JC Master Legal News Issue 811

Key Takeaways for This Issue
Shanghai and Shenzhen Stock Exchanges: Soliciting Public Comments on the Measures for Mandatory Delisting of Listed Companies for Material Violations
Recently, the Shanghai and Shenzhen stock exchanges have respectively issued the “Measures for the Mandatory Delisting of Listed Companies for Material Violations of the Shanghai Stock Exchange (Draft for Public Comments)” and the “Measures for the Mandatory Delisting of Listed Companies for Material Violations,” setting forth stringent legal requirements for mandatory delisting due to material violations and enumerating specific circumstances that trigger such delisting.
The China Insurance Regulatory Commission has issued the Measures for the Administration of Equity in Insurance Companies.
Recently, the China Insurance Regulatory Commission issued the Measures for the Administration of Equity in Insurance Companies. The Measures comprise 9 chapters and 94 articles, outlining a regulatory framework that covers three key areas: first, the rules governing investment and shareholding in insurance companies prior to entry; second, the rules applicable after becoming a shareholder; and third, the rules on equity supervision and administration, including priorities, specific measures, and mechanisms for holding violators accountable.
The State Taxation Administration has released the “List of Tax-Related Matters Requiring ‘At Most One Visit’”
Recently, the State Taxation Administration has compiled and released the “List of Tax‑Related Matters Requiring ‘At Most One Visit’” (hereinafter referred to as the “List”). Under this policy, taxpayers seeking to handle matters listed in the “List” need to visit the tax authority no more than once, provided that all required documents are complete and the application meets the statutory acceptance criteria.
The Supreme People’s Court has issued the “Minutes of the National Courts’ Conference on Bankruptcy Adjudication.”
Recently, the Supreme People’s Court issued the “Minutes of the National Courts’ Conference on Bankruptcy Adjudication” (hereinafter referred to as the “Minutes”). The overall objectives set forth in the Minutes are to leverage the role of bankruptcy adjudication in advancing the development of a modernized economic system; to focus on supporting the establishment of a new economic framework and improving mechanisms for the rescue and orderly exit of market entities; to refine the working mechanisms of bankruptcy adjudication so as to maximize its value; and to enhance the seamless coordination between enforcement and bankruptcy proceedings, thereby helping to address the challenges of enforcing court judgments.
Zhou Xiaochuan fielded questions from reporters on the central bank’s digital currency, Bitcoin, and ICOs.
On March 9, Zhou Xiaochuan addressed issues related to central bank digital currency, Bitcoin, and ICO regulation at a press conference. He noted that, conceptually, the central bank’s digital currency—known as Digital Currency Electronic Payment (DCEP)—is designed to prioritize convenience, speed, and security. Such a digital currency may be built on blockchain or distributed ledger technology, or it may rely on existing electronic payment systems. While digital currencies are technologically inevitable, it is crucial to safeguard overall financial stability, manage risks, and protect consumers.

Table of Contents
Table of Contents

Finance & Capital Markets
Shanghai and Shenzhen Stock Exchanges: Soliciting Public Comments on the Measures for Mandatory Delisting of Listed Companies for Material Violations
The Shanghai and Shenzhen Stock Exchanges have issued the “Notice on Launching the Belt and Road Bond Pilot Program.”
The China Securities Regulatory Commission is soliciting public comments on the Measures for the Administration of Foreign-Invested Securities Companies.
The Hong Kong Stock Exchange is seeking market feedback on the listing regime for companies in emerging and innovative industries.

Corporate & Commercial
The China Insurance Regulatory Commission has issued the “Administrative Measures on Equity of Insurance Companies.”
Foxconn’s IPO application was approved in just 36 days, marking the official launch of a “green channel” for unicorn companies’ IPOs.
The National New Energy Vehicle Technology Innovation Center Construction Promotion Meeting Was Held.
Three departments have jointly issued the “Notice on Launching a Pilot Program for Innovating Support Policies for Agricultural Industrialization Consortia.”

Taxation
The State Taxation Administration has released the “List of Tax-Related Matters Requiring ‘At Most One Visit’”
The Ministry of Finance has provided explanations on the reforms to the property tax and individual income tax.

Litigation & Arbitration
The Supreme People’s Court has issued the “Minutes of the National Courts’ Conference on Bankruptcy Adjudication.”
The Supreme People’s Procuratorate has issued the “Opinions on Comprehensively Strengthening State Judicial Assistance for Minors.”

Other
Zhou Xiaochuan fielded questions from reporters on the central bank’s digital currency, Bitcoin, and ICOs.
U.S. Treasury Department and SEC: Virtual Currency “Exchanges” Must Operate Under a License
Finance & Capital Markets
Shanghai and Shenzhen Stock Exchanges: Soliciting Public Comments on the Measures for Mandatory Delisting of Listed Companies for Material Violations
Recently, the Shanghai and Shenzhen stock exchanges have respectively issued the “Measures for the Mandatory Delisting of Listed Companies for Material Violations of the Shanghai Stock Exchange (Draft for Public Comments)” (hereinafter referred to as the “Draft”) and the “Measures for the Mandatory Delisting of Listed Companies for Material Violations” (hereinafter referred to as the “Measures”), and have opened them up to public consultation.
The Shanghai Stock Exchange’s draft for public comment fully reflects the law‑based, stringent requirements for mandatory delisting due to material violations. First, it imposes strict penalties on issuers that engage in fraudulent issuance during initial public offerings or restructuring‑related listings. Second, it resolutely removes listed companies that circumvent delisting by falsifying financial indicators in their annual reports. Third, it enforces legal measures against all material information‑disclosure violations ascertained through judicial rulings and administrative penalties imposed by the China Securities Regulatory Commission. Finally, in line with a principle of strictness, it streamlines the procedures and mechanisms governing mandatory delisting for material violations. To strengthen delisting efforts, the draft refines the procedural framework for such cases. On the one hand, it shortens the suspension period for material violations: where a company is suspended pursuant to circumstances triggering mandatory delisting for material violations, the suspension is reduced from 12 months to 6 months, thereby enhancing delisting efficiency. On the other hand, it adopts a rigorous approach to the conditions for resuming or relisting companies found to have committed material violations. Once a company is suspended, no consideration will be given to its remediation, compensation, or other mitigating factors; upon expiration of the six‑month suspension, the company will be directly delisted, with no possibility of reinstatement.
The Shenzhen Stock Exchange’s Measures stipulate that a listed company’s shares shall be delisted if any of the following material violations occur: First, if the company’s IPO application or disclosure documents contain false records, misleading statements, or material omissions, and such conduct has been determined by an administrative penalty decision of the China Securities Regulatory Commission (CSRC) to constitute fraudulent issuance, or has been adjudicated as guilty by a people’s court pursuant to Article 160 of the Criminal Law; second, if the company issues shares to acquire assets, thereby constituting a restructuring‑based relisting, and its application or disclosure documents contain false records, misleading statements, or material omissions, and such conduct has been determined by a CSRC administrative penalty decision to constitute fraudulent issuance; third, if the company’s annual reports contain false records, misleading statements, or material omissions, and, based on the facts established in a CSRC administrative penalty decision, the audited financial indicators for consecutive accounting years have actually met the delisting criteria set forth in the Stock Listing Rules; fourth, if the company’s application or disclosure documents contain false records, misleading statements, or material omissions, and the company has been adjudicated as guilty by a people’s court pursuant to Article 161 of the Criminal Law; fifth, if, within the most recent sixty months, the company has been subject to three or more administrative penalties imposed by the CSRC under Article 193 of the Securities Law; and sixth, other circumstances as determined by the exchange based on the nature, severity, and social impact of the company’s unlawful acts.
Furthermore, to ensure that the mandatory delisting procedure for material violations is fair, impartial, and transparent, the Measures also provide for procedures such as defense, hearings, and review, thereby affording listed companies with the necessary safeguards for their lawful rights.

The Shanghai and Shenzhen Stock Exchanges have issued the “Notice on Launching the Belt and Road Bond Pilot Program.”
Recently, the Shanghai and Shenzhen stock exchanges have each formulated and issued the “Notice on Launching the Belt and Road Bond Pilot Program” (hereinafter referred to as the “Notice”), which sets out the key institutional arrangements for Belt and Road bonds.
The Shanghai Stock Exchange’s Notice covers four key areas: First, it defines “Belt and Road” bonds. These include government bonds issued on the SSE by governmental entities from countries (or regions) along the Belt and Road; corporate bonds issued by enterprises and financial institutions from such countries or regions; and corporate bonds issued by domestic and overseas issuers whose proceeds are earmarked for Belt and Road‑related projects. Second, it sets out regulatory arrangements for Panda government bonds. Governmental entities from Belt and Road countries or regions issuing government bonds on the SSE must submit, prior to issuance, application documents such as a bond offering prospectus and an economic data report. Third, it clarifies cross‑border capital‑flow provisions. Where the proceeds of “Belt and Road” bonds involve cross‑border capital movements, issuers are required to disclose their plans for the use of funds and comply with applicable regulations of the relevant supervisory authorities. Fourth, it outlines supporting measures. The SSE will assign dedicated personnel to handle the submission, acceptance, and review of “Belt and Road” bond applications, establish a dedicated “Belt and Road” bond segment, and encourage various investment institutions to invest in these bonds.
The Shenzhen Stock Exchange’s Notice comprises twelve articles and shall take effect from the date of its issuance. The Notice exhibits four key features: First, it delineates the scope of “Belt and Road” bonds. Under the Notice, Shenzhen Stock Exchange “Belt and Road” bonds are categorized into three types: (1) government bonds issued on the Exchange by governmental entities of countries (or regions) along the Belt and Road; (2) corporate bonds issued by enterprises and financial institutions of such countries (or regions); and (3) corporate bonds issued by domestic and overseas enterprises, with proceeds earmarked for Belt and Road‑related projects. Second, it specifies the procedures for the issuance, listing, or trading of “Belt and Road” government bonds, as well as the associated information‑disclosure requirements. Issuers of such bonds must, in accordance with the Notice, submit relevant documentation to the Exchange for pre‑issuance filing and ensure proper disclosure; the listing, trading, or transfer of these bonds shall be governed by the Exchange’s existing trading rules. Throughout the bond’s term, issuers are required to fulfill their obligations to disclose annual economic data and material developments. Third, it sets forth the project eligibility criteria and the requirements for the use of proceeds applicable to corporate bonds designated for Belt and Road initiatives. Fourth, it outlines supporting measures. The Exchange will assign dedicated personnel to handle bond application acceptance and review, adopt a standardized naming convention for such bonds, establish a dedicated section, and, when appropriate, publish a “Belt and Road” bond index, thereby encouraging investment institutions to allocate capital to these bonds.

The China Securities Regulatory Commission is soliciting public comments on the Measures for the Administration of Foreign-Invested Securities Companies.
Recently, the China Securities Regulatory Commission has revised the “Rules on the Establishment of Securities Companies with Foreign Equity Participation” and plans to reissue them as the “Administrative Measures for Foreign-Invested Securities Companies (Draft for Public Comment)” (hereinafter referred to as the “Measures”), which are now being made available for public consultation.
The revisions to the Measures primarily cover the following aspects: First, foreign investors are permitted to hold a controlling stake in joint‑venture securities offices. The domestic shareholder requirements for such joint ventures are aligned with those applicable to other securities offices, reflecting the shift from minority participation to control; accordingly, the title has been changed from “Rules on the Establishment of Securities Offices with Foreign Equity Participation” to “Administrative Measures for Foreign‑Invested Securities Offices.” Second, the scope of business activities for joint‑venture securities offices will be gradually liberalized. Newly established joint‑venture securities offices may, in accordance with the law and in an orderly manner, apply to conduct securities business based on their specific circumstances, with the initial scope of operations required to be commensurate with the securities‑business experience of the controlling shareholder or the largest shareholder. Third, the shareholding limits for foreign investors in both listed and unlisted securities offices will be unified. The aggregate shareholding limit for all overseas investors in domestically‑owned listed securities offices will be adjusted to “no more than the commitments China has made in opening up its securities industry.” Fourth, the cap on the shareholding proportion of a single overseas investor in a listed securities office will be relaxed. Specifically, “through securities transactions on stock exchanges or via contractual acquisitions, the shareholding by a single overseas investor, or the combined shareholding through agreements or other arrangements with others, shall not exceed 30% of the outstanding shares of the listed securities office.” Fifth, the eligibility criteria for overseas shareholders have been refined. Overseas shareholders must be financial institutions with a strong international reputation and solid operating performance, ranking among the global leaders in terms of business scale, revenue, and profitability over the past three years, and maintaining high‑level long‑term credit ratings during the same period. Sixth, policies governing changes in the identity of the actual controller of domestic shareholders—resulting in a change in the nature of domestically‑owned securities offices—have been clarified.

The Hong Kong Exchanges and Clearing is seeking market feedback on the listing regime for companies in emerging and innovative industries.
The Hong Kong Exchanges and Clearing Limited is closely following the direction of its listing regime as set out in the “Consultation Conclusions on the Proposed Establishment of an Innovation Board” (the Consultation Conclusions) issued on December 15 last year, and today is seeking public views on detailed measures to broaden existing listing channels and facilitate the listing of companies in emerging and innovative industries.
The recently published consultation paper includes proposed amendments to the Listing Rules, permitting (i) biotechnology issuers that have not yet met any Main Board financial eligibility tests and (ii) companies with different voting rights structures to list in Hong Kong; as well as (iii) the establishment of a new, streamlined secondary listing channel to accommodate Greater China‑based and overseas companies seeking a secondary listing in Hong Kong.
The Hong Kong Exchanges and Clearing Limited has proposed adding three new chapters to the Listing Rules to implement three recommendations: measures for the biotechnology sector, a framework for different voting rights structures, and the establishment of a streamlined channel for secondary listings. Under this proposal, the Exchange provides specific guidance on the suitability of listing for biotechnology issuers engaged in the research, development, and production of pharmaceuticals—covering small‑molecule drugs, biologics, and medical devices, including diagnostics—that have yet to achieve profitability or generate revenue. Whether other manufacturers of biotechnology products are suitable for listing will be assessed on a case‑by‑case basis.
As for innovative‑industry companies adopting a dual‑class share structure, the proposed framework closely aligns with the direction of the listing regime set out in the consultation conclusions. Issuers seeking to list must demonstrate that they possess the requisite characteristics to qualify for such a structure, including their corporate nature and the contributions made by the holders of the different voting rights. Given the potential risks associated with dual‑class share structures, the Hong Kong Stock Exchange has introduced detailed investor‑protection measures in the proposed framework, including restrictions on the scope of voting rights, safeguards to ensure equal voting rights for shareholders holding shares of the same class, and enhanced corporate governance and disclosure requirements.

Commercial & Corporate
The China Insurance Regulatory Commission has issued the Measures for the Administration of Equity in Insurance Companies.
Recently, the China Insurance Regulatory Commission issued the Measures for the Administration of Equity in Insurance Companies (hereinafter referred to as the “Measures”). The Measures comprise 9 chapters and 94 articles, outlining a regulatory framework structured around three key areas. First, pre‑investment rules governing the qualification of shareholders, the methods for acquiring equity interests, and specific requirements for funding used to acquire such interests. Second, post‑acquisition rules applicable to shareholders, including standards of conduct and provisions on the management of equity-related matters within insurance companies. Third, rules on equity supervision and administration, covering supervisory priorities, enforcement measures, and mechanisms for holding violators accountable. Grounded in a problem‑oriented approach, the Measures address issues such as false capital contributions, unauthorized nominee shareholding, circumvention of regulatory oversight through layered ownership structures, and opaque equity arrangements. They further clarify the fundamental principles of equity governance, expand the array of supervisory tools, and strengthen accountability for non‑compliant conduct. The main contents are as follows:
First, the fundamental framework for equity regulation has been comprehensively revised. The substantive content of the Measures is structured around three key components: pre‑investment rules, post‑investment rules, and equity supervision and management rules. Second, the basic principles governing equity management have been clearly defined, encompassing sound qualifications and clear ownership relationships, a rational structure and compliant conduct, as well as openness, transparency, and orderly transfer of shares—thereby explicitly signaling to the public the regulatory authorities’ policy orientation and underlying stance. Third, classified supervision of equity has been introduced. Based on shareholders’ shareholding ratios and their influence on the insurance company’s operations and management, shareholders are categorized into four types—controlling, strategic, financial Category II, and financial Category I—and subject to distinct regulatory policies and standards. Fourth, a negative list for market access has been established. While specifying detailed eligibility criteria and capital‑contribution requirements for each type of shareholder, the Measures also set out three negative lists: prohibiting certain investors from investing in insurance, barring specific investors from exercising controlling interests in insurers, and disallowing particular types of funds from being used for insurance investments—thereby further clarifying policy direction and tightening entry requirements for investors. Fifth, limits on investment proportions and numbers have been explicitly stipulated, including caps on the shareholding ratios of various types of capital, maximum numbers of investments in insurance companies, and lock‑up periods for shareholders’ holdings—thus addressing concrete issues of widespread public concern in equity regulation. Sixth, the review process for equity approvals has been strengthened, with clearer delineation of review priorities, methods, and the obligations of administrative license holders, effectively curbing various violations in the acquisition of equity. Seventh, oversight of shareholder conduct has been intensified. Penetrative supervision has been implemented, regulatory tools have been diversified, and exit mechanisms have been clarified. Depending on the severity of violations, regulators may impose measures such as ordering the transfer of equity, revoking administrative licenses, or restricting investment in the insurance sector, thereby resolutely cracking down on illegal and non‑compliant behavior.

Foxconn’s IPO application was approved in just 36 days, marking the official launch of a “green channel” for unicorn companies’ IPOs.
On March 8, 2018, following review by the 17th Issuance Examination Committee of the China Securities Regulatory Commission, Foxconn Industrial Internet Co., Ltd. (hereinafter referred to as Foxconn) received approval for its initial public offering on the A-share market. From the submission of its draft prospectus on February 1 to today’s approval, Foxconn took just 36 days, setting a new record for the fastest-ever A-share IPO review.
Foxconn’s initial public offering approval and 360’s successful listing can be seen as concrete outcomes of the reform of the new‑stock issuance system. Going forward, similar unicorn companies are expected to leverage an expedited IPO process to gain smooth access to the capital markets. In a research report released on March 6, Sinolink Securities noted that Foxconn’s “report‑and‑review‑immediately” approach and its rapid submission to the review committee underscore the pressing need to accelerate the deployment of the new economy, which will help improve the industrial structure and fully demonstrate that the securities market is steadily implementing its extraordinary, robust support for the “Four New” initiatives.

The National New Energy Vehicle Technology Innovation Center Construction Promotion Meeting Was Held.
Recently, the meeting to advance the construction of the National New Energy Vehicle Technology Innovation Center was held in Beijing. At the meeting, Vice Minister Li Meng read out the Ministry of Science and Technology’s letter endorsing the establishment of the National New Energy Vehicle Technology Innovation Center, while a representative from BAIC Group, on behalf of the co‑founding entities, reported on the center’s progress.
Minister Wan Gang emphasized that, in advancing the construction of the National New Energy Vehicle Technology Innovation Center, four key priorities must be addressed. First, prioritize technology‑driven innovation by grasping the overarching trends shaping the future of new energy vehicles, addressing current shortcomings, leading at the cutting edge to meet market demands, and drawing on best practices from around the world while adhering to the principles of interdisciplinary innovation. Second, strengthen the ethos of openness and collaboration by intensifying research on foundational and common technologies, expanding international cooperation, fostering cross‑sectoral integration, and promoting the sharing of成果. Third, bolster talent recruitment and development by designing sound, well‑structured mechanisms for attracting, retaining, and effectively utilizing top global talent, thereby creating an environment where young people can turn their aspirations into thriving careers, supported by the broader “mass entrepreneurship and innovation” movement. Fourth, increase investment in innovation resources, deepen reforms of the science and technology system, pool project, market, and human‑resource assets, and refine frameworks for intellectual property management and patent‑use sharing, ensuring that the Center becomes a beacon of technological innovation in the new energy vehicle sector.

Three departments have jointly issued the “Notice on Launching a Pilot Program for Innovating Support Policies for Agricultural Industrialization Consortia.”
Recently, the Ministry of Agriculture, the National Office for Comprehensive Agricultural Development, and the Agricultural Bank of China jointly issued the “Notice on Launching a Pilot Program for Innovative Support Policies for Agricultural Industrialization Consortia,” deciding to carry out a pilot initiative to innovate policies supporting agricultural industrialization consortia.
Pilot provinces annually allocate a certain number of comprehensive agricultural development projects to support the growth of local agricultural industrialization consortia, helping their members leverage their respective strengths for mutually beneficial complementarity. Branches of the Agricultural Bank of China facilitate members of these consortia in obtaining production and operating loans through credit enhancement, guarantees, and other means; loan interest rates are, in principle, set at the benchmark rate for the same period and tier as stipulated by the People’s Bank of China, with the flexibility to adjust upward or downward by no more than 5% based on market conditions. Strengthening cooperation between banks and government authorities, promoting innovation in collateral and guarantee mechanisms, and effectively addressing difficulties in securing collateral and guarantees, the Agricultural Bank gives priority to investigating, reviewing, and approving loan applications, as well as allocating credit quotas, for the financing needs of agricultural industrialization consortia. Furthermore, for projects included within the scope of subsidized-interest support under the comprehensive agricultural development initiative, the Agricultural Bank prioritizes loan disbursement.
Fiscal equity investment funds funded by comprehensive agricultural development programs, as well as various industry‑focused investment funds backed by the Agricultural Bank of China, should adhere to a model that combines government guidance with market‑driven operations. They should proactively identify and invest in eligible projects among members of agricultural industrialization consortia, further encouraging private and financial capital to increase their contributions, thereby providing robust financial support for the development of these consortia and helping their members establish sound mechanisms characterized by clear property rights, rational shareholding structures, and effective governance.

Taxation TAXATATION
The State Taxation Administration has released the “List of Tax-Related Matters Requiring ‘At Most One Visit’”
Recently, the State Taxation Administration has compiled and released the “List of Tax‑Related Matters Requiring ‘At Most One Visit’” (hereinafter referred to as the “List”). Under this policy, taxpayers seeking to handle matters listed in the “List” need to visit the tax authority no more than once, provided that all required documents are complete and the application meets the statutory acceptance criteria.
For the tax‑related services listed in the “List,” tax authorities at all levels shall ensure full implementation of the “at most one visit” principle. Provincial national tax and local tax authorities may, by adopting a variety of measures such as online tax processing, mail‑delivery services, and on‑site service, add additional “at most one visit” tax‑related items to the State Taxation Administration’s “List,” thereby establishing their own respective “at most one visit” lists for national and local tax services and publicly announcing their implementation.
While implementing the “at most one visit” reform, tax authorities at all levels should actively fulfill the State Taxation Administration’s requirements for deepening the “delegation, regulation, and service” reform, vigorously promote online tax services, and strive to enable taxpayers to complete their tax-related matters without having to visit a tax office in person.
Provincial tax authorities shall prepare and publicly disclose tax‑administration guides covering the documentation required, eligibility criteria, processing time limits, handling methods, and procedural steps for “at most one visit” tax services, thereby enabling taxpayers to readily understand and smoothly implement the reform aimed at ensuring that such tax matters require no more than one in‑person visit.

The Ministry of Finance has provided explanations on the reforms to the property tax and individual income tax.
Recently, the Ministry of Finance has provided public explanations on property tax and individual income tax reforms. In line with the central government’s strategic plans, the Budget Committee of the Standing Committee of the National People’s Congress, the Ministry of Finance, and other relevant authorities are currently expediting the drafting and refinement of a draft law on real estate taxation. The overarching approach to real estate taxation is to prioritize legislation, grant ample authority, and advance implementation in stages. Under this comprehensive framework, work is underway to design and improve the draft while conducting feasibility studies and soliciting public input.
The real estate tax serves to regulate income distribution, particularly the concentration of personal wealth, thereby promoting social equity. At the same time, it generates fiscal revenue to meet the government’s needs for public services. The tax applies to all commercial and industrial properties as well as residential housing, with taxation based on assessed value. Regarding tax incentives, virtually every country’s real estate tax system includes certain preferential measures—such as setting specific deduction thresholds or granting tax relief to low-income households, families in financial hardship, and other vulnerable groups. While the specific mechanisms and levels vary, such incentives are a common feature. As a local tax, real estate tax revenues accrue to local governments, which use these funds to finance expenditures on education, public security, and other public infrastructure. In designing China’s real estate tax, we will draw on internationally recognized institutional frameworks while also tailoring the system to China’s unique national conditions. For example, we may consolidate and integrate related tax categories, and appropriately reduce the tax and fee burden associated with property development and transactions. Given the complexity of determining the tax base for real estate tax, establishing a robust tax administration and collection framework is essential to ensure both effective enforcement and equitable taxation.
On the personal income tax front, the Ministry of Finance stated that adjustments will be made in line with changes in residents’ basic living and consumption levels. The personal income tax system will introduce additional special deductions; in addition to the items already outlined in the Government Work Report—such as expenses for children’s education and major medical expenses—the specific scope and number of these special deductions will be determined based on actual circumstances. Furthermore, a personal income tax system that combines comprehensive and categorized approaches will be established, transitioning from a purely categorized system to one that integrates both elements. Under this new framework, certain labor‑related incomes—including wages and salaries, remuneration for services, manuscript fees, and royalties—will be aggregated, after which a standard basic deduction will be applied before taxation proceeds.

LITIGATION & ARBITRATION
The Supreme People’s Court has issued the “Minutes of the National Courts’ Conference on Bankruptcy Adjudication.”
Recently, the Supreme People’s Court issued the “Minutes of the National Courts’ Conference on Bankruptcy Adjudication” (hereinafter referred to as the “Minutes”). The overall objectives set forth in the Minutes are to leverage the role of bankruptcy adjudication in advancing the development of a modernized economic system; to focus on supporting the establishment of a new economic framework and improving mechanisms for the rescue and orderly exit of market entities; to refine the working mechanisms of bankruptcy adjudication so as to maximize its value; and to ensure seamless coordination between enforcement proceedings and bankruptcy procedures, thereby helping to address the challenges of enforcing court judgments. The main contents are as follows:
In terms of professionalizing bankruptcy adjudication, measures have been adopted, including advancing the professionalization of bankruptcy review bodies, rationally allocating review tasks, and establishing a scientific performance appraisal system.
With regard to improving the administrator system, measures have been adopted, including refining the structure of the administrator corps, exploring cross‑regional practice for administrators, implementing a tiered management framework for administrators, establishing a competitive mechanism for selecting administrators, clearly delineating the respective functions and responsibilities of courts and administrators, leveraging the incentive and restraint mechanisms embedded in administrator remuneration, and advancing the establishment of a comprehensive funding mechanism to ensure bankruptcy expenses.
In the area of bankruptcy reorganization, efforts are being made to refine procedures related to the identification and review of reorganizable enterprises, hearings, the formulation and communication‑coordination of reorganization plans, the review and approval of such plans, the conditions for compulsory approval of draft reorganization plans, the conditions and procedures for modifications during implementation, the re‑voting and adjudicated approval following any amendments, the safeguarding of the normal production and operation of reorganized enterprises, and the exploration of mechanisms to seamlessly link out‑of‑court restructuring with in‑court reorganization.
With respect to bankruptcy liquidation, emphasis is placed on the conditions and procedures for declaring bankruptcy, as well as the mechanisms for converting between different types of proceedings; the exercise and limitations of secured creditors’ rights; the disposal of assets; the protection of employees’ rights and interests; the principles and order of creditor repayment; and the termination of the liquidation process.
With respect to the bankruptcy of affiliated enterprises, emphasis is placed on the prudent application of substantive consolidation, the review of applications for substantive consolidation, and the provision of remedies for the rights of interested parties when a substantive consolidation order is issued.
With respect to the coordination between enforcement proceedings and bankruptcy proceedings, this includes the enforcing court’s obligations to provide review and notification, offer clarification, and transfer cases; the transfer and acceptance of cases where enforcement is converted to bankruptcy; and, following the acceptance of a bankruptcy case, the lifting of seizure measures or the transfer of seized assets.

The Supreme People’s Procuratorate has issued the “Opinions on Comprehensively Strengthening State Judicial Assistance for Minors.”
The “Opinions of the Supreme People’s Procuratorate on Comprehensively Strengthening State Judicial Assistance for Minors” were recently issued. According to these Opinions, eight categories of minors who have fallen into hardship due to unlawful harm suffered by themselves or their caregivers will be eligible for state judicial assistance, with the amount of assistance generally determined based on the average monthly wage of employees in the province where the case is under jurisdiction during the preceding year.
The Opinions clearly stipulate that, for the following minors, the procuratorial organs in the jurisdiction of the case shall provide assistance: those who have sustained physical disabilities or suffered severe psychological trauma as a result of criminal harm and, due to the inability to obtain timely and effective compensation, face significant difficulties in meeting their basic living needs; those who urgently require medical treatment but whose families are unable to afford the associated costs; those whose caregivers have been killed or seriously injured by crime and who, owing to the lack of prompt and effective compensation, experience severe hardship; those whose family property has suffered substantial losses due to criminal acts and, because they cannot obtain timely and effective compensation or receive reasonable redress and assistance, are left in dire straits; those who have suffered bodily injury or significant property loss as a result of reprisals for reporting crimes or giving testimony and, lacking prompt and effective compensation, find themselves in financial difficulty; those who seek child support but are unable to secure it because the obligor lacks the means to pay, thereby facing hardship; those who have sustained personal injuries from civil torts such as road traffic accidents and, unable to obtain effective compensation through litigation, are in a state of economic distress; and other cases where individuals experience severe hardship due to the circumstances of the case and are deemed in need of assistance.
The “Opinions” set forth the criteria for assistance: procuratorial organs shall, based on the economic circumstances of the family of the minor in need of assistance and taking into account the reasonable expenses required for the minor’s education and development, determine the amount of assistance by using the average monthly wage of employees in the province, autonomous region, or municipality directly under the central government where the case is jurisdictional as the benchmark, with the total assistance generally not exceeding thirty-six months’ wages. For minors who have sustained severe physical injuries or serious disabilities, whose families face particularly difficult living conditions, or who require long-term psychological treatment or physical rehabilitation, the assistance cap may be waived.

Other
Zhou Xiaochuan fielded questions from reporters on the central bank’s digital currency, Bitcoin, and ICOs.
At 10:00 a.m. on March 9, the Press Center of the First Session of the 13th National People’s Congress invited Governor Zhou Xiaochuan, Vice Governor Yi Gang, and Vice Governor and Director of the State Administration of Foreign Exchange Pan Gongsheng of the People’s Bank of China to answer questions from reporters on issues related to “financial reform and development.” At the event, Governor Zhou addressed topics such as the central bank’s digital currency, Bitcoin, and the regulation of initial coin offerings (ICOs).
Zhou Xiaochuan noted that, conceptually, the central bank’s digital currency is referred to as Digital Currency Electronic Payment (DCEP), and its core objectives are convenience, speed, and security. Such a digital currency may be built on blockchain or distributed ledger technology, or it may rely on existing electronic payment systems. While digital currencies are technologically inevitable, it is essential to safeguard overall financial stability, manage risks, and protect consumers.
In 2017, the People’s Bank of China launched a research project on digital currency and electronic payments. Following formal approval by the State Council, work is currently underway to advance this initiative. The development of digital currency is driven by technological progress; in the future, traditional forms such as paper banknotes and coins may gradually decline and could even eventually disappear. This scenario is indeed possible.
Recently, we have collaborated with the industry to organize distributed research and development, exploring multiple approaches and working closely with the market to advance digital currency. Digital currency is a versatile system that, at its core, seeks to deliver convenience, speed, and low cost in retail payments, while also prioritizing security and privacy protection. Nevertheless, digital currency has sparked considerable debate and posed numerous risks, with prices experiencing significant volatility. A key issue is that certain technological applications have shifted away from focusing on retail‑payment use cases and instead gravitated toward virtual‑asset trading. From our perspective, virtual‑asset trading warrants greater caution; moreover, such activities are not fully aligned with China’s policy direction of ensuring that financial products and services support the real economy.
Regarding the regulation of digital currencies such as Bitcoin and ICOs, Zhou Xiaochuan believes that regulatory frameworks are dynamic and that no definitive policy can be predicted for the future. Overall, such policies should be guided by the technology’s capacity to absorb regulation and by the outcomes of localized pilot programs. The rapid emergence of Bitcoin and its forks has lacked sufficient prudence; their swift proliferation could lead to adverse consequences. Products lacking due diligence might be temporarily suspended, while promising ones should undergo rigorous testing and certification before being rolled out.

U.S. Treasury Department and SEC: Virtual Currency “Exchanges” Must Operate Under a License
On March 6, the Financial Crimes Enforcement Network (FinCEN), an agency under the U.S. Department of the Treasury, released its response to a query from Senator Ron Wyden. In its letter, FinCEN emphasized that, in 2013, it explicitly classified virtual currency exchanges and their operators as money services businesses (MSBs) subject to the Bank Secrecy Act (BSA). Accordingly, these entities are required to register with FinCEN as MSBs, meaning they must operate under a license and comply with anti–money laundering and counterterrorism financing regulations.
On March 7, the U.S. Securities and Exchange Commission (SEC) issued a statement regarding alleged violations by online digital‑asset trading platforms. The SEC stated that virtual‑currency trading platforms that label themselves as “exchanges” create the misleading impression among investors that they are subject to rigorous oversight—when in fact no such platform is currently registered with the SEC. Under federal securities laws, the SEC has clarified that virtual‑currency trading platforms must either register with the SEC as a national securities exchange or seek an exemption to register as an alternative trading system (ATS); in either case, they must operate under the supervision of a self‑regulatory organization (SRO). Registering as an ATS entails applying to the SEC for a broker‑dealer license.

JC Master Law Office
Address: 9th Floor, National Water Resources Building, No. 70 Qingjiang South Road, Nanjing City
Postal Code: 210036
Phone: 025-84503333
Fax: 025-84505533
Website: www.jcmaster.com
This legal notice is provided solely for informational purposes and does not constitute legal advice or a legal analysis of any specific case. The transmission of this legal notice does not establish an attorney–client relationship between JC Master Law Office and the user or reader. JC Master Law Office assumes no responsibility for any third-party content accessible via the internet. If you do not wish to receive this legal notice, please notify us by email at jcm@jcmaster.com.
The copyright in this legal information is owned by JC Master Law Office ©. Without written permission, no organization or individual may reproduce, publish, or cite it in any form.