JC Master Legal News Issue 1138

The Shanghai Stock Exchange has issued guidelines on periodic reporting for infrastructure REITs, aiming to enhance the quality of information disclosure.

The Shanghai Stock Exchange has issued the “Shanghai Stock Exchange Guidelines on the Application of Rules for Publicly Offered Infrastructure Real Estate Investment Trusts (REITs), No. 6: Annual Report (Trial)” and the “Shanghai Stock Exchange Guidelines on the Application of Rules for Publicly Offered Infrastructure Real Estate Investment Trusts (REITs), No. 7: Interim and Quarterly Reports (Trial).”

Public Consultation on the Measures for the Supervision and Administration of State‑Owned Asset Appraisals by Financial Institutions

The Ministry of Finance has issued the “Letter on Public Solicitation of Comments on the Measures for the Assessment and Supervision of State‑Owned Assets in Financial Institutions,” with a deadline for submitting feedback set for December 31.

Four departments have issued a document to deepen contractual cooperation between medical and health institutions and elderly care institutions.

On December 4, the National Health Commission website published the “Notice on Deepening Contractual Cooperation Between Medical and Healthcare Institutions and Elderly Care Institutions.”

The Supreme People’s Procuratorate has issued 36 guidelines to comprehensively deepen procuratorial reform.

On December 4, the Supreme People’s Procuratorate issued the “Opinions on Comprehensively Deepening Procuratorial Reform and Further Strengthening Procuratorial Work in the New Era.”

Finance and Capital Markets

FINANCE &CAPITAL MARKETS

Highlighting Innovation and Growth Characteristics Regular constituent adjustments for the Shenzhen Component Index, the ChiNext Index, and the SZSE 100 Index.

On December 2, the Shenzhen Stock Exchange and its wholly owned subsidiary, Shenzhen Securities Information Co., Ltd., issued an announcement stating that, in accordance with the index‑construction rules and taking into account factors such as market capitalization representativeness, securities liquidity, and compliance with regulatory requirements, they will conduct a periodic adjustment of the constituent stocks of the SZSE Composite Index, the ChiNext Index, and the SZSE 100 Index (hereinafter collectively referred to as the Shenzhen Market Core Indices). The adjustments will take effect on December 16, 2024. Specifically, the SZSE Composite Index will replace 19 constituent stocks, adding 14 companies from the Main Board and 5 from the ChiNext; the ChiNext Index will replace 7 constituent stocks; and the SZSE 100 Index will replace 6 constituent stocks, incorporating 4 companies from the Main Board and 2 from the ChiNext.

Technological innovation has become even more robust. Following this adjustment, the constituent structure of Shenzhen’s core indices has been optimized, further enhancing their ability to reflect new drivers and competitive advantages. The Shenzhen Component Index is the benchmark index with the highest proportion of manufacturing in China’s capital market, with manufacturing companies accounting for over 70% of its weighting; 222 constituents belong to the advanced manufacturing sector, and real‑economy industries comprise more than 90% of the index. The ChiNext Index, as a flagship indicator of growth‑oriented innovative and entrepreneurial firms, is led by new‑type productive forces, with strategic emerging industries accounting for 92% of its weighting. Notable clusters have emerged in next‑generation information technology, new‑energy vehicles, and the bio‑industry, with respective weightings of 33%, 23%, and 15%. Meanwhile, the SZSE 100, a large‑cap index distinguished by its strong innovation profile, allocates 69% of its weighting to key sectors such as advanced manufacturing, the digital economy, and green, low‑carbon development. Its constituent companies continue to ramp up R&D investment, with a compound annual growth rate in R&D expenses of 26% over the past three years.

Growth momentum remains robust. Core constituent companies of Shenzhen’s benchmark indices continue to strengthen their core competencies, with steadily improving organic earnings growth. Among the constituents of the Shenzhen Component Index, 116 are manufacturing “single-champion” enterprises; roughly 30% reported year-on-year increases of over 10% in both operating revenue and net profit for the first three quarters. On the ChiNext Index, the next-generation information technology sector is experiencing strong expansion, with operating revenue up 41% and net profit up 38% year-to-date. Meanwhile, the Shenzhen 100 Index brings together a cohort of industry-leading firms with global competitiveness, which have been steadily expanding their overseas operations, posting a compound annual growth rate of 27% in international revenue over the past three years.

Long-term investment value has been steadily improving. Core constituent companies of Shenzhen‑listed indices place a strong emphasis on returning value to investors, consistently setting an example and promoting a value‑investment mindset. Since the beginning of this year, the constituent companies of the SZSE Component Index have distributed cumulative dividends totaling RMB 387.6 billion, accounting for 77% of the Shenzhen market. More than half of these companies have formulated and released “dual‑enhancement” action plans aimed at boosting both quality and returns, while 196 firms have implemented share‑repurchase programs, further bolstering market confidence. The ChiNext Index has become the preferred choice for incremental capital seeking innovative, growth‑oriented investments, with its product scale continuing to expand; leading ETFs have seen significant net inflows, attracting nearly RMB 50 billion in new funds this year, including several ETFs with assets under management exceeding RMB 100 billion. Meanwhile, the constituent companies of the SZSE 100 Index have collectively paid out RMB 252.3 billion in dividends, representing 50% of the Shenzhen market, and the index’s trailing‑twelve‑month return on equity stands at 13%, providing an attractive allocation vehicle for medium‑ to long‑term investors.

The Shanghai Stock Exchange has issued guidelines on periodic reporting for infrastructure REITs, aiming to enhance the quality of information disclosure.

Under the guidance of the China Securities Regulatory Commission, the Shanghai Stock Exchange has issued “Shanghai Stock Exchange Guidelines on the Application of Rules for Publicly Offered Infrastructure Real Estate Investment Trusts (REITs), No. 6—Annual Report (Trial)” and “Shanghai Stock Exchange Guidelines on the Application of Rules for Publicly Offered Infrastructure Real Estate Investment Trusts (REITs), No. 7—Interim and Quarterly Reports (Trial)” (hereinafter collectively referred to as the “Periodic Reporting Guidelines”). The promulgation of these rules will help further refine the framework of post‑issuance regulations for infrastructure REITs, with a focus on asset‑based oversight, continuously enhance the standardization, effectiveness, and relevance of information disclosure, and ensure that all market participants in the infrastructure REITs sector fulfill their respective duties and responsibilities.

Strengthen the principal’s disclosure obligations and clarify the requirements for disclosing the performance of duties by business participants.

Building on the establishment of basic information‑disclosure requirements for infrastructure REITs, the Guidelines on Periodic Reports further clarify the information‑disclosure obligations and duty‑of‑care disclosure requirements of all market participants. First, they delineate the principal responsibilities of both the obligors and the entities required to cooperate in providing information, stipulating that fund managers and asset‑management operators must establish relevant information‑disclosure policies, and emphasizing the duties and liabilities of the person responsible for information‑disclosure matters throughout the preparation of periodic reports. Second, the Guidelines specify in greater detail the disclosure requirements regarding the performance of duties by fund managers, asset‑backed securities managers, fund custodians, asset‑backed securities custodians, asset‑management operators, and original equity holders, thereby ensuring that each participating institution fulfills its respective roles and responsibilities.

Strengthen operational management responsibilities and standardize disclosure requirements at the fund level.

The Guidelines on Periodic Reporting address information disclosure at the fund level, establishing standards for fund finances, fund transactions, and material matters, and urging fund managers to faithfully discharge their product‑management responsibilities. With respect to financial reporting, the guidelines specify disclosure requirements for key accounting and financial metrics, fee structures, investment‑property accounting, asset impairments, and other related items. In the area of transactions, they further detail disclosure obligations concerning related‑party transactions, asset transfers, and portfolio investments. As for material matters, the guidelines strengthen disclosure requirements for significant capital expenditures, renovation or expansion projects, and the fulfillment of commitments.

Highlighting the Characteristics of Infrastructure REITs and Refining Disclosure Requirements for Infrastructure Projects

The periodic reporting guidelines take full account of the asset characteristics of infrastructure REITs, enhancing the relevance and effectiveness of information disclosure by ensuring that investors are adequately informed about the operational status of the underlying assets. First, they set out detailed general disclosure requirements covering the basic information of infrastructure projects, their operating performance, financial metrics, and significant developments. Second, in light of industry-specific features, they prescribe sector‑by‑sector disclosure standards for the operational status of underlying assets, financial indicators, and material changes. Third, they reinforce the obligation of the asset‑management entities to cooperate in providing information, thereby improving the quality of disclosures related to the underlying assets.

Oriented toward investor needs, reasonably reduce the cost of information disclosure.

The guidelines for periodic reporting emphasize the principle of the importance of information disclosure. Annual reports provide relatively comprehensive disclosures, while interim and quarterly reports, while meeting investors’ information needs, adopt a more streamlined approach to appropriately reduce the information‑disclosure costs for market participants. Interim reports focus on operating and financial conditions over the six‑month period; compared with annual reports, they are not required to disclose audit reports or valuation reports, and certain items—such as reviews and future outlooks, significant capital expenditures, and changes in the accounting measurement methods for investment properties—are omitted. Quarterly reports place greater emphasis on infrastructure REIT performance and project‑operation details, further simplifying disclosure requirements—building on the interim report—regarding fund operations, the duties of market participants, and infrastructure projects.

Going forward, the Shanghai Stock Exchange will, in accordance with the requirements set forth by the China Securities Regulatory Commission, uphold the principle of balancing regulation with development, continue to strengthen information disclosure oversight of listed REITs, and work to foster a market ecosystem characterized by active investment‑financing interaction and mutual trust. This effort will help promote the high‑quality development of the REITs market and better support national strategies and the broader goals of economic and social development.

Public Consultation on the Measures for the Supervision and Administration of State‑Owned Asset Appraisals by Financial Institutions

The Ministry of Finance has issued the “Letter on Public Solicitation of Comments on the Measures for the Assessment and Supervision of State‑Owned Assets in Financial Institutions,” with a deadline for submitting feedback set for December 31.

The Measures comprise eight chapters and forty-five articles, clearly setting forth provisions on matters subject to appraisal, the selection and appointment of asset appraisal institutions, the commissioning of appraisals, public disclosure of appraisal results, approval and filing procedures, supervisory inspections, and penalties. The Measures further stipulate that, where a financial institution has multiple state-owned shareholders, the state-owned shareholder with de facto control or the largest shareholding shall apply for approval or filing of the asset appraisal project; if the shareholdings are equal, the parties may, by mutual agreement, designate one of them to make the application.

The National Administration of Financial Regulation: Insurance companies shall include the classification of asset risks in both internal and external audit scopes.

The National Administration of Financial Regulation has revised the “Guidelines on the Five‑Level Classification of Insurance Asset Risks,” resulting in the “Provisional Measures for the Classification of Insurance Asset Risks,” which were officially released on November 29 and will take effect on July 1, 2025.

This revision, first, expands the scope of asset risk classification. Except in special circumstances, the Measures now bring all investment assets within the classification framework. Second, it refines the classification criteria for fixed-income assets. Third, it improves the risk‑classification standards for equity‑type and real‑estate‑type assets, shifting from the previous five‑tier system to a three‑tier structure: normal, substandard, and loss. Fourth, it requires insurance companies to include asset risk‑classification information in both internal and external audits. In cases where an accounting firm issues a materially inaccurate audit report, the National Administration of Financial Regulation or its local branches may, depending on the circumstances, order the insurer to change accounting firms, reject the audit report, or issue industry-wide notifications; in serious cases, they may refer relevant leads to the competent authorities for administrative penalties in accordance with the law.

Business and Corporations

COMMERCIAL & CORPORATE

The State Administration for Market Regulation has designated the third batch of national pilot areas for innovation in trade secret protection.

On December 4, the website of the State Administration for Market Regulation published the “Notice on the Determination of the List of the Third Batch of National Pilot Areas for Innovation in Commercial Secret Protection.”

The Notice clarifies that, following deliberation, 11 regions—including Shijiazhuang City in Hebei Province, Baotou City in the Inner Mongolia Autonomous Region, Shenyang City in Liaoning Province, and Minhang District in Shanghai—have been designated as the third batch of national pilot areas for innovation in trade secret protection. Additionally, it approves expanding the scope of the pilot program in Hefei High-tech Industrial Development Zone, Anhui Province, from the first batch to cover the entire city of Hefei.

The National Development and Reform Commission plans to issue the Administrative Measures for the Licensing of Installation of Power Facilities.

On December 4, the National Development and Reform Commission’s website published an announcement soliciting public comments on the “Administrative Measures for Licenses to Install (Repair, Test) Power Facilities (Revised Draft for Public Comment).” The deadline for submitting feedback is January 4, 2025.

The Measures consist of seven chapters and forty-two articles, stipulating that if a unit engaged in the installation, maintenance, or testing of power facilities obtains a license through deception to carry out such activities, subcontracts or illegally assigns these tasks, alters, resells, rents out, or lends its license, or otherwise unlawfully transfers its license, then, in accordance with the relevant administrative penalty provisions set forth in the Regulations on Quality Management of Construction Projects and other applicable laws and regulations, the prescribed penalties shall apply. Where no specific provisions exist, the competent supervisory authority shall order the entity to make corrections, issue a warning, and impose a fine ranging from RMB 10,000 to RMB 100,000.

The Ministry of Commerce has released statistical data on the development of service trade for January–October 2024.

On December 3, the Ministry of Commerce website released statistical data outlining the performance of China’s service trade from January to October 2024.

Statistical data show that from January to October 2024, China’s trade in services continued to grow rapidly, with total imports and exports reaching RMB 6.12558 trillion, up 14.6% year on year. Specifically, exports amounted to RMB 2.54491 trillion, an increase of 16.6%, while imports totaled RMB 3.58067 trillion, up 13.2%. The service trade deficit stood at RMB 1.03576 trillion.

Three departments have issued a document to further improve parking and rest facilities.

On December 4, the website of the Ministry of Transport published the “Notice on Further Improving Parking and Rest Conditions and Showing Care and Concern for Truck Drivers.”

The Notice comprises five key areas and stipulates that, in light of the characteristics of inbound and outbound truck drivers’ gathering patterns and their actual needs, local authorities should, on a case-by-case basis, leverage international customs clearance ports, cargo distribution hubs along port logistics corridors, port logistics parks, and designated gathering points for inbound and outbound truck drivers. It further requires trade unions at all levels to facilitate the establishment of consultation and coordination mechanisms between major internet-based road freight‑transport platforms, trade unions, and truck drivers. Through forums, negotiation meetings, workers’ congresses, and other formats, these mechanisms should address issues directly affecting truck drivers’ rights—such as freight‑rate structures, commission rates, working hours, order allocation, reward‑and‑penalty systems, and supplementary insurance—while fully soliciting drivers’ views and suggestions. In turn, relevant business strategies should be promptly refined and adjusted to safeguard truck drivers’ rights to information, expression, and participation in decision‑making.

Four departments have issued a document to deepen contractual cooperation between medical and health institutions and elderly care institutions.

On December 4, the National Health Commission website published the “Notice on Deepening Contractual Cooperation Between Medical and Healthcare Institutions and Elderly Care Institutions.”

The Notice sets forth requirements regarding the content of cooperative agreements, safety, institutional mechanisms, and operational models: First, medical and health institutions and elderly care facilities shall, based on their respective qualifications and service needs, negotiate and determine the scope of cooperation in accordance with the principles of “equality and voluntariness, proximity and convenience, seamless service integration, and joint development.” Second, such cooperative arrangements must be conducted in compliance with applicable laws and regulations, with proper registration of physicians’ practice at multiple institutions. Third, a grassroots-level cooperative mechanism should be established to facilitate connections between elderly care facilities that have relevant needs and various primary-level medical and health institutions within their jurisdiction. Fourth, multi-tiered cooperative frameworks are encouraged; elderly care facilities willing to collaborate may proactively engage with general hospitals, traditional Chinese medicine hospitals, specialized hospitals, and other institutions to establish cooperative agreements, leveraging the expertise of departments such as geriatrics and rehabilitation medicine, and attracting participation from social entities. Fifth, institutions meeting the requisite conditions are encouraged to provide embedded services in compliance with laws and regulations, and, on the basis of mutual consent and clearly defined rights and obligations, to explore托管式 (trust‑based) cooperative arrangements.

The National Energy Administration has issued a document to support the innovative development of new types of market entities in the power sector.

Recently, the website of the National Energy Administration released the “Guiding Opinions on Supporting the Innovative Development of New Types of Market Entities in the Power Sector.”

The “Guiding Opinions” comprise eight provisions, primarily defining the connotations and characteristics of new types of market entities, clarifying their scope, and proposing measures to foster their innovative development. These measures cover such areas as improving dispatch and operational management, encouraging equal participation in the electricity market, streamlining market registration, refining market trading mechanisms, and ensuring sound metering and settlement practices.

The Sixth Service‑Oriented Manufacturing Conference Was Held

The 6th Service‑Oriented Manufacturing Conference was held in Hangzhou, Zhejiang Province.

The conference, themed “Service‑oriented Manufacturing Supporting New‑type Industrialization,” was co‑hosted by the China Electronics Products Reliability and Environmental Testing Research Institute and the Zhejiang Provincial Department of Economy and Information Technology. During the event, several key outcomes were unveiled, including the “China Service‑Oriented Manufacturing Regional Development Index (2024),” the report “Service‑Oriented Manufacturing: Supporting the Construction of a Modern Industrial System,” the guide “The Path to Service‑Oriented Manufacturing: A Implementation Guide for Product‑Service Systems,” and the “Collection of Typical Cases in Service‑Oriented Manufacturing (2024).” In addition, five group standards were released, among them the “Assessment Model for the Maturity of Service‑Oriented Manufacturing in Manufacturing Enterprises.”

Anhui Data Exchange Has Issued Measures for the Registration of Data Property Rights.

Recently, the Anhui Provincial Data Exchange issued the “Measures for the Registration of Data Property Rights of the Anhui Provincial Data Exchange (Trial).”

The Measures comprise nine chapters and thirty-four articles, regulating data‑property registration activities with respect to registrants, registration authorities, third‑party professional service providers, types of registration, registration procedures, review processes, and legal liabilities. It is expressly provided that, in any of the following circumstances, the registration authority may refuse to grant registration: (1) the data involves national security or state secrets; (2) the source of the data violates applicable laws and regulations; (3) the description of the data is false or incomplete; (4) there is an unresolved dispute over ownership of the data; (5) the registrant has concealed material facts or submitted false documentation; (6) the registrant may pose a serious risk of violating laws or regulations, or has filed the registration in bad faith; or (7) other circumstances prescribed by laws or regulations.

Four Shanghai departments have jointly issued a document to promote the effective implementation of quality‑based financing and credit enhancement.

On December 4, the Shanghai Municipal Administration for Market Regulation published the “Notice on Effectively Carrying Out Quality‑Financing Credit‑Enhancement Work in Shanghai.”

The Notice clarifies that, in prioritizing quality‑related financing and credit enhancement, priority will be given to enterprises that have received quality awards at various levels of government, been recognized for brand‑building initiatives, obtained honors or qualifications in quality‑infrastructure areas such as standards, metrology, certification and accreditation, inspection, and testing, or achieved recognition for industrial quality‑improvement projects. Additionally, special consideration will be accorded to senior quality professionals—such as chief quality officers and standards directors—employed by enterprises that meet the criteria for priority target groups.

Beijing plans to launch a three-year initiative to fully leverage the functions and roles of work safety liability insurance.

On December 4, the Beijing Municipal Government website published the “Notice on Public Solicitation of Comments on the ‘Fully Leveraging the Functions and Roles of Work Safety Liability Insurance to Support Beijing’s Three-Year Campaign for Root-Cause Rectification in Work Safety,’” with a deadline for submitting feedback set for January 3, 2025.

The Notice aligns closely with Beijing’s “Eight Major Actions” for addressing root causes and tackling tough challenges, mandating that accident prevention services under the work‑related liability insurance focus on key areas such as urban gas systems, hazardous chemicals, “nine small venues,” and places of dense occupancy. It also calls for assisting in the implementation of safeguard measures, including the prohibition of conducting business while carrying out construction, the requirement of having two or more independent escape routes, and the ban on electric bicycles being brought into buildings and residential units.

The Ministry of Foreign Affairs has imposed countermeasures against U.S. defense contractors and their senior executives.

On December 5, the Ministry of Foreign Affairs website published the “Decision on Taking Countermeasures Against U.S. Arms-Producing Enterprises and Their Senior Management.”

The Decision stipulates that, with respect to the 13 entities listed in the attached “Countermeasure List”—namely, Teliada Brown Engineering Co., Ltd., BRINC Unmanned Aerial Vehicle Co., Ltd., Rapid Flight Co., Ltd., Red Six Solutions Co., Ltd., Shield Artificial Intelligence Co., Ltd., Senix Co., Ltd., Firestorm Laboratory Co., Ltd., Kratos Unmanned Systems Co., Ltd., Havoc Artificial Intelligence Co., Ltd., Niros Technology Co., Ltd., Cyborex Co., Ltd., Dommo Tactical Communications Co., Ltd., and Group W Co., Ltd.—all movable and immovable property and other types of assets located within China shall be frozen; furthermore, organizations and individuals within China are prohibited from engaging in any transactions, cooperation, or other related activities with these entities. The Decision also provides for the freezing of all movable and immovable property and other types of assets located within China belonging to six senior executives of U.S. companies, and prohibits organizations and individuals within China from conducting any transactions or cooperation with these individuals; moreover, visas will not be issued to them, and they will be denied entry into China, including Hong Kong and Macao.

The State Administration for Market Regulation has once again sought public comments on the Measures for the Administration of Green Product Certification and Labeling.

On December 4, the website of the State Administration for Market Regulation published the “Notice on Further Soliciting Public Comments on the Measures for the Administration of Green Product Certification and Labeling (Draft for Comments),” with a deadline for submitting feedback set for December 20.

Following its revision, the Measures comprise 7 chapters and 45 articles, setting out the management procedures for the green product certification and labeling system. By delineating processes across certification schemes, implementation, certification certificates, green product labels, and supervisory oversight, the Measures standardize administrative workflows, clarify the responsibilities of each regulatory authority, and specify the legal liabilities that all participating entities must bear for violations of these Measures. In particular, Chapter 3 defines the end-to-end scope of green product certification activities and mandates that certification bodies establish risk‑prevention mechanisms, while also laying down provisions governing the management of certification personnel and information‑related matters.

China strengthens export controls on relevant dual-use items to the United States.

The Ministry of Commerce website has published the “Notice on Strengthening Export Controls over Relevant Dual-Use Items to the United States,” which prohibits the export of dual-use items to U.S. military users or for military purposes.

The Notice clarifies that, in principle, exports to the United States of dual-use items related to gallium, germanium, antimony, and superhard materials will not be licensed. For graphite‑related dual-use items exported to the United States, more stringent reviews of end‑users and end‑uses will be implemented. The Ministry of Commerce stated that, in recent years, the U.S. side has broadened the concept of national security, politicized and weaponized economic, trade, and technological issues, abused export control measures, imposed unwarranted restrictions on the export of relevant products to China, and placed numerous Chinese enterprises on sanctions lists in an effort to suppress and contain them. Such actions have severely undermined international trade rules, gravely infringed upon the legitimate rights and interests of businesses, and seriously disrupted the stability of global industrial and supply chains. In response, China has decided to strengthen export controls on relevant dual-use items destined for the United States. Any organization or individual, regardless of country or region, that violates these regulations will be held legally accountable.

Multiple Chinese associations are calling for prudent procurement of U.S. chips.

On December 3, several industry associations, including the China Internet Association, the China Semiconductor Industry Association, and the China Association of Automobile Manufacturers, issued a statement urging domestic companies to exercise caution when procuring U.S.-made chips.

Among these developments, the China Semiconductor Industry Association issued a statement noting that the arbitrary nature of U.S. export controls on China has disrupted supply chains and increased operating costs for U.S. companies, thereby undermining the stable supply of U.S.-made chips. As a result, U.S. chip products are no longer considered safe or reliable, forcing relevant Chinese industries to exercise caution when procuring such components. Meanwhile, the China Association of Automobile Manufacturers stated that the U.S. government’s frequent and unilateral revisions to export‑control regulations have severely jeopardized the steady supply of U.S.-made chips. Consequently, the Chinese automotive sector’s trust in and confidence in U.S. chip suppliers are being eroded, rendering U.S. automotive chips neither reliable nor secure. To ensure the security and stability of the automotive industry’s value chain and supply chain, the association recommends that Chinese automakers proceed with caution when sourcing U.S.-made chips.

Effective December 1, relevant important national standards, including those for industrial internet platforms, will come into force.

Effective December 1, a number of important national standards have come into force, including those covering industrial internet platforms, Chinese domain names, electrochemical energy storage, digitalization of logistics parks, operational services for esports venues, the sale and after-sales service of urban gas‑fired appliances, and on-site signage at border‑control checkpoints at ports open to international traffic.

Among these, the recommended national standards—including “Guidelines for Monitoring and Analysis of Industrial Internet Platforms,” “Classification Method for Industrial Internet Platform Solutions,” and “Quality Management Requirements for Industrial Internet Platforms”—standardize monitoring and analysis, scenario classification, and quality management for industrial internet platforms. They provide methodological guidance for scientifically building capabilities and selecting platforms in areas such as platform development and application, thereby effectively advancing the industrial internet’s ability to better support high-quality manufacturing development.

State Administration for Market Regulation: The nationwide unified platform for market regulation credit restoration will be launched soon.

Recently, the State Administration for Market Regulation stated that it is accelerating the development and construction of a nationwide unified platform for market regulation-related credit restoration, which is expected to go live by the end of this year or early next year.

Upon completion, the unified platform will fully leverage the strengths of the National Enterprise Credit Information Publicity System in collecting and disclosing credit information on market entities, offering services such as access to information on violations and breaches of trust, as well as applications for credit restoration. Market entities need only log in to the unified platform using their electronic business license via the homepage of the National Enterprise Credit Information Publicity System to obtain, with a single click, details on administrative penalties, inclusion on the List of Abnormal Operations, and placement on the List of Seriously Dishonest Entities—enabling them to gain a comprehensive understanding of their own credit standing.

The National Medical Products Administration has announced that 15 batches of cosmetics were found to contain prohibited ingredients.

On December 4, the National Medical Products Administration (NMPA) website published the “Notice on the Detection of Prohibited Ingredients in 15 Batches of Cosmetics.”

The Notice clarifies that, following testing by the Sichuan Provincial Institute for Drug Control and other institutions, 15 batches of cosmetics—including products labeled as “Facaidi Anti-Dandruff Purifying Shampoo”—were found to be non‑compliant, with prohibited ingredients listed in the Technical Specifications for Cosmetic Safety (2015 Edition) detected. The National Medical Products Administration has instructed the drug regulatory authorities of Zhejiang Province and Guangdong Province to initiate lawful investigations into the registrants, filers, and contract manufacturers involved in these non‑compliant cosmetic products, and to order the relevant enterprises to immediately implement risk‑control measures in accordance with the law and carry out self‑inspections and corrective actions.

The 2024 Conference on the Development of Specialized, Sophisticated, and Novel Small and Medium-Sized Enterprises Has Opened.

The 2024 Conference on the Development of Specialized, Sophisticated, Distinctive, and Innovative SMEs opened at the Zhangjiang Science Hall in Shanghai.

The conference unveiled the third batch of listings for the “Specialized, Refined, Distinctive, and Innovative” board on regional equity markets, released evaluation indicators for the specialized, refined, distinctive, and innovative development of SMEs, held a signing ceremony between leading enterprises and specialized, refined, distinctive, and innovative SMEs, and promoted the National SME Service Network. Jin Zhuanglong, Secretary of the Party Group and Minister of the Ministry of Industry and Information Technology, stated that the next steps will include refining the tiered cultivation system for high-quality enterprises, accelerating the digital transformation of SMEs, launching a special action to empower SMEs through digitalization, promoting “chain‑based” and cluster‑based transformations, vigorously developing “small, fast, lightweight, and precise” digital products and solutions, building a high‑quality, efficient service system for SMEs, and improving the institutional framework for factor support tailored to the growth of specialized, refined, distinctive, and innovative SMEs.

The National Symposium on Work Related to Small and Medium-Sized Enterprises Has Been Held.

On December 1–2, 2024, the National Symposium on Work Related to Small and Medium-Sized Enterprises was held in Shanghai.

The meeting emphasized that the national SME system must continuously refine the legal and policy framework—comprising “one law, one regulation, one standard, one plan, and a series of policy documents”—to enhance the implementation of inclusive support policies. Efforts should focus on invigorating the business environment by improving mechanisms for regular government–enterprise dialogue, conducting ongoing assessments of the business climate, and carrying out comprehensive oversight to ensure that pro‑business policies are effectively put into practice. Priority should be given to fostering innovation-driven enterprise development, strengthening the foundation for cultivating high‑quality SMEs, further elevating the “golden brand” of specialized, refined, distinctive, and innovative enterprises, promoting integrated innovation among large, medium, and small firms, guiding SMEs toward cluster‑based growth, and deepening their digital transformation. Service‑oriented support for enterprises must be reinforced by aligning service supply with demand, coordinating public and market‑based services, and ensuring that online and offline offerings complement one another, thereby raising the overall quality of assistance. Talent‑driven enterprise development should be advanced by streamlining talent‑attraction channels, intensifying efforts to nurture human capital, and creating conditions that retain and leverage skilled personnel. Finally, legal safeguards for enterprises must be strengthened by continually improving the legal framework and long‑term mechanisms for protecting SMEs’ rights and interests, thus ensuring robust protection of their legitimate rights and entitlements.

The Beijing Arbitration Commission has officially changed its name.

On December 4, the official WeChat account of the Beijing Arbitration Commission issued an announcement titled “Notice on the Renaming of the ‘Beijing Arbitration Commission/Beijing International Arbitration Center’ to the ‘Beijing Arbitration Commission/Beijing International Arbitration Court.’”

The Notice clarifies that, in response to the central government’s call to establish Beijing as an international commercial arbitration center supporting the development of an international science and technology innovation hub and an international exchange center, and to bolster the construction of such a center, the Beijing Arbitration Commission, following lawful registration amendments by the Beijing Municipal Justice Bureau, changed its name from “Beijing Arbitration Commission/Beijing International Arbitration Center” to “Beijing Arbitration Commission/Beijing International Arbitration Court” effective December 4, 2024.

Beijing plans to issue the 2024 edition of the “List of Matters in the Field of Ecological Environment for Which No Administrative Penalties Will Be Imposed.”

Recently, the Beijing Municipal Government website published an announcement soliciting public comments on the “List of Matters in the Field of Ecological Environment in Beijing Not Subject to Administrative Penalties (2024 Draft for Public Comment).” The deadline for submitting feedback is December 9.

The Checklist comprises six components: discretionary benchmark code, name of the unlawful act, legal basis for penalty, applicable conditions, administrative measures, and level of enforcement. It covers two main categories—minor violations exempt from penalty and first-time violations not subject to penalty—and introduces 15 new types of unlawful acts while revising five existing categories. Specifically, minor‑violation‑exempt cases are numbered 1 through 24, whereas first‑time‑violation‑exempt cases are numbered 25 through 50.

Beijing has unveiled seven specific measures to facilitate the implementation of urban renewal projects.

On December 4, the Beijing Municipal Government website published the “Notice on Issuing the ‘Several Measures for the Determination and Payment of Land Premiums in Urban Renewal Projects.’”

The “Several Measures” comprehensively takes into account factors such as land acquisition costs and contributions of public amenities in urban renewal projects, and proposes measures for determining and paying land fees across seven key areas: the development of affordable rental housing, the renovation of dilapidated and aging buildings, the construction of public facilities, industry‑oriented urban renewal, the development and utilization of underground space, the mixed‑use of land parcels, and the extension of land use rights.

Four departments in Shanghai have issued the “One-Stop” Implementation Plan for Enterprise Relocation Registration in Shanghai.

On December 4, the Shanghai Municipal Administration for Market Regulation published on its website the “Notice on Issuing the Implementation Plan for the ‘One-Stop’ Registration of Enterprise Relocation in Shanghai.”

The Implementation Plan sets out the following key tasks: (1) Establish a cross-departmental coordination and communication mechanism for the “one‑stop” registration of enterprise relocations. (2) Develop an online service portal dedicated to the “one‑stop” handling of enterprise relocation matters. (3) Streamline business processes and enhance the quality and efficiency of services. (4) Enhance system functionality and improve data quality. (5) Refine service measures to deliver more attentive and user‑friendly support.

Shanghai Advances the Implementation of the Quality Supervision Indicator System for Skilled Talent Assessment.

Recently, the website of the Shanghai Municipal Human Resources and Social Security Bureau issued the “Notice on Effectively Implementing the ‘Quality Supervision Indicator System for Skills Talent Evaluation.’”

The Notice clarifies the scope of entities subject to talent evaluation, encompassing both evaluation agencies and quality‑supervision authorities, and provides a detailed description of the indicator system, which comprises 12 first‑level indicators and 33 second‑level indicators. The Municipal Vocational Skills Assessment Center will revise its operational procedures in accordance with the Indicator System, streamlining processes such as the selection of evaluation agencies and the organization and implementation of assessments. Evaluation agencies are required to conduct regular self‑inspections and corrective actions, while human resources and social security departments at all levels will carry out quality oversight, clearly document oversight outcomes, and strengthen enforcement against violations. These measures aim to establish a long‑term mechanism, enhance the standardization and professionalization of evaluation work, and ensure that skills assessment activities comply with national standards.

The State-owned Assets Supervision and Administration Commission and the National Development and Reform Commission have jointly issued a document to encourage central state-owned enterprises to initiate the establishment of venture capital funds.

Recently, the State-owned Assets Supervision and Administration Commission of the State Council and the National Development and Reform Commission jointly issued policy measures to promote the high-quality development of venture capital funds among central enterprises, supporting them in initiating and establishing such funds that focus on early-stage investments, small‑scale ventures, long-term commitments, and hard‑tech sectors.

The two departments clarified that central enterprise venture capital funds shall primarily invest in technology‑driven startups and early‑stage, growth‑stage enterprises with strong hard‑tech capabilities. The funds’ maximum duration may extend up to 15 years, nearly doubling the typical term of conventional private equity funds. Furthermore, the two departments specifically addressed concerns such as state‑owned capital’s reluctance or hesitancy to invest by establishing a robust assessment framework and due‑diligence, compliance, and liability‑exemption mechanism tailored to the characteristics of state‑owned enterprises and central SOEs. Under this framework, if a project aligned with the fund’s strategic objectives and investment approach results in investment failure, falls short of expectations, or involves exploratory missteps, personnel who have acted in full compliance with laws and regulations, fulfilled their duties of loyalty and diligence, and refrained from seeking illegal gains may, in accordance with applicable rules, be exempted from accountability.

Taxation

TAXATION

Many localities have introduced regulations to continuously improve the tax-related business environment.

Recently, the Regulations on Optimizing the Business Environment of Beijing Municipality and the Regulations on Optimizing the Business Environment of Hunan Province have been promulgated one after another.

Among these measures, Beijing’s regulations stipulate that tax authorities and other relevant departments shall implement facilitative measures for the payment of taxes and fees, including: promoting the use of fiscal and tax auxiliary filing systems to provide business entities with automated data conversion services between financial statements and tax return forms; and encouraging the adoption of electronic invoices. Furthermore, enterprises expected to encounter specific, complex, and significant tax-related matters in the future may submit a tax‑service request to the tax authorities regarding the application of tax policies, and the tax authorities are required to provide a written response outlining their views on policy applicability.

According to the regulations of Hunan Province, the provincial government shall standardize investment‑attraction policies and strictly prohibit the granting of illegal or non‑compliant preferential measures in areas such as fiscal support, tax and fee reductions, and land use. People’s governments at all levels must comply with the relevant investment‑attraction policies and may not engage in cutthroat competition that disregards costs.

The State Taxation Administration plans to issue a document to standardize tax-related professional services.

The State Taxation Administration has issued the “Administrative Measures for Tax-related Professional Services (Trial) (Draft for Comments),” with a deadline for submitting feedback set for December 28, 2024.

The draft for public comment comprises six chapters and 40 articles, covering General Provisions, Scope of Administration, Administration and Services, Supervision and Inspection, Handling and Penalties, and Supplementary Provisions. Chapter Two, “Scope of Administration,” consists of four articles, specifying the scope of tax-related professional services, implementing categorized management, setting out principled requirements for professional knowledge and skills, and regulating the administrative registration of tax accounting firms, among other matters. Chapter Three, “Administration and Services,” contains 14 articles, outlining provisions on real-name registration, credit‑code management, information collection and reporting, professional conduct and record‑keeping, credit‑evaluation management, public information disclosure, and facilitative services.

Corporate Income Tax Update: The Catalogue of Encouraged Industries in the Western Region (2025 Edition) Has Been Officially Released.

The “Catalogue of Industries Encouraged in the Western Region (2025 Edition)” was publicly released on November 29, 2024, and will take effect on January 1, 2025. The “Catalogue of Industries Encouraged in the Western Region (2020 Edition)” is hereby repealed.

The “Catalogue (2025 Edition)” maintains the original structural framework and largely preserves its core content. The first section continues to reference the encouraged industries listed in the “Guidance Catalogue for Industrial Structure Adjustment” and the “Catalogue of Industries Encouraged for Foreign Investment,” while specifying that any revisions to these catalogues will be implemented according to their newly amended versions. The second section remains organized by the 12 western provinces, autonomous regions, and municipalities directly under the central government, with appropriate additions, deletions, and modifications to the existing entries in each jurisdiction. Following the revision, the total number of encouraged industries listed by province in the western region stands at 564, a net increase of 29 compared with the 2020 edition, representing a 5.4% rise. The newly added items are concentrated primarily in such sectors as specialty agriculture and animal husbandry, electronic information, advanced resource processing, and equipment manufacturing.

The “Announcement on the Extension of the Enterprise Income Tax Policy for the Western Development” stipulates that, from January 1, 2021, to December 31, 2030, enterprises engaged in encouraged industries located in the western region shall be subject to an enterprise income tax rate of 15%. An enterprise engaged in encouraged industries is defined as one whose principal business consists of projects listed in the “Catalogue of Encouraged Industries in the Western Region,” and whose revenue from such principal businesses accounts for more than 60% of its total revenue.

The Customs Law has officially come into effect, with a series of supporting policies issued in quick succession.

The Customs Law of the People’s Republic of China will officially come into force on December 1, 2024. In recent days, the Customs Tariff Commission of the State Council, the Ministry of Finance, the General Administration of Customs, and other relevant departments have issued a series of supporting documents.

The “Measures for the Collection of Customs Duties, Value-Added Tax, and Consumption Tax on Imported Articles,” promulgated by the Customs Tariff Commission of the State Council, essentially carries forward the existing tax regime for imported goods. It stipulates that imported articles intended for personal use and in reasonable quantities shall be subject to customs duties, value-added tax, and consumption tax under a simplified procedure, applying a comprehensive tax rate that remains at the current level. The Measures also revise and refine certain provisions, make minor adjustments to the classification of specific goods, and further clarify and improve procedural requirements related to itemized pricing, declaration, and tax payment.

The Ministry of Finance and the General Administration of Customs have jointly issued two documents. The “Announcement on the Exemption of Customs Duties for a Single Shipment” stipulates that customs duties will continue to be exempted for any single shipment with a duty amount of RMB 50 or less. The “Announcement on the Continued Implementation of Special Preferential Tariff Policies” clarifies that, following the entry into force of the Customs Law, the existing valid special preferential tariff policies and their related supporting documents will remain in effect.

The General Administration of Customs has also issued, in parallel, the “Announcement of the General Administration of Customs on Matters Relating to the Release of Principles for the Classification of Imported Articles and the Determination of Taxable Values,” the “Announcement of the General Administration of Customs on the Amendment and Repeal of Relevant Documents Governing the Administration of Imported Articles,” and the “Announcement of the General Administration of Customs on Clarifying Certain Issues Concerning Tax Collection and Administration.”

Litigation and Arbitration

LITIGATION & ARBITRATION

The Supreme People’s Procuratorate has issued 36 guidelines to comprehensively deepen procuratorial reform.

On December 4, the Supreme People’s Procuratorate issued the “Opinions on Comprehensively Deepening Procuratorial Reform and Further Strengthening Procuratorial Work in the New Era.”

The “Opinions” comprise 36 measures across seven areas, proposing to improve the mechanism for assessing the consistency between procuratorial policies and macroeconomic policy orientations; to rigorously prosecute, in accordance with the law, financial fraud and other crimes that undermine financial management order; to promote the refinement of mechanisms linking administrative enforcement and criminal justice in the financial and securities sectors; to crack down on illegal financial activities; to strengthen judicial efforts to combat monopoly and unfair competition; to ensure equal accountability, criminal liability, and penalties for acts that infringe upon the property rights and legitimate interests of economic entities under all forms of ownership; and to further enhance the system of judicial protection of property rights. In addition, the Opinions call for the comprehensive and accurate implementation of, and continuous improvement and refinement of, the judicial accountability system, by detailing and perfecting lists of prosecutors’ powers and duties, lists of responsibilities for procuratorial support staff, lists of cases handled by court leaders who have been granted prosecutorial status, and lists of review responsibilities for heads of business departments, while reinforcing the supervisory and managerial duties of the Procuratorial Committee, the Chief Prosecutor, and heads of business departments in judicial case handling.

First Review of the Draft Regulations on the Establishment of the Beijing International Commercial Arbitration Center

On the morning of November 28, the 13th Meeting of the Standing Committee of the 16th Beijing Municipal People’s Congress conducted its first review of the Draft Regulations on the Establishment of the Beijing International Commercial Arbitration Center.

The draft supports arbitration institutions in establishing and improving their corporate governance structures, granting them autonomy in decision-making and management over financial, personnel, and remuneration matters. It also encourages Beijing-based arbitration institutions to strengthen exchanges and collaboration, share information, and explore mechanisms such as mutually recommending overseas arbitrators, sharing courtrooms and secretarial services, and jointly cultivating talent. Furthermore, the draft encourages these institutions to formulate specialized arbitration rules for particular fields, with the aim of building branded arbitration services in areas including international trade, maritime and shipping law, construction engineering, intellectual property, data trading, and green transactions. The draft clarifies the concept of “arbitration seat” and stipulates that, for foreign-related arbitration cases where the arbitration seat is located abroad, the parties may agree on the law applicable to the arbitral proceedings. Additionally, the draft proposes that Beijing explore the application of “ad hoc arbitration” to two specific categories of cases: commercial and maritime disputes arising between enterprises within domestic free trade zones, and commercial and maritime disputes involving foreign parties occurring outside China. Moreover, aligning with the World Bank’s Doing Business assessment framework for arbitration, the draft sets forth provisions regarding arbitrator disclosure and conflict-of-interest review, judicial support for arbitral fact-finding and evidence collection, and the public disclosure of summaries of arbitral awards.