JC Master Legal News Issue 1110

The China Securities Regulatory Commission has issued the Regulatory Guidelines on Guidance for Companies Listed on the National Equities Exchange and Quotations System Applying to Issue and List on the Beijing Stock Exchange, further optimizing the guidance and regulatory framework of the Beijing Stock Exchange.

The China Securities Regulatory Commission has formulated and issued the “Guidance on the Application of Regulatory Rules—Beijing Stock Exchange Category No. 1: Regulatory Guidance on Sponsorship for Companies Listed on the National Equities Exchange and Quotations System Seeking an IPO on the Beijing Stock Exchange,” which, for the first time in the form of a guidance document on the application of regulatory rules, systematically regulates the sponsorship and supervision of companies listed on the New Third Board as they pursue an IPO on the Beijing Stock Exchange through a step-by-step, tiered pathway.

The China Securities Regulatory Commission has revised the “Guidelines for Evaluating Science and Technology Innovation Attributes (Trial).”

To implement the State Council’s “Several Opinions on Strengthening Regulation, Preventing Risks, and Promoting High-Quality Development of the Capital Market” and the “Opinions on Strictly Screening Companies for IPOs to Enhance the Quality of Listed Companies at the Source (Trial),” the China Securities Regulatory Commission has revised the “Guidelines for Evaluating Science and Technology Innovation Attributes (Trial).”

The tax payment deadline for individual income tax on equity incentives granted by listed companies has been further extended.

The Ministry of Finance has issued the “Announcement on Individual Income Tax Policies Related to Equity Incentives for Listed Companies” (Ministry of Finance and State Taxation Administration Announcement No. 2 of 2024), which will be effective from January 1, 2024, and remain in force until December 31, 2027.

The Supreme People’s Court has issued a judicial interpretation concerning the enforcement of property-related provisions in parole and sentence‑reduction cases.

On April 30, the Supreme People’s Court website published the “Provisions on the Examination of the Enforcement of Property‑Related Sentences in Cases Involving Commutation of Sentence and Parole.”

Finance and Capital Markets

FINANCE &CAPITAL MARKETS

The China Securities Regulatory Commission has issued the Regulatory Guidelines on Guidance for Companies Listed on the National Equities Exchange and Quotations System Applying to Issue and List on the Beijing Stock Exchange, further optimizing the guidance and regulatory framework of the Beijing Stock Exchange.

On September 1, 2023, the “Opinions on High-Quality Development of the Beijing Stock Exchange” (hereinafter referred to as the “Opinions”) proposed “fully leveraging the New Third Board’s advantages in ongoing supervision and its role in standardizing and nurturing companies, while optimizing the filing requirements for guidance on applications by New Third Board‑listed companies seeking to list on the Beijing Stock Exchange.” To implement these provisions, the China Securities Regulatory Commission recently formulated and issued the “Guidance on the Application of Regulatory Rules—Beijing Stock Exchange Category No. 1: Regulatory Guidance on Guidance for Companies Listed on the National Equities Exchange and Quotations System Seeking to Issue and List on the Beijing Stock Exchange” (hereinafter referred to as the “Beijing Stock Exchange Guidance”). For the first time, this document adopts the format of a regulatory‑rules‑application guideline to systematically regulate the guidance and oversight of New Third Board‑listed companies pursuing an IPO on the Beijing Stock Exchange through a stepwise, tiered pathway.

Since the Beijing Stock Exchange opened in November 2021, the public issuance of shares by listed companies to an indefinite pool of qualified investors and their subsequent listing on the BSE have been governed by the relevant requirements set forth in the “Regulations on Supervision of Guidance for Initial Public Offerings and Listings” (hereinafter referred to as the “Guidance and Supervision Regulations”). In light of the fact that, compared with traditional IPOs, small and medium-sized enterprises seeking to list on the BSE through a step-by-step, tiered approach are already subject to ongoing regulatory oversight by the China Securities Regulatory Commission (CSRC) and the National Equities Exchange and Quotations System, it is appropriate to refine and optimize the focus, procedures, and tools of guidance and supervision. To this end, the CSRC has conducted a comprehensive review and study of the guidance and supervision framework applicable to this listing pathway. While revising the “Guidance and Supervision Regulations” to eliminate the requirement of “reference-based implementation,” the CSRC has also formulated the “Beijing Stock Exchange Guidance Guidelines,” taking into account the specific characteristics of applicant companies and the strengths of the CSRC’s ongoing regulatory oversight. The “Beijing Stock Exchange Guidance Guidelines” implement the spirit of the State Council’s “Several Opinions on Strengthening Regulation, Preventing Risks, and Promoting High-Quality Development of the Capital Market” and the CSRC’s “Opinions on Strictly Controlling Entry into the Issuance and Listing Process to Enhance the Quality of Listed Companies at the Source (Trial),” among other documents. While maintaining the general applicability of the “Guidance and Supervision Regulations,” these guidelines are grounded in market realities and further elevate the institutionalization and standardization of guidance and supervision for issuances and listings on the BSE, thereby enhancing the quality of BSE‑listed companies from the outset.

The “Guidance on Sponsorship for the Beijing Stock Exchange” highlights “three key areas of reinforcement.” First, it strengthens the linkage between sponsorship supervision and ongoing regulatory oversight. By leveraging the tiered, end-to-end regulatory advantages of the New Third Board and the Beijing Stock Exchange, it establishes a mechanism for sharing regulatory information across all stages—namely, listing review, routine supervision, sponsorship supervision, and IPO review—and stipulates that the National Equities Exchange and Quotations System and the local securities regulatory bureaus must set up communication and coordination mechanisms, while also specifying detailed requirements for the exchange of regulatory information between them. At the same time, it clarifies the content requirements for sponsorship supervision reports submitted by the securities regulatory bureaus and emphasizes that the Beijing Stock Exchange should pay close attention to the contents of these reports during the review process, ensuring seamless coordination between the sponsorship phase and the registration‑review stage.

Second, we will strengthen the “gatekeeper” responsibilities of intermediary institutions. Leveraging our advantages in end-to-end regulatory oversight, we will intensify supervisory inspections of sponsoring institutions and other intermediaries, thereby ensuring that these entities fully assume their duties. At the same time, we require sponsoring institutions to verify and provide clear opinions on the status of corrective measures for issues identified during prior on-site inspections, as well as on whether any material changes have occurred between the company’s most recent on-site inspection and the completion of its guidance work, thus urging them to perform their roles diligently and responsibly.

Third, we will strengthen integrity and compliance among the “key few.” The Securities Regulatory Bureau places particular emphasis on monitoring the reputation and public image of this group and reflects such assessments in its guidance and regulatory reports. In addition, we will enhance the targeted nature of compliance‑related knowledge assessments for the “key few,” further refine the specific arrangements for securities‑market knowledge tests, and ensure that at least 20 percent of the test content is directly related to the Beijing Stock Exchange.

Meanwhile, in accordance with the principles of fairness and reasonableness and cost‑effectiveness, the “Beijing Stock Exchange Guidance on Sponsorship” has also implemented three optimizations to the exchange’s sponsorship‑related regulatory framework through a “three‑fold integration.”

First, the approach emphasizes supporting high-performing companies while restricting lower‑performing ones, integrating guidance and regulatory oversight with corporate performance to optimize the structure of the guidance period. Under the Beijing Stock Exchange’s Guidance on Corporate Guidance, a company that has been continuously listed on the New Third Board for at least twelve months as of the date of submitting the guidance‑acceptance materials—excluding re‑listed companies that had already maintained continuous listing for twelve months prior to delisting—and that, during the reporting period, has not been subject to disciplinary sanctions or any regulatory measures or administrative penalties imposed by the China Securities Regulatory Commission, may have a guidance period of less than three months.

Second, by balancing regulatory intensity with costs and integrating guidance-based supervision with on-site inspections, the approach to guidance-based supervision has been optimized. The “Beijing Stock Exchange Guidance on Supervision” stipulates that if a listed company has undergone an on-site inspection within the preceding twenty-four months, it may, in principle, be exempted from on-site visits during the guidance‑based supervision process, and materials obtained during the earlier on-site inspection may be cited in the guidance‑based supervision report.

Third, we will enhance the convenience of regulatory procedures by integrating guidance and oversight with service optimization, thereby streamlining the securities market knowledge‑testing process. To facilitate the participation of relevant personnel at companies planning to go public, the “Beijing Stock Exchange Guidance on Pre‑Listing Counseling” stipulates that the CSRC’s local bureaus may, in response to the actual needs of listed companies, organize centralized testing sessions—either on a regular or ad hoc basis—and clearly specifies the circumstances under which participants may be exempted from taking the test.

The China Securities Regulatory Commission has revised the “Guidelines for Evaluating Science and Technology Innovation Attributes (Trial).”

To implement the State Council’s “Several Opinions on Strengthening Regulation, Preventing Risks, and Promoting High-Quality Development of the Capital Market” and the “Opinions on Strictly Screening Companies for IPOs to Enhance the Quality of Listed Companies at the Source (Trial),” the China Securities Regulatory Commission has revised the “Guidance on Evaluating Science and Technology Innovation Attributes (Trial)” (hereinafter referred to as the “Guidance”), which shall take effect from the date of its promulgation.

In March 2020, the China Securities Regulatory Commission issued and implemented the Guidelines for the first time. Over the past four years, these Guidelines have played a crucial role in clarifying evaluation criteria for the science-and‑technology innovation (SciTech) attributes of market participants, upholding the positioning of the STAR Market, and highlighting its “hard‑tech” characteristics. The revised Guidelines have moderately raised the requirements for R&D investment, the number of invention patents, and the compound growth rate of operating revenue among companies seeking to list on the STAR Market, with the aim of encouraging SciTech firms to place greater emphasis on research investment and the commercialization of scientific and technological achievements, thereby further enhancing the quality of applicant companies.

Going forward, the CSRC will guide the SSE in ensuring the effective implementation of relevant rules, steadfastly upholding the STAR Market’s positioning. The STAR Market will primarily serve companies that align with national strategies, possess critical core technologies, demonstrate outstanding capabilities in scientific and technological innovation, conduct production and operations largely based on such core technologies, maintain stable business models, enjoy high market recognition, project a positive public image, and exhibit strong growth potential—thereby leveraging technological innovation to drive industrial advancement and further enhance the STAR Market’s role and effectiveness.  

China Banking and Insurance Regulatory Commission: Enhance the Effectiveness of Financial Company Supervision and Strengthen Routine Oversight Across the Board.

On April 29, the National Administration of Financial Regulation issued the “Guiding Opinions on Promoting the Standardized and Sound Development of Corporate Group Finance Companies and Enhancing Regulatory Quality and Efficiency,” which shall take effect from the date of issuance.

The Guiding Opinions call for enhancing the effectiveness of financial‑company supervision and comprehensively strengthening day‑to‑day oversight. It is essential to reinforce穿透式 (penetrative) supervision, examining both the asset and liability sides. This entails scrutinizing key indicators—such as excessive off‑group liabilities and bill‑related activities, sharp declines in member‑unit deposits, and severe mismatches between asset and liability maturities—and, where necessary, taking regulatory measures in accordance with the law, including suspending certain business lines or imposing limits on scale. Moreover, it requires looking beyond the “balance sheet” to the underlying “books,” and further penetrating these records to identify risks, thereby uncovering the business and risk dynamics behind various developments. Finally, it calls for intensifying analysis and assessment of corporate groups’ production, operations, and risk profiles, seamlessly integrating monitoring of corporate groups with oversight of their financial companies.

The Anti-Money Laundering Law is slated for revision, clarifying financial institutions’ money‑laundering risk management measures and special preventive measures.

The website of the National People’s Congress of China has published the “Anti-Money Laundering Law (Draft Amendment)” and is soliciting public comments, with the deadline for submitting feedback set for May 25.

The draft amendment comprises seven chapters and sixty-two articles, supplementing and refining relevant systems by clarifying the scope of legal application, strengthening anti‑money laundering supervision and administration, and improving provisions on anti‑money laundering obligations. It requires financial institutions to establish and effectively implement robust internal control mechanisms for anti‑money laundering; conduct customer due diligence to ascertain customers’ identities, transaction backgrounds, and risk profiles; maintain records of customer identification and transactions; and rigorously enforce the reporting regimes for large transactions and suspicious transactions. The draft also defines the scope of designated non‑financial institutions and their associated anti‑money laundering oversight, and stipulates that neither entities nor individuals may engage in money‑laundering activities or facilitate such activities, and must cooperate with financial institutions and designated non‑financial institutions in carrying out customer due diligence and other measures as prescribed by law.

The tax payment deadline for individual income tax on equity incentives granted by listed companies has been further extended.

On April 26, the Ministry of Finance website published the “Announcement on Individual Income Tax Policies Related to Equity Incentives for Listed Companies” (Ministry of Finance and State Taxation Administration Announcement No. 2 of 2024), which will be implemented from January 1, 2024, through December 31, 2027.

The Notice clarifies that, upon filing with the competent tax authority, individuals who receive stock options, restricted shares, or equity awards from domestic listed companies may pay their individual income tax within a period of no more than 36 months from the date of exercising the stock options, the lifting of restrictions on restricted shares, or the receipt of the equity award. If a taxpayer leaves the company during this period, all outstanding taxes must be paid in full prior to departure. For the purposes of this Notice, “domestic listed companies” refer to joint-stock companies whose shares are listed and traded on the Shanghai Stock Exchange, the Shenzhen Stock Exchange, or the Beijing Stock Exchange. Article 2, Paragraph (1) of CaiShui [2016] No. 101 and CaiShui [2022] No. 16 are hereby repealed simultaneously.

Former CSRC officials who take equity stakes in companies seeking to go public will face stricter oversight.

Building on the “Regulatory Guidance on the Application of Regulatory Rules—Issuance Category No. 2,” the China Securities Regulatory Commission has formulated the “Provisions on the Supervision of Former CSRC Personnel Holding Shares in Companies Seeking IPOs (Trial)” and is now soliciting public comments, with a deadline for feedback set for May 11, 2024.

The Regulations on the Supervision of Former Employees introduce three new provisions based on Guideline No. 2: First, they further strengthen the management of key personnel by extending the prohibition period for former employees in issuance‑related regulatory positions and centrally managed cadres from three to ten years after leaving their posts. Second, they broaden the scope of oversight over former employees by expanding the circle of those subject to stringent review—from the former employee themselves to include their parents, spouses, children, and their spouses. Third, they impose more rigorous verification requirements: intermediary institutions must conduct thorough due diligence on the investment background, sources of funds, fairness of pricing, and authenticity of asset disposals involving former employees, while the China Securities Regulatory Commission will conduct follow‑up reviews of such efforts.

Business and Corporations

COMMERCIAL & CORPORATE

The Ministry of State Security has, for the first time, promulgated regulations on law enforcement and case-handling procedures.

On April 26, Minister of State Security Chen Yixin signed Orders No. 3 and No. 4, promulgating the “Regulations on Administrative Law Enforcement Procedures of State Security Organs” and the “Regulations on Criminal Case Handling Procedures of State Security Organs,” which shall take effect as of July 1, 2024.

The “Regulations on Administrative Enforcement Procedures of State Security Organs” comprises 7 chapters and 140 articles, covering general provisions, preventive guidance, investigation and evidence collection, requisition and compensation, administrative penalties, time limits and service of process, and supplementary provisions. The “Regulations on Criminal Case Handling Procedures of State Security Organs” consists of 11 chapters and 360 articles, including general provisions, jurisdiction, recusal, the participation of lawyers in criminal proceedings, evidence, coercive measures, case initiation and termination, investigation, execution of penalties, special procedures, and supplementary provisions.

The State Administration for Market Regulation has revised the General Rules for the Examination of Food Business Licenses.

On April 29, the website of the State Administration for Market Regulation published the “Announcement on the Release of the General Rules for the Examination of Food Business Licenses.”

The regulation comprises six chapters and 71 articles, organized into General Provisions, General Requirements for Licensing Review, Licensing Review Requirements for Catering Services, Licensing Review Requirements for Food Sales, Licensing Review Requirements for Other Categories of Food Operations, and Supplementary Provisions. First, it implements the “four strictest” standards for food safety and imposes stringent licensing requirements in key areas. It emphasizes rigorous review criteria for canteens serving centralized meals at schools, childcare institutions, and similar facilities, setting forth provisions regarding the applicant entity, the designation of business format, the principle of hierarchical correspondence, and the establishment of a contracting‑management system. Furthermore, it tightens licensing review requirements for canteen‑contracting operations by stipulating that permits must be obtained at the location of the contracted canteen, assessing risk‑control capabilities, addressing cross‑provincial operations, and regulating personnel and internal systems. Second, in response to public expectations, the regulation streamlines licensing requirements. It clarifies that for simple food products with low food‑safety risks, review items such as equipment and facilities, as well as dedicated areas, may be appropriately simplified, with corresponding annotations on the duplicate copy of the food‑business license to specify the exact circumstances under which a dedicated room or specialized operation area is required. Third, to align with the needs of reform and development, the regulation refines licensing procedures for emerging business models. Fourth, it strengthens risk management and reinforces the implementation of principal‑responsibility obligations.

The National Medical Products Administration has issued the “Administrative Measures for Cosmetic Inspections.”

On April 29, the website of the National Medical Products Administration published the “Announcement on the Issuance of the Measures for the Administration of Cosmetic Inspections.”

The Measures comprise six chapters and forty-seven articles, specifying that cosmetic inspections are categorized into licensing inspections, routine inspections, cause‑based inspections, and other types of inspections. Among these, routine inspections shall place particular emphasis on cosmetics for children, special‑purpose cosmetics, and cosmetics containing new ingredients during their monitoring period, as well as on cosmetic registrants, filers, and contract manufacturing enterprises. The drug regulatory authorities shall adopt a problem‑oriented approach, comprehensively taking into account factors such as cosmetic registration and filing, sampling inspections, adverse reaction monitoring, risk monitoring, complaints and reports, case investigations, and public opinion monitoring, to formulate routine inspection plans and determine the scope of entities to be inspected, inspection priorities, inspection methods, and inspection requirements.

The Ministry of Finance and the Ministry of Commerce are jointly supporting the development of pilot cities for a modern commerce and distribution system.

On April 28, the Ministry of Finance’s website published the “Notice on Supporting Pilot Cities in Building a Modern Commerce and Distribution System.”

The Notice clarifies that, starting in 2024, the Ministry of Finance and the Ministry of Commerce will launch, in phases, pilot projects to develop modern commerce and circulation systems in selected cities. Eligible applicants include municipalities directly under the central government, cities separately listed for planning purposes, provincial capitals, and other prefecture-level cities; priority will be given to cities with a solid foundation, strong spillover effects, and significant potential for improvement. The pilot program is planned to be implemented in three phases from 2024 to 2026, with a three-year implementation period, and up to 20 cities are slated to receive support in 2024. In subsequent years, the scale of the pilot program will be determined based on progress, with priority accorded to eligible cities in provinces not yet covered by the policy. Support will focus on the following areas: (1) promoting integrated development of urban and rural commerce and circulation; (2) establishing a system to ensure the stable supply of essential goods; (3) improving the rural commerce and circulation network; and (4) accelerating the cultivation of leading modern distribution enterprises.

Premier Li of the State Council inspected the Beijing International Automotive Exhibition, stressing the vigorous development of intelligent, connected, and new-energy vehicles.

On April 28, Li Qiang, a member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council, conducted an inspection tour at the 2024 Beijing International Automotive Exhibition. He emphasized the need to vigorously develop intelligent, connected, and new-energy vehicles, to steadfastly use technological innovation to drive industrial advancement, to deepen and expand open cooperation, and to promote the high-end, intelligent, and green upgrading of the automotive industry.

Li Qiang emphasized that the future development of intelligent, connected, and new‑energy vehicles will require all stakeholders to leverage their respective strengths and deepen division of labor and collaboration. China will further advance the construction of a unified national market, expand high‑level opening-up, continue to ease market access, and promote trade and investment liberalization and facilitation. It will treat domestic and foreign‑invested enterprises equally, fostering broader exchanges and cooperation among Chinese and foreign automakers in areas such as capital, technology, management, and talent, thereby sharing opportunities in the Chinese market and achieving common development and mutually beneficial outcomes amid the technological revolution and industrial transformation. To better harness the automotive industry’s role in boosting investment and stimulating consumption, more high‑quality automotive products should be made accessible to households. Policies supporting vehicle purchases and usage must be effectively implemented, the charging‑infrastructure network should be accelerated, and a multi‑pronged approach adopted to optimize the consumer environment and ignite purchasing enthusiasm, thus unlocking greater potential for consumption of automobiles and other major commodities.

The State Administration for Market Regulation plans to clarify the procedures for priority review and approval of special medical purpose formula foods.

On April 29, the website of the State Administration for Market Regulation published the “Notice on Public Solicitation of Comments on the ‘Procedures for Priority Review and Approval of Registration of Foods for Special Medical Purposes (Draft for Comments)’,” with a deadline for submitting feedback set for May 30.

The “Work Procedures” stipulate that applicants seeking registration of foods for special medical purposes may apply to avail themselves of the priority review and approval procedure if any of the following circumstances apply:

(1) Special medical-purpose formula foods for rare diseases;

(2) New types of special medical-purpose formula foods that are urgently needed in clinical practice and have not yet been approved;

(3) Other circumstances for priority review and approval as prescribed by the State Administration for Market Regulation.

The Ministry of Transport has strengthened the management of qualifications for road maintenance operation entities.

On April 28, the website of the Ministry of Transport published the “Notice on Further Strengthening the Qualification Management of Highway Maintenance Operation Units.”

The Notice clarifies that, effective June 1, 2024, all provinces (autonomous regions and municipalities directly under the central government) shall, when processing enterprise qualification applications, query the national application and approval status of the applying enterprises through the ministry–province data interface, thereby preventing enterprises that have already been approved or are currently under review from submitting duplicate applications in other localities. Provincial transportation authorities shall, within three working days of issuing, renewing, amending, or revoking a qualification license, transmit the relevant information to the ministry-level system module via the ministry–province data interface.

The National Health Commission has issued two recommended health industry standards, including the “Standards for the Configuration of Medical Equipment in Operating Rooms.”

On April 28, the website of the National Health Commission published the “Notice on the Release of Two Recommended Health Industry Standards, Including the ‘Standard for the Configuration of Medical Equipment in Operating Rooms.’”

This batch of recommended health‑industry standards includes the “Standard for the Configuration of Medical Equipment in Operating Rooms” and the “Standard for the Testing and Control of Performance Technical Specifications of Continuous Renal Replacement Therapy Devices.” Among these, the “Standard for the Configuration of Medical Equipment in Operating Rooms” establishes the overarching requirements and fundamental principles for the configuration of medical equipment in operating rooms across all levels of healthcare institutions, specifying the classification, requirements, items, and quantities of such equipment. Healthcare institutions may, in light of the functional positioning of their operating rooms, surgical and anesthesia needs, and business development objectives, supplement their equipment inventory with additional appropriate items.

The Ministry of Housing and Urban–Rural Development plans to issue the mandatory national standard for engineering construction, “General Code for Special Gas and Chemical Distribution Facilities in Electronics Factories.”

On April 30, the website of the Ministry of Housing and Urban–Rural Development published the “Notice on Public Solicitation of Comments on the Mandatory National Standard for Engineering Construction, ‘General Specification for Special Gas and Chemical Distribution Facilities in Electronic Factories (Draft for Comments),’” with a deadline for submitting feedback set for May 31.

This Standard has been formulated to ensure the safety of human health and life, as well as the safety of property and the ecological environment, in the design, construction and acceptance, operation and maintenance, and decommissioning and demolition of special‑gas and chemical delivery facilities in electronic manufacturing plants, thereby meeting the fundamental requirements of economic and social management. It stipulates that the design, construction and acceptance, operation and maintenance, and decommissioning and demolition of such facilities for new, expanded, or renovated electronic manufacturing plants must comply with this Standard.

Shanghai has issued the “Key Points for Food Business Safety Supervision.”

On April 29, the Shanghai Municipal Market Supervision Administration website published the “Notice on Issuing the Key Work Points for Food Business Safety Supervision in Shanghai for 2024.”

The “Key Work Plan” calls for firmly implementing the “dual responsibility” system in the food business sector, intensifying oversight in priority areas, and launching a targeted campaign to inspect and rectify food safety on campuses. Focusing on vector‑borne disease prevention, improving canteen hygiene, standardizing the washing and disinfection of reusable tableware, and enforcing incoming‑goods inspection procedures, the plan mandates comprehensive self‑inspections and corrective actions, centralized supervisory inspections, and rigorous assessment and acceptance. It also seeks to strengthen regulation of food sales, enhance food safety information traceability, bolster emergency response capabilities and ensure food safety at major events, and overall elevate the capacity for safe supervision of food businesses.

Beijing has issued an action plan to actively promote equipment upgrades and the trade-in of used consumer goods for new ones.

On April 28, the Beijing Municipal Government website published the “Notice on Issuing the ‘Beijing Action Plan for Actively Promoting Equipment Upgrading and Consumer Goods Trade-In’.”

The Action Plan comprises six key areas and 23 specific measures, proposing to advance the digital and green upgrading of manufacturing enterprises to meet established standards. It prioritizes supporting large-scale manufacturing firms in achieving comprehensive digital and green transformation, while also fostering and upgrading a cohort of smart factories. The plan accelerates the large-scale deployment of next-generation digital infrastructure, encourages the modernization of both internal and external enterprise networks, and supports the renewal of pilot‑scale verification and testing equipment. It further promotes the safe retrofitting of aging equipment in priority industries. To stimulate automobile consumption, the plan gives priority to scrappage‑and‑renewal programs, designating new‑energy vehicles as a focal point in consumer voucher schemes and vehicle exhibition and sales events. It actively guides automakers and dealers to offer enhanced incentives for purchasing new‑energy vehicles through trade‑in subsidies and value‑added after‑sales services. Moreover, it encourages enterprises to establish integrated “one‑stop” platforms for vehicle trade‑ins—covering used‑car recycling, new‑car sales, end‑of‑life vehicle disposal, financial services, and cash‑equivalent subsidies—thereby providing consumers with a simpler, more convenient used‑car recycling experience and more affordable new‑car prices. Finally, the plan advances the development of an information‑exchange system for managing the full lifecycle of automobiles.

Seven departments have jointly issued the “Detailed Rules for Implementing the Automobile Trade-In Subsidy Program.”

To implement the requirements of Document No. 58 [2024] issued by the Ministry of Commerce, the Ministry of Commerce and six other departments recently promulgated the “Detailed Rules for the Implementation of Subsidies for Scrapping Old Vehicles and Purchasing New Ones,” which will take effect on April 24, 2024.

The Implementing Rules consist of five chapters and fifteen articles, setting forth provisions on the scope and standards of subsidies, the application, review, and disbursement processes, the management of subsidy funds, and oversight and supervision. They specify that individual consumers who scrap gasoline-powered passenger vehicles meeting Emission Standard III or lower, or newly registered new‑energy passenger vehicles, and then purchase either a new‑energy passenger vehicle listed in the “Catalogue of New‑Energy Vehicle Models Eligible for Reduction or Exemption from Vehicle Acquisition Tax” or a gasoline‑powered passenger vehicle with an engine displacement of 2.0 liters or less, will receive a one‑time fixed‑amount subsidy. Specifically, a subsidy of RMB 10,000 is granted for scrapping the aforementioned two categories of older vehicles and purchasing a new‑energy passenger vehicle; a subsidy of RMB 7,000 is provided for scrapping a gasoline‑powered passenger vehicle meeting Emission Standard III or lower and purchasing a gasoline‑powered passenger vehicle with an engine displacement of 2.0 liters or less. Local authorities are prohibited from requiring scrapped vehicles to be delivered to designated enterprises, nor may they separately establish subsidy catalogs or enterprise lists that are regionally specific or tailored to particular technologies or products.

The “Antitrust Compliance Guidelines for Operators” Are Set for Revision, with New Chapters on Compliance Management Structures and Compliance Incentives Added.

The State Administration for Market Regulation has published the “Guidance on Antitrust Compliance for Operators.”

The Guidelines further refine the scope of application, revise and enhance provisions on the fundamental concepts of compliance management, and enrich content related to building a culture of compliance. They also dedicate a separate chapter to the organizational structure for compliance management, providing guidance on the overall framework for operators’ antitrust compliance management systems, clarifying the establishment of compliance management bodies, and specifying the concrete responsibilities of entities at different levels in compliance oversight. Compliance risks and compliance risk management are consolidated into a single chapter, with added scenario‑based guidance for identifying antitrust compliance risks. The Guidelines place particular emphasis on key areas, critical processes, and priority personnel, revising and improving provisions governing compliance risk management mechanisms such as risk identification and assessment, risk alerts, and risk mitigation. New provisions have been introduced to address monopoly‑related risks arising from administrative agencies’ abuse of administrative power to exclude or restrict competition. Additionally, the Guidelines incorporate effective operational mechanisms proven in practice—such as antitrust compliance reviews, compliance consulting, oversight mechanisms, and evaluation and improvement processes—and add a dedicated chapter on compliance incentives, clearly outlining the procedures for operators seeking such incentives and the specific circumstances under which compliance incentives will be denied. Furthermore, the Guidelines include 22 illustrative examples in relevant sections, making the guidance more precise and readily understandable.

The State Council Executive Meeting reviewed and approved the Draft Regulations on Disciplinary Measures for Managers of State-Owned Enterprises.

Premier Li Qiang of the State Council presided over an executive meeting of the State Council, heard a report from the General Office of the State Council on the findings of a special inspection and research mission to optimize the business environment, and reviewed and approved the Draft Regulations on Disciplinary Measures for Managers of State-Owned Enterprises and the Decision on Adjusting and Improving the Catalogue of Industrial Product Production License Administration.

The meeting emphasized the need to focus on addressing persistent pain points and challenges in areas such as promoting fair competition, safeguarding the legitimate rights and interests of enterprises, dismantling market barriers, expanding opening-up, and improving government services, by introducing pragmatic and effective measures to deliver concrete solutions. With regard to managerial personnel in state-owned enterprises, it is essential to strengthen routine oversight, closely monitor key sectors and individuals in light of the unlawful acts stipulated in relevant regulations, zero in on issues that are prone to recurrence, and address problems at an early stage—nipping them in the bud.

The National Energy Administration plans to issue the “Rules on the Issuance and Trading of Green Certificates for Renewable Energy.”

On April 26, the website of the National Energy Administration published the “Notice on Public Solicitation of Comments on the ‘Rules for Issuance and Trading of Green Electricity Certificates for Renewable Energy (Draft for Comments)’,” with a deadline for submitting feedback set for May 25.

The Regulations comprise eight chapters and thirty-five articles, stipulating that green certificates are the sole proof of the environmental attributes of renewable energy electricity in China and the exclusive credential for verifying the production and consumption of such power. Trading entities must establish a unique, real-name‑based green certificate account within the national green certificate issuance and trading system to participate in issuance and trading activities and to record their holdings. The National Energy Administration shall issue green certificates on a monthly basis for electricity generated by renewable energy projects, steadily improving issuance efficiency. One green certificate unit corresponds to 1,000 kilowatt-hours of renewable energy electricity. In principle, green certificate issuance shall be based on data provided by grid operators and electricity trading institutions, with verification against data submitted by power generators or project owners. Green certificates may be traded separately or together with the associated renewable energy electricity, with the quantity, price, and delivery schedule of the certificates explicitly specified in the transaction contract. The organizational methods for green certificate trading include listed trading, bilateral negotiation, and centralized auction, with transaction prices determined through market‑based mechanisms.

The “China Annual Report on Combating Infringement and Counterfeit Goods (2023)” has been released.

On April 26, the website of the State Administration for Market Regulation released the “Annual Report on China’s Efforts to Combat Infringement and Counterfeit Goods (2023).”

The Report analyzes the international and domestic economic landscape for 2023 and comprehensively outlines the progress and outcomes of China’s efforts to combat intellectual property infringement and counterfeit goods in 2023, covering seven key areas: top-level design, legislation and regulations, administrative law enforcement, judicial protection, regulatory services, public awareness and guidance, and international cooperation.

Two departments have issued the “Key Work Priorities for the Digital Economy in 2024.”

Recently, the General Office of the National Development and Reform Commission and the Comprehensive Department of the National Data Administration issued the “Key Work Priorities for the Digital Economy in 2024,” outlining the main tasks for advancing the digital economy in 2024.

The “Key Work Plan” outlines nine areas of implementation: First, proactively and appropriately advance the deployment of digital infrastructure, deepen the development of information and communication networks, accelerate the construction of a nationwide integrated computing power network, and comprehensively develop data infrastructure. Second, expedite the establishment of a foundational data system, implement the “Twenty Measures on Data,” and intensify efforts to develop and open up public data. Third, vigorously promote the digital transformation of industries, deepen the intelligent upgrading, digital transformation, and networking of manufacturing, and robustly advance digitalization in key sectors. Fourth, accelerate breakthroughs in digital innovation, strengthen independent research and development of critical core technologies, enhance the competitiveness of core industries, foster new business forms and models, and build digital industry clusters. Fifth, continuously improve the quality of public services. Sixth, refine the governance framework for the digital economy, bolster digital governance capabilities, safeguard the rights and interests of workers in new employment forms, and advance the creation of a new model of multi‑stakeholder co‑governance. Seventh, comprehensively fortify the digital security perimeter, enhance cybersecurity defenses, improve the data security governance system, and effectively mitigate all types of risks. Eighth, actively expand international cooperation in the digital economy and accelerate the digitalization of trade. Ninth, strengthen cross‑departmental coordination and collaboration, reinforce mechanisms for overall planning and alignment, increase policy support, and enhance statistical monitoring of the digital economy.

The Ministry of Transport has announced the second batch of pilot projects for intelligent transportation applications in the fields of autonomous driving and smart construction.

The website of the Ministry of Transport has published the “Notice on the Announcement of the Second Batch of Pilot Projects for Intelligent Transportation Applications (in the Areas of Autonomous Driving and Intelligent Construction).”

The Notice specifies that the second batch of pilot projects for intelligent transportation applications comprises a total of 32 initiatives, including pilot programs such as autonomous driving applications for highway freight and urban mobility services in Ordos City, cross-border road freight autonomous driving in Heihe, urban mobility and logistics services in Shanghai’s Lingang area, safety inspection operations and campus‑area transport services at Urumqi International Airport, and intelligent construction of tunnels on the Yilongqing Expressway in Zhejiang Province.

Four departments have launched the 2024 unannounced inspections of medical security funds.

On April 28, the National Healthcare Security Administration’s website published the “Notice on Conducting Unannounced Inspections of the Medical Insurance Fund in 2024.”

The Notice specifies that each province shall designate two cities as inspection targets: first, the provincial capital; and second, one additional prefecture-level city randomly selected from within the province. Direct-administered municipalities shall serve directly as inspection cities. The institutions subject to inspection include designated medical institutions and designated retail pharmacies. In addition, five provinces will be randomly selected for follow-up national spot inspections. These inspections will focus on the use and management of medical insurance funds, as well as the establishment and implementation of relevant internal control systems, during the period from January 1, 2022, to December 31, 2023; where necessary, retrospective reviews may extend to earlier years or be further extended into 2024.

The State Tobacco Monopoly Administration plans to issue the “Detailed Rules for the Logistics Management of Electronic Cigarettes.”

The website of the State Tobacco Monopoly Administration has published the “Notice on Public Solicitation of Comments on the ‘Detailed Rules for the Logistics Management of Electronic Cigarettes (Draft for Comments)’,” with a deadline for submitting feedback set for May 8.

The Detailed Rules comprise six chapters and 32 articles. The main revisions include: first, refining certain definitions—for example, adding Article 28 to define enterprises engaged in the sale of nicotine raw materials for e‑cigarettes and clarifying the scope of their licensing; second, amending provisions on the issuance of logistics documents—such as revising Article 6 to change the method of issuing such documents from enterprise‑generated to platform‑generated; and third, introducing new regulatory requirements—such as adding Article 17, which stipulates that, during domestic transportation, e‑cigarette manufacturers and related service providers shall not illegally sell e‑cigarette products, e‑liquids, or nicotine intended for use in e‑cigarettes for export.

The State Tobacco Monopoly Administration plans to issue the “Detailed Rules for the Administration of E-cigarette Transactions.”

The website of the State Tobacco Monopoly Administration has published the “Notice on Public Solicitation of Comments on the ‘Detailed Rules for the Administration of E-Cigarette Transactions (Draft for Comments)’,” with the deadline for submitting feedback set for May 8.

The Detailed Rules are divided into six chapters comprising a total of 30 articles. The main revisions include: first, clarifying the entities involved in various types of e‑cigarette transactions—for example, Article 28 introduces a definition of e‑cigarette import and operating enterprises and specifies their scope of licensing; second, refining the specifics of overall quantity management—such as enriching and improving the content of Article 18 on overall quantity control and simplifying the description of quantity‑management requirements for different product categories; third, standardizing the use of specialized terms and standardized nomenclature—for instance, Article 5 adopts the uniform designation “e‑cigarette nicotine raw material sales enterprise”; fourth, adding new regulatory requirements—such as Article 19, which sets forth filing obligations for marketing activities conducted by manufacturing enterprises; and fifth, removing technical provisions unrelated to transaction management—for example, deleting Article 10’s provision on the platform’s automatic recording, statistical reporting, and analysis of transaction prices.

Seven departments: Further strengthen the development of green mines.

On April 16, seven departments, including the Ministry of Natural Resources and the Ministry of Ecology and Environment, jointly issued the “Notice on Further Strengthening Green Mine Construction.”

The Notice calls for accelerating the adoption of advanced, green, and low‑carbon technologies. Mining enterprises are urged to upgrade and transform their technologies, processes, and equipment to enhance sustainability, encouraging the use of cutting‑edge solutions in resource extraction, comprehensive utilization, energy conservation and emissions reduction, and ecological restoration, thereby driving a green and low‑carbon transition. Furthermore, efforts should be stepped up to integrate information technologies such as 5G, big data, the Internet, and artificial intelligence, fostering the digital, intelligent, and green development of mining operations and improving the efficiency of resource exploration, development, and production management.

The State Tobacco Monopoly Administration plans to issue the “Detailed Rules for the Management of Fixed-Asset Investment in Electronic Cigarettes.”

On April 25, the website of the State Tobacco Monopoly Administration published the “Notice on Public Solicitation of Comments on the ‘Detailed Rules for the Management of Fixed-Asset Investment in Electronic Cigarettes (Draft for Comments)’,” with a deadline for submitting feedback set for May 8.

The Detailed Rules comprise four chapters and twenty-two articles, primarily aligning with the relevant requirements of the “Catalog (2024 Edition)” and, in light of the actual operations of the e‑cigarette industry, refining and improving the scope of approval for fixed‑asset investment in the e‑cigarette sector as well as the associated regulatory measures.

Beijing has issued the “Implementation Plan for Building Computing Power Infrastructure.”

The Beijing Municipal Government website has published the “Notice on Issuing the Implementation Plan for the Construction of Computing Power Infrastructure in Beijing (2024–2027).”

The Implementation Plan outlines the following key tasks: (1) advancing independent innovation in the computing power industry; (2) establishing an efficient computing‑power supply system; (3) promoting integrated development of computing power across Beijing, Tianjin, Hebei, and Inner Mongolia; (4) enhancing the green and low‑carbon performance of intelligent computing centers; (5) deepening the application of computing power to drive industry‑specific solutions; and (6) ensuring the secure and stable operation of computing‑power infrastructure. A coordination mechanism will be established to align energy quotas and green electricity supply in support of intelligent computing center construction. Enterprises that procure domestically developed, independently controllable GPU chips to deliver intelligent computing services will receive subsidies equivalent to a specified percentage of their investment. Additionally, existing data centers that proactively undertake green and energy‑efficient upgrades will be eligible for subsidies corresponding to a certain proportion of their investment.

Proposed amendment to the Statistics Law raises the maximum fine for enterprises and public institutions that submit statistical data late to RMB 100,000.

The website of the National People’s Congress of China has published the “Statistical Law (Draft Amendment)” and is soliciting public comments, with the deadline for submitting feedback set for May 25.

The draft amendment proposes fourteen revisions to the existing law, emphasizing that heads of local governments at all levels, statistical agencies of governments at or above the county level, relevant departments, and all organizations shall not require, imply, or induce subordinate units or statistical survey respondents to submit false statistical data. It also stipulates that, in accordance with relevant state regulations, a sound accountability system for preventing and punishing statistical fraud and falsification must be established and improved. Furthermore, the draft amendment seeks to bring work secrets and personal privacy within the scope of regulatory measures addressing related acts of disclosure. In addition, the draft specifically raises the maximum fine for enterprises and public institutions that submit statistical data late or fail to maintain original records and statistical ledgers from RMB 10,000 to RMB 100,000.

Taxation

TAXATION

The Party Committee of the Certified Tax Agent Industry in China convened a meeting on the tax agent industry. Party Building Work Conference and Mobilization and Deployment Meeting for Party Discipline Study and Education

On April 28, the Party Committee of the Chinese Certified Tax Agent Industry convened a meeting on Party building in the tax agent sector and a mobilization and deployment conference for disciplinary education. Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the meeting conveyed and implemented the work arrangements of the Central Organization Department, the Central Social Work Department, and the United Front Work Department, as well as the requirements of the Party Committee of the State Taxation Administration. It also made arrangements for disciplinary education within the tax agent industry and outlined key tasks for 2024. Rao Lixin, Member of the Party Committee and Deputy Director of the State Taxation Administration, and Secretary of the Party Committee of the Chinese Certified Tax Agent Industry, attended the meeting and delivered a speech.

At the meeting, eight provincial-level industry Party secretaries from Tianjin, Inner Mongolia, Shanghai, Jiangsu, Fujian, Hubei, Guangdong, and Sichuan delivered reports on their work, which were individually commented on by Rao Lixin.

The meeting noted that launching Party‑discipline study and education across the entire Party is a major decision and deployment made by the CPC Central Committee with Comrade Xi Jinping at its core. Party organizations at all levels in the tax‑advisor profession must, in accordance with the CPC Central Committee’s unified arrangements for this initiative and the specific requirements of the Party Leadership Group of the State Taxation Administration, elevate their political awareness and fully appreciate the profound significance of carrying out this work. They should strive to study thoroughly and gain deep understanding, accurately grasp the guiding principles and relevant provisions of the Regulations on Disciplinary Actions of the Communist Party of China, and internalize compliance with rules and discipline as both a conscious mindset and a conscious course of action. Moreover, they must adopt a holistic and balanced approach, tailored to the realities of the tax‑advisor sector, employing diverse methods such as instructional lectures, case‑based explanations, disciplinary interpretations through cases, and study‑exchange activities, to help practitioners strengthen their awareness of laws and discipline and ensure that the Party‑discipline study and education is conducted in a solid and effective manner.

The meeting emphasized that, in 2024, Party organizations at all levels within China’s certified tax agent profession must adhere to Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the spirit of the 20th National Congress of the Communist Party of China, and take the Party’s political development as the overarching principle. They should further enhance the role of the industry’s Party Committee, strengthen grassroots Party organization building, deepen united front work within the sector, reinforce professional practice oversight, and promote high-quality development of the industry, thereby contributing to advancing the tax‑related aspects of Chinese‑style modernization.

The meeting was held via video conference, chaired by Zheng Jiangping, Deputy Secretary of the Party Committee of the Chinese Certified Tax Agents Industry and Vice President and Secretary-General of the China Association of Certified Tax Agents. Leaders of the industry’s Party Committee, leaders of the China Association of Certified Tax Agents, and heads of relevant departments attended the meeting at the main venue. Leaders of provincial-level industry Party Committees and associations, along with heads of pertinent departments, participated from their respective sub-venues.

China has released the 14th list of tariff exclusions for goods subject to additional U.S. tariffs.

On April 29, the Ministry of Finance website published the “Announcement of the Customs Tariff Commission of the State Council on the Fourteenth List of Exclusions and Extensions for Additional Tariffs on U.S. Goods.”

The Notice clarifies that the Customs Tariff Commission of the State Council has published the 14th list of exclusions from additional tariffs on U.S. goods, extending the exclusion period for the relevant products listed in Tariff Commission Announcement No. 7 of 2023. From May 1, 2024, to November 30, 2024, the additional tariffs imposed by China in response to the U.S. Section 301 measures will remain suspended.

Hainan: Leveraging policies such as VAT rebates for international shipping vessels to foster core maritime enterprises.

On April 28, the website of the Hainan Provincial People’s Government released the “Implementation Measures for Accelerating the Integrated Development of Domestic and Foreign Trade in Hainan Province,” outlining 19 measures across six key areas to help market entities more easily integrate into both domestic and international markets.

The Measures propose guiding capable enterprises to establish overseas warehouses and enhancing their digitalization and intelligentization. Leveraging the ship registration system for vessels flying the “China Yangpu Port” flag, along with policies such as VAT rebates for international shipping vessels, the Measures aim to foster core maritime transport enterprises. Additionally, the Measures call for cultivating integrated domestic‑and‑foreign‑trade enterprises by launching initiatives to identify and nurture leading firms in this field, amplifying the impact of the policy that exempts processed, value‑added goods destined for domestic sale from customs duties, and gradually strengthening a cohort of such leading enterprises in sectors including tropical high‑efficiency agriculture, marine fisheries, and health‑food processing.

Litigation and Arbitration

LITIGATION & ARBITRATION

The Supreme People’s Court has issued a judicial interpretation concerning the enforcement of property-related provisions in parole and sentence‑reduction cases.

On April 30, the Supreme People’s Court website published the “Provisions on the Examination of the Enforcement of Property‑Related Sentences in Cases Involving Commutation of Sentence and Parole.”

The Regulations comprise fifteen articles and stipulate that the enforcement of property‑related judgments is a key factor in assessing whether an offender has genuinely demonstrated remorse when considering commutation or parole. The Regulations standardize the relevant rules, requiring that offenders who have the capacity to perform must first fulfill their obligations before being granted commutation or parole. They further provide that, following a court’s decision to grant commutation or parole, if it is subsequently discovered that the offender made false declarations or deliberately concealed assets—where the circumstances are serious—the commutation or parole shall be revoked. In response to the difficulty of determining an offender’s ability to perform, the Regulations propose a tiered assessment model based on the court’s enforcement records, supplemented by the offender’s asset‑declaration information, actual possession of assets, and consumption patterns during incarceration. The Regulations also explicitly enumerate situations where an offender demonstrably has the capacity to perform but fails to do so, and establish criteria for determining a lack of such capacity through a combination of positive evidence and a negative list.

The Supreme People’s Procuratorate has issued typical cases of procuratorial organs lawfully safeguarding the legitimate rights and interests of workers.

On April 30, the Supreme People’s Procuratorate website published the “Notice on Issuing the ‘Typical Cases of Procuratorial Organs Lawfully Safeguarding the Legitimate Rights and Interests of Workers.’”

This batch of typical cases comprises eight matters, covering the legal supervision functions of the “Four Major Prosecutorial Areas.” The Supreme People’s Procuratorate stated that the issues revealed in labor dispute cases are primarily concentrated in the following areas: First, employers fail to adequately implement systems for safeguarding workers’ rights and interests, leading to a high incidence of labor-related conflicts and disputes. Disputes concerning confirmation of employment relationships, recovery of wages, payment of economic compensation, and social insurance account for 73.5% of all cases. Employers exhibit varying degrees of shortcomings in areas such as workforce management, wage disbursement, social insurance contributions, protection of women’s rights during pregnancy, childbirth, and lactation, and recognition of occupational injuries. Second, wage arrears affecting rural migrant workers occur from time to time, with particularly notable deficiencies in the effective implementation of labor oversight measures. Third, workers in new‑type employment sectors frequently encounter disputes with platform enterprises over issues such as confirmation of employment relationships, workers’ compensation, and medical benefits. Consequently, further standardization is needed in areas such as employment practices in emerging industries and social security coverage for non‑standard‑employment workers.

The Supreme People’s Court has released typical cases of labor disputes.

On April 30, the Supreme People’s Court website published a batch of typical labor dispute cases.

This batch of typical cases comprises six matters. In a dispute over non‑compete restrictions between a certain company and Li, the company had stipulated a non‑compete clause with its ordinary employee, Li. After Li joined a new employer, the company sought to impose liquidated damages on him. The people’s court held, in accordance with the law, that the company information Li accessed in the course of his daily work did not constitute core business information, nor did Li fall within the category of other persons bound by confidentiality obligations. This ruling effectively safeguards workers’ right to freely choose their employment and promotes the orderly social mobility and rational allocation of human resources.