December 2024: Annual Report on NPC's Mechanism for Resolving Legislative Conflicts
New VAT law and amendments to Supervision Law. Plus: seven new legislative drafts.
Welcome back to NPC Observer Monthly, a monthly newsletter about China’s national legislature: the National People’s Congress (NPC) and its Standing Committee (NPCSC). And thank you for your patience while I worked on this issue after a much-needed break!
Each issue will start with “News of the Month,” a recap of major NPC-related events from the previous month, with links to any coverage we have published on our main site, NPC Observer. If, during that month, we have also written posts that aren’t tied to current events, I’ll then provide a round-up in “Non-News of the Month.” Finally, depending on the month and my schedule, I may end an issue with discussions of an NPC-related topic that is in some way connected to the past month.
If you’re enjoying the newsletter, I hope you’ll share it widely. —Changhao
News of the Month
On December 17, the NPCSC Legislative Affairs Commission appointed the second Expert Committee on the Translation of Laws, which consists of 25 individual experts (20 of whom specialize in English and the others respectively in Arabic, Russian, German, French, and Spanish) and 6 new institutional members.1 As the readout of the investiture ceremony notes, recent NPCSC leaders have emphasized the importance of producing quality English translations of Chinese laws—an effort that has received a mention in the NPCSC’s annual work reports for the past two years. According to the readout, as of December 17, the NPC’s official website hosted the (non-binding) English translations of 141 NPC enactments, which have been viewed over 400,000 times. The Expert Committee was established in November 2019, and its members serve renewable five-year terms.
On December 21–25, the 14th NPCSC convened for its 14th session, at the end of which it decided to send the draft amendment to the Law on the Delegates to the National People’s Congress and Local People’s Congresses (Delegates Law) [全国人民代表大会和地方各级人民代表大会代表法] to the 2025 NPC session for a final review and passed three other bills.
First, the NPCSC enacted the Value-Added Tax Law [增值税法], which will take effect on January 1, 2026. As various law firms and accounting firms have published summaries and analyses of the Law, here I’ll note only two interesting features of its final version:
Under the Law, contraceptives will no longer be exempt from the value-added tax (VAT)—yet another apparent attempt by the Chinese government at increasing the country’s birth rate.
The final version of the Law also removed several provisions that would’ve authorized the State Council to expand or limit the application of certain default rules (e.g., to deem additional activities as taxable transactions). This change is consistent with the NPC’s post-2013 effort to reassert greater control over taxation—or, in the words of the 2024 Third Plenum decision, to “fully implement the principle of law-based taxation” [全面落实税收法定原则].
Last April, I reviewed China’s progress toward realizing that reform goal in this newsletter. Once the VAT law takes effect next year, only four taxes will be levied by State Council regulations: consumption tax [消费税], building tax [房产税], land value-added tax [土地增值税], and urban land use tax [城镇土地使用税]. The legislature is likely to tackle the consumption tax next, whereas legislation on the other three land-related taxes might have been put on hold pending the planned real estate tax pilots.
Second, the NPCSC adopted the first amendments to the 2018 Supervision Law [监察法], which governs the structure, powers, and procedures of supervision commissions, China’s state anti-corruption bodies. My colleague Jeremy Daum, who is an expert on Chinese criminal procedure, has posted a detailed explanation of the major changes to the Law here. He has also translated the Law as amended here. The amendments will take effect on June 1, 2025.
Finally, the NPCSC revised the Science and Technology Popularization Law [科学技术普及法], effective immediately. “Sci-tech popularization” (STP) refers to efforts to “popularize scientific and technological knowledge, advocate the scientific method, disseminate scientific ideas, and promote the spirit of science” (art. 2). The revision newly places STP efforts under the Communist Party’s “comprehensive leadership” and specifies the following requirements and goals for STP: “STP shall be people-centered; persist in focusing on the frontiers of global science and technology, on the main battlefield of economic development, on the country’s major needs, and on the people’s health and well-being; cultivate and promote a culture of innovation; foster a social ethos of respecting science and pursuing innovation; serve high-quality development; and lay a solid foundation for building a scientific and technological powerhouse” (art. 3). “The State puts STP on an equal footing with sci-tech innovation,” the revision adds (art. 4). The revised Law is short on directly enforceable provisions, however, and consists mostly of policy statements.
At last month’s session, the NPCSC also reviewed the following bills, on which it sought public comment through January 23:
draft amendment to the Delegates Law;
draft National Parks Law [国家公园法];
draft Law on Publicity and Education on the Rule of Law [法治宣传教育法];
draft Private Economy Promotion Law [民营经济促进法];
draft revision to the Anti–Unfair Competition Law [反不正当竞争法];
draft revision to the Fisheries Law [渔业法]; and
draft Hazardous Chemicals Safety Law [危险化学品安全法].
2024 Report on Recording and Review
The NPCSC also heard several reports at last month’s session, including its Legislative Affairs Commission’s annual report on “recording and review” (R&R) [备案审查]—which I will focus on in the remainder of this newsletter.
R&R is the NPCSC’s mechanism for identifying and resolving legislative conflicts that undermine China’s hierarchy of legal norms, at the top of which sits the Constitution. Since 2017, the NPCSC Legislative Affairs Commission (LAC), which administers the process in practice, has submitted annual reports to the NPCSC on the operation of the mechanism. Last month’s report disclosed a number of interesting developments from 2024, including 10 carefully selected cases in which legislation failed review.
I already covered, at this link, the LAC’s decisions repudiating certain collateral consequences imposed on individuals with criminal convictions for infringing on the constitutional right to material assistance from the State and the right to work. I also mentioned the LAC’s rejection of a provision in a 2024 Supreme People’s Court interpretation that gave retroactive effect to a new Company Law provision on equity transfers in our year-end review for 2024; other outlets have reported on this development in more detail. Below are a few additional highlights of the LAC’s 2024 R&R report.
Uptick in citizen requests for review. A year ago, the LAC reported concerning, unexplained drops both in the total number of citizen requests submitted and in the percentage filed online. It is thus encouraging to see that both metrics rebounded in 2024. Here’s the relevant data for the past five years:
2020: 5,146 in total (62.7% submitted online);
2021: 6,339 (79.9%);
2022: 4,829 (~70%);
2023: 2,827 (19.3%);
2024: 5,682 (53.4%).
Provincial legislation databases. According to the report, all 31 mainland provinces had launched a provincial legislation database by end of 2024. The databases collect and make publicly available local regulations, local government rules, resolutions or decisions of people’s congresses, and other non-legislative normative documents issued by administrative, judicial, or supervision organs—totaling over 380,000 documents as of November 2024. In February 2021, the NPC launched the National Database of Laws and Regulations, which partially overlaps with the provincial databases in coverage. Next, the NPC is likely to work with its provincial counterparts to create “a unified national information platform for laws, regulations, and other normative documents”—a goal set by the 2024 Third Plenum decision.
Tickets for unpaid parking fees. Zhuhai’s traffic regulations imposed a 200 yuan fine on anyone who fails to pay for street parking. Citizens successfully challenged the legality of this fine. The LAC explained that, because the national Road Traffic Safety Law [道路交通安全法] does not penalize failure to pay for street parking, such nonpayment does not violate national law if the car is otherwise parked legally. And consistent with unspecified principles and provisions of the Administrative Punishments Law [行政处罚法], the LAC continued, whether to penalize failure to pay for street parking is a question for the NPCSC or the State Council to decide, not a local authority. (I wish the report had offered more explanation, because I am not fully persuaded by the second part of the LAC’s reasoning. But I suppose the decision is good news for Chinese drivers everywhere!)
Renting out residential parking spaces. As I’ve explained here, a homeowner living in a residential compound has both (1) the right to exclusive ownership of their unit in a building and (2) the right to co-own and jointly manage common spaces in their building and the surrounding compound with other homeowners. The homeowners may form an owners’ committee [业主委员会] to manage community affairs. A local regulation provided that, if a residential compound contains more parking spaces than the homeowners need, its owners’ committee may decide to rent out the surplus parking spaces to persons outside the compound. Several unnamed departments (presumably of the State Council) jointly petitioned for review of that provision. The LAC concluded that renting out co-owned parking spaces in a residential compound constitutes using co-owned space for business activities and “implicates the homeowner’s rights and interests in co-owned property as well as the safety, environment, and order within the residential compound, and other vital interests of the homeowners.” Under the Civil Code [民法典], this decision is one that must be made by all homeowners jointly—not by the owners’ committee alone. The enacting body has agreed to amend the provision as soon as possible, according to the report.
That’s all for this month’s issue. Thanks for reading!
I’ll back in your inbox (relatively) soon to recap January. In the meantime, Happy Year of the Snake! 🧧🐍
Chentuo Zhu contributed to this post
They are the Beijing Foreign Studies University, China University of Politics and Law, Southeast University, Heilongjiang University, East China University of Politics and Law, and Guangdong University of Foreign Studies.
on the topic of judicial interpretation of Article 88 of the Company Law, see the SPC Monitor's comments: ....The Legislative Affairs Commission stated that the “[they] will urge the relevant judicial interpretation-making authorities to take appropriate measures to properly handle the matter.” The SPC issued a follow-up interpretation two days after the annual report was made public, signaling that the SPC had been previously informed. Although the problematic July 2024 interpretation must have been reviewed by the Legislative Affairs Commission in draft form before it was approved by the SPC judicial committee, as required by Article 18 of the SPC’s Judicial Interpretation Work Provisions, it appears that whichever office of the Legislative Affairs Commission initially reviewed the SPC’s draft and the office responsible for recording and review took different views.