JC Master Legal News Issue 867

Key Takeaways for This Issue

The Shanghai Stock Exchange has released the STAR Market Recommendation Guidelines.

Late on March 3, the Shanghai Stock Exchange released the “Guidelines for Recommending Companies for Listing on the STAR Market,” identifying seven priority sectors for listing, including next-generation information technology, high-end equipment, and new materials.

A Decade of Evolution in Investor Relations among Chinese Listed Companies — Summary of the China Listed Companies Investor Relations Report

As a vital interpersonal bridge between listed companies and investors, the company secretary plays a pivotal role in investor relations management.

Better leverage the positive role of taxation in supporting the Belt and Road Initiative.

As the number of countries participating in the Belt and Road Initiative continues to grow, cross-border investment is expanding in scale, economic and trade exchanges are becoming more frequent, and the importance of taxation is increasingly evident. Tax systems are emerging as a key reflection of the business environment along the Belt and Road, tax‑related facilitation is becoming an essential safeguard for investment ease, and tax cooperation is increasingly integral to broader economic and trade collaboration. Tax authorities must fully leverage their functions, wholeheartedly support the overarching goal of opening up, and forge ahead with determination to realize the bright prospects of the Belt and Road Initiative.

Xi Jinping’s Remarks at the Press Conference of the Second Belt and Road Forum for International Cooperation

The theme of this high-level forum was “Jointly Building the Belt and Road Initiative and Forging a Bright Future.” At the Roundtable Summit, participating leaders and heads of international organizations engaged in in-depth discussions on such topics as “Promoting Connectivity and Unlocking New Drivers of Growth,” “Strengthening Policy Coordination to Build Closer Partnerships,” and “Advancing Green and Sustainable Development and Implementing the United Nations 2030 Agenda.” These deliberations refined the guiding principles of cooperation, clarified priority areas, and reinforced institutional mechanisms, culminating in a broad consensus on high-quality joint development of the Belt and Road Initiative. This consensus is reflected in the Joint Communiqué unanimously adopted at the Roundtable Summit and will serve as a roadmap for future international cooperation under the Belt and Road Initiative.

Table of Contents

Table of Contents

Finance & Capital Markets

The Shanghai Stock Exchange has released the STAR Market Recommendation Guidelines.

Some “highlights” of the STAR Market

Corporate & Commercial

A Decade of Evolution in Investor Relations among Chinese Listed Companies — Summary of the China Listed Companies Investor Relations Report

Behind the equity transfer of Gree Electric, multiple consortia are emerging, with Houpu Eyeing the Opportunity Closely; Gree States It Is Still Soliciting Interested Parties.

Taxation

Better leverage the positive role of taxation in supporting the Belt and Road Initiative.

30 Risk Points That Tax Audits of Wages and Salaries Must Examine!

Litigation & Arbitration

The Provincial Higher People’s Court has released the 2018 Report on Judicial Protection of Intellectual Property Rights by Jiangsu Courts.

New Marriage Law: Provisions Regarding Pregnancy During Cohabitation

Other

Xi Jinping’s Remarks at the Press Conference of the Second Belt and Road Forum for International Cooperation

Finance & Capital Markets

The Shanghai Stock Exchange has released the STAR Market Recommendation Guidelines.

Late on March 3, the Shanghai Stock Exchange released the “Guidelines for Recommending Companies for Listing on the STAR Market,” identifying seven priority sectors for listing, including next-generation information technology, high-end equipment, and new materials.

In addition, the Shanghai Stock Exchange has issued the “Q&A on the Review of IPOs on the STAR Market,” which is well worth careful study by investment professionals. The document comprises sixteen key issues, covering such topics as how issuers select their listing criteria, situations where a company is not yet profitable, shareholder matters, R&D expenditures, market capitalization thresholds, employee stock ownership plans, and equity‑based incentive schemes.

What are the key highlights? Below, we’ve quickly outlined them for you—starting with the three main areas of focus:

The Four Principles of Sponsor Institutions

The “Guidelines on Listing Recommendations” stipulate that sponsoring institutions shall, in light of the STAR Market’s positioning, recommend enterprises for issuance and listing on the STAR Market. When assessing the STAR Market’s positioning, sponsoring institutions shall adhere to the following principles:

1. Uphold the principles of focusing on the forefront of global science and technology, the main battlefields of the economy, and the major needs of the nation;

2. Respect the principles governing scientific and technological innovation and the laws of corporate development;

3. Properly balance the current realities of science and technology innovation enterprises with the objectives of developing the STAR Market.

4. Properly balance the relationship between prioritizing companies that receive key support from the STAR Market and those that benefit from the STAR Market’s inclusive approach.

Three types of enterprises are given priority.

Article 3 of the Guidelines stipulates that sponsoring institutions shall give priority to recommending the following enterprises:

1. Technology‑innovative enterprises that align with national strategies, have achieved breakthroughs in critical core technologies, and enjoy high market recognition;

2. Technology‑innovative enterprises belonging to high‑tech industries and strategic emerging industries, such as next‑generation information technology, high‑end equipment, new materials, new energy, energy conservation and environmental protection, and biopharmaceuticals;

3. A technology‑innovation enterprise that achieves deep integration among the internet, big data, cloud computing, artificial intelligence, and manufacturing.

While giving priority to recommending the enterprises specified in the preceding paragraph, sponsoring institutions may, in accordance with the Guidelines, also recommend other enterprises that demonstrate strong capabilities in scientific and technological innovation.

Key Recommendations for Seven Major Sectors

The Shanghai Stock Exchange has stated that sponsoring institutions should accurately grasp the development trends of scientific and technological innovation and give priority to recommending technology‑innovation enterprises in the following sectors:

1. In the field of next-generation information technology, the key areas include semiconductors and integrated circuits, electronic information, next-generation information networks, artificial intelligence, big data, cloud computing, emerging software, the Internet, the Internet of Things, and smart hardware, among others.

2. In the high-end equipment sector, the main areas include intelligent manufacturing, aerospace, advanced rail transit, marine engineering equipment, and related technical services, among others.

3. In the field of new materials, the main areas include advanced steel materials, advanced non-ferrous metal materials, advanced petrochemical and chemical new materials, advanced inorganic non-metallic materials, high-performance composite materials, cutting-edge new materials, and related technical services, among others.

4. In the new energy sector, the main areas include advanced nuclear power, large-scale wind power, high-efficiency photovoltaic and solar‑thermal technologies, high‑efficiency energy storage, and related technical services, among others.

5. In the energy conservation and environmental protection sector, the key areas include high-efficiency energy-saving products and equipment, advanced environmental protection technologies and equipment, cutting-edge eco-friendly products, resource recycling, complete new-energy vehicles, critical components for new-energy vehicles, power batteries, and related technical services, among others.

6. In the biopharmaceutical sector, the main areas include biological products, high-end chemical pharmaceuticals, advanced medical devices and equipment, as well as related technical services;

7. Other sectors that align with the STAR Market’s positioning.

Technological innovation capability is primarily assessed based on these six factors.

In understanding the operational characteristics of science and technology innovation enterprises and thoroughly assessing their technological innovation capabilities, the Listing Recommendation Guidelines require sponsoring institutions to give particular attention to the following matters:

(1) Whether the entity possesses core technologies with independent intellectual property rights, whether the ownership of such core technologies is clear, whether they are domestically or internationally leading, and whether they are mature or subject to rapid iterative risks;

(2) Whether the entity possesses an efficient R&D system, sustained innovation capabilities, and the foundational capacity and potential to achieve breakthroughs in critical core technologies, including but not limited to R&D management practices, the number of R&D personnel, the composition of the R&D team and the backgrounds of key R&D personnel, R&D investment levels, R&D equipment, and the status of technological reserves.

(3) Whether the entity possesses market‑recognized R&D achievements, including but not limited to invention patents, software copyrights, and new‑drug approval certificates related to its principal business; whether it has independently or as lead partner undertaken major research projects; whether it has chaired or participated in the formulation of national or industry standards; and whether it has received national science and technology awards or prestigious industry accolades.

(4) Whether the entity possesses a relative competitive advantage, including but not limited to the size of the industry’s market and the level of technological barriers; its industry position and the profile of its major competitors; its technological strengths and their sustainability; and the competitiveness of its core management and technical teams.

(5) Whether the entity possesses the conditions necessary to effectively translate its technological achievements into commercial outcomes; whether it has established a business model conducive to sustainable operations; and whether it has leveraged core technologies to achieve robust growth—taking into account, but not limited to, the status of technology application, market expansion, the composition of key customers, the scale and growth of operating revenue, and the profitability of its products or services.

(6) Whether it serves high-quality economic development, whether it supports national strategies such as the innovation-driven development strategy, the sustainable development strategy, and the military‑civilian integration development strategy, and whether it contributes to supply-side structural reform. The sponsor institution shall disclose in the “Special Opinion on the Issuer’s Compliance with the STAR Market Positioning Requirements” the relevant verification procedures, supporting rationale, and conclusions.

Some “highlights” of the STAR Market

In 2019, the hottest buzzword in the capital markets at the start of the new year was undoubtedly the STAR Market. Following the Hong Kong market’s vibrant performance in 2018, Shanghai—this winter at the turn of the year—has welcomed a spring brimming with hope, eagerly anticipated yet tinged with trepidation.

Following our previous discussions—covering the popularization of STAR Market rules, a vivid analysis of emerging concepts, and an in-depth examination of how red-chip companies are governed under these regulations—this article will highlight the key terms and hot topics of the STAR Market’s regulatory framework and explore the thought‑provoking implications of these new rules.

One of the key topics is “positioning”—the positioning of the STAR Market.

The “Implementation Opinions on Establishing the STAR Market at the Shanghai Stock Exchange and Piloting the Registration-Based IPO System” (hereinafter referred to as the “Implementation Opinions”) and the “Administrative Measures for the Registration of Initial Public Offerings on the STAR Market (Trial)” (hereinafter referred to as the “Registration Measures”), both issued by the China Securities Regulatory Commission, underscore the STAR Market’s positioning: “oriented toward the forefront of global science and technology, the main battlefields of the economy, and major national needs; aligned with national strategies; possessing critical core technologies; demonstrating outstanding capabilities in scientific and technological innovation; primarily relying on core technologies in production and operations; maintaining a stable business model; enjoying high market recognition and a positive public image; and exhibiting strong growth potential.” Furthermore, these measures emphasize that the STAR Market will “focus on supporting next-generation information technology, high-end equipment, new materials, new energy, energy conservation and environmental protection, as well as biopharmaceuticals—key high-tech industries and strategic emerging sectors—while promoting the deep integration of the internet, big data, cloud computing, artificial intelligence, and manufacturing, leading mid- to high-end consumption, and driving transformations in quality, efficiency, and growth drivers.”

The second hot topic is “market capitalization,” the listing threshold for the STAR Market.

According to six accompanying business rules, including the “Shanghai Stock Exchange Rules for the Review of Issuance and Listing of Stocks on the STAR Market” (hereinafter referred to as the “Listing Review Rules”) drafted by the Shanghai Stock Exchange, companies that align with the STAR Market’s positioning and either remain unprofitable or have accumulated uncompensated losses are permitted to list on the STAR Market. The rules use projected market capitalization as a criterion, thereby not requiring such companies to be profitable.

Thirdly, inclusiveness: the STAR Market permits dual-class share structures and allows red-chip companies to list.

Enterprises that meet certain requirements may adopt a dual-class share structure, and red-chip‑structured companies that satisfy specified conditions—including those employing a VIE structure—are also permitted to list on the STAR Market.

Fourth hotspot: the registration-based system, including the registration process and information disclosure regime of the STAR Market.

Under the relevant regulations, the Shanghai Stock Exchange is responsible for reviewing and approving issuances and listings on the STAR Market, while the China Securities Regulatory Commission (CSRC) oversees the registration of STAR Market stock offerings. Following receipt of an application, the Shanghai Stock Exchange’s review period is, in principle, three months; the CSRC, in turn, must decide within 20 working days whether to approve the registration.

As is well known, one of the key highlights of the STAR Market is its pilot implementation of the registration-based system, which imposes stricter requirements on information disclosure. The STAR Market’s rules introduce three new criteria for disclosure—sufficiency, consistency, and understandability—distinct from the traditional “three characteristics” of truthfulness, completeness, and accuracy. At the same time, the disclosure regime places greater emphasis on disclosing industry-specific information and operational risks.

Fifth hotspot: “Securities Offices + Co-Investment,” implementing a co-investment mechanism through securities office subsidiaries.

The sponsor institution of the issuer, or any other related subsidiary legally established by the securities office that effectively controls such sponsor institution, may participate in the strategic allocation for this offering, subject to a specified lock-up period.

Sixth hot topic: delisting—The STAR Market has instituted the strictest delisting regime.

The STAR Market has abolished the mechanisms for suspending and resuming trading, and once a listed company’s shares have been delisted, they may not apply to be relisted. Delisting may be triggered by five categories: mandatory delisting for material violations, mandatory delisting due to trading‑related reasons, mandatory delisting on financial grounds, mandatory delisting for compliance‑related issues, and voluntary delisting.

Point No. 7 is “share reduction,” with the STAR Market imposing even stricter rules on share sales.

Unlike the main board of the Shanghai Stock Exchange, the STAR Market’s rules impose stricter restrictions on share reductions by controlling shareholders, actual controllers, directors, supervisors, senior management, and core technical personnel. For instance, core technical personnel are subject to a lock-up period; any reduction of pre-IPO shares on the secondary market must not exceed 1% per year; and no reductions are permitted during the first five years if the company remains unprofitable. In addition, the STAR Market has introduced a “non‑public transfer” mechanism: eligible institutional investors may acquire shares through a book‑building process conducted by the sponsor or a securities office designated by the listed company. Furthermore, any subsequent resale by the transferee is subject to additional limitations, including a 12‑month lock‑up period and specific restrictions on the sale of pre‑IPO shares held by certain shareholders.

Point No. 8 is “Appropriateness,” which establishes investor suitability requirements.

The STAR Market requires individual investors to meet certain criteria to trade its stocks: their securities account and cash account must have a combined balance of no less than RMB 500,000, and they must have been engaged in securities trading for at least 24 months. Investors who do not meet these suitability requirements may still participate in the STAR Market by purchasing public mutual funds or other eligible investment products.

The extent of the reforms to the STAR Market’s listing rules is widely recognized. Beyond the aforementioned focal points, innovations and integrations have been introduced in areas such as equity incentives, issuance and underwriting, and market‑based bookbuilding. However, the much‑anticipated “T+0” trading mechanism has yet to be implemented: for stocks issued through an initial public offering or a subsequent share placement, price limits will remain in place during the first five trading days after listing, while trading will continue to follow the T+1 settlement cycle. This arrangement has raised concerns that, in the event of sharp price swings, investors may be unable to promptly cut their losses and that price discovery could be impaired.

Commercial & Corporate

A Decade of Evolution in Investor Relations among Chinese Listed Companies — Summary of the China Listed Companies Investor Relations Report

The educational profile of company secretaries continues to improve, while the gender ratio keeps declining.

As a vital interpersonal bridge between listed companies and investors, the company secretary plays a pivotal role in investor relations management. Over the past decade, statistical analysis of company secretaries’ basic profiles reveals continuous improvement in their educational attainment: in 2018, the share of those holding master’s degrees or higher exceeded 45% for the first time. With a substantial increase in the absolute number of highly educated company secretaries, their relative proportion has also risen by 3.7 percentage points compared to ten years earlier. Meanwhile, the gender gap has steadily narrowed, and the number of female company secretaries continues to grow, reflecting growing recognition of their professional expertise, meticulous attention to detail, and natural affability. Similar trends are observed among securities representatives. As the primary implementers of investor relations initiatives, the overall enhancement of company secretaries’ competencies is bound to elevate the overall quality of investor relations management.

Over the past three years, the frequency of investor‑relations engagements by listed companies has declined, and this trend is positively correlated with market performance.

According to the data, the number of investor‑related Q&A interactions has declined over the past three years: in 2018, 3,561 listed companies posted 360,000 questions and answers, down from 437,000 in 2017 across 3,454 companies. On average, the number of Q&A entries per company fell by 33.2% compared with 2016. In terms of the frequency of investor‑relations meetings, the Shanghai and Shenzhen stock exchanges saw declines of 14.4% and 23%, respectively, over the same period. Moreover, the total volume of such meetings in 2018 was 11% lower than in 2016.

Moreover, these three years coincided with a prolonged slump in the capital markets, demonstrating a positive correlation between the evolution of investor relations and market performance. This pattern is closely tied to the predominantly retail‑oriented investor base in China: during periods of market weakness, investment activity declines markedly, and investors’ willingness to engage proactively with companies also wanes. Yet this situation presents a crucial challenge for listed companies: precisely when markets are sluggish and valuations are undervalued, they should redouble their efforts in investor relations management, thereby helping to foster the market’s healthy and stable development.

3. Over the past three years, the investor relations landscape has become increasingly complex, raising the challenges of managing investor relations.

The number of senior executives leaving their positions has been rising year after year.

Another emerging trend over the past three years is the steady rise in the number of senior executives resigning from listed companies. Once synonymous with high‑earning “golden collars” and a hub for elite professionals, such executives now jokingly refer to themselves as a “disadvantaged group.” In 2018, as the real economy grew increasingly challenging and the stock market declined, the pressure on corporate executives was far greater than that faced by their counterparts at non‑listed offices. Although executive compensation has been rising steadily over the past several years, the accompanying stress has also intensified markedly. Coupled with a climate of stringent regulatory oversight, the resignation rate among senior executives reached a nearly decade‑high.

The number of penalties imposed on listed companies for violations has surged.

At present, although information disclosure in China’s capital markets is generally fairly standardized, challenges remain significant. Specifically, cases of fraudulent disclosure account for 814, or 27%, while instances of non‑compliant disclosure total 1,498, representing 50%.

Data show that companies with prior violations of information disclosure requirements or instances of financial statement restatements constitute a significant and non-negligible segment of the capital market, exerting a substantial impact on the overall quality of information disclosure and the level of investor relations in China’s capital market.

4. Institutional investors contribute to an improvement in the quality of investor relations engagement.

As shown in the large‑screen chart, although the frequency of investor engagement has declined over the past three years, its quality has improved. With an increasing number of listed companies being included in the Shanghai–Shenzhen–Hong Kong Stock Connect and international investment indices, investment research activities have become increasingly professional: the share of institutional research visits has risen year by year, while that of individual research visits has fallen. Given differences in capital scale and expertise, the attention of long‑term investors is a key factor in maintaining the stability of a listed company’s market capitalization, and institutional investors play a crucial role in enhancing the quality of investor‑relations interactions.

5. Leading listed companies have become the market’s focal point.

Although overall engagement metrics show a downward trend, polarization is pronounced, with leading industries and top-tier companies commanding the bulk of market attention. Moreover, there are significant differences in industry‑level interest between individual and institutional investors. In 2018, the sectors receiving the most institutional visits were: information technology, banking, telecommunications, defense and military industries, and electrical equipment—underscoring that even in a weak market, investor relations management remains highly effective.

Passive, extensive communication needs to shift toward proactive, precision‑driven engagement.

In recent years, listed companies have generally become more proactive in disclosing information; however, their communication approaches remain largely reactive and rudimentary, relying primarily on interactive Q&A on regulatory websites, answering inquiry calls, hosting investor briefings, and conducting roadshows—centered mainly on passive information disclosure and responses to queries. Proactivity in information disclosure encompasses not only the content itself but also the effectiveness of subsequent, proactive communication, which should be a key performance metric in investor relations. Moreover, the manner in which information is presented, the methods of communication, and the channels used should align with audiences’ screen‑reading habits, moving toward a more proactive and refined approach.

Behind the equity transfer of Gree Electric, multiple consortia are emerging, with Houpu Eyeing the Opportunity Closely; Gree States It Is Still Soliciting Interested Parties.

A single stone stirs up a thousand ripples: the equity transfer involving Gree Electric, a star enterprise with a market capitalization of hundreds of billions of yuan, has sparked endless speculation from the outside world.

Recently, the company announced that its controlling shareholder, Gree Group, plans to transfer, via a public solicitation of potential acquirers, 15% of Gree Electric’s total shares, which could result in a change in the company’s controlling interest.

In response, an insider at the Zhuhai State-owned Assets Supervision and Administration Commission stated that details and progress regarding the “transfer of shares in Gree Electric Appliances” should be based on information released by the company itself. As for the report in the Securities Daily about Houpu Investment extending an “olive branch,” the insider neither conofficeed nor denied it. Meanwhile, Gree Group also said, “We are not aware.”

However, during the interview, a senior representative from Houpu Investment explicitly expressed to a Securities Daily reporter an interest in Gree’s equity, stating: “We believe Gree Electric is an excellent company.” He added that Houpu will closely monitor Gree.

According to reports, in fact, it is not only Houpeng Investment—several other consortia have also expressed interest in acquiring equity in Gree Electric Appliances.

An informed source revealed: “As for the prospective acquirer, although several versions have been circulating in the market, this equity transfer involving Gree Group concerns state-owned assets and is far from straightforward. It will still require a series of procedures, including regulatory approval, tendering, or negotiated transfers. At present, Zhuhai’s state‑owned assets authority has only expressed its intention to proceed with the transfer, and there are already preliminary interested parties; however, significant uncertainties remain, and all parties involved will proceed with utmost caution.”

In response to reports of multiple potential bidders, Gree Electric’s board secretary, Wang Jingdong, stated: “At present, no specific agreement has been reached with any particular party. The transfer process is currently in the public solicitation phase; please stay tuned for further announcements.”

Houpure Investment: Will Closely Monitor Gree

Gree Electric’s controlling shareholder, Gree Group, is preparing to divest a 15.22% stake in Gree Electric. According to the announcement, the proposed transaction value for this equity portion amounts to RMB 41.1 billion.

This sudden transfer of equity, though still unresolved, has thrust the usually low-key Houpu Investment into the spotlight, catapulting it into the limelight. Multiple reports suggest that Houpu may be the buyer.

Recently, a spokesperson for Houpu Investment told a reporter from the Securities Daily: “We believe Gree is an excellent company. As a professional private equity office, Houpu closely monitors any high-quality enterprise with investment potential.”

Who exactly is Houpu Investment, and does it have the financial strength to take over?

Houpu Investment is regarded as a partnership‑style private equity fund built to international standards. Founded by Fang Fenglei, a China partner at Goldman Sachs, Houpu Fund has attracted a distinguished roster of investors, including Goldman Sachs and Singapore’s Temasek. Over the more than decade since its inception, Houpu has been notably active, acquiring a HK$1.83 billion stake in Mengniu, investing in iron ore projects in Mongolia, co‑investing with Temasek in Yurun Food, and backing over 22 Chinese start-ups, among them Xiaomi and NIO.

However, RMB 41.1 billion is by no means a small sum. Determining the ultimate buyer, as well as the transaction price and whether it truly aligns with the objectives and requirements of mixed‑ownership reform, will be crucial.

Although Houpu Investment has expressed a strong willingness to participate in the acquisition of equity in Gree Electric, Gree has remained relatively noncommittal.

And it’s not just Houpu Investment that has extended an olive branch.

It is understood that several consortia and institutions have expressed interest in Gree Electric’s equity, but it remains unclear which party will ultimately secure the stake.

Gree Group stated that, at present, the specific plan for this public solicitation of transfer is still under further study and formulation.

Since its establishment in 1991, the controlling stake in Gree Electric has remained with Gree Group, which is under the jurisdiction of the Zhuhai Municipal State-owned Assets Supervision and Administration Commission. If this equity transfer is successful, Gree Group will hold only 3.22% of the total share capital and retain voting rights, while the new shareholder, with a 15% stake, will become the largest shareholder.

However, given the extreme caution exercised by all parties in this equity transfer, the identity of the transferee remains shrouded in mystery, sparking widespread speculation. The senior management team led by Dong Mingzhu, along with the distributor network, is widely regarded as the “first in line” to take over.

According to Gree Electric’s third-quarter report for last year, as of September 30, 2018, Gree Group held a 18.22% stake in Gree Electric, while the second-largest shareholder, Jinghai Dan, held an 8.91% stake.

Among Gree Electric’s top ten shareholders, although Dong Mingzhu ranks last, the second-largest shareholder, Jinghai Guarantee, is backed by distributors and is widely regarded as acting in concert with her. Currently, Dong Mingzhu and her concerted actors hold approximately 10% of the company’s shares.

If Jinghai Guarantee successfully acquires a 15% stake in Gree this time, the battle for control of Gree and the ensuing father–son rivalry will be resolved.

However, some industry insiders believe that securing a 15% stake would be quite challenging for distributors. While it is plausible that Dong Mingzhu, together with management and distributors, could acquire less than 10% of the shares, she is very likely to rally external investors to jointly acquire a 15% stake in Gree Electric Appliances.

In addition to gaining control of Gree Electric through equity, the battle over “decision‑making power” on the board of directors is set to be fiercely contested. “Handing a market‑oriented company over to market‑oriented managers is unlikely to trigger major upheaval; but if external forces intervene and the controlling shareholder gains the right to reshuffle the board, it could unleash a seismic shock for Gree. Conversely, if the new investor aligns itself with the existing management team, that could help maintain stability to some extent—though it would also sow the seeds of autocratic decision‑making. Still, given Gree’s relatively dispersed shareholding structure, the position of the controlling shareholder will be highly delicate,” an industry insider noted.

In addition to Dong Mingzhu’s team, other investors are also eyeing Gree’s equity with keen interest—for instance, Houpu Investment, which has recently entered the fray. According to reports, Houpu Investment is considering partnering with a Macau‑based financial investment office to participate in the acquisition of state‑owned shares in Gree Electric Appliances, and it may have already reached a preliminary agreement with the Zhuhai Municipal State‑Owned Assets Supervision and Administration Commission.

According to reports, Houpu Investment has made no secret of its interest in Gree Electric’s equity. However, the Zhuhai State-owned Assets Supervision and Administration Commission also stated: “The new investor has not yet been identified.”

Foxconn, a manufacturing giant, as well as internet giants like Alibaba and JD.com, have all reportedly expressed interest in acquiring a stake in Gree Electric. Although these companies have maintained an ambiguous public stance, they are nonetheless viewed by outsiders as potential suitors.

“In addition to Hopu Investment, several other consortia have already expressed interest in Gree Electric’s equity. Previously, Hillhouse Capital and others also stepped in to support Gree in the secondary market. Gree Electric is a high-quality asset—a ‘lucrative prize’ that many players are eager to secure, though not all may succeed. What’s certain is that the Zhuhai State-owned Assets Supervision and Administration Commission already has potential bidders, though it may be waiting for more options as well,” said an industry insider.

A “testing ground” for mixed-ownership reform

If this transfer plan is approved, the introduction of private capital is highly likely.

An official from the Zhuhai State-owned Assets Supervision and Administration Commission stated, “Gree is the ‘experimental field’ for mixed-ownership reform among Zhuhai’s state-owned enterprises.”

According to industry insiders, the Zhuhai State-owned Assets Supervision and Administration Commission had long since outlined a strategy to advance mixed-ownership reform at Gree Electric Appliances. The recent infusion of external capital is one step in that process; however, whether the deal ultimately goes through will depend on how smoothly the proceedings unfold.

Analysts at Guosheng Securities believe that “Gree’s mixed‑ownership reform represents a pivotal step in state‑owned enterprise (SOE) reform, signaling that state assets are poised to enter a new phase of market‑based pricing. With this round of SOE reform now officially underway, and assuming progress remains on track, it could rival the share‑splitting reform in significance and is highly likely to unlock a fresh wave of institutional dividends.”

Although the identity of the transferee and the specifics of the equity transfer at Gree Electric remain shrouded in uncertainty, the secondary market has already erupted in excitement. Following the announcement of the trading suspension, Gree Electric posted two consecutive daily limit-up rallies. On April 10, the stock recorded a record‑high turnover of RMB 18.2 billion, with foreign investors net buying RMB 1.4 billion—of which RMB 1.09 billion was channeled through the Shenzhen Stock Connect.

Industry insiders believe that, unless the equity transfer involving Gree remains unresolved, this situation will persist in the secondary market.

Taxation TAXATATION

Better leverage the positive role of taxation in supporting the Belt and Road Initiative.

As the number of countries participating in the Belt and Road Initiative continues to grow, cross-border investment is expanding in scale, economic and trade exchanges are becoming more frequent, and the importance of taxation is increasingly evident. Tax systems are emerging as a key reflection of the business environment along the Belt and Road, tax‑related facilitation is becoming an essential safeguard for investment ease, and tax cooperation is increasingly integral to broader economic and trade collaboration. Tax authorities must fully leverage their functions, wholeheartedly support the overarching goal of opening up, and forge ahead with determination to realize the bright prospects of the Belt and Road Initiative.

In 2013, General Secretary Xi Jinping, with a broad vision of China’s and the world’s development trends, proposed the Belt and Road Initiative to promote common prosperity among all countries. Over the past six years, the Belt and Road Initiative has transformed from an idea into concrete actions and from a vision into reality, aligning with the prevailing trend of peaceful development and win-win cooperation, and resonating with the shared aspiration of nations for open, interconnected growth. It is now becoming a vital platform for advancing the building of a community with a shared future for mankind. Taxation plays a crucial role in resource allocation, cross-border flows of production factors, and international economic and trade exchanges, making tax cooperation an essential component of Belt and Road cooperation. Tax authorities must thoroughly study and implement the important instructions of General Secretary Xi Jinping on the development of the Belt and Road Initiative and the deepening of international tax cooperation, earnestly carry out the decisions and arrangements of the CPC Central Committee and the State Council, and fully leverage the functions and roles of taxation to support the construction of the Belt and Road.
Taxes play a crucial role in supporting the Belt and Road Initiative.
As the Belt and Road Initiative advances to cover broader scopes, wider sectors, and higher levels, the number of participating countries continues to grow, cross-border investment is expanding in scale, and the frequency of economic and trade exchanges is increasing. Consequently, the importance of taxation is becoming ever more pronounced: tax systems are increasingly serving as a key indicator of the business environment in countries and regions along the Belt and Road, tax‑related facilitation is emerging as an essential safeguard for investment ease, and tax cooperation is steadily becoming an integral component of economic and trade collaboration.
It helps facilitate smooth economic and trade ties among countries along the Belt and Road. The Belt and Road Initiative emphasizes aligning the development strategies of all parties, seeking to forge interconnected links across nations, cultures, and systems. Tax cooperation is a particularly crucial component, playing a vital role in advancing connectivity among countries. A fair and modern international tax system requires the establishment of globally shared tax technical standards and principles, thereby enhancing tax certainty. Accordingly, deepening international tax cooperation, strengthening policy coordination and administrative collaboration, and removing barriers to factor allocation caused by the localization of tax laws are essential safeguards for Belt and Road development—and an inevitable choice for advancing together in a spirit of win‑win cooperation.
It helps promote complementary strengths among countries along the Belt and Road. In the context of global economic development, the flow of resources and factors of production can reshape and optimize a country’s factor endowments and its comparative‑advantage structure, thereby transforming its trade and investment patterns. Countries and regions along the Belt and Road account for more than 60 percent of the world’s population, yet their combined economic output represents only about 30 percent of global GDP. This underscores the imbalances in global economic growth while highlighting the substantial growth potential of these economies. Moreover, these countries exhibit diverse comparative advantages, varying resource endowments, and strong complementarities in trade and investment. Tax cooperation can enhance the cross‑border allocation of production factors, enabling countries along the route to leverage their strengths, address deficiencies in factor endowments, and cultivate new comparative advantages, thus fostering coordinated economic and trade growth across nations.
It is conducive to fostering economic development in countries along the Belt and Road. Global economic growth necessarily requires the orderly, free flow and efficient allocation of production factors, as well as the promotion of trade liberalization and investment facilitation. By leveraging the positive impact of tax policies on economic development, it helps reduce transaction costs, enhance economic efficiency, and stimulate economic growth in regions along the Belt and Road, thereby creating greater well-being for the people of these countries and advancing inclusive global economic growth.
On this basis, international tax cooperation has become an indispensable and vital component of the global governance system. The Group of Twenty (G20) summits have repeatedly underscored the need to support and advance international tax reform and cooperation, striving to establish a fair, sustainable, and modern international tax system.
In recent years, the tax authorities have achieved significant results in supporting the Belt and Road Initiative.
In recent years, the tax authorities have upheld the Silk Road spirit of “peaceful cooperation, openness and inclusiveness, mutual learning and mutual appreciation, and mutually beneficial win-win outcomes,” adhering to the principles of extensive consultation, joint contribution, and shared benefits, thereby effectively advancing the Belt and Road Initiative.
Vigorously implementing tax and fee reductions to foster a high-quality tax‑business environment. Tax and fee cuts are a major measure to ease the burden on enterprises and an essential component of optimizing the tax‑business climate. In recent years, China has successively rolled out a series of tax‑and‑fee reduction policies, and this year has introduced an even larger package totaling nearly RMB 2 trillion. As the primary force in delivering these measures, China’s tax authorities have resolutely acted on General Secretary Xi Jinping’s important instructions on tax and fee reductions, mobilizing all resources and going all out to ensure that these policies take root and deliver tangible benefits—benefiting both domestic and foreign‑invested enterprises, supporting Chinese companies “going global” while also facilitating the attraction of foreign investment. In the first quarter alone, cumulative new tax reductions amounted to RMB 341.1 billion, further enhancing the business environment.
First, we have devoted ourselves wholeheartedly to coordinated planning. This round of tax and fee reductions involves numerous tax and fee categories, multiple internal departments, various external agencies, and multiple levels within the tax system. From the State Taxation Administration down to grassroots tax sub‑bureaus, working groups led by principal officials have been established at each level, creating a unified command structure that ensures “comprehensive coordination from top to bottom,” thereby guaranteeing the consistent, efficient, and standardized implementation of these policies.
Second, we have made every effort to ensure effective implementation. Adhering to meticulous operations and precise execution, we have broken down the policy‑implementation tasks into 443 specific items, assigning clear responsibilities and timelines to each; to date, 140 of these items have been completed. We have also rebuilt the statistical accounting and analysis system and established a dedicated digital platform, enabling automated data collection and aggregation for tax and fee reductions without any human intervention, thereby accurately measuring the outcomes of these measures.
Third, we have devoted ourselves wholeheartedly to achieving tangible results. With tight deadlines and heavy workloads in implementing tax and fee reduction policies, the tax system—from top to bottom—has demonstrated a strong sense of responsibility, worked overtime, tackled tough challenges, and committed itself fully to the task. For example, with each reform, we have ensured comprehensive outreach, guidance, and training for all taxpayers; by the end of March, we provided full‑coverage guidance to more than 9 million general VAT taxpayers within just five days, and in early April, we extended that same level of support to over 48 million small and micro enterprises in only ten days.
Actively establishing tax administration cooperation mechanisms to support and facilitate smooth economic and trade flows. In line with General Secretary Xi Jinping’s important instructions on strengthening global tax cooperation, building on the “Belt and Road” Tax Cooperation Conference co-hosted in May 2018 with relevant countries and international organizations, the State Taxation Administration convened the first “Belt and Road” Tax Administration Cooperation Forum in Wuzhen, Zhejiang, from April 18 to 20, 2019. The forum brought together heads of tax authorities or their authorized representatives from 85 countries and regions, along with representatives from 16 international organizations, numerous academic institutions, and multinational enterprises. It stands as the highest‑level, home‑grown multilateral event hosted by China’s tax authorities to date, featuring the largest number of participants, the broadest scope, and the highest level of international attention. Through the concerted efforts of all parties, the forum yielded significant outcomes in four key areas.
First, a tax administration cooperation mechanism under the Belt and Road Initiative has been established. During the forum, 34 Council members, 22 observers, and 19 members of the Tax Administration Capacity‑Building Alliance jointly signed the first Memorandum of Understanding on tax administration cooperation for the Belt and Road, formally launching this mechanism. This mechanism is a standardized, institutionalized, official multilateral platform for tax cooperation, jointly proposed, deliberated, and established by the tax authorities of countries and regions along the Belt and Road. It plays a positive role in dismantling tax barriers, facilitating trade and economic exchanges, and advancing the United Nations’ 2030 Agenda for Sustainable Development.
Second, the Belt and Road Tax Administration Capacity‑Building Alliance has been established. Comprising 19 countries and regions, the Alliance will help countries and regions along the Belt and Road jointly enhance their tax administration capabilities by conducting tax training, providing technical assistance, conducting research on cutting-edge tax issues, and developing knowledge‑sharing products. As the platform for the Alliance, China’s tax authorities have leveraged existing tax training institutions to set up two Belt and Road Tax Academies in Beijing and Yangzhou, with additional Belt and Road Tax Academies in Kazakhstan, China’s Macao, and other jurisdictions slated to open in due course.
Third, the consensus on tax administration cooperation under the Belt and Road Initiative was further deepened. The Wuzhen Declaration was issued, in which all forum participants welcomed and supported the Belt and Road Initiative, emphasizing that tax administration cooperation is a key component of international cooperation within the framework of the Belt and Road. They pledged to strengthen collaboration, share best practices, establish a transparent, efficient, stable, and predictable tax‑cooperation mechanism, foster a growth‑friendly tax environment, and promote economic development in countries and regions along the Belt and Road.

Fourth, an Action Plan on Tax Administration Cooperation under the Belt and Road Initiative was formulated. Building on the Wuzhen Declaration, a clear roadmap and timeline were established, resulting in the Wuzhen Action Plan (2019–2021), which ensures that all participating parties to the cooperation mechanism take concerted action to achieve the plan’s phased objectives.
This forum, along with the Belt and Road Tax Administration Cooperation Mechanism, is characterized by high transparency, broad representation, strong inclusiveness, and a pragmatic approach. It is committed to further facilitating smooth trade, has received high praise from all participating parties, and has made a significant tax‑related contribution to the Second Belt and Road International Cooperation Summit Forum.
Continuously optimizing cross-border tax services to help enterprises grow and thrive. For six consecutive years, the State Taxation Administration has launched the “Spring Breeze Action for Convenient Tax Services,” constantly innovating and refining tax measures that support the Belt and Road Initiative, thereby providing robust support for the development of cross-border businesses.
First, we have issued country-specific investment tax guides to make it easier for enterprises to access relevant policies. We have conducted comprehensive country‑by‑country tax information studies covering 106 countries and regions, including those along the Belt and Road Initiative and China’s major investment destinations, and published tailored tax guides for outbound investment. To date, we have released 84 such guides, covering 67 Belt and Road countries, helping Chinese enterprises “going global” quickly and conveniently understand the business environment, key tax types, tax administration systems, and tax‑related risks in their target markets, thereby reducing compliance costs and enhancing their ability to manage tax risks.
Second, we have established an international tax service platform to ensure that businesses can more smoothly articulate their needs. A dedicated “Belt and Road” hotline has been launched on the national 12366 tax service line. Additionally, the 12366 Shanghai (International) Tax Service Center has been set up, offering professional tax guidance to cross-border taxpayers through a bilingual Chinese–English website and multilingual advisory services. At the same time, we are appropriately guiding accounting offices, tax advisory offices, and other intermediary agencies to provide foreign‑investment tax and legal advisory services to enterprises expanding overseas.
Third, we launched targeted policy briefings and guidance to help businesses address their concerns more directly. In 2018 alone, tax authorities organized nearly a thousand outreach events on Belt and Road tax policies, enabling cross-border taxpayers to gain a clearer understanding of the relevant tax measures. We also provided consultations on the tax regimes of host countries, enhanced tax compliance for outbound investments, and guided enterprises to voluntarily adhere to foreign laws and regulations, thereby supporting both Chinese companies expanding overseas and foreign offices investing in China to achieve greater success.
Effectively strengthen policy coordination to safeguard the legitimate rights and interests of cross-border taxpayers. The State Taxation Administration, with a focus on promoting equal and mutually beneficial cross-border investment, has intensified efforts in negotiating and concluding tax treaties and resolving tax-related disputes, thereby protecting the tax rights and interests of cross-border enterprises.
First, we have accelerated the negotiation and conclusion of tax treaties to strengthen mutual protection of taxpayers’ rights. Since 2013, China has signed or revised tax treaties with a total of 24 countries, 17 of which are participating in the Belt and Road Initiative. To date, China’s network of tax treaties covers 111 countries and regions worldwide, creating a stable and favorable tax‑legal environment for cross‑border investment.
Second, actively resolve tax-related disputes and eliminate double taxation. Leveraging the mutual agreement procedure under tax treaties, we promptly address tax controversies involving countries along the Belt and Road. Since 2017, the State Taxation Administration has conducted 248 bilateral consultations with the tax authorities of relevant countries, thereby helping cross-border enterprises avoid double taxation totaling RMB 5.05 billion.
Third, we have earnestly implemented tax policies to achieve mutually beneficial outcomes. Since 2017, we have put into effect the policy of temporarily exempting withholding income tax on direct reinvestment of distributed profits by foreign investors and expanded its scope of application. In 2018, nearly 500 enterprises benefited from the deferred taxation regime, with deferred tax payments or tax refunds totaling over RMB 4.7 billion. We have also adopted a comprehensive credit method for overseas investment income, effectively reducing the tax burden on such income. Furthermore, the policy increasing the additional deduction rate for R&D expenses from 50% to 75% has been extended to all enterprises, and expenses incurred for commissioned R&D conducted abroad have been included in the scope of the additional deduction, thereby supporting innovation and development among both domestic and international offices.
Gradually establish and improve working mechanisms to provide specialized tax support. The State Taxation Administration leverages its strengths, puts in place institutional frameworks, and diligently carries out related tasks to contribute to the Belt and Road Initiative.
First, a dedicated agency was established to undertake specialized tasks. The International Taxation Department of the State Taxation Administration set up an Overseas Tax Division, which is solely responsible for providing tax services and management support to Chinese enterprises investing abroad. In collaboration with the Ministry of Foreign Affairs and the Ministry of Commerce, tax officials have been posted to the embassies and consulates of China’s major investment‑receiving and trade‑partner countries. To date, 12 tax officers have been assigned to Chinese missions along the Belt and Road, thereby effectively advancing tax administration cooperation with these host countries.
Second, specialized measures were introduced to refine the support mechanism. In April 2015, the State Taxation Administration, from three perspectives—“negotiating and concluding tax treaties to safeguard rights and interests, improving services to promote development, and strengthening cooperation for mutual benefit”—formulated and rolled out ten tax measures to support the Belt and Road Initiative. Starting in October 2015, in line with the requirements set forth in the “Plan for Deepening the Reform of the National and Local Tax Collection and Administration Systems” issued by the CPC Central Committee and the State Council to enhance tax services for the Belt and Road Initiative, nine policy measures across nine key areas were successively introduced to advance this initiative, thereby vigorously promoting the international expansion of Chinese equipment and fostering international capacity cooperation. In April 2018, the Administration issued Guiding Opinions on Strengthening Tax Cooperation under the Belt and Road Initiative, further advancing tax cooperation along the Belt and Road through sector‑specific and tiered approaches, focusing on three pillars: deepening multilateral cooperation, enhancing bilateral collaboration, and bolstering capacity building.
Third, we have actively engaged in international tax technical assistance. The State Taxation Administration established the first OECD Multilateral Tax Training Centre located in a non-OECD country, in Yangzhou, China. To date, it has organized 22 training sessions for 412 tax officials from more than 50 countries and regions along the Belt and Road, thereby significantly enhancing the tax administration capacity of developing countries.
Further enhance all tax-related work to support the development of the Belt and Road Initiative.
At present and in the period ahead, the tax authorities will continue to thoroughly implement the important instructions of General Secretary Xi Jinping, and work to achieve even greater results in advancing the Belt and Road Initiative.
Continuously deepen international tax cooperation. Faithfully implement the outcomes of the Second Belt and Road Forum for International Cooperation and the consensus reached under the Belt and Road Tax Administration Cooperation Mechanism, further promoting exchanges and cooperation among tax authorities of participating countries, attracting more nations to join the mechanism, and striving to make it a pragmatic, effective, and efficient platform for collaboration. Expand the scope of international tax cooperation to support cross-border trade and investment and foster economic growth. Continue to dispatch tax officials to key investment destination countries and deepen tax-related exchanges and cooperation.
Actively engage in international tax policy coordination. Promote the establishment of tax rules and guidelines that are universally adhered to, eliminate tax barriers and international double taxation, and optimize the cross-border allocation of production factors, thereby expanding the shared interests of Belt and Road economic and trade exchanges through mutually accepted tax principles. Establish an effective mechanism for resolving international tax disputes, seeking the optimal balance between safeguarding national tax rights and protecting investors’ legitimate interests, and fostering fair competition in Belt and Road economic and trade relations through equitable tax consultations. Develop cross-border tax service‑consultation and administration‑cooperation mechanisms, enhance tax transparency, and encourage compliant operations in cross‑border trade and investment, thus bolstering investor confidence in Belt and Road economic and trade engagements through greater tax certainty.
Continuously build a tax service system that promotes two-way opening-up. Adhering to the principle of combining “attracting investment” with “going global,” further optimize tax measures to support the Belt and Road Initiative. Enhance tax legal advisory services for key investment destinations, strengthen the collection and analysis of overseas tax information, and steadily expand the number of country-specific investment tax guides to improve compliance. Over the next two years, China’s tax authorities will update and issue an additional 100 country-specific investment tax guides, achieving comprehensive coverage of the key countries and regions involved in the Belt and Road Initiative.

Vigorously assist developing countries in enhancing their tax administration capacity. Fully leverage both international and domestic resources to scale up tax training and technical assistance for developing countries, with a particular focus on those along the Belt and Road. Relying on the Belt and Road Tax Academy, we will organize an additional 12 training sessions this year, each accommodating 350 participants, thereby jointly advancing mutual support for strengthening tax administration capabilities among Belt and Road countries and regions.
The Belt and Road Initiative is unfolding a grand vision that spans vast distances and connects the world, bringing significant opportunities to global economic development. The tax authorities will shoulder their historic mission with courage, fully leverage their functions, and wholeheartedly support the overarching strategy of opening up, striving to advance toward the bright prospects of the Belt and Road!

30 Risk Points That Tax Audits of Wages and Salaries Must Examine!

Risk 1

In the company’s payroll records, the employer is consistently listed as the sole taxpayer, or income tax is filed only for one or two employees over an extended period.

Risk 2

Employees’ salaries have long been either zero or one yuan.

Risk 3

Most employees earn 3,500 yuan or close to that amount.

Risk 4

Large-scale or well-performing entities have long reported a tax liability of zero yuan.

Risk 5

Some employees have received their salaries, but no full‑amount individual income tax returns have been filed for all of them.

Risk 6

There is a significant gap between the number of individuals filing individual income tax returns and the number of individuals contributing to social insurance.

Risk 7

There is a significant discrepancy between the wages and salaries reported in the individual income tax filing system and those reported in the enterprise income tax annual return.

Risk 8

Hide the number of employees to meet the criteria for small and micro enterprises and thereby qualify for the preferential corporate income tax policies applicable to such entities.

Risk 9

An employee has two or more sources of salary and wages but has not filed individual income tax returns on their own.

Risk 10

The company has undergone a change in equity interests held by an individual, but no individual income tax has been reported.

Risk 11

At year-end, the company distributed dividends to individual shareholders but failed to withhold personal income tax.

Risk 12

The company has a natural person shareholder who has borrowed funds that have remained unpaid for an extended period and have not been used for business purposes.

Risk 13

The company frequently provides employees with benefits and allowances without including them in the payroll for individual income tax reporting.

Risk 14

The company artificially inflated headcount to split high salaries, thereby reducing its individual income tax liabilities.

Risk 15

The company has a practice of having employees use expense receipts to offset their salaries.

Risk 16

The company has distributed a large number of gifts to its customers without withholding and remitting the applicable individual income tax as required by law.

Risk 17

Subsidies and allowances paid by the company to employees each month under the guise of meal allowances are not included in the monthly wages or salaries for the purpose of withholding individual income tax.

Risk 18

The company employs retirees and temporary workers but has failed to file their individual income tax returns.

Risk 19

The company has paid service fees to external personnel and has withheld individual income tax accordingly; however, it has not obtained invoices for these service fees.

Risk 20

The company has employees whose annual salary and wages exceed RMB 120,000, yet they have failed to file their individual income tax returns within the statutory deadline.

Risk 21

The company has been issuing monthly travel allowances to employees under the guise of such payments, with the aim of reducing individual income tax liabilities.

Risk 22

The company has long maintained a practice of disbursing salaries in cash, often in substantial amounts.

Risk 23

The company has, in a given tax year, applied the individual income tax calculation method for year-end bonuses on multiple occasions.

Risk 24

The company frequently reimburses employees for routine expenses unrelated to its business operations, yet it fails to report and withhold individual income tax on such payments.

Risk 25

Companies often accrue salaries but fail to disburse them for extended periods.

Risk 26

The accounting voucher prepared for payroll disbursement includes only the bank’s salary‑payment conofficeation as an attachment, with no individual employee details.

Risk 27

The company has been circumventing payroll income tax by issuing personal loans.

Risk 28

The company has failed to disburse wages on a monthly basis, instead making a lump-sum payment covering several months’ salaries, while also incorrectly withholding individual income tax.

Risk 29

The company has instances where former employees are still filing individual income tax returns.

Risk 30

The company has engaged in practices of artificially altering tax categories in individual income tax returns, such as changing “wages and salaries” to “dividends and bonus income.”

LITIGATION & ARBITRATION

The Provincial Higher People’s Court has released the 2018 Report on Judicial Protection of Intellectual Property Rights by Jiangsu Courts.

On the afternoon of April 23, the Provincial Higher People’s Court convened a press conference at the Suzhou Intellectual Property Tribunal to mark World Intellectual Property Day. At the event, the court released the “2018 Jiangsu Courts’ Blue Book on Judicial Protection of Intellectual Property” and highlighted ten landmark cases, providing a comprehensive overview of the key developments and major initiatives in Jiangsu courts’ intellectual property judicial protection efforts during 2018. The press conference was attended by representatives from the National and Provincial People’s Congresses, members of the Chinese People’s Political Consultative Conference, media reporters, lawyers, and other stakeholders from across society.

In 2018, the Jiangsu courts proactively responded to the intrinsic demands of the province’s economic development and technological innovation, as well as to rights holders’ calls for stronger intellectual property protection. They put forward the requirement of providing the strictest possible IP protection and implemented and deployed this policy at the provincial court conference on IP and foreign-related commercial adjudication. Throughout the year, courts across the province kept their work officely focused on enforcing the principle of the strictest IP protection, fully leveraging the leading role of judicial IP protection. Through case adjudication, they further promoted technological innovation, standardized market competition, and worked to foster a favorable legal and business environment conducive to the high-quality development of an innovation-driven economy, achieving notable results in judicial IP protection. Below, I will briefly introduce the main contents of the 2018 Jiangsu Courts Intellectual Property Judicial Protection Blue Book, including an overview of the current state of IP judicial protection in Jiangsu and selected landmark cases.

I. Main Features of Intellectual Property Judicial Protection in Jiangsu Courts

— Fully leveraging the adjudicatory functions, courts in Jiangsu Province handled a large number of intellectual property cases in accordance with the law. In 2018, Jiangsu courts accepted a total of 19,938 IP cases and concluded 16,926. Newly filed first-instance civil IP cases numbered 15,984, up 45.48% year on year; criminal IP cases totaled 433, an increase of 32.01%; and administrative IP cases stood at 10, down 47.36% compared with the previous year. By type of civil case, technology‑related disputes rose 22.61% year on year, copyright disputes surged 62.86%, trademark disputes increased by 29.72%, and unfair competition disputes grew by 64.25%. The underlying reasons are as follows: First, the rapid development of emerging cultural industries has given rise to a steady stream of IP issues, including online novel reprints, live streaming of video game footage, and disputes over adaptation rights for film and television works. Second, Jiangsu’s innovation‑driven economy is becoming increasingly dynamic, leading to the emergence of new types of cases and complex, difficult matters closely tied to the innovation economy. Third, disputes arising from new business models in the internet sphere are frequent; computer software disputes stemming from the integration of new technologies and business models, as well as technical contract disputes centered on the development of mobile apps and websites, continue to grow. Fourth, as Jiangsu products transition toward Jiangsu‑branded offerings, parties’ awareness of brand protection has strengthened, prompting them to actively pursue litigation to combat infringement, safeguard trademark rights, and enhance brand value.

— Continuing to advance the strategy of excellence in intellectual property adjudication, fully leveraging the role of judicial rulings in clarifying the boundaries of rights, regulating conduct, and fostering innovation. In 2018, a copyright dispute involving the auction of controversial manuscripts, concluded by the Nanjing Intermediate People’s Court, was selected as one of the Top Ten Intellectual Property Cases of the Chinese Courts; additionally, four other cases were included among the 50 Typical Intellectual Property Cases of the Chinese Courts. Furthermore, a case heard by the Jiangsu Higher People’s Court—between Tianjin Tianlong Seed Industry Technology Co., Ltd. and Jiangsu Xunong Seed Industry Technology Co., Ltd., concerning mutual claims of infringement of plant variety rights for the rice varieties “9 You 418” parent lines—was named one of the Ministry of Agriculture’s Top Ten Typical Cases on the Protection of New Plant Varieties. The courts of Jiangsu are committed, through their judgments, to continuously strengthening the normative influence of judicial precedents on similar cases, guiding public behavior, and regulating business practices, thereby providing innovators with clear, stable, and predictable legal guidance, bolstering the confidence of entrepreneurs and innovators, and enhancing society’s overall innovative vitality.

— Further intensifying penalties and sanctions to impose substantial costs on infringers, thereby curbing infringing conduct to the greatest extent possible. From 2016 to 2018, the amount of damages awarded by Jiangsu courts increased year after year. Over these three years, a total of 24 cases resulted in awards exceeding RMB 10 million, with 18 such cases in 2018—accounting for 75%—a 3.5-fold increase compared with 2017. Cases awarding more than RMB 5 million totaled 16, of which 11 were decided in 2018, representing approximately 69%—a 2.7-fold rise over 2017. Cases with awards above RMB 1 million numbered 199, including 97 in 2018, or about 49%, a doubling compared with 2017. Meanwhile, cases awarding more than RMB 500,000 reached 262, with 116 in 2018—roughly 44%—an increase of approximately 50% over 2017. These figures demonstrate that in 2018, the number of cases resulting in substantial damage awards rose sharply, reflecting a marked strengthening of judicial protection for intellectual property rights and the full implementation of the principle of the strictest possible protection. At the same time, officely upholding the notion that “the rule of law is the best business environment,” the courts have rigorously cracked down on all forms of dishonest litigation, safeguarded the legitimate rights and interests of enterprises, and further optimized the legal framework for a favorable business climate.

— Deepening the “three-in-one” reform of intellectual property adjudication to enhance the overall effectiveness of the strictest possible protection. In 2009, Jiangsu courts took the lead nationwide in launching a pilot program for the “three-in-one” approach to IP adjudication across all three levels of the provincial court system. In 2018, Jiangsu courts continued to deepen these reforms, focusing on addressing key and difficult issues arising during the implementation of the “three-in-one” model, thereby effectively improving the overall efficacy of the strictest IP protection. First, the deterrent effect of criminal penalties was maintained, with rigorous legal enforcement against serious IP‑related offenses. In criminal IP cases, particularly those involving food and pharmaceuticals, a zero‑tolerance stance was adopted, with probation applied sparingly, thus underscoring the deterrent power of criminal IP protection. Second, efforts were made to strengthen criminal IP adjudication and standardize sentencing practices in IP criminal cases. The Provincial High People’s Court issued the “Guidelines on Sentencing for Intellectual Property Crimes (Trial Implementation),” clearly setting forth fundamental principles for sentencing, the application of common mitigating and aggravating factors, the determination of fine amounts, conditions for probation, and general sentencing guidelines. Pilot programs were launched at the Nanjing Railway Transport Court and the Tongzhou District People’s Court of Nantong City to identify challenges, accumulate experience, and actively explore ways to standardize sentencing for IP crimes. Third, simplified procedures were introduced for both civil and criminal IP cases, promptly responding to parties’ demands for efficient and convenient protection of their rights. Fourth, the judiciary’s review function was effectively leveraged to promote alignment between administrative enforcement standards and judicial adjudication standards. In 2018, the Provincial High People’s Court reviewed and analyzed IP administrative cases adjudicated over the preceding five years, submitting to the provincial government the “Report on Administrative Enforcement and Regulatory Issues in IP Administrative Adjudication.” From the perspective of judicial IP protection, the report offered recommendations aimed at standardizing administrative enforcement and regulatory practices and enhancing the capacity of administrative enforcement agencies. Governor Wu Zhenglong issued important instructions on this report. Fifth, mechanisms for inter‑agency coordination were continuously refined, advancing the establishment of a scientific and efficient comprehensive IP protection system. The Provincial High People’s Court repeatedly convened relevant departments—including industry and commerce, copyright, and patent authorities—to exchange views and discuss contentious issues, thereby harmonizing enforcement standards. Courts across the province have likewise established working mechanisms linking judicial adjudication with administrative enforcement. For instance, the Suzhou Intellectual Property Court, in collaboration with public security organs, procuratorial bodies, and market supervision authorities, jointly signed and promulgated the “Opinions on Several Issues Concerning the Handling of Commercial Secret Infringement Cases (Trial Implementation).” Meanwhile, the Yancheng Intermediate People’s Court, leading ten member units of a joint conference comprising public security, procuratorial, and other agencies, formulated and issued the “Implementation Opinions on the Mechanism for Coordinated Judicial and Administrative Protection of Intellectual Property,” further strengthening six mechanisms, including the Joint Conference on Judicial and Administrative Protection of Intellectual Property.

— Promoting innovation in institutional mechanisms and establishing a robust framework for the strictest possible protection. First, we have made every effort to strengthen the development of intellectual property courts. Since the Nanjing and Suzhou Intellectual Property Courts were officially inaugurated on January 19, 2017, under the guidance of the Jiangsu High People’s Court, they have clearly defined their roles, focused on adjudication, and achieved significant progress in specialized judicial work. At this press conference, responsible officials from both courts will also provide a detailed overview of the judicial protection of intellectual property since their establishment. Second, we have refined the mechanism for ascertaining technical facts. The Third Civil Division of the Provincial High People’s Court has signed a Framework Agreement on Collaborative Investigation of Technical Facts in Intellectual Property Cases with the Jiangsu Provincial Collaborative Innovation Center for Biomedical Functional Materials, fully leveraging the center’s technological strengths and those of its key laboratories to enable technical experts to assist in the adjudication of IP cases. The Nanjing Intellectual Property Court has formulated standardized documents, such as the “Work Rules for the Participation of Technical Investigators in Litigation Activities (Trial),” thereby strengthening the deployment and management of full-time technical investigators. Meanwhile, the Suzhou Intellectual Property Court has capitalized on the talent pool of the Jiangsu Center for Patent Examination Collaboration under the National Intellectual Property Administration, further advancing a mechanism whereby part-time technical investigators support the adjudication of technology‑related cases, and piloting a simultaneous review process with the Patent Reexamination Board to enhance the quality and efficiency of trials. Third, we are promoting the development of diversified dispute‑resolution mechanisms. Courts at all levels have strengthened coordination and cooperation with administrative authorities for intellectual property, people’s mediation organizations, arbitration institutions, industry associations, and specialized mediation bodies, continuously establishing and improving mechanisms for linking litigation and mediation in areas such as the internet, the entertainment sector, and patent‑related technologies, thereby further enhancing the efficiency of resolving IP disputes. For example, the Yangzhou Intermediate People’s Court has intensified its collaboration with the Plush Toy Copyright Association, successfully mediating hundreds of related disputes through the association in 2018 alone. Similarly, the Wuxi Intermediate People’s Court has enhanced interagency communication with local cultural authorities and the Federation of Industry and Commerce, facilitating the formal establishment of an entertainment and cultural industry association, actively encouraging the local karaoke industry to enter into paid licensing agreements, and effectively resolving numerous rights‑protection disputes.

— Strengthening research and public outreach to continuously optimize the legal environment for the strictest possible protection. First, in accordance with nationwide directives, courts across the province organized a series of thematic publicity events marking World Intellectual Property Day on April 26. The Jiangsu High People’s Court held a press conference in Nantong Home Textile City, inviting deputies to the National and Provincial People’s Congresses, members of the Chinese People’s Political Consultative Conference, media reporters, lawyers, and other representatives from various sectors of society; numerous outlets—including People’s Daily, Xinhua Daily, Guangming Daily, and Jiangsu Television—provided extensive coverage. For ten consecutive years, the court has published the “Blue Book on the Judicial Protection of Intellectual Property by Jiangsu Courts,” along with a list of the top ten intellectual property cases handled by Jiangsu courts, and for seven consecutive years it has released the “Annual Report on Intellectual Property Cases in Jiangsu Courts.” Second, the Jiangsu courts convened a press conference on judicial safeguards for technological innovation, presenting an overview of their work in adjudicating intellectual property disputes related to scientific and technological advancement, highlighting key practices, and unveiling ten landmark cases involving patents, trade secrets, computer software, and new plant varieties—cases that underscore the judiciary’s commitment to fostering and protecting innovation. Third, proactively adapting to the development of new media, the courts have expanded their channels for judicial communication. They continue to maintain and operate the official WeChat account “Jiangsu IP Perspective,” while also establishing dedicated columns on the Jiangsu High People’s Court’s Sina Weibo and WeChat accounts, as well as on specialized IP‑focused platforms such as “IP Power,” regularly and promptly publishing the reasoning behind difficult and complex cases concluded by courts throughout the province, disseminating the latest developments in IP judicial protection, and conveying the strong stance of Jiangsu courts in upholding the strictest possible protection of intellectual property. Since its launch, the “Jiangsu IP Perspective” account has featured 184 issues, covering more than 170 representative cases and nearly ten informational articles, earning broad influence within the industry. Fourth, fully leveraging the proactive role of the judiciary to support innovative economic development, the provincial court has drafted the “Opinions on Implementing the Strictest Judicial Protection of Intellectual Property to Provide High‑Quality Judicial Safeguards for Innovative Economic Development (Draft for Public Comment),” exploring new approaches and measures for the strictest possible IP protection in the context of the new era. Following a symposium on “Strengthening Judicial Protection of Intellectual Property to Promote Innovative Development” scheduled for May this year, the draft will be revised and refined before being issued as an official guiding document. Meanwhile, the Nanjing Intellectual Property Court has formulated “Several Measures to Strengthen Reform and Innovation in IP Adjudication to Support the Construction of a Globally Influential City of Innovation,” outlining 26 specific service initiatives to advance Nanjing’s “121” strategy for innovation‑driven growth. Similarly, the Suzhou Intellectual Property Court has issued “Opinions on Comprehensively Raising the Level of Judicial Protection of Intellectual Property to Safeguard and Promote the Implementation of the Regional Innovation‑Driven Development Strategy,” thereby supporting Suzhou’s efforts to build itself into an innovative city.

II. Main Contents of Typical Cases of Intellectual Property Judicial Protection by Jiangsu Courts

Today, we are releasing the Blue Book, which highlights the ten landmark intellectual property cases adjudicated by courts across the province in 2018. Detailed information on these cases is provided in the Blue Book. I will now briefly outline some of the key features of these cases, as well as the judicial standards and value orientations they reflect.

First, it reflects an effort to further strengthen penalties and sanctions, thereby maximizing the deterrence of infringing conduct and enhancing rights holders’ sense of entitlement, security, and protection. In the case of New Balance v. a preliminary injunction, the court imposed the statutory maximum fine of RMB 1 million on the defendant for refusing to comply with the intellectual property‑related interim injunction, thus actively upholding judicial authority and ensuring the effective enforcement of such injunctions. In another case involving Baroque Flooring’s infringement of trademark rights and unfair competition, the court conducted a comprehensive analysis when determining the amount of damages, taking into account the profits lost due to declining sales volumes, the losses resulting from price erosion, the future sales profits that would inevitably be foregone, as well as reputational harm. Balancing these factors against the degree of the infringer’s subjective malice, the court fully upheld the plaintiff’s claim for RMB 10 million in damages, and the parties voluntarily fulfilled their obligation to pay after the judgment was rendered. Lastly, in a patent‑infringement dispute concerning Leyden Automotive Components, the court further explored the modalities and mechanisms for engaging expert litigation assistants in cases involving complex technical issues, deepening its understanding of how claims—through their technical features—define the scope of patent protection. In addition to awarding substantial monetary damages, the court, relying on the plaintiff’s submitted agency agreement and bank transfer records, and considering the nature and complexity of the case as well as the volume of work performed by the attorney, fully granted the plaintiff’s request for RMB 1.5 million in legal fees. The total compensation awarded exceeded RMB 10 million.

Second, it demonstrates an intensified crackdown on intellectual property infringements in areas of public concern, thereby maximizing the protection of the public interest. In the case between Global Water Services Co., Ltd. and Nanjing Jiedeng Fluid Equipment Co., Ltd. concerning trademark infringement and unfair competition, the court fully upheld the rights holder’s claim for RMB 3 million in damages, reflecting a further strengthening of IP protection under the current framework of the strictest possible IP safeguards, as well as a zero‑tolerance stance toward IP infringements involving specialized equipment critical to public welfare. Similarly, in the unfair competition dispute between Jiangsu Mingtian Seed Industry Co., Ltd. and Simumian Seed Industry Co., Ltd., the court, having found that the infringer engaged in unfair competition, took into account such factors as the public‑health implications of the seed products at issue, the clear subjective malice of the infringer, the covert nature of the infringing conduct, the large scale of sales, and the extraordinary difficulty faced by the rights holder in gathering evidence. Relying on Article 73 of the Seed Law, the court actively applied punitive damages, ordering Simumian Seed Industry Co., Ltd. to compensate Jiangsu Mingtian Seed Industry Co., Ltd. for economic losses in the amount of RMB 3 million, thereby reinforcing the protection of plant variety rights and underscoring a judicial approach committed to the strictest possible IP protection.

Third, it reflects an enhanced crackdown on dishonest conduct in the field of intellectual property, strengthened protection for well-known brands, and the promotion of a healthy and orderly competitive environment. In a case involving the malicious registration and overbroad use of the “Yanghe” well-known trademark on milk products, the court, recognizing the long‑accumulated brand reputation and high level of public awareness associated with the “Yanghe” mark, not only granted cross‑class protection to the “Yanghe” well-known trademark but also issued an injunction prohibiting the infringer from using the maliciously registered “Yanghe Yanghe” trademark, thereby preventing further infringement of the rights holder’s well‑known mark at its source. In another case, Zhongxun Co., Ltd. v. Bit Co., Ltd., concerning liability for damages arising from the malicious filing of an intellectual property lawsuit, the court clarified the constituent elements of such malicious litigation and, taking into full account the adverse impact of such conduct on the social integrity system, ordered Bit Co., Ltd. to compensate Zhongxun Co., Ltd. for economic losses and reasonable expenses in the amount of RMB 1 million, thus upholding, in accordance with the law, an order of honest litigation and mainstream values.

Fourth, it demonstrates a strengthened crackdown on online intellectual property infringements, fostering the healthy development of emerging industries and purifying the online environment. In the case of Modern Express v. Toutiao over copyright infringement, the court clearly defined the review obligations of online platforms and awarded RMB 100,000 in damages for four news articles found to constitute infringement, thereby reinforcing copyright protection in the digital sphere and effectively regulating business practices in emerging sectors such as aggregated news‑reading platforms. Additionally, the court concluded a criminal case—placed under special supervision by the National Copyright Administration—concerning the infringement of film and television works via the BT Paradise website. Under the provisions of the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Public Security, the defendant, Yuan, was found to have “reproduced and distributed” others’ audiovisual works by making them available to the public through information networks, constituting the crime of copyright infringement. He was sentenced to three years’ imprisonment, underscoring the deterrent effect of criminal protection for intellectual property. Following the verdict, the defendant did not file an appeal. The case trended prominently on Weibo, drawing widespread public attention and generating over 100 million views. This judgment has played a positive role in rigorously combating infringement, cleansing the online environment, and guiding innovators to engage in ethical entrepreneurship and fair competition.

Fifth, it embodies the principle of equal protection for the legitimate rights and interests of parties involved in foreign-related matters as well as those from Hong Kong, Macao, and Taiwan, continuously enhancing Jiangsu’s international influence in intellectual property judicial protection and optimizing the business environment for foreign investors. The court concluded a dispute over the ownership of patent application rights between Weitu Electronic Mechanical Technology Co., Ltd. and Xinbai Mechanical Technology Co., Ltd., holding that inventions and creations filed by former employees based on specialized technical information, technical deficiencies, and needs for technological improvements acquired during their employment with their former employer should be deemed related to their official duties and thus qualify as official inventions. In this case, the plaintiff, Weitu Company, is a wholly owned subsidiary of a German enterprise established in China. Additionally, the court adjudicated the dispute between Zhongxun Company and Bit Company concerning liability for damages arising from maliciously brought intellectual property litigation, as well as the “New Balance” v. Zhongjin injunction case involving the maximum cap on judicial penalties—both cases implicating the legitimate rights and interests of well-known foreign brands. By fairly and lawfully hearing cases involving the intellectual property protection of foreign parties, Jiangsu courts have effectively safeguarded the lawful rights and interests of foreign-invested enterprises, actively improved the investment climate for foreign businesses, and encouraged and attracted foreign investors to invest and start businesses in mainland China, particularly in Jiangsu Province.

The year 2019 marked the 70th anniversary of the founding of the People’s Republic of China and was a pivotal year for achieving moderate prosperity in all respects. Jiangsu’s courts will fully recognize the new tasks posed by the development of socialism with Chinese characteristics in the new era, as well as the new requirements arising from the provincial Party committee’s strategic plan to lead the way in high-quality development. With law enforcement and case adjudication as the central focus, the principle of the strictest possible protection as the guiding tenet, reform and innovation as the driving force, and quality improvement and efficiency enhancement as the overarching direction, the courts will strive to foster a business environment that is rule-of-law‑based, internationally oriented, and highly convenient, thereby providing robust judicial services and safeguards to support Jiangsu’s high‑quality economic development.

New Marriage Law: Provisions Regarding Pregnancy During Cohabitation

I. What are the provisions of the new Marriage Law regarding cohabitation and pregnancy?

Cohabitation refers to two people in a romantic relationship temporarily living together; today, it is typically used between partners of opposite sexes. Unlike marriage, which establishes a legally recognized marital relationship that cannot be terminated arbitrarily and requires specific legal procedures, cohabitation is not recognized by law and offers no legal protections. During the period of cohabitation, either party may at any time end the relationship by simply parting ways.

1. In principle, any income or property acquired by one party after cohabitation shall belong to that party. However, if the other party provided financial support at the time of acquisition, or rendered auxiliary labor or furnished domestic assistance during the process of acquiring such property, then that income or property shall be deemed jointly owned. The respective shares may be determined according to the extent of each party’s contribution to the acquisition of the property.

2. Income earned and property acquired jointly after cohabitation shall be held in common by the parties; if acquired on a share basis, it may be determined as joint ownership in shares.

3. During the period of separation following cohabitation, any income or property acquired shall belong to the respective parties.

4. Property agreed upon after cohabitation shall be handled in accordance with such agreement.

5. Property acquired on the basis of personal relationships shall belong to the party concerned.

6. Property acquired by derivative title vests in the derivative acquirer. However, with respect to property acquired through sale, barter, or gambling, the original owner of the underlying capital shall be deemed the rightful owner.

II. How should a cohabitation relationship be recognized?

1. The two parties do not establish a marital relationship, nor do they automatically become spouses simply by the passage of time; this is the essential distinction from marriage.

2. Property acquired by both parties during their cohabitation shall be treated as jointly owned, unless there is evidence establishing that it is the exclusive property of one party. When two individuals live together and establish a quasi‑marital relationship, this may also be regarded as a partnership; accordingly, under the laws governing partnerships, any property acquired in the course of the partnership shall be held in joint ownership. Of course, the following items shall be deemed personal property: property owned by either party prior to cohabitation; medical expenses, disability allowances, or other benefits received by one party due to bodily injury; property expressly designated in a gift contract as belonging solely to one party; and personal articles used exclusively by one party.

3. Both parties have a mutual obligation to provide support; when one party fails to fulfill this duty, the party in need has the right to demand that the other party pay maintenance payments. This serves as a guarantee that the two parties can come together and also provides the material foundation necessary for them to continue their life together.

4. The two parties do not have a relationship of inheritance. Upon the death of one party, they are not entitled to inherit the estate; instead, their rights shall be governed by the principle of mutual support, and they may receive an appropriate share of the estate. With regard to survivor benefits, given their relationship to the deceased, they may also be accorded a reasonable portion thereof to help alleviate their grief.

In summary, under the provisions of the new Marriage Law regarding cohabitation and pregnancy, if a child is born during the period of cohabitation, both parties are obligated to jointly raise the child. Even if they have not yet established a legally recognized marital relationship at that time, they nonetheless bear the duty to provide for the child. Should the two parties separate, the party who does not assume custody shall pay the other party a reasonable compensation.

Other

Xi Jinping’s Remarks at the Press Conference of the Second Belt and Road Forum for International Cooperation

Ladies and gentlemen,

Dear friends in the press:

Hello everyone!

Welcome, everyone, to the press conference of the Second Belt and Road Forum for International Cooperation. Since its launch more than five years ago, the Belt and Road Initiative has consistently attracted extensive attention from the media. Since the opening of this year’s forum, journalists have closely followed and reported on the event, capturing its many inspiring moments, amplifying positive voices, and highlighting the remarkable achievements of Belt and Road cooperation. On behalf of the Chinese government and all participating delegates, I would like to express our heartfelt gratitude to the media for their support and dedicated efforts.

This is the second time China has hosted the Belt and Road Forum for International Cooperation. Compared with the inaugural forum, this edition is larger in scale, richer in content, involves more participating countries, and has yielded more substantial outcomes. During the forum, we held an opening ceremony, convened a high-level meeting, organized 12 parallel sub-forums, and hosted an entrepreneurs’ conference, bringing together representatives from all sectors of society from over 150 countries. Today, leaders from 38 countries, along with heads of the United Nations and the International Monetary Fund, have gathered here for a leaders’ roundtable summit.

The theme of this high-level forum was “Jointly Building the Belt and Road Initiative and Forging a Bright Future.” At the Roundtable Summit, participating leaders and heads of international organizations engaged in in-depth discussions on such topics as “Promoting Connectivity and Unlocking New Drivers of Growth,” “Strengthening Policy Coordination to Build Closer Partnerships,” and “Advancing Green and Sustainable Development and Implementing the United Nations 2030 Agenda.” These deliberations refined the guiding principles of cooperation, clarified priority areas, and reinforced institutional mechanisms, culminating in a broad consensus on high-quality joint development of the Belt and Road Initiative. This consensus is reflected in the Joint Communiqué unanimously adopted at the Roundtable Summit and will serve as a roadmap for future international cooperation under the Belt and Road Initiative.

— We warmly commend the progress and significance of cooperation under the Belt and Road Initiative. We all agree that the BRI is a path of opportunity leading to shared prosperity. Over the past five-plus years, and particularly since the first High-Level Forum, thanks to the concerted efforts of all parties, policy coordination has continued to expand, infrastructure connectivity has steadily improved, economic, trade, and investment cooperation has reached new heights, financial integration has been further strengthened, and people-to-people exchanges have grown ever closer. The early achievements of BRI cooperation have opened up greater space for the growth of national and global economies, provided a platform for enhanced international collaboration, and made new contributions to building a community with a shared future for mankind.

— We have enriched the guiding principles of Belt and Road cooperation and unanimously reafofficeed our commitment to high-quality Belt and Road development. We will uphold the principles of extensive consultation, joint contribution, and shared benefits, ensuring that all parties engage in equal-footed dialogue, share responsibilities, and reap mutual gains, and we welcome the participation of all interested countries. We stand united in supporting open, clean, and green development, opposing protectionism, and striving to build a new‑era Silk Road characterized by integrity, transparency, and environmental sustainability. We agree to adhere to the principles of high standards, people‑centred outcomes, and sustainable development; actively align with widely accepted international rules and norms; and remain committed to a people‑oriented development philosophy, pursuing coordinated progress across economic, social, and environmental dimensions. These common understandings provide clear guidance for the further development of Belt and Road cooperation. Our shared goal is to work together to make connectivity among countries more effective, economic growth stronger, international cooperation closer, and people’s lives better.

— We have identified the priorities for future joint efforts under the Belt and Road Initiative and agreed to strengthen all‑round, multi‑sectoral cooperation. We will continue to advance connectivity across land, sea, air, and cyberspace, building high‑quality, sustainable, resilient, affordable, and inclusive infrastructure that is accessible to all. We will promote the development of economic corridors, foster cooperative industrial and trade parks, and further enhance “soft connectivity” in areas such as markets, regulations, and standards, while also stepping up digital infrastructure development. All relevant projects will be guided by governments, led by enterprises, and operated according to market principles, ensuring sustainability and creating a fair, non‑discriminatory business environment for investors from all countries. We will keep broadening financing channels and reducing financing costs, welcoming the participation of multilateral and national financial institutions in investment and financing cooperation. We also agree to carry out extensive, diverse cultural and people‑to‑people exchanges and implement more projects that deliver tangible benefits to local communities. We all support the development‑oriented approach of Belt and Road cooperation, backing global development efforts—particularly the implementation of the United Nations 2030 Agenda for Sustainable Development—and striving to achieve clean, low‑carbon, and sustainable development. At the same time, we will help developing countries overcome developmental bottlenecks, better integrate into global value chains, industrial chains, and supply chains, and reap their benefits.

— We unanimously support efforts to build a global partnership for connectivity and to strengthen cooperation mechanisms. To this end, we will closely align our economic development initiatives and plans with those of other countries and international organizations, enhance bilateral and third‑party market cooperation, and develop major international logistics and trade corridors such as the China–Europe Railway Express and the New International Land‑Sea Trade Corridor, thereby helping more countries raise their level of connectivity. We have reviewed the Policy Recommendations Report of the High-Level Forum Advisory Committee and look forward to the Committee providing further intellectual support for Belt and Road cooperation and for the continued development of the High-Level Forum. We will uphold multilateralism and work to establish an architecture led by the High-Level Forum and underpinned by multilateral and bilateral cooperation across various sectors, ensuring that our collaboration is guided by shared principles, backed by concrete actions, and supported by robust institutional frameworks. There is broad consensus that the Belt and Road International Cooperation High-Level Forum is an important platform for multilateral cooperation, and all parties support its regular convening.

— We all support strengthening practical cooperation and achieving more tangible results. Throughout the preparatory process and during the forum, participants reached 283 concrete outcomes, including the signing of intergovernmental cooperation agreements, the launch of pragmatic project collaborations, the establishment of multilateral dialogue and cooperation platforms in specialized fields, and the release of reports on progress in jointly building the Belt and Road Initiative as well as policy recommendation reports from the High-Level Forum Advisory Committee. As the chair country, China will compile and publish a comprehensive list of these achievements. The Business Leaders’ Conference held during the forum drew broad participation from the business community and resulted in the signing of project cooperation agreements totaling over US$64 billion. These outcomes clearly demonstrate that the joint development of the Belt and Road Initiative aligns with global trends, enjoys popular support, improves people’s livelihoods, and benefits the world at large.

Yesterday, I announced a series of major reform and opening-up measures that China will implement. These measures have been widely welcomed as good news for both China and the world, and they will create significant opportunities for jointly building the Belt and Road Initiative and for global economic development.

This forum has sent a clear message to the world: the circle of friends sharing in the joint development of the Belt and Road Initiative is growing ever larger, the number of trusted partners is steadily increasing, the quality of cooperation is continuously improving, and the prospects for future development are becoming brighter. As I have repeatedly stated, the Belt and Road Initiative originated in China, but its opportunities and achievements belong to the entire world. Building the Belt and Road is a long-term endeavor—a shared cause for all our partners. China stands ready to work with all parties to implement the consensus reached at this year’s High-Level Forum, embracing the spirit of meticulous craftsmanship to advance Belt and Road cooperation in a more substantive, steady, and high‑quality manner, thus opening up an even brighter future. We also hope that media colleagues will continue to lend their active support to the joint development of the Belt and Road Initiative.

Thank you, everyone.

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