JC Master Legal News Issue 1149

Key Takeaways for This Issue

Two departments: Optimize the equity investment pilot program for financial asset investment companies and promote the orderly expansion of the pilot scope.
On February 26, the China Banking and Insurance Regulatory Commission and the National Development and Reform Commission convened a symposium in Beijing on the equity‑investment pilot program for financial asset investment companies, to review the pilot’s experience and further strengthen support for technological innovation and private enterprises.
Two departments convened a meeting to promote financing for small and micro enterprises.
On February 25, the National Administration of Financial Regulation and the National Development and Reform Commission jointly convened a meeting to advance the coordination mechanism for supporting financing for small and micro enterprises, outlining key priorities for the next phase.
The State Taxation Administration has issued the “Administrative Measures for the Annual Individual Income Tax Settlement and Finalization of Comprehensive Income.”
To thoroughly implement the arrangements set forth at the Third Plenary Session of the 20th CPC Central Committee and to ensure the regularized conduct of individual income tax comprehensive income final settlement, the State Taxation Administration officially issued the Measures for the Administration of Individual Income Tax Comprehensive Income Final Settlement on February 26.
The Supreme People’s Procuratorate has released typical cases of the “China Model” for public interest protection.
On February 24, the Supreme People’s Procuratorate website published six typical cases illustrating the “China Model” of public interest protection.
Finance & Capital Markets
The STAR Market is steadily maturing, and the plans for the STAR 100 and STAR 200 indices are set to be refined.
As the STAR Market continues to mature, and in order to better reflect the overall performance of its listed companies while further standardizing the compilation rules for broad-based STAR Market indices, the Shanghai Stock Exchange and China Securities Index Co., Ltd. recently announced revisions to the methodology of the SSE STAR 100 Index and the SSE STAR 200 Index, which will take effect on March 17, 2025.

The STAR 100 Index and the STAR 200 Index were launched in August 2023 and August 2024, respectively, and each captures the overall performance of listed companies on the STAR Market with medium‑sized and small market capitalizations, respectively. Together with the STAR Composite Index and the STAR 50 Index, they form the STAR Market’s size‑based index series.

In the early stages of the STAR Market’s establishment, the number of listed companies was relatively small. To enhance the index’s representativeness and promptly incorporate newly listed offices, the STAR 50, STAR 100, and STAR 200 indices all adopted a rule requiring new issues to have been listed for at least six months before inclusion. Over more than five years of development, the number of STAR Market‑listed companies has steadily grown, “hard‑tech” enterprises have continued to emerge, and the market has gradually matured, effectively serving as a testing ground for the registration‑based reform. The STAR 50 Index has now adopted a rule allowing new shares to be included after 12 months of listing, while retaining the fast‑track inclusion criterion for large‑cap stocks. Furthermore, the STAR Composite Index, released in January this year, stipulates that securities whose average daily total market capitalization since listing ranks outside the top ten on the STAR Market must be added to the index only after 12 months from their debut.

To further standardize the compilation rules for broad-based indices on the STAR Market, we propose to make reasonable refinements to the index construction methodologies of the STAR 100 and STAR 200 indices. The key revision is to amend the eligibility criterion for newly listed stocks to require a listing period of at least 12 months. All other aspects of the index construction methodologies will remain unchanged.

To ensure a smooth implementation of the index revision, in line with the principle of investability and after extensive consultation with market participants, this revision proposes a transitional approach that separates new and existing constituents. New constituents will be selected based on having been listed for more than 12 months, while for certain existing constituents whose listing dates are close to 12 months, the inclusion criteria will be appropriately relaxed, thereby minimizing unnecessary turnover in the index.

In recent years, under the unified leadership of the China Securities Regulatory Commission, the Shanghai Stock Exchange and China Securities Index Co., Ltd. have remained committed to implementing strategic initiatives such as achieving a high level of scientific and technological self-reliance and strength. By enriching the STAR Market index system, they have proactively advanced the development of science-and‑technology‑focused finance. The revisions to the STAR 100 and STAR 200 indices will further standardize the rules governing the STAR Market index framework, enhance the investability of these indices, and enable broad‑based STAR Market index products to play an even more pivotal role in attracting incremental capital and supporting innovation in critical core technologies.

Further efforts are being made to implement the “Six Measures on Mergers and Acquisitions” and the “Eight Measures for the STAR Market,” with a focus on building Shanghai into a global M&A hub—Shanghai’s financial regulators have once again convened a symposium on mergers, acquisitions, and corporate restructuring.
On February 27, the Shanghai Municipal Financial Work Committee, the Shanghai Securities Regulatory Bureau, and the Shanghai Stock Exchange jointly convened another symposium on M&A and restructuring activities among listed companies in the Shanghai market. More than 20 market participants—including securities offices, private equity investors, commercial banks, accounting offices, and law offices—attended the event. The symposium aimed to share insights into the M&A and restructuring landscape in Shanghai since the second half of last year, highlight representative cases, solicit feedback from the market, and build consensus, thereby further advancing the implementation of the “Six Measures on M&A,” the “Eight Measures for the STAR Market,” and the “Shanghai Action Plan to Support M&A and Restructuring by Listed Companies (2025–2027)” (hereinafter referred to as the “Action Plan”). These efforts seek to help Shanghai become a global M&A hub, enhance the quality of listed companies, and better leverage the capital market’s unique role in supporting technological innovation and the development of new‑type productive forces.

According to statistics, since the release of the “Eight Measures for the STAR Market” on June 19, 2024, STAR Market–listed companies have initiated nearly 80 M&A transactions, more than doubling in number, all of which are industry‑focused. Notably, the number of major cash acquisitions and share‑issuance deals has surpassed the total for the five-year period from 2019 to 2023. A growing number of innovative structures have emerged, including combinations of share issuance, targeted convertible bonds, and cash payments, as well as differentiated consideration arrangements. Additionally, transactions have included acquisitions of overseas listed companies, purchases of non‑profitable assets, and takeovers of pre‑IPO enterprises. Since the launch of the “Six Measures on M&A” on September 24, 2024, the Shanghai market has seen over 460 new asset‑related transactions, with 53 involving major asset restructurings or share‑issuance‑based asset acquisitions. The number of such deals has increased by nearly 50% compared with the five months preceding the announcement of the “Six Measures,” and more than 80% of these asset‑purchase transactions are aligned with emerging high‑quality productivity sectors.

The participating institutions unanimously agreed that, since last year, regulatory authorities have introduced a series of new policies on mergers and acquisitions (M&A) and corporate restructuring, enhancing the inclusiveness of the institutional framework, invigorating market dynamism, and bolstering market confidence—measures that have been warmly welcomed by all market stakeholders. The Shanghai Stock Exchange has continuously strengthened market communication and policy outreach, implementing a range of measures to ensure the effective implementation of these policies, with positive responses from the market. Listed companies in Shanghai have focused on industrial consolidation through M&A and restructuring, resulting in a substantial increase in deal activity compared with previous years, a trend that shows no sign of abating, accompanied by a growing number of landmark transactions. These developments mark significant progress in leveraging the capital market as the primary channel for M&A and restructuring, thereby better supporting listed companies’ transformation and upgrading and fostering the growth of new‑type productive forces. At the same time, in response to certain emerging issues and challenges observed in recent practice, the participating institutions put forward relevant recommendations, such as launching more exemplary cases to address market concerns, coordinating and refining regulations governing cross‑border M&A, providing stronger support for M&A funds to participate in listed‑company M&A and restructuring, and continuing to conduct regular, comprehensive training and dialogue on M&A and restructuring activities.

Zhou Xiaoquan, Executive Deputy Director of the Financial Affairs Office of the Shanghai Municipal Party Committee, stated that Shanghai will take implementing the Action Plan and facilitating the successful completion of more landmark M&A transactions in the city as key levers. By fully leveraging the resource advantages of Shanghai as an international financial center, the city will enhance its M&A service capabilities, refine the M&A market ecosystem, and position the development of a global M&A hub in Shanghai as an integral part of its broader efforts to build an international financial center, thereby supporting industries and enterprises nationwide in achieving high-quality growth through M&A. Moving forward, Shanghai will focus on four priority areas: establishing M&A clusters to consolidate M&A resources; piloting regulatory policies that facilitate M&A and corporate restructuring to address bottlenecks; hosting high‑quality M&A conferences to boost the sector’s visibility; and cultivating specialized M&A talent to strengthen the industry’s foundational capacity.

An official from the Shanghai Securities Regulatory Bureau stated that the bureau will actively implement the spirit of the new “Nine Measures,” in line with the unified deployment of the China Securities Regulatory Commission, and adhere to the principle of seeking progress while maintaining stability, using progress to promote stability. First, the bureau will vigorously implement the “Six Measures on M&A” and the corresponding Action Plan, providing policy support to Shanghai‑listed companies through joint field visits, symposiums, and research surveys, thereby facilitating the successful completion of more high‑quality M&A and restructuring transactions. Second, leveraging high‑quality M&A and restructuring as a key driver, the bureau will advance vertical integration across upstream and downstream segments of industrial chains and foster strategic alliances among industry peers, elevating the overall quality of Shanghai‑listed companies to a new level. Third, by strengthening fundamentals and enforcing rigorous oversight and management, the bureau will effectively guard against all forms of “deceptive” M&A and restructuring activities, thereby safeguarding the rights and interests of small and medium‑sized investors.

Relevant officials at the Shanghai Stock Exchange stated that building a well‑regulated, vibrant, and efficient M&A and restructuring market is an urgent necessity for enhancing the quality of listed companies; it is an essential requirement for accelerating the development of a new type of industrialization, fostering new‑driving productive forces, and promoting industrial transformation and upgrading; and it also constitutes a key measure to support the construction of Shanghai as an international financial center. Under the guidance of the China Securities Regulatory Commission, the SSE will continue to focus on the overarching priorities of risk prevention, strengthened regulation, and high‑quality development. Leveraging the distinctive characteristics of the Shanghai Stock Exchange’s main board—“large‑cap blue chips”—and the STAR Market—“hard‑tech” enterprises—the exchange will further enhance the inclusiveness and adaptability of its institutional framework and regulatory approach, and make every effort to ensure the thorough implementation of the “Six Measures on M&A” and the “Eight Measures on the STAR Market.” Priority will be given to supporting M&A and restructuring activities involving technology offices engaged in tackling critical core technologies, while intensifying efforts to nurture and expand leading technology enterprises and industry‑chain‑leading flagship companies, thereby better serving the development of new‑driving productive forces and the goal of achieving scientific and technological self‑reliance and strength. The SSE will also deepen its “Three Openings” service initiative, stepping up research and communication to solicit insights, advice, and needs from the market; continuously improve the market ecosystem; and proactively foster a market environment conducive to M&A and restructuring. It is hoped that all market participants will fulfill their respective roles and responsibilities, further leveraging their initiative and professional expertise, strengthening policy outreach on M&A and restructuring, and expediting the launch of more landmark and representative cases, so as to jointly promote the enhancement of listed company quality and the sound development of the capital market.

Two departments: Optimize the equity investment pilot program for financial asset investment companies and promote the orderly expansion of the pilot scope.
On February 26, the China Banking and Insurance Regulatory Commission and the National Development and Reform Commission convened a symposium in Beijing on the equity‑investment pilot program for financial asset investment companies, to review the pilot’s experience and further strengthen support for technological innovation and private enterprises.
The meeting noted that, following the introduction in September 2024 of a pilot program to expand equity investments by financial asset investment companies as part of a comprehensive package of measures to stabilize economic growth, all 18 pilot cities have now completed signing agreements, with total contracted amounts exceeding RMB 350 billion. The meeting emphasized the need to actively advance the pilot program to attract and leverage additional private capital in support of the development of science-and‑technology‑driven enterprises. It also stated that the China Banking and Insurance Regulatory Commission will strengthen coordination with the National Development and Reform Commission to improve the equity investment environment, mobilize more funding and resources to support the pilot initiatives, and continuously draw on lessons learned from the pilots to refine and enhance relevant policies, thereby ensuring the orderly expansion of the program.

Two departments convened a meeting to promote financing for small and micro enterprises.
On February 25, the National Administration of Financial Regulation and the National Development and Reform Commission jointly convened a meeting to advance the coordination mechanism for supporting financing for small and micro enterprises, outlining key priorities for the next phase.
The meeting noted that since the launch of the financing coordination mechanism for small and micro enterprises in October 2024, local authorities have collectively visited more than 50 million business entities, including small and micro enterprises and individual industrial and commercial households, with total credit lines exceeding RMB 10 trillion. The outstanding balance of principal‑free loan renewals for small and micro enterprises has approached RMB 7 trillion. The meeting called for further enhancing the effectiveness of the financing coordination mechanism to provide robust support for stabilizing businesses, bolstering market confidence, and promoting development. It emphasized the need to intensify on‑site visits to enterprises and promptly coordinate solutions to their practical challenges. Additionally, banks were urged to increase resource allocation and improve service quality, helping enterprises secure more orders, expand into new markets, and strengthen their capacity and momentum for sustainable operations.

CSRC: The number of financial fraud cases and the total fines continue to rise; it will closely monitor red flags such as “financial washing” and unusual changes of auditing offices.
Recently, the Supreme People’s Procuratorate, in conjunction with the China Securities Regulatory Commission, held a press conference on cracking down rigorously on securities-related crimes and violations. The CSRC outlined the current measures for punishing financial fraud cases and outlined its plans for the next steps.
The China Securities Regulatory Commission (CSRC) stated that, based on recent administrative penalty cases, financial fraud by listed companies has become increasingly systemic, concealed, and complex, making it ever more difficult to detect. In terms of enforcement力度, in 2024 the CSRC imposed administrative penalties in 61 cases of financial fraud, a 17% year-on-year increase; the average penalty per case amounted to RMB 15.77 million, up 12% from the previous year. Moreover, fines were levied at the statutory maximum in seven cases, a 75% year-on-year rise. Regarding accountability, in 35 cases, while penalizing the listed companies and their responsible individuals, the CSRC also imposed administrative sanctions on 39 intermediary institutions and suspended the business operations of five such institutions, thereby continuously strengthening the “gatekeeper” responsibilities of accounting offices and other intermediaries.
The China Securities Regulatory Commission stated that, in the next phase, it will identify fraud clues through multiple channels, including off-site supervision, on-site inspections, public opinion monitoring, and the handling of complaints and reports. In particular, it will refine its reward system for reporting leads, closely monitor suspicious indicators such as “financial washing,” sudden reversals in earnings performance, and unusual changes of auditing offices, enhance its ability to detect violations, improve enforcement efficiency, and continuously consolidate and strengthen a climate of strict regulation.

The Shanghai Securities Regulatory Bureau has issued regulatory guidance addressing issues such as financial accounting at companies listed on the New Third Board.
On February 26, the Shanghai Securities Regulatory Bureau announced the typical issues identified during on-site inspections of New Third Board companies within its jurisdiction in 2024 and issued regulatory warnings.
According to the report, the main issues identified during on-site inspections in 2024 encompass five key areas: irregularities in financial accounting, insufficient timeliness and accuracy of information disclosure, and inadequate internal control standards. Specifically, problems in financial accounting are concentrated in six aspects: inaccurate revenue recognition, non‑standard cost accounting, improper allocation of R&D expenses, inaccurate impairment loss calculations, imprecise expense accounting, and incorrect classification of accounting accounts. For instance, one company recorded the full salaries of its sales director and certain sales personnel as R&D expenses. Additionally, some companies posted expenses at the time of reimbursement without making accruals in accordance with the accrual basis of accounting, resulting in interperiod misallocation of expenses. Furthermore, certain entities failed to timely reclassify warranty deposits for receivables that had already passed their warranty period from contract assets to accounts receivable.

The Shanghai Securities Regulatory Bureau advises that listed companies should prepare their financial statements in strict compliance with the requirements of the Enterprise Accounting Standards, paying particular attention to key areas such as revenue and cost accounting, impairment provision accruals, related parties and related-party transactions, and the application of accounting policies and estimates. This will ensure that annual report data are true and accurate, faithfully reflecting the company’s financial position. Meanwhile, accounting offices are urged to rigorously implement audit procedures, strengthen quality management in their professional practice, maintain appropriate vigilance regarding any red flags, and obtain sufficient and appropriate audit evidence to support their audit conclusions and opinions, thereby issuing objective and impartial audit reports.

The National Administration of Financial Regulation has issued a document clarifying matters related to the equity participation of financial institutions from Hong Kong and Macao in insurance companies.
On February 26, the website of the National Administration of Financial Regulation published the “Notice on Matters Relating to the Equity Participation of Financial Institutions from Hong Kong and Macao in Insurance Companies.”
The Notice clarifies that, in accordance with Article 4 of the Foreign Investment Law of the People’s Republic of China and Article 48 of the Implementing Regulations of the Foreign Investment Law of the People’s Republic of China, effective March 1, 2025, financial institutions from Hong Kong and Macao will no longer be required to meet the condition that their total assets at the end of the most recent year must not be less than US$2 billion when acquiring equity stakes in insurance companies.

Commercial & Corporate
The State-owned Assets Supervision and Administration Commission has mandated that central enterprises strictly ensure the quality of their financial information and refrain from any artificial manipulation of profits.
The State-owned Assets Supervision and Administration Commission of the State Council has issued a notice, having studied and formulated the “2024 Annual Corporate Financial Settlement Statements,” the “2024 Annual Financial Settlement Statements for Overseas Subsidiaries,” along with the relevant preparation guidelines.
The Notice requires all central enterprises to rigorously manage their 2024 annual financial closing, with strict oversight of the quality of financial information. Adjustments to opening balances must be standardized; where such adjustments are genuinely necessary, they shall be disclosed item by item in the special notes to the financial statements. Enterprises are to make appropriate provisions for various types of impairment losses, refrain from artificially manipulating profits, strictly adhere to revenue recognition and cost allocation principles, standardize the recognition of revenue from agency trading activities, and accurately reflect their financial position and operating results. In doing so, they must ensure that accounting records are accurate and compliant, and that the financial closing reports are truthful and reliable.
The State-owned Assets Supervision and Administration Commission of the State Council has also issued the “Notice on Issuing the 2024 Statistical Reporting Forms for State-owned Assets of Enterprises Under Central Government Departments” and the “Notice on Issuing the 2024 Statistical Reporting Forms for State-owned Assets of Local Enterprises,” setting out the relevant work requirements.

The National Energy Administration has issued the “Guiding Opinions on Energy Work for 2025.”
On February 27, the website of the National Energy Administration issued the “Notice on the Issuance of the ‘Guiding Opinions on Energy Work for 2025.’”
The “Guiding Opinions” set out the key objectives for energy work by 2025 and outlined 21 priority tasks for the year, specifying that oversight of natural monopoly segments—such as the power grid and oil and gas pipeline networks—will be strengthened to prevent the abuse of monopolistic positions to extend into competitive downstream and upstream sectors. Comprehensive regulatory pilots will continue in six provinces, with end-to-end oversight covering power planning and development, production and operations, and supply security. Targeted inspections will also be conducted on issues such as fair access to the grid and order in the electricity market, while routine measures will be implemented to address inappropriate local interference in market‑based electricity trading.

Beijing, Tianjin, and Hebei have launched joint initiatives to enhance regional credit.
Recently, the market regulation authorities of Beijing, Tianjin, and Hebei jointly issued the “Opinions of the Market Regulation Authorities of Beijing, Tianjin, and Hebei on Implementing the Three-Year Action Plan to Deepen Credit Enhancement and Support the High-Quality Development of Market Entities.”
Under the action plan, Beijing, Tianjin, and Hebei will explore innovative applications of credit‑based services. By rolling out “Credit Plus” initiatives and leveraging new credit‑regulation tools—such as credit commitments, credit ratings, credit reports, and credit indices—they will enhance the quality and efficiency of market supervision across all functional areas. At the same time, they will further standardize the eligibility criteria, application requirements, review procedures, and processing timelines for credit‑repair measures related to various types of untrustworthy information, ensuring consistent and uniform handling of credit repairs across the three regions. They will also establish a collaborative mechanism for cross‑regional verification and assistance in credit‑repair matters, and clearly commit to conducting joint credit assessments of enterprises in the three areas. Priority will be given to recommending enterprises with low credit risk and high credit ratings within the region to join enterprise credit alliances, thereby fostering high‑quality credit brands and core enterprises driving new‑type productivity. In addition, Beijing, Tianjin, and Hebei will formulate and refine local standards for the coordinated exchange and application of unified social credit codes, as well as mechanisms for sharing information on these codes; they will expand credit‑risk‑based classification management and enable mutual recognition and sharing of credit‑risk classification outcomes among the three regions.

The State Administration for Market Regulation has issued the “Approval Rules for Special Equipment Inspection Agencies (Amendment No. 1).”
Recently, the website of the State Administration for Market Regulation published the “Announcement on the Issuance of the ‘Rules for the Approval of Special Equipment Inspection Agencies (Amendment No. 1).’”
This revision includes adjustments to the “Instructions for Completing the Approval Certificate of Special Equipment Inspection and Testing Institutions.” For example, Class B inspection institutions are required to specify in the “Remarks” column the administrative regions within which they conduct inspection activities. In addition, if an applicant shares the approval conditions of its subordinate units, it must list the relevant details one by one in the “Remarks” column. The amendment also revises the “Application Form for Approval of Equipment Inspection Institutions,” clarifying the definition of subordinate units, adjusting the format for reporting personnel information, and refining the classification of inspection and testing personnel.

Eight departments have launched the second batch of pilot programs for comprehensive electrification of vehicles in the public sector in 10 cities.
Recently, eight departments, including the Ministry of Industry and Information Technology and the Ministry of Transport, launched the second batch of pilot programs for vehicle‑to‑grid demonstration zones in the public sector, supporting ten pilot cities—including Tianjin—in deepening the innovative application of new technologies and business models such as vehicle‑to‑grid integration, solar‑storage‑charging‑swapping systems, and intelligent connected vehicles.
According to the work plan, it is expected that more than 250,000 new energy vehicles will be promoted in 10 cities, and over 240,000 charging piles will be built. The plan calls for accelerating the iterative development of next-generation charging and battery-swapping technologies and advancing their commercial deployment; expanding V2G applications across diverse demonstration scenarios to achieve initial scale; enabling market‑driven adoption of the solar‑storage‑charging‑discharging model and fostering related ecosystem development; further broadening the range of application scenarios and vehicle types for autonomous driving technologies; and unlocking the potential of zero‑emission freight transport by demonstrating electric‑powered heavy‑duty trucks in multiple operational contexts.

The Joint Committee of the China–New Zealand Free Trade Agreement is seeking public input.
Since the China–New Zealand Free Trade Agreement entered into force in 2008, seven Joint Committee meetings have been held. The two sides are set to convene the eighth Joint Committee soon, where they will comprehensively review the implementation of the Agreement and exchange views. In this regard, the Ministry of Commerce is soliciting from relevant domestic departments, local authorities, business associations, enterprises, and citizens any issues encountered in economic and trade cooperation with New Zealand, as well as related suggestions. The deadline for submitting feedback is March 10.

The State Administration for Market Regulation convened a symposium on quality development.
From February 25 to 26, the State Administration for Market Regulation convened a national symposium on quality development to review the work of 2024 and outline key tasks for 2025.
The meeting reviewed the achievements of quality development in 2024, including the implementation of the Quality‑Driven Industrial Chain Project, the launch of the Quality‑Driven County Initiative, the inclusion of enterprises in the National Quality‑Driven Development Database, and the execution of numerous product recalls. The key priorities for 2025 emphasize elevating political awareness, enhancing both the quality and quantity of products and services, advancing initiatives to strengthen enterprises and counties through quality, implementing a quality‑brand strategy, reinforcing product recall management, and promoting international cooperation on quality issues.

In 2025, the Beijing Municipal Administration for Market Regulation will launch 12 initiatives to promote the high-quality development of the advertising industry.
On February 25, the Beijing Municipal Administration for Market Regulation announced on its website that it plans to introduce 12 measures by 2025, focusing on institutional development, boosting market vitality, and helping enterprises achieve regulatory compliance, in order to promote the healthy growth of the advertising industry.
The measures include formulating guidelines for the internationalization of digital advertising enterprises, issuing sector-specific advertising guidelines, and advancing the development of standards for the protection of minors and for advertising monitoring; fostering innovation by releasing case studies of digital advertising innovation, hosting the Beijing–Tianjin–Hebei Advertising Festival, and promoting the development of industrial parks; and enhancing regulatory services by fully implementing a tolerance-and-correction mechanism for minor violations while focusing on cracking down on illegal advertisements that contravene public order and good morals or infringe upon legitimate rights and interests.

Shanghai Lingang has unveiled an Action Plan for High-Quality Development of Industry-Education Integration.
On February 18, the Management Committee of the Lingang New Area of the China (Shanghai) Pilot Free Trade Zone released the “Action Plan for High-Quality Development of Industry-Education Integration in the Lingang New Area of the China (Shanghai) Pilot Free Trade Zone (2025–2027).”
The Action Plan comprises four initiatives—optimizing working mechanisms, upgrading the capacity of higher‑education resources, enhancing the quality of collaborative education, and strengthening the foundation of industry‑education resources—totaling 22 measures. It calls for focusing on sectors such as integrated circuits, aerospace, high‑end equipment, intelligent new‑energy vehicles, and the digital economy; advancing the high‑standard development of industry‑education integration demonstration and cultivation bases; establishing a management system for industry‑education integration bases in the Lingang New Area; and making innovation and outcomes in collaborative education key criteria for base evaluation, with the gradual introduction of entry‑and‑exit mechanisms. Furthermore, it seeks to bolster existing sub‑industry alliances in integrated circuits, artificial intelligence, high‑end equipment, and aerospace, while expanding these alliances to encompass advanced manufacturing and modern service sectors, including intelligent new‑energy vehicles, cross‑border and offshore finance, the digital economy, and high‑level shipping services.

Three departments have unveiled 16 measures to facilitate customs clearance at air ports.
On February 26, the General Administration of Customs published on its official WeChat account the “Notice of the General Administration of Customs, the National Immigration Administration, and the Civil Aviation Administration of China on Several Measures to Further Facilitate Customs Clearance at Air Ports.”
The Notice comprises four key areas and sixteen measures, proposing that, in response to business needs, pilot programs be launched at eligible air ports to implement “direct loading” of export cargo on the apron and “direct pickup” of import cargo on the apron; giving priority to supporting the establishment of aviation pre‑clearance warehouses within comprehensive bonded zones; enabling cross‑border e‑commerce enterprises, via air transport, to consolidate and sort goods originating from various sources—such as overseas returns, domestic goods entering the zone, and foreign imports—within the comprehensive bonded zone for subsequent consolidation and export; issuing detailed operational guidelines for cross‑border e‑commerce transshipment to streamline procedures; and supporting international aviation hub ports in piloting systems such as air cargo control agents and known shippers, while implementing tiered, categorized, and differentiated security inspection measures, among other initiatives.

The National General Emergency Response Plan for Sudden Incidents Has Been Released.
Recently, the CPC Central Committee and the State Council issued the National General Emergency Response Plan for Sudden Incidents.
The National General Emergency Response Plan is the overarching institutional framework for organizing responses to emergencies. It comprises sections on general provisions, the organizational and command structure, operational mechanisms, emergency support, and plan management, and applies to the work of the CPC Central Committee and the State Council in addressing exceptionally serious emergencies. It provides guidance for nationwide emergency response efforts, with a focus on strengthening the Party’s overall leadership, improving the emergency command and coordination system, preventing and defusing major risks at their source, establishing and refining early‑warning systems and mechanisms, clarifying emergency response procedures and requirements, bolstering grassroots emergency preparedness, and standardizing the structure and interlinkages of the emergency response plan system. In addition, the plan sets out requirements for information release and public opinion guidance, recovery and reconstruction, investigation and assessment, as well as for human resources, financial support, material supplies, transportation and communications, and power‑supply assurance, along with scientific and technological support.

The State Administration for Market Regulation convened a symposium on fair competition among enterprises.
On February 25, the State Administration for Market Regulation convened a symposium on fair competition with representatives from several enterprises, including LONGi Green Energy, JA Solar, Trina Solar, Alibaba Group, JD.com, BAIC Group, and Mercedes-Benz Group. Participants engaged in an in-depth discussion on addressing “involutionary” competition and heard their views and suggestions.
Participating enterprises, drawing on their own circumstances, outlined the market environment they face, the competitive landscape, and the challenges they encounter, while putting forward specific recommendations on issues such as antitrust and anti-unfair competition enforcement, fair‑competition reviews, and corporate compliance guidance. An official from the State Administration for Market Regulation stated that the Administration will strengthen regular communication and dialogue with businesses, intensify regulatory enforcement in the areas of antitrust and anti‑unfair competition, reinforce the binding nature of fair‑competition reviews, accelerate the development of a unified national market, and proactively address the problems enterprises encounter in ensuring fair competition, thereby supporting their high‑quality growth.

The Cyberspace Administration of China hosted a symposium on cross-border data transfer policies for EU‑based enterprises operating in China.
On February 25, the Cyberspace Administration of China hosted a symposium in Beijing on the European Union’s policies governing cross-border data flows for businesses operating in China.
At the meeting, a representative from the Cyberspace Administration of China outlined China’s policies and regulations on cross-border data flows, as well as the mechanisms for China–EU exchanges on this issue, and addressed questions raised by EU‑based enterprises operating in China. The participating EU companies commended China’s policy measures to promote and regulate cross-border data flows, expressing their willingness to contribute further to China–EU economic and trade cooperation. A total of 23 EU‑based enterprises in China, along with relevant officials from the European Union Chamber of Commerce in China, took part in the discussion.

The National Energy Administration is soliciting information on exemplary cases of China–Europe energy cooperation.
On February 25, the website of the National Energy Administration published the “Notice on Soliciting Typical Cases of China–Europe Energy Cooperation.”
The Notice clarifies that exemplary cases will focus on projects in clean energy sectors of mutual interest to China and Europe, including hydrogen energy, smart energy, energy storage, and offshore wind power. Such cases must involve energy projects jointly implemented by Chinese and European enterprises within China, as well as joint research and development and technological cooperation undertaken by institutions from both sides in the energy field. The exemplary cases fall into three categories: first, projects that have been completed, commissioned, and are operating smoothly; second, projects that have fulfilled all necessary approval procedures and are progressing steadily; and third, projects for which Chinese and European enterprises have reached a preliminary cooperation agreement and are actively advancing.

The National E-Commerce Work Conference Was Held.
From February 24 to 25, the National E‑Commerce Work Conference was held in Beijing. The conference comprehensively reviewed the achievements of e‑commerce work in 2024, analyzed the development landscape, and outlined key priorities for 2025.
The meeting emphasized that, by 2025, we must ground our work in the “three important” roles of commerce, coordinate development and security, and intensify efforts to integrate online and offline channels, with a focus on fostering a sound e‑commerce ecosystem, expanding digital consumption, and empowering industrial transformation. We will also strengthen domestic–international linkages, advance high‑level institutional openness in the e‑commerce sector, promote high‑quality cooperation under the “Silk Road E‑Commerce” initiative, and bolster e‑commerce supply and value chains. Furthermore, we will accelerate digital transformation across the commercial sector, enhance the quality and effectiveness of the three-year action plan for digital commerce, and strengthen digital governance capabilities, thereby contributing the power of e‑commerce to high‑quality commercial development.

The Ministry of Civil Affairs has issued the “Criteria for Identifying Major Accident Hazards in Mental Health and Welfare Institutions.”
On February 24, the website of the Ministry of Civil Affairs published the “Notice on Issuing the ‘Criteria for Identifying Major Accident Hazards in Mental Health and Welfare Institutions.’”
The Standard consists of ten articles and specifies that major accident hazards in mental health welfare institutions primarily encompass the following areas: (1) significant safety hazards related to facilities and equipment; (2) non‑compliance of relevant qualifications and credentials with statutory requirements; (3) significant safety hazards in daily management; and (4) other major accident hazards, further delineating detailed requirements for each scenario.

The Ministry of Industry and Information Technology has issued the 2025 edition of the “Industry Standard Requirements for Key Household Safety and Emergency Products.”
On February 24, the website of the Ministry of Industry and Information Technology published Announcement No. 3 of 2025, issuing the “Industry Standardization Requirements for Key Household Safety and Emergency Products (2025 Edition)” and the “Administrative Measures for the Public Announcement of Industry Standards for Key Household Safety and Emergency Products.”
The “Standardized Conditions” set forth requirements for manufacturers of key household safety and emergency‑response products, covering five areas: basic requirements; enterprise layout and site selection; production conditions and product quality; workplace safety and social responsibility; and consumer rights protection. The “Administrative Measures,” which are to be applied in conjunction with the “Standardized Conditions,” comprise eight chapters and twenty-six articles, addressing such matters as division of responsibilities, application procedures, review and public announcement, supervision and management, changes, corrective actions, and revocation of announcements.

The National Energy Administration has issued a document to strengthen safety and quality supervision and management for the resumption of work on power construction projects and maintenance and technical upgrade projects.
The website of the National Energy Administration has published the “Notice on Strengthening Safety and Quality Supervision and Management for the Resumption of Work on Power Construction Projects and Overhaul and Technological Upgrade Projects.”
The Notice emphasizes that all power‑generation enterprises must strictly fulfill their primary responsibility for workplace safety and comprehensively strengthen disaster monitoring and early warning as well as safety management. The principal person in charge of each enterprise must earnestly assume the statutory duty of being primarily responsible for workplace safety, establishing clear criteria for resuming work and production and standardized management procedures. Furthermore, the principal persons in charge, technical leaders, and safety‑and‑quality management personnel of all participating construction units and of all operational units engaged in maintenance and technological upgrades must be on duty; it is strictly prohibited to assign names without actual presence or to fail to perform duties while merely holding a nominal position.

Taxation
The State Taxation Administration has issued the “Administrative Measures for the Annual Individual Income Tax Settlement and Finalization of Comprehensive Income.”
To thoroughly implement the arrangements set forth at the Third Plenary Session of the 20th CPC Central Committee and to ensure the regular and systematic conduct of individual income tax comprehensive annual settlement, the State Taxation Administration officially issued the Measures for the Administration of Individual Income Tax Comprehensive Annual Settlement (hereinafter referred to as the “Measures”) on February 26. The Measures comprise six chapters and thirty-seven articles, covering general provisions, preparation for and completion of the annual settlement, procedures and services related to the settlement, tax refunds and additional payments, administrative measures and legal liabilities, and supplementary provisions. For detailed information, please visit the official website of the State Taxation Administration.
According to reports, the Measures, based on a comprehensive and systematic review of previous annual tax reconciliation and settlement practices, have thoroughly incorporated feedback and suggestions from taxpayers and all sectors of society. They codify into formal regulations those measures that have demonstrated significant effectiveness in recent years and have been well received by taxpayers, thereby further improving the related tax‑related service management system. For example, at the outset of the reconciliation process, services such as appointment‑based processing are offered to enable taxpayers to complete their filings more efficiently. Moreover, unlike previous years when normative documents were issued prior to each reconciliation period with a one‑year validity, these newly promulgated Measures have been revised into departmental rules with a long‑term scope, which helps stabilize public expectations and facilitates the standardized implementation of tax reconciliation and settlement work.
The issuance of the Measures, which carry a higher legal status, has clarified the rights and obligations of all parties involved in the annual tax reconciliation and final settlement process, thereby providing stronger legal safeguards for the administration of related tax‑related services. For example, the Measures require tax authorities and their staff to maintain the confidentiality of individuals’ tax‑related information in accordance with the law, and they set out the legal remedies available when taxpayers’ legitimate rights and interests are infringed.
The Measures further underscore a taxpayer‑centered service philosophy, making individual income tax final settlement and filing much more convenient. For example, the tax authorities leverage the individual income tax app and website to offer pre‑filled return forms, helping taxpayers complete their final settlement and clearance with ease. Meanwhile, for special taxpayers who encounter difficulties in completing the process on their own, the tax authorities may, upon request, provide tailored, user‑friendly services.
It is understood that, to effectively implement the Measures and help taxpayers gain a deeper understanding of the individual income tax final settlement process, the State Taxation Administration has prepared the “2024 Individual Income Tax Comprehensive Income Final Settlement Q&A” and the “Individual Income Tax Comprehensive Income Final Settlement Illustrative Cases.” The former addresses frequently asked questions raised by taxpayers, while the latter summarizes and analyzes cases of incorrect or false filings identified in recent years, thereby alerting taxpayers to common mistakes in the final settlement and advising them to file accurately and avoid violations.
Shi Zhengwen, Director of the Center for Fiscal and Tax Law at China University of Political Science and Law, pointed out that the Measures, in the form of departmental regulations, clearly set forth the specific rules for annual tax reconciliation and final settlement. By institutionalizing previously effective practices, the Measures further clarify the rights and responsibilities of both tax authorities and taxpayers, safeguard taxpayers’ legitimate rights and interests, and enhance the stability of social expectations. This marks a significant step forward in China’s personal income tax reform—moving toward a more standardized and rule-of-law‑based system that combines comprehensive and classified approaches.
An official from the Income Tax Department of the State Taxation Administration stated that, going forward, the tax authorities will, on the basis of further refining the various functions of the individual income tax app, continue to strengthen taxpayer guidance, enhance tax services, and deliver a more precise and efficient service experience.

In 2024, the main policies supporting technological innovation and the development of the manufacturing sector—tax and fee reductions, as well as tax rebates—will benefit the private sector by 60 percent.
According to the latest data released by the State Taxation Administration, in 2024, the major policies currently in place to support scientific and technological innovation and the development of the manufacturing sector resulted in tax and fee reductions and refunds totaling RMB 2.6293 trillion. Of this amount, taxpayers from the private sector—including private enterprises and individual business households—benefited from such measures to the tune of RMB 1.587 trillion, accounting for 60.4%.
According to the head of the Taxpayer Services Department of the State Taxation Administration, in 2024 the tax authorities continued to refine the regular “tax‑enterprise face‑to‑face” communication mechanism, established direct liaison points for private business entities, and systematically collected and efficiently addressed tax and fee-related concerns. They also launched the “Spring Rain Nurtures Seedlings” special campaign, the “SME Service Month,” and the “National Individual Business Household Service Month,” organizing more than 70,000 promotional and guidance events that benefited 10.39 million small and micro business entities. Additionally, over 4,000 “Walk the Process, Listen to Suggestions” sessions were held, resulting in the collection and response to more than 38,000 individual business household requests. Furthermore, new businesses received a “First Lesson on Starting Up,” with one‑stop, package‑style services provided; targeted promotional materials totaling 14.28 million items were distributed to 10.96 million newly registered enterprises nationwide, continuously enhancing the precision and reach of the “policies find people” approach and ensuring that eligible taxpayers can promptly access the benefits they are entitled to.
A series of policies, including tax and fee concessions, have effectively boosted the vitality of private-sector entities. Tax data show that in 2024, the growth rate of sales revenue in the private sector outpaced the national average for all enterprises by 0.5 percentage points. Specifically, sales revenue in high‑tech manufacturing and core industries of the digital economy increased year on year by 13% and 4.7%, respectively—1.8 and 1.7 percentage points higher than the corresponding national averages for these sectors.
A responsible official from a relevant department of the State Taxation Administration stated that the tax authorities will earnestly implement the spirit of General Secretary Xi Jinping’s important speech at the symposium on private enterprises, and, in accordance with the arrangements of the CPC Central Committee and the State Council, ensure the thorough and meticulous implementation of all tax and fee preferential policies. They will continue to refine tax collection and administration measures, uphold strict, standardized, impartial, and civilized law enforcement, optimize enforcement methods, and create a favorable tax environment for the healthy growth and robust development of the private sector.

LITIGATION & ARBITRATION
The Supreme People’s Procuratorate has released typical cases under the theme “Procuratorial Organs Deeply Advance the Building of a Higher‑Level Peaceful China.”
On February 26, the Supreme People’s Procuratorate’s official website released five typical cases under the theme “Procuratorial Organs Deeply Advancing the Building of a Higher‑Level Peaceful China.”
In Case Four, on the evening of May 25, 2015, Ma Moulin drove a vehicle—borrowed from his younger cousin—from Hezheng County, Gansu Province, to Linxia City, where he picked up Yi Mouhong and took her back to Hezheng County. Beginning on May 26, Ma Moulin, disguised as a woman, repeatedly withdrew cash using two of Yi Mouhong’s bank cards late at night, totaling RMB 284,000. On June 21, Ma Moulin was apprehended; police seized Yi Mouhong’s bank cards and RMB 320,000 in cash from his residence, and also discovered his cross-dressing attire among nearby piles of debris. On June 26, authorities found Yi Mouhong’s body along a field ridge near the location where Ma Moulin had returned his cousin’s vehicle. Forensic examination determined that Yi Mouhong died of mechanical asphyxiation caused by someone pressing over her mouth and nose and placing a hood over her head. In this case, with no confessions and no eyewitnesses, the prosecutor relied on retrieved mobile‑phone signal data, working in concert with forensic technicians and a forensic pathologist. The prosecution commissioned relevant authorities to conduct precise re‑measurements using specialized positioning instruments, thereby dispelling the original verdict’s suggestion that a third party might have been involved. The court conofficeed that the defendant’s and victim’s mobile‑phone signals overlapped during the relevant time period, and provided thorough reasoning and argumentation to address the grounds on which the original judgment had declined to find Ma Moulin guilty of robbery. From the incident in 2015 to the retrial and revised sentence in 2024—a span of ten years—the Gansu High People’s Court ultimately overturned the conviction, reclassifying Ma Moulin’s offense as robbery and sentencing him to death with a two‑year reprieve, subject to restrictions on commutation.

The Supreme People’s Procuratorate has released typical cases of the “China Model” for public interest protection.
On February 24, the Supreme People’s Procuratorate website published six typical cases illustrating the “China Model” of public interest protection.
In Case No. 2, in response to environmental pollution issues in the scrapped motor vehicle recycling and dismantling sector, the procuratorial organs leveraged the synergistic advantages of public interest litigation and prosecutorial expertise. By employing forensic examination and appraisal techniques, they accurately established the facts of public‑interest harm caused by environmental pollution, issued prosecutorial recommendations in accordance with the law, and urged the relevant competent authorities and local governments to fulfill their statutory duties. This effort facilitated industry‑wide governance and effectively safeguarded the public interest.

JC Master Law Office
Address: 9th Floor, National Water Resources Building, No. 70 Qingjiang South Road, Nanjing City
Postal code: 210036
Phone: 025-84503333
Fax: 025-84505533
Website: www.jcmaster.com
This legal notice is provided solely for informational purposes and does not constitute legal advice or a legal analysis of any specific case. The transmission of this legal notice does not establish an attorney–client relationship between JC Master Law Office and the user or viewer. JC Master Law Office assumes no responsibility for any third-party content accessible via the internet. If you do not wish to receive this legal notice, please notify us by email at jcm@jcmaster.com.
The copyright of this legal information is owned by JC Master Law Office ©. Without written permission, no organization or individual may reproduce, publish, or cite it in any form.