JC Master Legal News Issue 1081

Release Date:

2023-09-25 19:29

Key Takeaways for This Issue

In her address, Deputy General Manager Zhang Mei stated that Guangxi serves as a gateway for financial openness to ASEAN, while the Beijing Stock Exchange is committed to becoming a premier platform for serving innovative small and medium-sized enterprises. The Exchange will further advance the national innovation-driven development strategy, continue to support the growth of SMEs and the private sector, and strengthen its support for enterprises participating in the Belt and Road Initiative. The establishment of a joint service base between the Beijing Stock Exchange and Guangxi not only builds on the positive outcomes of their previous collaboration but also lays a solid foundation for expanding the scope and deepening the depth of their partnership. Leveraging this initiative, the Beijing Stock Exchange will work with all stakeholders in Guangxi to pool resources and synergies, thereby helping Guangxi’s enterprises achieve innovative development.

Since the establishment of the Beijing Stock Exchange, Guangxi Zhuang Autonomous Region has seized opportunities by proactively identifying and mobilizing high-quality enterprises to apply for listing on the exchange. Currently, the region has three companies listed on the Beijing Stock Exchange and 43 companies listed on the New Third Board, with a well-organized pipeline of prospective listings and an emerging tiered structure for going public taking shape.

Going forward, the Beijing Stock Exchange and the National Equities Exchange and Quotations Company will leverage the Guangxi Service Base to further strengthen cooperation with governments at all levels in Guangxi and relevant institutions. Through a variety of channels—including training sessions, symposiums, and on-site visits—they will forge close ties with enterprises, intermediary agencies, investment offices, and other market participants, jointly facilitating the listing of a group of leading benchmark companies on the Beijing Stock Exchange and cultivating a distinctive, competitively strong “Guangxi sector” within the exchange.

Reigniting Momentum: Beijing Stock Exchange Market Makers Step Up Their Strategic Deployment
Since September, market makers have continued to ramp up their presence on the Beijing Stock Exchange, with 17 new market-making mandates added to date—some brokerage offices have even secured more than six new listings in a single round. At present, Guojin Securities (600109) leads the pack with 37 listed securities under its market-making program.
With the Beijing Stock Exchange lowering the eligibility threshold for market makers and refining its market-making trading framework, industry insiders expect the exchange’s pool of market makers to grow steadily, thereby enhancing market liquidity, trading activity, and pricing efficiency.
On September 1, Orient Securities (600958) announced that it has joined the market-making roster for Dezhong Auto. This marks another addition to its market-making list, following its initial entry into the market-making program for Meideng Technology on August 18. At present, Orient Securities has a total of two market-making constituents.
Several market makers have been actively expanding their coverage of market-making securities. Notably, CITIC Securities (601066) announced on September 13 that it would begin providing market-making services for seven companies listed on the Beijing Stock Exchange; subsequently, Guojin Securities disclosed on September 15 that it had joined six additional companies as a market maker.
On September 15, CITIC Securities (600030) added three new market-making securities to its roster. Following the initial inclusion of six companies on February 17, the office subsequently expanded its market-making coverage on June 6, June 15, August 31, and September 15.
Currently, there are 15 market makers on the Beijing Stock Exchange. In terms of the number of securities they cover, Guojin Securities leads with 37 underlying stocks; Anxin Securities remains in second place with 26, trailing only Guojin; and CITIC Securities ranks third with 16. The gap among the top three is steadily narrowing. Meanwhile, Zhejiang Commercial Securities (601878), which was granted market-making eligibility on the Beijing Stock Exchange in the second batch, has already added three eligible securities to its roster since launching its market-making operations in June.
From the perspective of market-making stocks, “high-performing shares” are favored by market makers. Wuhan Landian, which listed on the Beijing Stock Exchange on June 1, recently received its first-ever inclusion in the market-making program following the release of its 2023 interim report. Companies such as Kerun Zhikong and Fangsheng Shares have also recently welcomed market makers to their trading platforms.
Many companies have multiple market makers. With CITIC Securities joining the market-making roster this month, Chuangyuan Xinke now has five market makers; CompuChem has two; and companies such as Xinzhi Bio, Huifeng Diamond, and Haitai New Energy each also have two or more market makers.
On July 28, the China Securities Regulatory Commission issued the “Special Provisions on Market-Making Trading of Stocks on the Beijing Stock Exchange by Securities Offices (Draft for Comments),” proposing to lower the threshold for securities offices to submit market-making applications on the BSE. Meanwhile, with the introduction of a comprehensive package of deep‑reform measures for the BSE, market makers’ enthusiasm for providing liquidity has significantly increased.
On the very day the Beijing Stock Exchange unveiled its “19 Measures for Deepening Reform” on September 1, it also launched an initial package of eight reform and innovation initiatives. These measures include optimizing the market-making trading framework, such as revising the Detailed Rules for Stock Market-Making Trading at the Beijing Stock Exchange and their accompanying operational guidelines, allowing market makers to use dedicated securities accounts for strategic allocations to facilitate access to securities; and aligning the exemption from quotation requirements with the over-allotment option mechanism, so that lead underwriters may commence market-making quotes immediately upon disclosing the completion of share repurchases. This approach encourages market makers to promptly provide quoting services following a new stock’s listing, thereby providing foundational liquidity and enhancing price stability for newly listed shares.
Zhu Kan, a seasoned investor in the Beijing Stock Exchange and partner at BeiYin Capital, noted that market makers have recently stepped up their activities on the exchange for two main reasons: First, the Beijing Stock Exchange has moderately relaxed its eligibility criteria for market-making, lowering requirements for capital strength and classification-based evaluations, which will expand the pool of qualified market makers. Second, following the release of the “19 Measures for Deepening Reform,” the exchange has introduced a series of favorable policies, creating more investment opportunities. For instance, with the relaxation of rules governing transfers to other exchanges, the Beijing Stock Exchange—currently an undervalued market—now hosts numerous high‑quality companies whose valuations are poised to rise. Recent sharp gains in stocks such as Tongli Shares, Hechang Polymer, Wuxin Tunnel Equipment, and Huifeng Diamond all reflect this trend, as they are closely tied to the transfer‑to‑other‑exchanges concept.
“In the future, as the Beijing Stock Exchange continues to refine its market-making system, I believe the pool of market makers will keep expanding, which will help enhance market liquidity, trading activity, and pricing efficiency. However, optimizing the market-making regime is only one small step in the BSE’s broader reform agenda; the core of the overall reform remains focused on elevating the overall quality of listed companies and attracting high‑quality offices to list on the exchange, thereby drawing in capital and encouraging it to stay invested,” said Zhu Kan.
In the view of Zhu Weiyi, a veteran of the Beijing Stock Exchange and general manager of Guangdong Liliang Private Fund Management Co., Ltd., the number of new market-making transactions on the Beijing Stock Exchange in September is expected to surpass that of August. He believes that with the significant reduction in the exchange’s market-making准入 requirements, the Beijing Stock Exchange will attract more experienced market makers, who are likely to expand their activities on the exchange, thereby boosting trading volume.
“As market makers ramp up their market-making activities on the Beijing Stock Exchange, they may begin to scale back their positions in New Third Board‑listed stocks; investors should be mindful of avoiding such securities,” Zhu Weiyi noted.

The China Securities Regulatory Commission strictly regulates the lending of securities by strategic investors. On the first day of its listing, Jindi Shares’ short-selling activities complied with current regulatory requirements, and no instances were found of any parties circumventing restrictions to reduce holdings or colluding to transfer benefits.
On the first day of trading, an asset management plan established for the strategic allocation in JinDi Shares’ IPO—participated in by senior executives and core employees—lent out its allotted securities, drawing market attention. On September 19, a responsible official from the relevant department of the China Securities Regulatory Commission stated that the authorities have taken note of the situation and conducted a review. Based on the findings to date, the securities‑lending activities undertaken by strategic investors on JinDi Shares’ listing day are in compliance with current regulatory requirements, and no evidence has been found of circumvention to reduce holdings or collusive efforts to transfer benefits.
In accordance with Articles 21 and 23 of the Measures for the Administration of Securities Issuance and Underwriting, senior management and core employees of the issuer may participate in strategic allocations by establishing asset management plans. Investors participating in strategic allocations may, within the committed holding period, borrow the allocated securities from securities finance companies in compliance with applicable regulations. A responsible official from the relevant department of the China Securities Regulatory Commission stated that the primary purpose of these provisions is to enhance liquidity in the early stages of a new share listing and to curb excessive price volatility. Upon maturity of the borrowed securities, strategic investors will repurchase all shares, receiving only the proceeds from the loan, and the shares will continue to be subject to restricted‑sale arrangements.
Following verification by the China Securities Regulatory Commission, after senior executives and core employees of Jindi Co., Ltd. participated in the strategic allocation, on the first day of listing, an asset management plan lent shares to a securities finance company through the stock‑lending‑through‑margin‑trading mechanism. The securities finance company then provided these shares on margin to 13 securities offices, enabling 124 investors—including 35 individual investors and 89 private equity funds—to borrow and sell the shares in accordance with applicable regulations. Based on the current findings, the aforementioned short‑selling transactions comply with prevailing regulatory requirements, and no instances of circumventing share reductions or collusive transfer of benefits have been identified.
The China Securities Regulatory Commission stated that it will strictly regulate the practice of strategic investors lending out securities, explicitly prohibiting relevant parties from engaging in disguised share reductions or colluding to transfer benefits in any form. Any violations will be rigorously investigated and dealt with in accordance with the law. With regard to the rules governing the temporary lending of shares by listed-company executives and core employees following strategic allocations—issues raised by the market—the Commission will solicit extensive input from all stakeholders and conduct further deliberation and assessment.

Detouring to reduce holdings? Transferring benefits? The CSRC’s latest response! This rule will undergo further deliberation and assessment.
The RMB 200 million in short‑selling orders that appeared on the first day of Jindi Shares’ IPO has sparked intense debate over whether the lending of restricted shares amounts to a backdoor method of reducing shareholdings. On September 19, an official from the relevant department of the China Securities Regulatory Commission stated that the authorities have taken note of the situation and conducted a thorough review. Based on the findings to date, the short‑selling activity on Jindi Shares’ listing day complied with current regulatory requirements, and no evidence has been found of entities circumventing restrictions to reduce holdings or colluding to transfer benefits.
The aforementioned official stated that the CSRC exercises strict oversight over securities lending activities by strategic investors, explicitly prohibiting relevant parties from engaging in disguised share reductions or colluding to transfer benefits in any manner. Any violations will be rigorously investigated and dealt with in accordance with the law.
On September 1, Jindi Co., Ltd. listed on the A-share market and was simultaneously added to the margin‑and‑short‑selling eligible securities list. Data show that on its first day of trading, the company’s shares were shorted by 4.583227 million shares. That same day, the total number of shares lent through the securities‑lending program reached 4.70 million. Coincidentally, the strategic‑allocation asset‑management plan involving the company’s senior management and core employees held 4.700871 million shares. In light of this, some market observers speculated that the more than 4.58 million shares shorted on Jindi’s debut day originated precisely from the restricted shares allocated under the strategic placement.
This has sparked intense debate in the market over whether the lending of restricted shares amounts to an indirect share sell‑off.
An official from the relevant department of the China Securities Regulatory Commission stated that, in accordance with Articles 21 and 23 of the Measures for the Administration of Securities Issuance and Underwriting, senior management and core employees of the issuer may participate in strategic allocations by establishing asset management plans. Investors participating in strategic allocations may, within the committed holding period, borrow the allocated securities from securities finance companies in compliance with applicable regulations. The primary purpose of these provisions is to enhance liquidity in the early stages of a new share listing and to curb excessive price volatility. Upon maturity of the borrowed securities, strategic investors will reclaim all shares, receive only the borrowing income, and continue to manage them as restricted shares.
Following review by the China Securities Regulatory Commission, after senior executives and core employees of Jindi Co., Ltd. participated in the strategic allocation, on the first day of listing, an asset management plan lent the shares to a securities finance company through the stock‑lending‑through‑margin‑trading mechanism. The securities finance company then provided these shares on margin to 13 securities offices, enabling 124 investors—including 35 individual investors and 89 private equity funds—to borrow and sell the shares in accordance with applicable regulations.
The head of the relevant department stated that, based on the current verification findings, the aforementioned securities‑lending activities are in compliance with existing regulatory requirements, and no instances have been identified of entities circumventing restrictions to reduce holdings or colluding to transfer benefits. The China Securities Regulatory Commission exercises strict oversight over the lending of securities by strategic investors, explicitly prohibiting any form of disguised share reduction or concerted efforts to siphon off benefits; any violations will be rigorously investigated and dealt with in accordance with the law.
Further substantiation of the relevant evaluation rules
In response to market feedback regarding the rules allowing senior executives and core employees of listed companies to temporarily lend out shares acquired through strategic allocations, a responsible official from the relevant department of the China Securities Regulatory Commission stated that the authorities will thoroughly solicit views from all stakeholders and conduct further deliberation and assessment.
On its very first day of trading, Jindi Shares was hit by massive short-selling activity, prompting market speculation that the company was “shorting itself.” In the wake of this episode, “short selling” has become a sensitive topic in recent market discussions. On September 18, dozens of listed companies—including Changchun High-Tech (000661), Qianhe Flavor & Spice (603027), Dunhuang Seed Industry (600354), and Kejingyuan—jointly issued clarifications via exchange‑listed platforms, asserting that they had not lent shares to securities offices for short‑selling purposes.
As early as 2019, when the STAR Market was launched, regulatory authorities introduced a pilot program to broaden the supply of securities available for short selling, stipulating that shares acquired through strategic allocations in initial public offerings under the registration-based system could be lent out during the lock-up period. With the full implementation of the registration-based system, this rule was extended to the main board. The original intent behind this measure was to address the longstanding shortage of short‑selling collateral in the A‑share market and the imbalance between margin financing and short selling. It also created favorable conditions for securities offices to expand their short‑selling activities, helping to balance long and short positions, enhance market liquidity and efficiency, boost trading activity, and strengthen the market’s price‑discovery function.
Some industry insiders in the quantitative private‑equity space argue that when shareholders lend out their restricted shares, they are not transferring ownership—only the right to use the shares. The lender earns a fee for this arrangement, capturing income derived from the asset’s utilization, and this does not constitute an indirect reduction of shareholdings. At present, only strategically allocated shares are eligible for lending; this institutional design is intended to curb speculative trading and help balance supply and demand in the market.
Tian Lihui, Dean of the Institute for Financial Development at Nankai University, argues that, provided the scale and methods are appropriately regulated and market fairness and transparency are ensured, moderate financial innovation can be pursued within the bounds of applicable laws and regulations. The goal of financial innovation should be to invigorate the market, while safeguarding its soundness and sustainability.
Tian Lihui stated that if, under the guise of innovation in certain practices, the market experiences severe regulatory arbitrage or suffers an excessive adverse impact on stock prices, then measures should be considered to curb such behavior.

The new rules for transferring to the Beijing Stock Exchange are set to be unveiled soon, and several companies have openly shared their thoughts.
On September 12, the Beijing Stock Exchange concluded its public consultation on optimizing the transfer‑listing arrangements. On September 15, the Exchange convened a special symposium with selected sponsoring institutions to solicit market feedback on the draft revisions to the relevant transfer‑listing rules and the associated coordination mechanism. Industry insiders expect that the revised rules will be released shortly, with the possibility of an announcement as early as this week.
The new rules for transferring to another board are about to be announced.
Recently, the China Securities Regulatory Commission issued the “Opinions on High-Quality Development of the Beijing Stock Exchange” (hereinafter referred to as the “Opinions”), which stipulates that “the transfer of listed companies from the Beijing Stock Exchange to other exchanges shall be advanced in a prudent and orderly manner.”
Following closely, the Beijing Stock Exchange has sought public input on optimizing its transfer‑listing arrangements. In light of the capital market’s reform and development since the issuance of the China Securities Regulatory Commission’s Guiding Opinions on the Transfer Listing of Companies Listed on the Beijing Stock Exchange—particularly the growing number of BSE‑listed companies and the increasingly diversified expectations—the BSE has initiated revisions to “Beijing Stock Exchange Continuous Supervision Guideline No. 7: Transfer Listing” (hereinafter referred to as the “Transfer Listing Guideline”) and, in coordination with the Shanghai and Shenzhen stock exchanges, is refining the communication and collaboration mechanisms for transfer listings. The BSE has also issued a notice inviting sponsoring institutions, listed companies, and other market participants to submit their views and suggestions on the proposed amendments to the Transfer Listing Guideline; based on these inputs, it will promptly finalize the revisions to further streamline the transfer‑listing process.
According to reports, the “Guidance on Transfer Listing” completed its public consultation on September 12. The Beijing Stock Exchange has, in light of feedback from all stakeholders, drafted a revised version of the guidance and coordinated with the Shanghai and Shenzhen stock exchanges on a transfer‑listing cooperation mechanism. On the afternoon of September 15, the Beijing Stock Exchange convened a special symposium with selected sponsoring institutions to solicit market views on the draft revision and the transfer‑listing cooperation framework. Industry insiders expect the revised guidance to be released shortly.
The transfer of listings does not lead to “expansion” of capacity.
The China Securities Regulatory Commission stated, “If a company listed on the Beijing Stock Exchange genuinely intends to transfer to another exchange, it must carefully assess whether it meets the relevant transfer criteria, strictly comply with applicable laws and regulations, and strengthen communication with the target exchange through appropriate institutional arrangements. The Shanghai and Shenzhen stock exchanges, together with the Beijing Stock Exchange, should enhance coordination; any instances of ‘deceptive’ transfer attempts, insider trading, market manipulation, or other illegal and non‑compliant activities must be rigorously investigated upon discovery, so as to effectively uphold market order and safeguard the legitimate rights and interests of investors.”
The transfer‑board mechanism is a key component of the multi‑tiered capital market system, helping to enhance the functional roles of each market segment and providing high‑quality enterprises with diversified growth pathways and options for listing. The transfer process does not involve public offerings or additional financing, thereby avoiding the concerns—often raised about “market expansion” and “capital drainage.” From a broader market perspective, companies seeking to transfer are already publicly traded; the transfer merely changes the stock’s listing venue, without increasing the total number of listed companies.
At present, three companies listed on the Beijing Stock Exchange—Guandian Defense, Taixiang Shares, and Hanbo High-Tech—have successfully transferred to the Shanghai and Shenzhen stock exchanges.
Several companies have expressed their views.
The revision of the “Guidelines on Transfer Listing” has drawn close attention from companies listed on the Beijing Stock Exchange, with many offices publicly expressing their intentions to transfer to another exchange.
“The company is continuously and closely monitoring and studying the relevant regulations, conducting timely self-assessments of eligibility, and, in light of capital market conditions, the implementation of related mechanisms, internal and external support, and its own development needs, will prudently consider the prospect of transferring to another board,” said Dezhong Auto.
In a relevant announcement, Jilin TanGu stated that, following the CSRC’s release of its Opinions on High-Quality Development of the Beijing Stock Exchange, the company’s management has been closely monitoring the matter. At present, the Beijing Stock Exchange’s transfer‑listing mechanism appears to be functioning smoothly. Once the revised “Transfer Listing Guidelines” are published, the company will engage in proactive dialogue with all stakeholders, taking into account its own circumstances, and will carefully assess the situation before deciding whether to proceed with a transfer‑listing plan.
Lude Medical stated that the Beijing Stock Exchange is a specialized platform for the capital market development of small and medium-sized enterprises. The company will continue to prioritize prudent operations, and, while safeguarding the maximization of shareholder value, will prudently advance its capital market strategy in alignment with its corporate growth objectives.
Tonghui Electronics also stated that its top priority at present is to focus on the electronic measurement instruments sector and continuously expand and strengthen its core business. Meanwhile, as the policy for transferring to another board gains momentum, the capital markets are offering the company new options; it will comprehensively assess whether to pursue such a transfer based on its own development needs and the broader capital market environment.

The China Securities Regulatory Commission plans to introduce new regulations that will significantly enhance dividend policies: main-board listed companies that fail to meet the prescribed dividend payout ratio will be required to disclose the reasons; and stricter disclosure requirements will be imposed on companies with substantial financial‑type investments.
The China Securities Regulatory Commission (CSRC) recently plans to revise the rules governing cash dividends for listed companies. According to a responsible official from the relevant CSRC department, the proposed changes aim to strengthen institutional oversight of companies that either do not pay dividends or distribute only minimal dividends, thereby encouraging greater dividend payouts and promoting more prudent dividend‑payout policies and timing. The measures also seek to provide stronger incentives for well‑performing dividend‑paying offices while tightening constraints on companies that distribute dividends beyond their financial capacity.
The aforementioned proposed policy amendments pertain to a series of regulations, including “Regulatory Guidance No. 3 for Listed Companies—Cash Dividends of Listed Companies” (hereinafter referred to as the “Dividend Guidance”) and “Guidance on Articles of Association of Listed Companies” (hereinafter referred to as the “Articles of Association Guidance”), among others. The stock exchange will concurrently revise its Guidelines on Standardized Operations.
Specifically, this round of revisions strengthens institutional constraints on companies that either do not pay dividends or distribute only modest dividends, thereby encouraging greater dividend payouts. First, it enhances information‑disclosure oversight: listed companies on the main board that fail to meet a specified dividend payout ratio are required to disclose and explain the reasons for such underperformance. Second, it imposes stricter disclosure requirements on companies with substantial financial‑investment holdings, urging them to improve asset‑utilization efficiency and better focus on their core businesses while delivering higher returns to investors. Third, it intensifies regulatory inquiries and supervisory interviews, using enhanced scrutiny to help investors make more informed judgments about dividend policies and leveraging such engagements to encourage companies to increase dividend distributions.
At the same time, we will further promote the optimization of dividend distribution methods and timing. First, we will streamline the interim dividend process, enabling companies to increase the frequency of dividend payouts and helping investors better plan their capital allocation. Second, we will guide companies in formulating stable, growth‑oriented dividend policies, encouraging them to revise their articles of association to enhance the practicality of these policies and explore sustainable, steadily increasing dividend‑distribution strategies, thereby delivering more consistent returns to investors.
For companies that distribute dividends beyond their capacity, the China Securities Regulatory Commission will tighten oversight and adopt a multi‑pronged approach to enhance risk prevention. First, it will strive to ensure the authenticity of corporate performance and a solid foundation for dividend payouts, effectively deterring financial fraud and the practice of raising capital through excessive dividend distributions. Second, for listed companies with high debt ratios and insufficient operating cash flow yet maintaining consistently high dividend payout ratios, the Commission will require them to provide detailed disclosures on the rationale behind their dividend plans and their impact on the company’s operations and production.
In recent years, the China Securities Regulatory Commission has consistently encouraged listed companies to increase their dividend payouts, and the total dividends distributed in the domestic market now rank second globally. Data show that over the past five years, cash dividends paid by A-share listed companies have risen annually, with cumulative payouts reaching RMB 8.2 trillion—exceeding the year’s total financing volume. In 2022, a total of 3,291 Shanghai and Shenzhen‑listed companies distributed cash dividends, accounting for 67.1% of all listed offices at year‑end; the aggregate cash dividend payout amounted to RMB 2.06 trillion, of which RMB 1.62 trillion was attributable to A‑share shareholders. By international comparison, the domestic market ranks first among major global stock exchanges in terms of the number of dividend‑paying listed companies, second in total cash dividends, and second in the proportion of companies paying dividends. Furthermore, 163 listed companies have announced plans to distribute cash dividends for the first half of 2023, with expected payouts totaling RMB 203.01 billion.
From a growth‑trend perspective, the overall dividend payout in China’s domestic market has shown a marked upward trajectory. Since 2012, the annualized average growth rate of total dividends has been 13.3%, while the corresponding average growth rate of total net profits has been approximately 10%. Moreover, the share of listed companies paying dividends has risen from around 50% prior to 2010 to a recent median level of about 70%.
From the perspective of dividend payout ratios, driven by the successive introduction of relevant policies and guidelines, both the dividend yield and the dividend payout ratio in the domestic market have exhibited a volatile yet upward trend since 2000. Specifically, the dividend yield range has gradually expanded from 0.5%–1.5% prior to 2010 to the current 1.5%–2%. In 2022, the average dividend payout ratio in China’s domestic market stood at 32.5%, while the average dividend yield was 1.97%, placing it at a mid-to-upper tier among major global markets.
From the perspectives of dividend sustainability and growth, as of 2022, the share of companies that have paid dividends for five consecutive years has risen from 20% a decade ago to 48%, while the share of those paying dividends for ten consecutive years has increased from 8% to 31%. Among listed companies, 412 saw their dividend payouts grow for three consecutive years, with their share climbing from 3% a decade ago to 12%; meanwhile, the proportion of offices reporting five-year consecutive dividend increases has expanded from 1% to 4%.
“Overall, domestic dividend‑paying practices are broadly aligned with offices’ stages of development and industry characteristics,” experts note. Specifically, main‑board companies have a dividend payout ratio of 33%, higher than the 25% observed among companies listed on the ChiNext and STAR Markets. Dividend behavior varies across industries: on average, energy offices pay out 50% of earnings, consumer staples 48%, and utilities 45%, reflecting relatively modest new‑investment needs and stable cash flows. By contrast, information technology, industrials, and real estate exhibit lower average payout ratios, at 25%, 26%, and 28%, respectively.
Experts believe that whether a company can distribute dividends and, if so, the amount of those dividends, is primarily influenced by three factors: first, the undistributed profits accumulated through the company’s operations in the current year and over previous periods; second, the cash on hand at present; and third, whether retained earnings are sufficient to meet the company’s future growth needs. To assess whether dividend payouts are reasonable, one must first verify the authenticity of the reported profits and determine whether any accounting fraud is involved; second, examine the source of the cash—whether the dividends are being paid out using borrowed funds; and finally, consider the major shareholder’s motives for distributing dividends, bearing in mind that a high‑ratio payout does not necessarily equate to a distribution beyond the company’s means.

CSRC: There is no “shutdown” of IPOs and refinancing.
On the evening of September 15, in response to recent reports by certain self-media outlets alleging that new share issuances have been temporarily suspended and that listing standards have changed, the China Securities Regulatory Commission (CSRC) issued five key statements: Market rumors may not be comprehensive or accurate; the recent temporary tightening of the IPO approval process is intended to ensure the stable functioning of the market; the CSRC and stock exchanges have not suspended any related work, including IPO applications, reviews, or registrations, and there is no “shutdown” of IPOs; likewise, there is no “shutdown” of refinancing activities by listed companies. At present, the positioning of each market segment, the requirements for issuance and listing, and information disclosure obligations remain unchanged, and there are no plans to raise the threshold for listing.
An official from the China Securities Regulatory Commission has addressed five key issues that have recently drawn market attention.
First, it clarifies the situation regarding the tightening of the IPO issuance pace. The CSRC stated that it has strengthened counter-cyclical adjustments between the primary and secondary markets and, while fully taking into account the secondary market’s capacity to absorb new issues, is maintaining a normalized IPO process in a prudent and balanced manner to better promote coordinated and balanced development between the two markets. The recent temporary moderation of the IPO pace is an arrangement designed to ensure the stable functioning of the market; the CSRC and stock exchanges have not suspended any related work—such as IPO acceptance, review, or registration—and there is no “shutdown” of IPOs. Similarly, there is no “shutdown” of refinancing activities by listed companies.
Second, it underscored support for the development of science and technology enterprises. The China Securities Regulatory Commission (CSRC) stated that it will deepen the development of the STAR Market, uphold its positioning, and help eligible “hard‑tech” companies in six key sectors—those possessing critical core technologies—grow stronger and more competitive through the STAR Market, while guiding resources to converge in the field of scientific and technological innovation. At the same time, the CSRC indicated that it is formulating an action plan to leverage the capital market in supporting high‑level scientific and technological self‑reliance and strength, further facilitating a virtuous cycle among science and technology, industry, and finance.
Third, it is emphasized that the conditions for issuance and listing have not changed. Since the launch of the pilot registration-based system, the CSRC has placed information disclosure at the core, further clarified the positioning of each market segment, streamlined and optimized issuance requirements, and established diversified and inclusive listing criteria. A framework has essentially taken shape in which the Shanghai, Shenzhen, and Beijing stock exchanges each focus on distinct priorities while coordinating their development, thereby meeting the financing needs of companies across different industries and at various stages of growth. At present, the positioning of each market segment, the issuance and listing requirements, and the information disclosure standards remain unchanged, and there are no plans to raise the threshold for listing.
Fourth, the reasons behind the withdrawal of certain companies under review have been clarified. The CSRC noted that, in recent cases, withdrawals were primarily attributable to issues such as insufficient stability of control and declining financial performance—factors that could undermine a company’s ability to sustain operations. With respect to enterprises operating in industries characterized by overcapacity, strong cyclicality, or limited growth potential—as highlighted in media reports—the CSRC and stock exchanges, in their review processes, pay close attention to industry development trends and the issuers’ specific circumstances, rigorously assessing and scrutinizing applications in light of relevant industrial policies, issuance criteria, and sector‑specific positioning.
Fifth, we reafoffice our commitment to maintaining rigorous quality control in the review process. Since the launch of the pilot registration-based system, the CSRC has implemented stricter, more transparent, and more prudent oversight of issuance and listing, making full use of multi‑factor verification, inquiry‑driven reviews, and on‑site inspections to expedite the exit of underperforming companies. During the issuance and listing review process, we have officely prevented and rigorously investigated fraudulent issuances, held issuers and intermediary institutions strictly accountable, maintained a high‑pressure enforcement stance, and adopted a zero‑tolerance approach to combat financial fraud, imposing severe and stringent penalties.
There is a clear trend of slowing down in the IPO pace.
Notably, recent statistical data indicate a clear slowdown in the pace of IPOs.
Statistical data show that since August this year, the pace of equity financing in the A-share market has slowed markedly. Based on the issuance date, a total of 108 companies completed equity financings, raising RMB 148.437 billion. Among them, 37 companies launched initial public offerings (IPOs), with IPO proceeds totaling RMB 64.766 billion.
Specifically, in August, the number of equity financings fell to 74, with total proceeds amounting to RMB 83.981 billion. Twenty-eight companies completed IPOs, raising RMB 27.879 billion in their initial public offerings.
Notably, with more than half of September already behind us, only 16 companies have completed equity financings, raising a total of RMB 11.563 billion. Of these, 10 were IPOs, which raised RMB 8.76 billion. At this pace, September’s total equity‑financing proceeds would hit a one-year low.
As of September 15, a total of seven companies—listed on the ChiNext, the STAR Market, the Beijing Stock Exchange, and the Shanghai and Shenzhen main boards—are in the “issued but not yet listed” stage. These are Feinan Resources, Wanbang Pharmaceutical, Chongde Technology, Hengxing New Materials, Zhongyan Shares, Fuheng New Materials, and Keqiang Shares. Additionally, four companies are currently in the issuance phase: AikosaiBo has announced its offering price and is awaiting subscription; Santai Shares has completed the bookbuilding process and is pending the announcement of its offering price; while Haochen Software and CIMC Environmental Technology are still undergoing bookbuilding. From September 11 to 15, five companies successfully completed registration on the ChiNext, the STAR Market, the Beijing Stock Exchange, and the Shanghai and Shenzhen main boards.

The State Administration of Foreign Exchange plans to revise the rules governing the verification of statistics on external financial assets, liabilities, and transactions.
The State Administration of Foreign Exchange has launched a public consultation on the “Rules for the Verification of Statistics on External Financial Assets, Liabilities, and Transactions (2023 Edition) (Draft for Comments),” with the deadline for submitting feedback set for October 19, 2023.
This revision encompasses three major categories: additions, deletions, and supplementary adjustments. With respect to additions, the draft for public comment introduces verification rules and other provisions for newly added reporting forms under the “Statistical System for External Financial Assets, Liabilities, and Transactions” (hereinafter referred to as the “System”). Regarding deletions, the draft removes rules that have already been implemented through front-end system validation, eliminates provisions no longer applicable to the requirements of the revised “System,” and deletes rules that duplicate checks on the same type of transaction, among other changes. As for supplementary adjustments, the draft adds requirements for providing explanatory notes on special transactions and revises the types of error or questionable data subject to verification, among other modifications.

Commercial & Corporate
Three departments have clarified the procedures for compiling the list of industrial machine tool enterprises eligible for the additional tax credit policy in 2023.
According to a September 20 announcement on the website of the Ministry of Industry and Information Technology, the ministry, together with the Ministry of Finance and the State Taxation Administration, has jointly issued the “Notice on Matters Related to the Preparation of the List of Industrial Machine Tool Enterprises Eligible for the Value-Added Tax Additional Deduction Policy in 2023,” clarifying the relevant provisions.
The “list” referred to in the Notice is the list of advanced industrial machine tool mainframes, key functional components, and CNC system enterprises that are eligible for the value-added tax additional deduction policy, as specified in Document Cai Shui [2023] No. 25. Enterprises seeking inclusion on the list shall submit their applications through the information reporting system by October 10, 2023. Local departments of industry and information technology, in coordination with the finance and tax authorities, shall strengthen routine oversight of the enterprises on the list. During such oversight, if any enterprise is found to have obtained tax exemption or reduction eligibility through false information, a joint verification shall be promptly conducted, and the case shall be jointly reported to the Ministry of Industry and Information Technology for review.

Many localities have issued corresponding guidelines on preferential policies for small and micro enterprises.
The Ministry of Finance and the State Taxation Administration have recently compiled and issued the “Guidance on Tax and Fee Preferential Policies Supporting the Development of Small and Micro Enterprises and Individual Business Households (Version 1.0),” based on the tax and fee policies they have introduced to bolster these sectors. Local authorities have subsequently rolled out corresponding implementation guidelines.
Recently, the Jiangxi Provincial Department of Finance, the Provincial Tax Service Bureau, and other relevant departments jointly issued the “Notice on Further Implementing Tax Policies Supporting Self-Employed Retired Soldiers in Starting Businesses and Finding Employment” and the “Notice on Further Implementing Tax Policies Supporting Entrepreneurship and Employment among Key Groups,” raising the maximum allowable deduction limits or fixed‑amount reductions to the statutory ceiling. Drawing on best practices and taking into account Jiangxi’s specific circumstances, the Jiangxi Provincial Tax Service Bureau has compiled the “Jiangxi Province Guidelines on Tax and Fee Preferential Policies for Supporting the Development of Small and Micro Enterprises and Individual Business Households (Version 1.0),” which is intended as a reference for taxpayers, payers, and tax officials at all levels.
The Finance Department and the Tax Service Bureau of Jilin Province have also issued the “Guidance on Tax and Fee Preferential Policies Supporting the Development of Small and Micro Enterprises and Individual Business Households in Jilin Province (Version 1.0),” helping taxpayers better understand, master, and effectively utilize these policies.

The State Administration for Market Regulation plans to issue nineteen policy measures to comprehensively deepen the “double-random, one-public” regulatory approach.
On September 19, the website of the State Administration for Market Regulation published the “Notice on Public Solicitation of Comments on the ‘Opinions of the State Administration for Market Regulation on Comprehensively Deepening ‘Double Random, One Public’ Supervision (Draft for Comments)’,” with the deadline for submitting feedback set for October 7.
The “Opinions” comprise 19 provisions across four key areas, clearly stipulating the need to optimize and improve the “double-random, one-public” regulatory platform; dynamically adjust and update in real time the “one list, two databases”; coordinate the development of annual inspection plans; publicly disclose inspection results in accordance with the law; effectively ensure seamless integration between double‑random inspections and law enforcement; comprehensively promote the routine application of credit‑risk classification outcomes; and advance, in a coordinated manner, both targeted regulation and the “double‑random, one‑public” regulatory approach. For priority sectors—such as food, pharmaceuticals, and special equipment—that directly affect public safety and property, as well as those characterized by significant potential risks and high social risk, the document calls for integrated industry‑wide risk prevention and control alongside enterprise credit‑risk classification management, thereby implementing end-to‑end regulatory oversight.

Shanghai has outlined 12 initiatives to boost innovation and industrial development in the field of gene therapy.
On September 18, the Shanghai Municipal Government website published the “Notice on Issuing the Action Plan for Promoting Scientific and Technological Innovation and Industrial Development in Gene Therapy in Shanghai (2023–2025).”
The Action Plan comprises 12 major tasks across four key areas and eight supporting measures, focusing on strengthening the capacity for innovation in the gene therapy sector, enhancing the enabling role of high‑level clinical research, advancing the development of public service platforms, optimizing the business ecosystem, bolstering financial support, innovating payment models, reinforcing talent recruitment and cultivation, and improving policy frameworks and service delivery. The Plan specifies that gene therapy products that have already undergone domestic clinical trials, obtained marketing authorization through registration by local enterprises, and are manufactured within the city will be eligible for funding of up to RMB 30 million, with a cumulative annual cap of RMB 100 million per entity. Additionally, gene therapy companies that successfully secure equity financing exceeding RMB 50 million will receive subsidies of up to 2% of the actual amount raised, capped at RMB 10 million per company per year.

The National Railway Administration’s Measures for the Supervision and Administration of Work Safety in Railway Construction Projects
On September 12, the website of the National Railway Administration published the “Notice on Soliciting Public Comments on the ‘Measures for the Supervision and Administration of Work Safety in Railway Construction Projects (Draft for Comments)’,” with a deadline for submitting feedback set for October 12.
The Measures comprise nine chapters and eighty-one articles, setting forth the safety responsibilities of project owners, survey and design entities, construction contractors, supervisory bodies, and other relevant parties, as well as provisions on work safety supervision and management, emergency response to accidents, and investigation and handling thereof. The Measures explicitly stipulate that project owners must rigorously assume primary responsibility for work safety in railway construction projects, establish and improve work safety management systems and performance‑assessment frameworks, conduct inspections of work safety practices, and urge all participating entities to strengthen their work safety management, fulfill their respective safety obligations, and ensure the safe execution of railway construction projects.

Pilot Program for the Application of Electronic Licenses in the National Cultural and Tourism Market Launched
To implement the State Council’s requirements for accelerating the expansion of electronic certificate applications across more sectors and achieving nationwide mutual recognition, the General Office of the Ministry of Culture and Tourism recently issued the “Notice on Launching a Pilot Program for the Application of Electronic Certificates in the National Cultural and Tourism Market” and released the “Overall Implementation Plan for the Pilot Program on the Application of Electronic Certificates in the National Cultural and Tourism Market” (hereinafter referred to as the “Plan”). Accordingly, starting this September, a six-month pilot program for the application of electronic certificates will be carried out in five provinces and autonomous regions—Jiangsu, Fujian, Shandong, Sichuan, and Ningxia.
The pilot program aims to significantly enhance the level of government services and the effectiveness of market regulation in the cultural and tourism sectors, steadily advance the application of electronic licenses and certificates in public‑service contexts and their secure, widespread use in society, establish a comprehensive management system for electronic credentials, foster innovative integrated online–offline applications, and put in place a long‑term mechanism for managing electronic licenses and certificates. By encouraging pilot regions to take the lead in experimentation and innovation, the initiative seeks to generate distinctive institutional breakthroughs.
The pilot program centers on the practical application of electronic licenses and certificates, aiming to support a broader range of user‑friendly services in the culture and tourism sectors and to ensure the effective implementation of three key tasks. First, it advances the issuance of electronic licenses and certificates. Each pilot region, leveraging the National Electronic License and Certificate Management System for the Culture and Tourism Market, establishes diversified service channels and adopts multiple measures to increase the uptake of electronic credentials. Second, it strengthens the correction and resolution of errors in electronic licenses and certificates. Pilot regions are to establish and refine local mechanisms for handling objections to electronic credentials, enhance inter‑agency coordination with electronic license management authorities at all levels, and improve the quality of credential data. Third, it expands the scope of applications for electronic licenses and certificates. The initiative promotes their use across government, public‑private partnerships, enterprises, and individual users, focusing on areas such as government services, industry regulation, cultural experiences, and tourism, with the goal of achieving integrated online‑offline applications of electronic credentials in at least two specific business scenarios.
To ensure the smooth implementation of the pilot program, we will strengthen safeguards in four key areas. First, we will enhance application evaluation by placing great emphasis on the management of electronic certificates and licenses, promptly addressing challenges encountered during the pilot phase, and intensifying assessments in areas such as the issuance of electronic credentials, handling of objectionable data, integration with related services, and innovation in application scenarios. Second, we will reinforce security management by rigorously enforcing accountability, bolstering cybersecurity measures for information systems and data interfaces, and strengthening operational monitoring of electronic certificate and license services, thereby improving both external service delivery and overall security management capabilities. Third, we will refine supporting measures by maintaining traditional in-person certificate and license services and ensuring that electronic credentials are not used as the sole form of identification in any application scenario, thus guaranteeing the normal online and offline use of relevant permits and licenses by market entities in the cultural and tourism sectors. Fourth, we will intensify publicity and outreach efforts, employing diverse formats and channels to raise awareness among businesses and the public about how to use electronic certificates and their convenience, promptly addressing public concerns, and fostering a positive environment for the pilot program.

Ensure Safe Production in Mines in the New Era
Mine safety production is vital to the safety of people’s lives and property, as well as to the overall goals of economic development and social stability, making it the top priority in workplace safety. Recently, the General Office of the CPC Central Committee and the General Office of the State Council issued the “Opinions on Further Strengthening Mine Safety Production” (hereinafter referred to as the “Opinions”), which have now been made public. On the morning of September 18, the State Council Information Office held a press conference, at which Zhang Xin, Deputy Director of the National Administration of Mine Safety, and other officials provided details on the matter.
Strengthen the principal responsibility of enterprises.
In recent years, the national mine safety production situation has remained generally stable; however, new circumstances and challenges have emerged, making it imperative to issue a guiding document that is aligned with the evolving landscape, institutional framework, tasks, and requirements, and that can steer high-quality development of mine safety production nationwide both in the present and over the coming period.
“The issuance of the ‘Opinions’ is timely, providing a fundamental framework for ensuring safe production in the mining sector in the new era,” Zhang Xin stated. The document comprises seven sections and 24 specific measures, laying out targeted arrangements across six key areas: tightening safety access standards for mines; promoting the transformation and upgrading of the mining industry; preventing and mitigating major safety risks; strengthening the principal responsibility of enterprises; implementing the responsibilities of local Party and government leaders as well as those of relevant departments in supervision and oversight; and advancing law-based governance of mine safety. At the same time, it reinforces organizational implementation by setting forth concrete requirements in such areas as bolstering leadership, formulating supporting policies, securing adequate funding, establishing coordination mechanisms, and strengthening accountability.
In addition, the Opinions for the first time stipulate at the national level that the headquarters of central enterprises involved in mining, as well as large and medium-sized mining enterprises, must appoint a chief safety officer. “To ensure that mining enterprises fulfill their primary responsibility for workplace safety, it is essential to focus on the ‘key few,’ including the principal persons in charge of these enterprises,” said Li Feng, Director-General of the Non-Coal Mine Safety Supervision Department of the National Administration of Mine Safety. He noted that, in practice, the principal leaders of central mining enterprises and large and medium-sized mining offices often have limited capacity, making it objectively necessary to assign a dedicated professional with decision-making authority to oversee occupational safety and health matters.
The “Opinions” represent the first programmatic document in the field of mine safety production to be issued with the approval of both the CPC Central Committee and the State Council since the founding of the People’s Republic of China. According to Zhang Xin, the “Opinions” not only uphold the proven practices and lessons learned from the past but also focus on addressing pressing current issues, striving to eliminate accident hazards and resolve problems at their root. They set forth a series of major tasks and key measures to strengthen and improve mine safety production.
Promote the standardization of safety supervision in non-coal mines.
Promoting the standardization of safety supervision and regulation in non‑coal mines is one of the key priorities for ensuring safe production in the mining sector. In recent years, the National Mine Safety Administration has strengthened risk‑based tiered supervision of non‑coal mines and revised the “Non‑Coal Mine Safety Supervision and Enforcement Manual,” continuously enhancing the precision and effectiveness of regulatory enforcement.
“We are prioritizing the monitoring of tailings ponds, underground mines, and steep‑slope open‑pit mines—areas characterized by high hazard levels and a propensity for accidents—and accelerating the development of a safety risk monitoring and early‑warning system for non‑coal mines,” said Xue Jianguang, Director of the Policy, Regulations, and Science‑Technology Equipment Department of the National Mine Safety Administration. At present, all operational tailings ponds nationwide, including all “top‑of‑dam” facilities, have been equipped with online monitoring systems, and the vast majority are connected to the national platform. Furthermore, nearly all metal and non‑metal open‑pit mines with slope heights exceeding 200 meters have installed online slope‑monitoring systems. Across the country, slope monitoring, water‑hazard detection, and video surveillance in open‑pit mines have all been integrated into a single unified network, providing robust support for enhancing risk prevention and control as well as regulatory and oversight capabilities.
In the first half of this year, the National Mine Safety Administration issued a notice to launch a comprehensive safety rectification campaign across mines nationwide, with outsourced project safety management designated as a separate special initiative and subject to thorough inspections.
“Through targeted rectification efforts, the management of outsourced projects in non‑coal mines has been further standardized, and the overall level of management has improved significantly. However, challenges remain, including inconsistent personnel management, unauthorized contracting and subcontracting, unclear assignment of safety responsibilities, and inadequate investment in safety,” said Sun Qingguo, Director of the Safety Foundation Department of the National Mine Safety Administration. He added that the “Opinions” set forth additional requirements for the management of outsourced projects in non‑coal mines, clarifying safety responsibilities, and establishing specific standards regarding the number of contracted entities in underground metal and non‑metal mines, staffing levels and educational qualifications of contractors, blasting operations, and the establishment of in‑house mining and excavation teams.
Sun Qingguo stated that, building on the Interim Measures for the Safety Management of Outsourced Projects in Non-Coal Mines, the next step will be to promptly revise the Measures for the Safety Management of Mine Outsourcing Projects, continuously strengthening and improving safety management for outsourced projects in non-coal mines, and steadily elevating the institutionalization and standardization of outsourcing management systems.
Accelerate the transition of mine safety governance toward a proactive, preventive approach.
“Shifting the public safety governance model toward proactive prevention is both a guiding principle and a practical approach,” said Zhang Xin. The “Opinions” outline a series of measures centered on this preventive transformation: first, strengthening source‑level control by improving planning quality, rationally allocating mining rights, and enforcing stringent safety准入 standards; second, conducting preemptive hazard management through regular, institutionalized surveys and remediation of hidden disaster‑inducing factors in mines; and third, elevating the technological capabilities of monitoring and early warning systems and mandating that no underground operations proceed without continuous video surveillance at all work sites.
With regard to identifying and addressing major safety hazards, the Opinions put forward three targeted measures, focusing on the implementation of principal responsibility by mining enterprises and the fulfillment of regulatory and supervisory duties by government departments.
“The Opinions emphasize that mining enterprises must conduct regular, comprehensive hazard identification and remediation involving all employees. Such efforts should not be confined to enterprise leaders and safety management personnel; rather, a full‑staff safety production responsibility system must be implemented, harnessing the enthusiasm and initiative of every miner,” said Li Feng. He added that companies must genuinely enhance the quality of risk and hazard identification and rectification, moving beyond merely detecting minor issues to identifying potential major accident hazards. They should boldly undertake self‑inspections, self‑corrections, and self‑reporting of significant hazards, promptly implementing measures to ensure thorough remediation and achieving genuine inspection, genuine correction, and genuine elimination. Meanwhile, mining safety regulatory and supervisory authorities should establish a supervision and follow‑up mechanism for addressing major hazards, maintaining ongoing oversight until such hazards are eliminated and verifying that corrective actions have been properly closed out. This will further strengthen the accountability of regulatory and supervisory bodies for overseeing and ensuring effective remediation, and promote closed‑loop management of major hazard rectification, thereby guaranteeing both the quality and effectiveness of inspections and corrections.
In addition, we will strengthen the accountability mechanism for identifying and addressing potential hazards. Not only will enterprises and individuals responsible for accidents resulting from inadequate identification and rectification of major hazards be held accountable, but enterprises that fail to address significant hazards despite such efforts will also face consequences. At the same time, we will further tighten the chain of responsibility in government oversight and inspection by strictly enforcing the principle of “who inspects, who signs, who is responsible.” Any failure to take action or impose penalties when major hazards are identified, or any inadequate follow-up on corrective measures, will result in rigorous legal accountability.
Zhang Xin stated that, in the next phase, the National Mine Safety Administration will continue to prioritize preventive measures and source‑level control, implement dynamic management and proactive risk mitigation, issue timely warnings, and respond swiftly—aiming to address risks before they materialize into hazards and eliminate hazards before they lead to accidents. This approach will further advance China’s mine safety governance model toward a preventive, pre‑emptive framework, ensuring high‑quality, safe development in the mining sector.

Taxation
Tax incentives for “little giants” ensure that real, tangible funds flow directly to the front lines of corporate R&D and production.
Specialized, Sophisticated, Distinctive, and Innovative enterprises are a vital force for bolstering the core competitiveness of the manufacturing sector, a key driver of innovation and development in the real economy, and an essential safeguard for invigorating regional economic growth. To help these “little giants” unleash their full potential, the Weihai Municipal Tax Service Bureau of the State Taxation Administration is fully leveraging policy benefits and precisely supporting the innovative development of specialized, sophisticated, distinctive, and innovative SMEs.
According to available information, as of now, Weihai City has cultivated a total of 697 enterprises recognized at or above the provincial level as single-champion offices, specialized, refined, distinctive, and innovative companies, gazelle enterprises, and unicorn enterprises. Among these, 56 are national-level “Little Giant” enterprises specializing in niche fields. The robust innovation vitality of these enterprises is injecting strong momentum into the city’s high-quality economic development.
Policy‑Driven Outreach: Businesses Reap Tax Benefits Immediately
Stepping into the digital workshop of Weihai Xinbeiyang Digital Technology Co., Ltd., a leading domestic provider of smart device solutions, one sees robotic arms moving swiftly and deftly along the production line, with materials conveyed seamlessly through an integrated material‑handling system. The system provides real-time digital tracking, allowing workers to focus solely on operating and monitoring the equipment—demonstrating the formidable productivity unleashed by digital transformation and data‑driven empowerment.
“The tax authorities have shown great concern for our growth and provided numerous convenient services. In particular, following the introduction of the latest 2023 policy on additional deductions for R&D expenses, tax experts promptly offered us pre‑emptive guidance, enabling us to claim the first-half-year R&D expense deduction during the July filing period,” said Fan Yawen, head of finance at Xinbei Yang Digital Technology.
According to reports, Xinbeiyang Digital Technology specializes in the R&D, manufacturing, sales, and service of self-service equipment and system integration solutions. Backed by a robust research team, the company is a leading domestic provider of precision sheet-metal fabrication and comprehensive self-service equipment and system solutions, with its products widely deployed across numerous industries and sectors, including logistics, new retail, telecommunications, and healthcare.
As the company has experienced rapid growth, timely tax‑benefit support has consistently accompanied its development. The Weihai tax authorities have established a policy‑delivery platform that leverages tax‑related big data to precisely identify eligible entities for tax and fee incentives. Through multiple channels—including text messages, WeChat, and a tax‑enterprise interaction platform—the authorities deliver targeted policy information, shifting from a “people seeking policies” model to a “policies finding people” approach, thereby significantly enhancing the efficiency of implementing tax‑incentive measures. In the first half of this year, Weihai Xinbeiyang Digital Technology Co., Ltd. benefited from an additional deduction of over RMB 26 million for R&D expenses, received software tax refunds totaling more than RMB 2.6 million, and secured a reduction of RMB 340,000 in land‑use tax.
“The tax and fee benefits have given our company the confidence to ramp up innovation and R&D and expand production, significantly bolstering our technological capabilities and ensuring that our technologies and products stay one step ahead. Today, in our smart factory, the level of automation—where machines replace human labor—has surpassed 90%,” remarked Fan Yawen with emotion.
Customized services help address the development challenges faced by “little giants.”
R&D innovation is the core driving force behind the breakthroughs and growth of “Little Giant” enterprises that excel in niche markets. To help these specialized, refined, distinctive, and innovative companies pursue high‑quality development by becoming even more focused and sophisticated, the Weihai tax authorities have launched tailored, customized services addressing their key challenges and pain points. By providing coordinated, rapid responses to their individualized needs in tax filing and payment, they are supporting these enterprises in achieving innovative breakthroughs and realizing leapfrog growth.
“Carbon fiber technology is characterized by extremely high technical barriers. In recent years, China has seen a substantial expansion in carbon fiber production capacity, with capacity utilization rates rising rapidly and domestic substitution accelerating. To break through development bottlenecks and take the lead in the market, our company regards technological innovation as the ‘key to victory’ in an intensely competitive environment, continuously increasing R&D investment and upgrading to build smart production lines,” said Gu Xiaohong, Chief Financial Officer of Weihai Baowei New Materials Technology Co., Ltd.
At Baowei New Materials’ smart factory stands the carbon fiber industry’s first “dark‑factory,” where pristine white carbon‑fiber precursor filaments move in orderly fashion along the production line. After undergoing multiple processing steps, these filaments—often dubbed the “black gold” of the new materials sector—are wound into spools by the take‑up machines.
As a “5G + Industrial Internet”–enabled smart factory, Baowei’s intelligent manufacturing facility integrates with a carbon‑fiber prepreg‑fabric smart‑manufacturing platform, achieving deep integration across automated production scheduling, autonomous material and semi‑finished‑product logistics, and real‑time quality inspection. This results in energy savings of 1,000 kWh and water savings of 400 tons per 10,000 square meters of prepreg fabric, while reducing production costs by 30% and boosting productivity by 50%.
Reflecting on the company’s development journey, Gu Xiaohong stated, “Baowei New Materials would not have reached where it is today without the support of the tax authorities. During their extensive outreach efforts, the tax department identified our challenges and dispatched a team of tax experts to provide tailored guidance on accessing tax incentives, which has significantly alleviated our funding constraints for research and development.”
According to reports, in the first half of this year, Baowei New Materials benefited from tax and fee concessions totaling nearly RMB 10 million, effectively boosting its cash flow. With the strong support of government tax‑benefit policies, Baowei New Materials will continue to pursue innovative development and achieve key technological breakthroughs that elevate its offerings from “good” to “excellent.”
Precision drip irrigation helps enterprises enhance their core competitiveness.
Weihai Tianli Power Technology Co., Ltd., established in 2007, is a national “Little Giant” enterprise specializing in the R&D, manufacturing, and sales of automotive and industrial‑grade power supplies and electronic control systems.
“Initially, we built our business on contract manufacturing. Later, we strategically ramped up in‑house R&D, establishing a full‑chain development model that encompasses OEM, ODM, and proprietary products. Our independent R&D efforts have gradually yielded significant results,” said Wei Shibao, Chairman of Tianli Power Technology Co., Ltd. He added that the company places great emphasis on research and development, having set up R&D centers in Shanghai, Xi’an, and Harbin Institute of Technology, and has obtained more than 60 national intellectual property rights.
With the support of cutting-edge technology, Tianli Power has accelerated its growth trajectory. The company has successively implemented an industrial Internet platform to dynamically monitor every stage of its production process, achieving a comprehensive leap in both manufacturing efficiency and quality control. It has also established “customized” workshops that seamlessly align with customer needs. Today, Tianli Power serves a distinguished client base that includes global Fortune 500 companies such as BOE, LG, Hisense, and Hitachi, as well as the top three domestic players in its industry.
From Tianli Power Technology’s perspective, this entire trajectory of development has been inseparable from the robust support of the tax authorities, in addition to the company’s own dedicated efforts. For many years, the Weihai Torch High-Tech Industrial Development Zone Tax Bureau of the State Taxation Administration has consistently conducted outreach initiatives—identifying needs and addressing concerns, as well as providing on-site guidance—to help Tianli Power Technology fully understand and appropriately apply tax‑reduction and fee‑cutting preferential policies. Since last year, the company has benefited from tax and fee concessions totaling over RMB 18 million, including more than RMB 5.8 million in benefits related to the additional deduction for R&D expenses and corporate income tax incentives for high‑tech enterprises, along with approximately RMB 8.8 million in value‑added tax credit refunds, effectively injecting tangible financial resources into the company’s core production and operations.
“The Weihai High-tech Zone Tax Bureau proactively monitors enterprises’ production and operations, accurately identifies their tax-related needs, and provides tailored outreach on tax and fee preferential policies along with meticulous support for policy implementation, helping taxpayers and payers efficiently and conveniently access these benefits and further bolstering their R&D and innovation capabilities,” said Han Mengxi, Deputy Director of the Second Tax Office of the Weihai Torch High-tech Industrial Development Zone Tax Bureau under the State Taxation Administration.
Today in Weihai, specialized, refined, distinctive, and innovative small and medium-sized enterprises are thriving in clusters and flourishing across the board, showcasing the city’s economic vitality and creativity. The Weihai tax authorities will work hand in hand with these enterprises, implementing favorable tax policies and streamlining tax‑filing and payment services, so that more technology‑savvy, business‑oriented, and socially committed SMEs can set out from Weihai, expanding nationwide and reaching the global stage.

LITIGATION & ARBITRATION
The National Supervisory Commission, the Supreme People’s Procuratorate, and the Ministry of Public Security have issued the Opinions on Strengthening Anti-Money Laundering Coordination and Cooperation in Handling Cases of Corruption and Bribery Crimes.
To thoroughly study and implement the spirit of the 20th National Congress of the Communist Party of China, fully apply Xi Jinping’s Thought on the Rule of Law, and advance the implementation of the CPC Central Committee’s decisions and arrangements on strengthening anti‑money laundering efforts, the General Offices of the National Supervisory Commission, the Supreme People’s Procuratorate, and the Ministry of Public Security recently jointly issued the “Opinions on Strengthening Anti‑Money Laundering Coordination and Cooperation in Handling Cases of Corruption and Bribery” (hereinafter referred to as the “Opinions”). The document sets forth clear requirements for supervisory, procuratorial, and public security organs to effectively enhance their coordination and cooperation in combating corruption and bribery, with the aim of further intensifying case handling, comprehensively advancing efforts to combat and address money laundering crimes, and better safeguarding national security, social stability, and the legitimate rights and interests of the people.
The Opinions place particular emphasis on strengthening the institutional framework for collaboration and coordination, establishing a multi‑agency mechanism for combating and addressing money laundering in cases of corruption and bribery that features clearly defined responsibilities, robust interagency cooperation, and efficient operations, thereby fostering synergistic efforts. They also set forth the overarching requirements, delineate the division of responsibilities, specify working mechanisms, and clarify organizational leadership for handling such cases.
The Opinions require that supervisory, procuratorial, and public security organs at all levels consciously integrate anti‑money‑laundering efforts in cases of embezzlement and bribery into the broader framework of safeguarding national security, thereby using a new security architecture to underpin a new development paradigm. They must not only conduct effective investigations into upstream embezzlement and bribery offenses but also attach equal importance to prosecuting money‑laundering crimes, implementing the “dual investigation” mechanism for both types of offenses, and simultaneously scrutinizing the destination and transfer pathways of the proceeds and benefits derived from such crimes.
The Opinions further clarify the respective responsibilities of the three agencies. In investigating cases of embezzlement and bribery, supervisory authorities, in conjunction with efforts to recover illicit proceeds and mitigate losses, shall ascertain the ownership, origin, destination, proceeds, and the relationship between the assets involved and the facts of the offense. If it is discovered that an individual involved is suspected of “self‑laundering,” the relevant evidence must be promptly collected and preserved, and the leads along with supporting materials must be transferred to the public security organs for handling. Where the facts of self‑laundering have been established and there is a clear need, such facts may also be included in the indictment as part of the corresponding official‑duty offenses and submitted to the procuratorial organs for review and prosecution. If an individual is suspected of “other‑party laundering,” the relevant leads must be promptly forwarded to the competent public security organs. Public security organs shall, in accordance with the law, crack down on all forms of money laundering and underground banking crimes, dismantle source‑level criminal organizations and professional criminal gangs, sever channels through which illicit funds circulate, and effectively recover criminal proceeds and their associated gains. Upon identifying suspicious leads, they shall trace the sources and destinations of the funds, promptly collect and secure evidence, establish the relevant facts of money laundering, and refer the case to the procuratorial organs for review and prosecution. If, during the course of a case, clues are uncovered indicating that a public official has engaged in disciplinary or legal violations, or is suspected of related official‑duty offenses, such information shall be promptly transmitted to the supervisory authority. Where the conduct involves judicial personnel abusing their power to extract confessions by torture, perverting justice for personal gain, or other crimes that infringe upon citizens’ rights and undermine judicial impartiality, the procuratorial organs may simultaneously be notified. The procuratorial organs shall earnestly fulfill their legal supervisory duties and strengthen oversight over the initiation of proceedings, investigation, and trial of money‑laundering criminal cases. During early intervention and the review and prosecution of embezzlement and bribery cases, they shall concurrently examine whether there are any leads indicating money‑laundering offenses. If such leads are identified, they should recommend that the supervisory authority coordinate their handling, or transfer the leads to the public security organs while informing the supervisory authority. With respect to embezzlement and bribery cases referred by the supervisory authorities for prosecution, if omissions in the determination of money‑laundering offenses are discovered—provided that the underlying facts are clear, the evidence is solid and sufficient, and the conditions for prosecution are met—the procuratorial organs, after soliciting the views of the supervisory authority and the competent public security organ at the same level and receiving no dissenting opinions, may institute public prosecution jointly with the embezzlement and bribery charges.
The Opinions propose establishing and improving mechanisms for case consultations and information sharing. Supervisory, procuratorial, and public security organs may conduct joint consultations on issues arising in major, difficult, or complex cases, thereby cracking down on money‑laundering offenses with precision in accordance with the law. Efforts will be intensified to advance information‑based and intelligent governance, leveraging big data and other technologies to progressively promote cross‑departmental, big‑data‑driven collaborative case handling, enabling online processing and seamless workflow. Enhanced analysis and assessment of critical data and developments related to anti‑money‑laundering efforts will be undertaken, along with the establishment of robust mechanisms for sharing and exchanging operational information, briefings, notifications, details of major cases, and relevant policy measures. Furthermore, a rapid‑access channel will be established for bank account transactions, third‑party payments, and digital RMB transactions in money‑laundering cases, providing effective support for frontline law enforcement and case handling.
The Opinions propose strengthening the mechanism for coordinated operations. When supervisory authorities and public security organs uncover money‑laundering offenses during case investigations, the procuratorial organs may, in accordance with relevant regulations, intervene at an early stage and enhance collaboration and coordination, offering guidance on evidence collection, fact‑finding, case classification, and the application of law. For major, difficult, complex, or sensitive cases that attract public attention, higher‑level supervisory, public security, and procuratorial organs may jointly place these cases under special supervision and oversight. The supervisory, public security, and procuratorial organs handling such cases shall strictly adhere to the requirements of this oversight, ensure proper case management, and promptly report at key stages of the investigation and upon achieving significant progress.
The Opinions call for deepening governance at the source. Adhering to a dual approach that addresses both symptoms and root causes while adopting a systematic, holistic governance strategy, they emphasize effectively following up on case handling. In the course of investigating money‑laundering offenses and related upstream crimes such as corruption and bribery, if management loopholes or potential risks are identified among financial institutions, non‑bank payment institutions, and other entities obligated to combat money laundering, the relevant authorities shall promptly notify the People’s Bank of China and its branches, as well as the financial regulatory agencies, the securities and futures regulatory authorities, and the foreign exchange administration—each of which bears supervisory responsibilities. They should also put forward targeted recommendations for rectification, covering organizational leadership, institutional mechanisms, and specific measures, so as to achieve a comprehensive effect: addressing one case, issuing a warning to a broader sector, and improving governance across an entire jurisdiction.

The Supreme People’s Court has released typical cases of crimes endangering drug safety.
In September 2023, during the nationwide “Quality Month” campaign jointly launched by the Supreme People’s Court, the State Administration for Market Regulation, and other departments, the Supreme People’s Court released a series of typical cases involving crimes that endanger pharmaceutical safety, thereby strengthening legal interpretation through case analysis, effectively deterring such offenses, and fostering a strong societal consensus on safeguarding pharmaceutical safety.
Drug safety is vital to the health and lives of the people, to national economic development and people’s livelihood, and to overall social stability. The Party Central Committee with Comrade Xi Jinping at its core has consistently attached great importance to drug safety, emphasizing the need to accelerate the establishment of a scientific and sound governance system for drug safety based on the “four strictest” standards, while giving equal weight to both production and regulation and rigorously safeguarding every line of defense from the laboratory to the hospital. People’s courts at all levels have strictly implemented the “four strictest” requirements, fully exercised their adjudicative functions, and imposed severe punishments in accordance with the law on crimes that endanger drug safety, thereby effectively ensuring the safe use of medicines by the public. From 2013 to 2022, courts nationwide concluded more than 28,000 first-instance criminal cases involving the production, sale, or provision of counterfeit drugs, the production, sale, or provision of substandard drugs, and offenses disrupting pharmaceutical management, sentencing over 38,000 individuals.
The five cases announced this time are all closely related to the public’s everyday medication safety, covering a range of drug categories including imported medicines, vaccines, medical‑cosmetic products, specialty drugs, and over-the-counter oral medications. They involve typical criminal schemes such as cybercrime, the fraudulent misrepresentation of disinfectant products as medicines, and insurance fraud, making them highly representative. Several defendants were sentenced to more than ten years’ imprisonment and fined heavily, underscoring the people’s courts’ unwavering commitment to putting the people first and rigorously punishing crimes that endanger pharmaceutical safety.
The Supreme People’s Court will steadfastly uphold Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as its guiding principle, thoroughly implement the spirit of the 20th National Congress of the Communist Party of China and General Secretary Xi Jinping’s important instructions and directives on safeguarding pharmaceutical safety and protecting the health of the people, remain committed to a people-centered approach, and supervise and guide people’s courts at all local levels to further enhance their awareness, strengthen principal responsibility, adjudicate in accordance with the law, and exercise proactive judicial functions, thereby ensuring that measures to safeguard pharmaceutical safety and protect public health are effectively put into practice.

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