JC Master Legal News Issue 858

Key Takeaways for This Issue

The China Securities Regulatory Commission has issued the revised “Regulations on Categorized Supervision of Futures Companies.”

Recently, the China Securities Regulatory Commission (CSRC) issued the revised “Regulations on Categorized Supervision of Futures Companies” (hereinafter referred to as the “Regulations”), which shall take effect from the date of their promulgation. In recent years, the futures market has made significant progress in reform and opening-up, and both the business models of futures companies and regulatory practices have evolved, giving rise to numerous new developments and characteristics. To keep pace with these changes, further implement the requirement of comprehensive, law-based, and stringent regulation, and guide futures companies to focus on their core businesses, operate in compliance, pursue steady growth, and strengthen their capabilities under the new circumstances—thereby enhancing their service capacity and competitiveness—the CSRC, after extensively soliciting industry feedback, has undertaken a review and revision of the Regulations.

New regulations from the Ministry of Housing and Urban–Rural Development: Residential units will be measured by net floor area, and buildings with four or more stories must be equipped with elevators.

On February 18, the official website of the Ministry of Housing and Urban–Rural Development issued the “Notice on Public Solicitation of Comments on 38 Full-Text Mandatory Engineering Construction Standards in the Housing and Urban–Rural Development Sector, Including the ‘Urban–Rural Water Supply Project Standard.’” According to the notice, the Ministry, together with entities such as the China Academy of Urban Planning and Design Co., Ltd., has drafted 38 engineering standards—including the “Urban–Rural Water Supply Project Standard”—covering various aspects of housing and urban–rural development. While seeking input from housing and urban–rural development authorities at all levels and relevant organizations, the Ministry is also inviting public comments. The deadline for submitting feedback is March 15, 2019.

State Taxation Administration: Effectively deepen the implementation of tax and fee reduction measures.

The National Conference on Advancing Tax and Fee Reductions was held in Beijing on the 22nd. Ren Rongfa, Deputy Director of the State Taxation Administration, stated that, as of now, tax authorities at the provincial, municipal, and county levels have all established leading groups for tax and fee reductions, issued a “1+4” package of fiscal and tax documents and collection‑administration announcements to support the development of small and micro enterprises, and that all 31 provinces, autonomous regions, and municipalities directly under the central government have successively released local tax‑reduction and exemption measures. In addition, the tax collection and administration system has been upgraded on schedule, statistical and accounting preparations are in place, and inspection and supervision arrangements have been fully implemented, thereby effectively ensuring the effective implementation and deep-rooted impact of the tax and fee reduction policies.

The Measures for the Administration of the Total Wage Bill of Central Enterprises Have Been Issued and Put into Effect.

On January 16, the Measures for the Administration of Total Wages in Central Enterprises (hereinafter referred to as the “Measures”) were recently issued and will be fully implemented across central enterprises in 2019. At the outset of the new year, this marks the first time that the State-owned Assets Supervision and Administration Commission has publicly released, in the form of an official order, a regulatory document governing total wage management for central enterprises, signaling the effective implementation of the spirit of the State Council’s Opinions on Reforming the Wage-Determination Mechanism of State-owned Enterprises within the central enterprise sector. Total wage management in central enterprises is a crucial mechanism for balancing the interests of the state, enterprises, and employees; it bears directly on the reform and development of these enterprises and concerns the vital interests of their vast ranks of cadres and workers, thus consistently attracting close attention from all quarters.

Li Keqiang: When formulating regulations and policies affecting businesses, it is essential to solicit the views of enterprises and industry associations.

On February 20, Premier Li Keqiang presided over an executive meeting of the State Council, which mandated that when formulating laws, regulations, and normative documents affecting enterprises, the views of relevant enterprises and industry associations and chambers of commerce must be solicited, so as to ensure that government decision-making better reflects reality and public opinion.

Table of Contents

Table of Contents

Finance & Capital Markets

The China Securities Regulatory Commission has issued the revised “Regulations on Categorized Supervision of Futures Companies.”

The China Securities Regulatory Commission is soliciting public comments on the Measures for the Supervision and Administration of Sales Institutions of Publicly Offered Mutual Funds and related supporting rules.

The China Securities Regulatory Commission has completed its 2018 special on-site inspection of corporate bond issuers.

The China Securities Regulatory Commission has imposed administrative penalties, in accordance with the law, on four insider trading cases.

Yi Huiman visited Shanghai to conduct a fact-finding mission on the preparatory work for establishing the STAR Market and piloting the registration-based IPO system.

Corporate & Commercial

New regulations from the Ministry of Housing and Urban–Rural Development: Residential units will be measured by net floor area, and buildings with four or more stories must be equipped with elevators.

Following WeChat, Alipay will begin charging fees for credit card repayments starting next month; amounts under 2,000 yuan per month will remain free.

State Administration for Market Regulation: Aflatoxin levels in food products sold on JD.com exceed the regulatory limit.

Shared Wardrobe representative Yi’er San attended the Ministry of Commerce’s review meeting on the “O2O Service Procedures and Standards for the Laundry and Dyeing Industry.”

Taxation

State Taxation Administration: Effectively deepen the implementation of tax and fee reduction measures.

The Legislative Affairs Commission of the National People’s Congress: The process of enshrining taxation in law has clearly accelerated.

Policies on property tax and stamp duty for university student dormitories have been clarified.

Adjustments to Anti-Counterfeiting Measures for Special Value-Added Tax Invoices

Litigation & Arbitration

The Measures for the Administration of the Total Wage Bill of Central Enterprises Have Been Issued and Put into Effect.

The National Energy Administration is seeking public input on the 2019 Measures for the Administration of Photovoltaic Power Generation.

The State Council Information Office held a briefing on the “Measures for the Administration of the Recycling of Scrapped Motor Vehicles (Revised Draft).”

Implemented in tandem with the Administrative Measures, it supports reforms in market access management; the “two review requirements” compel enterprises to accelerate technological upgrading.

This year, the revision of the Teachers’ Law will be launched to strengthen the development of teachers’ professional ethics and conduct.

Other

Li Keqiang: When formulating regulations and policies affecting businesses, it is essential to solicit the views of enterprises and industry associations.

Trump Meets with Liu He; Both Sides Agree to Extend This Round of Talks by Two Days

Finance & Capital Markets

The China Securities Regulatory Commission has issued the revised “Regulations on Categorized Supervision of Futures Companies.”

Recently, the China Securities Regulatory Commission issued the revised “Regulations on Categorical Supervision of Futures Companies” (hereinafter referred to as the “Regulations”), which shall take effect from the date of their promulgation.

The current Regulations were issued by the China Securities Regulatory Commission in April 2011. Since then, the classification‑based evaluation system has served as an effective regulatory tool and a guiding mechanism, playing a crucial role in promoting compliant operations and sound development among futures companies. In recent years, the futures market has made significant progress in reform and opening-up, giving rise to numerous new developments and characteristics in both the business models of futures offices and the regulatory framework. To keep pace with these evolving market dynamics, further implement the requirement of law‑based, comprehensive, and stringent regulation, and guide futures companies—under the new circumstances—to focus on their core businesses, operate in compliance, pursue steady growth, and strengthen their capabilities, the CSRC, after extensively soliciting industry feedback, has undertaken a review and revision of the Regulations.

On October 30, 2018, the China Securities Regulatory Commission (CSRC) publicly solicited comments from the public on the revised Regulations. After carefully reviewing and analyzing the feedback received, and taking into account both the current state of the industry and practical regulatory considerations, the CSRC further amended and refined the Regulations.

The Regulations comprise seven chapters and fifty-one articles, with the following key revisions: First, the bonus‑point criteria have been refined, including incorporating support for national strategies into the special evaluation framework, establishing a new major category of indicators assessing the ability to serve the real economy, and making minor adjustments to the evaluation standards for certain indicators. Second, the penalty‑point criteria have been revised, covering indicators related to restructuring and risk management, adjusting penalty‑point items for specific circumstances, detailing measures and penalties for point deductions, and expanding the list of serious violations that trigger downgrading. Third, the evaluation procedures have been improved, such as appropriately increasing self‑assessment components, rationally allocating responsibilities for preliminary reviews, and clarifying requirements for regulatory coordination.

Going forward, the China Securities Regulatory Commission will strengthen organizational coordination and overall planning to ensure that the classification and evaluation of futures companies are conducted in accordance with the new regulations.

The China Securities Regulatory Commission is soliciting public comments on the Measures for the Supervision and Administration of Sales Institutions of Publicly Offered Mutual Funds and related supporting rules.

Recently, the China Securities Regulatory Commission (CSRC) has launched a public consultation on the “Administrative Measures for the Supervision and Administration of Sales Institutions of Publicly Offered Mutual Funds (Draft for Comments)” (hereinafter referred to as the “Sales Measures”) and related supporting rules.

The “Sales Measures” represent a further revision and refinement of the China Securities Regulatory Commission’s 2013 “Measures for the Administration of Securities Investment Fund Sales,” with the regulatory title adjusted to reflect the latest amendments. The “Measures for the Administration of Securities Investment Fund Sales” serve as a supporting rule to the “Securities Investment Fund Law,” first promulgated in 2004 and subsequently revised twice—in 2011 and 2013. Since their implementation, these measures have played a vital role in standardizing the sales practices of public‑offering funds and safeguarding the legitimate rights and interests of fund investors. At present, the public‑offering fund sales sector has initially established a diversified distribution network that spans on‑exchange and off‑exchange channels, online and offline platforms, and both direct and agency sales. Meanwhile, the retail investor base continues to expand, and the inclusive finance benefits are beginning to emerge; by the end of 2018, the number of active individual investor accounts in public‑offering funds had reached 600 million. Nevertheless, certain provisions of the original measures no longer fully align with evolving practical needs, necessitating timely adjustments. Accordingly, following thorough research, the CSRC initiated a revision process for the “Measures for the Administration of Securities Investment Fund Sales,” resulting in the issuance of the “Sales Measures” along with two accompanying rules.

The fundamental guiding principle of this round of revisions is to remain officely problem- and risk‑oriented, with the protection of investors’ legitimate rights and interests as both the starting point and the ultimate goal. It upholds the baseline requirements for sales suitability, fund security, and transaction safety; promotes public‑fund sales institutions in enhancing their professional service capabilities and strengthening internal controls and risk management; fosters the industry’s long-term, sustainable development; and cultivates a healthy ecosystem for the sector. The key revisions include: first, clarifying the boundaries of public‑fund sales activities and bringing all types of service providers under regulatory oversight; second, consolidating and streamlining the registration criteria for public‑fund sales licenses, reinforcing licensed market access for public‑fund sales as a financial service; third, comprehensively reviewing and refining the regulatory framework for public‑fund sales, with a stronger focus on investor protection and investor services; fourth, tightening internal control and risk‑management requirements for public‑fund sales institutions, particularly independent fund distributors; fifth, encouraging public‑fund sales institutions—especially independent ones—to enhance their professional service capabilities and guide clients toward long-term investing through asset allocation and other value‑added services; and sixth, further improving the exit mechanism for public‑fund sales qualifications, building a sound industry ecosystem based on market‑based and rule‑of‑law principles.

To clarify the implementation arrangements for the Measures on Sales, particularly with respect to the regulatory requirements applicable to existing public‑fund sales institutions and sales activities, and to ensure the smooth and orderly application of these rules, this revision proposes the concurrent issuance of the Implementing Provisions. Furthermore, in recognition of the foundational and framework‑oriented nature of the Measures on Sales, the core requirements pertaining to marketing and promotion originally set out in the existing measures have been retained. The remaining detailed requirements have been consolidated with the normative document “Supplementary Provisions on the Supervision of Marketing and Promotion Materials for Securities Investment Funds” (CSRC Announcement [2008] No. 2), and reorganized into the “Interim Provisions on the Administration of Marketing and Promotion Materials for Publicly Offered Securities Investment Funds,” which are proposed to be issued concurrently.

The China Securities Regulatory Commission has completed its 2018 special on-site inspection of corporate bond issuers.

To continuously strengthen regulatory oversight of the exchange‑traded bond market, promote its sound and orderly development, and effectively safeguard the legitimate rights and interests of bondholders, in 2018 the China Securities Regulatory Commission (CSRC) directed its local securities regulatory bureaus to conduct on‑site inspections of 264 corporate bond issuers, with a focus on identified issues and risks. To date, these targeted on‑site inspection activities have been fully completed.

The issues identified during this on-site inspection primarily focused on two areas: the management and use of raised funds, and information disclosure. Key problems in fund management and utilization included misappropriation or loaning of raised funds to third parties, unauthorized purchase of wealth-management products, and non‑compliant establishment or management of dedicated accounts. In the realm of information disclosure, the main concerns were failure to file annual reports on time, untimely disclosure of material matters, and inaccuracies in disclosed content. In response to these findings, the respective securities regulatory bureaus have imposed a total of 35 administrative regulatory measures—such as issuing warning letters and ordering corrective actions—on corporate bond issuers, and have taken administrative regulatory actions against the directly responsible personnel of 16 issuers. Additionally, based on follow-up inspections of intermediary institutions’ performance of duties, administrative regulatory measures were applied six times to trustees and four times to accounting offices. Through this on-site inspection, both bond issuers’ compliance awareness and the ability of intermediary institutions to fulfill their responsibilities have been further strengthened.

Going forward, the China Securities Regulatory Commission will continue to strengthen routine oversight of corporate bonds, rigorously address all types of violations of laws and regulations, and steadily promote the long-term, sound development of the exchange‑traded bond market.

The China Securities Regulatory Commission has imposed administrative penalties, in accordance with the law, on four insider trading cases.

Recently, the China Securities Regulatory Commission (CSRC) imposed administrative penalties in accordance with the law on Li Fu and Liu Dan for insider trading involving “Xinri Hengli,” confiscating their illegal gains totaling RMB 4,487,398.72 and levying a fine of RMB 13,462,196.16. The Henan Securities Regulatory Bureau also imposed an administrative penalty on Liu Xiaobin for insider trading related to “Best,” fining him RMB 60,000. Meanwhile, the Xinjiang Securities Regulatory Bureau issued administrative penalties, respectively, to Li Jingang and Zhang Xinhong for insider trading involving “Western Gold”: Li Jingang was ordered to dispose of his illegally held securities in accordance with the law and was fined RMB 250,000; Zhang Xinhong was required to dispose of his illegally held securities, had his illegal gains of RMB 5,602.1 confiscated, and was fined RMB 30,000. (For details of these administrative penalty decisions, please refer to the websites of the CSRC and the relevant securities regulatory bureaus.)

In the aforementioned cases, Li Fu maintained a close relationship with an insider and engaged in frequent communications during the sensitive period for inside information. Subsequently, he and his spouse, Liu Dan, jointly used the “Liu Dan” account to trade shares of “Xinri Hengli,” with trading patterns that were clearly abnormal. Liu Xiaobin, a director and deputy general manager of Baiwei Storage—the target company in Best’s restructuring—leveraged his professional position to contact and communicate with insiders during the sensitive period and, using another person’s account, engaged in insider trading of “Best” shares. Li Jingang also maintained frequent communications with insiders during the sensitive period and, through his personal account, traded shares of “Western Gold,” with trading behavior that was markedly abnormal. Zhang Xinhong’s spouse was an insider; Zhang Xinhong, having learned of the inside information from her spouse, utilized her personal account to trade shares of “Western Gold” during the sensitive period, with trading patterns that were clearly abnormal.

Insider trading exploits informational advantages to obtain illicit gains, infringes upon the legitimate rights and interests of a broad base of investors, and severely undermines the principles of openness, fairness, and impartiality that underpin market order. The Commission will continue to maintain robust regulatory enforcement, rigorously crack down on insider trading, purify the securities market environment, and effectively safeguard the lawful rights and interests of investors.

Yi Huiman visited Shanghai to conduct a fact-finding mission on the preparatory work for establishing the STAR Market and piloting the registration-based IPO system.

From February 20 to 21, Yi Huiman, Chairman of the China Securities Regulatory Commission, led a delegation to Shanghai to solicit opinions and suggestions from market institutions on issues related to the establishment of the STAR Market and the pilot registration-based system, and to conduct on-site inspections and provide guidance on the Shanghai Stock Exchange’s preparations for relevant reforms.

Yi Huiman chaired a symposium at the Shanghai Stock Exchange, carefully listening to the views and suggestions of representatives from science-and‑technology‑innovation‑focused enterprises, securities offices, fund management companies, private equity institutions, accounting offices, and law offices. Market participants put forward valuable insights on key issues such as the listing criteria for the STAR Market, pricing mechanisms, trading rules, share‑reduction regimes, securities offices’ co‑investment, and the listing of red-chip companies on the STAR Market. Yi Huiman emphasized that successfully implementing the major reform task of establishing the STAR Market and piloting the registration‑based IPO system is a shared responsibility. The CSRC and the SSE bear an inescapable duty, as do all market participants. It is essential to officely uphold the overarching principles of the reform, adhere to its mission of supporting innovation in critical core technologies, respect market dynamics, strengthen market‑based constraints, and develop institutional frameworks that are both replicable and scalable. All market institutions must earnestly assume their responsibilities, carry out thorough and meticulous preparations, and ensure the successful implementation of this reform. Yi Huiman stated that the CSRC will, in conjunction with the ongoing public consultation process, carefully examine and actively incorporate relevant opinions and suggestions to further refine the relevant systems and rules.

Yi Huiman listened to a briefing from the Shanghai Stock Exchange on its preparatory work for establishing the STAR Market and piloting the registration-based IPO system, as well as its considerations regarding key issues. Yi Huiman noted that the Exchange has already undertaken extensive efforts in the preliminary phase and should maintain this momentum, further refining and rigorously implementing all preparatory measures. He urged enhanced coordination across departments, full mobilization of stakeholders, and the forging of a concerted force to advance the reform. Responsibilities must be clearly assigned, deadlines closely monitored, and both minor and major initiatives executed with diligence and care. The reform must remain officely aligned with market‑oriented and law‑based principles, focusing on priority areas such as issuance and listing reviews, strengthening ongoing regulatory capabilities, optimizing trading mechanisms, enforcing stringent delisting rules, improving risk‑response plans, and bolstering public communication and outreach, while ensuring the steady and prudent implementation of this major reform. Throughout the process, oversight must be strengthened, and the integrity threshold must be officely safeguarded.

Vice Chairman of the China Securities Regulatory Commission, Fang Xinghai, along with heads of relevant departments, participated in the research visit.

Commercial & Corporate

New regulations from the Ministry of Housing and Urban–Rural Development: Residential units will be measured by net floor area, and buildings with four or more stories must be equipped with elevators.

On February 18, the official website of the Ministry of Housing and Urban–Rural Development issued the “Notice on Public Solicitation of Comments on 38 Full-Text Mandatory Engineering Construction Standards in the Housing and Urban–Rural Development Sector, Including the ‘Urban–Rural Water Supply Project Standard.’” According to the notice, the Ministry, together with entities such as the China Academy of Urban Planning and Design Co., Ltd., has drafted 38 engineering standards—including the “Urban–Rural Water Supply Project Standard”—covering various aspects of housing and urban–rural development. While seeking input from housing and urban–rural development authorities at all levels and relevant organizations, the Ministry is also inviting public comments. The deadline for submitting feedback is March 15, 2019.

Among the 38 mandatory engineering construction codes issued this time is the “Residential Project Code (Draft for Public Comment)” (hereinafter referred to as the “Residential Code”), which comprises approximately 31,000 characters. The Residential Code states that it has been formulated to implement the state’s technical and economic policies, ensure that residential projects are safe, functional, livable, environmentally friendly, and durable, and to standardize the scale, layout, functions, performance, and technical measures of such projects. The construction, use, and maintenance of residential projects must comply with this code.

Article 2.4.6 of Part II of the Residential Building Code stipulates that residential properties shall be traded based on their net internal floor area. This marks the first time the Ministry of Housing and Urban–Rural Development has explicitly stated in an official document that housing transactions should be conducted according to net internal area. Analysts note that this regulation was introduced primarily because this issue is a major concern for residents, directly affecting the vital interests of every homebuyer. At present, residential properties in China are predominantly sold by gross floor area, which can lead to situations where projects with identical gross floor areas have differing net internal areas, thereby exacerbating the longstanding controversy over “shared‑area charges” that burden consumers.

In addition to calculating floor area based on the net internal dimensions, the Residential Code also sets forth clear requirements for the installation of elevators in future residential buildings. According to the Code, new residential buildings of four stories or more, or those where the floor level of the住户入口 (residential entrance) is more than 9 meters above the designed outdoor ground level, must be equipped with elevators, and each floor with access to apartment doors and common corridors must have an elevator stop. Specifically, every residential unit served by an elevator shall have at least one elevator capable of accommodating a stretcher, with cab dimensions no smaller than 1.50 m × 1.60 m and a clear door width of no less than 0.90 m. For residential buildings of twelve stories or more, each residential unit must have no fewer than two elevators, including at least one elevator that can accommodate a stretcher. As for existing residential buildings, any newly installed elevator must have a rated load capacity of no less than 300 kg and a clear door width of no less than 0.80 m.

The Residential Code stipulates that newly built urban residential units must be delivered fully finished, meaning that all fixed surfaces in every functional space have been fully tiled or painted; the water supply and drainage, heating, ventilation and air conditioning, gas, and lighting and power systems have been essentially installed; and all basic fixtures in kitchens and bathrooms have been fully installed, meeting minimum standards for usability. At the time of delivery, the residence must also be equipped with connections for water, electricity, gas, and heating, with all ancillary facilities ready for use and safety‑related protective measures having passed inspection. Furthermore, the Residential Code sets out detailed criteria for the acceptance and handover of housing. For example, regarding waterproofing works, walls and floors must be free of leaks and standing water; as for plastered ceilings, they must exhibit strong adhesion, no hollow sounds, a smooth and clean surface, and be free of cracks, flaking, or other defects.

Following WeChat, Alipay will begin charging fees for credit card repayments starting next month; amounts under 2,000 yuan per month will remain free.

After more than half a year of charging fees for WeChat credit card repayments, Alipay announced on February 21 that, in order to continue providing users with higher‑quality services, it will begin levying a service fee on credit card repayments made through Alipay starting March 26. However, users will enjoy a monthly free allowance of RMB 2,000; amounts up to this threshold remain fee‑free, while any amount exceeding RMB 2,000 will incur a service fee of 0.1%. Thanks to the RMB 2,000 monthly cap, using Alipay to repay a credit card will always be RMB 2 cheaper than using WeChat, regardless of the repayment amount. For example, if you repay RMB 3,000, the excess—RMB 1,000—would attract a service fee of RMB 1, calculated at 0.1%.

Industry insiders note that, compared with services like consumption and wealth management, credit card repayment is a relatively infrequent feature. Moreover, aside from WeChat and Alipay, users can make fee‑free repayments through bank online banking and other channels, so the impact on users this time is expected to be limited.

In its announcement, Alipay stated that the reason for the fee is “a rapid increase in overall operating costs,” and that adjusting the service rules for credit card repayments is intended to alleviate some of this cost pressure. Earlier, when WeChat announced fees for credit card repayments, it similarly noted: “Each repayment transaction incurs payment‑channel processing fees. To enable a broad user base to enjoy a partially free experience, Tencent’s Tenpay has consistently invested in subsidizing these fees.”

Over the past few years, an increasing number of online services have begun charging users. According to a survey by China’s National Copyright Administration, paid content accounted for nearly half of all internet content in 2017. Meanwhile, users have gradually grown accustomed to paying, with iQIYI reporting 80.7 million subscribers in its third-quarter earnings—up 89% year over year. Subscription revenue now makes up 41% of its total income, while advertising, once its primary revenue driver, now accounts for 34%.

Industry insiders note that there is no such thing as a permanently free business model in any sector. In a highly competitive market, whether or not a company charges ultimately hinges on whether its offerings justify the price in the eyes of consumers, and pricing levels will naturally converge to a level that reflects market conditions.

State Administration for Market Regulation: Peanut butter sold on JD.com exceeds the permissible level of aflatoxin.

On the 22nd, China’s State Administration for Market Regulation issued a notice announcing that 12 batches of food products had failed quality inspections, with affected retailers including JD.com, Carrefour, Walmart, and Beijing Hualian.

According to reports, the State Administration for Market Regulation recently conducted random inspections on 2,332 batches of samples across 10 food categories, including seasonings, convenience foods, fruit products, and dairy products. Among these, 12 batches were found to be non‑compliant, with violations involving indicators such as microbial contamination, residues of agricultural and veterinary drugs, and heavy metals.

Today, the State Administration for Market Regulation announced that peanut butter sold on JD.com’s “China Specialty Products – Hebei Supply and Marketing Pavilion” fails to meet the national food safety standards for aflatoxin B1; fruit‑dried cereal oatmeal branded “Ai Meike” sold by the Changying branch of Beijing Hualian Comprehensive Supermarket does not comply with the national food safety standards for mold; and crucian carp sold at the Yunfang store of Carrefour Kunming fails to meet the national food safety standards for enrofloxacin and diazepam. In total, 12 batches of substandard products were identified.

It is reported that, with respect to substandard products identified in random inspections, the State Administration for Market Regulation has instructed the relevant provincial market regulation authorities to investigate and impose penalties in accordance with the law.

Shared Wardrobe representative Yi’er San attended the Ministry of Commerce’s review meeting on the “O2O Service Procedures and Standards for the Laundry and Dyeing Industry.”

On February 21, the review meeting for the industry standard “O2O Service Processes and Specifications for the Laundry and Dyeing Industry,” submitted by the China Laundry Association, was held at the Ministry of Commerce, with industry experts invited to participate in the evaluation. Attendees included Chen Yong, Director of the Service Trade Department of the Ministry of Commerce; Pan Wei, Director of the China Laundry Association; Wang Xue Ren, Director of the Laundry Specialized Committee of the All-China Federation of Industry and Commerce; Zeng Yi, Deputy Director of the Service Standardization Research Institute of the National Institute of Standardization; Lu Zhiji, President of the Guangdong Laundry and Dyeing Association; Liu Mengyuan, CEO of Yi’er San; Xu Fajiang, Manager of Funait; Li Linli, Assistant to the President of Ilsa; Liu Shuai, General Manager of Xinxiangxingyuan; Dong Bowen, CEO of Yiwenhui Technology; Zheng Xiaojuan, General Manager of Yunwei Technology; Cui Yan, Manager of Rongrong Laundry; as well as Feng Jina, Secretary-General of the Laundry Label Committee, and Chen Qian, Deputy Secretary-General.

The meeting was chaired by Director Pan of the China Laundry Committee. In his address, Director Chen Yong emphasized that the Ministry of Commerce attaches great importance to the industry’s development and fully commended the efforts made by the China Laundry Committee and the Laundry Standards Committee in advancing industry standardization, while also setting forth new requirements for the formulation and revision of standards. During the session, the expert panel heard a briefing on the “Preparation Notes” from the drafting working group, elected Director Wang Xueren as chair of the review panel, and tasked him with organizing the review process. The experts conducted a chapter-by-chapter, article-by-article review of the standard’s content and put forward several recommendations for revision. The meeting concluded that the submitted materials were complete, the drafting process had extensively solicited industry input, the content was practical and implementable, and the standard had reached an advanced domestic level; accordingly, it was approved. The review panel requested that the drafting working group refine the draft for approval and related documentation in accordance with the stipulated requirements and submit them to the Ministry of Commerce to complete the approval procedures.

“The O2O Service Process and Standards for the Laundry and Dry‑Cleaning Industry” was jointly drafted by the China Laundry Association, Tiantian Laundry, Rongchang Yaohua, Shanghai Taidi, and Shandong Dola Company. This standard defines the terminology, service requirements, transaction requirements, information security requirements, operational procedures, transportation requirements, dispute resolution, quality standards, and other relevant aspects of O2O services in the laundry and dry‑cleaning sector. As the first industry‑specific standard to explicitly regulate e‑commerce activities within this sector, it provides a technical foundation for standardizing China’s laundry and dry‑cleaning service market, safeguarding the legitimate rights and interests of service providers and consumers, and clarifying the respective needs and responsibilities of both parties.

Taxation TAXATATION

State Taxation Administration: Effectively deepen the implementation of tax and fee reduction measures.

The National Conference on Advancing Tax and Fee Reductions was held in Beijing on the 22nd. Ren Rongfa, Deputy Director of the State Taxation Administration, stated that, as of now, tax authorities at the provincial, municipal, and county levels have all established leading groups for tax and fee reductions, issued a “1+4” package of fiscal and tax documents and collection‑administration announcements to support the development of small and micro enterprises, and that all 31 provinces, autonomous regions, and municipalities directly under the central government have successively released local tax‑reduction and exemption measures. In addition, the tax collection and administration system has been upgraded on schedule, statistical and accounting preparations are in place, and inspection and supervision arrangements have been fully implemented, thereby effectively ensuring the effective implementation and deep-rooted impact of the tax and fee reduction policies.

The meeting emphasized that tax authorities at all levels must adopt concrete, practical measures and robust policies to deepen the implementation of tax and fee reductions: ensure the quality of tax returns by implementing end-to-end quality control, conducting rigorous data reviews and error corrections, and evaluating the performance of the first filing period; collect and respond to taxpayer feedback in a substantive manner, continuously improving the effectiveness and timeliness of such feedback; conduct thorough research to identify taxpayers’ pain points and pinpoint bottlenecks in policy implementation; strengthen publicity and guidance by intensifying training and outreach efforts; maintain rigorous statistical reporting, focusing on data integration and enhancing impact analysis; enforce strict oversight and inspection, assigning responsibilities at every level, bolstering external coordination and collaboration, and ensuring rigorous follow-up on corrective actions; fortify risk prevention and control to guard against inadequate policy implementation and tax revenue losses; and uphold discipline and compliance by consistently prioritizing adherence to rules and regulations and further reinforcing awareness of compliance.

Ren Rongfa pointed out that tax and fee reductions constitute a large-scale, systematic undertaking. Tax authorities at all levels should further refine their mechanisms for implementing these measures and establish a robust performance‑evaluation system to marshal the greatest possible effort in ensuring their effective execution.

The Legislative Affairs Commission of the National People’s Congress: The process of enshrining taxation in law has clearly accelerated.

Recently, Wang Ruihe, Director of the Economic Law Division of the Legislative Affairs Commission of the Standing Committee of the National People’s Congress, stated in a collective media interview that in 2018, progress in implementing the principle of tax legality was significantly accelerated.

Wang Ruihe stated that in 2018, the Standing Committee of the 13th National People’s Congress enacted the Law on the Tax for the Occupation of Cultivated Land and the Law on the Vehicle Acquisition Tax, amended the Individual Income Tax Law, and conducted a first reading of the draft Law on the Resource Tax, thereby making new progress in implementing the principle of tax legality.

“Implementing the principle of tax legality” is an important reform task set forth in the Decision adopted at the Third Plenary Session of the 18th CPC Central Committee. The “Implementation Opinions on Implementing the Principle of Tax Legality,” approved by the CPC Central Committee, stipulates that the reform tasks related to this principle will be completed, with efforts made to achieve this goal before 2020. During the term of the Standing Committee of the 12th National People’s Congress, the Environmental Protection Tax Law, the Tobacco Leaf Tax Law, and the Ship Tonnage Tax Law were enacted, and the Corporate Income Tax Law was amended. In the term of the Standing Committee of the 13th National People’s Congress, the following laws have been included in the legislative plan: the Individual Income Tax Law (as amended), the Value-Added Tax Law, the Consumption Tax Law, the Resource Tax Law, the Real Estate Tax Law, the Customs Tariff Law, the Urban Maintenance and Construction Tax Law, the Cultivated Land Occupation Tax Law, the Vehicle Acquisition Tax Law, the Deed Tax Law, the Stamp Duty Law, and the Tax Collection and Administration Law (as amended).

In August 2018, the Fifth Session of the Standing Committee of the 13th National People’s Congress adopted the seventh amendment to the Individual Income Tax Law, advancing the transition of the individual income tax system from a classified structure to one that combines comprehensive and classified approaches. This amendment brought four categories of labor‑related income under the scope of comprehensive taxation, adjusted and optimized the tax rate structure, raised the basic deduction threshold, and established special additional deductions for expenses closely related to people’s livelihoods, such as education, medical care, housing, and elderly care. In December, the Seventh Session of the Standing Committee of the 13th National People’s Congress reviewed and adopted the Farmland Occupation Tax Law and the Vehicle Acquisition Tax Law, steadily and prudently elevating provisional tax regulations to the level of law, and conducted the first reading of the draft Resource Tax Law.

Wang Ruihe stated that, in the next phase, work related to tax legislation will continue to be carried out in accordance with the legislative plan and the annual legislative work schedule. At the same time, relevant departments will be urged to expedite the drafting of pertinent tax laws in line with the timelines set forth in the “Implementation Opinions on Putting the Principle of Tax Legalism into Practice,” and to submit the corresponding draft tax laws to the Standing Committee of the National People’s Congress for deliberation as soon as possible, thereby ensuring the timely completion of the reform tasks aimed at implementing the principle of tax legalism.

Policies on property tax and stamp duty for university student dormitories have been clarified.

The Ministry of Finance and the State Taxation Administration recently issued the “Notice on Property Tax and Stamp Duty Policies for University Student Dormitories.” The notice stipulates that property tax shall be exempted for university student dormitories, and stamp duty shall be exempted on lease contracts for such dormitories entered into with university students. The measures will be in effect from January 1, 2019, to December 31, 2021.

Adjustments to Anti-Counterfeiting Measures for Special Value-Added Tax Invoices

The State Taxation Administration recently issued the “Announcement on Adjusting Matters Related to Anti-Counterfeiting Measures for Special Value-Added Tax Invoices” (State Taxation Administration Announcement No. 9 of 2019), clarifying that, starting from the first quarter of 2019, special value-added tax invoices will be printed in accordance with the revised anti-counterfeiting measures. Specifically, anti-counterfeiting features such as the optically variable color ring fiber and paper‑making security thread have been discontinued, while others—including color‑changing ink, specially shaped serial numbers, and composite information‑based anti-counterfeiting elements—will remain in place. Invoices already in stock with tax authorities or not yet used by taxpayers may continue to be employed. This announcement shall take effect from the date of its issuance.

LITIGATION & ARBITRATION

The Measures for the Administration of the Total Wage Bill of Central Enterprises Have Been Issued and Put into Effect.

Total wage‑bill management in central enterprises is a crucial mechanism for balancing the interests of the state, the enterprises, and the workforce; it bears on the reform and development of these enterprises and directly affects the vital interests of their vast ranks of cadres and employees. With this round of reform, how the mechanism for determining the total wage bill will be effectively implemented—and how it can genuinely incentivize workers to create value and promote high‑quality enterprise development—has become a matter of widespread public concern. On January 16, the Measures for the Administration of Total Wage Bills of Central Enterprises (hereinafter referred to as the “Measures”) were recently issued and will be fully applied across central enterprises starting in 2019. At the outset of the new year, the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) publicly released, for the first time in the form of an official order, a regulatory document governing total wage‑bill management in central enterprises, marking the concrete implementation of the spirit of the State Council’s Opinions on Reforming the Wage‑Determination Mechanism of State‑Owned Enterprises within the central enterprise sector. As an essential tool for harmonizing the interests of the state, enterprises, and employees, total wage‑bill management in central enterprises has long been a subject of close attention from all quarters, given its profound implications for the reform and development of these enterprises and its direct impact on the livelihoods of their broad workforce.

“The management of total payroll for central enterprises must both align with the overarching direction of reforming the wage-setting mechanism in state-owned enterprises and fully reflect the unique operational and developmental characteristics of these enterprises,” said a responsible official from the State-owned Assets Supervision and Administration Commission. The Measures aim to establish and improve a wage‑determination and regular‑increase mechanism that is broadly aligned with the labor market and linked to corporate economic performance and labor productivity, thereby enhancing enterprise vitality and momentum, promoting high‑quality development, and strengthening, optimizing, and expanding state capital. Guided by the principle of investor‑driven capital management and reinforced by robust incentive and constraint mechanisms, the Measures undertake a comprehensive reform of the total‑payroll determination process and the related management system for central enterprises.

A key innovation of this reform is the introduction of category‑based management of the total wage bill for central enterprises, aligned with their functional positioning. The scope of the budget‑filing system for total wage‑bill management has been extended to all commercial‑type central enterprises whose core businesses operate in fully competitive industries and sectors. Under this arrangement, the enterprise’s board of directors independently determines the annual total wage‑bill budget in accordance with laws and regulations, while the SASAC shifts from ex‑ante approval to ex‑ante guidance, ongoing monitoring, and ex‑post oversight. To ensure full alignment with the pilot reforms of state‑owned enterprises and state capital, central enterprises participating in pilot programs—such as those involving state‑capital investment and operation companies or mixed‑ownership reform—may explore more flexible and efficient approaches to managing their total wage bills. At the same time, for commercial‑type central enterprises whose core businesses are in critical industries and key areas vital to national security and the national economy, or that undertake major special projects, as well as for public‑service‑oriented central enterprises primarily engaged in providing public goods and services, the total wage‑bill budget will continue to be subject to an ex‑ante approval regime. In line with the “delegation, regulation, and service” reform and the emphasis on elevating the market‑entity status of SOEs, this reform seeks to achieve an organic integration of investor‑driven, law‑based regulation and enterprises’ autonomous allocation. The Measures explicitly stipulate a tiered management framework for the total wage bill of central enterprises: the SASAC is responsible for institutional oversight, overall‑level control, and supervisory functions, while the central enterprises themselves manage internal autonomous allocation, budget breakdown and implementation, and specific operational execution. This arrangement ensures clear delineation of powers and responsibilities between the SASAC and the central enterprises, with each fulfilling its respective duties.

In the state-owned enterprise sector, longstanding inertia has led to wage levels that can only rise but not fall, with significant disparities across industries and among enterprises—resulting in situations where wages are neither sufficiently high nor adequately low. These issues have been widely discussed. With this reform, a key concern for society is how the mechanism for determining total payroll will be strengthened and effectively incentivize workers to create value while fostering high-quality enterprise development.

An official from the State-owned Assets Supervision and Administration Commission stated that the Measures embody the development philosophy of prioritizing quality and efficiency, as articulated at the 19th National Congress of the Communist Party of China, and align with the spirit of strengthening positive incentives put forward at the symposium on state‑owned enterprise reform. The Measures further refine the mechanism linking the total payroll of central enterprises to their economic performance and introduce a series of innovations. For example, they explicitly stipulate that the total payroll of central enterprises is determined by performance and adjusted according to efficiency, thereby enriching the substance of the linkage between wages and results and officely establishing the core principle that “wages are earned.” They also clarify rules under which increases in headcount—measured on a comparable basis—do not lead to an increase in total payroll, nor do reductions in headcount result in a reduction, thus encouraging central enterprises to enhance labor productivity. According to the introduction, the Measures are closely aligned with the goal of establishing and improving a wage‑determination mechanism characterized by “one adaptation and two linkages,” proposing that the budget for the total payroll of central enterprises be determined primarily through three stages: performance‑based determination, efficiency‑adjusted adjustment, and level‑controlled regulation. First, growth in total payroll is mainly linked to the rate of increase in the enterprise’s economic performance. The Measures specify that the payroll budget for central enterprises is tied to performance‑assessment targets for key economic indicators such as total profit, with different budget levels set according to the degree of achievement of these targets, thereby guiding central enterprises to drive reasonable and orderly growth in employee compensation by meeting high‑quality development goals. Second, the rate of increase in total payroll should be appropriately adjusted in line with efficiency levels. The Measures further require that wage growth be calibrated against benchmarks such as labor‑cost input‑output efficiency and labor productivity, emphasizing a management orientation that encourages enterprises to improve efficiency, better harmonize wage‑distribution relationships among offices with differing efficiency levels, and enhance the scientific rigor and effectiveness of the mechanism for determining total payroll. Third, the Measures place a strong emphasis on fairness in income distribution. In accordance with wage guidelines issued by relevant national authorities and the wage‑regulation requirements applicable to non‑competitive state‑owned enterprises, the SASAC imposes appropriate constraints on industries and enterprises with excessively high or overly rapid wage growth—particularly those whose core businesses do not fall within fully competitive sectors—ensuring that employees’ wage levels and growth rates are fairer, more reasonable, and more standardized. At the same time, the Measures explicitly provide for appropriate support for central enterprises undertaking special tasks or major scientific and technological innovation projects.

This reform is broad in scope, highly policy‑driven, and far‑reaching; the State-owned Assets Supervision and Administration Commission will, over the coming period, adopt proactive measures to ensure its comprehensive implementation.

“We will accelerate the formal issuance of relevant supporting documents,” said a responsible official from the State-owned Assets Supervision and Administration Commission. Specifically, these include detailed implementation procedures for the wage‑determination mechanism outlined in the Measures, plans for managing the filing‑based system, plans for implementing the cyclical management approach, and a checklist of special matters in wage administration. A comprehensive wage‑management policy framework will be promptly studied and promulgated to facilitate enterprise implementation. At the same time, related ancillary reforms in wage distribution will keep pace. Enterprises must earnestly assume responsibility for improving and invigorating internal remuneration systems, continue deepening the three‑system reforms, and establish market‑oriented mechanisms for labor employment and income distribution that allow managerial personnel to move up or down, employees to enter or exit, and incomes to rise or fall, thereby continuously enhancing their vitality and competitiveness. While intensifying reforms to delegate greater authority to investors, the SASAC will also strengthen oversight and inspection of compliance with wage‑distribution regulations at central enterprises. The Measures explicitly bring the management of total wages into the scope of all supervisory and inspection activities, coordinating efforts with auditing, inspection tours, and other initiatives. For enterprises subject to the filing‑based management regime, if they are found to have seriously violated national laws and SASAC regulations on income distribution, their total‑wage budgeting will be reclassified from the filing system to an approval‑based system, ensuring that powers and responsibilities are appropriately aligned.

The National Energy Administration is seeking public input on the 2019 Measures for the Administration of Photovoltaic Power Generation.

On the afternoon of February 18, the New Energy Department of the National Energy Administration convened a symposium with relevant enterprises to solicit their views on matters related to the management of photovoltaic power generation projects in 2019.

The meeting revealed that this year, China’s work on the development and management of photovoltaic power generation will feature significant institutional innovations:

First, “spend within one’s means” by capping the installed capacity eligible for subsidies. Since the fourth quarter of last year, the Ministry of Finance, the National Development and Reform Commission, and the National Energy Administration have held multiple rounds of coordination on photovoltaic power generation-related work for 2019, breaking with the previous practice of each agency operating independently, which had resulted in a disconnect between the total subsidy allocation and the scale of installed capacity.

II. Clearly categorize photovoltaic projects into those requiring national subsidies and those that do not. Projects without subsidies shall be planned and implemented by each province in accordance with policies for grid-parity and low‑price projects. Subsidized projects are classified into five categories:

1. Poverty alleviation project;

2. Residential photovoltaic systems;

3. Conventional photovoltaic power plants (ground-mounted solar farms);

4. Commercial and industrial distributed photovoltaics;

5. Special projects such as the Leading Runner Program and supporting projects for ultra-high-voltage transmission corridors.

III. For the first time, residential photovoltaic systems are listed separately and allocated an independent capacity target, with a fixed subsidy applied. At the beginning of the year, the National Energy Administration announces the annual total installed capacity for residential PV projects eligible for national subsidies. The grid operator then publishes, on a monthly basis, the installation volume for the preceding month. Once the cumulative installed capacity reported for the previous month exceeds the overall cap, the last day of that month shall be the deadline for connecting residential PV systems to the grid to qualify for national subsidies for the current year—providing a one-month grace period for such installations.

IV. Addressing the outstanding issues arising from last year’s 531 policy on residential photovoltaic systems. It is clarified that residential PV systems connected to the grid after May 31 of last year but not included in the national subsidy quota may apply for allocation under the 2019 scheme.

V. With the exception of poverty‑alleviation projects, residential‑scale systems, and previously approved special projects, all distributed‑generation and utility‑scale solar power plants shall obtain subsidy quotas through a competitive bidding process.

Based on the resource zone to which each project belongs, projects are ranked according to the magnitude of their bid‑price reduction—expressed in cents per kilowatt-hour—relative to the tender‑cap price for that zone. Projects with the largest reductions are prioritized until the total subsidy allocation for selected projects reaches the nationally prescribed cap on subsidies for newly added projects.

6. Project quotas will no longer be allocated to localities in a fragmented, “sprinkling‑pepper” manner. Bidding will be organized and applications submitted by each province, but the national ranking will be conducted uniformly, with subsidy applications and competitive bidding held, in principle, once per year.

7. Project bidding is based on the quarter in which commercial operation commences—that is, the grid‑connection milestone. If, for any reason, the project fails to be completed, the deadline may be extended by two quarters, with the tariff subject to the prescribed phase‑down schedule. Should the project still not be commissioned after two additional quarters, eligibility for subsidies will be revoked.

Despite significant policy shifts last year, China’s cumulative photovoltaic capacity still surpassed 44 GW, marking the second-highest level on record and far exceeding industry expectations. Determining this year’s policy framework—so as to prevent sharp booms and busts and to foster the healthy, stable development of China’s PV sector—is no small feat; indeed, this is the primary reason why the 2019 PV policy was delayed for so long.

According to reports, this week the New Energy Department of the National Energy Administration will not only solicit feedback from enterprises but also broadly seek input from industry associations, relevant experts, and financial institutions. We hope that all stakeholders will step up their efforts and move swiftly to finalize the policy, as more than half of the first quarter has already elapsed, leaving limited time for photovoltaic companies to develop new projects.

The State Council Information Office held a briefing on the “Measures for the Administration of the Recycling of Scrapped Motor Vehicles (Revised Draft).”

On February 22, the State Council Information Office held a regular policy briefing in Beijing, inviting Vice Minister of Commerce Wang Bingnan, Zheng Shuwei, head of the Market Development Department of the Ministry of Commerce, and Zhang Yaobo, head of the Second Legislative Bureau of the Ministry of Justice, to present details on the “Measures for the Administration of the Recycling of Scrapped Motor Vehicles (Draft Amendment)” and to answer questions from the press.

Implemented in tandem with the Administrative Measures, it supports reforms in market access management; the “two review requirements” compel enterprises to accelerate technological upgrading.

Recently, the Ministry of Industry and Information Technology issued the “Access Review Requirements for Road Motor Vehicle Manufacturers” and the “Access Review Requirements for Road Motor Vehicle Products” (hereinafter referred to as the “Two Review Requirements”). According to reports, these Two Review Requirements serve as implementing documents supporting the “Administrative Measures for the Access of Road Motor Vehicle Manufacturers and Products” (hereinafter referred to as the “Measures”) and will come into effect on June 1, 2019, concurrently with the Measures.

On November 27, 2018, the Ministry of Industry and Information Technology issued the “Administrative Measures,” which set forth the basic requirements, review procedures, and processes for applying for approval as a road motor vehicle manufacturer and for product certification, and also outlined specific measures to advance the reform of vehicle access management in the next phase.

The “Administrative Measures” are a guiding document, and their promulgation marks only the first step in reforming vehicle‑access management. Ensuring their effective implementation will require complementary measures to flesh out the details; the introduction of the “two review requirements” is precisely aimed at this end. According to He Weifang, the concurrent application of these two review requirements provides a solid foundation for the comprehensive enforcement of the Administrative Measures: one serves as a guiding framework, while the other constitutes the implementing rules, with the two reinforcing each other. An official from the Equipment Industry Department of the Ministry of Industry and Information Technology stated that, to promote high‑quality development of the automotive industry, invigorate enterprises, and better implement the administrative approval reforms under the “delegation, regulation, and service” approach, the “two review requirements” were introduced on January 3. He noted that these requirements further clarify the specific criteria and review procedures for the admission of various vehicle manufacturers and their products, helping manufacturers, technical service providers, and review bodies to understand and comply with the relevant stipulations, ensuring consistency in assessment standards. This, in turn, facilitates oversight by the industry and the general public, thereby guaranteeing that the provisions and requirements of the Administrative Measures are effectively put into practice.

It is reported that the “Two Review Requirements” were developed in parallel with the drafting of the Administrative Measures, and, in line with the principles set forth in those Measures, enterprises and products of different categories were consolidated and streamlined. Guided by a reform approach emphasizing simplified documentation and optimized procedures, a preliminary draft of the “Two Review Requirements” was formulated. During this process, multiple rounds of focused discussions were convened with automotive industry experts, enterprises, and testing institutions, and input was solicited from leading companies in the sector, the Equipment Industry Development Center, the China Automotive Technology & Research Center, the China Association of Automobile Manufacturers, and the Society of Automotive Engineers, among others. Innovation is the primary driver of productivity; by alleviating the burden on enterprises, it can help them regain vitality and inject much‑needed momentum into the sluggish automotive market. For commercial vehicles, as market‑driven competition intensifies, fostering innovation—while enabling offices to achieve greater scale and specialization and to continuously make breakthroughs in the application of new technologies, processes, and materials—will yield immeasurable benefits for both individual companies and the industry as a whole.

This year, the revision of the Teachers’ Law will be launched to strengthen the development of teachers’ professional ethics and conduct.

In 2019, efforts will be intensified to strengthen the overall institutional framework for reforming teacher workforce development, with the initiation of revisions to the Teachers’ Law and the formulation and promulgation of policy documents on teacher‑staffing reforms in higher education and vocational education for the new era.

According to reports, one year ago, the CPC Central Committee and the State Council issued the “Opinions on Comprehensively Deepening Reform of Teacher Development in the New Era.” Over the past year and more, local authorities have actively implemented these measures; to date, 30 provinces have formulated high‑quality implementation plans tailored to their specific circumstances. In 2019, the Ministry of Education will further refine top‑level design and release guidelines to strengthen professional ethics and conduct in the new era. It will also urge all localities and schools to thoroughly enforce the Code of Professional Conduct for Teachers, refine relevant systems and measures, and translate the code’s requirements into practical behavioral standards and clear red lines. In addition, the ministry will increase support for the development of normal universities and teacher‑training programs, promote innovative approaches to staffing and resource allocation, and work to address the shortage of teachers in primary and secondary schools as well as kindergartens. Furthermore, it will vigorously bolster teacher development in rural and impoverished areas, providing strong support for poverty alleviation through education.

In 2019, the Department of Teacher Development of the Ministry of Education will re‑mobilize and redeploy efforts to advance teacher‑workforce reform across the country, develop an evaluation indicator system, and conduct third‑party assessments. It will also establish a notification mechanism to periodically publicize cases from localities where implementation is inadequate, progress is slow, or outcomes are limited.

Other

Li Keqiang: When formulating regulations and policies affecting businesses, it is essential to solicit the views of enterprises and industry associations.

On February 20, Premier Li Keqiang presided over an executive meeting of the State Council, which mandated that when formulating laws, regulations, and normative documents affecting enterprises, the views of relevant enterprises and industry associations and chambers of commerce must be solicited, so as to ensure that government decision-making better reflects reality and public opinion.

“Market economic activities are complex and ever‑changing. As market entities, businesses are highly sensitive to regulations and policies issued by government authorities, concerned about a lack of transparency and unstable expectations. Going forward, when formulating laws and policies that affect enterprises, it is imperative to solicit the views and recommendations of market participants in advance, thereby fostering stable expectations and bolstering confidence in the market,” Premier Li Keqiang emphasized.

Premier Li Keqiang pointed out that, in accordance with China’s Legislation Law and the Regulations on the Procedures for Formulating Administrative Regulations, administrative regulations must solicit extensive public input during the drafting process. Accordingly, all regions and departments, when formulating and implementing administrative regulations, rules, and normative administrative documents closely related to business operations, should ensure that the views of enterprises and industry associations and chambers of commerce are sought throughout the entire process. This is an important measure for advancing scientific and democratic decision-making and building a law-based government.

Li Keqiang stated that we have not been without lessons in this regard: in one scenario, when formulating regulations and policies, failure to solicit broad input from market entities results in their implementation disrupting enterprises’ normal production and business plans, leading to losses and waste; in another scenario, when businesses do not accept newly introduced regulations and policies, they resort to “finding workarounds to circumvent the rules,” ultimately rendering such measures difficult to enforce.

“Ignoring the voices of market entities will, in turn, invite punishment from the market,” the Premier said.

Premier Li Keqiang has instructed that, going forward, before drafting laws and policies, authorities should proactively and promptly ascertain the urgent needs, priorities, and expectations of enterprises, striving to ensure that proposed regulations and policies are more targeted. During the formulation process, except for matters legally required to be kept confidential, public consultations should be conducted through various channels, and the views of representative enterprises should be solicited; the outcomes of such consultations must be promptly made public or communicated back to stakeholders. In the implementation phase, buffer periods should be established based on actual circumstances, providing enterprises with sufficient time to prepare for compliance.

“We must adhere to the principle that ‘public disclosure is the norm, and non-disclosure is the exception,’ by enhancing the openness and transparency of the formulation and implementation of laws and policies, preventing backroom dealings, and truly ensuring ‘transparent governance,’” the Premier said.

Trump Meets with Liu He; Both Sides Agree to Extend This Round of Talks by Two Days

On February 22, local time, U.S. President Donald Trump met in the Oval Office with Liu He, Special Envoy of President Xi Jinping, Member of the Political Bureau of the CPC Central Committee, Vice Premier of the State Council, and China’s chief negotiator for the China–U.S. Comprehensive Economic Dialogue, who was in the United States for the seventh round of high-level China–U.S. economic and trade consultations.

Liu He first conveyed a personal message from President Xi Jinping to President Trump. In his message, President Xi noted that, over the past period, the economic and trade teams of both countries have implemented the consensus reached during their meeting in Argentina, engaged in intensive economic and trade consultations, and made positive progress. This has been met with broadly favorable responses from both nations and the international community. He expressed the hope that both sides will continue to approach matters with mutual respect and a spirit of win-win cooperation, pressing ahead with renewed efforts, moving toward each other, and reaching an agreement that delivers mutual benefits and win-win outcomes. He added that he stands ready to maintain close communication with President Trump through various channels. On behalf of himself and his wife, Professor Peng Liyuan, he extended sincere greetings and best wishes to the President, Mrs. Melania Trump, and their family.

Liu He stated that, as Special Envoy of President Xi Jinping, he is once again visiting Washington to further implement the important consensus reached by the two heads of state and to advance economic and trade consultations, building on existing progress. Over the past two days, the economic and trade teams of both countries have conducted fruitful negotiations, achieving positive advances in areas such as trade balance, agriculture, technology transfer, intellectual property protection, and financial services. Moving forward, both sides will redouble their efforts, press ahead with consultations, and fulfill the significant responsibilities entrusted to them by the two heads of state.

President Trump expressed his gratitude to President Xi Jinping for the message he conveyed, and asked Vice Premier Liu He to relay his warm greetings and best wishes—along with those of his wife, Mrs. Melania—to President Xi, Professor Peng Liyuan, and the Chinese people. President Trump stated, “I enjoy a close and strong relationship with President Xi. U.S.-China relations are of paramount importance, and at present, our bilateral ties are very robust. This round of high-level economic and trade consultations has made substantial progress, though much work remains to be done. To that end, both sides have decided to extend these talks by two days. The U.S. side stands ready to work together with China to achieve further tangible outcomes. I am confident that we will ultimately reach a meaningful agreement that benefits both countries. I very much look forward to meeting President Xi again in the near future and jointly witnessing a historic moment in U.S.-China economic and trade relations.”

U.S. officials, including Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, and Senior Advisor to the President Jared Kushner, attended the meeting.

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