JC Master Legal News Issue 1207

Key Takeaways for This Issue

The People’s Bank of China has released a summary of major monetary policy events for the first quarter, highlighting key measures. On May 11, the PBOC published the “Key Events in China’s Monetary Policy for the First Quarter of 2026.”

On May 13, the State Administration for Market Regulation released data on the development of business entities nationwide for the first quarter, titled “Stable and Improving Trends in National Business Entity Development in the First Quarter.”

On May 11, the General Office of the State Council issued the “2026 Legislative Work Plan,” outlining key projects.

Finance & Capital Markets

The People’s Bank of China has released a summary of major monetary policy events for the first quarter, highlighting key measures. On May 11, the PBOC published the “Key Events in China’s Monetary Policy for the First Quarter of 2026.”
In the first quarter, the People’s Bank of China cut the rates on relending and rediscounting by 25 basis points, increased the quotas for agricultural and small‑business relending by RMB 500 billion and for science‑and‑technology innovation and technological transformation relending by RMB 400 billion, and established a RMB 1 trillion special relending facility under the agricultural and small‑business programs to support private enterprises. In coordination with the National Administration of Financial Regulation, it also adjusted the minimum down payment ratio for commercial‑property mortgages to no less than 30%. During the same period, it issued a notice on cross‑border interbank financing, promulgated the Measures for the Administration of Outbound Lending by Domestic Enterprises, and expanded the scope of support under the carbon‑reduction support tool. The 1‑year LPR remained unchanged at 3.0%, while the LPR for maturities of five years and above stayed steady at 3.5%.

The People’s Bank of China released its Monetary Policy Implementation Report for the first quarter of 2026. On May 11, the People’s Bank of China published the “Report on the Implementation of China’s Monetary Policy (First Quarter 2026).”
The report indicates that, in the first quarter, the central bank continued to pursue a moderately accommodative monetary policy, employing a mix of tools—including reverse repos, medium-term lending facilities, and government bond operations—to maintain ample liquidity. It lowered the interest rates on structural monetary policy instruments by 0.25 percentage points, increased the quota for agricultural and small‑business reloans by RMB 500 billion, established a separate RMB 1 trillion reloan program for private enterprises, raised the quota for reloans supporting technological innovation and industrial upgrading by RMB 400 billion, and introduced a combined risk‑sharing mechanism for bonds issued by technology‑innovation offices and private enterprises. As of the end of March, outstanding aggregate financing and M2 grew by 7.9% and 8.5%, respectively, year on year, while the average interest rate on newly issued corporate loans stood at approximately 3.1%.

Commercial & Corporate

The State Administration for Market Regulation has recently released the first batch of typical cases from its systematic crackdown on violations in the tendering and bidding sector. These cases cover a range of illegal practices, including bid-rigging, renting out business licenses, illegally trading certification certificates, commercial bribery, and issuing false testing reports. Shanghai Lüjie Company was stripped of its business license and placed on the list of seriously law‑breaking and untrustworthy entities for organizing five offices to engage in bid‑rigging and illegally securing 86 school‑meal projects. In Anhui, a company that rented out its business license to win contracts was fined and had RMB 703,059 confiscated. In Shandong, another company that arranged for the issuance of fake ISO certification certificates for use in bidding had its illegal gains confiscated and was fined. In Guizhou, a construction office was fined RMB 200,000 for bribing public officials to secure 202 education‑related projects. Meanwhile, a testing agency in Xiamen had its illegal gains confiscated and was fined for issuing false test reports.
The State Administration for Market Regulation has launched a special campaign to raise the entry barriers for certification bodies. Recently, the Administration released the “Implementation Plan for the Special Campaign to Raise Certification Body Entry Barriers.” The plan specifies that the campaign will be carried out nationwide from now until December, with 15 measures across four key areas: tightening institutional access, standardizing certification activities, enhancing certification capabilities, and strengthening regulatory oversight. These measures include improving the qualification‑licensing review system, conducting rigorous qualification assessments, bolstering expert technical reviews, and implementing on-site compliance inspections; refining certification management practices, establishing unified national certification rules, reinforcing the filing and review of such rules, and holding institutions and personnel strictly accountable; intensifying efforts to cultivate reputable certification bodies, strengthening specialized accreditation supervision, and enhancing the innovation capacity of certification bodies; and reinforcing risk monitoring and early warning for certification activities, stepping up “double-random, one-public” supervisory inspections, improving the effectiveness of smart regulation, and perfecting mechanisms for the orderly exit of certification bodies.

Five departments have issued a document to advance the “one‑stop” handling of joint acceptance for construction projects. Recently, the General Office of the Ministry of Housing and Urban–Rural Development, together with four other departments, released the “Implementation Opinions of the General Office of the Ministry of Housing and Urban–Rural Development and Other Departments on Deeply Promoting the ‘One‑Stop’ Joint Acceptance of Construction Projects.”
The Implementation Opinions stipulate that joint acceptance procedures will be advanced for matters including the filing of completion acceptance for construction projects, fire safety acceptance (and filing), planning verification and land inspection, completion acceptance of civil defense facilities, acceptance of construction project archives, and pre‑commissioning or pre‑operational fire safety inspections for venues where the public gathers. The document sets a target to achieve “one‑stop service,” “joint on-site inspection,” and “online one‑stop processing” by the end of October 2026, and to promote cross‑departmental and cross‑hierarchical data sharing and feedback by the end of June 2027. It also calls for establishing a joint on-site inspection mechanism, supporting key investment projects to conduct phased acceptance under conditions that ensure overall safety and independent functional use, while standardizing electronic document formats and strengthening ongoing and post‑event supervision.

The State Administration for Market Regulation has approved the release of 15 mandatory national standards and three amendment sheets. Recently, the State Administration for Market Regulation and the National Standardization Administration jointly issued an announcement approving the publication of “15 Mandatory National Standards, including ‘Surgical Implants—Metal Materials—Part 1: Forged Stainless Steel,’ as well as three amendments to mandatory national standards.”
This release covers areas including medical devices, automobiles and motorcycles, edible mushroom strains, detergents, the return of livestock and poultry manure to farmland, electric motors, ophthalmic instruments, fire‑fighting products, and polysilicon production. Among the 15 mandatory national standards, the safety technical specification for rotating electrical machines will take effect on November 1, 2026, while most other standards—such as those for automotive steering systems, speedometers, and detergent safety—will be implemented in phases between 2027 and 2029. In addition, three amendments to mandatory national standards have been issued: the amendment on energy and water efficiency for electric washing machines will be effective April 30, 2026, and two amendments to China VI emission standards for light‑ and heavy‑duty vehicles will take effect May 1, 2026.

On May 13, the State Administration for Market Regulation released data on the development of business entities nationwide for the first quarter, titled “Stable and Improving Trends in National Business Entity Development in the First Quarter.”

Data show that in the first quarter of 2026, 5.098 million new market entities were established nationwide, including 2.074 million enterprises and 3.014 million individually owned businesses. By sector, the primary, secondary, and tertiary industries accounted for 229,000, 396,000, and 4.473 million new establishments, respectively. As of the end of March, the number of registered “four‑new” economy enterprises stood at 26.848 million, up 6.8% year on year, representing 40.9% of the total enterprise base. Among high‑tech manufacturing sectors, new entities in integrated circuit manufacturing and intelligent unmanned aerial vehicle manufacturing increased by 31.0% and 15.7%, respectively, compared with the same period last year. In the high‑tech services sector, 535,000 new enterprises were established, with inspection and testing services and technology transfer services growing by 30.8% and 7.56%, respectively. Additionally, 16,000 foreign‑invested enterprises were newly registered, a year-on-year increase of 10.0%.
 

Taxation TAXATATION

Two departments have adjusted the list of branch institutions eligible to file and pay value-added tax on a consolidated basis for railway and air transport enterprises. Recently, the Ministry of Finance and the State Taxation Administration issued the “Notice on Adjusting the List of Branch Institutions Eligible to File and Pay Value-Added Tax on a Consolidated Basis for Railway and Air Transport Enterprises” (hereinafter referred to as the “Notice”).
According to the Notice, Annex 1 of the “Notice on the Consolidated VAT Payment by Railway Transport Enterprises,” titled “List of Branches of China State Railway Group Subject to Consolidated VAT Payment (I),” is supplemented to include the branches listed in Annex 1 of this Notice, namely Xinjiang–Tibet Railway Co., Ltd. and Tianjin Jin’gang Third‑Line Railway Co., Ltd. The Notice further clarifies that, with respect to Annex 2 of the aforementioned notice—“List of Branches of China State Railway Group Subject to Consolidated VAT Payment (II)—” the branches listed therein are to be supplemented, deleted, or amended as specified in Annex 2 of this Notice, including Shigang Intercity Railway Co., Ltd. and others. Additionally, the Notice stipulates that, for the annex to the “Notice on the List of Head Offices and Branches of Air Transport Enterprises Subject to Consolidated VAT Payment,” titled “List of Head Offices and Branches of Air Transport Enterprises,” the branches listed in Annex 3 of this Notice are to be added, including Shanghai Juneyao Airlines Co., Ltd. and others.

Litigation & Arbitration

On May 11, 2026, the Supreme People’s Court and the Supreme People’s Procuratorate jointly issued the “Provisions of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in Handling Cases of Illegal Occupation of Cultivated Land.”
The Regulations, comprising twenty-one articles, will enter into force on May 18, 2026, and establish unified rules governing administrative, civil, criminal, public-interest litigation, and enforcement procedures in cases of illegal occupation of cultivated land. The provisions include: clarifying the subjects of administrative legal liability; authorizing lawful measures such as sealing off construction sites for newly erected illegal structures; and setting the statute of limitations for administrative penalties to commence from the date the unlawful act ceases. They also stipulate that agreements involving the construction of houses or tombs on occupied farmland, mining activities, or the sale and lease of buildings on agricultural land are void, along with the corresponding civil liabilities. Furthermore, the Regulations detail the modes of conduct, quantitative thresholds, rules for handling concurrent offenses, criteria for imposing lenient or aggravated penalties, corporate criminal liability, and methods of cumulative calculation in cases of the crime of illegally occupying agricultural land. Finally, they specify the procedural linkages between decisions ordering demolition within a prescribed time limit and related administrative reconsideration and litigation, set forth time limits for filing lawsuits, and establish standards for adjudication and enforcement, while providing that the procuratorial organs may, in accordance with the law, institute public-interest litigation.

The Zhejiang Provincial Department of Justice has issued twelve measures to promote consumption and private investment through legal safeguards. Recently, the department released the “Several Measures on Promoting Consumption and Private Investment Through Legal Safeguards.”
The Measures set forth 12 initiatives, including prioritizing the review and repeal of unreasonable regulatory restrictions in the consumer sector by 2026, advancing legislation on the management of single-purpose prepaid consumer cards, and conducting research on issues such as intellectual property protection for data, online‑rental housing regulation, and product recalls. They also aim to standardize administrative law enforcement involving businesses, refine guidelines on discretionary powers, and promote “QR‑code‑based enterprise access” and “integrated one‑stop inspections.” Furthermore, the measures seek to implement the Law on Promoting the Private Economy and related policies supporting private investment, while issuing risk‑management and legal guidance on areas such as live‑streaming commerce, cross‑border consumption, cross‑border data transfers, and consumer privacy protection, and enhancing mechanisms for coordinating mediation, arbitration, and litigation.

The General Office of the State Council has issued the 2026 Legislative Work Plan, outlining key projects. On May 11, the General Office of the State Council released the “State Council’s 2026 Legislative Work Plan.”
The Plan arranges legislative initiatives across such areas as the market economy, the business environment, science and technology, culture, people’s livelihoods and environmental protection, public security and stability, and foreign-related rule of law. It lists draft bills including the Financial Law, the revised Draft Law on Tendering and Bidding, the Regulations on Building a Unified National Market, the revision of the Implementing Regulations of the Administrative Review Law, the revision of the Measures for the Administration of Internet Information Services, the revision of the Implementing Regulations of the Drug Administration Law, and the draft revision of the Customs Law. In addition, it calls for advancing comprehensive legislation to promote the sound development of artificial intelligence, requiring all departments of the State Council to ensure effective implementation and instructing the Ministry of Justice to strengthen oversight and coordination.