China’s Yangtze River Delta reins in ‘profit-driven’ fines in relief for private sector
Move by Shanghai and the provinces of Jiangsu, Zhejiang and Anhui aims to offer relief from arbitrary cross-regional inspections
The four jurisdictions have introduced China’s first mechanism designed to rein in cross-jurisdictional and profit-driven law enforcement, establishing a formal coordination framework to standardise cross-regional enforcement practices.
“If these new measures are effectively implemented and promoted to more provinces across China, they’ll offer much-needed safety and confidence, especially for private enterprises,” said Chris Liang, co-founder of a private technology company based in Guangdong province.
He said there had been many “truly alarming” cases in recent years of private business owners being detained by enforcement authorities from outside their regions who were acting on unclear jurisdictional grounds.
Deng Jianping, a senior lawyer at Guangdong Lawsons Law Office who serves as legal counsel for multiple companies, said many enterprises had reported frequent but unreasonable checks by different departments under various pretexts, which had severely disrupted production and exhausted management resources.
“Amid growing economic headwinds, frequent and disorderly enforcement actions undoubtedly undermine corporate vitality and disrupt normal economic activity,” Deng said.
She urged more provinces to follow the Yangtze River Delta’s move by setting clear boundaries for cross-regional enforcement, which has seen officials travel beyond their jurisdictions to investigate, detain people and levy fines. The practice has become so widespread that it has been likened to fishing boats trawling in offshore waters.
China’s non-tax revenue reached 4.47 trillion yuan last year, a year-on-year increase of 25.4 per cent, while tax revenue declined by 3.4 per cent to 17.5 trillion yuan.
01:18
Chinese President Xi Jinping holds rare meeting with China’s top entrepreneurs amid US tech rivalry