JC Master Legal News Issue 1119

Key Takeaways for This Issue

The China Securities Regulatory Commission has imposed a comprehensive suspension of securities lending and borrowing activities, while the three major stock exchanges have simultaneously raised margin requirements for short-selling transactions.
According to the website of the China Securities Regulatory Commission on July 10, the CSRC has, in accordance with the law, approved the application by China Securities Finance Corporation to suspend its securities lending and borrowing business, effective July 11, 2024.
CSRC: Will promptly issue detailed rules for the implementation of algorithmic trading and expedite the formulation of guidelines on reporting algorithmic trades by Northbound Funds.
Previously, the China Securities Regulatory Commission (CSRC) issued the “Provisions on the Administration of Algorithmic Trading in the Securities Market (Trial).” Recently, the CSRC has provided clear guidance on the progress of related work and subsequent regulatory measures.
New features have been launched to align with the revised Company Law, and the National Enterprise Credit Information Publicity System has completed its upgrade and renovation.
Recently, the National Enterprise Credit Information Publicity System has completed its upgrade and renovation. In accordance with the principles of standardization, convenience, efficiency, and security, it has fully launched new features that align with the revised Company Law.
The Supreme People’s Procuratorate has issued typical cases of corporate compliance in the field of work safety.
Recently, the Supreme People’s Procuratorate released a batch of typical cases involving corporate compliance in the field of work safety.
Finance & Capital Markets
The China Securities Regulatory Commission has, in accordance with the law, approved the suspension of securities lending and borrowing (short-selling) activities, further strengthening counter-cyclical regulation of short-selling.
To effectively address investors’ concerns and safeguard the stable functioning of the market, after a thorough assessment of the current market conditions, the China Securities Regulatory Commission has, in accordance with the law, approved the application of China Securities Finance Corporation to suspend its securities lending‑borrowing business, effective July 11, 2024. Existing securities lending‑borrowing contracts may be extended, but must be closed out no later than September 30. At the same time, the Commission has approved an increase in the margin ratio for securities lending from not less than 80% to 100%, and an increase in the margin ratio for private securities investment funds participating in securities lending from not less than 100% to 120%, both effective July 22, 2024.

Margin trading and short selling are among the fundamental institutional pillars of the capital market, playing a positive role in dampening irrational volatility, promoting a balance between long and short positions and facilitating price discovery, as well as attracting medium- and long-term capital into the market. In light of the development of China’s domestic securities market and the practical needs of centralized regulation, China established the securities lending and borrowing system around 2013. This system not only provides the necessary funding and securities supply for margin trading and short selling but also equips regulators with tools to monitor the conduct of these activities, strengthen day-to-day oversight, and promptly implement counter-cyclical policy measures.

Since August 2023, in response to market conditions and investor concerns, the China Securities Regulatory Commission has implemented a series of measures to strengthen oversight of securities lending and stock borrowing‑lending activities. These include restricting the lending of shares allocated to strategic investors, raising margin requirements for securities lending, improving the efficiency of market‑based, agreed‑upon securities transfers under stock borrowing‑lending arrangements, and suspending the addition of new stock borrowing‑lending positions. At the same time, securities offices have been required to enhance their management of client trading behavior and to intensify regulatory enforcement against illegal and non‑compliant practices, such as improper arbitrage through securities lending. As of the end of June 2024, the outstanding sizes of securities lending and stock borrowing‑lending had declined cumulatively by 64% and 75%, respectively. Securities lending now accounts for approximately 0.05% of the free‑float market capitalization of A‑shares, and the share of daily securities‑lending sales in total A‑share turnover has fallen from 0.7% to 0.2%, significantly reducing its impact on the market and creating the conditions for the suspension of stock borrowing‑lending operations. This adjustment sets out clear arrangements for existing positions—either lawful extensions or a phase‑out of old‑and‑new rules—which will help mitigate business risks and ensure the stable, orderly functioning of the market.

Going forward, the China Securities Regulatory Commission will thoroughly implement the State Council’s “Several Opinions on Strengthening Regulation, Preventing Risks, and Promoting High-Quality Development of the Capital Market,” adhering to a problem‑oriented and goal‑oriented approach, and consistently prioritizing the safeguarding of institutional fairness and the enhancement of the market’s intrinsic stability. At the same time, in light of market conditions, it will reinforce routine supervision and counter‑cyclical adjustments, rigorously crack down on illegal and non‑compliant practices such as improper arbitrage, ensure the stable functioning of the market, and effectively protect investors’ interests.

A responsible official from the relevant department of the China Securities Regulatory Commission answered questions from reporters on the progress of regulatory oversight of algorithmic trading.
Q: Earlier, the China Securities Regulatory Commission (CSRC) issued the “Provisions on the Administration of Algorithmic Trading in the Securities Market (Trial).” Could you please update us on the progress of this initiative and outline the CSRC’s plans for further strengthening the regulation of algorithmic trading?

A: The new “Nine Measures” explicitly calls for the introduction of regulatory provisions on algorithmic trading and for strengthening oversight of high-frequency quantitative trading. On May 15 this year, the China Securities Regulatory Commission (CSRC) officially issued the Provisional Regulations on the Administration of Algorithmic Trading in the Securities Market (hereinafter referred to as the “Administrative Regulations”), which set out a series of regulatory arrangements covering trade supervision, risk prevention and control, system security, and special rules for high-frequency trading. Under the regulatory framework established by these Administrative Regulations, the CSRC guided the Shanghai, Shenzhen, and Beijing stock exchanges in formulating the Detailed Rules for the Administration of Algorithmic Trading, which were made public for public comment on June 7. At the same time, the CSRC has continued to enhance its monitoring of algorithmic trading, commissioning the stock exchanges to develop four categories of surveillance indicators—abnormal instantaneous order submission rates, frequent instantaneous order cancellations, repeated price‑pumping and dumping, and large‑volume trades executed within short time frames—and launched a trial run starting in April this year. The CSRC has also been issuing reminders and urging investors engaging in algorithmic trading that frequently trigger these indicators to rectify their practices, thereby promoting more standardized trading behavior. In line with the principle of equal treatment for domestic and foreign investors, the CSRC has intensified consultations and communication with Hong Kong authorities to explore ways and pathways for implementing a reporting regime for northbound algorithmic trading.

Since the beginning of this year, algorithmic trading in the securities market has generally remained stable while trending downward, with some positive shifts in trading behavior. As of the end of June, there were just over 1,600 high-frequency trading accounts across the market, down more than 20% year-to-date, and instances of activity triggering abnormal‑trade monitoring thresholds have declined by nearly 60% over the past three months.

Going forward, the China Securities Regulatory Commission will thoroughly implement the requirements set forth in the new “Nine Measures,” adhering to the principles of balancing benefits and risks, upholding fairness, enforcing stringent regulation, and promoting orderly development. With a strong focus on addressing specific issues and achieving clear objectives, the Commission will accelerate the introduction of more pragmatic measures, further enhancing the adaptability and precision of oversight over algorithmic trading, mitigating its adverse effects, and effectively safeguarding market fairness. First, the Commission will guide stock exchanges to promptly issue detailed rules for the administration of algorithmic trading, refining and improving specific operational arrangements. At the same time, it will instruct exchanges to assess and enhance their reporting regimes for algorithmic trading, strengthening the verification of reported information and intensifying on-site inspections. Second, the Commission will urge stock exchanges to swiftly promulgate and enforce standardized criteria for monitoring abnormal algorithmic trading, delineating clear red lines for such activities, thereby further encouraging a reduction in the frequency and speed of algorithmic trading, particularly high-frequency trading. Third, the Commission will strengthen communication and coordination with Hong Kong authorities, expediting the formulation and issuance of guidelines on reporting algorithmic trading by northbound investors, ensuring that these investors are subject to the same regulatory standards as domestic investors. Fourth, the Commission will clarify differentiated fee structures for high-frequency quantitative trading. Based on metrics such as order submission volume and cancellation rates, it will study and establish clear standards for imposing additional charges—such as traffic fees and cancellation fees—on high-frequency quantitative trading, aiming to curb rapid execution through increased costs. Fifth, the Commission will continue to reinforce monitoring and supervision of trading behavior, resolutely cracking down on, and rigorously investigating, any illegal or non-compliant conduct conducted through algorithmic trading, especially high-frequency quantitative trading, in accordance with the law.

The CSI Guoxin Hong Kong Stock Connect Central Enterprise Dividend ETF has been simultaneously listed on both the Shanghai and Hong Kong stock exchanges.
Recently, ETF products tracking the CSI‑CICC China‑Hong Kong Stock Connect Central Enterprise Dividend Index were simultaneously listed on the Shanghai Stock Exchange (SSE) and the Hong Kong Exchanges and Clearing. At the Shanghai listing ceremony, representatives from ETF managers including GF Fund, Invesco Great Wall Fund, and Southern Fund; state‑owned enterprise leaders from CNOOC, China Railway Construction Corporation, AVIC Science & Technology Industry Co., Ltd., and China Communications Construction Company; as well as delegates from more than 30 institutions—such as CSI Index Co., Ltd., securities offices, banks, and insurance asset management companies—attended the event.

A relevant official from China National Investment Corporation stated that the company remains officely committed to serving national strategies and has progressively established seven major business segments—fund investment, financial services, asset management, equity operations, overseas investment, direct investment, and securities—thereby achieving high-quality development. Among these, China National Investment’s equity‑operation arm, operating on a market‑oriented and professional basis, has collaborated with partners to launch the CSI‑CNI “1+N” series of central‑enterprise indices and successfully issued 13 ETF products. The newly launched Hong Kong Stock Connect Central‑Enterprise Dividend ETF serves as a bridge and link between central enterprises and the capital markets, guiding greater inflows of international capital and industrial resources into Hong Kong‑listed central‑enterprise issuers, thus helping to restore their valuations to more reasonable levels.

A relevant official from Hong Kong’s Financial Services and the Treasury Bureau stated that, as mainland China accelerates its reform and opening-up, Hong Kong has seized the opportunity to develop into the world’s largest offshore RMB business hub. As the nation’s international financial center, Hong Kong has consistently provided high‑quality investment and financing platforms and services to mainland enterprises, including central state-owned enterprises, thereby supporting the robust growth of emerging industries on the mainland. Recently, in active response to the country’s newly introduced “Nine Measures,” the Hong Kong SAR Government and regulatory authorities have been working to attract medium- and long-term capital into the market and continue to refine the institutional framework of Hong Kong’s capital markets.

As an investment product under the umbrella of inclusive finance, ETFs serve as a vital tool for the general public to manage their wealth and pursue common prosperity. The listing of the CSI Guoxin Stock Connect Central Enterprise Dividend ETF is expected to further highlight the exemplary role of central enterprises in dividend distribution, enhancing investors’ sense of gain and satisfaction in the capital markets. Taking this as an opportunity, the Shanghai Stock Exchange, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and in accordance with the unified deployment of the China Securities Regulatory Commission, will wholeheartedly support the high-quality development of central enterprises, continue to foster a new pattern of two-way financial openness between the mainland and Hong Kong, and better contribute to the building of a modern capital market with Chinese characteristics.

CSRC: Will promptly issue detailed rules for the implementation of algorithmic trading and expedite the formulation of guidelines on reporting algorithmic trades by Northbound Funds.
Previously, the China Securities Regulatory Commission (CSRC) issued the “Provisions on the Administration of Algorithmic Trading in the Securities Market (Trial).” Recently, the CSRC has provided clear guidance on the progress of related work and subsequent regulatory measures.
The China Securities Regulatory Commission stated that, in the next phase, it will undertake the following measures: First, it will guide stock exchanges to promptly issue detailed rules for the administration of algorithmic trading, refining and improving specific arrangements. At the same time, it will instruct exchanges to assess and enhance the algorithmic trading reporting system, strengthening the verification of reported information and intensifying on-site inspections. Second, it will direct stock exchanges to swiftly promulgate and implement monitoring standards for abnormal algorithmic trading, thereby establishing clear “red lines” for such activities. Third, it will strengthen communication and coordination with Hong Kong authorities, expediting the formulation and issuance of guidelines on reporting algorithmic trading by northbound capital, ensuring that northbound investors are subject to the same regulatory standards as domestic investors. Fourth, it will clarify differentiated fee structures for high-frequency quantitative trading. Fifth, it will continue to reinforce oversight and monitoring of trading practices, resolutely cracking down on, and rigorously investigating, any illegal or non-compliant conduct conducted through algorithmic trading, particularly high-frequency quantitative trading, in accordance with the law.

The China Securities Regulatory Commission has imposed a comprehensive suspension of securities lending and borrowing activities, while the three major stock exchanges have simultaneously raised margin requirements for short-selling transactions.
According to the website of the China Securities Regulatory Commission on July 10, the CSRC has, in accordance with the law, approved the application by China Securities Finance Corporation to suspend its securities lending and borrowing business, effective July 11, 2024.
The China Securities Regulatory Commission (CSRC) emphasized that existing securities lending contracts may be extended, but must be closed out no later than September 30. At the same time, the CSRC approved exchanges’ adjustments to the margin ratios for short‑selling transactions. The Shanghai Stock Exchange, the Shenzhen Stock Exchange, and the Beijing Stock Exchange jointly issued the “Notice on Adjusting Margin Ratios for Short‑Selling Transactions,” specifying that the minimum margin ratio for short‑selling will be raised from no less than 80% to 100%, and that the minimum margin ratio for private securities investment funds engaging in short‑selling will be increased from no less than 100% to 120%. These measures will take effect on July 22, 2024.

The National Administration of Financial Regulation convened a symposium on key proposals and recommendations from the Two Sessions of 2024.
Recently, the National Administration of Financial Regulation convened a symposium on key proposals and recommendations from the 2024 Two Sessions. Participants—including deputies and members—put forward targeted suggestions on strengthening financial consumer rights protection in the big data era, preventing the “financialization” of e‑commerce platforms, and addressing challenges related to opening bank accounts for individuals with rare or non‑standard characters in their names. Meanwhile, experts and scholars, drawing on their respective fields, offered recommendations such as bolstering mechanisms for safeguarding financial consumers’ rights, advancing legislative efforts, prioritizing the protection of financial rights for vulnerable groups, and enhancing the financial literacy of the general public.
The Financial Consumer Protection Bureau of the National Administration of Financial Regulation reported on the handling of relevant proposals and suggestions, and, drawing on the views and recommendations of deputies and committee members, outlined specific plans to translate these proposals into concrete measures that enhance the effectiveness of financial consumer rights protection and improve the well-being of financial consumers. Participants engaged in a thorough exchange of views and reached consensus on officely upholding the principle of regulatory oversight for the people and effectively elevating the quality and efficacy of financial consumer rights protection efforts.

Commercial & Corporate
The State Council has approved opening the domestic Internet virtual private network (VPN) service to foreign investment in five cities.
On July 11, the Chinese Government Website published the “Reply Approving the Temporary Adjustment of Relevant Administrative Regulations and Departmental Rules Approved by the State Council in Six Cities Including Shenyang.”
The Approval Document clarifies that, in accordance with the State Council’s approval to launch comprehensive pilot programs for expanding service-sector openness in six cities including Shenyang, effective immediately, the relevant provisions of the Interim Regulations on the Registration and Administration of Private Non‑Enterprise Units, the Regulations on Travel Agencies, the Regulations on the Administration of Entertainment Venues, the Regulations on the Administration of Commercial Performances, and the Special Management Measures for Foreign Investment Access (Negative List) (2021 Edition) will be temporarily adjusted and implemented in the six pilot cities—Shenyang, Nanjing, Hangzhou, Wuhan, Guangzhou, and Chengdu. Notably, in Shenyang, Nanjing, Hangzhou, Guangzhou, and Chengdu, domestic Internet virtual private network services will be opened to foreign investment, with a foreign equity cap of no more than 50%, thereby encouraging overseas telecommunications operators to establish joint ventures to provide such services to foreign‑invested enterprises.

New features have been launched to align with the revised Company Law, and the National Enterprise Credit Information Publicity System has completed its upgrade and renovation.
Recently, the National Enterprise Credit Information Publicity System has completed its upgrade and renovation. In accordance with the principles of standardization, convenience, efficiency, and security, it has fully launched new features that align with the revised Company Law.
The public disclosure system has been revised and enhanced to cover a range of real-time information, including the subscribed and paid‑in capital amounts, methods of contribution, and contribution dates for shareholders of limited liability companies, as well as the number of shares subscribed by promoters in joint‑stock companies. New entries have been added, such as notices of company dissolution, compulsory deregistration announcements, public disclosures of registration cancellations initiated pursuant to court judgments, and termination notices, while the notice regarding reductions in registered capital has been adjusted. In addition, effective June 15, 2024, the system has ceased publishing “information on frozen equity that has been unfrozen.”

The Measures for the Administration of Price Index Behavior for Important Goods and Services Have Been Issued.
On July 11, the National Development and Reform Commission’s website published the Measures for the Administration of Price Index Activities for Important Commodities and Services, which will take effect on August 11, 2024.
The Measures comprise nine chapters and twenty-nine articles, clearly defining the entities responsible for price indices, the methodology for compiling such indices, their publication, operational maintenance, evaluation, transfer and termination, as well as related legal liabilities. Notably, the entities responsible for price indices may independently determine the channels through which they are published, and prior to public release, price indices must undergo a trial run of no less than six months.

The inaugural plenary meeting of the Guangdong-Hong Kong-Macao Greater Bay Area Legal Services Consultation Mechanism was held in Beijing.
On July 10, the Ministry of Justice convened the inaugural plenary meeting of the Guangdong–Hong Kong–Macao Greater Bay Area Legal Services Consultation Mechanism.
The meeting reviewed and approved the work plan for the consultation mechanism, and held deliberations on issues including accelerating the development of the Guangdong–Hong Kong–Macao Greater Bay Area International Commercial Dispute Resolution Center, refining supporting policies for the pilot program allowing Hong Kong and Macao lawyers to practice in the mainland part of the Greater Bay Area, and fostering talent development and exchanges in legal services among Guangdong, Hong Kong, and Macao. A series of pragmatic measures were proposed.

The State Administration for Market Regulation has implemented mandatory product certification for products such as flexible hoses used for connecting gas appliances.
On July 10, the website of the State Administration for Market Regulation published the “Announcement on Implementing Compulsory Product Certification for Products such as Flexible Hoses Used for Connecting Gas Appliances.”
Effective October 1, 2025, flexible hoses for gas appliance connections and gas emergency shut-off valves that are included in the CCC certification catalog shall be manufactured, sold, imported, or used in other business activities only after obtaining CCC certification and bearing the CCC certification mark. Starting October 1, 2024, designated certification bodies will begin accepting applications for CCC certification.

The Ministry of Commerce plans to issue the industry standard “Technical Specifications for Shredding End-of-Life Vehicles.”
The Ministry of Commerce website has published the “Public Notice Soliciting Comments on the Industry Standard ‘Technical Specifications for Shredding Scrapped Motor Vehicles’ (Draft for Public Comment),” with a deadline for submitting feedback set for August 4.
The Standard supersedes SBT 11160—2016, “Technical Specification for Scrap Vehicle Shredding,” and primarily expands the range of vehicle models covered by the reference standards, adds and updates normative reference documents, revises the terms and definitions related to end-of-life motor vehicles, introduces new terms and definitions for shredded materials, non‑shredded materials, shredder products, and refined products, modifies the categories of facility and equipment inspection and maintenance procedures, and incorporates ecological protection requirements for site selection, minimum annual shredding capacity requirements, stormwater–wastewater separation provisions, total weight limits for shredder residues, revised reuse rate criteria, as well as new and expanded enterprises’ requirements for overall electricity consumption and fresh water usage.

The “Regulations on the Procedures for Formulating Rules of the National Intellectual Property Administration” are slated for promulgation.
On July 11, the website of the National Intellectual Property Administration published the “Notice on Public Solicitation of Comments on the ‘Regulations of the National Intellectual Property Administration on Procedures for Formulating Regulations (Draft for Comments)’,” with a deadline for submitting feedback set for August 12.
The draft for public comment comprises seven chapters and thirty-three articles, arranged in the chronological order of regulatory drafting. The drafting chapter sets forth the requirements and target audiences for soliciting opinions, as well as the documentation that must be submitted. Where the formulation of a regulation involves the responsibilities of other State Council departments or is closely related to them, due consideration shall be given to the views of those departments, the competent authorities in the relevant sector, or the judicial organs. The review chapter specifies the scope of review, the tasks undertaken by the legal affairs department, and the circumstances under which a draft may be deferred or returned. The deliberation, promulgation, and filing chapter outlines the procedures for submitting a draft for deliberation and the requirements for the issuance and implementation of regulations. The interpretation, amendment, and repeal chapter delineates the situations requiring interpretation, as well as the conditions warranting amendment or repeal.

The Ministry of Transport plans to revise the Regulations on the Prevention and Control of Marine Environmental Pollution Caused by Ships and Related Operational Activities.
On July 10, the website of the Ministry of Transport published the “Notice on Public Solicitation of Comments on the ‘Regulations of the People’s Republic of China on the Prevention and Control of Marine Environmental Pollution Caused by Ships and Related Operational Activities (Revised Draft for Public Comment)’,” with a deadline for submitting feedback set for August 9.
The Regulations comprise seven chapters and sixty-eight articles, stipulating that for operations involving significant pollution risks—such as cargo tank cleaning on oil tankers of 10,000 deadweight tons or more, the transfer of bulk liquid hazardous cargoes exceeding 10,000 tons, salvage of sunken vessels, and the dismantling of oil tankers—the operator shall conduct a feasibility study of the operational plan and submit to inspection by the maritime administration during the course of such activities.

The Ministry of Transport plans to issue the national standard “Technical Requirements for the Safe Transportation and Multimodal Transport of Power Lithium Batteries.”
On July 10, the website of the Ministry of Transport published the “Notice on Soliciting Public Comments on the National Standard ‘Safety Requirements for the Transportation of Power Lithium Batteries and Multimodal Transport Technical Requirements (Draft for Comment)’,” with a deadline for submitting feedback set for September 9.
The “Requirements” specify the classification and grading, as well as the basic requirements, for the transport of power lithium batteries, and set forth requirements for transport packaging, consignment, loading and unloading, temporary storage, multimodal transport, and emergency response. These provisions apply to the transport and multimodal transport of power lithium batteries. The transport of energy‑storage lithium batteries and related products (excluding containerized energy‑storage systems), as well as sodium‑ion single cells and battery packs containing organic electrolytes, shall be governed by these requirements; however, they do not apply to the transport of damaged or defective power lithium batteries.

The Ministry of Transport plans to issue the “Administrative Measures for the Operation and Maintenance of Urban Rail Transit Facilities and Equipment.”
On July 10, the website of the Ministry of Transport published the “Notice on Soliciting Public Comments on the Draft Measures for the Operation and Maintenance Management of Urban Rail Transit Facilities and Equipment,” with a deadline for submitting feedback set for August 10.
The Measures consist of six chapters and thirty-four articles, stipulating that operating entities shall closely monitor the operational status of facilities and equipment. In the event of alarm signals indicating equipment malfunctions, such incidents shall be categorized and graded, with prompt inspection, verification, and resolution. If continued operation is no longer feasible or if resuming service would jeopardize train safety, operations must be suspended for emergency repairs, with efforts made to restore service as soon as possible. For conditions that can still be maintained, measures such as speed restrictions on specific sections, onboard inspections, and enhanced safety safeguards should be implemented as appropriate, with fault repair completed without undue delay. As for other faults that do not affect operations, a clear repair plan must be established, and remedial actions should be organized promptly once the necessary conditions are met.

The National Medical Products Administration has convened a regulatory consultation on innovative medical devices in the fields of medical imaging and artificial intelligence.
On July 10, the National Medical Products Administration convened technical experts from relevant fields, provincial drug regulatory authorities, and marketing authorization holders to hold a regulatory consultation on three cutting-edge medical devices: China’s first magnetic resonance imaging system for pulmonary gas imaging; the country’s first variable-angle, dual-detector, general-purpose single-photon emission computed tomography and X-ray computed tomography system; and software for computer-aided detection of intracranial aneurysm CT angiography images. Drawing on comprehensive input from inspection, review, verification, and monitoring activities, the meeting identified key regulatory priorities and outlined essential quality‑management requirements for marketing authorization holders.

The National Medical Products Administration has deployed measures to strengthen the supervision of pharmaceutical distribution.
The National Medical Products Administration convened a national video conference to strengthen the regulation of pharmaceutical distribution.
The meeting briefed participants on the recent nationwide oversight of pharmaceutical distribution and further outlined plans to strengthen inspections and supervision of pharmaceutical enterprises. It emphasized that drug regulatory authorities at all levels must uphold the “four strictest” requirements, thoroughly analyze emerging trends and challenges in the pharmaceutical supply chain, and launch targeted rectification efforts. The meeting also called for a problem‑oriented approach, with drug regulators at every level assuming local responsibility, rigorously scrutinizing market access, conducting stringent checks on the sources of incoming products, effectively managing potential risks, and severely cracking down on illegal activities such as the unauthorized purchase and sale of medicines through illicit channels. These measures are intended to steadily advance initiatives to consolidate and enhance pharmaceutical safety and continuously improve order in the pharmaceutical market.

The Shenzhen Municipal Water Resources Bureau plans to amend the “Regulations on Soil and Water Conservation Management for Production and Construction Projects in Shenzhen.”
On July 10, the Shenzhen Water Bureau published on its website a notice soliciting public comments on the “Regulations on Soil and Water Conservation Management for Production and Construction Projects in Shenzhen (Revised Draft for Public Comment).” The deadline for submitting feedback is July 21.
The original Regulations consisted of seven chapters and 54 articles. Following the reduction in the number of provisions under the Water and Soil Conservation Regulations, the revised Regulations now comprise seven chapters and 50 articles. With respect to the management model for soil and water conservation plans, Articles 9, 10, and 11 of the Regulations stipulate that, across the city, production and construction projects may adopt one of three management approaches: approval (under a commitment‑based system), exemption from approval, or exemption from preparing a plan. Specifically, projects exempted from the approval procedure for soil and water conservation plans must implement measures to prevent and control soil and water loss, while projects exempted from preparing such a plan shall carry out soil and water conservation work in accordance with relevant technical standards.

The second draft of Guangzhou’s Data Regulations is open for public comment, emphasizing data asset management and the inclusion of data on corporate balance sheets.
The Standing Committee of the Guangzhou Municipal People’s Congress is soliciting public comments on the “Guangzhou Data Regulations (Second Draft for Deliberation – Public Consultation Draft),” with the deadline for submitting feedback set for August 9, 2024.
The Regulations comprise eight chapters and fifty-two articles. Article 23 specifically addresses the management of data assets and their accounting treatment, stipulating that the city shall explore the establishment of a data asset management system, develop and refine mechanisms for valuing data assets, monitoring their lifecycle, disclosing information, and preparing reports, thereby advancing end-to-end management of data assets and enhancing both their economic and social value. The municipal finance department shall promote the accounting standards related to corporate data resources, strengthen education and guidance to ensure their effective implementation across enterprises, and urge companies to maintain sound accounting practices and improve the quality of their accounting information.

The Ministry of Industry and Information Technology is soliciting leads on issues identified during the nationwide comprehensive inspection aimed at alleviating the burden on enterprises and promoting the development of small and medium-sized enterprises.
On July 10, the website of the Ministry of Industry and Information Technology published the “Notice on Soliciting Leads for the Comprehensive Inspection on Promoting New‑Type Industrialization and Reducing the Burden on Enterprises while Fostering the Development of Small and Medium‑Sized Enterprises Nationwide,” with the deadline for submitting leads set for July 26.
The Notice clarifies that the Ministry of Industry and Information Technology, in coordination with relevant departments, will conduct a comprehensive inspection to advance new‑type industrialization and to reduce the burden on enterprises and promote the development of small and medium‑sized enterprises nationwide. From today until July 26, the inspection team will solicit public reports on instances where the implementation of the CPC Central Committee and the State Council’s decisions and arrangements—regarding the promotion of new‑type industrialization, the alleviation of the burden on enterprises, and the fostering of SMEs—has fallen short, as well as on issues such as unauthorized fees, arbitrary fines, improper levies, non‑standard enforcement and inspections, and the defaulting or delayed payment of outstanding debts, all of which infringe upon the legitimate rights and interests of enterprises.

Premier Li Qiang of the State Council presided over a symposium on the economic situation with experts and entrepreneurs.
On July 9, Li Qiang, Member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council, chaired an afternoon symposium with economic experts and entrepreneurs to solicit their views and suggestions on the current economic situation and the next phase of economic work.
He emphasized that, to consolidate and strengthen the economy’s recovery and improvement, we must adhere to innovation-driven development, foster and expand new growth drivers, and open up fresh avenues for expansion. We should respond to emerging trends—such as faster technological iteration, more disruptive innovations, and deeper cross-sectoral integration—fully leverage the role of enterprises as market actors, and tailor policy support to catalyze further breakthroughs in critical core technologies. Moreover, we must reform outdated institutional mechanisms, better mobilize the enthusiasm, initiative, and creativity of all stakeholders, fully unleash the innovative vitality of society as a whole, and effectively organize and harness China’s vast array of innovation resources, thereby continuously unlocking tremendous innovative potential.

China has newly established six international telecommunications entry-exit bureaus in cities including Haikou.
On July 10, the Ministry of Industry and Information Technology convened a symposium on the operation of international telecommunications gateway bureaus and issued licenses to China Telecom, China Mobile, and China Unicom, approving the establishment of such bureaus in Nanning, Guangxi; Qingdao, Shandong; Kunming, Yunnan; and Haikou, Hainan.
Minister of Industry and Information Technology Jin Zhuanglong emphasized the need to accelerate the construction of new international internet gateway facilities, with basic telecommunications enterprises serving as the primary responsible entities, and with full participation from local governments and telecommunications regulatory authorities to foster coordinated efforts. These facilities should empower high-quality economic and social development, support the liberalization of telecommunications services, cross-border data flows, and international digital trade, and promote the deep integration of information technology and industrialization, while actively facilitating the attraction of foreign investment and the internationalization of enterprises. Furthermore, it is essential to strengthen the secure operation of these gateway facilities by establishing and improving management systems, further enhancing network resilience and capacity, bolstering cybersecurity and information security safeguards, and ensuring stable facility operations and high‑quality network performance.

The Second Symposium on Deeply Integrating Procuratorial Work in the New Era with High-Quality Jointly Building the Belt and Road Initiative Was Held.
On July 10, the Second Symposium on Deeply Integrating Procuratorial Work in the New Era with High-Quality Jointly Building the Belt and Road Initiative was held in Xi’an, Shaanxi Province.
A member of the Party Leadership Group of the Supreme People’s Procuratorate emphasized that it is essential to stay focused on set goals and priorities, strive to handle every case with high quality and efficiency, and continue to exert sustained efforts in serving the overall national interest, delivering justice for the people, and upholding the rule of law. It is also crucial to integrate theory with practice, internal work with external engagement, and talent development with talent recruitment, while strengthening research on procuratorial theory related to the Belt and Road Initiative and harnessing new momentum to support and ensure the high‑quality joint construction of the Belt and Road.

The National Medical Products Administration has issued specific regulations on the management of traditional Chinese medicine standards.
On July 10, the website of the National Medical Products Administration published the “Announcement on the Issuance of Special Regulations for the Management of Traditional Chinese Medicine Standards.”
The Notice comprises nine chapters and sixty-two articles, setting forth provisions on fundamental requirements, standards for Chinese medicinal materials, standards for processed Chinese medicinal slices, standards for Chinese medicine granules and extracts, standards for proprietary Chinese medicines, the revision of Chinese medicine standards, as well as related procedures and implementation. It further clarifies that the selection of analytical indicators in Chinese medicine standards shall be centered on the product’s critical quality attributes, taking into account factors such as specificity, quality relevance, stability, bioactivity, and content.

The State Administration for Market Regulation has issued the “Guidelines on Reporting, Investigation, and Handling of Special Equipment Accidents.”
On July 4, the website of the State Administration for Market Regulation published the “Announcement on the Issuance of the Guidelines for Reporting, Investigating, and Handling Special Equipment Accidents.”
The Guidelines are formulated to standardize the reporting, investigation, handling, and statistical analysis of special equipment accidents, ensuring timeliness, scientific rigor, and accuracy. They apply to all related activities within the scope of the Regulations on the Reporting, Investigation, and Handling of Special Equipment Accidents, including accident reporting, investigation, and statistical analysis. The submission of information and statistical analysis concerning special equipment‑related accidents and safety incidents shall be conducted in accordance with these Guidelines; investigative and handling procedures may also refer to these Guidelines for guidance.

The National Medical Products Administration plans to issue the “Technical Guidance Principles for Research on Drug Exposure–Effect Relationships.”
The Center for Drug Evaluation of the National Medical Products Administration has published the “Notice on Public Solicitation of Comments on the ‘Technical Guidance Principles for Research on Drug Exposure–Effect Relationships (Draft for Comment)’,” with a comment‑submission period of one month from the date of publication.
This guidance is intended to provide technical guidance for the scientifically sound and rational conduct of exposure–response studies in new drug development. Its main contents include an introduction, the value and applications of such studies, study design, study data, analytical methods, study reporting, and regulatory submissions.

The Ministry of Natural Resources plans to issue the mandatory national standard “Basic Provisions for Fundamental Geographic Information Standard Data.”
On July 10, the website of the Ministry of Natural Resources published the “Notice on Public Solicitation of Comments on the Draft Mandatory National Standard ‘Basic Provisions for Fundamental Geographic Information Standard Data,’” with a deadline for submitting feedback set for September 10.
The Regulations set forth the basic requirements for standard geospatial data from four perspectives—temporal and spatial reference, data content, production process, and data validation—and apply to the production, validation, and use of such standard geospatial data.

The Beijing Municipal Government plans to introduce the “Measures for the Identification and Administration of Pilot Units with Intellectual Property Advantages.”
On July 11, the Beijing Municipal Government website published the “Notice on Soliciting Public Comments on the ‘Measures for the Recognition and Administration of Pilot Leading Units in Intellectual Property in Beijing (Draft for Comments)’,” with the deadline for submitting feedback set for August 9.
The Measures comprise six chapters and twenty-five articles, covering general provisions, eligibility criteria, application and certification procedures, evaluation and management, support and safeguards, and supplementary provisions. Specifically, entities seeking to be designated as pilot units for intellectual property shall meet the following conditions:
(1) Establishment of departments and personnel responsible for intellectual property management;
(2) Continuously strengthen innovation activities, with R&D investment or research funding continuing to grow;
(3) Continuously foster intellectual property creation, maintaining a certain volume of patent applications and a portfolio of valid invention patents;
(4) Continuously promote the utilization of intellectual property: for applicant entities that are enterprises, the average patent implementation rate over the past three years shall not be less than ; for applicant entities that are universities or research institutions, the total contract value of intellectual property transfers, licenses, and equity contributions based on intellectual property valuation over the past three years shall not be less than yuan.

The Beijing Municipal Government plans to revise the “Detailed Rules for the Administration of Subcontracting in Highway Engineering Construction in Beijing.”
The Beijing Municipal Government website has published the “Notice on Public Solicitation of Comments on the ‘Detailed Rules for the Administration of Subcontracting in Highway Construction Projects in Beijing’ (Draft for Comments),” with a deadline for submitting feedback set for July 16.
This revision of the Implementing Rules primarily clarifies the scope of “principal entities and key tasks,” revises and refines provisions related to the “timing of subcontracting” and the “conditions for subcontracting,” and streamlines the procedures for submitting subcontracting applications and filing them for record.

The Beijing Municipal Government plans to issue the “Guiding Opinions on the Conofficeation and Registration of Land Use Rights for Residential Sites Integrated with Buildings in Beijing.”
The Beijing Municipal Government website has published the “Notice on Public Solicitation of Comments on the ‘Guiding Opinions on the Conofficeation and Registration of Land Use Rights for Integrated Housing and Land Parcels in Beijing (Draft for Comments)’,” with the deadline for submitting feedback set for July 24.
The “Guiding Opinions” set forth the procedures for conofficeing and registering residential land use rights, comprising four stages: issuing public notices, conducting cadastral surveys, obtaining conofficeation at both the village and township levels, and completing real estate registration. To address longstanding issues in the management and registration of residential land, the document outlines guiding policies, establishes principles for defining a “household,” and specifies four circumstances under which non‑members of rural collective economic organizations may legally acquire residential land use rights in accordance with the law. These include cases where residential land is used pursuant to government‑approved plans for relocation, geological disaster prevention, new‑rural development, or resettlement; where residential land is occupied by inherited houses; where urban residents legally obtained residential land in rural areas prior to the issuance of Document No. 39 [1999] of the State Council; and where former members of collective economic organizations have registered as urban residents. Furthermore, the document provides for the proper handling of the “one household, multiple residences” issue, stipulating that, in principle, each household should be allocated one residence; however, two exceptions are permitted: households that meet local conditions for separate housing but have not yet separated, resulting in “one household, multiple residences,” and cases where “one household, multiple residences” arise from the occupation of residential land through inherited houses.

Shanghai has unveiled an action plan to accelerate vehicle replacement and consumption.
Recently, Shanghai has unveiled the “Shanghai Action Plan for Accelerating Automobile Renewal and Consumption (2024–2027).”
The Action Plan specifies that by 2027, the average age of used cars traded in the city will be reduced by one year. Used-car transaction volume will reach 900,000 units, a 50% increase compared with 2023; used-car exports will total 15,000 vehicles, doubling the 2023 level; and the number of scrapped vehicles recycled will reach 50,000, also doubling the 2023 figure. The Action Plan outlines nine key measures: implementing the national policy on trade‑in programs for old vehicles; enacting a local vehicle‑replacement subsidy scheme; piloting “group value‑preserving leasing” services; accelerating the phasing out and upgrading of aging vehicles; encouraging the development of used‑car dealership operations; supporting automakers in offering trade‑in and replacement services; improving the used‑car pricing and appraisal system; streamlining procedures to facilitate used‑car circulation; and optimizing the management processes for used‑car exports.

The Shanghai Municipal Administration for Market Regulation has issued a document to advance the work of government information disclosure in market regulation for 2024.
The Shanghai Administration for Market Regulation has published the “Notice on Promoting Government Transparency in Market Regulation for 2024” on its website.
The Notice specifies that it is necessary to consolidate the outcomes of integrated policy releases and explore the establishment of new thematic databases; to refine mechanisms for diversified interpretation and dissemination of policies; to promptly respond to inquiries submitted through policy‑related message boards; to comprehensively advance the “reading‑and‑handling‑in‑parallel” approach to policy release; to deliver targeted policy outreach and strengthen cooperation between government and civil society; to systematically collate and compile policies related to market access for foreign‑invested enterprises; to improve transparency in administrative decision‑making and public participation; and to actively organize “Government Openness Month” events, among other measures.

The Ministry of Industry and Information Technology has released the seventh batch of the catalog of new-energy vehicle models eligible for reductions or exemptions from the vehicle purchase tax.
On July 9, the Ministry of Industry and Information Technology issued Announcement No. 15 of 2024, publishing the “Catalogue of Energy-Saving and New-Energy Vehicle Models Eligible for Reduction or Exemption of Vehicle and Vessel Tax” (63rd batch) and the “Catalogue of New-Energy Vehicle Models Eligible for Reduction or Exemption of Vehicle Acquisition Tax” (7th batch), both approved by the State Taxation Administration.
Among them, the seventh batch of the “Catalogue of New Energy Vehicle Models Eligible for Reduction or Exemption from Vehicle Acquisition Tax” comprises two categories: newly added models and models that, after re‑submission, meet the latest technical requirements. The new models include 81 all‑electric passenger vehicles, with offerings such as NIO’s L60 and Xpeng’s M03 listed.

Taxation
The Ministry of Civil Affairs has clarified the key areas for spot checks and audits of social organizations and privately-run non-enterprise entities.
Recently, the Ministry of Civil Affairs issued the “Notice from the General Office of the Ministry of Civil Affairs on Conducting Spot Audits of Social Organizations and Private Non‑Enterprise Units in 2024,” specifying the list of entities to be audited, the key areas of focus for the audits, and other relevant details.
The Notice clarifies that this round of spot checks and audits covers 100 social organizations registered with the Ministry of Civil Affairs, including 90 social groups—comprising two foreign chambers of commerce and three international associations—and 10 privately-run non‑enterprise entities. The audit focuses on ten key areas, such as annual work reports, the formulation and implementation of internal regulations, fee‑charging practices, expenditures, and violations related to associated transactions.
With respect to violations related to expenditures and related-party transactions, the issues include: whether assets have been allocated or indirectly distributed through such means as inflating business‑activity costs, making fictitious disbursements for staff expenses, or paying expert fees; whether there are instances of unreasonable recording of business‑activity costs, administrative expenses, or other expenditures that result in the squandering of social organization assets or public resources; whether investment income is accounted for in accordance with the Accounting Standards for Non‑Profit Organizations, and whether such accounting practices have harmed the interests of the social organization; and whether related‑party transactions have undergone internal decision‑making procedures, were conducted at arm’s length, and have been disclosed in the notes to the financial statements in compliance with the Accounting Standards for Non‑Profit Organizations and the Interpretations on Certain Issues Pertaining to Those Standards.

LITIGATION & ARBITRATION
The Supreme People’s Procuratorate has issued typical cases of corporate compliance in the field of work safety.
Recently, the Supreme People’s Procuratorate released a batch of typical cases involving corporate compliance in the field of work safety.
According to reports, the batch of typical cases comprises five instances: the major liability accident case involving Tang Moumou in Zhejiang; the major liability accident case involving Zhang Moumou and others in Shandong; the major liability accident case involving Tang Moumou and others in Guangdong; the major liability accident case involving Luo Moumou and Tan Moumou in Jiangsu; and the major liability accident case involving Li Moumou in Fujian. These typical cases encompass both large state-owned enterprises and private offices, include listed companies as well as small and medium-sized enterprises, and cover both emerging industries such as new energy and traditional chemical enterprises, thereby fully reflecting the procuratorial organs’ judicial philosophy of providing equal legal protection to all types of market entities.

The Guangdong High People’s Court has released typical cases to standardize property management services.
On July 10, the Guangdong High People’s Court released a set of typical cases on judicial safeguards for harmonious community development, focusing on property service management.
This batch of typical cases comprises 10 matters, covering cutting-edge and high‑profile issues in property service contract disputes, such as whether a property management company has standing to bring suit against resolutions passed by the owners’ assembly, how property fees are allocated in secondhand home sales, the calculation of property fees under a “commission‑based” arrangement, and the hiring and dismissal of property management companies. Notably, in the case of “A Property Management Company v. Wen,” the court found that the property services provided by the company suffered from significant defects, which had led to frequent thefts in the residential community, and accordingly ordered a discretionary reduction in the service fee owed by the owner, Wen, thereby encouraging the property management company to improve its service quality.

The Supreme People’s Procuratorate has released typical administrative prosecution cases under the “Procuratorial Protection of People’s Livelihood” initiative.
On July 8, the Supreme People’s Procuratorate released the fourteenth batch of typical cases under the “Administrative Prosecution and Public Welfare” series, focusing on administrative prosecution cases that safeguard people’s livelihoods.
This batch of typical cases comprises six matters, involving issues such as a subdistrict office’s failure to fulfill its statutory duty to provide administrative compensation, the Civil Affairs Bureau’s suspension of minimum living allowance payments, the Human Resources and Social Security Bureau’s determination of work-related injuries, the government’s failure to perform its obligation to change the lessee of publicly owned housing, administrative compensation claims brought by a subdistrict office, and the enforcement of administrative litigation concerning the disbursement of subsidies for fishing‑vessel renewal. In Case No. 1, the procuratorial organ focused on reviewing the methods used to assess property values and calculate compensation, issued a prosecutorial recommendation for retrial, and corrected the original court’s erroneous calculation of compensation for the reasonable losses incurred by a farmers’ specialized cooperative following its closure. The court subsequently recalculated the compensation amount, reinstated management fees that had been wrongly deducted, and ultimately reversed the judgment, ordering the relevant subdistrict office to compensate the cooperative for various losses totaling over RMB 10.1 million, thereby safeguarding the lawful rights and interests of the cooperative and its members.

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