JC Master Legal News Issue 1192

Key Takeaways for This Issue

The People’s Bank of China has released the “China Financial Stability Report (2025).”
Recently, the People’s Bank of China released the “China Financial Stability Report (2025).”
The Asset Management Association of China for Banking and Insurance has released a group standard on data classification and grading.
Recently, the Asset Management Association of China Banking and Insurance Industry released the group standard “Guidelines for Data Classification and Grading in the Insurance Asset Management Industry” (T/BIAMAC 001—2025). The standard will take effect on January 1, 2026.
The Standing Committee of the National People’s Congress has issued an interpretation of Article 292 of the Criminal Procedure Law.
Recently, the Standing Committee of the National People’s Congress adopted the “Interpretation of Article 292 of the Criminal Procedure Law of the People’s Republic of China” by the Standing Committee of the National People’s Congress.
The Supreme People’s Court has issued a reply on issues concerning the application of law in the jurisdiction of civil cases.
On December 30, the Supreme People’s Court promulgated the “Reply of the Supreme People’s Court on Certain Issues Concerning the Application of Law to Jurisdiction in Civil Cases” (Fa Shi [2025] No. 15). The reply was adopted at the 1959th meeting of the Judicial Committee of the Supreme People’s Court on November 24, 2025, and shall enter into force as of December 31, 2025.

Finance & Capital Markets

The People’s Bank of China has released the “China Financial Stability Report (2025).”
Recently, the People’s Bank of China released the “China Financial Stability Report (2025).”
The report provides a comprehensive analysis of the operational status of China’s financial system in 2024 and the key measures taken to prevent and control major risks. The main provisions include: first, in 2024, the reserve requirement ratio was cut twice by a total of one percentage point, and policy interest rates were lowered twice by a combined 0.3 percentage points, thereby fostering ample liquidity and reducing financing costs; second, policies were introduced to support the resolution of debt risks faced by financing platforms, a debt‑statistics and monitoring system was established, and orderly exit mechanisms for these platforms were promoted; third, the minimum down‑payment ratio for mortgages was reduced, the lower limit on mortgage interest rates was abolished, and a re‑lending facility for affordable housing was created, thus enhancing the framework of housing‑rental finance policies; fourth, swap facilities for securities, fund, and insurance companies, along with re‑lending instruments for share buybacks and additional holdings, were instituted to bolster the sound and stable development of the capital market; fifth, reforms were advanced to mitigate risks at small and medium‑sized financial institutions, resulting in a reduction in the number of high‑risk small and medium‑sized banks; and sixth, legislative efforts were undertaken to enact the Financial Stability Law and revise the People’s Bank of China Law, while refining the management rules for the Deposit Insurance Fund and the Financial Stability Guarantee Fund, thereby strengthening resource safeguards for risk resolution.
Two departments have issued a document clarifying matters related to the integrated domestic and foreign currency pooling business of multinational corporations.
Recently, the People’s Bank of China and the State Administration of Foreign Exchange jointly issued the “Notice on Matters Concerning the Integrated Domestic and Foreign Currency Funds Pool Business of Multinational Corporations” (Yin Fa [2025] No. 251), which shall take effect from the date of its promulgation.
The Notice promotes, nationwide, the integrated domestic‑foreign currency funds pooling business for multinational corporations, clarifying the definition of multinational corporations, the eligibility criteria for member enterprises, and the responsibilities of the sponsoring enterprise. Financial institutions, local government financing platform companies, and real estate enterprises are prohibited from participating in such funds‑pooling activities, except for finance companies acting as sponsoring enterprises. The funds‑pooling business must meet requirements regarding scale, compliance, and the number of participating entities, and it stipulates procedures for filing, amendment, and cancellation. Centralized limits are established for foreign‑debt and overseas‑lending exposures, with clear guidelines on the calculation of risk‑weighted balances and an annual adjustment mechanism. The sponsoring enterprise shall centrally manage both domestic and foreign‑currency funds through a domestic master account, handling current‑account and capital‑account receipts and payments as well as foreign‑exchange settlement and sales, while streamlining the authenticity‑verification process. Partner banks must possess international settlement capabilities, robust anti‑money‑laundering internal controls, and other requisite qualifications, and they are obligated to submit data and conduct risk monitoring.
The Asset Management Association of China for Banking and Insurance has released a group standard on data classification and grading.
Recently, the Asset Management Association of China Banking and Insurance Industry released the group standard “Guidelines for Data Classification and Grading in the Insurance Asset Management Industry” (T/BIAMAC 001—2025). The standard will take effect on January 1, 2026.
The “Guideline on Data Classification and Grading in the Insurance Asset Management Industry” sets forth requirements for the classification and grading of data generated and utilized by insurance asset management institutions in the course of business management, operational management, customer service, and other activities. The standard explicitly divides data into four major categories—customer data, business data, operational‑management data, and system‑operation and security‑management data—and further refines these into three tiers of sub‑classification. Data is graded into core data, important data, sensitive data, and other general data, with differentiated protection measures prescribed for each level. The guideline underscores the principles of compliance with laws and regulations, comprehensive coverage, business‑specific alignment, and dynamic updating, requiring institutions to dynamically adjust their data classification and grading outcomes in light of their specific business contexts. For unstructured data, the principle of “structural decomposition, higher‑tier classification, and holistic oversight” is applied. An appendix to the standard provides a detailed catalog of data classifications and gradings, encompassing key business data types such as investment, trading, risk management, customer contracts, finance, auditing, and system operations and maintenance.

Commercial & Corporate

The State Administration for Market Regulation has issued four national standards on asset management.
Recently, the State Administration for Market Regulation released four national standards on asset management: “Asset Management—Digital Reference Architecture,” “Asset Management—Digital Maturity Model,” “Asset Management—Guidelines for Implementing Cultural Digital Asset Trading,” and “Asset Management—Guidelines for Valuing Cultural Digital Assets.”
The four national standards released this time focus on the digital transformation of asset management and the management of cultural digital assets. The standard on a digital reference architecture clarifies the constituent elements and their interrelationships in asset‑management digitization, addressing issues of inconsistent understanding and unclear direction. The standard for a digital maturity model establishes a five‑level framework, encompassing five capability components and seventeen capability domains, providing a basis for assessing and improving an enterprise’s level of digital asset management. The standard on implementation guidelines for cultural digital‑asset transactions specifies the parties involved, the objects of trade, the transaction processes, and quality‑assurance measures, thereby enhancing transparency and security. Finally, the standard on guidelines for valuing cultural digital assets outlines recommended appraisal subjects, influencing factors, methodologies, institutions, and procedures, offering a valuation benchmark for cultural digital‑asset trading activities.
Jiangsu Releases Model Cases of Total Quality Management by Corporate Chief Quality Officers
Recently, relevant departments in Jiangsu Province have released exemplary cases of corporate chief quality officers strengthening comprehensive quality management.
This release brings together ten exemplary quality‑management cases under Jiangsu Province’s Chief Quality Officer system, spanning manufacturing, services, and scientific‑technological R&D. The case studies highlight: Xinyuan Cocoon & Silk Group’s development of a “Three‑All” high‑quality model; the Jiangsu Provincial Convention Center’s implementation of standardized service management; Jinfafa Technology’s “three‑in‑one” quality‑control framework; Yihe Co., Ltd.’s adoption of “Charming Demand”–based quality‑value‑chain management; Yanghe Distillery’s advancement of digital quality management; Zhengda Fenghai Pharmaceutical’s rollout of full‑lifecycle drug management; Maiande Group’s integration of five major systems to achieve intelligent quality control; the No. 716 Research Institute’s implementation of “Four‑All” equipment‑quality management; CALB’s use of a “New‑Quality Five‑All, Dual‑Core Driven” approach; and Nantong Haixing Electronics’ establishment of the “POWER 2.0” excellence‑management system. Each case underscores the Chief Quality Officer’s pivotal role in driving quality‑management innovation, streamlining processes, formulating standards, and accelerating digital transformation, offering practical guidance for enhancing corporate quality and ensuring compliance.

Taxation

The State Council has promulgated the “Implementation Regulations of the Value-Added Tax Law.”
Recently, the State Council promulgated the Implementing Regulations of the Value-Added Tax Law of the People’s Republic of China.
The Regulations shall enter into force on January 1, 2026, refining the definitions and scope of application under the Value-Added Tax Law and clearly delineating the specific categories of goods, services, intangible assets, and real estate. They establish a registration system for general taxpayers and set forth criteria for identifying small-scale taxpayers, while providing detailed provisions on the issuance of special VAT invoices, the deduction of input tax credits, and the treatment of sales discounts and returns. The Regulations also clarify the rules governing the deduction of input tax on long-term assets, setting a threshold of RMB 5 million for capitalization. With respect to tax incentives, they specify the exempted categories, including agricultural producers, medical institutions, nurseries, elderly care facilities, services for persons with disabilities, and schools. In terms of tax administration, the Regulations standardize taxpayer registration, invoice issuance, the timing of tax liability, export refund (exemption) filing, and restrictions on the waiver of refunds. Furthermore, they expressly confer tax authorities the power to obtain information and prescribe measures for anti‑avoidance adjustments.

LITIGATION & ARBITRATION

The Standing Committee of the National People’s Congress has issued an interpretation of Article 292 of the Criminal Procedure Law.
Recently, the Standing Committee of the National People’s Congress adopted the “Interpretation of Article 292 of the Criminal Procedure Law of the People’s Republic of China” by the Standing Committee of the National People’s Congress.
This interpretation clarifies that the phrase “other methods permitted by the law of the defendant’s place of residence” in Article 292 of the Criminal Procedure Law of the People’s Republic of China encompasses all types of service methods recognized under the laws, case law, established practices, and judicial precedents of the defendant’s place of residence. Such specific methods of service include, but are not limited to, mail, public notice, public posting, and electronic service.
The Supreme People’s Court has released typical cases of punishing debt evasion, strengthening the protection of corporate creditors’ rights and judicial enforcement measures.
On December 29, the Supreme People’s Court released a set of typical cases demonstrating how the people’s courts have punished debt evasion and default. These cases cover corporate debt, equity transfers, withdrawal of capital contributions, bankruptcy liquidation, fictitious bankruptcy, and debt‑evasion practices in enforcement proceedings, thereby strengthening judicial deterrence and safeguarding creditors’ rights.
The typical cases released this time clarify the legal liabilities of enterprises and related parties in areas such as debt performance, equity transfers, capital contribution obligations, and bankruptcy proceedings. Key provisions include: when a de facto controller uses affiliated companies to evade debts, those affiliated companies shall bear joint and several liability; if shareholders transfer equity at zero consideration or extend the capital contribution deadline with the intent to evade debts, they shall assume supplementary liability for damages to the company’s creditors; if shareholders withdraw their contributions, they shall bear supplementary liability within the scope of the withdrawn funds; where a divorce agreement between spouses leaves one party unable to repay debts, creditors may seek to rescind the property division agreement; if an affiliated party of a bankrupt enterprise enters into contracts maliciously, appropriates assets, or obstructs liquidation, the administrator is entitled to terminate such contracts and recover the assets; and any act of fabricating debts to file for bankruptcy or refusing to enforce court judgments and rulings in order to evade debts shall be subject to criminal liability.
The Supreme People’s Court has issued a reply on issues concerning the application of law in the jurisdiction of civil cases.
On December 30, the Supreme People’s Court promulgated the “Reply of the Supreme People’s Court on Certain Issues Concerning the Application of Law to Jurisdiction in Civil Cases” (Fa Shi [2025] No. 15). The reply was adopted at the 1959th meeting of the Judicial Committee of the Supreme People’s Court on November 24, 2025, and shall enter into force as of December 31, 2025.
The “Reply” consists of five articles and clarifies the rules governing the application of jurisdiction‑choice agreements in civil cases. Key provisions include: parties may agree to designate a court located outside the “five jurisdictions,” provided they can demonstrate that the chosen venue has a genuine connection to the dispute; otherwise, the agreement is void. No agreement may alter the statutory jurisdiction of specialized people’s courts; any such agreement is invalid. If a jurisdiction‑choice agreement does not specify a particular court but the court can be determined in accordance with the law, the agreement remains valid. In an “arbitration or litigation” clause, the invalidity of the arbitration agreement does not affect the validity of the agreed‑upon jurisdiction for litigation. Disputes arising under liability insurance contracts may be subject to the jurisdiction of the court at the insured’s domicile. These provisions cover contract disputes and property‑rights disputes, among others, with the aim of standardizing the legal effect of jurisdiction‑choice agreements, reducing jurisdictional conflicts, and enhancing judicial efficiency.

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