JC Master Legal News Issue 1182

Key Takeaways for This Issue

The China Securities Regulatory Commission has issued a revised version of the “Corporate Governance Code for Listed Companies,” which will take effect starting in 2026.
Recently, the China Securities Regulatory Commission issued the “Corporate Governance Guidelines for Listed Companies” (CSRC Announcement [2025] No. 18), which will take effect on January 1, 2026.
Three government departments: VAT preferential policies for multiple industries are set to be phased out.
Recently, the Ministry of Finance and two other departments jointly issued the “Notice on Adjusting the Value-Added Tax Policies for Wind Power Generation and Other Sectors” (hereinafter referred to as the “Notice”).

The Supreme People’s Court has released data on judicial adjudication for the first three quarters of 2025.
On October 21, the Supreme People’s Court released key statistics on trial and enforcement activities across courts nationwide for the period from January to September 2025.

Finance & Capital Markets

The China Securities Regulatory Commission has issued a revised version of the “Corporate Governance Code for Listed Companies,” which will take effect starting in 2026.
Recently, the China Securities Regulatory Commission issued the “Corporate Governance Guidelines for Listed Companies” (CSRC Announcement [2025] No. 18), which will take effect on January 1, 2026.
The Guidelines refine the management of directors’ and senior executives’ appointments, performance of duties, and departures, detailing requirements for qualification reviews, duties of loyalty and diligence, and post‑termination accountability and recovery. They mandate that listed companies establish remuneration policies linking directors’ and executives’ compensation to both corporate and individual performance, while enhancing deferred payment and clawback mechanisms. The Guidelines also impose strict constraints on the conduct of controlling shareholders and actual controllers, strengthening restrictions on intra‑industry competition and the review of related-party transactions, and clarifying provisions on information disclosure, internal controls, and the participation of institutional investors in corporate governance.

Commercial & Corporate

Beijing Issues Operational Guidelines for the Registration of Enterprise-Funded Basic Research Contracts
Recently, the Beijing Municipal Science and Technology Commission, the Zhongguancun Science Park Administrative Committee, and the Beijing Municipal Tax Service of the State Taxation Administration jointly issued the “Operational Guidelines for the Registration of Enterprise‑Funded Basic Research Contracts in Beijing.”
This guidance applies to enterprises that fund basic research through non‑profit research institutions, higher education institutions, and government‑funded natural science foundations registered in this city. Expenses incurred by enterprises for such basic research are eligible for a 100% pre‑tax additional deduction, while the recipient is exempt from corporate income tax. Contracts must be executed in writing, clearly specifying the parties’ details, the amount of funding, the type of research, and its intended use. Contract registration is handled by the Municipal Science and Technology Commission and the Zhongguancun Administrative Committee; upon approval, information is shared with the Municipal Tax Service Bureau. If either the funder or the recipient is registered in this city, the relevant party shall submit the registration application. Any act of fabricating or falsifying contracts to fraudulently obtain tax incentives will be prosecuted in accordance with the law and recorded as a breach of trust.
Shenzhen has released the Action Plan for High-Quality Development of Mergers and Acquisitions and Restructuring (2025–2027).
On October 22, the Shenzhen Municipal Bureau of Local Financial Regulation and five other departments jointly issued the “Shenzhen Action Plan for Promoting High-Quality Development of Mergers and Acquisitions and Restructuring (2025–2027).”
The plan explicitly supports enterprises in the “20+8” industrial clusters and emerging industries to undertake upstream and downstream mergers and reorganizations, establishes a pipeline of M&A targets, diversifies M&A financing channels, and encourages the participation of patient capital and social capital. It also encourages companies to list in Hong Kong, China, innovates cross-border M&A instruments, and strengthens cooperation between the Shenzhen and Hong Kong capital markets. Furthermore, it aims to enhance M&A service platforms and talent development, and to optimize the market‑service ecosystem. Risk management will be reinforced, compliance reviews tightened, and dispute‑resolution mechanisms improved. A dedicated coordination mechanism will be set up to streamline business processes and facilitate the implementation of key industrial projects.

Taxation TAXATATION

The Ministry of Commerce has announced the total quota for fertilizer import tariffs for 2026, among other details.
Recently, the Ministry of Commerce issued Announcement No. 66 of 2025, publicly announcing the total quota for fertilizer import tariffs in 2026, along with the allocation principles and relevant procedures.
The announcement stipulates that the total import tariff quota for fertilizers in 2026 will be 13.65 million tonnes, comprising 3.30 million tonnes of urea, 6.90 million tonnes of diammonium phosphate, and 3.45 million tonnes of compound fertilizer. The notice clarifies that applications for fertilizer import tariff quotas will be processed on a first-come, first-served basis until the entire quota is allocated. Upon application, the initial quota allocation will be determined based on the applicant’s historical utilization of tariff quotas; within this initial allocation, enterprises may submit multiple applications to obtain the “Fertilizer Import Tariff Quota Certificate” (hereinafter referred to as the “Certificate”). The announcement further specifies that each tariff‑quota issuing authority is responsible for accepting applications from local enterprises and, within five working days, issuing the Certificate to those whose documentation is complete and who meet the eligibility requirements. The Certificate is valid for three months and shall expire no later than December 31, 2026.
Three government departments: VAT preferential policies for multiple industries are set to be phased out.
Recently, the Ministry of Finance and two other departments jointly issued the “Notice on Adjusting the Value-Added Tax Policies for Wind Power Generation and Other Sectors” (hereinafter referred to as the “Notice”).
According to the “Catalogue of Abolished Documents and Provisions” attached to the Announcement, the documents and provisions being repealed cover a wide range of sectors, including wind power, nuclear power, financial leasing, aircraft maintenance, platinum, diamonds, new wall materials, and coalbed methane extraction. The Announcement stipulates that, from November 1, 2025, to December 31, 2027, taxpayers who sell electricity generated from offshore wind power they produce themselves will be eligible for a policy of immediate VAT refund at a rate of 50%. The “Notice on the VAT Policy for Wind Power Generation” and other related documents will be repealed effective November 1, 2025.

LITIGATION & ARBITRATION

The Supreme People’s Court has released data on judicial adjudication for the first three quarters of 2025.
On October 21, the Supreme People’s Court released key statistics on trial and enforcement activities across courts nationwide for the period from January to September 2025.
In the first three quarters of 2025, courts nationwide accepted 32.257 million cases of various types, a year-on-year decrease of 9.17%. Criminal first-instance cases totaled 804,000, down 11.61% year over year, with 1.048 million defendants receiving final convictions. Civil and commercial first-instance cases numbered 18.954 million, up 37.45% year over year, with significant increases across labor disputes, corporate matters, securities, intellectual property, environmental and resource issues, and foreign-related cases. Administrative first-instance cases reached 261,000, a year-on-year rise of 17.49%. First-time enforcement cases amounted to 8.065 million, up 16.72% year over year, while online judicial auctions generated RMB 256.45 billion in transactions. The Supreme People’s Court issued multiple judicial interpretations and released landmark cases, refining adjudicatory rules in areas such as labor disputes, the private sector, capital markets, intellectual property, and foreign-related matters, thereby promoting coordination between judicial and administrative oversight and strengthening the protection of business rights and interests.
The Shenzhen Intermediate People’s Court has issued the nation’s first ruling recognizing “Hong Kong‑invested, Hong Kong‑arbitrated” proceedings.
On October 23, the Shenzhen Intermediate People’s Court ruled in favor of a Shenzhen‑based Hong Kong‑invested enterprise’s application to recognize and enforce an arbitral award rendered in Hong Kong, China. This decision marks the first such ruling nationwide since the Supreme People’s Court’s Reply on the Legal Effectiveness of Designating Hong Kong or Macao Law as the Governing Law of Contracts or Specifying Hong Kong or Macao as the Arbitration Venue for Investment Enterprises Registered in Mainland China within the Guangdong–Hong Kong–Macao Greater Bay Area entered into force in February 2025.
Relying on Article 2 of the Reply, the Shenzhen Intermediate People’s Court has conofficeed that Hong Kong and Macao‑invested enterprises registered in the nine mainland cities of the Guangdong–Hong Kong–Macao Greater Bay Area may, by mutual agreement, designate Hong Kong or Macao as the seat of arbitration, thereby conferring jurisdiction on the arbitral institution to hear the dispute. No further examination of other Hong Kong‑related factors is required; the corporate identity of the Hong Kong‑invested entity constitutes the essential prerequisite. In this case, the court’s ruling recognizing and enforcing the award rendered by the South China (Hong Kong) International Arbitration Centre marks a transition of the Greater Bay Area’s cross‑border commercial dispute‑resolution mechanism from a breakthrough in regulatory framework to practical implementation, providing businesses with clear legal support and greater convenience.
Zhejiang Province has released the fifth batch of typical cases involving ecological and environmental damage compensation, covering corporate accountability across multiple sectors.
Recently, the Zhejiang Provincial Department of Ecology and Environment, the Provincial People’s Court, and the Provincial People’s Procuratorate jointly released the fifth batch of typical cases involving ecological and environmental damage compensation. These cases cover areas such as surface water, soil, groundwater, and ambient air, and involve illegal discharge by enterprises, improper storage of solid waste, and unauthorized mining, thereby demonstrating the coordinated efforts of multiple departments in advancing the implementation of the ecological and environmental damage compensation system. Some cases have specified compensation amounts, remediation methods, and judicial conofficeation, further strengthening accountability for corporate misconduct.
This batch of cases primarily addresses violations such as enterprises discharging pollutants through clandestine pipelines, spontaneous combustion incidents involving solid waste, illegal dumping of waste that encroaches on river channels, excessive discharge of wastewater and solid waste, tampering with monitoring data, unauthorized stockpiling of solid waste, evading regulatory oversight to pollute, illegal mining, unlicensed handling of hazardous waste, and unlawful occupation of forest land. The cases chiefly establish mechanisms for ecological and environmental damage assessment, determination of compensation amounts, implementation of restoration measures, monetary compensation coupled with compensatory technological upgrades, judicial conofficeation of settlement agreements, attribution of joint and several liability, recovery through public-interest litigation, and off-site remediation. Each case underscores the principle of “maximizing compensation where due,” ensuring that compensation funds are directed toward ecological restoration and thereby enhancing the effectiveness of ecological and environmental governance.
The Guangzhou Intellectual Property Court has released typical cases of judicial services for intellectual property related to new‑type productive forces.
On October 23, the Guangzhou Intellectual Property Court released a set of typical cases demonstrating how judicial services for intellectual property support the development of new‑type productive forces, covering such fields as high‑end chips, biopharmaceuticals, 5G technology, open‑source software, and plant variety rights.
Typical cases include: an integrated circuit layout‑design infringement case that clarified the criteria for originality and determined the liability of chip‑packaging companies; a 5G core‑technology patent case in which the court fully upheld a RMB 40 million damages claim, applying rules on evidence disclosure and obstruction of proof; a copyright case involving open-source software that, in the nation’s first judgment, expressly characterized open-source licenses as contracts; a plant variety‑rights case that delineated the boundary between scientific research and breeding activities and commercial exploitation; and a biopharmaceutical trade‑secret case that strengthened the rule on shifting the burden of proof. The conference underscored the importance of judicial protection in fostering new‑type productive forces, enhancing enterprises’ innovation capacity, and creating a fair competitive environment.

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