JC Master Legal News Issue 821

Key Takeaways for This Issue
The State Council has issued a plan to further deepen reform and opening-up in the Guangdong, Tianjin, and Fujian Free Trade Zones.
The State Council recently issued the “Plan for Further Deepening Reform and Opening-Up in the China (Guangdong) Pilot Free Trade Zone,” the “Plan for Further Deepening Reform and Opening-Up in the China (Tianjin) Pilot Free Trade Zone,” and the “Plan for Further Deepening Reform and Opening-Up in the China (Fujian) Pilot Free Trade Zone.”

The China Banking and Insurance Regulatory Commission has issued the “Guidelines on Data Governance for Banking Financial Institutions.”
To guide banking and financial institutions in strengthening data governance, enhancing data quality, fully realizing the value of data, and elevating their operational and management standards—thereby facilitating a transition from rapid growth to high-quality development—the China Banking and Insurance Regulatory Commission, after thoroughly incorporating constructive feedback from all sectors of society, has issued the “Guidelines on Data Governance for Banking and Financial Institutions” (hereinafter referred to as the “Guidelines”).

The Shenzhen Stock Exchange strengthens law-based market governance to safeguard the legitimate rights and interests of market entities.
On May 24, 2018, the Shenzhen Stock Exchange’s Listing Committee held its first hearing to deliberate on the proposed decision to delist the shares of Yinji EnCarbon New Materials Group Co., Ltd. (hereinafter referred to as “*ST EnCarbon” or the “Company”), and heard the parties’ arguments and defenses on the spot.

Jiangsu Province is publicly soliciting experts to establish a provincial PPP expert pool.
To make full use of expert resources, leverage their technical strengths, and ensure that activities such as the review, supervision, monitoring, and research of PPP (Public‑Private Partnership) projects in our province are conducted in a fair, impartial, scientific, and rigorous manner, the Provincial Department of Finance recently issued an announcement. From May 10 to May 30, 2018, it will publicly solicit PPP experts from all sectors of society to establish the Jiangsu Province PPP Expert Pool, thereby drawing on the expertise of a professional “think tank” to provide robust support throughout the entire process of high‑quality PPP development in Jiangsu.

Table of Contents
Table of Contents

Finance & Capital Markets
The State Council has issued a notice strictly prohibiting local governments from illegally and indirectly incurring debt under the guise of PPPs or other similar arrangements.
The China Banking and Insurance Regulatory Commission has issued the “Guidelines on Data Governance for Banking Financial Institutions.”
The Shenzhen Stock Exchange strengthens law-based market governance to safeguard the legitimate rights and interests of market entities.
Jiangsu Province is publicly soliciting experts to establish a provincial PPP expert pool.
Notice of the Shanghai Stock Exchange on Soliciting Public Comments on the Revision of the “Shanghai Stock Exchange Rules for the Listing of Corporate Bonds” and Other Relevant Business Rules

Corporate & Commercial
The China Banking and Insurance Regulatory Commission has issued the “Administrative Measures for Liquidity Risk Management of Commercial Banks.”
Spokesperson of the China Securities Regulatory Commission Answers Questions from Journalists on Cash Dividend Practices of Listed Companies
The State Council has granted the free trade zones greater autonomy in reform.
CSRC: This year, it will intensify efforts to channel capital “fresh liquidity” into financial poverty alleviation.
Our city’s “Unicorn and Gazelle Enterprise Club” was officially inaugurated.

Taxation
Tax authorities at all levels have resolutely implemented the decisions and arrangements of the CPC Central Committee and the State Council, and have steadily and prudently advanced the reform of the national and local tax collection and administration systems.
A new round of tax audits has been launched, with a focus on monitoring unusual activity in individual bank accounts.

Litigation & Arbitration
Supreme People’s Court Regulations on the Differentiation of Civil and Commercial Cases into Simple and Complex Categories and on the Procedures for Mediation and Summary Judgment (Trial Implementation)
The Jiangsu procuratorial organs have instituted public prosecution, in accordance with the law, against Wang Jianhua on suspicion of accepting bribes.

Other
Ministry of Transport: Ride-hailing services will be incorporated into the taxi service assessment system.
Guiyang High-Tech Zone Establishes a 100-Million-Yuan Development Fund to Attract Artificial Intelligence Investments
Finance & Capital Markets
The State Council has issued a plan to further deepen reform and opening-up in the Guangdong, Tianjin, and Fujian Free Trade Zones.
The State Council recently issued the “Plan for Further Deepening Reform and Opening-Up in the China (Guangdong) Pilot Free Trade Zone,” the “Plan for Further Deepening Reform and Opening-Up in the China (Tianjin) Pilot Free Trade Zone,” and the “Plan for Further Deepening Reform and Opening-Up in the China (Fujian) Pilot Free Trade Zone.”
Establishing pilot free trade zones is a strategic initiative undertaken by the CPC Central Committee and the State Council to comprehensively deepen reform and further open up in the new context. Since their launch, the Guangdong, Tianjin, and Fujian pilot free trade zones have, in alignment with national strategies and tailored to local conditions, pursued distinctive, targeted explorations, yielding a number of replicable and scalable innovations. Pilot experiences—including the international trade “Single Window,” a new model of government services featuring enterprise‑specific web portals, a market‑regulation system based on credit‑risk classification, the “Four Ones” reform of the investment‑management regime, and simplified business deregistration—have been rolled out nationwide. As a result, the benefits of reform and opening-up are gradually being realized, and overall, the intended objectives have been achieved.
To further deepen reform and opening-up in the Guangdong, Tianjin, and Fujian Pilot Free Trade Zones, we must fully implement the spirit of the 19th National Congress of the Communist Party of China, take Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as our guiding principle, and, in line with the requirements of high-quality development, remain committed to supply-side structural reform as the central task, institutional innovation as the core, and risk prevention and control as the bottom line. We will continue to liberate our minds, pioneer and experiment, use openness to drive reform, foster development, and spur innovation, and take the lead in establishing a system that aligns with internationally accepted rules on investment and trade, thereby creating a business environment characterized by rule of law, internationalization, and convenience. We will grant the free trade zones greater autonomy in reform, and further tap their reform potential and address persistent challenges in forging a new pattern of comprehensive opening-up, enhancing government governance, and accelerating the cultivation of new drivers of growth and competitive advantages.
The Guangdong Pilot Free Trade Zone, with the aim of establishing itself as a pioneering area for a new open‑economy system, a high‑level gateway for opening up to the outside world, and a demonstration zone for cooperation within the Guangdong–Hong Kong–Macao Greater Bay Area, has put forward 18 specific measures, including fostering a fair and clean rule‑of‑law environment, building a pilot and demonstration window for the opening up of the financial sector, and further advancing the liberalization of service trade among Guangdong, Hong Kong, and Macao.
The Tianjin Free Trade Zone, with the aim of establishing a new open‑economy framework, enhancing its international competitive edge, and building a demonstration zone for coordinated development in the Beijing–Tianjin–Hebei region, has put forward 16 specific measures, including innovating mechanisms for allocating production factors, fostering cutting‑edge emerging technologies, and improving mechanisms to support collaborative development.
The Fujian Pilot Free Trade Zone, with the aim of further enhancing government governance, deepening cross‑strait economic cooperation, and accelerating the development of the core area of the 21st Century Maritime Silk Road, has put forward 21 specific measures, including fostering a high‑standard, internationally competitive business environment, promoting standardization and transparency in government services, and strengthening financial cooperation between Fujian and Taiwan.
The plan emphasizes that Guangdong, Tianjin, and Fujian should officely grasp their core roles, strengthen implementation and organization, reinforce their sense of responsibility and mission, and refine their working mechanisms. They are to fully leverage the initiative of local authorities and relevant departments, systematically advance the implementation of pilot reform tasks, and promptly summarize and evaluate the outcomes of these pilots. By enhancing the systemic integration of reforms, they should strive to produce more institutional innovations that can be replicated and scaled up, thereby better serving the overarching national agenda of reform and opening-up.
According to the briefing, the three deepening reform plans place institutional innovation at their core and risk prevention and control as their bottom line. They focus on key reform areas such as “giving full play to the decisive role of the market in resource allocation,” “further advancing administrative streamlining, delegation of power, integration of regulation and service optimization,” “creating a business environment that is law-based, internationalized, and convenient,” and “serving the development of the real economy.” These plans also undertake in-depth explorations of reform in such fields as trade, investment, finance, and ongoing and post-event regulatory oversight.

The China Banking and Insurance Regulatory Commission has issued the “Guidelines on Data Governance for Banking Financial Institutions.”
To guide banking and financial institutions in strengthening data governance, enhancing data quality, fully realizing the value of data, and elevating their operational and management standards—thereby facilitating a transition from rapid growth to high-quality development—the China Banking and Insurance Regulatory Commission, after thoroughly incorporating constructive feedback from all sectors of society, has issued the “Guidelines on Data Governance for Banking and Financial Institutions” (hereinafter referred to as the “Guidelines”).
The Guidelines comprise seven chapters—General Provisions, Data Governance Framework, Data Management, Data Quality Control, Realization of Data Value, Supervision and Administration, and Supplementary Provisions—totaling fifty-five articles.
First, the data governance framework has been clearly defined. The Guidelines require adequate allocation of data governance resources, delineate the respective responsibilities of the board of directors, the supervisory board, and senior management, and suggest establishing a chief data officer position tailored to the organization’s specific circumstances. They also clarify the roles and responsibilities of the lead department and business units, and set forth requirements for job design, team building, and the development of a data‑driven culture.
Second, enhance the efficiency and effectiveness of data management and data quality. The Guidelines set forth key requirements for data management, explicitly establishing a self-assessment mechanism as well as accountability and incentive frameworks to ensure the efficient operation of data governance. They also comprehensively strengthen data quality standards by instituting data quality control mechanisms to guarantee the authenticity, accuracy, consistency, completeness, and timeliness of data. Furthermore, the Guidelines clarify that regulatory data should be incorporated into the scope of data governance and specify concrete requirements in relevant provisions.
Third, the key requirements for fully realizing data value have been clarified. It is stipulated that banking financial institutions shall integrate data applications into every stage of business operations, risk management, and internal control, thereby effectively identifying risks, optimizing business processes, and achieving data‑driven bank development. Particular emphasis is placed on building robust data aggregation capabilities and on the requirements for evaluating new products, ensuring that the impact of major acquisitions and asset disposals on data governance is duly assessed and appropriately managed.
Fourth, strengthen regulatory oversight. The responsibilities, methods, and requirements of supervisory authorities have been clearly defined. For banking financial institutions whose data governance fails to meet the relevant laws, regulations, and supervisory rules, they are required to develop remediation plans and be ordered to make corrections within a specified timeframe; such non‑compliance may also be linked to corporate governance assessments and regulatory ratings. Additionally, other appropriate regulatory measures may be imposed in accordance with the law, and administrative penalties may be imposed.
The issuance and implementation of the Guidelines will help the banking sector transition from rapid growth to high-quality development, expand new business lines, unlock new drivers of growth, enhance service capabilities, and improve the quality and efficiency of operations and management.

The Shenzhen Stock Exchange strengthens law-based market governance to safeguard the legitimate rights and interests of market entities.
On May 24, 2018, the Shenzhen Stock Exchange’s Listing Committee held its first hearing to deliberate on the proposed decision to delist the shares of Yinji EnCarbon New Materials Group Co., Ltd. (hereinafter referred to as “*ST EnCarbon” or the “Company”), and heard the parties’ arguments and defenses on the spot.
At the hearing, Shenzhen Stock Exchange staff presented on the proposed decision to delist *ST Xiancarbon shares, along with the relevant factual grounds and regulatory basis. Due to negative audited net profits for three consecutive fiscal years—2014, 2015, and 2016—*ST Xiancarbon shares were suspended from trading effective July 6, 2017. On April 28, 2018, the company disclosed its 2017 annual report, which revealed that its financial statements had received an “unable to express an opinion” audit report from Zhongxinghua Certified Public Accountants (Special General Partnership). Pursuant to Article 14.4.1 of the Shenzhen Stock Exchange’s Rules for Listing Stocks, if a listed company is suspended due to meeting any of the specified criteria related to net profit, net assets, operating revenue, or the type of audit opinion, and if, in the first annual report following suspension, its financial statements receive a qualified, “unable to express an opinion,” or adverse audit opinion—regardless of whether the financial results are profitable or loss‑making—the company shall be subject to mandatory delisting.
The parties to the hearing presented their views to the hearing panel, covering the company’s historical evolution, the work undertaken during the suspension of its stock trading, the change in the company’s actual controller, the matters addressed in the 2017 audit report expressing a disclaimer of opinion, and the measures the company plans to implement going forward. They also stated that the company is fully aware that it clearly falls under the circumstances specified in the Stock Listing Rules that warrant delisting; however, they requested that the Commission take into account the company’s specific circumstances and grant it a reasonable period to effect necessary rectifications. The hearing panel members raised inquiries regarding the reasons behind the accounting office’s issuance of an audit report with a disclaimer of opinion, the independent directors’ rationale for abstaining from signing the 2017 annual report, and the applicable provisions of the Stock Listing Rules that trigger delisting. The parties to the hearing and Shenzhen Stock Exchange staff provided responses and clarifications. Following the hearing, the Listing Committee convened a working meeting to formulate its review opinion based on the proceedings, and the Shenzhen Stock Exchange will, on this basis, decide whether to terminate the listing of *ST Eni Carbon shares.
This hearing marks the first since the Shenzhen Stock Exchange (SZSE) issued its newly revised “Detailed Rules on Self-Regulatory Hearing Procedures” on April 23 this year, and also represents the SZSE’s inaugural hearing in the context of reviewing applications for the mandatory delisting of stocks. By clearly explaining to the parties concerned the factual grounds and regulatory basis underlying the decision to delist a stock, and by affording them ample opportunity to present their views and defenses, the SZSE seeks to provide members of the Listing Committee with a more comprehensive and accurate understanding of the review rationale, thereby enhancing the scientific rigor and standardization of major regulatory decisions. This face-to-face hearing and dialogue between the SZSE and market participants has further strengthened stakeholders’ comprehension of regulatory rules, effectively safeguarding their rights to information, participation, expression, and oversight, and playing a positive role in improving the transparency and credibility of the exchange’s frontline regulatory functions.
Going forward, the Shenzhen Stock Exchange will uphold law-based market governance, conscientiously fulfill its frontline regulatory duties, and establish and refine a fair, impartial, and transparent regulatory framework. It will strive to build a transparent exchange, thereby providing robust safeguards for the sound and stable development of the multi-tiered capital market.

Jiangsu Province is publicly soliciting experts to establish a provincial PPP expert pool.
To make full use of expert resources, leverage their technical strengths, and ensure that activities such as the review, supervision, monitoring, and research of PPP (Public‑Private Partnership) projects in our province are conducted in a fair, impartial, scientific, and rigorous manner, the Provincial Department of Finance recently issued an announcement. From May 10 to May 30, 2018, it will publicly solicit PPP experts from all sectors of society to establish the Jiangsu Province PPP Expert Pool, thereby drawing on the expertise of a professional “think tank” to provide robust support throughout the entire process of high‑quality PPP development in Jiangsu.
The solicitation covers seven major categories—fiscal management, sectoral management, investment and financing management, law, financial auditing and asset valuation, engineering consulting, and construction and operations—providing more precise and professional intellectual support for PPP projects in our province across infrastructure and public service sectors, including transportation, tourism, agriculture, water conservancy, environmental governance, integrated development, education, elderly care, healthcare, wastewater and waste treatment, culture, sports, and utility tunnels.
The announcement stipulates that experts selected for the PPP Expert Pool must hold a senior professional technical title in a PPP‑related field, possess a registered professional qualification, a lawyer’s license, or an equivalent level of professional expertise; have at least 10 years of work experience, including at least three years dedicated to PPP‑related activities; and maintain a clean record with no violations of laws, regulations, or ethical standards. In principle, they should have participated in at least three PPP projects within the past three years and be capable of providing high‑quality services to government departments at all levels across the province, in accordance with PPP management policies, throughout all stages—including project appraisal, scheme formulation, two‑review and verification, tendering and procurement, and contract drafting and negotiation.
The announcement clarifies that the primary responsibilities of experts listed in the database include, on behalf of the Provincial Department of Finance, participating in the formulation of PPP‑related policies, conducting research projects, screening and evaluating projects, providing expert consultations and justifications, carrying out supervisory inspections and field studies, compiling case studies, and delivering professional training. They may also, upon request from local governments, private sector investors, and other stakeholders, engage in the design of PPP project proposals, perform feasibility assessments and technical reviews, provide staff training, and manage government procurement processes. Government departments at all levels throughout the province are expected to make full use of the PPP expert pool, integrating the experts’ technical expertise and intellectual contributions into the entire PPP management cycle—before, during, and after implementation—thereby continuously enhancing the province’s PPP management capacity and overall governance standards.

Notice of the Shanghai Stock Exchange on Soliciting Public Comments on the Revision of the “Shanghai Stock Exchange Rules for the Listing of Corporate Bonds” and Other Relevant Business Rules
To further standardize the listing and transfer‑on‑board activities of corporate bonds, promote the sound and stable development of the bond market, and strengthen the protection of bond investors’ rights and interests, in light of the evolving needs of the bond market and regulatory practice, the Shanghai Stock Exchange has revised the “Shanghai Stock Exchange Rules for the Listing of Corporate Bonds (Revised in 2015)” and the “Provisional Measures for the Administration of Non‑Public Issuance of Corporate Bonds by the Shanghai Stock Exchange” (drafts for public comment and explanatory notes are attached). The Exchange now invites public comments.
Commercial & Corporate
The China Banking and Insurance Regulatory Commission has issued the “Administrative Measures for Liquidity Risk Management of Commercial Banks.”
Since its implementation in March 2014, the Measures for the Administration of Liquidity Risk of Commercial Banks (Trial) (hereinafter referred to as the “Liquidity Measures”) has played a crucial role in strengthening liquidity risk management and supervision. In recent years, with the marketization of interest rates and the continued deepening of financial innovation, differences among banks of varying types—regarding business models, operational complexity, and asset–liability structures—have become increasingly apparent, placing higher demands on liquidity risk management. Revising the Liquidity Measures will better align with the current needs of commercial banks in managing liquidity risk, further helping them consolidate their liquidity risk‑management foundations, enhance their risk‑resilience, support the real economy, and ensure the safe and sound operation of the banking system.
The main contents of this revision include: First, three new quantitative indicators have been introduced. Among them, the Net Stable Funding Ratio measures the extent to which a bank’s long-term stable funding supports its business development and applies to commercial banks with total assets of RMB 200 billion or more. The High-Quality Liquid Assets Ratio is a simplified version of the Liquidity Coverage Ratio, assessing whether a bank’s holdings of high-quality liquid assets can cover short-term liquidity shortfalls under stress scenarios, and applies to commercial banks with total assets below RMB 200 billion. The Liquidity Matching Ratio evaluates the maturity structure of a bank’s major assets and liabilities and applies to all commercial banks. Second, the liquidity risk monitoring framework has been further refined. The calculation methods for certain monitoring indicators have been rationally optimized, with greater emphasis on their application in risk management and regulatory oversight. Third, requirements related to liquidity risk management have been detailed, including day‑to‑day liquidity risk management and funding management.
The revised “Liquidity Measures” comprises four chapters, 75 articles, and seven annexes. Chapter One, “General Provisions,” primarily clarifies the scope of application of the Measures, defines liquidity risk, and sets out the overarching requirements for liquidity risk management and supervision. Chapter Two, “Liquidity Risk Management,” establishes the overall framework and qualitative requirements for banks’ liquidity risk management systems. Chapter Three, “Liquidity Risk Supervision,” specifies various liquidity risk‑related regulatory indicators, introduces multi‑dimensional liquidity risk monitoring tools, and outlines the methods and measures for supervising liquidity risk. Chapter Four, “Supplementary Provisions,” delineates the effective date of the Measures, the scope of institutions subject to their application by reference, and the implementation arrangements for the liquidity coverage ratio, the liquidity matching ratio, and the high‑quality liquid assets adequacy ratio, among other matters. The seven annexes to the Measures provide detailed technical specifications for key aspects of liquidity risk management and set forth the measurement standards for quantitative indicators.
The revised “Liquidity Measures” further clarifies the qualitative requirements for commercial banks’ liquidity risk management frameworks, establishes differentiated quantitative regulatory standards tailored to the characteristics of different banks, and introduces a unified, multidimensional toolkit for monitoring and analyzing liquidity risk, thereby constructing a relatively comprehensive liquidity risk regulatory framework. The revised measures take effect on July 1, 2018. Among the three newly introduced quantitative indicators, the net stable funding ratio requirement will be implemented concurrently with the Measures. The high-quality liquid assets adequacy ratio will follow a phased compliance schedule, with commercial banks required to reach 80% by the end of 2018 and 100% by the end of June 2019. The liquidity coverage ratio will be enforced starting January 1, 2020, but will remain a monitoring indicator until that date.

Spokesperson of the China Securities Regulatory Commission Answers Questions from Journalists on Cash Dividend Practices of Listed Companies
A reporter asked the CSRC spokesperson about specific issues concerning certain listed companies that have either failed to distribute cash dividends for an extended period or have paid only minimal dividends.
A spokesperson for the China Securities Regulatory Commission stated that some listed companies have long failed to distribute dividends, either by not paying dividends when they should or by paying insufficient ones, prompting considerable criticism in the market. Investors rightly expect to share in the benefits and returns generated by economic growth and the expansion of listed companies through their equity holdings. As regulators, our primary objective is to uphold fairness and justice in the capital markets, enhance the efficiency of resource allocation, provide effective support to the real economy, and safeguard the legitimate rights and interests of the broad base of small and medium-sized investors. In recent years, while steadfastly adhering to the principle of comprehensive, rigorous, and law-based regulation, the CSRC has actively promoted cash dividends among listed companies, encouraged them to place greater emphasis on investor returns, strengthened mechanisms for shareholder remuneration, and maintained stringent oversight of companies that have persistently refrained from distributing dividends, thereby driving continuous improvements in their cash dividend payout ratios.
According to available information, the cash dividend practices of listed companies have undergone significant improvement in recent years, reflecting a positive trend. The 2017 annual reports of listed companies show that 2,754 offices disclosed cash dividends totaling approximately RMB 1.070572 trillion, up 21.88% year on year—a first-ever breach of the RMB 1 trillion threshold. Among them, 1,424 main‑board companies distributed RMB 956.38 billion, accounting for 89.33%; meanwhile, 714 SME‑board companies and 616 ChiNext companies paid out RMB 85.219 billion and RMB 28.973 billion, respectively, representing 7.96% and 2.71% of the total. Specific characteristics include:
First, non-financial enterprises representing the real economy distributed over RMB 600 billion in cash dividends, roughly one-third of their net profits for the same period. In particular, traditional industries such as coal and steel—direct beneficiaries of supply-side structural reform—not only reversed losses but also saw some companies proactively propose generous dividend plans, sharing the fruits of reform and development with investors.
Second, the number of listed companies maintaining consistently high dividend payout ratios continues to grow. Over the past three years (2015–2017), 660 companies sustained a cash dividend payout ratio above 30%, and 128 companies exceeded 50%, representing increases of 14% and 20%, respectively, compared with the preceding three-year period (2014–2016). In 2017, 1,512 companies reported dividend payout ratios of 30% or higher, accounting for 55.08% of all listed offices; among them, 547 companies had payout ratios of 50% or more, and 211 companies exceeded an 80% payout ratio.
Third, some listed companies that have long refrained from paying dividends or maintained low dividend payout ratios have proactively announced dividend plans. For instance, among the 35 companies that were financially capable of distributing dividends during the 2014–2016 period but had not paid any dividends consecutively, 15 introduced dividend proposals in 2017, with an average payout ratio exceeding 50%.
In addition, dividend practices have undergone a positive shift, with the “high‑ratio stock dividends and share transfers” that had long been prevalent in the A‑share market significantly curtailed. In 2017, only 57 companies announced such measures, down by 144 and 313, respectively, compared with 2016 and 2015. Statistics show that, on the trading day preceding the disclosure of a high‑ratio stock dividend or share transfer, the average stock price increase was just about 1%; on the day following disclosure, the average gain stood at roughly 2%; and by the third trading day after the announcement, share prices had largely returned to their pre‑announcement levels. This indicates that market reactions to such announcements have become increasingly rational and cautious.

The State Council has granted the free trade zones greater autonomy in reform.
On May 26, the State Council Information Office held a press conference on the plans for deepening reform and opening-up in the free trade zones and on the replication and promotion of their experiences. At the event, Ren Hongbin, Assistant Minister of Commerce, stated that the three plans—“Further Deepening Reform and Opening-Up in the China (Guangdong) Pilot Free Trade Zone,” “Further Deepening Reform and Opening-Up in the China (Tianjin) Pilot Free Trade Zone,” and “Further Deepening Reform and Opening-Up in the China (Fujian) Pilot Free Trade Zone”—have recently been officially issued by the State Council.
The plan states that, to further deepen reform and opening-up in the Guangdong, Tianjin, and Fujian Pilot Free Trade Zones, greater autonomy in reform should be granted to these zones, enabling them to tap into their reform potential and address persistent challenges in forging a new pattern of comprehensive opening-up and accelerating the cultivation of new drivers of development. The plan focuses on key reform areas—such as supporting the real economy—and undertakes in-depth explorations across multiple sectors. In alignment with national strategies and leveraging their respective strengths, the three provinces and municipalities have also formulated distinctive pilot tasks, each with its own priorities and emphases.
The Guangdong Pilot Free Trade Zone, with the aim of establishing itself as a pioneering area for an open economic system, a high‑level gateway for opening up to the outside world, and a demonstration zone for cooperation within the Guangdong–Hong Kong–Macao Greater Bay Area, has put forward 18 specific measures, including fostering a fair and clean rule‑of‑law environment, building a pilot window for the opening up of the financial sector, and further advancing the liberalization of service trade among Guangdong, Hong Kong, and Macao. The Tianjin Pilot Free Trade Zone, focused on constructing a new open economic system, cultivating new advantages in international competition, and developing a demonstration zone for coordinated development in the Beijing–Tianjin–Hebei region, has proposed 16 concrete initiatives, such as innovating mechanisms for allocating production factors, promoting the incubation of cutting‑edge emerging technologies, and improving mechanisms for collaborative service development. The Fujian Pilot Free Trade Zone, aiming to further enhance government governance, deepen cross‑strait economic cooperation, and accelerate the development of the core area of the 21st Century Maritime Silk Road, has outlined 21 specific measures, including creating a high‑standard, internationally oriented business environment, advancing the standardization and transparency of government services, and strengthening financial cooperation between Fujian and Taiwan.
Ren Hongbin stated that the 30 reform measures piloted across the 11 free trade zones reflect differentiated experimentation. These pilot initiatives, tailored to each zone’s development positioning and local characteristics, are highly innovative and distinctly rooted in their respective regions. Taking the biopharmaceutical sector as an example, the Shanghai FTZ, by strengthening its linkage with scientific and technological innovation, took the lead in exploring and rolling out the “Administrative Licensing Reform for Low-Risk Special Biological Products.” The Guangdong FTZ, focused on deepening cooperation between the mainland and Hong Kong and Macao, pioneered a pilot program to “expand the scope of establishing partnership‑type joint law offices” between the mainland and these two regions. Meanwhile, the Fujian FTZ, committed to building itself into a core hub of the 21st Century Maritime Silk Road, conducted in‑depth explorations in the international shipping field, promoting pilot reforms—such as the “Three‑in‑One Processing of Ship Certificates”—that bear clear local hallmarks. Although the seven newly established FTZs, including Liaoning, have been in operation for only one year, they account for 17 of the 30 reform measures being replicated and promoted this time—more than half. For instance, the Liaoning FTZ has launched innovative pilots aimed at developing Northeast Asia into a major shipping center, replicating and scaling up the “Innovative Supervision Model for Bonded Mixed Ore.” The Zhejiang FTZ, pursuing greater liberalization of investment and trade facilitation in bulk commodities—particularly oil products—has replicated and extended five policy measures related to bonded fuel oil supply, including a new model of credit‑based supervision for bonded fuel‑oil enterprises. Similarly, the Shaanxi FTZ, seeking to enhance the reach and efficiency of China–Europe Railway Express services, has boldly explored and adopted new approaches such as “Consolidation of Railway Transport Manifests,” significantly improving customs clearance procedures for these trains.

Last year, seven pilot free trade zones, including Liaoning, were officially launched, bringing the total number of such zones to 11 and establishing a “1+3+7” pilot framework. As these zones deepened their reforms and opening-up experiments, they introduced a series of innovative institutional measures that have proven effective and are manageable in terms of risk. The Ministry of Commerce, together with relevant departments and local governments, conducted a comprehensive review and assessment of these new innovations, distilling them into a new batch of 30 replicable reform pilot practices—27 of which are intended for nationwide replication and promotion, and 3 for implementation within special customs supervision zones, for a total of 30 items. Recently, the State Council has formally approved and issued this package.

CSRC: This year, it will intensify efforts to channel capital “fresh liquidity” into financial poverty alleviation.
On the 26th in Chengdu, Yang Zhihai, Deputy Director of the China Securities Regulatory Commission’s Poverty Alleviation Office, stated that this year the CSRC will intensify its financial support for poverty alleviation, channeling capital as “living water” into impoverished areas. Focusing on deeply impoverished regions, the Commission will actively explore new, multi‑channel and diversified approaches to targeted poverty reduction, encourage listed (and over-the-counter) companies to proactively align with industry‑driven poverty‑alleviation projects, strengthen the disclosure of information on such projects, and help impoverished populations achieve sustainable poverty eradication.
According to reports, in 2016 the China Securities Regulatory Commission issued the “Opinions of the CSRC on Leveraging the Capital Market to Support the National Poverty Alleviation Strategy,” which seeks to channel capital, talent, and technology from relatively more developed regions to impoverished areas by harnessing market‑based mechanisms such as IPOs, mergers and acquisitions, and restructuring. This approach aims to address the widespread issues in poverty‑stricken areas—namely, the inability to attract, retain, or activate capital. As of the first quarter of 2018, 12 enterprises from poverty‑stricken counties had completed IPOs through a “green channel,” raising a total of RMB 6.9 billion, while 66 other companies had initiated their listing processes. Additionally, 94 companies were listed on the New Third Board, with 50 of them having relocated their registered headquarters to poverty‑stricken regions.
Yang Zhihai stated that this year, the futures market will be leveraged to support poverty alleviation efforts by guiding futures exchanges to steadily expand the “insurance + futures” pilot program and explore a pilot initiative integrating “contract farming + insurance + futures (options),” thereby fostering industrial development in impoverished areas and helping impoverished populations achieve sustainable poverty reduction.

Our city’s “Unicorn and Gazelle Enterprise Club” was officially inaugurated.
On the afternoon of May 23, the Nanjing “Unicorn and Gazelle Enterprise Club” was officially inaugurated, and its inaugural meeting was held. Leaders from the city’s first cohort of unicorn and gazelle enterprises, as well as representatives from companies in the nurturing and monitoring stages, along with capital‑market service providers and relevant government departments, gathered to join forces and target their efforts precisely, ensuring that unicorn and gazelle offices continue to spring up like bamboo shoots after rain, thrive robustly, and grow into towering pillars across various industries—thereby injecting inexhaustible momentum into Nanjing’s drive to become a renowned city of innovation.
Taxation TAXATATION
Tax authorities at all levels have resolutely implemented the decisions and arrangements of the CPC Central Committee and the State Council, and have carried out the reform of the national and local tax collection and administration systems in a solid and prudent manner.
On the afternoon of May 10, Han Zheng, a member of the Standing Committee of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, visited the State Taxation Administration and the Local Taxation Administration in Beijing, emphasizing the need to deepen the reform of the national and local tax collection and administration systems so that the public and taxpayers can enjoy greater benefits. Recently, Wang Jun, Secretary of the Party Leadership Group and Director of the State Taxation Administration, presided over an expanded meeting of the Party Leadership Group, calling on Party leadership groups at all levels of tax authorities and the broader contingent of tax officials to thoroughly study and implement General Secretary Xi Jinping’s important thoughts on deepening the reform of Party and state institutions, earnestly carry out Premier Li Keqiang’s clear directives on institutional reform, and, in accordance with the spirit of Vice Premier Han Zheng’s remarks during his inspection of Beijing’s tax authorities, proactively, prudently, effectively, and in an orderly manner advance all tasks related to the reform of the national and local tax collection and administration systems.
The Party Leadership Group of the State Taxation Administration believes that Vice Premier Han Zheng’s on-site inspection of grassroots tax authorities fully demonstrates the CPC Central Committee and the State Council’s high regard for the reform of the national and local tax collection and administration system, as well as their heartfelt care for tax officials. This has further strengthened the tax system’s office resolve and unwavering confidence in advancing institutional reform, while also enhancing its sense of responsibility, mission, and urgency in successfully implementing the reform agenda. The national tax system must align its thinking with the decisions and arrangements of the CPC Central Committee and the State Council and advance the reform work in a solid and prudent manner. It must remain officely focused on the current priorities of the reform, earnestly carry out ideological and political work among cadres, continue to uphold mutual promotion and coordinated progress, and ensure that all tasks move forward in tandem.
The Beijing Municipal State Taxation Administration and the Local Taxation Administration stated that Vice Premier Han Zheng personally visited Beijing’s tax authorities to conduct on-site research and solicit opinions and suggestions from the grassroots level. He carefully reviewed the progress of initiatives such as “one-stop service” and “online tax processing,” as well as efforts in tax risk management, information technology development, and taxpayer services, leaving tax officials deeply honored and greatly inspired. Taking this as motivation, Beijing’s tax authorities will fully leverage their role as a model district, continuously enhance taxpayer services, effectively improve the efficiency of tax collection and administration, and proactively take the lead in advancing the reform of the national and local tax collection and administration system, striving to accumulate experience and set an example for tax‑administration reform nationwide.
The tax bureaus of other provinces, autonomous regions, and municipalities directly under the central government stated that they will resolutely implement the decisions and arrangements of the CPC Central Committee and the State Council on institutional reform, adhering to the principle of “establish first, then dismantle; no dismantling without establishment,” and ensuring the thorough and meticulous execution of all reform tasks. They will emphasize learning through practice and summarizing lessons along the way, so as to guarantee the orderly advancement of the reform of the national and local tax collection and administration systems. They will uphold the approach of “institutional reform preceded by service,” continuously enhancing the sense of gain among the public and taxpayers. Moreover, they will maintain a dual focus—“neither neglecting nor compromising”—to strengthen revenue‑generation efforts without letup, fully implement all tax‑reduction policies, and better support economic and social development.

A new round of tax audits has been launched, with a focus on monitoring unusual activity in individual bank accounts.
One month after the State Council announced the merger of the national and local tax authorities, tax inspection agencies jointly operated by both have recently undergone a reorganization. In accordance with the requirements of the national video conference on tax inspection work, tax inspection departments at all levels are to remain committed to serving the overarching goals of economic and social development and the central tasks of tax administration, while launching a special campaign to crack down on fraudulent claims for export tax rebates and the illegal issuance of special value-added tax invoices.
With the launch and widespread implementation of the Golden Tax Project Phase III, instances of enterprises evading taxes through fictitious transactions have been extensively exposed. In the era of data-driven tax administration, corporate entities’ use of personal accounts for tax avoidance and money laundering is now subject to heightened scrutiny. Earlier, the State Council issued a directive mandating information sharing between banks and tax authorities regarding large‑value and suspicious transactions in personal accounts, thereby providing robust technical safeguards to combat individual money‑laundering and tax‑avoidance activities.
Litigation & Arbitration
Supreme People’s Court Regulations on the Differentiation of Civil and Commercial Cases into Simple and Complex Categories and on the Procedures for Mediation and Summary Judgment (Trial Implementation)
On May 8, 2017, the Supreme People’s Court issued the “Notice on the Trial Implementation of the Operating Procedures for the Differentiation of Civil and Commercial Cases Based on Complexity and for Mediation and Summary Judgment.” This pilot program will be implemented within the people’s courts.
In order to implement the Supreme People’s Court’s “Several Opinions on Further Promoting Case Classification Based on Complexity and Optimizing the Allocation of Judicial Resources” and “Opinions on Further Deepening Reform of the Diversified Dispute Resolution Mechanism in the People’s Courts,” and to advance and standardize such practices as case classification by complexity, preliminary mediation, and summary adjudication in civil and commercial cases, thereby ensuring the lawful and efficient adjudication of such cases, achieving swift handling of simple cases and meticulous examination of complex ones, and effectively alleviating the burdens borne by the parties, this Procedure is formulated in accordance with the Civil Procedure Law of the People’s Republic of China and relevant judicial interpretations, taking into account the actual conditions of trial work in the people’s courts.

The Jiangsu procuratorial organs have instituted public prosecution, in accordance with the law, against Wang Jianhua on suspicion of accepting bribes.
Recently, the case involving Wang Jianhua, former Party Secretary of Jiangsu Bank Co., Ltd. (at the level of a department‑level official), who is suspected of accepting bribes, was assigned jurisdiction by the Jiangsu Provincial People’s Procuratorate and subsequently prosecuted by the Nantong Municipal People’s Procuratorate before the Nantong Intermediate People’s Court.
During the review-and-prosecution stage, the procuratorial organ duly informed the defendant, Wang Jianhua, of his procedural rights and, in accordance with the law, interrogated him and heard his defense. The indictment filed by the Nantong People’s Procuratorate alleges that, between 1993 and 2017, the defendant, Wang Jianhua, took advantage of his positions as a leader at the Nanjing Municipal Planning Commission, Jiangning County (District), Nanjing City, and Lianyungang City, as well as his role as Party Secretary of Jiangsu Bank Co., Ltd., together with the convenient conditions arising from his official authority and status, to seek benefits for others—either directly or through the official acts of other state functionaries—and, either personally or through persons with whom he had special relationships, solicited or illegally accepted property from others in an especially large amount, thereby constituting the crime of accepting bribes, for which he should be held criminally liable in accordance with the law.
Other
Ministry of Transport: Ride-hailing services will be incorporated into the taxi service assessment system.
People’s Daily, May 24 — Recently, the Ministry of Transport issued the newly revised Measures for Assessing the Service Quality and Credibility of Taxi Services, which will take effect on June 1. The Measures further refine and improve the assessment indicators for both taxi companies and drivers, while also bringing ride-hailing platform operators and their drivers into the evaluation framework, thereby comprehensively elevating the service standards of the taxi industry.
For online ride-hailing platform companies, the Measures have tailored specific indicators covering data access and the disclosure of operational service information, with a total of 19 metrics across six categories: corporate governance, information and data management, safe operations, service quality, social responsibility, and bonus‑point items.
For taxi drivers, assessments are conducted across areas including compliance with laws and regulations, safe operations, business conduct, and service quality. Drivers who accumulate fewer than 3 points within an assessment cycle must undergo training as required.
An official from the Ministry of Transport stated that, going forward, to effectively ensure the safety of ride-hailing passengers, all relevant parties and enterprises should strengthen background checks on drivers, including their driving experience, traffic‑related accidents, and records of violent crimes, thereby preventing non‑compliant companies, vehicles, and personnel from entering the industry, upholding the safety baseline, and safeguarding safety at its source.

Guiyang High-Tech Zone Establishes a 100-Million-Yuan Development Fund to Attract Artificial Intelligence Investments
On the opening day of the 2018 China International Big Data Industry Expo, on the 26th, the Guiyang National High-tech Industrial Development Zone publicly released the “Ten Provisional Policy Measures of the Guiyang National High-tech Industrial Development Zone to Promote the Development of the Next-Generation Artificial Intelligence Industry.” In addition to establishing an annual special fund of RMB 50 million for AI development, the zone will also set up an AI industry development fund with a total scale of RMB 100 million.
“The Ten Measures for Artificial Intelligence” is the first set of preferential policies issued by the Guiyang National High-Tech Industrial Development Zone to boost the AI industry, and it has established an AI Industry Development Fund with a total scale of RMB 100 million, focusing on emerging smart‑technology sectors such as intelligent robotics, smart software and hardware, intelligent sensors, virtual reality and augmented reality, and intelligent vehicles.
Looking ahead, the Guiyang National High-Tech Industrial Development Zone will continue to vigorously advance innovation in key artificial intelligence technologies, build AI research and development platforms, demonstrate AI technology applications, and facilitate the transfer and commercialization of AI innovations. Over the next three to five years, the zone aims to attract a cohort of renowned enterprises and R&D institutions distinguished by their industry-specific strengths, cutting-edge technological offerings, and concentration of top-tier talent; to foster the emergence of original AI breakthroughs within the zone; to drive the development of critical AI technologies here; and to conduct pilot trials of priority AI applications. Ultimately, it seeks to become a regional hub where AI technologies and applications are deeply integrated, where policies and regulations are pioneered through experimentation, and where industrial development leads the way.

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