JC Master Legal News Issue 1161

Key Takeaways for This Issue

The People’s Bank of China and the State Administration of Foreign Exchange stipulate that proceeds from overseas listings, as well as funds obtained from share reductions or transfers, shall, in principle, be repatriated to China.
On May 23, the People’s Bank of China and the State Administration of Foreign Exchange issued the “Notice on Issues Related to the Management of Funds from Overseas Listings by Domestic Enterprises (Draft for Public Comment).”
The National Development and Reform Commission has issued a document to implement the Law on the Promotion of the Private Economy.
On May 20, the website of the National Development and Reform Commission published the “Notice on Studying, Publicizing, and Implementing the Law of the People’s Republic of China on Promoting the Private Economy.”
Financing for small, medium, and micro enterprises receives renewed support as eight departments join forces.
On May 21, the “Notice on Issuing the ‘Several Measures to Support Financing for Small and Micro Enterprises’” jointly issued by the National Administration of Financial Regulation and seven other departments was officially released. The notice leverages the combined force of regulatory, monetary, fiscal, tax, and industrial policies, outlining 23 specific measures across eight key areas.
The Supreme People’s Court has issued a judicial interpretation on administrative cases involving government information disclosure.
On May 20, the Supreme People’s Court issued the “Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in Adjudicating Administrative Cases Involving Government Information Disclosure,” which will take effect on June 1, 2025.

Finance & Capital Markets
The National Administration of Financial Regulation has amended certain regulations, covering trust equity and related-party transactions of banking and insurance institutions.
On May 20, the “Decision of the National Administration of Financial Regulation on Amending Certain Regulations” was officially promulgated and will take effect on May 15, 2025.
The Decision, in accordance with the latest requirements of the Company Law regarding the establishment of supervisory boards and the management of related-party transactions, amends certain existing regulations to ensure consistency with the Company Law. The main revisions include: first, revising the provisions on the establishment of supervisory boards in the Measures for the Administration of Trust Companies and the Interim Measures for the Administration of Equity in Trust Companies, clarifying that where a board of directors establishes an audit committee composed of directors to exercise the functions and powers of the supervisory board, a separate supervisory board need not be established. Second, the Measures for the Administration of Related-Party Transactions of Banking and Insurance Institutions have been supplemented with new provisions to strengthen the oversight of related-party transactions involving directors, supervisors, and senior management, stipulating that such transactions must be submitted to the board of directors or the shareholders’ meeting for approval in accordance with the company’s articles of association.
The Measures for the Administration of Trust Companies, the Interim Measures for the Administration of Equity in Trust Companies, and the Measures for the Administration of Related-Party Transactions of Banking and Insurance Institutions have been amended in accordance with the Decision and are hereby reissued.
The Shanghai Stock Exchange is piloting initiatives such as the reissuance of corporate bonds.
On May 21, the Shanghai Stock Exchange issued the “Notice on Matters Relating to the Pilot Program for the Reissuance of Corporate Bonds and the Additional Offering of Asset-Backed Securities,” clarifying the relevant arrangements.
The so‑called secondary issuance of corporate bonds refers to an issuer of existing corporate bonds already listed on the Shanghai Stock Exchange conducting an additional offering and combining the newly issued bonds with the outstanding bonds for joint listing. The so‑called expansion of asset‑backed securities refers to the plan manager undertaking an additional offering of existing held‑in‑trust real estate asset‑backed securities listed on the Shanghai Stock Exchange, followed by their combined listing. Such expansion offerings do not involve the establishment of a new asset‑backed special purpose vehicle. The Notice requires issuers to disclose in the offering circular the principles and methods used to determine the issue price, and to use the proceeds from the secondary issuance of corporate bonds strictly in accordance with the provisions set forth in the offering memorandum and relevant regulations.
The SSE also concurrently released the accompanying guideline, “Shanghai Stock Exchange Guidelines on the Issuance, Listing, and Trading of Corporate Bonds and Asset-Backed Securities (Revised May 2025).”
The People’s Bank of China and the State Administration of Foreign Exchange stipulate that proceeds from overseas listings, as well as funds obtained from share reductions or transfers, shall, in principle, be repatriated to China.
On May 23, the People’s Bank of China and the State Administration of Foreign Exchange issued a draft notice on issues related to the management of funds raised by domestic enterprises through overseas listings, inviting public comments. The draft proposes unifying policies for both domestic and foreign currency management. Proceeds from overseas listings, as well as income derived from share reductions or transfers, may be repatriated in either foreign currency or RMB, with all such funds eligible to be remitted into or out of capital account settlement accounts. For funds repatriated in RMB, domestic corporate RMB bank settlement accounts may also be used. Listed entities participating in the H‑share “full circulation” regime shall distribute dividends to domestic shareholders in RMB within China. Funds raised through overseas listings that are repatriated in foreign currency may be freely converted and utilized. Listed entities may independently choose their foreign‑exchange risk‑management strategies and conduct spot foreign‑exchange transactions and hedging operations through banks or securities offices.
The guidelines stipulate that proceeds from overseas listings, as well as funds obtained from share reductions or transfers, should in principle be repatriated to China. If shareholders have surplus funds resulting from additional share purchases or if a transaction fails to materialize, such funds must be promptly remitted back to China. The regulatory requirements governing the issuance of convertible bonds overseas and the conversion of such bonds into equity are also clarified. Furthermore, in recognition of enterprises’ legitimate needs for cross-border use, it is specified that, provided they had already obtained approval or filing documents from relevant authorities—such as the National Development and Reform Commission and the Ministry of Commerce—prior to listing abroad, they may retain these documents to carry out overseas direct investment, cross-border lending, and other related activities.

Commercial & Corporate
The National Development and Reform Commission has issued a document to implement the Law on the Promotion of the Private Economy.
On May 20, the website of the National Development and Reform Commission published the “Notice on Studying, Publicizing, and Implementing the Law of the People’s Republic of China on Promoting the Private Economy.”
The Law on Promoting the Private Economy was adopted on April 30, 2025, and will enter into force on May 20, 2025. The notice calls on development and reform commissions at all levels to thoroughly study and publicize the law, clarify its principles for fostering the sustained and sound development of the private sector, and underscore that the private economy enjoys equal legal status with other economic entities. The notice also mandates the establishment of sound working mechanisms and the refinement of supporting systems to ensure effective implementation of the law’s provisions and to advance high-quality development of the private sector.
Financing for small, medium, and micro enterprises receives renewed support as eight departments join forces.
On May 21, the “Notice on Issuing the ‘Several Measures to Support Financing for Small and Micro Enterprises’” jointly issued by the National Administration of Financial Regulation and seven other departments was officially released. The notice leverages the combined force of regulatory, monetary, fiscal, tax, and industrial policies, outlining 23 specific measures across eight key areas.
The Notice explicitly calls for expanding financing supply, directing support resources toward key sectors such as foreign trade, private enterprises, technology, and consumption. It urges increased lending in areas including first-time loans, credit loans, medium- and long-term loans, corporate‑type loans, and loans to private enterprises. Structural monetary policy tools, such as re-lending programs supporting agriculture and small businesses, are to be effectively utilized. Policies facilitating principal‑free loan renewals for micro and small enterprises will be fully implemented. Support will be provided to help these enterprises raise equity capital, and relevant fiscal and tax incentives will be put into practice. In addition, tax preferential policies—such as the exemption from value-added tax on interest income from small loans to small and micro enterprises and individual business households—will be rigorously enforced. Finally, fiscal policies supporting the development of inclusive finance will be implemented, with special funds for inclusive finance being leveraged to bolster the financing and growth of micro and small enterprises.
The State Council Information Office briefed on the latest progress of the special campaign to standardize administrative law enforcement involving enterprises.
On May 22, the State Council Information Office held a press conference to brief the media on the progress of a special campaign to standardize administrative law enforcement involving enterprises, and to answer questions from reporters.
The special campaign was launched nationwide in March, focusing on four types of issues that businesses have strongly voiced, including unauthorized fees, unlawful cross‑jurisdictional law enforcement, inconsistent enforcement standards, and abuse of authority. Key sectors targeted include food and drugs, natural resources, and the ecological environment. As of May 21, a total of 6,232 leads had been collected, with 5,246 cases being processed, involving funds totaling RMB 335 million. The State Administration for Market Regulation has emphasized rigorous scrutiny of illegal fee‑charging practices and is advancing the development of a monitoring platform for enterprise‑related charges. Meanwhile, the Ministry of Emergency Management has introduced a “first‑time minor violation without penalty” policy to minimize disruptions to businesses’ normal operations.

Taxation
The Ministry of Finance has released the latest fiscal revenue and expenditure data: during the year-end tax reconciliation season, corporate income tax fell 3.1% year on year, while individual income tax rose 7.4% year on year.
On May 20, the Ministry of Finance released data on fiscal revenue and expenditure for January–April 2025. During this period, national tax revenue totaled RMB 6.5556 trillion, down 2.1% year on year.
The main tax revenue items are as follows:
Domestic value-added tax totaled RMB 262.54 billion, up 1.8% year on year.
Domestic consumption tax totaled RMB 650.2 billion, up 1.8% year on year.
Corporate income tax amounted to RMB 1.7341 trillion, down 3.1% year on year.
Individual income tax revenue totaled RMB 537.6 billion, up 7.4% year on year.
Stamp duty totaled RMB 161.4 billion, up 18.9% year on year. Of this amount, stamp duty on securities transactions reached RMB 53.5 billion, an increase of 57.8% compared with the same period last year.
Among taxes related to land and real estate, deed tax totaled RMB 161.8 billion, down 15.7% year on year; property tax reached RMB 202.6 billion, up 11.2% year on year; urban land use tax amounted to RMB 101.1 billion, up 4.8% year on year; land value-added tax stood at RMB 180.4 billion, down 16.1% year on year; and farmland occupation tax was RMB 55.0 billion, down 0.1% year on year.
The Chinese Institute of Certified Public Accountants has revised the Comprehensive Evaluation Measures for Accounting Offices, stipulating that offices involved in serious incidents with adverse public impact shall be disqualified from participation.
On May 21, the Chinese Institute of Certified Public Accountants issued the revised Measures for the Comprehensive Evaluation and Ranking of Accounting Offices (hereinafter referred to as the “Measures”), which shall take effect from the date of issuance. The Measures for the Comprehensive Evaluation and Ranking of Accounting Offices (CICPA [2023] No. 21) are hereby repealed.
Compared with the previous version, the Measures have revised the eligibility criteria, expanding the circumstances under which an entity may be excluded from the Top 100 ranking to three, with the addition of “the occurrence of events that have a serious adverse impact on the industry.” The Measures specify that the evaluation indicators comprise both basic and supplementary metrics, with the basic indicators serving as the core components of the overall assessment. These indicators reflect the status of accounting offices across four dimensions—revenue, internal governance, resources, and disciplinary actions—and encompass a total of ten specific metrics. Compared with the prior version, a new indicator, “integrated management,” has been introduced; the two original indicators, “level of IT expenditure” and “level of talent‑development expenditure,” have been merged into a single metric, “level of IT and talent development”; and the former indicator, “ratio of partners (shareholders) to employees,” has been revised to “ratio of partners (shareholders) to certified public accountants.” With respect to the weighting and scoring of the basic indicators, the integrated management indicator carries a weight of 1% and a maximum score of 10 points, while the level of IT and talent development indicator carries a weight of 3% and a maximum score of 30 points.

Litigation & Arbitration
The Supreme People’s Court and the National Development and Reform Commission have jointly released typical cases of punishing, in accordance with the law, bid-rigging and related crimes.
On May 19, the Supreme People’s Court and the National Development and Reform Commission jointly released typical cases of lawful punishment for bid-rigging and related crimes.
The published cases highlight new characteristics of the crime of bid-rigging, such as the diversification of perpetrators and the increasing sophistication of their methods, which disrupt market order. These cases underscore a strategy of comprehensive coverage across all sectors and end-to-end enforcement, spanning areas like construction projects, procurement of goods and services, and land‑lease contracting. The specific modus operandi encompasses various forms, including collusion between the procuring entity and bidders—both internally and externally—during the preparation of tender documents; intermediary involvement by bidding agencies; and concerted agreements among bidders to rig bids or engage in sham bidding. The Supreme People’s Court has made clear that, in handling such cases, it is essential first to adopt a principle of full‑sectoral coverage and impose strict penalties in accordance with the law; second, to pursue end-to‑end accountability, ensuring that all stakeholders at every link in the illicit bid‑rigging supply chain are held fully accountable, thereby achieving thorough oversight both vertically and horizontally.
The Supreme People’s Court has announced the latest compensation standards for violations of personal liberty.
Recently, the Supreme People’s Court issued a notice stating that, effective May 19, 2025, the compensation rate for violations of citizens’ personal liberty will be 475.52 yuan per day.
According to data released by the National Bureau of Statistics on May 16, 2025, in 2024 the average annual wage for employees in non‑private urban units nationwide was RMB 124,110, with an average daily wage of RMB 475.52. The Supreme People’s Court has clarified that, effective May 19, 2025, when issuing decisions on state compensation, courts at all levels shall calculate compensation for deprivation of personal freedom at RMB 475.52 per day, in accordance with Article 33 of the State Compensation Law and relevant legal interpretations.
The Supreme People’s Court has issued a judicial interpretation on administrative cases involving government information disclosure.
On May 20, the Supreme People’s Court issued the “Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in Adjudicating Administrative Cases Involving Government Information Disclosure,” which will take effect on June 1, 2025.
The Interpretation comprises fifteen articles, clearly defining the circumstances under which administrative cases concerning government information disclosure are admissible, the standing of plaintiffs, the proper defendants, and the burden of proof. It categorizes the types of decisions that administrative agencies may issue in response to requests for government information disclosure and provides detailed guidance on the grounds for non-disclosure. The Interpretation further stipulates that plaintiffs must furnish evidence supporting their applications, with particular requirements for demonstrating claims involving commercial secrets or personal privacy. The available forms of judicial relief include judgments ordering performance, declarations of illegality, and dismissals of the claim. A preventive remedy mechanism is retained to ensure the protection of commercial secrets and personal privacy.
The Supreme People’s Court has released the twentieth batch of selected Q&A from the Legal Answers Website, focusing on the statute of limitations.
On May 22, the Supreme People’s Court published, through the People’s Court Daily, a selection of Q&A from the Legal Answers Website (the twentieth batch), addressing issues related to the statute of limitations.
The Q&A released this time primarily addresses three issues: First, whether withdrawing a prior action in cases involving concurrent rights gives rise to an interruption of the statute of limitations. The Supreme People’s Court has clarified that, in situations of concurrent rights, withdrawing the earlier suit may still trigger an interruption of the limitation period. Second, when a sales contract does not specify a payment deadline for the purchase price, how should the starting point for calculating the statute of limitations on the seller’s claim be determined? The Supreme People’s Court has expressly held that the limitation period shall be calculated in accordance with the “simultaneous payment rule” set forth in Article 628 of the Civil Code. Third, the issue of the statute of limitations applicable to property management fees. The Supreme People’s Court has made clear that the limitation period should be computed separately for each installment, pursuant to Article 188 of the Civil Code, since each property‑management‑fee obligation constitutes an independent debt.

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