JC Master Legal News Issue 1058

Key Takeaways for This Issue

The Shanghai Stock Exchange has issued two trading‑related guidelines, covering margin trading and short selling.
The Shanghai Stock Exchange has issued “Shanghai Stock Exchange Securities Trading Business Guide No. 9—Margin and Short‑selling Trading” and “Shanghai Stock Exchange Securities Trading Business Guide No. 10—Securities Lending under the Stock Borrowing and Lending Program.”
CSRC: Securities offices engaging in market-making activities shall establish and improve systems for quote‑making decision‑making and authorization, among others.
The China Securities Regulatory Commission is advancing the revision of the Regulations on the Supervision and Administration of Securities Companies. This revision supplements certain business rules for securities companies, including the newly established section on “Market-Making Trading Business,” which sets out the basic standards and internal control requirements for such activities.
State Taxation Administration: Strictly punish unscrupulous tax intermediaries for instigating and misleading taxpayers into committing tax violations.
On April 6, the website of the State Taxation Administration issued the “Notice on Implementing and Refining Tax and Fee Preferential Policies and Launching the Third Batch of Measures under the ‘Spring Breeze Action’ for Convenient Tax Services,” which comprises a total of 20 measures.
Since September last year, procuratorial organs nationwide have prosecuted 381 individuals for crimes related to medical aesthetics.
Since September 2022, procuratorial organs nationwide have focused on addressing prominent issues in the medical aesthetics sector, working in concert with market regulation and other authorities to vigorously advance targeted rectification campaigns. They have rigorously prosecuted, in accordance with the law, illegal and criminal activities such as false advertising, unauthorized medical practice, the manufacture and sale of counterfeit products, trademark infringement, smuggling, and price fraud. Since the launch of these special campaigns, procuratorial organs across the country have approved the arrest of 306 individuals in 89 cases involving medical‑aesthetics crimes and instituted public prosecution against 381 individuals in 129 cases. Additionally, they have filed and handled a total of 838 public interest litigation cases in this field.

Finance & Capital Markets
The Shanghai Stock Exchange has issued two trading‑related guidelines, covering margin trading and short selling.
Recently, the Shanghai Stock Exchange issued “Shanghai Stock Exchange Securities Trading Business Guide No. 9—Margin Trading and Short Selling” and “Shanghai Stock Exchange Securities Trading Business Guide No. 10—Securities Lending under the Stock Borrowing and Lending Program.”
Both guidelines shall take effect from the date of listing of the first main-board stock issued in accordance with the Measures for the Administration of Registration of Initial Public Offerings.
The Guide to Margin and Short‑Selling Trading comprises nine chapters, covering an overview of margin and short‑selling, applications for and activation of trading permissions, trading procedures, and more. The Guide stipulates that members engaging in margin and short‑selling activities must obtain approval from the China Securities Regulatory Commission. Without such approval, no member may extend margin or short‑sell to its clients, nor may it provide any facilitation or services for margin or short‑selling transactions between clients, or between clients and third parties.

Leveraging Comprehensive Service Advantages to Support High-Quality Development — The Shenzhen Stock Exchange, in collaboration with the Shanghai Stock Exchange and the Beijing Stock Exchange, has launched Beijing Capital Market Service Week.
To further enhance the exchanges’ comprehensive service capabilities for Beijing’s real economy and to support the development of a full‑product‑line service ecosystem, the Shenzhen Stock Exchange, in collaboration with the Shanghai Stock Exchange and the Beijing Stock Exchange, recently launched the Beijing Capital Market Service Week (hereinafter referred to as “Beijing Service Week”). More than a hundred representatives from the China Securities Regulatory Commission’s Beijing Regulatory Bureau, relevant departments of the Beijing Municipal Government, central state‑owned enterprises, local state‑owned enterprises, and private offices attended the event. Prior to this, the Shenzhen Stock Exchange had already held Service Week events in Qingdao, Shaanxi, Chongqing, and other locations.
To meet the diversified capital market development needs of the Beijing region and to promote high-quality economic and industrial growth, with strong support from relevant Beijing municipal authorities, “Beijing Service Week” has invited guidance and participation from ministries and commissions such as the State-owned Assets Supervision and Administration Commission of the State Council and the China Securities Regulatory Commission. The three stock exchanges have jointly organized more than ten events targeting a wide range of market participants—including listed companies, pre‑IPO offices, bond issuers, intermediary institutions, and individual and institutional investors—covering topics such as comprehensive registration‑based reform training, specialized seminars on high‑quality development for listed companies, roundtable discussions on “specialized, refined, distinctive, and innovative” enterprises and infrastructure public REITs, as well as integrated service days for central state‑owned enterprises and local state‑owned enterprises. During “Beijing Service Week,” the Shenzhen Stock Exchange will also, in alignment with Beijing’s plan for developing high‑end, sophisticated, and cutting‑edge industries, leverage the advantages of the “Kerongtong” platform to host dedicated investment‑financing matchmaking events focused on sectors like intelligent connected vehicles, thereby helping early‑stage innovative enterprises integrate into industrial and innovation value chains.
The Shenzhen Stock Exchange has long placed great emphasis on fostering and developing Beijing’s capital market, establishing a joint listing‑preparation base with relevant Beijing municipal authorities as early as 2015. In recent years, under the unified leadership of the China Securities Regulatory Commission and with strong support from governments at all levels in Beijing, the Exchange has leveraged its institutional strengths to provide comprehensive services across its entire product lineup, actively engaging with Beijing municipal and district governments as well as a wide range of market participants. This has enabled the Exchange to deliver high‑efficiency product solutions and services that help advance Beijing’s high‑end, sophisticated, and cutting‑edge industries and bolster the city’s drive for independent, self‑reliant technological innovation. In 2022, 17 new companies listed on the Shenzhen Stock Exchange were based in Beijing, including a number of technology‑driven enterprises such as Huada Jiutian. To date, the total number of Shenzhen‑listed companies headquartered in Beijing has reached 217, with offices in strategic emerging sectors and technology‑innovation fields accounting for more than 70 percent.
Going forward, the Shenzhen Stock Exchange will steadfastly implement the strategic directives of the 20th National Congress of the Communist Party of China to accelerate the establishment of a new development paradigm and vigorously promote high-quality development. It will remain committed to serving technological innovation, focusing on key areas such as advanced manufacturing, the digital economy, and green, low-carbon industries, and expedite the development of a premier hub for high‑quality innovative capital. In collaboration with the Shanghai Stock Exchange and the Beijing Stock Exchange, it will support the national strategy for coordinated development of the Beijing–Tianjin–Hebei region, foster a healthy capital market ecosystem in Beijing, and comprehensively elevate the level of building an international center for scientific and technological innovation, thereby making a greater contribution to driving high‑quality economic growth in the capital.

State Administration of Foreign Exchange: In 2023, it will expand the pilot program to facilitate cross-border financing for high-tech enterprises and “specialized, refined, distinctive, and innovative” offices.
The State Administration of Foreign Exchange recently released the “2022 Report on China’s International Balance of Payments,” which comprises five sections: an overview of the international balance of payments, an analysis of its major components, the status of the international investment position, the functioning of the foreign exchange market and the RMB exchange rate, and a outlook on the international balance of payments.
The Report indicates that in 2023, foreign exchange authorities will deepen reform and opening-up in the foreign exchange sector to foster steady growth in foreign trade and foreign investment. Specifically: first, they will advance the optimization and innovation of current‑account foreign exchange management; second, they will steadily and orderly promote high‑level opening-up of capital accounts, supporting enterprises’ outbound and inbound investment activities, further expanding the pilot program for integrated domestic‑and‑foreign‑currency funding pools among multinational corporations, and extending the pilot scheme to facilitate cross‑border financing for high‑tech and “specialized, refined, distinctive, and innovative” enterprises nationwide; third, they will support regional openness and innovation; and fourth, they will enhance foreign exchange services for small and medium-sized enterprises.

CSRC: Securities offices engaging in market-making activities shall establish and improve systems for quote‑making decision‑making and authorization, among others.
Recently, the China Securities Regulatory Commission has advanced the revision of the Regulations on the Supervision and Administration of Securities Companies (hereinafter referred to as the “Regulations”). In alignment with the newly revised Securities Law and grounded in regulatory practice, it has drafted the Regulations on the Supervision and Administration of Securities Companies (Revised Draft for Public Comment) (hereinafter referred to as the “Draft”), which is now being made available to the public for comments.
According to the announcement, this revision supplements certain business rules for securities offices. In particular, the draft opinion introduces a new section on “Market-Making Trading,” setting out the basic standards and internal control requirements for such activities, and clarifying the responsibilities of trading venues. Securities offices engaging in market-making trading must establish sound systems for quotation decision‑making and authorization, abnormal‑transaction monitoring, and contingency‑plan management; fulfill their information‑reporting obligations as prescribed; effectively manage operational risks; and ensure that market-making trading is conducted in compliance with applicable regulations.
The draft also stipulates that securities offices shall not use their market-making activities to engage in insider trading, market manipulation, or other illegal and non‑compliant practices. When conducting market‑making business, securities offices must comply with the business rules duly formulated by stock exchanges and other nationwide securities trading venues approved by the State Council, and shall be subject to their oversight.
In addition, the draft opinion clarifies that when securities offices engage in derivatives trading and other business activities outside trading venues, they must comply with applicable laws and regulations, are required to fulfill information‑reporting obligations, and must strengthen data collection, statistical analysis, and monitoring. With respect to derivatives trading, the draft also calls for enhanced oversight of key areas, including customer identification and suitability management, collateral‑based risk‑mitigation mechanisms, and risk‑limit management.
In the area of compliance and risk management, the draft opinion requires securities offices to formulate recovery and resolution plans in accordance with applicable regulations, strengthen oversight and control over their domestic and overseas subsidiaries and branches, and reinforce their responsibilities for preventing conflicts of interest, managing related-party transactions, and monitoring abnormal trading activities. It also supplements anti‑money‑laundering requirements, strengthens integrity‑based conduct standards and the accountability of securities offices for managing such conduct, and clarifies personnel‑management requirements.
According to the CSRC, the current Regulations were promulgated and came into effect in April 2008, providing comprehensive and systematic provisions on the establishment and amendment of securities companies, their organizational structure, business operations and risk control, protection of client assets, and supervisory management. As a key foundational regulatory framework for the capital market, they have furnished robust legal safeguards for the orderly and stable functioning of the securities industry. Nearly 15 years have elapsed since their promulgation, with a minor revision undertaken in 2014. In recent years, the CSRC has focused on serving the real economy and supporting high-quality development, continuously strengthening oversight of securities offices, urging them to fulfill their duties, enhance their functional roles, and proactively prevent and defuse major risks. This effort has yielded valuable regulatory experience, yet it has also encountered new circumstances and challenges, making it necessary to institutionalize these lessons and address gaps in regulatory requirements. Overall, given the Regulations’ early drafting date, some provisions have become relatively outdated. The revision process adheres to principles that balance regulatory stability with adaptability, implement穿透监管 (penetrative supervision), and strike an appropriate balance between immediate needs and long-term development, thereby laying the groundwork for the industry’s transformation and fostering innovation while preserving room for future evolution.

Yi Gang Provides a Detailed Explanation of the PBOC’s Two Core Tasks
“Maintaining currency stability and financial stability are the two core tasks of the People’s Bank of China. When these two tasks are successfully accomplished, they will help promote full employment and economic growth, and better serve the cause of Chinese‑style modernization,” said Yi Gang, Governor of the People’s Bank of China, at the 2023 Annual Academic Conference of the China Financial Society and the China Finance Forum on April 4. He added that, in the next phase, the People’s Bank will build a modern central banking system, safeguard both currency and financial stability, and use these efforts to foster full employment and economic growth, thereby better supporting Chinese‑style modernization.
Safeguard the people’s “wallets”
Yi Gang provided a detailed explanation of the two core tasks of maintaining currency stability and financial stability. With regard to safeguarding currency stability, he argued that it encompasses two dimensions: price stability and broadly stable exchange rates. Ultimately, both price stability and broadly stable exchange rates aim to protect the public’s purchasing power and ensure that people’s savings do not lose their value.
Yi Gang stated that in recent years, the global economy has faced numerous unexpected shocks, resulting in significant uncertainty regarding both the economic environment and policy outcomes. China has consistently pursued a prudent monetary policy, with adjustments increasingly aligned with a “prudent intuition.” From a historical perspective, this “intuition” may reflect empirical experience; viewed along the time axis, it could represent the average across different past cycles; and from an international standpoint, it might correspond to regional averages.
“These empirical and average values are highly informative, enabling us to anticipate post‑cycle conditions and ensuring that our policies remain forward‑looking. Accordingly, we formulate a prudent monetary policy that is officely grounded in China’s national circumstances, while assessing cross‑cycle and cross‑regional averages from both a temporal perspective and an international vantage point,” said Yi Gang.
Specifically, Yi Gang noted that, on the aggregate side, the primary approach has been to lower the reserve requirement ratio, thereby releasing previously “frozen” liquidity and boosting the money multiplier, thus supporting moderate growth in monetary aggregates and credit while keeping the central bank’s balance sheet broadly stable. On the interest-rate front, policy rates have remained relatively prudent and accommodative, with limited volatility. In formulating monetary policy, full consideration has been given to its impacts across a wide range of factors—such as the economy, employment, investment, and deposit yields for households—reflecting a people-centered approach. With regard to the exchange rate, China operates a managed floating exchange-rate regime based on market supply and demand and calibrated against a basket of currencies, ensuring that the renminbi remains flexible and exhibits two-way fluctuations, thereby serving as an automatic stabilizer for macroeconomic conditions and the balance of payments.
“Domestic prices and the RMB exchange rate in China have both remained broadly stable, thanks to the state’s efforts to ensure the supply and stabilize the prices of food and energy. At the same time, stable and appropriately accommodative monetary and financial conditions have provided an important foundation for price stability. Overall, the effects of macroeconomic policies have been quite favorable,” said Yi Gang.
Yi Gang emphasized that price stability and the basic stability of the RMB exchange rate at an appropriate and balanced level can provide strong support for achieving the strategic goals of Chinese modernization.
Promote the overall convergence of financial risks.
“While maintaining currency stability, the central bank must also safeguard financial stability,” Yi Gang stated. He noted that, in most cases, currency stability and financial stability are aligned, but currency stability does not necessarily ensure financial stability. Should financial risks materialize, they could harm the interests of the general public and even give rise to social problems.
“In recent years, we have adhered to the principles of the market economy, continuously refining our interest-rate policies and allowing exchange rates to be determined by the market with two-way fluctuations. This approach helps maintain macroeconomic and financial stability and guard against systemic financial risks. Recent cases have shown that when macroeconomic variables encounter disruptions, they can give rise to destabilizing factors and trigger financial risks. Looking at China’s experience, our key macroeconomic indicators—such as interest rates, exchange rates, economic growth, and unemployment—are reasonably aligned, well-coordinated, and stable, which goes a long way toward preventing systemic financial risks. At the same time, we have implemented a series of measures to bring overall financial risks under control, officely safeguarding the bottom line of averting systemic financial crises,” said Yi Gang.
On promoting full employment and economic growth, Yi Gang stated that achieving currency stability and financial stability helps foster both. The People’s Bank of China actively supports maintaining macroeconomic stability and boosting economic growth, consistently prioritizing full employment as a key policy objective. It emphasizes leveraging the dual functions—both aggregate and structural—of monetary policy tools, having introduced appropriately calibrated structural monetary policy instruments to encourage financial institutions to support, on a market‑based basis, priority sectors and weak links that underpin stable growth and employment. At present, the outstanding balance of these structural tools stands at RMB 6.4 trillion, accounting for roughly 15% of the PBOC’s total balance sheet, with an overall scale that remains moderate.
“Overall, China’s path to modernization poses new demands on the development of a modern central banking system, with tasks spanning a wide range of areas. To summarize, the most critical objectives are achieving price stability and financial stability. When these two goals are attained, they will in turn foster full employment and economic growth,” Yi Gang concluded.

Commercial & Corporate
In the first quarter, more than 170 housing‑market support measures were introduced across 100 cities. How can we rationally assess the objectives of these regulatory policies?
In 2023, the overarching policy stance for the real estate sector has been to stabilize the industry’s pillar role, stimulate demand, and guard against risks. During the first quarter, more than a hundred regulatory measures were introduced, aimed either at bolstering housing demand or at mitigating risks facing enterprises and the sector as a whole.
According to monitoring by the China Index Academy, in the first quarter of 2023, more than 100 provincial and municipal (county-level) governments introduced over 170 policy measures. Over 30 cities lowered the floor for first-home mortgage rates to below 4%. Local policies have largely focused on increasing public housing fund loan limits and issuing home-purchase subsidies, while also addressing measures such as easing home‑purchase restrictions, reducing down payment ratios, and improving oversight of pre-sale funds.
Under a package of policy measures, the real estate markets in key cities continued to rebound in the first quarter, marking the onset of a “mini spring recovery,” with sales area across 100 cities posting positive growth and pronounced recovery in hot-spot cities. On the supply side, efforts to ensure timely delivery of pre-sold homes have also made notable progress in many localities.
Industry observers expect that, looking ahead to the second quarter, real estate policies will maintain a “supportive yet restrained” stance, guiding market expectations toward steady recovery and gradually mitigating risks—while avoiding aggressive stimulus measures that could trigger sharp market swings. Instead, the focus will be on risk prevention and resolution. Local governments are likely to prioritize easing home‑purchase restrictions by supporting both first‑time buyers and those seeking to upgrade their housing.
Easing housing purchase restrictions on the demand side
In 2023, real estate regulatory policies continued to be rolled out in a concentrated manner, with two primary focuses: supporting demand for housing upgrades and preventing and resolving risks among property developers. Financial support for the real estate sector is being pursued along four key fronts: differentiated credit measures on the demand side, refinement of policy tools to ensure timely delivery of pre-sold homes, improvement of the balance sheets of high-quality property developers, and enhancement of financial support policies for the rental housing market.
Among these measures, stabilizing the property market by addressing demand—by supporting both first-time homebuyers and those seeking to upgrade their housing—is not only a consistent policy approach adopted across regions, but also an essential prerequisite for the industry to emerge from its current predicament and enter a virtuous cycle.
How can we strike the right balance in easing housing purchase restrictions and stimulating market demand? At the start of the year, the Minister of Housing and Urban–Rural Development made it clear: “We will vigorously support first-time home purchases, provide reasonable support for second homes, tilt policies toward home‑exchanges and families with multiple children, and, in principle, refrain from endorsing third homes,” offering a useful guideline for local governments to tailor policies to their specific circumstances.
For example, just over the past week, several cities have refined their housing provident fund policies. Cities including Lishui in Zhejiang, Yingtan in Jiangxi, Suining in Sichuan, Xuancheng in Anhui, Putian in Fujian, Guiyang and Guian in Guizhou, and Lanzhou in Gansu have increased the maximum loan amounts under the housing provident fund scheme, thereby moderately easing the financial burden on homebuyers.
On April 4, Hefei adjusted its real estate policies, introducing measures in four key areas: lifting purchase restrictions in certain districts, revising eligibility criteria for first-time homebuyers, and allowing households with members aged 60 or older, as well as families with multiple children, to purchase a third home. These changes both narrow the scope of restricted zones and relax home‑purchase eligibility requirements.
Zhengzhou has adjusted its home‑purchase restrictions: the purchase limits have been lifted outside the Second Ring Road, while they remain in effect within the Second Ring Road. The resale‑restriction policy has also been revised: previously, properties could be sold one year after the date of real‑estate registration; now, the applicable period is determined by whichever comes first—either the online‑contract signing date, the date of stamp‑duty payment, or the date of real‑estate ownership registration—provided that at least one of these dates has elapsed for a full year.
Xiamen has also adjusted its home‑purchase and resale restrictions: single residents with Xiamen household registration may now buy a second property, while families with two or more children may purchase a third. The resale restriction period has been shortened from two years from the date of obtaining the real estate ownership certificate to two years from the date of online contract signing.
At the central level, on March 30, the Ministry of Natural Resources, in conjunction with the China Banking and Insurance Regulatory Commission, issued a document to promote “transfer with mortgage,” initially applying it to residential real estate. This move further streamlines second-hand home transaction procedures and is expected to boost market activity while meeting both first-time and upgrade‑type housing demand.
Amid coordinated policy measures, the housing market is showing signs of recovery. According to data from the China Index Academy, in the first quarter of 2023, new-home prices rose 0.01% month-on-month, marking a stabilization after the decline seen in the fourth quarter of 2022; meanwhile, second-hand residential prices fell 0.18% month-on-month, with the rate of decline narrowing by 0.41 percentage points compared to the fourth quarter of 2022.
Notably, the industry is closely watching whether the housing market can maintain its upward momentum and what direction policy will take going forward.
The China Index Academy believes that, since the beginning of the year, China’s economy has stabilized and begun to rebound; however, the foundations for this recovery remain fragile, and the real estate market likewise faces uncertainties. In some cities, as pent-up housing demand has been gradually released, downward pressure on the market is increasingly evident. With the goal of stabilizing the property sector, it is expected that, in the second quarter, regulatory authorities and local governments will still have room to further refine and optimize real estate policies.
On the demand side, policies are expected to continue focusing on lowering the barriers to home ownership and reducing housing costs, while tailoring support to demographic shifts. For instance, measures could include easing purchase restrictions, lowering down-payment requirements, and providing home‑purchase subsidies for families with multiple children and for talent‑attracting groups. Meanwhile, eligible cities may further cut the floor rate on first‑home mortgage loans to further reduce the cost of buying a home.
The aforementioned research institute believes that, following a temporary market upturn in the first quarter, sales in the second quarter are expected to return to a more normal pace. In the first quarter, transaction volumes for existing homes in key cities continued to rise, and the upgrade‑driven demand generated by earlier transactions has yet to fully enter the market; the eventual entry of this demand could provide some support to the new‑home market. Accordingly, nationwide commercial housing sales area is projected to register a modest increase in 2023.
However, uncertainties surrounding the market’s recovery remain. According to China Index Academy, since March, foot traffic at sales offices for new-home projects in key cities has already declined. Meanwhile, expectations for household incomes have yet to reverse fundamentally, and homebuyers’ concerns about stalled construction projects and their anticipation of falling home prices continue to be major constraints on the recovery of new-home sales. By late March, buyers’ willingness to purchase had edged lower, underscoring that market confidence remains fragile.
Ensuring housing delivery and making every effort to defuse risks.
Regarding the outlook for the real estate market, Minister Ni Hong of the Ministry of Housing and Urban–Rural Development made remarks in March. He stated that he is fully confident in the stabilization and recovery of the sector, but such stabilization and recovery hinge on certain prerequisites: steadfastly upholding the principle that “housing is for living, not for speculation,” vigorously supporting both first-time homebuyer and housing‑upgrade demand, and preventing sharp market swings.
The real estate sector remains a pillar of the economy, but as the above statements make clear, policy formulation must steadfastly uphold the bottom line of “housing is for living, not for speculation.”
CRIC stated that, at this stage, the core objective of policymakers regarding the real estate sector is stability—rather than a return to rapid growth or reliance on real estate to boost the economy in the short term. In the second quarter, central policies will prioritize stability, maintaining the “support without stimulus” stance and placing greater emphasis on risk prevention and resolution, with policy red lines such as ensuring timely delivery of pre-sold homes remaining officely in place.
Since the Central Economic Work Conference at the end of last year, “risk prevention” has become a frequently used term in high-level statements on the real estate sector. At the beginning of this year, the National Housing and Urban–Rural Development Work Conference also emphasized the need to “focus on both ends while guiding the middle, and adopt a gradual, measured approach to prevent and defuse risks.”
Among the various measures to guard against risks, ensuring the timely delivery of pre-sold housing stands as a top priority. Data show that, bolstered by a series of initiatives—including an initial 350 billion yuan special-purpose loan and a 200 billion yuan interest-free relending facility—housing completions in the first two months of 2023 rose 8% year on year, second only to December 2022 and marking the second-highest level since 2022. These efforts have yielded tangible results in safeguarding home‑delivery commitments.
“On the other hand, challenges such as lengthy approval processes for relief funds in some regions, difficulties in accessing these funds, and limited coverage remain pressing issues. Moreover, many projects continue to be stalled or have resumed work only in name, making it clear that ensuring timely project delivery and stabilizing people’s livelihoods remains a formidable task,” said CRIC.
Recently, the Hunan Provincial Department of Housing and Urban–Rural Development convened a symposium bringing together government, banks, and enterprises to discuss financial support for ensuring the timely delivery of pre-sold housing units. The three parties jointly examined how to address funding challenges in the second phase of this effort. During the meeting, questions were raised regarding whether certain banks have been slow to respond or operate inefficiently, whether funds improperly disbursed as pre-sale proceeds have been recovered, and whether any irregular practices may involve the transfer of benefits.
Data show that, to date, Hunan Province has delivered a total of 47,000 housing units under special‑purpose loan‑backed projects aimed at ensuring on‑schedule property delivery, and more than 60 projects have been closed. Both the housing delivery rate and the project closure rate rank among the highest nationwide. At the same time, risk‑mitigation projects still face substantial funding shortfalls.
An official from the province’s Department of Housing and Urban–Rural Development stated that, in accordance with the principle that “the entity approving the special-purpose loan is responsible for establishing the escrow account, and the same entity is responsible for arranging additional project‑specific financing,” banks holding the special‑purpose loans will be vigorously encouraged to provide such additional financing to eligible projects.
In addition to bank financing, real estate developers have also been found to improperly use pre-sale housing funds. According to a responsible official from the Real Estate Division of the Provincial Department of Housing and Urban–Rural Development, local authorities are vigorously launching operations to recover misappropriated pre-sale funds and mitigate losses. They are investigating and prosecuting, in accordance with the law, illegal and non-compliant practices such as misappropriation of project funds, diversion of funds, and premature distribution of dividends, and promptly referring these cases to public security, tax, and other relevant departments for investigation and prosecution.
Henan Province stated that, in line with the goals of completing and delivering all projects under the first batch of special-purpose loans by the end of October and delivering 50% of those under the second batch by year-end, it will leverage the “one building, one plan, one dedicated task force, one bank” mechanism, ensuring progress on a weekly basis to safeguard monthly targets, on a monthly basis to meet quarterly milestones, and on a quarterly basis to achieve annual objectives.
According to the China Index Academy, with the four major policy directions for financial support of the real estate sector now clearly defined, measures to bolster liquidity in the industry are expected to be implemented more swiftly, with continued efforts to strengthen support for high-quality developers. Special-purpose loans and loan‑support programs aimed at ensuring timely delivery of pre-sold homes are likely to be rolled out on an ongoing basis, while further refinements to pre-sale fund‑management policies within the year are also foreseeable.
Overall, while efforts to ensure project delivery and mitigate risks remain paramount, additional supportive policies for the real estate sector are likely to be introduced, particularly measures on the demand side aimed at further lifting home‑purchase restrictions to help stabilize and revive the market. Tier‑1 and strong Tier‑2 cities still have room to ease policies, such as revising suburban purchase‑restriction zones and expanding eligibility for family‑based or retirement‑related housing schemes; weaker Tier‑2 cities and third- and fourth-tier cities may consider relaxing the “four restrictions,” while pressure‑laden cities could move toward fully abolishing purchase and sales limits.

Optimizing the housing provident fund policy: What are the implications?
Optimizing housing provident fund policies is one of the key measures cities are taking to support housing consumption. Recently, numerous cities across the country have introduced policies such as “transfer with mortgage” for housing provident fund loans, support for converting commercial mortgages into public‑fund loans, and allowing withdrawals from the housing provident fund to cover down payments, thereby strengthening the fund’s backing for homebuyers. For homebuyers, how much tangible assistance can these new measures provide? What risks must both buyers and sellers, as well as banks, guard against? And what additional considerations should be kept in mind during policy implementation?
New changes have emerged.
According to data from the China Index Academy, since 2022, more than a hundred cities have introduced policies allowing second-hand home transactions to be completed with the existing mortgage in place; some of these cities also permit public housing fund loans to be used in such transactions. To date, cities including Nanjing in Jiangsu, Ningbo in Zhejiang, Zhangzhou in Fujian, Lu’an in Anhui, Xiangyang in Hubei, and Zhumadian in Henan have rolled out relevant policies enabling public housing fund‑backed mortgages to be transferred along with the property.
The so‑called “transfer with mortgage” for public housing fund loans allows, in secondhand home transactions involving properties encumbered by a public housing fund loan, the direct completion of real estate transfer and mortgage registration procedures without first repaying the loan or releasing the mortgage.
“Under the traditional model, sellers must repay their existing mortgage, release the mortgage lien, complete the transfer of ownership, and have the buyer re‑establish a mortgage—among other steps. ‘Transfer with mortgage’ streamlines the transaction process, shortens the time required, eases the financial burden on homebuyers, helps reduce the overall property‑transaction cycle, and supports both first‑time and upgrade‑type housing demand,” said Liu Lijie, a market analyst at the Shell Research Institute.
In January this year, the Housing Provident Fund Management Center of Xianyang City, Shaanxi Province, issued the “Detailed Implementation Rules for Converting Individual Commercial Housing Loans into Housing Provident Fund Loans” and completed the real estate registration for the first “commercial-to-provident fund” loan on February 22. According to statistics from the 58 Anjuke Research Institute, more than 20 cities—including Shenzhen, Qingdao, Changchun, Fuzhou, Chongqing, Wuhan, Kunming, Dongguan in Guangdong, and Luoyang in Henan—have now introduced policies allowing commercial mortgage loans to be converted into housing provident fund loans.
“The interest rate spread between commercial mortgages and public housing fund loans is quite substantial. Launching the ‘commercial-to-public’ conversion program will effectively ease the repayment burden for public housing fund contributors and help the fund play a more robust role in housing security. In some cities, the available balance of public housing funds is relatively large; by leveraging this mechanism to unlock dormant funds, it can further alleviate borrowers’ repayment pressures,” said Lu Qilin, Research Director at the 58 Anjuke Research Institute.
In addition, many localities have introduced policies allowing employees to withdraw their housing provident fund as a down payment for home purchases. Since 2022, more than 20 cities—including Fuzhou, Zhongshan in Guangdong, and Dazhou in Sichuan—have successively rolled out measures permitting workers buying commercial residential properties to use their housing provident fund to cover the down payment, with the number of cities adopting such policies continuing to grow.
Chen Wenjing, Director of Market Research at the China Index Academy, stated that this measure will ease homebuyers’ initial cash-flow pressures and help unlock housing demand.
Multi-party cooperation is required.
Compared with the previous situation, when withdrawals from the housing provident fund were subject to certain restrictions, cities today are adopting city-specific and targeted policies. In addition to the aforementioned changes, these measures also include increasing the loan limits for housing provident fund loans, extending the repayment period, and implementing policies such as “the entire family helps one member purchase a home.”
However, in practical implementation, these initiatives still require coordination among multiple parties. For instance, the “transfer with mortgage” arrangement for housing provident funds necessitates cooperation between the housing provident fund center and banks; currently, such transfers are primarily conducted between institutions within the same bank, meaning the bank holding the homeowner’s mortgage and the bank providing the buyer’s loan must be one and the same. Supporting the use of housing provident funds as a down payment requires the seller’s consent, while “commercial‑to‑public‑fund” conversions depend on collaboration between banks and the housing provident fund center and are subject to limits on loan amounts. At present, in most cities, these services remain in the pilot phase, according to Liu Lijie.
Guan Rongxue, a senior analyst at the Zhuge Data Research Center, cautions that the “commercial-to-public housing loan” policy can help reduce monthly mortgage payments, but it is temporary and contingent on the adequacy of public housing fund reserves. Homebuyers should closely monitor the financial health of the public housing fund.
Long Ye, director of the Research Center of the Beijing Real Estate Brokerage Industry Association, pointed out that although the “commercial-to-public‑fund” mortgage conversion has clear advantages, several pressing issues remain to be addressed in its implementation. For instance, in many cities that have launched this policy, the eligibility criteria are relatively stringent, currently applying only to local employees who are contributing to the housing provident fund and are purchasing their first home or applying for a housing provident fund loan for the first time. Moreover, given the limited loan amounts available under the housing provident fund scheme—typically lower than the original commercial mortgage balance—many borrowers who switch from commercial to public‑fund financing still face the challenge of covering the remaining shortfall with personal funds.
Regarding the practice of using housing provident fund withdrawals as a down payment, industry insiders note that in some cities, the individual loan ratio of the housing provident fund—the ratio of outstanding individual housing loans to the total balance of contributions—has already reached a high level. Authorities must continue to strengthen oversight to guard against risks stemming from insufficient liquidity in the housing provident fund.
“Among these policies, ‘transfer with mortgage’ addresses the key challenges in second-hand home transactions, streamlining the mortgage‑release process; ‘commercial‑to‑public‑housing loan conversion’ helps improve services and reduce costs; and using housing provident fund to pay the down payment can boost housing consumption. The housing provident fund is playing an increasingly supportive role in the real estate market,” said Yan Yuejin, Research Director at the E-House Institute. He cautioned, however, that using the housing provident fund as a down payment may encourage homebuyers to increase their leverage.
How can these risks be mitigated? Li Yujia, chief researcher at the Housing Policy Research Center of the Guangdong Provincial Urban Planning Institute, notes that for homebuyers, even though public housing funds can be used for the down payment, they should still assess whether their future income stream will be sufficient to cover monthly mortgage payments. For banks, it is essential to verify borrowers’ repayment capacity and its sustainability through income verification, bank statements, and other means. “Using public housing funds as a down payment indicates that the buyer’s own financial resources are inadequate and that the monthly mortgage burden will be relatively heavy. Banks must factor in this risk; if necessary, they may require a higher down payment or impose stricter loan‑approval standards on those who lack the ability to leverage,” Li Yujia said.
The effects are becoming apparent.
Ensuring the steady development of the real estate market and earnestly implementing measures to “ensure housing delivery, safeguard people’s livelihoods, and maintain stability” constitute a key priority for the industry in 2023. According to Zhao Qingxiang, Secretary-General of the Beijing Real Estate Agents Association, numerous cities nationwide have adjusted their housing provident fund policies to strongly support both first-time homebuyer demand and housing upgrades, effectively boosting market confidence. Initial policy effects are already becoming apparent, with real estate markets in many regions stabilizing and rebounding. Supported by this suite of measures, the real estate market has demonstrated a clear trend of recovery and stabilization since the beginning of 2023.
According to the latest data from the National Bureau of Statistics, in February, among 70 large and medium-sized cities, the number of cities recording month-on-month increases in new-home sales prices continued to rise. Sales prices for new homes rose overall on a month-over-month basis across all tiers of cities, with first-tier cities posting year-on-year gains and second- and third-tier cities seeing a narrowing of year-on-year declines. Chen Wenjing believes that, in the short term, local governments are likely to continue tailoring policies to their specific circumstances regarding housing‑fund usage, and the number of cities further optimizing related housing‑fund measures is expected to grow.
As more and more cities introduce policies to optimize and adjust their housing provident fund systems, these measures will, in the short term, to some extent stimulate demand in the real estate market and accelerate the pace of destocking in local property markets.
“However, as current adjustments to the housing provident fund policy are concentrated primarily in third- and fourth-tier cities—where the real estate market faces challenges such as insufficient economic growth momentum, net population outflows, and an oversupply of housing—additional measures are needed to mitigate risks and stimulate housing consumption,” said Zhao Qingxiang. He recommended, on the policy front, expanding coverage of housing provident fund contributions, streamlining application procedures, and relaxing restrictions on cross‑city loans. At the macro level, he suggested rationally planning for the development of upgrade‑oriented housing, continuously improving the rental market, enhancing healthcare and education services, and cultivating core industrial strengths in urban areas—thereby fostering the healthy and orderly development of the real estate market through both supply‑side and demand‑side policies.
Experts have noted that the successive introduction of new housing‑fund policies in many regions is helping to ease homebuyers’ financial burdens, boost their confidence, and steadily support the stabilization and improvement of the real estate market.

Jiangsu has issued implementation guidelines to support the development of private investment.
On March 27, Yancheng City unveiled 65 major projects designed to encourage private-sector investment, with a total planned investment of RMB 100.58 billion and an aim to attract RMB 70 billion in private capital. These projects span multiple sectors, including next-generation information technology, new materials, and the greater health industry. Some have already completed preliminary stages such as project design, approval, and environmental impact assessments, making them relatively mature; private investors may participate through wholly owned ventures, joint ventures, or cooperative operations. Yancheng’s initiative serves as a vivid illustration of Jiangsu Province’s efforts to invigorate private investment. Recently, the “Implementation Opinions of the Provincial Development and Reform Commission on Further Improving the Policy Environment and Strengthening Support for Private Investment” (hereinafter referred to as the “Opinions”) were officially issued, further bolstering policy support for private investment, enhancing investment expectations, boosting investor confidence, stimulating investment dynamism, and advancing high-quality development.
Encourage enterprises to form consortia.
Joint investment and operation
During this year’s Two Sessions, General Secretary Xi Jinping emphasized the need to invigorate private capital investment, encouraging and attracting more private capital to participate in the construction of major national projects and key industrial and supply chain initiatives, thereby making greater contributions to forging a new development paradigm and advancing high-quality development.
Jiangsu Province has consistently attached great importance to the development of private investment. In recent years, it has continuously strengthened policy measures to provide support. In 2022, private investment accounted for 68.6% of total societal investment in Jiangsu, placing the province among the national leaders, and contributed 52.2% to the growth of fixed‑asset investment.
The latest “Opinions” issued by the Jiangsu Provincial Development and Reform Commission comprise 23 measures across seven major categories. Grounded in the realities of private investment development in Jiangsu, the document adopts a problem‑oriented and results‑driven approach, introducing a series of targeted initiatives in areas such as project support, sector expansion, and institutional environment enhancement, with the aim of making policies more effective and bolstering the sense of gain among private enterprises.
“The Opinions clearly state that, provided risks are manageable and responsibilities are well-defined, enterprises should be encouraged to form consortia to jointly invest in, construct, and operate large-scale infrastructure projects—this aligns perfectly with the recommendation I put forward.” An entrepreneur from Nanjing participated in the preliminary research for the Opinions. At present, some projects impose stringent requirements on corporate qualifications and financial capacity, which many private offices find difficult to meet in full. Accordingly, he proposed that multiple private enterprises could team up to form consortia to co‑invest in large‑scale infrastructure projects, while giving preferential treatment in tendering processes to consortia comprising small, medium, and large enterprises. “The Opinions have greatly bolstered my confidence in investing,” the entrepreneur said.
The Opinions further relax market access for private investment, addressing the issue of “being unable to invest” by encouraging private capital to enter all industries and sectors not explicitly prohibited by laws and regulations. In addition to improving the oversight and follow-up mechanism for key cases to ensure strict implementation of the nationally unified negative list for market access, the Opinions also focus on fine‑tuning measures, striving to dismantle barriers in the procurement and bidding processes and stipulating that no illegal or disguised entry barriers may be imposed on private investment in government procurement and tendering.
Continuously optimize the “Five Environments”
Supporting Private Investment
By continuously strengthening policy support and dismantling the “glass doors,” “spring doors,” and “revolving doors” that have long hindered private capital investment, the Opinions have opened up new avenues for private-sector development. In particular, guiding private capital to revitalize and optimize existing assets through diverse channels will undoubtedly provide a robust platform for private enterprises to showcase their capabilities.
“We should encourage private investment to revitalize underutilized land through diverse approaches such as industrial upgrading, capacity expansion and technological renovation, and comprehensive redevelopment. We should also guide private investors to actively participate in the revitalization and optimization of existing state‑owned assets, and incentivize them to engage in the renewal of aging urban resources. Furthermore, we should proactively explore innovative models like subterranean wastewater treatment plants and integrated above‑ and below‑ground space development… In my view, the market potential has truly been fully unlocked,” said a leader of a private enterprise in Jiangsu Province.
The “Opinions” encourage private capital to establish industrial innovation funds or engage in deep cooperation with existing industry‑focused investment funds. According to the head of Nanjing Fengling Capital, the office will continue to deepen its presence in its established sectors. “We are a market‑oriented financial investment institution undergoing mixed‑ownership reform within the state‑owned framework. Previously, through the Nanjing Zijin Advanced Manufacturing Industry Fund it manages, we invested in Nanjing Maolai Optics, a leading domestic R&D and manufacturing enterprise specializing in optical lenses and components. On March 9 this year, the company successfully listed on the STAR Market.”
“This round of Opinions underscores the importance of maintaining the continuity and stability of various policies, enhancing their positive cumulative effects, and providing a stable and sound policy environment for the development of private investment, thereby helping private enterprises to form favorable expectations,” said a relevant official from the Provincial Development and Reform Commission.
The Opinions propose continuously optimizing the “five environments”—policy, market, government services, the rule of law, and the business climate—while demonstrating a spirit of boldness in taking initiative, pioneering, acting, and innovating to create a world-class business environment. At the same time, it calls for regularly reviewing and abolishing policies and measures that contain provisions on local protectionism, market segmentation, or designated transactions; strengthening antitrust oversight; and continually enhancing the effectiveness of government regulation. Furthermore, it urges advancing cross‑departmental integrated regulation, vigorously promoting “Internet Plus Regulation,” and improving the scientific rigor and effectiveness of regulatory practices while increasing regulatory transparency.
Helping private enterprises
Dare to invest in “hard tech”
“While mapping out the present, we are also looking ahead to the future. To effectively help private enterprises seize new opportunities in the new stage, the ‘Opinions’ focus on industrial transformation and upgrading, as well as the accelerated development of the digital economy and green, low-carbon initiatives, and propose a series of policy measures,” said a relevant official from the Provincial Development and Reform Commission.
With regard to encouraging private investment in green and low-carbon development, the Opinions propose “piloting ESG assessments for investment projects across the entire lifecycle—covering pre‑investment, in‑process, and post‑investment phases,” a measure that represents a first for Jiangsu Province.
“As a publicly listed company, we have consistently embraced the concept of green development. We look forward to establishing a robust evaluation framework to validate our low-carbon achievements and leverage it as a strategic lever to catalyze additional related projects,” said the head of a manufacturing‑focused public company in Jiangsu.
Technological innovation requires sustained, long-term effort. To encourage private enterprises to boldly invest in “hard tech,” the Opinions set forth a series of measures. For example, they urge leading enterprises in industrial chains to take proactive steps, foster deep collaboration across upstream, midstream, and downstream sectors as well as among large, medium, and small businesses, and promote the agglomeration, integration, and innovative development of supply chains and industrial chains. At the same time, central and provincial state-owned enterprises, along with industry-leading offices, are encouraged to strengthen the adoption of new products and technologies developed by private enterprises, while leveraging government procurement policies—such as first‑purchase and order‑based mechanisms—to support the industrial-scale application of these innovations.

Three departments have jointly issued a document to standardize land-use management and support the development of the photovoltaic power industry.
The photovoltaic industry needs to expand the deployment of solar panels to maximize solar irradiation. As the sector scales up, land‑use constraints have increasingly come to the fore. Recently, the Ministry of Natural Resources, in collaboration with the National Forestry and Grassland Administration and the National Energy Administration, issued the “Notice on Supporting the Development of the Photovoltaic Industry and Standardizing Land‑Use Management” (hereinafter referred to as the “Notice”), offering new approaches and solutions to address this challenge.
An official from the Ministry of Natural Resources stated that the Notice focuses on five key areas—guiding the rational spatial planning of projects, implementing categorized management of land use for photovoltaic power generation projects, expediting procedures for project land acquisition, strengthening land-use oversight, and appropriately addressing legacy issues—aimed at further supporting the development of green energy, accelerating the construction of large-scale photovoltaic bases, standardizing project land‑use management, and rigorously safeguarding both the arable‑land red line and the ecological red line.
What types of locations are suitable for developing large-scale photovoltaic power plants?
Industry insiders note that, by comparison, wind and solar power development in desert, gobi, and arid regions is better positioned to achieve economies of scale, thereby reducing costs related to land acquisition, infrastructure, and operations and maintenance.
In recent years, the Chinese government has repeatedly called for accelerating the development of large-scale wind and solar power bases in desert, gobi, and arid regions. In February last year, the National Development and Reform Commission and the National Energy Administration released the “Plan for the Layout of Large-Scale Wind and Solar Power Bases Focused on Desert, Gobi, and Arid Areas,” which sets out that by 2030, China will have planned and built wind and solar installations with a total installed capacity of approximately 455 million kilowatts. At present, construction of these large-scale wind and solar power bases is progressing smoothly: all projects in the first batch, totaling about 100 million kilowatts, have commenced, while the second and third batches are also being rolled out one after another.
The newly issued Notice emphasizes aligning the development plan for the photovoltaic power industry with territorial spatial planning, and encourages the use of unutilized land and existing construction land to expand the photovoltaic sector. On the premise of stringent ecological protection, it promotes the siting and construction of large-scale photovoltaic bases in deserts, gobi regions, and arid areas; furthermore, in oilfields, gas fields, and coal-mining subsidence zones that are difficult to reclaim or restore, it calls for advancing the planning and development of photovoltaic bases on non-cultivated portions of these sites.
Land use for photovoltaic power generation projects is also subject to strict “red lines.” The Notice stipulates that project sites must avoid farmland, ecological protection red lines, historical and cultural preservation zones, areas of special natural landscape value and cultural significance, natural forest lands, and national sandification‑affected land protection zones (though transmission lines for photovoltaic projects may traverse such protected areas). Where the project involves nature reserves, it must further comply with the relevant laws and policies governing those reserves. For new or expanded photovoltaic projects, permanent basic farmland, basic grasslands, Class I protected forest lands, and key state‑owned forest areas in Northeast China and Inner Mongolia are strictly off‑limits. Furthermore, all land occupied by photovoltaic arrays must not encroach upon cultivated land.
How should land use for photovoltaic power generation projects be classified and managed?
The Notice stipulates that land use shall be managed on a categorized basis. Land for photovoltaic power generation projects comprises both photovoltaic array land and ancillary facility land. Photovoltaic array land may not occupy cultivated land; where it does encroach upon other agricultural land, such use should be rationally controlled in accordance with actual conditions, promoting economical and intensive land use while minimizing adverse impacts on the ecological environment and agricultural production. Where photovoltaic array land involves the use of forestland, a forest–photovoltaic complementary model must be adopted. This permits the use of shrub‑forestland in areas with annual precipitation below 400 mm, as well as shrub‑forestland in other regions with canopy cover of less than 50%. Logging, brush clearing, or destruction of existing vegetation is prohibited, and it is likewise forbidden to convert tree‑covered or bamboo‑covered forestland into shrub‑forestland before installing photovoltaic panels. At the same time, the “grass–photovoltaic complementary” model is encouraged.
Land used for ancillary facilities of photovoltaic power generation projects shall be managed as construction land, and construction land approval procedures shall be carried out in accordance with applicable laws and regulations. Where such land involves the occupation of cultivated land, the balance between occupied and replenished land must be ensured as prescribed. Roads located within and around the photovoltaic array that directly serve the array and meet the standards for photovoltaic‑related land use may be managed as rural roads; where they involve the occupation of cultivated land, the balance between land taken and land restored must be maintained in accordance with relevant provisions.
In addition, the Notice emphasizes the prudent handling of legacy issues, addressing land‑use challenges in ensuring the continuity of enterprise projects, and avoiding a one‑size‑fits‑all policy approach. Photovoltaic power generation projects that have already been approved in accordance with the “Opinions on Supporting Photovoltaic Poverty Alleviation and Regulating Land Use for the Photovoltaic Power Generation Industry” — whether construction has commenced or not — shall be governed by the land‑use pre‑review and related opinions in effect at the time of approval; no expansion of the project’s land footprint or encroachment upon cultivated land, forestland, or grassland is permitted. For projects that have undergone land‑use pre‑review or received clearly defined local land‑use opinions but have not yet been formally approved, compliance shall be in line with the requirements set forth in this Notice.

Taxation
State Taxation Administration: Strictly punish unscrupulous tax intermediaries for instigating and misleading taxpayers into committing tax violations.
On April 6, the website of the State Taxation Administration issued the “Notice on Implementing and Refining Tax and Fee Preferential Policies and Launching the Third Batch of Measures under the ‘Spring Breeze Action’ for Convenient Tax Services,” which comprises a total of 20 measures.
Specifically, these comprise five measures to accelerate policy implementation, five measures to elevate the quality of key services, two measures to enhance the efficiency of responding to public requests, six measures to improve the quality of streamlined administrative procedures, and two measures to strengthen standardized law enforcement.
The measures require that tax‑related professional service providers be standardized to offer taxpayers and payers personalized services in accordance with market‑based principles, helping them promptly and compliantly benefit from policy incentives. At the same time, they mandate strict penalties for unscrupulous tax intermediaries that instigate or mislead taxpayers and payers into engaging in tax‑law violations, thereby safeguarding taxpayers’ credit standing and upholding national tax security.
The specific content of the notice is as follows:
To thoroughly study and implement the spirit of the 20th National Congress of the Communist Party of China, earnestly carry out the arrangements set forth at the Central Economic Work Conference, the Two Sessions, and the State Council Executive Meeting, and fully and accurately enforce the extended and optimized tax and fee preferential policies, the State Taxation Administration has launched the third batch of 20 measures under the “Spring Breeze Action for Convenient Tax Services.” These measures are designed to ensure the timely, meticulous, precise, and stable implementation of all tax and fee policies, bolster market confidence, stabilize market expectations, promote a sustained overall improvement in economic performance, and actively support high-quality development. The following notice is hereby issued:
I. Accelerating Policy Implementation
1. Improve and refine the mechanism for standardizing tax and fee policies, continuously issue clear guidance on policy-related Q&A, enhance the certainty of tax and fee policies and ensure consistent implementation, thereby providing robust support for the effective and meticulous rollout of all tax and fee measures.
2. Systematically review all tax and fee preferential policies, develop clear, concise, and easy-to-understand policy lists organized by theme, and tailor the dissemination of relevant tax and fee incentives to eligible taxpayers and payers, striving to ensure that “policies find the people” and “policies are delivered directly to their doorsteps.”
3. In conjunction with the 32nd National Tax Publicity Month, we will make extensive use of traditional media and online platforms to strengthen policy communication, conduct targeted outreach and guidance, and help taxpayers and payers accurately understand and promptly benefit from all tax and fee preferential policies.
4. For all tax and fee preferential policies introduced this year, conduct thorough follow-up assessments, conduct in-depth analyses of policy implementation outcomes, promptly identify any existing issues, and timely formulate recommendations for optimization and improvement.
5. Deeply implement the proactive delivery of tax and fee reduction benefit statements, further expand the scope of outreach, optimize delivery mechanisms, enhance the level of digital verification for these statements, broaden delivery channels, and strengthen taxpayers’ and payers’ sense of gain from tax and fee reductions.
II. Upgrading Key Services
6. Diligently implement the Regulations on Promoting the Development of Individual Industrial and Commercial Households, further streamline the procedures for changing operators of such entities through enhanced information sharing, and fully unlock the benefits of tax and fee preferential policies for individual industrial and commercial households.
7. The tax authorities have organized a nationwide “Service Month” for individual business households, implementing targeted measures to help them understand relevant policies, master the necessary procedures, and fully benefit from available support, thereby continuing to alleviate their difficulties and improve the business environment.
8. In collaboration with the All-China Federation of Industry and Commerce, we have launched the “Spring Rain Nourishes Seedlings” special campaign to ensure that preferential tax and fee policies, along with innovative service measures, promptly benefit small and micro enterprises, thereby continuously supporting their sound development.
9. Ensure that, for the entire year 2023, the average processing time for normal export tax refunds (exemptions) for Category I and Category II export enterprises remains within three working days, further boosting the vitality of export enterprises and supporting the steady development of foreign trade.
10. Formulate policy guidelines on the additional deduction for R&D expenses, and, in light of the uptake of preferential policies, conduct comprehensive publicity and guidance to help enterprises fully benefit from these measures and encourage them to increase their R&D investment.
III. Enhancing the Efficiency of Response to Public Requests
11. By means such as “walking through the procedures to solicit feedback,” we will conduct in-depth investigations and research, comprehensively gather information on the issues, difficulties, and concerns encountered by taxpayers and payers in accessing policy benefits, promptly address, analyze, and provide feedback, thereby ensuring more robust and effective policy implementation and fully safeguarding that taxpayers and payers receive the full extent of policy incentives.
12. Deepen the application of tax big data to identify taxpayers’ and payers’ latent needs regarding tax and fee preferential policies, administrative services, and other areas; explore the implementation of personalized and bundled push notifications, as well as taxpayer credit‑related alerts and reminders, to help taxpayers promptly mitigate risks of non‑compliance and rectify any breaches of trust, thereby enhancing tax law compliance.
IV. Enhancing the Quality of Convenient Services
13. Continuously advance the “reduce documentation and facilitate the public” initiative, thoroughly implement the notification-and-commitment system for tax-related certification matters, and provide greater convenience for taxpayers in filing applications to avail themselves of tax and fee preferential policies.
14. Continuously optimize the functions of the electronic tax bureau, expand its application scenarios, and ensure that the implementation of extended and refined tax and fee preferential policies—such as halving tax rates for individual business households and offering income tax incentives to small and micro‑profit enterprises—enables information systems to automatically calculate tax reductions and exemptions and pre‑fill tax returns, thereby enhancing the taxpayer and payer experience and ensuring that these policies are accurately and steadily delivered.
15. Enterprises with 30 or fewer employees are automatically exempt from the disability insurance contribution, ensuring that eligible enterprises fully benefit from this preferential policy.
16. Proactively provide notifications and promptly process refunds for contributions paid in the first quarter to taxpayers who meet the eligibility criteria for the disability insurance fund preferential policy, ensuring that the policy is effectively implemented.
17. Ensure proper implementation of the preferential policy on urban land use tax for land used by logistics enterprises for storing bulk commodities, including handling related tax refunds and offsets; in regions where urban land use tax is filed monthly, compile a list of taxpayers eligible for refunds or offsets, proactively pre‑fill tax refund/offset application forms and deliver them to eligible taxpayers, thereby expediting review processes and enhancing the efficiency of tax refunds and offsets.
18. Further expand online channels for handling real estate registration and tax-related matters, leveraging tax‑administration apps, WeChat mini‑programs, and other platforms to provide taxpayers with a broader range of mobile‑based services that better meet their individualized needs; strengthen information sharing on real estate registration and tax matters among relevant departments to enhance the quality and efficiency of service delivery.
V. Standardizing Law Enforcement and Enhancing It
19. Standardize and promote tax‑related professional service institutions to provide taxpayers and payers with personalized services in accordance with market‑oriented principles, helping them promptly and compliantly benefit from policy incentives; severely punish unscrupulous tax intermediaries that instigate or mislead taxpayers and payers into committing tax violations, safeguard taxpayers’ and payers’ credit standing, and uphold national tax security.
20. Further advance the electronic service of tax documents, gradually reducing the instances in which taxpayers are required to acknowledge receipt of paper-based documents, thereby easing the administrative burden on taxpayers.
Tax authorities at all levels must further strengthen their sense of responsibility and urgency, enhance systems thinking and scientific planning, tailor their approaches to local conditions, and ensure rigorous implementation. They should fully deliver on the continued, optimized tax and fee reduction policies, wholeheartedly address taxpayers’ and payers’ practical concerns and challenges, and help market entities alleviate difficulties, reduce burdens, and improve efficiency—thereby effectively ensuring that the decisions and arrangements of the CPC Central Committee and the State Council are implemented faithfully and to the letter.

The State Taxation Administration has announced one case of fraudulently obtaining export tax rebates and one case of issuing false value-added tax invoices.
A case involving ordinary invoices and two tax officials who accepted property from enterprises to improperly process invoice issuance.
Incremental business is assigned to handle disciplinary cases.
On April 6, the State Taxation Administration announced one case of fraudulently obtaining export tax rebates, one case of issuing false standard VAT invoices, and two cases in which tax officials were disciplined for accepting property from enterprises and improperly processing applications to increase invoice quotas. Specifically:
I. Hubei Province’s tax authorities and multiple other departments jointly investigated and prosecuted, in accordance with the law, a case of fraudulently obtaining export tax rebates. The Hubei Provincial Tax Service, Public Security, Procuratorate, Customs, People’s Bank of China, and Foreign Exchange Administration, among other agencies, collaborated to investigate and handle the case involving Suizhou-based Gencha Tea Co., Ltd., which had fraudulently obtained export tax rebates. The investigation revealed that the company employed illicit practices—including issuing false invoices for agricultural product purchases, smuggling exported goods back into the country for re‑export, and engaging in fictitious foreign‑exchange settlement—to illegally secure export tax refunds. In accordance with the Law of the People’s Republic of China on the Administration of Tax Collection and relevant regulations, the Suizhou Municipal Tax Authorities recovered RMB 19.924 million in improperly obtained export tax rebates. The tax authorities then referred the case to the judicial authorities for prosecution in compliance with applicable laws and procedures. Recently, the Intermediate People’s Court of Suizhou City, Hubei Province, issued its verdict: for the crime of fraudulently obtaining export tax rebates, the company’s legal representative, Dai Moumou, was sentenced to 10 years’ imprisonment; the deputy general manager, Zhang Moumou, received a sentence of 5 years and 6 months; and the accountant, Ao Moumou, was sentenced to 5 years and 6 months, with each of these three individuals also fined RMB 21.4 million. Additionally, three other individuals were convicted of the crime of illegal business operations and sentenced to terms ranging from 2 years to 2 years and 10 months, along with total fines amounting to RMB 420,000. The company itself, as an entity committing a crime, was imposed a fine of RMB 21 million.
II. Fujian Province’s police and tax authorities jointly investigated and prosecuted, in accordance with the law, a case involving the fraudulent issuance of standard VAT invoices. The investigation revealed that a criminal gang led by Liu Moumou, without any genuine goods transactions, used multiple shell companies under its control to issue 46,814 fraudulent standard VAT invoices to downstream enterprises. At present, five members of the gang have been sentenced to fixed-term imprisonment ranging from seven months to two years and six months for the crime of fraudulently issuing invoices, and have been fined and ordered to return their illegal gains in accordance with the law.
III. Cases of disciplinary action against two grassroots tax officials in Henan for accepting property from enterprises and improperly processing invoice‑increase applications. Recently, in accordance with the State Taxation Administration’s work plan, the Henan Provincial Tax Service conducted a thorough “dual investigation” into relevant tax‑related violations. As a result, two grassroots tax officials were disciplined for accepting property from enterprises and improperly handling invoice‑increase procedures. The investigation revealed that Cao, the former head of a tax sub‑bureau under the Runan County Tax Service in Zhumadian City, abused his position to accept gifts and cash from enterprises, indulge in banquets, and illegally process increases in the issuance of special VAT invoices and ordinary invoices. In accordance with the Regulations on Disciplinary Actions of the Communist Party of China, the Law of the People’s Republic of China on Administrative Sanctions for Public Officials, and other relevant provisions, Cao was given a two‑year probationary period within the Party and was removed from his post, with his rank downgraded from a second‑level principal officer to a first‑level administrative law enforcement officer. Similarly, Ma, the former head of a tax sub‑bureau under the Shangcai County Tax Service in Zhumadian City, took advantage of his position to accept cash from enterprises and improperly processed increases in the issuance of special VAT invoices. Pursuant to the Regulations on Disciplinary Actions of the Communist Party of China, the Law of the People’s Republic of China on Administrative Sanctions for Public Officials, and other applicable regulations, Ma received a serious warning within the Party and was demoted, and was also relieved of his post.
An official from the State Taxation Administration stated that it will resolutely implement the decisions and arrangements of the CPC Central Committee and the State Council, further leverage the regularized joint mechanism among the tax, public security, procuratorial, customs, People’s Bank of China, and foreign exchange administration authorities to combat the fraudulent issuance of invoices and tax fraud, and rigorously investigate and severely crack down on tax-related illegal and criminal activities. At the same time, focusing on key areas where tax evasion, avoidance, and fraud are prevalent, the authorities will launch “dual investigations” for each case, sternly investigating and punishing tax officials who collude with insiders or outsiders, engage in concerted fraud, or abuse their positions for personal gain. Every violation will be investigated and prosecuted, punished strictly in accordance with the law, and met with zero tolerance, thereby continuously sending a strong signal of comprehensive and unwavering enforcement.

The Ministry of Finance has released application cases for the income tax standards.
On April 4, the Ministry of Finance publicly released the “Application Case of Income Tax Standards: Accounting Treatment for Deferred Income Taxes Related to Assets and Liabilities Arising from a Single Transaction That Does Not Qualify for the Initial Recognition Exemption.”
According to Interpretation No. 16 of the Enterprise Accounting Standards, for a single transaction that does not constitute a business combination and, at the time of the transaction, neither affects accounting profit nor taxable income (or deductible losses), and whose initial recognition of assets and liabilities gives rise to equal amounts of taxable temporary differences and deductible temporary differences, the provisions in Article 11(2) and Article 13 of Enterprise Accounting Standard No. 18—Income Taxes—relating to the exemption from recognizing deferred tax liabilities and deferred tax assets upon initial recognition shall not apply. Instead, the enterprise shall recognize, at the time of the transaction, the corresponding deferred tax liabilities and deferred tax assets for the taxable and deductible temporary differences arising from the initial recognition of the assets and liabilities.

LITIGATION & ARBITRATION
Since September last year, procuratorial organs nationwide have prosecuted 381 individuals for crimes related to medical aesthetics.
Since September 2022, procuratorial organs nationwide have focused on addressing prominent issues in the medical aesthetics sector, working in concert with market regulation and other authorities to vigorously advance targeted rectification campaigns. They have rigorously prosecuted, in accordance with the law, illegal and criminal activities such as false advertising, unauthorized medical practice, the manufacture and sale of counterfeit goods, trademark infringement, smuggling, and price fraud. Since the launch of these campaigns, procuratorial organs across the country have approved the arrest of 306 individuals in 89 cases involving medical‑aesthetics crimes and instituted public prosecution against 381 individuals in 129 cases. Additionally, they have filed and handled a total of 838 public interest litigation cases in this field.
On the 6th, the Supreme People’s Procuratorate released six typical cases of procuratorial organs lawfully punishing illegal and criminal activities in the medical aesthetics sector. These cases systematically expose the principal methods of crime in this field, highlight common risks and hidden dangers associated with consumers’ choices of medical aesthetic services, and serve as a warning to consumers to make rational decisions when selecting such services.
According to reports, the typical cases released this time comprise five criminal cases and one public-interest litigation case, namely: the case involving Li et al. for manufacturing and selling counterfeit drugs, counterfeiting registered trademarks, and selling goods bearing counterfeit registered trademarks; the fraud case involving Wang, Zhu, and others; the medical‑accident case involving Li; the illegal‑practice‑of‑medicine case involving Luo; the case involving Chen for selling goods bearing counterfeit registered trademarks; and the administrative public-interest litigation case brought by the People’s Procuratorate of Yuhang District, Hangzhou City, Zhejiang Province, urging rectification of unlawful operations in the medical‑aesthetic industry.
Based on the number of criminal cases involving medical aesthetics prosecuted by the procuratorial organs, the top five offenses are: fraud; the crime of producing, selling, or providing counterfeit drugs; the crime of obstructing drug administration; the crime of selling goods bearing counterfeit registered trademarks; and the crime of practicing medicine without a license. For example, in the fraud case involving Wang, Zhu, and others, the perpetrators used free cosmetic procedures as a pretext to lure consumers into paying for multiple cosmetic treatments at prices far above market rates, while also obtaining personal consumer loans through several financial service companies designated by their office, thereby systematically carrying out “cosmetic‑loan” fraud schemes.
An official from the Fourth Procuratorial Office of the Supreme People’s Procuratorate stated that, going forward, the procuratorial organs will continue to routinely and strictly approve arrests and prosecute criminal cases in the medical aesthetics sector that are serious in nature and particularly egregious. They will also attach great importance to handling public interest litigation cases involving grave infringements on consumers’ legitimate rights and interests in this field, further consolidate the outcomes of targeted rectification efforts, and promote the standardized development of the medical aesthetics industry.

First-instance verdict rendered in the cases of Dong Zhimin’s abuse and illegal detention, and of Shi Lizhong, Tan Aiqing, and others for trafficking women.
On April 6, 2023, the Intermediate People’s Court of Xuzhou City, Jiangsu Province, held a public first-instance trial in the cases involving defendant Dong Zhimin for abuse and unlawful detention, defendants Shi Lizhong and Sang Heniu for trafficking women, and defendants Tan Aiqing, Huo Yongqu, and Huo Fude for trafficking women (the trafficking offenses committed by these five individuals having been approved for prosecution by the Supreme People’s Procuratorate). On April 7, the court delivered its verdict, finding Dong Zhimin guilty of abuse and sentencing him to six years and six months’ imprisonment, and guilty of unlawful detention, sentencing him to three years’ imprisonment; considering the cumulative effect of the sentences, the court decided to impose a total term of nine years’ imprisonment. The court also found defendants Shi Lizhong, Sang Heniu, Tan Aiqing, Huo Yongqu, and Huo Fude guilty of trafficking women, sentencing them to eleven years, ten years, thirteen years, eight years and six months, and eight years’ imprisonment, respectively, along with fines. During the trial, defendants Dong Zhimin, Shi Lizhong, Sang Heniu, Huo Yongqu, and Huo Fude all pleaded guilty and expressed remorse.
The Xuzhou People’s Procuratorate dispatched personnel to appear in court to support the public prosecution, and all defendants and their defense counsel attended the proceedings. During the trial, the prosecution presented relevant evidence, the defendants and their defense counsel cross-examined it, both sides fully articulated their arguments, and each defendant made a final statement.
Upon trial, it was ascertained that in early 1998, the defendants Shi Lizhong and Sang Heniu, under the pretext of seeking medical treatment, abducted Xiao Huamei from Yagu Village, Zilijia Township, Fugong County, Yunnan Province, and transported her to Donghai County, Jiangsu Province. Subsequently, the two sold Xiao Huamei to a local farmer, Xu Moudong, for RMB 5,000 (Xu Moudong is suspected of the crime of purchasing a woman who has been trafficked; however, due to the expiration of the statute of limitations, he was not prosecuted in accordance with the law). Xiao Huamei lived with Xu Moudong until early May of the same year, after which her whereabouts became unknown. In June of the same year, the defendant Tan Aiqing and his wife, Li Maling (who, given their minor role and relatively minor circumstances, and also due to the expiration of the statute of limitations, were not prosecuted in accordance with the law), discovered Xiao Huamei in Tanwa Village, Luoji Township, Xiayi County, Henan Province, took her into their care, and then sold her to the defendants Huo Yongqu and Huo Fude for RMB 3,000. Huo Yongqu and Huo Fude brought Xiao Huamei to Huan’kou Town, Feng County, where, through the introduction of Liu Mouzhu (who, owing to his minor role and relatively minor circumstances, and also due to the expiration of the statute of limitations, was not prosecuted in accordance with the law), she was resold for RMB 5,000 to Dong Mougeng (deceased) and his son, the defendant Dong Zhimin.
The defendant, Dong Zhimin, brought Xiao Huamei to his home in Dongji Village, where they lived together. Upon first arriving at the Dong residence, Xiao Huamei was largely able to care for herself and engage in communication, though she occasionally exhibited symptoms such as a vacant smile and a blank stare. In 1999, the couple had their first son. Between 2011 and 2020, they went on to have seven more children. After giving birth to her second and third sons in 2011 and 2012, Xiao Huamei’s psychiatric symptoms gradually worsened; following the birth of her sixth child in 2017, these symptoms became even more pronounced. During this period, Dong Zhimin took Xiao Huamei only once—during the first half of 2013—to a township hospital in a neighboring county for outpatient medication, after which he never again sought medical treatment for her. From July 2017 until the time of the incident, Dong Zhimin also subjected Xiao Huamei to abusive and coercive practices, including binding her with strips of cloth and ropes and chaining her by the neck. Throughout this time, her basic needs—including food and shelter—were not adequately met; she frequently endured hunger and cold, and her living conditions were characterized by the absence of running water, electricity, and natural light, resulting in a severely substandard environment. As a result of Dong Zhimin’s abuse, Xiao Huamei suffered substantial harm to her physical and mental health. An expert assessment determined that she suffers from schizophrenia (in the stage of decline) and has been classified as having a second-degree mental disability.
The Intermediate People’s Court of Xuzhou City held that the defendant Dong Zhimin abused his family members in a particularly egregious manner, constituting the crime of abuse, and that his actions resulted in Xiaohuamei developing irreversible schizophrenia, thereby qualifying as an aggravating circumstance involving grievous bodily harm. Furthermore, Dong Zhimin unlawfully deprived Xiaohuamei of her personal liberty, constituting the crime of illegal detention, and should therefore be punished for multiple offenses under the law. The defendants Shi Lizhong, Sang Heniu, Tan Aiqing, Huo Yongqu, and Huo Fude engaged in the trafficking of women, causing serious consequences, thus constituting the crime of trafficking women. Among them, Dong Zhimin, Shi Lizhong, and Sang Heniu confessed voluntarily, while Huo Yongqu and Huo Fude surrendered themselves; accordingly, they may be given lighter or reduced punishments in accordance with the law. However, Tan Aiqing is a recidivist and, pursuant to the law, must be sentenced more severely. Based on the facts, evidence, and relevant circumstances of this case, and following deliberation by the Adjudication Committee, the court rendered the above‑mentioned judgment in accordance with the law.
Relatives of the defendant, along with some deputies to the People’s Congress, members of the Chinese People’s Political Consultative Conference, journalists from the media, and members of the public from various sectors, attended the trial as observers.

Supreme People’s Procuratorate: Strengthen Supervision of Administrative Prosecutorial Cases and Deepen and Solidify Root-cause Governance
On April 4, the Supreme People’s Procuratorate held a press conference on “Upholding Law-Based and Proactive Performance of Duties to Deepen Social Governance,” at which it released the 42nd batch of guiding cases. In 2022, procuratorial organs nationwide handled more than 2,800 administrative supervision cases, fully leveraging the unique dual‑role of administrative prosecution—both promoting impartial justice in the people’s courts and advancing law-based administration by administrative agencies—to proactively address systemic root causes and collaboratively tackle challenges in social governance.
It is reported that the Supreme People’s Procuratorate has issued the “Rules on Administrative Litigation Supervision by the People’s Procuratorates,” which contains specific provisions for leveraging case-handling in administrative prosecution to advance social governance. In addition, the Seventh Procuratorial Office of the Supreme People’s Procuratorate has formulated and promulgated the “Guidelines for Case-Specific Supervision in Administrative Prosecution by the People’s Procuratorates (Trial),” providing guidance on conducting such supervision. Through measures including issuing individual or category‑specific prosecutorial recommendations, carrying out special‑purpose supervisory campaigns, and establishing an annual reporting system for administrative litigation supervision, these efforts aim to encourage relevant industries and institutions to improve their operations and enhance the effectiveness of social governance.
According to Zhang Buhong, Deputy Director of the Seventh Procuratorial Office of the Supreme People’s Procuratorate, the Supreme Procuratorate has fully leveraged the critical role of guiding and typical cases in directing judicial case handling, shaping social norms, and building consensus on the rule of law. Over the past four years, it has issued four batches of 17 administrative prosecution guiding cases and 38 batches of 212 typical cases. Previously, the Supreme Procuratorate released three guiding cases in the 15th batch, focusing on illegal land occupation and unauthorized construction; published six guiding cases in the 30th batch, centered on the substantive resolution of administrative disputes; and issued four guiding cases in the 36th batch, devoted to supervising similar administrative prosecution cases.
According to reports, in the 30th batch of guiding cases, in response to common issues highlighted in the case of Yao from Fujian—such as “a marriage that cannot be dissolved after seven years”—the Supreme People’s Procuratorate, together with the Ministry of Civil Affairs, the Ministry of Public Security, and the Supreme People’s Court, formulated the “Guiding Opinions on Properly Handling Issues Related to Marriage Registration Obtained Through Impersonation or Fraud” (hereinafter referred to as the “Guiding Opinions”), thereby establishing a systemic framework to provide effective redress for victims of fraudulent or false marriage registrations. In 2022, procuratorial organs nationwide conscientiously implemented the Guiding Opinions, intensifying efforts to resolve administrative disputes involving marriage registration and handling over 1,100 such cases.
“The ‘Administrative Prosecution Walks with the People’ series has released ten consecutive landmark cases, systematically addressing public concerns and resolving pressing issues,” Zhang Buhong explained. Building on the four batches of “Prosecutorial Actions for the People—Practical Measures” — the Administrative Prosecution Walks with the People series — issued by the Supreme People’s Procuratorate in 2021, the procuratorial organs in 2022, in conjunction with the special campaign “Comprehensively Deepening Administrative Prosecutorial Supervision to Safeguard People’s Livelihoods and Rights in Accordance with the Law,” have further advanced efforts to tackle the urgent, difficult, and long‑standing problems that concern the public. Focusing on themes such as optimizing the business environment, protecting the legitimate rights and interests of market entities, safeguarding the lawful rights and interests of veterans, and ensuring the well‑being of the elderly, they have released six batches totaling 34 typical cases under the Administrative Prosecution Walks with the People series.
Going forward, the Supreme People’s Procuratorate will harness the digital “engine” to catalyze the intrinsic momentum of administrative prosecution in advancing social governance, leveraging big data to strengthen legal oversight and integrate it into the broader framework of social governance. This will facilitate a shift in the administrative prosecution model—from one centered on individual cases and driven by quantity to one focused on similar cases and empowered by data—thereby bolstering and innovating social governance and better serving and safeguarding high-quality economic and social development.

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