Taihe Legal News, Issue 1224

Key Takeaways for This Issue

Financial Strength The “15th Five-Year Plan” for National Development has been officially released.

On September 10, the State Council Information Office held a press conference to announce that the “15th Five-Year Plan” for Building a Financial Power, jointly formulated by the Central Financial Commission and various financial institutions, has been officially released. The plan sets out a clear roadmap: by 2030, a comprehensive framework for a modern financial system with Chinese characteristics will be established; by 2035, a modern financial system that is highly adaptable, competitive, and inclusive—also rooted in Chinese characteristics—will be essentially in place.

The General Office of the State Council has issued a notice to address, in accordance with the law, the issue of difficulties small and medium-sized enterprises face in collecting payments.

On September 10, the General Office of the State Council issued the “Notice on Strengthening Efforts to Address the Issue of Difficulties in Payment Collection by Small and Medium-sized Enterprises” (Guobanfa [2026] No. 24), outlining four sets of measures: improving industry‑specific payment rules; strengthening oversight of large enterprises’ payment practices; standardizing the management of non‑cash payment instruments; and enhancing the effectiveness of fund transmission and financing support. These measures aim to encourage leading enterprises to honor their commitment to settle accounts payable in cash within 60 days from the date of delivery.

The Supreme People’s Court has released six typical antitrust cases.

On September 10, the Supreme People’s Court released six typical antitrust cases, addressing issues such as the abuse of a dominant market position through exclusive dealing, differential treatment, and unfair high pricing; the identification of horizontal monopoly agreements; and judicial review of antitrust administrative penalties. These cases cover vital sectors—including agricultural product wholesale, motor vehicle inspection, cement, and concrete—as well as productive infrastructure services.

Finance and Capital Markets

FINANCE & CAPITAL MARKETS

The “15th Five-Year Plan” for Building a Financial Power has been officially released.

On September 10, the State Council Information Office held a series of thematic press conferences titled “Getting Off to a Good Start in the 15th Five-Year Plan Period,” introducing efforts to implement the 15th Five-Year Plan in the financial sector and advance the building of a financially strong nation. At the conference, it was announced that, in accordance with the requirements of the 15th Five-Year Plan Outline and under the unified deployment of the Central Financial Commission, the Central Financial Work Office, together with various financial institutions, has officially released the “15th Five-Year Plan for Building a Financially Strong Nation.” This document serves as the overarching strategy and detailed roadmap for financial work during the 15th Five-Year Plan period. The plan adheres to the general principle of seeking progress while maintaining stability, and upholds the guiding principle of “preventing risks, strengthening regulation, and promoting high-quality development.” Its overall objectives are to establish by 2030 a comprehensive framework for a modern financial system with Chinese characteristics—featuring coordinated and effective monetary policy, a rationally optimized financial structure, rigorous and robust financial supervision, precise and efficient risk prevention and control, continuously improving quality and effectiveness in supporting economic and social development, a fully developed legal framework for finance, steadily expanding high-level financial openness, and sustained enhancement of the financial sector’s international influence and competitiveness. By 2035, the plan aims to basically complete a modern financial system with Chinese characteristics that is highly adaptable, competitive, and inclusive. The plan systematically outlines key tasks, including improving the macro‑financial regulatory framework, comprehensively strengthening financial oversight, effectively preventing and defusing financial risks, actively and efficiently serving the real economy, promoting high‑quality financial development, and expanding high‑level financial openness. To ensure the effective implementation of these measures, the People’s Bank of China has formulated and issued the “People’s Bank of China 15th Five-Year Plan for Reform and Development,” accompanied by nine related action plans. At the press conference, the China Securities Regulatory Commission stated that it will introduce more inclusive systems for issuance and listing, mergers and acquisitions, and restructuring, striving to make the A‑share market the preferred destination for high‑quality domestic enterprises seeking an IPO.

The China Securities Regulatory Commission has approved CICC’s absorption and merger of Dongxing Securities and Cinda Securities.

On September 7, the China Securities Regulatory Commission issued an approval, authorizing China International Capital Corporation to absorb and merge Dongxing Securities Co., Ltd. and Cinda Securities Co., Ltd. through the issuance of new shares. Orient Asset Management and Cinda Asset Management have become major shareholders, and the relevant approval was publicly released on September 8. Under the agreed terms, the merger will be carried out via a share‑swap arrangement. Dongxing Securities (stock code 601198) and Cinda Securities (stock code 601059) have already commenced the share‑swap merger process; upon completion of the requisite procedures, both securities will delist. Accordingly, the Shanghai Stock Exchange issued an announcement on September 8 stating that, in accordance with the relevant provisions of the “Detailed Rules for Margin Trading and Short Selling of the Shanghai Stock Exchange,” the two securities will be removed from the list of eligible margin‑trading and short‑selling stocks effective September 9. This transaction marks another major consolidation among leading securities firms, following the merger between Guotai Junan and Haitong Securities. Upon completion, CICC’s capital strength and business scale are expected to expand further, while industry concentration is likely to continue rising. Market observers believe that, driven by policy initiatives to build world‑class investment banks, M&A activity and corporate restructuring in the securities sector will remain robust.

The People’s Bank of China announced that it will conduct overnight reverse repurchase operations.

On September 10, the People’s Bank of China issued an announcement stating that, to better align with the banking system’s short-term liquidity needs, it will conduct overnight reverse repurchase operations from September 14 to September 17, using a fixed-rate, quantity‑based tender process with daily volumes not exceeding RMB 600 billion. This marks the first time the PBOC has explicitly adopted a “daily cap plus fixed‑rate, quantity‑based tender” approach for overnight reverse repos, signaling a further enrichment of its monetary policy toolkit and a move toward more refined liquidity management. Earlier, on September 4, the PBOC had announced that, on September 7, it would conduct a RMB 500 billion three-month buyback‑type reverse repo operation through a fixed‑quantity, rate‑tender, multi‑price bidding mechanism; given that RMB 500 billion of such three-month reverse repos were maturing that month, this was a rollover of equivalent size. Analysts note that the introduction of the overnight reverse repo facility helps keep overnight rates anchored around the policy rate, prevents major market rates from deviating significantly from the policy‑rate midpoint, and strengthens the central bank’s capacity to manage short-term liquidity.

The Shanghai Stock Exchange and China Securities Index Co., Ltd. have adjusted the constituent stocks of indices including the STAR 50.

The Shanghai Stock Exchange and China Securities Index Co., Ltd. jointly issued an announcement earlier, announcing adjustments to the constituent stocks of indices such as the STAR 50. These changes will take effect after the market closes on September 11. Specifically, five constituents will be replaced in the STAR 50 Index, with RuiChuang Micro‑Nano, Huafeng Technology, Yitang Shares, Shadowstone Innovation, and Shenghe Jingwei among the companies added. Regular index‑constituent rebalancing is a standard institutional mechanism designed to ensure both the representativeness and investability of the index. Following the adjustment, index funds and exchange‑traded funds (ETFs) that track these benchmarks will simultaneously adjust their holdings, which may, in the short term, exert some influence on trading volumes and price volatility for the affected stocks. In addition, on September 8, a spokesperson from the Shanghai Stock Exchange stated at the Hong Kong Exchanges and Clearing’s China Opportunities Forum that, under the coordinated guidance of the securities regulators of both markets, the SSE will further diversify the range of eligible investment products available through mutual market access. At the same time, it will explore additional enhancements to trading mechanisms, scope of eligible securities, and investor eligibility thresholds, thereby continuing to advance high‑level, institutionally driven opening-up of the capital market.

Business and Corporations

COMMERCIAL & CORPORATE

The State Council executive meeting deliberated on the development of a computing power network and approved a draft amendment to the Regulations on the Administration of Foundations.

On September 11, Premier Li Qiang of the State Council presided over an executive meeting of the State Council. The meeting made further arrangements to strengthen workplace safety, noting that in recent times, some localities have experienced a spate of production safety accidents, with profoundly sobering lessons. It called for decisive measures to address issues such as lax implementation of regulations and rules, multi-tiered subcontracting in construction projects, and inadequate safety oversight, while ensuring full compliance with the “Three Controls, Three Musts” requirements. The meeting urged close monitoring of key industries and sectors, thorough identification and rectification of risks and hidden dangers, and resolute punishment of illegal and non-compliant practices in workplace safety, so as to effectively prevent serious and extremely serious accidents. The meeting pointed out that computing power networks are the foundational support for the development of artificial intelligence. It emphasized the need to pursue rational planning and orderly standardization, further improve computing infrastructure, vigorously advance research, development, and application of critical technologies and equipment, build a multi-tiered, networked computing system, promote synergy between computing and electricity, and integrate computing with networks. It also called for accelerating the implementation of projects such as direct connections to green power and integrated source–grid–load–storage systems, thereby better leveraging market mechanisms. The meeting reviewed work related to comprehensively and systematically upgrading aging reservoirs, stressing the importance of combining short-term and long-term measures, addressing both symptoms and root causes, and adopting tailored strategies—“one plan per reservoir.” It also called for enhanced interdepartmental coordination and robust resource guarantees to attract greater participation from social capital. In addition, the meeting heard a report on efforts to implement the spirit of the National Education Conference and accelerate the building of a strong education nation. It approved the draft amendment to the Regulations on the Administration of Foundations, requiring concrete steps to bolster the credibility of foundations, improve internal governance mechanisms, strengthen information disclosure in key areas, and harness the comprehensive regulatory role of multiple departments, thus fostering the healthy and orderly development of public‑interest and charitable undertakings.

The General Office of the State Council has issued a notice to address, in accordance with the law, the issue of difficulties small and medium-sized enterprises face in collecting payments.

On September 10, the General Office of the State Council issued the “Notice on Strengthening Efforts to Address the Issue of Difficulties in Receivables for Small and Medium‑Sized Enterprises” (Guobanfa [2026] No. 24), outlining measures to address, in accordance with the law, the problem of delayed payments to SMEs. The notice sets forth four key initiatives: First, to improve industry‑specific payment rules, relevant industry authorities will incorporate timely payment requirements into their regulatory frameworks, formulate and refine settlement and payment management provisions for their respective sectors, and clearly define critical elements such as the starting point for calculating payment terms, methods and procedures for disbursement, standards and deadlines for inspection, acceptance, or final settlement upon project completion, and maximum payment periods. It also encourages large enterprises—particularly leading firms—to take the lead in publicly committing to pay SMEs in cash within 60 days of delivery of goods, works, or services. Second, to strengthen oversight of large enterprises’ payment practices, a robust monitoring mechanism for receivables will be established; joint interviews will be conducted with companies that deliberately extend payment terms, accompanied by calls for corrective action; enforcement against unfair competition will be tightened; and disclosure rules for listed companies will be refined and improved, requiring those with accounts payable above a certain threshold to disclose details such as primary payment methods, average payment terms, and the issuance of commercial drafts and electronic instruments. Third, to standardize the management of non‑cash payment instruments, the maximum payment period for electronic instruments will be capped at six months. Fourth, to enhance the effectiveness of capital transmission and bolster financing support, all government procurement projects will be paid in full in cash, and large enterprises will be encouraged to use loans and bond financing to refinance their outstanding accounts payable.

Two departments have issued a document to regulate cost accounting in the context of low-price, disorderly competition for key industrial products.

On September 10, the National Development and Reform Commission and the State Administration for Market Regulation jointly issued and publicly released the “Notice on Matters Related to Cost Accounting for Low‑Price, Disordered Competition in Key Industrial Products.” In accordance with the Price Law of the People’s Republic of China and other relevant laws and regulations, as well as the requirements set forth in the “Announcement on Rectifying Disordered Price Competition and Maintaining a Sound Market Pricing Order,” the notice focuses on key industrial sectors where low‑price, disorderly competition is particularly pronounced. It clarifies the forms of cost accounting, the underlying bases for such calculations, and the specific requirements to be observed. The notice stipulates that, in principle, cost accounting shall be based on the individual costs incurred by operators in producing specific products. When calculating these individual costs, operators must adhere to the principles of legality, relevance, and reasonableness, relying on audited financial statements and related reports prepared by certified public accounting firms. Where individual costs cannot be determined, operators may refer to the industry‑average cost for the product, applying an appropriate downward adjustment; the industry‑average cost shall be calculated and established by industry associations and other relevant institutions under the guidance of the National Development and Reform Commission, the State Administration for Market Regulation, and the competent industry authorities. The notice further specifies that, for operators whose actual capacity utilization rates are significantly lower than the industry average, due consideration should be given to the impact of capacity utilization on individual costs. An official from the National Development and Reform Commission stated that the notice aims to strengthen the institutional framework for addressing low‑price, disorderly competition, encouraging relevant industries to shift from competing on price to competing on quality and innovation, thereby fostering a market environment characterized by high quality commanding fair prices.

Nine departments have issued the “15th Five-Year Plan” for the development of the intelligent, connected, and new-energy vehicle industry.

On September 10, the Ministry of Industry and Information Technology, in collaboration with the National Development and Reform Commission, the Ministry of Public Security, the Ministry of Transport, the Ministry of Commerce, the Ministry of Natural Resources, the Ministry of Housing and Urban–Rural Development, the State Administration for Market Regulation, and the Cyberspace Administration of China, jointly issued the “15th Five-Year Plan for the Development of the Intelligent Connected New Energy Vehicle Industry” (MIIT Joint Planning Letter [2026] No. 305, dated September 9). The plan outlines development goals for 2030, structured around a “1+4” framework: the overarching objective is to further consolidate China’s competitive advantages across the entire intelligent connected new energy vehicle industry chain, elevate the country to the ranks of leading global automotive powers, and achieve domestic market shares of 70% and 40% respectively for new‑energy passenger cars and commercial vehicles; additionally, vehicles equipped with autonomous driving capabilities are to be deployed on a large scale. Specific targets include reducing average fuel consumption of passenger cars to approximately 3.3 liters per 100 kilometers and average electricity consumption of pure electric passenger cars to about 11.5 kilowatt-hours per 100 kilometers; enabling highly automated driving on highways, urban expressways, and select urban road networks; increasing overall labor productivity by 15% compared with 2025; fostering several automakers among the top ten globally in terms of sales volume and establishing a cohort of component suppliers ranked within the global top 100; and peaking carbon emissions before 2030. The plan sets out 17 key tasks across five priority areas—enhancing technological innovation, optimizing and upgrading the industrial system, promoting cross‑sectoral integration and development, building a scientific and efficient industry governance framework, and opening up new prospects for global industrial cooperation—alongside four major projects and three flagship initiatives.

The Ministry of Industry and Information Technology has released the “15th Five-Year Plan” for the development of the information and communications industry.

On September 7, the Ministry of Industry and Information Technology released the “15th Five-Year Plan for the Development of the Information and Communications Industry,” outlining 26 key tasks across six priority areas, including the proactive and appropriately forward‑looking development of information infrastructure. The plan specifies that by 2030, China will have fully established a next‑generation communications network that is both comprehensive and technologically advanced, and sets forth 13 specific targets, notably: total revenue in the information and communications sector reaching RMB 4.1 trillion; cumulative investment in information infrastructure totaling RMB 3.8 trillion; R&D intensity rising to 4.8%; intelligent computing power reaching 980 exaflops per second; and 5G (including 5G‑A) penetration reaching 95%. The plan underscores the importance of proactively building information infrastructure, advancing research and development on critical technologies, promoting integrated applications, and deepening the convergence of information and communication technologies with the real economy. Industry experts note that during the 15th Five-Year Plan period, the information and communications sector will accelerate its transformation from a mere “network pipeline provider” to a provider of digital infrastructure and intelligent services. Coordinated efforts to enhance network capabilities, expand computing power, and facilitate data flows will become the central thread driving industry development, while also providing foundational support for emerging sectors such as artificial intelligence.

 

Taxation

TAXATION

The State Taxation Administration has clarified the filing requirements for withholding and remitting value-added tax on behalf of individuals.

On September 7, the State Taxation Administration issued the “Announcement on Filing Matters Related to Withholding and Remitting Value-Added Tax on Individuals by Domestic Entities,” which takes effect concurrently with the “Announcement of the Ministry of Finance and the State Taxation Administration on the Issuance of the ‘Administrative Measures for Withholding and Remitting Value-Added Tax on Individuals by Domestic Entities’” (No. 28 of 2026). In accordance with the relevant provisions of the Value-Added Tax Law of the People’s Republic of China, the Implementing Regulations of the Value-Added Tax Law of the People’s Republic of China, and the withholding measures, the Administration has formulated and promulgated the “Return Form for Withholding and Remitting Value-Added Tax and Additional Taxes on Individuals by Domestic Entities,” together with its supplementary schedules and instructions for completion, which shall enter into force simultaneously with the withholding measures. The return form is primarily used to report the withholding and remittance of value-added tax and additional taxes on individuals by domestic entities; it comprises five categories—basic information, taxable transaction details, VAT calculation, additional taxes, and remarks—totaling 14 columns. The supplementary schedules are intended to detail the withholding and remittance of urban maintenance and construction tax, education surcharge, and local education surcharge. Under the previously issued withholding measures, when domestic individuals engage in taxable transactions such as R&D services, software services, design services, consulting services, production of radio, film, and television programs (works), cultural services, or educational services, the domestic entity making the payment serves as the withholding agent and is required to withhold and remit value-added tax and additional taxes. These withholding measures will take effect on November 1, 2026. When enterprises procure the aforementioned services from individuals, they must file withholding returns in compliance with the requirements set forth in this announcement to mitigate tax compliance risks.

 

Litigation and Arbitration

LITIGATION & ARBITRATION

The Supreme People’s Court has released six typical antitrust cases.

On September 10, during the 2026 China Fair Competition Policy Publicity Week, the Supreme People’s Court released six landmark antitrust cases, aiming to fully leverage the exemplary and guiding role of these cases in upholding the spirit of socialist rule of law, clarifying market competition rules, and fostering a fair‑competition legal environment. The cases address key legal issues, including abuse of a dominant market position—such as tying transactions, differential treatment, and unfair high pricing—identification of horizontal monopoly agreements, and judicial review of antitrust administrative penalties and administrative guidance. They cover vital sectors like agricultural product wholesale, motor vehicle inspection, cement, and concrete, as well as productive infrastructure services such as electroplating and wastewater treatment, and pipeline thermal steam supply. Notably, the case “Tan v. a Certain Agricultural Products Company on Abuse of Dominant Market Position” held that imposing punitive differential treatment to compel merchants to choose between competing platforms constitutes the prohibited practice of tying transactions under antitrust law, thereby delineating lawful boundaries for competitive conduct in the agricultural product distribution sector. Another case involving a monopoly dispute among motor vehicle inspection agencies demonstrated how, in adjudicating contractual disputes, accurately identifying monopolistic conduct and duly transferring jurisdiction and relevant leads to administrative authorities can ensure seamless coordination between judicial enforcement and administrative oversight. The Supreme People’s Court stated that it will continue to strengthen antitrust adjudication, further refine and consolidate antitrust adjudicative standards, and create a fair‑competition market environment conducive to high‑quality development.

The Supreme People’s Court has released nine typical cases on combating unfair competition.

On September 9, the Supreme People’s Court released nine typical cases on combating unfair competition, fully leveraging the exemplary and guiding role of these cases to help foster a market order characterized by high quality commanding premium prices and healthy competition. This release coincided with China’s Fair Competition Policy Publicity Week 2026 and complemented the six antitrust典型案例 issued the following day, collectively demonstrating the people’s courts’ judicial stance of strengthening competition‑related adjudication and upholding a fair competitive order. In hearing such cases, the people’s courts not only curb, in accordance with the law, unfair competitive practices that disrupt market order and safeguard the legitimate rights and interests of business operators and consumers, but also respect market principles, exercise prudent judgment in applying relevant standards, and refrain from unduly subjecting ordinary commercial conduct to regulatory scrutiny, thereby leaving room for market entities to operate lawfully. The Supreme People’s Court stated that it will further standardize the criteria for adjudicating unfair competition cases, clarify rules governing market competition, stabilize business expectations, and promote a fair and orderly competitive environment, thus supporting the development of a unified national market and creating a favorable legal framework for high‑quality growth.

First-instance verdict delivered in the embezzlement and bribery case involving Zhou Jun, former president of Shanghai Industrial Holdings Group.

On September 11, the Second Intermediate People’s Court of Shanghai publicly pronounced its first-instance verdict in the case of Zhou Jun, former president of Shanghai Industrial (Group) Co., Ltd., who was convicted of embezzlement and bribery. The court sentenced defendant Zhou Jun to death with a two-year reprieve for embezzlement, deprived him of political rights for life, and ordered the confiscation of all his personal property; for bribery, he was sentenced to twelve years’ imprisonment and fined RMB 2 million. The court decided to impose the death sentence with a two-year reprieve, lifelong deprivation of political rights, and confiscation of all personal property, while ordering the recovery of all illicit gains and proceeds, which are to be turned over to the state treasury or returned to the victimized entities; any shortfall will continue to be pursued or the defendant will be ordered to make restitution. The trial established that, from 2019 to 2023, Zhou Jun, taking advantage of his position as president of Shanghai Industrial (Group) Co., Ltd., colluded with others to misappropriate public funds totaling more than RMB 154 million. From 2006 to 2023, leveraging his positions as general manager and chairman of Shanghai Xinghe Digital Investment Co., Ltd., vice chairman and chief executive officer of Shanghai Industrial Holdings Co., Ltd., chairman of the board of Shanghai Industrial Environmental Holdings Co., Ltd., and vice president and president of Shanghai Industrial (Group) Co., Ltd., Zhou Jun provided assistance to others in matters such as corporate investment, business operations, and settlement of project payments, and, acting alone or in collusion with others, accepted property worth over RMB 21.51 million. The court held that the amount of embezzlement involved was exceptionally large and that it had caused particularly grave losses to the interests of the state and the people, and accordingly rendered the above‑mentioned judgment in accordance with the law.

First-instance verdict delivered in the bribery case involving Zhang Rong, former Vice Chairman of the CPPCC Committee of Chongming District, Shanghai.

On September 10, the Third Intermediate People’s Court of Shanghai publicly pronounced its first-instance verdict in the case of Zhang Rong, former deputy secretary of the Party Leadership Group and vice chairman of the CPPCC Committee of Chongming District, Shanghai, who was convicted of accepting bribes. The court sentenced the defendant, Zhang Rong, to ten years and two months’ imprisonment for the crime of bribery, and imposed a fine of RMB 600,000; the illicit proceeds and any associated gains were confiscated and turned over to the state treasury. The trial established that, between 1998 and 2025, the defendant Zhang Rong, while holding various positions—including Party Secretary of Hexing Township in the former Chongming County; Deputy Secretary of the Party Committee, Deputy Director, and Director of the Construction Committee of the former Chongming County; Deputy Secretary of the Party Committee and Director of the Construction and Management Committee of the former Chongming County; Party Secretary and Director of the Development and Reform Commission of the former Chongming County; Vice Chairman of the Standing Committee of the People’s Congress of the former Chongming County; Chairman of the Chongming County Federation of Trade Unions; and former deputy secretary of the Party Leadership Group and vice chairman of the CPPCC Committee of Chongming District, Shanghai—abused his official position and the conveniences arising from his authority or status, either directly or through the official acts of other public officials, to facilitate others in securing engineering projects and other matters, thereby illegally accepting property totaling more than RMB 6.31 million. The Third Intermediate People’s Court of Shanghai held that Zhang Rong’s conduct constituted the crime of bribery, involving an especially large sum, and thus warranted punishment in accordance with the law. In view of his truthful confession upon surrender, his voluntary disclosure of additional bribery facts not yet known to the investigating authorities, his admission of guilt and acceptance of punishment, and his active restitution of illicit gains—circumstances that qualify for leniency under both statutory and discretionary provisions—the court decided to impose a lighter sentence in accordance with the law.

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