JC Master Legal News Issue 819

Key Takeaways for This Issue
The China Securities Regulatory Commission has launched the first batch of cases under its 2018 special enforcement campaign, rigorously investigating and prosecuting illegal acts that disrupt the order of market information dissemination.
Recently, the CSRC’s inspection authorities have centrally launched the first batch of cases under the 2018 special enforcement campaign, cracking down on the indiscriminate dissemination of false information related to securities and futures via the internet and social media. To effectively prevent and defuse market risks, the CSRC’s inspection units, in coordination with relevant agencies such as public opinion monitoring and market surveillance departments, have strengthened the integrated analysis of information and trading data and collectively initiated eight landmark cases.

The China Banking Regulatory Commission’s new regulations require that paper‑based bill‑of‑exchange transactions be confined to the same province, with enforcement taking effect after six months.
Recently, the China Banking and Insurance Regulatory Commission issued the “Notice on Regulating Interprovincial Bills Business of Banking Financial Institutions,” which defines and standardizes such business and sets forth regulatory requirements to address existing issues.

The China Securities Regulatory Commission has revised the Measures for the Administration of Securities Issuance and Underwriting.
The China Securities Regulatory Commission has issued the revised Measures for the Administration of Securities Issuance and Underwriting and is seeking public comments. The CSRC stated that this revision aims to support the innovation-driven development strategy and to prudently facilitate the domestic issuance of shares or depositary receipts by pilot innovative enterprises.

Nearly 5 trillion yuan worth of PPP projects have been rectified and reorganized.
The results of the nearly six-month nationwide review of the PPP project database have been released, and going forward, the ongoing removal of non‑compliant PPP projects from the database will become a regular practice. Following the issuance in November last year of the Ministry of Finance’s “Notice on Standardizing the Management of the Project Database on the Comprehensive Information Platform for Public‑Private Partnerships (PPP),” commonly known as Document No. 92, a concerted effort to clean up PPP projects was launched across the country.

Interpretation of the “Announcement of the State Taxation Administration on the Issuance of the Revised Measures for Handling Matters Related to Enterprise Income Tax Preferential Policies”
To implement the tax system’s “delegation, regulation, and service” reform, optimize the tax environment, and effectively enforce the various preferential policies under the corporate income tax, the State Taxation Administration recently revised and reissued the Measures for Handling Matters Related to Corporate Income Tax Preferential Policies.

Table of Contents
Table of Contents

Finance & Capital Markets
The China Securities Regulatory Commission has launched the first batch of cases under its 2018 special enforcement campaign, rigorously investigating and prosecuting illegal acts that disrupt the order of market information dissemination.
The China Banking Regulatory Commission’s new regulations require that paper‑based bill‑of‑exchange transactions be confined to the same province, with enforcement taking effect after six months.
The Shanghai Stock Exchange has issued and implemented the “Guidelines on the Content and Format of Periodic Reports for Asset-Backed Securities” and the “Guidelines on Credit Risk Management During the Life of Asset-Backed Securities (Trial).” In addition, the SSE’s tripartite repo business has officially gone live.
The Shenzhen Stock Exchange has issued the “Guidelines on Credit Risk Management During the Term of Asset-Backed Securities (Trial)” and the “Guidelines on the Content and Format of Periodic Reports for Asset-Backed Securities.”

Corporate & Commercial
The China Securities Regulatory Commission has revised the Measures for the Administration of Securities Issuance and Underwriting.
Nearly 5 trillion yuan worth of PPP projects have been rectified and reorganized.
The Yangtze River Delta has launched the development of a plan for hydrogen energy infrastructure construction.
New regulations on the private placement of corporate bonds take effect today; 16 red lines must not be crossed.
The non-public issuance of corporate bonds has adopted the revised “negative list,” further raising the cost of violations by tightening the ten red lines.

Taxation
Interpretation of the “Announcement of the State Taxation Administration on the Issuance of the Revised Measures for Handling Matters Related to Enterprise Income Tax Preferential Policies”
“Mass Entrepreneurship and Innovation” initiatives, along with small and micro enterprises, are set to receive another RMB 60 billion in tax relief.

Litigation & Arbitration
The National Pilot Work Promotion Conference on the Diversified Resolution of Overseas Chinese-related Disputes was held in Putian, Fujian.
The Supreme People’s Court’s official WeChat mini-program has been launched and is now operational.

Other
The China Securities Regulatory Commission has approved Foxconn Industrial Internet’s IPO application, but the fundraising amount has not been disclosed.
China’s first domestically built aircraft carrier conducted its sea trials on May 13, further cementing its place among the world’s most advanced carriers.

Finance & Capital Markets
The China Securities Regulatory Commission has launched the first batch of cases under its 2018 special enforcement campaign, rigorously investigating and prosecuting illegal acts that disrupt the order of market information dissemination.
Recently, the CSRC’s inspection authorities have centrally deployed the first batch of cases under the 2018 special enforcement campaign, focusing on cracking down on serious violations that disrupt the order of information dissemination in the capital market—such as the reckless dissemination of false securities and futures information via the internet and social media, acting as “black mouths” in the stock market, and profiting from such activities.
At present, leveraging market hotspots and the ripple effects of information dissemination, and relying on modern technological tools such as the internet and mobile communication devices, false information in the securities and futures markets is characterized by its sheer volume, rapid spread, and severe adverse impact, seriously misleading investors. In response to this trend and to effectively prevent and mitigate market risks, the CSRC’s inspection authorities, in coordination with relevant units and departments responsible for public opinion monitoring and market surveillance, have strengthened the integrated analysis of information and trading activities and launched a focused crackdown on eight representative cases. These cases primarily manifest in three ways: first, the use of new media platforms like WeChat and Weibo to publish articles that fabricate and disseminate false information, thereby disrupting the order of the securities and futures markets; second, the creation and propagation of untrue, inaccurate, or incomplete information on online forums such as stock‑related discussion boards, which misleads investors, influences securities and futures prices or trading volumes, and seeks to exploit these dynamics for reverse‑trading gains—actions that may constitute manipulative trading; and third, the practice of prominent online influencers purchasing stocks in advance, then heavily promoting those stocks on Weibo before selling off en masse to reap profits—a behavior suspected of “hat‑grabbing” trading.
At present, the investigation into the case has been fully launched. Going forward, the China Securities Regulatory Commission will continue to strengthen its oversight of securities and futures information dissemination and abnormal trading activities.
The China Banking Regulatory Commission’s new regulations require that paper‑based bill‑of‑exchange transactions be confined to the same province, with enforcement taking effect after six months.
Recently, the China Banking and Insurance Regulatory Commission issued the “Notice on Regulating Inter‑Provincial Bills Business of Banking Financial Institutions” (hereinafter referred to as the “Notice”), which sets out regulatory requirements for such business. The Notice comprises five articles, defining inter‑provincial bills business conducted by banking financial institutions and outlining specific compliance measures to address existing issues.
First, the Notice defines interprovincial bill‑related business. It categorizes such business by banking financial institutions into credit‑based and trading‑based activities, providing clear definitions for each category. Second, it sets out regulatory requirements to address key risk factors in bill‑related operations, mandating that banking financial institutions implement existing supervisory mandates, strengthen risk controls at critical stages, enhance employee management, and foster a culture of compliance. Third, it establishes regulatory standards specifically for interprovincial trading‑type transactions, requiring banking financial institutions to conduct cross‑province bill trades through bill‑market infrastructure while restricting high‑risk paper‑based interprovincial transactions. Fourth, it lays down regulatory requirements for interprovincial credit‑based business, calling on banking financial institutions to put in place internal management systems for off‑site credit granting, enforce rigorous authorization procedures, and establish internal coordination and control mechanisms. Fifth, it reinforces oversight of interprovincial bill‑related business by instructing regulatory authorities at all levels to intensify monitoring and inspections, ensure that identified issues are promptly rectified and appropriately addressed through accountability measures, and impose penalties in accordance with applicable laws and regulations.
The implementation of the Notice will help banking financial institutions operate in a compliant and prudent manner, reduce credit and operational risks associated with interprovincial bill‑related business, curb the circulation of funds within the financial system without real economic value added, and better support the development of the real economy.

The Shanghai Stock Exchange has issued and implemented the “Guidelines on the Content and Format of Periodic Reports for Asset-Backed Securities” and the “Guidelines on Credit Risk Management During the Life of Asset-Backed Securities (Trial).”
In recent years, the Shanghai Stock Exchange has adhered to the principle of giving equal weight to market development and regulatory risk control, driving reform and innovation while ensuring the sound and standardized development of the asset-securitization market. As a result, the total value of asset-backed securities issued and listed has continued to grow. To further refine the regulatory framework for the asset-securitization market, enhance the quality of information disclosure for asset-backed securities, strengthen credit risk management throughout the life cycle of these instruments, and effectively safeguard investors’ legitimate rights and interests, the Exchange, drawing on its frontline supervisory experience and extensive feedback from market participants, issued and implemented on May 11 the “Guidelines on the Content and Format of Periodic Reports for Asset-Backed Securities” (hereinafter referred to as the “Periodic Report Guidelines”) and the “Guidelines on Credit Risk Management During the Life Cycle of Asset-Backed Securities (Trial)” (hereinafter referred to as the “Risk Management Guidelines”).
The “Guidelines on Periodic Reports” are designed to facilitate informed investment decisions and strengthen risk disclosure. They clarify the responsibilities of all information‑disclosure obligors for asset‑backed securities, set forth the overarching disclosure principles, preparation requirements, and standard content formats for periodic reports, and focus on key disclosure priorities. By enhancing the timeliness, relevance, and effectiveness of information disclosure, these guidelines will streamline the preparation and submission of periodic reports by managers and custodians, while providing investors with richer, more comprehensive reference material to support their investment decisions.
The Risk Management Guidelines establish a continuous, standardized credit risk management framework that covers the entire lifecycle of asset-backed securities and involves all market participants: they assign clear responsibilities for credit risk management, emphasize the manager’s central role, and require active cooperation and proactive credit risk management by all market participants; with the goal of preventing and mitigating credit risks at the earliest possible stage, they place greater emphasis on ex-ante and in-process monitoring, identification, and early warning; they classify asset-backed special purpose vehicles based on credit risk and implement differentiated risk management arrangements; and they mandate that managers submit semi-annual periodic credit risk management reports, as well as ad hoc interim credit risk reports, to enable regulatory authorities to promptly assess and track the risk profile of asset-backed securities.
As key self-regulatory rules for the SSE’s asset-securitization market, the issuance and implementation of the “Periodic Reporting Guidelines” and the “Risk Management Guidelines” will ensure that market participants assume their principal responsibilities, strengthen awareness of information disclosure and risk management across all parties, and urge market participants to fulfill their duties and adhere to their respective roles. By enforcing the requirements set forth in these guidelines, the quality of information disclosure will be further enhanced, the focus of credit-risk control will be shifted upstream, a market‑based, rule‑of‑law framework for mitigating and resolving credit risks will be refined, and the exchange’s frontline regulatory and risk‑prevention responsibilities will be deepened. All these measures will effectively safeguard investors’ legitimate rights and interests and promote the healthy, orderly development of the asset‑securitization market.

The Shanghai Stock Exchange’s tri-party repo business has officially launched.
On May 9, 2018, the SSE bond market executed its first batch of tri-party repo transactions, marking the official launch of the SSE’s tri-party repo business. On the inaugural day, the market operated smoothly. According to reports, seven institutions—including Tianhong Fund, Everbright Securities, Guotai Junan, CITIC Securities, GF Securities, Industrial Securities, and Industrial Fund—participated in the initial round of trades. A total of eight transactions were completed that day, with a combined value of RMB 370 million. Transaction tenors were concentrated between one and seven days, and yields ranged from 3.0% to 3.3%. In terms of collateral baskets, financing was provided both through interest-rate‑linked bond baskets and high‑grade public‑offering bond baskets, as well as through high‑grade private‑placement bond baskets such as asset‑backed securities (ABS). The range of eligible collateral was broad, allowing all types of securities to be used for funding under the tri-party repo framework.
Earlier, on April 24, the Shanghai Stock Exchange and China Securities Depository & Clearing Corporation jointly issued the “Provisional Measures for Bond Pledge‑Based Tripartite Repo Transactions and Settlement of the Shanghai Stock Exchange and China Securities Depository & Clearing Corporation.” Subsequently, the Shanghai Stock Exchange released the accompanying “Shanghai Stock Exchange Guidelines for Bond Pledge‑Based Tripartite Repo Trading,” while China Securities Depository & Clearing Corporation issued the corresponding “China Securities Depository & Clearing Corporation Shanghai Branch Guidelines for Bond Pledge‑Based Tripartite Repo Registration and Settlement.” The launch of tripartite repo transactions is of great significance for building a multi‑tiered repo market, facilitating liquidity management among financial institutions, and promoting the sound development of the bond market. It also represents an important measure to implement the key tasks identified at the Central Economic Work Conference for preventing and defusing financial risks. Following the release of these rules, market professionals have generally expressed positive views, noting that tripartite repos enhance liquidity in the bond market and broaden financing channels for financial institutions.
In 2017, the Shanghai Stock Exchange recorded a total repurchase transaction value of RMB 243 trillion, with an average daily turnover approaching RMB 1 trillion. Tripartite repos represent a key component in the Exchange’s efforts to enhance its repo ecosystem. Previously, the SSE had introduced pledge‑based repos and negotiated repos; the former are relatively standardized, while the latter offer greater flexibility. Tripartite repos strike a balance between the two: drawing on years of experience with both models, they leverage a third‑party institution to provide centralized, professional management of collateral, thereby achieving a better trade‑off between security and convenience. Moreover, compared with pledge‑based repos, the eligible collateral now encompasses various types of exchange‑traded bonds, including privately placed corporate bonds and asset‑backed securities. And unlike negotiated repos, tripartite repos feature uniformly set standards for collateral and discount rates, with the third party offering collateral‑management services and conducting daily mark‑to‑market monitoring, thus improving trading efficiency and risk control. In addition, tripartite repo transactions are subject to investor suitability requirements, imposing stricter准入 thresholds on funding borrowers, while participants may also maintain their own whitelists of counterparties.

The Shenzhen Stock Exchange has issued the “Guidelines on Credit Risk Management During the Term of Asset-Backed Securities (Trial)” and the “Guidelines on the Content and Format of Periodic Reports for Asset-Backed Securities.”
Recently, the Shenzhen Stock Exchange officially released the “Shenzhen Stock Exchange Guidelines on Credit Risk Management During the Life Cycle of Asset-Backed Securities (Trial)” (hereinafter referred to as the “Risk Management Guidelines”) and the “Shenzhen Stock Exchange Guidelines on the Content and Format of Periodic Reports for Asset-Backed Securities” (hereinafter referred to as the “Periodic Report Guidelines”). The issuance of these two guidelines aims to improve the risk management framework for asset securitization, strengthen credit risk oversight throughout the life cycle of asset-backed securities, enhance the quality of periodic reporting disclosures, address concerns about information reliability in the market, and effectively safeguard the legitimate rights and interests of investors.
The key contents of the “Risk Management Guidelines” primarily encompass the following three aspects: First, clarifying the credit risk management responsibilities of all market participants. A systematic and comprehensive credit risk management framework centered on the manager is established, specifying the concrete duties of participating entities—including the manager, the original rights holders, asset service agencies, credit enhancement institutions, custodians, and credit rating agencies—in managing credit risks. Second, instituting a classification management system oriented toward credit risk. Based on the level of risk, asset-backed special plans are categorized into normal, watch, risk, and default classes. The manager shall, in accordance with the Guidelines, implement classified management of each special plan based on the results of risk monitoring and screening. Third, establishing a system of regular and ad hoc risk management reporting. The Guidelines require the manager to submit a semi-annual report to the Shenzhen Stock Exchange on the classification of risks and the progress of risk management activities, and to file interim reports on significant matters arising during the resolution and disposal processes of special plans classified as risk or default. The “Annual Report Guidelines” focus on the preparation and disclosure requirements for the annual asset management report and the annual custody report.
According to a responsible official at the Shenzhen Stock Exchange, the issuance of the “Risk Management Guidelines” and the “Periodic Reporting Guidelines” is part of a concerted effort to earnestly implement the China Securities Regulatory Commission’s regulatory philosophy—centered on information disclosure—further promote the steady and sound development of asset‑securitization business, guide managers, relevant market participants, and information‑disclosure obligors to fulfill their respective duties, and safeguard investors’ interests. All market participants are required to strictly adhere to the guidelines, strengthen ongoing management of asset‑securitization transactions, and carry out related tasks effectively. Meanwhile, to provide managers with sufficient time to conduct credit‑risk assessments, the deadline for submitting the first semiannual credit‑risk management report has been extended to June 30, 2018.
As of the end of April 2018, the Shenzhen Stock Exchange had listed 242 asset-backed special-purpose plans, with a total outstanding face value of RMB 217.4 billion. The underlying asset types cover corporate accounts receivable, infrastructure tolls, real estate, affordable housing, consumer finance, and financial leasing, achieving comprehensive and balanced coverage across all major categories of underlying assets.
Commercial & Corporate
The China Securities Regulatory Commission has revised the Measures for the Administration of Securities Issuance and Underwriting.
On the evening of May 11, the China Securities Regulatory Commission (CSRC) issued the revised Measures for the Administration of Securities Issuance and Underwriting and opened them to public consultation. The CSRC stated that this revision aims to support the innovation-driven development strategy and to prudently facilitate the domestic issuance of shares or depositary receipts by pilot innovative enterprises.
The revised Measures bring pilot‑listed companies issuing depositary receipts in the domestic market within their scope of application, clearly defining the obligations and legal liabilities associated with such issuances. At the same time, they enhance pricing flexibility by removing the mandatory requirement that companies issuing 20 million shares or fewer must adopt a direct pricing approach, allowing them to choose their own pricing method. Furthermore, the Measures stipulate that shares (or depositary receipts) subject to offline lock‑up periods shall not be eligible for online allocation adjustments, and permit strategic allocations and the exercise of over‑allotment options when issuing depositary receipts, as needed. These provisions aim to establish a balanced allocation between online and offline channels, regulate the pace of new share (or depositary receipt) listings, and help stabilize the market while curbing speculative trading.
In addition, the revised Measures have refined the information disclosure requirements for valuation metrics of non‑profitable companies, stipulating that if an issuer has not yet achieved profitability, it may omit disclosure of the offering price‑earnings ratio and related comparative data with industry peers; however, it must disclose valuation metrics that reflect the characteristics of the issuer’s industry, such as the price‑sales ratio and the price‑book ratio.
Nearly 5 trillion yuan worth of PPP projects have been rectified and reorganized.
The results of the nearly six-month nationwide cleanup of the PPP project database—the so‑called “storm”—have now been released, and going forward, the removal of non‑compliant PPP projects from the database will become a regular practice. Following the issuance in November last year of the Ministry of Finance’s Notice on Standardizing the Management of the Project Database on the Comprehensive Information Platform for Public‑Private Partnerships (PPP), or Document No. 92, a concerted effort to clean up PPP projects was launched across the country.
On May 8, 2018, the PPP Center of the Ministry of Finance released information on the progress of local efforts to carry out the centralized review and removal of projects from the PPP project database. According to the consolidated data, as of April 23, 2018, a total of 1,695 projects had been removed from the database, involving an investment of RMB 1.8 trillion; 2,005 projects had been reported for rectification, with a total investment of RMB 3.1 trillion. Thus, the combined investment of PPP projects that were either delisted or undergoing rectification amounted to RMB 4.9 trillion.
Document No. 92 of the Ministry of Finance explicitly stipulates that three types of projects shall not be included in the PPP project database: those that do not fall within the public‑service sector and for which the government has no obligation to provide services, and thus are unsuitable for implementation under the PPP model; new construction, renovation, or expansion projects that have failed to complete the requisite preliminary procedures, such as project approval and filing, as required; and projects whose construction costs are excluded from performance evaluation, thereby lacking a pay‑for‑performance mechanism. In addition, the document specifies five categories of projects that must be removed: those that have not conducted the two mandatory assessments—value‑for‑money analysis and fiscal affordability assessment—in accordance with regulations; those that, within one year of being added to the database, have made no substantive progress and are therefore no longer suitable for continued PPP implementation; those in which financing platform companies, failing to undergo the prescribed transformation, serve as private‑sector participants, thus failing to meet standardized operational requirements; those in which the government commits to fixed‑return payments to private capital, constituting illegal or non‑compliant debt‑guarantee arrangements; and those that have not promptly and adequately disclosed their project implementation plans, thereby violating information‑disclosure obligations.
Document No. 92 stipulates that all provincial-level fiscal departments shall complete the centralized review and cleanup of their respective project management databases by March 31, 2018, and submit a report on the status of this work to the Financial Department of the Ministry of Finance for record‑keeping. For regions that fail to complete the cleanup by the deadline, the PPP Center of the Ministry of Finance will provide guidance and urge them to rectify the issues within 30 days. If the rectification is not completed on time or is inadequate, new projects in those regions will be suspended from being added to the database until the required corrections are made.
In May 2017, the Ministry of Finance and five other ministries issued the “Notice on Further Regulating Local Government Debt‑Financing Activities,” which mandated the standardization of public‑private partnership (PPP) arrangements. The notice stipulated that local governments may not use borrowed funds to establish any type of investment fund; it strictly prohibits local governments from illegally or non‑compliantly engaging in disguised borrowing through PPPs or government‑funded investment funds. Except as otherwise provided by the State Council, when local governments and their subordinate departments participate in PPP projects or set up government‑funded investment funds, they may not, under any circumstances, commit to repurchasing the principal invested by private capital, assume liability for losses of such principal, guarantee minimum returns to private investors, or impose additional conditions—such as those applicable to limited‑partnership funds—that effectively constitute disguised borrowing.
Document No. 92 calls for further standardizing the operation of PPP projects, preventing PPPs from being repurposed as new financing platforms, and resolutely curbing the accumulation of hidden debt risks. Subsequently, in March 2018, the Ministry of Finance issued Document No. 23, “Notice on Regulating Financial Institutions’ Investment and Financing Activities with Local Governments and State-Owned Enterprises,” stipulating that state-owned financial institutions must make the proper implementation of PPP projects a prerequisite for providing financing. Specifically, they are prohibited from extending financing to PPP projects that have failed to secure sources of project equity capital, have not conducted value-for-money assessments or fiscal affordability analyses as required, or lack adequate disclosure of relevant information pertaining to such assessments.

The Yangtze River Delta has launched the development of a plan for hydrogen energy infrastructure construction.
At the launch event for the “Yangtze River Delta Hydrogen Corridor Development Plan” held recently in Jiading District, Shanghai, it was announced that the plan has officially entered the drafting stage. This marks the first time China has formulated a cross-provincial, cross-regional infrastructure development plan for hydrogen energy.
According to the planning objectives, the “Yangtze River Delta Hydrogen Corridor” will fully leverage the region’s resource endowments and locational advantages, using the Yangtze River Delta’s expressway network as a connecting backbone. By pioneering innovative models, it will guide the clustering and upgrading of regional industries, thereby establishing a globally unique industrial economic belt for hydrogen energy and fuel cell vehicles. This plan will also accumulate valuable experience for the large-scale development of hydrogen infrastructure in the future.
Zhang Jinhua, Executive Vice President and Secretary-General of the China Society of Automotive Engineers, stated that the development of the “Yangtze River Delta Hydrogen Economy Integration Plan” will proceed in two phases. The first phase will focus on addressing infrastructure bottlenecks by formulating and issuing the “Yangtze River Delta Hydrogen Corridor Development Plan.” The second phase will center on the entire industry, developing a comprehensive plan around the “Yangtze River Delta Hydrogen Economy Integration.”

New regulations on the private placement of corporate bonds take effect today; 16 red lines must not be crossed.
Effective May 11, the “Negative List for Underwriting Non‑Publicly Issued Corporate Bond Projects” has undergone a major overhaul, with the updated list now officially released. Following the issuance of a draft for public comment to all securities offices on January 15 this year, approximately four months later, the Securities Association of China has formally published the revised “Guidelines on the Negative List for Underwriting Non‑Publicly Issued Corporate Bond Projects.” The aim is to further mitigate risks associated with non‑public corporate bond underwriting, and the new regulations take effect from the date of their publication.
The negative list for the non-public issuance of corporate bonds comprises 16 items, with the following nine key points:
1. Local financing platform companies, pawnbrokers, guarantee companies with registered capital below RMB 600 million that have been engaged in financing‑guarantee business for less than three years, micro‑loan companies established within the past two years whose provincial regulatory or performance‑assessment ratings have failed to achieve the highest level for the most recent two consecutive years, as well as real estate companies identified by the Ministry of Land and Resources and other authorities as engaging in illegal or non‑compliant practices such as “idle land,” “land speculation,” “holding back supply to drive up prices,” or “artificially inflating housing prices”—all such issuers are placed on a negative list and are prohibited from issuing corporate bonds through non‑public offerings.
II. With stringent regulatory oversight now fully implemented, the period during which issuers are prohibited from issuing bonds—due to false statements in their financial and accounting documents or other material violations—is extended from 12 months to 24 months.
III. If the issuer’s outstanding corporate bonds or other debts have defaulted or are in arrears with principal and interest payments, or if there are instances of unauthorized external guarantees or improper appropriation of funds by related parties or third parties through loans, debt repayment on behalf of others, or advance payments—where such circumstances remain ongoing—non‑public issuance of corporate bonds shall be prohibited.
IV. For issuers who have been subject to disciplinary sanctions by stock exchanges or other self-regulatory organizations for violating relevant regulations on corporate bonds, the prohibition period on issuing bonds is set at six months; for those who have been subject to administrative regulatory measures by the China Securities Regulatory Commission, the prohibition period on non‑public issuance of bonds is twelve months.
V. Strengthen oversight of financial reporting: Entities whose financial statements have, within the past two years, been subject to a qualified audit opinion by a certified public accountant, where the matters giving rise to the qualification have not yet been resolved, or whose financial statements have received an adverse audit opinion or a disclaimer of opinion, shall be placed on a negative list.
VI. Strengthen the standardized management of proceeds from bond issuances; in line with national industrial policies, relevant provisions have been added to address cases where “the intended use of raised funds does not comply with national industrial policies.” Accordingly, the original provision has been revised to include two scenarios: “unauthorized alteration of the intended use of proceeds from the previous bond issuance without rectification” and “the intended use of proceeds from this issuance violates applicable laws and regulations or the allocation of funds is inconsistent with national industrial policies.”
VII. Guide bond proceeds to flow into the real economy, preventing a shift from the real to the virtual sector; restrict non-financial enterprises from using bond proceeds for financial‑type investments, and add the following provision: “Except for financial institutions, proceeds from this bond issuance shall not be used for holding financial assets held for trading, entrusted wealth management, or other financial‑type investments, nor shall they be used to directly or indirectly invest in companies whose primary business is the buying and selling of securities.”
8. If the issuer, due to serious violations of law or acts of dishonesty, has been designated by the competent authorities as a discredited person subject to enforcement, a discredited production and business entity, or another type of discredited entity, and has had its issuance of corporate bonds suspended or restricted, it shall be prohibited from issuing private placement bonds.
9. Strengthen integrity-building in the bond market by adding relevant provisions to the negative list, thereby restricting entities with poor credit standing from issuing corporate bonds. Specifically, the list now includes “entities that, due to serious violations of laws or breaches of trust, have been designated by competent authorities as discredited persons subject to enforcement, discredited production and business entities, or other discredited entities, and whose issuance of corporate bonds has been suspended or restricted.”
X. Subsidiary matters are brought within the scope of the parent company and subject to穿透核查 (penetrative verification); when issuing the negative list, the text explicitly states: “If a subsidiary’s total assets, net assets, or operating revenue account for more than 30% of any one of these indicators and falls under the circumstances set forth in Articles 1 through 5 and Articles 9 through 15 of the negative list, the issuer shall be deemed to fall within the scope of the negative list.”
The revision of the negative list can be summarized in three key points: first, stricter regulation, including extending maturity periods and strengthening exchange‑based self‑regulation; second, alignment with the spirit of the Financial Work Conference, aimed at preventing capital from shifting away from the real economy toward speculative activities; and third, overall, it reflects the CSRC’s intention to deleverage.
The cost of non-compliance has increased further.
“The regulatory penalties for companies engaging in private placements of corporate bonds have been further tightened. Although the regulators have clarified that the negative list for private‑placement corporate bonds applies solely to bond issuers, and that regulatory measures imposed on securities offices conducting underwriting or trust‑management activities do not fall within the scope of this negative list, the threshold for such offices to undertake private‑placement bond projects has nonetheless risen sharply.” A vice president at a mid-sized brokerage in northern China told a Securities Times reporter that any exchange‑listed private‑placement bond projects undertaken by these offices must avoid sectors subject to the negative list’s restrictions. An obvious sign is that, since 2018, the number of private‑placement bond applications accepted by exchanges has been declining, while the review process has grown increasingly slow.
Proceeds from fundraising shall not “be inconsistent with national industrial policies.”
It is worth noting that this revision introduces a new negative-list provision, prohibiting the use of proceeds from bond offerings in ways that are inconsistent with national industrial policies. Regulatory authorities stated that, in order to strengthen the standardized management of bond‑raising funds and to ensure compliance with national industrial policies, they have added relevant provisions addressing such non‑compliant uses. Accordingly, the original clause has been amended to include two scenarios: “unauthorized alteration of the intended use of proceeds from the previous bond issuance without rectification,” and “the intended use of proceeds from the current issuance violates applicable laws and regulations or is inconsistent with national industrial policies.”
So how should we interpret “not in compliance with national industrial policies”? Market observers predict that this will directly expand the negative list governing non‑public offerings of corporate bonds by real estate companies and also impose restrictions on industries plagued by overcapacity, such as steel and coal. Meanwhile, investment bankers caution: “It’s not that these sectors—real estate, steel, and coal—are entirely off‑limits; they can proceed as long as they meet the exchange’s requirements.”

The non-public issuance of corporate bonds has adopted the revised “negative list,” further raising the cost of violations by tightening the ten red lines.
On the afternoon of May 11, 2018, the Securities Association of China published on its official website the revised “Guidance on the Negative List for Undertaking Non-Public Issuance Bond Projects” (hereinafter referred to as the “Negative List Guidance”), which entered into force upon its publication.
Compared with the “Negative List Guidelines” issued in 2015, this revision introduces the following ten key changes: 1) The financial compliance requirement has been extended from 12 months to 24 months; 2) Provisions on unauthorized guarantees and misappropriation of funds have been added; 3) Requirements for disciplinary sanctions have been incorporated; 4) A qualified opinion that remains ongoing has been included; 5) Penalties for acts of dishonesty have been introduced; 6) The use of raised funds must now align with industrial policies; 7) Restrictions on using raised funds for financial investments have been imposed; 8) The provision stating that “the offering documents contain false records, misleading statements, or material omissions” has been added; 9) The requirements for guarantee companies have been revised; and 10) The credit rating threshold for micro‑loan institutions has been raised from AA‑ to AA.
This revision of the “Negative List Guidelines” both extends the period during which issuers previously subject to administrative penalties for financial fraud or serious violations are barred from issuing new bonds, and subjects corporate bond issuances to the sanctions imposed by stock exchanges and industry associations—thereby raising the threshold for non‑public offerings of corporate bonds and increasing the costs of non‑compliance. At the same time, the Guidelines strengthen oversight of how bond proceeds are allocated, emphasizing the need to channel funds into the real economy, particularly into sectors aligned with national industrial policies.
It is worth noting that, for real estate developers, although the negative list only stipulates that companies found by the Ministry of Land and Resources and other authorities to have engaged in illegal or non-compliant practices such as “idle land,” “land speculation,” “holding back supply to drive up prices,” or “artificially inflating housing prices,” this aligns with the prohibitive provisions set forth in the Shanghai and Shenzhen Stock Exchanges’ “Classification-Based Regulatory Framework for Real Estate‑Related Corporate Bonds” (hereinafter referred to as the “Classification Regulatory Framework”). However, the Classification Regulatory Framework imposes stringent additional requirements on real estate offices; accordingly, private placement of corporate bonds remains a relatively demanding financing channel for these companies.
Industry insiders note that, following the latest revision of the negative list, which has further raised the underwriting threshold for privately placed corporate bonds, the era of rapid expansion is now over. Historically, the exchange’s liberalization of private‑placement bond issuance coincided with a major surge in the outsourced market. Thanks to its streamlined issuance process and relatively lenient eligibility requirements for issuers, the private‑placement bond market expanded to exceed RMB 2 trillion in less than three years.
The expansion of private‑placement bonds was, in fact, merely a symptom of the previous round of monetary easing. During that phase, the bond market resembled the stock market at its most frenzied, with some investors even proclaiming they would sweep up bonds yielding more than 5% and rushing to enter the market. In the meantime, issuers with weaker credit profiles—previously struggling to gain access to the standardized market—also managed to find willing buyers in the bond arena.
As economic growth shifts from prioritizing “quantity” to emphasizing “quality,” the logic that once relied on debt‑driven expansion to sustain development may be coming to an end. And as the engine of debt‑fueled expansion begins to sputter, what follows is a balance‑sheet adjustment amid a massive debt stock—during which structural deleveraging will inevitably give rise to widespread sectoral and asset‑specific clean‑ups.
Appendix:
Guidance on the Negative List for Undertaking Non-Public Issuance of Corporate Bonds
(Revised in 2018)
Article 1: In order to effectively manage risk control in the underwriting of privately placed corporate bonds, this Guidance is formulated in accordance with the Measures for the Administration of the Issuance and Trading of Corporate Bonds and other relevant laws, regulations, and self-regulatory rules.
Article 2: The undertaking of non-public issuance corporate bond projects shall be subject to negative-list management. Underwriting institutions shall not undertake projects that fall within the scope of restrictions set forth in the negative list.
Article 3: The Securities Association of China (hereinafter referred to as the “Association”) shall be responsible for organizing the study and determination of the negative list and for publishing it on the Association’s website.
Article 4: The Association may invite relevant competent authorities, securities trading venues, securities offices, and other industry experts to establish a Negative List Assessment Expert Panel, which shall conduct at least one assessment of the Negative List every six months and may carry out ad hoc assessments as needed in light of business developments and regulatory requirements.
Article 5: The Association may convene an expert panel on negative‑list assessment to deliberate and study the negative list, determine adjustment proposals, and submit them to the China Securities Regulatory Commission for record‑keeping.
Article 6: Where a subsidiary, in the most recent audited year, has any one of the following indicators—total assets, net assets, or operating revenue—accounting for more than 30% of the corresponding consolidated‑statement indicator, and where such subsidiary falls under any of the circumstances set forth in Items (1) through (7) and Item (11) of the Negative List, it shall be deemed to fall within the scope of the Negative List.
Article 7: This Guideline shall be interpreted and revised by the Association and shall take effect from the date of its promulgation.
Negative List for Undertaking Non-Public Issuance of Corporate Bonds Projects
I. Issuers falling under any of the following circumstances
(1) Within the most recent 24-month period, the company’s financial and accounting documents contain false entries, or the company has engaged in other material violations of law.
(2) There remains an ongoing default or delay in the payment of principal and interest on outstanding corporate bonds or other debts.
(3) There remain ongoing instances of unauthorized external guarantees or the misappropriation of funds by related parties or third parties through methods such as loans, debt repayment on behalf of others, or advance payments.
(4) Within the most recent 12 months, having been subject to administrative regulatory measures by the China Securities Regulatory Commission for violations of regulations pertaining to corporate bonds; or, within the most recent 6 months, having been subjected to disciplinary sanctions by a stock exchange or other self-regulatory organization for violations of regulations pertaining to corporate bonds.
(5) Within the past two years, the financial statements have been subject to a qualified audit opinion, and the material impacts underlying such qualification have not yet been resolved; or the financial statements have been audited and received an adverse opinion or a disclaimer of opinion.
(6) Due to serious violations of the law and acts of dishonesty, the entity has been designated by the competent authorities as a discredited person subject to enforcement, a discredited production or business entity, or another type of discredited entity, and its issuance of corporate bonds has been suspended or restricted.
(7) Unauthorized alteration of the intended use of proceeds from the previous issuance of corporate bonds without making the necessary corrections.
(8) The intended use of the funds raised in this offering violates applicable laws and regulations, or the allocation of such funds is inconsistent with national industrial policies.
(9) Except for financial institutions, the proceeds from this bond issuance shall be used for financial investments such as holding financial assets for trading purposes and entrusted wealth management, or for direct or indirect investments in companies whose primary business is the buying and selling of securities.
(10) The offering documents contain false records, misleading statements, or material omissions.
(11) Where there are circumstances that seriously harm the legitimate rights and interests of investors and the public interest.
II. Issuers in the Following Special Industries or Categories
(12) Local financing platform companies. For the purposes of this provision, “local financing platform companies” refer to economic entities established by local governments, their departments, and related institutions through fiscal appropriations or the injection of assets such as land and equity, in accordance with relevant State Council documents, which undertake the financing of government‑funded projects and possess independent legal person status.
(13) Real estate companies identified by the Ministry of Land and Resources and other relevant authorities as engaging in illegal or non-compliant practices such as “idle land,” “land speculation,” “holding back properties to delay sales,” and “artificially inflating housing prices.”
(14) Pawnshops.
(15) Guarantee companies that fail to simultaneously meet the following conditions:
(1) Have been engaged in the business of financing guarantee for at least 3 years;
(2) The registered capital shall be no less than RMB 600 million;
(3) The issuer’s credit rating is AA or higher;
(4) No material violations of laws or regulations in the past three years.
(16) Microfinance companies that fail to simultaneously meet the following conditions:
(1) Established or filed with the approval of the competent provincial authority and having been in existence for at least two years;
(2) The entity must have maintained the highest regulatory rating or performance assessment rating for the past two consecutive years.
(3) The issuer’s credit rating must be AA or higher.

Taxation TAXATATION
Interpretation of the “Announcement of the State Taxation Administration on the Issuance of the Revised Measures for Handling Matters Related to Enterprise Income Tax Preferential Policies”
To implement the tax system’s “delegation, regulation, and service” reform, optimize the tax environment, and effectively enforce the various preferential policies under the Enterprise Income Tax, the State Taxation Administration recently revised and reissued the Measures for Handling Matters Related to Enterprise Income Tax Preferential Policies (hereinafter referred to as the “Measures”). An interpretation is provided below:
I. Background of the Revision
In 2015, in line with the requirements of the “delegation, regulation, and service” reform, the State Taxation Administration issued the Measures for Handling Matters Related to Corporate Income Tax Preferential Policies (Announcement No. 76 of 2015 by the State Taxation Administration), comprehensively abolishing the approval-based management of corporate income tax preferential treatments and replacing it with a filing‑based system. By streamlining tax‑filing procedures, reducing the documentation required, and standardizing administrative requirements, these measures created favorable conditions and provided greater convenience for enterprises to promptly and accurately benefit from corporate income tax incentives. To further implement the CPC Central Committee and the State Council’s series of directives on optimizing the business environment and advancing the “delegation, regulation, and service” reform, and to continue improving the tax environment, the State Taxation Administration revised these Measures and reissued them.
II. Major Changes
(1) Simplify the procedures for handling preferential measures.
According to the Measures, all corporate income tax preferential treatments are administered under a “self-assessment, declaration for enjoyment, and retention of relevant documentation for record‑keeping” approach. Prior to filing their annual tax returns and claiming such benefits, enterprises are no longer required to complete registration procedures or submit the “Corporate Income Tax Preferential Treatment Registration Form,” the “List of Registered Preferential Items for Branches of Consolidated Tax‑Paying Enterprises,” or any other supporting documents. All previously filed materials will now be retained by the enterprise as records for inspection, to be provided to the tax authorities upon request during subsequent verification.
(II) Update the contents of the “Catalogue for the Administration of Corporate Income Tax Preferential Items”
In light of adjustments to the corporate income tax preferential policies, the “Catalogue for Filing and Management of Corporate Income Tax Preferential Items (2015 Edition)” has been revised, resulting in the compilation of the “Catalogue for Management of Corporate Income Tax Preferential Items (2017 Edition)” (hereinafter referred to as the “Catalogue”). First, the names of preferential items have been standardized, ensuring consistency across various documents—including the Catalogue, the “Code Catalogue of Tax Reduction and Exemption Policies,” and the “Annual Corporate Income Tax Return of the People’s Republic of China (Type A, 2017 Edition)—thereby facilitating enterprises’ access and use. Second, the list of preferential items has been adjusted and supplemented, while the policy summaries and key legal bases have been refined, and the principal documentation to be retained for record‑keeping has been further specified. Third, a new section titled “Subsequent Management Requirements” has been added, clearly setting out the relevant requirements for the ongoing administration of these preferential measures.
(3) Strengthen the management of retained documentation for record-keeping purposes
Supporting documentation for record‑keeping refers to contracts, agreements, vouchers, certificates, documents, accounting records, explanatory notes, and other materials related to the preferential measures enjoyed by an enterprise, used to verify whether the enterprise meets the conditions stipulated for such measures. Given the diverse circumstances of enterprises, it is impractical to list all possible supporting documents; therefore, the Measures categorize these materials into “primary supporting documentation” and “other supporting documentation.” Enterprises shall compile and organize the primary supporting documentation in accordance with the checklist set out in the Catalogue, while other supporting documentation shall be compiled by the enterprise itself based on the specific preferential measures it avails, thereby enabling tax authorities to make accurate determinations during subsequent administration.
Under China’s corporate income tax system, which adopts a legal‑person‑based taxation regime, for enterprises that file consolidated returns across regions, the head office is responsible for centrally collecting and retaining all relevant supporting documentation pertaining to preferential treatments. However, if a branch meets the statutory requirements to independently enjoy such preferential treatments, then the branch shall be responsible for collecting and retaining the corresponding documentation. For example, with respect to the preferential treatment of reducing the corporate income tax rate to 15% for encouraged‑industry enterprises located in western regions, when a branch in the western region satisfies the prescribed conditions and qualifies for this benefit, that branch shall collect and retain the relevant supporting materials and, at the same time, submit a list of the retained documents to the head office for consolidation.
The supporting documentation for record‑keeping serves as the direct basis for an enterprise to determine whether it meets the eligibility criteria for the relevant preferential measures. Prior to filing its annual tax return, the enterprise shall comprehensively collect, organize, and carefully assess such documentation. Upon completion of the annual final tax settlement and payment, the enterprise must have fully compiled and organized all required supporting records in preparation for verification by the tax authorities. For example, if an enterprise avails itself of the preferential measure listed as Item 1 in the Catalogue and completes its 2017 corporate income tax return and payment by April 30, 2018, it shall, on that same date, complete the collection and organization of the supporting documentation for Item 1. Branches, as well as non‑resident enterprise entities or establishments subject to consolidated taxation that are entitled under the regulations to independently enjoy preferential measures, shall, upon completing their annual final tax settlement, not only ensure that all required supporting documentation has been collected and organized but also submit a list of such documentation to the head office for consolidation. For instance, if a branch of an enterprise located in the western region benefits from the preferential measure set out as Item 63 in the Catalogue and completes its 2017 corporate income tax return and payment by April 30, 2018, it shall, on that date, likewise complete the collection and organization of the supporting documentation for Item 63 and transmit a list of these documents to the head office for aggregation.
(4) Reafoffice the rights, obligations, and legal liabilities of enterprises.
Enterprises are entitled, in accordance with the law, to enjoy tax incentives, and they also have the obligation to file returns accurately and on time, and to accept supervision and inspections. For the purposes of these Measures, “enterprise” includes resident enterprises as well as non-resident enterprises that have established institutions or establishments within the territory of China.
Following the implementation of these Measures, enterprises may, based on their business circumstances, independently determine whether they meet the eligibility criteria for the relevant preferential treatments. Where such criteria are satisfied, enterprises may, in accordance with the “Eligibility Period” specified in the Catalogue, elect to avail themselves of the preferential treatment either starting from the provisional tax return or at the time of the annual tax return.
After benefiting from a preferential treatment, an enterprise is obligated to maintain and keep on file the required supporting documentation and shall be responsible for the authenticity and legality of such documentation. If the enterprise fails to provide the required documentation as requested by the tax authorities, or if the documentation submitted does not correspond to its actual production and business operations, financial accounting records, relevant technical fields, industries, applicable catalogs, qualification certificates, or other pertinent information—thereby failing to demonstrate compliance with the conditions stipulated for the preferential treatment—or if there are instances of fraud or misrepresentation, the tax authorities shall, in accordance with the law, recover any corporate income tax benefits previously granted.
(5) Requirements for Subsequent Management
To strengthen administration, the Measures stipulate that tax authorities shall conduct follow-up management of enterprises’ eligibility for preferential treatments. Enterprises are required to cooperate and submit supporting documentation for record‑keeping in accordance with the deadlines and procedures prescribed by the tax authorities. In particular, pursuant to the relevant provisions of the “Notice of the Ministry of Finance, the State Taxation Administration, the National Development and Reform Commission, and the Ministry of Industry and Information Technology on Issues Concerning Corporate Income Tax Preferential Policies for the Software and Integrated Circuit Industries” (Cai Shui [2016] No. 49), enterprises benefiting from the preferential measures listed in items 30–31, 45–53, and 56–57 of the Catalog shall, following the annual final tax settlement, submit the documents specified in the “Follow-up Management Requirements” section of the Catalog to the tax authorities. Such submissions must be made no later than the deadline for the current year’s final tax settlement. For example, if an enterprise avails itself of the preferential treatment under item 45 of the Catalog and completes its 2017 corporate income tax return and payment by April 30, 2018, it must simultaneously compile and organize all required supporting documentation by that date and, no later than May 31, 2018, submit the relevant materials to the tax authorities in accordance with the document checklist set out in the “Follow-up Management Requirements” section for item 45.
Verification of other preferential treatments shall be conducted by the tax authorities of each province (including those in cities under separate planning) in accordance with unified arrangements, including follow-up administration and related measures.
III. Implementation Period
These Measures apply to the annual corporate income tax final return and settlement for the 2017 tax year, as well as to the handling of preferential treatment in subsequent years. When conducting the 2017 corporate income tax final return and settlement, enterprises that qualify for tax preferences are no longer required to file any registration or record‑keeping procedures.

“Mass Entrepreneurship and Innovation” initiatives, along with small and micro enterprises, are set to receive another RMB 60 billion in tax relief.
Recently, the State Council Information Office held a regular policy briefing, during which officials from the Ministry of Finance and the State Taxation Administration outlined tax‑cut measures to support the development of small and micro enterprises, while an official from the China Banking and Insurance Regulatory Commission detailed efforts to enhance the capacity of banking and insurance institutions to deliver inclusive financial services. The seven tax‑reduction measures recently approved at the State Council Executive Meeting are expected to ease the tax burden on entrepreneurs, innovators, and small and micro businesses by more than 60 billion yuan for the year. Fiscal and tax authorities are expediting the issuance of implementing guidelines and rolling out taxpayer‑friendly measures to ensure that these tax‑cut “benefits” are fully realized.
At its executive meeting held on April 25, the State Council decided to introduce seven additional tax‑cut measures to support entrepreneurship, innovation, and the development of small and micro enterprises. The newly unveiled package of measures to further strengthen tax relief comprises seven key components, including raising the unit value cap for newly purchased equipment and instruments eligible for a one‑time pre‑tax deduction in the year of acquisition from RMB 1 million to RMB 5 million; increasing the annual taxable income threshold for small, low‑profit enterprises qualifying for a 50% reduction in corporate income tax from RMB 500,000 to RMB 1 million; removing the restriction that prevents the additional tax deduction of overseas R&D expenses commissioned by enterprises; and extending nationwide the pilot tax incentives applicable to venture capital offices and angel investors.
At the same time, the scope of policy benefits has been broadened. The measures include policies that directly expand the range of income tax reductions and exemptions, tax-deductible incentives to encourage corporate R&D and investment, and an extension of the carryforward period for losses incurred by technology offices. With diverse approaches and rich content, these policies enable a greater number of small and micro enterprises to reap their benefits. Moreover, the policies exhibit greater stability and continuity. For instance, venture capital and angel investment policies have accumulated mature experience in eight comprehensive innovation‑reform pilot zones, including the Beijing–Tianjin–Hebei region, as well as in the Suzhou Industrial Park, meeting the conditions for nationwide rollout and helping to stabilize market expectations.
At present, the main priorities can be summarized as follows:
1. Promptly issue detailed operational guidelines to ensure that tax reduction policies are implemented and take effect as quickly as possible.
2. Swiftly intensify efforts to publicize and provide guidance on preferential policies, helping taxpayers accurately understand and effectively implement tax reduction measures.
3. Promptly complete the upgrade of the tax collection and administration system and software to facilitate taxpayers’ online tax filing.
4. Promptly implement the new measures aimed at reducing the tax compliance burden on taxpayers.

LITIGATION & ARBITRATION
The National Pilot Work Promotion Conference on the Diversified Resolution of Overseas Chinese-related Disputes was held in Putian, Fujian.
On May 10, the Supreme People’s Court and the All-China Federation of Returned Overseas Chinese jointly convened a national conference in Putian City, Fujian Province, to advance pilot work on diversified dispute resolution involving overseas Chinese. Officials from the Supreme People’s Court’s Judicial Reform Office and the All-China Federation of Returned Overseas Chinese’s Department for Protecting Rights and Interests attended the meeting and delivered remarks. Participants exchanged experiences, discussed challenges, and put forward recommendations regarding the diversified resolution of disputes involving overseas Chinese. They also conducted on-site visits to a grassroots court branch in a traditional overseas Chinese hometown in Putian, as well as to local overseas Chinese federations and organizations engaged in mediation related to overseas Chinese affairs.
On March 19 this year, the Supreme People’s Court and the All-China Federation of Returned Overseas Chinese jointly issued the “Opinions on Launching a Pilot Program for Diversified Dispute Resolution Involving Overseas Chinese in Certain Regions,” initiating pilot projects in 11 provinces, autonomous regions, and municipalities directly under the central government, including Jilin, Shanghai, Jiangsu, Zhejiang, and Anhui. To ensure effective implementation of the pilot program and foster coordinated efforts, the Supreme People’s Court and the All-China Federation of Returned Overseas Chinese convened this working‑progress meeting, where they made unified arrangements to fully appreciate the significance of the pilot work, maximize the synergistic role of the courts and the federation, and promote the vigorous and orderly advancement of the pilot initiatives.
The Supreme People’s Court’s specially appointed supervisors, as well as responsible officials from the high people’s courts of the 11 pilot regions and the provincial overseas Chinese federations, attended the meeting.

The Supreme People’s Court’s official WeChat mini-program has been launched and is now operational.
To further expand the scope of mobile applications on the Supreme People’s Court’s official website and build a “smart court in your palm,” while enhancing the reach and influence of the Court’s official new-media platform, the Supreme People’s Court’s official WeChat mini‑program was officially launched and put into operation on May 2.
The Supreme People’s Court’s official WeChat mini‑program, now launched, comprises five major functional modules: judicial publicity, judicial transparency, judicial services, oversight and interaction, and the information portal for achieving a decisive victory in addressing the challenge of enforcing court judgments. Specifically, judicial publicity features an overview of the courts, a visitor’s guide, and highlights from the courts’ top news; judicial transparency includes four major public disclosure platforms as well as notices on court hearings and live-streamed trials; judicial services provide access to document templates, a legal library, and guiding cases; and oversight and interaction offers channels such as the chief justice’s mailbox, a message‑submission feature for the Chief Justice, and a communication platform connecting deputies to the National People’s Congress and members of the National Committee of the Chinese People’s Political Consultative Conference.
Going forward, the Supreme People’s Court’s official website and its WeChat mini‑program will further strengthen the real-time integration of mobile courtroom livestreaming with the China Court Trial Information Website. They will progressively enhance a suite of application tools, including public notice management, a platform for exposing discredited parties, a litigation fee calculator, online payment, face‑recognition case inquiry, online case filing, online mediation (integrated with the People’s Courts Mediation Platform), a directory of mediators, a roster of external entrusted institutions, online court sessions, WeChat‑based service of process, reward‑based enforcement, judge‑client communication, and channels for reporting leads in enforcement proceedings. Together, these features will forge a multi‑dimensional, end‑to‑end “smart court in your hand,” encompassing judicial publicity, judicial transparency, litigation services, and interactive oversight.
Other
The China Securities Regulatory Commission has approved Foxconn Industrial Internet’s IPO application, but the fundraising amount has not been disclosed.
On May 11, the China Securities Regulatory Commission (CSRC) approved, in accordance with statutory procedures, the initial public offering application of Foxconn Industrial Internet Co., Ltd. Foxconn and its underwriters will coordinate with the Shanghai Stock Exchange to determine the issuance schedule and publish the prospectus. Notably, this approval does not disclose the amount of funds to be raised, whereas previous approvals typically included such information. Since April, the CSRC has issued four approval notices, each covering two companies, with planned fundraising amounts of RMB 3 billion, RMB 1.5 billion, RMB 1.5 billion, and RMB 1.1 billion, respectively.
According to Foxconn’s prospectus, the company plans to raise approximately RMB 27.2 billion, representing 10% of its total share capital after the offering. This RMB 27.2 billion fundraising represents the largest IPO since 2018 and ranks among the top in the history of A‑share listings. Other companies that have raised tens of billions of yuan include industry giants such as PetroChina, China Construction Bank, and Ping An Insurance. Following Foxconn’s approval by the review committee, the offering was repeatedly delayed; reports at the time suggested the delay stemmed from the deal’s substantial size. From the submission of the draft prospectus on February 1 to receiving regulatory approval, only 36 days elapsed, setting a new record for the fastest IPO process in the A‑share market.
Foxconn primarily engages in the design, research and development, manufacturing, and sales of a wide range of electronic devices, leveraging the industrial internet to provide smart manufacturing and technology‑based service solutions to globally renowned clients. Its business is organized into three major segments: communication network equipment, cloud‑service equipment, and precision tools and industrial robots. Foxconn’s goal is to become a world‑leading provider of comprehensive smart manufacturing and technology‑service solutions powered by the industrial internet.

China’s first domestically built aircraft carrier conducted its sea trials on May 13, further cementing its place among the world’s most advanced carriers.
At around 7:00 a.m. on May 13, China’s second aircraft carrier departed from the Dalian Shipbuilding Yard dock to conduct sea trials in designated waters. The primary objectives are to test and verify the reliability and stability of the propulsion system and other key equipment. According to reports, since its launch on April 26 last year, construction of the second carrier has progressed steadily according to schedule, with system and equipment commissioning, outfitting work, and relevant mooring trials successfully completed, thereby meeting the technical requirements for sea trials.

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