JC Master Legal News Issue 847

Key Takeaways for This Issue

The China Securities Regulatory Commission has issued the “Operational Guidelines for the Application of the ‘Guiding Opinions on Regulating Asset Management Business of Financial Institutions’ to the Large‑Scale Collective Asset Management Business of Securities Companies.”

Recently, the China Securities Regulatory Commission issued the “Operational Guidelines for the Application of the ‘Guiding Opinions on Regulating Asset Management Business of Financial Institutions’ to the Large‑Scale Collective Asset Management Business of Securities Companies” (hereinafter referred to as the “Guidelines”).

The State Council Executive Meeting decided to launch an assessment of China’s business environment.

On November 28, Premier Li Keqiang of the State Council presided over an executive meeting of the State Council, heard a report on efforts to optimize the business environment, and decided to launch an assessment of China’s business environment. The meeting also outlined plans to further develop the elderly care industry, promote the integration of medical and elderly‑care services, and enhance the quality of care for seniors.

The first filing period of the personal income tax reform has proceeded smoothly: an inventory of tax records reveals notable highlights, fostering both fairness and momentum.

Recently, the first filing period since the launch of the personal income tax reform has proceeded smoothly, with income from wages and salaries paid in October and business income earned by individual industrial and commercial households having been duly reported.

Two Supreme Courts: Malicious overdrafts exceeding five million may be punishable by life imprisonment.

On November 28, the Supreme People’s Court and the Supreme People’s Procuratorate issued the “Decision on Amending the Interpretation on Several Issues Concerning the Specific Application of Law in Handling Criminal Cases Involving Obstruction of Credit Card Management” (hereinafter referred to as the “Decision”). The Decision clarifies that malicious overdrafts exceeding RMB 5 million shall be deemed to constitute a “particularly large amount” as stipulated in Article 196 of the Criminal Law.

The All China Lawyers Association will introduce “new regulations” on lawyers’ oaths.

On November 28, at its regular press conference, the All China Lawyers Association provided an explanation of the forthcoming “Rules on Lawyers’ Oath” (hereinafter referred to as the “Rules”).

Table of Contents

Table of Contents

Finance & Capital Markets

The China Securities Regulatory Commission has issued the “Operational Guidelines for the Application of the ‘Guiding Opinions on Regulating Asset Management Business of Financial Institutions’ to the Large‑Scale Collective Asset Management Business of Securities Companies.”

The Supreme People’s Court and the China Securities Regulatory Commission have jointly issued the “Opinions on Comprehensively Promoting the Development of a Diversified Dispute Resolution Mechanism for Securities and Futures Matters.”

The China Securities Regulatory Commission has streamlined the administrative licensing approval procedures for four items, including the qualification of public fund managers.

The Shanghai Stock Exchange has issued a new edition of the Fund Business Service Guide.

The Shanghai and Shenzhen Stock Exchanges are seeking public comments on the detailed rules governing share repurchases by listed companies.

CSRC Announcement No. 37: Ensuring Share Repurchases Are Legal and Compliant

Corporate & Commercial

The State Council Executive Meeting decided to launch an assessment of China’s business environment.

The China Banking and Insurance Regulatory Commission has launched a public consultation on the detailed rules for the administration of foreign-funded banks.

Ministry of Finance: Injects 1.5 billion yuan into central cultural enterprises to promote the integrated development of traditional and emerging media.

Two departments have jointly launched a “double-random, one-public” inspection campaign.

The CPC Central Committee and the State Council: Establish a New Mechanism for More Effective Coordinated Regional Development

Taxation

The first filing period of the personal income tax reform has proceeded smoothly: an inventory of tax records reveals notable highlights, fostering both fairness and momentum.

Three departments have significantly raised the per-transaction limit for cross-border e-commerce imports.

General Administration of Customs: Expanding the Scope of Banks for Electronic Transmission of Consolidated Tax Guarantee Data

Six Departments: Notice on Adjusting the Relevant Catalogues of the Import Tax Policy for Major Technical Equipment

Litigation & Arbitration

Two Supreme Courts: Malicious overdrafts exceeding five million may be punishable by life imprisonment.

The Supreme People’s Court has released typical cases on environmental and resource adjudication that support the high-quality development of the Yangtze Economic Belt.

Ministry of Justice: Promoting the Development of Individual Mediation Studios

Other

The All China Lawyers Association will introduce “new regulations” on lawyers’ oaths.

Jiangsu’s new legislation redefines acts of bravery and righteousness, with “wise acts of courage” now included in the statutory provisions.

Finance & Capital Markets

The China Securities Regulatory Commission has issued the “Operational Guidelines for the Application of the ‘Guiding Opinions on Regulating Asset Management Business of Financial Institutions’ to the Large‑Scale Collective Asset Management Business of Securities Companies.”

Recently, the China Securities Regulatory Commission issued the “Operational Guidelines for the Application of the ‘Guiding Opinions on Regulating Asset Management Business of Financial Institutions’ to the Large‑Scale Collective Asset Management Business of Securities Companies” (hereinafter referred to as the “Guidelines”).

Pursuant to the Securities Law, in 2003 the China Securities Regulatory Commission (CSRC) issued the Provisional Measures for the Client Asset Management Business of Securities Companies. Subsequently, securities companies and their asset management subsidiaries legally established more than 400 collective asset management schemes—hereinafter referred to as “large‑scale collective products”—in which the number of investors was not subject to the 200‑person limit. Since the enactment and implementation of the Fund Management Law in 2013, the CSRC has continuously urged industry participants to bring these large‑scale collective products into compliance with the requirements applicable to public mutual funds. In April 2018, the Guiding Opinions on Regulating Asset Management Business of Financial Institutions (hereinafter referred to as the “Guiding Opinions”) were promulgated and put into effect, further setting out a number of specific operational standards for public‑offering products. Since the issuance of the Guiding Opinions, industry institutions have generally focused on how large‑scale collective products should be governed by the relevant provisions of those guidelines.

To implement the Guiding Opinions and address industry concerns, the China Securities Regulatory Commission has formulated these Guidelines. Adhering to the principles of categorized, orderly, and standardized regulation, effective protection of investor interests, and maintenance of market stability, the Guidelines further refine and clarify the standards and procedures for aligning large‑scale collective investment products with public mutual funds, thereby promoting their regulated development. A reasonable transitional period is also provided, without imposing uniform requirements on the pace of compliance. Following such regulatory adjustments, large‑scale collective investment products will be converted into public mutual funds or private asset management plans and will continue to operate in a stable and compliant manner in accordance with applicable laws and regulations.

The Supreme People’s Court and the China Securities Regulatory Commission have jointly issued the “Opinions on Comprehensively Promoting the Development of a Diversified Dispute Resolution Mechanism for Securities and Futures Matters.”

Establishing a diversified dispute‑resolution mechanism for securities and futures disputes is an important measure to ensure smooth channels for investors to express their grievances and seek redress, strengthen the fundamental institutional framework of the capital market, and safeguard investors’ legitimate rights and interests. Since 2016, when the Supreme People’s Court and the China Securities Regulatory Commission jointly issued the “Notice on Piloting a Diversified Dispute‑Resolution Mechanism for Securities and Futures Disputes in Certain Regions Nationwide” (Fa [2016] No. 149), the people’s courts in the pilot areas, together with securities and futures regulatory authorities and pilot mediation organizations, have enhanced coordination and collaboration, fully leveraging the role of the diversified dispute‑resolution mechanism to resolve securities and futures disputes in a lawful, impartial, and efficient manner, thereby effectively protecting investors’ legitimate rights and interests. The pilot program has yielded positive results. In order to implement the “Opinions of the General Office of the CPC Central Committee and the General Office of the State Council on Improving the Mechanism for Diversified Resolution of Contradictions and Disputes,” the “Opinions of the General Office of the State Council on Further Strengthening the Protection of the Legitimate Rights and Interests of Small and Medium‑Sized Investors in the Capital Market,” and the “Opinions of the Supreme People’s Court on Further Deepening the Reform of the Diversified Dispute‑Resolution Mechanism by the People’s Courts,” the Supreme People’s Court and the China Securities Regulatory Commission, drawing on the experience gained from the pilot program, have decided to launch a nationwide joint initiative to build a diversified dispute‑resolution mechanism for securities and futures disputes. The following opinions are hereby put forward regarding relevant matters:

I. Work Objectives

1. Establish and improve a diversified dispute-resolution mechanism for securities and futures disputes that is seamlessly integrated, coordinated, and efficient and convenient for the public, thereby safeguarding investors’ legitimate rights and interests in accordance with the law, upholding an open, fair, and impartial capital market order, and promoting the harmonious and sound development of the capital market.

II. Principles of Work

2. Principle of Legality and Fairness. Investors’ right to choose procedural options shall be fully respected, and statutory procedures shall be strictly observed. The conduct of mediation must not contravene the fundamental principles of law, nor may it impair national interests, public interests, or the legitimate rights and interests of third parties.

3. Principle of Flexibility and Convenience. Taking into account the specific circumstances of each dispute, the methods, timing, and location for resolving disputes shall be determined flexibly, with a view to maximizing convenience for investors and minimizing the costs incurred by the parties in resolving their disputes. Mediation proceedings must specify clear time limits and strive to enhance efficiency; prolonged, unresolved mediation is prohibited.

4. Emphasize the principle of prevention. Leverage the conflict-prevention and root‑cause‑addressing functions of mediation, and promote the dissemination of a culture of sound investment, sound investment principles, and sound investment knowledge. People’s courts, securities and futures regulatory authorities, and mediation organizations should strengthen information sharing to prevent the accumulation and escalation of disputes and conflicts.

III. Job Responsibilities

(1) Strengthen the management of mediation organizations

5. Strengthen the development of securities and futures mediation organizations. Securities and futures mediation organizations are mediation bodies established or effectively managed by securities and futures regulatory authorities, industry associations, and other entities, and shall possess a standardized organizational structure, fixed office and mediation facilities, professional mediators, and a sound mediation operating system. The China Securities Regulatory Commission is responsible for the accreditation and administration of such organizations and shall, after consultation with the Supreme People’s Court, issue periodic public announcements.

6. Standardize internal management of mediation organizations. Mediation organizations shall establish working rules and procedural management systems, and put in place a sound performance appraisal and accountability framework.

7. Strengthen the development of the mediation workforce. Mediation organizations shall enhance mediators’ political and ideological education, professional ethics, and specialized skills training; refine the basic qualifications for practicing mediation; formulate guidelines for mediators’ work; and establish and improve systems for full-time or expert mediators.

8. Mediation organizations shall accept dispute mediation applications from small and medium-sized investors without charging any fees.

9. Establish a roster system for specially invited mediation organizations and mediators in securities and futures disputes. People’s courts at all levels shall include mediation organizations and their mediators on the roster, ensure timely updates and ongoing maintenance, and provide parties to securities and futures disputes with complete and accurate information on mediation organizations and mediators, enabling them to make voluntary selections.

(II) Improving the Mechanism for Linking Litigation and Mediation

10. Scope of the diversified dispute resolution mechanism for securities and futures disputes. Contractual and tort liability disputes arising from capital market investment activities—such as securities, futures, and funds—between natural persons, legal persons, and non‑legal‑person organizations all fall within the scope of mediation. Non‑litigation mediation and advance compensation measures undertaken by securities and futures regulatory authorities and mediation organizations may all be coordinated with judicial proceedings.

11. The system of judicial conofficeation of mediation agreements. Mediation agreements reached under the auspices of a mediation organization have the nature of civil contracts. After being signed and sealed by the mediator and the mediation organization, the parties may apply to the people’s court with jurisdiction for conofficeation of their legal effect. Cases in which the parties seek conofficeation of a mediation agreement shall be handled in accordance with Chapter 15, Section 6 of the Civil Procedure Law of the People’s Republic of China and the relevant judicial interpretations.

Where a mediation agreement, duly conofficeed by the people’s court as valid and specifying both the obligor and the subject matter of performance, is refused to be performed by one party, the other party may apply to the people’s court for compulsory enforcement.

12. Implement the mechanisms of court‑appointed mediation and court‑entrusted mediation. In the course of accepting and adjudicating securities and futures disputes, people’s courts shall, in accordance with the law, fully exercise their power to provide clarification and, with the consent of both parties, adopt methods such as pre‑filing appointment, post‑filing entrustment, or invitation during litigation, to guide the parties toward resolving their disputes through mediation organizations.

Where mediation has been entrusted by the people’s court and a mediation agreement has been reached, and the parties have applied for judicial conofficeation, the people’s court that entrusted the mediation shall accept the case in accordance with the law.

13. Establish a model judgment mechanism. In the course of addressing and resolving large-scale collective disputes, securities and futures regulatory authorities may entrust relevant matters pertaining to investor rights protection to mediation organizations for centralized mediation. For collective civil compensation disputes arising from unlawful acts such as false statements, insider trading, and market manipulation—where the people’s courts are required to clarify legal principles and ensure uniform application of the law through judicial rulings—the competent people’s court may select a number of representative cases that are exemplary in terms of fact-finding and legal application, hear them first, and render timely judgments. The standards of fact-finding and legal application established through these model judgments shall guide other parties to resolve their disputes via diversified mechanisms for settling securities and futures-related disputes, thereby reducing investors’ costs of protecting their rights and enhancing the efficiency of dispute resolution.

14. Establish a small-amount, expedited mediation mechanism. To more effectively resolve disputes in the capital markets, market participants in the securities and futures sectors are encouraged, on a voluntary basis, to enter into advance agreements with mediation organizations, committing to unconditionally accept the mediation proposals put forward by such organizations within a specified monetary threshold. Once a dispute arises, upon the investor’s request, if the mediation organization submits a proposal that falls within that threshold and the investor agrees, the parties shall be deemed to have voluntarily reached a mediated settlement, which the securities and futures market participant must honor. Should the parties apply for judicial conofficeation of such a mediated agreement, the people’s court shall process the application in accordance with the law.

15. Explore the establishment of a mechanism for recording undisputed facts. Upon conclusion of the mediation process, if the parties have not reached a mediation agreement, the mediator, with the consent of all parties, may document in writing the facts that both sides do not dispute during the mediation, and the parties shall sign to conoffice such records. In subsequent litigation proceedings, except where national interests, public interests, or the legitimate rights and interests of third parties are involved, the parties shall not be required to adduce evidence regarding the undisputed facts established during mediation.

16. Explore the establishment of a pre‑mediation procedure. Where conditions permit, people’s courts may, with the consent of the parties, guide them to seek mediation by specially appointed mediation organizations or mediators prior to filing a lawsuit, for disputes in areas such as securities, futures, and funds that are suitable for mediation.

17. Fully leverage online dispute resolution mechanisms in our work. Relying on the “China Investor Network” (www.investor.gov.cn), we will establish an online platform for resolving securities and futures disputes and integrate it with the case-handling information system of the people’s courts, thereby facilitating the seamless connection between litigation and mediation. Mediation organizations should make full use of modern communication tools such as the “China Investor Network,” seamlessly combining face-to-face interactions with online dialogue and real-time resolution, formulate rules for online dispute resolution, and systematically summarize and promote practices such as remote mediation. People’s courts at all levels should harness the internet and other cutting-edge technologies to explore online entrustment or assignment of mediation, as well as online judicial conofficeation of mediation agreements. By accepting relevant applications, conducting remote review and conofficeation, providing swift and professional service channels, implementing electronic reminders, and utilizing electronic service of process, they can facilitate parties’ participation in diversified dispute resolution and enhance both the quality and efficiency of their work.

(3) Strengthening the implementation of mechanisms for diversified dispute resolution

18. Fully leverage the functions of the summary procedure. Mediation agreements that meet the statutory requirements may serve as the basis for parties to apply to the competent basic-level people’s court for a payment order.

19. Scope of judicial review of disputes arising under a mediation agreement. Where the parties dispute the performance of the mediation agreement or its terms, they may bring an action before the people’s court, which shall adjudicate the matter as a contract dispute. If one party brings an action based on the original dispute and the other party raises the mediation agreement as a defense and produces the written mediation agreement, the people’s court shall examine the contents of the mediation agreement.

20. Strengthen regulatory support for diversified dispute-resolution mechanisms. When investors request that disputes be resolved through mediation, securities and futures market participants shall actively engage in the mediation process and cooperate with the people’s courts and mediation organizations to ascertain the facts. If a securities and futures market participant, without justifiable grounds, refuses to comply with a mediation agreement that has been reached, the securities and futures regulatory authority shall, in accordance with the law, record such conduct in the securities and futures market integrity database.

21. Strengthen law enforcement coordination and severely crack down on acts that infringe upon the legitimate rights and interests of investors. People’s courts and securities and futures regulatory authorities shall fully leverage their respective functional strengths and, in accordance with the law, promptly adopt preservation measures against conduct such as destruction of evidence or transfer of assets that may harm investors’ legitimate rights and interests. Any illegal or non-compliant activities discovered in the course of their work shall be investigated and dealt with without delay; where criminal offenses are suspected, such cases shall be referred to the relevant judicial authorities for handling in accordance with the law.

22. Strengthen financial support and personnel training. Securities and futures regulatory authorities, industry self-regulatory organizations, and other relevant entities shall provide the necessary human, financial, and material resources to establish and improve a diversified mechanism for resolving securities and futures disputes, and intensify training for mediators. People’s courts that are so equipped should set up dedicated mediation rooms for handling securities and futures disputes, enabling specially invited mediation organizations and mediators to carry out their work. A multi‑level joint training mechanism between the people’s courts and securities and futures regulatory authorities should be established to continuously broaden and deepen exchanges on professional matters.

IV. Work Requirements

23. Establish a diversified dispute resolution and coordination mechanism for securities and futures disputes. Each higher people’s court and each securities and futures regulatory authority shall designate dedicated liaison departments and contact persons to strengthen coordination on issues encountered in their work; enhance communication and information sharing, and develop a comprehensive mechanism for identifying and issuing early warnings regarding securities and futures disputes, so as to prevent the accumulation and escalation of conflicts.

24. Strengthen publicity and investor education. People’s courts, securities and futures regulatory authorities, industry self-regulatory organizations, specialized investor protection agencies, and mediation bodies should, through various channels, promptly summarize and publicize typical cases to serve as models for educational purposes; they should also intensify efforts to promote diversified mechanisms for resolving securities and futures disputes, enhance all stakeholders’ understanding of these mechanisms, and guide small and medium-sized investors to adopt a more informed mindset and pursue their rights in a rational and measured manner.

25. Strengthen supervision, guidance, coordination, and management. The Second Civil Division of the Supreme People’s Court and the Investor Protection Bureau of the China Securities Regulatory Commission have established a Working Group on the Multi‑Channel Dispute Resolution Mechanism for Securities and Futures Matters, which is specifically responsible for providing guidance and coordinating the development of this mechanism. All higher people’s courts shall guide, urge, and inspect the people’s courts within their jurisdictions to ensure full implementation of all requirements under the securities and futures multi‑channel dispute resolution mechanism. The China Securities Regulatory Commission is responsible for supervising and guiding the work of all mediation organizations; its branch institutions are tasked with urging relevant mediation organizations within their respective jurisdictions to enhance internal management and standardize their operations, as well as with providing guidance and support for these organizations in carrying out their activities locally. People’s courts at all local levels and securities and futures regulatory authorities shall promptly report their progress and any issues encountered to the Supreme People’s Court and the China Securities Regulatory Commission.

The China Securities Regulatory Commission has streamlined the administrative licensing approval procedures for four items, including the qualification of public fund managers.

To implement the State Council’s requirements for deepening the reform of the administrative approval system and streamlining and optimizing public service procedures, our Association, within the legal and regulatory framework of the Securities Investment Fund Law, the Measures for the Administration of Securities Investment Fund Custody Business, the Provisional Measures for the Administration of Overseas Securities Investments by Qualified Domestic Institutional Investors, and the Measures for the Administration of Sponsorship Services for Securities Issuance and Listing, has adjusted the administrative licensing procedures for four categories—public fund management qualifications, fund custodian qualifications, qualified domestic institutional investor qualifications, and sponsor registration. Specifically, we have shifted from the current practice of requiring applicants to first undertake preparatory work and undergoing on-site inspections by our Association before obtaining approval, to a new approach whereby our Association grants preliminary approval first; applicants then proceed with preparatory activities and, upon passing our on-site inspection, may commence their business operations.

Going forward, I will continue to ensure that the approval process for public fund management qualifications and other licensing matters is conducted in a lawful, compliant, and prudent manner, thereby promoting the sound and standardized development of the securities and fund industry.

The Shanghai Stock Exchange has issued a new edition of the Fund Business Service Guide.

Recently, the Shanghai Stock Exchange revised and issued the “Fund Business Service Guide (2018 Edition)” (SSE Letter [2018] No. 1279, hereinafter referred to as the “Guide”), which shall take effect from the date of its publication.

The revisions to the Guidelines are as follows: addition of standardized guidelines for the allocation of fund codes and fund short names; revision of service provisions related to ETF issuance and listing; addition of service provisions pertaining to LOF issuance and listing; revision of content concerning product development and amendments; and inclusion of additional provisions on fund supervision. Furthermore, relevant requirements have been introduced: upon the SSE’s formal acceptance of a product‑development application, the fund manager shall designate in writing a dedicated point of contact responsible for communication with the Exchange.

Attachment: “Fund Business Service Guide (2018 Edition)”

To all fund managers and member institutions:

To standardize the procedures for the development, issuance, listing, and information disclosure of mutual funds (hereinafter referred to as “funds”), clarify the responsibilities of all market participants, and enhance operational efficiency, in accordance with the Shanghai Stock Exchange’s Rules on the Listing of Mutual Funds, the Detailed Implementation Rules for Exchange-Traded Open-End Index Funds, the Guidelines for Listed Open-End Fund Business, the Administrative Measures for Open-End Fund Business, and the Guidelines for the Management of Structured Fund Business, among other relevant rules, the Shanghai Stock Exchange (hereinafter referred to as “the Exchange”) has revised the “Fund Business Service Guide,” which is hereby promulgated and shall take effect from the date of its publication.

The full text of the aforementioned guidelines is available on the Exchange’s official website (http://www.sse.com.cn) under the “Rules” section, in the “Exchange Business Guidelines and Procedures” subsection. All fund managers and relevant market participants are requested to conduct their fund‑related business in accordance with the requirements set forth in the “Fund Business Service Guide (2018 Edition).” The “Fund Business Service Guide” and the “One‑Stop Service Guide for Exchange‑Traded Fund Operations,” both issued by the Exchange on July 7, 2014, are hereby repealed.

The Shanghai and Shenzhen Stock Exchanges are seeking public comments on the detailed rules governing share repurchases by listed companies.

The Shanghai Stock Exchange recently released the “Detailed Rules for Share Repurchases by Listed Companies of the Shanghai Stock Exchange (Draft for Public Comments)” (hereinafter referred to as the “Repurchase Rules”), while the Shenzhen Stock Exchange has opened a public consultation on the “Detailed Rules for Share Repurchases by Listed Companies of the Shenzhen Stock Exchange” (hereinafter referred to as the “Implementation Rules”). The deadline for submitting comments on both documents is November 30, 2018.

The “Repurchase Detailed Rules” stipulate multiple sources of funds for share repurchases, permitting listed companies to draw on their own capital, proceeds from the issuance of preferred shares and bonds, excess proceeds raised through the issuance of common stock, and borrowings from financial institutions. At the same time, the upper and lower limits on the number of shares to be repurchased or the total amount of funds must be clearly specified, with the upper limit not exceeding twice the lower limit, and such limits must not mislead investors.

The Implementation Rules are expected to clarify the sources of funds for share repurchases, treat cash payments made in connection with share repurchases as equivalent to cash dividends, and set forth specific requirements and restrictions on the subsequent sale of repurchased shares. The daily volume of shares sold may not exceed 25% of the average daily trading volume over the twenty trading days preceding the date of pre‑disclosure of the sale; provided, however, that this limitation does not apply where the daily sale volume does not exceed 200,000 shares.

CSRC Announcement No. 37: Ensuring Share Repurchases Are Legal and Compliant

To support and regulate the lawful share repurchases by listed companies, the China Securities Regulatory Commission has issued “Notice No. 37 on Diligently Studying and Implementing the Decision of the Standing Committee of the National People’s Congress on Amending the Company Law of the People’s Republic of China,” issuing a notice on relevant matters.

Among these requirements, the announcement stipulates that, in principle, share repurchases shall be conducted only after the company’s shares have been listed for at least one year. Shares repurchased to safeguard the company’s value and shareholders’ rights may, upon fulfillment of the pre‑disclosure obligations, be sold through centralized bidding transactions; if such shares remain untransferred in accordance with the law within three years, they must be cancelled prior to the expiration of that period. Shares repurchased by a listed company shall be held in a dedicated account opened in compliance with applicable regulations, and the shares in such account shall, pursuant to law, not confer voting rights at shareholders’ meetings, entitlement to profit distributions, rights to subscribe for additional shares, or the right to be pledged.

Commercial & Corporate

The State Council Executive Meeting decided to launch an assessment of China’s business environment.

On November 28, Premier Li Keqiang of the State Council presided over an executive meeting of the State Council, heard a report on efforts to optimize the business environment, and decided to launch an assessment of China’s business environment. The meeting also outlined plans to further develop the elderly care industry, promote the integration of medical and elderly‑care services, and enhance the quality of care for seniors.

The meeting noted that, in accordance with the arrangements of the CPC Central Committee and the State Council and in response to public expectations, various regions and departments have steadily advanced reforms such as “delegation, regulation, and service” in recent years, yielding positive results in improving the business environment. Going forward, further optimizing the business environment should be regarded as a key measure for promoting high-quality development and addressing complex challenges. Focusing on the most pressing issues raised by market entities, we will intensify reform efforts and open-up initiatives, relax market access, strengthen impartial regulation, curb arbitrary fees and inspections, and prevent undue interference with enterprises’ autonomous operations. By continuously narrowing the gap with world‑class business environments, we will ensure that market vitality and social creativity continue to flourish. We will accelerate the nationwide rollout of practices already proven effective in certain localities that facilitate business operations, with particular emphasis on streamlining procedures, simplifying processes, and reducing costs. A working mechanism will be established to enable enterprises to participate in the formulation of business‑environment policies, support third‑party assessments, and foster a business climate that is market‑oriented, law‑based, and internationally competitive. The meeting decided that, guided by principles of international comparability, alignment with the World Bank’s standards, and Chinese characteristics, China will conduct an evaluation of its business environment—covering areas closely related to market entities, such as starting a business, obtaining construction permits, accessing credit, paying taxes, resolving insolvency, and protecting intellectual property—and gradually extend this assessment nationwide. This effort will help introduce more concrete measures to optimize the business environment, ensuring that businesses experience tangible improvements and reinforcing China’s position as an attractive destination for both domestic and foreign investment.

The meeting noted that meeting the diverse, multi‑tiered elderly care needs of a large aging population and boosting both the supply and quality of elderly care services are crucial steps in upholding a people‑centered development philosophy and improving living standards. These measures will also help expand employment and elevate the service sector. First, local authorities should be encouraged to address the shortage of adequate elderly care services through multiple channels. This includes streamlining and relaxing market access requirements, supporting the scaled and chain‑based development of elderly care institutions across all forms of ownership, and ensuring that publicly run facilities continue to serve as a safety net, with priority given to providing free or low‑cost residential care for economically disadvantaged seniors who are disabled or suffering from dementia, as well as for elderly members of special family planning households. Second, vigorous efforts must be made to develop home‑ and community‑based elderly care services. Requirements for the provision of elderly care facilities in newly built residential developments should be strictly enforced; age‑friendly renovations should be carried out in older neighborhoods and in the homes of elderly residents eligible for subsistence allowances or other forms of assistance; and elderly care institutions should be supported in operating community‑based care facilities. Third, vocational skills training for elderly care workers must be strengthened, and the development of long‑term care services should be accelerated. Eligible individuals and micro‑ and small enterprises engaged in elderly care services should receive entrepreneurial guarantee loans. Policies on land allocation for elderly care facilities should also be refined. Fourth, inter‑departmental coordinated oversight must be reinforced; mandatory national standards for the quality and safety of elderly care institutions should be established; and initiatives to renovate and upgrade nursing homes, along with projects to bring privately operated elderly care facilities into compliance with fire safety regulations, should be implemented.

The meeting heard a report on the integration of medical and elderly‑care services and called for stronger implementation of supporting policies, greater collaboration between existing medical‑healthcare and elderly‑care institutions to leverage their complementary strengths, and streamlined procedures for establishing such integrated facilities, with “one‑stop” processing. Eligible in‑facility medical institutions within elderly‑care facilities will be included in the scope of designated medical insurance providers. Efforts will be made to promote the integration of medical and elderly‑care services in rural areas and communities, and an incentive mechanism will be established to encourage village doctors to participate in health‑and‑elderly‑care services. Healthcare professionals are encouraged to practice at integrated medical‑elderly‑care institutions and will receive equal treatment in areas such as professional title evaluations.

The China Banking and Insurance Regulatory Commission has launched a public consultation on the detailed rules for the administration of foreign-funded banks.

The China Banking and Insurance Regulatory Commission recently released for public consultation the “Decision on Amending the Implementing Rules of the Regulations of the People’s Republic of China on the Administration of Foreign‑funded Banks (Draft for Comments),” with a deadline for submitting comments set for December 27, 2018.

The draft for public comment has added, deleted, and amended existing provisions, introducing the following requirements: “Where a foreign bank maintains both a wholly foreign‑owned bank (or a Sino‑foreign joint venture bank) and a branch within China, it shall clearly define the respective functional roles and governance frameworks of each entity, establish risk‑separation mechanisms covering management, business operations, personnel, and information, ensure that the names, products, and external operating premises of each entity are distinct, and implement independent management and independent operation; furthermore, its transactions must adhere to commercial principles, and the terms of such transactions may not be more favorable than those applicable to transactions with unrelated parties.”

Ministry of Finance: Injects 1.5 billion yuan into central cultural enterprises to promote the integrated development of traditional and emerging media.

To implement the spirit of the 19th National Congress of the Communist Party of China, deepen cultural system reform, and accelerate the establishment of a mechanism that prioritizes social benefits while achieving an integrated balance between social and economic returns, in 2018 the central government injected 1.5 billion yuan into centrally administered cultural enterprises—up 25% from the previous year—supporting a number of such enterprises, including China Publishing Group Corporation, to increase their state‑owned capital. First, we have implemented key national cultural development strategies, helping enterprises carry out major initiatives such as corporate restructuring and expanding their global presence, while guiding them to uphold their cultural responsibilities and leverage market‑based approaches to promote China’s fine traditional culture. Second, we have encouraged enterprises to pursue independent innovation, adhere to high‑quality development, intensify investment in “Culture Plus” initiatives, enhance the value of copyright assets, foster new cultural business models, advance the integrated development of traditional and emerging media, and build renowned cultural brands. Third, we have adjusted the structure of state‑owned capital allocation in the cultural sector, using capital as a connecting link to support cross‑regional, cross‑industry, and cross‑ownership mergers and reorganizations, the formation of corporate groups, and the consolidation of radio and television network resources, thereby facilitating effective integration between cultural resources and financial and social capital.

Going forward, the Ministry of Finance will continue to prioritize capital management, actively explore performance‑based budgeting for state‑owned assets that reflects cultural characteristics, and guide central cultural enterprises to align with their strategic development plans, ensuring the prudent and effective use of state‑owned budgetary funds. This will help continuously enhance the efficiency of state‑capital operations and support the reform, development, and growth of these enterprises.

Two departments have jointly launched a “double-random, one-public” inspection campaign.

On November 27, the launch ceremony for the joint “double-random, one-public” inspection conducted by the State Administration for Market Regulation and the China Securities Regulatory Commission was held at the State Administration for Market Regulation.

At the launch ceremony, responsible officials from the Credit Regulation Department of the State Administration for Market Regulation and the Private Equity Division of the China Securities Regulatory Commission jointly selected a list of 260 private fund management offices through a random lottery. The list was then handed over on-site to the Beijing Municipal Administration for Market Regulation and the Beijing Securities Regulatory Bureau to carry out subsequent tasks, including assigning inspection personnel and conducting inspections, thereby marking the official commencement of this joint “double-random, one-public” inspection initiative by the State Administration for Market Regulation and the China Securities Regulatory Commission. The results of the inspection will be uniformly published on the National Enterprise Credit Information Publicity System.

Strengthening ongoing and post‑event supervision and guarding against various market risks are responsibilities that government departments cannot shirk. This targeted “double-random” inspection of the private equity fund sector is intended to enhance deterrence against illegal activities and effectively mitigate financial risks; it also seeks to explore, at the ministerial level, the implementation of inter‑departmental “double-random, one-public” regulatory measures, thereby accumulating experience for the comprehensive rollout of such practices in the next phase.

Carrying out inter‑departmental “double random, one public” regulatory inspections is an important measure to ease the burden on businesses. According to reports, this joint inspection and oversight initiative among national ministries and commissions marks the first such effort, representing a valuable step toward the full-scale implementation of coordinated regulatory practices.

28 Departments: Nine Scenarios Will Be Added to the Social Security Serious Dishonesty Punishment List

The National Development and Reform Commission, together with 27 other departments, recently jointly issued the “Memorandum of Cooperation on Joint Punitive Measures Against Seriously Dishonest Enterprises and Relevant Personnel in the Social Insurance Sector,” reaching consensus on the implementation of such joint punitive measures.

These include nine types of serious breaches of trust and violations of norms, such as “refusing to pay social insurance contributions when legally required to do so”; the punitive measures comprise 32 items, including “restricting, in accordance with the law, untrustworthy enterprises from applying for fiscal subsidies, grant‑based funding, and social security‑related financial support,” as well as “restricting persons held accountable for serious breaches of trust from engaging in non‑essential consumption activities, such as traveling by air, soft‑sleeping carriages on trains, second‑class or higher cabins on ships, all seats on G‑series high-speed trains, and first‑class or higher seats on other high-speed train services.”

The CPC Central Committee and the State Council: Establish a New Mechanism for More Effective Coordinated Regional Development

On November 29, the CPC Central Committee and the State Council issued the “Opinions on Establishing a New Mechanism for More Effective Coordinated Regional Development” (hereinafter referred to as the “Opinions”), outlining measures to establish a regional strategic coordination mechanism and deepen mechanisms for inter‑regional cooperation.

Among these measures, the Opinions call for deepening cooperation in regions such as the Beijing–Tianjin–Hebei area, the Yangtze Economic Belt, and the Guangdong–Hong Kong–Macao Greater Bay Area, while elevating the level and quality of such collaboration. It also advocates actively developing diverse social intermediary organizations, fostering the orderly growth of regional industry associations and chambers of commerce, and encouraging enterprises to establish cross‑regional, cross‑sector platforms for cooperation in areas such as industry and technology. Furthermore, it emphasizes strengthening close intercity collaboration within urban agglomerations, promoting coordinated linkages in industrial division of labor and infrastructure, and accelerating the development of an urbanization pattern that ensures balanced growth among large, medium, and small cities as well as small towns. Finally, it encourages the proactive exploration of coordinated governance models for urban agglomerations and supports the establishment of urban alliances in various forms.

Appendix: “Opinions on Establishing a New Mechanism for More Effective Coordinated Regional Development”

Implementing the strategy of regional coordinated development is one of the major national strategies of the new era and an essential component of applying the new development philosophy and building a modernized economic system. Since the 18th National Congress of the Communist Party of China, all regions and departments have actively explored and achieved certain results in establishing and improving mechanisms for regional cooperation, inter‑regional mutual assistance, and inter‑regional benefit compensation, with a focus on promoting balanced regional development and properly managing the relationship between government and market. At the same time, it must be recognized that regional development disparities in China remain substantial, regional differentiation is becoming increasingly apparent, disorderly development and harmful competition persist, and imbalances and inadequacies in regional development continue to be prominent. Moreover, the mechanisms for regional development are still imperfect and struggle to meet the demands of implementing the strategy of regional coordinated development in the new era. To comprehensively carry out the tasks of this strategy and advance regional coordinated development toward higher standards and better quality, the following recommendations are put forward for establishing a more effective new mechanism for regional coordinated development.

I. General Requirements

(1) Guiding Principles. Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will comprehensively implement the spirit of the 19th National Congress of the Communist Party of China and the Second and Third Plenary Sessions of the 19th CPC Central Committee, earnestly carry out the decisions and arrangements of the CPC Central Committee and the State Council, uphold the new development philosophy, closely focus on the evolving principal contradiction in Chinese society, and, in accordance with the requirements of high-quality development, concentrate on advancing the “five-sphere integrated plan” and the “four-pronged comprehensive strategy.” Grounded in leveraging the comparative advantages of each region and narrowing regional development gaps, and with the goal of achieving equal access to basic public services, relatively balanced infrastructure connectivity, and broadly comparable levels of basic living standards, we will deepen reform and opening up, resolutely dismantle barriers to vested interests and policy obstacles between regions, and accelerate the establishment of a new mechanism for coordinated regional development that is well‑coordinated, orderly competitive, green and harmonious, and mutually beneficial, thereby promoting balanced regional development.

(II) Basic Principles

— Uphold the combination of market-driven approaches and government guidance. Fully leverage the market’s leading role in establishing new mechanisms for balanced regional development, while enhancing the government’s guiding role in this regard, to ensure the effective and orderly operation of these new mechanisms.

— Uphold the combination of central overall planning and local responsibility. Strengthen the central government’s top-level design for the new mechanism of regional coordinated development, clarify the principal responsibility of local governments in implementation, and fully mobilize their initiative and enthusiasm to advance coordinated development within their respective regions under this new framework.

— Uphold the principle of combining differentiated treatment with fair competition. Further refine the scope and implementation of regional policies, formulating tailored measures to address the specific circumstances of different regions, while placing greater emphasis on integrated regional development, safeguarding fair competition in the national unified market, and preventing the emergence of policy‑driven disparities and local protectionism.

— Uphold the integration of inheritance and improvement with reform and innovation. While consolidating and refining the mechanisms that have proven effective in promoting balanced regional development, we will continuously pursue reform and innovation in response to new circumstances and requirements, thereby establishing new mechanisms for regional coordinated development that are more scientific and more effective.

— Uphold the integration of goal‑oriented and problem‑oriented approaches. By aligning with the objectives and requirements of the regional coordinated development strategy, we will address the salient issues hindering the mechanisms for balanced regional development, thereby enhancing the synergy, interconnectivity, and overall coherence of regional development.

(III) Overall Objectives

— By 2020, a new mechanism for balanced regional development aligned with the goal of building a moderately prosperous society in all respects will have been established. Breakthroughs will have been achieved in establishing mechanisms for strategic regional coordination, equal access to basic public services, regional policy regulation, and safeguards for regional development. Further progress will have been made in refining market‑integration mechanisms, deepening regional cooperation frameworks, optimizing interregional mutual assistance arrangements, and improving inter‑regional benefit‑compensation systems. This new mechanism for balanced regional development will play a positive role in effectively curbing regional disparities, standardizing the order of regional development, and advancing regional integration.

By 2035, a new mechanism for balanced regional development aligned with the goal of basically achieving modernization will be established, ensuring effective coordination and synergy among regional policies and such macroeconomic tools as fiscal and monetary policies. This new mechanism will play a pivotal role in significantly narrowing inter‑regional development gaps, achieving equal access to basic public services, attaining a relatively balanced level of infrastructure connectivity, and ensuring broadly comparable standards of basic living security, thereby providing crucial support for building a modernized economic system and meeting the people’s growing aspirations for a better life.

— By the middle of this century, a new mechanism for balanced regional development will be established, aligned with the goal of fully building a modern socialist country. This new mechanism will prove even more effective in improving the regional governance system, enhancing regional governance capacity, and advancing common prosperity for all the people, thereby providing strong institutional support for transforming China into a modern socialist power.

II. Establishing a Regional Strategic Coordination Mechanism

(4) Promote the integrated development of major national regional strategies. Guided by major initiatives such as the Belt and Road Initiative, the coordinated development of the Beijing–Tianjin–Hebei region, the development of the Yangtze Economic Belt, and the construction of the Guangdong–Hong Kong–Macao Greater Bay Area, and anchored in the four major regions—Western, Northeastern, Central, and Eastern China—we will foster mutual connectivity and complementary relationships among regions. The Belt and Road Initiative will facilitate coordinated opening-up across coastal, inland, and border areas; leveraging international economic cooperation corridors as the backbone, we will strengthen interconnectivity of major infrastructure, thereby forging a new pattern of regional development that integrates domestic and international dimensions and coordinates the eastern, central, western, and southern regions. Taking the relocation of non-capital functions from Beijing as the key driver, we will advance the coordinated development of the Beijing–Tianjin–Hebei region, adjust its economic and spatial structures, and promote the construction of the Xiongan New Area in Hebei and the Beijing Sub‑Center, while exploring optimized development models for megacities and super‑cities—densely populated and economically vibrant areas—to orderly relocate non‑core functions and effectively address “big city diseases.” Fully harnessing the Yangtze Economic Belt’s locational advantages spanning the eastern, central, and western regions, we will pursue a development approach characterized by joint efforts to protect the ecosystem rather than large‑scale development, guided by ecological priority and green growth. Relying on the Yangtze River’s golden waterway, we will promote balanced development among the upper, middle, and lower reaches of the river and high‑quality development along its banks. We will establish a new model in which central cities lead urban agglomeration development, with urban agglomerations in turn driving broader regional progress, thus fostering integrated and interactive development among regional clusters. Centered on Beijing and Tianjin, we will spearhead the development of the Beijing–Tianjin–Hebei urban agglomeration and catalyze coordinated development in the Bohai Rim region. With Shanghai at the core, we will lead the development of the Yangtze River Delta urban agglomeration and stimulate growth across the Yangtze Economic Belt. Anchored by Hong Kong, Macao, Guangzhou, and Shenzhen, we will guide the construction of the Guangdong–Hong Kong–Macao Greater Bay Area and spur innovative, green development along the Pearl River–Xijiang Economic Belt. Meanwhile, with Chongqing, Chengdu, Wuhan, Zhengzhou, Xi’an, and other cities serving as hubs, we will drive the development of urban agglomerations in the Chengdu–Chongqing region, the Middle Yangtze, the Central Plains, and the Guanzhong Plain, thereby advancing the integrated development of their respective sub‑regions. We will strengthen coordination and alignment among major strategies—including the Belt and Road Initiative, the Beijing–Tianjin–Hebei coordinated development, the Yangtze Economic Belt, and the Guangdong–Hong Kong–Macao Greater Bay Area—to promote collaborative linkages across regions. Furthermore, we will advance Hainan’s comprehensive deepening of reform and opening-up, focusing on building free trade pilot zones and exploring the establishment of free trade ports with Chinese characteristics.

(5) Coordinate development between developed and underdeveloped regions. Promote reform and innovation, the transition from old to new growth drivers, and regional integration in developed areas such as the eastern coastal regions; support better‑off areas in the central and western regions to accelerate their development; and encourage national-level new areas, free trade pilot zones, national development zones, and other platforms to boldly pursue innovation, thereby playing a leading role in advancing high‑quality regional development. Adhere to a dual approach of “blood transfusion” and “hematopoiesis” to spur faster development in underdeveloped areas. Establish and improve long‑term, inclusive support mechanisms, as well as targeted, differentiated support measures, to swiftly address shortcomings in infrastructure, public services, the ecological environment, and industrial development; win the battle against poverty through precision‑targeted efforts; and ensure that revolutionary old‑base areas, ethnic minority areas, border regions, and impoverished areas achieve moderate prosperity in step with the rest of the country. Strengthen the system of territorial space use control, guiding resource‑depleted, industrially declining, and ecologically severely degraded areas to proactively explore distinctive paths of transformation and development, thus fostering green modes of production and lifestyles. Leveraging demonstration zones for industrial transfer and interprovincial cooperation parks as platforms, support joint efforts by developed and underdeveloped regions to build industrial cooperation hubs and deep‑processing bases for resources. Establish a regional coordination mechanism between developed and underdeveloped areas, with wealthier regions leading the way to help less prosperous ones, thereby promoting the common development of both.

(6) Promote integrated land–sea development. Strengthen top-level design for the development of the marine economy, refine the planning framework and management mechanisms, and formulate policies and measures to advance land–sea coordination, while fostering the establishment of a number of marine‑economy demonstration zones. Guided by comprehensive plans, facilitate all‑round, coordinated development between land and sea in areas such as spatial planning, industrial development, infrastructure construction, resource exploitation, and environmental protection. Prepare and implement a comprehensive plan for the protection and sustainable use of coastal zones, enforce strict controls on land reclamation and enclosure, and promote integrated ecological conservation, remediation, and restoration of coastal areas. Innovate market‑based mechanisms for the allocation of marine and island resources, and improve systems for resource assessment, transfer, and acquisition. Advance legislation on coastal zone management, refine the standards and indicator systems for the marine economy, strengthen marine‑economic statistical and accounting frameworks, enhance capabilities for monitoring and evaluating the marine economy, reinforce inter‑agency data sharing, and establish a marine‑economic survey system. Promote practical maritime cooperation, safeguard national maritime rights and interests, and actively participate in upholding and improving international and regional maritime order.

III. Improving the Mechanisms for Integrated Market Development

(7) Promote the free flow of production factors across urban and rural areas and among regions. Implement a nationally unified negative list system for market access, eliminating discriminatory and hidden restrictions on regional market entry. Deepen the implementation of the fair competition review system, remove barriers to regional markets, break down administrative monopolies, and rectify or abolish all regulations and practices that impede the establishment of a unified market and fair competition, thereby further improving the business environment and invigorating market dynamism. Fully relax urban household registration requirements, refine supporting policies, dismantle unreasonable barriers that hinder the mobility of labor between urban and rural areas and across regions, and promote the optimal allocation of human resources. Accelerate the deepening of rural land‑system reform, advance the establishment of a unified urban–rural construction‑land market, further improve the separation of ownership, contract rights, and operating rights for contracted land, and explore reforms to separate ownership, qualification rights, and usage rights for residential land. Guide the spatial reallocation of scientific and technological resources in line with market demand, and facilitate the full circulation of innovation‑related factors.

(8) Promote the development of regional market integration. In line with the goal of establishing a unified, open, competitive, and orderly market system, advance market‑building initiatives in regions such as the Beijing–Tianjin–Hebei area, the Yangtze Economic Belt, and the Guangdong–Hong Kong–Macao Greater Bay Area. Accelerate efforts to explore new mechanisms for integrated regional market development that feature unified planning frameworks, jointly promoted development models, consistent governance approaches, and coordinated inter‑regional market linkages, thereby fostering the emergence of a nationwide unified large market. Further refine the working mechanism for cooperation in the Yangtze River Delta, deepening collaboration among the three provinces and one municipality in areas such as planning alignment, cross‑provincial major infrastructure projects, joint environmental protection and pollution control, industrial structure adjustment, and reform and innovation.

(9) Enhance regional trading platforms and institutional frameworks. Establish and improve systems for the initial allocation and trading of water rights, pollutant‑discharge rights, carbon‑emission rights, and energy‑use rights, while fostering the development of diverse property‑rights trading platforms. Further refine the system of paid use of natural resource assets and build a unified platform for trading such assets. Select regions with favorable conditions to develop regional markets for pollutant‑discharge rights, carbon‑emission rights, and other environmental‑related rights; advance market‑based trading of water rights and electricity; and continue to improve trading mechanisms. Establish and strengthen a management system for energy‑use budgets. Facilitate the orderly and free flow of capital across regions, and enhance regional equity markets.

IV. Deepening Regional Cooperation Mechanisms

(10) Promote regional cooperation and interaction. Deepen cooperation in areas such as the Beijing–Tianjin–Hebei region, the Yangtze Economic Belt, and the Guangdong–Hong Kong–Macao Greater Bay Area, elevating the level and quality of collaboration. Actively develop diverse social intermediary organizations, systematically foster regional industry associations and chambers of commerce, and encourage enterprises to establish cross‑regional, cross‑sector platforms for cooperation in industries, technology, innovation, and talent. Strengthen close intercity collaboration within urban agglomerations, advancing coordinated linkages among cities in industrial division of labor, infrastructure development, public services, environmental governance, opening-up, and reform and innovation, thereby accelerating the establishment of an urbanization pattern that fosters balanced development among large, medium, and small cities as well as small towns. Actively explore the establishment of a coordinated governance model for urban agglomerations and encourage the formation of urban alliances in various forms.

(11) Promote cooperative development between upstream and downstream areas within river basins. Accelerate the advancement of collaborative development among upstream and downstream regions in key river basin economic belts, including the Yangtze River Economic Belt, the Pearl River–Xijiang River Economic Belt, the Huaihe River Ecological Economic Belt, and the Hanjiang River Ecological Economic Belt. Establish and improve mechanisms for aligning planning among neighboring provinces and municipalities along these basins, and coordinate to resolve major issues in inter‑regional cooperation and development. Refine consultation and cooperation frameworks among relevant provincial and municipal governments within each basin, build a comprehensive infrastructure network, enforce stringent environmental access standards, strengthen joint efforts in ecological and environmental protection and governance, promote the orderly relocation and upgrading of industries across basins, and advance balanced and coordinated development between upstream and downstream regions.

(12) Strengthen cooperation in interprovincial border areas. Support the collaborative development of interprovincial border regions such as the Yellow River Golden Triangle spanning Shanxi, Shaanxi, and Henan; Guangdong–Guangxi; Hunan–Jiangxi; and Sichuan–Chongqing, and explore the establishment of a new cooperative framework featuring unified planning, integrated management, joint development, and shared benefits. Enhance exchanges and cooperation among cities in these border areas, establish and improve a system of intergovernmental joint conferences between cities across provincial boundaries, and refine mechanisms for interprovincial consultation and coordination.

(13) Actively promote international and regional cooperation. Focusing on the Belt and Road Initiative, we will pursue a more proactive opening-up strategy and work to establish new mechanisms for mutually beneficial, win-win international and regional cooperation. We will fully leverage the roles of such international and regional cooperation frameworks as the Belt and Road Forum for International Cooperation, the Shanghai Cooperation Organization, the Forum on China–Africa Cooperation, China–Russia cooperation in the Northeast and Far East, the Yangtze–Volga River cooperation, China–ASEAN cooperation, ASEAN Plus Three cooperation, China–Japan–ROK cooperation, Lancang–Mekong cooperation, and the Tumen River Region Development Cooperation, thereby strengthening regional and subregional collaboration. We will support border areas in making use of international cooperation platforms to proactively engage in international and regional cooperation. We will advance the development of key pilot zones for development and opening-up, support the growth of border economic cooperation zones, steadily establish cross-border economic cooperation zones, and further enhance the catalytic role of overseas industrial capacity‑cooperation parks and economic and trade cooperation zones.

V. Optimizing the Regional Mutual Assistance Mechanism

(14) Deepen the implementation of east–west poverty‑alleviation cooperation. Strengthen efforts in this area, fostering an integrated “three‑in‑one” poverty‑reduction framework that combines targeted poverty alleviation, sector‑specific poverty reduction, and social‑sector initiatives, with diverse measures and mutual support. Enhance poverty‑alleviation collaboration anchored in corporate partnerships, encouraging enterprises to invest in and establish businesses in impoverished regions, develop local industries, and create employment opportunities. Improve mechanisms for precise matching between labor supply and demand, ensuring stable inter‑provincial employment for impoverished populations. Further intensify exchanges of Party and government officials as well as professional and technical personnel between cooperating regions, facilitating the flow of talent, capital, and technology to impoverished and border areas, and deepening the implementation of the “Joint Efforts Toward Moderate Prosperity” initiative. Actively mobilize social forces to participate broadly in the battle against poverty in deeply impoverished areas, helping those living in extreme poverty overcome difficulties in production and daily life.

(15) Deepen and expand paired assistance. Strengthen all‑round, precision‑targeted support to promote the sustained and sound economic and social development of Xinjiang, Tibet, and the Tibetan‑inhabited areas of Qinghai, Sichuan, Yunnan, and Gansu; foster greater ethnic interaction, exchange, and integration; and consolidate the foundations for social stability and long-term peace and prosperity. Enhance planning guidance, uphold the rigor of planning, and further improve and standardize the mechanisms for formulating, implementing, evaluating, and adjusting paired‑assistance plans. Strengthen management of funds and projects, conduct comprehensive performance assessments in a scientifically sound manner, and advance paired assistance toward greater depth, higher quality, and greater sustainability.

(16) Innovatively advance paired assistance and cooperation. Targeting regions facing challenges in economic transformation and upgrading, we will organize and implement paired assistance and cooperation initiatives, establishing a comprehensive framework that engages governments, enterprises, research institutions, and other social actors. We will deepen paired cooperation with the source areas of the Central Route of the South-to-North Water Diversion Project, promoting green development in these regions. We will continue to provide targeted support to the Three Gorges Reservoir Area, helping it enhance its capacity to deliver basic public services, accelerate the steady and prosperous resettlement of relocated residents, and foster social harmony and stability. Furthermore, we will deepen paired cooperation between the developed eastern provinces and municipalities and the Northeast region, conducting cadre secondments and exchanges, offering systematic training, and developing key demonstration parks under this cooperative framework, thereby achieving mutual benefit and win-win outcomes.

VI. Improving the Interregional Benefit Compensation Mechanism

(17) Improve the diversified horizontal ecological compensation mechanism. In line with the important principle that “lucid waters and lush mountains are invaluable assets” and the systemic vision that mountains, rivers, forests, farmland, lakes, and grasslands constitute a community of life, we will continue to refine the horizontal ecological compensation mechanism in accordance with the principles of inter‑regional equity, alignment of rights and responsibilities, pilot‑first implementation, and phased advancement. We will encourage ecologically benefiting areas and ecological conservation areas, as well as downstream and upstream river basins, to establish horizontal compensation arrangements through financial transfers, paired cooperation, industrial relocation, talent training, and joint development of industrial parks. We will support inter‑provincial horizontal ecological compensation in trans‑provincial river basins that perform critical drinking‑water functions and provide significant ecosystem services, where the beneficiaries are clearly identified and both upstream and downstream parties demonstrate strong willingness to engage in compensation. Furthermore, we will carry out in‑depth pilot projects on cross‑regional ecological protection compensation in key areas such as the Beijing–Tianjin–Hebei water‑conservation zone, the Xin’an River basin spanning Anhui and Zhejiang, the Jiuzhou River basin between Guangxi and Guangdong, the Tingjiang–Hanjiang basin across Fujian and Guangdong, the Dongjiang basin linking Jiangxi and Guangdong, and the Xijiang basin in Guangxi and Guangdong, and promote replicable best practices.

(18) Establish a mechanism for compensating interests between major grain-producing and major grain-consuming regions. Develop specific measures to facilitate production‑marketing cooperation between these two types of regions, encouraging major grain‑consuming areas to engage in such collaboration by establishing processing parks in major producing areas, setting up high‑quality commercial grain bases, instituting reserve‑cooperation mechanisms between producing and consuming regions, and providing financial, human‑resource, and technical support. Strengthen support for major grain‑producing regions to enhance their overall grain‑production capacity, fully motivate local governments in these regions to prioritize grain production and farmers to actively engage in grain cultivation, and jointly safeguard national food security.

(19) Improve the mechanism for compensating interests between resource‑exporting and resource‑importing regions. Focusing on key resources such as coal, oil, natural gas, hydropower, wind energy, solar energy, and other mineral resources, we will adhere to a combination of market‑driven principles and government regulation, accelerate the refinement of a resource pricing system that promotes intensive and efficient resource use and sustainable development, and ensure that resource prices adequately reflect extraction costs as well as expenses related to ecological restoration and environmental management. We will encourage resource‑importing regions to support exporting regions in developing follow‑on and alternative industries through joint park development, industrial cooperation, and “out‑of‑region” economic models, and expedite the establishment of long‑term mechanisms to facilitate the economic transformation of resource‑dependent areas.

VII. Improving the Mechanism for Equalizing Basic Public Services

(20) Enhancing the capacity to ensure basic public services. In the field of basic public services, we will deepen reforms to delineate fiscal powers and expenditure responsibilities, gradually establishing a system and mechanism for basic public services that features clear allocation of powers and responsibilities, coordinated financial resources, reasonable standards, and robust safeguards. We will standardize the methods for sharing expenditure responsibilities for matters involving joint central–local fiscal powers, refine and improve the transfer payment system, and tilt public service funding toward impoverished areas, weak links, and priority groups, thereby strengthening the capacity of city- and county-level finances—particularly at the county level—to provide basic public services. We will reinforce the coordinating role of provincial governments, increase support for areas with inadequate basic public services within each province, and, through measures such as improving the division of fiscal powers and expenditure responsibilities below the provincial level and standardizing transfer payments, progressively narrow the gaps in basic public services across counties and between cities and prefectures.

(21) Raise the level of unified management of basic public services. Improve the central pooling system for enterprise employees’ basic old-age insurance funds and promptly achieve nationwide unified administration of old-age insurance. Enhance the basic medical insurance system and continuously elevate the level of pooled management. Consolidate and refine the management system for compulsory education, increase the scale of central government transfer payments for compulsory education, strengthen the coordinating role of provincial and municipal authorities, and step up support for deeply impoverished areas such as the “Three Regions and Three Prefectures” as well as contiguous poverty-stricken areas.

(22) Promote the seamless integration of basic public services across urban and rural areas and among different regions. Accelerate the establishment of systems for the cross‑urban/rural and cross‑regional transfer and coordination of essential public services such as healthcare and employment, and develop specific measures and supporting mechanisms for interprovincial portability and continuity. Strengthen coordinated cooperation on basic public services across regions. Encourage the Beijing–Tianjin–Hebei, Yangtze River Delta, and Pearl River Delta regions to proactively explore concrete approaches to the cross‑regional transfer and coordination of basic public services, and expedite the development of replicable and scalable best practices.

VIII. Innovating Regional Policy Regulation Mechanisms

(23) Implement differentiated regional policies. Fully take into account regional characteristics, leverage comparative advantages, and enhance the precision and effectiveness of fiscal, industrial, land-use, environmental protection, and talent‑related policies, so as to cultivate and stimulate region‑specific development drivers in line with local conditions. While upholding the principle of protecting the ecological environment through the strictest systems and the most rigorous rule of law, further prioritize key regions, sectors, and pollutants, and effectively guard against ecological and environmental risks. Strengthen environmental oversight throughout the process of industrial relocation and reception, and prevent cross‑regional pollution transfer. For areas of critical ecological function and those with sensitive or fragile ecosystems, resolutely adhere to the policy orientation that protecting the ecological environment is itself protecting productivity, and improving it is itself developing productivity, and strictly prohibit all development activities that are inconsistent with the designated functional zoning. Relevant central budgetary investments and special central government transfer payments will continue to be tilted toward less‑developed regions such as the central and western areas, as well as old industrial bases like the Northeast; policy measures to deepen the Great Western Development and promote the rise of the central region will be studied and formulated. The relevant industrial guidance catalogues for the western region will be dynamically adjusted, with necessary policy preferences granted to industries where the west enjoys comparative advantages and to those suitable for development in the region. In terms of land‑use policy, ensure adequate land supply for major cross‑regional infrastructure projects and public‑interest initiatives, and apply preferential land‑use planning quotas to border areas and other regions facing particular difficulties. Develop preferential policies to encourage talent to work in the central and western regions, the Northeast, and especially in deeply impoverished areas such as the “Three Regions and Three Prefectures,” and support local governments in formulating region‑specific policies to attract domestic and international talent in accordance with their development needs.

(24) Establish a regionally balanced system of fiscal transfer payments. Based on inter‑regional disparities in fiscal capacity, refine and improve the central government’s general transfer payment mechanisms to local governments, increase the scale of equalization transfers, and, while fully accounting for differences in expenditure costs across regions and effectively strengthening the self‑development capacity of the central and western regions, keep per capita fiscal expenditure disparities among resident populations within an appropriate range. Strictly uphold ecological protection red lines, enhance supporting policies for functional zones, and increase central fiscal transfers to key ecological function zones to provide more high‑quality ecological products. Provincial governments should, through adjustments to revenue sharing arrangements and by scaling up transfer payments, bolster the financial capacity of sub‑provincial governments to promote coordinated regional development.

(25) Establish and improve a coordination mechanism between regional policies and other macroeconomic regulation policies. Strengthen the alignment and synergy among regional policies and fiscal, monetary, investment, and other policy tools, optimize the policy toolkit, and ensure the precise implementation of macroeconomic regulatory measures. Fiscal, monetary, and investment policies should be aligned with major national regional strategies; in line with regional plans and policy orientations, measures such as refining fiscal policies, providing lawful and compliant financial support, and jointly formulating both guiding and binding industrial policies should be adopted to bolster major cross‑regional projects in transportation, water conservancy, ecological and environmental protection, and public welfare. For regions experiencing slower economic growth due to objective factors, provide more targeted care, guidance, and support, while increasing policy assistance under controllable risk conditions to keep regional economic performance within an appropriate range. Enhance dynamic monitoring and early warning for areas with high leverage ratios, strengthen inter‑local financial regulatory cooperation and joint risk prevention and control, and more effectively prevent and defuse systemic and regional financial risks.

IX. Improving the Mechanisms for Ensuring Regional Development

(26) Standardize the preparation and management of regional plans. Strengthen preliminary research for regional plan development, refine procedures for drafting, approval, and implementation, institute a planning‑approval‑schedule management system, further improve mechanisms for implementing regional plans, and enhance mid‑term and ex‑post evaluations, thereby establishing a regional planning framework that is scientifically sound, rigorously managed, and effectively guiding. For regional plans whose implementation periods have expired, those that genuinely require an extension may do so through revisions to the plan; those that no longer need to be extended shall be promptly repealed. In accordance with major national strategies and overarching spatial arrangements, new regional plans shall be formulated and implemented as appropriate.

(27) Establish a regional development monitoring, evaluation, and early-warning system. Focusing on key areas such as narrowing regional development gaps, advancing regional integration, and achieving coordinated resource–environment management, develop an evaluation indicator system for balanced regional development to assess the degree of coordination in a scientific and objective manner, thereby providing guidance for the formulation and adjustment of regional policies. Encourage social think tanks to conduct research and publish a regional balanced‑development index. Accelerate the establishment of a risk‑identification and early‑warning mechanism for regional development, closely monitor salient issues, and proactively prevent and appropriately address potential risks to regional development.

(28) Establish and improve a legal and regulatory framework for balanced regional development. Conduct research and feasibility studies on laws and institutional mechanisms to promote balanced regional development, clarify the conceptual framework, strategic priorities, and guiding directions of such development, and refine the mechanisms for formulating, implementing, monitoring, and evaluating regional policies. Clearly define the responsibilities of relevant departments in advancing balanced regional development, specify the duties and obligations of local governments in this process, and leverage the roles of social organizations, research institutions, and enterprises in fostering balanced regional development.

X. Effectively Strengthen Organization and Implementation

(29) Strengthen organizational leadership. Uphold and reinforce the Party’s leadership over regional coordinated development, give full play to the role of central–local regional coordination mechanisms, enhance local principal responsibility, and mobilize the broad participation of all sectors of society to jointly establish a more effective new mechanism for regional coordinated development, thereby providing robust institutional support for implementing the strategy of regional coordinated development. Relevant departments of the CPC Central Committee and state organs shall, in accordance with their respective functions, formulate specific policies and measures and work in concert to advance regional coordinated development. All provinces, autonomous regions, and municipalities directly under the central government shall develop corresponding implementation plans, refine relevant supporting policies, and ensure the smooth operation of the new mechanism for regional coordinated development.

(30) Strengthen coordination and guidance. The National Development and Reform Commission shall, in collaboration with relevant departments, intensify monitoring, analysis, and coordinated guidance on the implementation of the new mechanisms for balanced regional development; conduct research on emerging issues, summarize new experiences, and address emerging challenges; and promptly report any major issues to the CPC Central Committee and the State Council.

Taxation TAXATATION

The first filing period of the personal income tax reform has proceeded smoothly: an inventory of tax records reveals notable highlights, fostering both fairness and momentum.

Recently, the first filing period since the launch of the personal income tax reform has proceeded smoothly, with income from wages and salaries paid in October and business income earned by individual industrial and commercial households having been duly reported.
Data show that in the first month of the reform’s implementation, personal income tax reductions nationwide totaled 31.6 billion yuan, and more than 60 million taxpayers who were subject to taxation prior to the reform no longer pay personal income tax on wages and salaries. Among sectors benefiting from broad-based tax cuts, manufacturers recorded the largest reduction in tax burdens, while private enterprises saw particularly significant relief. Fiscal and tax experts note that this underscores the original intent and profound significance of the personal income tax reform: to promote social equity while bolstering the economy’s endogenous growth momentum.

This round of personal income tax reform has optimized the tax rate structure, significantly widening the brackets for the middle- and lower-income tax rates, thereby extending the benefits of the reform to a broader base of middle- and low-income earners. According to Luo Tianshu, Director-General of the Income Tax Department of the State Taxation Administration, taxpayers whose October salary and wage income was RMB 20,000 or less saw tax reductions exceeding 50 percent; they accounted for 96.1 percent of all pre-reform taxpayers, with total tax cuts amounting to RMB 22.4 billion—representing 70.9 percent of the month’s overall tax reduction.

The private sector has played a vital role in stabilizing growth, fostering innovation, creating jobs, and improving people’s livelihoods. According to statistics, the private sector accounts for more than 60% of GDP, provides over 80% of employment opportunities, and contributes more than 50% of tax revenues.
Data show that in the first month of the reform’s implementation, private‑sector employees paid RMB 16.45 billion less in personal income tax, accounting for 54.1% of the month’s total tax reductions and representing a 44% decrease. “Judging from the tax‑reduction results in the very first filing period, both the total amount and the magnitude of tax cuts for private enterprises are substantial, which will further stimulate their endogenous momentum and enhance their competitive soft power,” said Li Wanfu, Director of the Tax Science Research Institute of the State Taxation Administration.

It is reported that, in response to the tax-related bottlenecks and challenges confronting the development of the private sector, the State Taxation Administration has issued the “Notice on Implementing Several Measures to Further Support and Serve the Development of the Private Economy,” outlining 26 specific measures across five key areas—such as implementing and refining relevant policies to help private enterprises reduce their tax burden. The notice also specifies that, in 2019, the documentation required from taxpayers, including private enterprises, submitted to tax authorities will be further streamlined by more than 25 percent.
Reducing taxes and burdens while enhancing services. In this personal income tax reform, the tax authorities have directly addressed the challenges and issues faced by private enterprises in filing personal income tax returns, delivering more robust measures and superior support to bolster their confidence in innovation and growth. As a result, enterprise employees have fully benefited from the dividends of the reform, effectively contributing to the expansion and strengthening of the private sector.

As the backbone of the real economy, China’s manufacturing sector has maintained overall stability while showing steady improvement.
During the first filing period of the personal income tax reform, tax reductions for manufacturing employees totaled RMB 5.85 billion, accounting for 19.3% of the month’s overall tax cuts—this represents a notable highlight of the reform. Among them, the equipment manufacturing sector recorded the largest tax relief in the manufacturing industry, with reductions amounting to RMB 3.43 billion, or 58.7% of the total tax cuts across all manufacturing. Zhang Bin, a researcher at the Chinese Academy of Social Sciences, noted: “Most manufacturing offices are labor-intensive, face high labor costs, and tend to employ a significant share of high-income earners. Reducing their tax burden will help foster stronger growth in the manufacturing sector.”

Three departments have significantly raised the per-transaction limit for cross-border e-commerce imports.

The Ministry of Finance, the General Administration of Customs, and the State Taxation Administration recently jointly issued the “Notice on Improving the Tax Policy for Cross-Border E‑Commerce Retail Imports” (Cai Guan Shui [2018] No. 49), significantly raising the per-transaction threshold, effective January 1, 2019.

The per‑transaction threshold for cross‑border e‑commerce retail imports will be raised from RMB 2,000 to RMB 5,000, and the annual transaction threshold will be increased from RMB 20,000 to RMB 26,000. If the dutiable value exceeds the per‑transaction threshold of RMB 5,000 but remains below the annual threshold of RMB 26,000, and the order contains only a single item, such goods may be imported through the cross‑border e‑commerce retail channel, subject to full tariffs and import‑stage value‑added tax and consumption tax at the applicable rates for goods. The transaction amount will be counted toward the annual total; however, if the annual total exceeds the annual threshold, the transaction will be governed as ordinary trade.

Attachment: Notice on Improving the Tax Policy for Cross-Border E‑Commerce Retail Imports (Cai Guan Shui [2018] No. 49)

To the Finance Departments (Bureaus) of all provinces, autonomous regions, municipalities directly under the central government, and cities separately listed in the national plan; to the Finance Bureau of the Xinjiang Production and Construction Corps; to the Guangdong Sub‑Administration of the General Administration of Customs and all its directly affiliated customs offices; to the tax bureaus of all provinces, autonomous regions, municipalities directly under the central government, and cities separately listed in the national plan; and to the Commissioner’s Offices of the State Taxation Administration stationed throughout the country:

To promote the sound development of the cross-border e‑commerce retail import sector and foster a fair and competitive market environment, the following matters concerning the refinement of the tax policies for cross-border e‑commerce retail imports are hereby notified:

I. The per-transaction threshold for cross-border e‑commerce retail imports will be raised from RMB 2,000 to RMB 5,000, and the annual transaction threshold will be increased from RMB 20,000 to RMB 26,000.

II. Where the customs value exceeds the single-transaction threshold of RMB 5,000 but remains below the annual transaction threshold of RMB 26,000, and the order contains only one item, such goods may be imported through the cross-border e‑commerce retail channel, with customs duties, import VAT, and consumption tax levied in full at the applicable rates for goods. The transaction amount shall be included in the annual aggregate; however, if the annual aggregate exceeds the annual transaction threshold, the transaction shall be subject to general trade regulations.

III. E‑commerce imported goods that have already been purchased are final consumer‑use products and may not be re‑sold in the domestic market; in principle, the “bonded e‑commerce + offline self‑pickup” model is prohibited for bonded‑imported goods outside customs special regulatory zones.

IV. With respect to other matters, please continue to implement the relevant provisions set forth in the “Notice of the Ministry of Finance, the General Administration of Customs, and the State Taxation Administration on the Tax Policies for Cross-Border E‑Commerce Retail Imports” (Cai Guan Shui [2016] No. 18).

V. To accommodate the development of cross-border e‑commerce, the Ministry of Finance, in coordination with relevant departments, has revised the “List of Cross-Border E‑Commerce Retail Imported Goods,” which will be announced separately.

This notice shall take effect as of January 1, 2019.

General Administration of Customs: Expanding the Scope of Banks for Electronic Transmission of Consolidated Tax Guarantee Data

On November 26, the General Administration of Customs issued the “Announcement on Expanding the Scope of Banks Authorized to Electronically Transmit Data for Consolidated Tax Guarantee” (hereinafter referred to as the “Announcement”), which shall take effect from the date of its publication.

The Announcement clarifies that the banks authorized to electronically transmit consolidated tax‑guarantee data have been expanded to include Industrial Bank, China Minsheng Bank, China Merchants Bank, China Everbright Bank, Guangdong Development Bank, Agricultural Bank of China, and Hangzhou Bank.

Attachment: “Announcement on Expanding the Scope of Banks for Electronic Transmission of Consolidated Tax Guarantee Data”

To further facilitate enterprises in handling consolidated tax‑guarantee procedures, optimize tax services, and improve the business environment, the General Administration of Customs has decided, effective December 1, 2018, to expand the scope of banks authorized to electronically transmit consolidated tax‑guarantee data. Relevant matters are hereby announced as follows:

Banks authorized to electronically transmit consolidated tax‑guarantee data have been expanded to include Industrial Bank, China Minsheng Bank, China Merchants Bank, Everbright Bank, Guangdong Development Bank, Agricultural Bank of China, and Hangzhou Bank. Other matters shall be governed by General Administration of Customs Announcement No. 70 of 2018.

After other commercial banks have completed joint testing with the General Administration of Customs and been certified by the Administration as meeting the requirements for go-live, they may commence operations without further public announcement from the General Administration of Customs.

This announcement shall take effect from the date of its issuance.

Six Departments: Notice on Adjusting the Relevant Catalogues of the Import Tax Policy for Major Technical Equipment

To the Finance Departments (Bureaus), Development and Reform Commissions, and departments in charge of industry and information technology of all provinces, autonomous regions, municipalities directly under the central government, and cities separately listed in the national plan; to the Finance Bureau and Development and Reform Commission of the Xinjiang Production and Construction Corps; to the Guangdong Sub‑Administration of the General Administration of Customs and all directly affiliated customs offices; to the tax bureaus of all provinces, autonomous regions, municipalities directly under the central government, and cities separately listed in the national plan under the State Taxation Administration; and to the Commissioner Offices of the Ministry of Finance stationed in all provinces, autonomous regions, municipalities directly under the central government, and cities separately listed in the national plan:

Based on the recent development of China’s equipment manufacturing sector and its supporting industries, and after extensively soliciting views from relevant industry authorities, trade associations, and enterprise representatives, the Ministry of Finance, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the General Administration of Customs, the State Taxation Administration, and the National Energy Administration have decided to revise the relevant catalogues under the import tax policy for major technological equipment. The following notice is hereby issued:

I. The “Catalogue of Major Technological Equipment and Products Supported by the State (Revised in 2018)” (see Annex 1) and the “Catalogue of Key Components and Raw Materials for Importing Major Technological Equipment and Products (Revised in 2018)” (see Annex 2) shall take effect as of January 1, 2019. Domestic enterprises that meet the prescribed conditions and, for the production of the equipment or products listed in Annex 1 to this notice, have a genuine need to import the goods listed in Annex 2 shall be exempt from customs duties and value-added tax at the import stage. For items specified in Annexes 1 and 2 with defined periods of applicability, the tax‑exempt period for the relevant equipment, products, components, and raw materials shall expire on December 31 of the respective year.

In light of domestic industrial development, effective January 1, 2019, the tax exemption policy for equipment such as one-million-kilowatt-class nuclear power units (improved second-generation nuclear power units) has been revoked, and the corresponding advance allocation of duty-free import quotas for enterprises producing and manufacturing related equipment and products for the 2019 fiscal year has been canceled.

II. The “Catalogue of Major Technological Equipment and Products Not Eligible for Import Duty Exemption (Revised in 2018)” (see Annex 3) shall take effect as of January 1, 2019. With respect to the following projects and enterprises approved on or after January 1, 2019, which are entitled to import tax preferential policies in accordance with or by analogy to the relevant provisions of the State Council’s Notice on Adjusting the Tax Policies for Imported Equipment (Guofa [1997] No. 37), all imports of the self‑used equipment listed in Annex 3, as well as the technologies and accompanying parts and spare parts imported together with such equipment pursuant to the contract, shall be subject to import taxes in accordance with applicable regulations.

(1) Domestic investment projects and foreign-invested projects that are encouraged by the state;

(2) Projects financed by loans from foreign governments and international financial institutions;

(3) Processing trade enterprises that import equipment on a non‑monetary basis provided by foreign investors;

(4) Foreign-invested projects in advantageous industries located in the central and western regions;

(5) Technology upgrading projects undertaken by foreign-invested enterprises and research centers established with foreign investment, using their own funds, as stipulated in the “Notice of the General Administration of Customs on Further Encouraging Foreign Investment through Relevant Import Tax Policies” (No. 791 [1999] of the Customs Tariff Department).

To ensure the smooth implementation of the aforementioned projects that were approved prior to the revision of the “Catalogue of Major Technological Equipment and Products Not Eligible for Duty Exemption upon Import (Revised in 2018),” equipment imported by such projects and enterprises on or before June 30, 2019—provided that the import was approved on or before December 31, 2018—shall continue to be governed by Annex 3 of the “Notice of the Ministry of Finance, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the General Administration of Customs, the State Taxation Administration, and the National Energy Administration on Adjusting Relevant Catalogues of the Import Tax Policy for Major Technological Equipment” (Cai Guan Shui [2017] No. 39) and by the “Announcement of the Ministry of Finance, the National Development and Reform Commission, the General Administration of Customs, and the State Taxation Administration on Adjusting the ‘Catalogue of Imported Goods Not Eligible for Duty Exemption for Domestic Investment Projects’” (No. 83 of 2012).

Effective July 1, 2019, import duties shall be levied in accordance with the applicable regulations on all equipment listed in the “Catalogue of Major Technological Equipment and Products Not Eligible for Import Tax Exemption (Revised in 2018)” imported by the aforementioned projects and enterprises. To ensure uniform implementation of this policy, imports by relevant projects and enterprises shall be reviewed and subject to tax treatment in accordance with both the “Catalogue of Major Technological Equipment and Products Not Eligible for Import Tax Exemption (Revised in 2018)” and the “Catalogue of Imported Goods Not Eligible for Tax Exemption under Domestic Investment Projects (Adjusted in 2012).” For goods whose names appear in both catalogues, or for those listed only in the “Catalogue of Major Technological Equipment and Products Not Eligible for Import Tax Exemption (Revised in 2018),” the provisions set forth in the latter catalogue, together with its technical specifications and criteria, shall prevail.

III. Effective January 1, 2019, the “Notice of the Ministry of Finance, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the General Administration of Customs, the State Taxation Administration, and the National Energy Administration on Adjusting the Relevant Catalogues of the Import Tax Policy for Major Technological Equipment” (Cai Guan Shui [2017] No. 39) is hereby repealed.

Attachment: 1. Catalog of Major Technological Equipment and Products Supported by the State (Revised in 2018)

2. Catalogue of Key Components and Raw Materials for the Import of Major Technological Equipment and Products (Revised in 2018)

3. Catalog of Major Technological Equipment and Products Not Eligible for Duty-Free Importation (Revised in 2018)

Litigation & Arbitration

Two Supreme Courts: Malicious overdrafts exceeding five million may be punishable by life imprisonment.

On November 28, the Supreme People’s Court and the Supreme People’s Procuratorate issued the “Decision on Amending the Interpretation on Several Issues Concerning the Specific Application of Law in Handling Criminal Cases Involving Obstruction of Credit Card Management” (hereinafter referred to as the “Decision”). The Decision clarifies that malicious overdrafts exceeding RMB 5 million shall be deemed to constitute a “particularly large amount” as stipulated in Article 196 of the Criminal Law.

The Decision clarifies that malicious overdrafts amounting to RMB 50,000 or more but less than RMB 500,000 shall be deemed “a relatively large amount” as stipulated in Article 196 of the Criminal Law; those amounting to RMB 500,000 or more but less than RMB 5 million shall be deemed “a huge amount”; and those exceeding RMB 5 million shall be deemed “an especially huge amount” as prescribed in Article 196 of the Criminal Law.

Attachment: Decision on Amending the “Interpretation on Several Issues Concerning the Specific Application of Law in Handling Criminal Cases Involving Obstruction of Credit Card Management”

In light of judicial practice, it is hereby decided to amend the “Interpretation by the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Specific Application of Law in Handling Criminal Cases Involving Obstruction of Credit Card Management” (Fa Shi [2009] No. 19, hereinafter referred to as the “Interpretation”) as follows:
I. Article 6 of the original Interpretation is hereby amended to read as follows: “Where a cardholder, with the intent of illegal appropriation, exceeds the prescribed credit limit or repayment period in making an overdraft and, after two valid demands for repayment by the issuing bank, fails to repay within three months, such conduct shall be deemed to constitute ‘malicious overdraft’ as stipulated in Article 196 of the Criminal Law.”
With regard to whether the intent was to unlawfully appropriate, such determination shall be made by comprehensively considering factors including the cardholder’s credit history, repayment capacity and willingness, the circumstances surrounding the application for and use of the credit card, the intended purpose of the overdrawn funds, the cardholder’s conduct following the overdraw, and the reasons for failing to make repayments as required. The mere fact that the cardholder failed to make repayments in accordance with the stipulated terms may not, by itself, be sufficient to establish an intent to unlawfully appropriate.
“Where any of the following circumstances exist, it shall be deemed to constitute ‘with the intent of illegal possession’ as stipulated in Article 196, Paragraph 2 of the Criminal Law, unless there is evidence proving that the cardholder genuinely did not have such intent:”
(1) Knowingly incurring substantial credit card overdrafts despite lacking the ability to repay, and being unable to make repayment;
(2) Obtaining a credit card by using false creditworthiness certificates and then incurring an overdraft that cannot be repaid;
(3) After incurring an overdraft, evading the bank’s collection efforts by means such as absconding or changing contact information;
“(4) Withdrawing or transferring funds, concealing assets, and evading repayment;”
“(5) Using overdraft funds to engage in criminal activities;”
“(6) Other circumstances involving the unlawful appropriation of funds and refusal to return them.”
II. Add a new provision, to be Article 7 of the Interpretation: “A debt collection shall be deemed to constitute ‘effective debt collection’ as stipulated in Article 6 of this Interpretation if it simultaneously meets the following conditions:”
(1) Conducted after the overdraft exceeds the prescribed limit or the prescribed period;
(2) Collection efforts shall be conducted by means that can conoffice the cardholder’s receipt, except where the cardholder intentionally evades collection;
(3) The two collection attempts shall be spaced at least thirty days apart;
(4) Complies with the relevant provisions or agreements governing debt collection.
With respect to whether a debt collection is valid, the determination shall be based on the telephone recordings, records of message delivery, acknowledgment of receipt for mailed correspondence, records of email delivery, signatures of the cardholder or their family members, and other original evidence of collection provided by the issuing bank.
“The relevant evidentiary materials provided by the issuing bank shall bear the signatures of bank staff and the official seal of the bank.”
III. Add the following as Article 8 of the Interpretation: “Malicious overdrafts in an amount of no less than RMB 50,000 but less than RMB 500,000 shall be deemed to fall under the category of ‘relatively large amount’ as stipulated in Article 196 of the Criminal Law; those in an amount of no less than RMB 500,000 but less than RMB 5 million shall be deemed to fall under the category of ‘huge amount’; and those in an amount of RMB 5 million or more shall be deemed to fall under the category of ‘particularly huge amount’ as stipulated in Article 196 of the Criminal Law.”
IV. Add a new provision as Article 9 of the Interpretation: “The amount of malicious overdraft refers to the actual principal amount of the overdraft that has not yet been repaid at the time the public security organ initiates criminal proceedings, and does not include interest, compound interest, late payment penalties, service fees, or other charges levied by the card‑issuing bank. Any amounts repaid or paid shall be deemed to have been applied toward the repayment of the actual principal of the overdraft.”
“When reviewing cases for prosecution and instituting public prosecution, the procuratorial organs shall, based on evidence such as transaction records and categorized statements (overdraft statements, repayment statements) provided by the card‑issuing bank, together with the explanations and defense arguments advanced by the suspect or defendant and their defense counsel, as well as relevant supporting evidence, examine and determine the amount of malicious overdraft. If the amount of malicious overdraft is difficult to ascertain, it shall be determined in accordance with forensic accounting and audit reports, taking into account other available evidence. During the trial, the people’s courts shall, upon verifying the authenticity of the aforementioned evidence, render a determination of the amount of malicious overdraft.”
“The relevant evidentiary materials provided by the issuing bank shall bear the signatures of bank staff and the official seal of the bank.”
V. Add a new provision as Article 10 of the Interpretation: “Where the amount of malicious overdraft is substantial, but is fully repaid prior to the filing of public prosecution, or where other circumstances are minor, prosecution may be refrained from; and where it is fully repaid before the first-instance judgment, or where other circumstances are minor, criminal punishment may be waived. However, this shall not apply to those who have been punished two or more times for credit card fraud.”
VI. Add a new provision as Article 11 of the Interpretation: “Where an issuing bank, in violation of regulations, issues loans in disguise through credit card overdraws, and the cardholder fails to repay in accordance with the relevant provisions, the provisions of Article 196 of the Criminal Law concerning ‘malicious overdraft’ shall not apply. If the conduct constitutes another crime, it shall be prosecuted as such other crime.”
VII. Article 7 of the original Interpretation shall be renumbered as Article 12 of the amended Interpretation.
VIII. Article 8 of the original Interpretation shall be renumbered as Article 13 of the amended Interpretation and revised to read: “Where a legal person commits any act prescribed in this Interpretation, the sentencing standards applicable to the corresponding natural person offenses set forth in this Interpretation shall apply.”
In accordance with this Decision, the Interpretation shall be republished after making the corresponding amendments and rearranging the order of its articles.

Supreme People’s Court, Supreme People’s Procuratorate

On the Handling of Criminal Cases Involving Obstruction of Credit Card Management

Interpretation of Several Issues Concerning the Application of Law

(At the 1475th meeting of the Judicial Committee of the Supreme People’s Court on October 12, 2009,

Adopted at the 22nd Meeting of the 11th Procuratorial Committee of the Supreme People’s Procuratorate on November 12, 2009, and amended in accordance with the “Decision of the Supreme People’s Court and the Supreme People’s Procuratorate on Amending the Interpretation on Several Issues Concerning the Specific Application of Law in Handling Criminal Cases Involving Obstruction of Credit Card Management,” adopted at the 1745th Meeting of the Judicial Committee of the Supreme People’s Court on July 30, 2018, and at the 7th Meeting of the 13th Procuratorial Committee of the Supreme People’s Procuratorate on October 19, 2018.

In order to punish, in accordance with the law, criminal activities that disrupt the administration of credit cards and to safeguard the order of credit card management and the legitimate rights and interests of cardholders, and pursuant to the provisions of the Criminal Law of the People’s Republic of China, the following interpretations are hereby issued on certain issues concerning the specific application of the law in handling such criminal cases:
Article 1: Anyone who duplicates another person’s credit card, writes another person’s credit card information onto a magnetic stripe or chip, or otherwise forges one or more credit cards shall be deemed to have committed “forgery of a credit card” as stipulated in Paragraph 4 of Article 177, Paragraph 1 of the Criminal Law, and shall be convicted and punished for the crime of forging financial instruments.
Where ten or more blank credit cards are forged, such conduct shall be deemed to constitute “forging credit cards” as stipulated in Article 177, Paragraph 1, Item 4 of the Criminal Law, and shall be prosecuted and punished as the crime of forging financial instruments.
Forging credit cards shall be deemed to constitute “serious circumstances” as stipulated in Article 177 of the Criminal Law if any of the following circumstances applies:
(1) Forging five or more but fewer than twenty-five credit cards;
(2) Where the balance of deposits or the credit limit on a forged credit card, either individually or in aggregate, amounts to RMB 200,000 or more but less than RMB 1 million;
(3) Forging more than fifty but fewer than two hundred and fifty blank credit cards;
(4) Other circumstances involving serious misconduct.
Forging credit cards shall be deemed to constitute “particularly serious circumstances” as stipulated in Article 177 of the Criminal Law if any of the following situations applies:
(1) Forging twenty-five or more credit cards;
(2) The balance of deposits or the credit limit on a forged credit card, whether taken individually or in aggregate, amounts to RMB 1 million or more;
(3) Forging two hundred and fifty or more blank credit cards;
(4) Other circumstances involving particularly serious circumstances.
For the purposes of this Article, “credit card balance” and “overdraft limit” shall be determined based on the highest recorded balance and the maximum overdraft limit as documented by the issuing bank following the forgery of the credit card.
Article 2: Where a person knowingly possesses or transports ten or more but fewer than one hundred blank credit cards that have been forged, such conduct shall be deemed to constitute “a relatively large quantity” as stipulated in Article 177-1, Paragraph 1, Item 1 of the Criminal Law; where a person illegally possesses five or more but fewer than fifty credit cards belonging to others, such conduct shall be deemed to constitute “a relatively large quantity” as stipulated in Article 177-1, Paragraph 1, Item 2 of the Criminal Law.
Where any of the following circumstances exists, it shall be deemed to constitute “a huge quantity” as stipulated in Article 177-1, Paragraph 1 of the Criminal Law:
(1) Knowingly possessing or transporting ten or more counterfeit credit cards;
(2) Knowingly possessing or transporting more than one hundred counterfeit blank credit cards;
(3) Illegally possessing fifty or more credit cards belonging to others;
(4) Obtaining ten or more credit cards by means of false identification documents;
(5) Selling, purchasing, or providing others with ten or more forged credit cards, or obtaining credit cards by means of false identification.
Anyone who, against another person’s will, uses that person’s resident identity card, officer’s certificate, soldier’s certificate, Mainland Travel Permit for Hong Kong and Macao Residents, Mainland Travel Permit for Taiwan Residents, passport, or other identity documents to apply for a credit card; or who uses forged or altered identity documents to apply for a credit card, shall be deemed to have committed the offense of “obtaining a credit card by fraudulent use of false identity documents” as stipulated in Article 177‑1, Paragraph 1, Item 3 of the Criminal Law.
Article 3: Anyone who steals, purchases, or illegally provides another person’s credit card information, and such information is sufficient to forge a credit card capable of being used for transactions, or sufficient to enable others to transact in the name of the credit card holder, shall, where the number of credit cards involved is one or more but fewer than five, be convicted and punished for the crime of stealing, purchasing, or illegally providing credit card information in accordance with Paragraph 2 of Article 177‑1 of the Criminal Law; where the number of credit cards involved is five or more, it shall be deemed to constitute “a huge quantity” as stipulated in Paragraph 1 of Article 177‑1 of the Criminal Law.
Article 4: Anyone who prepares or provides false documents concerning creditworthiness—such as proof of financial status, income, or employment—for a credit card applicant, and whose conduct involves the forgery, alteration, or trading of official documents, certificates, or seals of state organs, or the forgery of seals of companies, enterprises, public institutions, or people’s organizations, shall be held criminally liable in accordance with Article 280 of the Criminal Law and shall be convicted and punished respectively for the crimes of forging, altering, or trading official documents, certificates, or seals of state organs, and for the crime of forging seals of companies, enterprises, public institutions, or people’s organizations.
Intermediary organizations or their personnel entrusted with duties such as asset appraisal, capital verification, certification, accounting, auditing, and legal services who provide credit card applicants with false documentation regarding their financial status, income, employment, or other creditworthiness shall, where criminal liability is to be pursued, be convicted and punished in accordance with Article 229 of the Criminal Law, respectively, for the crime of providing false certification documents and the crime of issuing certification documents containing material misstatements.
Article 5: Anyone who uses a forged credit card, a credit card obtained by means of false identification, a cancelled credit card, or a credit card held in another person’s name to engage in credit card fraud, and whose fraudulent amount is RMB 5,000 or more but less than RMB 50,000, shall be deemed to have committed an offense involving a “relatively large amount” as stipulated in Article 196 of the Criminal Law; if the fraudulent amount is RMB 50,000 or more but less than RMB 500,000, it shall be deemed to involve a “huge amount”; and if the fraudulent amount is RMB 500,000 or more, it shall be deemed to involve a “particularly huge amount.”
The “impersonation of another person’s credit card” referred to in Article 196, Paragraph 1, Item 3 of the Criminal Law encompasses the following circumstances:
(1) Finding and using another person’s credit card;
(2) Obtaining another person’s credit card by deception and using it;
(3) Stealing, purchasing, fraudulently obtaining, or acquiring others’ credit card information by other unlawful means, and using such information via the Internet, communication terminals, or other channels;
(4) Other circumstances involving the unauthorized use of another person’s credit card.
Article 6: Where a cardholder, with the intent of illegal appropriation, incurs an overdraft exceeding the prescribed limit or the prescribed period, and fails to repay the debt within three months after two valid demands for repayment by the issuing bank, such conduct shall be deemed “malicious overdraft” as stipulated in Article 196 of the Criminal Law.
With respect to whether the intent was to unlawfully appropriate, such determination shall be made by comprehensively considering factors including the cardholder’s credit history, repayment capacity and willingness, the circumstances surrounding the application for and use of the credit card, the intended purpose of the overdrawn funds, the cardholder’s conduct following the overdraw, and the reasons for failing to make repayments as required. The mere fact that the cardholder failed to make repayments in accordance with the applicable rules may not, by itself, be sufficient to establish an intent to unlawfully appropriate.
Where any of the following circumstances exist, it shall be deemed to constitute “with the intent of illegal possession” as stipulated in Article 196, Paragraph 2 of the Criminal Law, unless there is evidence proving that the cardholder genuinely did not have such intent:
(1) Knowingly incurring substantial overdrafts despite lacking the ability to repay, and being unable to make repayment;
(2) Obtaining a credit card by using false creditworthiness certificates and then incurring an overdraft that cannot be repaid;
(3) After incurring an overdraft, evading the bank’s collection efforts by means such as absconding or changing contact information;
(4) Withdrawing or transferring funds, concealing assets, and evading repayment;
(5) Using overdraft funds to engage in criminal activities;
(6) Other circumstances involving the unlawful appropriation of funds and refusal to return them.
Article 7: Collection efforts that simultaneously meet the following conditions shall be deemed “effective collection” as stipulated in Article 6 of this Interpretation:
(1) After exceeding the prescribed credit limit or the prescribed repayment period;
(2) Collection efforts shall be conducted by means that can conoffice the cardholder’s receipt, except where the cardholder intentionally evades collection.
(3) The two collection attempts shall be spaced at least thirty days apart;
(4) Complies with the relevant provisions or agreements governing debt collection.
With respect to whether a debt collection is valid, the determination shall be based on the telephone recording, records of message delivery, acknowledgment of letter delivery, records of email delivery, signatures of the cardholder or their family members, and other original evidence of collection provided by the issuing bank.
The relevant evidentiary materials provided by the issuing bank shall bear the signatures of bank staff and the official seal of the bank.
Article 8: Malicious overdrafts in an amount of no less than RMB 50,000 but less than RMB 500,000 shall be deemed to fall under the category of “relatively large amount” as stipulated in Article 196 of the Criminal Law; those in an amount of no less than RMB 500,000 but less than RMB 5 million shall be deemed to fall under the category of “huge amount”; and those in an amount of RMB 5 million or more shall be deemed to fall under the category of “particularly huge amount” as stipulated in Article 196 of the Criminal Law.
Article 9. The amount of malicious overdraft refers to the actual principal balance that remains unpaid at the time the public security organ initiates a criminal case, and does not include interest, compound interest, late payment penalties, service fees, or other charges levied by the card‑issuing bank. Any amounts repaid or paid shall be deemed to have been applied toward the repayment of the actual principal balance of the overdraft.
When reviewing cases for prosecution and instituting public prosecution, the procuratorial organs shall, based on evidence such as transaction records and account statements (including overdraft statements and repayment statements) provided by the card‑issuing bank, together with the explanations and defenses offered by the suspect or defendant and their defense counsel, as well as relevant supporting evidence, examine and determine the amount of malicious overdraft. If the amount of malicious overdraft is difficult to ascertain, it shall be determined in accordance with forensic accounting and audit reports, taking into account other available evidence. During the trial, the people’s courts shall, upon verifying the authenticity of the aforementioned evidence, make a determination of the amount of malicious overdraft.
The relevant evidentiary materials provided by the issuing bank shall bear the signatures of bank staff and the official seal of the bank.
Article 10: Where the amount of malicious overdraft is substantial but is fully repaid prior to the filing of public prosecution, or where other circumstances are minor, prosecution may be refrained from; and where the full amount is repaid before the first-instance judgment, or where other circumstances are minor, criminal punishment may be waived. However, this shall not apply to those who have been punished two or more times for credit card fraud.
Article 11: Where an issuing bank, in violation of regulations, issues loans in disguise through credit card overdrafts, and the cardholder fails to repay as required, the provisions of Article 196 of the Criminal Law concerning “malicious overdraft” shall not apply. If the conduct constitutes another crime, it shall be prosecuted as such.
Article 12: Anyone who, in violation of state regulations, uses point-of-sale terminal equipment (POS machines) or other methods to make direct cash payments to credit card holders through fictitious transactions, artificially inflated pricing, cash refunds, or other means, and whose conduct is serious, shall be convicted and punished for the crime of illegal business operations in accordance with Article 225 of the Criminal Law.
Where the acts specified in the preceding paragraph involve an amount of RMB 1 million or more, or result in financial institutions having funds overdue and unpaid in the amount of RMB 200,000 or more, or cause economic losses to financial institutions in the amount of RMB 100,000 or more, such cases shall be deemed to fall under the “serious circumstances” stipulated in Article 225 of the Criminal Law; where the amount involved is RMB 5 million or more, or results in financial institutions having funds overdue and unpaid in the amount of RMB 1 million or more, or causes economic losses to financial institutions in the amount of RMB 500,000 or more, such cases shall be deemed to fall under the “particularly serious circumstances” stipulated in Article 225 of the Criminal Law.
Where a cardholder, with the intent of illegal appropriation, maliciously overdraws by means as described above and such conduct is subject to criminal liability, the offender shall be convicted and punished for credit card fraud in accordance with Article 196 of the Criminal Law.

Article 13: Where a legal entity commits an act specified in this Interpretation, the sentencing and conviction standards applicable to the corresponding natural person offenses set forth in this Interpretation shall apply.

The Supreme People’s Court has released typical cases on environmental and resource adjudication that support the high-quality development of the Yangtze Economic Belt.

On November 28, the Supreme People’s Court released ten typical cases demonstrating how people’s courts have provided judicial safeguards for the high-quality development of the Yangtze River Economic Belt in environmental and resource matters. These cases include the case involving defendant Yi Wenfa and others for the illegal production of drug‑precursor chemicals and environmental pollution, as well as the case against the defendant entity Chongqing Shouxu Environmental Protection Technology Co., Ltd. and defendant Cheng Long and others for environmental pollution, among others.

The ten typical cases released this time cover areas such as water pollution prevention and control, encompassing environmental elements including the atmosphere as well as natural resources. They include ordinary criminal, civil, and administrative cases, as well as environmental civil and administrative public-interest litigation cases. These ten exemplary cases vividly demonstrate that environmental and resource adjudication in the Yangtze River Basin is officely centered on the ecological characteristics of water, while also reflecting the distinctive features of case adjudication across different segments of the Yangtze Economic Belt. They hold significant guiding value for strengthening environmental and resource adjudication not only within the Yangtze Economic Belt but also in other regions nationwide.

Ministry of Justice: Promoting the Development of Individual Mediation Studios

On November 26, the Ministry of Justice released the “Guiding Opinions on Promoting the Establishment of Individual Mediation Studios” (hereinafter referred to as the “Opinions”).

The Opinions stipulate that the establishment, naming, and management of individual mediation studios shall be standardized in accordance with the law; further efforts shall be made to strengthen their organizational development, personnel capacity, professional expertise, and institutional framework; and their vital role in identifying and resolving disputes and conflicts shall be fully leveraged, ensuring that such issues are promptly addressed at the local level and preventing their escalation.

The Opinions state that judicial administrative organs at all levels must strengthen organizational leadership, proactively seek the support and cooperation of Party committees, governments, and relevant departments, enhance operational safeguards, intensify recognition and publicity efforts, and foster a favorable social environment for the effective functioning of individual mediation studios.

Attachment: “Guiding Opinions on Promoting the Establishment of Individual Mediation Studios”

To the Justice Departments (Bureaus) of all provinces, autonomous regions, and municipalities directly under the central government, and to the Justice Bureau of the Xinjiang Production and Construction Corps:

In order to uphold and develop the “Fengqiao Experience,” thoroughly implement the “Opinions on Strengthening the Building of the People’s Mediation Team,” fully leverage the role of people’s mediation as the “first line of defense” in safeguarding social harmony and stability, improve the network of people’s mediation organizations, innovate their organizational forms, and promptly resolve disputes at the local level—thereby striving to prevent conflicts from being escalated—we hereby put forward the following recommendations for advancing the establishment of individual mediation studios.

I. Fully Recognize the Significant Importance of Promoting the Establishment of Individual Mediation Studios

Individual mediation studios are mediation organizations established under the name of a people’s mediator or a distinctive, proprietary title. In recent years, localities have leveraged the leading and exemplary role of skilled mediators to promote the creation of people’s mediation studios named after individuals, effectively resolving a large number of conflicts and disputes. Practice has demonstrated that individual mediation studios represent an innovative evolution of traditional mediation structures and serve as an effective extension of grassroots mediation networks. They play a crucial role in boosting mediators’ enthusiasm and initiative, enhancing the authority and influence of mediation work, and elevating its quality and standards. At present, socialism with Chinese characteristics has entered a new era. As the principal social contradiction in China has evolved, disputes and conflicts have taken on new forms and characteristics, while the public has come to expect higher‑level, more sophisticated mediation services. Judicial administrative organs at all levels must raise their political awareness, fully recognize the significance of advancing the development of individual mediation studios, and adopt concrete measures to cultivate a cohort of mediation brands that are “well‑run, trustworthy, and widely respected.” By continuously fostering innovation in people’s mediation in the new era, we can ensure that disputes are resolved at the local level—without being escalated or exacerbated—thereby safeguarding the legitimate rights and interests of the people, promoting social fairness and justice, and upholding national security and social harmony and stability.

II. General Requirements

(1) Guiding Principles

Adhering to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will comprehensively implement the spirit of the 19th National Congress of the Communist Party of China and the Second and Third Plenary Sessions of the 19th CPC Central Committee, thoroughly enforce the Law on People’s Mediation, and uphold and develop the “Fengqiao Experience.” Focusing on innovating organizational structures and enhancing the quality of the mediation workforce, we will actively promote the establishment of individual mediation studios, standardize, in accordance with the law, their establishment, naming, management, and support mechanisms, and fully leverage their critical role in identifying and resolving conflicts and disputes. In doing so, we will effectively safeguard the legitimate rights and interests of the people and maintain social harmony and stability, thereby making a positive contribution to building a safe and law-based China.

(II) Basic Principles

— Uphold the leadership of the Party. Diligently implement the central government’s decisions and arrangements for strengthening people’s mediation, ensuring that Party leadership is integrated into every stage and aspect of people’s mediation work, thereby safeguarding the proper direction of the development of individual mediation studios.

— Uphold a people-centered approach. Ensure that people’s mediation serves the people, take public satisfaction as the fundamental criterion for evaluating mediation work, and strive to provide high-quality, efficient mediation services to all parties involved, thereby safeguarding the legitimate rights and interests of both sides.

— Adhere to lawful establishment and standardized management. Comply with the fundamental provisions of the People’s Mediation Law, refine the procedures for establishing individual mediation studios, improve management systems, standardize work processes, and continuously enhance the quality and effectiveness of mediation work.

— Adhere to a tailored, locally‑specific approach and emphasize distinctive features. Based on the actual conditions of local disputes and the mediators’ areas of expertise and professional strengths, proceed pragmatically: “develop one as it matures,” and proactively cultivate mediation brands that reflect unique local characteristics, thereby ensuring the authority and public trust of individual mediation studios.

III. Main Tasks

(1) Strengthen organizational development

1. Conditions for applying to establish a private mediation studio. People’s mediators who meet the following criteria may apply to establish a private mediation studio: they must possess high political integrity, be fair and upright, and enjoy considerable prestige among the public; be dedicated to people’s mediation work, with substantial experience in mediation and a high success rate; have a certain level of education, policy awareness, and legal knowledge, and have developed distinctive and effective mediation approaches and methods; and have received commendations or awards from Party committees, governments, relevant departments, or judicial administrative organs at or above the county level.

2. Standardize the naming of individual mediation studios. The full name of an individual mediation studio shall consist, in sequence, of the “name of the affiliated people’s mediation committee,” the “individual’s name or distinctive designation,” and the term “mediation studio.” The abbreviated name shall consist, in sequence, of the “individual’s name or distinctive designation” and the term “mediation studio.” Naming shall be the responsibility of judicial administrative authorities at or above the county level.

(II) Strengthening Team Building

3. Composition of individual mediation studios. An individual mediation studio may consist of a single mediator or multiple mediators. It is encouraged that full-time people’s mediators, retired political and legal officers, lawyers, other social professionals, and respected community leaders at the grassroots level establish individual mediation studios, thereby fostering a mediation team with a well‑balanced structure and complementary strengths.

4. Strengthen professional training for mediators. Judicial administrative organs at all levels should organize large-scale mediation workshops, conduct centralized instruction, facilitate exchanges and seminars, analyze case studies, arrange on-site observations, and allow participation in court hearings, thereby enhancing the legal literacy, policy understanding, specialized knowledge, and mediation skills of mediators working in individual mediation studios.

(III) Strengthening Professional Development

5. Responsibilities of the Individual Mediation Studio: Conduct screening and mediation of routine disputes within the jurisdiction; participate in the mediation of major, difficult, and complex disputes at the local level; carry out public legal education and awareness‑raising activities; undertake training and instruction duties for people’s mediators; proactively report work progress to the affiliated People’s Mediation Committee and ensure proper management of mediation statistics and documentary archives; voluntarily accept guidance from judicial administrative authorities and professional oversight from grassroots people’s courts; and conscientiously fulfill other tasks assigned by the judicial administrative authorities and the affiliated People’s Mediation Committee.

6. Conduct mediation in accordance with the law. Individual mediation studios shall comply with all provisions of the People’s Mediation Law, uphold the fundamental principles of people’s mediation, and refrain from charging any fees. When carrying out mediation activities, such studios shall be guided by their respective people’s mediation committees, and any mediation agreements they prepare must bear the official seal of the relevant people’s mediation committee.

7. Strengthen information technology development. Individual mediation studios should make full use of the China Legal Service Network and the People’s Mediation Information System to provide online consultation, case acceptance, and mediation services. They should also actively leverage mobile terminals, mobile apps, WeChat groups, and other digital tools to carry out mediation work, innovating approaches such as online mediation and video mediation.

(4) Strengthen institutional development

8. Establish and improve working systems. Individual mediation studios shall, in accordance with the law, establish and refine systems covering post responsibilities, training and education, dispute registration, routine screening and mediation, follow-up visits, information feedback, performance appraisal and reward‑and‑punishment mechanisms, statistical reporting, and document and archive management. Judicial administrative organs at or above the county level shall maintain a roster system and regularly publicize information on individual mediation studios; they shall also refine the performance evaluation system and strengthen dynamic oversight of these studios.

9. Establishment of an exit mechanism. If a designated people’s mediator falls under any of the following circumstances, the nominating judicial administrative authority shall revoke the designation of their individual mediation studio and publicly announce this decision on a regular basis: engaging in fraud or submitting false application materials to obtain the designation; voluntarily applying to no longer serve as a people’s mediator due to personal reasons such as health issues or changes in employment; being deemed unfit to continue mediation work because of serious violations of laws or disciplines; causing conflicts and disputes to escalate through ineffective mediation, thereby resulting in adverse social repercussions; or other circumstances warranting revocation of the designation.

IV. Organizational Support

(1) Organizational Leadership

Judicial administrative organs at all levels must attach great importance to the establishment of individual mediation studios, strengthen guidance, and ensure effective implementation. They should proactively report on the progress and outcomes of these studios and actively seek policy support and operational safeguards from Party committees, governments, and relevant departments. Furthermore, they should intensify research and investigation, promptly coordinate to address new circumstances and challenges arising in the development of individual mediation studios. Finally, they should carefully summarize the experiences gained in establishing these studios and promote the formulation of a set of practices that are replicable, instructive, and scalable.

(II) Work Assurance

Mediators working in individual mediation studios shall enjoy the same treatment as mediators affiliated with their respective people’s mediation committees, including subsidies, training, and recognition. Individual mediation studios shall have relatively independent office space and the necessary office equipment; where such conditions are not met, they may share office space with their affiliated people’s mediation committee, provided that they maintain a designated, permanent mediation venue. Support shall be given to the registration of individual mediation studios as privately-run non‑enterprise entities, or to their participation, through local people’s mediation associations, in government‑procured service projects, so as to facilitate the effective implementation of their work.

(III) Publicity and Recognition

It is essential to make full use of both traditional media and new media channels—such as the internet, WeChat, and Weibo—to vigorously promote the distinctive strengths, achievements, and exemplary cases of individual mediation studios, thereby continuously expanding their social influence. Furthermore, efforts should be intensified to recognize and reward these studios and their mediators, fostering a favorable social environment that supports their work.

Localities may, in light of their specific circumstances, formulate detailed implementation measures in accordance with the spirit of these Opinions.

Other

The All China Lawyers Association will introduce “new regulations” on lawyers’ oaths.

On November 28, at its regular press conference, the All China Lawyers Association provided an explanation of the forthcoming “Rules on Lawyers’ Oath” (hereinafter referred to as the “Rules”).

The Rules comprise sixteen articles, with key provisions covering the purposes and legal basis for their formulation, the applicable subjects, the organizing authorities, the oath‑taking text, standards governing oath‑taking activities, the oath‑taking procedure, forms of oath‑taking, ceremonial protocols, guidelines for reciting the oath, conofficeation of its legal effect, archiving of the oath‑taking text, public disclosure of the ceremony, implementation of the oath, provisions for analogous application, the authority to interpret the Rules, and the date of entry into force.

Wu Chen, Deputy Director of the Lawyers’ Industry Rules Committee of the All China Lawyers Association, stated that the Rules clearly stipulate that taking the oath is a mandatory procedure for practicing law and that organizing the oath‑taking is the responsibility of the bar association; they also set out detailed requirements regarding the oath‑taking process, attire, and ceremonial protocols. In addition, the Rules prescribe procedures for validating the efficacy of the oath and establish penalties for those who fail to take the oath or whose oath is deemed invalid.

Jiangsu’s new legislation redefines acts of bravery and righteousness, with “wise acts of courage” now included in the statutory provisions.

On November 23, at the sixth session of the Standing Committee of the 13th Jiangsu Provincial People’s Congress, the Regulations of Jiangsu Province on Rewarding and Protecting Persons Who Act Bravely in the Face of Danger (hereinafter referred to as the “Regulations”) were adopted by vote. The Regulations will come into effect on January 1 next year, while the regulations enacted in 1995 shall be simultaneously repealed. According to reports, the new Regulations provide a scientifically revised definition of persons who act bravely in the face of danger and further strengthen measures to protect and offer preferential treatment to such individuals.
In this regulation, when defining the term “person acting bravely and righteously,” the phrase “regardless of personal safety” has been removed, emphasizing reverence for and respect toward human life. This not only afoffices acts of courage that are upright and unafraid of bloodshed or sacrifice, but also encourages and promotes prudent, lawful, and legitimate forms of righteous action.
The inclusion of “acting with wisdom and prudence in the face of injustice” in the legal provisions is the result of years of practical experience in promoting courageous and righteous conduct, coupled with ongoing refinements to its guiding principles. During the draft stage, some deputies to the National People’s Congress proposed that, while intensifying publicity and education on courageous and righteous behavior, it is equally important to advocate for its scientific and rational implementation—particularly by placing greater emphasis on educating young people about acting with wisdom and prudence in the face of injustice.
The reporter noted that the provision previously included in the draft regulations—“If a recipient of the ‘Act of Bravery’ title is sentenced to criminal punishment by law or engages in other unlawful or disciplinary violations that have caused serious adverse social repercussions, and if continuing to confer the title would severely damage its reputation, the awarding authority, upon verification by the public security organ, may revoke the title and publicly announce the decision”—has been deleted.
Some experts have argued that the provision stipulating the revocation of the “Act of Bravery” title when its recipient is sentenced to criminal punishment by law or engages in other unlawful or disciplinary violations that have caused serious adverse social repercussions is inappropriate, given that the factual occurrence of the act of bravery remains objectively established.
However, with respect to those who fraudulently obtain rewards and protections for acts of bravery, the regulations explicitly stipulate that their designation as persons of bravery shall be revoked and publicly announced, their awards and related benefits shall be canceled, any prize money or other subsidies they have received shall be recovered, and the relevant units and individuals shall be held legally accountable in accordance with the law.
Gu Wenqing, Deputy Director of the Economic Law Division of the Legislative Affairs Commission of the Jiangsu Provincial People’s Congress and the Legislative Affairs Commission of the Standing Committee, stated that this legislative initiative represents “replacing the old with the new,” aiming to strengthen and standardize the work of rewarding and protecting individuals who act bravely and righteously, improve the mechanisms for such activities, clarify the procedures for recognizing and rewarding these individuals, and safeguard their legitimate rights and interests.

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