JC Master Legal News Issue 860

Key Takeaways for This Issue

New rules for opening accounts on the STAR Market have been unveiled! What are the suitability requirements? The Shanghai Stock Exchange has just clarified five key points regarding account opening.

On the evening of the 7th, the Shanghai Stock Exchange released the “Q&A on Enabling Securities Offices to Activate Client Trading Access for STAR Market Stocks” (hereinafter referred to as the “Q&A”), which clarified the rules governing investor participation in STAR Market trading and further specified the criteria for assessing investor suitability. The Exchange stated that the technical systems supporting the STAR Market and its pilot registration-based issuance regime are currently undergoing intensive development and testing, with additional market-wide tests to follow. Investors should have ample time to complete the procedures for obtaining trading access to the STAR Market; they are advised to consult their respective brokerage offices for detailed information.

The property market is now being stabilized through “floor‑support” measures: some cities have imposed restrictions on price cuts.

Industry insiders note that China’s real estate market exhibits pronounced regional disparities, with both upward and downward trends potentially unfolding simultaneously across different cities. Consequently, in efforts to maintain market stability, it is possible for “bottom‑supporting” and “restraining” measures to coexist.

In 2019, the National People’s Congress will implement the formulation of the Real Estate Tax Law.

“We will concentrate our efforts on effectively implementing the major legislative tasks set by the CPC Central Committee, including deliberating the Civil Code and enacting the real estate tax law,” said Li Zhanshu, Chairman of the Standing Committee of the National People’s Congress, at the Second Session of the 13th National People’s Congress on March 8. Earlier, on March 5, Premier Li Keqiang stated in the Government Work Report that China would improve the local tax system and steadily advance legislation on the real estate tax.

This year, the draft amendment to the Prosecutors Law will continue to be deliberated, and the Personal Information Protection Law will be enacted.

The Second Session of the 13th National People’s Congress held its first press conference at the Great Hall of the People on March 4. Spokesperson Zhang Yesui stated that the Standing Committee of the National People’s Congress has included the enactment of a Personal Information Protection Law in this session’s legislative plan, and the relevant departments are expediting their research and drafting efforts.

The Second Session of the 13th National People’s Congress has opened.

At 9:00 a.m. on the morning of the 5th, the Second Session of the 13th National People’s Congress opened at the Great Hall of the People, where it heard Premier Li Keqiang’s report on the work of the government, reviewed the State Council’s report on the implementation of the 2018 Plan for National Economic and Social Development and the draft 2019 Plan, and examined the State Council’s report on the execution of the 2018 central and local budgets and the draft 2019 central and local budgets.

Table of Contents

Table of Contents

Finance & Capital Markets

New rules for opening accounts on the STAR Market have been unveiled! What are the suitability requirements? The Shanghai Stock Exchange has just clarified five key points regarding account opening.

Ministry of Finance: Strengthen support for private and foreign-invested enterprises to participate in PPP projects.

The Ministry of Finance has issued the Implementation Opinions on Promoting the Standardized Development of Public-Private Partnerships.

The Shanghai Composite Index fell below 3,000 points, plunging more than 4%, while trading volume has exceeded RMB 1 trillion for three consecutive days.

Hong Kong’s Hang Seng Index closed down nearly 2%, led by declines in financial and Chinese property stocks.

Bull Group Faces Patent Litigation and Is Sued for 1 Billion Yuan, Which May Impact Its IPO

Corporate & Commercial

The property market is now being stabilized through “floor‑support” measures: some cities have imposed restrictions on price cuts.

Shagang has introduced an unmanned continuous casting steel-tapping project.

The Metallurgical Industry Energy Conservation Professional Committee of the China Energy Conservation Association has established an Expert Committee.

Taxation

In 2019, the National People’s Congress will implement the formulation of the Real Estate Tax Law.

Universal tax cuts take effect; small and micro enterprises reap substantial benefits in the first filing period.

China will continue to implement the value-added tax policy supporting the development of cultural enterprises.

Litigation & Arbitration

This year, the draft amendment to the Prosecutors Law will continue to be deliberated, and the Personal Information Protection Law will be enacted.

The new performance appraisal regulations for central enterprises will be fully implemented within the year.

The Regulations on Emergency Response to Production Safety Accidents came into effect on April 1, requiring meteorological and other relevant departments to assist in emergency rescue operations.

Tianjin Municipality has issued the Provisional Measures for the Administration of Electronic Certificates and Licenses.

Shenzhen’s new regulations on the management of civil micro‑ and light‑weight drones will come into effect.

Other

The Second Session of the 13th National People’s Congress has opened.

The Finance and Economic Affairs Committee of the National People’s Congress has, in accordance with the law, carried out its review of the 2019 plans and budgets.

Ministry of Commerce: China and the United States Have Made Substantive Progress on Key Issues

The 2019 provincial civil service recruitment exams have begun in stages, with many provinces scheduled to hold their written tests on the same day.

Finance & Capital Markets

New rules for opening accounts on the STAR Market have been unveiled! What are the suitability requirements? The Shanghai Stock Exchange has just clarified five key points regarding account opening.

On the evening of the 7th, the Shanghai Stock Exchange released the “Q&A on Enabling Securities Offices to Activate Client Trading Access for STAR Market Stocks” (hereinafter referred to as the “Q&A”), which clarified the rules governing investor participation in STAR Market trading and further specified the criteria for assessing investor suitability. The Exchange stated that the technical systems supporting the STAR Market and its pilot registration-based issuance regime are currently undergoing intensive development and testing, with additional market-wide tests to follow. Investors should have ample time to complete the procedures for obtaining trading access to the STAR Market; they are advised to consult their respective brokerage offices for detailed information.

Key Point 1: Investors can now apply to activate trading access.

On March 1, the Shanghai Stock Exchange officially released the “Special Provisions for Trading Stocks on the STAR Market of the Shanghai Stock Exchange” (hereinafter referred to as the “Trading Special Provisions”), which has clearly defined the specific eligibility criteria for individual investors to participate in trading STAR Market stocks.

The Shanghai Stock Exchange stated that the procedure for activating trading access to STAR Market stocks is broadly similar to that of Stock Connect. Investors who meet the suitability requirements for STAR Market securities may now apply to have such access activated.

Investors need only apply through their designated securities office to activate trading access for STAR Market stocks on their existing Shanghai‑A‑share securities account; there is no need to open a new securities account with China Securities Depository & Clearing Corporation. Members are also not required to submit any additional applications or complete any further procedures with the SSE.

Key Point Two: The RMB 500,000 threshold covers stocks, mutual funds, wealth management products, and precious metals, among others.

The STAR Market imposes an asset threshold of RMB 500,000 and a two-year securities trading experience requirement on investors.

With regard to the determination of assets held in securities accounts and funds accounts, the Shanghai Stock Exchange stated that, for the purpose of calculating an individual investor’s net worth, eligible securities accounts include those opened with China Securities Depository & Clearing Corporation Limited, as well as accounts maintained by investors at securities offices.

The accounts opened by China Securities Depository & Clearing Corporation include A‑share accounts, B‑share accounts, closed‑end fund accounts, open‑end fund accounts, derivatives contract accounts, and other securities accounts established by China Securities Depository & Clearing Corporation as required by its business operations. Fund accounts used to calculate investors’ assets comprise client trading settlement funds accounts, stock options margin accounts, and the like.

Meanwhile, assets held in securities accounts opened with China Securities Depository & Clearing Corporation may be counted as part of an investor’s total assets. These include equities—such as A-shares, B-shares, preferred shares, Hong Kong stocks purchased through Stock Connect, and shares listed on the National Equities Exchange and Quotations System; public fund units; bonds; asset-backed securities; shares in asset management plans; and stock option contracts. For option contracts, long positions are added to the investor’s net worth at the settlement price, while short positions are deducted at the settlement price.

Assets held in an investor’s account opened with a securities office may be counted toward the investor’s total assets, including public‑fund shares, private‑fund shares, bank wealth‑management products, and precious‑metal holdings, among others.

Assets held in the funds account may be counted as investor assets, including trading settlement funds in the client’s trading settlement funds account and trading settlement funds in the stock options margin account, such as margin corresponding to short positions.

When calculating assets related to various financing‑type transactions, the Shanghai Stock Exchange requires that such assets be measured based on net assets, excluding securities and funds borrowed.

Based on data analysis, the suitability requirements of a 500,000‑yuan asset threshold and two years of securities trading experience appear reasonably appropriate. Currently, approximately 3 million individual investors in the A‑share market meet these criteria; together with institutional investors, they account for over 70% of trading volume.

Key Point 3: How to Determine Two Years of Securities Trading Experience

With respect to two years of securities trading experience, the Shanghai Stock Exchange has clarified that any individual investor who trades A-shares, B-shares, or stocks listed on the National Equities Exchange and Quotation System (NEEQ) may have such trading activity counted toward their total securities‑trading tenure. The relevant trading history is calculated from the date of the investor’s first trade executed through any one of their securities accounts under the “One‑Account” system on the Shanghai Stock Exchange, the Shenzhen Stock Exchange, or the NEEQ. The date of the first trade can be verified by contacting China Securities Depository & Clearing Corporation via the securities office.

Institutional investors that comply with applicable laws, regulations, and the SSE’s business rules may directly apply to activate trading access for STAR Market stocks without needing to meet the aforementioned requirements regarding assets and trading experience. When granting such trading access, members shall require clients placing their first order to purchase STAR Market stocks to sign, in paper or electronic form, a Risk Disclosure Statement for STAR Market Stock Trading. This statement must include the content specified in the “Essential Clauses of the Shanghai Stock Exchange Risk Disclosure Statement for STAR Market Stock Trading,” fully disclosing the key risk characteristics of the STAR Market.

Going forward, the SSE will also issue business guidelines on matters related to brokerage services for the STAR Market, including investor suitability management.

Key Point Four: Investors Have Ample Time to Open Accounts

At present, the Shanghai Stock Exchange is making every effort to expedite the establishment of the STAR Market and the pilot implementation of the registration-based IPO system. The technical systems are being rapidly developed and tested, and full‑market testing will follow.

The Shanghai Stock Exchange stated that investors should allow ample time to complete the procedures for activating trading access on the STAR Market; they may consult their brokerage office to obtain specific details. Before activating such access and engaging in trading, investors are advised to carefully review relevant laws, regulations, and exchange business rules, fully understand the associated risks, and participate in a rational and informed manner.

Key Point 5: On the STAR Market, there will be no daily price limits for the first five trading days, and T+0 trading will not be implemented.

Under the rules of the STAR Market, stock trading on the STAR Market is subject to price fluctuation limits, with an upper and lower limit of 20%. The formula for calculating the allowable price change is: Price Change = Closing Price × (1 ± Fluctuation Limit). For stocks issued through an initial public offering, no price fluctuation limits apply during the first five trading days after listing, and T+0 trading is not yet implemented.

The Shanghai Stock Exchange stated that, in the next phase, it will actively encourage fund management companies to launch a batch of public‑offering funds primarily investing in the STAR Market. In addition, all existing public funds eligible to invest in A‑shares may also invest in STAR Market stocks, and the six strategic‑allocation funds issued earlier are likewise permitted to participate in the strategic allocation of STAR Market shares.

Ministry of Finance: Strengthen support for private and foreign-invested enterprises to participate in PPP projects.

According to the Ministry of Finance on March 8, the ministry has issued implementation guidelines to promote the standardized development of public‑private partnerships. The guidelines set out seven key requirements, including encouraging participation by private and foreign investors, enhancing financing support, and focusing on priority sectors. Specifically, they call for strengthening support for private and foreign enterprises to engage in PPP projects, actively promoting high‑quality projects with sound government credit and stable cash flows to private offices, and granting preferential treatment to private entities under otherwise equal conditions. Additionally, the guidelines urge insurance funds and the China PPP Fund to increase equity investments in projects and broaden sources of project capital.

The Ministry of Finance has issued the Implementation Opinions on Promoting the Standardized Development of Public-Private Partnerships.

The Ministry of Finance has issued Implementation Opinions on Promoting the Standardized Development of Public‑Private Partnerships. The document sets out seven key requirements, including encouraging participation by private and foreign investors, strengthening financing support, and focusing on priority sectors. Specifically, it calls for intensifying support for private and foreign enterprises to engage in PPP projects; actively promoting high‑quality projects with sound government credit and stable returns to private offices; and, under equal conditions, giving priority to private-sector participation. It also urges insurance funds and the China PPP Fund to increase equity investments in projects, thereby broadening sources of project capital. Furthermore, it encourages leveraging equity transfers, asset transactions, and asset securitization to unlock the value of existing project assets and diversify channels for social capital to enter and exit. Priority will be given to public‑interest projects that deliver measurable returns in areas such as infrastructure addressing critical shortcomings, as well as in basic public services like health care, elderly care, culture, sports, and tourism, thereby advancing equal access to these services.

The Shanghai Composite Index fell below 3,000 points, plunging more than 4%, while trading volume has exceeded RMB 1 trillion for three consecutive days.

On March 8, market open saw the three major stock indices all gapped lower. The financial sector led the broader market’s decline throughout the day, serving as the primary driver of selling pressure. Although chip-related stocks staged a counter‑trend rally during trading, sparking a wave of limit‑up gains, they failed to reverse the overall downward trend. As the session drew to a close, losses on the major indices widened further, with more than 3,000 individual stocks falling. The Shanghai Composite Index slipped below the 3,000-point mark, plunging over 4%. Trading volume across both exchanges remained above RMB 1 trillion for the third consecutive session. At the close, the Shanghai Composite stood at 2,969.86 points, down 4.40%; the Shenzhen Component Index settled at 9,363.72 points, down 3.25%; and the ChiNext Index closed at 1,654.49 points, down 2.24%.

On the market front, chip stocks, poultry farming, and pork led the gainers’ list, while securities, insurance, and gas & water utilities topped the decliners’ list.

Hot sectors:

Chip-related stocks surged against the market trend, triggering a wave of limit-up rallies. Stocks such as Feilixin (6.320, +0.57, +9.91%), Kangqiang Electronics (11.830, +1.08, +10.05%), Huacan Electronics, Dagang Shares (5.810, +0.53, +10.04%), Tongfu Microelectronics (10.640, +0.97, +10.03%), Taiji Industry (7.460, +0.68, +10.03%), Skyworth Digital (12.280, +1.11, +9.94%), Zhaori Technology (10.540, +0.96, +10.02%), Chengmai Technology (31.120, +2.83, +10.00%), Youxunda (15.620, +1.42, +10.00%), Beijing Junzheng (29.700, +2.70, +10.00%), and Zhenxin Technology (13.530, +1.23, +10.00%) all hit their daily upper limits.

Pork‑related stocks rallied strongly, posting robust gains. Stocks such as Tiankang Bio (8.210, +0.75, +10.05%), Tangrenshen (11.620, +1.06, +10.04%), Tianbang Co., Ltd. (17.890, +1.63, +10.02%), Xinwufeng (9.000, +0.82, +10.02%), and Jinxinnong (10.680, +0.97, +9.99%) all hit their daily upper limits. Meanwhile, other names like New Hope (13.460, +0.74, +5.82%), Muyuan Foods (54.600, +3.06, +5.94%), Delisi (6.070, +0.09, +1.51%)—which is currently under shareholder scrutiny—Wens Food Group (39.540, +1.55, +4.08%), Huatong Shares (20.100, +0.54, +2.76%), and Da Bei Nong (5.470, +0.04, +0.74%) also delivered solid performances.

Market News:

1. The Ministry of Finance has issued Implementation Opinions on Promoting the Standardized Development of Public–Private Partnerships. These opinions set forth seven key requirements, including encouraging participation by private and foreign capital, strengthening financing support, and focusing on priority sectors.

2. The Ministry of Industry and Information Technology and another department have jointly issued the “Guidance on Building a Comprehensive Standardization System for the Industrial Internet,” leveraging standards to provide top-level design and regulatory guidance in shaping the industrial internet ecosystem, promoting the transformation and upgrading of related industries, and accelerating progress toward building a manufacturing powerhouse and a cyber power.

3. In response to recent market concerns about a resurgence in off-exchange margin financing, the Guangdong Securities Regulatory Bureau has been closely monitoring the situation and strengthening preventive measures. On March 7, the Bureau convened a symposium with heads of relevant securities branches within its jurisdiction to gather information on the models, target clients, and trends associated with off-exchange margin financing, and issued clear requirements for securities offices to effectively manage and mitigate related risks.

Market Outlook:

Shanxi Securities (8.290, -0.92, -9.99%) believes that this round of rebound lacks fundamental support and is driven primarily by market sentiment and liquidity. However, with price‑volume dynamics officely established and favorable conditions in place, the rally is likely to persist. Shanxi Securities notes that by dissecting the participants in this rebound, one can infer their order of entry and the underlying rationale: foreign investors were the first to scoop up undervalued stocks, spurred by a global shift toward monetary easing—led by the Federal Reserve’s pause on rate hikes and balance-sheet reduction—as well as the relative value advantage of A‑shares; next came active speculative capital. As external uncertainties eased and risk appetite improved, coupled with ample liquidity, highly volatile small- and mid-cap thematic stocks saw brisk trading, attracting substantial short-term funds. Following them were institutions that had missed the initial move; constrained by bear‑market mindsets and slow to react, these players belatedly piled into positions after missing the spring rally. Finally, retail investors entered the fray, often in tandem with those institutions that had been left behind. With the stock market’s profitability surging, rising risk appetite and the upward trend reinforced each other in a virtuous cycle, prompting a wave of new entrants across all investor segments.

CICC believes that the current shift in style within the A-share market is fundamentally driven by macroeconomic factors. At the trading level, this manifests as varying degrees of dominance among different types of capital at different stages, thereby shaping relative strength and weakness across styles. In January, amid a broad-based improvement in global risk appetite, allocation‑oriented investors took the lead, with companies boasting solid earnings quality, steady profit growth, and reasonable valuations delivering excess returns. Since February, as the rebound in risk appetite has spread more widely, speculative capital has re‑entered the market, prompting a pronounced oversold bounce among small- and mid‑cap stocks that had endured consecutive drawdowns over the past two years. This dynamic is reflected in a simultaneous pullback across fundamental‑driven factors in the A‑share market, while momentum‑ and sentiment‑related factors have staged a sharp recovery.

Hong Kong’s Hang Seng Index closed down nearly 2%, led by declines in financial and Chinese property stocks.

Hong Kong’s Hang Seng Index gapped lower today, closing down 1.91% at 28,228.42 points. Financial and Chinese property stocks led the decline, with CITIC Securities plunging 9.84% and Sunac China tumbling 10.89%.

Looking ahead, Guo Sizhi of Di Feng Securities notes that the market’s current pattern is one of lower lows followed by higher highs: the Hang Seng Index has risen from a low of 28,663 points on the 1st to a high of 29,241 points on the 4th. However, with a range of just 578 points, this move is unlikely to meet the month’s expectations. Moreover, monthly highs and lows typically do not occur within the same two trading days. Therefore, if the index fails to break above 29,241 points by mid-month, it could technically retest support at 28,663 points. Consequently, the first level to watch is the 10-day moving average, currently at 28,834 points.

Xin Cheng Jin Feng’s financial analyst Wen Jinhui stated that, at present, there is a very high likelihood that Hong Kong stocks will not follow the movements of overseas markets. He added that, with the possibility of positive policy announcements from mainland China and the recent strong performance of A-shares, it is still too early to conclude that Hong Kong stocks are poised for a sharp correction. However, should the index fall below 28,860 points, the risk of a pullback would increase significantly; conversely, if it manages to rebound and test the 29,300-point level, it could gain further upward momentum.

A partner at a Guangzhou‑based private equity office believes that, although Hong Kong stocks have lagged behind A‑shares in terms of gains this year, there are still plenty of investment opportunities. However, with the Hang Seng Index up nearly 4,000 points so far this year—having even briefly breached the 29,000 mark—its upside appears limited. Upward momentum faces significant headwinds, making a sustained move above 30,000 points unlikely in the near term, and a period of corrective consolidation is expected.

Guoxin Securities’ research report points out that it is still premature to conclude that Hong Kong stocks have emerged from their bottom (with a reversal yet to be conofficeed). Currently, having risen above last year’s annual moving average, the 29,000–30,000 range is likely to face significant resistance. Taking into account the following factors: 1) it takes time for liquidity to percolate into the real economy; 2) EPS remains on a downward trajectory, and a turning point is still far off in our forecasts; 3) A‑shares have posted substantial short‑term gains, but their fundamentals remain to be validated; and 4) foreign investors remain relatively cautious, we expect this rally to stall in March.

Haitong Securities analyst Xun Yugen stated that the correction in Hong Kong stocks since February 2018 has been driven by a second dip in corporate earnings. Valuations are currently at historic lows, and the market has entered a phase of fundamental validation; investors should closely monitor China’s economic data and annual report results. Hong Kong stocks tend to exhibit smaller, more rational volatility, whereas A‑shares remain subject to greater swings influenced by sentiment.

Bull Group Faces Patent Litigation and Is Sued for 1 Billion Yuan, Which May Impact Its IPO

On March 7, data from Tianyancha showed that Bull Group Co., Ltd. (hereinafter referred to as “Bull Group”) has been sued by Jiangsu Tongling Technology Co., Ltd. (hereinafter referred to as “Jiangsu Tongling”) for alleged patent infringement, with the latter seeking RMB 1 billion in damages. According to reports, Bull Group’s dedicated legal team is currently handling the case, which remains in the trial phase. Industry insiders believe that this litigation could potentially impact Bull Group’s planned IPO.

On December 23, 2017, Bull Group held the inaugural general meeting of Bull Group Co., Ltd. at its Longshan base in Cixi, Ningbo, where Ruan Liping was elected Chairman and President. The company stated that the establishment of Bull Group Co., Ltd. marks the completion of Bull Group’s restructuring and the achievement of the first key milestone in its IPO process.

On August 28, 2018, Guojin Securities (9.730, -1.08, -9.99%) released a summary report on the guidance work for Bull Group’s initial public offering and listing. The report indicated that the guidance period spanned February to August 2018, during which all directors, supervisors, and senior executives of Bull Group received training. Guojin Securities stated that, following the guidance, the company’s directors, supervisors, and senior management have gained a thorough understanding of the fundamental requirements for an IPO.

According to the prospectus released by Bull Group, the company has 2,179 distributors, with its distribution network covering all 31 provinces, municipalities directly under the central government, and autonomous regions across China, as well as 1 million retail outlets. These include 740,000 hardware‑related outlets, nearly 110,000 specialized building‑materials and lighting‑fixture outlets, and over 140,000 digital‑accessories outlets. In recent years, Bull Group’s e‑commerce sales have grown rapidly, with revenue increasing from RMB 239 million in 2015 to RMB 625 million in 2017, reflecting a three-year compound annual growth rate of 61.78%.

In 2015, 2016, 2017, and the first three months of 2018, Bull Group reported operating revenues of RMB 4.459 billion, RMB 5.366 billion, RMB 7.24 billion, and RMB 2.049 billion, respectively; and net profits attributable to shareholders of the parent company of RMB 1.0 billion, RMB 1.407 billion, RMB 1.285 billion, and RMB 321 million, respectively.

Commercial & Corporate

The property market is now being stabilized through “floor‑support” measures: some cities have imposed restrictions on price cuts.

Industry insiders note that China’s real estate market exhibits pronounced regional disparities, with both upward and downward trends potentially unfolding simultaneously across different cities. Consequently, in efforts to maintain market stability, it is possible for “bottom‑supporting” and “restraining” measures to coexist.

On March 6, the Housing and Urban–Rural Development Bureau of Gan County, Ganzhou City, Jiangxi Province, issued a document to real estate developers titled “Cease Sales of Discounted Units.” The document mandates that developers halt the sale of “special‑price” units priced below their declared listing prices. This move comes amid reports that, following the Spring Festival, certain real estate projects in Gan County have been offering discounts, with some units sold at prices lower than those filed with the authorities. Although official authorities have yet to issue a formal response, Gan County is far from the only city to recently introduce measures aimed at halting housing price declines. Analysts generally expect that, during periods of market downturn, “bottom‑line‑support” policies will continue to be deployed.

In the document circulating online, in order to safeguard the healthy and stable development of the real estate market, Gancounty District in Jiangxi Province has issued three measures to local property developers: First, all developers must immediately cease selling special‑price housing units; any such sales must be submitted to the Housing and Urban–Rural Development Bureau and the Price Administration Bureau for prior approval. Second, effective March 3, contracts for residential properties whose transaction prices fall below the project’s average transaction price for similar units in February will have their registration temporarily suspended. Third, by March 5, all developers are required to formulate contingency plans addressing potential price reductions and submit them to the Comprehensive Division of the Housing and Urban–Rural Development Bureau for record‑keeping.

Prior to this, similar “price‑stabilization orders” had already been issued. In September 2018, news of price cuts at the Country Garden project in Dangshan, Anhui, sparked market panic. Local authorities promptly summoned more than a dozen developers for talks and imposed penalties on Country Garden—an episode that came to be known as the “Country Garden Price‑Cut Fiasco Briefing.” Earlier this year, a real estate project in Wuhu, Anhui, launched a price‑reduction promotion, prompting strong dissatisfaction among existing homeowners, who gathered at the sales office to demand explanations. Ultimately, the local housing and urban–rural development commission intervened, ordering the developer to immediately halt the promotional activities. Launching price‑cut promotions during a market downturn is a common strategy for real estate offices; however, in most parts of China, such direct price reductions often provoke discontent among early‑stage homeowners.

On March 8, Zhou Xiaoqiang, Director and Party Secretary of the Chengdu Branch of the People’s Bank of China and Director of the Sichuan Provincial Branch of the State Administration of Foreign Exchange, stated in a media interview that real estate prices must not plunge sharply. Real estate is both a household asset and a component of banks’ credit portfolios; a sharp drop would be unbearable for ordinary citizens and unsustainable for banks. At the same time, prices cannot keep rising indefinitely. That is precisely why the Central Economic Work Conference last year called for stabilizing the housing market. Starting in the fourth quarter of last year, the national real estate market began to cool, with some cities seeing price cuts on new developments, which in turn sparked “rights‑defending” actions by earlier‑stage homeowners. Some observers argue that, from a practical standpoint, preventing widespread price declines helps maintain stability in the market.

Since the end of last year, local governments across the country have convened their respective “Two Sessions” and laid out plans for real‑estate regulation in 2019. Among these, the “three stabilizations”—stabilizing land prices, housing prices, and market expectations—and the principle of “one city, one policy” have emerged as the key guiding principles. On March 5, Premier Li Keqiang delivered the Government Work Report, emphasizing the need to “better address housing issues for the people, ensure that cities assume primary responsibility, reform and improve the housing market and social security systems, and promote the stable and sound development of the real‑estate market.” Analysts note that although the phrase “housing is for living, not for speculation” was not explicitly mentioned, “market stability” remains a central focus of this year’s real‑estate policy. Most institutions agree that maintaining policy consistency while granting local governments discretion to fine‑tune measures will set the tone for this year’s regulatory approach nationwide. In particular, the adoption of diverse stabilization tools reflects the implementation of the “one city, one policy” framework.

Shagang has introduced an unmanned continuous casting steel-tapping project.

On February 21, Shagang Group Co., Ltd. and Baosteel Engineering & Construction Co., Ltd. formally signed a contract for an unmanned continuous casting steel‑pouring project. This project represents a decisive step forward in Shagang’s ongoing efforts to build smart factories, in line with its development strategy centered on the “Four Modernizations.”

After nearly a year of technical exchanges and on-site testing, the two parties have finalized the technical solution and performance criteria. Once the project is commissioned, robots will replace manual labor in performing tasks such as installing and removing long nozzles, cleaning, oxygen‑burning, and temperature measurement and sampling at the tundish, significantly reducing physical strain, decreasing the number of operators, and improving operational efficiency. Following its launch, Shagang plans to roll out this initiative across other continuous casting workshops, thereby accelerating the full-scale implementation of unmanned operations in continuous casting.

The “steel + intelligent manufacturing” development model is making steel production smarter. “Shagang will vigorously carry out smart upgrades, further optimizing and elevating both its process‑technology capabilities and equipment‑automation levels, turning intelligent manufacturing into a ‘new engine’ for the company’s efficient growth,” said Shen Wenrong, Chairman of the Board of Shagang Group. Over the next five years, drawing on advanced domestic and international practices, Shagang plans to transform its sintering, coking, ironmaking, steelmaking, rolling, and auxiliary workshops into smart facilities, thereby achieving the goals of Industry 4.0.

In recent years, Shagang has advanced steadily on the path of intelligent manufacturing, consistently investing in smart upgrades and the development of smart workshops, thereby injecting new momentum into the company’s efficient growth.

On September 20 last year, the Power and Energy Control Center of Shagang’s Power Plant— a key project in its smart‑manufacturing initiative—was fully commissioned. In the center’s nearly 500‑square‑meter control hall, a 21‑meter‑long, 1.3‑meter‑high electronic display screen dynamically presents live footage from 510 monitoring points across the plant’s various workshops, while 45 computer terminals provide real‑time views of energy‑system operating data and a range of operational interfaces. Through remote centralized control, Shagang has achieved unified management and balanced dispatch of the company’s energy resources, ensuring the stability of both production processes and power‑generation systems while further enhancing overall energy efficiency and cost‑effectiveness.

The silicon steel workshop of Shagang Cold Rolling Mill is vigorously developing an end-to-end intelligent manufacturing production line. It has now essentially established a comprehensive information system, spanning from shop-floor automation and process control systems to manufacturing execution systems, enterprise resource planning, and decision-support tools. By enabling seamless information exchange across these systems, the workshop has achieved full‑process digital control of its production workflows, breaking down the “information silos” that previously existed between disparate systems and personnel in different roles, and enabling “one‑click order‑driven production scheduling.” The workshop was also recognized as a “Jiangsu Provincial Demonstration Smart Workshop” in 2018.

At Shagang, a series of seemingly impossible “unmanned” visions have been turned into reality through intelligent manufacturing. China’s first rapid, online, automated temperature‑measurement and sampling robot for the furnace front has proven highly effective at the electric‑arc furnace steelmaking plant. The robotic system consists primarily of an Italian COMAU six‑axis industrial robot configured for metallurgical applications, along with a protective thermal‑insulation enclosure. Through programming and teach‑in, the robot automatically loads the temperature‑measurement and sampling probe and, following a pre‑set motion trajectory, autonomously performs temperature measurement and sample collection from the molten steel in the electric‑arc furnace. The entire process takes just 25 seconds—fast, accurate, and capable of displaying real‑time data on steel temperature and elemental composition directly on a computer screen.

Since 2011, Shagang has been implementing a “machines replace workers” initiative. To date, it has deployed more than 100 robots, enabling automated slag addition, automatic numbering by robotic arms, and rapid online temperature measurement and sampling. Over the next three to five years, Shagang plans to bring an additional 1,000 to 1,500 robots into service. These robots will be stationed at tasks involving repetitive, routine work as well as in harsh working conditions such as high temperatures and heavy dust exposure. By doing so, they will not only reduce labor requirements, alleviate physical strain, and minimize safety incidents, but also significantly enhance operational precision and improve product quality.

The Metallurgical Industry Energy Conservation Professional Committee of the China Energy Conservation Association has established an Expert Committee.

On March 8, the inaugural meeting of the Expert Committee of the Metallurgical Industry Specialized Committee of the China Energy Conservation Association was held in Beijing. Attending the event were Academician Yin Ruiyu of the Chinese Academy of Engineering, Academician Sun Yongfu of the Chinese Academy of Engineering, Academician Jiang Yi of the Chinese Academy of Engineering and a member of the Board of Directors of the China Energy Conservation Association, former Chief Engineer Zhu Hongren of the Ministry of Industry and Information Technology, as well as leaders and experts from the National Energy Conservation Center, the Energy Research Institute of the National Development and Reform Commission, the China Energy Conservation Association, the China Iron and Steel Association, the Chinese Society for Metals, the China Ferroalloy Industry Association, the China Coking Industry Association, the China Scrap Steel Application Association, the China Foundry Association, the China Metallurgical Mining Enterprises Association, and such enterprises as CITIC Pacific Special Steel Group, Xinxing Cast Pipe, Taiyuan Iron & Steel Group, and Anyang Iron & Steel Group. The meeting was chaired by Fan Tiejun, Deputy Director of the Metallurgical Industry Planning Research Institute and Executive Deputy Director of the Metallurgical Specialized Committee of the China Energy Conservation Association.

In his address on behalf of the China Energy Conservation Association, Academician Jiang Yi expressed full appreciation for the work of the Metallurgical Industry Energy‑Saving Professional Committee of the China Energy Conservation Association (hereinafter referred to as the Metallurgical Committee) over the past two years. He noted: “The Metallurgical Committee has played a pivotal role in advancing energy efficiency in the metallurgical sector and fostering the development of energy‑saving services within the industry, thereby providing crucial support for the sound and sustainable growth of energy conservation in metallurgy.” He further emphasized that, to take the Committee’s future efforts to the next level, it is imperative to bring together more industry experts to pool their insights and strategies. The establishment of this Expert Committee, he added, is of great significance for promoting energy‑efficient, low‑carbon, and green development in the metallurgical industry.

In his address, Li Xinchuang, President of the Metallurgical Industry Planning and Research Institute and Chairman of the Metallurgy Specialized Committee of the China Energy Conservation Association, emphasized that pursuing green development is both an indispensable path for China’s overall development and a necessary trajectory for the future growth of the metallurgical industry. At present, the metallurgical sector stands at a critical juncture—where the “key period,” the “hard‑fight phase,” and the “window of opportunity” overlap—placing significant pressure on energy conservation and low‑carbon transformation. First, the metallurgical industry accounts for a substantial share of national energy consumption and carbon emissions: black metal smelting and rolling account for approximately 14% of total national energy use, with the steel industry alone consuming around 11% of the country’s energy and generating roughly 15% of China’s total carbon emissions. Without revolutionary changes to production processes, further reductions will become increasingly challenging. Second, with the imminent official release of the action plan for ultra‑low‑emission upgrades, metallurgical enterprises face mounting environmental‑protection retrofit pressures, leading to sharp increases in both energy‑use costs and environmental‑compliance operating expenses. Third, as the national carbon‑trading system is set to expand into the metallurgical sector, companies will confront growing pressure to transition toward low‑carbon operations. Achieving green development and energy‑efficient, low‑carbon progress in China’s metallurgical industry remains a long and arduous journey. The establishment of the Expert Committee responds precisely to the sector’s urgent needs for energy conservation, low‑carbon development, and ecological sustainability. He expressed the hope that the committee members will provide comprehensive, systematic guidance to the work of the Metallurgy Specialized Committee, collaboratively addressing the key challenges and pain points hindering the industry’s green and low‑carbon transformation, thereby contributing to its sustainable development.

Subsequently, the conference announced the expert committee’s principal responsibilities, selection criteria, and the list of its members. Academician Yin Ruiyu, serving as the chair of the expert committee, presented an analysis of the current state of flue‑gas treatment, energy consumption, and scrap‑steel utilization in China’s metallurgical sector. He underscored the critical role of adjustments to both the energy mix and process flows in advancing energy conservation, emissions reduction, and green development within the industry. Drawing on international trends in metallurgical development and progress in energy‑saving and environmentally friendly technologies, he offered recommendations for charting a path toward the sector’s next phase of green transformation. Academician Yin Ruiyu emphasized that China’s metallurgical industry should adopt a higher‑level strategic vision and meticulous planning, expressing his hope that all stakeholders will join forces to foster high‑quality growth in the sector.

During the ceremony marking the establishment of the Expert Committee, Academicians Yin Ruiyu, Sun Yongfu, and Jiang Yi, Chief Engineer Zhu Hongren, and President Li Xinchuang jointly took to the stage to unveil the plaque commemorating the committee’s founding, thereby witnessing this historic moment.

Taxation TAXATATION

In 2019, the National People’s Congress will implement the formulation of the Real Estate Tax Law.

“We will concentrate our efforts on effectively implementing the major legislative tasks set by the CPC Central Committee, including deliberating the Civil Code and enacting the real estate tax law,” said Li Zhanshu, Chairman of the Standing Committee of the National People’s Congress, at the Second Session of the 13th National People’s Congress on March 8. Earlier, on March 5, Premier Li Keqiang stated in the Government Work Report that China would improve the local tax system and steadily advance legislation on the real estate tax.

In last year’s Government Work Report, Premier Li Keqiang stated that the legislation on the real estate tax would be advanced in a prudent and steady manner. The legislative process for the real estate tax is a topic of close public attention and is expected to exert a notable influence on the real estate market. On March 7 last year, Minister of Finance Xiao Jie, responding to questions from reporters, noted that the Budget Committee of the Standing Committee of the National People’s Congress, the Ministry of Finance, and other relevant authorities are urgently drafting and refining the draft legislation on the real estate tax. The overarching approach to the real estate tax is to prioritize legislation, grant ample authority, and implement it in stages.

Universal tax cuts take effect; small and micro enterprises reap substantial benefits in the first filing period.

In February just past, small and micro enterprises entered their first tax filing period following the implementation of new inclusive tax and fee reduction policies. The tax authorities have provided taxpayers with a convenient “file and enjoy” service, enabling small and micro taxpayers across the country to more easily and comfortably benefit from the government’s tax and fee relief measures.

The new inclusive tax and fee reduction policies for small and micro enterprises not only further lower VAT for small-scale taxpayers and income tax for small, low-profit enterprises, but also authorize provincial, autonomous region, and municipal governments to reduce, by up to 50%, resource tax, urban construction and maintenance tax, property tax, urban land use tax, stamp duty (excluding securities transaction stamp duty), cultivated land occupation tax, as well as the education surcharge and local education surcharge, for small-scale VAT taxpayers.

“Claim and enjoy” is a key feature of the latest round of universal tax‑reduction policies for small and micro enterprises, and it reflects the shared experience of taxpayers who have already benefited from tangible tax cuts during this filing period. According to reports, ahead of the February filing deadline, all provincial tax authorities nationwide have added a reminder function to the online filing system of the electronic tax bureau, alerting small‑scale taxpayers and small, low‑profit enterprises to their eligibility for preferential tax policies.

At present, leading groups for tax and fee reductions have been established at all levels, from the State Taxation Administration down to provincial, municipal, and county tax authorities. These groups are headed by the top official, with several specialized working teams under them, which have drawn up task lists and action roadmaps, ensuring that responsibilities are officely assigned at each level and that policies are implemented thoroughly and in meticulous detail.

Upon the issuance of the operational guidelines for inclusive tax reductions targeting small and micro enterprises, tax authorities at all levels promptly strengthened policy publicity, guidance, and interpretation. They conducted specialized training for 12366 hotline staff and frontline personnel at tax service halls, and employed multiple channels to disseminate information and provide guidance to taxpayers who are expected to qualify for the preferential measures.

“A year’s plan begins in spring.” With the gradual rollout of additional tax and fee reduction policies, small and micro enterprises will reap even greater benefits. Meanwhile, as the tax authorities continue to enhance their taxpayer-friendly services, tangible gains for market entities are already on the horizon.

China will continue to implement the value-added tax policy supporting the development of cultural enterprises.

To further deepen the reform of the cultural system and promote the development of cultural enterprises, China will continue to implement the value-added tax policy supporting the growth of cultural businesses. The validity period of this policy is from January 1, 2019, to December 31, 2023.

The Ministry of Finance and the State Taxation Administration recently issued the “Notice on Continuing to Implement the Value-Added Tax Policy Supporting the Development of Cultural Enterprises,” which stipulates that value-added tax shall be exempted on income derived by film groups (including their member enterprises), film studios, and other film enterprises—provided they have been approved by the competent film authorities in accordance with their respective functions and powers—to engage in film production, distribution, and exhibition. Such exempted income includes revenue from the sale of film prints (including digital copies), revenue from the transfer of film copyrights (both outright transfers and licensing), film distribution revenue, and revenue from film screenings conducted in rural areas.

Meanwhile, urban film‑screening services provided by general taxpayers may, in accordance with the current policy, opt to calculate and pay value‑added tax under the simplified taxation method. Value‑added tax is exempted on the basic subscription maintenance fees for cable digital television and the basic subscription fees for rural cable television collected by broadcasting and television service providers.

The notice further stipulates that, for value-added tax amounts that cultural enterprises are entitled to have reduced or exempted in accordance with its provisions, any such amounts already collected and remitted to the treasury prior to the issuance of this notice may be offset against taxes payable in subsequent tax periods or refunded to the treasury.

LITIGATION & ARBITRATION

This year, the draft amendment to the Prosecutors Law will continue to be deliberated, and the Personal Information Protection Law will be enacted.

The Second Session of the 13th National People’s Congress held its first press conference at the Great Hall of the People on March 4. Spokesperson Zhang Yesui stated that the Standing Committee of the National People’s Congress has included the enactment of a Personal Information Protection Law in this session’s legislative plan, and the relevant departments are expediting their research and drafting efforts.

According to Zhang Yesui, in 2019 the Standing Committee of the National People’s Congress will prioritize legislative work in four key areas. First, it will expedite the enactment or amendment of laws urgently needed to deepen market‑oriented reforms and expand high‑level opening up. In addition to the Foreign Investment Law, it will revise the Land Management Law, the Patent Law, and the Securities Law, and enact the Resource Tax Law, among others. Second, it will accelerate legislation to safeguard and improve people’s livelihoods and advance ecological progress. This includes promptly reviewing draft provisions of the Civil Code, continuing deliberations on the draft Basic Medical and Health Care and Health Promotion Law, the draft Vaccine Administration Law, and the draft amendment to the Drug Administration Law, as well as enacting the Yangtze River Protection Law to provide robust legal safeguards for the river’s protection. Third, it will strengthen legislation in the fields of national security and social governance. This entails enacting the Export Control Law, the Data Security Law, the Biosecurity Law, and other measures to enhance the capacity to prevent and counter security risks; and enacting the Community Corrections Law and the Veterans’ Rights and Benefits Law, while revising the Criminal Law, thereby providing legal support for strengthening and innovating social governance. Fourth, it will refine the legal framework governing the organization of state institutions. This includes amending the Organic Law of the National People’s Congress and its Rules of Procedure to further improve the system of people’s congresses, continuing deliberations on the draft amendments to the Judges Law and the Prosecutors Law, and deepening judicial system reform. It will also enact the Administrative Disciplinary Measures Law to strengthen the national supervision system.

With the rapid development of network information technology and the digital economy, incidents in which citizens’ rights and interests are infringed upon due to the improper collection, misuse, or leakage of personal information have become increasingly frequent. In response to questions from reporters, Zhang Yesui stated that strengthening the protection of personal information through legislation has become an imperative for safeguarding citizens’ privacy and their life and property, as well as for ensuring the healthy and orderly development of the internet. “China already has numerous laws, regulations, and rules addressing the protection of personal information. For example, the Criminal Law, the General Provisions of the Civil Law, the Consumer Rights Protection Law, the Cybersecurity Law, and the E‑Commerce Law all contain relevant provisions. However, overall, these measures remain fragmented. Therefore, in light of evolving circumstances, it is necessary to enact targeted, specialized legislation to provide coherent regulation and create a synergistic effect.”

The new performance appraisal regulations for central enterprises will be fully implemented within the year.

The State-owned Assets Supervision and Administration Commission of the State Council recently revised and issued the Measures for Assessing the Business Performance of Leaders of Central Enterprises. The new regulations establish, from multiple perspectives, a high-quality development assessment framework that integrates annual and tenure‑based performance metrics for central enterprise leaders, emphasizing differentiated and category‑specific evaluation while strengthening international and industry benchmarking. The Measures will be fully implemented across all central enterprises within this year.

Highlighting performance‑based assessment and guidance for high‑quality development is a key focus of this revision. The measures cover indicators across such areas as profitability and efficiency, technological innovation, structural adjustment, international operations, risk management, capacity assurance, and energy conservation and environmental protection. Emphasis is placed on using technological innovation as a central driver in performance evaluation, encouraging enterprises to increase R&D investment and treating R&D expenditures as equivalent to profits. In light of the diverse assessment needs of different enterprises, the SASAC selects indicators according to the principle of “fewer but more refined,” incorporating them into both annual and tenure‑based evaluations.

The Measures stipulate that differentiated assessment criteria shall be established for enterprises of different functions and categories, with categorized assessments implemented. For mixed‑ownership enterprises and those at special stages of development, assessment indicators and methods may be tailored on a case‑by‑case basis, taking into account the enterprise’s functional positioning, reform objectives, and development strategy.

To guide enterprises in striving to reach world-class standards, the measures strengthen the application of international and industry benchmarking in indicator design, target setting, performance evaluation and scoring, and outcome rating. Specifically, for eligible enterprises, international and industry benchmarks are used to identify underperforming indicators and incorporate them into the assessment framework. In the evaluation and rating process, A‑level enterprises are, for the first time, determined based on their operational performance scores, supplemented by a comprehensive assessment of their international and industry benchmarking positions, with the number of such enterprises strictly limited.

It is worth noting that the measures emphasize “positive incentives.” For example, the performance‑linked annual salary coefficient for heads of A‑rated enterprises will be appropriately increased; and it is explicitly stipulated that, where a company’s business performance is significantly impacted by the implementation of major scientific and technological innovations or the development of forward‑looking, strategic industries, no negative assessment will be applied in the evaluation, in accordance with the principle of “three distinctions.”

In October 2003, the State-owned Assets Supervision and Administration Commission (SASAC) issued the Interim Measures for the Assessment of Business Performance of Heads of Central Enterprises, and beginning the following year, it conducted annual and tenure‑based performance assessments of these executives in its capacity as an investor. As the strength of central enterprises has grown and state‑owned enterprise reform has advanced, SASAC has revised and refined the performance‑assessment indicator system five times, including through the measures now being introduced.

The Regulations on Emergency Response to Production Safety Accidents will come into effect on April 1.

The Regulations on Emergency Response to Production Safety Accidents (hereinafter referred to as the “Regulations”) were recently promulgated and will take effect on April 1, 2019.

Chapter III of the Regulations, entitled “Emergency Rescue,” explicitly stipulates that the people’s government of the place where a production safety accident occurs shall provide essential logistical support to emergency rescue personnel and shall organize relevant entities—such as telecommunications, transportation, medical services, meteorology, hydrology, geology, electricity, and water supply—to assist in emergency rescue operations.

The CPC Central Committee and the State Council attach great importance to emergency response work for production safety accidents. Based on the Law on Work Safety and the Law on Response to Emergencies, the Regulations set forth provisions on the institutional framework for emergency response to production safety accidents, as well as on emergency preparedness and emergency rescue, with the aim of addressing prominent issues in this area and enhancing the scientific, standardized, and law-based management of emergency response efforts.

The Regulations clarify the emergency response system, mandate the strengthening of preparedness measures, and provide for the planning of on-site emergency rescue operations. The Regulations specifically stipulate that, during emergency response and rescue efforts, measures must be taken to prevent the escalation of accident-related hazards and the occurrence of secondary and consequential disasters.

The China Meteorological Administration has consistently attached great importance to workplace safety and emergency response efforts in the event of safety incidents. In January 2019, it issued the “Guidelines for Workplace Safety in the Meteorological Sector (Trial).” On February 15, the Ministry of Emergency Management and the China Meteorological Administration signed a framework agreement to establish a coordinated mechanism for integrating emergency management with meteorological monitoring, forecasting, and early warning services.

The Party Leadership Group of the China Meteorological Administration has called on meteorological agencies nationwide to take Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as their guiding principle, uphold the people-centered development philosophy, officely establish the concept of safe development, prioritize life and safety above all else, strengthen awareness of red-line boundaries, rigorously enforce accountability, and strive to enhance capabilities in meteorological support for workplace safety, lightning‑protection safety oversight, and departmental management of workplace safety, thereby using workplace safety to promote and ensure the high-quality development of the meteorological sector.

Tianjin Municipality has issued the Provisional Measures for the Administration of Electronic Certificates and Licenses.

To implement the relevant provisions of the Electronic Signature Law of the People’s Republic of China and the six national standards for electronic certificates and licenses, standardize the city’s development and management of electronic certificates and licenses, promote their application and the sharing of data resources, and support the construction of “Internet Plus Government Services” and their broader societal use, Tianjin Municipality recently issued the Interim Measures for the Administration of Electronic Certificates and Licenses of Tianjin (hereinafter referred to as the “Administrative Measures”).

As a regulatory framework for citywide electronic certificate and credential data management, the Measures will play a pivotal role in the collection, sharing, and application of such data, representing a major reform initiative that innovates data governance and unlocks the value of data resources. The Measures stipulate that electronic certificates and credentials shall be applied across all municipal government service domains, encouraging enterprises and public institutions throughout the city to widely adopt them in economic and social activities. Electronic certificates carry the same legal validity as their physical counterparts and may serve as statutory grounds for administrative procedures and archival records, enjoying mutual recognition and seamless sharing among all departments utilizing electronic certificates within the city. At the same time, agencies responsible for electronic certificate applications are required to establish mechanisms for overseeing the operation and effectiveness of electronic certificate‑sharing services, integrating these services into business workflows to enable online querying, verification, and cross‑checking of electronic certificate information, thereby ensuring timeliness, security, and reliability. Currently, Tianjin has established a unified electronic certificate database, aggregating approximately 3.6 million records across 40 categories from selected entities. Moving forward, the city will remain demand‑driven, continuing to enhance the quality of data in the electronic certificate repository, expanding coverage to include additional types of electronic certificates, and supporting the development of “Internet Plus Government Services.” This effort will provide robust data support for advancing smart government initiatives and ensuring the smooth implementation of the city’s “One System, Three Transformations” approval‑system reform.

Shenzhen’s new regulations on the management of civil micro‑ and light‑weight drones will come into effect.

Shenzhen’s recently released “Interim Measures for the Management of Civil Micro‑ and Light‑Weight Drones” has swiftly sparked widespread debate within the industry. Industry insiders note that these measures are consistent with the “Interim Regulations on the Flight Management of Unmanned Aircraft,” drafted by the National Air Traffic Management Commission in January last year, as well as with the drone‑flight‑management pilot program launched in Shenzhen in November last year. Together, they provide a practical framework for lawful drone operations and offer valuable case studies and model references for nationwide drone‑management efforts.

The Measures provide clear provisions for the management and enforcement related to excessively restrictive flight zones and no‑fly areas. For instance, under the current Shenzhen pilot program for drone‑flight management, most areas have been designated as flyable zones. In contrast to certain regions where regulatory frameworks remain somewhat unclear, these Measures offer valuable guidance: they avoid a one‑size‑fits‑all approach that could hinder the development of the drone industry, while also enabling the standardization of flight operations through the “Comprehensive Drone Supervision Platform” and the release of additional flyable airspace.

It is worth noting that the previously discussed option of managing drones through an additional, externally installed regulatory module was not adopted. Instead, the Measures have embraced the internet‑based approach widely accepted in the civil aviation sector, thereby providing enterprises with a clear technological roadmap while minimizing the operational burden on both consumers and commercial users. According to DJI, this method of leveraging an online platform to oversee drone operations in both the public and commercial domains represents a global first.

As the industry has grown, drone enthusiasts can readily purchase a wide range of components and kits; however, the quality of these parts varies considerably. When individuals or organizations undertake modifications or assemblies that fail to meet technical specifications and safety standards, not only does this compromise the safety of drones during operation, but it can also give rise to adverse public impacts. Following the implementation of the interim measures in March, unauthorized modifications to drones will be subject to oversight and penalties. The Measures establish technical standards for drones and set out regulations governing their operation, providing consumers and commercial entities with a clear legal framework. They also furnish a regulatory basis for addressing non‑compliant and unsafe drone products and component kits.

According to the draft “Regulations on Civil Aviation Flight Standards Management” previously prepared by the Civil Aviation Administration, ordinary drone operators and drone pilots are not required to obtain permits or licenses. Similarly, Shenzhen’s newly released Measures do not address the issue of licensing for drone operators. Industry insiders note that, at present, users of micro‑ and light‑weight drones are not required to apply for a license; they need only complete the prescribed procedures, such as real‑name registration.

The Measures also stipulate that drone manufacturers must implement measures to ensure that lightweight drones can seamlessly connect to the integrated drone‑flight supervision platform during operation, with no‑fly zone data configured in real time and remaining valid. In response, DJI stated that flight safety is the prerequisite and foundation upon which the drone industry depends. Previously, DJI incorporated airport no‑fly zone data into its drones via officeware updates, preventing DJI‑branded drones from entering such zones or taking off within them.

According to reports, most consumer‑grade drones currently on the market are classified as light‑weight unmanned aerial vehicles and can be operated in designated compliant flight zones without requiring a flight plan. It is understood that, within a height limit of 120 meters, the majority of Shenzhen’s airspace qualifies as a permitted flight area. DJI states that users can operate their drones with confidence in legally authorized airspace. Meanwhile, for operators of small, medium, and large drones—such as agricultural spraying drones and industrial‑use UAVs—submitting an online flight application through the UTMISS system will typically result in approval from multiple relevant authorities, including the Air Force, the Civil Aviation Administration, and public security agencies, within five working days.

Other

March 5: The Second Session of the 13th National People’s Congress opened.

The Second Session of the 13th National People’s Congress opened at 9:00 a.m. on the 5th at the Great Hall of the People, where it heard Premier Li Keqiang’s report on the work of the government, reviewed the State Council’s report on the implementation of the 2018 national economic and social development plan and the draft 2019 plan, and examined the State Council’s report on the execution of the 2018 central and local budgets and the draft 2019 central and local budgets. The key points are as follows: First, last year’s achievements: China’s GDP grew by 6.6%, surpassing RMB 90 trillion; 13.61 million new urban jobs were created; the rural poor population decreased by 13.86 million; tax and fee reductions for businesses and individuals totaled approximately RMB 1.3 trillion; the overall tariff level was lowered from 9.8% to 7.5%; prices of 17 anti-cancer drugs were significantly reduced and added to the national medical insurance catalog. At the same time, we must remain vigilant: external risks are on the rise, downward pressure on the domestic economy is mounting, the real economy faces numerous challenges, and potential risks in finance and other sectors persist. Second, this year’s targets: GDP growth of 6%–6.5%; creation of more than 11 million new urban jobs, with the surveyed unemployment rate around 5.5% and the registered unemployment rate kept below 4.5%; a consumer price increase of about 3%; reduction of the rural poor population by over 10 million; and a roughly 3% decline in energy consumption per unit of GDP. Third, this year’s priority tasks: Tax and fee reductions—lowering the current 16% VAT rate for manufacturing and related industries to 13%, thereby easing the tax and social security burdens on enterprises by nearly RMB 2 trillion for the year; employment—placing employment‑first policies at the macro‑policy level for the first time; consumption—continuing preferential policies for purchasing new‑energy vehicles; investment—completing RMB 800 billion in railway investment and RMB 1.8 trillion in road and waterway transport investment; finance—establishing the STAR Market and piloting a registration‑based IPO system, while promoting the sound and stable development of a multi‑tiered capital market; targeted poverty alleviation—intensifying efforts to lift deeply impoverished areas such as the “Three Regions and Three Prefectures” out of poverty; pollution prevention and control—reducing sulfur dioxide and nitrogen oxide emissions by 3% and chemical oxygen demand and ammonia‑nitrogen emissions by 2%; education—allocating over RMB 1 trillion in central government spending for education; healthcare—lowering and standardizing the deductible for critical illness insurance, raising the reimbursement ratio from 50% to 60%; speeding up and reducing costs—cutting average mobile data tariffs by another 20% or more and implementing nationwide number portability; opening-up—shortening the negative list for foreign investment access and establishing a new area within the Shanghai Pilot Free Trade Zone; continuing to advance China–U.S. economic and trade consultations; coordinated development—elevating integrated development of the Yangtze River Delta to a national strategy.

The Finance and Economic Affairs Committee of the National People’s Congress has, in accordance with the law, carried out its review of the 2019 plans and budgets.

On the morning of the 8th, the Finance and Economic Affairs Committee of the 13th National People’s Congress convened a plenary session. Building on its preliminary review and taking into account the opinions of the delegations and relevant specialized committees, the Committee conducted a further examination of the 2019 Plan Report and Draft Plan, as well as the Budget Report and Draft Budget. Following thorough deliberation, the Committee adopted the “Report on the Results of the Review of the Implementation of the 2018 National Economic and Social Development Plan and the Draft 2019 National Economic and Social Development Plan” and the “Report on the Results of the Review of the Implementation of the 2018 Central and Local Budgets and the Draft 2019 Central and Local Budgets” (hereinafter referred to as the Plan and Budget Review Result Reports), and decided to submit these two reports to the Presidium of the Congress.

To ensure that the review process is conducted in accordance with the law, the Financial and Economic Affairs Committee of the National People’s Congress and the Budget Committee of the Standing Committee have adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era. They have thoroughly studied and grasped General Secretary Xi Jinping’s important ideas on upholding and improving the system of people’s congresses, as well as his economic thought on socialism with Chinese characteristics for a new era. They have promptly conveyed and deeply studied the spirit of General Secretary Xi Jinping’s recent series of important speeches and the spirit of the Central Economic Work Conference. In addition, they have convened numerous symposiums to hear reports from relevant departments and to solicit opinions and suggestions from pertinent special committees, some deputies to the National People’s Congress, relevant departments of the State Council, industry associations, enterprises, and experts and scholars. From January 23 to 25, 2019, the Financial and Economic Affairs Committee of the National People’s Congress held a plenary meeting, conducting preliminary reviews of the 2019 Plan Report and Draft Plan, as well as the Budget Report and Draft Budget. It also carried out a special deliberation on poverty‑alleviation policies and measures and on the allocation of fiscal funds. On this basis, it prepared draft reports on the results of its reviews of the 2019 Plan and Budget.

The Financial and Economic Affairs Committee finds that, overall, the implementation of the 2018 National Economic and Social Development Plan has been satisfactory. The plan report and draft plan submitted by the State Council are in line with the spirit of the Central Economic Work Conference, consistent with the requirements of the 13th Five-Year Plan Outline, and well aligned with China’s actual economic and social development conditions. The guiding principles are clear, and the main objectives and work arrangements are generally feasible. It is recommended that the Second Session of the 13th National People’s Congress approve the “Report on the Implementation of the 2018 National Economic and Social Development Plan and the Draft 2019 National Economic and Social Development Plan” submitted by the State Council, and approve the draft 2019 National Economic and Social Development Plan.

The Finance and Economic Affairs Committee finds that, overall, the implementation of the 2018 central and local budgets was satisfactory. The draft 2019 central and local budgets submitted by the State Council are in line with the spirit of the Central Economic Work Conference and comply with the provisions of the Budget Law, and are generally feasible. It is recommended that the Second Session of the 13th National People’s Congress approve the Report on the Implementation of the 2018 Central and Local Budgets and the Draft 2019 Central and Local Budgets submitted by the State Council, approve the 2019 central budget draft, and concurrently approve the 2019 quotas for outstanding general government debt at RMB 1,330.8922 billion and for outstanding special-purpose government debt at RMB 1,076.8508 billion.

The year 2019 marks the 70th anniversary of the founding of the People’s Republic of China and is a pivotal year for completing the building of a moderately prosperous society in all respects and achieving the first centenary goal. Under the strong leadership of the Party Central Committee with Comrade Xi Jinping at its core, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we must fully implement the spirit of the 19th National Congress of the Communist Party of China, the Second and Third Plenary Sessions of the 19th CPC Central Committee, and the Central Economic Work Conference. In accordance with the requirements of coordinating the “five-sphere” overall layout and the “four-pronged” strategic layout, we will uphold the general principle of seeking progress while maintaining stability, adhere to the new development philosophy, promote high-quality development, take supply-side structural reform as the main thread, deepen market-oriented reforms, expand high-standard opening-up, accelerate the building of a modernized economic system, continue to fight the three critical battles, focus on invigorating microeconomic entities, innovate and improve macroregulation, and coordinate efforts to stabilize growth, advance reform, adjust the economic structure, improve people’s livelihoods, and guard against risks. We will keep the economy operating within an appropriate range, further ensure stable employment, stable finance, stable foreign trade, stable foreign investment, stable investment, and stable expectations, boost market confidence, enhance the people’s sense of gain, happiness, and security, and maintain sustained, healthy economic development and overall social stability, thereby laying a decisive foundation for completing the building of a moderately prosperous society in all respects. To this end, the Finance and Economic Affairs Committee puts forward seven recommendations for advancing economic and social development in 2019: First, further strengthen and improve macroregulation to enhance the effectiveness of policy implementation; second, continue to deepen supply-side structural reform and vigorously revitalize the real economy; third, consolidate achievements, adopt targeted measures, and resolutely win the three critical battles; fourth, bolster innovation capacity and raise the quality of economic development; fifth, synergistically advance the rural revitalization strategy and the new urbanization strategy, and promote balanced regional development; sixth, continue to deepen reforms in key areas and push forward higher‑level opening-up; and seventh, further safeguard and improve people’s livelihoods and promote the comprehensive development of social programs. The Finance and Economic Affairs Committee also puts forward seven recommendations for ensuring sound fiscal budgeting in 2019: First, fully implement the decisions and arrangements to strengthen and enhance the effectiveness of proactive fiscal policy; second, devote all efforts to winning the battle against poverty; third, focus on preventing and defusing local government debt risks; fourth, accelerate fiscal and tax system reform; fifth, continuously raise the level of rule of law and standardization in budget management; sixth, actively cooperate in implementing the NPC’s reforms to strengthen budget review and oversight and state‑asset supervision; and seventh, earnestly uphold the principle of tax legality.

Ministry of Commerce: China and the United States Have Made Substantive Progress on Key Issues

At a press conference held on the morning of March 9, Vice Minister of Commerce and Deputy Representative for International Trade Negotiations Wang Shouwen stated that the China–U.S. trade friction—characterized by mutual tariff increases—serves no one’s interests. The latest data show that U.S. exports to the rest of the world have declined by 7%, while China’s statistics for January and February indicate a 19.9% drop in exports to the United States. The reciprocal imposition of tariffs has severely undermined investor confidence and harmed global interests. In less than four months, China and the United States have already conducted three rounds of high-level consultations, achieving substantive progress on several key issues.

The 2019 provincial civil service recruitment exams have begun in stages, with many provinces scheduled to hold their written tests on the same day.

Recently, several provinces—including Jilin, Yunnan, and Fujian—have successively launched the recruitment process for the 2019 provincial civil service examinations. An examination of the recruitment announcements across these provinces reveals that, in some cases, the scale of recruitment has decreased compared with the previous year. As for the exam schedule, many provinces have set the written test for the common subjects for April 20 this year. In contrast to the central government’s civil service recruitment—often referred to as the “national exam”—civil service exams organized at the provincial level are commonly known as “provincial exams.”

Recently, provinces including Jilin, Yunnan, and Fujian have issued announcements formally launching the 2019 civil service recruitment process. Meanwhile, according to an earlier notice from the Chongqing Personnel Examination Center, registration for the local open recruitment exam for civil servants (including personnel managed by reference) is expected to begin in mid-to-late March. Prior to this, cities and provinces such as Beijing, Shanghai, Liaoning, and Jiangsu had already initiated their 2019 civil service recruitment drives. Notably, the written examinations for the 2019 civil service recruitments in Beijing, Shanghai, and Liaoning have already concluded.

In terms of the number of applicants, according to recruitment announcements released by various regions, Yunnan plans to recruit 3,470 civil servants in 2019, Fujian plans to recruit 2,471, and Jilin plans to recruit 3,668. Compared with last year’s recruitment quotas, some provinces have seen a decline: for instance, Fujian’s planned intake this year is 2,471, down from 3,601 in 2018—a reduction of more than 1,000 positions. Meanwhile, in Yunnan, the province’s planned recruitment of 3,765 civil servants in 2018 has been reduced to 3,470 this year.

Examining the test schedules across provinces, some have already concluded the written examination stage of their 2019 civil service recruitment processes. For instance, Beijing held its public‑subject written exam on December 16, 2018, while Shanghai’s exam was scheduled for January 13, 2019. In contrast to the staggered testing dates adopted by certain provinces, others have standardized their civil service written exams to a single day—commonly referred to as the “civil service joint examination.” According to announcements from relevant provinces, public‑subject written exams in Jilin, Fujian, Yunnan, and others are all set for April 20, 2019. Moreover, although Chongqing has yet to issue its official civil service recruitment notice, the Chongqing Personnel Examination Center’s “2019 Chongqing Personnel Examination Work Plan” indicates that the region will also hold its exam on April 20.

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