JC Master Legal News Issue 861

Key Takeaways for This Issue

The China Securities Regulatory Commission is soliciting public comments on amendments to the “Guidelines for Articles of Association of Listed Companies.”

Recently, the China Securities Regulatory Commission has revised relevant provisions of the “Guidelines for Articles of Association of Listed Companies” (hereinafter referred to as the “Articles of Association Guidelines”) and, effective March 15, has opened the draft for public consultation.

MIIT: Requires Tencent, Huawei, and others to comprehensively remove the “Social Security Mobile Service” app from app stores.

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 “suppression‑driving” measures to coexist.

The State Taxation Administration has once again announced the cancellation of 15 tax certification requirements, further facilitating the implementation of tax and fee reductions.

To further implement the decisions and arrangements of the CPC Central Committee and the State Council on tax and fee reductions and streamlining procedures to better serve the public, as well as the requirements set forth in the 2019 Government Work Report for deepening administrative streamlining and delegation of powers, the State Taxation Administration, following its decision at the end of 2018 to abolish 20 tax‑related certification requirements, issued on March 8 the “Decision on Abolishing a Batch of Tax‑Related Certification Requirements” (hereinafter referred to as the “Decision”), announcing the elimination of 15 such requirements, primarily pertaining to the processing of tax incentives.

Draft Foreign Investment Law: Ushering in an “Upgraded Version” of Opening-Up to the Outside World

Following two rounds of deliberation and amendment, on March 8, the Draft Foreign Investment Law of the People’s Republic of China was publicly presented at the Second Session of the 13th National People’s Congress. Reform is advanced under the rule of law, and the rule of law is further improved through reform. During the deliberations, the majority of deputies agreed that considering the Foreign Investment Law at the first National People’s Congress held after the 40th anniversary of reform and opening-up underscores China’s unwavering will and office resolve to expand its opening-up in the new era. This represents a significant new step in deepening reform and opening-up through legislation, with far-reaching implications.

The Second Session of the 13th National People’s Congress concluded in Beijing.

The Second Session of the 13th National People’s Congress concluded at the Great Hall of the People on the morning of the 15th, having successfully completed all its agenda items.

Table of Contents

Table of Contents

Finance & Capital Markets

The China Securities Regulatory Commission is soliciting public comments on amendments to the “Guidelines for Articles of Association of Listed Companies.”

The China Securities Regulatory Commission hosted a symposium on EU financial institutions operating in China.

The China Securities Regulatory Commission has issued the 2019 Legislative Work Plan.

The China Securities Regulatory Commission and the Ministry of Education have jointly issued the “Memorandum of Cooperation on Strengthening Public Education on Securities and Futures Knowledge.”

The China Securities Regulatory Commission has imposed administrative penalties on five cases in accordance with the law.

Jiulongshan National Tourism Case: The Supreme Court’s Final Judgment Sides the China Securities Regulatory Commission

Starting on the 18th, the STAR Market will begin accepting listing applications, with the entire submission process conducted electronically.

Corporate & Commercial

MIIT: Requires Tencent, Huawei, and others to comprehensively remove the “Social Security Mobile Service” app from app stores.

Another major figure has been arrested following Quanjian.

The trial in the Qualcomm–Apple patent infringement case has concluded, with Qualcomm ordered to pay $31 million in damages.

This year, the central government plans to allocate 18 billion yuan in subsidies for the purchase of agricultural machinery.

Deepening the “capacity reduction” effort in the steel industry requires a three-pronged approach.

Audi vehicles are embroiled in an odor scandal; official customer service states that the odor poses no health risks.

Taxation

The State Taxation Administration has once again announced the cancellation of 15 tax certification requirements, further facilitating the implementation of tax and fee reductions.

Optimizing the tax-related business environment to support the sustained development of foreign investment in China.

The State Taxation Administration has issued the “Notice on Effectively Implementing the 2019 VAT Reform Measures.”

Hong Kong Property Market: Vacancy Tax Is Coming

Conditions for foreign nationals to be exempt from individual income tax have been relaxed, with new regulations from the fiscal and tax authorities sending a signal to attract talent.

Litigation & Arbitration

Draft Foreign Investment Law: Ushering in an “Upgraded Version” of Opening-Up to the Outside World

Aligning Goals with Needs: Concurrent Legislation and Oversight for Environmental Protection

The Law on Compulsory Enforcement has been included in the legislative agenda of the Standing Committee of the National People’s Congress.

Other

The Second Session of the 13th National People’s Congress concluded in Beijing.

Nur Bekri, former Party Secretary and Director of the National Energy Administration, has been expelled from both the Party and public office.

Finance & Capital Markets

The China Securities Regulatory Commission is soliciting public comments on amendments to the “Guidelines for Articles of Association of Listed Companies.”

Recently, the China Securities Regulatory Commission has revised relevant provisions of the “Guidelines for Articles of Association of Listed Companies” (hereinafter referred to as the “Articles of Association Guidelines”) and, effective March 15, has opened the draft for public consultation.

In 2018, the Standing Committee of the National People’s Congress undertook a special amendment to Article 142 of the Company Law concerning share repurchases, introducing new provisions for listed companies engaging in share buybacks. Meanwhile, the China Securities Regulatory Commission revised and issued the Guidelines on Corporate Governance, setting forth new requirements for corporate governance. More recently, the CSRC promulgated the Measures for the Ongoing Supervision of Companies Listed on the STAR Market (Trial), clarifying the listing arrangements for enterprises with special equity structures.

To implement the aforementioned provisions and requirements, the China Securities Regulatory Commission has made three key amendments to the “Guidelines on Articles of Association”: First, it has clarified the relevant requirements for the articles of association of listed companies with special equity structures. Second, in light of the new provisions of the Company Law, it has refined the statutory circumstances under which a listed company may acquire its own shares, specifying the methods of acquisition, decision-making procedures, and requirements for share disposal. Third, drawing on the “Corporate Governance Code for Listed Companies” and actual corporate governance practices, it has further improved the rules governing the convening of shareholders’ meetings, the removal of directors, the establishment of specialized committees of the board of directors, and the appointment qualifications of senior management. Moving forward, the CSRC will continue to monitor the corporate governance landscape of listed companies, refine relevant governance regulations, and urge listed companies to operate in compliance with the law and ensure that all stakeholders fulfill their duties, thereby effectively enhancing the overall level of corporate governance.

We welcome valuable feedback from all sectors of society. The China Securities Regulatory Commission will, based on the responses to the public consultation, further revise and refine the measures and, after completing the relevant procedures, issue and implement them.

The China Securities Regulatory Commission hosted a symposium on EU financial institutions operating in China.

On March 13, 2019, the China Securities Regulatory Commission (CSRC) hosted a symposium in Beijing with EU financial institutions operating in China. The event was attended by Fang Xinghai, Vice Chairman of the CSRC, and Nicolas Chapuis, Ambassador of the European Union to China. Representatives from ten EU‑based financial institutions participated, including Société Générale, Deutsche Bank, BNP Paribas, Intesa Sanpaolo, SEB Merchant, Standard Chartered Bank, HSBC, Santander, Amundi Asset Management, and Euroclear Bank.

The meeting noted that, since President Xi Jinping announced a series of major measures to further open up the financial sector in his address at the Boao Forum for Asia in 2018, the China Securities Regulatory Commission, in accordance with the unified deployment of the CPC Central Committee and the State Council, has actively promoted the implementation of these opening-up policies, accelerated the two-way opening of the capital market, and supported high-quality foreign financial institutions, including those from the European Union, in establishing operations in China. These efforts have helped elevate the development and service standards of China’s securities, futures, and fund industries, thereby providing high‑quality, efficient financial services to support the country’s move toward high‑quality economic growth. EU financial institutions have responded positively, expressing their intention to enter the Chinese market through various channels. At the meeting, the Chinese side further briefed EU financial institutions on its policies for opening up the capital market, addressing their questions and clarifying issues related to the specific application of rules and practical regulatory procedures. Participants engaged in in-depth exchanges and discussions, and the symposium achieved favorable results, successfully meeting its intended objectives.

Representatives from the relevant business departments of the China Securities Regulatory Commission and the Asset Management Association of China attended the symposium.

The China Securities Regulatory Commission has issued the 2019 Legislative Work Plan.

To further enhance legislative work on securities and futures regulatory rules in 2019, refine the system of legal implementation standards for securities and futures regulation, strengthen the development of fundamental market institutions, and promote the long-term, stable, and sound development of the capital market in accordance with the law, the China Securities Regulatory Commission recently issued its 2019 Legislative Work Plan, outlining the overall framework for legislative activities throughout the year.

In 2019, the China Securities Regulatory Commission (CSRC) planned to formulate or revise a total of 28 regulatory legislative projects, including 13 designated as “key projects to be issued within the year” and 15 categorized as “projects requiring urgent study and issuance at an appropriate time.” Specifically: (1) Further implementing the innovation-driven development strategy and enhancing the capital market’s capacity to support breakthroughs in critical core technologies, the CSRC will draft the “Administrative Measures for Registration of Initial Public Offerings on the STAR Market (Trial),” the “Administrative Measures for Registration of Securities Issuance by Listed Companies on the STAR Market (Trial),” and the “Administrative Measures for Ongoing Supervision of Listed Companies on the STAR Market (Trial).” (2) Promoting reform and development of the capital market and establishing a new framework for opening up to the outside world, the CSRC aims to publicly release within the year the “Administrative Measures for Equity Crowdfunding Pilots,” the “Administrative Measures for Employee Stock Ownership Plans of Listed Companies,” and the “Administrative Measures for Domestic Securities and Futures Investments by Qualified Foreign Institutional Investors and Renminbi‑Qualified Foreign Institutional Investors,” while accelerating the revision of the “Administrative Measures for the Supervision and Administration of Non‑Listed Public Companies.” (3) Standardizing the conduct of market participants and improving market mechanisms, the CSRC seeks to complete, within the year, the formulation or amendment of the “Provisional Administrative Measures for the Management of Commentary Information in the Securities and Futures Markets,” the “Administrative Measures for Securities Brokerage Business,” the “Administrative Measures for Disclosure of Information by Publicly Offered Mutual Funds,” the “Administrative Measures for the Supervision and Administration of Futures Companies,” the “Administrative Measures for Bond Pledge‑Based Repurchase Transactions,” and the “Provisional Administrative Measures for the Supervision and Administration of Private Investment Funds.” In addition, it will promptly study and issue, when appropriate, the “Administrative Measures for Information Disclosure by Companies Listed on the National Equities Exchange and Quotation System,” the “Administrative Measures for the Supervision and Administration of Directors, Supervisors, Senior Management Personnel, and Practitioners of Securities and Fund Operating Institutions,” the “Administrative Measures for the Licensing of Securities Company Business Activities,” the “Administrative Measures for the Management of Fund Management Companies,” the “Administrative Measures for the Sale of Securities and Fund Investment Advisory Services,” the “Administrative Measures for the Management of Securities and Fund Investment Consulting Businesses,” and the “Administrative Measures for the Qualification Requirements of Directors, Supervisors, and Senior Management Personnel of Futures Companies.” (4) Effectively strengthening the building of a law-based government and deepening law-based administration, the CSRC will actively study and formulate the “Regulations on the Procedures for Implementing Supervisory Measures in the Securities and Futures Markets” and the “Administrative Measures for Administrative Penalties for Securities and Futures Law Violations.” (5) Enhancing financial risk prevention and reinforcing internal control systems, the CSRC aims to complete the revision of the “Administrative Measures for Futures Exchanges” within the year, while continuing to advance the legislative processes for the “Administrative Measures for Indices,” the “Administrative Measures for Securities Registration and Settlement,” the “Administrative Measures for the Securities Settlement Risk Fund,” the “Administrative Measures for Internal Controls of Securities and Fund Operating Institutions,” and the “Administrative Measures for the Subsidiaries of Futures Companies.”

In addition to the aforementioned regulatory initiatives, in 2019 the CSRC will continue to coordinate with and support the relevant departments of the National People’s Congress in advancing the revision of the Securities Law, the drafting of the Futures Law, the amendment of the Criminal Law, and the revision of the Company Law; collaborate with the relevant departments of the State Council on the formulation of the Interim Regulations on the Administration of Private Fund Management and the Regulations on the Supervision and Administration of Listed Companies; and work closely with the pertinent judicial authorities to carry out legislative and judicial interpretation efforts in the securities and futures sectors. Furthermore, in light of the pilot registration‑based system on the STAR Market and the ongoing revision of the Securities Law, the CSRC will actively undertake a comprehensive review and refinement of the existing system of regulations, normative documents, and other institutional rules.

At present, the legislative work plan is being implemented in an orderly manner. Among these efforts, two regulations—the Measures for the Registration of Initial Public Offerings on the STAR Market (Trial) and the Measures for the Ongoing Supervision of Listed Companies on the STAR Market (Trial)—have been officially promulgated and put into effect, while other legislative projects are also advancing according to schedule.

The China Securities Regulatory Commission and the Ministry of Education have jointly issued the “Memorandum of Cooperation on Strengthening Public Education on Securities and Futures Knowledge.”

Vigorously promoting knowledge of securities and futures in school education is of great significance for fostering a culture of rational investing across society, enhancing the public’s financial literacy and investment skills, and safeguarding social harmony and stability. The “Opinions of the General Office of the State Council on Further Strengthening the Protection of the Legitimate Rights and Interests of Small and Medium‑Sized Investors in the Capital Market” (Guobanfa [2013] No. 110) explicitly calls for “gradually integrating investor education into the national education system, with pilot programs to be launched first in regions where conditions permit.” In recent years, thanks to the concerted efforts of all stakeholders, provinces, autonomous regions, and municipalities directly under the central government have carried out pilot projects at various educational levels, involving more than 500 schools and reaching over one million students. Some localities have incorporated investor education into the curricula of primary and secondary schools, developing textbooks to promote financial literacy at these levels; others have integrated it into higher education and vocational training as elective or compulsory courses; still others have conducted meaningful explorations within continuing education and ethnic minority education. However, these pilot initiatives have also revealed challenges such as uneven textbook quality, insufficient teaching resources, and limited learning materials, underscoring the urgent need for strengthened overall planning and standardized guidance. To address these issues, the China Securities Regulatory Commission and the Ministry of Education jointly issued the “Memorandum of Cooperation on Strengthening Public Education in Securities and Futures Knowledge” (hereinafter referred to as the “Memorandum of Cooperation”). This document represents a concrete step taken by the two ministries to thoroughly study and implement Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, uphold a people‑centered approach, and deliver tangible benefits to the general public. It also constitutes a specific action to implement the spirit of the report delivered at the 19th National Congress of the Communist Party of China, the Central Economic Work Conference, and the National Financial Work Conference.

Under the Memorandum of Cooperation, the Ministry of Education is committed to advancing the following initiatives:

1. Promote the seamless integration of securities and futures knowledge into the curriculum and textbook system. At the basic education level, incorporate securities and futures concepts into relevant subject curricula and textbooks in accordance with students’ developmental stages, and encourage regions with the necessary resources to offer investment and financial management courses. At the higher education level, institutions that are well-equipped are encouraged to offer courses on securities and futures to all students; furthermore, institutions offering finance-related programs are urged to strengthen collaboration with securities and futures offices to jointly refine curriculum design and textbook content, explore effective teaching methodologies, and conduct related research projects.

2. Enhance the financial literacy of the teaching workforce. Through specialized lectures, online courses, and other formats, provide general education in areas such as securities, futures, and investment financing to teacher‑training students. Leveraging intensive training sessions and online professional development, promote the improvement of financial literacy among teachers across different regions.

3. Innovate approaches to learning and applying securities and futures knowledge. Leveraging school clubs at all levels and of various types, expand students’ channels for acquiring and applying this knowledge through activities such as virtual trading, summer camps, social practice, and internships and hands-on training. Encourage university students in relevant fields to take advantage of their vacations to engage with local communities, conducting public‑service initiatives that disseminate securities and futures knowledge.

The China Securities Regulatory Commission is vigorously promoting the following initiatives:

1. Leverage the role of securities and futures investor education bases. In consultation with the education administrative departments of all provinces, autonomous regions, and municipalities directly under the central government, jointly develop a coordinated plan to make optimal use of these local investor education bases, offering free access to primary, secondary, and tertiary students as well as teachers, and providing essential hands-on training for students and professional development opportunities for educators.

2. Organize a series of public‑interest lectures on securities and futures. Leveraging the professional expertise of securities and futures offices, industry associations, and self‑regulatory organizations, we will conduct a comprehensive outreach program in universities and communities, disseminating basic knowledge about securities and futures and enhancing college students’ and the general public’s awareness of investment risks and their financial management skills.

3. Develop educational resources on securities and futures. Local securities regulatory authorities, in collaboration with their respective education administrative departments, shall, based on local conditions, convene experts from the securities and futures industry and education specialists to jointly compile public‑interest textbooks on securities and futures tailored to students’ cognitive development at different age stages. Furthermore, leveraging online learning platforms, they will partner with higher education institutions to develop multimedia learning resources and establish high‑quality open online courses, enabling diverse segments of society to engage in self‑directed learning.

Securities and futures regulatory authorities at all levels, together with education administrative departments, encourage and guide all sectors of society to increase resource investment, jointly strengthen oversight and management, and rigorously review and approve securities and futures awareness‑raising activities to ensure their public‑interest orientation and safeguard the normal educational and teaching order of schools. Activities aimed at primary and secondary school students must, in accordance with regulations, be reviewed and filed with the local education administrative department; they must not impose additional burdens on schools or teachers and students, nor may they involve the use of the national flag, red scarves, Youth League (or Young Pioneers) flags, or any other means of publishing—directly or indirectly—advertisements through textbooks, supplementary materials, workbooks, stationery, teaching aids, school uniforms, school buses, or similar items.

The China Securities Regulatory Commission has imposed administrative penalties on five cases in accordance with the law.

Recently, the China Securities Regulatory Commission (CSRC) imposed administrative penalties in accordance with the law on Ou Haiying for failing to disclose information as required and engaging in trading during a restricted period. The Commission ordered him to rectify his failure to disclose holdings exceeding the statutory threshold and his additional purchases made during the restriction period, issued a warning, and levied a fine of RMB 1 million. The Guizhou Securities Regulatory Bureau, acting in accordance with the law, imposed an administrative penalty on Huang Tinghai for short‑term trading of “Panjiang Shares,” issuing a warning and imposing a fine of RMB 30,000. The Beijing Securities Regulatory Bureau, also in accordance with the law, imposed administrative penalties on Zhou Xingang for failing to disclose information as required and for trading during a restricted period. The Bureau ordered him to correct his failure to disclose holdings exceeding the statutory threshold and his buying and selling of shares during the restriction period, issued a warning, and imposed a fine of RMB 7.5 million. The Shenzhen Securities Regulatory Bureau, likewise in accordance with the law, imposed administrative penalties on Fu Wei, Gui Zaiqun, and Gu Jun for failing to disclose information as required and for trading during a restricted period. The Bureau issued warnings for Fu Wei, Gui Zaiqun, and Gu Jun’s failure to disclose share reductions exceeding the statutory threshold and for their share sales during the restriction period, and imposed a combined fine of RMB 500,000 on Fu Wei and Gui Zaiqun, as well as a separate fine of RMB 500,000 on Gu Jun. The Shenzhen Securities Regulatory Bureau further imposed administrative penalties on Tianjin Dongjiang, Shang Yongqiang, and Chen Yifa for failing to disclose information as required and for trading during a restricted period. The Bureau issued warnings to all three and imposed fines of RMB 600,000 on Tianjin Dongjiang, RMB 900,000 on Chen Yifa, and RMB 100,000 on Shang Yongqiang, the directly responsible senior manager of Tianjin Dongjiang. (For details of the administrative penalty decisions, please refer to the websites of the CSRC and the relevant securities regulatory bureaus.)

In the aforementioned cases, Huang Tinghai, as a senior executive of Panjiang Co., Ltd., engaged in multiple trades of “Panjiang Co., Ltd.” shares within a six-month period, constituting short‑term trading as defined in Article 195 of the Securities Law. Ou Haiying and Zhou Xingang, as shareholders holding more than 5% of the listed company’s shares, failed to suspend trading and fulfill their disclosure obligations when their aggregate shareholding reached 5%. Youneng Holdings is a company listed on the New Third Board; Fu Wei, Gui Zaiqun, and Gu Junchao reduced their holdings in “Youneng Holdings” by exceeding the prescribed proportion, while Tianjin Dongjiang increased or reduced its holdings in “Youneng Holdings” by exceeding the prescribed proportion. Furthermore, Chen Yifa, upon increasing his holdings in “Youneng Holdings” by exceeding the prescribed proportion, likewise failed to suspend trading and comply with his disclosure obligations.

Major shareholders, directors, supervisors, and senior management of listed companies play a pivotal role in corporate governance. They are required to strictly comply with applicable laws and regulations, faithfully fulfill their information disclosure obligations, and actively uphold the integrity of information disclosure in the capital market. The China Securities Regulatory Commission will continue to enhance the effectiveness of administrative penalties, impose severe sanctions on violations of information disclosure rules, and thereby improve the overall quality of listed companies while safeguarding the legitimate rights and interests of small and medium-sized investors.

Jiulongshan National Tourism Case: The Supreme Court’s Final Judgment Sides the China Securities Regulatory Commission

Recently, the China Securities Regulatory Commission (CSRC) received a retrial judgment from the Supreme People’s Court, which upheld both the CSRC’s penalty decision and its reconsideration decision in the short‑term trading case involving Zhejiang Jiulongshan International Tourism Development Co., Ltd. (hereinafter “Jiulongshan International Tourism”). The judgment also afofficeed the first‑instance and second‑instance rulings issued by the Beijing No. 1 Intermediate People’s Court and the Beijing Higher People’s Court, respectively. As a result, the administrative litigation concerning Jiulongshan International Tourism’s illegal short‑term trading has concluded with a victory for the CSRC. The retrial judgment recognizes and supports the CSRC’s enforcement principles and standards regarding short‑term trading violations, provides a thorough interpretation of the constituent elements—namely, the subject matter, the parties involved, and the subjective intent—and further clarifies the compliance standards applicable to such trading activities. This ruling is of great significance in guiding and regulating investors’ lawful trading practices.

The retrial judgment held that the purpose of Article 47 of the Securities Law, which prohibits short‑term trading, is to prevent certain insiders of listed companies from exploiting their control or informational advantages to engage in rapid buying and selling of the company’s shares for improper gains, thereby effectively establishing a system of proactive prevention and deterrence against insider trading. The judgment further clarified that the determination of short‑term trading violations follows a simplified objective standard and applies the principle of strict liability; if, at the time of purchasing shares of a listed company, the actor was neither a director, supervisor, nor senior management personnel of the company, or if the actor only became a shareholder holding more than 5% of the shares as a result of such purchase, then, should the actor sell those shares within six months of the purchase while subsequently acquiring the aforementioned status, the provisions of Article 47 of the Securities Law shall apply.

Short-term trading violations undermine the principles of fairness, openness, and impartiality and harm the interests of a broad base of investors; they must be resolutely cracked down upon. The China Securities Regulatory Commission will continue to strengthen regulatory enforcement, severely punish securities law violations such as short-term trading, effectively safeguard the order of the securities market, and earnestly protect the legitimate rights and interests of investors.

Starting on the 18th, the STAR Market will begin accepting listing applications, with the entire submission process conducted electronically.

On the afternoon of March 16, the Shanghai Stock Exchange held a “Member Mobilization Conference for the Establishment of the STAR Market and the Pilot Registration System” on its fifth floor. Industry insiders have dubbed the event a full‑scale mobilization. With the STAR Market poised to open, the exchange is coordinating all stakeholders to make final preparations for its full‑scale launch.

On the afternoon of March 16, the “Member Mobilization Conference for the Establishment of the STAR Market and the Pilot Registration System” was held in the trading hall on the fifth floor of the Shanghai Stock Exchange. Huang Hongyuan, Chairman of the SSE, Lu Wenda, Chief Counsel, and other officials attended the meeting. Also present were senior representatives from the Institutional Department of the China Securities Regulatory Commission, the Securities Association, China Securities Depository & Clearing Corporation, as well as the heads of the various working groups under the Listing Guidance Department. The agenda began with a mobilization address by the SSE on advancing the STAR Market and the registration‑based IPO system. During this segment, the heads of the Enterprise and Issuance Readiness Group, the Listing Review Readiness Group, the Systems and Operations Readiness Group, the Training and Investor Education Group, and the Market Readiness Group (covering trading mechanisms and market supervision) each delivered remarks. The second item on the agenda featured speeches by representatives from ten member offices; the third was a discussion and exchange session; and the program concluded with addresses by five additional attendees. According to insiders, the symposium required the participation of senior executives from member institutions authorized to act as sponsors, and similar meetings may be convened in the future. Public records indicate that the SSE’s membership comprises 116 securities offices, including Guotai Junan, CITIC Securities, and CITIC Securities Investment. Yesterday’s meeting drew senior management from roughly one hundred brokerage offices. Sources suggest that this gathering was of a high level, effectively serving as a full‑scale mobilization conference.

The Shanghai Stock Exchange will soon establish a Self‑Regulatory Committee for the Public Offering of STAR Market Stocks. On the morning of March 16, the Exchange convened a symposium on underwriting for STAR Market stock offerings in its seventh‑floor conference room. Senior executives from various securities offices and heads responsible for investment banking attended to discuss related matters. According to reports, the symposium focused on two key issues: first, how to promote appropriate pricing in new STAR Market share issuances; and second, how to ensure the smooth and stable functioning of secondary‑market trading on the STAR Market. The aforementioned self‑regulatory committee will comprise representatives from the equity‑issuance sector and major market participants. It will carry out its duties through working meetings, providing advisory input on the formulation of policies related to STAR Market stock offerings and putting forward industry‑wide recommendations on underwriting matters. The establishment of this committee aims to fully leverage industry self‑regulation, foster sound and stable market expectations, and ensure the orderly and steady conduct of STAR Market stock issuance and underwriting activities. On the evening of March 15, the Shanghai Stock Exchange issued two sets of STAR Market business guidelines: the “Guidelines on Financial Reporting Information Disclosure for Innovative Pilot Red‑Chip Enterprises on the STAR Market” and the “Guide for Sponsors to Handle Business via the Shanghai Stock Exchange’s STAR Market Stock Issuance and Listing Review System.” Meanwhile, personnel arrangements for the leadership of the STAR Market Listing Review Center have been finalized: Li Weiyou, formerly Deputy Director of the Issuance Supervision Department of the China Securities Regulatory Commission, has joined the Shanghai Stock Exchange and assumed the role of Director of the STAR Market Listing Review Center. In accordance with previously released rules, the Shanghai Stock Exchange also plans to set up a Science and Technology Innovation Advisory Committee and a STAR Market Stock Listing Committee to rigorously review and approve companies seeking to list on the STAR Market.

The STAR Market has entered its final sprint before launch, with regulators, intermediary institutions, and prospective issuers all stepping up preparations. According to reports, on March 18, the Shanghai Stock Exchange’s STAR Market issuance and listing review system will officially open to submissions. This means that any documents submitted through the review system will be treated as formal applications for STAR Market stock issuance and listing. Unlike current filing procedures in other A-share market segments, the STAR Market has adopted a fully electronic submission process—covering everything from project application and acceptance to feedback, follow-up feedback, and review—all paperless. Sponsor offices need only upload relevant electronic materials via the SSE’s STAR Market review system. On March 18, training sessions for sponsor representatives will be held, with participation from all securities offices; attendees will primarily include senior management responsible for sponsorship and heads of investment banking departments. This training can be seen as a mobilization meeting marking the official commencement of project filings under the STAR Market regime. “This week, we’ve already been conducting material‑testing exercises with investment banks, and the submission interfaces are fully in place. By this weekend, we’ll clear out all test materials, after which the submissions we send in will be genuine, production‑ready filings,” an SSE official stated at a forum on the afternoon of March 15. Meanwhile, the Beijing Securities Regulatory Bureau recently issued a notice announcing that, effective March 18, it will begin accepting registration applications for pre‑listing guidance on the STAR Market from companies within its jurisdiction. Additionally, according to an announcement by the Shandong Securities Regulatory Bureau on March 14, Ruichuang Weina, which is seeking to list on the STAR Market, has completed its listing guidance, becoming the first such case in the market.

Commercial & Corporate

MIIT: Requires Tencent, Huawei, and others to comprehensively remove the “Social Security Mobile Service” app from app stores.

On March 16, the website of the Ministry of Industry and Information Technology announced that it would rigorously investigate and prosecute violations in the information and communications sector exposed during the “3·15” Gala. This year’s program highlighted several pressing issues: the illicit trade in medical waste; hazardous “la tiao” snacks; “makeup‑ed” farm eggs; unethical automated nuisance calls; the improper practice of piggybacking on qualifications; unsanitary hygiene products; pervasive after-sales service scams that masquerade as legitimate practices yet cannot be evaded; and the “714 high‑interest loan” scheme—where borrowers are pressured to pay at any cost. Among these, the problems of automated nuisance calls and apps’ indiscriminate collection of users’ personal data have drawn particular attention.

According to the Ministry of Industry and Information Technology’s website, in response to issues raised during CCTV’s “3·15” Gala, the ministry, together with relevant departments, has intensified efforts to curb nuisance calls, further strengthened the protection of personal information of telecom and internet users, rigorously investigated and penalized implicated enterprises in accordance with laws and regulations, and added violators to the list of entities with poor business practices in the telecommunications sector. Regarding the reported nuisance‑call problem, the website clarifies the following measures: First, basic telecom operators are immediately ordered to shut down the dedicated voice lines used by the companies mentioned in the report to make harassing calls, halt the unauthorized forwarding of offending numbers, and tighten the standardized management of communication resources. Second, call‑center operators cited in the report—namely Yige Technology, Yilong Xinke, Miaodi Technology, and Lingwo Network—are subject to verification and follow-up action. As for the issue of mobile apps collecting personal information, the following steps have been taken: First, a coordinated response mechanism involving app stores has been activated, requiring major domestic app stores—including Tencent, Baidu, Huawei, Xiaomi, OPPO, Vivo, and 360—to comprehensively remove the “Social Security on Your Palm” app from their platforms. Second, Hangzhou Dijin Network Technology Co., Ltd., the entity responsible for the “Social Security on Your Palm” app, is undergoing verification and enforcement. Third, similar apps are being systematically reviewed and tested, with all identified issues subject to corrective measures.

Regarding the next steps, the website explicitly states that efforts will be stepped up to curb nuisance calls and strengthen the protection of personal information in mobile apps. The Ministry of Industry and Information Technology, in coordination with relevant departments, will continue to advance a special campaign to comprehensively address nuisance calls, reinforce source‑level governance, and work together to sever the profit chains behind such calls, thereby fostering a healthy communications environment. Comprehensive inspections and cleanups will be carried out to prevent various communication resources from being misused for harassing calls. Voice‑dedicated lines will be strictly regulated, with rigorous scrutiny of violations involving the use of call‑transmission technologies to spoof caller IDs; all calls that fail authentication will be blocked. At the same time, the ministry will collaborate with the Cyberspace Administration of China, the Ministry of Public Security, the State Administration for Market Regulation, and other agencies to implement a targeted campaign addressing the illegal and non‑compliant collection and use of personal information by apps. Long‑term mechanisms will be further refined, with enhanced oversight through routine technical monitoring and ad hoc inspections, along with stronger enforcement and public disclosure of violations. Legislative efforts to protect personal information will be actively advanced to ensure that the collection and use of users’ personal data are conducted in full compliance with applicable laws and regulations.

Another major figure has been arrested following Quanjian.

On March 13, the Case Information Disclosure Website of the People’s Procuratorate announced that on February 18, 2019, after review, the People’s Procuratorate of Huanghua City lawfully approved the arrest of Liu Delin of Hebei Hualin Acid–Alkali Balance Biotechnology Co., Ltd. on suspicion of organizing and leading pyramid-scheme activities and concealing or intentionally destroying accounting books. Ni Zhonglin and Dong Lanying were also approved for arrest on the charge of concealing or intentionally destroying accounting books. Zou Longzhu, Liu Qing, Liu Yulong, Sun Shujie, Zuo Yingjie, Yao Hongyi, and Chang Yulian were approved for arrest on suspicion of organizing and leading pyramid-scheme activities. The case review is currently ongoing.

According to publicly available information from the Ministry of Commerce, the core entity involved in the case is Hebei Hualin Acid–Alkali Balance Biotechnology Co., Ltd., which obtained a direct-selling business license in February 2015. The company’s registered capital stands at RMB 85 million, with Liu Yulong holding a 52.7% stake and serving as the de facto controller. Jia Yongge holds 24.7%, while Tian Longqi owns 22.59%. However, according to Hualin’s official promotional materials, Liu Yulong serves only as vice chairman, whereas Liu Delin is the company’s chairman and holds a 5.9% equity interest in Hebei Hualin Mechanical Equipment Co., Ltd. Public records indicate that in his early years, Liu Delin worked as a health‑care physician for a township enterprise and later served as the director of a brick‑and‑tile factory. In 1994, when the local atmospheric‑pressure boiler plant underwent restructuring, Liu Delin bought out the enterprise’s ownership rights and renamed it Hebei Hualin Mechanical Equipment Co., Ltd.

Soon, the local alfalfa industry in Huanghua caught Liu Delin’s attention. During the SARS outbreak in 2003, he began exploring advanced processing of alfalfa products and, after numerous experiments, developed a nutritional health food he named the “Nutritional Metabolic Acid–Base Balance Regulator,” abbreviated as “Acid–Base Ping.” In 2015, Hualin obtained a direct‑selling business license and invited Professor Li Jianmin of Nankai University to endorse the “Acid–Base Ping” product. In Hualin’s promotional video, Li Jianmin is billed as a professor of biochemistry and molecular biology, a director on the New Dosage Forms Committee of the World Federation of Chinese Medicine Societies, a senior research fellow in applied science and technology in the United Kingdom, and the chief investigator for national key scientific‑technological projects spanning the Sixth Five‑Year Plan through the Fifteenth Five‑Year Plan—earning him the title “the Father of China’s Acid–Base Ping.” Meanwhile, within the academic community, the “acid–base body type” concept has long been dismissed as pseudoscience and has faced widespread criticism.

However, this has not affected Hualin’s business; its performance continues to climb steadily. At the Fifth Bo’ao Direct Selling Summit in November 2018, Hebei Hualin was awarded the “China Direct Selling Excellence Brand Award,” while Liu Delin received the “Entrepreneur of the Year” honor. According to data published on the Direct Selling DaoDao website, Hualin’s sales reached RMB 3.6 billion in 2016 and rose to RMB 3.9 billion in 2017, with cumulative sales totaling RMB 7.5 billion just two years after obtaining its direct selling license. The “health‑care empire” Quanjian boasts a signature “fire therapy,” claiming it can treat conditions ranging from brain atrophy and baldness to deafness, cervical erosion, kidney deficiency, erectile dysfunction, premature ejaculation, facial paralysis, constipation, and frozen shoulder—effectively purporting to cure virtually anything. Not surprisingly, Hebei Hualin also operates a similar “back‑to‑the‑body” business: its flagship product, the Acid–Alkali Balance DDS, is marketed as a bioelectric therapy device, a human meridian cell‑repair instrument, or even a “Suanjian Ping DDS” beauty and wellness massager.

And the inventor of this technology is none other than Chairman Liu Delin. According to Hualin Group’s official profile, Chairman Liu Delin holds an MBA from Tsinghua University, serves as a member of the Standing Committee of the Huanghua Municipal Political Consultative Conference, and has been recognized as an outstanding farmer‑entrepreneur in Hebei Province. Furthermore, according to publicly available patent‑search databases in China and several other countries, he holds at least three national patents related to “Suanjianping.” Meanwhile, according to information posted on the Ministry of Commerce’s official website for direct‑selling industry regulation, Hualin’s licensed direct‑selling products include only eight cosmetic items—such as the Suanjianping Whitening Body Lotion and the Suanjianping Magnetic Cleansing Gel—and that the so‑called Suanjianping therapeutic technology and associated therapy devices are not among the approved offerings.

The so‑called direct‑selling model has long been suspect. The Anti‑Monopoly and Anti‑Unfair Competition Enforcement Bureau of the State Administration for Market Regulation released its 2017 report on direct‑selling complaints, revealing that Hebei Hualin Acid–Alkali Balance Biotechnology Co., Ltd. topped the list with 33 complaints, surpassing Quanjian. Like most companies accused of pyramid schemes, members earn income not only from their own recruits but also from the new recruits those recruits bring in. At Hualin, Level C allows for nine tiers of recruitment, Level B ten tiers, and both Levels A and W eleven tiers—this compounding “money‑making‑money” scheme has drawn many participants. A Quanjian distributor once told AI Finance that Quanjian’s rewards amounted to 750 yuan per person, with a maximum of three recruitment levels—far below what Hebei Hualin offers. These pyramid schemes share similar selling points: they cloak themselves in the banner of inheriting traditional Chinese culture, don the guise of TCM, and masquerade behind Western medical theories and treatment devices, lulling people into believing they can survive for now—only to end up endangering their lives rather than curing them. On paper, they hold direct‑selling licenses registered with the Ministry of Commerce, yet behind the scenes they follow the same pyramid‑scheme playbook: product value is artificially inflated, and distributors’ earnings are tied not to actual sales but to recruiting new members.

Seeing him raise a towering edifice: Under Liu Delin’s leadership, Hualin transformed from a manufacturer of boiler equipment into a conglomerate dedicated to the “acid–alkaline balance” health industry. Seeing him host grand banquets: In the second year after obtaining its direct‑selling license, Hualin’s Acid–Alkaline Balance division posted sales of 3.6 billion yuan. Today, many can’t help but hope that his empire will come crashing down.

The trial in the Qualcomm–Apple patent infringement case has concluded, with Qualcomm ordered to pay $31 million in damages.

The patent dispute between Apple and Qualcomm has dragged on for a long time without resolution. At the end of last year, Munich, Germany, ruled that Apple had infringed on certain Qualcomm patents and granted Qualcomm’s request for a sales ban. Subsequently, Apple suspended sales of the iPhone 7 and iPhone 8 in Germany; however, it soon resumed selling iPhones equipped with Qualcomm chips.

According to foreign media reports, the trial in Qualcomm’s patent‑infringement lawsuit against Apple concluded Wednesday at the U.S. District Court in San Diego. During the proceedings, Qualcomm asserted that Apple had used its patents in certain iPhone models without authorization and sought $1.40 in damages per infringing iPhone, totaling $31 million. In its closing arguments, Qualcomm contended that Apple’s infringement centered on a specific device‑related patent. Apple countered that this patent was merely one of several held by a former engineer; however, Qualcomm’s legal counsel pointed out that the individual in question never claimed to be an inventor.

Ultimately, whether Apple will accept this request remains to be seen and will depend on how the situation unfolds.

This year, the central government plans to allocate 18 billion yuan in subsidies for the purchase of agricultural machinery.

This year, the state will continue to maintain a stable policy on subsidies for agricultural machinery purchases, with the central government planning to allocate 18 billion yuan to subsidize such acquisitions. At the National Conference on Spring Agricultural Production and the Transformation and Upgrading of Agricultural Mechanization held in Xiangyang City, Hubei Province, on the 16th, Han Changfu, Director of the Central Rural Work Office and Minister of Agriculture and Rural Affairs, stated that this year’s subsidy funds will prioritize green technologies and demand-driven needs, ensuring full coverage of eligible equipment—including machinery for conservation tillage, residual plastic film recovery, straw management, and the resourceful utilization of livestock and poultry manure—as well as new agricultural machines urgently required in hilly and mountainous areas and for specialized industries.

At the end of 2018, the State Council issued Guiding Opinions on Accelerating the Transformation and Upgrading of Agricultural Mechanization and the Agricultural Machinery Equipment Industry. In response, Han Changfu stated that agricultural and rural departments at all levels should ensure effective implementation, pushing forward the expansion of mechanization from the tillage, sowing, and harvesting stages to cover the entire process—including plant protection, drying, and straw management—while extending its reach from crop production to animal husbandry, fisheries, facility agriculture, and primary processing of agricultural products. Furthermore, mechanization efforts should be broadened from plain areas to hilly and mountainous regions, in coordination with the Ministry of Industry and Information Technology to promote high-quality development of the agricultural machinery equipment sector. He added that in 2019, support would be provided for deep loosening and land preparation on 140 million mu, with the goal of establishing 400 demonstration counties achieving full-process mechanization, and ensuring that the three major staple crops—wheat, corn, and rice—are essentially fully mechanized. Moreover, adapting to mechanization requirements should be set as a fundamental objective in areas such as variety approval and the reform of cropping systems, thereby fostering the integrated application of superior varieties, advanced practices, optimal land use, and appropriate machinery.

Han Changfu stated that, in the course of building high-standard farmland and advancing comprehensive rural land consolidation, “enabling agricultural machinery to operate in the fields” has been set as a key objective, with efforts focused on consolidating small plots into larger ones, leveling steep slopes, and straightening winding fields. Support is also being provided for hilly and mountainous areas to carry out “machinization‑friendly” upgrades to their farmland. At the same time, innovative measures are being introduced to promote the shared use of agricultural machinery, thereby better serving smallholder farmers.

Deepening the “capacity reduction” effort in the steel industry requires a three-pronged approach.

After three years of steadfast supply-side structural reform, the steel industry has already achieved ahead of schedule the target set in the 13th Five-Year Plan for reducing excess capacity, thereby laying a solid foundation for the sustained and sound development of China’s steel sector.

Cao Zhiqiang, a deputy to the 13th National People’s Congress from Hunan Valin Steel Group Co., Ltd., believes that as China’s industrialization and urbanization are essentially complete and its economic structure undergoes adjustment, the issue of excess steel capacity will persist in the future. He recommends consolidating the hard-won gains in capacity reduction by taking three measures: establishing a long-term mechanism to crack down on “strip‑steel” production; strengthening the review and oversight of capacity‑replacement projects; and enabling the government to play a leading role when market‑based mechanisms fail.

Li Jianyu, General Manager of Hualing Xianggang, stated that the company’s products are used in numerous “super‑projects” both at home and abroad, with production lines operating at full speed. Last year, Hualing Steel Group achieved revenues of RMB 120 billion and a profit of RMB 7.5 billion. In the view of Hualing’s employees, these results have been made possible by institutional mechanisms that promote quality improvement and efficiency gains, technological innovation, and market expansion.

Cao Zhiqiang believes that persisting in phasing out outdated production capacity, strictly prohibiting the addition of new capacity, cracking down hard on “strip steel,” and rigorously regulating capacity replacement are the foundations for China’s steel industry to advance toward high-quality development. To this end, he puts forward three recommendations: first, establish a long-term mechanism to combat “strip steel”; second, strengthen scrutiny and conduct targeted spot checks on capacity‑replacement projects; and third, leverage the “visible hand” to correct market failures.

It is recommended that the relevant authorities resolutely implement the eight-character policy of “consolidate, strengthen, upgrade, and unblock,” further tighten the capacity‑replacement ratio, abolish the vague so‑called “reduction‑based replacement” mechanism, and conduct special inspections on steel‑capacity replacement. For environmentally sensitive areas and regions subject to overall steel‑capacity controls, it is suggested that the state establish a special fund for capacity reduction and, through national buyback programs, phase out excess steel capacity, thereby effectively preventing such surplus capacity from being transferred across the country via capacity‑replacement policies and further enhancing the international competitiveness of China’s steel industry.

Audi vehicles are embroiled in an odor scandal; official customer service states that the odor poses no health risks.

Recently, several Audi owners have reported that persistent odors inside their vehicles, even after purchase, have failed to dissipate and are adversely affecting their health and that of their families.

Since 2013, Car Quality Network has received more than 400 complaints regarding severe interior odors in multiple Audi models, including the A6, A6L, A4L, A3, and Q5. In this period, on March 10, 2017, FAW-Volkswagen Automobile Co., Ltd. issued a statement acknowledging that some vehicles might experience internal odor issues caused by sound‑insulating materials, and offered owners free replacement of the relevant sound‑proofing components. Regarding the specific substances responsible for these odors and whether they pose any health risks, Audi’s official customer service responded: “Based on the information currently available, the sound‑insulating foam may affect driving comfort but does not compromise personal safety. The odor‑producing compounds are primarily small‑molecule substances such as carboxylic acids and ketones, which pose no harm to human health; customers can use the vehicle with confidence.”

Recently, an article titled “They All Bought Audis, They All Developed Leukemia—The Poisonous Cars That Are Destroying the Middle Class” published on the self-media account Youyou Luming has drawn widespread attention online. The piece cites numerous car owners who allege that they developed leukemia after purchasing and driving Audi vehicles with noticeable odors. Following the article, many readers commented that, after buying and using certain Audi models, they went on to suffer from leukemia, lymphatic system tumors, nasopharyngeal cancer, as well as symptoms like dizziness and nausea. For a time, Audi cars found themselves under intense public scrutiny.

On March 10, 2017, the Volkswagen Group (China), FAW-Volkswagen Automotive Co., Ltd., and SAIC Volkswagen Automotive Co., Ltd. issued a statement regarding the “joint implementation of a service campaign to ensure in‑vehicle comfort.” The statement indicated that the initiative aims to address potential interior odors caused by sound‑insulating materials in certain vehicles, thereby safeguarding occupants’ comfort. For vehicles affected by such odors, the aforementioned manufacturers will provide free replacement of the relevant sound‑insulating components. Specifically, this covers Audi models under FAW‑Volkswagen—namely the A4L (January 2013 to April 2016), Q5 (September 2013 to March 2016), and A3 (February 2014 to April 2016). According to the announcement, the replacement program was scheduled to begin in June 2017 and gradually extend to all affected models. However, some owners did not receive recall notifications until late 2018, while others reported still having received no notice to replace the sound‑insulating material as of today.

In fact, in‑car odors are a matter of industry practices and supply‑chain management. Many issues remain overlooked, and inadequate control at the source is a major factor behind problems at the end user. If the source is sound and properly managed, even companies seeking to procure substandard materials would find it difficult to do so, thereby preventing such adverse outcomes. Yet, at present, China’s technical standards for in‑vehicle air pollution are limited to the “Guideline for Evaluating In‑Vehicle Air Quality in Passenger Cars,” which was officially implemented in March 2012. This is merely an industry‑specific technical standard, not a mandatory regulation. Consequently, even when consumers detect obvious unpleasant odors or testing agencies independently identify formaldehyde levels exceeding the limit, this does not provide a legal basis for holding automobile manufacturers accountable.

To this end, industry insiders are calling for the urgent establishment of mandatory in‑vehicle air quality standards. Geely Chairman Li Shufu has proposed that China’s in‑vehicle air quality standards should promptly align with those of leading automotive nations and that the “Guideline for Evaluating In‑Vehicle Air Quality in Passenger Cars” should be upgraded from its current status as a recommended standard to a national mandatory standard. Notably, in January 2016, the Ministry of Environmental Protection released a draft of GB 27630‑201X, the “Guideline for Evaluating In‑Vehicle Air Quality in Passenger Cars,” which indicates that this standard will replace GB/T 27630‑2011, the previous guideline. Following revision, the new standard will continue to apply only to newly manufactured vehicles; however, it will transition from a recommended national standard to a mandatory one, with corresponding provisions amended and limits for certain pollutants adjusted. The specific date for its official implementation, however, remains undetermined.

Taxation TAXATATION

The State Taxation Administration has once again announced the cancellation of 15 tax certification requirements, further facilitating the implementation of tax and fee reductions.

To further implement the decisions and arrangements of the CPC Central Committee and the State Council on tax and fee reductions and streamlining procedures to better serve the public, as well as the requirements set forth in the 2019 Government Work Report for deepening administrative streamlining and delegation of powers, the State Taxation Administration, following its decision at the end of 2018 to abolish 20 tax‑related certification requirements, issued on March 8 the “Decision on Abolishing a Batch of Tax‑Related Certification Requirements” (hereinafter referred to as the “Decision”), announcing the elimination of 15 such requirements, primarily pertaining to the processing of tax incentives.

According to the head of the Policy and Regulations Department of the State Taxation Administration, ensuring that tax and fee reduction policies and measures are effectively implemented is the central theme of tax work in 2019. Further abolishing a batch of tax‑related certification requirements is an important step toward making these reductions simpler, more convenient, and easier to administer. The recently announced removal of 15 tax‑certification items will significantly streamline procedures for taxpayers seeking tax reductions, exemptions, or refunds, thereby ensuring that tax and fee cuts are delivered in a tangible, concrete manner.

According to reports, the 15 tax‑related certification requirements that have been abolished this time include five items that previously required taxpayers to obtain certificates from third parties—for example, when applying for a reduction or exemption of vehicle and vessel tax, taxpayers had to submit proof of financial hardship due to natural disasters issued by the relevant authorities; and when seeking an exemption from withholding resource tax, they were required to provide resource tax administration certificates obtained from the seller. The remaining ten items were documents and credentials that taxpayers were originally required to furnish themselves, such as the vehicle and vessel ownership certificate when applying for an exemption from vehicle and vessel tax, or the certificate of discharge from active duty when claiming tax relief for demobilized soldiers pursuing self‑employment.

The 15 tax‑related certification requirements that have been abolished this time not only ease the burden on businesses but also closely affect the daily lives of the general public, thereby reducing the administrative burden on individual taxpayers. For example, the requirement for a notarized certificate to qualify for personal income tax exemption on inherited real estate has been eliminated, as has the obligation for persons with disabilities and purchasers of new‑energy vehicles to provide identity documents when applying for relevant tax reductions or exemptions, among other measures.

In recent years, as part of the ongoing “delegation, regulation, and service” reform, tax authorities have actively transformed their tax administration approach, striving to establish and refine a new taxpayer‑administration relationship based on the presumption of good faith. This has enabled credit‑based supervision, risk management, and big‑data analytics to play an even greater role, creating favorable conditions for further reducing the submission of tax‑related documentation and shortening processing times. Following the abolition of 20 tax‑related certification requirements at the end of 2018 and the latest removal of 15 such items, the supporting documents that are no longer required can, in some cases, be replaced by inter‑agency information sharing—for example, certificates for science and technology business incubators and university science parks; in other cases, they can be substituted by taxpayers’ self‑certifications, such as proof of financial hardship; and in most instances, taxpayers may simply retain these documents for their own records, including identity proofs, institutional certifications, or approval documents.

Zhang Bin, a researcher at the Institute of Financial Strategy of the Chinese Academy of Social Sciences, believes that although a single certificate may seem minor, it is crucial for bridging the “last mile” in implementing tax and fee reductions, for ensuring tangible convenience for both the public and businesses, and for enhancing taxpayers’ sense of gain from these policies. Following the abolition of 20 tax‑related certification requirements at the end of 2018, the latest round of such eliminations once again underscores the tax authorities’ unwavering commitment to continuously improving the tax‑related business environment and vigorously advancing the effective implementation of tax and fee reduction measures.

The Decision emphasizes that tax authorities at all levels must earnestly implement measures to abolish tax‑related certification requirements, refrain from retaining such requirements or circumventing them in disguised forms, and proactively address the concerns of businesses and the public. It calls for further streamlining the submission of tax‑related documentation to ensure taxpayers experience tangible benefits. A responsible official from the State Taxation Administration stated that the Administration will continue to introduce more concrete, robust facilitation measures, fully supporting the effective implementation of policies and measures to cut taxes and fees, while further optimizing tax enforcement, strengthening credit‑based regulation, ensuring fair oversight, and enhancing inter‑agency joint supervision. These efforts aim to better stimulate the vitality of market entities and foster a law‑based, convenient, and high‑quality tax business environment.

Optimizing the tax-related business environment to support the sustained development of foreign investment in China.

In recent years, in accordance with the decisions and arrangements of the CPC Central Committee and the State Council, the tax authorities, in collaboration with relevant departments, have introduced a series of tax policies designed to boost foreign investment and promote high-quality economic development. At the same time, they have continuously advanced the “delegation, regulation, and service” reform within the tax system, strengthened international tax cooperation, and enhanced taxpayer services, thereby creating a favorable environment for foreign investors and fostering sustained, healthy economic and social development. By leveraging their core functions, the tax authorities have actively coordinated with other agencies to roll out various tax‑reduction and fee‑cutting measures targeted at foreign investors, playing an increasingly pivotal role in optimizing the tax‑related business environment and in stabilizing foreign investment while advancing trade liberalization and investment facilitation.

— Introduction of preferential tax and fee reduction policies for foreign investors. In 2017, the State Council issued the “Notice on Several Measures to Promote Foreign Investment,” outlining three tax‑related measures to sustain the growth of foreign capital. In accordance with this document, the State Taxation Administration, in coordination with relevant departments, implemented a deferred‑tax policy for overseas investors who reinvest profits distributed by Chinese resident enterprises into encouraged‑category projects, temporarily suspending withholding income tax to encourage continued expansion of foreign investment in China. To further incentivize foreign investment, in 2018 China broadened the scope of this deferred‑tax treatment from encouraged‑category projects to all non‑prohibited foreign‑invested projects and sectors; at the same time, it granted temporary exemptions from corporate income tax and value‑added tax on bond interest earned by overseas institutions investing in the domestic bond market, thereby combining incentives for both indirect and direct investment. According to statistics, in 2018 nearly 500 enterprises benefited from the deferred‑tax policy, with dividend payments totaling approximately RMB 48 billion and deferred tax liabilities or refunds exceeding RMB 4.7 billion.

— Improving tax support policies in key areas. Recognizing that foreign investment, particularly major foreign‑invested projects, is concentrated in high‑tech sectors and involves substantial R&D expenditures, the tax authorities, in accordance with the State Council’s directives, have collaborated with relevant departments to introduce and refine a series of tax policies targeting priority sectors, with a particular focus on providing tax incentives for high‑tech enterprises. In recent years, the tax authorities, together with the Ministry of Finance and the Ministry of Science and Technology, have continuously refined the administrative measures for the recognition of high‑tech enterprises, enhancing the efficiency of the recognition process, streamlining procedures, and effectively reducing the tax compliance costs for foreign‑invested high‑tech offices. In July 2018, the State Taxation Administration, in coordination with the Ministry of Finance, issued a document extending the carryforward period for losses incurred by high‑tech enterprises and technology‑based SMEs from five to ten years, thereby further alleviating concerns among foreign investors in high‑tech fields. In March 2018, the Ministry of Finance, the State Taxation Administration, and the China Securities Regulatory Commission jointly issued a notice stipulating that, for eligible overseas institutional investors, income derived from trading crude oil futures within China (excluding income from physical delivery) would be temporarily exempt from corporate income tax; furthermore, starting from the date when crude oil futures were opened to international participation, personal income derived by overseas individual investors from investing in Chinese crude oil futures would be exempt from personal income tax for a period of three years. These measures have helped promote the opening and development of the crude oil futures market and have been warmly welcomed and highly praised by foreign investors. Following the release of the operational guidelines for universal tax reductions benefiting small and micro enterprises, tax authorities at all levels promptly strengthened policy publicity, guidance, and interpretation, conducted specialized training for 12366 hotline staff and frontline service personnel, and employed various approaches to inform and advise taxpayers who are expected to qualify for the preferential treatment.

— Striving to eliminate international double taxation. In recent years, the State Taxation Administration has intensified efforts to negotiate and conclude tax treaties, accelerating the expansion and refinement of its treaty network. To date, China has concluded tax treaty arrangements with 111 countries (and regions). The Administration has also actively engaged in mutual agreement procedures with the competent tax authorities of other countries, jointly resolving cross-border tax disputes and effectively reducing compliance costs and the risk of double taxation. From 2016 to 2018, the Administration reached 94 bilateral tax consultations with countries including the United States, Japan, South Korea, Singapore, and Switzerland, comprising 31 bilateral advance pricing arrangements and 63 mutual agreement cases. These efforts have helped cross-border taxpayers avoid approximately RMB 10 billion in double taxation, playing a positive role in optimizing the tax business environment, promoting stable growth in foreign investment, and supporting enterprises’ international expansion.

— Providing high-quality, convenient tax services to foreign investors. To deliver more precise and efficient support to foreign-invested enterprises, the tax authorities have adopted an “Internet Plus” approach, leveraging online platforms and channels such as WeChat, Weibo, and mobile apps to offer a variety of tax‑related services. For example, a dedicated hotline for the Belt and Road Initiative has been established on the national 12366 taxpayer service line, and the 12366 Shanghai (International) Taxpayer Service Center has been set up to coordinate with relevant departments in providing tailored, cross‑border tax advisory services. At present, the tax authorities are vigorously advancing a new round of reforms to further streamline tax‑filing procedures, striving to ensure that businesses—including foreign‑invested enterprises—can fully benefit from tax cuts and fee reductions. Under this year’s “Spring Breeze Action” for Convenient Tax Services, by 2019 the volume of documentation required from taxpayers, including foreign‑invested enterprises, will be further reduced by more than 25%, and over 70% of tax‑related matters will be resolved in a single visit. In addition, a “commitment‑based” deficiency‑acceptance mechanism has been introduced for processes such as tax deregistration: when foreign‑invested enterprises submit incomplete documentation, they may proceed immediately upon making a written commitment, thereby balancing the promotion of foreign investment with the protection of their right to orderly tax‑deregistration. Furthermore, the approval requirement for consolidated corporate income tax filing by non‑resident enterprise branches and establishments has been abolished, and clear operational guidelines for such consolidated filing have been issued, continuously unleashing and invigorating market vitality.

— Building a multilateral tax cooperation mechanism. As the Belt and Road Initiative advances to broader scope, higher standards, and deeper levels, establishing a long-term mechanism for tax cooperation has become increasingly essential. Based on the consensus among all parties to strengthen tax cooperation under the Belt and Road framework, the Belt and Road Tax Cooperation Conference opened in Astana, the capital of Kazakhstan, in May 2018. With the theme “Jointly Building the Belt and Road: Tax Coordination and Cooperation,” the conference adopted the Astana Initiative on Belt and Road Tax Cooperation, reaching important agreements on setting up a dedicated tax cooperation mechanism. In November 2018, the 48th Annual Meeting of the Asian Organization for Tax Administration and Research (SGATAR) was held in Hangzhou, China. “Taxation Services for the Belt and Road” was one of three main agenda items, drawing significant attention and strong support from participating delegates. SGATAR member countries generally agreed that the Belt and Road Initiative contributes to sound, sustainable, and inclusive regional and global economic development, and expressed their anticipation for enhanced tax cooperation within this framework. According to data from the Ministry of Commerce, in 2018, China’s actual utilization of foreign investment reached US$134.97 billion, up 3% year on year. Among this, direct foreign investment from countries along the Belt and Road totaled US$6.45 billion, an increase of 16% compared with the previous year, demonstrating robust growth momentum. A responsible official from the State Taxation Administration stated that the tax authorities will continue to implement the decisions and arrangements of the CPC Central Committee and the State Council, ensuring synergy between tax policies and tax administration. By leveraging industry‑specific policy guidance, they will integrate foreign investment into the overall national economic development strategy, continuously improve tax services, actively promote foreign investment, safeguard the legitimate rights and interests of foreign investors, and help foster a new pattern of comprehensive opening-up.

The State Taxation Administration has issued the “Notice on Effectively Implementing the 2019 VAT Reform Measures.”

On the morning of March 5, Premier Li Keqiang, on behalf of the State Council, delivered the Government Work Report at the Second Session of the 13th National People’s Congress, emphasizing the need to implement larger-scale tax cuts and outlining specific plans and requirements for deepening VAT reform in 2019. To ensure that measures such as reducing the VAT rate are put into effect on schedule and take root, the State Taxation Administration promptly issued the “Notice on Doing a Good Job in Deepening VAT Reform in 2019” (hereinafter referred to as the “Notice”), setting forth 12 concrete measures across three key areas: pooling reform efforts, solidifying reform initiatives, and guaranteeing tangible results. An official from the State Taxation Administration stated that the tax authorities will fully implement the tax‑cut arrangements for deepening VAT reform as outlined in the Government Work Report, thereby supporting China’s high‑quality economic development.

The Notice requires tax authorities at all levels to strengthen organizational leadership, further enhance the proactiveness and forward-looking nature of their work, and focus on establishing a mechanism that ensures effective implementation from top to bottom. It emphasizes that the principal leader must assume overall responsibility, leveraging the leading group for implementing tax and fee reductions as a platform to clearly define responsibilities, refine task lists, adhere to key timelines, and advance work by benchmarking against established standards. Higher standards must be set for ideological awareness, policy implementation, tax administration and accounting, service and publicity, and supervision and follow-up. In line with the principle of simplicity, practicality, and ease of execution, operational procedures should be refined and made more concrete, thereby enhancing the scientific rigor, targeted approach, and effectiveness of the work.

The Notice requires tax authorities at all levels to further strengthen the taxpayer‑centered approach, address pain points and bottlenecks in taxpayers’ administrative processes through comprehensive measures and innovative service delivery, and strive to provide higher‑quality, more convenient tax services. The State Taxation Administration will guide localities in optimizing tax administration services, closely aligning with taxpayers’ needs and addressing their concerns. Tax authorities at all levels must ensure that, following the implementation of relevant policies, taxpayers can issue VAT invoices promptly, accurately, and smoothly.

With regard to the training and guidance that taxpayers are widely concerned about, the Notice requires tax authorities at all levels to prioritize strengthening such efforts and to organize both internal training within the tax system and outreach programs for taxpayers. The State Taxation Administration will conduct “end-to-end” video‑based training sessions, while relevant business departments will promptly review and address frequently asked and complex issues, ensuring consistent guidance across service halls, the 12366 hotline, and other channels. Tax authorities at all levels should, in light of local conditions, provide comprehensive, phased, and targeted policy briefings as well as practical, hands‑on training, with particular emphasis on facilitating the smooth transition between old and new policies, helping taxpayers apply the regulations accurately, and ensuring the steady and orderly implementation of reforms.

To effectively establish a robust “iron ledger” for tax‑reduction accounting, the State Taxation Administration has formulated a plan for follow‑up statistical accounting and impact analysis, outlining arrangements and setting requirements for provincial tax authorities to utilize the analytical platform in conducting tax‑reduction statistics, accounting, and effect assessments. The Notice mandates that tax authorities at all levels, with a focus on the outcomes of the VAT reform, refine their statistical accounting to high standards, strengthen data quality, and comprehensively reflect the reform’s results.

Hong Kong Property Market: Vacancy Tax Is Coming

In Hong Kong, where one can barely afford a small apartment after nearly two decades of not eating or drinking, the vacancy tax—dubbed the “property‑price killer”—is set to be officially imposed. According to reports, the draft legislation for the vacancy tax has largely been finalized and is slated to be submitted to the Legislative Council for deliberation next month. Since the Hong Kong SAR government introduced the first‑hand property vacancy tax last June, the local housing market has gradually entered a downward trend. Industry observers believe that even before its formal implementation, the vacancy tax has already exerted a deterrent effect on the market. Meanwhile, although there have been strong calls for such a measure on the Chinese mainland, difficulties in defining an appropriate vacancy rate have delayed progress, leaving no immediate prospect of adopting a similar policy.

On June 28 last year, Hong Kong introduced a vacancy tax, imposing an “additional rates charge” on newly built private residential units that have remained vacant for more than six months and are neither occupied nor rented out. The charge amounts to 200% of the unit’s rateable value—roughly equivalent to two years’ rent and about 5% of the property’s market price. At the time, Hong Kong’s housing prices were soaring: since early 2016, home prices had risen for 25 consecutive months, with a cumulative increase of 38.5%, and had set new record highs for 18 straight months. It is worth noting that Hong Kong’s current residential vacancy rate remains relatively low; the vacancy rate for private homes fell from 4.3% at the end of 2012 to 3.7% at the end of 2017. However, this vacancy tax applies only to newly built properties, targeting developers who hold back supply, which distinguishes it from policies in other jurisdictions that impose taxes on both new and existing homes.

Former Vice Minister of the Ministry of Housing and Urban–Rural Development, Qiu Baoxing, has publicly stated that China’s housing vacancy rate is relatively high, varying significantly across cities—for example, Ordos registers a vacancy rate of 70%, while Beijing’s stands at roughly 15% to 20%. Internationally, countries that impose vacancy taxes typically see vacancy rates hovering around 5%. According to the “2017 Analysis of Urban Housing Vacancy in China” report released by the China Household Finance Survey and Research Center at Southwestern University of Finance and Economics, more than 80% of Chinese households own their homes, with an urban housing vacancy rate of 21.4%; the situation is even more severe in second- and third-tier cities, posing risks that cannot be ignored. In 2011, 2013, 2015, and 2017, urban housing vacancy rates were 18.4%, 19.5%, 20.6%, and 21.4%, respectively. By 2017, there were 65 million vacant housing units nationwide in urban areas. Under commonly accepted international standards, a vacancy rate below 10% is considered reasonable, indicating a basic balance between housing supply and demand; a rate between 10% and 20% falls into a risk zone; and a rate exceeding 20% signals severe inventory buildup.

Industry insiders say that imposing a vacancy tax on the mainland is necessary but difficult to implement. First, there is no reliable way to track vacant properties; second, defining what constitutes a property left vacant for more than six months—something relatively straightforward in Hong Kong—is particularly challenging on the mainland. Consequently, the mainland is unlikely to introduce such a tax for now. Meanwhile, as the Two Sessions are deliberating the rollout of a property tax, there is no need to simultaneously impose two major taxes. In Hong Kong, the vacancy tax is primarily targeted at developers.

Conditions for foreign nationals to be exempt from individual income tax have been relaxed, with new regulations from the fiscal and tax authorities sending a signal to attract talent.

On the 16th, the Ministry of Finance and the State Taxation Administration issued a public announcement: they have further relaxed the eligibility criteria for the personal income tax exemption on overseas-source income paid from abroad, sending a strong signal that China is stepping up efforts to attract talent from overseas, including Hong Kong, Macao, and Taiwan. The announcement takes effect on January 1, 2019.

Effective January 1 of this year, the new Individual Income Tax Law has revised the residency‑based criterion for determining resident status from a continuous stay of one year within China to 183 days.

The “Announcement of the Ministry of Finance and the State Taxation Administration on the Criteria for Determining the Length of Residence of Individuals Without a Domicile in China,” jointly issued this time, further clarifies that the newly implemented Regulations on the Implementation of the Individual Income Tax Law continue to maintain the original provision exempting foreign-source income paid from abroad from taxation, while further relaxing the conditions for such tax exemption:

First, the tax exemption requirement has been relaxed from a period of less than five years of residency to a continuous period of less than six years.

Second, in any given year, if an individual is absent from the country for more than 30 days on a single occasion, the period of continuous residence will be recalculated.

Third, the management procedure has been changed from requiring approval by the competent tax authority to a filing requirement, thereby streamlining the process and enhancing convenience for taxpayers.

Officials from the Tax Policy Department of the Ministry of Finance, the Income Tax Department of the State Taxation Administration, and the International Tax Department of the State Taxation Administration stated that, following this adjustment, the tax‑exempt treatment for foreign‑source income earned by non‑residents working in China—including residents of Hong Kong, Macao, and Taiwan—has become even more favorable than before, thereby attracting greater foreign investment and encouraging expatriates to work in China.

The announcement also stipulates that the starting point for the six-year consecutive period of residing in China for a cumulative total of 183 days or more shall be calculated beginning with the year 2019 (inclusive) and thereafter. Officials from the Tax Policy Department of the Ministry of Finance, the Income Tax Department of the State Taxation Administration, and the International Tax Department of the State Taxation Administration explained that this means any years of residence prior to and including 2018 are entirely “reset to zero” and will not be counted; furthermore, for all individuals without a domicile who have resided in China for fewer than six years as of 2024 (inclusive), their foreign-sourced income paid from abroad will qualify for tax exemption. In addition, starting in 2019, if an individual’s stay outside China exceeds 30 days in any given year, the previously accumulated continuous period of residence will be reset to zero and recalculated from that point forward.

Litigation & Arbitration

Draft Foreign Investment Law: Ushering in an “Upgraded Version” of Opening-Up to the Outside World

After two rounds of deliberation and revision, the Draft Foreign Investment Law of the People’s Republic of China was publicly presented at the Second Session of the 13th National People’s Congress. Reform is advanced under the rule of law, and the rule of law is improved through reform. During the deliberations, the majority of deputies agreed that considering the Foreign Investment Law at the first National People’s Congress held after the 40th anniversary of reform and opening-up underscores China’s unwavering will and office resolve to further open up in the new era, marking a significant and far-reaching “new step” in deepening reform and opening-up through legislation.

Foreign investment has been pivotal to China’s economic transformation over the past four decades of reform and opening-up. Since the 18th National Congress of the Communist Party of China, the Party Central Committee with Comrade Xi Jinping at its core has adopted a series of major policy decisions and arrangements to expand opening-up and promote foreign investment, emphasizing that China’s door of openness will not close—it will only open wider. High‑level opening-up cannot be achieved without a rule-of-law framework that aligns with international norms.

Treating domestic and foreign-invested enterprises equally is a policy that China has consistently upheld. This year’s Government Work Report emphasized accelerating alignment with internationally accepted economic and trade rules, and fostering a fair market environment in which domestic and foreign‑invested enterprises are treated equally and compete on a level playing field. For a long period since the launch of reform and opening-up, foreign investors seeking to enter the Chinese market for investment and operations were required to obtain approval from relevant government authorities. This process not only entailed submitting extensive documentation but also involved time‑consuming, item‑by‑item reviews, leading to widespread complaints about the burdensome nature of such procedures. The draft Foreign Investment Law currently under deliberation stipulates that China will adopt a pre‑entry national treatment regime combined with a negative list system for foreign investment, thereby abolishing the case‑by‑case approval model. Sectors where foreign investment is prohibited or restricted will be explicitly listed, while all other areas will be fully open, ensuring that domestic and foreign investors enjoy equal treatment.

The vitality of the law lies in its implementation. Zhou Guangquan, Vice Chairman of the Constitution and Law Committee of the National People’s Congress, stated that if the draft law is adopted smoothly, “the negative list must not only be adjusted dynamically but also become progressively shorter.” Local governments must set a leading example in enforcing the Foreign Investment Law and ensure the stability and continuity of foreign‑investment policies. In addition to shortening the negative list, other provisions in the draft—such as those guaranteeing equal treatment for both domestic and foreign‑invested enterprises—have also drawn significant attention. During deliberations, many deputies and committee members noted that the draft specifically incorporates measures ensuring that foreign‑invested enterprises can participate equally in standardization efforts, compete fairly in government procurement, and enjoy the same state support for enterprise development as their domestic counterparts.

Since the launch of reform and opening-up, China has established a legal framework for foreign investment centered on the three laws governing foreign-invested enterprises—namely, the Law on Sino‑Foreign Joint Ventures, the Law on Foreign‑Invested Enterprises, and the Law on Sino‑Foreign Cooperative Ventures—which has provided institutional safeguards for expanding openness and actively leveraging foreign capital. According to data, by the end of November 2018, the cumulative number of foreign‑invested enterprises established under these three laws had reached 950,000, with total utilized foreign investment exceeding US$2 trillion, making foreign investment a key driver of China’s economic and social development. However, as both the domestic and international environments have evolved, the “three laws” have increasingly struggled to meet the requirements of building a new, open‑economy system.

To ensure that the legal framework governing foreign investment keeps pace with the times and continues to improve, there is an urgent need to enact a new foundational law on foreign investment. The draft bill draws on the fundamental lessons learned from China’s 40 years of opening-up, aligning with international norms and the foreign investment regulations of major economies in areas such as national treatment, information reporting, and security reviews. This represents a crucial step toward refining the legal system for foreign-related matters, fostering foreign investment, and further expanding opening-up, and it will undoubtedly serve as a powerful tool for China’s steadfast commitment to opening-up and its drive to advance governance based on the rule of law. With the draft Foreign Investment Law now submitted to the National People’s Congress for deliberation, China’s determination to deepen its opening-up will be enshrined in law, reflecting the collective will of the people. We can expect the world to view China in an even more positive light.

Aligning Goals with Needs: Concurrent Legislation and Oversight for Environmental Protection

2018 marked the first year of the 13th National People’s Congress and its Standing Committee exercising their duties in accordance with the law. At the two press conferences on NPC work held during the recently concluded Two Sessions of 2019, whether discussing the new NPC’s legislative or oversight work, issues related to ecological civilization and environmental protection stood out as a particularly commendable achievement. From March 11, 2018, when the First Session of the NPC Standing Committee voted to adopt constitutional amendments that enshrined ecological civilization in the Constitution for the first time, to December 29, when the Seventh Session adopted decisions amending seven laws, including the Environmental Impact Assessment Law and the Law on the Prevention and Control of Environmental Noise Pollution.

Throughout the year, environmental legislation kept lawmakers busy from start to finish. Yet, if one were to single out the most significant piece of environmental legislation enacted that year, it would undoubtedly be the Soil Pollution Prevention and Control Law. On August 31, 2018, the Fifth Session of the Standing Committee of the National People’s Congress adopted this law, the product of a decade-long effort. As the ancients said, “All things spring from the soil.” Preventing and controlling soil pollution is a matter of paramount importance, ensuring that the public can eat with confidence and live in peace of mind. With this law in place, we now have robust legal support to wage the battle for clean land. Moreover, in the Five-Year Legislative Plan published by the Standing Committee of the 13th National People’s Congress, several other initiatives directly related to the ecological environment were also listed: the enactment of the Yangtze River Protection Law, as well as amendments to the Law on the Prevention and Control of Environmental Pollution by Solid Waste and the Law on the Prevention and Control of Environmental Noise Pollution, all designated as top-priority legislative projects. In December of the same year, the draft Civil Code—specifically its sections on contracts and tort liability—entered its second reading, with provisions addressing environmental tort liability and related issues. High‑quality legislation, however, requires equally high‑quality implementation, which in turn hinges on effective oversight.

This year, oversight of ecological and environmental protection has remained stringent from spring through winter. The Standing Committee of the National People’s Congress conducted enforcement inspections of the Law on the Prevention and Control of Air Pollution and the Law on the Protection of the Marine Environment, heard the State Council’s report on the 2017 environmental situation and the achievement of environmental targets, reviewed the report on the enforcement inspection of the Law on the Prevention and Control of Environmental Pollution by Solid Waste, and examined the report on the handling of deliberative opinions. Notably, the Standing Committee also convened, for the first time in its history, a special session to hear the enforcement‑inspection report on the Law on the Prevention and Control of Air Pollution, held a focused inquiry, and adopted the Resolution on Comprehensively Strengthening Ecological and Environmental Protection and Lawfully Advancing the Tough Battle Against Pollution, thereby leveraging legal instruments to advance pollution control.

Looking ahead to 2019, the Yangtze River Protection Law has been included in the legislative work plan, and enforcement inspections of the Water Pollution Prevention and Control Law will be a top priority of this year’s oversight efforts. The upcoming enforcement inspection of the Water Pollution Prevention and Control Law will focus on systematically gathering information on issues in the Yangtze River Basin and soliciting public input, thereby advancing the legislative process for the Yangtze River Protection Law and enhancing the effectiveness of oversight. To win the tough battle against pollution, the 13th National People’s Congress and its Standing Committee have pursued both legislation and oversight, harnessing the power of the rule of law to ensure that green remains the defining feature of development.

The Law on Compulsory Enforcement has been included in the legislative agenda of the Standing Committee of the National People’s Congress.

On the afternoon of March 12, the Press Center of the Second Session of the 13th National People’s Congress held a press conference, inviting Liu Guixiang, a vice-ministerial‑level full‑time member of the Judicial Committee of the Supreme People’s Court; Wu Xielin, President of the Fujian Provincial Higher People’s Court; and Ge Xiaoyan, President of the Jiangxi Provincial Higher People’s Court, to answer questions from Chinese and foreign journalists on issues related to “making decisive progress in fundamentally resolving difficulties in enforcement.” In his response, Liu Guixiang, a vice-ministerial‑level full‑time member of the Judicial Committee of the Supreme People’s Court, emphasized that we must remain steadfastly committed to the goal of effectively addressing enforcement difficulties—without slackening, wavering, or losing resolve—and continue to exert sustained effort, pursuing concrete actions and tackling challenges head‑on. To this end, we have formulated a comprehensive plan for the next phase. First, we have drawn up a five‑year work program to advance efforts to resolve enforcement difficulties, covering reforms of the enforcement system, innovations in enforcement models, and the upgrading and modernization of information technology, among other areas. Second, relevant authorities are currently developing strategies and policy recommendations aimed at addressing enforcement difficulties at their root. Third, the people’s courts will implement measures to further enhance the overall competence of the enforcement workforce, seeking to remedy the current mismatch between the capabilities of enforcement personnel and the demands of enforcement work. According to him, the Law on Compulsory Enforcement has already been included in the legislative agenda of the Standing Committee of the National People’s Congress. In accordance with the Standing Committee’s requirements, the Supreme People’s Court is vigorously drafting this law, with the aim of submitting it to the National People’s Congress by the end of this year. In addition, work is underway to improve the corporate bankruptcy regime, which is closely linked to compulsory enforcement, as well as to explore the establishment of a personal bankruptcy system. Overall, we have adopted a holistic approach to advancing enforcement work in the next stage, and we will intensify our efforts without any reduction in the current momentum, striving to make tangible progress toward effectively resolving enforcement difficulties.

Other

The Second Session of the 13th National People’s Congress concluded in Beijing.

The Second Session of the 13th National People’s Congress concluded at the Great Hall of the People on the morning of the 15th, having successfully completed all its agenda items.

At the meeting, a resolution on the Report on the Work of the Government was adopted by vote. The resolution noted that the meeting fully endorsed the State Council’s work over the past year, approved the overall requirements, policy orientations, goals, tasks, and key priorities for economic and social development in 2019 as set forth in the report, and decided to adopt the report.

The meeting adopted the Foreign Investment Law by vote. The Foreign Investment Law shall come into force on January 1, 2020.

The session voted to adopt the Resolution of the Second Session of the 13th National People’s Congress on the Implementation of the 2018 Plan for National Economic and Social Development and the 2019 Plan for National Economic and Social Development, decided to approve the Report on the Implementation of the 2018 Plan for National Economic and Social Development and the Draft 2019 Plan for National Economic and Social Development, and approved the 2019 Plan for National Economic and Social Development. It also voted to adopt the Resolution of the Second Session of the 13th National People’s Congress on the Implementation of the 2018 Central and Local Budgets and the 2019 Central and Local Budgets, decided to approve the Report on the Implementation of the 2018 Central and Local Budgets and the Draft 2019 Central and Local Budgets, and approved the 2019 Central Budget.

The meeting voted to adopt the Resolution of the Second Session of the 13th National People’s Congress on the Work Report of the Standing Committee of the National People’s Congress. The resolution stated that the meeting fully commended the work of the Standing Committee of the National People’s Congress over the past year, approved the major tasks and work arrangements for the coming year as set forth in the report, and decided to ratify the report.

At the meeting, by vote, the Resolution on the Work Report of the Supreme People’s Court and the Resolution on the Work Report of the Supreme People’s Procuratorate submitted to the Second Session of the 13th National People’s Congress were adopted, and it was decided to approve both reports.

The meeting voted to adopt the Decision of the Second Session of the 13th National People’s Congress on conofficeing the Standing Committee of the National People’s Congress’ acceptance of Zhang Rongshun’s request to resign from his post as a member of the Standing Committee of the 13th National People’s Congress.

Subsequently, Li Zhanshu delivered a speech. He stated that the Second Session of the 13th National People’s Congress had successfully concluded all its agenda items. The session noted that, over the past year, the Party Central Committee with Comrade Xi Jinping at its core united and led the people of all ethnic groups across the country in forging ahead with determination and overcoming difficulties, achieving new accomplishments in all areas of work, which the session commended highly.

Li Zhanshu stated that the session fully upheld democracy, strictly adhered to the law, and deliberated and approved the Report on the Work of the Government as well as other reports. The deputies faithfully discharged their duties, reflected the will of the people, and demonstrated a commendable demeanor. This was a congress marked by democracy, unity, pragmatism, and progress. We must courageously shoulder our responsibilities and work diligently to ensure the successful completion of all goals and tasks set forth at the session.

Li Zhanshu stated that the Foreign Investment Law, which was deliberated and adopted at the meeting, is a foundational statute for advancing high-standard opening-up in the new era. We must study it thoroughly and implement it in all respects, using high-standard opening-up to drive high-quality economic development.

Li Zhanshu pointed out that, as socialism with Chinese characteristics has entered a new era, new and higher demands have been placed on the work of the people’s congresses. The people’s congresses and their standing committees must adhere to Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, thoroughly study and implement General Secretary Xi Jinping’s important thought on upholding and improving the system of people’s congresses, uphold the organic unity of Party leadership, the people being masters of the country, and governance by law, and conscientiously fulfill the duties entrusted to them by the Constitution and laws in light of the overall work of the Party and the state, thus living up to the trust and high expectations of the Party and the people.

Li Zhanshu concluded by saying that the Chinese nation is at a critical juncture in its great rejuvenation. We must rally even more closely around the Party Central Committee with Comrade Xi Jinping at its core, hold high the great banner of socialism with Chinese characteristics, strengthen our “four consciousnesses,” officely uphold our “four confidences,” and ensure “two safeguards.” We must keep our mission officely in mind, forge ahead with determination, lay a decisive foundation for securing a complete victory in building a moderately prosperous society in all respects, and celebrate the 70th anniversary of the founding of the People’s Republic of China with outstanding achievements.

At 9:29 a.m., Li Zhanshu announced that the Second Session of the 13th National People’s Congress of the People’s Republic of China had concluded. The session adjourned to the stirring strains of the national anthem.

Nur Bekri, former Party Secretary and Director of the National Energy Administration, has been expelled from both the Party and public office.

According to the website of the Central Commission for Discipline Inspection and the National Supervisory Commission, with the approval of the CPC Central Committee, the CCDI and the NSC have initiated an official investigation into the serious disciplinary and legal violations committed by Nur Bekri, former member of the Party Leadership Group and Deputy Director of the National Development and Reform Commission, as well as former Secretary of the Party Leadership Group and Director of the National Energy Administration.

Upon investigation, it was found that Nur Bekri resisted organizational scrutiny and failed to provide truthful answers during official interviews; he was greedy and morally corrupt, engaging in family‑based corruption. Taking advantage of his position or the conveniences afforded by his authority and status, he facilitated promotions, job transfers, business operations, and mineral resource development for others, directly or through his relatives, illegally accepting vast sums of money and property. He also violated the spirit of the CPC Central Committee’s Eight‑Point Decision on Improving Party and Government Conduct by persistently demanding that others provide his family with luxury cars, personal drivers, and other perks at no cost, blatantly disregarding disciplinary regulations. Furthermore, he repeatedly accepted lavish banquets in violation of rules and received substantial gifts and cash. In his personal life, he led a dissolute and extravagant lifestyle, indulged in pleasure, exhibited serious moral decay, and engaged in transactions involving power and sex.

Nur Bekri has lost his ideals and convictions, completely lacks the “four consciousnesses,” and has gravely violated the Party’s political discipline, organizational discipline, integrity discipline, and lifestyle discipline. His conduct constitutes a violation of official duties and is suspected of bribery; moreover, after the 18th National Congress of the CPC, he failed to curb his misconduct, showing no restraint or respect for discipline, with an extremely egregious nature and particularly grave consequences, warranting severe disciplinary action. In accordance with relevant provisions of the Regulations on Disciplinary Actions of the Communist Party of China, the Supervision Law of the People’s Republic of China, and other pertinent regulations, and following deliberation at a meeting of the Standing Committee of the Central Commission for Discipline Inspection and approval by the CPC Central Committee, it has been decided to expel Nur Bekri from the Party; the National Supervisory Commission has imposed the penalty of dismissal from public office; his illicit gains derived from violations of discipline and law have been confiscated; and his suspected criminal offenses have been referred to the procuratorial organs for lawful review and prosecution, with all related assets transferred along with the case.

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