JC Master Legal News Issue 1096

Key Takeaways for This Issue
The Beijing Stock Exchange’s corporate bond market has opened.
On January 15, 2024, the Beijing Stock Exchange’s corporate bond market opened, with the first batch of corporate bonds listed and traded. Wang Jianjun, a member of the CPC Committee and Vice Chairman of the China Securities Regulatory Commission, attended the opening ceremony and delivered a speech.
The Beijing Stock Exchange and the National Equities Exchange and Quotations Company hosted a 2024 training program for accounting offices newly engaged in securities services.
To strengthen day-to-day oversight of accounting offices newly engaged in securities‑related services, help these newly licensed offices better understand regulatory requirements, and promote the enhancement of their professional standards, the Beijing Stock Exchange and the National Equities Exchange and Quotations Company, under the guidance of the Accounting Department of the China Securities Regulatory Commission, hosted a special training session for newly licensed offices in Beijing on January 15, 2024, and invited selected new entrants to participate in a roundtable discussion.
The State Council has amended three financial administrative regulations and issued a State Council decision.
On January 18, the Chinese Government Website published the “Decision of the State Council on Amending Certain Administrative Regulations and State Council Decisions,” which took effect upon its promulgation. This round of amendments primarily responds to the institutional requirements arising from the reform of Party and state institutions.
The Supreme People’s Court has issued a judicial interpretation on disputes involving betrothal gifts, refining the rules governing the return of such gifts.
On January 18, the Supreme People’s Court website published the “Provisions on Several Issues Concerning the Application of Law in the Trial of Disputes Involving Betrothal Gifts,” which will take effect on February 1.
Finance & Capital Markets
The Beijing Stock Exchange’s corporate bond market has opened.
On January 15, 2024, the Beijing Stock Exchange’s corporate bond market opened, with the first batch of corporate bonds listed and traded. Wang Jianjun, a member of the CPC Committee and Vice Chairman of the China Securities Regulatory Commission, attended the opening ceremony and delivered a speech.
The establishment of the Beijing Stock Exchange is a major decision personally announced by General Secretary Xi Jinping. Launching the development of the credit bond market at the Beijing Stock Exchange is an important measure to thoroughly implement the spirit of the 20th National Congress of the Communist Party of China and the Central Financial Work Conference, resolutely carry out the CPC Central Committee and the State Council’s decisions and arrangements on institutional reform, and comprehensively advance the high-quality development of the Beijing Stock Exchange. This initiative is of great significance for further deepening supply-side structural reform in the financial sector, improving the multi-tiered capital market system, enhancing the functions of the exchange‑traded bond market, and elevating the bond market’s capacity and effectiveness in serving the real economy.
Going forward, the China Securities Regulatory Commission will remain guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the spirit of the Central Financial Work Conference and the Central Economic Work Conference, and work in concert with all relevant parties to provide robust support for the high-quality development of the Beijing Stock Exchange. It will steadily advance the development of the Beijing Stock Exchange’s bond market, strengthen regulatory oversight and risk prevention in the exchange‑listed bond market, deepen the functionality of the bond market, better serve the high‑quality development of the real economy, and make even greater contributions to building a modern capital market with Chinese characteristics and to fostering high‑quality development.

The first batch of buyback‑linked index ETFs is on the way, with five public fund managers having filed applications.
On the evening of January 17, according to information posted on the CSRC’s official website, five public fund management offices—E Fund Management, China Asset Management, Bosera Fund Management, Invesco Great Wall Fund Management, and Penghua Fund Management—filed applications on the same day for the first batch of share-repurchase‑linked index ETFs (exchange-traded open-ended index funds).
Specifically, three public fund managers—Boshi Fund, E Fund Management, and China Asset Management—have filed applications for CSI Repo Value Strategy ETFs, while two others—Invesco Great Wall Fund and Penghua Fund—have submitted applications for CSI Repo ETFs, which track the CSI Repo Value Strategy Index and the CSI Repo Index, respectively.
According to the official website of CSI Indexes, on October 17, 2023, four repurchase‑related indices were officially launched: the CSI Repurchase Index, the CSI Repurchase Value Strategy Index, the CSI Repurchase Quality Strategy Index, and the SSE Repurchase Index. Among these, the CSI Repurchase Value Strategy Index selects 50 listed company securities with relatively low valuations and favorable earnings prospects from among those that have conducted share repurchases, thereby reflecting the overall performance of such securities. Meanwhile, the CSI Repurchase Index comprises 100 listed company securities with high repurchase ratios, aiming to capture the aggregate performance of securities characterized by elevated repurchase activity.
An official from Bosera Fund stated: “Publicly listed companies undertake share buybacks for four primary purposes: stabilizing stock prices, highlighting intrinsic value, implementing equity‑based incentives, and consolidating control. Since 2018, both the total value and the number of share repurchases in the A‑share market have been on the rise. Historically, buyback waves have typically emerged when the market is at relatively low levels, underscoring the counter‑cyclical nature of A‑share buybacks, which tend to be concentrated during periods of market weakness.”
Share buybacks have also received encouragement and support from regulators. In August 2023, the China Securities Regulatory Commission (CSRC) unveiled a comprehensive package of policies and measures aimed at “activating the capital market and boosting investor confidence,” and, in terms of enhancing the investment appeal of listed companies, stated: “We will revise the rules governing share repurchases, relax relevant conditions, and support listed companies in conducting share buybacks.” In December 2023, the CSRC revised and issued the “Rules on Share Repurchases by Listed Companies,” further improving the convenience of share repurchases and strengthening the mechanisms for overseeing such activities.
At a press conference held by the China Securities Regulatory Commission on January 12, 2024, a relevant official stated that, over the past two months since November 2023, listed companies have become more proactive in share buybacks and additional share purchases, continuously sending positive signals to the market. During this period, a total of 309 companies listed on the Shanghai and Shenzhen stock exchanges disclosed new buyback and增持 plans, with aggregate upper limits totaling RMB 42.8 billion—representing year-on-year increases of 189% in the number of companies and 85% in the total amount. According to the implementation data, 514 companies carried out actual buybacks and additional share purchases worth more than RMB 27.7 billion, with the number of companies and the total value of transactions up 46% and 71%, respectively, compared with the same period last year.
Meanwhile, listed companies are showing strong enthusiasm for share buybacks. Recently, several more listed offices have issued announcements related to buybacks, covering buyback proposals, repurchase plans, and progress in implementation.
According to a research report by Huafu Securities, as the policy framework continues to improve and the importance of share buybacks grows, an increasing number of A-share listed companies are expected to actively and appropriately utilize share‑repurchase mechanisms. This, in turn, will help bolster investor confidence, promote the stable functioning of the capital market, and lay a solid foundation for establishing long-term institutional mechanisms in the capital market.
“Compared with cash dividends, share buybacks can reduce a company’s outstanding share count, thereby boosting earnings per share and return on equity, which to some extent enhances the valuation of listed companies. At the same time, share repurchases send a signal to the market that the company’s stock is undervalued, bolstering investor confidence and providing strong support for current valuation levels,” added a representative from Bosera Fund.
Speaking about the investment appeal of the buyback‑focused index ETFs, a representative from Bosera Fund stated: “In addition to their undervaluation and high ROE (return on equity), stocks subject to share buybacks in the A‑share market also exhibit robust growth in both revenue and net profit attributable to shareholders. While offering strong value, they also demonstrate a degree of growth potential, making them attractive investments.”

The compensation payments in China’s first securities class-action settlement have been fully disbursed.
Recently, the Shanghai Financial Court, through a securities registration and clearing institution, disbursed compensation totaling over RMB 280 million to investors in the Zeda Yisheng class-action lawsuit, and the payments have now been fully distributed.
The special representative lawsuit involving Zeda Yisheng was the first of its kind nationwide to concern a company listed on the STAR Market, and also marked China’s first settlement in a securities class-action case. Following the entry into force of the civil mediation agreement, all defendants fulfilled their obligations as agreed. The Shanghai Financial Court remitted the compensation payments to the Shanghai Branch of China Securities Depository & Clearing Corporation Limited, which then disbursed the funds to the securities accounts of the individual plaintiffs through an automated allocation mechanism.
As the first successful attempt at settling a securities class-action lawsuit, the Zeda Yisheng special representative litigation was filed in April 2023 and concluded with full payment of compensation in less than nine months, fully demonstrating the fairness, efficiency, and convenience of financial justice in safeguarding investors’ legitimate rights and interests. The Shanghai Financial Court will uphold the principles of fairness and efficiency, continue to advance the substantive resolution of securities-related collective disputes, and provide more replicable and scalable case studies to uphold and further develop the “Fengqiao Experience” for the new era.

Another M&A and restructuring case—three key regulatory trends deserve close attention.
On January 17, AsiaInfo Security disclosed a preliminary plan for the acquisition of significant assets, marking another M&A and restructuring deal announced on the STAR Market in recent days, following Puyuan Precision’s announcement on January 9 of its plan to acquire assets through the issuance of shares.
It is worth noting that, since the full registration-based system was implemented in 2023, companies on the STAR Market—including DEMA Technology, Lingzhi Software, and Juguang Technology—have undertaken mergers and restructurings. With the introduction of a series of new policies aimed at market‑oriented reforms in M&A and restructuring, trading activity in the STAR Market’s M&A market has begun to pick up.
With frequent policy support, industrial M&A on the STAR Market may be entering a strategic window of opportunity.
Mergers and acquisitions, along with corporate restructuring, are crucial mechanisms for science and technology enterprises to accelerate technological breakthroughs, optimize resource allocation, and empower innovation.
Since 2023, the China Securities Regulatory Commission has repeatedly voiced its support for high-quality industrial M&A, introducing policies such as rules on targeted convertible bond‑based restructuring and extensions to the validity period of financial information. It has also explicitly proposed establishing a “green channel” for the merger and reorganization of technology offices that have achieved breakthroughs in critical core technologies, appropriately enhancing valuation flexibility for light‑asset tech companies, and refining and improving the “small‑amount, fast‑track” review mechanism for M&A transactions—demonstrating an open and inclusive regulatory stance.
Regulatory authorities have also engaged proactively with all market participants, offering open‑door services to help companies fully leverage new policies and regulations. Throughout 2023, the STAR Market hosted a total of four symposiums on mergers and acquisitions and restructuring, during which the Shanghai Stock Exchange convened representatives from investment institutions, securities offices, and listed companies to discuss trends in M&A and restructuring within the science and technology innovation sector, the latest regulatory policies, and related suggestions. Together, they explored ways to further invigorate the M&A and restructuring market and to better harness the STAR Market’s role as a “testing ground.”
Previously, numerous misunderstandings in the market regarding the rules and policies governing mergers and reorganizations in the science and technology innovation sector were specifically clarified at the symposium.
For example, following the full implementation of the registration-based system, the rules governing the STAR Market’s criteria for M&A and restructuring targets have already diverged from the IPO standards. Nevertheless, some market participants mistakenly believe that such targets must still meet the quantitative requirements for IPO‑related sci‑tech innovation attributes.
Relevant regulators hold that M&A targets of STAR Market‑listed companies are not subject to the IPO‑stage criteria for assessing sci‑tech innovation attributes; instead, the focus is on ensuring that the target assets align with the STAR Market’s positioning—namely, that their respective industries either belong to the same sector as, or are upstream or downstream of, those of STAR Market‑listed offices, and that they generate synergies with the listed company’s core business.
Furthermore, with respect to performance commitments, the current regulations only mandate their inclusion in cases where assets are acquired from controlling shareholders, actual controllers, or their controlled affiliates, and where such acquisitions constitute a restructuring‑based listing and are valued using methods based on future earnings expectations. Beyond these scenarios, performance commitments in relevant cases are typically market‑driven arrangements between the merging parties, rather than requirements imposed by regulators.
In addition to the aforementioned symposium, the Shanghai Stock Exchange has recently conducted two specialized training sessions on mergers and acquisitions and restructuring for companies listed on the STAR Market, reaching approximately 200 listed companies.
The Shanghai Stock Exchange will soon conduct specialized training for independent financial advisors on M&A and restructuring activities involving STAR Market‑listed companies, with the aim of encouraging professional market institutions to provide high‑quality M&A and restructuring services to listed offices.
The regulatory guidance for M&A in the science and technology innovation sector has become clearer.
Since its launch, the STAR Market has disclosed more than 350 asset transactions, with a total transaction value of approximately RMB 57.8 billion. These cases already highlight the regulators’ clear policy orientation: their tolerance for and precision in guiding industrial M&A activities within the science and technology innovation sector are steadily increasing.
First, the focus is on the target asset’s “going‑concern capability,” with an emphasis on its technological content.
In December 2022, Haoyuan Pharmaceutical issued shares to acquire assets. Although the target company’s profits were modest during the reporting period, its core R&D team has been deeply engaged in the CMC field for 18 years and operates multiple GMP‑compliant kilogram‑scale API laboratories as well as five independent Class D cleanrooms for formulation production. The transaction is expected to enable the listed company to secure critical technologies and expand its footprint in the innovative drug sector, and it has ultimately been approved and implemented.
Under the comprehensive registration-based system, revisions to the restructuring rules have shifted the focus from the “sustained profitability” of target assets to their “sustained operating capability.” As evidenced by relevant implementation cases, in line with the characteristics of science and technology innovation enterprises, profitability is no longer a mandatory requirement for M&A targets on the STAR Market.
Secondly, respect for market‑driven commercial judgment and adopt a more accommodating approach to valuation and pricing.
High-tech enterprises typically feature substantial R&D investment, strong growth potential, and, in certain sectors, a light‑asset business model. In July 2022, during Xianhui Technology’s major asset acquisition transaction, the target company’s net asset value was appraised at RMB 1.64 billion using the income approach, reflecting a valuation premium of 504.09%. This notably high premium primarily stems from the target company’s long‑standing position as a supplier deeply embedded in the power‑battery structural components sector, with a robust foundation of technological innovation and prospects for sustained revenue growth. With respect to valuation premiums for light‑asset, technology‑driven offices, regulators have adopted a more accommodating stance. For market‑oriented M&A transactions that comprehensively address key aspects—such as the enterprise’s development stage, industry characteristics, the rationale and methodology underlying the valuation, and the fairness of the pricing—the regulatory framework adheres to an information‑disclosure‑centric review philosophy, placing no rigid constraints on valuation methodologies and refraining from arbitrary intervention in valuation outcomes.
Currently, among the seven M&A and restructuring transactions completed on the STAR Market, six employed the income approach and the asset‑based approach, while one used both the market approach and the income approach, with an average premium of 417.23%.
In addition, we encourage industry mergers and acquisitions that generate synergies and respect the recognition of a company’s “intangible assets.”
In the first major asset‑restructuring deal on the STAR Market in June 2020—Hua Xing Yuan Chuang’s acquisition of Suzhou Oulitong—the preliminary valuation thoroughly identified the target company’s intangible assets, including patents and non‑patent technologies, thereby reducing the amount of goodwill recognized and laying a solid foundation for the listed company to operate with a leaner balance sheet. Following the merger, Hua Xing Yuan Chuang gained access to the target’s industrial foothold, technological reserves, and sales channels in the assembly and testing of consumer electronics such as wearable devices, driving sustained growth in operating performance; moreover, the acquired assets have already surpassed their performance commitments.
Regulatory authorities have begun focusing on key areas such as “hard‑card‑replacement” transactions, guiding the launch of more benchmark cases and encouraging companies to leverage a mix of payment instruments—including share issuances and targeted convertible bonds—to acquire high‑quality assets. They are also adopting a more accommodating stance toward transaction structures that employ diversified valuation approaches like the market‑based method, target acquisitions of high‑quality yet unprofitable targets, and innovative performance‑commitment metrics.
In the future, more success stories are likely to convey the principles of review and the standards of regulatory oversight, fostering in the market a fresh set of expectations and a shared understanding regarding industrial M&A activities involving science and technology enterprises. This will further invigorate market dynamism and jointly promote the high-quality development of companies listed on the STAR Market.

Deliver the first lesson in regulation and ensure the first hurdle of professional practice is properly cleared.
— The Beijing Stock Exchange and the National Equities Exchange and Quotations Company hosted a 2024 training program for accounting offices newly engaged in securities services.
To strengthen the day-to-day oversight of accounting offices newly engaged in securities‑related services (hereinafter referred to as “newly licensed offices”), help them gain a deeper understanding of regulatory requirements, and promote the enhancement of their professional standards, the Beijing Stock Exchange and the National Equities Exchange and Quotations Company, under the guidance of the Accounting Department of the China Securities Regulatory Commission, hosted a specialized training session for newly licensed offices in Beijing on January 15, 2024, and invited selected new offices to participate in a roundtable discussion. More than 140 senior partners and quality‑management partners from over 60 newly licensed offices attended the training.
This training session is closely aligned with the latest rules and guidelines governing securities‑related services at accounting offices. Experts from the Accounting Department and the Inspection Corps of the China Securities Regulatory Commission, as well as from the Chinese Institute of Certified Public Accountants, provided policy interpretations, analyzed professional responsibilities, and presented case studies to help newly licensed offices adopt a development philosophy of “standardized operations and quality first,” while urging them to exercise due diligence and fulfill their professional duties, thereby better fulfilling their role as gatekeepers of the capital market.
First, we laid the groundwork and clarified the requirements. We provided an in-depth analysis of the key provisions of the newly revised “Compliance Manual for Accounting Offices Engaged in Securities Services,” elucidating the fundamental requirements for accounting offices undertaking securities‑related services, thereby offering valuable guidance to newly licensed offices seeking to deliver high‑quality professional services.
Second, establish clear standards and enhance quality. This involves analyzing the newly drafted “Guidance on the Application of Regulatory Rules—Audit Category No. 2,” and, drawing on relevant case studies, emphasizing the professional judgment that practitioners should maintain in their work. At the same time, by introducing the relevant standards for quality management in accounting offices, it provides guidance to newly licensed offices to strengthen their quality‑management systems and promote improvements in audit quality.
Third, uphold the bottom line and be fully aware of one’s responsibilities. This session explains the administrative liabilities of accounting offices in securities-related matters under the new circumstances, conveys regulatory requirements, and strengthens risk‑management and compliance awareness among personnel at newly licensed offices.
Going forward, the Beijing Stock Exchange and the National Equities Exchange and Quotations Company will, under the guidance of the relevant departments of the China Securities Regulatory Commission, continue to strengthen oversight of the professional practices of accounting offices and provide ongoing professional training, thereby enhancing the quality of financial information disclosure by listed and over-the-counter companies and laying a solid foundation for their high-quality development.

Commercial & Corporate
The State Administration for Market Regulation has issued regulations to address the challenge of companies being fraudulently registered.
To effectively prevent and investigate illegal acts of impersonating corporate registration, address the challenge of unauthorized registrations in which enterprises are fraudulently registered, strengthen penalties for those responsible for submitting false documents, accelerate the establishment of a market order based on integrity and compliance, and continuously improve the business environment, the State Administration for Market Regulation recently issued the Regulations on Preventing and Investigating Illegal Acts of Impersonating Corporate Registration (hereinafter referred to as the “Regulations”), which will come into force on March 15, 2024.
The Regulations stipulate that a comprehensive, end-to-end prevention and control approach shall be adopted, with lawful and equal protection afforded to the legitimate rights and interests of all types of business entities. In response to the characteristics of counterfeit‑enterprise violations—namely, their high degree of concealment, rapid spread, and significant social impact—the Regulations introduce a series of institutional measures, including strengthening identity verification, enhancing inter‑agency collaboration, implementing information‑based cross‑checking and validation, refining procedures for revoking registrations, refusing registration of enterprises already under investigation in accordance with the law, and imposing severe penalties on illegal practices by intermediary agencies. Addressing the challenges in practice—namely, the difficulty and high cost of appraising and verifying acts of registering counterfeit enterprises—the Regulations clarify that registration authorities may, based on expert opinions issued by legally qualified institutions or written opinions from relevant departments, lawfully impose administrative penalties or revoke enterprise registrations. Furthermore, the Regulations strictly regulate enterprise registration agency activities, requiring intermediary agencies to clearly disclose their agency status when handling registration matters; prohibiting them from using improper means to submit false information or materials; and forbidding them from maliciously filing large numbers of enterprise registration applications for the purpose of resale and profit, thereby harming public interests or disrupting public order. For cases where false materials are submitted or other fraudulent means are employed to conceal material facts in obtaining enterprise registration, the registration authority shall, in accordance with the law, order corrective action, confiscate unlawful gains, and impose fines; the directly responsible individuals shall be barred from reapplying for enterprise registration for three years and shall be listed, as required by law, on the Market Supervision and Administration’s List of Seriously Dishonest Entities.

Promoting the deepening of state-owned enterprise reform, the new Company Law includes a dedicated chapter to refine provisions governing state-funded companies.
The newly revised Company Law of the People’s Republic of China (hereinafter referred to as the New Company Law) will come into effect on July 1, 2024. Notably, the New Company Law establishes a dedicated chapter—Chapter VII—on “Special Provisions for the Organizational Structure of State‑Invested Companies,” thereby refining the relevant regulations governing such entities and attracting widespread attention.
State-owned enterprise reform has yielded fruitful results.
Article 1 of the new Company Law stipulates that, in order to regulate the organization and conduct of companies, protect the legitimate rights and interests of companies, shareholders, employees, and creditors, improve the modern enterprise system with Chinese characteristics, promote the spirit of entrepreneurship, safeguard socio-economic order, and foster the development of the socialist market economy, this Law is enacted in accordance with the Constitution.
Article 168 of the New Company Law stipulates that, for the purposes of this Law, “state-funded companies” refer to wholly state-owned enterprises and state-capital-controlled companies, including limited liability companies and joint-stock companies in which the state holds an investment.
“This aligns with the current progress of state‑owned enterprise (SOE) reform and reflects the need to deepen, elevate, and further refine the modern enterprise system with Chinese characteristics. The ‘1+N’ policy framework for SOE reform has now reached maturity, while the targeted initiatives and the three‑year action plan have yielded a wealth of experience and tangible results. These achievements must be codified into law and used to drive the next phase of deeper, more comprehensive SOE reform,” said Zhu Changming, partner at Sunshine Times Law Office and head of the SOE Mixed‑Ownership Reform Center. He added that the modern enterprise system with Chinese characteristics is now fully established; the new Company Law should fully incorporate these developments and provide robust legal safeguards, addressing existing gaps in the rule of law and ensuring that enterprises operate in line with genuine market‑based mechanisms.
Wu Gangliang, a researcher at the China Association for Research on Enterprise Reform and Development, likewise argues that, following years of equity‑diversification and mixed‑ownership reforms, some corporate groups are no longer structured as wholly state‑owned entities. Specifically, some have adopted a “central‑local cooperation” model—such as China Southern Airlines Group and China Eastern Airlines Group; others are newly established central SOEs, like China Rare Earth Group and China Logistics Group; still others are state‑owned banks that have undergone comprehensive shareholding reform and gone public; and yet others are central enterprises in which 10% of shares have been transferred to the National Council for Social Security Fund. Once a formerly wholly state‑owned company undergoes reform and becomes an equity‑diversified entity, the special regulations previously applicable to such wholly state‑owned offices no longer apply, potentially leaving them outside the scope of those provisions. Accordingly, the revised Company Law has introduced the concept of a “state‑funded enterprise,” extending the reach of these special rules to companies controlled by state capital, regardless of whether they are joint‑stock or limited‑liability companies. This new provision in the revised Company Law aligns with the evolving realities of SOE reform. Furthermore, Wu Gangliang maintains that the term “state‑funded enterprise” refers specifically to first‑tier subsidiaries; mixed‑ownership reforms and equity diversification at the subsidiary level have long since become the norm, and the relevant regulations governing enterprises funded by state‑funded entities can simply be applied.
State-funded companies stand out with notable strengths.
The new Company Law has refined the provisions governing state‑invested companies, which is regarded as a major highlight of this revision.
“The new Company Law dedicates an entire chapter to regulating state‑invested companies, thereby legally defining their institutional framework,” said Zhu Changming. “First, state‑invested companies are those in which the State Council or local people’s governments, acting on behalf of the state, exercise the duties of investors in accordance with the law—these constitute first‑tier entities. Such companies include wholly state‑owned enterprises and state‑controlled corporations, encompassing both limited liability companies and joint-stock companies funded by the state, thus providing a legal foundation for future central–local cooperation. Moreover, the Law makes specific provisions only for the organizational structure of state‑invested companies, while subsidiaries established by these companies remain subject to the other provisions of the Company Law.”
“This will provide a legal foundation for the centralized oversight of state-owned assets going forward,” Zhu Changming added. Centralized oversight of commercially operated state-owned assets is the direction of state‑owned asset reform. At present, in addition to the state‑owned asset supervision and administration commissions at all levels, the fiscal authorities and numerous ministries and commissions also oversee state‑owned enterprises. The new Company Law explicitly stipulates that the State Council or local people’s governments may authorize state‑owned asset supervision and administration institutions or other departments and agencies to exercise the duties of investors on behalf of their respective governments with respect to state‑funded companies, thereby providing a legal basis for the future centralized oversight of commercially operated state‑owned assets.
Hu Chi, a researcher at the Research Center of the State-owned Assets Supervision and Administration Commission of the State Council, believes that the new Company Law introduces the concept of “state-funded companies,” which represents a key highlight of this revision. The introduction of this concept primarily reflects the outcomes of state‑owned enterprise reforms over recent years: in mixed‑ownership enterprises, a large number of entities are no longer wholly owned by the state, making the previous definition inadequate to encompass all state‑owned enterprises. Moreover, the new Company Law includes specific provisions on the investors of state‑funded companies and on Party building, making it more comprehensive than its predecessor.
Zhu Changming believes that the new Company Law further refines the corporate governance framework of state‑invested enterprises, notably by explicitly establishing audit committees within boards of directors. At present, all wholly state‑owned companies have already abolished their supervisory boards; the new law likewise codifies, at the statutory level, that limited liability companies and joint‑stock companies may establish board‑level audit committees to exercise the functions of the supervisory board. Moreover, it introduces a separate provision for wholly state‑owned enterprises: where an audit committee composed of directors is set up within the board of directors to perform the duties of the supervisory board, no separate supervisory board or supervisors are required. By vesting the board’s audit committee with oversight responsibilities, the new Company Law adopts a dual‑track approach—governing both decision‑making and oversight—which will significantly strengthen supervisory capacity.
Providing legal support for risk prevention and control.
It is worth noting that Article 177 of the new Company Law stipulates that state‑invested companies shall, in accordance with the law, establish and improve internal supervision and management and risk‑control systems, and strengthen internal compliance management.
Wu Gangliang argues that this provision effectively establishes a comprehensive oversight framework integrating internal control, risk management, and compliance management within state-owned enterprises. Operating in accordance with the law and maintaining robust compliance are essential requirements for mitigating risks and building world-class companies. In 2022, the State-owned Assets Supervision and Administration Commission of the State Council issued the “Measures for Compliance Management of Central Enterprises,” underscoring that strengthening compliance management has become one of the key priorities in current SOE reform. In practice, internal control, risk management, and compliance management systems often overlap, necessitating coordinated efforts to integrate relevant functions and establish unified management platforms. At present, state-owned enterprises are seizing the opportunity presented by enhanced compliance management to explore tailored models that strengthen internal controls, prevent risks, and promote compliance—each suited to their specific circumstances. From a legal perspective, Chapter VII of the new Company Law, titled “Special Provisions on the Organizational Structure of State-funded Companies,” applies only to first-tier state-owned enterprises (holding groups), while their subsidiaries remain subject to the other provisions of the new Company Law. However, in recent years, as state‑owned assets, operations, and personnel have increasingly extended down the corporate hierarchy, state capital has exhibited characteristics of “penetrative” governance. Consequently, subsidiaries at all levels have adopted governance frameworks modeled on those of first-tier entities, including procedures requiring prior approval by Party organizations, the appointment of employee directors, a majority of independent directors, and the principle of separating the roles of chairman and general manager, among other measures.
In Hu Chi’s view, this is the result of years of state‑owned enterprise reform—namely, the strengthening of corporate governance, internal oversight, and risk management—and it is reflected in the new Company Law, which has been refined and supplemented to better address these developments.
Zhu Changming likewise believes that the new Company Law explicitly stipulates that state‑invested enterprises must, in accordance with the law, establish and improve internal supervision and management as well as risk‑control systems and strengthen internal compliance management. This elevates risk prevention to a statutory requirement, providing legal support for state‑owned enterprises to “strengthen internal controls, prevent risks, and promote compliance.”
Liu Junhai, a professor at the Law School of Renmin University of China and a member of the Advisory Group on Corporate Law Reform under the Legislative Affairs Commission of the Standing Committee of the National People’s Congress, stated: “Emphasizing that state‑invested enterprises must improve their internal supervision, management, and risk‑control systems and strengthen internal compliance management is ultimately aimed at deepening state‑owned enterprise reform, enhancing corporate governance, and ensuring the enduring success of these companies—so as to enable state‑owned enterprises to become ‘century‑old institutions.’”

The new Measures for the Administration of Financial Leasing Companies are now open for public comment, with a focus on addressing existing issues and strengthening regulatory oversight.
To thoroughly implement the spirit of the Central Financial Work Conference, comprehensively strengthen financial regulation, optimize financial services, and guard against financial risks, the National Administration of Financial Regulation recently revised the “Administrative Measures for Financial Leasing Companies” (hereinafter referred to as the “Measures”), originally issued in 2014, and has formulated the “Administrative Measures for Financial Leasing Companies (Draft for Public Comment)” (hereinafter referred to as the “Draft for Public Comment”), which is now being made public for public consultation.
After a decade, the evolving economic and financial landscape has rendered the existing Measures inadequate to meet the needs of high-quality development and effective regulation in the financial leasing sector. Moreover, in recent years, regulatory authorities have continuously refined their supervisory frameworks governing corporate governance, equity management, and related-party transaction oversight, making it imperative to revise and improve the Measures without further delay.
The Draft for Public Comment, guided by the principles of returning to the essence of the leasing business, maintaining stringent entry standards and regulatory requirements, and prioritizing risk prevention as the guiding principle of financial work, undertakes a comprehensive revision of the Measures. The Draft comprises 9 chapters and 96 articles, with key provisions covering company establishment and amendments, scope of business, corporate governance, capital and risk management, operational rules, supervisory oversight, as well as risk resolution and market exit.
Adhere to a problem-oriented approach and strengthen oversight.
Professor Qiang Li of Northwest University of Political Science and Law stated that, following the convening of the Central Financial Work Conference, regulatory authorities have markedly accelerated oversight of non‑bank financial institutions. As risk prevention remains a perennial priority for financial offices, regulatory measures have incorporated multifaceted institutional designs to address this issue. These entities share the common characteristic of not accepting public deposits; they can meet the financing needs of diverse groups and thus serve a legitimate purpose, yet they must be subject to appropriate institutional constraints.
According to the Draft for Public Comments, a financial leasing company is a non-bank financial institution established with the approval of the National Administration of Financial Regulation, whose primary business is financial leasing. In this context, financial leasing is characterized by the financial leasing company, acting as the lessor, purchasing leased assets from a seller based on the lessee’s selection of both the seller and the leased asset, and then making those assets available for the lessee’s use in exchange for rental payments. At the same time, ownership of the leased asset transfers from the seller to the lessor.
The Financial Regulatory Administration has revised its Measures, drawing on regulatory experience and, above all, addressing the issues that have surfaced in practice, thereby maintaining a problem‑oriented approach. According to Liu Xiaoyu, a senior partner at Beijing Zhongyin Law Office, in recent years, numerous financial leasing companies have been issued fines amounting to millions of yuan, with both the total penalties and the range of violations expanding. The grounds for sanctions have become increasingly diverse, primarily involving such matters as failing to acquire ownership of leased assets or holding defective title, non‑compliance of leased assets with regulatory requirements, inadequate oversight and monitoring of the use of lease‑financing funds, insufficient due diligence in leasing transactions, weak post‑lease management, violations related to related-party transactions, unauthorized financing of government projects, shortcomings in anti‑money‑laundering controls, non‑compliant reporting of statistical data, and unlawful engagement in fixed‑return investment activities—each of which has been a key focus of regulators in recent years.
The Draft for Soliciting Opinions revises the Measures precisely in light of the aforementioned issues.
Increase the shareholding ratio of the principal sponsor.
In terms of company establishment, the most notable feature is the revision and refinement of the principal promoter system. According to Liu Xiaoyu, building on the three categories of promoters established in the Measures, the draft for public comment adds two additional categories: state‑owned financial capital investment and management companies, and large overseas manufacturing enterprises.
In addition to the eligibility requirements, Liu Xiaoyu stated that the draft for public comment also raises the threshold for key sponsors in terms of total assets and operating revenue. Specifically, the requirement for total assets has been increased from “total assets at year-end not less than RMB 80 billion or its equivalent in freely convertible currency” as stipulated in the existing Measures, to “total assets at the end of the most recent fiscal year not less than RMB 800 billion or its equivalent in freely convertible currency.” Similarly, the minimum registered capital for establishing a financial leasing company has been raised from “RMB 100 million or its equivalent in freely convertible currency” under the previous Measures to “RMB 1 billion or its equivalent in freely convertible currency.” Furthermore, the shareholding ratio requirement for key sponsors has been tightened from no less than 30% under the previous Measures to no less than 51%.
Significantly raising the asset‑holding ratio of the principal sponsor, in Liu Xiaoyu’s view, helps to clearly identify major shareholders and de facto controllers, thereby mitigating risks such as shareholders circumventing regulatory oversight, engaging in improper manipulation, or even siphoning off financial leasing companies through nominee shareholding or concealment of concerted‑action relationships. It also strengthens shareholder accountability, preventing governance gridlock arising from dispersed equity, as well as situations where, following the emergence of risks, shareholders pass the buck and shirk responsibility, leaving risk‑resolution obligations unresolved.
Raising the minimum registered capital requirement for financial leasing companies aims to enhance their risk‑resilience.
New leverage ratio and multiple indicators
As non‑bank financial institutions that do not accept public deposits, financial leasing companies are subject to additional regulatory requirements—introduced in the draft for public comment—to prevent unchecked expansion and address inherent risks such as capital adequacy, credit risk, liquidity risk, operational risk, and significant related‑party transactions. These measures include new leverage ratio and financial leverage multiple metrics, as well as liquidity‑related indicators like the liquidity ratio and the liquidity coverage ratio. Specifically, the leverage ratio requires that the ratio of a financial leasing company’s Tier 1 capital net amount to its adjusted on‑ and off‑balance‑sheet asset balance be no less than 6%, while the financial leverage multiple mandates that the company’s total assets may not exceed ten times its net worth.
At the same time, regulatory indicators for the loan loss reserve coverage ratio and the interbank borrowing ratio have been optimized. According to a responsible official from the National Administration of Financial Regulation, in line with the principle of countercyclical regulation, the minimum threshold for the loan loss reserve coverage ratio has been lowered from no less than 150% to no less than 100%. This adjustment aims to ensure that loss provisions adequately cover expected credit losses while enabling financial leasing companies to strengthen their support for the real economy. Additionally, the scope of the interbank borrowing ratio requirement has been expanded from solely interbank borrowings to encompass both interbank borrowings and interbank lendings.
The Draft for Comments also introduces new liquidity regulatory indicators, such as the liquidity ratio and the liquidity coverage ratio, thereby strengthening oversight of liquidity risk at financial leasing companies.
Economic forests have become new leased assets.
According to Liu Xiaoyu, another key highlight of the draft for public comment is the comprehensive refinement of the scope of leased assets, which has been expanded from fixed assets to include equipment assets, thereby providing financial services to support equipment procurement and renewal by small, medium, and micro enterprises. In addition, drawing on practical experience gained in recent years, the draft permits productive biological assets—such as economic forests, firewood forests, breeding livestock, and working animals—to be used as lease objects, thus guiding financial leasing companies to return to the core essence of leasing. It is understood that, going forward, the National Administration of Financial Regulation will promptly summarize and disseminate industry‑wide pilot initiatives, launch targeted business trials, and continue to refine and improve the scope of eligible leased assets.
Strengthen regulatory oversight of the eligibility of leased assets. Leased assets must have clear ownership, be specifically identified, be readily disposable, possess economic value, and generate usable income. Low‑value consumables and consumer goods other than passenger vehicles (including micro‑ and small‑size passenger cars) may not be used as leased assets. Furthermore, assets that are already mortgaged, subject to ownership disputes, or seized or impounded by judicial authorities, as well as assets with defects in title, shall not be accepted as leased items.
Strengthening positive guidance for the development of the leasing business. The draft for public comment requires financial leasing companies to promptly adjust their business development plans in accordance with the encouragement and negative lists issued by the regulatory authorities. According to reports, the National Administration of Financial Regulation is working with relevant national departments to formulate these lists, guiding financial leasing companies to keep the nation’s overarching interests at heart, serve national strategies, and actively explore appropriate ways to integrate into the manufacturing and utilization of large-scale equipment. Furthermore, they are encouraged to develop effective business models that support major aircraft, new‑energy vessels, first‑of‑a‑kind (set) equipment, and critical technological apparatus, thereby enhancing the industry’s capacity and level of service to the real economy—particularly in upgrading and transforming traditional industries, as well as in fostering strategic emerging industries and advanced manufacturing.
In addition, the Draft for Comments strengthens the management of asset‑valuation for leased items. Based on recent experience in business development and risk resolution, when appropriate leased assets are selected and their values are accurately assessed, the likelihood of defaults and losses in financial leasing operations is relatively low. The Draft places particular emphasis on enhancing the management of leased‑asset valuation, requiring financial leasing companies to establish internal checks-and-balances mechanisms, refine their asset‑valuation frameworks, and formulate comprehensive valuation and pricing policies that clearly define valuation procedures, factors, and methodologies, thereby ensuring a sound determination of the assets’ value. At the same time, it calls for stricter oversight of external appraisal institutions, specifying clear criteria for market entry and exit, so as to comprehensively improve the capacity for valuing and managing leased assets.

In accordance with the requirements of the Party and the state’s institutional reform, the State Council has amended three financial administrative regulations and issued a State Council decision.
On January 18, the Chinese Government Website published the “Decision of the State Council on Amending Certain Administrative Regulations and State Council Decisions,” which took effect upon its promulgation. This round of amendments primarily responds to the institutional requirements arising from the reform of Party and state institutions.
The Decision amends certain provisions of the administrative regulations “Regulations of the People’s Bank of China on the Monetary Policy Committee” and of two State Council decisions—“Decision of the State Council on Implementing Access Management for Bank Card Clearing Institutions” and “Decision of the State Council on Implementing Access Management for Financial Holding Companies.” The Decision adds language afofficeing that the Monetary Policy Committee’s work shall be conducted under the leadership of the Communist Party of China, revises the composition of the Committee in terms of its constituent units and personnel, further clarifies the categories of Committee members and the procedures for their appointment and removal, improves the criteria for membership and the term‑of‑office system, and transfers to the National Administration of Financial Regulation those provisions in the two decisions that previously pertained to functions formerly exercised by the former China Banking and Insurance Regulatory Commission and the People’s Bank of China.

The National Development and Reform Commission convened a national investment work conference for the development and reform system.
The National Development and Reform Commission convened a national investment work conference for the development and reform system in Beijing. The meeting emphasized the need to advance, with high quality, projects financed by additional government bonds; to expedite the issuance and allocation of project lists and the implementation of these projects; and to strengthen project oversight effectively. It called for maximizing the impact of central budgetary investment by accelerating the release of investment plans and improving their execution. Local governments were urged to make full use of special-purpose bonds, promptly prepare projects, and speed up the commencement of construction. Efforts should be made to stimulate private investment by enhancing support and services, ensuring that private capital can invest profitably, enter the market smoothly, and exit when necessary. Furthermore, reforms of the investment and financing system must be deepened, project feasibility studies strengthened, investment management efficiency improved, and the application of online investment platforms innovated. Finally, project planning and reserves should be bolstered, preliminary work meticulously carried out, and project quality substantially enhanced.

The Ministry of Finance has revised the Measures for the Administration of Public Donation Receipts, bringing electronic receipts under its scope.
On January 18, the Ministry of Finance’s website publicly released the Measures for the Administration of the Use of Donation Receipts for Public Welfare Activities, which will take effect on February 1, 2024.
The Measures comprise six chapters and thirty-one articles, covering general provisions; the content and scope of application of donation receipts for public welfare purposes; the supervision, printing, issuance, and distribution of such receipts; their use and management; as well as their cancellation, destruction, and oversight and inspection. The Measures stipulate that donation receipts for public welfare purposes serve as primary accounting vouchers and are available in both electronic and paper formats. Electronic and paper receipts carry equal legal validity and constitute the basis for oversight and inspection by fiscal, tax, auditing, and supervisory authorities. Furthermore, these receipts may be used by donors as valid documentation to substantiate their external donations and to apply for pre‑tax deductions in accordance with relevant national regulations.

The National Energy Administration has issued the “Administrative Measures for the Assessment and Management of Quality Supervision Agencies for Power Construction Projects.”
On January 19, the website of the National Energy Administration published the “Notice on Issuing the Measures for the Assessment and Management of Quality Supervision Agencies for Power Construction Projects.”
The Measures consist of five chapters and twenty-two articles, stipulating that the National Energy Administration shall conduct a comprehensive assessment of all power quality‑supervision agencies once every three years. The assessment process comprises three stages: self‑evaluation by the agencies, on-site inspections, and final review and approval of the results. The sponsoring entities of power quality‑supervision agencies shall provide the necessary personnel, funding, materials, and other resources to ensure that these agencies can perform their duties in accordance with the law. Power quality‑supervision agencies may not unilaterally alter the scope of their quality‑supervision activities, nor may they, without justifiable reasons, refuse to accept applications for registration of power construction project quality‑supervision that meet the relevant requirements within the prescribed scope.

The National Intellectual Property Administration has issued a document clarifying matters related to the handling of patent term compensation procedures.
On January 18, the website of the National Intellectual Property Administration published the “Notice on the Handling of Patent Term Compensation Procedures.”
The Notice clarifies that, effective January 20, 2024 (inclusive), any request for patent term compensation filed on or after that date, as well as paper‑based requests for patent term compensation filed on or after June 1, 2021 that require subsequent processing, shall be handled in accordance with the current procedures applicable to the relevant patent: electronic applications are to be submitted in electronic form, and paper applications are to be submitted in paper form. Where a patentee seeks patent term compensation pursuant to Article 42, paragraph 2 of the Patent Law, the request must be filed with the National Intellectual Property Administration within three months from the date of the patent grant announcement. Where a patentee seeks pharmaceutical patent term compensation pursuant to Article 42, paragraph 3 of the Patent Law, the request must be filed with the National Intellectual Property Administration within three months from the date the new drug obtains marketing authorization in China. For patent term compensation requests filed under Articles 42, paragraphs 2 and 3, if the statutory time limits are missed, no grace period will be granted.

The Ministry of Civil Affairs has issued the Measures for the Administration of Names of Social Organizations.
On January 17, the Ministry of Civil Affairs published the Measures for the Administration of Social Organization Names, which will take effect on May 1.
The Measures consist of twenty-five articles, each specifying the compositional structure of the names of social organizations, foundations, and privately-run non‑enterprise entities, while also setting forth corresponding special provisions. Notably, the name of an out-of‑region chamber of commerce is explicitly required to comprise an administrative division name, a proper name denoting the place of origin’s administrative division, and the term “Chamber of Commerce.” With regard to the “name element” in the names of social organizations, the Measures clarify that such elements may not consist of sentences or sentence clusters and must be clearly distinguishable from the relevant industry or field. Furthermore, if a social organization genuinely needs to use a personal name, it may do so only for individuals who have made significant contributions in the fields of science and technology, culture, health, education, or the arts and who enjoy high prestige both domestically and internationally. If there is a bona fide need to adopt the name of a deceased eminent figure as a name element, that individual must likewise have made substantial contributions in the relevant public‑interest domain and enjoy widespread recognition at home and abroad.

Five departments have jointly issued guidelines to leverage quality infrastructure in enhancing the quality of industrial and supply chains.
On January 17, the website of the State Administration for Market Regulation published the “Guiding Opinions on Leveraging Quality Infrastructure to Promote the Coordinated Enhancement of Quality Across Industrial and Supply Chains.”
The “Guiding Opinions” lay out 11 key tasks across three major areas: advancing quality improvements along the industrial and supply chains at the point, line, and systemic levels; strengthening the support provided by quality‑related infrastructure for building robust industrial clusters and reinforcing supply chains; and enhancing the incentive and regulatory effects of quality policies. The document proposes developing quality roadmaps and compiling lists of quality issues, priority R&D projects, and quality policy tools, thereby waging a decisive battle to elevate quality, driving coordinated quality upgrades across the entire value chain, and fostering regionally integrated quality development. It further aims to boost the innovation capacity of industrial and supply chains through modern, cutting‑edge measurement systems; enhance their stability with collaborative, industry‑leading standards; ensure their reliability via professional, efficient inspection and testing; and promote their high‑end transformation through authoritative, credible quality certification and accreditation.

Taxation
Three departments have issued a document to enhance the convenience of cross-border tax and fee payments.
The People’s Bank of China, the Ministry of Finance, and the State Taxation Administration recently issued a joint document to further standardize cross-border tax and fee collection and refund procedures, enhance the efficiency of budgetary revenue collection and deposit, and improve the convenience of cross-border tax and fee payments.
According to reports, in response to the growing demand in recent years for cross-border payment of taxes and fees in RMB, three departments jointly issued the “Notice on Matters Relating to the Administration of Cross-Border Tax and Fee Collection and Refund Operations,” expanding the scope of cross-border tax collection and refund services—previously handled by tax authorities—to encompass the remittance of all types of tax and fee payments, including taxes, non-tax revenues, and social insurance contributions, as well as the corresponding refund procedures for such payments.
The notice clarifies the business processes, account‑usage procedures, and information‑reporting requirements for cross‑border tax and fee remittance and refund under various modalities, thereby providing a robust institutional framework for cross‑border tax and fee remittance and refund operations in all currencies, including the Renminbi.
The notice stipulates that treasury collection agencies handling the remittance of cross-border foreign‑currency taxes and fees must be authorized to conduct foreign‑exchange settlement and sales; furthermore, the banking financial institutions where such treasury collection agencies are located must possess the capability to carry out cross-border RMB settlement operations.
The three departments stated that, going forward, the People’s Bank of China, the Ministry of Finance, and the State Taxation Administration will guide local authorities to coordinate and collaborate, ensuring the secure and timely remittance and refund of cross-border tax and fee funds, while continuously enhancing the quality and efficiency of services.

In 2023, new tax and fee reductions, along with tax refunds and deferrals, exceeded RMB 2.2 trillion.
According to the latest data released by the State Taxation Administration, in 2023, nationwide tax and fee reductions, refunds, and deferrals exceeded RMB 2.2 trillion, effectively helping to stabilize market expectations, boost confidence, and invigorate market dynamism. Throughout the year, total tax and fee revenues amounted to RMB 31.7 trillion, laying a solid foundation for fiscal sustainability.
Support for innovation has been further strengthened. In 2023, the state continued to enhance tax incentives aimed at encouraging enterprises to increase their R&D spending. According to preliminary corporate income tax return data, during the first three quarters of 2023, companies nationwide reported claiming R&D expense super‑deductions totaling 1.85 trillion yuan, with manufacturing offices benefiting most, accounting for 58.9% of the total amount eligible under this policy.
Policies are tailored to reach the right beneficiaries, enhancing efficiency. Leveraging the advantages of tax‑related big data, the tax authorities intelligently match tax and fee policies with eligible entities, ensuring that qualifying businesses promptly receive measures aligned with their specific needs. Since July 2023, a cumulative total of 670 million individual and corporate notifications—amounting to 1.49 billion messages—have been delivered.
Optimizing services to solve pressing challenges. Focusing on the needs of businesses, and respecting their preferences, we leveraged tax‑related big data to facilitate connections between enterprises, helping them complete transactions totaling RMB 21.3 billion over the year. To address the financing difficulties faced by small and micro‑enterprises, we deepened and expanded the “bank‑tax collaboration” initiative, further lowering the barriers to participation for smaller banks. As a result, throughout the year, we supported small and micro‑enterprises in securing 8.928 million bank loans, with a total loan value of RMB 2.84 trillion.

Taxation Big Data Reflects High-Quality Economic Development
Tax data serves as a “barometer” of economic development. At a press conference held by the State Council Information Office on January 18, Huang Yun, spokesperson for the State Taxation Administration and Director of its General Office, stated that the Administration has leveraged tax‑related big data to develop a high‑quality development indicator system. Preliminary findings indicate that in 2023, China’s drive toward high‑quality development gained further momentum.
Corporate innovation investment continues to strengthen, with the amount of R&D expenses eligible for additional tax deductions increasing by 13.6% year on year. According to preliminary corporate income tax return data, in the first three quarters of 2023, enterprises nationwide reported claiming R&D expense add-back deductions totaling RMB 1.85 trillion, with manufacturing offices benefiting most, accounting for 58.9% of the total amount.
Innovative industries are accelerating their growth, with sales revenue in the high‑tech sector rising 9.8% year on year. According to VAT invoice data, in 2023, sales revenue in the high‑tech sector continued to expand at a robust pace, and its share of total national enterprise sales revenue increased by 0.5 percentage points compared with 2022—marking a steady year‑on‑year rise that underscores the significant output gains achieved by innovative industries in recent years.
High-end manufacturing has achieved breakthroughs, with the share of the equipment manufacturing sector in total manufacturing rising to 44.8%. According to VAT invoice data, in 2023, sales revenue in the equipment manufacturing industry increased by 6.4% year on year, 2.9 percentage points above the average growth rate for the manufacturing sector, and its share of total manufacturing grew by 1.2 percentage points compared with 2022. Notably, sales revenue across industries related to the “new three major” products—electric passenger vehicles, lithium-ion batteries, and solar cells—combined rose by 22.4% year on year.
The integration of the digital and real economies is accelerating, with sales revenue from core digital‑economy industries accounting for 12.1% of total sales revenue. According to VAT invoice data, in 2023, sales revenue in the core digital‑economy sectors grew by 8.7% year on year, up 2.1 percentage points from 2022; meanwhile, nationwide corporate spending on digital technologies increased by 10.1% year on year, a rise of 3.2 percentage points compared with 2022, underscoring the accelerated convergence of digital and physical economies and the steady advancement of both digital industrialization and industrial digitalization.
The process of building a unified national market is accelerating, with interprovincial trade accounting for 42.7% of the country’s total trade volume. According to VAT invoice data, in 2023, interprovincial trade—measuring the intensity of trade linkages among China’s provinces—increased by 5.9% year on year, and its share of the nation’s total trade rose by 0.5 percentage points compared with 2022, showing a steady upward trend that underscores the growing smoothness of the domestic economic circulation.
The three major economic engine regions have strengthened their driving effect, with their share of national sales revenue rising to 54.1%. According to VAT invoice data, in 2023, the Beijing–Tianjin–Hebei, Yangtze River Delta, and Pearl River Delta—these three key economic hubs—exhibited a generally robust growth trajectory, with combined sales revenue increasing by 5.4% year on year. Their share of nationwide sales revenue expanded by 0.3 percentage points compared with 2022.
The green transformation of industries has continued to advance, with the share of high‑energy‑consumption manufacturing in the overall manufacturing sector falling to 30.7%. According to VAT invoice data, in 2023, industrial enterprises significantly increased their green‑related investments, with purchases of environmental protection and pollution‑control services rising 17.7% year on year. Meanwhile, the proportion of high‑energy‑consumption manufacturing within the manufacturing sector declined by 1.5 percentage points compared with 2022.
Reinvestment of profits by foreign-invested enterprises has grown steadily, with the amount of reinvestment benefiting from deferred tax treatment reaching RMB 141.2 billion. According to corporate income tax return data, in 2023, the value of reinvestments eligible for deferred taxation by overseas investors in foreign-invested enterprises increased by 0.8% year on year. Since the introduction in 2018 of the preferential policy deferring withholding income tax on reinvested foreign profits, the cumulative amount of such deferred‑tax‑eligible reinvestments has reached RMB 660.3 billion.
Consumer spending continues to gain momentum, with both goods and services consumption growing at around 10 percent. According to VAT invoice data, in 2023, sales revenue from goods and services increased by 11.4 percent and 9 percent year on year, respectively. Among these, retail sales of apparel and cosmetics rose by 18.3 percent and 14.5 percent, respectively, while amusement parks, accommodation services, and food and beverage services posted particularly strong growth, expanding by 69.5 percent, 26.3 percent, and 19.6 percent, respectively.
Social security has been strengthened, with social insurance premium revenue surpassing RMB 8 trillion. According to data from the tax authorities, in 2023, social insurance premium revenue reached RMB 8.2 trillion, and the number of individuals receiving contribution‑related services exceeded 1.3 billion, thereby providing robust support for the development of a social security system that is distinctly Chinese in character and the largest of its kind worldwide.

LITIGATION & ARBITRATION
The Supreme People’s Court has issued a judicial interpretation on disputes involving betrothal gifts, refining the rules governing the return of such gifts.
On January 18, the Supreme People’s Court website published the “Provisions on Several Issues Concerning the Application of Law in the Trial of Disputes Involving Betrothal Gifts,” which will take effect on February 1.
The Regulations comprise seven articles and primarily address key and challenging issues in judicial practice, such as the scope of betrothal gifts subject to recognition, the principles governing their return, and the standing of parties to litigation. They reafoffice the prohibition against soliciting property under the guise of marriage, clarify the distinction between betrothal gifts and ordinary gifts made during the courtship period, specify the eligible parties in disputes over betrothal gifts, and refine the rules for returning such gifts. Notably, the Regulations stipulate that where the parties have cohabited, the duration of their cohabitation shall be a crucial factor in determining whether and to what extent the betrothal gift is to be returned; and where the parties have not registered their marriage, the decision on whether to return the gift and the specific proportion thereof shall be based on a comprehensive assessment of the actual use of the gift, the nature of the dowry, the circumstances of cohabitation and childbearing, as well as the respective degrees of fault.

The Supreme People’s Procuratorate has issued a work guideline to ensure the implementation of the Law on the Construction of an Accessible Environment.
Recently, the Eighth Procuratorial Office of the Supreme People’s Procuratorate issued the “Notice on Precisely and Standardly Conducting Public Interest Litigation in the Field of Barrier-Free Environment Construction,” providing guidance on public interest litigation related to barrier-free and age-friendly measures—such as self-service public service terminals and drug package inserts—and overseeing the uniform and proper implementation of the Law on the Construction of a Barrier-Free Environment.
The “Work Guidance” calls for the precise and standardized conduct of public-interest litigation by the procuratorial organs in the field of barrier-free environment development, with a particular focus on supervising instances where laws impose mandatory requirements. In terms of barrier-free infrastructure construction, this includes overseeing compliance of public barrier-free facilities with mandatory national standards, actively exploring preventive oversight during both the pre‑ and in‑process stages, and proactively improving barrier-free environments for the concentrated employment and education of persons with disabilities. The guidance further emphasizes clarifying the division of regulatory and principal responsibilities, carefully selecting the most effective supervisory approach within public-interest litigation, giving priority to prosecutorial recommendations in public-interest cases, applying social governance recommendations as appropriate, and strengthening the overall effectiveness of oversight. It also seeks to secure support from local legislation to advance the refinement of the legal framework for building a barrier-free environment.

The Supreme People’s Procuratorate has once again revised the “Key Evaluation Indicators for Case Quality in Procuratorial Organs,” reducing both the number of evaluation indicators and the reporting thresholds.
On January 17, according to the Supreme People’s Procuratorate’s website, the agency recently revised the “Key Evaluation Indicators for Case Quality in Procuratorial Organs,” which was first implemented in March 2023. The number of evaluation indicators has been streamlined from the original 46 to 38, and the number of indicator reporting items has been reduced from 14 to 6.
In this revision, in accordance with the principle that indicators may only be reduced but not increased, we have eliminated those that fail to objectively reflect work quality and effectiveness, whose data are prone to inflation and difficult to verify, or that pertain to non‑priority areas; we have also removed indicators associated with cases of negligible volume and limited significance. We have streamlined the reported values and consolidated detailed sub‑indicators for specific types of work—for example, “rate of modification in civil protest cases” and “rate of court acceptance of procuratorial recommendations for civil retrials” have been merged and adjusted into a single indicator, “rate of modification in supervision of civil judgment cases,” thereby better reflecting an overall assessment of procuratorial functions.

The Jiangsu High People’s Court has released the Top Ten Typical Cases of 2023.
On January 17, the official WeChat account of the Jiangsu High People’s Court released the Jiangsu Courts’ Top Ten Typical Cases for 2023.
This batch of typical cases includes: “The case of Huang et al. for infringing upon citizens’ parking information”; “The case of Xie et al. for producing and selling substandard and fake products and engaging in illegal business operations”; “The case concerning the appointment of an administrator for the estate of an elderly, solitary, and disabled person”; “The case of Han and Zhang seeking a personal safety protection order”; “The bankruptcy reorganization case of Jiangsu Baotong Nickel Industry Co., Ltd.”; “Panpan Company v. Xin Panpan Company et al. for trademark infringement and unfair competition”; “Wuxi Xingshun Metal Materials Co., Ltd. v. the Housing Expropriation Office of a certain district in Wuxi City regarding an administrative agreement”; “A public interest litigation concerning the illegal introduction of alien species”; “The enforcement-to-bankruptcy‑reorganization case of Kunshan Yucheng Real Estate Co., Ltd.”; and “Hong Kong Fenglian Kex Maritime Transport Co., Ltd.’s application to seize a vessel.” Among these, Case No. 1 is the nation’s first full‑chain crackdown on the infringement of citizens’ parking information, placed under direct supervision by the Ministry of Public Security. Taking into account such factors as the close connection between vehicle parking location data and individuals’ personal privacy, as well as the potential risks to personal and property security posed by its disclosure, the court classified vehicle parking location information as personal information and sentenced all 13 defendants across the entire criminal chain for the crime of infringing upon citizens’ personal information.

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