25th Session Watch Pt. 3: NPCSC Passes New Laws and Reform Authorizations

Yesterday, the 12th NPCSC concluded its last session in 2016 with the passage of three new laws and several decisions concerning reforms of various areas. The following is a quick summary of the outcome of this Session. For those of you who are looking for more information on the anti-corruption system reform, please see this post instead.

2017 NPC Session

The 5th Session of the 12th NPC will convene on March 5, 2017. The NPCSC suggested an agenda for the Session, which include the following items:

  • Hearing work reports by the State Council, the NPCSC, the Supreme People’s Court, and the Supreme People’s Procuratorate;
  • Approving the 2017 National Economic and Social Development Plan;
  • Approving the 2017 national budget;
  • Reviewing the draft General Provisions of the Civil Code;
  • Reviewing a draft decision concerning the number and election of delegates to the 13th NPC;
  • Reviewing draft measures for electing Hong Kong and Macau delegates to the 13th NPC.

We do not anticipate any changes to the agenda.


Chinese Medicine Law (effective July 1, 2017)

This Law is officially hailed as a “landmark” in the development of Chinese medicine. As the first national law devoted to the topic of Chinese medicine, it makes clear that Chinese medicine is an “important component” of China’s medical and health services (Art. 3). The Law establishes a regulatory system that is appropriate to the “distinct” characteristics of Chinese medicine—a scheme that is oftentimes different from its Western medicine counterpart. For example, Chinese medicine clinics may be set up simply by recording with relevant authorities, instead of obtaining prior approval. The Law also provides for other supportive measures for the Chinese medicine industry. Those who are interested (and who have sufficient Chinese competency) can read this official introduction for more information.

Law on Ensuring Public Cultural Services (effective March 1, 2017)

According to Xinhua, this Law will promote the “standardization and equalization” of public cultural services, which are defined as “public cultural facilities, cultural products, cultural activities, and other relevant services” provided primarily by the government to satisfy the citizens’ basic cultural needs (Art. 2). For more information on this Law, please refer to the full text and the news report linked above.

Environmental Protection Tax Law (effective January 1, 2018—yep, that’s 2018)

The first tax law adopted by the 12th NPCSC, this Law is China’s first step to upgrade all of its tax legislations to national laws—most are administrative regulations at this point. The Law levies environmental protection taxes on the atmospheric pollutants, water pollutants, solid waste, and noise provided in the appendices (Art. 3). The taxable pollutants discharged by motor vehicles, vessels, locomotives, and airplanes, among others, are “temporarily” exempted from environmental protection taxes (Art. 12). The Law also provides for possibilities of tax reductions. For more information, please refer to the full text linked above.

Reform Authorizations

Social Insurance System Reform (effective January 1, 2017)

We already covered the content of this reform in the last post (see the second paragraph in the “Other Updates” section.) Specifically, the NPCSC allows the State Council to suspend the enforcement of Article 64, paragraph 1 and Article 66 of the Social Insurance Law in twelve cities. The two articles stipulate that the maternity insurance fund and the basic medical insurance fund must be set up separately for accounting, budget, and other purposes, whereas the reform seeks to combine the two.

The Decision will be implemented for a duration of two years.

Military Officer System Reform (effective January 1, 2017)

Unlike the other authorizations approved by this NPCSC Session, this one is lacking in details. Instead of listing the specific legal provisions it allows for temporary suspension (which is the usual practice), this Decision simply provides that, “during the reform of the military officer system,” the application of relevant provisions of the Officers in Active Duty Law and the PLA Military Officer Ranks Regulations concerning “an officer’s level of post and rank, appointment and removal, education and training, benefits guarantee, and post-retirement placement” will be temporarily adjusted. Nor does the Decision specify the regions where this reform will be conducted. It therefore gives the Central Military Commission much leeway in conducting the reform.

For a discussion of the general direction of this reform, please see our prior post.

Civil Servant System Reform (effective December 26, 2016)

This reform is the counterpart of the military officer reform in the civilian service. Much like the military post and rank system, each civil servant simultaneously has a post (such as the Premier) and a rank (of which there are 27 levels; the Premier would be level 1). In addition, a civil servant’s post, instead of rank, determines his or her income. This creates the unnatural situation where the head of a county (县长) and a division chief (处长) of a central state organ receive the same amount of income because they hold the same level of post, even though the former has a lot more responsibilities than the latter. This reform seeks to tie a civil servant’s income and other benefits to his/her rank instead of post. It will make changes to the mechanisms for promotions as well.

The reform will run for a period of two years when the measures for the reform pilots are released. The State Council is ordered to submit a midterm report to the NPCSC.

State Supervision System Reform (effective December 26, 2016)

Please refer to this separate blog post.

Solicitation of Public Comments

This Session deliberated over three other legislative bills: an amendment to the Water Pollution Prevention and Control Law, a draft E-Commerce Law, and a draft National Intelligence Law.

We expect the NPCSC to release the first two laws for public comments soon (possibly within this week), but not the last one, as we’ve discussed in the last post.

We’ll keep you updated on any new developments.

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