In the news: The SPC, CSRC, SAIC and PBOC link up, polluters fined US$26 million and IP Action Plan approved

SPC, CSRC, SAIC and PBOC tighten regulatory net

On December 19 the SPC and CSRC announced they were linking their blacklists and regulatory systems. This follows the SPC's move to share information with other regulators after establishing its judgment debtor database in October 2013. The court will be able to access the CSRC's database of those who have committed securities violations, preventing debtors from accessing the capital markets and the SAIC's credit information disclosure system. An arrangement with the PBOC aims to prevent debtors from obtaining loans or financing. This comprehensive initiative will tighten the net around non-compliant companies and individuals, as the court system often encounters interdepartmental regulatory difficulties in having judgments enforced which enable debtors to avoid enforcement against their assets. Hopefully this sharing of information actually will reduce enforcement challenges.

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China orders US$26 million in pollution fines

The Higher People's Court of Jiangsu province has ordered six companies to pay fines totalling US$26 million (Rmb162 million) for discharging 25,000 tons of waste acid into two waterways over a period of a year. This marks the largest Chinese environmental pollution case and signals a crackdown on violating companies. The court has ordered them to pay the fines to an environmental protection fund within 30 days. With the updated Environmental Protection Law and the rules issued by the SPC last year which enhanced public interest litigation against polluters, the courts are showing real commitment to protecting the environment.

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National IP Strategy Action Plan approved

On December 29, the State Council reviewed and approved the Action Plan for Further Implementation of the National IP Strategy (2014-2020). The Plan aims to improve IP utilisation and rights protection and promotes the development of IP intensive industries and greater coordination among government branches. It also calls for strengthening patent pilot projects, joint utilisation and collective management of patents. The focus on IP intensive industries is new and influenced by the US 2012 report on IP and the US economy. This strategy should benefit both domestic and international investors and tangible efforts should soon follow to encourage more innovation and ensure higher quality patents.

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China lifts prices of 24 commodities and services

The NDRC has removed all price controls on agricultural products such as tobacco leaves. Prices of railway bulk cargo, parcels and privately-funded cargo and passenger transport have also been allowed to freely float, as well as prices of domestic air cargo, passenger transport of some airlines, port services fees such as fees on container loading, ship rubbish treatment and water supply. The decision shows the NDRC is prepared to loosen government price control over these products and services and let the market decide prices. Does this, however, open up the possibility of anti-competitive behaviour in these areas

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Investment rules in three FTZs may ease

China may relax investment rules in three planned free trade zones (Guangdong, Fujian and Tianjin) as well as the Shanghai FTZ. The NPC will debate the State Council's proposal to temporarily adjust regulations on administrative approvals in the FTZs, specifically to remove the approval process for foreign companies that want to set up ventures in the areas for three years. The companies will not need approval to shut down ventures or change business purpose and instead only report business plans to the authorities. These policies conflict with current laws on foreign companies, Sino-foreign joint ventures and Taiwan investors, so several articles in the FTZ laws will need adjusting. Given the anticlimactic effect of the Shanghai pilot FTZ, this proposal appears to mark a sound step in removing access barriers. If it passes, the bill may allow foreign investors to get a real sense of investment potential in these zones.

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Not so free zone
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