JC Master Legal News Issue 806

Key Takeaways for This Issue

The China Insurance Regulatory Commission has revised and promulgated the Measures for the Administration of Insurance Funds Investment.
On January 26, 2018, the China Insurance Regulatory Commission issued the Measures for the Administration of Insurance Funds Investment. The key provisions of these Measures include: clarifying the principal forms of insurance fund investment; stipulating the management framework for the deployment of insurance funds; explicitly defining the decision-making and risk‑control mechanisms for such investments; requiring insurance institutions to strengthen corporate governance and internal controls, and to earnestly assume their respective management responsibilities and bear associated risks; and specifying the regulatory authorities’ accountability for violations committed by insurance institutions and relevant parties.
A pilot program for constructing rental housing on collectively owned land in 11 cities, including Shenyang, has been approved.
The General Offices of the Ministry of Land and Resources and the Ministry of Housing and Urban–Rural Development have issued a letter on the opinions regarding the pilot implementation plans for using collectively owned construction land to build rental housing in 11 cities, including Shenyang. The offices have, in principle, approved the pilot implementation plans for such projects in Shenyang, Nanjing, Hangzhou, Hefei, Xiamen, Zhengzhou, Wuhan, Guangzhou, Foshan, Zhaoqing, and Chengdu.
The State Administration for Industry and Commerce and the State Taxation Administration have issued the “Notice on Strengthening Information Sharing and Joint Supervision.”
Recently, the State Administration for Market Regulation and the State Taxation Administration jointly issued the “Notice on Strengthening Information Sharing and Joint Supervision” (hereinafter referred to as the “Notice”), further implementing the State Council’s “delegation, regulation, and service” reform, deepening efforts to enhance inter‑departmental information sharing and joint supervision, promoting simplified business deregistration, and optimizing the business environment.
The Ministry of Justice has issued the “Opinions on Further Strengthening the Development of Judicial Offices and Striving to Enhance the Level of Grassroots Public Legal Services (Draft for Comments).”
Recently, the Ministry of Justice issued the “Opinions on Further Strengthening the Development of Judicial Offices and Striving to Enhance the Level of Grassroots Public Legal Services (Draft for Comments).” The draft outlines the scope of grassroots public legal services, which primarily includes providing, free of charge, legal advisory services such as access to laws and regulations, answers to legal questions, analysis of legal matters, and introductions to public legal service programs, all tailored to the production and daily life needs of the public.
The CPC Central Committee and the State Council have issued the “Notice on Launching a Special Campaign to Combat Organized Crime and Evil Forces.”
Recently, the CPC Central Committee and the State Council issued the “Notice on Launching a Special Campaign to Eradicate Organized Crime and Evil Forces.” The notice states that, in order to thoroughly implement the arrangements of the 19th National Congress of the CPC and the important instructions of General Secretary Xi Jinping, to ensure the people’s peace and well-being, social stability and order, and the long-term security and prosperity of the country, and to further consolidate the Party’s governing foundation, the CPC Central Committee and the State Council have decided to launch a nationwide special campaign to eradicate organized crime and evil forces.

Table of Contents
Table of Contents

Finance & Capital Markets

The China Insurance Regulatory Commission has revised and promulgated the Measures for the Administration of Insurance Funds Investment.
Seven ministries and commissions have issued the “Notice on Specific Policy Issues in the Implementation of Market-Based Bank Debt-to-Equity Swaps.”
The China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission have successively emphasized the need for stringent regulatory oversight.
The Asset Management Association of China has released the “Fund Valuation Standards (2017 Edition).”

The China Banking Regulatory Commission has, in accordance with the law, investigated and prosecuted the illegal bill‑related case involving the Wenchang Road Branch of the Postal Savings Bank of China in Wuwei, Gansu Province.

Corporate & Commercial

A pilot program for constructing rental housing on collectively owned land in 11 cities, including Shenyang, has been approved.
The People’s Bank of China, the State Oceanic Administration, and six other departments have jointly issued the “Guiding Opinions on Improving and Strengthening Financial Services for Marine Economic Development.”
Six departments have issued the “Work Plan for Poverty Alleviation through Ecology.”
Seven departments have jointly issued the Provisional Measures for Filing (Approval) Reports on Outbound Investments.
The General Office of the State Council has issued the “Opinions on Promoting the Coordinated Development of E‑Commerce and Express Delivery Logistics.”

Taxation

The State Administration for Industry and Commerce and the State Taxation Administration have issued the “Notice on Strengthening Information Sharing and Joint Supervision.”
The pilot program allowing small-scale taxpayers to issue special VAT invoices on their own has been further expanded.

Litigation & Arbitration

The Ministry of Justice has issued the “Opinions on Further Strengthening the Development of Judicial Offices and Striving to Enhance the Level of Grassroots Public Legal Services (Draft for Comments).”
The Supreme People’s Court convened an expert symposium on “basically resolving the difficulty of enforcement within two to three years.”

Other

The CPC Central Committee and the State Council have issued the “Notice on Launching a Special Campaign to Combat Organized Crime and Evil Forces.”
The 2018 Winter Davos Forum Opens

Finance & Capital Markets

The China Insurance Regulatory Commission has revised and promulgated the Measures for the Administration of Insurance Funds Investment.
On January 26, 2018, the China Insurance Regulatory Commission revised the Interim Measures for the Administration of Insurance Funds and issued the Measures for the Administration of Insurance Funds (hereinafter referred to as the “Measures”). The Measures constitute a foundational regulatory framework for the management of insurance fund investments. Their key provisions include: clarifying the principal investment vehicles for insurance funds; establishing the governance model for their deployment; specifying in detail the decision-making and risk‑control mechanisms; requiring insurance institutions to strengthen corporate governance and internal controls, and to assume full responsibility for all management duties and associated risks; and delineating the accountability of supervisory authorities for violations committed by insurance institutions and relevant parties.
The main contents of this revision include:
First, we will earnestly implement the directives of the CPC Central Committee, the State Council, and the National Financial Stability Committee, including clarifying regulatory requirements for insurance asset management products with respect to registration, custody, trading, and other matters; further standardizing trustees’ management of insurance funds; prohibiting the sub‑delegation of entrusted funds and the provision of conduit services; and effectively strengthening efforts to de‑nest, deleverage, and reduce reliance on conduits.
Second, it is essential to strengthen regulatory and risk‑management mechanisms, including: enhancing oversight of overseas investments and stipulating that insurance funds engaging in such activities must comply with the relevant regulations of the China Insurance Regulatory Commission, the People’s Bank of China, and the State Administration of Foreign Exchange; establishing a clear system of risk accountability by requiring insurance institutions to designate specific individuals responsible for risks associated with the deployment of insurance funds, as well as a chief investment officer, thereby ensuring that risk responsibilities are assigned to specific persons; and clarifying the information‑disclosure requirements for the use of insurance funds.
Third, we will effectively promote the use of insurance funds to support the real economy by elevating recent beneficial practices and relevant normative documents to the level of departmental regulations. These measures include permitting insurance funds to invest in asset-securitization products, allowing specialized insurance asset management institutions to establish private equity funds, and authorizing insurance funds to engage in venture capital investments.
Fourth, in line with policy initiatives such as “delegation, regulation, and service,” relevant provisions have been revised to: clarify that insurance asset management products are subject to a registration-based regulatory regime, transitioning the issuance of debt investment plans and similar products from a filing system to a registration system; refine the prudential oversight of insurance fund‑investment ratios by allowing the China Insurance Regulatory Commission to adjust the classification, types, and applicable limits of insurance assets based on actual investment conditions; and stipulate that the appointment of principal officers of asset management departments will shift from prior approval to post‑submission reporting.

Seven ministries and commissions have issued the “Notice on Specific Policy Issues in the Implementation of Market-Based Bank Debt-to-Equity Swaps.”
On January 26, 2018, the National Development and Reform Commission, together with six other ministries and commissions, issued the “Notice on Specific Policy Issues in the Implementation of Market-Based Bank Debt-to-Equity Swaps” (hereinafter referred to as the “Notice”).
The main contents of the notice are as follows: First, comprehensive equity‑debt hybrid schemes are permitted to reduce corporate leverage. Implementing institutions may, in accordance with the target leverage‑reduction objectives of the enterprises concerned, design integrated equity‑debt restructuring plans that prioritize equity, and allow for conditional, phased conversion into equity. Second, implementing institutions are authorized to establish private equity investment funds to carry out market‑based debt‑to‑equity swaps. Third, the practice of implementing institutions conducting market‑based debt‑to‑equity swaps through share issuance to repay debt is standardized. When employing this approach, such institutions must clearly specify the particular debts to be repaid in the debt‑to‑equity agreement and promptly settle those debts upon receipt of funds. Fourth, enterprises of all forms of ownership are encouraged to undertake market‑based debt‑to‑equity swaps. Non‑state‑owned enterprises meeting the criteria set forth in the “Opinions,” including private and foreign‑invested offices, are supported in engaging in such swaps. Fifth, in addition to bank claims, other types of claims may also be included within the scope of eligible debt‑to‑equity assets. While bank loans extended to enterprises remain the primary component, consideration will be given to other claim categories, including but not limited to financial‑company loans, entrusted loans, finance‑lease receivables, and operating‑type receivables; claims arising from private lending, however, are excluded. Sixth, implementing institutions are allowed to acquire claims across various quality tiers. Seventh, listed companies and non‑listed public companies are permitted to issue equity‑based financing instruments to implement market‑based debt‑to‑equity swaps. Eligible listed and non‑listed public companies may raise funds by issuing common stock, preferred stock, or convertible bonds to creditors, thereby repaying their outstanding debts. Eighth, a pilot program is authorized to convert bank claims held by non‑listed, non‑public joint‑stock companies into preferred shares. Ninth, innovation in standardized market‑based debt‑to‑equity swap models is encouraged. Tenth, the reporting and management of information related to market‑based debt‑to‑equity swap projects are standardized.

The China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission have successively emphasized stringent regulatory oversight.
On January 26, 2018, the China Banking Regulatory Commission released details of the National Banking Supervision Work Conference, stating that in 2018, efforts to win the tough battle against financial risks would continue. Specifically, the following measures were outlined: 1. Focus on reducing corporate leverage by promoting structural adjustments and mergers and reorganizations, strictly controlling financing for highly leveraged enterprises, establishing joint credit‑granting and creditor committee mechanisms, and accelerating the disposal of non‑performing loans. 2. Work to curb household leverage, with an emphasis on curbing its rapid rise, cracking down on the misappropriation of consumer loans and unauthorized credit‑card overdrafts, and rigorously preventing personal loans from illegally flowing into the stock and real estate markets. 3. Continue to scale back interbank investments, making investments in special‑purpose vehicles a key focus of regulatory inspections, and implementing a whitelist system for outsourcing institutions. 4. Strictly regulate cross‑border financial products, encourage banks to begin transitioning their wealth‑management businesses at an early stage, gradually reduce bank‑trust channeling activities, and enforce the recently issued Measures for the Administration of Entrusted Loans. 5. Launch a vigorous crackdown on illegal and non‑compliant business practices, further deepening efforts to address market irregularities in the banking sector. 6. Severely crack down on illegal financial activities, coordinate the handling of illegal fundraising cases, and push for the prompt issuance of regulations governing the resolution of illegal fundraising. 7. Streamline and standardize financial holding groups, and accelerate the promulgation of regulatory rules for financial holding companies. 8. Dispose of high‑risk institutions in an orderly manner, adopting a whitelist system, formulating and effectively implementing risk‑reduction plans and emergency response protocols, and employing a multi‑pronged approach to effectively mitigate case‑specific risks. 9. Continue to curb the formation of a real estate bubble, rigorously investigating and prosecuting all forms of illegal real estate financing. 10. Actively cooperate with local governments in addressing hidden debt.
On the same day, the China Securities Regulatory Commission held a press conference, once again underscoring its commitment to stringent regulatory oversight. Specifically, the following measures were announced: First, enforcement actions were taken against nine securities offices and fund management companies; administrative penalties were imposed in five cases, and those who fabricate and disseminate false information were severely sanctioned. Second, IPO reviews were tightened: of the six companies that appeared before the review committee on January 26, only one passed, four were rejected, and one had its review withdrawn. Third, it was emphasized that in 2018, the Commission will steadfastly uphold comprehensive, law-based, and rigorous regulation; wage a tough battle to prevent and control financial risks; resolutely crack down on illegal and non-compliant activities in the securities and futures markets; safeguard investors’ legitimate rights and interests; and ensure the smooth achievement of its regulatory objectives.
On the same day, the China Insurance Regulatory Commission announced that it had revised the Interim Measures for the Administration of Insurance Funds’ Investment.

The Asset Management Association of China has released the “Fund Valuation Standards (2017 Edition).”
On January 25, 2018, the Asset Management Association of China issued a notice stating that, to help member institutions, industry professionals, and investors better understand fund valuation practices, enhance their professional expertise, and fulfill their social responsibilities, the Association has compiled its previously published valuation standards and guidelines into a single volume, resulting in the “China Fund Valuation Standards (2017 Edition).”
The Standard states that the industry valuation framework currently established by the association comprises two components: first, the asset side—namely, valuation standards for the various investment assets in which funds participate and for emerging transaction structures; and second, the liability side, such as the extraction of performance fees in private equity funds. Moving forward, the Association’s Valuation Working Group will continue to deepen its research, further refine the valuation standards system for the asset management industry, and develop a China‑specific benchmark for global performance reporting.

The China Banking Regulatory Commission has, in accordance with the law, investigated and prosecuted the illegal bill‑related case involving the Wenchang Road Branch of the Postal Savings Bank of China in Wuwei, Gansu Province.
On January 27, 2018, the China Banking Regulatory Commission announced that, following a series of statutory procedures—including case filing, investigation, adjudication, deliberation, notification, and review of statements and defenses—the Commission, in coordination with the relevant local banking regulatory bureaus, had lawfully investigated and prosecuted the illegal bill‑related case involving the Wenchang Road Branch of Postal Savings Bank of China in Wuwei, Gansu Province. A total of RMB 295 million in fines and confiscations was imposed on the 12 banking financial institutions implicated in the case.
At the end of December 2016, during an internal audit of the Wuhai Wenchang Road Branch of the Postal Savings Bank of China in Gansu Province, it was discovered that funds intended for wealth management products purchased by the Jiaohe Rural Commercial Bank of Jilin had been misappropriated. This revealed a case in which the branch’s former branch manager, acting in the name of the Postal Savings Bank’s Wuwei City Branch, illegally and unlawfully obtained bill‑based financing totaling RMB 7.9 billion, while also misappropriating RMB 3 billion in wealth‑management funds.

Commercial & Corporate

A pilot program for constructing rental housing on collectively owned land in 11 cities, including Shenyang, has been approved.
The General Offices of the Ministry of Land and Resources and the Ministry of Housing and Urban–Rural Development have issued a letter on the opinions regarding the pilot implementation plans for using collectively owned construction land to build rental housing in 11 cities, including Shenyang. The offices have, in principle, approved the pilot implementation plans for such projects in Shenyang, Nanjing, Hangzhou, Hefei, Xiamen, Zhengzhou, Wuhan, Guangzhou, Foshan, Zhaoqing, and Chengdu.
Meanwhile, the approval emphasizes the following points: First, officely establish a sense of the bigger picture and a strong sense of responsibility. Uphold the principle that housing is for living in, not for speculation, and, in line with the goals of balanced regional development and rural revitalization, diversify channels for supplying residential land, establish a housing system that promotes both renting and home ownership, and advance integrated urban–rural development to ensure that all people have access to adequate housing, thereby enhancing their sense of gain. Second, stay on the right track. Strictly enforce the principal responsibility of the pilot cities’ governments, coordinate and advance pilot initiatives, and ensure effective oversight at every stage—project site selection, commencement of construction, and ongoing operations. Improve mechanisms for monitoring contract compliance to safeguard the legitimate rights and interests of relevant stakeholders, including village and township collectives, farmers, enterprises, and tenants; establish a rent‑monitoring and regulatory framework, set rents at reasonable levels, institute transparent and publicly disclosed mechanisms to constrain rent adjustments, and support long-term leasing. Encourage financial institutions to participate in the pilot programs and provide financial products and services in accordance with laws and regulations. Third, implement the pilot work in a steady and orderly manner. Pilot cities must adopt an integrated urban–rural approach, coordinating the planning of urban and rural construction land use and spatial layouts. Projects should be planned in concert with surrounding infrastructure and public service facilities, clearly defining the entities responsible for and the standards governing ancillary facility construction, so as to achieve equitable access to public services across the region. Standardize the approval and regulatory procedures for constructing rental housing on collectively owned land, clarify the entities eligible to submit project applications, refine the project approval process, prioritize small and medium‑sized units under 90 square meters, strengthen ongoing and post‑event supervision, and ensure orderly and controllable implementation. Intensify policy communication and public opinion guidance, foster a well‑regulated and orderly housing rental market, and produce institutional outcomes that are replicable and scalable.

The People’s Bank of China, the State Oceanic Administration, and six other departments have jointly issued the “Guiding Opinions on Improving and Strengthening Financial Services for Marine Economic Development.”
On January 26, 2018, eight ministries and commissions—the People’s Bank of China, the State Oceanic Administration, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission—jointly issued the “Guiding Opinions on Improving and Strengthening Financial Services for Marine Economic Development” (hereinafter referred to as the “Opinions”).
The Opinions, centered on promoting high-quality development of the marine economy, clearly define priority areas and directions for support across banking, securities, insurance, and diversified financing. In the realm of bank credit, eligible banking institutions are encouraged to establish specialized financial service divisions, financial service centers, or niche‑focused subsidiaries dedicated to the marine economy, thereby enhancing the level of professional services. In light of the unique characteristics of the marine economy, efforts will be intensified to innovate and expand collateral‑based lending products; targeted support will be provided to diverse stakeholders, including marine infrastructure projects, major initiatives, supply‑chain enterprises, and fishermen. Banking institutions are also urged to align their credit allocation and structure with the National Plan for Marine Economic Development, fostering accelerated growth in key sectors of the primary, secondary, and tertiary industries. Furthermore, environmental and social risk assessments for marine‑related enterprises will be strengthened, with a office commitment to an “environmental veto” policy. In equity and bond markets, enterprises at different stages of development are guided to actively tap multi‑tiered capital markets for financing. In the insurance sector, the development of various mutual‑aid insurance schemes will be standardized, while mechanisms for catastrophe insurance and reinsurance will be explored. Efforts will be expedited to expand coverage for shipping insurance, coastal tourism insurance, environmental liability insurance, and other lines, and to broaden the scope of export‑credit insurance. Insurance funds are encouraged to increase investment through specialized asset‑management offices and marine‑industry investment funds. Finally, in the area of diversified financing, eligible financial institutions and enterprises will be supported in establishing financial leasing companies; the development of shipping finance will be advanced, and public‑private partnership (PPP) models, as well as loan‑investment linkages, will be systematically promoted within the marine sector. Additionally, various types of funds will be mobilized to play a more robust role in supporting the growth of the marine economy.

Six departments have issued the “Work Plan for Poverty Alleviation through Ecology.”
Recently, the National Development and Reform Commission, the State Forestry Administration, the Ministry of Finance, the Ministry of Water Resources, the Ministry of Agriculture, and the State Council Leading Group Office of Poverty Alleviation jointly formulated the “Work Plan for Ecological Poverty Alleviation,” outlining measures to leverage ecological conservation in targeted poverty alleviation and eradication, thereby achieving a win-win outcome that advances both poverty reduction and ecological civilization.
According to the Work Plan, by 2020, the goal is to establish 12,000 eco‑conservation‑based poverty‑alleviation cooperatives, engage 100,000 impoverished people in ecological‑construction projects, create an additional 400,000 ecological‑monitoring and management positions, and, through vigorous development of eco‑industries, help approximately 15 million impoverished people increase their incomes. In terms of pathways to lift the poor out of poverty, the Work Plan proposes increasing their income through various means: earning labor remuneration by participating in construction projects; receiving stable wage‑based income from public‑interest ecological jobs; boosting business and property‑related income via the growth of eco‑industries; and receiving transfer payments under policies such as ecological‑protection compensation. The Work Plan outlines 12 major ecological projects, including returning farmland to forests and grasslands, restoring grazing lands to grasslands, and implementing the second phase of the Qinghai Sanjiangyuan Ecological Protection and Construction Project. It also specifies measures such as continuously improving the transfer‑payment system, exploring diversified mechanisms for ecological‑protection compensation, refining the forest‑ecological‑benefit compensation and subsidy framework, and launching pilot programs for comprehensive ecological compensation.

Seven departments have jointly issued the Interim Measures for Filing (Approval) Reports on Outbound Investment.
On January 25, 2018, the Ministry of Commerce, the People’s Bank of China, the State-owned Assets Supervision and Administration Commission, the China Banking Regulatory Commission, the China Securities Regulatory Commission, the China Insurance Regulatory Commission, and the State Administration of Foreign Exchange jointly issued the Interim Measures for the Filing (Approval) Reporting of Outbound Investments (Document No. [2018]24 of the Ministry of Commerce, hereinafter referred to as the “Measures”).
The Measures consist of six chapters and 26 articles, covering general provisions, filing and approval, reporting, supervision, post‑investments measures, and supplementary provisions. The main contents are as follows: First, Chapter One, “General Provisions,” clarifies that the competent authorities in commerce, finance, state-owned assets management, and other sectors shall, in accordance with their respective functions and in compliance with the law, carry out tasks such as filing (or approval) and reporting for outbound investments by domestic investors, thereby fostering coordinated regulatory efforts under the principle of “horizontal collaboration and vertical linkage.” Second, Chapter Two, “Filing and Approval,” stipulates that the People’s Bank of China, the State-owned Assets Supervision and Administration Commission of the State Council, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission shall, within fifteen working days of the following month, notify the Ministry of Commerce of the status of outbound investment filings (or approvals) processed during the current month, for consolidated reporting. The Ministry of Commerce shall, on a regular basis, provide feedback on the aggregated information to the aforementioned departments and institutions. Third, Chapter Three, “Reporting,” provides that the People’s Bank of China, the State-owned Assets Supervision and Administration Commission of the State Council, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission shall, within one month after each semi‑annual period, report to the Ministry of Commerce the outbound investment information submitted by the domestic investors under their jurisdiction, for unified aggregation. The Ministry of Commerce shall, on a regular basis, forward the aggregated information to the aforementioned departments and institutions. At the same time, the relevant competent authorities shall, in line with their respective duties and divisions of labor, make full use of the information collected and consolidated by the Ministry of Commerce to carry out oversight and management of outbound investments. Fourth, Chapter Four, “Supervision,” mandates that the relevant competent authorities shall, every six months, submit to the Ministry of Commerce a summary of key inspections and random spot checks. Fifth, Chapter Five, “Post‑Investment Measures,” sets forth the disciplinary measures that the relevant competent authorities shall impose on domestic investors found to have engaged in violations or illegal activities in their outbound investments. Sixth, Chapter Six, “Supplementary Provisions,” stipulates that the filing (or approval) and reporting procedures for outbound investments undertaken by other centrally administered entities shall be implemented in accordance with these Measures.

The General Office of the State Council has issued the “Opinions on Promoting the Coordinated Development of E‑Commerce and Express Delivery Logistics.”
Recently, the General Office of the State Council issued the “Opinions on Promoting the Coordinated Development of E‑Commerce and Express Delivery Logistics” (Guobanfa [2018] No. 1, hereinafter referred to as the “Opinions”).
The “Opinions” adopt a problem‑oriented approach, focusing on coordinated development and outlining policy measures across six key areas: First, strengthen institutional innovation to optimize the policy and regulatory framework for coordinated development. This includes streamlining procedures for obtaining operating licenses for express delivery services, reforming the annual reporting system for express delivery enterprises, innovating industrial support policies, improving data‑sharing mechanisms among enterprises, and refining collaborative governance models. Second, enhance planning guidance to improve e‑commerce‑related express delivery and logistics infrastructure. This entails coordinating the development of e‑commerce and express delivery logistics, building a service system that aligns with e‑commerce growth, securing land for infrastructure projects, and optimizing the layout of express delivery networks while promoting the construction and upgrading of e‑commerce and logistics parks. Third, reinforce standardized operations and refine urban delivery traffic management. Local authorities are encouraged to start by regulating the operation of urban delivery vehicles, improving traffic‑management policies for such vehicles, and granting preferential access to express delivery vehicles. Fourth, foster service innovation to bolster last‑mile delivery capabilities. The integration of smart parcel lockers into public‑service and livelihood‑oriented initiatives is encouraged, along with the wider deployment of intelligent delivery facilities; the establishment of comprehensive last‑mile service hubs is also promoted to facilitate efficient organization and coordinated utilization of delivery and related resources, thereby advancing consolidated last‑mile services. Fifth, advance standardization and digitalization to enhance operational efficiency in coordination. This involves expanding the application of modern information technologies and equipment—such as big data, cloud computing, and robotics—in e‑commerce and express delivery logistics; strengthening the development of a robust standards system for express delivery and logistics; guiding e‑commerce and logistics enterprises to improve system interconnectivity and business collaboration; and developing integrated warehousing‑and‑delivery services to optimize resource allocation and boost supply‑chain coordination. Sixth, promote green principles and develop eco‑friendly value chains. E‑commerce and express delivery companies are urged to undertake green process reengineering throughout their supply chains to achieve greater resource efficiency; the use of green packaging is encouraged, with the formulation and implementation of e‑commerce‑specific standards for green and reduced‑packaging, alongside pilot and demonstration projects; e‑commerce platforms are also encouraged to launch green consumption campaigns. Furthermore, efforts should be made to advance green transportation and delivery by accelerating the restructuring of the transport mix, encouraging enterprises to optimize scheduling, and gradually increasing the share of new‑energy vehicles in the express delivery sector.

Taxation TAXATATION

The State Administration for Industry and Commerce and the State Taxation Administration have issued the “Notice on Strengthening Information Sharing and Joint Supervision.”
Recently, the State Administration for Market Regulation and the State Taxation Administration jointly issued the “Notice on Strengthening Information Sharing and Joint Supervision” (hereinafter referred to as the “Notice”), further implementing the State Council’s “delegation, regulation, and service” reform, deepening efforts to enhance inter‑departmental information sharing and joint supervision, promoting simplified business deregistration, and optimizing the business environment.
The Notice requires the two departments to expand the scope of registration information collection. The State Administration for Market Regulation will revise the standards for enterprise registration application documents and add two new data items—“accounting method” and “number of employees”—to the enterprise registration process. Meanwhile, the tax authorities will obtain enterprise registration information through information sharing, thereby eliminating redundant data collection. The Notice also emphasizes the need to coordinate and provide timely reminders regarding tax-related matters. At the time of enterprise registration, the market regulation authorities will issue a notice on tax‑related matters, reminding enterprises to promptly handle relevant tax affairs with the tax authorities. For enterprises registering at the market regulation service hall, the authorities will directly distribute the notice; for those registering entirely online, the notice will be embedded in the relevant registration interface, allowing enterprises to view and download it. Furthermore, the market regulation authorities will include a downloadable template of the simplified deregistration commitment on the enterprise information‑filing interface and, prior to publishing the announcement of simplified deregistration, will prompt enterprises to complete tax clearance.

The pilot program allowing small-scale taxpayers to issue special VAT invoices on their own has been further expanded.
Following the pilot program allowing small-scale VAT taxpayers in the accommodation, certification and consulting, and construction sectors to issue their own special VAT invoices, the State Taxation Administration recently issued the “Announcement on Several Matters Concerning VAT Invoice Management,” stipulating that, effective February 1, 2018, small-scale VAT taxpayers in the industrial sector, as well as in the information transmission, software, and information technology services industries, will be brought within the scope of the pilot. Under this pilot, taxpayers may choose to issue special VAT invoices themselves or apply to the tax authorities for代開 (agency issuance). This measure further enhances the quality of invoice‑related services and ensures that taxpayers fully benefit from the dividends of reform.

LITIGATION & ARBITRATION

The Ministry of Justice has issued the “Opinions on Further Strengthening the Development of Judicial Offices and Striving to Enhance the Level of Grassroots Public Legal Services (Draft for Comments).”
Recently, based on thorough preliminary investigations and extensive consultations with relevant departments and local judicial administrative organs, the Ministry of Justice has drafted the “Opinions on Further Strengthening the Development of Judicial Offices and Striving to Enhance the Level of Grassroots Public Legal Services” (hereinafter referred to as the “Opinions Draft”).
The draft “Opinions” clearly defines the scope of grassroots public legal services, which primarily includes: providing free legal advisory services—such as access to laws and regulations, answers to legal questions, analysis of legal matters, and introductions to public legal service programs—tailored to the production and daily life needs of the public; coordinating and guiding legal aid, attorney services, notarization, grassroots legal services, and forensic expertise; and conducting the initial review of applications for legal aid. It also actively offers legal services to support the implementation of the rural revitalization strategy, targeted poverty alleviation and the battle against poverty, and efforts to safeguard and improve people’s livelihoods, with particular attention to protecting the rights and interests of vulnerable groups such as the mobile population and rural migrant workers. Furthermore, it organizes, coordinates, and guides people’s mediation organizations in carrying out regular identification and resolution of disputes and conflicts, proactively mediating disputes related to issues of public concern, and actively participating in the mediation of major, complex, or potentially volatile civil disputes. In addition, it conducts public legal education and mass‑based legal culture activities, and promotes law‑based governance at the community level. At the same time, it undertakes the supervision and management, educational correction, and social reintegration support of individuals serving sentences in the community, and assists relevant authorities in implementing policies on resettlement and assistance for persons released from prison.
The draft “Opinions” proposes actively adapting to the diversified and personalized public legal service needs of the people in the new era by providing a wide range of regular legal services. Through methods such as answering legal inquiries, offering legal aid, mediating disputes, and issuing legal opinions, basic public legal services will be made available to the public. By coordinating grassroots legal service resources and pooling efforts, we will strive to deliver comprehensive, one-stop public legal services to communities at the grassroots level, thereby reducing the need for residents to make multiple trips. In line with the trends of “Internet Plus” and technological informatization, we will vigorously leverage the 12348 Public Legal Service Platform, assisting and guiding villagers and residents within our jurisdiction to utilize the 12348 China Legal Network and the 12348 Public Legal Service Hotline, thus gaining access to both online legal services and guidance on offline services. We will also establish WeChat groups and other communication platforms for public legal services, promptly addressing questions, resolving conflicts, and effectively disseminating policies and regulations.

The Supreme People’s Court convened an expert symposium on “basically resolving the difficulty of enforcement within two to three years.”
On the afternoon of January 26, 2018, the Supreme People’s Court convened an expert symposium on “basically resolving difficulties in enforcement within two to three years.” Chief Justice Zhou Qiang attended the symposium and delivered a speech, emphasizing the need to uphold Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guiding principle, earnestly implement the spirit of the 19th National Congress of the Communist Party of China and the Central Political and Legal Work Conference, continuously enhance the standardization, informatization, and professionalization of enforcement work, pool wisdom and strength from all sectors, tackle tough challenges head-on, and resolutely win this critical battle to fundamentally resolve enforcement difficulties on schedule, thereby achieving the goal of “striving to ensure that the people feel fairness and justice in every judicial case.”

Other

The CPC Central Committee and the State Council have issued the “Notice on Launching a Special Campaign to Combat Organized Crime and Evil Forces.”
Recently, the CPC Central Committee and the State Council issued the “Notice on Launching a Special Campaign to Eradicate Organized Crime and Evil Forces.” The notice states that, in order to thoroughly implement the arrangements of the 19th National Congress of the CPC and the important instructions of General Secretary Xi Jinping, to ensure the people’s peace and well-being, social stability and order, and the long-term security and prosperity of the country, and to further consolidate the Party’s governing foundation, the CPC Central Committee and the State Council have decided to launch a nationwide special campaign to eradicate organized crime and evil forces.
The Notice emphasizes the need to focus on key regions, industries, and sectors where organized crime and evil forces are particularly rampant, ensuring that law enforcement efforts are consistently directed at all types of criminal activities perpetrated by such groups—activities that the public most vehemently deplores and against which they have voiced the strongest concerns. It calls for unwavering adherence to the principles of strict punishment in accordance with the law, early and small‑scale crackdowns, and thorough eradication of evil, thereby maintaining a sustained high‑pressure stance against all forms of organized crime and related illegal conduct. All political and legal organs must further clarify the boundaries between policy and law, align their enforcement philosophies, and strengthen coordination and cooperation. They should both resolutely crack down on all criminal activities involving organized crime and evil forces and ensure that cases are handled strictly in accordance with the law, thus achieving a balance between case quality and efficiency and harmonizing political, legal, and social outcomes. The principle of combining leniency with severity in criminal policy must be rigorously implemented: organizers, leaders, and core members of mafia‑type organizations, as well as their “protective umbrellas,” shall be punished severely in accordance with the law, while other participants whose offenses are relatively minor shall receive lighter or reduced penalties as prescribed by law. In line with the law, measures such as seizure, impoundment, and freezing of assets must be promptly applied, and a comprehensive array of tools—including recovery and confiscation, imposition of property‑based penalties, and administrative fines—should be employed to dismantle the economic foundations of organized crime and evil forces. Proactive adaptation to the reform of the criminal procedure system, which places trial at its center, is required to ensure rigorous scrutiny of factual findings, evidence, procedural compliance, and legal application. Torture and coerced confessions must be strictly prohibited, miscarriages of justice prevented, and every case brought to a close as an ironclad conviction.

The 2018 Winter Davos Forum Opens
On January 23, local time, the World Economic Forum’s Annual Meeting 2018 opened in Davos, Switzerland. This year’s forum is expected to bring together more than 70 national leaders, over 340 government ministers, and more than 2,000 business executives, marking record numbers of participating heads of state and leaders of international organizations. The Chinese delegation will be led by Liu He, a member of the Political Bureau of the CPC Central Committee and Director of the Office of the Central Leading Group for Financial and Economic Affairs.
As this year marks the 10th anniversary of the global financial crisis, “how to prevent the next financial crisis” has been a central topic of discussion at this year’s Winter Davos Forum. Moreover, with technological advances and the continued growth of the digital economy, addressing the challenges posed by the Fourth Industrial Revolution has also emerged as a key focus of debate.

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