JC Master Legal News Issue 1079

Key Takeaways for This Issue

Guidelines for Sustainability Disclosure by Listed Companies Are Under Development and Drafting
On September 7, Guo Jun, Deputy Director of the Listed Companies Supervision Department of the China Securities Regulatory Commission, stated at the 2023 China Sustainable Investment and Free Trade Port Development Forum that the CSRC is guiding the Shanghai and Shenzhen Stock Exchanges in drafting sustainability disclosure guidelines for listed companies.
The National Administration of Financial Regulation has issued the “Notice on Matters Concerning the Pilot Program for Individually Tax-Deferred Commercial Pension Insurance and Its Coordination with the Individual Pension System.”
To implement the requirements of the personal pension system and to steadily advance the pilot program for individually funded, tax-deferred commercial pension insurance in alignment with the personal pension scheme, the National Administration of Financial Regulation has issued the “Notice on Matters Relating to the Alignment between the Pilot Program for Individually Funded, Tax-Deferred Commercial Pension Insurance and the Personal Pension Scheme.”
The VAT additional deduction policy has been further expanded, bringing advanced manufacturing enterprises within its scope of application.
On September 6, the Ministry of Finance published on its website the “Announcement on the Value-Added Tax Additional Deduction Policy for Advanced Manufacturing Enterprises” (No. 43 of 2023), which took effect on January 1, 2023.
The CIETAC has released its new arbitration rules, marking several “firsts.”
On September 5, the “China International Commercial Arbitration Annual Report (2022–2023)” was released.
Finance & Capital Markets
Jiao Jinhong, Chief Counsel of the China Securities Regulatory Commission, stated that a special campaign to address “financial restatements” among listed companies has been launched, and investigations have been initiated against 32 companies.
At the 2023 China International Finance Annual Forum, Jiao Jinhong, Chief Counsel of the China Securities Regulatory Commission, stated that in recent years, the CSRC has strengthened regulatory enforcement in the capital market, adopted a “zero-tolerance” approach to cracking down on illegal and non-compliant activities, continuously improved the market environment, and remained committed to addressing issues at an early stage and at their nascent level while reinforcing routine oversight.
He stated that, since the beginning of this year, the China Securities Regulatory Commission has launched a special campaign to conduct “clean‑up” reviews of listed companies’ financial statements, initiating investigations into 32 offices. The targeted initiative on corporate governance has concluded successfully, with a rectification rate exceeding 95% for identified issues. Meanwhile, oversight of annual report audits has been strengthened, resulting in “non-standard” audit opinions being issued for the annual reports of 235 listed companies. On-site inspections of securities and fund institutions have been intensified, and a special campaign to foster industry‑wide cultural development has been carried out. In areas where internal governance, performance appraisal, and employee management remain relatively weak, regulatory standards have been tightened, and violators—both institutions and responsible individuals—have been swiftly and rigorously sanctioned.
Jiao Jinhong stated that the China Securities Regulatory Commission has established a coordination task force to combat illegal activities in the capital market, strengthening coordination on major cases and improving information-sharing mechanisms. In collaboration with public security authorities, it has successfully investigated and prosecuted a number of high-profile, significant cases through intelligence-led investigations. Additionally, a working mechanism has been put in place for the Supreme People’s Procuratorate to dispatch personnel to the CSRC, and a system has been established to simultaneously forward criminal‑related referral cases to the procuratorial organs. From 2021 to 2022, a total of 190 such cases were concurrently forwarded to the procuratorates.
In addition, he stated that the CSRC has intensified its efforts to prosecute major and high‑profile cases and to enforce the law in key areas. From 2021 to 2022, it handled more than 1,200 cases involving financial fraud by listed companies, illegal conduct by intermediary institutions, and false statements in bond offerings, issuing over 700 penalty decisions, imposing fines and confiscations totaling more than RMB 7 billion, and banning over 160 individuals from the securities market.

Illegal share reductions take many forms; on August 18, shareholders of eight companies received regulatory letters.
Illegal share reductions persist despite repeated bans, prompting regulators to take strong, swift action.
According to statistics, in August, the Shanghai Stock Exchange and the Shenzhen Stock Exchange jointly issued 18 regulatory documents concerning illegal share reductions by listed companies. By type of violation, the most common offenses include trading within prohibited periods and breaches related to changes in shareholding ratios. As for the parties involved, violations were committed by shareholders holding more than 5% of a company’s shares, as well as directors, supervisors, and senior executives; there were also instances of multiple shareholders colluding to engage in unlawful share reductions.
Recently, the China Securities Regulatory Commission issued requirements to further regulate share‑selling activities by relevant parties. This new regulation on share reductions has become a major step in bolstering the current vibrant capital market.
The lawyer stated that the legal and regulatory framework should be further refined, with more detailed provisions and operational guidelines on share reductions, ensuring that such reductions by listed companies are conducted within the bounds of the law and leaving no opportunity for those seeking to profit through unlawful share sales.
Frequent violations of share reduction rules within the prescribed period.
What characteristics do the latest cases of illegal share reductions exhibit?
An analysis of the announcements reveals that, among the 18 cases of unauthorized share reductions, five violated the requirement prohibiting sales within a specified period.

For example, Zeng Xianzhi, a director and deputy general manager of Bojie Co., Ltd., sold 104,000 shares of the company via block trades on July 6, representing 0.075% of the company’s total share capital, for a transaction value of RMB 4.0602 million. Two days later, Bojie Co., Ltd. disclosed its “2023 First-Half Performance Forecast,” projecting that its first-half results would decline by 87.89% to 91.52% compared with the same period last year. This transaction occurred within ten days of the company’s announcement of its half-year performance forecast, constituting an unauthorized reduction in holdings. The Shenzhen Stock Exchange has required Mr. Zeng to learn from this incident, promptly implement corrective measures, and prevent similar violations from recurring.
For example, a supervisory board member of a listed chemical company sold 25,400 shares of the company’s stock in four separate transactions via block trades on the secondary market from January 3 to 10, representing 0.013% of the company’s total share capital, for a total transaction value of approximately RMB 860,000. The company disclosed a preliminary announcement of a year‑on‑year earnings increase for 2022 on January 12. All of the supervisor’s sales occurred within ten days of the earnings forecast release, constituting prohibited trading during the earnings‑forecast window period. The Shanghai Stock Exchange issued a regulatory warning to the supervisor.
In addition, Shanxi Lucheng Rural Commercial Bank, a former shareholder of Rendong Holdings holding more than 5% of its shares, reduced its stake in Rendong Holdings by 300,000 shares through block trades on May 10, 2022, representing 0.05% of Rendong Holdings’ total share capital, for a transaction value of RMB 2.034 million.
On March 25, 2022, Rendong Holdings received an Administrative Penalty Decision from the China Securities Regulatory Commission, under which the company and certain senior executives were subject to administrative penalties for violating relevant provisions of the Securities Law. Shanxi Lucheng Rural Commercial Bank engaged in share reductions within six months of Rendong Holdings’ receipt of the administrative penalty, constituting a violation of securities‑related regulations. The Shenzhen Stock Exchange has urged the company to give full attention to these issues, draw appropriate lessons, implement timely rectification measures, and ensure that such violations do not recur.
On August 21, the Shenzhen Stock Exchange issued a penalty notice that also revealed the details of Zhang Xin, a shareholder of five listed companies, who repeatedly engaged in unauthorized share reductions.
According to the disciplinary decision, Zhang Xin was a former shareholder of Yanhuhu Shares, Zhejiang Shibao, Huazhong CNC, Runjian Shares, and Landun Shares. Between 2021 and 2023, after acquiring shares representing more than 5% of the outstanding stock in each of these five companies through block trades, Zhang Xin transferred those shares within six months of acquisition. The Shenzhen Stock Exchange rejected Zhang Xin’s arguments and imposed a public censure as a disciplinary measure.
Ye Xiaojie, Director of the Department of Finance at the National Accounting Institute in Shanghai, argues that repeated violations of share‑sale restrictions cannot be curbed without addressing both subjective and objective factors. On the one hand, major shareholders and directors, supervisors, and senior executives—being a small but pivotal group—typically enjoy an informational advantage. For instance, they are often among the first to access material information prior to the release of periodic reports or other significant events, giving them the objective capacity to exploit this advantage by “jumping the gun” and engaging in unauthorized share sales. On the other hand, such violations usually involve substantial profit opportunities: cashing out shares at relatively high prices can yield considerable gains, thereby constituting the subjective motivation behind these illicit transactions.
“Violations related to changes in shareholding ratios” account for the largest share.
Among the aforementioned 18 cases of unauthorized share reductions, eight involved violations arising from cumulative changes in shareholding that reached 5%, including instances of a single transaction reducing holdings by more than 5% as well as successive transactions that, when aggregated, totaled 5%.
For example, an executive of a Shenzhen‑listed company sold a total of 40.1705 million shares between June 17, 2021, and August 21, 2023, through both centralized bidding and block trades, representing 5.42% of the listed company’s total share capital. Following these transactions, the executive’s shareholding ratio decreased from 15.09% to 9.67%.
The Shenzhen Stock Exchange determined that, upon the cumulative change in the executive’s shareholding reaching 5%, the executive failed to promptly fulfill the reporting and disclosure obligations and to cease selling shares of the listed company, as required by Article 13 of the Measures for the Administration of Acquisitions of Listed Companies (revised in 2020).
For example, Dashing Group, from November 18, 2016, to November 22, 2016, its concerted actor, Dashing Investment Management Co., Ltd., cumulatively reduced its holdings in Zhongxing Commercial by 3.08% through centralized bidding. From April 23, 2019, to December 30, 2022, Dashing Group first increased its stake by 1.74% and subsequently reduced it by 4.81% in Zhongxing Commercial shares.
Prior to this change in equity interests, Dalian Department Store Group and its concerted actors collectively held a 20% stake. Following the transaction, their combined shareholding fell to 13.85%, representing a reduction of 6.15 percentage points, which constitutes a violation of securities‑related disclosure and trading rules. The Shenzhen Stock Exchange has issued a public reprimand to Dalian Department Store Group.
In addition, Anle Group, between June 17, 2020, and February 14, 2022, reduced its stake in Jialitu through both centralized bidding and block trades, decreasing its shareholding by a total of 5.59 percentage points. Upon reaching a 5% change in its shareholding, Anle Group failed to promptly cease trading and did not timely disclose a report on the change in equity interests; instead, it continued to actively sell shares until the cumulative change amounted to approximately 10.20% of the company’s total share capital, at which point it finally filed a simplified report on the change in equity interests. During this period, it engaged in unauthorized active share sales totaling 1.2799 million shares, representing 0.59% of the company’s total share capital. The Shanghai Stock Exchange issued a regulatory warning to Anle Group.
In addition, from November 25, 2021, to May 11, 2023, Zhang Renhua and Han Xu, controlling shareholders of Ruikang Pharmaceutical, reduced their holdings by 88.3679 million shares through block trades, bringing their aggregate shareholding in Ruikang Pharmaceutical down from 31.59% to 25.72%, for a cumulative change of 5.87%. On May 11, 2023, Zhang Renhua further sold 15 million shares via block trades, representing a 1% reduction in his stake. The Shenzhen Stock Exchange has requested that the company draw lessons from this incident, implement timely corrective measures, and prevent recurrence of such issues.
From the beginning of this year through August 9, more than 50 A-share companies have had their shareholders slapped with fines or subjected to regulatory measures for violating share‑sale restrictions. Many shareholders have sought to cash out through illicit share reductions, disrupting market order and making them prime targets for stringent enforcement by regulators.

Lowering the Bar! The Beijing Stock Exchange Expands Its Market-Making Membership
The threshold for market makers on the Beijing Stock Exchange has been lowered.
On September 1, the China Securities Regulatory Commission (CSRC) issued relevant policies. Previously, to ensure a stable market launch, the Beijing Stock Exchange had aligned its market-maker qualification requirements with those of the STAR Market; however, the STAR Market’s entry barriers were relatively high. To broaden the pool of market makers and enhance market liquidity, the CSRC has revised the eligibility criteria for market-making on the Beijing Stock Exchange: the net capital requirement for securities offices has been lowered from RMB 10 billion to RMB 5 billion; and the previous requirement of maintaining an A‑class rating for three consecutive years has been replaced by a new standard—having at least one year of an A‑class rating in the past three years, coupled with a B‑class rating or higher in the most recent year.
At present, 15 securities offices have obtained market-making qualifications on the Beijing Stock Exchange. Market participants expect that, as eligibility thresholds are lowered, more brokerage offices will join the ranks of market makers on the exchange, potentially boosting market liquidity.
The net capital threshold has been lowered to RMB 5 billion.
On September 1, the China Securities Regulatory Commission issued the “Special Provisions on Market-Making Trading of Beijing Stock Exchange Stocks by Securities Companies” (hereinafter referred to as the “Special Provisions”), which shall take effect from the date of their promulgation. The Special Provisions comprise seven articles and primarily address market-making eligibility criteria for BSE stocks, arrangements for aligning relevant rules, and supervisory and administrative measures.
The “Special Provisions” appropriately adjust the capital‑strength and classification‑rating requirements for securities offices seeking to obtain market‑making qualifications on the Beijing Stock Exchange, building on the criteria applicable to the STAR Market. Specifically, the net capital threshold is lowered from RMB 10 billion to RMB 5 billion; the requirement that a office maintain an A‑class rating (or higher) for three consecutive years is revised to stipulate that, over the past three years, the office must have at least one year with an A‑class rating (or higher), and that its most recent annual rating be B‑class (or higher). In addition, two new indicators more aligned with the characteristics of the Beijing Stock Exchange have been introduced: ranking among the top 20 in the number of companies sponsored for listing on the Beijing Stock Exchange, or ranking within the top 50 in terms of market‑making turnover on the New Third Board over the past year. All other conditions remain unchanged.
Meanwhile, to ensure seamless coordination with the “STAR Market Market-Making Regulations,” the “Special Provisions” stipulate: First, entities that have obtained qualification to conduct market-making trading in listed securities pursuant to the “STAR Market Market-Making Regulations” may, in accordance with the relevant rules, engage in market-making activities on the Beijing Stock Exchange. Second, apart from the admission requirements, other provisions—covering the securities offices’ admission procedures, obligation fulfillment, market‑making inventory sources, risk management, and monitoring of abnormal trading—are to be implemented by reference to the “STAR Market Market-Making Regulations.”
According to reports, in February this year, the Beijing Stock Exchange introduced a market-making system, which has begun to deliver its intended functions. At present, 15 securities offices have obtained market-making authorization on the exchange, and market-making transactions account for roughly 6% of the total trading value of the stocks subject to market making.
At the time, one of the prerequisites for this group of market makers to apply for market-making qualifications on the Beijing Stock Exchange was obtaining approval from the China Securities Regulatory Commission (CSRC) and acquiring eligibility to conduct market-making trading in listed securities. This eligibility was identical to the market-making qualification previously required for the STAR Market. In other words, the threshold for market makers on the Beijing Stock Exchange had previously been aligned with that of the STAR Market. The latest policy, however, has appropriately lowered the entry barrier for market makers on the Beijing Stock Exchange.
It is reported that from July 28 to August 27, 2023, the China Securities Regulatory Commission (CSRC) publicly sought comments on the “Special Provisions.” Overall, stakeholders expressed strong support for the provisions, while also calling for an expansion of the Beijing Stock Exchange’s market-making roster and the inclusion of more high-quality market makers from the New Third Board. Following careful deliberation, the CSRC has incorporated these suggestions and further refined the relevant eligibility criteria.
Following September 1, “qualified securities offices may, in accordance with the relevant requirements, apply to the CSRC for eligibility to conduct market-making trading in Beijing Stock Exchange stocks,” the CSRC stated.
Expand the market-making roster.
On September 1, a responsible official from the relevant department of the China Securities Regulatory Commission answered questions from reporters regarding the issuance of opinions on high-quality development of the Beijing Stock Exchange.
Regarding measures to improve the trading mechanism, the China Securities Regulatory Commission stated that the Beijing Stock Exchange is primarily oriented toward financing for small and medium-sized enterprises on the funding side, while its investor base consists of qualified investors. Under this market structure, it is essential to fully leverage the functions of the trading mechanism, refine institutionally distinctive arrangements, and ensure that the market maintains an appropriate level of liquidity.
“The market‑making system helps enhance the trading activity and liquidity of small- and mid‑cap stocks. Going forward, with a focus on refining the market‑making mechanism, we will continue to improve the Beijing Stock Exchange’s trading framework, primarily by: first, expanding the pool of market makers. After years of development, the New Third Board has cultivated a cohort of securities offices deeply engaged in market‑making. Initially, to ensure a stable start, the BSE’s market‑maker qualification regime was aligned with that of the STAR Market. Building on this foundation and in light of actual market conditions, we now propose to establish market‑maker eligibility criteria that better reflect the BSE’s unique characteristics, allowing qualified New Third Board market makers to participate in BSE market‑making activities and thereby increasing the overall number of market makers on the exchange. In addition, we will explore the possibility of permitting private equity funds to engage in market‑making trading on the BSE,” the China Securities Regulatory Commission stated.
On the same day, the Beijing Stock Exchange also announced that, in order to expand its pool of market makers, the China Securities Regulatory Commission has issued the “Special Provisions,” inviting more high-quality market makers from the New Third Board and securities offices actively engaged in sponsorship business on the Beijing Stock Exchange to participate in market-making activities. To effectively implement this expansion of the market-maker base, the Beijing Stock Exchange has streamlined the application process for securities offices seeking to engage in market-making, further strengthened market-making business management and risk‑control mechanisms, and ensured the smooth, steady, and risk‑controlled operation of market-making activities.

Comprehensive measures to boost confidence: a new round of deepening reforms in the capital market has been launched.
A new round of deepening reform and opening-up in the capital market has been launched. Measures such as the “25 Measures” to invigorate the capital market, the Beijing Stock Exchange’s “19 Measures for Deep Reform,” and regulations governing share‑sale restrictions are being implemented in a coordinated manner across investment, financing, and trading channels. These policies address both short-term pain points and long-term structural challenges, with a focus on institutional reforms and improvements. They will help forge a powerful synergy to energize the market and bolster investor confidence, enabling the capital market to better fulfill its roles in resource allocation, price discovery, and risk management, and fostering positive interactions with the real economy.
Implementing a comprehensive set of measures to boost investor confidence.
Recently, the China Securities Regulatory Commission has resolutely implemented the CPC Central Committee’s important directive to “vitalize the capital market and boost investor confidence,” rolling out 25 policy measures. Subsequently, multiple government departments introduced a series of policies and measures to support the development of the capital market, including halving the securities transaction stamp tax. On August 27, the CSRC issued another package of policy measures, covering a temporary tightening of the IPO pace, the release of regulations to standardize share‑reduction practices, and a moderate relaxation of margin‑financing ratios. In early September, the Beijing Stock Exchange unveiled its “19 Measures for Deepening Reform,” further accelerating efforts to build a robust, coordinated system that serves as the primary platform for innovative small and medium-sized enterprises.
Gong Fang, Chief Researcher at the Sinolink Securities Research Institute and Director of the Policy Research Office, believes that bolstering the confidence of private entrepreneurs, consumers, and investors is a key priority for macroeconomic policy. The recent series of capital market policies and measures represent an integral part of broader macro‑regulatory efforts, aimed at further enhancing investor confidence while also serving as an effective institutional complement to the comprehensive registration‑based reform, thereby helping to foster a healthy and sustainable ecosystem in the capital markets. Moreover, these initiatives are highly targeted, promptly addressing pressing market and investor concerns, reducing transaction costs, and contributing to higher returns and greater satisfaction among investors.
It is reported that, with a focus on high-quality development and the construction of a modern capital market system with Chinese characteristics, the capital market has preliminarily established a “1+N+X” policy framework. Public information indicates that, among the specific measures under this framework, the “Opinions on High-Quality Development of the Beijing Stock Exchange” have already been issued, while the “Action Plan for Reform on the Investment Side of the Capital Market” and the “Action Plan for Leveraging the Capital Market to Support the Building of a Modern Industrial System” are being urgently formulated.
“As the ‘1+N+X’ policy framework and key initiatives are implemented, and through coordinated efforts on both the investment and financing sides, the quality and effectiveness of capital market services in supporting the real economy and building a modern industrial system will continue to improve,” said Jiao Jinhong, Chief Counsel of the China Securities Regulatory Commission.
The effectiveness of the counter-cyclical adjustment mechanism in the primary and secondary markets is gradually becoming apparent.
As the package of policies and measures continues to be implemented, the capital market has also witnessed several positive developments.
On the one hand, following the release of new regulations governing share‑sale restrictions, numerous companies issued announcements on the evening of August 28 explicitly stating that their shareholders had voluntarily terminated their planned share reductions. According to statistics from Xingzheng Asset Management, from August 29 to 31, a total of 77 listed‑company shareholders voluntarily withdrew their share‑reduction plans. Listed‑company shareholders have responded positively to the new rules, bolstering confidence among both companies and investors while also helping to invigorate the capital market.
“The new regulations on share reductions and the adjustment of the IPO pace can effectively alter supply in the secondary market, thereby helping to improve liquidity conditions,” said Tian Lihui, Director of the Institute for Financial Development at Nankai University. He added that the institutional framework underlying the new rules aligns the interests of major shareholders with corporate development, “encouraging them to focus not on cashing out and exiting, but on enhancing corporate profitability and dividend payouts in the current environment.” More importantly, these measures underscore the CPC Central Committee’s high regard for the capital market and its commitment to protecting and safeguarding small and medium-sized investors.
On the other hand, the scale of share buybacks in the A-share market has been steadily expanding. According to data from Choice, nearly 400 A-share companies disclosed buyback-related announcements—including proposals, plans, and progress updates—in August alone, with more than 140 of them having announced shareholder‑initiated buyback proposals or formal buyback plans.
Tianfeng Securities stated that share buybacks and additional share purchases by listed companies help convey a positive signal to the market, underscoring confidence in economic recovery. Large-scale buybacks and increased holdings not only contribute to restoring and enhancing a company’s reputation but also safeguard the interests of existing investors and bolster investor sentiment.
Promote the entry of medium- and long-term capital into the market with greater vigor.
Industry experts generally agree that the recent flurry of policies aimed at invigorating the capital market clearly and unequivocally signals the decision-makers’ commitment to safeguarding market stability. Further measures are expected to be rolled out in due course, bolstering risk appetite. Among these, vigorously encouraging medium- and long-term capital to enter the market stands as the top priority for the next phase of investment‑side reforms in the capital market.
“The next phase of policy efforts will continue to focus on establishing a robust institutional framework that supports the sustained, medium- to long-term improvement of A‑shares,” said Li Zhan, Chief Economist at China Merchants Fund’s Research Department. This includes actively attracting medium- and long-term investment capital, accelerating the nationwide rollout of the individual pension system to broaden its coverage, enriching the range of individual pension products, expanding both on‑ and off‑exchange financial derivatives, relaxing restrictions on the use of derivatives by various institutional investors, and proactively encouraging all types of medium- and long-term capital to adopt a performance‑oriented, long‑term investment approach.
Ge Xiaobo, Chairman and President of Guolian Securities, believes that insurance funds, pension and annuity assets, and bank‑channel funds currently constitute the most significant sources of long-term capital. He recommends that the state strengthen policies to encourage the deployment of medium- and long-term capital, enabling it to serve as a “stabilizer” and “ballast” in the market. To this end, he suggests appropriately lowering entry barriers for major medium- and long-term institutional investors—such as the social security fund, bank wealth‑management products, and insurance asset management offices—while optimizing the capital market environment to create conditions that make these investors both willing to enter and able to remain.
In Gong Fang’s view, in addition to addressing bottlenecks that hinder the entry of medium- and long-term capital into the investment side, action plans are also being actively formulated on the financing side to enable the capital market to better support high-level scientific and technological self-reliance and a modern industrial system. These measures will further expand the supply of high-quality medium- and long-term assets and enhance the capital market’s capacity to generate growth. On the product front, foundational instruments such as Shenzhen 100 Index futures and options, as well as CSI 1000 ETF options, will be launched one after another, and the diversification of basic financial products will provide investors with more tools for risk hedging and diversified trading. The introduction of this series of initiatives will further strengthen the functions of the capital market and boost its vitality and attractiveness.

The Shenzhen Stock Exchange hosted a special event on “Innovation and Growth: The National Defense Science and Technology Industry Chain,” aiming to better support high-level scientific and technological self-reliance and strength.
The “Innovation and Growth: Special Event on the Defense‑Technology Industry Value Chain,” co‑hosted by the Shenzhen Stock Exchange, the Shaanxi Provincial Local Financial Regulatory Bureau, the Shaanxi Securities Regulatory Bureau, the competent authority for the defense‑technology industry in Shaanxi, and CITIC Science & Technology Co., Ltd., was successfully held in Xi’an, Shaanxi. The event aimed to further enhance the capital market’s ability to serve the defense‑technology industry, highlight the leading role of strategic emerging industries, unleash momentum for high‑quality development, and foster a high‑level cycle among technology, industry, and capital within the defense‑technology sector, thereby better supporting China’s drive toward independent and self‑reliant scientific and technological advancement.
During the event, experts from central state-owned enterprise groups in the defense‑technology and industrial sectors, listed companies, Shaanxi’s competent authorities for defense‑technology and industry, the Shaanxi Provincial Local Financial Regulatory Bureau, the Shaanxi Provincial Department of Industry and Information Technology, the Shenzhen Stock Exchange, and various market institutions gathered at the eighth session of the “SZSE·Chuangxianghui” program. They engaged in exchanges and discussions, sharing insights on topics such as reshaping corporate value in the defense‑technology and industrial sector, nurturing high‑quality enterprises, and emerging trends in industry development. Meanwhile, CITIC Science & Technology Co., Ltd., together with securities offices and law offices, conducted specialized training sessions on information disclosure, corporate governance, and capital operations for the 85 listed and pre‑listed companies in the defense‑technology and industrial fields, as well as for participating investment institutions. In addition, the Shenzhen Stock Exchange, in collaboration with fund management companies, hosted the “Innovation & Growth: ETF Masterclass” at brokerage‑office investor‑education centers, facilitating in-depth dialogue with more than 50 investors on the ETF market and its ecosystem, as well as the investment appeal of high‑end equipment ETFs.
The defense science, technology, and industry is a strategic high‑tech sector of national importance, serving as a key driver and enabler for economic development, scientific and technological progress, and industrial upgrading. The report to the 20th National Congress of the Communist Party of China emphasized “optimizing the structure and layout of the defense science, technology, and industry and strengthening its capacity‑building,” which constitutes both an important task and a major opportunity for the development of related industries in the current and coming period. In recent years, the Shenzhen Stock Exchange has continuously deepened its strategic cooperation with the State Administration for Science, Technology and Industry for National Defense, central state‑owned enterprises in the defense science, technology, and industry, local governments, and market institutions. Together, they have organized a series of initiatives, including specialized training programs for defense‑related companies, thematic salons, and guidance on corporate listings, thereby actively supporting the enhancement of capabilities within the defense science, technology, and industry. At present, the Shenzhen market lists 116 companies in the defense science, technology, and industry, including AVIC Xi’an Aircraft Industrial Co., Ltd., NORINCO Hongjian Group, CASIC Rainbow, CASC Tianyi Rocket, Filihua, Sanjiao Defense, and AVIC Electric Measurement Instrument Co., Ltd., with a combined market capitalization of approximately RMB 1.5 trillion.
Shaanxi Province is a national hub for the development of the defense‑related science and technology industry and a major center for specialized talent, boasting a complete defense‑technology industrial chain. The Shenzhen Stock Exchange has long placed great emphasis on supporting Shaanxi’s development: in 2019, it signed a strategic cooperation agreement with the Shaanxi Provincial Government and established the Shaanxi Base; in 2020, it launched a listing‑reserve enterprise management information system developed in-house; and it has continuously organized Capital Market Service Weeks, investment‑and‑financing roadshows, symposiums, and training sessions. To date, 36 companies from Shaanxi Province are listed on the Shenzhen Stock Exchange, having raised RMB 151.3 billion, while the total financing scale of fixed‑income products issued in the Shenzhen market by Shaanxi entities exceeds RMB 124.3 billion.
Going forward, the Shenzhen Stock Exchange will, under the unified leadership of the China Securities Regulatory Commission, uphold the principle of “two unwavering commitments,” fully leverage the unique characteristics and functional strengths of the Shenzhen market, place greater emphasis on supporting high‑level scientific and technological self‑reliance and strength, and actively contribute to the development of a modern industrial system. First, we will deepen capital market reforms and strengthen support for direct financing. Focusing on key sectors such as advanced manufacturing, the digital economy, and green, low‑carbon industries, we will further refine mechanisms for the capital market to support technological innovation, expand targeted institutional and product offerings, and strive to build a transparent, clean, and high‑quality registration system. We will also launch the “Three Sunlight, Two Promotions” special campaign in depth, continuously guiding innovative resources toward priority areas of national strategic support. Second, we will enhance the quality and effectiveness of bond market services and establish a new hub for REITs development. We will implement a “green channel” policy for science and technology innovation bonds—enabling immediate review upon filing and issuance upon approval—strengthening the bond market’s precise support for technological innovation, accelerating the implementation of high‑quality REITs projects, promoting the regular issuance of REITs, and facilitating the transition from old to new growth drivers. Third, we will build a full‑cycle, digital‑intelligent service platform to bolster high‑quality economic development. We will further mobilize the concerted efforts of all market participants, advance the high‑quality construction of the Science and Technology Exchange Center, deepen the coordinated operation of platforms such as “Science‑Finance Integration,” “Equity‑Traffic,” “Cultivation‑Connect,” and “Growth‑Link,” and serve the commercialization of scientific and technological achievements and the cluster‑based industrialization of key strategic sectors, including the defense‑related science and technology industry. We will also support high‑quality technology enterprises in tiered, orderly access to the capital markets, thereby fostering a cohort of high‑quality listed companies.

Guidelines for Sustainability Disclosure by Listed Companies Are Under Development and Drafting
On September 7, Guo Jun, Deputy Director of the Listed Companies Supervision Department of the China Securities Regulatory Commission, stated at the 2023 China Sustainable Investment and Free Trade Port Development Forum that the CSRC is guiding the Shanghai and Shenzhen Stock Exchanges in drafting guidelines on sustainability disclosure for listed companies. He noted that, given China’s national conditions, it would be prudent to begin with voluntary disclosure; however, permitting voluntary disclosure does not mean that companies may disclose information arbitrarily—such disclosures must still meet the minimum requirements for information disclosure and comply with relevant capital market regulations.
“The development of sustainability‑related disclosure rules is a complex, system‑wide undertaking, encompassing a broad range of issues, involving numerous stakeholders, and having far‑reaching economic implications—far beyond the scope of conventional, specific disclosure requirements,” said Guo Jun. He added that, in advancing this rulemaking process, the following fundamental principles should be upheld:
Adhere to the principle of seeking truth from facts: in rule‑making, we must balance theoretical rigor and scientific soundness with a comprehensive assessment of listed companies’ capabilities, market institutions’ capacities, and regulatory effectiveness. Uphold a systems‑thinking approach: both in drafting rules and in their implementation, we should emphasize systemic and holistic perspectives, focusing on concrete actions to drive higher‑quality disclosure through improved practice. Remain self‑reliant: while actively drawing on and adapting beneficial international experiences, we must also calibrate the pace of implementation to develop a roadmap that is well‑suited to our own circumstances.
Guo Jun stated that, in the process of establishing and improving China’s disclosure framework for the sustainable development of listed companies, many specific issues still require careful study. These include: the implementation pathway for reporting—namely, whether mandatory disclosure should be required; the target audience and format of reporting—i.e., who the disclosures are intended for and how they are presented; the content to be disclosed—specifically, which topics should be addressed; and the selection of reporting indicators—namely, how to set the appropriate level of standards.
He stated that, at the micro level, among the more than 5,000 listed companies, there are substantial differences in both the practical foundations and managerial capabilities across offices of varying sizes and in different industries. Consequently, the same disclosure requirements may empower certain large enterprises while imposing a burden on smaller ones.
“Given China’s national conditions, it is relatively prudent to begin with voluntary disclosure,” said Guo Jun. The capital market places high demands on the quality of disclosures, emphasizing consistency and comparability in information reporting. Allowing voluntary disclosure does not mean that companies can disclose information arbitrarily; such disclosures must still meet the minimum standards for information disclosure and comply with the relevant rules governing the capital market.
He argues that, in choosing a course of action, it is essential not only to ensure theoretical consistency but also to assess alignment with the local social and cultural context. Whether the disclosed content can gain societal acceptance is one of the key considerations in rule‑making. As for agenda‑setting, it is important to balance commonalities with specificities—taking into account both international consensus and domestic priorities—and, grounded in China’s national conditions, to develop solutions that can garner broader agreement.
In addition, Guo Jun noted that it is important to view the relationship between sustainability disclosure and sustainability practices in the proper light.
“Sustainability disclosure is merely an outward‑facing outcome; the key lies not in how polished or flashy the report is, but in whether better practices are actually being implemented,” said Guo Jun. He emphasized that companies must genuinely elevate the importance they attach to sustainable development, systematically strengthen internal management improvements, and embed enhanced sustainability capabilities into their day‑to‑day operations. Moreover, they should adopt a balanced perspective on the relationship between sustainable investing and sustainable information disclosure.

The National Administration of Financial Regulation has issued the “Notice on Matters Concerning the Pilot Program for Individually Tax-Deferred Commercial Pension Insurance and Its Coordination with the Individual Pension System.”
To implement the requirements of the personal pension system and to steadily advance the pilot program for individually funded, tax-deferred commercial pension insurance (hereinafter referred to as “tax‑deferred pension insurance”) in alignment with the personal pension scheme, the National Administration of Financial Regulation has issued the “Notice on Matters Concerning the Alignment Between the Pilot Program for Individually Funded, Tax-Deferred Commercial Pension Insurance and the Personal Pension System” (hereinafter referred to as the “Notice”).
The Notice comprises 16 provisions, with its main contents clarifying work requirements, business adjustments, product management, policy transfers, and other matters in the process of aligning the deferred‑tax pension insurance pilot program with the individual pension system. It also sets forth requirements for China Banking and Insurance Information Technology Management Co., Ltd. to coordinate customer information verification and strengthen system development, as well as for the pilot insurance companies offering deferred‑tax pension insurance regarding their operational procedures, public announcements, and information reporting.
The National Administration of Financial Regulation will steadfastly uphold the political and people-centered nature of financial work, safeguard consumer rights in accordance with the law and regulations, strengthen coordination and guidance, and urge the industry to ensure smooth transitions across all relevant tasks, thereby promoting the sustained and sound development of the individual pension system.

Commercial & Corporate
The Cyberspace Administration of China has imposed a fine of RMB 50 million on CNKI for illegally processing personal information.
On September 6, according to China Internet Information Office, the National Internet Information Office imposed administrative penalties on CNKI in accordance with the law as part of a cybersecurity review.
Upon investigation, it was conofficeed that CNKI is primarily operated by three companies: Tongfang CNKI (Beijing) Technology Co., Ltd., Tongfang CNKI Digital Publishing Technology Co., Ltd., and China Academic Journals (CD Edition) Electronic Magazine Co., Ltd. The 14 apps it operates, including Mobile CNKI and CNKI Reading, have engaged in unlawful practices such as collecting personal information in violation of the principle of necessity, collecting personal information without consent, failing to disclose or clearly specify rules for collection and use, failing to provide an account-deletion feature, and failing to promptly delete users’ personal information after they have deactivated their accounts. On September 1, the Cyberspace Administration of China issued administrative penalties in accordance with the law following a cybersecurity review of CNKI, ordering it to cease its unlawful processing of personal information and imposing a fine of RMB 50 million.

The Ministry of Commerce has guided the four regions of the Yangtze River Delta in signing a cooperation agreement on integrated market development.
On September 5, under the guidance of the Ministry of Commerce, the commerce authorities of Shanghai, Jiangsu, Zhejiang, and Anhui signed the “Agreement on Deepening Commercial Development for Market Integration in the Yangtze River Delta Region” in Beijing.
Under the cooperation agreement, the commerce authorities of Shanghai, Jiangsu, Zhejiang, and Anhui will deepen pragmatic cooperation in six key areas: advancing the harmonization of market rules and institutions, fostering interconnected commercial infrastructure, sharing trade and circulation systems, promoting win-win collaboration between agricultural producers and marketers, strengthening regional supply-chain cooperation, and jointly building a favorable market‑consumption environment. These efforts will support high‑level opening-up, boost large‑scale circulation, and help build a robust, integrated market, while continuously ensuring the efficient flow and expansion of markets across the Yangtze River Delta region. They will also accelerate the creation of a business environment that is more stable, fair, transparent, and predictable, thereby contributing to the development of a unified national market. At the same time, the three provinces and one municipality will establish a coordinated mechanism for inter‑provincial and municipal commerce, enhance information exchange, put in place data‑sharing arrangements, and jointly advance the integration of regional markets.

Beijing upgrades its “Two Lists” to attract talent for innovation and entrepreneurship.
On September 4, the Beijing Municipal Human Resources and Social Security Bureau published on its official website the “Notice on the Release of the ‘Catalogue of Human Resource Development for the Construction of the National Comprehensive Demonstration Zone for Expanding Service Sector Opening-Up and the China (Beijing) Pilot Free Trade Zone (2023 Edition).’”
The Notice clarifies that efforts will be further intensified to advance high‑level opening-up, attract top talent to Beijing for innovation and entrepreneurship, and promote the capital’s high‑quality development. The Catalogue of Recognized Overseas Professional Qualifications (Version 3.0) encompasses 122 overseas professional qualifications and has identified seven “high‑value” qualifications to form a Priority Shortage List. Meanwhile, the Human Resources Development Catalogue for the “Two Zones” (2023 Edition) rates 15 core sectors—including chip design and financial technology services—at five stars, reflecting the highest overall level of shortage; additionally, 18 occupations and job categories, such as pharmaceutical formulation technicians and optical instrument inspectors, are classified as being in extremely acute short supply.

Last year, China’s new display industry ranked first globally in terms of output value.
At the 2023 World Display Industry Conference, which opened on the 7th, it was announced that in recent years, a series of key policies and measures have been rolled out one after another, and a large number of major projects have been steadily advanced, strongly propelling the rapid growth of China’s new‑type display industry. From 2012 to 2022, the industry posted a compound annual growth rate of 21.6%. In 2022, the total output value of China’s new‑type display sector exceeded RMB 490 billion, accounting for 36% of the global market and maintaining its position as the world’s largest.
According to reports, in 2022, China’s display‑device industry generated an output value of RMB 367.1 billion, accounting for 48% of the global total. Display‑device shipments reached 160 million square meters, up 5 percentage points year on year, helping China maintain its position as the world’s largest producer of televisions, monitors, smartphones, and laptops. Display technologies are advancing at an accelerated pace, with a steady stream of innovative products emerging; new‑generation displays are increasingly integrated with cutting‑edge technologies such as 5G, artificial intelligence, and the Internet of Things, yielding significant results in areas like industrial control, automotive electronics, telemedicine, and smart cities, thereby supporting the digital and intelligent transformation of diverse industries. Moving forward, China will continue to strengthen innovation‑driven development, address key bottlenecks in the sector, intensify efforts to master critical core technologies, and enhance the resilience and security of industrial and supply chains. At the same time, it will reinforce forward‑looking strategic planning, accelerate the commercialization of emerging display technologies, and expand downstream applications, tailoring product offerings to meet the growing demands of emerging fields such as 5G, AI, the IoT, new‑energy vehicles, and the metaverse.
During this year’s conference, the total number of events—including innovation competitions, exhibition‑trade shows, and new‑product launches—will exceed 30, marking the highest figure in the event’s history. Focusing on hot topics such as smart cities, cultural‑tourism applications, and intelligent hardware, the conference will host thematic forums as well as a series of matchmaking and exchange activities for industry and supply chains. In addition, the event featured a集中 signing ceremony for major projects, with 95 initiatives spanning the next‑generation display industry and its ecosystem, totaling RMB 165.643 billion in investment. Among these, Chengdu signed 51 projects, accounting for RMB 117.576 billion in total investment.

August import and export data have been released! Experts say that policies to stabilize foreign trade may be further strengthened.
According to data released by the General Administration of Customs on September 7, China’s total import and export value for the first eight months of this year reached RMB 27.08 trillion, a slight year-on-year decline of 0.1% (the same below). Specifically, exports totaled RMB 15.47 trillion, up 0.8%, while imports amounted to RMB 11.61 trillion, down 1.3%. The trade surplus stood at RMB 3.86 trillion, expanding by 7.3%.
Specifically for August, the total value of imports and exports reached 3.59 trillion yuan, down 2.5% year on year but up 3.9% month on month. Among them, exports totaled 2.04 trillion yuan, down 3.2% year on year and up 1.2% month on month; imports amounted to 1.55 trillion yuan, down 1.6% year on year and up 7.6% month on month; the trade surplus stood at 488 billion yuan, narrowing by 8.2% year on year (the same below).
Experts’ analysis indicates that the total value of imports and exports declined over the first eight months, with weakening external demand remaining the primary driver. However, in August, as the impact of the earlier high base faded and global trade conditions improved, both import and export figures posted month-on-month gains compared with July.
Global trade conditions have shown a modest recovery, with the decline in August’s imports and exports narrowing.
“Against the backdrop of sluggish global economic and trade growth, China’s exports continued to expand in the first eight months, while its share of the international market remained stable. Looking at monthly trends, export value rebounded to over RMB 2 trillion in July and expanded further in August, posting month-on-month growth for three consecutive months, thereby demonstrating strong resilience,” said Lü Daliang, Director-General of the Statistics and Analysis Department of the General Administration of Customs.
In August alone, the decline in China’s export value narrowed by 7 percentage points compared with July, reflecting a continued marginal improvement on a month-over-month basis.
Wang Qing, Chief Macro Analyst at Orient Securities, stated that there are two main reasons behind the marginal improvement: First, following the peak in exports last July, the year-on-year growth rate of export value plunged in August, thereby boosting this year’s August figures on a year-over-year basis. Second, the recent slowdown in new export momentum has eased somewhat, with August export growth rebounding to levels better than seasonal norms.
In addition, Wang Qing noted that in August, the year-on-year declines in South Korea’s and Vietnam’s exports both narrowed overall, signaling a modest recovery in global trade conditions from their recent lows.
From an export‑destination perspective, in August the growth rates of exports to developed economies such as the United States and the European Union also improved across the board. In dollar terms, China’s exports to the U.S. fell 9.5% year on year, with the decline narrowing sharply by 13.6 percentage points compared with the previous month. Meanwhile, the year‑on‑year growth rate of exports to ASEAN rebounded by 8.2 percentage points.
“This month, export growth to major trading partners has largely rebounded across the board, with particularly strong gains in exports to the United States and ASEAN. Together, these two markets accounted for roughly 65% of the overall improvement in export growth this month, indicating that the decline in exports has narrowed—not only due to the low-base effect, but also reflecting a weakening drag from the slowdown in global demand,” said Wu Chaoming, deputy director of the Caixin Institute.
Although the absolute value of China’s exports to developed economies such as the United States and Europe remains on a downward trend, the share of China’s exports to countries along the Belt and Road continues to rise. According to data from the General Administration of Customs, from January to August, China’s total imports and exports with Belt and Road partner countries reached 12.62 trillion yuan, up 3.6%. Specifically, exports amounted to 7.01 trillion yuan, an increase of 9.4%, while imports totaled 5.61 trillion yuan, down 2.9%.
“This reflects a further optimization of China’s export market structure and an enhanced capacity to withstand external shocks,” said Wang Qing.
However, external demand has yet to fully recover. According to Zheng Houcheng, Chief Macroeconomist at Yingda Securities, the JPMorgan Global Manufacturing PMI stood at 49.0 in August. Although this represents a 0.40‑percentage‑point increase from the previous reading, it has remained below the 50‑point threshold for 12 consecutive months. Consequently, while there is some marginal upside for export growth, the absolute level remains below the threshold, weighing on export expansion.
Automobile exports continue to grow robustly, and policies aimed at stabilizing foreign trade may be further strengthened.
By product category, in the first eight months, China’s exports of electromechanical products totaled RMB 8.97 trillion, up 3.6% and accounting for 58% of the country’s total export value.
Among these, automatic data processing equipment and its parts totaled RMB 849.27 billion, down 19%; mobile phones reached RMB 513.5 billion, down 7.5%; and automobiles amounted to RMB 442.7 billion, up 104.4%.
During the same period, exports of labor-intensive products totaled RMB 2.71 trillion, down 2.4% and accounting for 17.5% of total exports. Specifically, apparel and clothing accessories amounted to RMB 745.28 billion, a decrease of 2.9%, while plastic products reached RMB 461.2 billion, up 1.4%.
Looking ahead, Wu Chaoming expects that a slowdown in external demand will shape the trajectory of export volumes; however, global growth remains relatively resilient, suggesting that the downward slope of export volumes may be moderate. At the same time, the rising risk of de‑China‑ization in Western countries’ supply chains could accelerate the restructuring of global value chains, weighing on China’s export trade and hindering any further expansion of its export market share.
However, Wu Chaoming also pointed out that China’s advantages in its complete industrial chain, the diversification of its trading partners, and the ongoing optimization of its export structure will provide solid support for maintaining its share of global exports.
Since the second quarter, the deceleration in export growth has become a key factor behind the slowing momentum of economic recovery. “This means that to bolster domestic recovery in the third quarter, we will need to rely more heavily on domestic demand, focus on boosting consumption and expanding investment, and effectively restore market confidence. Given that the foreign trade sector generates substantial employment, it will also serve as an important lever for ensuring stable job creation,” said Wang Qing. He added that, going forward, policy measures aimed at stabilizing the scale and optimizing the structure of foreign trade will be further strengthened, including temporary tax and fee reductions for foreign‑trade enterprises, inclusive regulatory frameworks to encourage innovation in new forms of foreign trade such as cross‑border e‑commerce and overseas warehouses, full exploitation of the potential of foreign‑trade infrastructure like China–Europe freight trains, and accelerated progress in bilateral and multilateral trade agreement negotiations—all designed to create a more favorable institutional environment for export growth.
In fact, at the recently concluded 2023 China International Fair for Trade in Services, Wang Shouwen, Deputy Secretary of the Party Group of the Ministry of Commerce and Vice Minister and Chief Negotiator for International Trade, explicitly stated that, going forward, the Ministry will appropriately shorten the negative list for foreign investment access, accelerate the release of a national negative list for cross-border trade in services, and establish an institutional framework for China’s phased opening-up of cross-border services. At the same time, the Ministry will intensify stress tests on the opening-up of pilot free trade zones and free trade ports, strengthen efforts to align these pilots with high-standard international economic and trade rules, and launch the construction of the first batch of national demonstration zones for innovative development of service trade, thereby creating new hubs of openness and innovation.
“Looking ahead, we will continue to implement and refine policies such as the ‘Opinions on Further Optimizing the Foreign Investment Environment and Strengthening Efforts to Attract Foreign Investment,’ guiding foreign capital to increase investment in areas like modern services, energy conservation and environmental protection, and research and development and innovation,” said Wang Shouwen.

The Ministry of Human Resources and Social Security and the Ministry of Finance have issued a notice to further strengthen efforts to implement employment policies.
Recently, the Ministry of Human Resources and Social Security and the Ministry of Finance issued the “Notice on Further Strengthening the Implementation of Employment Policies,” calling on all localities to thoroughly implement the CPC Central Committee and the State Council’s directives on ensuring stable employment, to apply employment support policies in a targeted and effective manner, to enhance public awareness of and compliance with these policies, to bolster the sense of gain among workers and employers, and to translate the outcomes of thematic education into concrete actions that deliver tangible benefits to the people.
The Notice sets forth clear requirements in five key areas. First, it calls for concentrated, targeted outreach on employment policies. A rolling publicity campaign titled “Employment Policies at Your Fingertips” will be launched, with policy lists issued by target group and category, and detailed explanations provided for each measure—ensuring that beneficiaries can easily understand the content, calculate eligibility, and navigate the application process. Second, it mandates a comprehensive review of the implementation progress of employment policies, including a thorough assessment of all measures introduced since 2021 and follow-up inspections to address any outstanding issues. Particular attention will be paid to delays in processing applications, reviewing cases, or disbursing funds; priority will be given to implementing central government‑mandated subsidy programs and safeguarding the basic livelihood needs of vulnerable groups. Any instances of delayed implementation or slow disbursement must be rectified within a specified timeframe. Third, it seeks to vigorously promote the “direct subsidy, rapid processing” service model. This includes extending eligibility to internship subsidies and one-time entrepreneurship grants, conducting monthly data cross‑checks, proactively communicating relevant policy details to eligible applicants, and expediting approval and disbursement. Fourth, it places strong emphasis on supporting private enterprises and small, medium, and micro businesses. A series of outreach events will be organized, with heads of human resources and social security departments visiting enterprises; key private offices and specialized, refined, distinctive, and innovative SMEs will be designated as priority employers, with bundled policy packages rolled out. Through mechanisms such as single‑step notification, one‑stop application processing, and comprehensive benefit delivery, businesses will be better positioned to reap the rewards of these policies. Finally, it underscores the need to continuously address corruption and misconduct affecting the public. Measures will be taken to prevent collusion between insiders and outsiders, irregular practices, favoritism, and dereliction of duty. Service procedures and authority allocations will be streamlined, and a “separation of review and approval” model will be implemented. Failure to properly implement policies will be subject to oversight and reporting, ensuring proactive acceptance of public and societal scrutiny.

Taxation
Delivering a “combination punch” of policy implementation to ensure that the continued, optimized, and improved tax and fee preferential policies take root and deliver tangible results.
On September 7, the State Council Information Office held a regular policy briefing, inviting Vice Minister of Finance Wang Dongwei and Chief Accountant of the State Taxation Administration Luo Tianshu to present updates on the extension, optimization, and refinement of tax and fee reduction policies aimed at fostering steady and sound economic development, followed by a Q&A session with reporters. Luo Tianshu stated that, with strong support from relevant departments, the tax authorities have acted swiftly, deploying a comprehensive package of measures with greater intensity and improved approaches to ensure effective implementation of these policies, thereby making “policies reach the people” a tangible reality and helping the extended, optimized, and refined tax and fee preferential policies take root and deliver concrete results.
Ensure the effective implementation of tax and fee preferential policies with greater efforts and more robust measures.
Continuing, optimizing, refining, and effectively implementing tax and fee reduction policies is a major decision and deployment made by the CPC Central Committee and the State Council in response to the evolving situation and with far-sighted vision. It is of paramount importance for sustaining the improvement of economic performance, bolstering endogenous growth drivers, and enhancing public expectations. According to Luo Tianshu, recently, the CPC Central Committee and the State Council have successively introduced a series of measures to extend, optimize, and refine tax and fee preferential policies. In response, the tax authorities have acted swiftly, working proactively and efficiently in close coordination with relevant departments, and deploying a comprehensive package of policy measures with greater intensity and more effective initiatives. From January to July this year, nationwide new tax and fee reductions, refunds, and deferrals totaled 1.05 trillion yuan.
First, we will strengthen coordinated implementation with greater vigor. The tax authorities have established a four-tiered, seamlessly linked policy‑implementation mechanism spanning the State Taxation Administration, provincial, municipal, and county tax bureaus. Building on this framework, we have instituted a “daily monitoring, weekly planning, monthly scheduling” approach: daily updates on progress, weekly preparation of priority task lists, and monthly consolidation of all work plans. At the same time, through rapid response mechanisms and direct liaison points at the grassroots level, we are extensively gathering feedback on various issues. For matters that attract significant taxpayer and payer attention and reflect concentrated concerns, we have clarified standardized responses to ensure that tax and fee preferential policies are implemented more effectively and fully.
Second, we are achieving “policy‑to‑people” delivery with even greater precision. Building on the earlier issuance of the “Plan for Optimizing and Upgrading Precise Tax and Fee Policy Delivery” and the “Provisional Standards for Precise Tax and Fee Policy Delivery,” the State Taxation Administration has, in light of the recent surge in policy releases—characterized by a large number of measures, broad coverage, and diverse eligible entities—developed a tailored approach: one policy, one dedicated plan. By segmenting recipients according to their corporate roles and addressing their differentiated policy needs at different stages, the Administration combines targeted outreach to legal representatives, financial officers, and tax‑filing personnel with time‑based reminders before, during, and after key events. This end‑to‑end, progressive, and personalized delivery strategy further enhances the accuracy of policy dissemination. For example, following the State Council’s announcement on August 31 of three new standards for individual income tax special additional deductions, the tax authorities promptly used the Individual Income Tax App to deliver relevant policy information directly to eligible taxpayers. Since August, more than 275 million individual and entity instances have received such precise notifications in successive batches, fully ensuring that policies reach those who need them.
Third, we are delivering even better services to meet public expectations. In early August, at a press conference, the tax authorities announced that, in the near term, they will focus on supporting the development of the private sector by rolling out the fifth batch of 28 measures under the “Spring Breeze Action” for Convenient Tax Services. More recently, they also issued the “Guidance on Tax and Fee Preferential Policies Supporting the Development of Small and Micro Enterprises and Individual Business Households (Version 1.0),” making it easier for taxpayers to promptly understand and access these benefits. Meanwhile, a number of tax service stations for private enterprises are being established, and the policy of temporarily exempting withholding income tax on reinvested profits distributed to overseas investors within China is being implemented in an orderly manner. These timely, targeted, and effective measures to benefit businesses and facilitate taxpayers are helping to further support the growth and strengthening of the private sector.
Fourth, we are safeguarding policy benefits with even stricter standards. The tax authorities have consistently balanced the effective implementation of policies with robust risk prevention and control. In particular, they have fully leveraged the joint mechanism established with seven departments—public security, procuratorates, courts, customs, the People’s Bank of China, and foreign exchange regulators—to crack down on the fraudulent issuance of invoices and tax fraud, rigorously prosecuting violations of tax and fee preferential policies in accordance with laws and regulations. At the same time, efforts to publicize high‑profile cases have been intensified: since August, 29 cases involving tax‑related illegal and criminal activities have been disclosed, along with four cases of dereliction of duty or complicity between insiders and external parties, ensuring that preferential policies are implemented swiftly, accurately, and stably.
Going forward, the tax authorities will take the in-depth implementation of the second phase of thematic education as an opportunity to further refine working mechanisms, optimize precision‑targeted outreach, deepen public awareness and guidance, and ensure effective delivery of policies down to the “last mile,” thereby contributing greater tax‑related support to high‑quality economic development.
Enable taxpayers to benefit from individual income tax policy incentives in the fastest and most convenient way.
On August 31, the State Council issued the “Notice on Raising the Standards for Certain Special Additional Deductions under the Individual Income Tax,” deciding to increase the standards for deductions related to childcare for infants and toddlers under the age of three, children’s education, and eldercare. Luo Tianshu stated that this policy primarily benefits those who are caring for both elderly parents and young children—a group that is extremely large—and that the tax authorities attach great importance to its implementation, working in concert with relevant departments to roll it out through a series of targeted measures.
First, “speed.” On the very day the State Council issued its notice, the State Taxation Administration, together with the Ministry of Finance, released clarifications on relevant issues. At the same time, the State Taxation Administration specifically promulgated the “Announcement on Implementing the Policy Raising the Standards for Certain Special Additional Deductions under the Individual Income Tax,” clearly setting out the specific policy provisions and operational procedures. That evening, the tax authorities worked through the night to seize the critical time window and upgrade the tax collection and administration information system, ensuring that taxpayers could promptly benefit from the new standards.
Second is “efficiency.” To make it even easier and more convenient for taxpayers to claim their benefits, starting in September, for those who have already reported the three special additional deductions this year, the new system will automatically update the original deduction amounts to the new standards—no further action is required on the taxpayer’s part. At the same time, the tax information system will calculate taxes based on the new standards, ensuring that taxpayers receive the full benefit of the policy. For payments made in advance under the old standards prior to September, any overpaid tax can be offset against future monthly estimated tax liabilities. If the overpayment is not fully offset within the current year, it may continue to be applied when filing the annual individual income tax settlement next year.
Third is “broad coverage.” For taxpayers who have already claimed these three special additional deductions, the tax authorities provide targeted notifications and automatic eligibility. As for those who may qualify but have not yet filed, the State Taxation Administration has released short policy‑explanation videos on its official website, official video account, Douyin, and other platforms, helping more taxpayers become aware of this policy. Local tax authorities have also adopted a “region‑by‑region responsibility” approach, offering guidance to various enterprises and institutions, enabling taxpayers who previously did not file to complete the process more intuitively and conveniently through the tax authorities’ information system. Meanwhile, the individual income tax app features a dedicated section, making it easy for taxpayers to quickly locate the filing portal; after completing the form, they can choose to have the deduction applied monthly through their employer, or defer it until next year’s annual individual income tax settlement.
Luo Tianshu stated that the tax authorities will do everything possible to ensure that the broad base of eligible taxpayers can promptly and accurately benefit from the policy incentives.
Implement precise outreach in a thorough and meticulous manner, ensuring that “policies find the people” and “policies are delivered right to their doorsteps.”
Luo Tianshu stated that in recent years, the tax authorities have regarded the precise delivery of tax and fee policies as a key measure for implementing the major decisions and arrangements of the CPC Central Committee and the State Council, as well as an essential component of promoting “refined services.” Building on earlier efforts, the tax authorities have established a five-tier coordinated operational mechanism—“Headquarters overall coordination—Provincial bureaus primary responsibility—Municipal bureaus detailed implementation—County bureaus supplementary measures—Sub‑bureaus providing a safety net”—to ensure that “policies reach the people” is truly put into practice.
First, in terms of content, we segment our target audiences and tailor policy recommendations to specific needs. Leveraging tax‑related big data, we automatically identify, match, and deliver relevant policy information based on industry, region, enterprise type, and individual status. For example, we prioritize technology‑focused offices with policies such as the enhanced deduction for R&D expenses; we highlight universal tax relief measures—like halving taxes and fees—for small and micro businesses; and we provide targeted tax and fee incentives related to entrepreneurship, employment, and social security contributions to key groups. Moreover, these communications are not limited to businesses but also extend to individuals. We inform legal representatives about applicable preferential policies so they can promptly grasp the relevant arrangements; for finance and tax‑administration personnel, we go beyond mere content by offering step‑by‑step procedures and guidance, helping them effectively leverage these policies; and for individual taxpayers, we disseminate updates such as increased standards for special additional deductions under the individual income tax system, ensuring they are among the first to learn of favorable developments that directly affect their interests.
Second, throughout the process, we break down key milestones and align policy dissemination with the progression of business workflows. By adopting a comprehensive approach that combines pre‑event notifications, real‑time reminders during processing, and post‑event follow‑ups, we deliver information in a stepwise, end‑to‑end manner. For example, prior to the filing period, we proactively share relevant policy details, operational guidelines, and access points, clearly explaining to taxpayers how to proceed. During the filing process, we promptly remind those who have not yet claimed their benefits. Even after filing is complete, if some taxpayers inadvertently overlook or forget to claim their entitlements, the tax authorities will issue additional reminders. At the same time, for taxpayers and payers who have already benefited from the policies, we provide personalized “benefit statements.” In the recent rollout, which reached 275 million individual instances, we delivered a cumulative total of 272 million pre‑filing notifications, 316,430 in‑process reminders, and an additional 261,300 post‑filing follow‑up messages targeting those who had not yet claimed their benefits—ensuring that every stage of the process accurately reaches the intended audience.
Third, in terms of outreach methods, we segment user habits and adopt an integrated approach that combines online and offline channels to disseminate policy information. By closely aligning with the preferences and behaviors of taxpayers and payers, we have established a model centered on online channels—such as the Electronic Tax Bureau, mobile apps, taxpayer‑administration interaction platforms, text messages, and WeChat—supplemented by in‑person guidance from tax‑grid officers. Specifically, legal representatives are primarily reached via text message or WeChat, while tax‑handling personnel are served through the Electronic Tax Bureau; individual taxpayers are directed to the Individual Income Tax App. This multi‑channel strategy ensures broader access to those who need to understand the policy. For taxpayers who still fail to receive relevant information through these channels, grid officers provide a safety net, visiting each enterprise or taxpayer individually to offer tailored guidance, thereby helping every eligible taxpayer and payer fully benefit from the policy incentives.
Luo Tianshu stated that the tax authorities will continue to refine their targeted outreach efforts, striving to make “policies find the people” faster and more precise, thereby ensuring that taxpayers and payers fully benefit from relevant policies.

The VAT additional deduction policy has been further expanded, bringing advanced manufacturing enterprises within its scope of application.
On September 6, the Ministry of Finance published on its website the “Announcement on the Value-Added Tax Additional Deduction Policy for Advanced Manufacturing Enterprises” (No. 43 of 2023), which took effect on January 1, 2023.
The Announcement clarifies that, from January 1, 2023, to December 31, 2027, advanced manufacturing enterprises may deduct an additional 5% from their payable value-added tax liability, calculated on the basis of their current deductible input VAT. “Advanced manufacturing enterprises” refer to general VAT taxpayers engaged in manufacturing among high-tech enterprises (including their non‑corporate branches). High‑tech enterprises are identified in accordance with the provisions set forth in Document No. 32 [2016] issued by the National Science and Technology Commission. The specific list of advanced manufacturing enterprises shall be determined by the relevant authorities.
Input VAT that, under the current regulations, is not deductible from output VAT shall not be subject to the additional deduction; for input VAT that has already been allocated to the additional deduction and is subsequently transferred out in accordance with the relevant provisions, the corresponding amount of the additional deduction shall be reduced in the period in which such transfer-out is recorded.

Promoting Steady and Sound Economic Development — Three Departments Outline the Continuation, Optimization, and Enhancement of Tax and Fee Reduction Policies
Since the beginning of this year, China has steadily strengthened its macroeconomic policy support by extending and refining a number of temporary tax and fee relief measures, while also formulating and introducing a series of targeted new policies. What are the key features of this package of measures, and how can we ensure their effective implementation? At the State Council’s regular policy briefing held on the 7th, officials from the Ministry of Finance, the State Taxation Administration, and the State Administration for Market Regulation provided details on these developments.
Vice Minister of Finance Wang Dongwei stated that, since the beginning of this year, China has focused on bolstering the real economy, boosting incomes and expanding consumption, and advancing high‑level scientific and technological self‑reliance, among other priorities. In response, the government has rolled out a comprehensive package of tax and fee policies to provide concrete support for businesses facing difficulties and fostering their growth. For instance, building on earlier refinements, temporary tax and fee preferential measures benefiting small and micro enterprises and individual business households have been extended through the end of 2027; the pre‑tax additional deduction rate for R&D expenses in relevant sectors has been increased, and this policy has been institutionalized for long-term implementation.
Wang Dongwei stated that the series of policies emphasizes continuity, forward-looking orientation, precision, and coordination. In response to evolving circumstances and economic trends, these measures strengthen counter-cyclical adjustments and deepen research on policy reserves, thereby fully leveraging the role of tax policy in macroeconomic regulation. At the same time, efforts are being made on two fronts—enhancing supply quality and expanding effective demand—while placing particular emphasis on robust support for technological innovation, the real economy, and the development of small, medium, and micro enterprises.
In response to the challenges faced by small and micro enterprises in their production and operations, the state has recently introduced a series of tax and fee preferential policies.
“For example, there are measures such as reducing or exempting VAT for small-scale taxpayers, offering income tax breaks to micro and small enterprises, and providing tax incentives for venture capital offices. At the same time, several policies have been refined and improved—such as expanding the scope of individual business households eligible for a 50% reduction in personal income tax, and applying a uniform 50% cut to the ‘six taxes and two fees’ for micro and small enterprises and individual business households—each of which is highly targeted,” said Wang Dongwei.
How can we ensure that all newly introduced policies are swiftly and effectively implemented, reaching the intended beneficiaries in a timely and targeted manner?
“A large number of tax and fee preferential policies have been rolled out recently, covering a wide range of sectors, with significant variations in the eligible entities,” said Luo Tianshu, Chief Accountant of the State Taxation Administration. He added that the tax authorities have developed a targeted “one policy, one tailored plan” delivery mechanism, leveraging categorized outreach and a combination of time‑based reminders—before, during, and after implementation—to further enhance the precision of policy dissemination.
Chen Zhijiang, head of the Price Supervision and Inspection and Anti-Unfair Competition Bureau of the State Administration for Market Regulation, stated that the agency has made addressing illegal fees imposed on enterprises a key priority. Through regulatory enforcement, it is continuously refining and effectively implementing tax and fee reduction policies to help businesses lower their burdens and enhance their efficiency.
Recently, the tax‑deduction standards for the “elderly and young children” special additional deductions were raised, drawing widespread public attention. Luo Tianshu stated that the tax authorities promptly upgraded the tax administration information system. Starting in September, taxpayers who have already reported the three relevant special additional deductions this year no longer need to take any further action; the new system will automatically adjust their deductions to the revised rates, ensuring they can benefit from the preferential policies.
“We will leverage tax‑related big data to automatically identify, match, and deliver relevant policy information tailored to different industries, regions, enterprise types, and taxpayer categories. At the same time, in close alignment with taxpayers’ and payers’ usage habits, we have established a delivery model that prioritizes online channels—such as the electronic tax bureau, the taxpayer‑tax authority interaction platform, text messages, and WeChat—while supplementing it with offline guidance provided by tax‑grid officers,” said Luo Tianshu. He added that the tax authorities will continue to refine their precision‑targeted outreach efforts, ensuring that taxpayers and payers can more fully benefit from applicable policies.

Litigation & Arbitration
China’s Civil Procedure Law has been revised and will take effect on January 1 next year.
The Fifth Session of the Standing Committee of the 14th National People’s Congress reviewed and adopted the Decision of the Standing Committee of the National People’s Congress on Amending the Civil Procedure Law of the People’s Republic of China, which shall enter into force on January 1, 2024.
This amendment to the Civil Procedure Law focuses on refining the procedural framework for foreign-related civil litigation, which will help further enhance the quality and efficiency of adjudication in such cases, better safeguard the parties’ procedural rights and legitimate interests, and more effectively protect China’s sovereignty, security, and development interests. At the same time, it proactively addresses public concerns by revising and improving other relevant issues in the field of civil procedure.

The CIETAC has released its new arbitration rules, marking several “firsts.”
Each year, during China Arbitration Week, the release of the Annual Report on International Commercial Arbitration in China (hereinafter referred to as the “Annual Report”) is a highlight and draws significant attention from the industry.
After all, this is a pioneering achievement in the annual summary of China’s international commercial arbitration development. Since 2015, when the China International Economic and Trade Arbitration Commission (hereinafter referred to as CIETAC) began issuing this annual report on an ongoing basis, the report has come to embody the efforts and expectations of Chinese arbitrators.
It is widely recognized within the industry that the annual report provides an accurate reflection of the current state of international commercial arbitration in China, thereby enhancing the international credibility and influence of Chinese arbitration, supporting the development of a foreign-related legal system, advancing the rule of law in international relations, and contributing Chinese wisdom and solutions to global governance.
“Arbitration, as a crucial component of the multi‑tiered dispute‑resolution system, is playing an increasingly prominent role in building a world‑class, internationally competitive business environment; each arbitration case serves as a litmus test for that environment,” said Wang Chengjie, Deputy Director and Secretary-General of the China International Economic and Trade Arbitration Commission. This underscores that, at a time when the business climate is receiving unprecedented attention, the release of the annual report should leave an indelible mark.
Responding to the Demands of the Times: CIETAC Amends Its Rules
At 10:00 a.m. on September 5, at No. 1 Huapichang Hutong, Xizhimen, Beijing—home to the CIETAC office—the China International Commercial Arbitration Annual Report (2022–2023) (hereinafter referred to as the “Report”) was released.
Although it has long been an annual “ritual,” those awaiting the report’s release found this year’s publication to be somewhat different from previous years: prior to the report’s unveiling, CIETAC first “interrupted” with a “new segment”—the announcement of the release of its revised arbitration rules.
These two seemingly unrelated topics, brought together at the same press conference, are in fact deeply significant. The release of the new arbitration rules reflects the evolving trends in international commercial arbitration and highlights the latest developments in the field—precisely the essence of the annual report.
As Wang Chengjie stated, in order to better meet the heightened demands posed by the new landscape on arbitration and to satisfy parties’ need for fair and impartial dispute resolution, CIETAC has formulated arbitration rules that benchmark against international best practices. Actively responding to the calls of the times, CIETAC has continuously drawn on practical experience, kept pace with developments in international arbitration, and revised its existing rules, thereby providing commercial entities with modern, internationally aligned arbitration procedures and striving to play a leading, exemplary role in advancing the development of China as an international arbitration hub.
The current arbitration rules of the China International Economic and Trade Arbitration Commission came into effect on January 1, 2015. The revised version expands the number of articles from 84 to 88, adding four new provisions and incorporating more than 30 substantive amendments.
According to Qu Zhujun, former Director of the Work Department of the China International Economic and Trade Arbitration Commission, the revisions to the new version of the arbitration rules are primarily reflected in five key areas: first, fully upholding the principle of party autonomy; second, granting arbitral tribunals more robust powers to manage the arbitration proceedings; third, regulating conduct that abuses procedural rights; fourth, enhancing the fairness and legitimacy of the arbitration process; and fifth, strengthening the flexibility, efficiency, and transparency of the arbitration procedure.
This aligns with the development trend observed in recent years, as major arbitration institutions worldwide have successively revised their arbitration rules. According to Zhao Jian, Senior Counsel at Zhonglun Law Office, this evolving landscape is characterized by four key features: First, the internationalization of commercial arbitration—arbitration rules are increasingly centered on the parties, emphasize problem‑oriented approaches, and seek to address their legitimate expectations. Second, the digitalization of international commercial arbitration—responding to the Fourth Industrial Revolution and seeking to mitigate the impact of the pandemic, arbitral institutions have integrated digital tools into their proceedings, leveraging technological innovation. Third, the pursuit of greater efficiency in international commercial arbitration—rules now place a strong premium on speed, aiming to shorten arbitration timelines, reduce costs, and enhance quality and effectiveness. Fourth, the growing convergence of international commercial arbitration—arbitration rules are increasingly reflecting a “East‑West” dialogue, with a pronounced trend toward cross‑cultural integration.
Key indicators are on par with international standards.
It clarifies that electronic service shall be the preferred method for delivering arbitral documents, leveraging technology to ensure accuracy and thereby enhancing the convenience, cost-effectiveness, and efficiency of arbitration. For the first time, the Rules expressly stipulate the legal effect of pre‑arbitration procedures on the filing of an arbitration application, helping to promptly safeguard the legitimate rights and interests of the parties. It also introduces innovative provisions allowing the addition of additional contracts to the arbitration proceedings, providing a regulatory framework for the swift resolution of complex multi‑contract disputes. Furthermore, it is the first in China to adopt an early dismissal procedure and the first to explicitly apply evidentiary rules within the arbitral process.
The many notable features and multiple “firsts” of the CIETAC’s new arbitration rules once again underscore the robust growth of Chinese arbitration institutions, with CIETAC at the forefront.
The subsequently released report conofficeed this. According to the report, in 2022 China’s arbitration sector had largely returned to pre‑COVID‑19 levels while adapting to the new economic landscape and exhibiting emerging characteristics. In 2022, the country’s 277 arbitration institutions handled a total of 475,173 cases, an increase of 59,284 over 2021, representing a year‑on‑year growth of 14.25%. The aggregate value of all arbitration cases nationwide reached RMB 986 billion, up RMB 126.7 billion from 2021, or a year‑on‑year rise of 14.74%. Among these, traditional commercial arbitration cases numbered 320,262, up 19.11% year over year; meanwhile, 89 arbitration institutions conducted 154,911 cases through online arbitration, a year‑on‑year increase of 5.40%.
Even when compared with the world’s leading international commercial arbitration institutions, China’s arbitration bodies—represented by CIETAC—are fully competitive. In terms of caseload, CIETAC recorded a steady upward trend in 2022, handling 4,086 cases, a year-on-year increase of 0.37%, marking three consecutive years of growth. By contrast, the caseloads of SIAC (Singapore International Arbitration Centre), LCIA (London Court of International Arbitration), HKIAC (Hong Kong International Arbitration Centre), and SCC (Arbitration Institute of the Stockholm Chamber of Commerce) declined, reflecting the adverse impact of the broader macroeconomic environment. “CIETAC’s influence and standing in the field of international commercial arbitration have continued to expand, and it is poised to play an even more prominent role in this arena going forward,” said Professor Du Huanfang, Secretary of the Party Committee and Vice Dean of the Law School at Renmin University of China.
In terms of the amount in dispute, the CIETAC has once again surpassed the RMB 100 billion threshold, with the total value of cases accepted reaching RMB 126.9 billion—marking the fifth consecutive year that this milestone has been achieved, up 2.99% year over year. Notably, the number of high‑value cases exceeding RMB 100 million was particularly significant, totaling 188; among these, 17 cases involved disputes worth RMB 1 billion or more, a 6% increase compared with the previous year. By contrast, both the HKIAC and the SIAC reported declines in the aggregate value of cases they accepted. “This substantial growth in the total value of cases accepted also underscores that China’s international commercial arbitration institutions are not only steadily increasing the volume of cases they handle but are simultaneously enhancing the quality of their proceedings, with service standards and professional expertise consistently earning the trust and recognition of the parties involved,” explained Du Huanfang.
Du Huanfang analyzes that, in terms of internationalization, the international influence of China’s international commercial arbitration institutions has been steadily growing. As a leading institution in China’s international commercial arbitration landscape, the CIETAC has gained increasing recognition among parties to international commercial disputes. Moreover, China’s international commercial arbitration institutions have established close, institutionalized ties with dispute‑resolution bodies and organizations worldwide, actively participating in the development of international rules in the field of arbitration, building bridges of cooperation, and demonstrating the growing influence and new responsibilities of Chinese arbitration institutions in international arbitration exchanges and collaboration.
Focus on the automotive sector—promising great potential.
It is worth noting that this year’s annual report places particular emphasis on the practical aspects of arbitration in automotive‑industry legal disputes.
The Report begins by examining the characteristics of legal disputes in the automotive industry, the advantages of resolving such disputes through arbitration, and the growing credibility of arbitration within this sector. By analyzing representative arbitration cases involving automotive‑related legal issues, it puts forward recommendations for refining the arbitration‑based dispute‑resolution mechanism in the industry and offers a forward‑looking perspective on its future prospects.
The automotive industry is a strategic and pillar sector of China’s national economy, enjoying a pivotal position and a long industrial value chain. For 14 consecutive years, China has maintained its status as the world’s largest producer and seller of automobiles. As the industry continues to expand in scale and the number of stakeholders and transactions grows substantially, the volume of legal disputes is bound to increase.
“The automotive industry faces a large volume of legal disputes, with increasingly diverse types and considerable complexity and technical sophistication; moreover, most of these disputes involve industry‑specific expertise as well as relevant practices and customary business norms,” said Sun Yanchen, Senior Counsel at Hong Kong’s Haotian Xinhé Law Office.
In Sun Yanchen’s view, China’s leading arbitration institutions, exemplified by the CIETAC, have, through their extensive experience in arbitrating numerous specific legal disputes in the automotive industry, demonstrated the advantages of expert‑driven arbitration to all parties involved in such disputes, while also providing valuable insights and guidance for risk management and prevention within the sector.
Liu Jing, a senior partner at Beijing Chang’an Law Office, points out that arbitration is characterized by “finality of the award,” meaning that, in principle, the parties’ avenues for redress are limited to applying for annulment of the arbitral award or seeking non-enforcement of it, and they may not appeal, seek retrial, or invoke procuratorial supervision. “While parties benefit from the convenience and efficiency of ‘finality of the award,’ the fairness and appropriateness of the substantive outcome of the arbitration are essential to safeguarding this principle.” According to Liu Jing, judicial review should precisely determine when an arbitration constitutes a “duplicate proceeding,” thereby providing a clear pathway for arbitration to correct its own errors.

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