JC Master Legal News Issue 1116

Key Takeaways for This Issue

The China Securities Regulatory Commission has issued the “Eight Measures to Deepen the Reform of the STAR Market and Support Technological Innovation and the Development of New‑Type Productive Forces.”
On June 19, the China Securities Regulatory Commission issued the “Eight Measures to Deepen Reform of the STAR Market and Support Technological Innovation and the Development of New‑Type Productive Forces” (hereinafter referred to as the “Eight Measures”), further advancing reform, enhancing inclusiveness toward new industries, business models, and technologies, and leveraging the functions of the capital market to better serve the overarching goal of Chinese‑style modernization.
The China Securities Regulatory Commission and the Shanghai Municipal Government have signed a memorandum of understanding on a collaborative working mechanism to leverage the capital market in supporting Shanghai’s accelerated development of its “Five Centers.”
On the afternoon of June 19, the China Securities Regulatory Commission and the Shanghai Municipal Government held a signing ceremony at the 2024 Lujiazui Forum for a memorandum of understanding on the collaborative working mechanism to support Shanghai’s efforts to accelerate the development of its “five centers.”
The State Administration for Market Regulation plans to issue the “Notice on Strictly Prohibiting Metrological Fraud in Electronic Weighing Scales.”
On June 20, the website of the State Administration for Market Regulation published the “Notice on Public Solicitation of Comments on the ‘Announcement on Strict Prohibition of Metrological Fraud in Electronic Weighing Scales (Draft for Comments)’,” with a deadline for submitting feedback set for July 19.
The Ministry of Justice has introduced 18 measures to strengthen oversight of administrative law enforcement involving enterprises.
The Ministry of Justice, in collaboration with the National Development and Reform Commission and the All-China Federation of Industry and Commerce, has jointly issued the “Special Action Plan for Administrative Review to Safeguard High-Quality Enterprise Development.”
Finance & Capital Markets
The China Securities Regulatory Commission and the Monetary Authority of Singapore held the 8th China–Singapore Securities and Futures Regulatory Roundtable.
On June 14, 2024, the China Securities Regulatory Commission and the Monetary Authority of Singapore held the Eighth China–Singapore Securities and Futures Regulatory Roundtable in Singapore.

Vice Chairman Chen Huaping of the China Securities Regulatory Commission and Deputy Managing Director Ho Heng‑Kian of the Monetary Authority of Singapore attended the meeting and delivered remarks. Both sides commended the significant progress made in capital market cooperation between the two countries since the seventh China–Singapore Securities and Futures Regulatory Roundtable, exchanged views on the latest regulatory developments and practices—including securities issuance and listing oversight, derivatives market regulation, and corporate sustainability‑related disclosure—and reached a series of agreements on deepening ETF mutual access and index‑based cooperation, as well as strengthening exchanges and mutual learning in the field of green finance. The two sides expressed their expectation that further enhanced cooperation in the capital markets will better support the development of a comprehensive, high‑quality, forward‑looking China–Singapore partnership. More than 30 participants attended, including heads of relevant departments from the China Securities Regulatory Commission and the Monetary Authority of Singapore, along with representatives from both stock exchanges.

The China–New Zealand Securities and Futures Regulatory Roundtable serves as an important platform for implementing the outcomes of President Xi Jinping’s visit to New Zealand in November 2015, fostering dialogue between the regulatory authorities and industry representatives of both countries, and deepening practical cooperation in the capital markets.

The China Securities Regulatory Commission has issued the “Eight Measures to Deepen the Reform of the STAR Market and Support Technological Innovation and the Development of New‑Type Productive Forces.”
On June 19, the China Securities Regulatory Commission issued the “Eight Measures to Deepen Reform of the STAR Market and Support Technological Innovation and the Development of New‑Type Productive Forces” (hereinafter referred to as the “Eight Measures”), further advancing reform, enhancing inclusiveness toward new industries, business models, and technologies, and leveraging the functions of the capital market to better serve the overarching goal of Chinese‑style modernization.

Over the past five-plus years, the STAR Market has remained committed to its “hard‑tech” positioning, growing steadily from scratch and continuously expanding. Its role as a testing ground for institutional reforms and its effectiveness in supporting technological innovation have become increasingly evident. The “Eight Measures” thoroughly implement the directives of the CPC Central Committee, the State Council, and the new “National Nine Articles,” focusing squarely on fostering high‑level scientific and technological self‑reliance and the development of new‑type productive forces. By prioritizing key areas and balancing short‑term needs with long‑term goals, the measures introduce a comprehensive package of reform initiatives. In particular, addressing issues that have drawn widespread market attention—such as excessive pricing and oversubscription in new share offerings, an active M&A and restructuring market, and strengthened oversight of listed companies—the “Eight Measures” put in place targeted arrangements. These steps not only proactively address market concerns but also lay the groundwork and accumulate experience for the next phase of comprehensively deepening capital market reform. At the same time, the “Eight Measures” are of great significance in helping Shanghai accelerate the development of its “five centers.”

The “Eight Measures” focus on the overarching goal of strengthening regulation, managing risks, and promoting high-quality development. Adhering to the principles of seeking progress while maintaining stability, adopting comprehensive policies, being both goal‑oriented and problem‑oriented, respecting underlying trends, and upholding fundamental principles while fostering innovation, these measures aim to ensure the sustained, healthy development of the STAR Market along a market‑based and law‑governed track. The key components include: First, reinforcing the STAR Market’s positioning as a hub for “hard technology.” Strictly controlling entry, priority will be given to companies in emerging industries, new business models, and cutting‑edge technologies that have achieved breakthroughs in critical core technologies, enabling them to list on the STAR Market. The mechanism for precisely identifying science‑and‑technology‑focused enterprises will be further refined, and high‑quality, pre‑profit technology offices will be supported in listing. Second, launching pilot programs to deepen reforms of the issuance and underwriting system. This includes optimizing the pricing mechanism for new share offerings and piloting adjustments to the proportion of high‑priced bids excluded during pricing. Arrangements for allocating new shares on the STAR Market will be improved, increasing the allocation ratio for offline investors with long‑term holding intentions, while strengthening oversight of bookbuilding and price‑inquiry practices. Third, refining the equity and debt financing framework for STAR Market‑listed companies. A “green channel” will be established to facilitate equity and debt financing, as well as mergers and reorganizations, for “hard‑tech” enterprises engaged in tackling critical core technologies. Standards for identifying “light‑asset, high‑R&D‑intensity” companies will be explored, and pilot programs for shelf registration of refinancing offerings will be advanced, with the STAR Market serving as the first testing ground. Fourth, providing stronger support for mergers and reorganizations. STAR Market‑listed companies will be encouraged to pursue upstream and downstream integrations within their industrial chains. Valuation flexibility in M&A transactions will be enhanced, and listed offices will be supported in acquiring high‑quality, pre‑profit “hard‑tech” enterprises. Payment instruments for M&A will be diversified, with research underway on installment payments using equity as consideration. Additionally, listed companies will be encouraged to carry out absorption‑type mergers focused on strengthening and upgrading their core businesses. Fifth, improving the equity‑incentive system. Precision in equity‑incentive design will be increased to better align interests with investors. Procedures for implementing equity incentives on the STAR Market will be refined, applicable rules regarding short‑term trading and blackout periods will be optimized, and arrangements for reserving equity‑incentive rights will be reviewed. Sixth, enhancing trading mechanisms to guard against market risks. Trading supervision will be strengthened, with studies underway to optimize the STAR Market’s market‑making and after‑hours trading frameworks. The range of STAR Market indices, ETF products, and ETF options will be expanded. Seventh, intensifying end‑to‑end regulatory oversight of STAR Market‑listed companies. Market misconduct such as fraudulent issuances and financial fraud will be rigorously cracked down upon, ensuring more effective protection of the legitimate rights and interests of small and medium investors. Founding teams and core technical personnel will be encouraged to voluntarily extend the lock‑up periods for their shares. The exit‑“reverse linkage” regime for private equity and venture capital funds will be streamlined, and the delisting system will be strictly enforced. Eighth, proactively fostering a sound market ecosystem. Efforts will be made to refine the judicial safeguards and institutional mechanisms supporting the STAR Market. Collaboration with local governments and relevant ministries will be strengthened, with regular visits to STAR Market‑listed companies to jointly promote improvements in corporate quality. The “Improve Quality, Boost Efficiency, Emphasize Returns” initiative will be deepened, and investor education services will be enhanced.

Going forward, the China Securities Regulatory Commission will, in line with the overarching principle of seeking progress while maintaining stability, further advance and solidify the stock issuance registration system, steadily implement and put into practice all policies and measures to deepen the reform of the STAR Market, dynamically assess and refine relevant institutional frameworks, and, once replicable and scalable best practices have been established, gradually and orderly extend these reforms to other market segments. In doing so, it will continue to enhance the capital market’s capacity to support high‑level scientific and technological self‑reliance and the development of new‑type productive forces.

The China Securities Regulatory Commission and the Shanghai Municipal Government have signed a memorandum of understanding on a collaborative working mechanism to leverage the capital market in supporting Shanghai’s accelerated development of its “Five Centers.”
On the afternoon of June 19, the China Securities Regulatory Commission and the Shanghai Municipal Government held a signing ceremony at the 2024 Lujiazui Forum for a memorandum of understanding on a collaborative working mechanism to support Shanghai’s efforts to accelerate the development of its “five centers.” Wu Qing, Secretary of the CPC Committee and Chairman of the CSRC, and Gong Zheng, Deputy Secretary of the CPC Shanghai Municipal Committee and Mayor of Shanghai, witnessed the signing. Li Chao, Member of the CPC Committee and Vice Chairman of the CSRC, and Xie Dong, Vice Mayor of Shanghai, delivered remarks and signed the agreement on behalf of their respective sides. Qiu Yong, Secretary of the CPC Committee and Chairman of the Board of the Shanghai Stock Exchange, also attended the event.

Accelerating the development of Shanghai’s “Five Centers” is a major national strategy. To better leverage the capital market’s role in advancing this initiative, the China Securities Regulatory Commission and the Shanghai Municipal Government have jointly established a collaborative working mechanism. This mechanism strengthens synergy, facilitates regular consultations, enhances information sharing, and coordinates efforts to address key challenges in promoting high-quality capital market development and expediting the construction of Shanghai’s “Five Centers.” The establishment of this collaborative framework helps institutionalize and normalize best practices in inter‑agency coordination; fosters a concerted effort to drive high‑quality capital market growth, thereby better serving the real economy and the development of new‑type productive forces; and contributes to jointly advancing the building of Shanghai’s “Five Centers,” supporting the city as a vanguard of reform and opening-up and a pioneer in innovative development.

Relevant departments and bureaus of the China Securities Regulatory Commission, the Shanghai Securities Regulatory Bureau, as well as the Financial Affairs Office of the Shanghai Municipal Party Committee, the Organization Department of the Municipal Party Committee, the Municipal Development and Reform Commission, the Municipal Commission of Economy and Informatization, the Municipal Commission of Commerce, the Municipal Science and Technology Commission, the Municipal Justice Bureau, the Municipal Transportation Commission, the Municipal State-owned Assets Supervision and Administration Commission, and the Pudong New Area, together with responsible officials from the Shanghai Stock Exchange, the Shanghai Futures Exchange, and the China Financial Futures Exchange, attended the meeting.

The first batch of ETFs investing in the Saudi market has been approved, bolstering the high‑level opening-up of the capital market.
Recently, the first batch of cross-border ETF products investing in the Saudi market have officially received approval. In September 2023, the Shanghai Stock Exchange and the Tadawul Group signed a memorandum of cooperation in Riyadh, the capital of Saudi Arabia, further deepening capital market exchanges between the two regions. Under the memorandum, the two parties will jointly explore opportunities in areas such as cross‑listing, financial technology, ESG, data sharing, and research, and work together to advance product‑related cooperation, including ETFs. The approval of these products marks a significant milestone in the bilateral collaboration.
The ETF is managed by Huatai-PineBridge Fund and invests in the Southern East Money Saudi ETF listed in Hong Kong. It tracks the FTSE Saudi Arabia Index, covering more than 50 large and mid-cap companies in the Saudi market, spanning sectors such as finance, raw materials, energy, utilities, and telecommunications.
In recent years, under the unified guidance of the China Securities Regulatory Commission, the Shanghai Stock Exchange has positioned cross-border index‑based investing as a key lever for advancing the opening-up of the capital market. It has successively launched ETF connectivity programs linking China and Japan, Shanghai and Hong Kong, and Shanghai and Singapore; developed jointly compiled China–Korea index products; and facilitated the inclusion of ETFs in the Shanghai–Hong Kong Stock Connect, all of which have operated smoothly and received positive feedback. As of the end of May 2024, the Shanghai market listed 68 cross-border ETFs with total assets under management reaching RMB 207.5 billion, covering markets such as Hong Kong, the United States, Germany, France, Japan, South Korea, and Singapore. With the addition of the Saudi market, these ETFs now broadly track underlying indices that span major global markets, providing investors with a robust tool for global asset allocation.
Going forward, the Shanghai Stock Exchange will thoroughly study and implement the spirit of the Central Financial Work Conference, earnestly carry out the arrangements set forth in the new “Nine Measures for National Financial Development,” uphold the dual focus on both “bringing in” and “going global,” enrich the exchange’s cross-border fund product lineup, strengthen the asset management industry’s capacity for internationalization, expand and refine capital market mechanisms for cross-border connectivity, and steadily advance high-standard, institution‑based opening-up of the capital market.

CSRC Chairman Wu Qing: Financial fraudsters and those who collude with them will be investigated and prosecuted as a single unit.
On June 19, at the opening ceremony of the 2024 Lujiazui Forum, China Securities Regulatory Commission Chairman Wu Qing stated that protecting investors should be integrated throughout the entire process of capital market institutional development and regulatory enforcement.
Wu Qing stated that financial fraud by listed companies has long been a key focus of regulatory enforcement. The China Securities Regulatory Commission is working with relevant departments to further establish a comprehensive system for prevention and punishment, strengthen transparent, end-to-end supervision, and hold investment banks, auditors, and other intermediary institutions strictly accountable as “gatekeepers,” thereby enhancing detection capabilities, intensifying penalties, and elevating preventive measures. Both perpetrators of fraud and those who collude with them will be investigated and prosecuted in tandem, with accountability pursued across all dimensions and in a multi‑pronged manner; where criminal offenses are involved, criminal liability will be officely pursued.

The China Securities Regulatory Commission has issued a draft for public comment to further optimize the mutual recognition arrangement for funds between the mainland and Hong Kong.
The China Securities Regulatory Commission (CSRC) plans to revise the Interim Provisions on the Administration of Hong Kong‑Recognized Funds (CSRC Announcement No. 12 of 2015), resulting in the draft “Regulations on the Administration of Hong Kong‑Recognized Funds (Revised Draft for Public Comment).” The deadline for submitting comments is July 14, 2024.
This revision, first, moderately relaxes the cap on the proportion of cross‑border sales for mutual recognition funds, increasing it from 50% to 80%. Second, it appropriately eases restrictions on the sub‑delegation of investment management functions for such funds, permitting the delegation of these functions to overseas affiliates within the same group. At the same time, it stipulates that the delegated institutions must be located in countries or regions that have signed a regulatory cooperation memorandum of understanding with the China Securities Regulatory Commission and maintain an effective regulatory cooperation framework. In addition, certain provisions of the Interim Regulations on the Administration of Hong Kong Mutual Recognition Funds have been revised to align with current requirements, including the removal of the prior filing requirement for promotional materials of mutual recognition funds under Article 16, replacing it with internal review and archival retention for record‑keeping purposes.

The Shanghai and Shenzhen stock exchanges continue to refine their mutual market access mechanisms, further expanding the scope of ETFs eligible under the Shanghai–Hong Kong Stock Connect and Shenzhen–Hong Kong Stock Connect programs.
On June 14, the Shanghai and Shenzhen stock exchanges each issued notices announcing the revised “Shanghai Stock Exchange Measures for the Implementation of the Shanghai–Hong Kong Stock Connect (2024 Revision)” and “Shenzhen Stock Exchange Measures for the Implementation of the Shenzhen–Hong Kong Stock Connect (2024 Revision),” and clarified relevant matters.
Among them, the “Shanghai Stock Exchange Measures for the Implementation of the Shanghai–Hong Kong Stock Connect (Revised in 2024)” has been amended in a total of six provisions, primarily to revise the scope of ETFs eligible under the Shanghai Stock Connect and the Hong Kong Stock Connect. Specifically: first, Articles 26 and 76 have been revised to adjust the eligibility criteria for including ETFs in the Shanghai Stock Connect and the Hong Kong Stock Connect, with respect to size and weight‑based inclusion thresholds; second, Articles 27 and 77 have been revised to modify the circumstances under which ETFs may be excluded, again in relation to size and weight‑based exclusion thresholds; and third, Articles 80 and 146 have been revised to reflect adjustments to clause numbering and the repeal of certain provisions. The notice also sets out the transitional arrangements for the entry into force of the two revised Measures.

Commercial & Corporate
China and Malaysia have issued a joint statement to deepen and elevate their comprehensive strategic partnership and jointly build a community with a shared future.
Recently, China and Malaysia signed the Joint Statement on Deepening and Elevating the Comprehensive Strategic Partnership and Jointly Building a China-Malaysia Community with a Shared Future.
The Joint Statement afoffices that the two countries will steadfastly strengthen and deepen bilateral cooperation, elevate the building of a community with a shared future to a higher level, foster high‑level strategic mutual trust, and deepen development alignment. They will seize opportunities presented by the rise of new‑type productive forces—such as the digital economy, green development, artificial intelligence, and energy—and explore cooperation in advanced manufacturing, scientific and technological innovation, the entrepreneurship and growth of small and medium‑sized enterprises, and financial services. Leveraging existing cooperation and facilitation platforms, they will jointly identify and develop new areas of mutual synergy. Furthermore, they will continue to work closely to advance key projects such as Malaysia’s East Coast Rail Link and the “Twin Parks” initiative, further expand trade volumes, enhance financial cooperation, encourage two‑way investment, and strengthen exchanges and collaboration in the field of intellectual property, thereby creating a favorable business environment for economic and trade relations between the two sides.

The National Development and Reform Commission has organized the recommendation of green technologies.
On June 20, the National Development and Reform Commission published the “Notice on Organizing the Recommendation of Green Technologies” on its website.
The Notice clarifies that the technologies recommended this time must pertain to the energy‑saving and carbon‑reduction sector, the environmental protection sector, the resource recycling sector, the green and low‑carbon transformation of the energy system, ecological conservation, restoration, and sustainable utilization, as well as the green upgrading of infrastructure. Such technologies should demonstrate significant energy‑saving, carbon‑reduction, and environmental protection benefits, effectively enhance the green development level of the relevant industries, and exhibit advanced, leading, and exemplary characteristics within their respective sectors, with strong potential for widespread adoption and promising application prospects. Moreover, the recommended technologies must be mature and reliable, economically viable, and supported by at least two domestic implementation cases, each in operation for no less than one year.

The State Administration for Market Regulation plans to issue the “Notice on Strictly Prohibiting Metrological Fraud in Electronic Weighing Scales.”
On June 20, the website of the State Administration for Market Regulation published the “Notice on Public Solicitation of Comments on the ‘Announcement on Strict Prohibition of Metrological Fraud in Electronic Weighing Scales (Draft for Comments)’,” with a deadline for submitting feedback set for July 19.
The Notice comprises eight provisions: it strictly prohibits the manufacture of electronic weighing scales that have not obtained type approval; it forbids manufacturers from unilaterally altering approved designs, thereby creating loopholes for illegal modifications; it bans the sale of electronic weighing scales lacking information such as the manufacturer’s name and address, specifications and model, type‑approval mark and number, conformity mark, and intact lead seals; it prohibits the sale of electronic weighing scales with fraudulent features; it strictly prohibits the repair or modification of electronic weighing scales in violation of laws and regulations, as well as the provision of technical services for such activities; it prohibits the use of electronic weighing scales that have not been verified, have failed verification, are past their verification interval, lack a valid verification mark, or possess “fraudulent” functions; it strictly forbids the use of electronic weighing scales to commit metrological fraud or deceive consumers; and it prohibits market operators from failing to fulfill their metrological management responsibilities, including failing to establish metrological management systems, failing to install fair scales, and failing to register and keep records of electronic weighing scales subject to mandatory verification.

Four departments have jointly launched initiatives to phase out and decommission aging chemical production facilities, as well as to upgrade and renovate them.
Recently, the Ministry of Emergency Management, the Ministry of Industry and Information Technology, the State-owned Assets Supervision and Administration Commission of the State Council, and the State Administration for Market Regulation jointly issued the “Work Plan for the Phasing Out and Renovation of Aging Chemical Facilities.”
The Work Plan covers enterprises that have obtained licenses for the safe production and safe use of hazardous chemicals. For these enterprises, it sets out clearly defined classification‑based remediation requirements—based on industrial policies, safety standards, and safety risks—for aging equipment, pressurized liquefied hydrocarbon spherical tanks, and certain atmospheric‑pressure storage tanks containing flammable or highly toxic liquids that have been identified through recent inspections. The goal is to phase out a number of facilities in accordance with the law, facilitate the orderly exit of others, and upgrade and modernize a third group.

China-ASEAN Digital Governance Dialogue Held
On June 19, the China-ASEAN Digital Governance Dialogue was held in Guilin, Guangxi Zhuang Autonomous Region.
During the dialogue, participating experts shared their countries’ policies and practices on topics such as “AI governance,” “data governance,” and “cybersecurity emergency response cooperation,” engaging in in-depth exchanges and discussions. They put forward targeted cooperation proposals, further building consensus and deepening and expanding China–ASEAN cooperation in the field of digital governance.

The Digital-Era Corporate Rights Protection Exchange Conference was held in Beijing.
On June 19, the World Internet Conference’s “Member Activity Day” and the Symposium on Protecting Corporate Rights in the Digital Age were held in Beijing.
Officials from the Comprehensive Governance Bureau and the Reporting Center of the Cyberspace Administration of China attended the meeting and, during the interactive session, engaged with member representatives on issues such as combating enterprise‑related rumors, curbing false reviews, and advancing the rule of law in the business‑friendly online environment. Member representatives unanimously agreed that the exchange deepened their understanding of relevant policies, effectively addressed their concerns, and further bolstered their confidence in corporate development. They expressed hope that the conference would continue to organize more “Member Activity Days,” creating a platform for member enterprises to engage in joint consultation, co‑construction, and shared benefits.

Two departments have designated Hefei Airport Port as an import port for pharmaceuticals.
On June 20, the website of the National Medical Products Administration published the “Notice on Matters Related to Designating Hefei Airport Port as an Import Port for Pharmaceuticals.”
The Notice clarifies that, with the approval of the State Council, Hefei Airport Port has been designated as an additional port of entry for pharmaceutical imports. Effective from the date of issuance of this Notice, with the exception of the pharmaceuticals specified in Article 10 of the Measures for the Administration of Pharmaceutical Imports, other imported traditional Chinese medicines (excluding crude herbal materials) and chemical pharmaceuticals (including narcotic drugs and psychotropic substances) may be imported via Hefei Airport Port (customs district codes 3311 and 3323).

The Accounting Department of the Ministry of Finance has released application cases for the share-based payment standard.
On June 20, 2024, the Accounting Department of the Ministry of Finance released a new application case for the share-based payment standards, titled “Amendments to Share-Based Payment Plans Result in an Increase in the Fair Value of the Granted Equity Instruments.”
This case clarifies that if the modification of the equity‑based payment vesting conditions results in an increase in the fair value of the equity instruments granted, the entity shall recognize a corresponding increase in the services received, measured by the amount of the increase in the fair value of those equity instruments. If an entity modifies the terms and conditions by reducing the total fair value of the share‑based payment or by adopting other measures that are disadvantageous to employees, it must continue to account for the services received as if the change had never occurred, unless the entity cancels some or all of the equity instruments that have already been granted.

The Ministry of Justice has introduced 18 measures to strengthen oversight of administrative law enforcement involving enterprises.
Recently, the Ministry of Justice, in collaboration with the National Development and Reform Commission and the All-China Federation of Industry and Commerce, jointly issued the “Special Action Plan for Administrative Review to Safeguard High-Quality Enterprise Development.”
The special campaign has introduced 18 specific measures across five key areas to ensure that administrative reconsideration supports the high-quality development of enterprises: First, streamline channels for enterprises to file administrative reconsideration applications. A dedicated portal for enterprise applications has been launched on the national platform for administrative reconsideration and litigation, accompanied by targeted outreach and awareness‑raising activities. Second, strengthen efforts to achieve substantive resolution of administrative disputes involving enterprises. Third, intensify oversight of administrative enforcement actions affecting businesses. This includes adjudicating, in accordance with the law, administrative reconsideration cases challenging fines, addressing persistent issues such as disproportionate penalties for minor infractions, substituting fines for effective regulation, and using fines to boost revenue, and bolstering scrutiny of government misconduct that undermines trust. Fourth, leverage administrative reconsideration to prevent administrative disputes involving enterprises. Fifth, enhance monitoring and evaluation of administrative reconsideration cases related to businesses.

The State Administration for Market Regulation has released the “Key Areas for Implementing the 2024 Enterprise Standards ‘Leader’ Program.”
On June 20, the website of the State Administration for Market Regulation published the “Announcement on the Release of the Key Areas for the 2024 Enterprise Standard ‘Leader’ Program.”
The Announcement identifies 146 key areas, including medical instruments and equipment, specialized electronic and electrical machinery, automobile manufacturing, electrical machinery and equipment manufacturing, computer, communications, and other electronic equipment manufacturing, emerging energy and hydrogen‑related operation and maintenance services, e‑commerce, internet services, and financial information services.

The National Development and Reform Commission has issued the Measures for the Administration of Natural Gas Utilization.
On June 19, the National Development and Reform Commission published the Measures for the Administration of Natural Gas Utilization on its website, which will take effect on August 1, 2024.
The Measures consist of sixteen articles, clearly categorizing natural gas utilization into priority, restricted, prohibited, and permitted classes, and specifying the particular directions for each category. They stipulate that the commercialization rate of natural gas must be increased, industrial vented gas recovery strengthened, and flaring and wastage strictly controlled. New natural gas utilization projects shall secure reliable gas supplies, conclude gas purchase agreements or contracts with gas suppliers, and ensure alignment between project siting and pipeline network planning. For existing gas‑using projects, both supply and demand parties are required to implement contractual safeguards.

The Ministry of Industry and Information Technology has revised the Regulations on Industry Standard Conditions for Lithium-Ion Batteries and the Measures for the Administration of Standard Announcements.
On June 19, the website of the Ministry of Industry and Information Technology published Announcement No. 14 of 2024, revising both the “Normative Conditions for the Lithium-Ion Battery Industry” and the “Administrative Measures for the Issuance of Normative Announcements in the Lithium-Ion Battery Industry.”
The “Standardized Conditions” clearly define requirements related to industrial layout and project establishment, production and operations as well as process technology, product performance, safety and quality management, comprehensive resource utilization and ecological environmental protection, public health and social responsibility, and supervision and administration.

The Ministry of Industry and Information Technology plans to issue 135 industry standards and 7 recommended national standard project proposals.
On June 19, the website of the Ministry of Industry and Information Technology published a notice soliciting public comments on 135 industry standard projects, including “Technical Requirements for Multicast and Broadcast Enhancements in the 5G Mobile Communication Network Core Network,” as well as seven recommended national standard project proposals. The deadline for submitting feedback is July 18.
This batch of recommended national standard projects open for public comment primarily includes: “Optical Fibre Cables — Part 50: Sectional Specification — General Requirements for Micro‑duct Cabling Technology Used in Air‑Blowing Installation”; “Optical Fibre Cables — Part 51: Sectional Specification — Air‑Blowing Micro‑Cable Technology”; “Optical Fibre Cables — Part 52: Sectional Specification — Optical Fibre Units for Air‑Blowing Installation”; and “Fibre Optic Test Methods — Part 50: Measurement Methods and Test Procedures for Environmental Performance — Constant Damp Heat,” among others.

Shanghai, Jiangsu, Zhejiang, and Anhui have jointly issued the “Work Guidelines for the Yangtze River Delta CCC Exemption Coordination Mechanism.”
On June 19, the Shanghai Administration for Market Regulation published on its website the “Notice on Issuing the ‘Work Guidelines for the Yangtze River Delta CCC Exemption Coordination Mechanism.’”
The Guidelines specify that review will focus on the completeness and compliance of application materials, including whether CCC‑certified products are being imported, whether the intended use qualifies for exemption, and whether the applying entity meets the relevant requirements. The business scope listed on the applicant’s business license must encompass activities related to the exempted products; the subsequent management commitment letter must clearly state the intended use of the exempted products; and supporting documents must include an import contract, invoice, or bill of lading accompanied by a detailed product list.

The Beijing Municipal Medical Insurance Bureau has issued the “Administrative Measures for Handling Illegal and Non‑Compliant Conduct in the Field of Medical Security.”
On June 17, the Beijing Municipal Government website published the “Notice on the Measures for the Administrative Handling of Illegal and Non‑Compliant Conduct in the Field of Medical Security in Beijing (Trial).”
The Measures clarify the criteria for administrative penalties applicable to violations of laws and regulations in the medical insurance sector. They stipulate that if a medical insurance participant: (1) allows another person to fraudulently use their medical insurance card or other eligibility credentials; (2) receives duplicate medical insurance benefits; or (3) takes advantage of such benefits to resell medications, accept cash or in-kind rebates, or obtain other illicit gains—such actions, if they result in losses to the medical insurance fund, shall be subject to an order from the medical insurance administrative authority to reimburse the funds, along with a suspension of online settlement of medical expenses for at least three months. Furthermore, if a designated medical institution engages in practices such as fictitious hospitalization, overtreatment, duplicate billing, or drug substitution; facilitates participants’ resale of medications by exploiting their entitlements to medical insurance benefits, thereby accepting cash or in-kind rebates or obtaining other illegal gains; or includes medical expenses not covered by the medical insurance fund in the fund’s reimbursement process—such conduct, even if it does not yet cause losses to the fund, shall be ordered by the medical insurance administrative authority to rectify the issue, with the possibility of summoning relevant responsible persons for a discussion. If such conduct results in losses to the medical insurance fund, the administrative authority shall order the institution to refund or recover the improperly paid amounts.

The Ministry of Human Resources and Social Security has unveiled a series of measures to support employment and entrepreneurship among college graduates and other young people.
On June 19, the website of the Ministry of Human Resources and Social Security issued the “Notice on Doing a Good Job in Employment and Entrepreneurship for College Graduates and Other Young People.”
The Notice proposes measures such as consolidating and streamlining policies on employment‑incentive subsidies and job‑expansion allowances, extending the policy that allows state‑owned enterprises to increase headcount and capital, and launching an employment initiative for young people in advanced manufacturing. With regard to the consolidation and optimization of these policies, the Notice stipulates that the one‑off employment‑incentive subsidy and the one‑off job‑expansion allowance shall be merged. Enterprises that hire recent college graduates within their graduation year or within two years of leaving school who remain unemployed, as well as registered unemployed youth aged 16 to 24, enter into labor contracts with them, and make full contributions—on their behalf—for at least three months to unemployment insurance, work‑injury insurance, and employee pension insurance in accordance with relevant regulations, may receive a one‑off job‑expansion allowance of up to RMB 1,500 per newly hired worker.

The Cyberspace Administration of China has released the sixth batch of filing information for deep synthesis service algorithms.
On June 12, China Internet Information Office published the “Announcement on the Release of Filing Information for the Sixth Batch of Deep Synthesis Service Algorithms.”
The announcement disclosed 492 registered domestic deep synthesis service algorithms, including Tencent’s Hunyuan large‑model multimodal algorithm, Haidian Culture and Tourism’s Ruru large‑model algorithm, Himalaya’s speech recognition algorithm, Tencent Music’s Weiban virtual‑human synthesis algorithm, Alipay’s image‑generation algorithm, Li Auto’s MindDiffusion image‑generation algorithm, Himalaya’s speech synthesis algorithm, Insta360’s AI‑generated content algorithm, Youdao Cloud Note’s content‑generation algorithm, Beijing Kuaishou Technology Co., Ltd.’s Kuaiyi large‑model generation and synthesis algorithm, and Alibaba Cloud’s AI portrait‑creation algorithm, among others.

A new round of award and subsidy policies for specialized, refined, distinctive, and innovative SMEs has been unveiled, with plans to support one thousand “Little Giant” enterprises in 2024.
On June 18, the website of the Ministry of Industry and Information Technology released the “Notice on Further Supporting the High-Quality Development of Specialized, Sophisticated, Distinctive, and Innovative Small and Medium-Sized Enterprises,” outlining specific work objectives and support measures.
The Notice plans to focus on key industrial chains, the “six foundational” sectors of industry, as well as strategic emerging industries and future‑oriented industries. Through a comprehensive fiscal incentive scheme, it will provide prioritized support in three phases to help “Little Giant” enterprises achieve high‑quality development, with the first batch in 2024 covering more than 1,000 such companies. Specifically, central government funds will encourage these enterprises to increase investment in scientific and technological innovation around the “three new” areas and the “one strong” pillar, while enhancing their collaborative and supporting capabilities. Local authorities will be encouraged to explore measures to nurture and empower specialized, refined, distinctive, and innovative SMEs. The total amount of local incentives and subsidies will be calculated at RMB 6 million per enterprise over a three‑year period. Funds will be reclaimed from enterprises whose planned investment falls short of RMB 20 million; for those whose planned investment exceeds RMB 20 million but fail to meet their target objectives, any remaining funds will not be allocated.

The Shenzhen Municipal Bureau of Commerce plans to issue the Implementation Rules for the “Several Measures to Promote Innovative Development of Commerce and Trade Enterprises.”
On June 12, the Shenzhen Municipal Bureau of Commerce published on its website the “Notice on Public Solicitation of Comments on the Implementation Rules for the ‘Several Measures of Shenzhen to Promote Innovative Development of Commerce and Trade Enterprises’ (Draft for Comments),” with a deadline for submitting feedback set at 30 days from the date of publication.
The Implementing Rules consist of seven sections, clearly defining the background for their formulation, scope of application, working mechanisms, management model for fund utilization, basic eligibility criteria for applications, areas and conditions for support, as well as corresponding standards, procedures for project application and review, project management, performance evaluation, and oversight and supervision. Each provision specifies the eligibility criteria and standards for the following programs: incentives for chain enterprises opening new company‑owned stores; existing‑stock incentives for retail and catering enterprises; existing‑stock incentives for wholesale enterprises; incremental‑growth incentives for wholesale enterprises; and funding under the domestic trade credit insurance scheme.

The National Medical Products Administration has issued a list of typical application scenarios for artificial intelligence in pharmaceutical regulation.
On June 18, the website of the National Medical Products Administration published the “Notice on Issuing the List of Typical Application Scenarios for Artificial Intelligence in Pharmaceutical Regulation.”
The “List” identifies 15 application scenarios that are pioneering and exemplary, hold significant development potential, address key operational pain points, and reflect pressing needs. Its aim is to advance research and exploration of artificial intelligence technologies in the field of pharmaceutical regulation, with a focus on fostering deep integration between AI and regulatory processes. The List seeks to standardize and guide pharmaceutical regulatory authorities at all levels in conducting AI‑related research and applications, concentrate resources, and leverage AI to strengthen the pharmaceutical oversight system. At the same time, it provides reference and guidance for other research institutions, technology companies, and pharmaceutical enterprises engaged in related R&D and implementation efforts.

Shanghai has issued the “Administrative Measures for ‘Challenge-Based Recruitment’ Projects under the Science and Technology Program.”
On June 19, the Shanghai Municipal Government website published the “Notice on Issuing the Measures for the Administration of ‘Challenge‑Based’ Projects under the Shanghai Science and Technology Program (Trial).”
The Measures comprise six chapters and twenty-five articles, clearly delineating that “listing‑and‑taking‑the‑lead” projects fall into two categories: industry‑wide common‑technology R&D projects and enterprise‑proposed projects. Industry‑wide common‑technology R&D projects are oriented toward supporting major national strategic tasks and the city’s high‑quality development, with a focus on addressing common technological challenges that underpin industrial progress. Enterprise‑proposed projects aim to enhance enterprises’ capacity for technological innovation, concentrating on critical needs in key industries within the city—namely, breakthroughs in core technologies for major equipment and flagship products, as well as in key components, essential materials, and advanced manufacturing processes. In principle, “listing‑and‑taking‑the‑lead” projects adopt a lump‑sum funding system, implemented in accordance with the relevant lump‑sum policy, with expenditures managed under a negative‑list framework.

Guangdong has issued a document to accelerate the development of a modern pilot-scale platform system, fostering synergistic and mutually reinforcing advances in industry and technology.
On June 18, the Guangdong Provincial Government website released the “Opinions on Accelerating the Development of a Modern Pilot‑Scale Platform System to Promote Mutual Reinforcement Between Industry and Science and Technology.”
The “Implementation Opinions” comprise five key areas and nineteen specific measures, proposing that leading enterprises and “chain‑leader” offices in industrial chains take the lead in establishing pilot‑scale testing platforms, collaborate with upstream and downstream companies to develop technical protocols and service standards for pilot-scale testing, and focus on addressing common challenges in industrial pilot‑scale services. The document also supports technology‑leading enterprises in spearheading the establishment of specialized pilot‑scale testing service platforms, aligned with national and provincial strategic priorities and aimed at resolving critical, cross‑industry technological bottlenecks, thereby accelerating the effective commercialization and iterative application of major scientific and technological breakthroughs. Furthermore, it calls for state‑owned enterprises to strengthen the development of pilot‑scale testing service platforms and to take the lead in deploying pilot‑scale results in priority sectors. Finally, it encourages active efforts to attract central state‑owned enterprises to set up innovation centers or R&D institutions in Guangdong that offer pilot‑scale testing services.

Jiangsu: The integration and interactive operation of new-energy vehicles with the power grid have entered the stage of practical application.
Jiangsu Province recently demonstrated the coordinated reverse power discharge of 59 new-energy vehicles from multiple brands across various scenarios, marking the entry of new-energy vehicle–grid integration and interaction into the practical application phase and holding promise for further large-scale deployment.
Vehicle-to-grid (V2G) interaction refers to the exchange of energy and information between new-energy vehicles and the power grid via charging stations, enabling vehicle owners to charge during off-peak hours in an orderly manner and even feed electricity back to the grid, thereby earning financial benefits while helping to smooth out peak demand and fill valleys, thus supporting stable grid operations—a win-win outcome. Previously, the National Development and Reform Commission and several other departments issued implementation guidelines on strengthening the integration and interactive coordination between new-energy vehicles and the power grid, calling for vigorous efforts to foster a new industrial ecosystem centered on vehicle‑grid integration and interaction.

The State Administration for Market Regulation plans to issue the “Guidance on the Review of Horizontal Merger Transactions.”
On June 17, the website of the State Administration for Market Regulation published an announcement soliciting public comments on the “Guidance on the Review of Horizontal Merger Transactions (Draft for Comments),” with a deadline for feedback set for July 6.
The Guidelines comprise twelve chapters and eighty-seven articles, clarifying matters related to evidentiary materials, the relevant market, market share and market concentration, unilateral effects, coordination effects, potential competition, market entry, buyer power, efficiency, and other factors. They further specify that, when assessing whether a horizontal merger has or may have the effect of excluding or restricting competition, antitrust enforcement authorities shall primarily examine the following factors:
(1) The purpose of the concentration; (2) the market shares of the undertakings participating in the concentration and their degree of control over the relevant market; (3) the level of market concentration in the relevant market; (4) the impact of the concentration on market entry and technological progress; (5) the impact of the concentration on consumers and other relevant undertakings; (6) the impact of the concentration on national economic development; (7) any other factors that should be taken into account in assessing the impact on market competition.
Antitrust enforcement agencies, by analyzing the aforementioned factors, assess whether a concentration of undertakings will give rise to unilateral or coordinated effects, and thereby determine whether a horizontal merger has, or is likely to have, the effect of excluding or restricting competition.
Taxation
General Office of the State Council: Implement and refine tax preferential policies for venture capital offices and strengthen differentiated regulation.
On June 19, the Chinese Government Website issued the “Notice of the General Office of the State Council on Printing and Distributing the ‘Several Policy Measures for Promoting the High-Quality Development of Venture Capital,’” outlining five key initiatives.
First, foster a diversified ecosystem of venture capital investors. Accelerate the development of high‑quality venture capital offices and support the growth of specialized investment institutions. Second, broaden funding channels for venture capital. Encourage long-term capital to flow into venture capital, assist asset management entities in increasing their investments, and expand the pilot program for direct equity investments by financial asset investment companies. Third, strengthen government guidance and adopt differentiated regulatory approaches for venture capital. Continuously implement and refine tax incentives for venture capital enterprises. Put into effect tax‑support policies that encourage venture capital offices and angel investors to invest in seed‑stage and early‑stage technology‑focused companies, intensify outreach and advisory efforts, and continually enhance taxpayer services. Fourth, improve the exit mechanisms for venture capital investments. Fifth, optimize the market environment for venture capital.

Guangzhou: Eliminates unreasonable market access requirements related to enterprises’ tax contributions and other factors, and regulates improper competitive practices.
Recently, the Guangzhou Municipal Leading Group for Comprehensive Optimization of the Business Environment issued the “Guangzhou Three-Year Action Plan (2024–2026) for Building an International First-Class Business Environment in the Guangdong–Hong Kong–Macao Greater Bay Area,” outlining 24 reform measures across six key areas and a total of 107 priority tasks.
The Plan proposes to deepen the implementation of fair competition policies, launch pilot programs for centralized reviews of fair competition, and introduce measures for such centralized reviews. It also calls for targeted campaigns in key areas—such as tendering and government procurement—to address violations that undermine the development of a unified market, eliminate unreasonable entry requirements related to enterprise size, ownership structure, tax contributions, performance, qualifications, personnel, and premises, and regulate improper competitive practices and market interventions. Furthermore, the Plan outlines the full-scale rollout of a nationally standardized electronic tax bureau, offering more intelligent, personalized services, enabling “end-to-end online processing” for tax and fee-related matters, allowing individuals to handle high-frequency tax and fee issues via mobile apps, and ensuring that various tax and fee reduction and exemption policies are delivered swiftly and directly to eligible taxpayers.

Litigation & Arbitration
The Supreme People’s Procuratorate has released typical cases of crimes involving the abuse of addictive substances, including narcotic and psychotropic drugs.
On June 21, the website of the Supreme People’s Procuratorate issued the “Notice on the Issuance of Typical Cases Involving the Prosecution of Crimes Related to the Abuse of Addictive Substances Such as Narcotics and Psychotropic Drugs.”
This batch of typical cases comprises six matters, involving addictive substances such as psychotropic and narcotic drugs—including triazolam, etomidate, pethidine, and tramadol—presenting a diverse range of types. These cases have clarified the legal standards that procuratorial organs should apply when handling such matters. Given the covert methods employed by the suspects and the significant challenges in prosecuting and suppressing these offenses, the procuratorial organs have actively guided public security authorities in investigation and evidence collection, thoroughly uncovering unprosecuted crimes and offenders, and promptly initiating prosecution. While rigorously cracking down on these crimes, the procuratorial organs have also proactively engaged in social governance, issuing prosecutorial recommendations to address the mismanagement of anesthetic drugs in medical institutions and thereby plugging regulatory loopholes in the industry.

Five departments have jointly issued guidelines to punish die-hard “Taiwan independence” elements for crimes of secession and incitement to secession.
On June 21, the Supreme People’s Court published on its official website the “Opinions on Lawfully Punishing ‘Taiwan Independence’ Fugitives for the Crimes of Splitting the Country and Inciting National Division.”
The “Opinions” comprise 22 provisions across four sections, clearly defining the circumstances under which the crimes of secession and incitement to secession apply in cases involving “Taiwan independence,” and specifying the concrete criteria for such designations as “principal offender,” “serious offense,” and “active participation.” The “Opinions” further stipulate that those who collude with foreign entities or overseas institutions, organizations, or individuals to commit the crimes of secession or incitement to secession shall be punished more severely in accordance with Article 106 of the Criminal Law. Where recalcitrant “Taiwan independence” elements engage in criminal acts of secession or incitement to secession that are either continuous or ongoing, the statute of limitations shall commence from the date such criminal conduct ceases. Moreover, once a case has been filed for investigation by public security organs or state security organs, or accepted by the people’s court, any attempt to evade investigation or trial shall not be subject to the limitation period for prosecution.

The Ministry of Justice has released five typical cases of administrative reconsideration involving enterprises.
On June 19, the Ministry of Justice website published a batch of typical administrative reconsideration cases involving enterprises.
In Case 2, the applicant, a certain company, acquired a state‑owned construction land parcel that fell within the scope of a “certain local ecological plan,” rendering it unable to commence construction by the date stipulated in the contract. Subsequently, the land was removed from the scope of that ecological plan, and the applicant proceeded with preparing the necessary planning and construction approval documents. On October 12, 2020, the Natural Resources and Planning Bureau of a certain city issued a “Certificate of Idle Land,” determining that the land parcel acquired by the applicant constituted idle land because more than one year had elapsed since the contractually agreed commencement date without any development or construction. Thereafter, the same bureau decided to impose an idle‑land fee of RMB 11.976 million. Dissatisfied with this decision, the applicant filed an administrative reconsideration request with the Provincial People’s Government. The provincial government held that the competent natural resources authority had mechanically applied the statutory provision, arbitrarily taking the contractually agreed commencement date as the official start date for development and, on that basis, concluded that the enterprise had committed an act of idle land, thereby resulting in an inaccurate determination of idle land. Accordingly, the provincial government revoked the respondent’s decision to levy the idle‑land fee, effectively safeguarding the lawful rights and interests of the enterprise and further standardizing law‑enforcement practices involving businesses.

The Ministry of Justice has introduced 18 measures to strengthen oversight of administrative law enforcement involving enterprises.
Recently, the Ministry of Justice, in collaboration with the National Development and Reform Commission and the All-China Federation of Industry and Commerce, jointly issued the “Special Action Plan for Administrative Review to Safeguard High-Quality Enterprise Development.”
The special campaign has introduced 18 specific measures across five key areas to ensure that administrative reconsideration supports the high-quality development of enterprises: First, streamline channels for enterprises to file administrative reconsideration applications. A dedicated portal for enterprise applications has been launched on the national platform for administrative reconsideration and litigation, accompanied by targeted outreach and awareness‑raising activities. Second, strengthen efforts to achieve substantive resolution of administrative disputes involving enterprises. Third, intensify oversight of administrative enforcement actions affecting businesses. This includes adjudicating, in accordance with the law, administrative reconsideration cases challenging fines, addressing persistent issues such as disproportionate penalties for minor infractions, substituting fines for effective regulation, and using fines to boost revenue, and bolstering scrutiny of government misconduct that undermines trust. Fourth, leverage administrative reconsideration to prevent administrative disputes involving enterprises. Fifth, enhance monitoring and evaluation of administrative reconsideration cases related to businesses.

The Supreme People’s Court has released the 2023 National Typical Cases in Maritime Adjudication.
Recently, the Supreme People’s Court released the 2023 list of typical cases in maritime adjudication nationwide, highlighting the crucial role of maritime justice in resolving international maritime disputes, upholding shipping order, and fostering the development of the marine economy.
This batch of typical cases comprises five matters. In Case 3, the Chinese Maritime Court duly exercised its jurisdiction to hear a ship collision liability dispute arising outside China’s territorial waters and dismissed the parties’ objection to jurisdiction on the ground of “inconvenience of the court,” thereby providing a reference case for the accurate application of the newly added provisions in the Civil Procedure Law. In Case 4, the court accurately interpreted and applied the 1989 International Convention on Salvage and the relevant provisions of China’s Maritime Law concerning maritime salvage, further clarifying the criteria for reviewing the statutory agency or emergency representation authority of a ship’s master or shipowner when entering into a salvage contract. This approach both underscores support for the master’s timely decision to seek assistance and guides the master to exercise such rights with due care.

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