JC Master Legal News Issue 1126

Key Takeaways for This Issue

Eight departments have issued a document to promote the coordinated development of green finance, inclusive finance, and elderly‑care finance.
Recently, the People’s Bank of China and seven other departments jointly issued the “Guiding Opinions on Further Strengthening Financial Support for the Green, Low-Carbon, and High-Quality Development of the Yangtze River Economic Belt.”
CSRC: Harmonize Accounting Regulatory Standards and Use Case Studies to Clarify Key and Difficult Accounting Issues in the Market
The China Securities Regulatory Commission has released the Accounting Supervision Report on the 2023 Annual Financial Reports of Listed Companies.
The Accounting System for Private Non-Profit Organizations Is Set for Revision, with Numerous Accounting Provisions Added and Removed.
On August 29, the Ministry of Finance launched a public consultation on the “Accounting System for Non-Profit Organizations (Draft for Comments),” with the deadline for submitting feedback set for September 20, 2024.
Supreme People’s Court Ruling: Large enterprises may not use “back-to-back” clauses to delay payments to small and medium-sized enterprises.
On August 27, the Supreme People’s Court issued the “Reply on the Legal Effect of Clauses in Contracts Between Large Enterprises and Small and Medium-sized Enterprises That Make Payment Conditional Upon Receipt of Funds from a Third Party.”
Finance & Capital Markets
The China Securities Regulatory Commission convened a symposium for institutional investors to study and implement the spirit of the Third Plenary Session of the 20th CPC Central Committee, further advancing the comprehensive deepening of capital market reform.
To thoroughly study and implement the spirit of the Third Plenary Session of the 20th CPC Central Committee, and to further comprehensively deepen capital market reform, Wu Qing, Secretary of the CPC Committee and Chairman of the China Securities Regulatory Commission, recently convened a special symposium in Beijing. He engaged in in-depth discussions with representatives from ten leading institutional investors, including the National Council for Social Security Fund, insurance asset management offices, bank wealth management companies, and private equity funds, and fully solicited their views and suggestions. Li Chao, a member of the CPC Committee and Vice Chairman, also attended the symposium.

During the symposium, participants unanimously agreed that the Decision adopted at the Third Plenary Session of the CPC Central Committee lays out a comprehensive plan for further deepening reform of the capital market. All sectors of society place great hopes on the capital market to play an even greater role in advancing China’s path to modernization. The participating institutions emphasized that investment and financing are two sides of the same coin in the capital market, and their coordinated development is crucial for the market’s long-term, healthy growth. At present, China’s economy is at a critical juncture of high-quality development. As demand continues to rise among households for asset allocation, wealth management, and retirement‑related investments, the need for medium- and long-term capital to increase equity‑based investments is also growing steadily. Meanwhile, the participants put forward concrete recommendations for the next phase of comprehensive capital‑market reform, including: improving incentive mechanisms—such as performance evaluation, accounting standards, and tax policies—to encourage long-term investment and support the entry of more long-term capital into the market; further refining the capital market’s foundational institutional framework, deepening and solidifying the stock issuance registration system, and enhancing the inclusiveness and precision of these systems to attract more companies representing technological innovation and new‑type productive forces to go public; guiding listed companies to increase dividend payouts and share buybacks, and encouraging them to leverage mergers and acquisitions, restructuring, and equity‑based incentives to enhance their investment value; and so forth.

Wu Qing emphasized that studying and implementing the spirit of the Third Plenary Session of the 20th CPC Central Committee is an important political task for the CSRC system, both now and in the period ahead. The CSRC will thoroughly carry out the arrangements set forth in the Decision adopted at the Third Plenary Session, continue to ensure the effective implementation of the new “Nine Measures” and the capital market’s “1+N” policy framework, and leverage reform to promote stability, mitigate risks, and foster high-quality development. It will steadily advance the optimization and improvement of key systems related to issuance and listing, trading, and delisting; work to establish a policy framework that encourages long-term investment with long-term capital; and strengthen the capital market’s functions of coordinated investment and financing, thereby better serving the cause of Chinese‑style modernization. Wu Qing noted that in recent years, the ranks of institutional investors in the capital market have continued to grow and mature, with their share of trading rising markedly. They have gradually become a benchmark force for rational, value‑oriented, and long-term investing, playing a vital role in promoting the healthy and stable development of the capital market. He expressed the hope that institutional investors will remain confident, maintain composure, uphold a long-term and professional approach, continuously enhance their research and investment capabilities, further demonstrate leadership, steadily expand the buying side, help investors secure reasonable returns, bolster investor confidence and trust, and increasingly serve as a “stabilizer” for market operations and a “booster” for economic development.

Small‑loan companies face stricter regulation, with new requirements for internal control systems, including those governing related‑party transactions.
The China Banking and Insurance Regulatory Commission has launched a public consultation on the “Interim Measures for the Supervision and Administration of Small Loan Companies (Draft for Comments),” with the deadline for submitting feedback set for September 23, 2024.

The Provisional Measures comprise seven chapters and sixty-six articles, covering business operations, corporate governance and risk management, consumer rights protection, and supervisory oversight. First, they standardize the business conduct of micro‑loan companies by: strictly prohibiting the leasing or lending of licenses and other illicit “channeling” practices; and mandating that loans may not be extended using funds such as pre‑deposited security deposits held by partner institutions. Second, they strengthen corporate governance and risk management by setting clear requirements for internal control systems related to corporate governance, risk management, and the management of related-party transactions. Third, they place a strong emphasis on consumer rights protection, reinforcing the management of a negative list that prohibits illegal and improper conduct. Fourth, they enhance the oversight and management of partner institutions.

Eight departments have issued a document to promote the coordinated development of green finance, inclusive finance, and elderly‑care finance.
According to a notice posted on the website of the People’s Bank of China on August 27, the People’s Bank of China and seven other departments recently jointly issued the “Guiding Opinions on Further Strengthening Financial Support for the Green, Low-Carbon, and High-Quality Development of the Yangtze River Economic Belt.”

The “Guiding Opinions” set forth 16 key tasks across four areas—vigorously developing green finance, strengthening financial risk assessment and prevention, among others—and outline three supporting measures, including enhanced supervision and management. They also call for fostering synergistic development between green finance, inclusive finance, and pension finance. Financial institutions are encouraged to actively engage in personal pension services and launch a broader array of personal pension products. Furthermore, financial institutions are urged to invest, through debt, equity, property rights, and other mechanisms, in enterprises spanning the upstream and downstream segments of the pension industry, thereby meeting the diverse养老 needs of the public.

CSRC: Harmonize Accounting Regulatory Standards and Use Case Studies to Clarify Key and Difficult Accounting Issues in the Market
The China Securities Regulatory Commission has released the 2023 Annual Financial Report Accounting Supervision Report for listed companies. Among the listed companies that disclosed their annual financial reports on time, 209 received audit reports with non-standard opinions, including 29 cases of “unable to express an opinion.”
The Report indicates that certain listed companies have committed errors in accounting treatment or financial information disclosure in areas such as revenue recognition, long-term equity investments and business combinations, financial instruments, asset impairment, income taxes, and non-recurring gains and losses. The China Securities Regulatory Commission stated that, going forward, it will continue to undertake the following tasks: first, systematically review and assess the leads on issues identified among listed companies, promptly follow up, and carry out subsequent regulatory actions in accordance with applicable rules; second, convene an annual accounting regulatory coordination meeting to address typical issues uncovered during supervisory work, thereby standardizing regulatory approaches; and third, closely monitor emerging and challenging accounting matters of particular market concern, and further strengthen practical guidance through case analyses and other formats.

The China Securities Regulatory Commission convened a symposium for institutional investors on further comprehensively deepening capital market reform.
Recently, Wu Qing, Secretary of the CPC Committee and Chairman of the China Securities Regulatory Commission, convened a special symposium in Beijing, engaging in in-depth discussions with representatives from ten leading institutional investors—including the National Council for Social Security Fund, insurance asset management offices, bank wealth-management subsidiaries, and private equity funds—and thoroughly soliciting their views and suggestions.
The participating institutions put forward specific recommendations for the next phase of comprehensively deepening reform of the capital market, including: improving incentive mechanisms—such as performance evaluation, accounting, and taxation—to encourage long-term investment and support the entry of more long-term capital into the market; further refining the capital market’s foundational institutional framework, advancing the stock issuance registration system in a substantive and effective manner, and enhancing the inclusiveness and precision of these systems to attract more companies representing technological innovation and new‑type productive forces to go public; guiding listed companies to increase dividend payouts and share buybacks, and encouraging them to leverage mergers and acquisitions, restructuring, equity incentives, and other tools to enhance their investment value; and so on.

Commercial & Corporate
The Accounting System for Private Non-Profit Organizations Is Set for Revision, with Numerous Accounting Provisions Added and Removed.
On August 29, the Ministry of Finance launched a public consultation on the “Accounting System for Non-Profit Organizations (Draft for Comments),” with the deadline for submitting feedback set for September 20, 2024.
The draft for public comment revises content in three areas: First, it adds certain accounting treatment provisions, including: expanding the types of entities to which the standards apply; introducing accounting treatments for service donations; and adding new accounting accounts such as other long-term investments, long-term deferred expenses, and taxes payable, along with corresponding disclosure requirements. Second, it revises certain existing accounting treatment provisions, including: amending the accounting treatment for restricted net assets; revising the accounting treatment for long-term equity investments; and modifying the account used to recognize asset impairment losses. Third, it deletes the accounting treatment provisions related to consolidated financial statements.

Exposure Draft of Interpretation No. 18 of the Enterprise Accounting Standards: Subsequent Measurement of Investment Property
The Ministry of Finance is seeking public comments on “Interpretation No. 18 of the Enterprise Accounting Standards (Exposure Draft),” with the deadline for submitting feedback set for September 24, 2024.
Interpretation No. 18 comprises two key aspects: first, the subsequent measurement of investment property held as a basic item under the fair value model; and second, the accounting treatment of warranty‑type quality assurances that do not constitute separate performance obligations. Interpretation No. 18 revises and refines the subsequent measurement approach for investment property set forth in Accounting Standard for Business Enterprises No. 3—Investment Property, expressly stipulating that the aforementioned investment property may not be measured using both models concurrently, and that once the fair value model is elected, it cannot be switched to the cost model.

The medical device management sector will be subject to dedicated legislation, which is expected to provide support in areas such as financing and credit.
On August 28, the National Medical Products Administration (NMPA) released the “Draft Law of the People’s Republic of China on the Administration of Medical Devices” for public consultation, with the deadline for submitting comments set for September 28, 2024.
The draft for public comment comprises eleven chapters and 190 articles, setting forth provisions on medical device standards and classification, as well as on the research and development, manufacturing, marketing, import and export, vigilance and recall, supervisory management, and legal liabilities of medical devices. The draft emphasizes strengthening the role of enterprises as the primary drivers of technological innovation, supporting them in establishing or jointly forming R&D institutions, and encouraging collaboration with universities, research institutes, and medical institutions to advance the development and innovation of medical devices. It also stipulates the formulation of industrial plans and policies for medical devices, prioritizing their R&D and innovation in national development strategies, and providing support in areas such as scientific‑technological project approval, financing, credit, tendering and procurement, and medical insurance. Furthermore, it calls for the establishment of a medical device industry development fund to foster the innovative development of high‑performance, high‑quality medical devices, and encourages cooperation between government funds and private capital to broaden financing channels for medical device enterprises.

The Ministry of Natural Resources has issued a document to deepen the reform of “integrated multi‑survey” for engineering construction projects.
On August 28, the website of the Ministry of Natural Resources published the “Notice on Deepening the Reform of ‘Multi-Survey Integration’ for Engineering Construction Projects.”
The Notice comprises eight items across four key areas. The main tasks of the “integrated multi‑survey” reform fall into three categories: First, in terms of operations, surveying and mapping activities should be streamlined and consolidated in light of local conditions, while simultaneously advancing the harmonization of technical standards for area calculations, cadastral surveys, and other related processes. Second, in terms of data sharing, the use of information‑based management for “integrated multi‑survey” projects should be encouraged, and a mechanism for mutual recognition and sharing of surveying and mapping results should be established, ensuring that the same object is surveyed only once, the same surveying and mapping output is submitted only once, and results are shared among relevant parties. Third, in terms of policy, existing local policies should be systematically reviewed, and any measures that hinder the fair and open development of the surveying and mapping services market must be promptly revised or repealed, thereby breaking down departmental monopolies and local protectionism in this sector.

The Ministry of Industry and Information Technology has issued the third batch of industry standard development and revision plans for 2024.
On August 28, the website of the Ministry of Industry and Information Technology published the “Notice on Issuing the Third Batch of Industry Standard Development and Revision Plans for 2024.”
The Plan specifies that, in the third batch for 2024, a total of 108 industry standard development and revision projects have been scheduled. Of these, 105 are new standards and 3 are revisions; 92 are key and basic general‑purpose standards, while 16 are other standards, covering areas such as artificial intelligence, integrated circuits, next‑generation displays, virtual reality, data centers, vehicle‑to‑everything (V2X) networks, solar photovoltaics, new materials, rare earths, quantum information, future networks, advanced energy storage, digital transformation, and green, low‑carbon technologies.

The Ministry of Industry and Information Technology has deployed the 2024 training program for leading talents in the management of small and medium-sized enterprises.
On August 28, the website of the Ministry of Industry and Information Technology released the “Notice on Effectively Carrying Out the 2024 Training Program for Leading Talents in SME Management.”
The Notice specifies that, for 2024, the plan is to train no fewer than 800 leading talents in the management of small and medium-sized enterprises, with a total of 10 intensive training sessions, each lasting four days. Training costs will be fully subsidized by the government, ensuring that participants attend free of charge. The program is primarily targeted at outstanding SME entrepreneurs and managers who are patriotic and dedicated, law-abiding, embody the entrepreneurial spirit, fulfill their social responsibilities, lead corporate innovation and development, and contribute to local economic and social progress—individuals who enjoy significant public influence. This includes key executives from specialized, refined, distinctive, and innovative SMEs; innovative and technology‑driven SMEs; manufacturing “single‑champion” enterprises; “unicorn” companies; and high‑tech enterprises, with preference given to top corporate leaders. The training program is designed around priority tasks such as developing new‑quality productive forces and advancing new‑type industrialization, as well as the specific needs of SMEs. It features a curriculum covering political guidance, entrepreneurial spirit, policies and regulations, innovation and development, investment and financing, digital transformation, green development, strategic management, macroeconomic trends, and internationalization.

The Ministry of Industry and Information Technology plans to issue the industry standard “Industrial Electronic Detonators and Electronic Ignition Modules.”
On August 28, the website of the Ministry of Industry and Information Technology published a notice soliciting public comments on the draft industry standard “Industrial Electronic Detonators and Electronic Ignition Modules.” The deadline for submitting feedback is September 29.
This standard specifies the classification and nomenclature, requirements, test methods, inspection rules, packaging, marking, transportation, storage, and other relevant aspects of electronic ignition modules for industrial electronic detonators. It applies to the research and development, production, inspection, transportation, storage, and sale of such modules.

The Ministry of Transport plans to issue the industry standard “Coding and Naming Specifications for Video Resources on the National Integrated Transportation Information Platform.”
On August 28, the website of the Ministry of Transport published the “Notice on Public Solicitation of Comments on the Industry Standard ‘Coding and Naming Specifications for Video Resources of the National Integrated Transportation Information Platform (Draft for Comments)’,” with a deadline for submitting feedback set for September 26.
The Specification sets forth the coding rules, naming conventions, and attribute indicators for video resources on the National Integrated Transportation Information Platform, applying to the coding and naming of video resources accessed by the platform—covering railways, highways, waterways, civil aviation, postal services, and other sectors. Local transportation authorities may refer to these provisions when establishing coding and naming standards for their own video resources.

The National Energy Administration has issued the outline for preparing the overall plan of the provincial “Thousand Towns and Ten Thousand Villages Wind Power Initiative.”
Recently, the website of the National Energy Administration published the “Notice on Issuing the Outline for Preparing the Overall Plan of the ‘Thousand Towns and Ten Thousand Villages Wind Power Initiative’ at the Provincial (Autonomous Region, Municipality) Level.”
The Outline explicitly stipulates that the government shall not impose non‑technical investment costs through measures such as requiring supporting industries, settling debts, or levying resource taxes (fees) in disguised forms, and must actively foster a fair, just, and transparent market environment. It also seeks to prevent the emergence of monopolistic practices by development entities that may result from county‑wide development models. The selection of investment entities should comprehensively take into account factors such as an enterprise’s investment capacity, technological expertise, operational capabilities, and creditworthiness, thereby ensuring the safe and stable operation of projects. Furthermore, the equity‑based cooperation framework between the investor and village collectives, along with the specific terms of collaboration and the corresponding rights and responsibilities, must be clearly defined—covering the division of labor for project construction, operation and maintenance, and safety management—and all parties’ obligations must be rigorously enforced.

The Beijing Municipal Government plans to issue the “Beijing Municipal Transportation Credit Evaluation Standards (Freight Transport Section).”
On August 27, the Beijing Municipal Government website published the “Notice on Soliciting Public Comments on the ‘Beijing Municipal Transportation Credit Evaluation Standards (Freight Transport Section)’,” with a deadline for feedback set for September 27.
The original “Evaluation Criteria” comprised 56 indicator items, divided into general indicators (16 items) and road freight transport industry indicators (40 items), with each category including both bonus‑point and penalty‑point components. Following this revision, the overall set of evaluation indicators now consists of three parts: general indicators (16 items, unchanged), road freight transport industry indicators (21 items), and tier‑breakdown indicators (5 items), totaling 42 items. Within the road freight transport industry indicators, certain elements of the original criteria have been consolidated, while others have been further refined. Additionally, five new tier‑breakdown indicators have been introduced. At the same time, revisions and adjustments have been made to the sources of the indicators, the assessment basis, and the institutions responsible for data entry.

Guangdong has issued an implementation plan to make effective use of funds from ultra-long-term special government bonds and step up support for the trade-in program for consumer goods.
Recently, the Guangdong Provincial Government issued the “Implementation Plan for Leveraging Ultra-Long-Term Special Government Bonds to Strengthen Support for the Trade-In Program for Consumer Goods.”
The Implementation Plan specifies that, across the province (excluding Shenzhen), the new round of home appliance trade-in program aims to achieve sales of 2.01 million units. In light of Guangdong’s specific circumstances, individual consumers purchasing three categories of products—mobile phones, tablets, and smart wearable devices—will receive subsidies: mobile phones will be subsidized at 10% of the retail price, with a maximum subsidy of RMB 1,000 per unit; tablets and smart wearables will be subsidized at 15% of the retail price, with a maximum subsidy of RMB 2,000 per unit. Local cities may, based on their own conditions, extend the subsidy scope to additional “N” categories of home appliances beyond the aforementioned “8+3” product groups, with subsidy rates set no higher than those applicable to comparable products. For “3+N” products, each consumer is eligible for one subsidy per product category. Furthermore, regarding vehicle scrappage and replacement, the province (excluding Shenzhen) aims to facilitate the scrapping and replacement of 135,000 vehicles.

Documents on the development and utilization of enterprise data resources are expected to be issued within the year.
On August 27, the National Data Administration stated that two documents on the development and utilization of public and enterprise data resources will be issued successively within this year, while policies related to the development and utilization of personal data resources are also being expedited.
The National Data Administration stated that, at present, there remains substantial room to unlock the value of enterprises’ data resources. Moving forward, it will strengthen the protection of enterprises’ legitimate data rights and interests, promote the sharing and openness of enterprise data, encourage small and medium-sized enterprises to leverage data for innovation, and enhance the effectiveness of data compliance governance. At the same time, it will further refine mechanisms that align market‑based assessments of contributions with remuneration determined by those contributions, thereby bolstering the intrinsic motivation of enterprises to develop and utilize their data resources.

The State Administration for Market Regulation has issued documents related to the guidance of administrative law enforcement cases in the field of food safety.
On August 27, the State Administration for Market Regulation issued a notice promulgating the “Relevant Documents on Case Guidance for Food Safety Administrative Law Enforcement,” which include the “Rules of Procedure of the Working Committee on Case Guidance for Food Safety Administrative Law Enforcement” and the “Administrative Measures for the Expert Panel on Case Guidance for Food Safety Administrative Law Enforcement (Trial).”
According to the Administrative Measures, the expert panel’s principal tasks include: participating in the review and selection of guiding cases by providing advice and recommendations and attending expert deliberation meetings; contributing to the refinement of the guiding‑case system through research projects, conference discussions, and case reviews; and offering training activities related to guiding cases for frontline law enforcement personnel, such as preparing analyses of guiding cases and delivering specialized lectures.

Jiangsu: Jointly Releases Typical Cases of Ecological and Environmental Damage Compensation
Recently, the Jiangsu Provincial People’s Procuratorate, in collaboration with the province’s Department of Ecology and Environment, released the fourth batch of ten landmark cases on ecological and environmental damage compensation. The cases unveiled this time cover a range of areas, including wastewater discharge, gaseous emissions, and solid waste management.
In this batch of typical cases, the methods by which offenders assume restoration obligations exhibit diversity and innovation, with labor‑based compensation being supported by digital tools for enhanced oversight. In a case involving illegal logging handled by the Suzhou procuratorial organs in collaboration with the ecological and environmental authorities, the authorities commissioned the national carbon‑emissions trading market to facilitate the purchase of verified forestry carbon‑sink projects, thereby carrying out ecological and environmental restoration—such cases were selected for inclusion.

The Publicity Department of the CPC Central Committee: Organizes and carries out the 2024 “National Defense Education Month” activities.
Recently, the Publicity Department of the CPC Central Committee and eleven other departments issued the “Notice on Organizing Activities for the 2024 ‘National Defense Education Month,’” calling for the concentrated implementation of National Defense Education Month activities in September under the theme “Conducting National Defense Education in Accordance with the Law to Enhance the Nation’s Overall Defense Literacy.”
The Notice outlines seven categories of activities. First, it calls for public awareness campaigns on the National Defense Education Law; second, commemorative events to honor those who have made sacrifices; third, national defense education programs for young people; fourth, educational and practical initiatives under the theme “Love Our Country, Defend Our Nation”; fifth, publicity and learning campaigns highlighting exemplary role models; sixth, open‑door events at military camps; and seventh, online publicity and education activities. The Notice further stipulates that key dates—such as September 3, the anniversary of the victory of the Chinese People’s War of Resistance Against Japanese Aggression; September 18, the anniversary of the Mukden Incident; September 30, Martyrs’ Day; and National Defense Education Day—should be fully leveraged to organize solemn, highly ceremonial public memorial ceremonies and bell‑ringing and siren‑blowing events.

The tourism industry standard “Requirements for Big Data Security and Privacy Protection in Tourism” is now open for public comment.
The tourism industry standard “Requirements for Big Data Security and Privacy Protection in Tourism” was approved in 2024. Recently, the drafting group has launched a public consultation on this standard, with the deadline for submitting comments set for October 8.
By establishing and refining standards for the security and privacy protection of tourism big data, this standard promotes the healthy and orderly development of the tourism industry, ensuring that data security and the personal information of tourists are effectively safeguarded throughout the collection, processing, storage, and use of such data, while also enhancing service quality and operational efficiency. The formulation of this standard will help strengthen industry oversight, guide tourism data‑processing entities in conducting data‑security management in a scientific and prudent manner, prevent and reduce the occurrence of data‑security incidents, foster the development and innovation of data resources, protect consumer rights, and bolster consumers’ trust in and satisfaction with tourism services.

Four departments have jointly issued a document calling for further efforts to facilitate the scrapping and replacement of aging commercial freight vehicles.
On August 28, the Ministry of Transport, the Ministry of Commerce, and two other departments jointly issued the “Notice on Further Strengthening the Scrapping and Renewal of Old and Outdated Commercial Freight Vehicles.”
According to the Notice, vehicle owners may apply for financial assistance for eligible scrapped trucks, trucks undergoing replacement through scrapping, and newly purchased trucks. To apply for scrappage subsidies for older commercial trucks, applicants must submit the “Motor Vehicle Scrappage Recycling Certificate,” the “Motor Vehicle Cancellation Certificate,” and the “Road Transport Permit” (or its cancellation certificate), along with the identity card or business license of the vehicle’s registered owner. To apply for replacement‑and‑scrappage subsidies for older commercial trucks, applicants must provide the “Motor Vehicle Scrappage Recycling Certificate,” the “Motor Vehicle Cancellation Certificate,” and the “Road Transport Permit” (or its cancellation certificate) for the scrapped vehicle, as well as the “Motor Vehicle Registration Certificate” and the “Road Transport Permit” for the newly purchased vehicle, together with the identity card or business license of the vehicle’s registered owner. To apply for subsidies for newly purchased vehicles, applicants must submit the “Motor Vehicle Registration Certificate” and the “Road Transport Permit,” along with the identity card or business license of the vehicle’s registered owner.

Five government departments have introduced new regulations for the management of duty-free shops in cities, under which eight new duty-free stores will be established.
According to a notice posted on the Ministry of Finance’s website on August 28, the Ministry of Finance, the General Administration of Customs, the State Taxation Administration, and three other departments recently issued the “Notice on Improving the Policy for In-City Duty-Free Shops,” which will take effect on October 1, 2024.
The Notice issues, as an annex, the Interim Measures for the Administration of In-City Duty-Free Shops. The six in-city duty-free shops currently operated by China Duty Free (Group) Co., Ltd.—in Beijing, Shanghai, Qingdao, Dalian, Xiamen, and Sanya—shall be subject to these Measures effective October 1, 2024. Meanwhile, the twelve foreign-exchange‑denominated duty-free shops currently managed by China National Outbound Service Co., Ltd.—in Beijing, Shanghai, Qingdao, Dalian, Nanjing, Chongqing, Hefei, Nanchang, Kunming, Hangzhou, Zhengzhou, and Harbin—as well as the Harbin foreign-exchange‑denominated duty-free shop operated by China Travel Service Asset Management Co., Ltd., shall, within three months from October 1, 2024, transition into in-city duty-free shops and commence operations upon passing customs inspection and acceptance. In addition, one in-city duty-free shop will be established in each of eight cities: Guangzhou, Chengdu, Shenzhen, Tianjin, Wuhan, Xi’an, Changsha, and Fuzhou.

The National Development and Reform Commission has issued in full the “Implementation Plan for Building the China–Singapore Tianjin Eco-City into a National Green Development Demonstration Zone.”
Recently, the National Development and Reform Commission issued the “Implementation Plan for Building the China-Singapore Tianjin Eco-City into a National Green Development Demonstration Zone (2024–2035),” which comprises eight key areas and 29 specific measures.
The Implementation Plan proposes accelerating the development of green and low‑carbon industries and building green, low‑carbon, livable, and resilient cities, including fostering high‑end green and low‑carbon manufacturing, vigorously promoting green transportation, and developing smart cities. It calls for conducting applied research centered on technologies such as power batteries, fuel cells, and battery materials. The plan also seeks to advance breakthroughs in key technologies—including automotive‑grade chips, motor controllers, in‑vehicle intelligent sensing and control systems, and autonomous driving solutions—and to develop related components, thereby extending the entire new‑energy vehicle industry chain. Furthermore, it encourages R&D and industrialization of critical technologies—such as modular design for robotic product lines, dynamic performance optimization, high‑speed, high‑precision control, and open, networked system integration and control—along with their widespread deployment.

Shenzhen Institute of Certified Public Accountants Issues the Audit Procedure Guidelines for the Recognition of Data Resources on the Balance Sheet
The Shenzhen Institute of Certified Public Accountants has prepared the “Guidelines on Accounting Procedures for Recording Corporate Data Resources in Financial Statements” and the “Guiding Opinions on Audit Procedures for Recording Corporate Data Resources in Financial Statements,” which were publicly released on August 27.
Among these, the “Guiding Opinions on Audit Procedures for Recording Enterprise Data Resources on the Balance Sheet” (hereinafter referred to as the “Guiding Opinions”) are framed within the overarching structure of auditing standards and, guided by a risk‑based audit approach, highlight the distinctive aspects of auditing the inclusion of data resources on the balance sheet. According to Document No. 11 [2023] issued by the Ministry of Finance and the National Accounting Standards Commission, data assets that meet the definition of an asset and satisfy the recognition criteria are broadly classified into two categories: inventories and intangible assets. Accordingly, the Guiding Opinions comprise two sections—inventory auditing and intangible asset auditing—and provide guidance on audit objectives, risk‑based control testing, substantive procedures, and measures to address fraud risks.

Six departments have standardized the management of municipal infrastructure assets, stipulating that no off‑book assets may be created.
According to a notice posted on the Ministry of Finance’s website on August 26, the Ministry of Finance and five other departments recently jointly issued the “Administrative Measures for Municipal Infrastructure Assets (Trial),” which will take effect on September 1, 2024.
The Measures apply to the management and maintenance of municipal infrastructure assets by administrative and public institutions that implement the Government Accounting Standards System, and comprise nine chapters and forty-seven articles. The Measures stipulate that each managing and maintaining entity is responsible for conducting inventories, registering, accounting for, collecting revenues from, and preparing reports on the municipal infrastructure assets under its jurisdiction. Such entities shall, in accordance with the nationally unified accounting system, promptly record municipal infrastructure assets in their accounts and shall not maintain off‑book assets. They are also required to conduct regular physical inventories and reconcile records, ensuring consistency among account records, ledger entries, and actual asset holdings. Whenever there are changes in the value of these assets, the managing and maintaining entities shall promptly adjust the relevant accounting records.

Ten departments have issued the “Implementation Guidelines for Coordinated Digital and Green Transformation and Development.”
China Internet Information Office has issued the “Notice on the Issuance of the Implementation Guidelines for Coordinated Digital and Green Transformation and Development.”
The Implementation Guidelines articulate the fundamental principles for advancing the coordinated development of digitalization and green transformation across four dimensions: innovation-driven leadership, collaborative promotion, open cooperation, and a focus on tangible results. Structured around a “323” overarching framework, the Guidelines delineate three categories of implementing entities—local governments and relevant departments, industry associations, universities and research institutes, and enterprises in related sectors—providing guidance and reference for each to advance this dual‑transformation agenda. They also identify two key strategic priorities: fostering the green and low‑carbon development of the digital industry, and accelerating the use of digital technologies to drive the green transformation of industries. Furthermore, the Guidelines lay out a three‑pronged approach to integrated innovation, encompassing foundational capabilities for digitalization and green transformation, an integrated technological system for their convergence, and an industrial ecosystem that bridges the two.

Two departments have issued the Guidelines for Building an IoT Standards System (2024 Edition).
On August 26, the website of the Ministry of Industry and Information Technology released the “Notice on Issuing the Guidelines for Building an IoT Standards System (2024 Edition).”
The Notice clarifies that the IoT standards framework comprises four components: foundational standards, technical standards, construction and operation‑maintenance standards, and application standards. Foundational standards are overarching, framework‑level specifications that provide the basic underpinning for all other categories of standards. Technical standards cover key common and convergent technologies, offering the technical foundation necessary to enable IoT applications. Construction and operation‑maintenance standards govern the planning, deployment, operation, and maintenance of IoT systems, guiding industries in advancing system development and large‑scale application rollouts. Application standards address specific industry‑specific needs, refining and elaborating on the other standard categories to support sector‑wide growth.

From January to July, the total profits of state-owned enterprises nationwide declined by 2.0%.
On August 27, the Ministry of Finance website released data on the economic performance of state-owned and state-controlled enterprises nationwide for January–July 2024.
Data show that from January to July, the total operating revenue of state-owned and state-controlled enterprises nationwide reached RMB 47,287.27 billion, up 1.6% year on year; total profits amounted to RMB 2,570.15 billion, down 2.0% year on year; taxes and fees payable totaled RMB 3,487.27 billion, up 1.3% year on year; and the asset-liability ratio stood at 64.9%, an increase of 0.1 percentage point.

The State Administration for Market Regulation plans to issue the “Decision on Abolishing and Amending Certain Departmental Regulations.”
The website of the State Administration for Market Regulation has published the “Notice on Public Solicitation of Comments on the ‘Decision of the State Administration for Market Regulation on Abolishing and Amending Certain Departmental Regulations (Draft for Comments)’,” with a deadline for submitting feedback set for September 22.
The Decision introduces seven key adjustments to existing departmental regulations: First, it ensures alignment with the newly revised Administrative Review Law by abolishing the Measures for Administrative Review of the State Food and Drug Administration, among others. Second, it aligns with the newly promulgated Regulations on the Implementation of the Consumer Rights Protection Law, amending relevant provisions in eight regulations. Third, it coordinates with the newly revised Interim Regulations on the Public Disclosure of Enterprise Information, revising pertinent provisions in five regulations. Fourth, in accordance with requirements for streamlining penalty‑related matters, it modifies relevant provisions in four regulations, including the Measures for Investigating and Handling Illegal Acts in Online Food Safety. Fifth, it adjusts and refines the catalog governing the administration of industrial product production licenses. Sixth, it removes references to the National Intellectual Property Administration from the Provisions on the Procedures for Formulating Regulations of the State Administration for Market Regulation. Seventh, it strengthens penalties for false or misleading inspection and testing reports.

The State Administration for Market Regulation has issued the “Enforcement Guidelines on the Identifiability of Internet Advertising.”
The website of the State Administration for Market Regulation has published the “Announcement on the Issuance of the ‘Enforcement Guidelines on the Identifiability of Internet Advertising.’”
The Guidelines comprise sixteen articles, specifying the entities obligated to label advertisements and the particular methods for doing so, while also diversifying the ways in which advertisements may be marked. They permit advertisers to use voice prompts or other means to indicate that content is advertising. For the first time, the Guidelines clarify that internet advertisers and internet information service providers may apply “bundled” labeling to relevant online advertisements, thereby obviating the need for item-by-item labeling. The Guidelines enumerate specific situations in which the commercial nature of online information is particularly pronounced, making it difficult for consumers to distinguish between advertising and other types of content. They further emphasize circumstances under which administrative penalties may be waived in enforcement actions concerning the identifiability of online advertisements. By adopting a guiding provision, the Guidelines encourage advertisers to proactively disclose when they employ artificial intelligence technologies, thus facilitating the ongoing exploration and refinement of regulatory frameworks for AI and promoting the sound development of such technologies.

Three departments have issued a document to deploy work related to the 2024 basic medical insurance for urban and rural residents.
The website of the State Taxation Administration has published the “Notice on Doing a Good Job in Relevant Work Related to Basic Medical Insurance for Urban and Rural Residents in 2024.”
The Notice comprises four key areas and ten specific measures, stipulating that the increase in individual contributions will be appropriately reduced. Fiscal subsidies and individual contribution rates will rise by RMB 30 and RMB 20 per person, respectively, compared with the previous year, reaching no less than RMB 670 and RMB 400 per person annually. The deductible for critical illness insurance will, in principle, not exceed the per capita disposable income of urban and rural residents in the locality for the preceding year. Meanwhile, the maximum reimbursement limit under the integrated basic medical insurance and critical illness insurance scheme will, in principle, be set at approximately six times the local per capita disposable income of urban and rural residents for the previous year, with reimbursement ratios tilted toward high‑cost medical expenses.

General Administration of Customs: Simplification of Documentation Submission Requirements for Goods Transported via Third Parties under Preferential Trade Arrangements
Recently, the General Administration of Customs published on its website the “Announcement on Simplifying Documentation Submission Requirements for Goods Transported via Third Parties under Preferential Trade Arrangements.”
The Announcement clarifies that, when the consignee or agent of imported goods declares under an agreement‑based preferential tariff rate or a special preferential tariff rate, they need not submit a certificate of non‑reprocessing issued by a third country (or region) if they provide one of the following documents to Customs:
(1) A single transport document issued by the carrier, specifying that the place of origin is within the territory of the goods’ exporting country (or region) and the destination is within the territory of China. For sea‑borne imports originating in an inland country (or region), the place of origin may be the vessel’s port of loading.
(2) For goods transported entirely in containers, documentation proving that the container number and seal number remained unchanged throughout the transportation process.
For goods transported by international railway combined‑transport trains, if the importer submits an International Consignment Note or an International Cargo Transport Agreement waybill, no certificate of non‑reprocessing issued by any transit country (or region) other than the country of origin and the country of destination is required.

Shanghai has promulgated the newly revised “Regulations of Shanghai Municipality on Promoting the Development of an International Financial Center.”
The Shanghai Municipal People’s Congress website has published the Regulations of Shanghai Municipality on Promoting the Development of an International Financial Center, which will take effect on October 1.
The Regulations comprise eight chapters and sixty-five articles, grounded in local jurisdiction. They set forth specific provisions aimed at supporting the improvement of the financial market system, the financial institutions system, the financial regulatory system, the financial products and services system, and the financial infrastructure system. A dedicated chapter on “Financial Services for the Real Economy” has been established, delineating key priorities around the five major areas of finance and underscoring the role of finance in elevating the capabilities of international economic, trade, shipping, and science-and‑technology innovation hubs. The Regulations also strengthen coordinated financial supervision, enhance risk prevention and resolution capacities, bolster the development of a skilled financial workforce, and optimize the business environment for the financial sector, among other measures.

Taxation
Exposure Draft of Interpretation No. 18 of the Enterprise Accounting Standards: Subsequent Measurement of Investment Property
The Ministry of Finance is seeking public comments on “Interpretation No. 18 of the Enterprise Accounting Standards (Exposure Draft),” with the deadline for submitting feedback set for September 24, 2024.
Interpretation No. 18 comprises two key aspects: first, the subsequent measurement of investment property held as a basic item under the fair value model; and second, the accounting treatment of warranty‑type quality assurances that do not constitute separate performance obligations. Interpretation No. 18 revises and refines the subsequent measurement approach for investment property set forth in Accounting Standard for Business Enterprises No. 3—Investment Property, expressly stipulating that the aforementioned investment property may not be measured using both models concurrently, and that once the fair value model is elected, it cannot be switched to the cost model.

Qianhai has issued a new version of the Guidelines for Defining Industries Eligible for Corporate Income Tax Preferences.
Recently, the Qianhai Authority of Shenzhen issued the “Qianhai Guidelines on the Definition of Industries Eligible for Corporate Income Tax Preferences,” which will take effect on September 1, 2024, and remain in force until December 31, 2026.
The Guidelines clarify matters such as the definition of eligible entities, the scope of application, procedural requirements, and credit‑related facilitations. In accordance with the spirit of Cai Shui [2024] No. 13 and Cai Shui [2021] No. 30, and pursuant to the authorization granted by the Shenzhen Municipal Government, when it is difficult for the tax authorities to determine whether an enterprise’s principal business falls within the scope of the “Catalogue of Enterprise Income Tax Preferential Policies for the Qianhai Shenzhen–Hong Kong Modern Service Industry Cooperation Zone (2021 Edition),” the Qianhai Authority shall issue a formal opinion and prepare the relevant supporting documentation as required. The Guidelines also include, in the form of an annex, the “Key Criteria for Defining Eligible Industries under the Qianhai Enterprise Income Tax Preferential Policy and the Corresponding List of Supporting Documents.”

Litigation & Arbitration
Supreme People’s Court Ruling: Large enterprises may not use “back-to-back” clauses to delay payments to small and medium-sized enterprises.
On August 27, the Supreme People’s Court issued the “Reply on the Legal Effect of Clauses in Contracts Between Large Enterprises and Small and Medium-sized Enterprises That Make Payment Conditional Upon Receipt of Funds from a Third Party.”
The Reply consists of two provisions, addressing the legal application issues related to (1) the validity of clauses in which large enterprises and small and medium-sized enterprises stipulate that payment is contingent upon third-party remittance, and (2) how to reasonably determine the payment deadline and the corresponding liability for breach of contract when such contractual provisions are deemed invalid. The Reply clarifies that clauses whereby large enterprises and small and medium-sized enterprises make payment conditional upon third-party remittance essentially constitute agreements on unreasonable payment deadlines, methods, or conditions, and such clauses shall be deemed invalid.

The Supreme People’s Procuratorate has released typical cases of technical support for public interest litigation.
On August 26, the Supreme People’s Procuratorate website published typical cases of technical support in administrative public interest litigation and civil public interest litigation.
This batch of typical cases comprises five exemplary instances of technical support in administrative public interest litigation and three in civil public interest litigation. In the first administrative public interest litigation case, the Supreme People’s Procuratorate clarified that although legislation on light pollution control remains incomplete, there is nonetheless an objectively existing situation of harm to the public interest. During the handling of this case, great emphasis was placed on applying national standards and adopting a practice‑oriented approach. By identifying entry points within the existing technical standards and specifications for light pollution, the procuratorial authorities applied promulgated national recommended standards such as the “Code for Limiting Light Interference from Outdoor Lighting” and the “Standard for Measuring Light Interference from Outdoor Lighting,” thereby ensuring that investigations into and determinations of violations of light‑pollution regulations were grounded in solid evidence. This process not only yielded valuable experience in handling light‑pollution cases but also provided a useful reference for administrative law enforcement.

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