In March 2018, the NPC approved a plan to significantly reorganise China's State Council. The plan is intended to enable the government to more efficiently address China's current challenges (including poverty, environmental pollution and financial risk) and create a unified market supervision system. See Practice note, Understanding the 2018 government institutional reform: China.

In March 2018, the NPC added a chapter to China's Constitution to create the National Supervision Commission (NSC) and enacted a new anti-corruption law to empower the NSC to supervise, investigate and dispose of corrupt acts by members of China's vast public sector. See Legal update, NPC establishes National Supervision Commission and enacts Supervision Law.

In June 2018, the CSRC launched a pilot project to permit a select group of Chinese technology companies to issue Chinese depositary receipts (CDRs) to Chinese citizens through China's A-share market. See Legal update, China launches pilot CDR scheme.

In June 2018, the NDRC and MOFCOM jointly released the 2018 nationwide negative list for foreign investment, which was followed shortly by a separate negative list applicable in China's pilot free trade zones (FTZ). The revisions show China continuing its reform and opening-up policy to foreign investment, and are featured by both a significantly shortened list of restrictive items and wider foreign participation in key sectors including finance, transportation, automobiles, logistics, energy and agriculture. See Article, China unveils 2018 nationwide and FTZ negative lists in parallel.

In August 2018, the NPC Standing Committee enacted the E-commerce Law. The law regulates the business of selling goods or providing services over the internet or other information networks within China, except for e-commerce activities involving financial products and services, news publications, audio and video programs, and cultural products. Generally, the law imposes strict obligations in relation to user data privacy, information disclosure, intellectual property rights (IPR) protection, competition and cybersecurity on the strongest actors in the e-commerce marketplace, while also protecting the consumer. See Article, China's first e-commerce law enters into force.

In August 2018, the NPC Standing Committee significantly revised China's Individual Income Tax (IIT) Law. Among other changes, the amendment distinguishes between "resident" and "non-resident" individuals, increases the minimum IIT payment threshold from RMB3,500 monthly to RMB5,000 monthly (or RMB60,000 annually) and expands the lower level tax brackets. For resident individuals, it also integrates income from four types of work-related activities in calculating IIT (that is, wages and salaries, labour services, author remuneration, and royalties). See Legal updates, NPC Standing Committee amends Individual Income Tax Law and State Council issues final implementing rules on IIT Law.

In October 2018, the NPC Standing Committee amended the Criminal Procedure Law to reflect, among others, changes brought about earlier this year when the NPC established the NSC and enacted the National Supervision Law. See Legal update, NPC Standing Committee amends Criminal Procedure Law.

In December 2018, the NDRC issued the Regulations on the Administration of Investment in the Automobile Industry. The regulations expressly prohibit the construction of new manufacturing plants for fuel-powered vehicles, codifying a de facto ban put in place several years ago, and permit existing enterprises to expand production capacity only where they satisfy certain conditions, including capacity utilisation and production rates in the relevant province and thresholds for research and development (R&D) investment, production scale, and product competitiveness. See Legal update, NDRC issues new rules governing auto industry investment.

In December 2018, the NDRC and MOFCOM jointly issued the Market Access Negative List (2018 Version). The list consolidates and unifies China's market access policies by applying nationwide for the first time and applies equally to domestic and foreign investment. See Legal update, NDRC and MOFCOM issue nationwide market access negative list.

In December 2018, the NPC Standing Committee released a revised draft Foreign Investment Law of the People's Republic of China for public comment. Once adopted, it will become the unified law regulating foreign investment in China, repealing and replacing the existing three foreign investment laws that have been in place for decades. See Legal update, China opens revised draft foreign investment law for public consultation.