly launching participation in international trade shows and visits to global customers. While consolidating and expanding its customer base in the infant formula sector, it is simultaneously exploring a range of business opportunities in the health‑food segment. The company holds a 17.7% stake in Pharmaco and is developing Pharmaco’s Thai plant as an OEM facility for powdered‑form products to strengthen its global supply chain.
In terms of production capacity, the company’s expansion project for the unsaturated fatty acid oil microencapsulation production line was completed in June this year. Currently, trial production is underway, along with final corrective measures, and a small batch of trial‑produced products has been provided to customers for testing in preparation for on‑site audits and certifications related to the transition to the new production line. Meanwhile, at the second phase of the microbial oil expansion project, the fermentation and extraction workshops are undergoing individual equipment commissioning, while the refining workshop is conducting trial runs with feedstock; commissioning is scheduled to be finalized by the end of this year.
“If we don’t pursue synthetic biology, we won’t survive; if we don’t develop advanced biomanufacturing, we’ll have no chance!” said Yi Dewei. “After more than two decades of dedicated effort and continuous accumulation, Jiabiyou has established a unique innovation system for biomanufacturing, creating a complete technological closed loop. Moving forward, Jiabiyou will integrate big data and artificial intelligence technologies to achieve intelligent manufacturing and digital operations, further strengthening our international competitiveness.”
Taxation
New Measures by the Jingkai District Tax Bureau to Mitigate Risks Associated with Refunds of Input VAT Credits
As the centerpiece of the new package of tax and fee support policies, the large-scale refund of outstanding input VAT credits has been implemented with significant力度 and delivered substantial benefits to businesses. While ensuring that this policy—covering a broader scope and greater scale—is rolled out steadily and precisely, it is essential to guard against potential risks in its execution. The Jingkai District Tax Bureau, while guaranteeing that tax refunds are processed in a standardized, efficient, and timely manner, remains resolute in preventing and cracking down on tax evasion, fraud, and illicit subsidy schemes.
On the one hand, leveraging information technology to mitigate risks associated with refunding outstanding input VAT credits. Given the district’s large taxpayer base, substantial economic scale, and the sheer volume of transactions and supporting documentation, it is imperative to employ digital tools for VAT risk management. This will provide robust data support for the VAT risk monitoring and early‑warning system, ensuring that refund management keeps pace and risks are effectively contained. Analyzing recent risk data on incremental input VAT credit refunds issued by higher authorities, we have identified cases where taxpayers report simplified‑rate or tax‑exempt sales revenue but fail to record corresponding outflows of input VAT during the same period. Such risk indicators have drawn significant feedback from grassroots tax authorities. To address this issue, we recommend that, within the approval process for incremental input VAT credit refunds, the Golden Tax System III automatically cross‑checks whether a taxpayer has reported simplified‑rate or tax‑exempt sales revenue without recording corresponding input VAT outflows in the same period. If such discrepancies are detected, the system would flag the taxpayer as potentially having an anomaly and assign a verification task to the administrator. Once the task is completed, the refund application can proceed. By addressing these risks during the refund‑processing stage, we can both mitigate potential issues and ensure greater taxpayer acceptance.
On the other hand, efforts to crack down on tax fraud have been intensified. The review of applications for input‑credit refunds has been further strengthened, and a new dynamic, precision‑based regulatory mechanism grounded in “credit + risk” along with a robust risk‑prevention and control system for such refunds has been refined. These measures ensure that tax authorities promptly obtain taxpayers’ tax‑related information. For taxpayers with prior records of tax evasion or fraud, application materials are scrutinized against even stricter standards, and their filing practices and tax‑inspection histories are thoroughly investigated from multiple angles. Of the 38 flagged data points related to input‑credit refunds issued by higher authorities, all 38 have been verified, resulting in the recovery of over RMB 8 million in taxes. Additionally, the district bureau’s risk‑management unit independently identified 56 flagged cases in the final‑refund database; all 56 have been conofficeed, with nearly RMB 30,000 in taxes recovered.
As more industries implement both existing‑stock and incremental credit‑refund tax policies, the task of preventing and cracking down on fraudulent claims for such refunds has grown increasingly complex and challenging. The local tax authority will prioritize safeguarding against regional, sector‑specific, and systemic tax‑fraud risks, thereby ensuring the effective implementation and enforcement of these policies.
Young tax officials in Chengdu have launched an in-depth discussion on “Using Tax Modernization to Serve Chinese‑style Modernization.”
The Chengdu tax system has taken the large-scale discussion campaign on “Modernizing Taxation to Serve Chinese‑style Modernization” as a key initiative, closely integrating it with the study, publicity, and implementation of the spirit of the 20th National Congress of the Communist Party of China. By making concerted efforts to achieve comprehensive learning, thorough understanding, and full‑scale implementation, the system is guiding young cadres to steadfastly follow the Party, demonstrate confidence and self‑reliance, and assume responsibility, thereby injecting fresh momentum from the younger generation into the cause of tax modernization.
Learning first, emphasizing comprehensiveness and systematicness.
The Chengdu municipal tax system has actively organized all Party members and cadres to study the original texts and grasp the underlying principles. Through a variety of formats—including collective study sessions, thematic seminars, lectures and guidance, the “Three Meetings and One Lesson” system, and youth theoretical study groups—the system has conducted phased and batch‑wise learning and discussion activities, thereby laying a solid theoretical foundation for the large‑scale campaign to discuss “Tax Modernization in Service of Chinese‑Style Modernization.”
Young tax officials have organized a variety of learning activities. The No. 1 Tax Office in Xindu has voluntarily incorporated a “15-Minute Report‑Reading Session” into its daily morning meetings, emphasizing “learning from the original text.” The Qingbaijiang Tax Bureau hosted the “Implementing the Spirit of the 20th CPC National Congress: Qingbai Taxation Toward the Future” event, along with the second “Qingtax Cup” Employee Skills Competition, fostering “learning through competition.” The Jinjiang Tax Bureau held a showcase of young cadres’ growth, with 20 representatives taking the stage one after another to engage in “learning through sharing.” Meanwhile, the Tianfu New Area Tax Bureau, in collaboration with relevant agencies, organized an online knowledge contest titled “Striving Bravely in the New Era, Forging Ahead on the New Journey,” centered on studying the report of the 20th CPC National Congress—promoting “collaborative learning.” In Pengzhou, young tax officials launched a board‑game‑style competition on Party history titled “Red Memories,” encouraging “learning through fun.”
It is reported that grassroots Party organizations within Chengdu’s tax system have made effective use of thematic meetings, the “Three Meetings and One Lesson” format, and themed Party days to conduct 256 specialized discussions on the theme “Using Tax Modernization to Serve Chinese‑style Modernization.” Meanwhile, 342 youth theoretical study groups have adopted a combined approach—video, audio, and text—to share their insights and reflections, continuously enhancing their awareness and capacity to integrate tax modernization into the theoretical framework and practical implementation of Chinese‑style modernization.
The key is to achieve thorough understanding, striving for accuracy and depth.
Since November, the Chengdu tax system has remained officely focused on the overarching goals of “strengthening Party building, delivering excellent tax administration, and leading a high‑performing team,” while prioritizing key tasks in the tax field. It has made concerted efforts to thoroughly understand and master critical questions such as “what it is,” “what needs to be done,” and “how to do it.”
Li Jiesheng, Party Secretary and Director of the Chengdu Tax Service Bureau of the State Taxation Administration, visited the grassroots liaison offices of the Tianfu New Area Tax Service and the Jianyang Tax Service to deliver special Party lectures on studying and implementing the spirit of the 20th National Congress of the Communist Party of China. He also held discussions with young cadres on how tax modernization can serve Chinese‑style modernization. In early December, the 12366 tax service centers in Chengdu, Beijing, and Shanghai jointly organized an online symposium on using tax modernization to advance Chinese‑style modernization. Young cadres from the three cities exchanged insights and learned together, strengthening their ideals and convictions and staying true to their original aspirations and mission through earnest study, sincere belief, and the integration of learning, thinking, practice, and understanding.
Such seminars are commonplace throughout Chengdu’s tax system. The Chengdu tax authorities organized the “Tax Refunds and Tax Cuts: Golden Ideas” competition for young tax officials, collecting 110 innovative proposals that have provided robust support for enhancing the quality and effectiveness of citywide tax refund and reduction efforts. Meanwhile, the Longquanyi Tax Bureau and the Dadukou Tax Bureau of Chongqing jointly held a Youth League branch–level joint study and co‑construction event titled “Sichuan–Chongqing Youth Online Interaction: Discussing the 20th CPC National Congress on the Same Screen,” deeply studying and implementing the spirit of the 20th CPC National Congress in the context of building the Chengdu–Chongqing Twin-City Economic Circle, pooling wisdom and strength to better serve this initiative. At all levels, young Party members have aligned themselves with the guiding principles of the 20th CPC National Congress, proactively taking on assigned tasks, clearly identifying risks and challenges as well as strengths and weaknesses, and striving to pinpoint key areas, points of convergence, and avenues for integration in their work.
It is reported that the Chengdu tax system’s initiatives—“I Offer a Proposal to Serve China’s Modernization through Taxation” and a themed essay contest—received 251 policy suggestions and 214 submitted essays, vividly showcasing the fine spirit of Chengdu tax officials: aspiring yet down-to-earth, bold in action yet accomplished in execution.
Focus on substance and ensure full, unwavering implementation.
Putting things into practice is both the starting point and the ultimate goal of truly understanding and thoroughly grasping the principles. At Daoming Bamboo Art Village, exquisite bamboo‑woven artworks are displayed on shelves in Yang Longmei’s studio. Young Communist Party members from the Chongzhou tax authorities are studying the spirit of the 20th National Congress of the CPC alongside Yang Longmei, a post‑90s inheritor of intangible cultural heritage and a leading figure in Chongzhou’s rural revitalization efforts. At the same time, they are explaining the latest tax‑reduction and fee‑cutting policies to her, helping her move forward with greater momentum to drive development.
“I will integrate the study and implementation of the spirit of the 20th National Congress of the Communist Party of China into my future work and daily life, embedding it in concrete actions under the initiative ‘Doing Practical Things for Taxpayers and Payers,’” said Chen Rui, a young tax official from Chongzhou and recipient of Sichuan Province’s May Day Labor Medal.
Young tax officials from Pidu District visited Sichuan Gama Boshou Snow Art Culture Development Co., Ltd. to carry out a themed Party Day activity titled “Joint Study of the Spirit of the 20th National Congress of the CPC between Tax Authorities and Enterprises.” “Affected by the pandemic, our company’s order volume plummeted, plunging us into a difficult period. This year’s package of tax and fee preferential policies enabled us to promptly benefit from tax refunds totaling over 70,000 yuan and deferred tax payments of nearly 20,000 yuan, providing crucial support as we navigated these challenging times. During this event, I listened carefully to and studied the report of the 20th National Congress of the CPC, feeling deeply proud and inspired. I am grateful for the excellent policies of the Party and the state,” said Zhaxi Wengga, the company’s legal representative.
An official from the Chengdu Municipal Tax Service stated that the Chengdu tax authorities will steadfastly uphold the “People‑Centred Taxation” philosophy, mobilizing and guiding young cadres to hone their skills in enhancing taxpayer services, implementing preferential policies, and supporting the broader national agenda. They will strive to make significant contributions in the great endeavor of advancing Chinese modernization through tax‑system modernization, and dedicate their youth, wisdom, and strength to the unwavering implementation of the goals and tasks set forth at the 20th National Congress of the Communist Party of China.
Tai’an Tax Authorities: Tax Benefits Delivered Directly to Boost Momentum, with an Enhanced Smart Tax Service Environment
“Tax bureau staff provided guidance on our tax refund application via video link, and with just a few clicks through the electronic tax service platform, we completed the application for a carryforward VAT refund. The refund—over 5.7 million yuan—was credited to our account almost immediately, without us having to leave home,” said Xu Jianxin, legal representative of Shandong Yitianjian Chemical Co., Ltd. “This tax‑refund ‘red envelope’ arrived at just the right time, effectively easing our financial burden and resolving a major challenge. With so many favorable tax policies from the state, our confidence in future growth has grown even stronger.”
To ensure the thorough and meticulous implementation of tax and fee preferential policies, help enterprises achieve stronger growth, and make sure that the “tax rebate package” delivers tangible benefits directly to where they are most needed, the tax authorities in Tai’an City have leveraged online interactive platforms and provided door-to-door, one‑on‑one guidance. This approach has achieved full coverage of policy support both online and offline, guaranteeing that preferential measures reach every level of the business ecosystem.
To enhance the precision and personalization of its outreach and guidance, the Xintai City Tax Service Bureau has established a policy‑analysis team. Centered on the specific needs of businesses, the team has developed a comparative model for tax‑reduction and fee‑cut policies, enabling it to accurately identify eligible taxpayers and deliver tailored, highly targeted services. By formulating strategies based on the actual conditions of different industries, sectors, and industrial clusters, the bureau conducts focused assessments and prescribes appropriate measures for key enterprises along value chains. Proactively reaching out and providing timely follow‑up, it offers “point‑to‑point” guidance to ensure that taxpayers fully understand the policies, can implement them effectively, and comply with relevant regulations. This approach enables businesses to access the benefits of additional tax credit refunds in a comprehensive, swift, and hassle‑free manner, ensuring that taxpayer support is precisely targeted, practically implemented, and highly effective.
Building on the implementation of direct, swift access to tax and fee support policies, the Tax Service Department of Tai’an City has also integrated these efforts with the “Doing Practical Things for Taxpayers and Payers” initiative and the Spring Breeze Action for Convenient Tax Services. By focusing on taxpayers’ and payers’ needs, the department has streamlined service delivery, established seamless inter‑departmental collaboration channels, strengthened smart‑driven one‑stop services, and introduced innovative, precision‑targeted guidance on tax and fee coordination—leveraging a diversified array of measures to continuously enhance the business environment for taxation.
The Feicheng Municipal Tax Service Bureau has strengthened interdepartmental information coordination and sharing, accelerated data connectivity, and eliminated bottlenecks throughout the entire business‑processing workflow, enabling data to “travel more” while reducing the need for in-person visits. In collaboration with the Administrative Approval Service Center, the human resources and social security authorities, the medical insurance agency, and other departments, it has jointly established a problem‑solving and assistance mechanism, simplifying complex procedures and pooling service resources. The bureau has also expanded its cross‑departmental advisory team, enhancing the professional capabilities of multi‑agency teams, and adopted a “chain‑training” approach—“serve one person, benefit an entire community, and deliver tangible benefits to the people”—to ensure that every transaction is handled, every inquiry is answered, and every challenge is resolved.
“One phone call, one inquiry, one point of contact, and one round of feedback” — this approach ensures a “one-stop” solution. While providing taxpayers and payers with multi-channel policy advisory services and clearly communicating the details of tax and fee preferential policies, the Taian Municipal Tax Authority has vigorously promoted “non-contact” guidance for tax filing and payment, actively encouraging taxpayers and payers to adopt online processing habits. It has also optimized the user experience across multiple platforms, including in‑person–online coordination and the electronic tax bureau, enabling taxpayers and payers to handle their tax affairs without leaving home. Leveraging the grid‑based service model of community convenience stations and strategically allocating self-service tax‑filing resources throughout the jurisdiction, the authority has achieved full coverage, making it easier for payers to conduct business at their nearest location. For groups facing mobility challenges or difficulties in tax filing and payment, dedicated volunteer teams composed of experienced professionals provide personalized “one‑on‑one” services.
Going forward, the Tai’an Municipal Tax Service Bureau will continue to uphold the service philosophy of “putting taxpayers and payers first,” integrate the implementation of comprehensive tax and fee support policies with the development of “smart taxation,” persistently carry out initiatives to optimize and upgrade the business environment, further deepen and expand the role of taxation, and strive to create a world-class tax‑related business climate, thereby providing robust support and safeguards for market entities and for high‑quality economic and social development.
Litigation & Arbitration

Safeguarding Safety Through Enhanced Performance of Duties: A Review of the People’s Courts’ Lawful Punishment of Crimes Endangering Production Safety
Safe production is a matter of paramount importance that safeguards the lives and property of the people; it is a hallmark of coordinated and sound economic and social development, and an indispensable requirement for building a China that is even safer and for meeting the growing safety needs of the public.
General Secretary Xi Jinping has repeatedly issued important instructions on work related to workplace safety, consistently emphasizing that development must never come at the expense of safety. The people’s courts have thoroughly implemented the spirit of General Secretary Xi Jinping’s important instructions and the decisions and arrangements of the Party Central Committee, upheld the holistic approach to national security, fully leveraged their adjudicatory functions, accurately applied the Criminal Law, the Criminal Procedure Law, and relevant statutory provisions, and imposed strict penalties on crimes endangering production safety and related offenses, thereby advancing the building of a China that is even safer and more secure.
Since the 18th National Congress of the Communist Party of China, courts across the country have concluded over 22,000 first-instance cases involving crimes endangering workplace safety, sentencing more than 35,000 offenders. These efforts to punish such crimes in accordance with the law have been resolute and effective, yielding significant results.
Adhere to strict law enforcement and prioritize targeting key areas.
People’s courts resolutely implement the CPC Central Committee’s decisions and arrangements to strengthen workplace safety and rigorously hold those responsible for accidents accountable, consistently imposing strict legal penalties on crimes that endanger production safety.
The judicial interpretation jointly issued by the Supreme People’s Court and the Supreme People’s Procuratorate establishes a threshold for criminal liability: when an act results in a production safety accident causing one death, three serious injuries, or direct economic losses of RMB 1 million, it shall be deemed a crime. This provision imposes a strong legal deterrent against offenses and crimes that endanger production safety. The people’s courts have consistently maintained a stringent crackdown on such crimes; in 2021, the number of first-instance cases involving crimes endangering production safety concluded nationwide, as well as the number of offenders sentenced, increased by 28% and 47%, respectively, compared with 2013, fully demonstrating a resolute commitment to strengthening punishment for these offenses.
People’s courts have consistently prioritized the strict and lawful punishment of serious and extremely grave crimes endangering workplace safety that result in mass casualties and elicit strong public concern. Since the 18th National Congress of the Communist Party of China, people’s courts in Tianjin, Jiangsu, Fujian, and other localities have successively concluded high-profile cases, including the series of cases stemming from the August 12 massive fire and explosion at the Ruihai Company hazardous‑materials warehouse in Tianjin Port; the March 21 series of cases arising from the catastrophic explosion at Tianjia Yi Company in Xiangshui, Jiangsu; and the March 7 series of cases involving the collapse of the Xinjia Hotel in Quanzhou, Fujian. A number of individuals held accountable for these major production‑safety accidents—along with relevant intermediary‑organization personnel and state officials found to have neglected their duties or engaged in dereliction of duty—have been sentenced to severe penalties. In implementing the CPC Central Committee’s directives on “joint responsibility of the Party and government, dual responsibility for each post, concerted management, and accountability for negligence,” the people’s courts have imposed heavy sentences, in accordance with the law, on principal persons responsible for the accidents, top executives of the enterprises involved, and key officials occupying critical positions in the departments overseeing workplace safety, thereby using judicial rulings to advance the effective implementation of the workplace‑safety accountability system.
People’s courts have earnestly implemented the CPC Central Committee’s requirements of prioritizing safety, emphasizing prevention, and addressing risks at their source. They have made full use of criminal measures, applying, in accordance with the law, offenses such as the crime of hazardous operations—newly added under Criminal Law Amendment (XI)—to punish serious illegal and unlawful production and business practices in key sectors including mining, metal smelting, construction, and the production, operation, and storage of hazardous chemicals. From the entry into force of Criminal Law Amendment (XI) in March 2021 to October 2022, courts nationwide concluded 1,455 first-instance cases involving the crime of hazardous operations, sentencing 2,235 offenders. These efforts have effectively facilitated the timely elimination of safety risks and hazards, thereby helping to curb the occurrence of major and especially serious accidents.
Improve disciplinary regulations and standardize adjudication criteria.
To effectively address legal application issues arising from crimes endangering production safety and related offenses, and to ensure the principle of strict punishment in accordance with the law is fully implemented, the Supreme People’s Court has continuously conducted research and systematically summarized judicial experience, issuing a series of judicial interpretations and normative documents. In December 2015, in collaboration with the Supreme People’s Procuratorate, it jointly promulgated the “Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases Endangering Production Safety,” which clarified the criteria for conviction and sentencing as well as the appropriate application of criminal policies with respect to offenses involving threats to production safety, thereby providing clear adjudicatory standards for judicial organs at all levels.
Following the promulgation of relevant judicial interpretations and normative documents, the Supreme People’s Court has issued a series of specialized notices to further clarify the standards for applying the law and the specific requirements for case handling. In particular, in response to the lack of clear criteria and the overly broad application of suspended sentences and exemptions from criminal punishment in cases involving crimes endangering production safety, the Supreme People’s Court has instructed people’s courts at all levels to exercise precise discretion and strictly regulate the use of such measures. In 2021, the proportion of offenders convicted of crimes endangering production safety who received suspended sentences or were exempted from criminal punishment nationwide declined by 17 percentage points compared with 2013. The capacity of the people’s courts to adjudicate such cases has continued to improve, and public satisfaction with the outcomes of these cases has increased significantly.
Extend judicial functions and foster collaborative efforts.
Work on workplace safety is a systematic undertaking that requires coordinated efforts and joint action from all stakeholders. While adjudicating crimes endangering production safety, the people’s courts consistently emphasize strengthening coordination and collaboration with relevant departments to forge synergistic momentum.
The Supreme People’s Court has actively coordinated with the Supreme People’s Procuratorate, the Ministry of Public Security, and the Ministry of Emergency Management to establish a mechanism for seamless coordination between administrative law enforcement and criminal justice in the field of work safety. In April 2019, it jointly issued the “Measures on the Coordination between Administrative Law Enforcement and Criminal Justice in Work Safety,” which sets forth provisions on the referral of cases involving violations of work safety laws and crimes, as well as on inter‑agency collaboration mechanisms, thereby ensuring smooth and efficient procedural coordination.
People’s courts regard the lawful punishment of crimes endangering workplace safety as a concrete measure and an important lever for serving the people, continuously diversifying their approaches, strengthening legal publicity, and intensifying coordination and cooperation with relevant departments. They uphold judicial transparency and open justice, publicly disclosing judgment outcomes in accordance with the law and promptly serving judicial documents to the offenders’ former workplaces and pertinent authorities, thereby ensuring that disciplinary and administrative sanctions are effectively implemented. Higher People’s Courts in Hunan and other localities have jointly issued documents with discipline inspection and supervision agencies, emergency management departments, and other bodies to standardize the procedures for serving judicial documents in cases involving crimes endangering workplace safety. Moreover, the people’s courts fully leverage the positive role of judicial recommendations, urging relevant departments to promptly address safety risks and hazards and to work together to ensure workplace safety.
Safeguarding workplace safety is a responsibility that the people’s courts cannot shirk. The people’s courts will further study and implement the spirit of the 20th National Congress of the Communist Party of China, resolutely carry out the decisions and arrangements of the CPC Central Committee, uphold the holistic approach to national security, strictly enforce laws and judicial interpretations, and fully leverage the functions of the judiciary to punish, in accordance with the law, crimes that endanger workplace safety. In doing so, they will help bring about a fundamental improvement in workplace safety, thereby better fulfilling their duties to safeguard national security, social stability, and the peace and well-being of the people.
Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases Involving Endangerment to Production Safety
The “Interpretation (II) of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases Involving Endangerment to Production Safety” was adopted at the 1875th Meeting of the Adjudication Committee of the Supreme People’s Court on September 19, 2022, and at the 106th Meeting of the Thirteenth Procuratorial Committee of the Supreme People’s Procuratorate on October 25, 2022. It is hereby promulgated and shall enter into force as of December 19, 2022.
Supreme People’s Court Supreme People’s Procuratorate
December 15, 2022
Interpretation of the Supreme People’s Court No. 19 of 2022
Supreme People’s Court, Supreme People’s Procuratorate: On the Application of Law in Handling Criminal Cases Involving Endangerment to Production Safety
Interpretation of Several Issues (II)
(Adopted at the 1875th Meeting of the Judicial Committee of the Supreme People’s Court on September 19, 2022, and at the 106th Meeting of the Thirteenth Procuratorial Committee of the Supreme People’s Procuratorate on October 25, 2022; effective December 19, 2022)
In order to punish, in accordance with the law, crimes that endanger production safety, safeguard public safety, and protect the lives and property of the people—both public and private—pursuant to the Criminal Law of the People’s Republic of China, the Criminal Procedure Law of the People’s Republic of China, the Work Safety Law of the People’s Republic of China, and other relevant provisions, the following interpretations are hereby issued on certain issues concerning the application of law in handling criminal cases involving threats to production safety:
Article 1: Where a person, knowing that an accident hazard exists and that continuing operations would be dangerous, nevertheless violates relevant safety management regulations, and any of the following circumstances applies, such conduct shall be deemed “compelling others to undertake hazardous operations in violation of regulations” as stipulated in Paragraph 2 of Article 134 of the Criminal Law:
(1) Compelling others to engage in operations in violation of regulations by means of intimidation, coercion, or threats;
(2) Using organizational, commanding, or managerial authority to compel others to engage in operations in violation of regulations;
(3) Other circumstances in which others are forcibly ordered to engage in operations that violate safety regulations and pose significant risks.
Where a person, knowing full well that a serious accident hazard exists, nevertheless violates relevant safety management regulations, fails to eliminate such hazard or deliberately conceals it, and organizes others to carry out work, this constitutes “organizing operations under hazardous conditions” as stipulated in Article 134, Paragraph 2 of the Criminal Law.
Article 2 The subjects of the crime stipulated in Article 134‑1 of the Criminal Law include persons who bear organizational, commanding, or managerial responsibilities for production and operations—such as principals, managers, de facto controllers, investors, and others—as well as those directly engaged in production and operational activities.
Article 3: Where, due to the existence of a major accident hazard, an entity has been lawfully ordered to suspend production and operations, halt construction, cease using relevant equipment, facilities, or premises, or immediately implement corrective measures to eliminate the hazard, any of the following circumstances shall be deemed “refusal to comply” as stipulated in Article 134‑1, Paragraph 2 of the Criminal Law:
(1) Intentionally failing to implement, without justifiable reasons, the aforementioned administrative decisions or orders lawfully issued by people’s governments at all levels or by departments entrusted with responsibilities for safety production supervision and administration;
(2) Fabricating the fact that significant accident hazards have been eliminated in order to evade or obstruct the implementation of the aforementioned administrative decisions and orders issued by people’s governments at all levels or by departments entrusted with safety production supervision and management duties in accordance with the law;
(3) Employing bribery or other improper means to evade or interfere with the lawful implementation of the aforementioned administrative decisions and orders issued by people’s governments at all levels or by departments entrusted with safety production supervision and management duties.
Where the conduct specified in paragraph 3 of the preceding article also constitutes the crime of bribery under Article 389 of the Criminal Law, the crime of corporate bribery under Article 393 of the Criminal Law, or other offenses, punishment shall be imposed in accordance with the provisions on cumulative sentencing.
In determining whether a refusal to comply exists, a comprehensive assessment should be made, taking into account such factors as whether the administrative decision or order is supported by statutory or administrative‑regulatory provisions, whether its content and time‑frame requirements are clear and reasonable, and whether the actor possesses the capacity to implement it in accordance with those requirements.
Article 4. The “major accident hazards” referred to in Paragraph 2 of Article 134 and in Item 2 of Article 134‑1 of the Criminal Law shall be identified in accordance with laws, administrative regulations, departmental rules, mandatory standards, and relevant administrative normative documents.
The “hazardous materials” referred to in Article 134‑1, Paragraph 3 of the Criminal Law shall be determined in accordance with the provisions of Article 117 of the Work Safety Law.
Where it is difficult to determine whether a situation constitutes a “major accident hazard” or involves “hazardous materials,” such determinations may be made in accordance with the law by comprehensively reviewing expert opinions issued by forensic appraisal institutions, opinions issued by departments at or above the prefectural level that are responsible for safety production supervision and administration, or by agencies designated by such departments, together with other relevant evidence.
Article 5: Where, in the course of production or operations, a violation of relevant safety management regulations occurs, and one of the circumstances specified in Article 134‑1 of the Criminal Law is present, resulting in a major accident causing serious casualties or other grave consequences, thereby constituting the crimes of major liability accidents, major work safety accidents, accidents involving hazardous materials, or major engineering safety accidents as stipulated in Articles 134, 135 through 139 of the Criminal Law, such acts shall be convicted and punished in accordance with those provisions.
Article 6: Where the certification documents issued by personnel of an intermediary organization entrusted with safety assessment duties fall under any of the following circumstances, such documents shall be deemed “false certification documents” as stipulated in Paragraph 1 of Article 229 of the Criminal Law:
(1) Intentionally forged;
(2) Falsifying information regarding key aspects such as the surrounding environment, major buildings and structures, processes, installations, and equipment, thereby resulting in discrepancies with the actual conditions prevailing during the assessment period and undermining the validity of the assessment conclusions;
(3) Concealing major accident hazards of production and operation entities, as well as the status of corrective measures and their implementation, or the severity levels of major disasters, thereby affecting the evaluation conclusions;
(4) Falsifying or tampering with relevant information, data, technical reports, or conclusions of production and business entities, thereby affecting the evaluation conclusions;
(5) Intentionally using questionable third-party certification documents or monitoring and testing reports to undermine the assessment conclusions;
(6) Other instances of falsification or deception that affect the evaluation conclusions.
If a production and business entity submits false materials that affect the evaluation conclusion, and the personnel of the intermediary organization entrusted with conducting the safety assessment are not subjectively intentional in allowing the evaluation conclusion to be inconsistent with the actual situation, such conduct does not fall within the scope of “intentionally providing false certification documents” as stipulated in Article 229, Paragraph 1 of the Criminal Law.
Where, under the circumstances set forth in paragraph 2 of this Article, personnel of an intermediary organization entrusted with safety assessment duties act with gross negligence, resulting in materially false certification documents and causing serious consequences, criminal liability shall be pursued in accordance with the provisions of Article 229, paragraph 3, of the Criminal Law.
Article 7: Where personnel of an intermediary organization entrusted with the responsibility of conducting safety assessments intentionally provide false certification documents, and any of the following circumstances exist, such conduct shall be deemed to constitute “serious circumstances” as stipulated in Paragraph 1 of Article 229 of the Criminal Law:
(1) Where a safety accident results in the death of one or more persons or serious injury to three or more persons;
(2) Accidents that result in direct economic losses exceeding RMB 500,000;
(3) Where the amount of illegal gains exceeds RMB 100,000;
(4) Having been subject to two or more administrative penalties within two years for intentionally providing false certification documents, and then intentionally providing such false certification documents again;
(5) Other circumstances involving serious violations.
Providing false safety assessment documents in major projects or undertakings involving public safety shall be deemed to constitute “causing particularly serious losses to public property, the interests of the state, and the interests of the people” as stipulated in Article 229, Paragraph 1, Item 3 of the Criminal Law if any of the following circumstances applies:
(1) Where a safety accident results in the death of three or more persons, or serious injury to ten or more persons;
(2) Accidents that result in direct economic losses of RMB 5 million or more;
(3) Other circumstances that result in particularly serious losses to public property, the interests of the state, and the interests of the people.
When determining the penalty for personnel of intermediary organizations entrusted with safety‑assessment duties who have engaged in conduct falling under Article 229, Paragraph 1 of the Criminal Law, due consideration shall be given to such factors as the methods employed, the degree of subjective fault, the extent of their contributory role in the occurrence of the safety accident, the profits derived, and their consistent conduct, so as to comprehensively assess the social harm and impose a sentence in accordance with the law, thereby ensuring that the punishment is commensurate with the crime.
Article 8: Personnel of intermediary organizations entrusted with the responsibility of conducting safety assessments, who, through gross negligence, issue certification documents containing material inaccuracies, shall be deemed to have “caused serious consequences” as stipulated in Paragraph 3 of Article 229 of the Criminal Law if any of the following circumstances exists:
(1) Where a safety accident results in the death of one or more persons or serious injury to three or more persons;
(2) Accidents that result in direct economic losses exceeding RMB 1 million;
(3) Other circumstances that result in serious consequences.
Article 9: Where an intermediary organization entrusted with the responsibility of conducting safety assessments commits a crime as stipulated in Article 229 of the Criminal Law, such organization shall be imposed a fine, and its directly responsible principal officers and other persons directly liable shall be punished in accordance with the provisions of Articles 7 and 8 of this Interpretation.
Article 10: Where a person has engaged in conduct falling under Article 134‑1 of the Criminal Law and, by actively cooperating with the public security organs or the departments responsible for safety production supervision and administration in taking measures to eliminate potential accident hazards, demonstrates genuine remorse and pleads guilty and accepts punishment, such person may be given a lighter punishment in accordance with the law. If the circumstances of the crime are minor and no criminal penalty is required, prosecution may be refrained from or criminal punishment may be waived; if the circumstances are demonstrably minor and the harm caused is negligible, the act shall not be treated as a crime.
Article 11: Where conduct falling within the scope of these Interpretations has been subject to a decision not to prosecute or to exemption from criminal punishment, but administrative penalties, disciplinary sanctions, or other forms of punishment are still required, such cases shall be referred to the competent authorities for handling in accordance with the law.
Article 12 This Interpretation shall take effect as of December 19, 2022. In the event of any inconsistency between this Interpretation and any prior judicial interpretations issued by the Supreme People’s Court or the Supreme People’s Procuratorate, this Interpretation shall prevail.
Henan’s judicial and procuratorial organs have jointly issued twenty measures.
Strengthening judicial protection of intellectual property to support the innovation-driven development strategy.
Recently, the Higher People’s Court of Henan Province and the People’s Procuratorate of Henan Province jointly issued the “Several Opinions on Strengthening Judicial Protection of Intellectual Property Rights to Support and Safeguard Innovation-Driven Development.”
The “Opinions” set forth twenty measures across eight key areas: fostering consensus on judicial protection of intellectual property rights, strengthening coordinated protection of outcomes in priority sectors, standardizing the application of legal standards in case adjudication, refining the jurisdictional framework for IP cases, promoting the sharing of specialized resources, improving mechanisms for regular communication and liaison, jointly cultivating a robust public awareness, and establishing an overarching framework for comprehensive IP protection.
The Opinions emphasize the need to strengthen judicial protection for key core technologies in emerging industries such as artificial intelligence, biopharmaceuticals, intelligent equipment, and 5G, as well as for new plant varieties and geographical indications, thereby fully leveraging the supporting and driving role of science and technology in guiding economic and social development. They also call for enhanced protection of well-known trademarks and time-honored brands, fostering the growth of domestic brands and helping enterprises expand and fortify their brand presence. Furthermore, the Opinions urge strict crackdowns on intellectual property crimes in the food and pharmaceutical sectors to safeguard public health and safety, thus supporting the sound development of specialty food industries. Additionally, they advocate for robust judicial regulation of monopolistic practices by platform enterprises, imposing severe legal penalties on behaviors that undermine fair competition and disrupt market order—such as forced “choose one” requirements, price discrimination based on big data, predatory pricing, and compulsory bundling. Finally, the Opinions mandate vigorous legal action against self-media operators who exploit public opinion to extort businesses, as well as against other unfair competitive practices, including malicious defamation of business reputations and product reputations.
The Opinions state that it is essential to clearly delineate the boundary between criminal offenses and civil infringements in the field of intellectual property, and to strike an appropriate balance between cracking down on crimes involving infringement of intellectual property rights and safeguarding property rights and the legitimate rights and interests of entrepreneurs. With respect to criminal cases in the research and development sector, coercive measures should be applied with caution, prosecutions should be pursued prudently, and convictions should be imposed only when warranted. It is imperative to give equal weight to the protection of rights and the prevention of their abuse, ensuring that the scope of intellectual property protection is commensurate with the level of innovation and the degree of creative contribution. Furthermore, it is important to distinguish between legitimate rights‑assertion and malicious litigation; scrutiny of factual evidence and legal application in mass‑filed rights‑assertion cases must be strengthened. Any party that initiates baseless or legally unfounded malicious lawsuits for the purpose of obtaining illegal or improper gains shall be subject to sanctions in accordance with the law.
In accordance with the requirements of the “Opinions,” by the end of 2022, each prefecture-level city in Henan Province is to designate one or two county (district) people’s courts and people’s procuratorates to exercise centralized jurisdiction over first-instance intellectual property cases, and to implement a specialized case-handling model. The people’s courts and people’s procuratorates will establish systems for regular consultations and mutual reporting on key work, designate dedicated liaison agencies and full-time liaison officers, and ensure smooth communication channels with administrative law enforcement authorities and competent departments in the field of intellectual property, thereby promoting the alignment of judicial and administrative procedures and the harmonization of judicial rulings with administrative enforcement standards. Furthermore, they will explore the establishment of a joint training mechanism for judges, prosecutors, and administrative law enforcement personnel in the intellectual property domain, strengthen communication and cooperation with universities and relevant government departments, and cultivate multidisciplinary professionals capable of providing comprehensive judicial protection for intellectual property rights.
Highlight key priorities and strengthen accountability.
Anhui has deployed work related to juvenile courts across the province’s courts.
Recently, the Anhui Provincial Higher People’s Court convened a province-wide conference on juvenile court work to implement the spirit of the Seventh National Conference on Juvenile Courts and to outline priorities for the current period and the foreseeable future. Dong Kaijun, Secretary of the Party Group and President of the Anhui High People’s Court, attended the meeting and delivered a speech. Officials from relevant departments of 11 entities, including the Provincial Political and Legal Committee, the Standing Committee of the Provincial People’s Congress, and the Provincial People’s Government, as well as some deputies to the National People’s Congress, provincial people’s congresses, and members of the Chinese People’s Political Consultative Conference, also took part in the meeting.
The meeting emphasized that courts across the province must prioritize key tasks, strengthen accountability, and promote high-quality development of juvenile court work in the new era. It called for comprehensively reinforcing judicial protection of minors’ rights and interests, with a particular focus on preventing juvenile delinquency. A province-wide special campaign to prevent juvenile lawbreaking and crime will be launched, with case‑by‑case adjudication, social investigations, psychological interventions, courtroom education, post‑sentencing follow‑ups, and community supervision carried out in accordance with the law. The system of sealing juvenile criminal records will be fully implemented, judicial functions will be extended, legal publicity and education will be strengthened, and the effectiveness of public legal awareness‑raising will be enhanced. Furthermore, reforms of the juvenile court system will be continuously deepened, the performance‑evaluation framework will be refined, weighting factors will be optimized to create positive incentives, and the pioneering spirit at the grassroots level will be harnessed to encourage and guide innovative practices in local juvenile courts.
The meeting noted the need to advance the improvement of a comprehensive protection system for minors. It emphasized fostering a holistic, coordinated approach, fully implementing the Family Education Promotion Law, ensuring the effective deployment of vice principals for legal education in primary and secondary schools, actively participating in online governance and safeguarding the online rights and interests of minors, and proactively exploring the establishment of a judicial‑social support framework. Furthermore, it called for strengthening the institutional foundation for the development of juvenile courts by promptly reporting to the corresponding Party committees and governments, enhancing the allocation of personnel, funding, and resources to these courts, prioritizing the building of adjudicatory bodies, bolstering the ranks of juvenile court judges, and elevating the professional standards of juvenile justice.
At the meeting, 20 advanced collectives and 50 outstanding individuals from juvenile courts across the province were commended, and four courts shared their experiences.

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