JC Master Legal News Issue 1092

Key Takeaways for This Issue
The China Securities Regulatory Commission has revised and issued the “Rules on Share Repurchases by Listed Companies.”
To better align with market realities and corporate needs, enhance the inclusiveness and convenience of the share repurchase regime, and encourage listed companies to prioritize, implement, and conduct repurchases in a standardized manner—thereby actively safeguarding corporate value and shareholder rights—the China Securities Regulatory Commission has revised and issued the “Rules on Share Repurchases by Listed Companies,” refining and improving certain provisions.
The China Securities Regulatory Commission has issued the “Regulatory Guidance No. 3 for Listed Companies—Cash Dividends of Listed Companies (Revised in 2023)” and other normative documents.
To further improve the institutional framework for regular dividend payouts by listed companies and enhance investor returns, the China Securities Regulatory Commission has issued “Regulatory Guidance No. 3 for Listed Companies—Cash Dividends of Listed Companies,” along with the “Decision on Amending the Guidelines for the Articles of Association of Listed Companies,” both of which take effect from the date of their promulgation. In parallel, the Shanghai and Shenzhen Stock Exchanges have revised and refined their guidelines on corporate governance, clarifying operational requirements.
The Supreme People’s Court and the Supreme People’s Procuratorate jointly released typical cases of administrative public interest litigation.
On December 13, the Supreme People’s Court website published the “Notice of the Supreme People’s Court and the Supreme People’s Procuratorate on Issuing the ‘Typical Cases of Administrative Public Interest Litigation.’”
The Supreme People’s Court has released typical cases of punitive damages for food safety violations.
The Supreme People’s Court recently released four typical cases involving punitive damages for food safety violations, addressing hot‑button issues such as whether “knowing‑and‑purchasing‑a‑fake” claims are legally supported. The aim is to standardize judicial rulings, guide producers and operators to conduct business in compliance with the law, encourage consumers to protect their rights rationally, safeguard food safety, and foster a sound legal environment that promotes high‑quality economic and social development.
Finance & Capital Markets
The China Securities Regulatory Commission has issued the “Regulatory Guidance No. 3 for Listed Companies—Cash Dividends of Listed Companies (Revised in 2023)” and other normative documents.
To further improve the institutional framework for regular dividend payouts by listed companies and enhance investor returns, the China Securities Regulatory Commission has issued “Regulatory Guidance No. 3 for Listed Companies—Cash Dividends of Listed Companies” (hereinafter referred to as the “Cash Dividend Guidance”) and “Decision on Amending the ‘Guidance on Articles of Association of Listed Companies’” (hereinafter referred to as the “Articles of Association Guidance”), both of which take effect from the date of their promulgation. In parallel, the Shanghai and Shenzhen Stock Exchanges have revised and refined their guidelines on corporate governance to clarify operational requirements.
The revisions to the “Guidelines on Cash Dividends” primarily focus on three key areas: First, further clarifying the policy orientation of encouraging cash dividends and promoting higher dividend payout ratios. For companies that do not distribute dividends, enhanced disclosure requirements and other institutional constraints will be imposed to encourage dividend payouts. Companies with substantial financial investments but relatively low dividend levels will be subject to targeted oversight and scrutiny, urging them to raise their dividend payouts and concentrate on their core businesses. Second, the procedures for interim dividends have been streamlined to further optimize dividend timing and frequency. Companies are encouraged to increase the frequency of dividend distributions where feasible; in line with regulatory practice, listed companies may, at the annual general meeting when reviewing the annual profit distribution plan, approve, within a specified limit, the conditions and cap for next year’s interim cash dividends. This measure facilitates more frequent dividend payments, enabling investors to better plan their finances and share earlier in the fruits of corporate growth. Third, stricter controls have been introduced over companies that declare exceptionally high‑ratio dividends, guiding them toward more prudent dividend practices. It is emphasized that when formulating cash dividend policies, listed companies should comprehensively assess their profitability, capital expenditure plans, and debt‑repayment capacity, balancing investor returns with the company’s long-term development. Companies with high asset‑liability ratios, weak operating cash flows, and large‑scale cash dividends will remain under close scrutiny to prevent adverse impacts on their operations and debt‑servicing capabilities.
The amendments to the relevant provisions of the Articles of Association primarily address two key areas: First, they encourage listed companies to increase the frequency of cash dividends, foster a practice of interim dividend payouts, and help stabilize investors’ expectations regarding dividend distributions. At the same time, they impose clearer deadlines for the implementation of interim dividends. Second, they require companies to elaborate their dividend policies in their articles of association, set explicit targets for cash dividends, and thereby better anchor investor expectations. In addition, they guide companies to incorporate dividend‑related constraints into their articles, helping to prevent dividend payments under circumstances such as materially inaccurate profit reporting.
The implementation of the “Guidelines on Cash Dividends” and the “Guidelines on Articles of Association” will help listed companies enhance investor returns, better steer them toward their core businesses, and foster the stable and sound development of the market. Going forward, the CSRC will, while respecting corporate autonomy, further strengthen the regulatory role in guiding and constraining corporate behavior, encouraging listed companies to continuously raise dividend‑paying awareness, refine dividend‑distribution practices, cultivate a culture of regular dividends, and elevate dividend levels, while also curbing irregular dividend payouts to promote a steady yet sustained increase in the overall dividend payout ratio of listed companies.

The China Securities Regulatory Commission has revised and issued the “Rules on Share Repurchases by Listed Companies.”
To better align with market realities and corporate needs, enhance the inclusiveness and convenience of the share repurchase regime, and encourage listed companies to prioritize, implement, and conduct repurchases in a standardized manner—thereby actively safeguarding corporate value and shareholder rights—the China Securities Regulatory Commission has revised and issued the “Rules on Share Repurchases by Listed Companies,” refining and improving certain provisions.
The main contents of this revision include: First, enhancing the convenience of share repurchases by relaxing and adding a new condition under which share repurchases are permitted when necessary to safeguard the company’s value and shareholders’ rights; abolishing the prohibition on repurchase blackout periods; moderately easing the basic requirements for listed companies to conduct share repurchases; and refining the prohibitive provisions governing repurchase transaction filings. Second, further improving the mechanisms for regulating repurchases by encouraging listed companies to establish institutional arrangements for implementing buybacks and clarifying the board of directors’ obligations when circumstances arise that necessitate repurchases to protect the company’s value and shareholders’ interests. Third, making adaptive textual amendments. Earlier, our Commission publicly solicited comments on the rule revisions, and stakeholders generally expressed approval and support.
Share repurchases, as a fundamental institutional mechanism in the capital market, serve to optimize capital structure, safeguard corporate investment value, and enhance investor‑return mechanisms. The China Securities Regulatory Commission encourages listed companies to employ repurchase tools in compliance with laws and regulations, actively reward investors, and promote the stable and sound development of the market. At the same time, it will strengthen ongoing and post‑transaction oversight of repurchases, and rigorously investigate and prosecute, in accordance with the law, any illegal activities such as insider trading or market manipulation carried out through repurchase schemes.

The Shanghai Stock Exchange has revised and refined its self-regulatory rules on share repurchases and dividend distributions, guiding listed companies to actively reward investors.
Recently, under the unified deployment of the China Securities Regulatory Commission, the Shanghai Stock Exchange has revised and issued the “Guidelines on Share Repurchases,” the “Guidelines on Standardized Operations,” along with accompanying business guides, thereby refining two key mechanisms—share repurchases and cash dividends. This round of revisions, at the level of self-regulatory rules, further specifies and implements the adjustments to relevant CSRC regulations, ensuring seamless alignment. Share repurchases and cash dividends play a vital role in invigorating the capital market and bolstering investor confidence; they directly affect the legitimate interests of investors, particularly small and medium-sized investors, and contribute to the stable functioning of the capital market.
In recent years, thanks to the concerted efforts of all stakeholders, share buybacks and cash dividends have steadily increased. So far this year, nearly 300 Shanghai‑listed companies have disclosed share‑repurchase plans, with a combined maximum planned amount approaching RMB 75 billion. In 2022, cash dividends paid by Shanghai‑listed offices totaled RMB 1.7 trillion, surpassing the combined value of that year’s IPOs, secondary offerings, and major shareholders’ share sales. Meanwhile, listed companies that have undertaken substantial share buybacks and those with higher dividend yields have also delivered strong stock performance, serving as key benchmarks for long‑term, value‑oriented, and rational investing, and providing a clear indicator of high‑quality corporate governance.
The “Guidelines on Share Repurchases” uphold a regulatory approach that both guides and standardizes, ensuring that listed companies conduct share repurchases in compliance with the law. On the one hand, it seeks to enhance the convenience of share repurchases by relaxing certain requirements and introducing an additional condition under which share repurchases are permitted when necessary to safeguard the company’s value and shareholders’ rights; abolishing the prohibition on repurchase windows; moderately easing the basic conditions for listed‑company repurchases; refining the prohibitive provisions governing repurchase transaction filings; eliminating daily caps on the number of shares that may be repurchased; and lowering the threshold for initiating repurchases. On the other hand, it further strengthens the mechanisms for overseeing and constraining repurchases by encouraging listed companies to establish institutional arrangements for implementing buybacks and stipulating that, when circumstances arise warranting repurchases to protect the company’s value and shareholders’ interests, the board of directors must give full consideration to shareholders’ views and concerns regarding the execution of such repurchases.
The Guidelines on Standardized Operations exert concerted efforts from both an advocacy and a regulatory perspective to encourage listed companies to adopt proactive and prudent dividend policies. On the one hand, they further reinforce the orientation toward higher cash dividends by enhancing information disclosure transparency, urging companies that currently do not pay dividends or distribute only modest amounts to increase their dividend payouts. They also encourage listed companies, where profit distribution conditions are met, to raise the frequency of cash dividend distributions. On the other hand, the Guidelines require listed companies to formulate dividend plans in a reasonable and well‑justified manner. For offices facing significant operational risks, high debt ratios, or weak operating cash flows, stricter constraints are imposed to prevent adverse impacts on their production and operations, as well as on their debt‑repayment capacity.
Going forward, the Shanghai Stock Exchange will earnestly implement the guiding principles of the Central Economic Work Conference and the Central Financial Work Conference. Under the unified guidance of the China Securities Regulatory Commission, it will continue to guide, encourage, and promote more listed companies to return value to investors through share repurchases and cash dividends, thereby steadily anchoring investor expectations and fostering the sound development of the capital market.

The Shenzhen Stock Exchange and the Saudi Exchange Group have signed a memorandum of cooperation.
On December 10, 2023, the Shenzhen Stock Exchange (hereinafter referred to as the SZSE) and the Saudi Tadawul Group (hereinafter referred to as the STG) signed a Memorandum of Understanding on cooperation in Riyadh, the capital of Saudi Arabia, further deepening exchanges and cooperation between the Chinese and Saudi capital markets. Tang Rui, Deputy General Manager of the SZSE, and AlHasan Ashram, Chief Operating Officer of the STG, signed the agreement on behalf of their respective organizations.
To further strengthen multi‑tiered exchanges and cooperation between the capital markets of the two countries, the Shenzhen Stock Exchange and the Saudi Exchange Group have stipulated in this memorandum that they will engage in mutual learning and experience sharing across a range of areas, including ESG, financial technology, investor services, and corporate incubation, thereby supporting the high‑quality development of both markets. The two parties will also jointly explore collaboration on index‑based products, funds, and REITs; examine possibilities for ETF connectivity and cross‑listing of listed companies; and collaboratively establish a China–Saudi cross‑border capital services framework anchored by the SZSE’s V‑Next platform, with the aim of encouraging market participants from both sides to engage in cross‑border investment and further advancing the integration and interconnection of the Chinese and Saudi capital markets.
A relevant official from the Shenzhen Stock Exchange stated that, taking this memorandum of understanding as an opportunity, the two parties will strengthen their complementary strengths and build consensus on development. They will engage in pragmatic cooperation across multiple areas of mutual interest, including ESG and financial technology, jointly promote connectivity of cross-border products such as indices and ETFs, establish a cross-border investment and financing service platform to facilitate matchmaking between enterprises and investment institutions in both countries, and enhance the capital market’s capacity to serve the real economies of both nations.
A senior official from the Saudi Exchange Group stated that signing a memorandum of cooperation with the Shenzhen Stock Exchange represents a pivotal step in advancing the development of Saudi Arabia’s capital market. The agreement will foster deeper collaboration between the capital markets of Saudi Arabia and China. Promoting the growth of capital markets is a shared objective for both countries, and it is expected that issuers and investors in both nations will reap the benefits of this enhanced inter‑market cooperation. The Group looks forward to close cooperation with the Shenzhen Stock Exchange in the future, leveraging the unique strengths of both sides to unlock new opportunities for growth and innovation in the capital markets of both countries.
The Central Financial Work Conference called for steadily expanding institutional openness in the financial sector, enhancing the convenience of cross-border investment and financing, and attracting more foreign‑invested financial institutions and long-term capital to operate and grow in China. Going forward, the Shenzhen Stock Exchange will earnestly study and implement the spirit of the Central Financial Work Conference. Under the unified leadership of the China Securities Regulatory Commission, it will fully leverage the geographical advantages of the Guangdong–Hong Kong–Macao Greater Bay Area, continue to strengthen multi‑sector cooperation with overseas exchanges and market institutions, and, through mutual product listings, mechanism alignment, infrastructure interconnectivity, and resource sharing, further optimize its cross‑border product offerings, broaden cross‑border investment and financing channels, and bolster the internationalization capabilities of market participants. In doing so, it will steadily advance high‑level, institution‑based opening-up of the capital market, creating a market environment that encourages overseas medium- and long‑term capital to enter and remain.

The Shenzhen Stock Exchange and the Abu Dhabi Securities Exchange have signed a memorandum of cooperation.
On December 13, 2023, the Shenzhen Stock Exchange (hereinafter referred to as the SZSE) and the Abu Dhabi Securities Exchange (hereinafter referred to as ADX) signed a Memorandum of Understanding on cooperation in Abu Dhabi, the capital of the United Arab Emirates, laying the groundwork for collaboration and development between the two exchanges. The agreement was signed by Tang Rui, Deputy General Manager of the SZSE, and Abdulla Salem Al Nuaimi, CEO of ADX, representing their respective institutions.
To better leverage the demonstration effect and catalytic role of China–Arab capital market cooperation and to support the integrated development of the real economies of both countries, the Shenzhen Stock Exchange and the Abu Dhabi Securities Exchange have explicitly agreed in this memorandum to jointly conduct bilateral market promotion, deepen the sharing of best practices and research collaboration, and strengthen mutual understanding and recognition of each other’s capital markets. They will also explore cooperation on index‑based and fixed‑income products, examine the possibility of ETF product connectivity, and investigate cross‑border financing mechanisms such as depositary receipts for listed companies, thereby encouraging market participants from both sides to engage in cross‑border investment.
A relevant official from the Shenzhen Stock Exchange stated that, taking this memorandum of understanding as an opportunity, the two parties will further deepen their cooperative relationship by engaging in pragmatic collaboration across multiple areas, including market‑development services, cross‑border product cooperation, cross‑border financing mechanisms, and the exchange of experience and mutual learning, thereby establishing a model for open and cooperative capital markets between China and Arab countries.
A relevant official from the Abu Dhabi Securities Exchange stated that the cooperation with the Shenzhen Stock Exchange marks an important milestone in the exchange’s journey toward global integration. The signing of a memorandum of understanding between the two exchanges not only lays the groundwork for enhanced collaboration and innovation but also opens up greater opportunities for investors and stakeholders in mainland China. The Abu Dhabi and Shenzhen stock exchanges will work together to explore new prospects in financial services and tap into the vibrant markets of the United Arab Emirates and China. This strategic partnership underscores both exchanges’ shared commitment to sharing expertise, fostering mutual learning and cross‑industry insights, developing innovative products, and advancing the financial sector.
Going forward, the Shenzhen Stock Exchange will thoroughly study and implement the guiding principles of the Central Economic Work Conference and the Central Financial Work Conference. In line with the unified deployment of the China Securities Regulatory Commission, it will continue to deepen connectivity with overseas capital markets, steadily advance institutional‑based two‑way opening-up of the capital market, promote the efficient global allocation of various innovation factors, strengthen the synergistic effects between domestic and international markets and resources, and better support the establishment of a new development paradigm and the drive for high‑quality development.

The Shenzhen Stock Exchange has revised and refined its supporting rules on share repurchases to better harness the positive role of such buybacks.
On December 15, 2023, the China Securities Regulatory Commission issued the newly revised “Rules on Share Repurchases by Listed Companies,” while the Shenzhen Stock Exchange released “Self-Regulatory Guidance No. 9 for Listed Companies—Share Repurchases (Revised in 2023)” (hereinafter referred to as “Guidance No. 9”). These revisions aim to refine and improve the share-repurchase regime, enhance the positive role of repurchases, and promote the stable operation and high-quality development of the capital market.
Earlier, the “Guidance No. 9” was publicly released to solicit comments from the public. This revision, building on the thoughtful input received from all sectors of society, further aligns with the requirements of the comprehensive registration‑based reform and the reform of the independent director system, implements the latest amendments and adjustments to higher‑level regulations, and focuses on refining and improving the following key areas.
First, the conditions for share repurchases have been relaxed. Guideline No. 9 further refines the criteria for implementing buybacks, enhancing the flexibility and convenience of listed companies’ share‑repurchase activities. Specifically, the threshold for a repurchase to be deemed necessary to safeguard the company’s value and shareholders’ rights has been lowered from a cumulative 30% decline in the closing price over any consecutive twenty trading days to 20%. In addition, the requirement that a company must have been listed for at least one year before initiating a repurchase has been amended to “at least six months,” and the blackout periods applicable to annual reports, semi‑annual reports, quarterly reports, earnings forecasts, and preliminary earnings announcements have been removed.
Second, mechanisms have been refined. Guideline No. 9 encourages listed companies to incorporate robust share‑repurchase mechanisms into their articles of association or other governance documents, clearly defining trigger conditions and specific procedures for share repurchases. It also mandates that, when circumstances arise that necessitate safeguarding the company’s value and shareholders’ rights, the board of directors should fully exercise its role, thereby helping to enhance corporate governance standards.
Third, ensure seamless institutional alignment. In line with the requirements of the comprehensive registration system, Guidance No. 9 has been revised accordingly, specifying the exact time periods during which share repurchases and share issuances may not be conducted concurrently. In accordance with the latest reforms concerning independent directors, the mandatory requirement for independent directors to provide opinions on share‑repurchase matters, as well as the associated disclosure obligations, have been abolished.
Going forward, the Shenzhen Stock Exchange will earnestly implement the guiding principles of the Central Economic Work Conference and the Central Financial Work Conference. Under the unified leadership of the China Securities Regulatory Commission, it will adhere to the principle of seeking progress while maintaining stability—promoting stability through progress and establishing new frameworks before dismantling old ones—while steadily advancing key tasks for the reform, development, and stabilization of the capital market. It will continue to strengthen foundational institutional frameworks, enhance the capital market’s role as a pivotal hub, further invigorate market dynamism, bolster market confidence, and better support high-quality economic and social development.

The Greater Bay Area Exchange Technology Conference was held at the Shenzhen Stock Exchange, helping to unleash new digital and intelligent momentum in the capital markets.
From December 15 to 16, the Shenzhen Stock Exchange, in collaboration with the Hong Kong Exchanges and Clearing and the Guangzhou Futures Exchange, co-hosted the 2023 Greater Bay Area Exchanges Technology Conference, themed “Technology-Driven, Digital Intelligence Empowered.” The conference thoroughly implemented the guiding principles of the Central Economic Work Conference and the Central Financial Work Conference, focusing on cutting-edge trends in industry digitalization and technological innovation, deepening collaborative innovation within the Guangdong–Hong Kong–Macao Greater Bay Area, stimulating momentum for technological advancement across the sector, and supporting the high-quality development of the capital market.
Li Chao, Vice Chairman of the China Securities Regulatory Commission, and Charles Li, Group Chief Executive Officer of the Hong Kong Exchanges and Clearing, delivered video addresses. Shenzhen Stock Exchange General Manager Sha Yan attended the meeting and delivered a speech on-site, while Yu Huali, Chief Engineer of the Shenzhen Stock Exchange, also addressed the gathering. Leaders from the CSRC’s Science and Technology Bureau, the Shenzhen Stock Exchange, the Hong Kong Exchanges and Clearing, the Guangzhou Futures Exchange, industry associations, universities, and technology enterprises engaged in exchanges and shared insights on the implementation of digital‑intelligence strategies and visions for future development. In addition, officials from relevant departments and units within the CSRC system, senior technical executives and key personnel from mainland securities, fund, and futures market institutions, representatives from high‑tech companies, as well as technical experts and scholars from universities and research institutes, participated both online and offline, bringing the total attendance to over 5,000.
Li Chao stated that the Central Financial Work Conference emphasized “doing a good job on five major areas—technology finance, green finance, inclusive finance, elderly‑care finance, and digital finance”—and called for “solidly advancing key tasks such as strengthening financial regulation, preventing and defusing financial risks, and promoting high‑quality financial development.” This has provided clear direction and concrete guidance for unleashing new digital and intelligent momentum in the capital market and achieving high‑quality development. The China Securities Regulatory Commission attaches great importance to the trend of digitalization, embracing the vision of “making regulation smarter through data.” It continues to deepen reforms in technology‑driven regulation, strengthen top‑level design and coordinated planning for digital transformation, bolster the foundational capabilities of technology‑based supervision, enhance self‑reliance and security, and elevate the industry’s level of scientific and technological innovation. It is hoped that all stakeholders will work together to continuously strengthen the ability of digital technologies to serve the real economy, focus on improving the capacity for independent control over core technologies, give high priority to simultaneously advancing technological innovation and risk prevention, fully leverage the leading and driving role of innovation, and promote the deep integration of digital technologies with the real economy. In doing so, they will make positive contributions to fostering high‑quality development of the capital market, supporting the nation’s high‑quality real‑economy growth, and accelerating the building of a financially strong country.
Edmond Cheng stated that financial technology is driving profound transformations in the capital markets. Situated in the vibrant Guangdong–Hong Kong–Macao Greater Bay Area—a global hub for technological innovation—the Hong Kong Exchanges and Clearing (HKEX) keenly recognizes the transformative power of technological advancement. HKEX has been closely monitoring cutting-edge developments, striving to leverage technology to enhance market efficiency and competitiveness, and bridging the present with the future. HKEX looks forward to strengthening collaboration with all stakeholders, jointly seizing development opportunities across the Greater Bay Area, throughout China, and globally, embracing innovation proactively, ensuring market quality and stability, and further solidifying Hong Kong’s position as an international financial center.
Yu Huali stated that, under the coordinated planning of the China Securities Regulatory Commission, the Shenzhen Stock Exchange has in recent years vigorously advanced the development of a “digital‑intelligent” exchange, strengthening the foundations of its digital transformation, expanding intelligent business applications, and building up its soft power in digital‑intelligent innovation, while striving to explore pathways for “digital‑intelligent empowerment” across the industry. Going forward, the Shenzhen Stock Exchange will focus on making significant strides in “digital finance,” reinforce its technological leadership, uphold stringent security standards, and comprehensively deepen technological cooperation. By leveraging the exchange’s own digital‑intelligent transformation, it aims to drive the broader development of a digital‑intelligent ecosystem within the industry, thereby contributing to the high‑quality development of the capital market and better serving the cause of Chinese‑style modernization.
The conference also hosted a signing ceremony for the Shenzhen–Hong Kong Market Data Cooperation Agreement. Through this collaboration, the Shenzhen Stock Exchange and the Hong Kong Exchanges and Clearing will integrate Hong Kong stock market data into the SZSE’s data center. Subsequently, SZSE‑affiliated entities Shenzhen Securities Communications Co., Ltd. and Shenzhen Securities Information Co., Ltd. will respectively provide mainland users with Hong Kong stock market data dissemination and SDK services, delivering more stable, comprehensive, and low‑latency market data. This initiative further advances the interconnection of industry infrastructure and fosters the integrated development of the securities and financial sectors within the Guangdong–Hong Kong–Macao Greater Bay Area.
Since 2017, the Shenzhen Stock Exchange has hosted a technology conference annually for seven consecutive years. This year marks the second edition of the event, which has been expanded and upgraded into the Greater Bay Area Exchanges Technology Conference. Over the course of the one-and-a-half-day conference, attendees shared insights on topics including trading and settlement technologies, financial AI, digital transformation, financial big data, and regulatory compliance, while engaging in discussions on the application of digital technologies across the industry and the latest advancements.

The China Securities Regulatory Commission has improved the mechanism for regular dividend payouts by listed companies.
On December 15, the China Securities Regulatory Commission issued “Regulatory Guidance No. 3 for Listed Companies—Cash Dividends of Listed Companies” and “Decision on Amending the Guidelines for the Articles of Association of Listed Companies,” further strengthening the institutional framework for regular dividend payouts by listed companies and enhancing investor returns. The aforementioned rules shall take effect from the date of their promulgation.
The revisions to the “Guidelines on Cash Dividends” primarily focus on three key areas. First, they further clarify the policy orientation of encouraging cash dividends and promote an increase in dividend payout levels. For companies that do not distribute dividends, enhanced disclosure requirements and other institutional constraints are imposed to encourage dividend payouts. Companies with substantial financial investments but relatively low dividend yields will be subject to heightened regulatory oversight, urging them to raise their dividend levels and concentrate on their core businesses. Second, the procedures for interim dividends have been streamlined to further optimize dividend timing and frequency. Companies are encouraged, where feasible, to increase the frequency of dividend distributions. Drawing on regulatory practice, listed companies are permitted, when convening their annual general meetings to deliberate on the annual profit distribution plan, to review and approve, within a specified limit, the conditions and caps for next year’s interim cash dividends. This measure facilitates more frequent dividend payments, enabling investors to better plan their finances and share earlier in the fruits of corporate growth. Third, stricter oversight is being applied to offices that declare exceptionally high‑ratio dividends, guiding them toward more prudent dividend practices. It is emphasized that when formulating cash dividend policies, listed companies should comprehensively assess their profitability, capital expenditure plans, and debt‑repayment capacity, balancing investor returns with the company’s long-term development. Companies with high asset‑liability ratios, weak operating cash flows, and a history of large‑scale cash dividends will remain under close scrutiny to prevent adverse impacts on their operations and debt‑servicing capabilities.
The amendments to the relevant provisions of the Articles of Association primarily focus on two key areas: first, encouraging listed companies to increase the frequency of cash dividends, fostering a practice of interim dividend payouts, and stabilizing investors’ expectations regarding dividend distributions; at the same time, imposing clearer deadlines for the implementation of interim dividends. Second, requiring companies to elaborate their dividend policies in their articles of association, clearly articulating objectives for cash dividends to better anchor investor expectations; furthermore, guiding companies to incorporate dividend‑related constraints into their articles to prevent dividend payouts under circumstances such as materially inaccurate profit reporting.
According to statistics, from January to November 2023, total dividends paid by A‑share listed companies reached RMB 2.1 trillion, hitting a new all-time high—nearly four times the RMB 588.5 billion raised through equity refinancing during the same period. Dividend-paying offices accounted for 65.7% of the total, with an average dividend yield of 3.04%. Over a longer time frame, A‑share listed companies have distributed cumulative dividends totaling RMB 8.2 trillion over the past five years. As dividend‑paying practices take root, the share of companies that distribute dividends has risen from around 50% a decade ago to approximately 70%, while the proportion of offices that have paid dividends for five consecutive years has increased from 20% to 48%.
Meanwhile, since the beginning of this year, dividend‑index funds have delivered relatively strong performance. As of the end of November 2023, there were 54 domestic dividend‑index funds with total assets under management of RMB 68.5 billion, posting an annualized growth rate of over 40% over the past three years. From the start of the year through the end of November, their excess returns compared to the CSI All‑Index averaged 5.9% and stood at a median of 3.9%.
The implementation of the “Guidelines on Cash Dividends” and the “Guidelines on Articles of Association” will help listed companies enhance investor returns, better steer them toward their core businesses, and foster the stable and sound development of the market. The China Securities Regulatory Commission stated that, going forward, while respecting corporate autonomy, it will further leverage the regulatory role of guidance and oversight to encourage listed companies to strengthen their dividend‑paying culture, refine dividend‑distribution practices, cultivate sustainable dividend‑paying habits, and raise dividend levels—while also curbing irregular dividend payouts—to promote a steady yet upward‑trending overall dividend performance among listed offices.

Internal control systems at listed companies and prospective IPOs have been further strengthened.
On December 15, the Ministry of Finance and the China Securities Regulatory Commission issued the “Notice on Strengthening Internal Control Systems of Listed Companies and Prospective Listed Enterprises and Promoting Internal Control Evaluation and Auditing.” The Notice requires all listed companies to strictly adhere to relevant requirements, continuously refine their internal control frameworks, improve risk assessment mechanisms, and enhance internal control evaluation and auditing.
The Notice stipulates that all listed companies shall strictly comply with the Enterprise Internal Control Standards System and the requirements set forth in “Information Disclosure Compilation Rule No. 21 for Companies Issuing Securities to the Public—General Provisions on Annual Internal Control Evaluation Reports,” ensuring the truthful, accurate, and complete disclosure of information related to their internal controls. Each year, concurrently with the disclosure of the company’s annual report, they must also disclose the internal control evaluation report approved by the board of directors, as well as the audit report on the internal control over financial reporting issued by the certified public accounting office.
The Notice clarifies that ChiNext and Beijing Stock Exchange–listed companies that have not yet conducted internal control audits in accordance with the requirements of the Enterprise Internal Control Standards System shall, beginning with the disclosure of their 2024 annual reports, disclose both a company‑approved internal control evaluation report and the financial reporting internal control audit report issued by an accounting office.
The Notice stipulates that companies planning to go public shall, starting from the submission of their filing materials with an audit cut‑off date of December 31, 2024, provide a financial reporting internal control audit report issued by an accounting office expressing an unqualified opinion. Companies already under review shall submit the aforementioned document when updating their 2024 annual report materials.
The Notice requires that companies that complete the issuance and listing review and are listed in the year this Notice is issued shall, at the latest, disclose, concurrently with the annual report for the first accounting year following their listing, both a corporate internal control evaluation report approved by the board of directors and an internal control audit report on the financial statements issued by an accounting office. For companies that complete the issuance and listing review and are listed in the year following the issuance of this Notice, they shall, upon disclosure of the annual report for the year of their listing, disclose a corporate internal control evaluation report approved by the board of directors and an internal control audit report on the financial statements issued by an accounting office.

The Shanghai Stock Exchange is leveraging its role as a capital market hub to ensure smooth financing channels for private enterprises.
In October 2020, the State Council issued the “Opinions on Further Enhancing the Quality of Listed Companies.” Over the past three-plus years, the Shanghai Stock Exchange has actively leveraged its role as a capital market hub, smoothed financing channels for private enterprises, and injected strong momentum into their development.
According to Wind data, as of the end of November, the Shanghai market has seen 606 new private‑sector listed companies since 2020, raising a total of RMB 706.5 billion through initial public offerings (IPOs). Additionally, 402 Shanghai‑based private offices have disclosed secondary financings, with aggregate proceeds exceeding RMB 920 billion; and 69 such offices have announced merger and acquisition or restructuring plans, with the combined value of the transaction targets reaching RMB 311.5 billion.
As a seasoned veteran of the capital markets, Huang Bo, Deputy General Manager and Board Secretary of Jiufeng Energy, has spent more than a decade on the front lines of both capital and industry, gaining profound insights into how to enhance the quality of listed companies.
“The ‘Opinions’ are regarded as an action plan for promoting the high-quality development of listed companies,” said Huang Bo. “Guided by this framework, Jiufeng Energy took its listing as an opportunity to conduct ongoing self-assessments and rectifications, strengthen corporate governance and internal controls, and rigorously prevent practices such as misappropriation of funds and unauthorized guarantees. As a result, the company successfully went public in 2021, embarking on a new journey in the capital markets.”
Over the past three-plus years, numerous Shanghai‑based private listed companies have leveraged mergers and acquisitions to integrate industrial resources and strengthen their market positions. Take Jiufeng Energy as an example: the company acquired 100% of the shares in Sentai Energy, a office engaged in liquefied natural gas (LNG) operations, thereby establishing a dual‑source supply model—marine gas and onshore gas—expanding its market reach beyond its original footprint and swiftly entering the LNG vehicle‑fueling sector.
Huang Bo stated: “Taking advantage of the listing opportunity, the company has fully leveraged a range of consideration‑based payment methods and ancillary financing instruments to timely execute major asset restructurings, accompanying financings, and other related M&A activities, thereby effectively advancing the implementation of its strategic plan.”
Over the past three-plus years, Shanghai‑based private‑sector listed companies have consistently demonstrated robust operational vitality. According to Wind data, at year‑end 2022, these companies posted an average net‑asset growth rate exceeding 19%, while their full‑year compound net‑profit growth rate approached 10%. Meanwhile, their operating cash flow reached RMB 712.2 billion in 2022, with a three‑year compound growth rate surpassing 6%.
As of the end of November, the Shanghai Stock Exchange listed 1,373 private‑sector companies, with a combined market capitalization of RMB 15.47 trillion, accounting for nearly 28% of the entire Shanghai market—up more than 7 percentage points from the end of 2019. These private‑sector listed offices are widely distributed across over 30 industries, with a strong concentration in strategic emerging sectors such as new energy, new materials, power equipment, and pharmaceuticals and biotechnology, playing a pivotal role in upgrading the Shanghai market’s industrial structure.
Recently, eight government departments issued the “Notice on Strengthening Financial Support Measures to Boost the Development and Growth of the Private Sector,” which once again underscored the need to deepen and solidify the registration-based reform and to vigorously support private enterprises in issuing shares, listing, and raising capital through refinancing. Huang Bo stated that the company will seize policy opportunities, leverage the capital market’s asset‑integration capabilities, and actively employ mergers and acquisitions, restructuring, refinancing, and financial market‑support tools to continuously inject high‑quality assets, thereby achieving high‑quality, leapfrog development.
Huang Aijun, secretary of the board at Baofeng Energy, also stated that the Notice was intended to bolster the development and growth of the private sector, and expressed hope that more detailed and specific supporting policies would be issued promptly to ensure that these measures are effectively implemented. “We look forward to further policy support from the relevant authorities for private enterprises, particularly in areas such as public financing and mergers and acquisitions,” he added.
Dong Guoqun, Deputy General Manager of the Shanghai Stock Exchange, stated at a recent meeting on advancing financial support for the development of private enterprises that, going forward, the Exchange will remain officely focused on high-quality development and strive to help the private sector and private companies leverage the capital market to grow and strengthen. It will intensify efforts to enhance financing for private enterprises, further improve the efficiency of IPO and secondary‑financing reviews, and, in light of the unique characteristics of technology‑innovation offices, explore the establishment of more flexible mechanisms for mergers and reorganizations, thereby steadily increasing the share of direct financing among private enterprises. In addition, the Exchange will refine credit‑enhancement mechanisms for private‑enterprise bond issuances, encourage the issuance of asset‑backed securities, fully unlock the value of existing assets, harness their credit‑enhancing potential, and reduce financing costs.

Commercial & Corporate
The “Belt and Road” Series of Blue Books Has Been Released to the Public
At a special press conference held on December 15, the National Development and Reform Commission announced that the Office of the Leading Group for Promoting the Belt and Road Initiative, in collaboration with relevant departments, has researched and compiled a series of blue books covering areas such as people-to-people connectivity, the Green Silk Road, international cooperation in traditional Chinese medicine, China–ASEAN development, China–Africa development, and China–Latin America development. These publications were officially released to the public on the 15th.
Xu Jianping, Director-General of the Department of Regional Opening-Up at the National Development and Reform Commission, stated that the series of blue books systematically outlines the achievements, lessons learned, and future prospects of Belt and Road cooperation in these key sectors and priority regions.

Beijing has further refined and adjusted its real estate policies, lowering the down payment ratio for first-time homebuyers to 30%.
To implement the requirement of “better meeting residents’ needs for both essential and improved housing” and to support the healthy, orderly development of Beijing’s real estate market, on December 14, five departments—the Beijing Municipal Commission of Housing and Urban–Rural Development, the Beijing Branch of the People’s Bank of China, the Beijing Regulatory Bureau of the National Administration of Financial Regulation, the Beijing Housing Provident Fund Management Center, and the Beijing Tax Service of the State Taxation Administration—jointly issued the “Notice on Adjusting and Optimizing the City’s Standards for Ordinary Housing and Personal Housing Loan Policies” (hereinafter referred to as the “Notice”). The notice adjusts the down payment ratios for first- and second-home purchases, lowering the down payment for a first home uniformly to 30% and setting the minimum down payment for a second home at 40%.
Meanwhile, the Beijing Market Interest Rate Pricing Self‑Regulatory Mechanism has adopted a self‑regulatory resolution to lower the policy floor for interest rates on newly issued commercial individual housing loans, thereby better supporting both first‑time and upgrade‑type housing demand in the city. Under this resolution, the policy floor for new mortgage rates offered by commercial banks will also be adjusted: based on the November Loan Prime Rate (LPR), the minimum rate for first‑home mortgages will be 4.2%.
Adjust and optimize policies in a timely manner to better meet residents’ needs for both essential and upgraded housing.
Recently, at the national level, a series of policies have been introduced, including clarifying the “property‑based, not loan‑based” approach to first‑home mortgage eligibility, lowering the minimum down payment ratio for home loans and setting a floor for second‑home mortgage rates, offering tax rebates on personal income tax paid by residents when trading up to new homes, and reducing interest rates on existing first‑home mortgages.
At the meeting of the Political Bureau of the CPC Central Committee held on July 24, when discussing the real estate market, it was for the first time stated that, in response to the new circumstances marked by significant shifts in supply and demand in China’s real estate market, real estate policies should be adjusted and optimized in a timely manner to better meet residents’ needs for both essential and improved housing.
One month later, on August 31, the People’s Bank of China and the National Administration of Financial Regulation issued the “Notice on Adjusting and Optimizing Differentiated Housing Credit Policies,” stipulating that the minimum down payment ratio for first‑home commercial personal housing loans will be uniformly set at no less than 20%, while the minimum down payment ratio for second‑home commercial personal housing loans will be uniformly set at no less than 30%. Localities may, based on real estate market conditions and the regulatory requirements of their respective local governments, independently determine the minimum down payment ratios and interest rate floors for first‑ and second‑home commercial personal housing loans.
“Following the ‘no mortgage for second homes’ policy, this latest adjustment to relevant measures both implements the spirit of documents issued by the People’s Bank of China and the National Administration of Financial Regulation, and responds to the actual conditions of Beijing’s real estate market, with the aim of better meeting both first-time homebuyer and housing‑upgrade demand,” said a responsible official from the Beijing Municipal Commission of Housing and Urban–Rural Development.
The down payment ratio for first-time home purchases has been uniformly reduced to 30%.
Adhering to the principle that housing is for living in, not for speculation, and in response to the significant shifts in supply and demand in the real estate market, Beijing has, on the basis of a nationally unified policy, lowered the minimum down payment ratio for first-time home purchases from the previous 35% for standard residential properties and 40% for non-standard residential properties to 30% across the board. For second-home purchases, the down payment requirement has been reduced from 60% for standard residential properties and 80% for non-standard residential properties to 50% in the six central districts and 40% in areas outside the six central districts.
According to reports, prior to this adjustment, Beijing’s policy stipulated that for individuals purchasing commercial housing other than policy‑subsidized housing, both commercial mortgages and public housing fund loans were subject to differentiated down payment requirements based on whether the property was classified as ordinary or non‑ordinary residential, and whether it was the first or second home. Specifically, for a first home, the down payment was 35% for ordinary residences and 40% for non‑ordinary residences; for a second home, the down payment was 60% for ordinary residences and 80% for non‑ordinary residences.
As such, this reduction in the minimum down-payment ratio lowers the financial barrier to home purchase for residents, thereby helping to better meet both first-time and upgrade‑type housing demand.
Starting December 15, the minimum interest rate for newly issued mortgages will be 4.2%.
This adjustment applies to the lower limit of interest rates for newly issued commercial individual housing loans. Effective December 15, newly granted commercial individual housing loans will be subject to the revised rate floor: in the six central urban districts, the floor for first‑ and second‑home loans will be set at no less than the corresponding-term Loan Market Quote Rate plus 10 basis points and no less than the same rate plus 60 basis points, respectively; outside the six central districts, the floors for first‑ and second‑home loans will be no less than the corresponding-term LPR and no less than the same rate plus 55 basis points, respectively.
According to the People’s Bank of China’s latest November LPR rates, the rate for loans with maturities of five years or more stands at 4.2%. Based on these figures, the minimum interest rates for first- and second-home purchases in the six central districts are 4.3% and 4.8%, respectively, while in areas outside the six central districts, the respective minimum rates are 4.2% and 4.75%.
It is reported that banks should, in accordance with the policy floor set by the Beijing Regional Market Interest Rate Pricing Self‑Regulatory Mechanism and taking into account their own operational conditions, customers’ risk profiles, and other relevant factors, reasonably determine the interest rate for each newly issued mortgage loan in line with market‑based and rule‑of‑law principles.
The maximum loan term has been extended from 25 years to 30 years.
In response to the rapid rise in housing prices, Beijing has relaxed its strict controls on mortgage terms, restoring the maximum loan term from the current 25 years back to 30 years. Taking a loan of RMB 1 million at an interest rate of 4.2%—the latest five-year-plus LPR—as an example, extending the term from 25 to 30 years under the equal‑principal‑and‑interest repayment scheme would reduce monthly payments by RMB 499, thereby easing borrowers’ financial burdens and unlocking greater consumer spending power.
In addition, the minimum down payment ratio and the maximum loan term for housing provident fund loans have been adjusted accordingly. For further details, please contact the Beijing Housing Provident Fund Management Center.
Optimizing the criteria for identifying ordinary residential housing; price thresholds will no longer be used in the assessment.
Another aspect of this optimization is the adjustment of the criteria for identifying ordinary residential housing.
The Notice clarifies that the criteria for identifying ordinary residential housing have been refined. Beijing’s current standards for ordinary residential housing, issued in 2014, no longer fully align with market realities and have drawn significant public feedback. In light of recent market developments, this revision appropriately raises the thresholds for both floor area and price.
Following the adjustment, housing units with a floor-area ratio of 1.0 or higher, a single-unit floor area of 144 square meters or less, and transaction prices of RMB 85,000 per square meter or less within the Fifth Ring Road, RMB 65,000 per square meter or less between the Fifth and Sixth Rings, and RMB 45,000 per square meter or less beyond the Sixth Ring are classified as ordinary residential properties. With the proportion of ordinary residential properties across the city rising to approximately 70%, more households will be eligible for the value-added tax preferential policies applicable upon housing transfers.
Recently, the policy benefits of lowering interest rates on existing mortgage loans have already reached a broad base of homebuyers.
According to the notice issued on August 31, 2023, by the People’s Bank of China and the National Administration of Financial Regulation regarding the reduction of interest rates on existing first-home mortgages, commercial banks may, through independent negotiation with borrowers, adjust these rates to no lower than the policy‑mandated floor in effect at the time. To ensure that the benefits of this policy reach a broader segment of the population, banks within the jurisdiction have generally lowered interest rates on first‑home mortgages originated before October 8, 2019, to the corresponding tenor‑specific Loan Market Quote Rate (LPR). For first‑home mortgages disbursed after October 8, 2019, rates have also been reduced to the LPR for the relevant tenor plus 55 basis points. Similarly, for second‑home mortgages, if the borrower’s actual housing situation meets the criteria for a first home, the rate has been adjusted downward from no lower than the LPR for the relevant tenor plus 105 basis points to no lower than the LPR plus 55 basis points, enabling borrowers to benefit from the interest‑rate reductions.
According to reports, Beijing has largely completed the adjustment of interest rates on existing first-home mortgages, with the adjusted mortgage rates averaging a reduction of 47 basis points.

Local Financial Development Report Released in Beijing, Supporting the Building of a Digital Finance Ecosystem
Recently, 36 financial institutions from across the country convened in Beijing to discuss “local financial development.” Representatives from these institutions engaged in an in-depth exploration of digital finance development models and digital transformation pathways for local financial institutions under the “Financial Powerhouse” strategy. During the event, the “Local Financial Development Report (2023): Transformation and Mission in the Tides of the Digital Economy” was released, offering new avenues for building a digital finance ecosystem.
The “Report” comprises three sections: the Background section, which comprehensively explains how the development of the digital economy, the realization of data‑driven value, and technological innovation have become key catalysts for local financial holding platform companies to achieve new digital‑era growth and fulfill their renewed mission; the Internal section, which focuses on accelerating institutional digital transformation by addressing pressing challenges such as inadequate digital governance frameworks, insufficient infrastructure investment, imperfect internal management systems, and lagging business‑system development, while highlighting distinctive best practices in digital transformation; and the Ecosystem section, which supports regional digital economic development by drawing on innovative initiatives across various locales in areas like data aggregation, data trading, digital credit reporting, digital public services, and digital government, thereby offering a new model for building a digital finance ecosystem.
This conference brought together industry experts from government regulators, financial institutions, technology offices, and platform enterprises to engage in in-depth discussions—spanning policy, industry, and technology—on topics such as digital innovation, high-quality financial development, and the construction of digital financial infrastructure, all in pursuit of the goal of accelerating China’s rise as a global financial powerhouse. Participants exchanged ideas and shared innovative achievements.
To pool financial resources from all sectors and contribute to building a financially strong nation, the event’s organizers issued an “Initiative,” calling on participating institutions to join forces in exploring ways to leverage high-quality financial development to better support the country’s major national strategies and regional economic and social progress.
During the discussion session, Beijing Financial Holding Group stated that, as one of the first licensed financial holding companies nationwide and the first at the local level, it is focusing on building digital‑economy infrastructure across key areas—including public data applications, personal and corporate credit reporting, data trading, digital public services, and digital government administration. The group has preliminarily established a digital‑finance ecosystem with distinctive financial‑holding characteristics and is committed to becoming an ecosystem‑leading enterprise in the digital finance sector.
Hunan Caixin Financial Holding Group stated that it will strengthen its financial technology framework by leveraging five key digital dimensions—data, computing power, algorithms, network infrastructure, and cybersecurity—and proactively build a comprehensive digital meta‑system for financial management and services. This system will dynamically adapt to technological advancements, business transformation, enhanced regulatory requirements, and talent alignment, delivering “one-stop” integrated financial services. The group is committed to elevating the “gold content,” “innovation content,” and “green content” of economic development, thereby contributing Caixin’s expertise to fostering local economic growth.
According to Jiangxi Financial Control Group, the company will focus on its strategic goal of building a “100-billion‑yuan smart financial holding group” by strengthening risk management, enhancing integrated synergy, and bolstering fintech capabilities. These efforts will accelerate the group’s digital transformation, establish a comprehensive digital finance service platform, and further support the development of the digital economy while helping the real economy grow stronger and more robust.
Beijing Financial Control Group stated that, as a pioneer among local financial holding groups, it actively offers policy recommendations and contributes to fostering a development environment characterized by friendliness, orderliness, and prudence. Leveraging its subsidiaries—such as the Beijing Stock Exchange Fund supporting the digital economy, the RMB International Investment and Lending Fund, initiatives in public data authorization and operation as well as credit information platform development, and personal credit reporting services—the Group is working with participating institutions to co‑build an ecosystem, co‑create value, and jointly pursue growth.

The State Administration of Foreign Exchange has expanded the pilot program for high-standard opening-up in cross-border trade and investment.
On December 15, the State Administration of Foreign Exchange issued the “Notice on Expanding the Pilot Program for High-Level Opening-Up in Cross-Border Trade and Investment,” deciding to extend the pilot program to include Shanghai, Jiangsu, Guangdong (including Shenzhen), Beijing, Zhejiang (including Ningbo), and the entire territory of Hainan.
The pilot policy comprises eight measures, five of which pertain to current‑account transactions: facilitating the receipt and payment of foreign‑exchange funds under the current account; supporting settlement for new forms of international trade; expanding the scope of net‑balance settlement for trade receipts and payments; exempting special cases of returned remittances from registration requirements; and streamlining the administration of advance‑payment or cost‑sharing arrangements in services trade. The remaining three measures address capital‑account transactions: waiving registration for domestic reinvestment by foreign‑invested enterprises; allowing parent and subsidiary companies engaged in financial leasing to share a single external‑debt quota; and enabling banks to handle, directly, foreign‑exchange registration for capital‑account items such as external debt and overseas listings.

The Ministry of Industry and Information Technology plans to issue the “Administrative Measures for the Comprehensive Utilization of Power Batteries for New Energy Vehicles.”
On December 15, the website of the Ministry of Industry and Information Technology published the “Administrative Measures for the Comprehensive Utilization of Power Batteries for New Energy Vehicles (Draft for Public Comment),” with a public comment period running from December 15, 2023, to January 15, 2024.
The Measures comprise eight chapters and forty-three articles, applying to the comprehensive management of used power batteries generated across all stages—research and development, design, production, installation, use, maintenance, replacement, scrapping, recycling, treatment, storage, and transportation—within the territory of China. They clarify that automobile manufacturers bear primary responsibility for the collection of installed power batteries, battery manufacturers are responsible for collecting power batteries directly sold to the market, and cascade‑utilization enterprises are responsible for collecting cascade‑utilized products they produce.

Taxation
The Ministry of Industry and Information Technology and two other departments have revised the technical requirements for new-energy vehicles eligible for reductions or exemptions from the vehicle acquisition tax.
Recently, the Ministry of Industry and Information Technology, the Ministry of Finance, and the State Taxation Administration jointly issued the “Notice on Adjusting the Technical Requirements for New Energy Vehicles Eligible for Vehicle Acquisition Tax Exemption,” specifying that, effective January 1, 2024, any vehicle model seeking inclusion in the “Catalogue of New Energy Vehicle Models Eligible for Vehicle Acquisition Tax Exemption” must comply with the relevant technical requirements for new energy vehicles.
A relevant official from the Ministry of Industry and Information Technology stated that the announcement has appropriately raised existing technical requirements, introduced new criteria for low-temperature range degradation, and clarified the requirements applicable to battery-swap‑compatible vehicle models. Specifically, such vehicles must comply with the GB/T 40032 standard, “Safety Requirements for Battery Swapping of Electric Vehicles,” and applicants are required to submit supporting documentation demonstrating their ability to provide battery‑swap services.
The announcement states that the period from January 1, 2024, to May 31, 2024, will serve as a transition phase. Starting January 1, 2024, vehicle models that were included in the “Catalogue of New Energy Vehicle Models Exempt from Vehicle Acquisition Tax” prior to December 31, 2023, and remain valid, will be automatically transferred to the “Catalogue of New Energy Vehicle Models Eligible for Reduction or Exemption from Vehicle Acquisition Tax.” Such models must promptly upload the tax‑exemption markings and the battery‑swap‑mode identifiers; battery‑swap‑mode vehicles, fuel‑cell vehicles, and other eligible models shall, in accordance with the announcement’s requirements, submit the requisite supporting documentation. Effective June 1, 2024, any vehicle model that fails to meet the technical criteria specified in the announcement will be removed from the “Catalogue of New Energy Vehicle Models Eligible for Reduction or Exemption from Vehicle Acquisition Tax.” Relevant vehicle models are required to complete all compliance‑related tasks associated with the policy transition during the transition period.
A relevant official from the Ministry of Industry and Information Technology stated that the revised indicators in the announcement were carefully aligned with existing policies, including new‑energy vehicle purchase subsidies, the dual‑credit system, and fuel‑cell vehicle demonstration programs, while also allowing for a transitional period. From an industry perspective, these measures will help stabilize the automotive market, promote technological advancement and energy‑efficient consumption, and encourage enterprises to ensure product safety.

Over 1.6 trillion: Tax incentives deliver targeted benefits, helping businesses cut costs and boost vitality.
Continued reductions and exemptions of value-added tax for small-scale taxpayers, refinements to the policy on additional deductions for R&D expenses, and VAT credit‑offset measures for advanced manufacturing enterprises—since the beginning of this year, relevant authorities have rolled out, optimized, and improved nearly 70 tax and fee preferential policies in phases, effectively boosting the vitality of market entities and strengthening the momentum for innovation and development. According to the latest data from the State Taxation Administration, from January to October this year, nationwide tax and fee reductions, refunds, and deferrals totaled RMB 1.6607 trillion. Private-sector taxpayers were the primary beneficiaries, accounting for nearly 75% of the total; meanwhile, innovation-driven entities also reaped significant benefits, with 403,000 enterprises having already taken advantage of the early‑stage R&D expense additional deduction policy in the first three quarters.
As the national-level inheritor of the intangible cultural heritage technique for firing Yazhou pottery, Zhang Luqi founded Pingtang County Luqi Yazhou Ancient Pottery Culture Co., Ltd. in 2012. Its products are exported to more than ten countries, including the United States, the United Kingdom, and France. “Since we started the company, we have reaped the benefits of tax incentives, which have strengthened our confidence and resolve to remain committed to the pottery industry,” said Zhang Luqi.
According to Zhang Luqi, since the beginning of this year, the company has benefited from preferential policies for small-scale VAT taxpayers, resulting in tax reductions and exemptions totaling RMB 169,300. Additionally, during the 2022 annual corporate income tax settlement, it received a further RMB 113,800 in corporate income tax relief. “With the support of these tax and fee incentives, the company is now able to steadily help more than 30 local residents increase their incomes right at their doorsteps. Skilled artisans are working together to preserve and innovate, bringing Yazhou pottery culture into the everyday lives of ordinary people.”
Small and micro enterprises are a vital driving force behind national economic and social development. To support their growth, at the beginning of this year China announced that it would continue to exempt from VAT small-scale taxpayers with monthly sales below RMB 100,000, and reduce the VAT rate for those subject to the 3% levy to 1%. On August 1, in accordance with the State Council’s decision, the validity of these measures was extended to December 31, 2027, further stabilizing market expectations and bolstering the confidence of small and micro businesses. According to data from the State Taxation Administration, from January to October, tax and fee reductions, refunds, and deferrals totaling RMB 1.23856 trillion were granted to private-sector taxpayers nationwide, accounting for nearly 75% of the total.
“Small and micro enterprises are numerous and widespread, yet relatively vulnerable to risks. Only by stabilizing these businesses can we ensure employment, boost household incomes, and maintain social stability. A series of tax and fee‑support policies has strengthened the resilience of small and micro business operators and enhanced their confidence in the future,” said Wang Tingting, an associate professor at the School of Economic Law of Southwest University of Political Science and Law and a researcher at the China Institute for Fiscal and Tax Law.
“The tax incentive policies are substantial, and filing and paying taxes have become increasingly convenient, easing the burden on businesses and enabling them to move forward more steadily and swiftly. I’ve done the math: so far this year, we’ve benefited from VAT exemptions and reductions totaling 24,000 yuan for small-scale taxpayers, as well as income tax breaks worth 57,900 yuan for micro and small enterprises. These tangible financial benefits have filled our company with hope for the future,” said Song Shuixian, legal representative of Shuixian Ma Wei Embroidery Co., Ltd.
Enterprises are the main drivers of technological innovation. In addition to strengthening support for private small and micro businesses, since the beginning of this year, tax and fee‑reduction policies have also been focused on easing the burden and boosting the vitality of technology‑innovation enterprises.
“Technological innovation is the primary productive force, but without financial support, no strategy can be realized,” says Yuan Shihua, the chief financial officer of Sichuan Yongxiang Co., Ltd., a leading polysilicon producer. “Since the beginning of this year, the six subsidiaries under Yongxiang have collectively benefited from an additional tax deduction for R&D expenses totaling approximately RMB 190 million, bolstering our confidence in reducing costs and boosting efficiency in technological research and development.”
The tangible tax incentives and benefits clearly support enterprises’ innovative development. Yuan Shihua stated that, over the years, Yongxiang Group has remained deeply committed to the production of high-purity crystalline silicon, upgrading its technology through eight generations and successfully overcoming the technical challenges associated with extracting high-purity silicon.
The policy of additional tax deductions for R&D expenses is one of the key measures to advance innovation-driven development. In recent years, China has continuously refined this policy: in March of this year, the deduction rate for eligible enterprises was uniformly raised from 75% to 100% and institutionalized as a long-term arrangement. At the same time, a new July provisional‑tax filing period was introduced as the effective date for applying the policy, encouraging companies to increase their R&D investment more quickly and effectively. According to data from the State Taxation Administration, during the first three quarters, a total of 403,000 enterprises nationwide took advantage of the R&D expense additional deduction ahead of schedule.
“Over the past three years, we have benefited from tax and fee concessions totaling nearly RMB 8 million, including the additional deduction for R&D expenses. Since 2023 alone, these benefits have amounted to more than RMB 2 million. The reduced tax and fee burden has strengthened our growth momentum and ensured more steady progress. We have reinvested the savings into product R&D, enhancing our products’ competitiveness, attracting a more stable customer base and order flow, and continuously building up our development momentum,” said Liu Yueqi, a responsible official at Chengdu Ruihua Machinery Manufacturing Co., Ltd.
“Tax and fee reductions are crucial measures for stabilizing businesses, safeguarding employment, and supporting market entities in overcoming difficulties and achieving sustainable development; they also constitute a key component of this year’s proactive fiscal policy, which is being intensified and made more effective,” said Lan Fo’an, Secretary of the Party Group and Minister of the Ministry of Finance. It is reported that, going forward, the Ministry of Finance will work with relevant departments to ensure the continued implementation and tangible results of the policies already introduced, so that all tax and fee concessions are delivered precisely to those who need them and their full impact is fully realized.
An official from the State Taxation Administration also stated that it will continue to adopt stronger measures and more concrete actions to ensure that policy benefits are delivered precisely to business entities, thereby fully unleashing the impact of innovation‑stimulating policies.
“Our country has continuously introduced large-scale tax and fee reduction policies, which have effectively eased the burden on businesses and households, improved the cash flow of market entities, fostered technological innovation, and enhanced their resilience to risks.” Luo Zhiheng, Chief Economist and Dean of the Research Institute at Yuekai Securities, recommends that in the future, greater synergy should be forged between tax and fee reductions and other policy measures, with a focus on strengthening the systemic integration of fiscal policy, boosting its efficiency and effectiveness, proactively shaping market expectations, and enhancing communication with the market.

Litigation & Arbitration
The Supreme People’s Court has released typical cases of punitive damages for food safety violations.
“Food is paramount for the people, and food safety comes first.” Food safety is vital to the health and lives of the public. Recently, the Supreme People’s Court released four landmark cases involving punitive damages for food‑safety violations, addressing pressing societal issues such as whether claims brought by consumers who knowingly purchase counterfeit goods are legally admissible. These rulings aim to standardize judicial interpretation, encourage producers and operators to conduct business in compliance with the law, guide consumers to assert their rights rationally, safeguard food safety, and foster a sound legal environment that supports high‑quality economic and social development.
Release of typical cases to address the hot‑button issue of whether “knowing‑that‑it’s‑fake‑but‑still‑buying” is legally protected.
In 2013, the Supreme People’s Court issued a specific judicial interpretation stipulating that when a purchaser asserts rights against a producer or seller, any defense based on the claim that the purchaser knowingly bought the product despite being aware of its quality defects shall not be upheld by the people’s courts. This adjudicatory rule has played a positive role in implementing the “four strictest” requirements, punishing unlawful conduct in the food sector, and safeguarding the life, health, and safety of the public; however, new circumstances and issues have emerged in its application.
On the one hand, some purchasers engage in large‑scale, repeated, or high‑value claims that exceed their ordinary consumption needs; some even resort to extortion under the guise of defending their rights, thereby disrupting market order and infringing upon the legitimate rights and interests of producers and operators. On the other hand, in judicial practice, inconsistent interpretations and applications of relevant laws and judicial interpretations have led to uneven adjudication of similar cases, preventing the full realization of the punitive damages regime for food safety violations. This undermines the effectiveness of sanctions against the production and sale of substandard and counterfeit products and hinders efforts to promote high‑quality economic and social development.
The four typical cases released this time address the hotly debated issue in judicial practice—whether “knowing‑and‑purchasing‑counterfeit‑goods” is legally protected—clarifying and standardizing the rules for adjudication. “Alongside the publication of these typical cases, the Supreme People’s Court has formally opened for public comment the ‘Interpretation on Several Issues Concerning the Application of Law in Adjudicating Disputes over Punitive Damages for Food and Drug Safety’ (Draft for Comments), with the aim of ensuring uniformity in judicial standards, safeguarding food safety, cracking down on illegal acts such as extortion of producers and operators under the guise of rights protection, and fostering a sound business environment,” said an official from the Supreme People’s Court.
It is understood that, with regard to issues such as the legal application of punitive damages in the food sector, the Supreme People’s Court will focus on the following three areas: first, promoting the improvement of the public-interest litigation system to further enhance its role in deterring and curbing unlawful conduct by business entities; second, strengthening communication and coordination with administrative authorities, streamlining channels of dialogue and refining collaborative mechanisms, thereby forging a concerted effort to address illegal activities in the food sector; and third, intensifying public awareness campaigns on food safety and relevant laws, empowering the general public to safeguard their rights through legal means and leveraging their oversight role in identifying and addressing unlawful behavior.
Consistent with its longstanding judicial policy, the court upholds consumers’ claims for punitive damages.
The Food Safety Law stipulates that if a food product does not meet food safety standards, or if a business knowingly sells such a product, consumers may, in addition to seeking compensation for losses, demand from the producer or operator damages equal to ten times the purchase price or three times the amount of the loss. This law establishes a punitive damages regime of “refund one, compensate ten.” Furthermore, the Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Food and Drug Dispute Cases clarify that, in disputes arising from quality issues with food or drugs, if a purchaser asserts rights against the producer or seller, the people’s courts will not uphold the defense raised by the producer or seller on the grounds that the purchaser knowingly purchased the product despite being aware of its quality defects.
People’s courts consistently prioritize the protection of food safety as the paramount value in adjudicating food‑safety disputes. The typical cases released this time all upheld, in accordance with the law, consumers’ claims for punitive damages, thereby reafofficeing the Supreme People’s Court’s longstanding judicial policy.
The Supreme People’s Court has stated that when the likelihood of accountability for unlawful conduct is low and the costs of violating the law are minimal, negative incentives are likely to arise, making it difficult to effectively curb illegal activities in the food sector. Supporting consumers’ efforts to protect their rights helps to purify the market and foster a governance framework for food safety characterized by joint construction, joint governance, and shared benefits.
The public commonly refers to the practice of knowingly purchasing food that fails to meet food safety standards and then pursuing one’s rights as “knowing‑and‑buying‑fake.” There are differing views across society regarding whether to support this practice. However, the root cause of the “knowing‑and‑buying‑fake” phenomenon lies in the existence of illegal acts involving the production and sale of food that does not comply with food safety standards. If counterfeit products are effectively blocked and such illegal activities are brought under control, the “knowing‑and‑buying‑fake” phenomenon will naturally disappear.
Adhere to supporting claims for punitive damages within the scope of reasonable living and consumption needs.
In judicial practice, some individuals, seeking improper gains, purchase large quantities of food far in excess of their ordinary consumption needs, thereby inflating the base amount used to calculate punitive damages and pursuing exorbitant claims. This has resulted in certain producers and operators being held liable for disproportionately severe consequences for minor infractions, thus deviating from the spirit of the Food Safety Law and other relevant laws and judicial interpretations, and giving rise to controversy over whether “knowing‑and‑purchasing‑a‑fake” claims should be upheld.
The controversy over whether to uphold “buying counterfeit goods in good faith” primarily centers on the determination of the plaintiff’s motive for asserting rights. The landmark case adheres to an objective standard, consistently supporting consumers’ claims for punitive damages within the bounds of reasonable personal consumption needs. This approach helps resolve disputes, harmonize legal rules, and fosters a sound rule-of-law environment that safeguards food safety and promotes the healthy development of the food industry.
In the product liability dispute case of Guo v. a certain business entity, the plaintiff purchased a total of four bottles of baijiu, which did not exceed the scope of ordinary personal consumption. Relying on the total price paid by the consumer as the basis for calculation, the People’s Court upheld the plaintiff’s claim for punitive damages.
In the case of Zhang v. a Shanghai fresh‑food company concerning a sales contract dispute, Zhang purchased, on two consecutive days, 6 and 40 cooked, loose‑packed salted duck eggs that had just expired their shelf life. Using his bank card, he made 46 separate payments, and the seller issued 46 individual receipts. Exploiting the Food Safety Law’s provision that where the additional compensation falls short of RMB 1,000, it shall be capped at RMB 1,000, Zhang deliberately split the purchase of the 46 duck eggs into 46 separate transactions, thereby seeking to claim RMB 1,000 in additional compensation for each transaction, with the aim of obtaining a substantial total award.
The aforementioned conduct clearly exceeds the scope of ordinary personal consumption, and the People’s Court did not fully uphold Zhang’s claims. Zhang purchased 46 salted duck eggs for a total price of RMB 101.20; viewed in aggregate, this purchase does not exceed what is reasonably necessary for everyday living expenses. By calculating punitive damages at ten times the purchase price—RMB 101.20—the court has reafofficeed its judicial principle of granting consumers’ claims for punitive damages only to the extent that such claims fall within the bounds of “reasonable personal consumption needs.”
According to the briefing, supporting consumers’ claims for punitive damages within the scope of personal and household consumption aligns with the spirit of laws such as the Consumer Rights Protection Law and the Food Safety Law, as well as the Supreme People’s Court’s judicial interpretations. This approach helps deter and curb unlawful business practices, safeguarding public food safety; it also prevents excessive incentives and guards against illegal activities—such as extortion carried out under the guise of rights protection—thereby avoiding disruption to the normal order of production and operation.

The Supreme People’s Court and the Supreme People’s Procuratorate jointly released typical cases of administrative public interest litigation.
On December 13, the Supreme People’s Court website published the “Notice of the Supreme People’s Court and the Supreme People’s Procuratorate on Issuing the ‘Typical Cases of Administrative Public Interest Litigation.’”
This batch of typical cases comprises eight matters, primarily focusing on areas such as state-owned property, food safety, fire safety, arable land protection, the preservation of memorial facilities for martyrs and heroes, cultural heritage protection, and the payment of wages to migrant workers. Some cases involve recovering land‑transfer fees; others concern safeguarding drinking‑water source areas and ensuring the safety of bottled‑water products; still others pertain to maintaining the security of memorial facilities for anti‑Japanese martyrs and public‑space fire‑safety systems; and yet others seek to halt the illegal occupation of basic farmland and enforce the wage‑deposit system for migrant workers. The administrative agencies named as defendants span a range of functional departments—covering natural resources, market supervision, culture and tourism, emergency management, and human resources and social security—as well as grassroots governments. The case types include both actions challenging administrative inaction and requests for the revocation of administrative penalty decisions. This marks the first time that the Supreme People’s Court and the Supreme People’s Procuratorate have jointly issued a set of cases centered on administrative public‑interest litigation, with separate sections on “procuratorial oversight” and “judicial adjudication,” accurately reflecting the respective roles of the two institutions and highlighting the distinct contributions of the procuratorate and the courts at different stages of the litigation process.

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