JC Master Legal News Issue 862

Key Takeaways for This Issue

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

To further standardize the development of corporate bond business and enhance securities offices’ internal control, compliance, and risk management capabilities, the China Securities Regulatory Commission (CSRC), guided by a problem- and risk‑oriented approach, has tasked 36 CSRC bureaus and relevant entities with conducting special on-site inspections of the corporate bond operations of 63 securities offices.

Yang Jie has lit the first fire in his new post; a subsidiary of China Mobile may move forward with mixed-ownership reform.

On the afternoon of March 21, China Mobile released its 2018 annual report. According to the report, the company’s operating revenue in 2018 totaled RMB 736.8 billion, up 1.8% year over year, with telecom service revenue reaching RMB 670.9 billion, an increase of 3.7%. Profit attributable to shareholders amounted to RMB 117.8 billion, up 3.1% from the previous year. The report also indicated that in 2019, China Mobile will continue to advance 5G network trials and business‑application demonstrations, ensuring the launch of 5G trial commercial services within the year, while further implementing the “Double Hundred Initiative” at the subsidiary level.

Tax cuts to support R&D are fully propelling independent innovation.

2018 was a year in which the benefits of tax cuts were fully unleashed in the field of scientific and technological innovation. During this period, China’s economic development model transitioned from factor‑driven and investment‑driven growth to a stage of innovation‑driven transformation. Innovation thus became an imperative challenge for both the nation and enterprises. Over the past year, the tax authorities have actively implemented a series of tax‑reduction and fee‑cut measures introduced by the CPC Central Committee and the State Council to encourage R&D and support innovation, proactively aligning with the national innovation‑driven development strategy and supply‑side structural reform, thereby bolstering and empowering enterprises’ innovative development.

With strong policy support, can methanol‑powered vehicles truly thrive in this untapped market?

Methanol‑powered vehicles, already successfully piloted in several Chinese provinces, have received a major policy boost. On the 19th, the Ministry of Industry and Information Technology and seven other ministries jointly issued the “Guiding Opinions on Promoting the Application of Methanol Vehicles in Certain Regions,” prompting the share prices of numerous listed companies—such as Jinniu Chemical, Tianfu Energy, and Xinghua Shares—whose core businesses involve methanol processing and production, to hit their daily upper limits on the 20th.

Xi Jinping issued important instructions regarding the March 21 explosion at Jiangsu Xiangshui Tianjiayi Chemical Co., Ltd.

At approximately 2:48 p.m. on March 21, an explosion occurred at a chemical storage tank at Tianjiayi Chemical Co., Ltd. in Chenjiagang Town, Xiangshui County, Yancheng City, Jiangsu Province, affecting 16 nearby enterprises. Following intensive emergency response efforts, all open flames have been extinguished, and air pollutant levels remain within permissible limits. As of now, the accident has resulted in 47 fatalities and 90 critically injured, with additional members of the public sustaining injuries of varying severity.

Table of Contents

Table of Contents

Finance & Capital Markets

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

The China Securities Regulatory Commission has completed its 2018 special on-site inspection of asset-securitization business.

The China Securities Regulatory Commission has completed its on-site inspections of securities rating agencies for 2018.

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

The Party Committee of the China Securities Regulatory Commission conveyed and studied the spirit of General Secretary Xi Jinping’s important speech delivered at the 13th collective study session of the CPC Central Politburo.

Administrative investigation into the private fund manager of Fuxing Group has been completed.

The first batch of companies accepted for listing on the STAR Market has been announced, with nine offices taking the lead in “starting the race.”

Corporate & Commercial

Yang Jie has lit the first fire in his new post; a subsidiary of China Mobile may move forward with mixed-ownership reform.

Another privacy scandal erupts at Facebook: employee access allowed them to freely read the passwords of 600 million users.

China has manufactured the world’s largest seamless forged component.

China’s steel industry has emerged victorious in the U.S. Section 337 investigation, safeguarding nearly $2.8 billion in export markets. To further advance capacity reduction, a three-pronged approach is essential.

Taxation

Tax cuts to support R&D are fully propelling independent innovation.

Unprecedented tax cuts have been unveiled, with the VAT reform—a major strategic move—paving the way for high-quality development.

The State Taxation Administration has introduced another 20 concrete measures to ensure the effective implementation of the VAT reform.

Tax reduction details released! Three departments have issued policies to deepen VAT reform.

Party and government leaders in Hubei, Chongqing, and Ningbo have issued instructions commending tax administration work.

Litigation & Arbitration

With strong policy support, can methanol‑powered vehicles truly thrive in this untapped market?

This year, the Supreme People’s Procuratorate will intensify its efforts to combat crimes involving the infringement of personal information and related offenses.

The Ministry of Education plans to amend and repeal certain regulations, potentially streamlining the documentation required for teacher qualification certification.

Three departments have issued a notice calling for strengthened implementation of the new national standard for electric bicycles.

Shanghai has unveiled “25 Measures” for science and technology reform to promote the transfer and commercialization of scientific and technological achievements.

Other

Xi Jinping issued important instructions regarding the March 21 explosion at Jiangsu Xiangshui Tianjiayi Chemical Co., Ltd.

Li Xinhua, former member of the CPC Leadership Group and former Deputy General Manager of PetroChina, is under investigation.

Finance & Capital Markets

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

To further standardize the development of corporate bond business and enhance securities offices’ internal control, compliance, and risk management capabilities, the China Securities Regulatory Commission (CSRC), guided by a problem- and risk‑oriented approach, has tasked 36 CSRC bureaus and relevant entities with conducting special on-site inspections of the corporate bond operations of 63 securities offices.

This on-site inspection revealed a marked improvement in the compliance of securities offices’ corporate bond business, with significant reductions in previously common issues such as inadequate internal controls and irregular underwriting practices. However, problems persist in areas like due diligence, the use of raised funds, and information disclosure. In response to these findings, the relevant CSRC bureaus have imposed administrative regulatory measures—such as issuing warning letters and ordering corrective actions—on five institutions. Concurrently, the CSRC bureaus responsible for the issuers conducted follow-up inspections of the securities offices, resulting in 16 administrative regulatory measures against 12 institutions and four individuals held accountable.

Since 2015, the China Securities Regulatory Commission has conducted on-site inspections of 125 securities offices and 437 projects, and imposed 49 administrative regulatory measures on intermediary institutions and individuals. Going forward, the CSRC will continue to strengthen institutional frameworks and routine oversight, rigorously address violations of laws and regulations, and promote the sound and orderly development of the corporate bond market.

The China Securities Regulatory Commission has completed its 2018 special on-site inspection of asset-securitization business.

To further standardize the ongoing management of asset-securitization business and enhance the internal control, compliance, and risk-management capabilities of securities offices and fund‑management subsidiaries, the China Securities Regulatory Commission, guided by a problem- and risk‑oriented approach, has tasked its 36 local branches and relevant units with conducting special on-site inspections of the asset-securitization activities of 42 securities offices and 21 fund‑management subsidiaries.

On-site inspections revealed that securities offices have progressively strengthened their asset-securitization business frameworks, with compliance awareness and professional standards steadily improving; however, fund subsidiaries generally exhibit relatively weak due diligence and ongoing‑management capabilities. The key issues identified in this round of on-site inspections include: insufficient independence and inadequacy in due diligence; inadequate monitoring of underlying asset performance; irregularities in cash‑flow pooling; and inaccurate or incomplete information disclosure. In response to these findings, the respective CSRC bureaus have imposed six administrative regulatory measures.

Since 2015, the China Securities Regulatory Commission has conducted on-site inspections of a total of 102 companies and 327 asset-backed special-purpose plans, and has imposed 22 administrative regulatory measures on intermediary institutions and individuals. Going forward, the CSRC will continue to strengthen the institutional framework and day-to-day supervision of asset-securitization activities, rigorously address violations of laws and regulations, and steadily promote the sound and orderly development of this sector.

The China Securities Regulatory Commission has completed its on-site inspections of securities rating agencies for 2018.

To standardize securities rating activities and enhance the professional quality of securities rating agencies, our Commission has organized the Beijing, Tianjin, Shanghai, and Shenzhen Securities Regulatory Bureaus, in collaboration with the Shanghai and Shenzhen Stock Exchanges, the Securities Association, and the Traders Association, to conduct on-site inspections of seven securities rating agencies.

The inspection revealed that certain securities rating agencies have the following issues: first, they lack mechanisms to prevent conflicts of interest and conduct securities rating activities in violation of the principle of independence; second, their quality‑control processes are inadequate, with rating upgrades lacking objective justification; third, their follow‑up rating procedures are not properly implemented, failing to monitor material changes in the rated entities and delaying the initiation of follow‑up ratings; and fourth, due diligence on asset‑backed securitization projects is insufficient, and cash‑flow forecasts are not sufficiently prudent.

In accordance with the Interim Measures for the Administration of Credit Rating Business in the Securities Market and other relevant provisions, the Beijing Securities Regulatory Bureau has, in accordance with the law, imposed an administrative regulatory measure requiring Dagong International Credit Rating Co., Ltd. to carry out rectification within a specified time limit of one year; during this period, the company is prohibited from undertaking any new securities rating business and must replace senior management personnel who no longer meet the required qualifications. The Bureau has also issued supervisory warning letters to Orient Golden Credit International Credit Rating Co., Ltd. Meanwhile, the Shanghai Securities Regulatory Bureau has, in accordance with the law, issued supervisory warning letters to Shanghai New Century Credit Rating & Investment Service Co., Ltd. and to CCXI Securities Rating Co., Ltd.

Going forward, I will continue to implement the strategic plans of the CPC Central Committee and the State Council for winning the tough battle against major financial risks. I will pay close attention to pressing issues such as inflated ratings and rating bubbles at securities rating agencies, as well as their failure to adequately disclose credit risks. We will rigorously investigate and prosecute acts of dishonesty, including deliberate falsification and serious dereliction of duty, and hold both the directly responsible individuals and the senior management personnel of the relevant companies accountable. In doing so, we will purify the credit rating market environment and promote the high-quality development of the exchange‑traded bond market.

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

Recently, the Guangdong Securities Regulatory Bureau imposed administrative penalties in accordance with the law on Guangzhou Yatou for its violations, issuing a warning and fining the company RMB 30,000. At the same time, it issued warnings to the directly responsible senior managers, Zhang Hongfei and Zhong Jiecái, and imposed fines of RMB 20,000 and RMB 10,000, respectively. The Qingdao Securities Regulatory Bureau, acting in accordance with the law, imposed an administrative penalty on Liu Jiaqing for failing to file securities investment reports as required, ordering him to make corrections and imposing a fine of RMB 100,000. The Shanxi Securities Regulatory Bureau, in accordance with the law, imposed an administrative penalty on Zhang Jianwu for insider trading involving “Yicheng Xinneng,” fining him RMB 300,000. The Jilin Securities Regulatory Bureau, also in accordance with the law, imposed administrative penalties on Feng Tie and Guan Jian for insider trading related to “Shuanglong Shares,” confiscating their illegal gains—RMB 629,589.24 and RMB 225,439.59, respectively—and imposing fines equal to three times those amounts. Additionally, the Bureau imposed an administrative penalty on Dongfang Huijin Futures for providing financing to other related parties and engaging in other illegal and non-compliant activities, ordering the office to make corrections, issuing a warning, and imposing a fine of RMB 200,000. It also issued warnings to Zhang Ying and Wang Daqing, the directly responsible senior managers, and levied fines of RMB 60,000 and RMB 50,000, respectively. Furthermore, it issued warnings to three other persons held accountable, Li Zehou and two others, each receiving fines ranging from RMB 10,000 to RMB 20,000. (For details of the administrative penalty decisions, please refer to the websites of the respective securities regulatory bureaus.)

In the aforementioned cases, Guangzhou Yatou engaged in multiple violations of the Interim Measures for the Supervision and Administration of Private Investment Funds, including raising funds from individuals who were not qualified investors and promoting and marketing private‑placement products to an indefinite audience. Meanwhile, Liu Jiaqing, as a fund professional, conducted securities transactions without making the required prior filings with his employer regarding his investment activities. Zhang Jianwu, during the sensitive period for inside information, maintained frequent communications with insiders and used both his own and others’ accounts to trade shares of “Yicheng Xinneng,” with trading patterns that were clearly abnormal. Feng Tie and Guan Jian, who had close ties to insiders, also communicated with such insiders during the sensitive period and, using their personal accounts, traded shares of “Shuanglong Shares,” with trading behavior that was markedly irregular. Furthermore, Dongfang Huijin Futures violated the China Securities Regulatory Commission’s risk‑management regulatory requirements and provided financing to its equity‑participated subsidiary, thereby breaching relevant provisions of the Regulations on the Administration of Futures Trading.

In recent years, the regulatory and enforcement capabilities of the CSRC’s local branches have improved markedly, enabling them to respond swiftly and investigate promptly to a wide range of violations within their jurisdictions. This has effectively deterred various securities and futures‑related illegal activities, helped restore order in regional capital markets, proactively mitigated potential market risks, and safeguarded regional market stability—demonstrating a strong commitment to fulfilling their responsibilities. The CSRC will continue to leverage the coordinated efforts of its entire system in imposing administrative penalties, relentlessly cracking down on violations in the capital market, and earnestly protecting the legitimate rights and interests of the broad base of small and medium‑sized investors.

The Party Committee of the China Securities Regulatory Commission conveyed and studied the spirit of General Secretary Xi Jinping’s important speech delivered at the 13th collective study session of the CPC Central Politburo.

Since the 13th collective study session of the CPC Central Politburo held on February 22, the Party Committee of the China Securities Regulatory Commission has convened successive meetings of its Party Committee and an expanded session of its Party Theory Study Center Group, to convey, study, and thoroughly grasp the spirit of General Secretary Xi Jinping’s important speech, and to carefully deliberate measures for implementing and carrying out his directives in the capital markets.

The Party Committee of the China Securities Regulatory Commission (CSRC) believes that General Secretary Xi Jinping’s important speech, from the overarching perspective of the Party and the country’s development in the new era, profoundly expounds the strategic significance of finance for high-quality economic development. It lays out a well‑grounded plan for deepening supply‑side structural reform in the financial sector, preventing and defusing financial risks, and enhancing the ability of financial services to support the real economy, thereby providing an action guide and fundamental principle for our work in the capital market. The CSRC Party Committee and party committees at all levels throughout the system must thoroughly study and implement the spirit of General Secretary Xi Jinping’s important speech, integrating it with his series of important instructions and directives on the capital market, accurately grasp their respective roles and responsibilities, uphold respect for the market, the rule of law, professional expertise, and risk management, harness the combined strengths of all stakeholders, and strive to build a capital market that is standardized, transparent, open, dynamic, and resilient.

The Party Committee of the China Securities Regulatory Commission deeply recognizes that, in the new context, to do a good job in capital market work, it is essential to strengthen the “Four Consciousnesses,” officely uphold the “Four Confidences,” resolutely safeguard the “Two Upholds,” and align our thinking and actions with the CPC Central Committee’s scientific assessment of both the international and domestic financial landscape and its strategic decisions to deepen supply-side structural reform in the financial sector. Specifically, with regard to implementing these directives in the capital market: First, we must correctly grasp the essence of finance. Grounded in China’s realities, we must continuously deepen our understanding of finance’s fundamental nature, original aspirations, and underlying principles; adhere to the fundamental orientation of serving the real economy; respect, revere, and follow the laws of finance; and conduct all work in accordance with market‑driven principles. Second, we must deepen supply-side structural reform in the financial sector. We should steadfastly implement the new development philosophy, pursue a market‑oriented and law‑based approach, improve the capital market’s foundational institutional framework, vigorously develop direct financing, and refine the financing structure, thereby providing higher‑quality, more efficient financial services to support the development of the real economy and meet the needs of the people. Third, we must strike an appropriate balance between maintaining growth and preventing risks. We should prioritize risk prevention and conflict resolution throughout the process of reform and development, and continually enhance the capital market’s resilience to withstand shocks. Fourth, we must address risks in key areas with precision and effectiveness. We must cultivate a strong sense of vigilance, adhere to a historical perspective and dialectical thinking, adopt targeted measures, and meticulously manage risks in critical domains—including stock pledge financing, bond defaults, private equity funds, off‑exchange margin financing, various asset‑management businesses under regulatory oversight, and local trading venues—thus winning the tough battle of preventing and defusing major financial risks. Fifth, we must accelerate the deepening of financial reform and opening-up. In light of evolving international economic and financial conditions and China’s strategic development needs, we should study and advance new initiatives to reform and open up the capital market, promote comprehensive, high‑level opening-up, and use openness to drive reform and foster development. At the same time, we must build a cadre team that is politically reliable, of excellent conduct, and highly proficient in capital market affairs.

The CPC Committee of the China Securities Regulatory Commission emphasized the need to continue deepening study and understanding of the spirit of General Secretary Xi Jinping’s important speeches, closely aligning with the strategic arrangements for advancing supply-side structural reform in the financial sector. Focusing on key issues—including enhancing the quality of listed companies, substantially raising the costs of illegal and non‑compliant behavior, coordinating and promoting comprehensive reforms across relevant listing sectors, strengthening the responsibilities and capabilities of intermediary institutions, further improving trading mechanisms, intensifying end-to‑end regulatory oversight, proactively creating favorable conditions for the entry of medium- and long-term capital into the market, expanding the opening-up of the capital market, preventing and defusing risks in priority areas of the capital market, advancing unified regulation of the bond market, actively developing the futures and derivatives markets, bolstering investor education, forging a concerted effort to ensure the stable development of the capital market, and fostering a sound ecosystem for its growth—the Commission will strengthen research and top‑level design, formulate pragmatic and effective policy measures, further accelerate reform and expand opening-up, fully unleash market vitality, and promote high‑quality development of the capital market while better serving the healthy development of the real economy.

Administrative investigation into the private fund manager of Fuxing Group has been completed.

Since the occurrence of the risk event involving Shanghai Fuxing Industrial Group Co., Ltd. (hereinafter referred to as Fuxing Group), the China Securities Regulatory Commission, relevant authorities, and local governments including the Shanghai Municipal Government have attached great importance to the matter and established a cross‑departmental, inter‑provincial coordination mechanism led by the CSRC. The parties concerned have collaborated closely, coordinated their efforts, and jointly carried out investigations into alleged violations of laws and regulations by Fuxing Group, as well as measures to trace, freeze, and preserve assets and verify funds and property, thereby actively and prudently addressing the associated risks.

Recently, the Shanghai Securities Regulatory Bureau of the China Securities Regulatory Commission has concluded its administrative investigation into cases involving private fund managers affiliated with the Fuxing Group, who are suspected of violating relevant laws and regulations governing private investment funds. Meanwhile, leads uncovered during the administrative inquiry—such as those pertaining to Zhu Moumou and others suspected of criminal or unlawful conduct—have been formally referred to the public security authorities in accordance with the law.

Going forward, the relevant authorities will, on the basis of rigorously investigating and prosecuting cases of violations of laws and regulations, continue to advance related follow-up work in accordance with the principles of rule of law and market orientation.

The first batch of companies accepted for listing on the STAR Market has been announced, with nine offices taking the lead in “starting the race.”

The Shanghai Stock Exchange’s STAR Market IPO review system released its first batch of accepted applications on the 22nd. On the race to list on the STAR Market, nine companies—including Amlogic (Shanghai) Co., Ltd.—have taken the lead in getting off the starting line.

On March 18, the Shanghai Stock Exchange’s STAR Market issuance and listing review system officially began accepting applications from issuers. As of 5:00 p.m. on March 22, the STAR Market review system had received listing application documents from a total of 13 companies. In accordance with the procedures and requirements stipulated in the relevant rules, the STAR Market’s issuance and listing review department completed a completeness check on the application files of nine of these companies and issued requests for supplementary materials. Following such supplementation, the application files of nine companies—Jingchen Semiconductor (Shanghai) Co., Ltd., Yantai Ruichuang Micro‑Nano Technology Co., Ltd., Jiangsu Tiannai Technology Co., Ltd., Jiangsu Beiren Robot System Co., Ltd., Guangdong Liyuanheng Intelligent Equipment Co., Ltd., Ningbo Rongbai New Energy Technology Co., Ltd., Hejian Chip Manufacturing (Suzhou) Co., Ltd., Anhan Technology (Wuhan) Co., Ltd., and Wuhan Keqian Bio‑Pharmaceutical Co., Ltd.—were found to meet the completeness criteria, and the Shanghai Stock Exchange decided to accept them. The corresponding application documents have been simultaneously pre‑disclosed on the Exchange’s official website. Statistics show that the first batch of nine accepted companies operates across sectors including next‑generation information technology, high‑end equipment, biopharmaceuticals, new materials, and new energy. Among them, six have chosen the first set of listing criteria—market capitalization plus net profit/revenue—while three have opted for the fourth set—market capitalization plus revenue. One of these companies is not yet profitable. The nine companies have an average projected market capitalization of RMB 7.276 billion. From a financial perspective, excluding one loss‑making company, the remaining offices reported average total assets of RMB 1.532 billion as of year‑end, with average operating revenues and net profits after deducting non‑recurring items of RMB 1.034 billion and RMB 164 million, respectively, over the most recent fiscal year. Their average revenue growth rate stood at 61.43%, while the proportion of R&D expenditure to operating revenue ranged from 5% to 20%.

A relevant official from the Shanghai Stock Exchange stated that the aforementioned companies differ in their industries, corporate size, operating conditions, and stages of development; overall, they possess certain science-and‑technology innovation attributes, reflecting the inclusiveness of the STAR Market’s issuance and listing criteria. It is understood that the listing application documents of four additional companies, including Xiamen Tebao Bioengineering Co., Ltd., are currently undergoing completeness checks by the STAR Market’s review system. The Shanghai Stock Exchange will make a decision on whether to accept these applications in accordance with prescribed procedures and requirements. In light of the initial batch of applications and the acceptance process, the Shanghai Stock Exchange has put forward three recommendations to sponsoring institutions: accurately grasp the diligence and accountability requirements under the STAR Market’s pilot registration system, substantially enhance professional standards, and effectively fulfill their role as gatekeepers of the capital market; precisely align with the STAR Market’s positioning, giving priority to recommending high-quality enterprises with clear science-and‑technology innovation characteristics; and strictly adhere to the content and format requirements for listing application documents, ensuring rigorous quality control. Pursuant to applicable rules, the STAR Market’s stock listing review process comprises the following stages: acceptance, review and inquiry, deliberation by the Listing Committee, registration with the China Securities Regulatory Commission, and final issuance and listing.

A relevant official from the Shanghai Stock Exchange stated that the exchange will remain committed to market‑oriented and law‑based reform, and, on the basis of a clear understanding of the STAR Market’s positioning, will steadily carry out subsequent tasks such as accepting applications from companies and reviewing their issuance and listing. The SSE also calls on issuers, intermediary institutions, and all market participants to work in concert to create a favorable environment for high‑quality science and technology enterprises seeking to list on the STAR Market, thereby jointly ensuring the market’s smooth start and sustained, steady development.

Commercial & Corporate

Yang Jie has lit the first fire in his new post; a subsidiary of China Mobile may move forward with mixed-ownership reform.

On the afternoon of March 21, China Mobile released its 2018 annual report. According to the report, the company’s operating revenue in 2018 totaled RMB 736.8 billion, up 1.8% year over year, with telecom service revenue reaching RMB 670.9 billion, an increase of 3.7%. Profit attributable to shareholders amounted to RMB 117.8 billion, up 3.1% from the previous year. The report also indicated that in 2019, China Mobile will continue to advance 5G network trials and business‑application demonstrations, ensuring the launch of 5G trial commercial services within the year, while further implementing the “Double Hundred Initiative” at the subsidiary level.

In its annual report, China Mobile’s newly appointed Chairman Yang Jie outlined the company’s outlook for 2019 in his chairman’s report, stating that the company will advance the implementation of reforms to further invigorate its institutional framework, deepen IT transformation, and accelerate the centralization and optimization of IT capabilities across the entire network. It will also drive the rollout of digital initiatives, develop and deliver industry‑specific products, and build specialized e‑commerce operational capabilities. Additionally, the company will actively explore new operating models, pursuing further optimization and innovation in areas such as network operations and maintenance and market‑driven business systems. Leveraging its designation as a pilot enterprise for building world‑class companies, China Mobile will strengthen incentive and constraint mechanisms to sustain organizational vitality and vigorously implement the “Double Hundred Action” at the subsidiary level. As for the specific list of subsidiaries participating in the “Double Hundred Action,” China Mobile’s annual report notes that, in 2018, it proactively advanced deepened reforms among its subsidiaries, with Migu, Terminal, and Online—three of its affiliates—successfully selected as part of the SASAC’s first batch of “Double Hundred Action” enterprises.

Notably, just days earlier, on March 4, Yang Jie had stepped down as chairman of China Telecom Group and assumed the role of chairman at China Mobile Communications Group. At the time, an industry scholar told a Securities Daily reporter: “Yang Jie’s appointment to China Mobile will likely prioritize spearheading the company’s mixed‑ownership reform.” This move has sparked speculation within the industry about the progress of China Mobile’s own mixed‑ownership restructuring. Li Yi, chief researcher at the Internet Research Center of the Shanghai Academy of Social Sciences, noted in an interview with the Securities Daily that mixed‑ownership reform is a key component of state‑owned enterprise reform. Market rumors also suggest that China Mobile is poised to embark on such reforms, and the appointment of the former China Telecom chairman—already experienced in implementing partial mixed‑ownership initiatives—may be linked to this broader trend.

China Mobile’s 2018 annual report reveals that in 2018, Migu Video’s revenue grew 21.7% year over year, with over 4.3 billion views on its app during the World Cup; Migu Reading generated more than RMB 2.3 billion in revenue. On the cusp of the 5G era, China Mobile continued to maintain its leading position in the personal mobile market. The report indicates that in the fourth quarter of 2018, the company’s net additions and traffic share for 4G customers both rose to around 50%. Throughout 2018, China Mobile’s 4G subscriber base reached 713 million, while mobile data traffic surged 182.1% year over year. Additionally, the report highlights that in 2018, China Mobile further strengthened its network coverage and capabilities: it operated 2.41 million 4G base stations, achieved over 97.8% network coverage in administrative villages, and effectively met the rapidly growing demand for 4G data traffic. Cellular IoT now provides continuous coverage at the township level and above, and all residential broadband services across the network offer access speeds of 100 Mbps or higher.

The annual report notes that 5G development is accelerating further and will serve as a critical infrastructure for driving the digital transformation of the economy and society. China Mobile, however, faces significant challenges stemming from technological evolution and market competition. According to the company, 5G will bring about a revolutionary shift in network architecture, with continuously rising complexity in operations and maintenance; key links in the industry chain and vertical‑sector applications remain immature, and business models and operational approaches still require innovation. Regarding 5G progress, the report highlights that China Mobile has taken the lead in formulating 5G network architecture standards, ranking first among global operators in the number of standardization proposals submitted under Release 15, and holding key positions in multiple international standards organizations. The company is steadily advancing network transformation and upgrading, actively conducting 5G network trials and demonstrating service applications. It is also proactively building an intelligent connectivity infrastructure based on “5G + edge computing,” while continuing to drive large‑scale adoption and breakthroughs in emerging technologies such as cloud computing, big data, and artificial intelligence. In addition, China Mobile has initiated the establishment of a 5G Joint Innovation Industry Fund to foster end-to-end industrial maturity. Strategic collaborations with local governments and major enterprises have made solid progress, and collaborative innovation in priority vertical sectors—including “5G + high‑definition video,” transportation, and healthcare—continues to advance steadily.

In its annual report, Yang Jie stated that 2019 marked a foundational year on the path toward a 5G‑enabled information society. Looking ahead to 2019, China Mobile indicated that it will continue to advance 5G network trials and service‑application demonstrations, ensuring the launch of 5G trial commercial services within the year. The company will also collaborate with all stakeholders across the industry to explore 5G products and business models, striving to lead the evolution of 5G technology.

Another privacy scandal erupts at Facebook: employee access allowed them to freely read the passwords of 600 million users.

Earlier, a report claimed that Facebook had stored as many as 600 million user account passwords in plain text. These passwords were accessible in plaintext to tens of thousands of the company’s employees. Facebook conofficeed the report in a blog post. On Thursday, Facebook’s stock fell by less than 1%. The 600 million users represent 22% of Facebook’s global user base of 2.7 billion. The company said Thursday that it plans to begin notifying affected users so they can change their passwords.

“As part of our routine January security review, we discovered that some user passwords were stored in a readable format in our internal data storage systems,” Facebook said in a statement. “This came to our attention because our login system is designed to use technology to mask passwords, rendering them unreadable. We have since fixed these issues, and as a precautionary measure, we are notifying users whose passwords were found to be stored in this manner.” However, in a blog post, the company did not specify how many users were affected.

According to reports, this incident dates back to 2012. Krebs cited a Facebook software engineer named Scott Renfro, who stated that the company had found no evidence of data misuse and that “there was no real risk.” However, amid numerous privacy and security scandals, Facebook has faced intense scrutiny, drawing criticism from users as well as inquiries and fines from various regulators—particularly in the European Union. Despite these controversies, Facebook’s daily active user base has not been significantly eroded, with social media engagement even increasing last quarter. Unsurprisingly, this incident will trigger an investigation by Ireland’s Data Protection Commissioner, who is responsible for enforcing the EU’s new General Data Protection Regulation (GDPR). Under GDPR, companies are required to notify affected users within 72 hours and must securely store passwords.

If the incident indeed extends into 2012, Facebook may still need to conduct extensive investigations into how these passwords were misused. Although Facebook stated in its blog post that it has “to date found no evidence of internal misuse or unauthorized access,” the company would find it difficult to determine whether individuals with internal access outside the company abused this data.

China has manufactured the world’s largest seamless forged component.

The Chinese Academy of Sciences recently announced that, using a metal additive manufacturing technology developed by the Institute of Metal Research of the CAS, the world’s largest seamless monolithic stainless steel ring forging has been successfully rolled.

According to reports, the ring component has a diameter of 15.6 meters and weighs 150 tons, marking the first-ever achievement of graded-layered forming using a hundred-ton-class metal billet. It is also currently the largest-diameter, heaviest monolithic forged stainless steel ring in the world.

Under the commission and support of China National Nuclear Corporation, the Institute of Metal Research of the Chinese Academy of Sciences has established an industry–university–research consortium. Leveraging high-purity continuous-casting slabs from Tai Steel, the team successfully developed a 15.6-meter-diameter annular forging at Shandong Elite Heavy Industry. This forging is characterized by its seamless monolithic structure, superior homogenization, and excellent microstructural uniformity. The massive annular component will be deployed in China’s fourth-generation nuclear power units, and its successful development will provide robust assurance for the implementation of critical equipment in the nation’s nuclear industry.

As a core component of China’s fourth-generation nuclear power units, the support ring not only defines the pressure vessel’s boundary and serves as a safety barrier, but also bears a load of 7,000 tons, acting as the “backbone” of the entire reactor vessel. Traditionally, such large-scale forgings have been manufactured abroad through multi‑section, small‑blank assembly and welding—processes that are not only time‑consuming and costly, but also result in weakened material microstructures at the weld zones, thereby posing potential safety risks during reactor operation.

After more than a decade of painstaking research, scientists at the Institute of Metal Research of the Chinese Academy of Sciences have developed an original metal‑building forming technology and elucidated the healing mechanisms of the built‑up interface as well as the underlying microstructural evolution. By overcoming the limitations of the conventional “large‑to‑large” approach for producing large forgings, they have pioneered a suite of key technologies—including surface activation, vacuum encapsulation, multi‑directional forging, staged building, and integral ring rolling—completely eliminating interlayer interfaces. As a result, the built‑up interface of the support‑ring forgings is fully consistent with the base metal in composition, microstructure, and mechanical properties, enabling a novel “small‑to‑large” manufacturing paradigm that significantly enhances quality while reducing production costs.

According to industry insiders, this technology has been hailed by numerous academicians and experts as a transformative innovation in the field of large‑component manufacturing. It has already been deployed in critical sectors such as hydropower, wind power, and nuclear power, playing a pivotal role in accelerating the rapid development of China’s high‑end equipment and ensuring the independent and controllable supply of core materials for major industrial systems.

China’s steel industry has emerged victorious in the U.S. Section 337 investigation, safeguarding nearly $2.8 billion in export markets.

On March 19, the U.S. International Trade Commission (ITC) issued a notice announcing its decision to terminate the antitrust investigation in the Section 337 case involving carbon and alloy steels. The Commission ruled that the plaintiff had failed to demonstrate that it had suffered harm as a result of the defendant’s alleged monopolistic conduct; consequently, the plaintiff lacked standing to bring the action. With this ruling, after three years of litigation, Chinese steel companies have prevailed on all three counts—antitrust, trade secret misappropriation, and false origin—in the Section 337 investigation, successfully safeguarding nearly $2.8 billion in steel export markets.

On May 26, 2016, the U.S. International Trade Commission announced the initiation of a Section 337 investigation into imports of carbon and alloy steel products from China. The allegations cover virtually all Chinese steel products exported to the United States, with the investigation targeting 40 steel companies, including Baosteel, Shougang, and Angang. All of China’s major, leading steel enterprises are included, a level of comprehensiveness unprecedented in U.S. Section 337 investigations involving China.

According to reports, the investigation has leveled three sets of allegations against China’s steel industry: First, it accuses Chinese steelmakers, under the auspices of the China Iron and Steel Association, of forming a monopolistic cartel that engages in unfair competition with U.S. steel offices through price-fixing agreements, output controls, and restrictions on export volumes—this constitutes an antitrust charge. Second, it alleges that the Chinese government, in 2010 and 2011, employed hackers to launch cyberattacks against U.S. steel companies, stealing trade secrets to enable Chinese state-owned steel enterprises to develop advanced high‑strength steels; these companies subsequently exported their products to the United States—this is framed as a trade‑secret theft allegation. Third, it charges that Chinese offices, in order to evade U.S. anti-dumping and countervailing duties, falsified the origin of their products and re‑exported steel from other countries to the United States—this amounts to a false‑origin claim.

The aggressively launched Section 337 investigation represents yet another trade restriction measure, following the United States’ successive imposition of anti-dumping and countervailing duties as well as safeguard measures on Chinese steel products. In its statement, the ITC indicated that U.S. steel companies have requested the issuance of permanent general exclusion orders, limited exclusion orders, and cease-and-desist orders. Should China lose even a single one of the many claims in this case, it would mean that Chinese steel products would be barred from the U.S. market. Even more concerning is that a defeat could trigger a chain reaction, prompting governments of other countries and regions to impose additional trade restrictions on Chinese steel products on the grounds of trade diversion, thereby seeking to contain and undermine China’s steel industry. Under such circumstances, the entire Chinese steel sector would inevitably face a severe downturn. Moreover, a series of baseless accusations could inflict serious damage on the image of both the Chinese government and Chinese enterprises.

Upon the initiation of this Section 337 investigation, the Ministry of Commerce promptly notified the China Iron and Steel Association and the companies involved, addressing their questions regarding the products at issue and the U.S. side’s various allegations. The Ministry also guided the association and the enterprises in sorting through and assessing the relevant legal facts and evidence, encouraging them to invoke legal remedies and proactively mount a response. At the same time, the Ministry actively engaged with the United States through high-level visits and forums such as the U.S.–China Strategic Economic Dialogue, conveying its position and concerns on the matter. Throughout the litigation process, the three false accusations leveled by the U.S. side against China—previously cited—were systematically refuted.

In February 2017, the applicant in this case was compelled to file a motion to dismiss the claim alleging theft of trade secrets, and the ITC administrative law judge ruled to terminate the investigation into that allegation. In November 2017, the ITC formally issued a decision finding that Chinese companies had not engaged in fictitious origin practices, thereby terminating the investigation on that charge. On March 19, 2018, the ITC decided to terminate the investigation into the antitrust‑related allegation. With this, Chinese steel producers involved in the case secured victories on all three charges.

Taxation TAXATATION

Tax cuts to support R&D are fully propelling independent innovation.

2018 was a year in which the benefits of tax cuts were fully unleashed in the field of scientific and technological innovation. During this period, China’s economic development model transitioned from factor‑driven and investment‑driven growth to a stage of innovation‑driven transformation. Innovation thus became an imperative challenge for both the nation and enterprises. Over the past year, the tax authorities have actively implemented a series of tax‑reduction and fee‑cut measures introduced by the CPC Central Committee and the State Council to encourage R&D and support innovation, proactively aligning with the national innovation‑driven development strategy and supply‑side structural reform, thereby bolstering and empowering enterprises’ innovative development.

Innovation is the primary driving force behind economic development. To encourage a broader range of stakeholders to engage in innovation and entrepreneurship, the state has undertaken top-level design of tax policies supporting these endeavors. At its executive meeting on April 25, 2018, the State Council introduced seven tax‑reduction measures, five of which are directly aimed at fostering scientific and technological innovation: expanding the scope of one‑time pre‑tax deduction for fixed assets; allowing an additional deduction for overseas R&D expenses; extending the loss‑carryforward period for high‑tech enterprises and technology‑based SMEs; and extending the tax credit for venture capital and angel investments to cover the entire country.

On September 20, the Ministry of Finance, the State Taxation Administration, and the Ministry of Science and Technology jointly issued a notice stipulating that, for research and development expenses actually incurred by enterprises in R&D activities that are not capitalized as intangible assets but instead charged to current profit or loss, in addition to the standard actual‑cost deduction, an additional pre‑tax super‑deduction of 75% of the actual amount will be allowed during the period from January 1, 2018, to December 31, 2020. For expenses that result in the formation of intangible assets, a pre‑tax amortization allowance equal to 175% of the cost of such intangible assets will be granted during the same period.

“One part planning, nine parts execution.” Wang Jun, Director of the State Taxation Administration, emphasized that tax authorities at all levels must make ensuring the effective implementation and deep-rooted impact of tax‑cut and fee‑reduction policies the central theme of their work, placing it prominently on their agendas to further ease the burden on enterprises, invigorate market entities, and boost economic growth. Local tax authorities have taken the thorough and timely implementation of these policies as a key benchmark for gauging Party spirit and political awareness, conducting extensive policy briefings, and refining tax administration systems and procedures to ensure that taxpayers are fully informed and can fully benefit from the measures. Throughout 2018, the tax authorities delivered approximately RMB 1.3 trillion in tax and fee reductions to businesses and individuals, using tax cuts as a “subtraction” to drive an “addition” in R&D investment and a “multiplication” of innovative vitality.

The comprehensive, targeted, sustained, and coordinated implementation of policies has helped foster a favorable momentum in China, accelerating and intensifying innovation-driven development among enterprises while enabling the accumulation and expansion of new growth drivers. Data show that in 2018, R&D expenditure as a share of GDP reached 2.18%, up 0.03 percentage points from the previous year, and the contribution of scientific and technological progress is expected to rise to 58.5%. Both R&D investment and overall scientific and technological strength have been steadily strengthening. The new economy, new growth drivers, and emerging industries are experiencing rapid expansion. Critical core technologies cannot be obtained through import, purchase, or negotiation; they must be developed independently. However, R&D not only requires substantial financial outlays but also entails certain risks. The policy of additional tax deductions for R&D expenses provides precise tax relief to support corporate innovation, demonstrating the government’s unwavering commitment to fostering scientific and technological advancement. This policy has created a favorable tax environment for transitioning “Made in China” to “Smart Manufacturing in China,” playing a vital role in elevating industries toward the mid- to high-end and promoting high-quality economic development.

With the introduction of policies such as raising the additional tax deduction rate for R&D expenses to 75% and extending it to all enterprises, expanding the carryforward period for losses incurred by high-tech offices and technology‑based SMEs from five to ten years, Gansu Chengji Biopharmaceutical Co., Ltd., located in western China, has already begun to reap the benefits of innovation. Reducing taxes and easing the tax burden is intended to give wings to the “mass entrepreneurship and innovation” initiative, alleviating the financial strain on businesses through substantial tax and fee cuts, thereby revitalizing corporate operations while boosting returns on capital. In fact, the tax‑reduction measures rolled out by the state in the field of innovation not only support R&D activities but also extend to the very front end of the entrepreneurial ecosystem. The policy allowing venture capital offices and angel investors to deduct 70% of their investments in seed‑stage and early‑stage technology companies from their taxable income has been implemented nationwide, creating universally accessible tax incentives. Hefei Innovation Technology Venture Capital Co., Ltd., which has already invested in more than 80 nascent tech startups, has thus received a tangible “tax‑cut package.”

As the country’s upgraded “mass entrepreneurship and innovation” initiative continues to gain momentum, in 2018, the nation saw an average of over 18,000 new enterprises established each day, with the total number of market entities surpassing 100 million, unleashing a surge of entrepreneurial and innovative vitality.

Unprecedented tax cuts have been unveiled, with the VAT reform—a major strategic move—paving the way for high-quality development.

Among the nearly RMB 2 trillion in tax and fee cuts rolled out in 2019, the reduction of the value-added tax rate was undoubtedly the most closely watched “main course.” Following further measures announced at this week’s State Council Executive Meeting, on the 21st, the Ministry of Finance, the State Taxation Administration, and the General Administration of Customs jointly issued an announcement on policies related to deepening VAT reform, signaling that the VAT rate cut—set to take effect on April 1—has entered the implementation phase.

According to the implementation plan, effective April 1, 2019, items previously subject to a 16% VAT rate will be taxed at 13%, primarily affecting industries such as manufacturing; items previously taxed at 10% will now be taxed at 9%, mainly covering transportation, postal services, construction, real estate, basic telecommunications services, and agricultural products. The 6% tax rate will remain unchanged, applying to modern services, finance, consumer services, and value-added telecommunications services. Recently, several automobile manufacturers have announced price reductions in line with the VAT rate adjustment. China Railway Corporation has also stated that, owing to the reduction in the VAT rate for the transportation sector, it will lower railway freight rates accordingly, further reducing railway logistics costs. In addition, the announcement adjusts export rebate rates for certain goods and services. Following the revision, the number of rebate rate brackets remains at five, shifting from the pre-reform levels of 16%, 13%, 10%, 6%, and 0% to 13%, 10%, 9%, 6%, and 0%. Meanwhile, for overseas travelers purchasing goods subject to the 13% rate, the export rebate rate will stay steady at 11%; for purchases of goods subject to the 9% rate, the rebate rate will be adjusted to 8%.

In essence, the value-added tax works by subtracting input tax from output tax, ensuring that taxpayers only pay tax on the value added to goods and services. The more robust the credit chain, the less double taxation occurs. However, due to the structure of the tax system, it is possible that even with a reduced tax rate, certain industries may see an increase in their tax burden because of limited input‑tax credits. To address this, the three departments have issued a notice introducing two key measures designed to provide relief: significantly expanding tax reductions to ensure that the tax burden across all sectors declines rather than rises. In addition, the gradual establishment of a system for refunding end‑of‑period input‑tax credits represents another important step toward refining the VAT framework. End‑of‑period input‑tax credits refer to the portion of input tax that has been paid but not yet fully offset. The notice clarifies that, following the reduction in tax rates, any newly arising input‑tax credit refunds will be granted subject to specified conditions.

Value-added tax, often hailed in the industry as a “good tax,” has been adopted by more than 160 countries and regions worldwide precisely because of its neutrality. For China’s economy, which is advancing toward high-quality development, deepening VAT reform is undoubtedly a major strategic move that will help drive economic transformation and upgrading. Starting on January 1, 2012, China launched a pilot program in Shanghai to replace business tax with VAT for the transportation sector and five other industries—forming the so‑called “1+6” framework—and by May 1, 2016, construction, real estate, finance, and consumer services had also been brought into the pilot, marking the full rollout of the reform. Subsequently, on July 1, 2017, the 13% tax rate was abolished, reducing the number of VAT rate brackets from four to three; then, on May 1, 2018, the VAT rate for manufacturing and related sectors was cut from 17% to 16%, while rates for transportation and construction were lowered from 11% to 10%; most recently, beginning April 1, 2019, another round of even more substantial rate reductions was implemented.

The measures to deepen VAT reform are highly policy‑driven and far‑reaching. Given the tight timeline and the substantial workload—requiring preparations on the part of tax authorities, support from relevant agencies, and active cooperation from taxpayers—the tax authorities at all levels will strengthen communication and coordination with industry regulators and trade associations to ensure the thorough and effective implementation of this major reform, so that businesses and the general public can experience tangible benefits.

The State Taxation Administration has introduced another 20 concrete measures to support the effective implementation of the VAT reform.

Deepening the value-added tax reform is the centerpiece of the 2019 tax and fee reduction efforts. To thoroughly implement the CPC Central Committee and the State Council’s decisions and arrangements for carrying out a larger‑scale tax and fee reduction, and to ensure that the deepened VAT reform is effectively put into practice, the State Taxation Administration recently issued the “2019 Work Plan for Taxpayer Services in Deepening the Value-Added Tax Reform” (hereinafter referred to as the “Plan”). The Plan introduces 20 concrete measures through innovative integration, comprehensively and precisely strengthens publicity and guidance, streamlines administrative procedures, expedites problem resolution, and rigorously evaluates outcomes, thereby leveraging convenient and efficient taxpayer services to help taxpayers better benefit from the policy dividends of the deepened VAT reform and genuinely enhance their sense of gain.

The Plan introduces seven measures, including standardizing the tone and content of publicity and guidance, expanding outreach channels, and broadening the scope of such efforts, with the aim of further extending the reach of guidance, deepening its substance, and diversifying its delivery methods. Upholding the principle of “simplicity,” the Plan also rolls out six measures—streamlining application procedures and documentation, reducing the number of tax‑filing visits, and minimizing reporting errors—to ensure that every taxpayer eligible for preferential treatment can access these benefits with ease. Moreover, by emphasizing speed, the Plan implements four initiatives—promptly gathering taxpayer concerns, swiftly addressing complaints, and rapidly responding to needs—to enhance taxpayers’ tangible sense of gain.

Meanwhile, to ensure the substantive value of taxpayer services, the Plan proposes three measures: strengthening the evaluation of service effectiveness, conducting taxpayer satisfaction surveys, and mitigating risks associated with tax agency services. These efforts aim to uphold rigorous service standards, a robust work ethic, and effective risk management, using taxpayers’ awareness as a benchmark to verify the precision of outreach on VAT reform policies, and leveraging taxpayer satisfaction to assess the efficacy of taxpayer‑service initiatives.

Tax reduction details released! Three departments have issued policies to deepen VAT reform.

On the 21st, the Ministry of Finance, the State Taxation Administration, and the General Administration of Customs jointly issued an announcement stating that this year’s unprecedented reduction in the value-added tax rate will officially take effect on April 1, and unveiled a series of supporting measures to deepen VAT reform.

According to the “Announcement on Policies Related to the Deepening of VAT Reform” issued by three departments, effective April 1, 2019, for general VAT taxpayers engaging in VAT‑taxable sales or importing goods: the tax rate applicable to items previously subject to 16% will be reduced to 13%; the tax rate applicable to items previously subject to 10% will be reduced to 9%. In addition, for agricultural products purchased by taxpayers, the deduction rate previously set at 10% will be adjusted to 9%. For agricultural products purchased for use in the production of, or commissioned processing of, goods subject to a 13% VAT rate, the input tax shall be calculated using a 10% deduction rate.

The announcement states that, effective April 1, 2019, for export goods and services subject to a 16% tax rate and a 16% export rebate rate, the export rebate rate will be adjusted to 13%; for export goods and cross-border taxable activities previously subject to a 10% tax rate and a 10% export rebate rate, the export rebate rate will be adjusted to 9%. Meanwhile, for items eligible for a 13% tax rate that qualify for departure‑tax‑refund for overseas travelers, the refund rate will be 11%; for items eligible for a 9% tax rate, the refund rate will be 8%.

The announcement clarifies that the scope of input tax credit will be expanded to include domestic passenger transportation services. In addition, the input tax paid by taxpayers for real estate acquisitions will be changed from the current two-year phased‑in approach—60% in the first year and 40% in the second—to a one‑time full credit. Furthermore, from April 1, 2019, to December 31, 2021, taxpayers in the production and lifestyle service sectors will be permitted to add an additional 10% to their current period’s deductible input tax, thereby reducing their taxable amount.

The announcement also clarifies that, effective April 1, 2019, a pilot program will be implemented to refund the outstanding input VAT credit at the end of the tax period. Taxpayers meeting the relevant criteria may apply to their competent tax authorities for a refund of the incremental input VAT credit, which is defined as the increase in the end-of-period input VAT credit compared with the balance as of March 31, 2019.

Party and government leaders in Hubei, Chongqing, and Ningbo have issued instructions commending tax administration work.

Recently, Hubei Province Governor Wang Xiaodong, Executive Vice Governor Huang Chuping, Chongqing Executive Vice Mayor Wu Cunrong, and Ningbo Municipal Party Secretary Zheng Zhajie have each issued instructions on tax administration, calling on local tax authorities to continuously advance the modernization of taxation with high quality and to support local economic and social development.

Hubei: Recently, Hubei Province Governor Wang Xiaodong and Executive Vice Governor Huang Chuping separately issued instructions on the province-wide rollout of the Golden Tax Project Phase III system’s consolidation and go-live. In his instruction, Governor Wang Xiaodong emphasized that the launch of the Golden Tax Project Phase III across the province is a key step in deepening the reform of the national and local tax collection and administration systems and in building an optimized, efficient, and unified tax administration framework. He expressed the hope that the provincial tax authorities will seize this opportunity to continuously enhance taxpayer services and better leverage the fundamental, pillar‑building, and safeguarding roles of taxation. In his instruction, Vice Governor Huang Chuping urged the provincial tax system to take the transition and launch of the Golden Tax Project Phase III as an impetus to accelerate business integration, improve the quality of tax administration, and boost service effectiveness, thereby steadily increasing taxpayer satisfaction and sense of gain, and making new contributions to optimizing Hubei’s business environment and promoting high‑quality economic development throughout the province.

Chongqing: Recently, Wu Cunrong, Executive Vice Mayor of Chongqing, issued instructions on the report submitted by the Chongqing Municipal Tax Service of the State Taxation Administration, titled “The Municipal Tax Service Fully Supports the Construction of Our City as a ‘Beautiful Land of Clear Waters and Lush Mountains’”: The Municipal Tax Service has actively participated in Chongqing’s “Ecological Priority and Green Development Action Plan,” rigorously implemented the Environmental Protection Tax Law, and leveraged big data and intelligent technologies to progressively establish a green tax system that is standardized and equitable, coordinated in policy implementation, and efficient in administration. By proactively supporting the city’s major strategic initiatives, the service has earned full recognition. It is hoped that the Municipal Tax Service will continue to press ahead and make even greater contributions to promoting high-quality economic and social development across the city.

Ningbo: Zheng Zhajie, Deputy Secretary of the Zhejiang Provincial Party Committee and Secretary of the Ningbo Municipal Party Committee, recently issued instructions on the report titled “Tax Data Reveal Six Areas of Strength and Four Areas of Concern in the City’s Economy,” submitted by the Ningbo Municipal Tax Service of the State Taxation Administration. He noted that the report is well‑grounded and of high quality, relies on data to make its case, and offers valuable guidance for policy implementation. He urged the Development and Reform Commission, the Department of Economy and Information Technology, the Department of Commerce, the Department of Finance, and other relevant departments to conduct a thorough analysis and study, adopt targeted measures, and ensure that the respective leading officials oversee the process.

According to reports, the Ningbo Municipal Tax Service Bureau, drawing on 2018 tax data—including export tax rebates and tax‑reduction measures—conducted a comprehensive analysis of the city’s six key highlights in high‑quality economic development. It also identified four major concerns in the city’s economic performance by examining invoice‑related data, vehicle purchase tax records, and export tax rebate figures for the fourth quarter of 2018, and subsequently issued a forecast for the trajectory of Ningbo’s economy and tax revenues in 2019.

Litigation & Arbitration

With strong policy support, can methanol-powered vehicles successfully navigate this untapped market?

Methanol‑powered vehicles, already successfully piloted in several Chinese provinces, have received a major policy boost. On the 19th, the Ministry of Industry and Information Technology and seven other ministries jointly issued the “Guiding Opinions on Promoting the Application of Methanol Vehicles in Certain Regions,” prompting the share prices of numerous listed companies—such as Jinniu Chemical, Tianfu Energy, and Xinghua Shares—whose core businesses involve methanol processing and production, to hit their daily upper limits on the 20th.

While expanding the scope of pilot regions, the guidance document calls for advancing the research, development, and application of methanol‑powered vehicles and related fuel technologies; accelerating the establishment of a standards framework for methanol vehicles; ensuring that these vehicles meet emission standards throughout their entire life cycle; promoting clean and efficient production processes for methanol fuels; and fostering the green development of methanol as a fuel. Industry observers believe that the widespread adoption of methanol vehicles will undoubtedly benefit the entire sector.

The introduction of methanol fuel in China can be traced back to the Sixth Five-Year Plan period. At that time, Shanxi Province organized nearly 500 medium‑tonnage freight vehicles to conduct a commercial demonstration operation using M14 methanol‑gasoline, achieving promising results. Subsequently, Shanxi Province undertook numerous demonstration projects and pilot programs. Today, the number of provinces and municipalities participating in these pilot initiatives has grown to 26.

Like hydrogen fuel, methanol is an important component of alternative fuels for vehicles. Although methanol does not achieve the zero‑emission status of hydrogen, its advantages—low cost and reduced emissions—are highly compatible with China’s energy mix, which is characterized by oil scarcity, limited natural gas resources, and abundant coal. According to available data, methanol has a simpler molecular structure than coal, gasoline, or diesel, resulting in relatively clean combustion. Compared with gasoline, methanol fuel can cut carbon monoxide and hydrocarbon emissions by 50% to 60% while reducing costs by 30% to 40%.

From a safety perspective, methanol‑powered vehicles are now fully ready for widespread deployment. In 2012, the Ministry of Industry and Information Technology launched pilot programs for methanol‑fuelled vehicles in five Chinese provinces and municipalities—Shanxi, Shanghai, Shaanxi, Gansu, and Guizhou. As of February 2018, all pilot projects had successfully passed joint acceptance inspections conducted by the MIIT, the Ministry of Science and Technology, and the Ministry of Finance. According to available data, during the pilot phase, the ten participating cities deployed a total of 1,024 methanol‑fuelled taxis, buses, and multi‑purpose microvans, accumulating a combined mileage of 184 million kilometers. The “Guiding Opinions on Promoting the Use of Methanol‑Fuelled Vehicles in Certain Regions,” issued on March 19, undoubtedly represent a follow‑up policy based on the outcomes of these acceptance assessments.

The Guiding Opinions propose accelerating the development of a methanol‑vehicle manufacturing system in regions where the necessary conditions are in place, encouraging automobile and related component manufacturers to refine their production capabilities through technological upgrades tailored to the characteristics of methanol vehicles, thereby raising the overall level of methanol‑vehicle manufacturing. The document also calls for the development of methanol‑powered passenger cars, commercial vehicles, non‑road construction equipment, and other types of vehicles and power machinery. In addition, the Guidelines encourage the wider adoption of methanol vehicles, with a particular focus on areas such as Shanxi, Shaanxi, Guizhou, and Gansu—regions that boast favorable resource endowments and substantial experience in operating methanol‑fuelled vehicles—where the deployment of M100 methanol‑fuelled vehicles should be expedited. Furthermore, the Guidelines advocate promoting the use of methanol vehicles in sectors such as official fleets, taxis, and short‑haul passenger transport, where conditions permit.

This year, the Supreme People’s Procuratorate will intensify its efforts to combat crimes involving the infringement of personal information and related offenses.

On the 21st, the Supreme People’s Procuratorate convened a video‑conference, emphasizing the need to further strengthen risk awareness and foster a spirit of struggle, while reinforcing measures at every stage of the procuratorial process to safeguard public security and maintain social stability, and to effectively prevent and defuse all types of risks. It called for an in-depth special campaign to combat organized crime and evil forces, focusing on both prevention and crackdown, and addressing both symptoms and root causes; for stepping up punishment of economic and financial crimes; for continued active participation in the targeted rectification of corruption in poverty‑alleviation efforts; for sustained intensification of efforts to prosecute crimes that damage environmental and resource protection; for strict punishment of offenses that undermine the market economy—such as infringement of intellectual property rights, the production and sale of counterfeit or substandard goods, and acts endangering tax collection and administration; for ensuring equal protection of the legitimate rights and interests of private enterprises and translating the “11 Measures” of procuratorial policy into concrete actions; for strengthening penalties for crimes in the food and drug safety sector; and for improving coordination with the National Supervisory Commission in combating official misconduct, thereby prosecuting such crimes in accordance with the law and advancing the fight against corruption.

The Ministry of Education plans to amend and repeal certain regulations, potentially streamlining the documentation required for teacher qualification certification.

The Ministry of Education plans to issue the “Decision of the Ministry of Education on Streamlining Administration, Facilitating the Public, and Optimizing Services by Amending and Repealing Certain Regulations (Draft for Public Comment),” and is now soliciting public input. The draft proposes revisions to provisions concerning materials required for teacher qualification certification, among other matters. According to reports, in order to implement the CPC Central Committee and the State Council’s directives on streamlining administration, facilitating the public, and optimizing services, and to carry out the work of reviewing and abolishing unnecessary proof‑requiring items, and with the consent of relevant departments, the Ministry of Education has decided to amend certain provisions in four regulations that pertain to proof‑requiring matters.

1. Amend Article 12, Paragraph 1 of the “Primary School Management Regulations” (Order No. 26 of the State Education Commission) from “A primary school may, upon approval by the relevant authorities, grant a leave of absence to students who are unable to continue their studies due to illness (provided they present a certificate from a designated medical institution)” to “A primary school may, upon presentation of a medical record from a hospital at or above the county level, grant a leave of absence to students who are unable to continue their studies due to illness.”

2. Amend Article 11 of the Provisional Regulations for Special Education Schools (Ministry of Education Order No. 1) from “Special education schools may, upon approval by the competent educational administrative department, grant a leave of absence to students who are unable to continue their studies due to illness (provided they present certification from a medical institution at or above the county level)” to “Special education schools may, upon presentation of a medical record from a hospital at or above the county level, grant a leave of absence to students who are unable to continue their studies due to illness.”

3. Amend Article 11 of the Measures for the Implementation of the Regulations on Teacher Qualification (Ministry of Education Order No. 10) from “Applicants for teacher qualification certification shall, within the application acceptance period, submit their applications to the relevant teacher qualification certification authority or to a higher education institution lawfully entrusted, and obtain the relevant materials and forms” to “Applicants for teacher qualification certification shall, within the application acceptance period, submit their applications to the relevant teacher qualification certification authority or to a higher education institution lawfully entrusted.”

4. Amend Article 12 of the Measures for the Implementation of the Regulations on Teacher Qualification (Ministry of Education Order No. 10) from “Applicants for teacher qualification certification shall, within the prescribed time, submit the following basic materials to the teacher qualification certification authority or to a higher education institution lawfully entrusted” to “Applicants for teacher qualification certification shall, within the prescribed time, submit to the teacher qualification certification authority or to a higher education institution lawfully entrusted those items among the following basic materials that have not been verified through electronic data comparison”; amend “(2) Original and photocopy of ID card” to “(2) Original ID card”; amend “(3) Original and photocopy of diploma” to “(3) Original diploma”; amend “(5) Original and photocopy of the Putonghua Proficiency Test Certificate” to “(5) Original Putonghua Proficiency Test Certificate”; and delete “(6) Assessment or supporting documents regarding ideological and moral conduct.”

5. Delete Article 15 of the Measures for the Implementation of the Regulations on Teacher Qualification (Ministry of Education Order No. 10), which reads: “The assessment or supporting documentation regarding the applicant’s ideological and moral conduct shall be completed in accordance with the requirements set forth in the ‘Applicant’s Ideological and Moral Assessment Form’ (see Appendix II). For employed applicants, this form shall be filled out by their employer; for non-employed applicants, it shall be completed by the street office at the applicant’s registered domicile or by the people’s government at the township level. Recent graduates shall have their assessments provided by their graduating institution. Where necessary, relevant authorities may, upon request of the teacher qualification certification body, furnish more detailed supporting documentation.”

6. Delete “(4) Proof of capital verification (where assets or funds have been invested)” from Article 37 of the Measures for the Implementation of the Regulations of the People’s Republic of China on Sino‑Foreign Cooperative Education (Ministry of Education Order No. 20), and amend “(5) Agreement on donated assets and relevant supporting documents (where donations have been made)” to read “(4) Agreement on donated assets and relevant supporting documents (where donations have been made)”; furthermore, revise the provision stating, “Where a foreign educational institution has already cooperated with a Chinese entity to establish a Sino‑foreign cooperative educational institution or program within China, it shall also submit an evaluation report issued by the original approving authority or by a social intermediary organization authorized by that authority,” to read: “Where a foreign educational institution has already cooperated with a Chinese entity to establish a Sino‑foreign cooperative educational institution or program within China, the approving authority shall, through its internal working mechanisms, verify the academic standards, educational quality, and other relevant aspects of the existing programs.”

Four regulations that are clearly no longer suited to the requirements of economic and social development and educational reform and development are hereby repealed:

1. Repeal the Interim Provisions on the Administration of Seals for Privately Operated Schools (Order No. 17 of the State Education Commission and the Ministry of Public Security).

2. Repeal the Interim Provisions on Educational Supervision (Order No. 15 of the State Education Commission).

3. Repeal the Regulations on the Protection and Management of Intellectual Property in Institutions of Higher Education (Ministry of Education Order No. 3).

4. Repeal the Interim Measures for the Compilation and Review of Primary and Secondary School Textbooks (Ministry of Education Order No. 11).

According to the announcement, this decision shall take effect as of the date of its publication, March 20.

Three departments have issued a notice calling for strengthened implementation of the new national standard for electric bicycles.

The State Administration for Market Regulation, the Ministry of Industry and Information Technology, and the Ministry of Public Security recently jointly issued Opinions on Strengthening Supervision over the Implementation of National Standards for Electric Bicycles, further standardizing the production, sale, and use of electric bicycles. The new mandatory national standard for electric bicycles, “Safety Technical Specifications for Electric Bicycles” (GB 17761-2018), will come into effect on April 15, 2019.

With regard to the stringent management of electric bicycle production, following the implementation of the new standards, market regulatory authorities will strengthen oversight of mandatory product certification (CCC certification) for electric bicycles, intensify inspections of certification bodies and manufacturers, and ensure product conformity, thereby preventing vehicles that fail to meet the new standards from obtaining CCC certification and entering the market. The State Administration for Market Regulation, the Ministry of Industry and Information Technology, and the Ministry of Public Security will share information on electric bicycle products that have obtained CCC certification—including certification certificate numbers, vehicle identification codes, motor codes, controller details, battery specifications, and other relevant technical parameters—as well as data on enterprises found to be engaged in non‑compliant manufacturing or sales. Market regulators are required to rigorously investigate and prosecute practices such as unlicensed production, production beyond the scope of mandatory product certification, failure to comply with the new standards, production inconsistent with the CCC certificate, the use of export‑related pretenses to manufacture non‑compliant vehicles, and illegal modification of electric bicycles. For any of these violations substantiated through investigation, the certification body shall, in accordance with the law, take appropriate measures ranging up to revocation of the certification; meanwhile, market regulators shall, pursuant to law, order a cessation of production, impose fines, and confiscate unlawful gains; in cases of serious misconduct, business licenses may be revoked; and where criminal offenses are established, criminal liability shall be pursued in accordance with the law.

With regard to stringent oversight of electric bicycle sales, in regions that implement catalog‑based or publicly announced management of electric bicycle sales, once the new standards take effect, all models listed in catalogs that fail to meet the new standards or lack CCC certification shall be invalidated. Restrictions on the local sale of out‑of‑region vehicles that comply with the new standards and have obtained CCC certification are prohibited. Regulatory scrutiny of e‑commerce operators must be strengthened, requiring e‑commerce platform operators to rigorously verify and register the authentic identity, address, and contact information of sellers of electric bicycles operating on their platforms, and strictly prohibiting the sale of electric bicycles that do not meet the new standards or lack CCC certification. Supervision of electric bicycle dealers’ practices regarding the sale of chargers and lithium‑ion batteries must be enhanced, with strict enforcement of the law against illegal dismantling, modification, and repair of such devices. For those selling non‑compliant vehicles, authorities shall order a cessation of sales in accordance with the law, impose fines, and confiscate any illegal proceeds; in cases of serious violations, business licenses may be revoked pursuant to law; and where criminal offenses are established, criminal liability shall be pursued in accordance with the law.

For electric bicycles posing safety risks, market regulatory authorities shall intensify investigations into defective products and urge enterprises to fulfill their recall obligations. Where key components such as controllers harbor risks of tampering, the manufacturers of those components shall bear the corresponding legal liabilities in accordance with the law. If consumers are involved in traffic accidents due to the purchase or use of non‑compliant vehicles, public security organs shall guide the parties concerned to file civil lawsuits against the manufacturers and sellers, thereby safeguarding their legitimate rights and interests through judicial channels.

Shanghai has unveiled “25 Measures” for science and technology reform to promote the transfer and commercialization of scientific and technological achievements.

On March 20, the Shanghai Municipal Government Information Office held a press conference, at which Vice Mayor Wu Qing unveiled Shanghai’s newly issued “Opinions on Further Deepening Reform of the Science and Technology System and Mechanisms to Strengthen the Source‑Creating Capacity of the Science and Technology Innovation Center.” According to the briefing, accelerating the development of a globally influential science and technology innovation center has entered a phase of in-depth advancement. The Shanghai Municipal Party Committee and the Municipal Government attach great importance to reforming the science and technology system and mechanisms. Since mid-July last year, the Shanghai Municipal Science and Technology Commission, in collaboration with relevant departments, has conducted extensive research and formulated the “Opinions on Further Deepening Reform of the Science and Technology System and Mechanisms to Strengthen the Source‑Creating Capacity of the Science and Technology Innovation Center” (hereinafter referred to as Shanghai’s “25 Measures” for science and technology reform). On March 5, Shanghai convened a conference to advance the deepening of reforms to the science and technology system and mechanisms, launching a comprehensive mobilization and systematic deployment for the effective implementation of these “25 Measures.”

Shanghai’s “25 Measures” for science and technology reform, aimed at building a globally influential center for scientific and technological innovation, sets out 25 key reform tasks and initiatives across six areas. First, it seeks to foster the development of diverse innovation actors, establishing a well‑structured research landscape and R&D system characterized by pluralism, openness, and collaborative synergy. Second, it endeavors to unleash the full potential of science and technology talent, creating an enabling environment that attracts both domestic and international experts while allowing them to fully realize their capabilities. Third, it promotes the transfer and commercialization of scientific and technological achievements, strengthening endogenous momentum among stakeholders and enhancing the efficiency of such transfers. Fourth, it reforms and streamlines research management, deepening the implementation of the “three evaluations” reform to improve research quality and performance. Fifth, it integrates Shanghai into the global innovation network, establishing multi‑level, cross‑sectoral international cooperation frameworks and building a Yangtze River Delta community of scientific and technological innovation. Sixth, it advances the cultivation of an innovative culture, reinforcing the system of research integrity and strengthening intellectual property protection, thereby imbuing Shanghai’s cultural brand with new meaning.

The essence of these measures can be summarized in three key points: First, it is essential to bridge the gap between scientific and technological innovation and socio-economic development. By pursuing simultaneous reforms on both the science‑technology front and the economic‑social front, Shanghai’s “25 Measures” for science‑tech reform aim, on the one hand, to deepen institutional reforms in the science‑technology sector and further strengthen the supply of innovation. In recent years, Shanghai’s capacity for scientific and technological innovation has steadily grown, yet it still lacks world‑class research institutions and landmark, groundbreaking original achievements, leaving a considerable gap before it can fully embody the “Four Leads”—leading new academic ideas, new scientific discoveries, new technological inventions, and new industrial directions. To address this weakness, the policy adopts a “one institute, one plan” approach, piloting innovative systems and mechanisms such as the “Three Noes and One Comprehensive” framework—no fixed administrative rank, no set staffing quota, no constraints on post allocation or total payroll, and integrated budget management—so as to accelerate the cultivation of national laboratories and high‑level innovation institutions that can undertake major national innovation tasks. At the same time, by increasing the share of funding allocated to basic research and refining support mechanisms for basic research, strategic high‑tech research, and public‑interest research, the initiative seeks to achieve qualitative improvements and breakthroughs in the field of basic research. Furthermore, the policy reforms and streamlines the management of science‑tech programs, establishing unconventional review and support mechanisms for major projects involving original, disruptive, and interdisciplinary innovations, and putting in place robust mechanisms for identifying, organizing, and implementing critical core‑technology R&D initiatives, thereby providing solid backing for tackling bottleneck technologies. On the other hand, the policy promotes coordinated economic reform and scientific‑technological innovation, further unleashing demand for innovation. Economic development not only relies on innovation-driven growth but also, in turn, fuels the advancement of innovation itself. The “25 Measures” explicitly call for vigorously developing the science‑tech services industry, strengthening the capacity of universities and research institutes to establish specialized technology‑transfer service agencies, and linking technology‑transfer professionals to incentive‑based compensation schemes. It also advocates robust development of the technology market, integrating and aggregating technological resources, improving the institutional framework for technology transactions, and transforming the Shanghai Technology Exchange into a hub‑type marketplace and a pivotal node within the international technology‑transfer network. Finally, with a focus on the transfer and commercialization of research outcomes, the policy reinforces end‑to‑end support for innovation and entrepreneurship across the entire value chain—spanning the supply side, the demand side, and the service sector.

Second, it is essential to strike the right balance between government and market. Emphasizing the principle of “a vibrant market,” we must accelerate the development of mechanisms that orient technological innovation toward market demand, allocate innovative resources through market forces, and determine innovation rewards based on market outcomes, while allowing the market to play a decisive role in shaping specific innovation activities. Shanghai’s “25 Measures” for science and technology reform explicitly stipulate that, for certain key new types of R&D institutions, research entities shall be granted full autonomy, innovative operational and management systems shall be established, and competitive remuneration frameworks aligned with market realities and internationally benchmarked shall be put in place. As for scientific and technological achievements, pricing may be determined through market‑based methods such as negotiated pricing, listing on technology‑trading markets, or auction. We will speed up the transformation of government functions, placing greater emphasis on strengthening innovation‑related services and shifting the focus of work to strategic planning, tackling major scientific challenges, formulating policies and standards, conducting evaluation and assessment, advancing institutional reforms, and ensuring legal safeguards. Efforts will be concentrated on foundational public‑good tasks such as fostering an enabling environment, guiding policy direction, and providing high‑quality services. Specifically, we will further cultivate a fair market environment: while supporting the innovative development of state‑owned enterprises, we will refine enterprise‑service mechanisms, vigorously nurture and develop private‑sector technology offices, encourage and assist them in undertaking government‑funded research projects and building innovation platforms, and significantly increase support for training technical talent within private‑sector technology enterprises. At the same time, a series of policy measures have been introduced to enhance the atmosphere of innovation and entrepreneurship and to optimize relevant policies.

Third, we must fully unleash and mobilize the creativity and motivation of people. Innovation-driven development is, at its core, talent‑driven; without a strong talent base, there can be no competitive edge in innovation, science and technology, or industry. First, we will implement an income‑distribution mechanism oriented toward the value of knowledge. To ensure that researchers who truly deliver results and make meaningful contributions reap both recognition and rewards, we will explicitly establish a mechanism for the regular growth of the overall performance‑pay budget for public institutions, thereby raising researchers’ incomes. For competitive research projects, expenditures on performance‑related pay—whether as labor costs or indirect costs—and remuneration derived from technology development, technical consulting, and technical services duly registered under technology contracts, as well as awards and bonuses for the commercialization of official scientific and technological achievements, will all be excluded from the overall performance‑pay ceiling of public institutions. Furthermore, for high‑level talents whose numbers reach a specified proportion of the institution’s staff, the institution may allocate its own funds to set salaries independently; any amounts exceeding the institution’s approved performance‑pay cap will not be counted toward that cap. For team leaders who devote themselves full‑time to major strategic tasks, as well as for recruited top‑tier talent, we will adopt case‑by‑case, checklist‑based management and an annual‑salary system, with the funding required for such salaries separately allocated within project budgets. Second, we will further optimize the talent structure. Shanghai’s “25 Measures” for science and technology reform emphasize the need to give equal attention to scientists and technologists, entrepreneurs, and the broader community of innovators and entrepreneurs; to both high‑level innovators and young scientific and technological talent; and to both overseas talent recruitment and domestic innovation‑talent cultivation. We will treat domestically trained talent and overseas recruits equally, prohibiting the establishment of discriminatory criteria or thresholds. Third, we will refine the talent evaluation and incentive system. The “25 Measures” set a clear orientation toward the proper use of talent, adhering to the principle of “whoever employs evaluates, and evaluation is tailored to the task at hand.” We will introduce a representative‑outcome‑based evaluation system and implement differentiated assessment for those engaged primarily in various forms of innovative activity. We will also integrate individual and team evaluations, while respecting and recognizing the actual contributions of each team member. The names of talent‑program projects will no longer serve as titles of distinction, and during all types of reviews and assessments, we will eliminate the practice of placing undue emphasis on publications, professional titles, academic degrees, or awards.

Other

Xi Jinping issued important instructions regarding the March 21 explosion at Jiangsu Xiangshui Tianjiayi Chemical Co., Ltd.

At approximately 2:48 p.m. on March 21, an explosion occurred at a chemical storage tank at Tianjiayi Chemical Co., Ltd. in Chenjiagang Town, Xiangshui County, Yancheng City, Jiangsu Province, affecting 16 nearby enterprises. Following intensive emergency response efforts, all open flames have been extinguished, and air pollutant levels remain within permissible limits. As of now, the accident has resulted in 47 fatalities and 90 critically injured, with additional members of the public sustaining injuries of varying severity.

Following the accident, the CPC Central Committee and the State Council attached great importance to the situation. While en route on an overseas visit, General Secretary of the CPC Central Committee, President of the People’s Republic of China, and Chairman of the Central Military Commission Xi Jinping immediately issued important instructions, calling on Jiangsu Province and relevant departments to spare no effort in emergency rescue operations, search for and rescue those trapped, provide timely medical treatment to the injured, and properly handle post‑incident matters to effectively safeguard social stability. He also stressed the need to strengthen monitoring and early warning systems, prevent environmental pollution, and strictly guard against secondary disasters. Furthermore, he urged a swift investigation into the cause of the accident, the timely release of authoritative information, and enhanced public opinion guidance. Xi Jinping emphasized that, in recent times, several localities have experienced a series of serious safety accidents. All regions and relevant authorities must draw profound lessons from these incidents, intensify efforts to identify and address safety hazards, rigorously enforce the responsibility system for workplace safety, resolutely prevent major and especially serious accidents, and ensure the safety of people’s lives and property.

Li Keqiang, a member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council, issued instructions calling for scientifically sound and effective search-and-rescue operations, all-out efforts to treat the injured, and measures to minimize casualties. He also urged the implementation of robust steps to contain sources of danger and to prevent secondary accidents. Meanwhile, the Ministry of Emergency Management has directed local authorities to conduct further inspections and eliminate safety hazards in key sectors, particularly those involving hazardous chemicals, while reinforcing accountability at every stage.

In accordance with instructions from Xi Jinping and requirements from Premier Li Keqiang, the Ministry of Emergency Management and the Ministry of Ecology and Environment have each dispatched working groups to the scene to provide guidance on emergency rescue operations and environmental monitoring. The National Health Commission has assembled a national-level medical expert team, comprising specialists in critical care medicine, burn treatment, trauma surgery, neurosurgery, and psychological intervention, and sent them to the site to carry out medical rescue efforts. Leading officials from the Jiangsu Provincial Party Committee and the provincial government are on the ground directing response and handling measures. At present, on-site rescue and treatment of the injured are proceeding intensively and in an orderly manner.

Li Xinhua, former member of the CPC Leadership Group and former Deputy General Manager of PetroChina, is under investigation.

According to the Discipline Inspection and Supervision Group of the Central Commission for Discipline Inspection and the National Supervisory Commission stationed at the State-owned Assets Supervision and Administration Commission of the State Council, as well as the Sichuan Provincial Commission for Discipline Inspection and Supervision, Li Xinhua, former member of the Party Leadership Group and deputy general manager of China National Petroleum Corporation, is currently under investigation.

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