JC Master Legal News Issue 1061

Key Takeaways for This Issue
The Shanghai Stock Exchange has revised and issued the Business Guidelines on Information Disclosure During the Term of Corporate Bonds.
The Shanghai Stock Exchange has issued and implemented the “Shanghai Stock Exchange Guidelines on the Application of Self-Regulatory Supervision Rules for Bonds, No. 1 — Ongoing Information Disclosure for Corporate Bonds (2023 Revision).”
Three ministries have imposed strict regulations on the management of accounting offices engaged by state-owned enterprises and listed companies.
The “Administrative Measures for the Selection and Appointment of Accounting Offices by State-Owned Enterprises and Listed Companies,” jointly issued by the Ministry of Finance, the State-owned Assets Supervision and Administration Commission of the State Council, and the China Securities Regulatory Commission, was published on the Ministry of Finance’s website on May 4.
The Supreme People’s Procuratorate has placed the major fire accident case at Beijing Changfeng Hospital under direct supervision.
The Supreme People’s Procuratorate has placed the major fire incident at Beijing Changfeng Hospital under direct supervision, urging the Beijing municipal procuratorial organs to fully exercise their prosecutorial functions, coordinate with public security authorities and relevant departments, ascertain the responsibilities of all parties in accordance with the law, strengthen the evidentiary foundation of the case, impose lawful penalties on those involved in criminal offenses, and safeguard the legitimate rights and interests of the victims. At the same time, it calls for enhanced root-cause‑based governance to bolster risk prevention and comprehensive management in the field of workplace safety.
The Supreme People’s Court has released typical cases of enforcement in civil cases involving migrant workers’ wages.
On May 1, the Supreme People’s Court released typical cases of enforcement in civil cases involving wages owed to rural migrant workers.
The Beijing No. 1 Intermediate People’s Court has released typical cases involving labor disputes over equity incentive plans.
The Beijing No. 1 Intermediate People’s Court held a press conference on “Properly Adjudicating Equity-Incentive Cases to Support the Development of an International Science and Technology Innovation Center,” during which it presented the court’s and its subordinate courts’ experience in handling related cases and their approaches to streamlining adjudication procedures, and released several landmark labor dispute cases involving equity incentives.

Finance & Capital Markets
The Shanghai Stock Exchange has revised and issued the Business Guidelines on Information Disclosure During the Term of Corporate Bonds.
As the bond market continues to develop and the external credit environment evolves, stakeholders have raised higher standards for the quality of bond information disclosure. To further strengthen the risk‑disclosure function of bond disclosures, promote the formation of rational pricing, enhance the efficiency of resource allocation in the bond market, and ensure that market participants assume their responsibilities more rigorously, the Shanghai Stock Exchange, guided by a problem‑oriented and risk‑oriented approach and drawing on its prior regulatory experience, has issued and implemented the “Shanghai Stock Exchange Guidelines on the Application of Self‑Regulatory Rules for Bonds No. 1 — Ongoing Information Disclosure for Corporate Bonds (Revised in 2023).” This revision primarily covers four key areas:
First, we have streamlined and consolidated the requirements for preliminary information disclosure. By integrating the disclosure obligations set forth in documents such as “Shanghai Stock Exchange Self-Regulatory Rules Application Guidance No. 2—Direct Disclosure Services for Corporate Bonds and Asset-Backed Securities” and the “Notice on Relevant Work Regarding Corporate Bond Information Disclosure in 2022,” we have enhanced the systematic nature of the regulatory framework. Furthermore, content pertaining to the issuer’s substantive rights and obligations that was previously included in the annex to “Shanghai Stock Exchange Self-Regulatory Rules Application Guidance No. 1—Ongoing Information Disclosure for Corporate Bonds”—titled “Content and Format of Ad Hoc Report Disclosure for Corporate Bonds”—has been moved to the corresponding sections of the main text. Accordingly, specific regulations governing the format of such announcements have been removed, thereby preserving the necessary flexibility in fulfilling information disclosure obligations.
Second, the focus is on risk‑based approaches and the refinement of disclosure standards. New disclosure requirements have been introduced for matters that may trigger accelerated repayment of corporate credit bonds or the establishment of a creditors’ committee at financial institutions; clear verification and disclosure obligations have been set forth for situations involving declines in corporate bond prices or abnormal price volatility; and disclosure requirements for items with low relevance to credit risk—such as raising the thresholds for triggering disclosures related to new borrowings, new guarantees, and significant investments—have been streamlined.
Third, further strengthen the requirements for the standardization of information disclosure. Specifically, it clarifies the standards for the simultaneous disclosure of domestic and overseas information by issuers and their related parties; reinforces the obligations of directors, supervisors, senior management, and trustees to verify the content of periodic reports; and specifies disclosure requirements for impact assessments of material events and for arrangements to be implemented when key personnel of the issuer are unable to perform their duties.
Fourth, clarify the disclosure requirements for bankruptcy proceedings and market‑based restructuring. Taking into full account the actual circumstances of entities undergoing bankruptcy, receivership, or administration, the framework emphasizes risk resolution, strengthens disclosure on the progress of bankruptcy or comprehensive risk‑resolution procedures, and specifies disclosure obligations for matters unique to bankruptcy—such as bankruptcy conciliation, reorganization plans, or the formulation and implementation of market‑based restructuring plans—as well as special audit and valuation reports prepared during bankruptcy proceedings. At the same time, it appropriately streamlines the routine disclosure requirements for relevant entities.
Going forward, under the leadership of the China Securities Regulatory Commission, the Shanghai Stock Exchange will deepen the implementation of the registration‑based reform, ensuring the effective application of relevant rules through training, service enhancements, and strengthened supervision. It will consistently guide and urge market participants to continuously improve the quality of bond information disclosure, thereby enabling the exchange‑traded bond market to function more effectively and enhancing the quality and efficiency of its services to the real economy.

The China Securities Regulatory Commission has issued the “Work Plan for Promoting the High-Quality Development of Corporate Bonds Supporting Technological Innovation.”
To thoroughly implement the spirit of the 20th National Congress of the Communist Party of China and the Central Economic Work Conference, and to carry out the relevant work arrangements of the State Council, the China Securities Regulatory Commission recently formulated and issued the “Work Plan for Promoting the High-Quality Development of Corporate Bonds Supporting Technological Innovation” (hereinafter referred to as the “Work Plan”). The plan aims to further strengthen the functions of the capital market, accelerate the improvement of the quality and effectiveness of services provided to technology‑innovation enterprises, foster a virtuous cycle among science and technology, industry, and finance, and better support high‑level scientific and technological self‑reliance and strength.
In recent years, the China Securities Regulatory Commission has actively worked to establish a bond‑financing support framework that covers the entire lifecycle of science and technology innovation enterprises. It has smoothly launched a pilot program for science and technology innovation corporate bonds, which has since transitioned to regular issuance; steadily expanded the pool of eligible issuers; refined supporting policies and measures; and facilitated smoother access to direct financing for such enterprises. To date, these bonds have helped nearly 190 companies raise over RMB 210 billion, with funds primarily channeled into cutting‑edge sectors such as integrated circuits, artificial intelligence, and high‑end manufacturing, thereby vigorously promoting the rapid translation of scientific and technological advances into real‑world productive forces.
The Work Plan adheres to the fundamental orientation of serving the real economy and the innovation-driven development strategy. Grounded in the goal of improving the bond market’s financing mechanisms for supporting technological innovation, it emphasizes institutional innovation, coordinated efforts, and demonstration‑led initiatives, actively guiding various financial resources to accelerate their allocation to the field of scientific and technological innovation, thereby better supporting the high‑quality development of innovative enterprises. The plan comprises five key areas and 18 specific measures, with the following highlights: First, optimize financing service mechanisms by implementing a “green channel” policy that allows science‑and‑technology enterprises to benefit from “report‑and‑review‑immediately, issue‑upon‑approval,” while permitting eligible companies to apply, by analogy, the regime applicable to well‑known, mature issuers. This will substantially shorten the review and registration timelines for science‑and‑technology bonds and enhance the quality and efficiency of end‑to‑end services. Second, expand the supply of funding for technological innovation by continuing to leverage the exemplary and leading role of central state‑owned enterprises, increasing support for high‑quality offices issuing science‑and‑technology bonds, and encouraging enterprises in the innovation sector to issue REITs. Third, enhance the trading liquidity of science‑and‑technology bonds by including high‑quality issuers’ bonds in the benchmark market‑making list, exploring the launch of science‑and‑technology bond ETFs, and granting the highest‑tier discount factor for general pledge‑based repo financing on top‑tier science‑and‑technology bonds. Fourth, refine the evaluation and assessment system for science‑and‑technology bonds by incorporating underwriting performance into the special evaluation of securities offices’ fulfillment of social responsibilities, integrating it into the assessment of offices’ professional competence in corporate bond business, and establishing a separate mechanism for recognizing outstanding issuers of such bonds. Fifth, strengthen inter‑agency coordination by establishing and improving communication and consultation mechanisms with relevant ministries, including the State-owned Assets Supervision and Administration Commission of the State Council, and by enhancing collaboration with local government departments. Policy support will be provided to issuers, intermediaries, investors, and credit enhancement institutions involved in science‑and‑technology bond financing.
Going forward, the China Securities Regulatory Commission will work with relevant parties to implement the various measures outlined in the Work Plan, further refine the institutional framework for the bond market to support technological innovation, and provide stronger, more concrete support for scientific and technological advancement, thereby actively contributing to the establishment of a new development paradigm.

The Shenzhen Stock Exchange has issued two guidelines on information disclosure for corporate bonds.
Continuously enhance the quality and effectiveness of ongoing regulatory oversight.
On May 5, 2023, the Shenzhen Stock Exchange officially issued two regulatory guidelines—“Guideline No. 1 on Ongoing Supervision of Corporate Bonds: Periodic Reports” and “Guideline No. 2 on Ongoing Supervision of Corporate Bonds: Ad Hoc Reports”—further strengthening the information disclosure framework with a focus on debt‑repayment capacity, continuously enhancing the effectiveness and relevance of disclosures, and ensuring that market participants fulfill their respective responsibilities, thereby steadily improving the quality and efficiency of ongoing bond‑market supervision.
Focus on debt-servicing capacity and emphasize the effectiveness of information disclosure.
The newly formulated “Guidelines on Periodic Reporting” comprehensively and systematically standardizes the disclosure requirements for periodic reports by corporate bond issuers, emphasizing the disclosure of the issuer’s overall operational performance and risk profile while highlighting analyses of material changes. First, it strengthens disclosure obligations regarding the issuer’s operating conditions, with particular focus on developments in business segments and operating performance, significant related-party transactions, and changes in the ultimate controlling shareholder. Second, it refines disclosure requirements for matters that materially affect debt‑servicing capacity, detailing disclosures on changes in key balance‑sheet items, shifts in the scope of consolidated financial statements, and instances of material debt defaults.
The “Interim Report Guidelines” revise the “Guidelines on the Format for Interim Disclosure of Corporate Bond Information,” drawing on routine regulatory oversight and risk‑resolution practices to further strengthen timely disclosure and early warning for material matters, while also streamlining disclosure arrangements. First, the guidelines standardize disclosure requirements for commonly used elements in interim reports on various material matters, specifying that response measures must be disclosed when adverse impacts are involved. Second, they introduce new disclosure obligations for issues closely related to credit risk, such as the establishment of a financial institution’s creditor committee and abnormal fluctuations in transaction prices, and refine the specific circumstances under which disclosures are required regarding debt defaults and risks associated with credit enhancement or indemnification. Third, disclosure arrangements have been optimized, including clarifying the timing for disclosing cumulative items such as new borrowings, external credit enhancements, waivers of property rights, and asset seizures or attachments. Fourth, the guidelines add disclosure requirements for matters such as the implementation of resolutions passed at bondholders’ meetings and arrangements for secondary sales.
Focus on special disposal procedures to enhance the relevance of information disclosure.
For issuers undergoing bankruptcy proceedings or engaging in market‑based restructurings that meet the guidelines’ requirements, both sets of guidelines set forth specific information‑disclosure obligations. First, they mandate detailed disclosure of assets and liabilities that could significantly affect bankruptcy liquidation or risk‑resolution outcomes. Second, they specify disclosure requirements for key milestones, such as critical stages of the bankruptcy process and phased progress in risk‑resolution efforts. Third, they appropriately streamline routine disclosure obligations: except for certain material matters that directly impact the status of corporate bonds, bondholders’ rights, or the progress of risk‑resolution, other items may be disclosed in quarterly summary interim reports.
Improve information disclosure requirements for relevant institutions and strengthen the accountability of market entities.
The two sets of guidelines have refined the information‑disclosure requirements for credit enhancers, trustees, and other relevant parties, further urging market participants to fulfill their respective duties and responsibilities. First, with respect to credit enhancers, the guidelines clarify the scope of their annual reporting disclosure obligations and the corresponding preparation requirements; they also detail and specify the disclosure requirements for material matters that may affect their ability to honor indemnity obligations, including being sued or subject to arbitration over indemnity disputes, failing to perform indemnity obligations as agreed, loss or a substantial decline in the value of collateral, or default on interest‑bearing debt. Second, for trustees and other specialized institutions, the guidelines set forth disclosure requirements for their oversight of such履职 matters as verifying written conofficeations in periodic reports, auditing the use of raised funds, conducting resale reviews, and following up on bond‑default resolution.
Going forward, the Shenzhen Stock Exchange will earnestly implement the spirit of the 20th National Congress of the Communist Party of China and the Central Economic Work Conference. In accordance with the CPC Committee of the China Securities Regulatory Commission’s arrangements for carrying out thematic education on studying and applying Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the Exchange will adhere to the overarching principle of seeking progress while maintaining stability, fully, accurately, and comprehensively apply the new development philosophy, and officely prioritize high-quality development as its primary task. It will continue to refine and improve the regulatory framework for corporate bonds, strengthen training on relevant business rules, enhance its regulatory capabilities and service standards, and ensure that market participants assume their responsibilities. Together, these efforts will promote the high-quality development of the bond market and better support national strategies and the overall economic and social development agenda.

Demonstrating Vitality and Resilience: New Third Board Listed Companies Show Steady Performance in 2022
As of April 28, 2023, 6,187 companies listed on the New Third Board had disclosed their 2022 annual reports, with a timely disclosure rate of 95.16%. Based on the annual report filings, in 2022, supported by national policies, these listed companies remained committed to stabilizing operations, enhancing quality, pursuing innovation, strengthening supply chains, seeking growth, and safeguarding people’s livelihoods, thereby achieving steady performance and demonstrating the dynamism and resilience of small and medium-sized enterprises.
I. Overall revenue up, profits down; leading companies drive growth.
In 2022, listed companies collectively generated total operating revenue of RMB 1.4929 trillion and net profit of RMB 52.77 billion. Among them, non-financial enterprises reported operating revenue of RMB 1.4481 trillion and net profit of RMB 51.64 billion, with year-on-year changes of 2.16% and -8.37%, respectively. Despite multiple adverse shocks, New Third Board–listed companies maintained growth in revenue scale, with nearly 70% achieving profitability. Faced with a complex and evolving external environment, these companies proactively tightened cost controls; non‑financial enterprises reduced their three major expense categories by 1.08%. While weathering the downturn, they continued to build momentum for future growth through increased investment in innovation, with R&D spending rising 4.57% year over year—outpacing the growth rate of operating revenue.
While New Third Board companies as a whole are reducing costs and improving efficiency, leading offices are driving growth. In 2022, 346 listed companies reported net profits exceeding RMB 50 million, collectively generating RMB 42.171 billion in net profit—accounting for roughly 50% of all profitable companies. These companies posted an average return on equity of 15.09% and a net profit growth rate of 41.16%, making them exemplars of high profitability and robust growth among small and medium-sized enterprises.
Benefiting from national policies supporting small, medium, and micro enterprises—such as loan repayment and interest‑payment deferrals—the funding maturity structure of companies listed on the New Third Board has improved, effectively easing liquidity pressures. As of the end of 2022, these companies’ total interest‑bearing liabilities stood at RMB 362.015 billion, up 13.77% from the beginning of the year, with the share of long-term borrowings increasing by 2 percentage points. In terms of tax and fee reductions, listed companies have clearly reaped policy benefits, with their tax burden declining year over year. In 2022, the total taxes and fees paid by listed companies amounted to RMB 50.992 billion, accounting for 3.42% of operating revenue—a decrease of 0.12 and 0.40 percentage points compared with the previous year and the year before, respectively.
Capital market financing has effectively supported the innovation and development of small and medium-sized enterprises. In 2022, listed companies raised a total of RMB 23.2 billion through private placements, convertible bonds, and other channels, up 12.62% year on year. The aggregate amount of direct financing by non-financial offices increased by 12.87% compared with the previous year, further underscoring the supportive impact.
II. Concentration of Specialized, Sophisticated, Distinctive, and Innovative Enterprises; Continuous Improvement in Quality Across All Levels
The Beijing Stock Exchange is steadily unleashing its leading and catalytic effects, encouraging more high-quality small and medium-sized enterprises to choose the New Third Board as their growth platform. As of April 28, the New Third Board hosted 689 “Little Giant” companies specializing in niche markets, an increase of 358 compared with the same period last year, accounting for over 40% of all such enterprises in the capital market. The New Third Board has thus emerged as one of the primary platforms for nurturing specialized, refined, distinctive, and innovative offices. In 2022, these listed “Little Giants” posted an average return on equity of 10.35%, 4.76 percentage points higher than the overall market. More than 80% of them operate in advanced manufacturing or modern services, with 144 offices belonging to strategic emerging industries—primarily concentrated in high-end manufacturing, new materials, and next-generation information technology—where R&D intensity reached 7.77%. Moreover, over a dozen companies have had their flagship products in the “four foundational” sectors recognized as “Single-Champion” enterprises.
In 2022, the New Third Board added 270 newly listed companies, with a median net profit of RMB 22.94 million—8.14 times the overall median net profit of all listed companies. The average return on equity stood at 15.62%, more than 10 percentage points above the market average. These newly listed offices exhibit strong innovation-driven characteristics, with over 60% operating in advanced sectors such as advanced manufacturing and strategic emerging industries; 81 of them were recognized on the national-level “Little Giant” list for specialized, refined, distinctive, and innovative enterprises.
Companies in the Base Tier fully leveraged their flexibility, posting a full-year net profit of RMB 21.228 billion, up 1.52% year over year, with a compound growth rate of 12.71%. A total of 312 Base‑Tier companies reported net profits exceeding RMB 30 million, an increase of 6.85% compared with the previous year. In the Innovation Tier, total operating revenue reached RMB 806.2 billion and net profit stood at RMB 31.545 billion, with more than 80% of companies turning a profit. Following the revision of the Tiering Management Measures, the Innovation Tier’s functions for selection and enterprise development have been further strengthened, attracting a greater number of high‑quality offices and enhancing the overall quality of the tier. Since 2022, the 611 companies newly promoted to the Innovation Tier have posted an average net profit of RMB 25 million and an average return on equity of 12.57%, driving a 1.9 percentage‑point increase in the Innovation Tier’s aggregate return on equity.
As of April 28, 443 companies listed on the New Third Board were in the preparatory stage for a listing on the Beijing Stock Exchange, up 10.20% year over year. The pool of potential BSE listings continues to expand, with 68 companies disclosing their intention to list on the exchange shortly after being admitted. Over the past two years, these pre‑BSE offices have posted an average compound annual growth rate in net profit of 17.20%; their average R&D expenditure stands at RMB 17.2953 million, roughly twice the market average. Nearly 80% of these companies operate in high‑tech manufacturing and services, with a strong concentration in sectors such as advanced equipment manufacturing, information technology services, and pharmaceutical manufacturing.
III. Uphold efforts to strengthen and extend industrial chains, and actively fulfill social responsibilities.
In 2022, companies listed on the New Third Board continued to steadfastly pursue innovation-driven development, with an R&D intensity of 3.63%, up 0.09 percentage points from the previous year. Among them, 1,276 companies recorded an R&D intensity exceeding 10%, a figure that grew by 8.78% compared to the prior year. A total of 1,368 companies disclosed their R&D outcomes, filing over 8,000 new patents in 2022 and holding a combined portfolio of 74,657 patents. Several offices also achieved breakthrough progress in their R&D projects. To attract and retain innovative talent, listed companies have leveraged equity‑based incentives and other mechanisms, deploying flexible, multi‑phase incentive schemes to boost employee motivation. From the beginning of 2022 to date, 44 listed companies have implemented equity‑based incentive plans, while 95 have launched employee stock ownership programs, benefiting 5,312 employees and strengthening team cohesion to support the enterprises’ long-term strategic objectives.
Many listed companies are focused on niche segments, playing a pivotal role at key nodes in various industrial chains. In the new materials sector, listed offices have delivered standout performance: one company producing next‑generation graphite materials saw its net profit double in 2022. Meanwhile, suppliers of materials for lithium‑ion batteries and photovoltaic industries filed 28 new patents during the reporting period, providing crucial support for domestic substitution in the new materials space. In the biotechnology field, related listed companies maintained a robust compound annual growth rate of 15.94% in R&D spending in 2022; some achieved significant technological breakthroughs within China, while several biopharmaceutical offices made important advances in clinical trials.
In 2022, companies listed on the New Third Board actively engaged in poverty alleviation, disaster relief, and pandemic response, demonstrating their social responsibility. Many offices established poverty‑alleviation solar power stations and workshops to help farmers in underdeveloped regions secure employment and support the development of remote areas; they also donated funds and supplies to drought‑stricken and earthquake‑hit regions such as Sichuan, leveraging their professional expertise to assist post‑disaster reconstruction efforts. Despite ongoing macroeconomic volatility, these listed companies created an additional 87,700 jobs, employing a total of 1.5171 million people, and disbursed RMB 195.166 billion in employee compensation—up 6.01% year over year—thereby underscoring the commitment and proactive role of small and medium‑sized enterprises in enhancing public welfare and safeguarding social stability.
In 2022, listed companies employed a variety of approaches to reward their shareholders. Throughout the year, a total of 2,050 companies implemented profit distribution plans, with 90% opting for cash dividends, amounting to RMB 33.235 billion in total.

Risk Management, Quality Improvement, and Efficiency Gains: Bank Quarterly Reports Reveal Three Key Insights
Since the beginning of this year, the banking sector has continued to enhance the quality and effectiveness of its services to the real economy.
As of now, the first-quarter reports of all 42 A-share‑listed banks have been released. An analysis of these reports reveals three key trends in the sector: First, while asset and liability growth has accelerated, revenue has declined, underscoring a commitment to “sacrificing profit margins without compromising market stability.” Second, credit expansion is intensifying, with an increasingly optimized loan mix and higher-quality, more efficient growth. Third, the narrowing of net interest margins has stabilized, and asset quality remains sound with ample provisions, reflecting a clear stance of “sacrificing profits but not risks.”
Revenue and net profit growth has slowed.
In the first quarter, the banking sector actively supported the real economy. As policies aimed at stabilizing growth continued to be implemented, the growth rate of banking assets rebounded markedly, with this trend particularly pronounced among the major state-owned banks.
According to data recently released by the China Banking and Insurance Regulatory Commission, at the end of the first quarter, the total assets of banking financial institutions reached RMB 397.3 trillion, up 11% year on year; new RMB loans totaled RMB 10.6 trillion, an increase of RMB 2.27 trillion compared with the same period last year.
Overall, more than half of listed banks reported year‑end‑to‑quarter‑end growth in total assets and liabilities exceeding 5%, with most falling within the 5%–15% range. Among them, the five major state-owned banks all posted year‑end‑to‑March‑end increases in total assets and total liabilities above 5%, with the Agricultural Bank of China maintaining the highest growth rate. Leading the pack were three regional banks—Ruifeng Bank, Zijin Bank, and Changshu Bank—each recording asset and liability growth rates surpassing 10% compared with the end of 2022.
Meanwhile, weighed down by net interest margins and weak asset‑market performance that dampened non‑interest income, both revenue and net profit growth at listed banks have decelerated, with a pronounced divergence emerging between large and medium‑sized banks on the one hand, and small and mid‑size banks on the other.
Profitability indicators among small and medium-sized banks are notably strong. In terms of revenue, most of the banks maintaining positive growth are small and medium-sized; six listed small and medium-sized banks posted year-on-year revenue growth exceeding 10%, while 13 banks reported negative revenue growth. Net profit trends follow a similar pattern: nearly 70% of A-share‑listed banks recorded year-on-year net profit growth of at least 5%, with the top tier—exhibiting growth above 20%—largely comprising small and medium-sized banks.
Compared with medium- and small-sized banks, the major state-owned banks and joint-stock banks have shown signs of a slowdown in their profitability metrics. For instance, Industrial and Commercial Bank of China has experienced a moderate decline in revenue, while Industrial Bank and Shanghai Pudong Development Bank have both reported declines in both revenue and net profit.
Credit allocation has become more targeted.
Since the beginning of this year, commercial banks have maintained a robust pace of credit extension, and their asset base has continued to expand.
From the perspective of credit allocation, in the first quarter, most commercial banks actively supported national strategic development initiatives, channeling credit resources into real‑economy sectors aligned with government policies. Key areas of focus included manufacturing, infrastructure, technological innovation, green finance, and agriculture‑related industries.
According to data from the first-quarter reports, among A-share listed banks—including the six major state-owned banks—17 saw year-on-year growth in loans and advances exceeding 5%, with some smaller and mid-sized banks posting growth rates between 7% and 12%. Moreover, for more than half of A-share listed banks, the share of loans and advances in total assets increased compared with year-end levels. For example, Postal Savings Bank of China shifted its lending focus in the first quarter toward the real economy and retail customers, resulting in a marked acceleration in loan growth; the incremental volume of loans extended to the real economy reached a record high for the same period.
Taking the disbursement of manufacturing loans as an example, as of the end of March, among the major state-owned banks, the Agricultural Bank of China reported a 17% year-on-year increase in its outstanding manufacturing loans compared with year-end last year; among city commercial banks, Hangzhou Bank’s manufacturing loan balance rose 34.97% year over year; and among rural commercial banks, Shanghai Rural Commercial Bank’s manufacturing loans accounted for 17.75% of its total loan portfolio. In the realm of science-and‑technology‑focused finance, Bank of Beijing has served more than 7,000 national- and provincial-level “specialized, refined, distinctive, and innovative” enterprises, with a total loan portfolio approaching RMB 35 billion.
Green finance is currently one of the credit‑allocation sectors showing particularly strong growth. According to data from the People’s Bank of China, in the first quarter, the banking sector actively supported the greening and decarbonization of economic and social development, with the outstanding balance of green loans rising 34% year on year. Among listed banks, as of the end of March, both the Agricultural Bank of China and the China Construction Bank saw their green‑loan balances exceed RMB 3 trillion, up 22% and 17.45%, respectively, compared with year‑end last year. At Shanghai Pudong Development Bank, green‑loan balances in the Yangtze River Delta accounted for 40% of the bank’s total corporate green‑loan portfolio, while Beijing Bank reported a 13.83% increase in its green‑loan balance from the beginning of the year.
In addition, loans in the inclusive finance sector have continued to grow at a rapid pace. As of the end of March, the Agricultural Bank of China’s outstanding balance of inclusive finance loans stood at RMB 3.14 trillion, up 22% from year-end, with both the share and growth rate of inclusive small and micro enterprise loans remaining strong. Meanwhile, the Construction Bank reported an inclusive finance loan balance of RMB 2.67 trillion as of the end of March, an increase of RMB 322.048 billion from year-end.
According to data from the central bank, at the end of the first quarter, the year-on-year growth rates of medium- and long-term industrial loans, inclusive finance loans, green loans, agricultural loans, and loans to technology‑focused small and medium‑sized enterprises all exceeded that of overall loans. Notably, inclusive finance loans increased by RMB 3.06 trillion in the first quarter, an additional RMB 1.09 trillion compared with the same period last year, marking the highest quarterly increase on record. Meanwhile, financing costs for inclusive finance have also been declining: in the first quarter, the average interest rate on inclusive small and micro enterprise loans fell by 0.38 percentage points year over year.
The trend of narrowing net interest margins has weakened.
In the first quarter, the net interest margins of most listed banks declined to varying degrees year over year and quarter over quarter; however, improved asset quality and ample loan loss provisions provided a positive boost to net profit growth.
According to data released by the China Banking and Insurance Regulatory Commission, at the end of 2022, commercial banks’ overall net interest margin stood at 1.91%, down 17 basis points year on year—marking the first time since 2010 that the net interest margin has fallen below 2%.
Against the macroeconomic backdrop of offering concessions to the real economy, most mortgage loans and a portion of floating-rate loans were repriced in January this year. The decline in asset-side yields, coupled with the increasing proportion of time deposits on the liability side, has already led to expectations of a narrowing net interest margin among commercial banks. According to first-quarter reports, the net interest margins of listed banks generally declined year-on-year and quarter-on-quarter during January–March, with some state-owned banks seeing quarter-on-quarter declines of as much as 20 basis points.
In response to margin pressure, many senior executives at listed banks have highlighted their respective measures to stabilize net interest margins at recent earnings calls.
Bank of China stated that it will optimize its asset structure. While continuing to strengthen support for the real economy, it will, in line with the national strategy to expand domestic demand, ramp up retail loan issuance to bolster consumption recovery. At the same time, it will work to enhance the monetization of existing assets, steadily reduce the share of low‑yielding assets, and maintain a relatively stable profit margin.
At the bank’s earnings conference, senior executives of Postal Savings Bank of China disclosed that the bank’s efforts to reduce interest‑bearing costs are focused on three key areas: first, optimizing the asset‑under‑management (AUM) mix; second, continuing to curtail two‑year and three‑year term deposits in favor of shifting toward wealth management; and third, continually refining interest‑rate authorization and promoting differentiated pricing.
It is worth noting that positive signals of stabilizing net interest margins are also beginning to emerge. Recently, officials at several institutions have indicated that newly issued loan rates are showing signs of gradually bottoming out and even rebounding.
Recently, Peng Jiawen, Assistant President of China Merchants Bank, stated at the bank’s first-quarter earnings call that he expects a shift in the balance between credit supply and demand going forward, with corporate loan rates likely to show a modest upward trend. He added that even if the rebound remains muted, a bottoming-out has at least taken shape.
At the bank’s earnings call, CITIC Bank’s management also disclosed that interest rates on newly issued loans at the beginning of this year have begun to bottom out, and they expect corporate loan demand to improve markedly as the underlying economic fundamentals recover.
Ma Kunpeng, an analyst at CITIC Securities, also expects that the period of sustained downward pressure on loan interest rates is nearing its end. After playing a pivotal role during the three-year pandemic, the temporary counter-cyclical policy measures are now being phased out, and banks’ business strategies are gradually returning to normal.
Asset quality is steadily improving.
Another clear positive signal is that, in the first quarter, banks’ asset quality continued to improve, and provisions were further strengthened, which will also create greater room for listed banks to enhance their future net profits.
Based on an analysis of the first-quarter reports of 42 A-share listed banks, more than 90% saw their non-performing loan ratios decline or remain unchanged compared with year-end last year, while only three banks reported a slight uptick. Meanwhile, over 60% of these banks increased their loan-loss reserve coverage ratios further from year-end, and nearly 80% now have coverage ratios exceeding 200%.
In terms of the sectoral breakdown of non‑performing loans, although several listed banks continue to see risks emerging in real estate, retail, and small‑and‑micro enterprises, there has been no widespread deterioration in asset quality across the industry.
Taking real estate loans—highly scrutinized by the market—as an example, at China Merchants Bank’s first-quarter earnings call, Xu Mingjie, General Manager of the Risk Management Department, described the bank’s current rate of non‑performing real estate loan generation as having “passed its peak.” He noted that risks in the real estate sector have stabilized quite noticeably; although some NPLs will still emerge this year, their volume is expected to decline significantly compared with last year.
Wu Kaixiang, an analyst at Orient Securities, expects that the peak of the pandemic’s impact on banks’ asset quality has already passed. Looking ahead to 2023, with a robust economic recovery, an improving business environment, and rising consumer confidence—coupled with continued easing of real estate policies—banks’ pressure from new non‑performing loans is likely to gradually ease.

Commercial & Corporate
MIIT official: Strengthen top-level design and accelerate innovation and development in the metaverse industry.
At the XRMID 2023 Virtual Reality and Metaverse Industry Innovation and Development Summit, Ren Aiguang, Deputy Director-General of the Science and Technology Department of China’s Ministry of Industry and Information Technology, stated that the ministry will strengthen top-level design, accelerate innovation and development in the metaverse sector, and, through mechanisms such as the “challenge‑based recruitment” approach and the establishment of pilot zones, actively promote breakthroughs in key enabling technologies—including artificial intelligence, blockchain, and virtual reality—thereby laying a solid foundation for the industry’s growth.
The Ministry of Industry and Information Technology is actively positioning the metaverse as a new growth frontier for China’s future industries. Ren Aiguang stated that, as a key gateway to the metaverse, the virtual reality sector is poised for robust expansion. He expressed hope that all stakeholders will strengthen the metaverse ecosystem through decisive measures—such as breakthroughs in core technologies, broadening application scenarios, and fostering joint talent development—thereby jointly driving the vigorous growth of the digital economy.
Fu Yaowei, Chief Technology Officer of the High-Tech Center at the Ministry of Science and Technology, stated that China’s virtual reality and metaverse industries have a solid foundation, characterized by a well‑developed industrial ecosystem, robust support for industry growth, and steadily rising labor productivity. Moving forward, he expressed hope that all stakeholders will prioritize strategic planning, leverage open‑use scenarios and talent‑development initiatives, and work together to chart a new vision for the sector.
Jia Li, Deputy Director of the Beijing Municipal Bureau of Economy and Informatization, stated that Beijing boasts strong research capabilities, vibrant corporate innovation, a well‑developed industrial chain, and a wealth of application scenarios, all of which create favorable conditions for the development of the metaverse. At the summit, Shijingshan District of Beijing signed strategic cooperation agreements with the China Cultural Industry Development Group and the China Electronics Standardization Institute. These partnerships will further advance the building of an industrial cluster ecosystem, facilitate the implementation of real‑world applications in culture, tourism, and education, and promote the overall growth of the virtual reality industry and the broader economy—particularly through the development of standardized frameworks and testing‑service platforms for virtual reality technologies.

The Ministry of Industry and Information Technology has issued a public call for comments on four mandatory national standards, including “Data Recording System for Automated Driving in Intelligent Connected Vehicles.”
According to the Ministry of Industry and Information Technology on May 5, in accordance with the Standardization Law of the People’s Republic of China and the Measures for the Administration of Mandatory National Standards, the First Division of Equipment Industry under the Ministry has organized the National Automobile Standardization Technical Committee to undertake the development and revision of four mandatory national standards, including “Intelligent Connected Vehicles—Automated Driving Data Recording System.” Draft versions have been prepared and are now being publicly solicited for comments from all sectors of society.
Among them, the explanatory document for the “Intelligent Connected Vehicle Automated Driving Data Recording System” states that, as automated driving systems are still in their early stages of development, most manufacturers’ related products remain in the research and development phase, with technical solutions not yet fully stabilized. Currently, each manufacturer’s technical solution for automated driving includes detailed definitions of operational design conditions (ODC), which vary from one company to another, making it impossible to reach a consensus on the scope of relevant data. Consequently, the “minimum recording data capability range” for two categories—driving environment information and automated driving request information—has been revised to be determined by individual enterprises. Following the implementation of the standard, it is recommended that, for these two categories of data elements, the “minimum recording data capability range” be treated as a filing parameter, with enterprises submitting such filings.

Li Qiang presided over an executive meeting of the State Council, which reviewed and approved the Opinions on Accelerating the Development of Advanced Manufacturing Clusters, among other matters.
On May 5, Premier Li Qiang of the State Council presided over an executive meeting of the State Council, which reviewed and approved the Opinions on Accelerating the Development of Advanced Manufacturing Clusters and laid out plans to expedite the construction of charging infrastructure to better support the rollout of new-energy vehicles in rural areas and the rural revitalization initiative.
The meeting noted that developing advanced manufacturing clusters is a crucial lever for advancing industries toward the mid- and high-end, enhancing the resilience and security of industrial and supply chains, and fostering scale economies and competitive advantages through collaborative innovation, talent aggregation, cost reduction, and efficiency gains. It is essential to elevate the development of advanced manufacturing clusters to a more prominent position, uphold a nationwide coordinated approach, and guide localities in leveraging their comparative strengths by focusing on specialization, differentiation, and distinctive features—knowing what to prioritize and what to refrain from pursuing. We must coordinate efforts to transform and upgrade traditional industries while nurturing and expanding emerging ones, promote technological innovation and its application, drive transitions toward high-end, intelligent, and green production, strengthen the ranks of high-quality enterprises, and accelerate the building of a modern industrial system. Furthermore, we should ensure a better synergy between an efficient market and a proactive government, and work diligently to create a favorable ecosystem for industrial development.
The meeting noted that the rural market for new-energy vehicles holds vast potential. Accelerating the development of charging infrastructure will not only encourage the purchase and use of NEVs and unlock rural consumption capacity, but also foster emerging sectors such as rural tourism, injecting fresh momentum into rural revitalization. The meeting reviewed and approved implementation guidelines to expedite charging‑infrastructure deployment, better support the rollout of NEVs to rural areas, and advance rural revitalization. The meeting emphasized the need to address key bottlenecks hindering the expansion of NEVs into rural markets by proactively building out charging infrastructure, innovating approaches to its construction, operation, and maintenance, and ensuring that “there are builders, managers, and sustainability.” It called for guiding enterprises to extend their sales and service networks to rural areas and encouraging higher‑vocational colleges to train maintenance and repair technicians tailored to rural needs, thereby meeting the growing demand for NEV servicing and upkeep. Furthermore, policies supporting the purchase and use of NEVs should be refined, with businesses encouraged to broaden their offerings, while safety oversight is strengthened to promote the healthy development of the rural NEV market.

Three ministries have imposed strict regulations on the management of accounting offices engaged by state-owned enterprises and listed companies.
The “Administrative Measures for the Selection and Appointment of Accounting Offices by State-Owned Enterprises and Listed Companies,” jointly issued by the Ministry of Finance, the State-owned Assets Supervision and Administration Commission of the State Council, and the China Securities Regulatory Commission, was published on the Ministry of Finance’s website on May 4.
The Measures stipulate that state-owned enterprises, as well as joint-stock companies whose shares are listed and traded on domestic stock exchanges, shall accelerate the improvement of their systems for selecting and appointing accounting offices and standardize such selection procedures. They must employ competitive negotiation, open tendering, and invitational tendering methods to ensure that the selection process is conducted in a fair and impartial manner. The Measures also set forth regulations on key matters such as the rotation of accounting offices, information disclosure, and the duties of audit committees, and clarify that the financial authorities may, in accordance with the law, impose administrative measures—such as ordering rectification, conducting regulatory talks, issuing inquiry letters, or issuing warning letters—on accounting offices that violate the provisions of these Measures.

Hebei Province has introduced 25 measures to optimize and enhance the business environment in the natural resources sector.
Recently, the Provincial Department of Natural Resources issued the “Action Plan for Comprehensively Optimizing the Business Environment in the Natural Resources Sector (2023–2025),” which outlines 25 measures across four key areas, aiming to enhance and improve the business environment in the province’s natural resources sector over the next three years.
Significantly streamline approval procedures and timelines. Further optimize the review and approval processes for construction land, eliminate the three-tier on-site inspection system for enforcement reviews, accelerate the development and implementation of a regulatory system for land‑use control, and effectively shorten processing times while enhancing efficiency. Enhance the quality and efficiency of mineral‑resource administration and approval by reducing the timeframes for reviewing and approving mineral exploration implementation plans, mineral resource development and utilization plans, and mineral resource reserve reports. Streamline land‑surveying and mapping approval procedures and promote the delegation of Class B surveying and mapping qualifications to municipal authorities.
Significantly enhancing the quality of administrative services. We have established the “Ji Shideng” government service brand, expanded and deepened the “Internet Plus” initiative, implemented one-stop online processing for real estate registration, transactions, and fee payments, and achieved “one matter, handled in one visit.” We have also introduced integrated bank loan processing, streamlined mortgage registration at nearby service centers, and enabled instant application and immediate processing. Furthermore, we launched a year-long campaign to promote fair and civilized law enforcement in the field of natural resources, bolstering enforcement oversight and protective capabilities, continuously standardizing enforcement practices, and establishing a system of exemption from penalties for minor violations.
We will make every effort to ensure the availability of essential resources. We will accelerate the development of a territorial spatial planning system, focusing on the preparation of city- and county-level master plans, urban control‑detail plans, and town‑and‑village‑area spatial plans. We will refine the land‑resource guarantee framework, proactively secure additional construction‑land allocation quotas, implement ledger‑based management for land provision to key projects, and establish a “green channel” for land‑approval procedures, ensuring that land needs for provincial key projects are met to the fullest extent possible. We will streamline the approval process for construction projects that overlay critical mineral deposits and support the early-stage use of land for priority projects. In addition, we will actively secure marine space for key projects by establishing a “project steward” mechanism.
We will vigorously advance policy innovation and reform. We will actively explore diversified land‑supply mechanisms to support rural industrial development, steadily implement pilot programs to bring collectively owned construction land for commercial purposes into the market, and address land‑use challenges faced by rural enterprises. We will comprehensively roll out reforms to issue property certificates concurrently with land handover and housing handover. We will implement the “land‑use list” system, deepen the practice of allocating industrial land under a “standard‑plot” model, and ensure that enterprises can commence construction immediately upon acquiring land. Furthermore, we will deepen policies supporting the real economy, adopting flexible approaches such as long‑term leases and lease‑then‑transfer to supply industrial land, thereby reducing enterprises’ land‑acquisition costs.

China has issued its first safety certificate for plant genome editing.
On the 4th, Shandong Shunfeng Biotechnology Co., Ltd. (hereinafter referred to as Shunfeng Bio) announced that the Ministry of Agriculture and Rural Affairs had released the “2023 List of Approved Biosafety Certificates for Gene-Edited Organisms Used in Agriculture,” issuing the nation’s first biosafety certificate for plant gene editing—awarded to Shunfeng Bio.
Gene editing is a cutting-edge technology in the global field of biological breeding. Unlike genetic modification, gene-edited breeding involves only the modification of an organism’s own genes, without introducing genes from other species. Its underlying principle is analogous to conventional mutation breeding, and the resulting varieties are indistinguishable from those produced through traditional breeding methods.
“Currently, internationally—such as in the United States, Japan, and India—genome-edited crops that do not contain foreign genes are regulated not as genetically modified organisms but as conventional crops. This is because the underlying principles of gene editing are identical to those of traditional mutagenesis breeding, and compared with mutagenesis-derived varieties, gene-edited products do not pose additional risks to environmental or food safety,” said Liu Yaoguang, an academician of the Chinese Academy of Sciences and a renowned rice breeder. “The issuance of the detailed rules and the granting of the first safety certificate have given us hope for the industrialization of gene-edited crops.”
The “Detailed Rules” cited by Academician Liu Yaoguang refer to the recently issued “Detailed Rules for the Review of Gene-Edited Plants for Agricultural Use (Trial)” by the Ministry of Agriculture and Rural Affairs, which further clarifies the classification criteria for gene-edited plants and streamlines the review procedures.
“Gene-editing breeding has an inherent advantage, enabling the rapid development of high-yielding, high-value‑added superior varieties.” Upon learning that Shunfeng Bio had obtained China’s first safety certificate for plant gene editing, Academician Xu Zhihong of the Chinese Academy of Sciences remarked, “The issuance of the detailed rules and the granting of the very first gene‑editing safety certificate have given us hope for the revitalization of our national seed industry.”
Zhu Jiankang, a member of the U.S. National Academy of Sciences, Director of the Institute for Frontier Biotechnology at the Southern University of Science and Technology, and Chief Expert Advisor at Shunfeng Bio, stated: “The issuance of these Detailed Rules marks another milestone following the 2022 release of the ‘Guidelines for Safety Assessment of Gene-Edited Plants for Agricultural Use (Trial).’ The new guidelines define review criteria across three dimensions—molecular characteristics, environmental safety, and food safety—and streamline the safety assessment process for gene-edited products that, based on existing literature or industry data, pose no risks to environmental or food safety. This will undoubtedly accelerate the industrialization of gene editing.”
According to reports, in May 2018, Shunfeng Bio established its presence in Jinan as the nation’s first world-class plant genome‑editing technology platform, vigorously supported and strategically developed by the Jinan Municipal Science and Technology Bureau, the Jinan Municipal Finance Bureau, and the Jinan High‑Tech Industrial Development Zone. In August 2022, Shunfeng Bio opened its core genome‑editing technology licensing program for the first time, marking China’s inaugural export of cutting‑edge genome‑editing technologies and providing multinational corporations with patent licenses and tailored technical solutions.

The first two enterprises in Shanghai have passed the data export security assessment.
Recently, Mazda (China) Enterprise Management Co., Ltd. and Sephora (Shanghai) Cosmetics Sales Co., Ltd. have successfully passed the data‑export security assessment. The fact that these two companies—the first batch in Shanghai—took this step is of significant reference value for our city in conducting more thorough completeness checks and guiding enterprises to refine their submission materials. As of April 28, the Shanghai Cyberspace Administration has answered over 3,300 consultation calls and received more than 400 sets of application materials covering key sectors such as finance, retail, business services, automotive, and healthcare. Nearly 60 applications have passed the completeness review and been submitted to the National Cyberspace Administration. In addition, through various measures—including establishing a dedicated hotline, issuing practical guidelines, organizing a series of briefings, and conducting extensive surveys—the Administration has provided guidance to local enterprises, helping them file for data‑export security assessments in an orderly manner and conduct cross‑border data transfers in compliance with laws and regulations. Moving forward, the Shanghai Cyberspace Administration will take several key industries in the city as entry points, carry out broad-based research, identify and address the challenges faced by enterprises in ensuring compliance with data‑export requirements, support efficient submission of data‑export security assessment applications, promote secure, compliant, and orderly cross‑border data flows, unlock the potential of data as a factor of production, underpin high‑quality development of the digital economy, and enhance the level and competitiveness of Shanghai’s open economy.

The Guangdong Provincial Administration for Market Regulation has introduced 16 measures to support Guangzhou in establishing itself as a national demonstration zone for online market regulation and services.
Guangzhou is currently the only city in Guangdong Province to have received approval from the State Administration for Market Regulation to establish a national demonstration zone for online market regulation and services. Recently, the Guangdong Provincial Administration for Market Regulation issued an action plan to support Guangzhou’s efforts to become such a demonstration zone, outlining 16 practical measures across four key areas to guide the city in focusing its efforts on promoting high-quality development of the digital economy and advancing its bid to become a national model for online market oversight and service.
First, we will promote the upgrading and expansion of the digital economy. We will support Guangzhou in introducing a series of policies and measures to foster high-quality development of the online market, host a livestreaming e‑commerce festival, pioneer a new “livestreaming + agricultural support” model, and roll out supportive policies for cross‑border e‑commerce. We will also organize cross‑border e‑commerce expos and explore an integrated air‑rail logistics model for cross‑border e‑commerce exports. Furthermore, we will assist Guangzhou in establishing itself as a benchmark city for quality, deepen quality‑driven transformation, and elevate the quality standards of “Guangzhou‑made” products.
Second, we will establish a standardized regulatory framework for the online market. We will support Guangzhou in strengthening its regulation of unfair competition practices in emerging sectors such as the platform economy and the sharing economy, and in developing a contactless regulatory mechanism for the online identification, referral, investigation, and handling of violations. Additionally, we will set up a data-sharing mechanism for online transactions in Guangzhou and a credit-risk classification indicator system for the e‑commerce sector, standardize online law‑enforcement procedures, and explore the implementation of online evidence‑collection and preservation measures.
Third, we will optimize the business environment for the development of the digital economy. We will support Guangzhou in advancing reforms to the market entity registration system, thereby enhancing the ease of market access for online businesses. We will guide enterprises in establishing and refining intellectual property management systems that align with the characteristics of the digital economy, while strengthening IP protection and brand-building in the e‑commerce sector. Additionally, we will support Guangzhou in accelerating the development of an “Internet Plus Trusted Consumption” platform, enabling data and information sharing for trusted consumption initiatives and achieving full coverage across key sectors and industries.
Fourth, we will explore innovative practices in the emerging digital economy. We will support Guangzhou in establishing a tiered and categorized regulatory framework for platform enterprises and a whitelist system for internet offices, while also piloting a “grace period” approach to managing businesses in the new‑economy sector. In addition, we will forge public‑private partnerships with major platform companies to share information and collaborate on governance, thereby fostering a multi‑stakeholder co‑governance model in the platform economy.
Going forward, the Guangdong Provincial Administration for Market Regulation will regard supporting Guangzhou in establishing itself as a national demonstration zone for online market regulation and services as a concrete measure to implement the provincial Party Committee and provincial government’s directives on vigorously developing the platform economy and the digital economy. The Administration will guide Guangzhou in focusing on three key objectives—“fostering a citywide online economy of greater distinctiveness and scale, building a more robust online market regulation and service system, and pioneering advanced governance models for emerging online economic business forms”—to comprehensively advance the demonstration‑zone initiative. Efforts will be made to produce a set of practical and institutional outcomes with strong guiding value, thereby creating a “Guangzhou model” for online market regulation and services and taking the lead in fully advancing the establishment of the demonstration zone.

Taxation
The “China’s Taxation” Special Section of the 30th University Film Festival was successfully held.
Taxation meets light and shadow, telling compelling tax‑related stories through the lens. Recently, the 30th University Film Festival’s “China’s Taxation” special section was successfully held in Beijing. This year’s edition received more than 800 submissions and honored 9 top works and 25 outstanding entries. Among them, “Razor Ship,” “To the Seaside,” and “The Secret of the Three‑Story Building” were awarded Best Microfilm; “China Has Momentum,” “Ten Years of Spring Breeze—Tax Policies Continuously Benefit Businesses and People,” and “My Mysterious Old Friend” won Best Public Service Advertisement; “‘My’ Tax Service Hall” took Best Microvideo; “In Search of Mayila” was named Best Animation; and “A Bond Across 2,200 Kilometers of Mountains and Seas” earned Best Documentary.
The establishment of the “China’s Taxation” special section at the University Film Festival represents a proactive effort by the tax authorities to study and implement General Secretary Xi Jinping’s important expositions on publicity and ideological work. It is a vivid manifestation of fully implementing the spirit of the 20th National Congress of the Communist Party of China and deepening legal education and publicity, helping to enrich tax‑related culture, further expand the influence and reach of tax‑related outreach, and foster among all sectors of society—particularly among university students—a greater awareness of, understanding of, and support for taxation.
This year, the “China Taxation” special section partnered with the University Film Festival for the third time, hosting, for the first time in an offline format, a symposium on tax-themed film and television production, an awards ceremony, and a screening of selected works. During the event, representatives from some of the winning entries shared their experiences, offering insights into the creative concepts and techniques behind their acclaimed projects. Cao Jian, a recipient of the National “Five-One Project” Award, and Shi Zheyu, a lecturer at the School of Arts and Media of Beijing Normal University, drew on their own creative journeys and the standout features of their award-winning works to engage in discussions on the creation of tax‑related films and documentaries, exploring topics such as character development and documentary filmmaking. Guests including Zheng Zi, a nationally recognized TV artist renowned for both moral integrity and artistic excellence, and Executive Vice President and Secretary-General of the Micro‑Video and Micro‑Film Committee of the China Television Artists Association; Xiao Xiangrong, Dean of the School of Arts and Media at Beijing Normal University; and Peng Jingyi, an associate researcher at the China Film Art Research Center, also took part in the event and presented awards to the honored filmmakers.
A relevant official from the Tax Publicity Center of the State Taxation Administration stated that they hope to leverage the platform of the Film Festival to further deepen cooperation between tax authorities and universities, attract more university students to participate in the creation of film and television works on tax-related themes, and draw on the fresh creativity and technological resources of higher education institutions to enrich tax‑related cultural outreach. This effort aims to enhance the appeal and impact of tax publicity, while continuously amplifying its social and legal‑education benefits.
Wu Jianxun, Secretary-General of the organizing committee for this year’s Beijing International Film Festival, stated that the “China’s Taxation” special section has showcased numerous outstanding film and television works on tax-related themes. For the first time, it hosted offline seminars and exchanges, creating a platform for creators of tax‑themed films and television programs to engage with industry experts and scholars. He expressed hope that more young people will take an interest in and participate in the creation of tax‑related cinematic and televised content.

In the first quarter, nationwide tax and fee reductions, refunds, and deferrals totaled RMB 367.98 billion.
Since the beginning of this year, tax authorities have earnestly implemented the two batches of extended, optimized, and innovative tax and fee preferential policies and related measures as outlined by the State Council. In the first quarter, nationwide tax and fee reductions, refunds, and deferrals totaled RMB 367.98 billion.
Looking at the measures in phases, the first batch of policies implemented at the beginning of the year generated an additional tax and fee reduction of RMB 179.69 billion, including RMB 102.43 billion from the policy exempting small-scale taxpayers with monthly sales below RMB 100,000 from VAT, and RMB 38.99 billion from the policy reducing the VAT rate for small-scale taxpayers from 3% to 1%. The second batch of policies, decided at the State Council’s second executive meeting on March 24, introduced an additional RMB 96.26 billion in tax and fee reductions, comprising RMB 47.25 billion from the policy reducing income tax for micro and small enterprises, RMB 39.05 billion from the continued temporary reduction in unemployment insurance rates, and RMB 3.93 billion from the continued temporary reduction in workers’ compensation insurance rates. Other measures, such as the carryforward VAT refund, contributed an additional RMB 92.03 billion in relief.
An official from the State Taxation Administration stated that, going forward, the tax authorities will earnestly implement the directives of the CPC Central Committee and the State Council, continue to collect taxes and fees in accordance with laws and regulations, fully and meticulously enforce tax and fee preferential policies, and further enhance and expand the role of taxation in supporting economic recovery and growth. In doing so, they will make a positive contribution to fostering sustained economic improvement and achieving both qualitative gains and reasonable quantitative expansion.

VAT invoice data show that the tourism consumption market was booming during the May Day holiday.
According to VAT invoice data released by the State Taxation Administration on the 4th, during the May Day holiday, residents’ willingness to consume and travel surged, with a booming tourism market driving a rapid recovery in service consumption, while commodity consumption maintained steady and robust growth.
Data show that during the May Day holiday, nationwide sales revenue in consumption‑related sectors rose 24.4% compared with the same period last year. Specifically, service‑sector spending increased by 28.7%, while merchandise sales grew by 19.5% year over year. Tourism services experienced explosive growth, with revenue in the travel and entertainment sectors surging 3.2 times year over year. Driven by a rebound in both domestic and international travel, revenue for travel agencies and related services jumped 4.4 times; meanwhile, revenue from parks and scenic areas, as well as leisure and sightseeing activities, expanded by 3.5 and 3.3 times, respectively, compared with the prior year.
In addition, driven by the rebound in the tourism market, sales revenue in the accommodation and catering sectors posted robust growth.

Guangdong: The “Taxation + Industry and Information Technology” dual‑pronged approach is empowering and accelerating the high‑quality development of large manufacturing enterprises.
To support Guangdong in strategically planning and advancing the development of a modern industrial system, the Guangdong Provincial Tax Service Administration of the State Taxation Administration recently joined forces with the Guangdong Department of Industry and Information Technology to host the “Smart Manufacturing, Guangdong’s Future” policy briefing in Foshan. The event introduced a series of support policies and service initiatives for the digital transformation and upgrading of large manufacturing enterprises to nearly one hundred participating companies, thereby empowering and accelerating their high-quality growth.
“Tailor-Made” Service Guide
Stabilizing expectations for the development of manufacturing enterprises to drive transformation.
To support the digital and intelligent transformation of large manufacturing enterprises, the Guangdong Provincial Tax Service Bureau has officially launched a specialized initiative—“Taxation Empowering Manufacturing as the Leading Sector”—offering tailored tax services to major companies. The initiative introduces six customized service measures: elevating the level of tax‑enterprise communication; ensuring rapid responses to tax‑related requests; developing “one‑enterprise‑one‑policy” solutions; rigorously implementing tax policies; providing dynamic early warnings to mitigate risks; and leveraging digital and intelligent tools to enhance efficiency. “We will conduct on-site visits and surveys to comprehensively gather information on the significant and complex tax‑related issues faced by large manufacturing offices, thereby offering them greater certainty in the application of tax policies and consistency in their implementation, thus stabilizing their production and business expectations,” said Zhu Manfei, a fourth‑level researcher at the First Tax Branch of the Guangdong Provincial Tax Service Bureau.
At the event, tax officials highlighted tax policies and key issues related to the digital transformation of manufacturing enterprises, focusing on areas such as equipment upgrades, technological innovation, and green development. They also provided participating companies with a tailored copy of the “Guidance on Tax and Fee Preferential Policies for Large Manufacturing Enterprises and a Guide to Typical Tax Risk Prevention and Control.”
This guide focuses on the characteristics and needs of large manufacturing enterprises as they undergo high-end, intelligent, and green industrial transformation. It consolidates 41 tax and fee preferential policies across nine tax categories that are relevant to the manufacturing sector, identifies 22 typical tax‑related risk areas for manufacturing offices, and offers targeted recommendations for risk prevention and control. By doing so, it helps large manufacturing enterprises not only fully capitalize on policy benefits but also strengthen their tax‑risk management, reduce production and operating costs, and empower them to accelerate transformation and upgrading, thereby growing bigger, better, and stronger.
“Previously, we lacked a clear understanding of how to ensure seamless tax management throughout the digital transformation process, and the information we had gathered was rather fragmented. This guide is exceptionally comprehensive and practical—particularly its section on risk prevention and control, which covers the entire business‑operational cycle, from procurement and R&D to production and sales—enabling us to confidently embrace the new wave of digital transformation,” said Zhang Shanghai, Finance Manager at Keshun Waterproof Technology Co., Ltd. He added that, going forward, the company will further refine its manufacturing‑sector digitalization strategy in line with the tax authorities’ policy guidance and risk alerts, fully leveraging the government’s tangible financial incentives to ensure a robust and well‑executed transformation and upgrade.
Harness the synergistic effects of policies.
Helping digital transformation accelerate onto the “fast track”
At this briefing, “interconnectivity and sharing” emerged as a key theme, playing a pivotal role in accelerating the digital transformation of large manufacturing enterprises.
To help enterprises gain a clear understanding of viable pathways and tangible benefits from digital transformation, Foshan has developed a number of benchmark projects and pilot enterprises. In particular, it has supported leading companies in taking the lead in their transformation, leveraging the “chain‑leader” role to drive broader adoption and encouraging small and medium‑sized enterprises to actively join the digital transformation wave. Moreover, recognizing that digital transformation is a long‑term, system‑wide undertaking involving technology, finance, management, and other dimensions, the departments of industry and information technology, together with the tax authorities, have established an integrated service framework. This framework strengthens information interconnection and sharing, maximizes the cumulative impact of policy measures, and provides tailored, tiered support to foster enterprise development.
“Going forward, we will continue to strengthen information sharing with the Ministry of Industry and Information Technology, refine the digital‑manufacturing enterprise classification system, and, based on each company’s unique characteristics, provide tailored guidance on key issues throughout their digital transformation journey, helping them effectively manage risks. At the same time, we will actively collaborate across departments and with enterprises of varying sizes and sectors to establish communication platforms, fostering knowledge sharing, matching supply with demand, and resolving challenges—thereby supporting Foshan in accelerating its development as a leading hub for manufacturing innovation,” said Huang Yuanbo, Deputy Director of the First Tax Sub‑bureau of the Foshan Municipal Tax Service Bureau.

LITIGATION & ARBITRATION
The Supreme People’s Procuratorate has placed the major fire accident case at Beijing Changfeng Hospital under direct supervision.
On April 18, a major fire broke out at Beijing Changfeng Hospital in Fengtai District, Beijing, resulting in 29 fatalities. On the day of the incident, the Fengtai Branch of the Beijing Municipal Public Security Bureau initiated a criminal investigation into the persons responsible on suspicion of the crime of major liability for accidents. Subsequently, 15 individuals from Beijing Changfeng Hospital and the construction contractor were placed under criminal detention. The case is currently under investigation.
To rigorously and lawfully crack down on criminal offenses that endanger workplace safety and safeguard the lives and property of the public, the Supreme People’s Procuratorate has placed the major fire incident at Beijing Changfeng Hospital under direct supervision, instructing the procuratorial organs of Beijing to fully exercise their prosecutorial functions, coordinate with public security authorities and relevant departments, ascertain the responsibilities of all parties in accordance with the law, strengthen the evidentiary foundation of the case, impose lawful penalties on those involved in related crimes, and protect the legitimate rights and interests of the victims. At the same time, it calls for enhanced root‑cause analysis and governance to bolster risk prevention and comprehensive management in the field of workplace safety.
The fire at Beijing Changfeng Hospital has exposed shortcomings such as inadequate identification and rectification of workplace safety hazards and failure to enforce safety‑production responsibilities. The procuratorial organs will continue to intensify their crackdown on criminal offenses that endanger workplace safety, taking the implementation of the Supreme People’s Procuratorate’s “No. 8 Procuratorial Recommendation” as a key leverage point. They will urge relevant competent departments to strengthen and improve workplace safety oversight, address issues early, tackle minor problems before they escalate, ensure the effective implementation of institutional norms, and proactively prevent risks, thereby effectively safeguarding the lives and property of the people.

The Supreme People’s Court has released typical cases of enforcement in civil cases involving migrant workers’ wages.
Ensuring the timely payment of wages to rural migrant workers is vital to their immediate interests and to the well-being of the people. On May 1, the Supreme People’s Court released a selection of typical cases involving the enforcement of wage‑related judgments in labor disputes, emphasizing that “handling one exemplary case can help resolve issues across a broader scope.” This initiative seeks to effectively safeguard the legitimate rights and interests of rural migrant workers, further deepen and solidify the thematic education campaign on studying and implementing Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and address, with dedication and empathy, the concerns, anxieties, and pressing issues that trouble the public.
According to the briefing, the 10 typical cases released this time feature a variety of distinctive enforcement measures, providing models and guidance for courts across the country. They are highly representative and offer meaningful guidance for further advancing efforts to eradicate wage arrears owed to migrant workers and safeguarding their legitimate rights and interests.
In typical cases, some courts have adopted a multi‑pronged approach to promote enforcement through amicable settlement, effectively resolving wage disputes involving rural migrant workers and achieving win‑win outcomes. Other courts have leveraged the “enforcement‑restructuring integration” mechanism to promptly and precisely channel cases into reorganization proceedings, thereby preserving the enterprise’s operational value while swiftly satisfying employees’ wage claims and addressing the company’s debt crisis. Yet other courts, after lawful review, have added shareholders as parties subject to enforcement and, by seizing and enforcing against their assets, successfully recovered millions in unpaid wages. Some courts, guided by a principle of good‑faith and civilized enforcement, have promptly executed on funds returned to enterprises, ensuring that 15 rural migrant workers received their full wages. Additionally, certain courts conducted on‑site visits over nine days to uncover leads on assets, enabling them to conclude 10 cases within that timeframe. Furthermore, by coordinating among various agencies and enterprises and refining the allocation of auction proceeds, these courts have ensured that migrant workers’ wages are disbursed preferentially, promptly, and with maximum convenience.
In recent years, the people’s courts have remained guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, earnestly implemented the decisions and arrangements of the CPC Central Committee, focused on addressing the pressing concerns and difficulties of the people, ensured both fairness and efficiency, fully leveraged the functions of the judiciary, and intensified efforts to enforce judgments in cases involving unpaid wages to rural migrant workers.
The Supreme People’s Court has launched a special enforcement campaign targeting cases involving unpaid wages to migrant workers. Courts across the country have adopted targeted measures and mounted concentrated efforts, thereby safeguarding the legitimate rights and interests of the general public. During the campaign, courts nationwide concluded 157,700 cases related to people’s livelihoods, including those involving unpaid wages to migrant workers, with a total of RMB 7.883 billion enforced.
In addition, courts across the country have implemented one-stop services, strengthened case‑sorting based on complexity, and made full use of three key mechanisms—online litigation, online mediation, and online enforcement—to adopt a convenient enforcement model that combines online and offline procedures with both local and cross‑jurisdictional approaches, thereby shortening case‑handling timelines. By streamlining fast‑track enforcement channels, they have efficiently resolved a number of wage‑arrears cases involving rural migrant workers, effectively reducing the burden on parties, lowering litigation costs, and enhancing enforcement efficiency.
Courts across the country have made full use of the “top‑to‑top” and “point‑to‑point” online enforcement information‑sharing systems, strengthening both online and offline asset investigations. They conduct comprehensive inquiries into the judgment debtor’s bank deposits, real estate, vehicles, equity interests, and other assets, while intensifying penalties for evading or resisting enforcement. Courts have also proactively coordinated with local mechanisms established to address wage arrears owed to migrant workers, reinforcing interagency collaboration and pooling resources to achieve greater effectiveness. At the same time, they have actively leveraged a variety of publicity channels—including television, radio, newspapers, Weibo, WeChat, news apps, outdoor digital billboards, and the release of typical cases—to foster a social climate that sanctions dishonesty and honors integrity.

The Beijing No. 1 Intermediate People’s Court has released typical cases involving labor disputes over equity incentive plans.
How should equity‑incentive civil cases be characterized? Is it valid to stipulate in an equity‑incentive agreement that disputes shall be governed by foreign law? Can stock options serve as economic compensation under non‑compete restrictions? On the morning of May 5, the Beijing No. 1 Intermediate People’s Court held a press conference titled “Properly Adjudicating Equity‑Incentive Cases to Support the Development of an International Science and Technology Innovation Center,” at which it presented the court’s and its subordinate courts’ experience in handling such cases and their approaches to streamlining adjudication procedures, and released several landmark labor dispute cases involving equity incentives.
Among the eight typical cases released, the case involving Lu and Company A demonstrates that equity‑based incentives are, in essence, consideration for the labor services rendered by the employee; the case of Liu and Companies B and C indicates that when a dispute concerns the protection of an employee’s rights, any agreement between the parties to subject the matter to the jurisdiction of foreign law is without legal effect; and the case of Gao and Company F reveals that if an agreement provides stock options as economic compensation for non‑competition obligations, such an arrangement is invalid—and should be treated as if no economic compensation had been agreed—when it is less favorable to the employee than the mandatory provisions of the Labor Contract Law.
According to available data, from 2019 through March 2023, the Beijing No. 1 Intermediate People’s Court and its subordinate courts collectively concluded 334 civil cases involving equity‑based incentive schemes. The number of such cases surged in 2020, increasing by 135% compared with 2019, and since 2021 has generally shown a steady upward trend. Among these, contract disputes were by far the most common, accounting for over 50%; company‑related disputes numbered 101, representing approximately 30%; and labor‑dispute cases totaled 51, or 15.27%.
“Labor dispute cases involving equity‑based incentive schemes not only affect the driving forces and potential for a company’s long-term development, as well as the vital interests of employees—particularly high‑caliber talent—but also have a significant impact on the evolution of an innovative, business‑friendly environment,” said a responsible official from the Beijing No. 1 Intermediate People’s Court. Such cases are characterized by broad systemic implications, substantial litigation amounts, complex and overlapping legal issues, and concentrated, intricate points of contention. The court has consistently adhered to a judicial philosophy of balanced protection, establishing a specialized review mechanism for emerging case types such as those involving equity incentives, standardizing approaches to case adjudication and uniformity in judgment criteria, conducting thematic training and research on equity‑based incentives, incorporating relevant content into legal risk‑prevention guidelines for science‑and‑technology enterprises, producing public‑interest legal‑education lectures, and organizing legal seminars—thereby continuously strengthening judicial adjudication and public legal awareness‑raising efforts, with a focus on fostering the shared development of both employers and employees.

Shandong Strengthens Judicial Protection of Intellectual Property in the Agricultural Sector
Recently, the Shandong Provincial Higher People’s Court issued the “Opinions on Strengthening Judicial Protection of Intellectual Property in the Agricultural Sector to Support the Development of a Strong Agricultural Province and Ensure Food Security,” and jointly signed with the Shandong Provincial Department of Agriculture and Rural Affairs the “Framework Agreement on Collaborative Protection of Intellectual Property in the Seed Industry.”
The “Opinions” put forward 16 specific measures to support the development of the Yellow River–adjacent “Qilu Granary” and to advance the building of a strong agricultural province. They require courts across the province to continuously strengthen their adjudicatory functions, establish a comprehensive judicial protection system for intellectual property in the agricultural sector, and lay out detailed provisions in ten areas: protection of plant variety rights, safeguarding farmers’ rights and interests, expanding the scope of protection, patent law, commercial trademarks, specialty agricultural products, trade secrets, antitrust and unfair competition, intensifying punitive measures, and criminal‑law protection. In particular, with respect to strengthening protection of new plant varieties, the Opinions call for the lawful application of rules on shifting the burden of proof, obstructing evidence, and ordering the production of documents, while reinforcing mechanisms such as evidence preservation, fact‑finding, and commissioned expert appraisal to protect the core interests of innovators in the seed industry. Regarding patent protection in the agricultural field, the Opinions urge greater efforts to safeguard intellectual property rights in key core technologies that constitute “bottlenecks” in seed resources, to strengthen judicial review of administrative actions involving agricultural patent infringement in accordance with the law, and to better protect the legitimate rights and interests of innovation entities in agriculture. As for the protection of distinctive agricultural resources, the Opinions recommend, in light of Shandong’s unique agricultural products—such as Yantai apples, Shouguang vegetables, and Yutai rice—studying and refining the legal rules governing the protection of geographical indications, thereby guiding the proper exercise of rights associated with such indications.
The Opinions clearly state that courts across the province are to deepen reform and innovation, continuously improving the mechanisms for supporting the development of a strong agricultural province and ensuring food security. These efforts encompass four key areas: refining the mechanism for ascertaining technical facts in agriculture-related cases; advancing coordinated protection of agricultural intellectual property rights; strengthening judicial guidance on agricultural IP matters; and enhancing the quality of judicial services for agricultural IP. With regard to improving the mechanism for ascertaining technical facts in agricultural cases, the document calls for establishing a province-wide, unified and shared pool of technical investigators and integrating it into the national court‑wide pool, while also establishing and perfecting a comprehensive system for ascertaining technical facts through technical investigation, technical consultation, expert participation in trials, and forensic appraisal. In promoting coordinated protection of agricultural IP, the Opinions require further advancing the “three-in-one” adjudication model for IP cases, improving the linkage between administrative and judicial protection, coordinating the development of diversified dispute‑resolution mechanisms, and fostering a working framework characterized by “strict protection, broad protection, swift protection, and equal protection.” Clear requirements are also set forth in other relevant areas.

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