Below is a brief analysis and explanation of the key provisions of the Opinions:

1. Imputation Principles for Tort Liability

Pursuant to Article 1165 of the Civil Code, the prerequisite for establishing tort liability is proof that the actor is at fault, unless the law explicitly prescribes a reversal of the burden of proof. In AI torts, it is often difficult to determine whether the actor is at fault for consequences arising from AI out-of-control incidents. Subparagraph （3） of Article 2 of Fa Fa〔2026〕No.10 stipulates: “…When determining whether an actor is at fault and the degree of such fault, the people’s court shall comprehensively consider factors including the specific scenario of the AI application, its level of autonomy, technical and informational transparency, potential risks and scope of impact; measures adopted and technical feasibility for AI developers, providers and other relevant parties to prevent and mitigate AI-related torts; and the foreseeability and control capacity of AI users over harm that may result from torts committed using AI technologies.”

Accordingly, for manufacturing enterprises deploying AI robotic arms and robots for operations, key factors to be assessed in future disputes shall include: whether the enterprise possesses foreseeability and control capacity over potential harm that such equipment may inflict on other participants in the operation, operators and other related personnel; and whether the enterprise has implemented effective preventive and control measures.

2. AI Infringement of Copyright

Over the past few years, there have been divergent views on whether information generated by AI constitutes copyright infringement. Fa Fa〔2026〕No.10 does not provide a universal conclusion, but sets out factors courts shall consider when hearing such infringement cases and specifies the burden of proof borne by each party. Subparagraph （12） of Article 3 of Fa Fa〔2026〕No.10 provides: “…People’s courts shall comprehensively consider factors such as the type of AI service, industry characteristics, sources of training data, degree of participation of each party, necessary measures adopted and profit gains, to lawfully and reasonably determine the liabilities of AI developers, providers and users. Where an AI developer raises a non-infringement defense, the people’s court shall order the developer to provide supporting evidence including sources of training data, records of the training process, model operation modes and scientific theoretical basis. Where a right holder claims that an AI provider infringes its copyright using algorithmic technology, the right holder shall submit relevant evidence. …”

3. Patent Grant and Validation for Inventions Created Using AI

Is AI merely a tool, or a secondary human brain capable of creativity? Fa Fa〔2026〕No.10 leans toward the former. Subparagraph (14) of Article 3 stipulates: “Where an AI-related invention creation adopts technical means complying with natural laws, solves a technical problem and achieves technical effects in line with natural laws, people’s courts shall lawfully recognize it as subject matter protected by the Patent Law, except where such invention creation violates the law, social morality, harms public interests, or involves no substantive contribution by a natural person. …”

Therefore, in future patent disputes concerning AI-generated inventions, whether a natural person has made substantive contributions will become a critical point of contention. Where enterprise R&D departments utilize AI, it is recommended that they preserve evidence of substantive R&D input by researchers, particularly records of ideas and research directions. In addition, costs incurred from AI use may be counted toward R&D expenditure, which will be helpful to calculate damages in the event of trade secret or patent infringement litigation.

Fa Fa〔2026〕No.10 also addresses more than ten other dispute points including AI data usage, liability for breach of technical contracts, and infringement of consumer rights and interests, which merit attention.

First, let us define each term and its applicable scenarios.

Commission, discount and rebate are all common promotional tools. Commission is consideration for intermediary services, generally paid to a middleman who facilitates a transaction. It qualifies as a service, issued with a positive-value invoice, and normally subject to a 6% VAT rate. In contrast, discounts and rebates usually arise between the two parties to a transaction and are tied to the underlying transaction, so their VAT rates follow those applicable to the transaction invoice. Discount refers to price concessions that reduce sales revenue. It is typically granted at the time of transaction, or after the transaction where the payee assumes liability and agrees to offer a discount, for example where goods have quality defects and the buyer accepts them with concessions, or where goods drop in price within the seller’s guaranteed price period. If the discount is granted at the time of sale, a positive-value invoice is issued, listing the original price on one line and the discounted negative amount on another. Pursuant to the Notice of the State Taxation Administration on the Issuance of Red-letter Special VAT Invoices for Discount and Allowance Transactions by Taxpayers (Guo Shui Han〔2006〕No.1279）， where a discount is granted after transaction completion, a red-letter invoice shall be issued. Rebate is generally paid after transaction completion and therefore also evidenced by a red-letter invoice. Lastly, where commission, discount or rebate is not truthfully recorded in the books and handled through off-book arrangements, it is commonly referred to as a kickback, which constitutes an act of commercial bribery.

With the development of online sales, new business models such as new media advertising placement and influencer live-streaming sales via platforms have created new types of promotional arrangements, making it sometimes difficult to immediately identify the parties and characterize the arrangement. We analyze platform models including Douyin’s Xingtu, Weibo’s Weitask, Tencent’s Tencent Mutual Selection Platform and Xiaohongshu’s Pugongying as examples.

The rules of these platforms generally deduct a percentage of platform service fees after an influencer completes a transaction through the platform. To enable such promotions and protect the rights and interests of merchants and influencers to a certain extent, platform rules mandate that the entire process —order placement, order acceptance, content delivery and platform settlement — must be conducted through the platform system. Platforms usually maintain publicly available or transparently disclosed quotation systems for partners, but do not allow direct modification of order prices within the system to realize instant discounts.

This transaction structure creates a problem, that is, a company may have reached an agreement with an influencer before the transaction, yet any promotional activity must be processed via the platform system. The discounts or rebates agreed privately cannot be adjusted within the system. Meanwhile, an influencer’s order volume processed through the platform affects the platform’s traffic allocation for the influencer. Therefore, influencers often prefer merchants to place higher-value orders through the platform, and then pay separate discounts or rebates to the merchant outside the platform. What legal relationship governs merchants and influencers under such arrangements?

In case (2023) Hu 0104 Min Chu No.855, the parties agreed that Company X would place orders through Douyin’s Xingtu and Xiaohongshu’s Pugongying platforms, and Company F would perform the promotion upon accepting the orders. The parties also agreed that Company F would grant rebates to Company X for orders placed by Company X on the platforms. The court ultimately upheld Company X’s claim for rebates. Notably, the cause of action in this case was a service contract dispute, not an intermediary service contract dispute. This shows that courts may recognize discounts or rebates as arrangements between contracting parties even where the underlying transaction is conducted via a third-party platform. In view of this case, if parties purchase property through an agent but conclude the transaction themselves, provided they do not bypass the agent and the agent receives commission (calculated based on the transaction amount before discount or rebate), there should be no legal risk.

However, when parties who are not familiar with the legal nature of these three concepts, they may make the payments under the title of commission. This is an incorrect practice. The business party itself is the counterparty to the transaction, while the platform acts as the intermediary. Therefore, such payment shall not be commission.

Finally, it should be noted that under Article 8 of the Anti-Unfair Competition Law, commissions, discounts and rebates must all be truthfully recorded in the accounting books by both parties; failure to do so constitutes commercial bribery. In practice, some business parties and influencers transfer funds under the guise of commission, information service fees, consulting fees, promotion fees, sponsorship fees and etc.. They fabricate service arrangements and false transaction backgrounds to create a veneer of compliance. Even with formal documents such as contracts, invoices and bank transfers through corporate accounts, such conduct may still be deemed invoice-related violations and even commercial bribery.

It is recommended that enterprises, when confronted with new business models, first properly distinguish commission, discount and rebate. Regardless of the model adopted, ensure all amounts are truthfully recorded and invoices are issued in accordance with law.

Let us analyze this layer by layer.

There are no statutory provisions governing such “review period”. Therefore, an employer may formulate internal rules or enter into agreements with employees regarding such period, in order to minimize operational disputes and litigation risks, the rules of such period must be clearly defined and reasonable.

The rules shall be clearly defined, which mainly means that the length of the period, remuneration during the period, evaluation criteria, and consequences upon failure upon the expiration of the period shall be clear and definite. The rules shall be reasonable, which mainly refers to the reasonableness of provisions when embodied in internal rules. If the rules are not reasonable, which may be deemed as invalid, in addition, such unreasonable rules may dampen employee motivation and initiative.

First, regarding the length of the period, since there are no statutory requirements, both parties may agree freely. An excessively long period will undermine employee motivation and mental stability, especially where salary increases are suspended or discounted during such period. Article 43 of the Regulations on the Selection and Appointment of Leading Party and Government Cadres sets a one-year probation period for non-elected personnel holding certain leading positions. Hence, by reference to this provision, the review period established by companies should preferably not exceed one year. Considering that promoted employees usually have several years of working experience, drawing on the provisions for employment probation, a period of 3 to 6 months is more reasonable.

Second, regarding remuneration during the review period, there are several available structures: (1) Remuneration in accordance with the salary standard for the promoted position; (2) Remuneration remains unchanged and is paid under the original position’s standard; or (3) Remuneration is paid at a discount against the promoted position’s salary scale. Each structure has its pros and cons. Scenario (1) maximizes employee motivation. However, if the employee fails the review period and reverts to the original position and salary, it often leads to a large psychological gap. In scenario (2), employees may feel aggrieved, assuming greater responsibilities without a corresponding pay rise. Scenario (3) strikes a balance between both sides, but the discount rate must be carefully considered. In addition, scenarios (2) and (3) carry the risk that employees may later claim underpayment and demand salary back pay. Nevertheless, where internal rules are valid or the agreement is clear, courts will not uphold employees’ claims. For example, in cases (2025) Yue 0113 Min Chu No. 2381 and No. 13394, the company’s employee handbook provided for a trial period upon promotion with salary adjustment effective the month after successful completion of the review period. The employee subsequently claimed back pay, which was rejected by the court.

Third, evaluation criteria during the review period should be as objective and quantifiable as possible to avoid disputes over the fairness, reasonableness and validity of evaluation results.

Fourth, rules governing outcomes upon expiry of the review period are also important. It is common to stipulate that employees who fail the review period shall return to their original positions and original remuneration. Adjusting the position and/or remuneration to a level lower than the original position carries risks of being deemed unreasonable. For instance, in case (2025) Yue 0112 Min Chu No. 15585, the company stipulated a review period after promotion, and stated that if an employee was found unsuitable or incompetent for the promoted role during the review period, the company could transfer the employee back to the original position or an equivalent role. Upon expiry of the review period, the company demoted the employee by two levels on the grounds of failing performance assessment in the following month. The salary after demotion was nearly 40% lower than pre-promotion salary, and the court ruled the demotion unlawful. As for employers seeking to terminate employment contracts during the review period based on incompetence in accordance with the relevant provisions of the Labor Contract Law, this approach generally carries high risks and is not recommended. On the one hand, the employer must prove incompetence; on the other hand, procedural prerequisites such as job transfer or training must be satisfied.

Lastly, in actual implementation, attention must be paid to procedural compliance and prudence to avoid adverse consequences arising from procedural errors. For example, in case (2026) Yue 0197 Min Chu No. 8104, the employee’s promotion had gone through the company’s complete approval process. The company later revoked the promotion on the ground of errors made when reviewing the employee’s qualifications during the approval process, and the court did not support the company’s position.

1. Exit Restrictions for Chinese Citizens

2. Entry Restrictions for Foreign Nationals

    Article 5 of the Regulation sets forth entry restrictions applicable to foreigners.

]]> https://www.kw-legal.com/en/2026/08/31/16802en/ Mon, 31 Aug 2026 02:56:56 +0000 https://www.kw-legal.com/?p=20945 Paragraph 2 of Article 562 of the “Civil Code” provides that: “The parties may agree on the grounds for termination of the contract by one party. Where the grounds for contract termination occur, the party entitled to the right of termination may terminate the contract.” This provision permits parties to pre‑agree termination grounds, embodying the core value of party autonomy in private law. Nevertheless, some parties seek to terminate the contract upon even trivial missteps by the counterparty, which also undermines contractual stability.

To address this issue, Article 47 of the “Minutes of the National Courts’ Civil‑Commercial Trial Work Conference” (Fa〔2019〕No. 254) stipulates: “Where the contractually‑agreed condition for termination is satisfied and the non‑breaching party petitions for contract termination on such ground, the people’s court shall examine whether the breaching party’s breach is de minimis and whether it frustrates the non‑breaching party’s contractual purpose, and determine whether the contract shall be terminated in accordance with the principle of good faith. …” It follows that in judicial practice, courts possess ex‑officio authority to review contract‑termination grounds agreed by the parties and render a decision on whether termination is warranted.

In light of judicial practice, where grounds for contract termination have been agreed and the counterparty’s conduct triggers such grounds, the following analytical steps are recommended to assess the follow up actions.

First, to confirm whether the contract is eligible for termination. Judicial interpretive positions on this question have evolved over time.

Article 47 of the aforesaid 2019 “Minutes of the National Courts’ Civil‑Commercial Trial Work Conference” once served as the primary legal basis for determining whether a contract could be terminated.

However, Article 26 of the “Judicial Interpretation of the Supreme People’s Court on Several Issues Concerning the General Provisions of the Contract Book of the Civil Code” (Fa Shi〔2023〕No. 13), which took effect on 5 December 2023, provides that where the breaching party fails to perform non‑primary contractual obligations as agreed, a claim for contract termination brought by the non‑breaching party shall not be upheld, unless such non‑performance frustrates the contractual purpose or the parties have agreed otherwise. Upon issuance of this judicial interpretation, viewpoints emerged arguing that minor breach per se should not bar exercise of the contractual right of termination.

In 2024, the Research Office of the Beijing Higher People’s Court submitted an inquiry to the Civil Division of the Research Office of the Supreme People’s Court concerning “whether a party may exercise a contractual right of termination in cases of minor breach”. The Supreme People’s Court indicated that the following factors should be weighed when exercising the contractual right of termination:

1. Degree of fault on the breaching party. While the “Civil Code” adheres to the strict‑liability principle and disregards fault when establishing breach of contract, fault is not devoid of significance under contract law. Where the breaching party is merely slightly negligent or even free from fault, a claim for contract termination ought generally not to be sustained.
2. Form of the breaching conduct. Contractual obligations may be categorized by nature into primary obligations, accessory obligations and collateral obligations. Courts should exercise caution when upholding a non‑breaching party’s termination claim for breach of accessory obligations, and especially collateral obligations.
3. Consequences of the breach. In scenarios such as minor delayed performance or isolated breaches arising in the performance of continuing contracts, where the breach is markedly trivial and does not defeat the non‑breaching party’s contractual purpose, granting termination may render substantial prior investments by the minor‑breaching party irrecoverable and produce severe imbalance of interests.
4. Availability of alternative remedies. Termination is neither the sole nor an automatic remedy for breach of contract. A de minimis breach does not absolve the breaching party of contractual liability. Where the non‑breaching party’s losses can be redressed through other forms of contractual liability (most commonly damages), and such remedy achieves greater fairness than outright termination, the non‑breaching party’s right of termination may be subject to restriction.

The response from the Supreme People’s Court largely returns to the doctrinal tone of Fa〔2019〕No. 254, that is, assessment must proceed by comprehensively weighing all relevant circumstances surrounding the minor breach.

Second, if the four factors have been reviewed, by which the termination could be confirmed as permissible, the contractual right of termination may be exercised. Conversely, the non‑breaching party may elect specific performance coupled with claims for contractual liability, or partial contract termination together with pursuit of contractual liability, depending on the circumstances of the contract.

In conclusion, from the contracting parties’ perspective, agreeing on termination grounds remains advisable. At minimum, it imposes an additional constraint on contracting parties. Should the counterparty indeed commit a breach, notwithstanding some uncertainty as to whether termination will ultimately be upheld, such clauses furnish an additional method.

Under Item 1 of Paragraph 1 of Article 15 of the “Regulations on Work‑Related Injury Insurance”, an employee who “dies of a sudden illness at work hours and at the work post, or dies despite rescue efforts within 48 hours” shall be deemed to have suffered a work‑related injury. This “48‑hour” threshold raises two questions: when does the 48‑hour clock start, and what standard governs the time‑of‑death determination.

First, the 48‑hour period does not commence when the employee collapses, feels unwell, or calls an ambulance. Instead, it starts from the time of the initial medical diagnosis made by a medical institution. This is explicitly stipulated in Article 3 of the “Opinions on Several Issues Concerning the Implementation of the Regulations on Work‑Related Injury Insurance”. In practice, key documents such as emergency‑room medical records, admission notes and pre‑hospital emergency care reports should be reviewed, rather than simply counting backwards from other events to calculate the 48‑hour period.

Second, the time of death shall in principle be that recorded on the death certificate, though the death certificate is not absolutely conclusive under all circumstances. Article 15 of the “Civil Code” provides: “The time of death of a natural person is the time recorded in the death certificate; in the absence of a death certificate, it shall be the time recorded in household‑registration or other valid identity registers. Where other evidence is sufficient to overturn the aforesaid recorded times, the time proven by such evidence shall prevail.” This is the core takeaway from the aforementioned Supreme People’s Court case. The judgment did not establish a new rule that deaths occurring after 48 hours automatically qualify as work‑related injuries. Rather, it conducted a substantive review of when the actual fatal state set in under specific evidentiary conditions.

However, such exception does not constitute a general rule. For example, in the case (2024) Hu7101XingChu No. 427, family members contended that the employee had suffered brain death within 48 hours, but a deemed work‑related‑injury finding was ultimately denied. By contrast, in the case (2017) LuXingShen No. 127, the Shandong High People’s Court upheld using the time of brain death as the time of death.

A persistent vegetative state is clearly distinguished from brain death and does not equate to death. Item 5.1.1 in the “Announcement of the Supreme People’s Court, Supreme People’s Procuratorate and Ministry of Public Security on Issuing the Grading of Disability Caused by Human‑Body Injuries” classifies “persistent vegetative state” as Grade‑I disability (the most severe disability grade). Therefore, even if an employee enters a vegetative state within 48 hours of falling ill, so long as the person remains alive, the condition cannot be treated as “death despite rescue efforts within 48 hours”.

Where an employee suffers a severe sudden illness at work, prompt hospital admission is a must to do action. For incidents falling near the 48‑hour threshold, a 48‑hour countdown should not be rigidly applied. Instead, a 48‑hour countdown time point shall be determined with a complete chain of evidence covering medical admission, diagnosis, resuscitation and the formal declaration of death.

1. Trademark Registration

Enterprises shall pay full attention to the following revisions when filing trademark registration applications:

1. Trademark Use

Enterprises shall attach particular importance to the following aspects concerning trademark use:

1. The Impact of Tendering Procedures on the validity of Contracts

Article 1 of Interpretation I stipulates that a must be tendered construction project failed to go through the tendering procedures, it shall be invalid. Interpretation II prescribes different circumstances regarding the validity of contracts. Article 2 provides that if the parties negotiate on substantive contents before tendering, the winning bid contract may be deemed invalid. This explicitly clarifies that illegal negotiation acts such as “open bidding with secret pre-determination” and “pre-determination before bidding” will invalidate the winning bid contract, aiming to force owners to comply with rules during the tendering procedures. Article 1 provides that if the project is no longer subject to mandatory tendering at the time of filing a lawsuit, the contract shall not be deemed invalid solely on the ground of failure to tender. In other words, for projects that “must be tendered”, if they have become “non-mandatory tendering” projects due to regulatory or policy adjustments at the time of litigation, the contract will not be invalidated solely because of “failure to tender”, reducing compliance risks for legacy projects.

2. The Owner’s Knowledge Becomes Key to Determine Whether an Affiliated Party Can Sue the Owner Directly

According to Article 4, if the owner “did not know and should not have known” about the qualification lending at the time of contract conclusion, the affiliated party cannot directly break through the privity of contract to claim project payment from the owner. If the owner “knew or should have known” about the affiliation, it shall directly bear the liability for compensatory payment to the actual constructor. Therefore, owners must strictly review qualifications during the contractor selection stage. Meanwhile, at all stages of contract signing, construction, and settlement, owners should avoid contacting and transacting with personnel whose identity as contractors is uncertain to prevent being deemed “knowledgeable”.

3.  Return to Privity of Contract, to Set Restrictions on Actual Constructors Suing Owners

Article 43 of Interpretation I stipulates that actual constructors may directly sue the owner as a defendant to claim rights, leading to numerous cases in practice where owners are sued unjustly. Interpretation II makes differentiated provisions.

Firstly, in principle, the privity of contract shall not be breached. Article 6 explicitly provides that in cases of prohibited subcontracting and illegal subcontracting, the court shall not support claims for payment from the owner by the party accepting the subcontracting or illegal subcontracting.

Secondly, to set the requirements for exercising subrogation rights. Actual constructors may exercise subrogation rights only if the prerequisite is met. The prerequisite is that the contractor is negligent in exercising matured claims or accessory rights related thereto, affecting the realization of its matured claims. Owners can effectively block recourse in subrogation lawsuits by strictly implementing payment milestones and improving payment ledgers.

4.  Fixed Lump-Sum Contracts Are Generally Non-Adjustable, Owner’sBudgets Becomes More Controllable

Article 9 stipulates that fixed-price contracts are generally not subject to price adjustments due to fluctuations in labor and material costs. However, two exceptions are reserved. If parties have agreed otherwise, or “changed circumstances” as stipulated in the Civil Code occur, then price adjustments may be claimed.

There is a special situation, if a fixed lump-sum construction contract is terminated midway, and the parties cannot reach an agreement on the completed part (with qualified quality), Article 10 sets a rule for calculation: “the proportion of the project price of the completed part to the total project price may be determined by reference to the pricing standards, pricing methods, or relevant norms in the engineering construction field issued by the construction administrative department at the place where the construction project is located at the time of contract conclusion, and the project price of the completed part shall be determined by multiplying this proportion by the fixed lump-sum price agreed in the contract.” The rationality and practicality of this rule seem to be highly controversial.

5.  Owners’ “Delaying” Settlement Behaviors Are Regulated

In practice, it is very common for owners to delay payment on grounds such as incomplete audits or postponed commencement dates for retention funds due to uncompleted completion procedures. Article 13 provides that if an audit is cited as a reason, unless otherwise agreed by the parties, the court may determine the time limit for issuing the audit conclusion based on the project scale, cost, and complexity, with a maximum of one year from the date the contractor submits the completion settlement documents. The aforementioned one-year limit does not apply if the delay is caused by the contractor’s failure to cooperate in providing materials. Article 14 provides that the retention fund refund period commences from the date the contractor exits the site; if the construction contract is terminated after the contractor exits, it commences from the date of termination.

6.  Contract Termination and Quality Liability

Article 15 explicitly provides that after contract termination, the owner has the right to request the contractor to hand over the construction site and construction materials, helping the owner quickly organize subsequent construction and reduce losses. Article 16 clarifies the quality repair procedure, requiring the owner to fulfill the pre-procedure of notifying the contractor for repair before claiming quality repair costs.

In conclusion, Interpretation II clarifies the boundaries of owner’s rights and imposes higher requirements on owner’s standardized project management, namely, focusing on full-cycle management including preliminary compliance review, process performance supervision, and capital risk control.

In practice, employees may terminate the labor contract and demand economic compensation on the grounds of wage issues, such as, late wage payment, non-payment of overtime pay, salary reduction after job reassignment, and so on. Whether an employer shall pay economic compensation due to such wage issues?

Let’s see a case. In 2017, Wang joined a company, and his salary consisted of a base salary and variable remuneration, with the variable part paid based on performance assessments. In January 2023, the company updated the performance appraisal plan, abolishing fixed-performance wages and replacing them with floating performance wages. In November 2024, Wang terminated the labor contract on the grounds that the company failed to pay wage in full and on time, and claimed unpaid performance wages and economic compensation. The labor arbitration commission upheld all of Wang’s claims, but both the first-instance and second-instance courts only supported Wang’s claim for the performance wage difference and rejected his claim for economic compensation (see (2025) Hu 02 Min Zhong 11106 for details).

Therefore, the answer to the above question is not positive.

The legislative purpose of Article 38 of the Labor Contract Law is to prevent employers from maliciously defaulting on wage. Therefore, in judicial practice, whether the employer acted with malice must also be considered. Three factors are keys on the determination of malice:

1. Reasons for Wage Arrears

Article 4 of the Supplementary Provisions on Issues Related to the Payment of Wages (Tentative Provisions) issued by the former Ministry of Labor stipulates two scenarios where wage payment may be appropriately delayed: (1) The employer encounters force majeure such as natural disasters or wars beyond human control; and (2) The employer faces genuine production and operation difficulties or cash flow problems, and may temporarily delay wage payment after obtaining the consent of the company’s labor union. The maximum delay period shall be determined by the local labor administrative departments based on local conditions. For scenario (2), special attention must be paid to the procedural requirement of obtaining consent of the labor union and the local regulations on the maximum delay period.

2. Duration of Wage Arrears

Article 7 of the Payment of Wages (Tentative Provisions) mandates that wages shall be paid on the agreed date, and if the payment date falls on a holiday or rest day, payment shall be made in advance on the nearest working day. However, some local departments have established reasonable delay period. For example, Article 12 of the Regulations on Wage Payment for Employees in Shenzhen allows a 5 days delay with justifiable reasons. Article 54 of the Answers to the Trial of Labor Dispute Cases (I) issued by the Beijing Higher People’s Court and the Beijing Labor and Personnel Dispute Arbitration Commission stipulates that the latest payment date shall not exceed 7 days after the agreed date.

In practice, even with local regulations, the reasonable delay period may be extended in individual cases, especially during economic downturns. For instance, in Case (2022) Jing Min Shen 5584, the labor contract stipulated wage payment by the 10th of each month, but wages were actually paid around the 15th or at the latest the 23^rd, which was late for around 13 days. Nevertheless, the court did not uphold the claim for economic compensation. Given that the Payment of Wages (Tentative Provisions) generally requires monthly wage payment, claims for economic compensation are less likely to be supported if the arrears period does not exceed one month in individual cases.

3. Scope of Wage Arrears

Article 9 of the Opinions on Several Issues Concerning the Application of the Labor Contract Law issued by the Shanghai Higher People’s Court stipulates that failure to pay in full and on time due to unclear or disputed calculation standards cannot serve as a basis for an employee to terminate the labor contract. This is also the judicial logic behind the aforementioned case.

There are divergent views in practice regarding the scope of wage arrears. For example, in cases related to insufficient payment of annual leave wages, courts in Beijing, Shanghai, and Guangdong have rejected such claims (see (2022) Jing 03 Min Zhong 2232, (2024) Yue Min Shen 18941, and (2024) Hu 01 Min Zhong 11005). However, courts in Chongqing have supported such claims (see (2023) Yu 01 Min Zhong 1976). In cases related to insufficient payment of high-temperature subsidies, courts in Shanghai and Qingdao have rejected such claims (see (2023) Hu 0117 Min Chu 6207 and (2022) Lu 02 Min Zhong 712). In contrast, Article 6 of the Notice on Adjusting High-Temperature Allowance Standards issued by Jiangxi Province stipulates that if an employee terminates the labor contract due to the employer’s arrears or deduction of high-temperature subsidies, the employer shall pay economic compensation in accordance with the Labor Contract Law.

In conclusion, when an employer genuinely faces payment difficulties due to objective circumstances, it is recommended to assess the risks based on the specific situation and take necessary measures accordingly.

1. Cited Data

Article 4 of the Guidelines stipulates: “Where data cited in an advertisement is obtained through experiments, measurements, inspections, testing or other means, the institution issuing the relevant experimental conclusions, measurement findings or inspection and testing data (including results, conclusions and the like, hereinafter the same) shall possess corresponding statutory qualifications and professional competence. Measuring instruments, facilities, environmental conditions and other related elements shall comply with national requirements set forth in laws, administrative regulations, rules, mandatory national standards, metrological technical specifications and other relevant national provisions. If national or industrial standards govern experimental, measurement, inspection and testing methodologies, such prescribed standards shall be followed. In the absence of applicable national or industrial standards, methodologies widely recognized within the relevant industry or field shall be adopted.”

This provision sets a stringent standard requiring issuing institutions to satisfy both statutory qualifications and professional competence (the two requirements are conjunctive rather than alternative). This raises a critical question: will measurement data generated by an enterprise’s internal laboratory be deemed false citations in the future, solely due to the laboratory lacking statutory qualifications?

2. Cited Excerpts and Quotations

Article 7 of the Guidelines provides: “Excerpts and quotations cited in advertisements shall be consistent with the original text in meaning; the source literature and materials shall be genuine, existing and retrievable; and the viewpoints contained therein shall conform to general scientific knowledge.”

This clause emphasizes that all cited source literature must be authentic and accessible. Beyond regulating enterprises’ citations of traditional printed literature, the provision imposes heavier due diligence obligations on enterprises to verify the authenticity of reference materials amid the current AI era.

3. Legibility Requirements for Cited Content

To curb the prevalent deceptive advertising practice of “large eye-catching headlines paired with tiny disclaimer fine print”, Article 11 of the Guidelines states: “Where an advertisement with cited content includes information regarding product performance, functions, applications, specifications, validity periods, preferential terms and other similar particulars, advertisers shall not adopt measures that hinder consumer identification — such as reducing font size, altering font styles, or using text colors similar to the background — to narrow the scope of the aforementioned product particulars, or to provide interpretations and explanations that contradict general scientific knowledge or harm consumers’ interests.”

4. Exempt Scenarios for Absolute Superlative Terms in Cited Advertisements

Article 13 of the Guidelines specifies three exempt scenarios where the use of absolute superlative terms will not trigger law enforcement penalties:

1. The geographic scope referenced by the superlative term covers an area smaller than a provincial-level administrative region.
2. The industry or field of the goods referenced by the superlative term falls under a narrower classification than the industrial categories defined in national and industrial standards such as the Industrial Classification for National Economic Activities.
3. No dedicated national or industrial product/service standards apply to the goods referenced by the superlative term.