JC Master Legal News Issue 815

Key Takeaways for This Issue
The Internet Finance Task Force has issued the document “Notice on Intensifying Rectification Efforts for Asset Management Activities Conducted via the Internet and on Carrying Out Acceptance Inspections.”
Recently, the Office of the Leading Group for the Special Rectification of Internet Finance Risks issued a document titled “Notice on Intensifying Rectification Efforts and Conducting Acceptance Inspections for Asset Management Activities Conducted via the Internet,” which specifically addresses the acceptance and disposition of rectification measures for asset management activities carried out online. The document explicitly states that internet-based asset management is a licensed business, and that the essence of conducting asset management activities over the internet remains asset management.
Two departments have jointly issued the “Administrative Measures for the Pilot Issuance of Special Bonds by Local Governments for Slum Renovation.”
Recently, the Ministry of Finance and the Ministry of Housing and Urban–Rural Development jointly issued the “Administrative Measures for the Pilot Issuance of Special Bonds by Local Governments for Slum Renovation,” aiming to establish a system that links these special bonds to project assets and revenues, thereby leveraging the government’s role in responsibly and appropriately borrowing to improve housing conditions for the public. The Measures stipulate that provincial-level governments serve as the issuers of slum‑renovation special bonds; with the approval of the provincial government, cities under separate planning may also issue such bonds on their own.
Two departments have issued the “Notice on Adjusting the Value-Added Tax Rates.”
Recently, the Ministry of Finance and the State Taxation Administration jointly issued the “Notice on Adjusting Value-Added Tax Rates,” which stipulates that for taxpayers engaging in VAT‑liable sales activities or importing goods, the tax rates previously applicable at 17% and 11% will be adjusted to 16% and 10%, respectively. For taxpayers purchasing agricultural products, the deduction rate previously set at 11% will be lowered to 10%. Furthermore, when taxpayers purchase agricultural products used in the production and sale of, or commissioned processing of, goods subject to a 16% VAT rate, the input tax credit shall be calculated using a deduction rate of 12%.
Xintai Electric’s appeal against the CSRC’s administrative penalty was dismissed at the final instance.
Recently, the Beijing Higher People’s Court issued its final judgment in the case of Xintai Electric’s appeal against the China Securities Regulatory Commission’s administrative penalty. The court found Xintai Electric’s grounds for appeal to be unfounded and dismissed the appeal, upholding the first-instance ruling.
The Customs Tariff Commission of the State Council has issued an announcement imposing additional tariffs on certain imported goods originating in the United States.
Recently, the Customs Tariff Commission of the State Council issued an announcement imposing additional tariffs on certain imported goods originating in the United States, deciding to levy a 25% tariff on 106 items across 14 categories, including U.S.-origin soybeans, automobiles, and chemical products. The date of implementation will be announced separately by the Customs Tariff Commission of the State Council, contingent upon the U.S. government’s application of additional tariffs on Chinese goods.

Table of Contents
Table of Contents

Finance & Capital Markets
The Internet Finance Task Force has issued the document “Notice on Intensifying Rectification Efforts for Asset Management Activities Conducted via the Internet and on Carrying Out Acceptance Inspections.”
The Shanghai and Shenzhen Stock Exchanges have launched a public consultation on the Guidelines for Information Disclosure Regarding High-Ratio Stock Dividends and Share Transfers by Listed Companies.
The Shenzhen Stock Exchange has launched the signing process for the new version of the Securities Listing Agreement.
The China Banking and Insurance Regulatory Commission was officially inaugurated.

Corporate & Commercial
Two departments jointly issued the “Administrative Measures for the Pilot Issuance of Special Bonds by Local Governments for Slum Renovation.”
The General Office of the State Council has issued the “Opinions on Reforming and Improving Policies for Ensuring the Supply and Use of Generic Drugs.”
Twenty-four departments recently jointly signed the Memorandum on Joint Punitive Measures Against Seriously Dishonest Entities in the Field of Public Resource Transactions.
The State Council Executive Meeting decided to further reduce business-related fees and lower costs for the real economy, among other measures.

Taxation
Two departments have issued the “Notice on Adjusting the Value-Added Tax Rates.”
Two departments have issued the “Notice on Unifying the Threshold for Small-Scale VAT Taxpayers.”

Litigation & Arbitration
Xintai Electric’s appeal against the CSRC’s administrative penalty was dismissed at the final instance.
The Ministry of Civil Affairs and the Supreme People’s Court have established a mechanism for sharing marital information among parties involved.

Other
The Customs Tariff Commission of the State Council has issued an announcement imposing additional tariffs on certain imported goods originating in the United States.
Trump calls for consideration of “additional” $100 billion in tariffs.

Finance & Capital Markets
The Internet Finance Task Force has issued the document “Notice on Intensifying Rectification Efforts for Asset Management Activities Conducted via the Internet and on Carrying Out Acceptance Inspections.”
Recently, the Office of the Leading Group for the Special Rectification of Internet Finance Risks issued the document “Notice on Intensifying Rectification Efforts and Conducting Acceptance Inspections for Asset Management Activities Conducted via the Internet” (Document No. [2018] 29 of the Rectification Office), which specifically addresses the acceptance and disposition of rectification efforts related to asset management activities carried out online. The document explicitly states that internet-based asset management is a licensed business, and that the essence of conducting asset management activities over the internet remains asset management.
This document primarily addresses two key areas: First, it clarifies the nature of internet‑based asset management activities and defines the scope of asset management categories, categorizing “traffic generation” as a form of “disguised distribution.” The document’s language is relatively precise, facilitating self‑inspection and corrective measures by internet‑based asset management institutions. Second, it outlines the procedures for rectifying and verifying non‑compliant internet‑based asset management activities, setting deadlines for addressing the issuance and sale of asset management products via the internet, and specifying the acceptance process and tiered handling approaches for such rectification efforts. Additionally, it sets forth other relevant requirements for mitigating risks associated with internet‑based asset management, thereby supporting the steady progress of remediation and verification work by these institutions.

The Shanghai and Shenzhen Stock Exchanges have launched a public consultation on the Guidelines for Information Disclosure Regarding High-Ratio Stock Dividends and Share Transfers by Listed Companies.
Recently, the Shanghai and Shenzhen stock exchanges have issued draft guidelines on information disclosure for listed companies’ high‑ratio stock dividends and share transfers, inviting public comments. Under the guidelines, the scale of such distributions is linked to a company’s financial performance, and “carrying‑the‑palanquin” style share reductions are subject to restrictions. A senior official from the relevant department of the Shanghai Stock Exchange stated that the release of these guidelines underscores the securities regulator’s determination to comprehensively address the market disorder caused by high‑ratio stock dividends and transfers, and that it is of great significance in guiding listed companies to focus on their core businesses and in steering the market back toward value‑based principles.
“The guiding principles behind this release are crystal clear: to further tighten regulatory oversight, curb companies’ misuse of high‑ratio stock dividends and share transfers for improper market‑capitalization management, and safeguard small and medium investors from being exploited,” said the official. “At its core, the goal is to serve the real economy, encourage listed companies to focus on their core businesses, guide them in adopting appropriate investor‑return strategies, attract investors through strong performance, foster a healthy culture of value investing, and continuously improve the market environment.”
In terms of specific institutional design, the guidelines have introduced targeted measures. On the one hand, they link high‑ratio stock dividends and share transfers to the company’s earnings growth; on the other hand, they stipulate that, for a specified period before and after significant shareholders reduce their holdings or when their restricted shares become eligible for trading, the company may not disclose any plans for high‑ratio stock dividends or share transfers. Through these arrangements, the regulatory framework severs the profit‑driven nexus between such actions and secondary‑market behavior, closes loopholes that allow improper market‑capitalization management via high‑ratio stock dividends and transfers, and ensures that listed companies’ equity‑related adjustments return to their fundamental purpose—accurately reflecting the company’s operating performance and its legitimate need for capital expansion.

The Shenzhen Stock Exchange has launched the signing process for the new version of the Securities Listing Agreement.
On March 29, the Shenzhen Stock Exchange held a signing ceremony for the “Securities Listing Agreement (2018 Revision),” officially launching the process of adopting the new version of the agreement. This move represents another significant step by the Shenzhen Stock Exchange to implement the newly revised “Administrative Measures for Stock Exchanges” (hereinafter referred to as the “Measures”), address institutional gaps, and strengthen comprehensive, law-based, and stringent regulatory oversight.
This revision follows the fundamental principle of “adapting to new requirements and addressing longstanding issues,” comprehensively optimizing the previous version of the agreement. The revised text is more comprehensive in content and more systematically organized, with the following three main aspects:
First, implement the new requirements of the Administrative Measures and strengthen frontline regulatory functions. First, diversify regulatory tools by explicitly authorizing stock exchanges to conduct on-site inspections of listed companies and specifying the methods and measures for such inspections. Furthermore, when a listed company violates relevant rules or agreements, in addition to issuing public notices of criticism or public censure, the Shenzhen Stock Exchange may, in accordance with regulations, adopt disciplinary measures such as issuing supervisory recommendation letters to the competent authorities and imposing punitive liquidated damages. Second, clarify the exchange’s key powers, including the authority to impose trading suspensions and resumptions, issue risk warnings, and make decisions to suspend, resume, or terminate listing, thereby ensuring full coverage of the regulatory chain. Third, reinforce the regulatory framework for information disclosure and compliant operations by stipulating that listed companies must act with honesty and integrity, operate in compliance with applicable rules, and fulfill their obligations regarding information disclosure and other related duties as prescribed. Listed companies bear primary responsibility for information disclosure and must ensure that the content disclosed is true, accurate, complete, timely, and fair.
Second, the agreement embodies the spirit of contract and underscores the exchange’s self-regulatory nature. First, it clearly defines the exchange’s obligations and service functions. The Shenzhen Stock Exchange and listed companies jointly comply with relevant laws, regulations, and business rules, and perform their duties in accordance with the law. In addition to exercising self‑regulatory oversight, the Exchange provides facilities, advisory services, training, and other conveniences for activities such as the issuance, listing, trading, suspension, and resumption of securities; as well as corporate information disclosure, mergers and acquisitions, and restructuring. Second, it establishes an internal redress mechanism to enhance the fairness and transparency of self‑regulatory supervision. The agreement stipulates that the Shenzhen Stock Exchange shall institute an internal redress system for self‑regulatory decisions, safeguarding listed companies’ rights to request hearings and reviews of significant self‑regulatory rulings issued by the Exchange. Furthermore, to further streamline internal redress channels, optimize implementation procedures, and strengthen protection for listed companies and other stakeholders, the Exchange has revised the “Rules on Hearing Procedures” and the “Detailed Rules of Procedure for the Appeals and Review Committee,” which are scheduled for public release in the near future. Third, the dispute‑resolution provisions have been adjusted to grant listed companies a degree of choice. Whereas the original listing agreement mandated arbitration, this revision offers both litigation before a competent court and arbitration as alternative options, enabling listed companies to independently select their preferred method of resolving disputes.
Third, enhance the flexibility and resilience of the agreement. First, it embodies the principle of “principle‑based regulation.” To effectively manage market risks, the agreement explicitly grants the SZSE the authority to impose self‑regulatory measures on listed companies in response to regulatory needs—such as safeguarding the public interest, maintaining market order, and protecting the legitimate rights and interests of investors. Second, it streamlines the provisions governing listing fees. In principle, listed companies are required to pay the applicable listing fees in full and promptly upon receipt of the relevant notice, in accordance with the fee schedule set out in the annex to the agreement. This arrangement facilitates the SZSE’s ability to adjust fee levels or methods in light of market developments, while also leaving room for further refinement of categorized regulatory approaches. Third, it simplifies the provisions relating to the transfer of delisted shares. The agreement stipulates in principle that, following a stock’s removal from trading, such shares must be transferred through the designated venues as prescribed, and clarifies that this provision remains effective even after the agreement is terminated.

The China Banking and Insurance Regulatory Commission was officially inaugurated.
On April 8, 2018, the China Banking and Insurance Regulatory Commission held its unveiling ceremony. Liu He, a member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, attended the ceremony and emphasized the need to fully recognize the importance and urgency of reforming the financial regulatory system, officely uphold the “Four Consciousnesses,” and earnestly strengthen the “Four Confidences.” He called for aligning thoughts and actions with the CPC Central Committee’s decisions and arrangements on deepening the reform of Party and state institutions, conscientiously fulfilling all duties entrusted by the central authorities, and living up to the high expectations of the CPC Central Committee and General Secretary Xi Jinping.
Liu He pointed out that the reform of the financial regulatory system is an essential component of the broader institutional reform. The reform plan represents a strategic, top-down design formulated by the Party Central Committee with Comrade Xi Jinping at its core, which has taken into account the overall landscape of economic and financial affairs. It was carefully deliberated and prudently decided upon by the central authorities, and it bears significant importance and far-reaching implications for addressing overlaps and gaps in financial regulation, gradually establishing a modern financial regulatory framework, and winning the tough battle to prevent and defuse financial risks.

Commercial & Corporate
Two departments have jointly issued the “Administrative Measures for the Pilot Issuance of Special Bonds by Local Governments for Slum Renovation.”
Recently, the Ministry of Finance and the Ministry of Housing and Urban–Rural Development jointly issued the “Administrative Measures for the Pilot Issuance of Special Bonds by Local Governments for Slum Renovation,” aimed at improving the management of local government special bonds, standardizing financing for slum renovation projects, and officely curbing the growth of local governments’ hidden debt. In 2018, a pilot program was launched in the field of slum renovation to steadily advance the issuance of these special bonds, while exploring the establishment of a mechanism that links such bonds to the assets and revenues generated by specific projects, thereby leveraging the positive role of government‑led, appropriately scaled borrowing in enhancing housing conditions for the public.
The Measures stipulate that provincial-level governments serve as the issuers of special-purpose bonds for shantytown redevelopment. With approval from the provincial government, cities under separate planning may also issue such bonds on their own. Funds raised through these bonds shall be incorporated by the fiscal authorities into the government fund budget and earmarked by the local shantytown redevelopment authorities exclusively for shantytown renovation projects; they are strictly prohibited from being used for any purposes other than shantytown redevelopment. No entity or individual may withhold, divert, or misappropriate these funds, nor may they be allocated to recurrent expenditures. With regard to the management of the special‑purpose bond quota for shantytown redevelopment, the Measures provide that, within the annual limit on local government special‑purpose debt approved by the State Council, the Ministry of Finance shall determine the national annual total quota for such bonds based on factors including local financing needs for shantytown renovation, as well as the revenue generated from the transfer of state‑owned land use rights and other designated revenues that are managed under the government fund budget.
The issuance of special-purpose bonds for shantytown redevelopment shall disclose information including the project overview, projected revenues and financing‑balance plan, third‑party assessment reports, the size and tenor of the bonds, the annual investment schedule, and arrangements for principal and interest repayment. During project implementation, the competent authority responsible for shantytown redevelopment shall, in light of actual conditions, promptly disclose updates on project progress and the utilization of funds from the special‑purpose bonds.
The Measures stipulate that special-purpose bonds for shantytown redevelopment shall be issued through market‑based mechanisms in accordance with the principles of openness, fairness, and impartiality, and shall be traded and circulated on venues such as the interbank bond market and stock exchanges. The tenor of these bonds shall be aligned with the timelines for expropriation, relocation, land acquisition, and land transfer associated with shantytown redevelopment projects, with a maximum term of 15 years in principle; this may be appropriately extended based on the actual needs of the project to mitigate maturity mismatch risks. Local governments at all levels and their departments are prohibited from incurring debt by any means other than issuing local government bonds, and, except as otherwise provided by law, they may not provide guarantees of any kind for the debts of any entity or individual.

The General Office of the State Council has issued the “Opinions on Reforming and Improving Policies for Ensuring the Supply and Use of Generic Drugs.”
Recently, the General Office of the State Council issued the “Opinions on Reforming and Improving Policies for Ensuring the Supply and Use of Generic Drugs” (hereinafter referred to as the “Opinions”). The Opinions propose promoting generic drug research and development, with a particular focus on addressing the shortage of high-quality generic medicines. Specifically: first, regularly formulate and publish a catalog of drugs encouraged for generic production, guiding enterprises in R&D, registration, and manufacturing; second, strengthen technological breakthroughs in generic drug development by including research on key common technologies for encouraging generic drug production in relevant national science and technology programs; and third, study and refine a pharmaceutical intellectual property protection system that is aligned with China’s level of economic and social development and the current stage of industrial development, thereby striking an appropriate balance between the interests of patent holders and the public.
The “Opinions” emphasize a problem‑oriented approach to enhancing the quality and efficacy of generic drugs. First, accelerate the evaluation of generic drug quality and therapeutic equivalence, and refine and implement policies and measures that encourage enterprises to conduct such evaluations. Second, improve the quality of pharmaceutical excipients, raw materials, and packaging materials; advance the development and revision of relevant standards; strengthen research and development; and achieve breakthroughs in key technologies such as purification and quality control. Third, raise manufacturing process standards and address bottlenecks that constrain product quality. Fourth, deepen reforms of the drug review and approval system and streamline review and approval procedures. Refine registration application criteria to enhance the safety and quality of generic drugs and improve the efficiency of market‑entry review and approval. Fifth, strengthen drug quality oversight, expedite the establishment of a quality management and traceability system covering the entire lifecycle of generic drugs, and rigorously investigate and prosecute illegal and non‑compliant practices such as data falsification, substandard materials, and adulteration.
The Opinions propose to refine supporting policies and accelerate the clinical adoption of high-quality generic drugs. First, promptly include generic drugs in procurement catalogs and initiate procurement procedures, fostering fair competition between generics that are consistent in quality and efficacy and their originator counterparts. Second, designate such generics as interchangeable with originator products and clearly indicate this on package inserts and labels, while strengthening the role of pharmacists in medication dispensing. Third, expedite the establishment of uniform reimbursement standards for drugs under basic medical insurance, ensuring that generics meeting the same quality and efficacy criteria as originators are reimbursed at the same rate, thereby promoting the substitution of generics for originators. Fourth, clarify the pathways for compulsory licensing of pharmaceutical patents, implementing patent‑related compulsory licensing on a case‑by‑case basis in accordance with the law, encouraging voluntary licensing by patent holders, and resorting to state‑mandated compulsory licensing when necessary. Fifth, implement favorable tax and pricing policies, and encourage local authorities to introduce measures tailored to their specific circumstances to support the transformation and upgrading of the generic‑drug sector. Sixth, accelerate the internationalization of drug research, development, registration, and market access, supporting enterprises in engaging in international capacity‑cooperation, establishing cross‑border R&D collaboration platforms, and advancing the global integration of the generic‑drug industry.

Twenty-four departments recently jointly signed the Memorandum on Joint Punitive Measures Against Seriously Dishonest Entities in the Field of Public Resource Transactions.
To establish and improve a joint punitive mechanism for dishonest behavior in the field of public resource transactions, the National Development and Reform Commission, the People’s Bank of China, the Central Organization Department, and 21 other departments recently jointly signed the “Memorandum on Joint Punitive Measures Against Seriously Dishonest Entities in the Public Resource Transactions Sector.” Under this memorandum, enterprises that violate relevant laws and regulations governing public resource transactions, act contrary to the principle of good faith, and have been subject to administrative penalties by the competent authorities in accordance with the law—along with their responsible legal representatives, individual shareholders, bid evaluation experts, and other related personnel—will be subject to coordinated punitive measures.
According to available information, the “Memorandum” defines untrustworthy enterprises and related parties in the public resource trading sector as including, in particular, procurers, purchasers, bidders, suppliers, tendering agents, procurement agents, bid evaluation experts, as well as other citizens, legal persons, or other organizations that participate in public resource transactions and have engaged in serious violations of laws or breaches of trust.
The Memorandum stipulates that, in accordance with laws, regulations, rules, and normative documents, one or more punitive measures will be imposed on entities subject to sanctions. Specifically, in the field of public resource transactions, 12 punitive measures will be implemented, including “restricting, in accordance with the law, untrustworthy enterprises from participating in the bidding and tendering for engineering construction projects,” “restricting, in accordance with the law, untrustworthy enterprises from participating in government procurement activities,” “restricting, in accordance with the law, untrustworthy enterprises from participating in the transfer of land use rights and mining rights,” and “restricting, in accordance with the law, untrustworthy enterprises from participating in state‑owned property transaction activities.” In other relevant sectors, 26 additional punitive measures will be applied, such as “subjecting administrative licensing and approval applications to stringent review and, in accordance with the law, restricting the approval and ratification of new projects,” “strictly controlling, in accordance with the law, the issuance of production licenses,” and “in accordance with the law, imposing restrictions on untrustworthy enterprises’ access to fiscal subsidies, grants, and social security funding.”

The State Council Executive Meeting decided to further reduce business-related fees and lower costs for the real economy, among other measures.
On April 4, Premier Li Keqiang presided over an executive meeting of the State Council, which decided to further cut business-related fees and lower costs for the real economy; heard a report on efforts to increase broadband speeds and reduce prices, thereby boosting the development of the digital economy and information consumption; and adopted measures to support entrepreneurship and innovation among returned overseas students, with the aim of attracting talent more vigorously.
To implement the CPC Central Committee’s directives and the requirements of the Government Work Report, and to further streamline and standardize enterprise‑related fees so as to ease the burden on market entities, the meeting decided on the following measures: First, the temporary policy of reducing the employer contribution rate for basic old‑age insurance, as well as the rates for unemployment insurance and work‑injury insurance, will be extended until April 30, 2019. Eligible regions may, starting May 1 this year, further reduce work‑injury insurance rates by either 20% or 50%. In addition, the temporary policy of lowering the employer contribution rate for housing provident funds will be extended until April 30, 2020. Enterprises are encouraged to pass on these cost reductions and efficiency gains to their employees. Second, the wage‑deposit system for migrant workers in the construction sector will be improved, with bank guarantees promoted for use in building construction and municipal infrastructure projects. Third, building on last year’s 25% reduction in the collection rate for the Major Water Conservancy Project Construction Fund, an additional 25% cut will take effect from July 1, bringing the total reduction to 50%. Starting April 1, the fee for issuing the first resident identity card will be abolished. Beginning August 1, fees such as patent registration fees will also be eliminated, and the period for reduced patent annuity payments will be extended. Fourth, the upper limit on the employer contribution rate for the Employment Guarantee Fund for Persons with Disabilities will be lowered from no more than three times the local average wage to no more than twice the local average wage. The government will continue to ensure effective employment support for persons with disabilities. Fifth, fees in sectors such as logistics and energy will be reviewed and standardized. An average 10% reduction in electricity prices for general industrial and commercial users will be ensured, with third‑party evaluations conducted to assess the impact of these price cuts. Efforts will be accelerated to consolidate annual vehicle inspections and reviews, and to lower charges at ports, on expressways, and for natural gas transmission and distribution. These measures are expected to reduce the burden on enterprises by more than 300 billion yuan over the course of the year. The meeting called for intensified oversight to ensure that fee reductions are fully implemented and that charging practices are brought into compliance with established standards.

Taxation TAXATATION
Two departments have issued the “Notice on Adjusting the Value-Added Tax Rates.”
Recently, the Ministry of Finance and the State Taxation Administration jointly issued the “Notice on Adjusting Value-Added Tax Rates” (hereinafter referred to as the “Notice”), which aims to refine the value-added tax system. The main provisions are as follows: First, for taxpayers engaging in taxable sales activities or importing goods, the tax rates previously applicable at 17% and 11% will be adjusted to 16% and 10%, respectively. Second, for agricultural products purchased by taxpayers, the deduction rate previously set at 11% will be adjusted to 10%. Third, for agricultural products purchased by taxpayers for the production and sale of, or consignment processing of, goods subject to a 16% tax rate, the input tax credit shall be calculated using a 12% deduction rate. Fourth, for exported goods that were previously subject to a 17% tax rate and a 17% export rebate rate, the export rebate rate will be adjusted to 16%. For exported goods and cross-border taxable transactions that were previously subject to an 11% tax rate and an 11% export rebate rate, the export rebate rate will be adjusted to 10%.

Two departments have issued the “Notice on Unifying the Threshold for Small-Scale VAT Taxpayers.”
Recently, the Ministry of Finance and the State Taxation Administration jointly issued the “Notice on Unifying the Threshold for Small-Scale VAT Taxpayers.” The main provisions are as follows: First, the threshold for small-scale VAT taxpayers is an annual taxable sales amount of RMB 5 million or less. Second, in accordance with Article 28 of the Implementing Rules of the Provisional Regulations of the People’s Republic of China on Value-Added Tax, entities and individuals already registered as general VAT taxpayers may, before December 31, 2018, opt to re-register as small-scale taxpayers; any input VAT credits that have not yet been offset shall be transferred out.

Litigation & Arbitration
Xintai Electric’s appeal against the CSRC’s administrative penalty was dismissed at the final instance.
Recently, the Beijing Higher People’s Court (hereinafter referred to as the Beijing High Court) issued its final judgment in the litigation brought by Xintai Electric against the China Securities Regulatory Commission’s administrative penalty. The court found Xintai Electric’s appeal unfounded and dismissed it. Accordingly, the court upheld the first-instance ruling, rejecting the appeal. Xintai Electric argued that although it had artificially inflated its accounts receivable on a substantial scale, the extent of the overstatement of net profit was relatively minor and thus did not constitute fraudulent issuance. However, the court held that issuers seeking a public offering must satisfy a comprehensive set of statutory requirements—covering corporate governance, financial condition, profitability, and a record of integrity and compliance—going far beyond mere financial metrics. The company’s false reporting of financial data in its application for a public offering constituted not only a matter of proper preparation of financial accounting documents but also a question of the company’s honesty, lawful business conduct, and the compliance and effectiveness of its governance structure. The court thereby afofficeed the CSRC’s principles for determining fraudulent issuance and its enforcement rationale.

The Ministry of Civil Affairs and the Supreme People’s Court have established a mechanism for sharing marital information among parties involved.
Recently, the Ministry of Civil Affairs and the Supreme People’s Court formally signed the Memorandum of Cooperation on Interdepartmental Information Sharing (hereinafter referred to as the “Memorandum”), establishing a mechanism for sharing information on parties’ marriage registration records and case files involving marital matters.
Under the Memorandum, the Supreme People’s Court will, via a dedicated network link, promptly exchange information on concluded cases—covering offenses such as violent interference with marital freedom, bigamy, disputes over the right to marital autonomy, divorce disputes, disputes over the invalidity of marriage, disputes over annulment of marriage, declarations of missing persons, declarations of death, and determinations of incapacity or limited capacity for civil conduct—with the Ministry of Civil Affairs, thereby further enhancing the Ministry’s national database of marriage registration information. In addition, people’s courts may use the identity numbers of the parties involved in a case to query their marriage registration records in the Ministry of Civil Affairs’ national database, thus expanding the scope of inquiry and enforcement under the online execution information‑sharing system.

Other
The Customs Tariff Commission of the State Council has issued an announcement imposing additional tariffs on certain imported goods originating in the United States.
Recently, the Customs Tariff Commission of the State Council issued an announcement imposing additional tariffs on certain U.S.-origin imports, in response to the United States’ tariff measures. The announcement stated that the U.S. government has released a list of goods subject to additional tariffs, imposing a 25% duty on 1,333 categories of Chinese exports to the United States, totaling $50 billion. This U.S. action violates World Trade Organization rules, gravely infringes upon China’s legitimate rights and interests, and poses a threat to China’s national development interests.
In accordance with the relevant provisions of the Foreign Trade Law of the People’s Republic of China and the Regulations on Import and Export Tariffs of the People’s Republic of China, and with the approval of the State Council, the Customs Tariff Commission of the State Council has decided to impose an additional 25% tariff on 106 items across 14 categories, including soybeans, automobiles, and chemical products, originating in the United States. The date of implementation will be announced separately by the Customs Tariff Commission of the State Council, depending on the U.S. government’s application of additional tariffs on Chinese goods.

Trump calls for consideration of “additional” $100 billion in tariffs.
Recently, in response to what he described as “China’s unfair retaliation,” President Trump has directed the Office of the United States Trade Representative to assess, under Section 301 of the Trade Act, whether it would be appropriate to impose additional tariffs on an extra $100 billion worth of Chinese imports. In reaction, on April 6, Ministry of Commerce spokesperson Gao Feng stated: “If the U.S. side persists in pursuing unilateralism and trade protectionism, China will stand office and take new, comprehensive countermeasures to safeguard the interests of the nation and its people, at whatever cost. We have noted the relevant statements from the U.S. side; on China-U.S. economic and trade issues, China’s position has been made very clear: we neither seek nor fear a trade war.”

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